ECJ asked to rule on case that could undermine football business

Karen Murphy is a publican who cancelled her contract with Sky Sports for its Premiership football service and bought a satellite signal decoder card and subscription from Greek company Nova for a price that was considerably cheaper than that of the UK's Sky service.

Media Protection Services, which investigates and takes action against pubs which show football in contravention of Sky's conditions, Murphy to court over her use of the Nova system.

The suit argued that Murphy was breaking copyright law by showing the matches from the Nova system rather than the Sky system. Sky had paid significant sums to the Premier League for the right to sole UK broadcasting rights.

The case claimed that Murphy had breached the section of the Copyright, Designs and Patents Act because she "dishonestly received a programme included in a broadcasting service provided from a place in the United Kingdom with intent to avoid payment of any charge applicable to the reception of the programme."

The EU's Copyright Directive refers to 'illicit devices'. Murphy claimed that her Nova card-fitted system was not an illicit device because that phrase should refer only to pirated devices, not to legitimate ones which are simply used in a different EU country.

Secondly she argued that to rule that she could not buy a legitimate service in Greece and use it in the UK was contrary to EU free trade rules.

Murphy's appeal was heard in the High Court, which had already heard an appeal on the non-EC law aspects of the case and referred its own questions to the ECJ.

Murphy's case, said Lord Justice Stanley Burton, was that "national measures restricting cross-border trade in respect of decoder cards originally put on the market in another Member State with the consent of the service provider are restrictions on free movement which cannot be justified under EC law".

Media Protection Services said that in a previous ruling involving Coditel the ECJ had said that it was possible to protect copyrighted works without falling foul of free trade laws.

"In that case the ECJ held that copyright in performances such as the showing of a film may be validly licensed and exploited on a national territorial basis without falling foul of the Treaty's free movement rules," said the ruling. "This was because copyright in films was not to be analysed in the same way as copyright in such works as books and sound recordings. The film belonged to the category of literary or artistic work which could be infinitely repeated by way of performance…thus, said the ECJ, the right to receive a fee for each showing of a film was "part of the essential function of copyright" in that category of artistic work."

"[Media Protection Services] says that the satellite broadcast in this case is indistinguishable in material terms from the broadcast of the film in question… with the result that the Premier League's copyright protection for broadcast coverage of its football matches gave it the right to license that coverage to different broadcasters in different Member States and to do so on terms which ensure that the geographical limits in each of those licences can be enforced," it said.

Murphy argued in court that she cannot have had, in the language of the Copyright, Designs and Patents Act, "intent to avoid payment of any charge applicable to the reception of the programme," because she had paid a charge, to Nova.

She said that if the Sky charge was the only 'applicable charge' because of geographically exclusive contracts signed by it and the owner of the footballing rights, then this deal, which forbade the export of decoder cards from one country to another, contravened EC free trade laws.

"[Murphy] contends that this export ban falls within the prohibition in Article 81(1) of the EC Treaty as being an agreement which is liable to affect trade between Member States and which has as its object or effect the prevention, restriction or distortion of competition within the Common Market," said the ruling. "As such the Appellant submits that it is prohibited and automatically void by virtue of Article 81(2)."

Should the ECJ agree with Murphy, Lord Justice Burton said, then there will be no offence that she will be deemed to have committed.

"If the contractual export ban is unlawful and unenforceable then absolute territorial protection, upon which the Respondent relies in order to establish that within the United Kingdom BSkyB has the exclusive right in question, does not in fact exist. In those circumstances…the subscription charge exacted by BSkyB would not be "applicable" to the programme screened by [Murphy], and the offence of which she has been convicted would fall away."

The Court decided to refer questions to the ECJ to settle the issues of EC law, saying that the questions could have a major impact on the world of football, whose commercial clout has rocketed on the back of lucrative, country-specific TV deals.

"The EC law issues in this case are clearly such that their resolution may well have a substantial impact on the way in which programmes of the kind with which this case is concerned are licensed and broadcast throughout the EU, and on the ways in which the intellectual property rights in question are remunerated and in which competition takes place in the relevant markets," said the judge.

Lord Justice Burton said that he had some problems with the case as a whole. "We digress at this stage to voice our unease about the bringing of a prosecution under [section 297 of the Copyright, Designs and Patents Act] in circumstances where the establishment of an essential element in the offence, namely "intent to avoid payment of any charge applicable to the reception of the programme", depends upon the compatibility with EC law of an export ban imposed in a licence agreement between two companies who are legally strangers to the purchaser and user of the decoder card in question who is the defendant to the criminal charge," he said.

"It seems to us unlikely that the legislature would have envisaged that the applicability of the avoided charge to the programme received by a defendant would be dependent upon something so remote from that defendant's own knowledge," he said.