Out-Law News 3 min. read

Copyright and competition laws clash in battle of football TV rights


The right of football clubs to carve up foreign markets for broadcasting matches will be challenged at a full trial after the clubs failed to win a snap judgment against a firm selling Greek decoder cards to UK pubs so they could show live English football.

The Football Association Premier League (FAPL) Ltd is the body which owns and runs the English football Premier League. It is made up of its member football clubs and it owns the rights to broadcast League games.

Broadcasters pay significant sums to be allowed to show the games, but the games are also filmed and packaged for foreign audiences. Broadcasters abroad pay to show those games.

Companies such as Sky in the UK charge viewers to watch games, with subscriptions for pubs being significantly higher than those for households.

QC Leisure, AV Station and others are accused of selling equipment to UK pubs which would allow them to watch foreign feeds of UK matches and avoid paying Sky or Setanta, the UK licensees.

FAPL claims that QC Leisure and AV Station sold decoder cards imported from Greece through subterfuge to enable UK pubs to watch games without paying UK licensees' fees. The cards allow the watching of live games on Saturday afternoons. This is banned in the UK in order to protect the ability of clubs to attract large stadium crowds to games.

FAPL said that this activity is in breach of the Copyright, Designs and Patents Act, which it claims gives it the right to charge for access to the content it has rights in.

QC and AV argue that they have not broken copyright law. They also say that attempts to stop them selling cards are in breach of the EC Treaty, which lays out the founding principles of the European Union. The Treaty guarantees the right of free trade between member states.

The clash between copyright and competition law is, says Kim Walker, an old one. Walker is an intellectual property law specialist with Pinsent Masons, the law firm behind OUT-LAW.COM.

"There has always been a tension between IP rights and competition law because IP gives exclusive rights to do certain things in certain places but competition law doesn't like the concept of exclusivity," he said.

Broadcasting, and football broadcasting in particular, has always been something of a special case, though, he said.

"The granting of exclusive broadcasting rights by territory has been held to be not incompatible with European Community law because it was thought that the only way for companies to get their money back is to carve up the territories," said Walker. "Because there is so much money in football the Commission bends over backwards to find a way through what would otherwise be examined in a lot of detail."

FAPL used as the basis of its claim the European Court of Justice (ECJ) verdict in a case involving film distribution, known as Coditel II. In that case the ECJ said that time-limited territorial exclusivity was not necessarily a breach of competition law.

Mr Justice Barling, though, said that the FAPL claim went further than that, that the football authorities were not only granting territorial exclusivity but asking the licensees to enforce that exclusivity. This may itself be against the law.

"[FAPL] places more weight on Coditel II than it can bear," he wrote in his judgment. "The scope of the judgment in that case was narrow, being restricted to 'the mere fact' of the grant to a licensee of exclusive rights in a particular territory. The contractual provision with which we are concerned does not consist merely of a grant of such exclusive rights … the provision appears to impose certain obligations upon the foreign broadcaster, namely to undertake to 'procure' that non-UK decoder cards are not authorised or enabled by the licensee or any sub-licensee … to enable anyone to view the foreign broadcaster's transmission outside the latter's territory. In other words, foreign licensees are apparently required to prevent use of the decoder cards outside their licensed territory."

Walker said that the forcing of licensees to police the use of signals may be against the law. "In intellectual property law you can have exclusive rights to sell goods in a certain territory but European law says you can't require that distributor to reject unsolicited orders that come from outside that territory," he said. "What the judge is worried about is that it might be a breach of Commission law to require the companies to police national borders."

Mr Justice Barling said that FAPL had not made its case so completely that it could skip a trial. He said that the case would have to go to a full trial.

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