The Austrian Supreme Court had referred questions to the CJEU on the availability to an internet protocol television ("IPTV") service provider of the private use exception to copyright infringement (Article 5(2)(b)*), and whether that provider itself made a communication to the public under its operating structure (Article 3(1)**).
It is important to understand the set-up of the IPTV service. Ocilion provided commercial customers (but not end users) with an IPTV service which included content for which broadcasters Seven.One and Puls owned retransmission rights. Ocilion's commercial customers (hotels, network operators etc) provided onward services to end users.
Ocilion offered its customers two options: an on-premise solution, for which it provided its customers with hardware and software which were then managed by the customers (with technical support provided by Ocilion); and a cloud-hosting solution, which was directly managed by Ocilion.
The service (however provided) allowed simultaneous retransmission of programmes, as well as a recording facility. Recordings were initiated by end users individually selecting content to record, and used a de-duplication process to avoid multiple copies being made. Each recording was then made available to all interested end users via a reference number communicated to them by Ocilion.
The Austrian court asked, essentially, whether Ocilion could avail itself of the private use exception under Article 5(2)(b), and whether its on-premise solution (but not its cloud-based solution) constituted a communication to the public under Article 3(1).
Private use exception
The CJEU pointed out that when interpreting EU law, the court must look not only at the wording of the law, but also at its context and objectives. It therefore took into account (as is customary) various cases and recitals as well as the wording of the law itself, to conclude that:
- only a "natural person" could benefit from the private use exception, and Ocilion was not a natural person; and
- copies made were not intended to be accessed solely by the first end user but to be accessible to an "indeterminate number of end users". This was for commercial purposes and was likely "unreasonably to prejudice the legitimate interests of the rightsholders". Permitting Ocilion to benefit from the exception would not lead to a fair balance between the interests of rightsholders and those of users.
Communication to the public
The court stated that the directive and the case law require that "communication to the public" should be interpreted broadly, and that it requires two criteria: a) an act of communication of the work, b) to a public, and then requires a multifactorial individual assessment. There had been an act of communication, as that encompasses any transmission of the protected works, but overall Ocilion had not made a communication to the public.
The court's reasoning here is hard to pinpoint. It makes no further distinction between the two criteria (the assumption would be that it considered but this is not specified), but refers broadly to factors considered in the individual assessment, holding:
- Ocilion did not play an "indispensable role" in giving end users access to protected works. Its provision of hardware, software and support, although necessary to access the protected content, did not mean that it played an indispensable role in making the content accessible to end users. The court referred to recital 27 of the directive: "the mere provision of physical facilities for enabling or making a communication does not in itself amount to a communication"; and
- Ocilion did not give end users access to protected works; that was done by its customers. There was no link between Ocilion and the end users. It had not been shown that Ocilion took action beyond the supply of hardware and software to give end users access to the content.
Ocilion had therefore not made a communication to the public.
Note that the question referred was limited to the on-premise solution, excluding the cloud-based solution. It is unclear why, but note Advocate General Szpunar's comment: "[the Austrian] court does not specify the reasons why it excludes from the scope of that question the cloud service, which nevertheless also appears to be the subject-matter of the dispute in the main proceedings. I assume that the referring court considers it obvious that, in that case, the applicant in the main proceedings is communicating it to the public.".
Ocilion could not defend against infringement using the private use exception, but did not infringe in any event via the on-premise solution as it had not made a communication to the public. It is hard to reconcile the positions the court has taken on these issues, given it seems to have looked behind the face of the service's structure to acknowledge its broader commercial purpose - to make available the content for financial reward - when considering the private use exception, but not when considering communication to the public (despite saying it had to consider the law's context and objectives, not just its wording).
It will now be up to the Austrian court to apply the law to the case, but it is hard to see how it can do other than hold Ocilion not liable.
Following the end of the Brexit transition period, this case is not directly binding on UK courts. However, the courts may have regard to it, and given s20 Copyright, Designs & Patents Act 1988 implements article 3 of the directive, and the volume of cases in this area, we consider it likely the UK courts would at least have regard to it. Of note, now the Retained EU Law (Revocation and Reform) Act 2023 has received royal assent, it will be easier for the lower UK courts to depart from EU law – see our article here: Retained EU Law (Revocation and Reform) Act 2023 receives Royal Assent | Fieldfisher
* An exception granted "in respect of reproductions on any medium made by a natural person for private use and for ends that are neither directly nor indirectly commercial, on condition that the rightholders receive fair compensation which takes account of the application or nonapplication of technological measures referred to in Article 6 to the work or subject-matter concerned"
** "Member States shall provide authors with the exclusive right to authorise or prohibit any communication to the public of their works…"
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