A six-year battle between a pub landlady and BSkyB could finally be over after the European Court of Justice (ECJ) ruled today on her use of a Greek decoder to screen Premier League football matches in her pub.
The judgment has the potential to change the face of English football by forcing the Premier League to re-evaluate how it structures broadcasting rights packages.
BSkyB will also need to take a critical look at the huge amount of money and resources it pours into its football coverage.
The game so far
Put off by the high cost of a BSkyB UK commercial licence, Karen Murphy, a landlady, bought a Greek decoder box and card to show Premier League matches in her Portsmouth pub for a fraction of the price.
In January 2007 she was found guilty of dishonestly receiving BSkyB's football coverage with intent to avoid proper payment for it. She appealed her conviction, and the ECJ was asked to give its view on a number of key legal points.
Ms Murphy argued that in buying a foreign decoder she was merely taking advantage of her right to buy competitively priced goods and services offered in other European countries.
The Football Association Premier League (FAPL), which owns the broadcasting rights to Premier League matches, argued Murphy's actions breached its copyright.
The FAPL also argued that the exclusivity was necessary to protect 'blackout' periods that operate in different countries, and during which live matches cannot be screened; the idea being that viewers would be encouraged to attend matches instead.
In the UK, the blackout period runs from 3pm on Saturdays, but times vary from country to country, depending on local scheduling customs. So a Premier League match being played live in the UK during the 'blackout' period could be viewed in other countries using a foreign satellite decoder box.
The case made headlines in February when an Advocate General from the ECJ gave her Opinion. Advocate Generals' Opinions are good indications of how the court will rule and, more often than not, the court follows them.
The Opinion said that using exclusive agreements to protect intellectual property rights could not be outweighed by the effect of restricting broadcasts along national lines. This was a breach of the European Union's fundamental right for individuals to enjoy free access to goods and services.
What did the ECJ say?
The ECJ joined Ms Murphy's case with claims being brought by the FAPL against other publicans and two importers of the foreign decoding devices.
The Court reviewed the law on Intellectual Property, and Articles 56 (on the right to freedom of movement of services) and 101 (on the anti-competitive aspects of the exclusivity agreements) of the European Treaty.
It agreed with the Advocate General's Opinion and said:
- foreign decoding devices used in the UK are not illegal even if obtained using a false name and address, because the devices are essentially genuine products
- national legislation which prevents the import, sale, or use of foreign decoder cards is against the freedom to provide services
- the restriction cannot be objectively justified on the basis of protecting intellectual property rights because the FAPL cannot claim copyright in the matches themselves - only the commentary, music or opening sequences are protected
- even if copyright in the games could be claimed, the restriction is still a disproportionate way of protecting the IP rights - dividing viewers up along national lines could lead to artificial price differences, which goes against the idea of the single market
- although exclusivity is not always anti-competitive, using a system of exclusive licences here to prohibit the supply of decoder equipment outside a particular territory is illegal, as it allows the possibility of eliminating all competition between broadcasters and could further partition the market along national lines
- the restrictions also cannot be justified on the basis that they encourage the public to attend live football matches by protecting the blackout periods
So what does this mean?
The case will now go back to the High Court for the final ruling, but the ECJ's decision has effectively settled the matter.
Publicans will now be thinking twice about whether to maintain their BSkyB subscriptions when there are far cheaper options available (although they may wait until the final High Court judgment before actually switching).
Having an English language commentary is an advantage, but whether it justifies the extra cost is debatable.
There will now be intense speculation about BSkyB's next move. Having been on notice since the Advocate General's Opinion that the ruling could go against it, it has no doubt already thought about its options and has a back-up plan ready to be put into action.
The FAPL will need to think about how this affects the value of its rights to the Premier League. On the basis that a lot of the money generated from licence fees is passed on to English clubs, the judgment could even affect the way Premier League clubs operate.
One possible option for the FAPL is to include in its footage more material, such as branded graphics, that is capable of copyright protection. This may have the effect of still leaving pubs and clubs liable for infringement of the FAPL's intellectual property rights if they try to use foreign decoders.
And with other industries dependent on the protection of intellectual property rights keeping a watchful eye on developments here, the judgment could have far-reaching effects beyond football.
This case underlines the difficulty under EU rules on competition and free movement of dividing up markets along national lines. And it highlights that even the protection of intellectual property rights is not an absolute defence to doing so.