Copyright and IPTV

computer law & security report 23 (2007) 248–261

available at www.sciencedirect.com

www.compseconline.com/publications/prodclaw.htm

Internet Protocol Television

Copyright and IPTV5 Paul Ganley Associate Baker & McKenzie LLP, London

abstract This article examines a number of UK copyright law issues relevant to providers and users of IPTV services. Broadly speaking this article examines three sets of issues. First, consideration is given to various matters lumped under the heading ‘‘rights issues’’. This includes rights clearance, the exploitation of new media rights, WIPO’s draft broadcasting treaty, and user generated content. Second, this article explains what rights are implicated during the transmission of broadcast content over the Internet either as a stream or download. Third, this article examines how copyright impacts on what end-users can do with IPTV content they receive and what consequences this may have for IPTV providers. The aim is to offer a commercial overview of the strategies being adopted by traditional broadcasters and Internet businesses and to tie this to legal provisions that govern the creation, distribution and use of copyright materials in the context of IPTV. ª 2007 Baker & McKenzie LLP, London. Published by Elsevier Ltd. All rights reserved.

1.

Introduction

There’s a lot going on in the world of television at the moment. Among the numerous deals and new services announced in the past few months were the following:  In September 2006 the BBC announced that its iPlayer application was being reviewed by the BBC Governance Unit (now the BBC Trust) in accordance with the public value test with a view to launching the new service in 2007.1 The iPlayer comprises a number of components including features

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that allow users to ‘‘catch-up’’ with programmes they missed by downloading them over the Internet for a period of 7 days following broadcast, and to receive ‘‘simulcasts’’2 of all the BBC’s public service TV channels via the Internet.3 A further feature – known as ‘‘series stacking’’ – will let users download all episodes in a series whilst the series is still being broadcast. The submission of the iPlayer proposals follows the conclusion of trials of the BBC’s interactive media player (iMP).4 Catch-up TV will be available from devices connected to the Internet with a UK based IP address and with Windows Media Player 10 installed. It

The views expressed in this article are the author’s own and do not necessarily reflect the views of Baker & McKenzie LLP or its clients. All errors and omissions remain the sole responsibility of the author who would like to thank Omar Eljadi and Caroline Lody for their research assistance. 1 ‘Market Impact and Public Value Assessments start on BBC iPlayer’ (BBC press release, 18 September 2006) available at http://www. bbc.co.uk/pressoffice/pressreleases/stories/2006/09_september/18/test.shtml (as at 17 October 2006). 2 A simultaneous broadcast – in this context a combination of Internet streaming and a conventional broadcast on TV. Many rights holders use simulcasts to allow a worldwide audience to access content only broadcast in one country or area (such as on local radio). 3 ‘Description of the BBC’s new on-demand proposals’ available at http://www.bbcgovernors.co.uk/docs/additionalinfoonthebbcson demandproposal.pdf (as at 17 October 2006). 4 See http://www.bbc.co.uk/imp/. 0267-3649/$ – see front matter ª 2007 Baker & McKenzie LLP, London. Published by Elsevier Ltd. All rights reserved. doi:10.1016/j.clsr.2007.01.005

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will utilise P2P technology to distribute the large video files. Digital rights management (DRM) software from Microsoft will allow content to be transferred to certain portable devices and permanently disable content that is not accessed with 13 weeks of it being downloaded or within 7 days of it being accessed. At launch the BBC expects around 70% of the BBC’s network TV schedule (i.e. in-house and independently commissioned productions) to be available via catch-up TV and it estimates that the service will ‘‘reach’’ 20% of all television households by 2011.5  In April 2006 Channel 4 in the UK began offering downloads of certain shows (e.g. Lost and Desperate Housewives) from its website at 99p an episode. Once downloaded viewers may view the episode an unlimited number of times during a 24 hour period.6 In June 2006, the broadcaster also announced that it was to begin simulcasting some programmes from its website.7 Both services are up and running and as well as micro-sites dedicated to some programmes, a new section of the Channel 4 website lets users stream the entire series of certain programmes for free.8  Sky by Broadband is a free service launched in January 2006 that lets the satellite broadcaster’s customers download movies and sports clips over the Internet. Up to 1000 movies and 1000 sports clips will be made available and can be viewed for periods ranging from a few days to a year following download. Viewing restrictions are enforced using DRM provided by Microsoft. At the time of writing (October 2006) access to all movies and some sports content has been suspended following the release of a programme called ‘‘FairUse4WM’’ which can remove Microsoft’s DRM protection. Sky are waiting for Microsoft to patch this before the full service goes live once again.9  In October 2006, YouTube – the video-sharing website with a reported 72 million worldwide users including 4.5 million in the UK – was acquired by Google for $1.65 billion.10 The deal was announced shortly after YouTube entered into agreements with Universal Music Group, Sony BMG and the television network CBS for use of music videos and video clips on the site in exchange for a share of advertising revenue.11 5 ‘‘Reach’’ is an aspect of the public value assessment and defined in the on-demand context as the number of people who use a service for at least 15 min in any given week. The ‘‘reach’’ figure for simulcast TV over the Internet is estimated at 11% by 2011. 6 Joe Lepper, ‘Channel 4 launches video-on-demand service with Lost and Desperate Housewives’ Brand Republic (26 April 2006) available at http://www.brandrepublic.com/bulletins/ digital/article/555905/channel-4-launches-videoondemand-servicelost-desperate-housewives/ (as at 17 October 2006). 7 ‘Channel 4 to air TV shows online’ BBC (22 June 2006) available at http://news.bbc.co.uk/1/hi/entertainment/5107294.stm (as at 17 October 2006). 8 See http://www.channel4.com/broadband/index.html. 9 Kelly Fiveash, ‘Sky responds to DRM Headache’ The Register (13 September 2006) available at http://www.theregister.co.uk/2006/ 09/13/microsoft_drm_bskyb1/ (as at 17 October 2006). 10 ‘Google buys YouTube for $1.65bn’ BBC (10 October 2006) available at http://news.bbc.co.uk/1/hi/business/6034577.stm (as at 17 October 2006). 11 ‘Google nets YouTube in $1.65bn takeover’ The Guardian (10 October 2006) available at http://technology.guardian.co.uk/ news/story/0,,1891795,00.html (as at 17 October 2006).

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YouTube users post content to the site, and the estimated 65,000 daily uploads often contain copyrighted materials. This has led some to question the legitimacy and, indeed, long-term viability of a service whose lack of revenue up to this point may have shielded it from lawsuits.12 The agreement with Google and the content providers represent steps to generate a revenue stream (via Google’s advertising and search capability) and acquire rights to make premium content available on the site (via deals with content providers). The common thread in the examples above is the use of the Internet for the distribution of television and video content. Content, distribution and regulatory issues are coalescing around this new form of content provision called Internet television, or Internet protocol television: ‘‘IPTV’’. IPTV is tricky to define but typically describes a system that lets users stream or download television programming or other audiovisual content using the core protocols that underpin the Internet. IPTV covers a range of activities including TV channels and TV shows which exist only on the Internet, traditional stations that simulcast live on the Internet, traditional stations that make select content available on-demand on their website and traditional TV stations making extra content exclusively for their website. Playback is typically via a PC or Internetenabled portable device or a set-top box connected to a TV. IPTV can easily be combined with other services such as basic Internet access, email, VoIP and complimentary technologies such as personal video recorders (PVRs). The main benefit of an IPTV platform – as distinct from cable, satellite or terrestrial transmission platforms – is the interactive possibilities it offers because data can flow both ways in an IP network. Attractive features include:  Large video libraries of premium and archive content available on-demand.  Virtual channels that let users pause and rewind live TV.  Interactive features such as betting, voting, additional programme information, etc.  Accurate reporting as to how and when content is being consumed. Traditional broadcasters, content providers, ISPs and Internet businesses are jostling for position in the emerging IPTV universe. Business models, distribution platforms, valueadded services and, fundamentally, consumer acceptance are all being tested in an increasingly crowded marketplace. 12

‘‘Mark Cuban: only a ‘moron’ would buy YouTube’’ News.com (28 September 2006) available at http://news.com.com/21001026_3-6121034.html (as at 17 October 2006) (quoting Mark Cuban – co-founder of HDNet – as saying, prior to Google’s acquisition of YouTube, ‘‘The only reason [YouTube] has not been sued yet is because there is nobody with big money to sue’’). In October 2006 the operators of two other video-sharing sites were sued by Universal Music Group for copyright infringement having failed to reach an agreement on licensing. See ‘Universal Music Group sues online video sites Grouper, Bolt’ SiliconValley.com (17 October 2006) available at http://www.siliconvalley.com/mld/ siliconvalley/news/editorial/15781910.htm (as at 19 October 2006).

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The move is less defensive than the response by the music industry to the challenges posed by online music, given the differences in funding between music and television content; nevertheless making IPTV pay is a significant challenge. Underlying the ongoing discussions, inevitably, is copyright law. Copyright laws around the world contain many detailed and specific provisions relating to traditional forms of broadcaster, but have until recently struggled to accurately categorise Internet-based services.13 As a consequence, the IPTV market is tentatively feeling its way through the complex web of copyright regulation in this area. The purpose of this article is to explain and offer an analysis of a number of the key copyright-related issues currently facing IPTV providers. This article broadly addresses three issues. First, consideration is given to various matters lumped under the heading ‘‘rights issues’’. This includes rights clearance, the exploitation of new media rights, WIPO’s draft broadcasting treaty, and user generated content. Second, this article considers how copyright is implicated during the transmission of broadcast content over the Internet either as a stream or download. Third, this article examines how copyright impacts on what end-users can do with IPTV content they receive, and what consequences this may have for IPTV providers. The aim is to offer a commercial overview of the strategies being adopted by broadcasters and to tie this to legal provisions that govern the creation, distribution and use of copyright materials in the context of IPTV. Before delving into the details, three preliminary observations are worth mentioning. First, this article will tend to focus on the IPTV offerings of traditional broadcasters such as the BBC, Sky and Channel 4 and Internet behemoths like Google or YouTube. However, it is not the intention to ignore the vast swathes of audio-visual Internet content that emanate from bedrooms, dorm rooms and from simply being in the right place at the right time with a phone-sized camcorder to hand. There may not be a market for much of this stuff, but there’s certainly a market for some of it, especially when ‘‘costs of producing and distributing a multicast IPTV stream in MPEG-4 on a PC are negligible’’.14 With the right content aggregators and filtering tools in place this niche content will increasingly find its audience. Nevertheless, this article’s focus on large commercial broadcasters is deliberate because it is these entities that have the widest range of copyrightrelated issues to consider. A kid lip-synching her favourite Robbie Williams track and uploading it to YouTube would not think twice about copyright; whereas much of the BBC’s

13 In the context of UK copyright laws see Shetland Times Limited v Wills [1997] EMLR 277 and Sony Music Entertainment (UK) Ltd and others v Easyinternetcafe Ltd [2003] EWHC 62 (Ch) (both discussing the fit between the Internet and the definition of a cable programme service in the Copyright, Designs and Patents Act 1988 (CDPA) prior to the addition of the ‘‘communication to the public’’ right in 2003). 14 See Alex Cameron, ‘ IPTV and VoD: the great content adventure’ The Register (23 January 2006) available at http://www.theregister.co.uk/2006/01/23/iptv_analysis/ (as at 17 October 2006) (‘‘The future of TV is not single subscriber bases of millions, but in an aggregated consumer population made up of many different-sized niche IPTV audiences’’).

preparatory work as it prepares to launch the iPlayer centres around copyright issues. Second, regulatory issues, particularly the ongoing discussions over the European Commission’s proposed Audiovisual Media Services Directive that will set minimum regulatory standards – in respect of, for example, advertising, hate speech and the protection of minors – for IPTV providers, are highly relevant but are not considered in this article. The regulatory side of IPTV has already been considered in this journal.15 Third, the so-called ‘‘net neutrality’’ debate is a huge political issue in the US at present and is rapidly gaining traction in Europe. The debate arises out of a concern that the Internet is ill-equipped to deal with bandwidth demands following the rapid increase in the volume of audio-visual content available online. Those investing large sums to upgrade the network infrastructure therefore believe that the Internet should be ‘‘tiered’’ to allow certain types of content or, more controversially, content from particular (i.e. paying) sources to be treated preferentially – a concept known as ‘‘access tiering’’. The author has considered the net neutrality question previously in this journal, and it is an important consideration when assessing the market for IPTV services where quality of service guarantees may be critical.16

2. Rights issues – past, present, future and user generated content 2.1.

Past – rights clearance

On the homepage for its Open News Archive, part of the Creative Archive project,17 the BBC stated: We’re pleased to present links to nearly 80 pieces of video and audio covering iconic news stories and events of the last 50 years. You might feel that some important stories have been left out. If so, it is likely to be because the BBC doesn’t have the rights to release the item. One of the biggest challenges facing the Creative Archive Licence project is rights clearance. Simply put, before it is possible to apply the Creative Archive Licence to a piece of video or audio, it is necessary to investigate who owns the rights associated with the content contained within it. It may not be always possible to secure the agreement of the rights owner.18 15 See Carolyn Burbridge, ‘IPTV: the dependencies for success’ [2006] 22 The Computer Law & Security Report 409. 16 See Paul Ganley and Ben Allgrove, ‘Net Neutrality: A User’s Guide’ [2006] The Computer Law & Security Report 454. 17 The Creative Archive project is an initiative involving, amongst others, the BBC, the British Film Institute, Channel 4 and the Open University to make archive content available for download under the terms of the Creative Archive Licence (CAL). The CAL allows users in the UK to watch, listen, share and re-use this content for non-commercial purposes. See Creative Archive FAQs at http://creativearchive.bbc.co.uk/archives/ faqs/ (as at 17 October 2006). 18 http://www.bbc.co.uk/calc/news/content_intro_results.shtml (nb: this page is no longer available because the trial phase of the Creative Archive has finished).

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Broadcasting organisations are familiar with the issues surrounding rights clearance. This section will not rehash these well-understood issues but point out a number of considerations that may be especially relevant to IPTV providers. First, IPTV providers need to consider whether they have permission to exploit works using IPTV where permission has already been obtained for a previous exploitation.19 If not, permission may be needed from a range of persons. For example, if a broadcaster wishes to make a documentary programme available online it will need to obtain permission to adapt, copy, perform and communicate to the public all the elements that go into the programme, including, for example, the original source material, artistic works, literary works, sound recordings, underlying musical works, and performances. This is not an easy task, particularly for older content. There is no centralised register of owners of copyright works and information that can be gleaned from the work itself (e.g. the credits of a film from which a clip is taken) will not necessarily provide the most up-to-date rights ownership information as owners may have died or assigned their rights. The legacy of historic rights is a significant barrier to entry into the IPTV market where archive and niche content distribution would otherwise become a viable proposition.20 Second, complications arise in the context of advertising. Common sense dictates that ‘‘the market for eye-balls’’ would welcome the opportunities afforded by new methods of distribution. However, adverts usually include copyright works and advertisers (who will typically indemnify broadcasters for infringing content contained in their advertisements) may have the same issues as providers in terms of clearing rights. They may decide to forego the opportunity presented by these new distribution channels for fear of contingent liabilities. As a result additional effort may be required by IPTV providers to tailor the stream or download for the online market. This may be considered to substantial a burden for niche content with a limited potential audience. Furthermore, local advertising may be inappropriate for Internet distribution that is not as regionalised as traditional broadcasting. Third, unlike with traditional (over the air) broadcasts, where a broadcast in one country is deemed to only take place in that country,21 there is no similar explicit adoption of the so-called ‘‘emission theory’’ in respect of the Internet transmissions such as IPTV.22 The emission theory only requires broadcasters to obtain rights clearance in the territory where

19

This is analogous to the issues considered by the US Supreme Court in New York Times v Tasini 533 US 483 (2001) and the Canadian Supreme Court in Robertson v Thomson 2006 SCC 43. 20 In this regard it is interesting to note that the BBC’s iPlayer proposition does not involve making any archive content available and only includes content broadcast from the point of launch. See further ‘Description of the BBC’s new on-demand proposals’, supra n3. 21 See Satellite Broadcasting and Cable Retransmission Directive 93/83/EEC, Article 1.2(b). Section 6(4) CDPA transposes this Directive and only covers ‘‘wireless’’ broadcasts. See further Copinger and Skone James on Copyright (15th ed. 2005) x 7–111 (hereinafter ‘‘Copinger’’). 22 Copinger x 27–256.

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the broadcast originates, not every jurisdiction where the signal may be received. This lack of clarity in respect of Internet transmissions by IPTV providers mean that multi-jurisdictional rights clearance may be necessary where content will potentially be globally accessible. Technology known as IP ‘‘geo-coding’’ can, in theory, work out the geographical location of a computer or portable device based on its IP address, so content is only made available to those who have a public IP address registered in a country where rights have been cleared.23 However, the technology is not foolproof so it may not provide enough comfort to certain IPTV providers. A number of the provisions in the Copyright, Designs and Patents Act 1988 (CDPA) assist broadcasters (and advertisers) by lightening the load of required clearances. These include Section 31 (incidental inclusion of copyright material)24; Section 58 (recording of the spoken word); and Section 62 (representation of certain artistic works on public display). Nevertheless, the number of rights that remain to be cleared can be significant as new modes of distribution and new forms of interactivity emerge. This has had a significant impact on the efficiency and effectiveness of copyright clearing systems. As a recent report by Solun puts it: [I]n the new digital environment there is a tendency by which broadcasters offer their channels for distribution to channel aggregators, who then transmit those channels to their subscribers via electronic communications infrastructures with which they are vertically integrated, or via third party electronic communications infrastructures. Therefore, the existing copyright regime does not reflect the current demands of the market including an ever increasing number of international channels as well as content modes (analogue, digital, Free TV, Pay TV subscriptions, on-demand). Consequently, there has been a rapid increase in the number of negotiations necessary to conclude rights clearance deals, resulting in a further increase in market intransparency. 25 Rights clearance is a significant barrier to entry in the IPTV market. In the online music context, the European Commission in July 2005 published a detailed study on how copyright for music works is licensed on the Internet.26 The report concluded that a cross-border licensing and royalty distribution model is needed if European-based online music services are

23 The BBC used this technology when restricting access to multicast Olympics coverage to UK viewers in 2004. 24 In IPC Magazines Limited v MGN Limited [1998] FSR 431 ‘‘incidental inclusion’’ was defined as meaning whether the inclusion was ‘‘casual, inessential, subordinate or merely background?’’, at 441. 25 See ‘Economic Impact of Copyright for Cable Operators in Europe’ (Solon Management Consulting, 2006) 7 available at http:// www.ecca.be/pdf/May2006-Solon_copyright_ECCA.pdf#search¼%22 solon%20%22cable%20operators%20in%20europe%22%22 (as at 17 October 2006). 26 European Commission, ‘Study on a Community Initiative on the Cross-Border Collective Management of Copyright’ (Brussels, 7 July 2005) available at http://europa.eu.int/comm/internal_ market/copyright/docs/management/study-collectivemgmt_en.pdf (as at 18 October 2006).

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to fully develop. The same can perhaps be said of rights clearance in respect of IPTV content. In the meantime, we can expect to see commercial and technical solutions develop that attempt to remove or at least reduce the rights clearance burden.27

2.2. Present – rights windows for public service broadcasters Broadcasters and producers have been quick to appreciate the value of the new opportunities presented by IPTV, but they have disagreed as to the mechanics of the exploitation of material originally commissioned for television broadcast. This issue has been considered most openly in the UK in the context of programming from independent producers for the public service channels (BBC, Channel 3, Channel 4, Five and S4C). The genesis for these negotiations and the ultimate outcome present an interesting case study of the types of issue that IPTV providers will have to grapple with in the next few years. In early 2006 Ofcom urged the industry to agree terms for ‘‘new media rights’’28 failing which it would intervene and impose its own regulations.29 Ofcom’s stated position was that ‘‘viewers are likely to benefit from a proliferation of means of accessing television programmes – and so broadcasters and producers should seek innovative approaches to growing new markets and exploiting new platforms’’.30 Ofcom did not agree with the concerns expressed by some broadcasters, that ‘‘models for new media rights and for ‘‘traditional’’ broadcasting can only represent a zero-sum game’’, adding ‘‘we do not consider that revenue from the exploitation of new media rights can only be at the expense of advertising or sponsorship for scheduled broadcast television. We consider that it should be possible to allow the development of new media rights in a way that supplements existing funding models’’.31 As a consequence, Ofcom rejected the idea that broadcasters should automatically own and control all new media rights as part of their primary license. To assist the industry in its negotiations Ofcom outlined a windowing system of rights that it would consider if forced to intervene. This system comprised three core elements32: 27 Cameron, supra n14 (describing Digital TX and its ‘‘globalised ‘marketplace’ platform where ISPs and content owners can meet to trade access rights in a relatively automated way’’). See also Digital TX website available at http://www.digitaltx.tv/ (as at 18 October 2006). 28 Described by Ofcom as the rights relating to ‘‘the distribution of television programmes on platforms other than the traditional broadcast platforms (analogue and digital terrestrial, cable, and satellite)’’ such as simulcast, time shifted distribution and on-demand services. See ‘Review of the television production sector’ (Ofcom Consultation, 10 January 2006) para 6.15 available at http://www.ofcom.org.uk/consult/condocs/tpsr/tpsr.pdf (as at 17 October 2006). 29 Ibid paras 6.15–6.75. 30 Ibid para 6.27. 31 Ibid para 6.31. 32 Ibid paras 6.45–6.46. Ofcom also suggested that the exploitation of ‘‘ancillary aspects’’ of programmes such as ring-tones and video games, as well as retail and other merchandising rights, should in principle remain with the producer (ibid, para 6.48).

1. A primary window for the rights acquired by a public sector broadcaster for free-to-air distribution across any distribution platform (other than retail distribution), on any wholly-owned channel and for a specified duration. 2. Following the primary window, a holdback period would apply, during which the broadcaster may limit the exploitation of rights by the producer. 3. Following the expiry of the holdback period, all rights to exploit the programme would revert to the producer. The length of the primary window and holdback period were not stipulated by Ofcom, which sought the views of the industry. However, Ofcom did state that ‘‘within a windowing system comprising primary and holdback windows, there could be the flexibility for different broadcasters to negotiate different durations for the primary and holdback windows according to their requirements’’.33 Following Ofcom’s prompting, PACT (the UK trade association for producers in film, television and interactive media) negotiated deals with the BBC, ITV and Channel 4 in respect of new media rights that, in accordance with Ofcom’s proposed ‘‘when not where’’ windowing schema, provides extended opportunities to view programmes within a specified period following initial transmission. For instance, Channel 4 negotiated an exclusive 30-day window following initial transmission to exploit its programmes via on-demand platforms including broadband, mobile and cable. Distribution can be on a free, pay-per-view or subscription basis with a royalty or share of the revenue going to the producer. The agreement gives the parties the option to agree rights for a longer period and includes a holdback period of 5 months during which Channel 4’s commissions will be kept off rival ondemand services.34 Similarly, the BBC – with the functionality of the iPlayer in mind – negotiated a deal with PACT that lets viewers download programmes locally to view for a period of 7 days and catch-up on previous episodes in a series while that series is still going out.35 The broadcasters have welcomed these deals as a means of securing viewing windows that meet consumer expectations in the on-demand world. The deals have also strengthened the position of independent producers by giving them greater freedom to utilise technological developments when rights revert to them following the primary window and holdback period. In anticipation of this, two of the larger independent producers, RDF (producer of Wifeswap and Faking It) and Talkback Thames (The Bill, Greenwing) plan to launch their own IPTV services that let viewers purchase programmes made by various independent producers.36 33

Ibid para 6.57. ‘Channel 4 agrees deal with PACT for 30-day new media rights window’ (Channel 4 press release, 7 June 2006) available at http:// www.channel4.com/corporate/4producers/commissioning/docu ments/mediarightsdealwithPact.pdf (as at 17 October 2006). 35 ‘BBC and Pact agree on new media rights’ (BBC press release, 2 June 2006) available at http://www.bbc.co.uk/pressoffice/pressreleases/stories/2006/06_june/02/newmedia.shtml (as at 17 October 2006). 36 Kate Bulkley, ‘Coming to a computer near you: television’ Observer (16 July 2006) available at http://observer.guardian.co. uk/business/story/0,,1821267,00.html (as at 17 October 2006). 34

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The agreements between PACT and the main terrestrial public service broadcasters – which account for 87% of spend on first run originations37 – are indicative of the shift to ondemand television that technological advances such as IPTV enable. It will be interesting to see in the coming years how the effect of these deals changes viewing patterns in the home and the knock-on effects this has on other broadcasters who must act to widen their distribution options. Fundamentally, the fact that all the UK public service broadcasters have been so keen to secure such deals is a function of new media convergence that is agnostic towards particular modes of distribution.

2.3.

Future – proposed broadcasting treaty

WIPO’s proposed broadcast treaty would create a new layer of intellectual property rights designed to protect transmitted audio-visual material. The US administration is a keen supporter of the treaty, arguing that extra protection is needed to combat signal piracy – the capture, conversion and retransmission of transmitted content – that technological developments facilitate. In response to the threat of signal piracy broadcasting organisations have lobbied for increased and, above all, harmonised protection for all forms of broadcast signal. In a press release in September 2006, WIPO emphasised that a treaty was needed in response to ‘‘a growing signal piracy problem in many parts of the world, including piracy of digitized pre-broadcast signals’’.38 The principle right enshrined by the draft treaty is the exclusive 50-year ‘‘right of retransmission’’, including retransmission of broadcasts over computer networks. This is accompanied by exclusive rights of communication to the public, fixation, reproduction and distribution.39 The latest draft of the treaty (September 2006) applies only to ‘‘broadcasting’’ and ‘‘cablecasting’’ which excludes initial transmission over a computer network. A previous draft (May 2006) contained a non-mandatory appendix, which extended analogous rights to webcasters ‘‘in recognition of the principle of technological neutrality’’ and the ‘‘increasing opportunities for unauthorised use of webcasts both within and across borders.’’40 The September 2006 draft deleted this appendix, though the intention is to draft a separate proposal specifically in respect of webcasting and simulcasting.41 37 Ofcom, ‘Review of the television production sector’, supra n28, para 6.30. 38 ‘Negotiations on the Protection of Broadcasting Organisations Enters Final Phase’ (WIPO press release, 13 September 2006) available at http://www.wipo.int/edocs/prdocs/en/2006/wipo_pr_2006_ 454.html (as at 18 October 2006). 39 See Standing Committee on Copyright and Related Rights, ‘Revised Draft Basic Proposal for the WIPO Treaty on the Protection of Broadcasting Organizations’ (15 Session, Geneva, September 11–13, 2006) available at http://www.wipo.int/edocs/mdocs/sccr/ en/sccr_15/sccr_15_2.pdf (as at 18 October 2006). 40 A copy of the previous draft is archived at http://www.wipo. int/edocs/mdocs/sccr/en/sccr_14/sccr_14_2.pdf (as at 18 October 2006). 41 ‘General Assembly Approves Convening of Diplomatic Conference on the Protection of Broadcasting Organizations’ (WIPO press release, 2 October 2006) available at http://www.wipo.int/ edocs/prdocs/en/2006/wipo_pr_2006_460.html (as at 18 October 2006).

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The possible creation of new rights for webcasters has been particularly controversial. Supporters of the webcasting right such as the US Digital Media Association (DiMA) – a consortium of large US broadcasters – appeal to the need for parity and uniformity, claiming that protecting small broadcasters while omitting to protect large commercial webcasters is an arbitrary distinction that undermines the principle of technical neutrality. Jonathan Potter of the DiMA has argued that the two types of transmission are becoming more comparable, with large-scale webcasters reaching millions of people following multi-million dollar investments in programming. Potter argues that without a ‘‘legally-protected level playing field’’ webcasters will be at an unfair disadvantage.42 Those who object to the need for additional protection for webcasting offer a number of arguments in support of their position. First, Internet interest groups have claimed that parity and uniformity are insufficient arguments in the face of compelling differences between the two transmission mediums. The Electronic Frontier Foundation (EFF) has emphasised that while traditional television and radio involves ‘‘high technology investment and one-way delivery of content’’, the Internet is a ‘‘multi-directional content forum with a high level of public participation’’ which promises ‘‘lower barriers to entry’’.43 A one-size-fits-all approach to the medium may fail to reflect the level of investment undertaken by providers of webcast content. In response some have suggested that extending to webcasters the rights of broadcasters should only occur when the services are sufficiently analogous – the only real difference being the mode of transmission. Their argument being that an outright failure to extend protection would distort market competition between webcasters and broadcasters (who are increasingly competing for the same customer base), thus harming the development of webcasting as a commercial enterprise, quite apart from its myriad other uses. Second, James Love argues that the additional layer of copyright protection is unjustified where the broadcaster or webcaster has made little or no creative contribution to the material.44 This is particularly so given that the malaise that the treaty is designed to cure – signal piracy – could be addressed by a relatively uncontroversial thin layer of signal protection. Indeed, as recently shown in the UK in UEFA v Briscomb (discussed below), existing copyright provisions are well

42 Jonathan Potter, ‘We all have a stake in protecting webcasters form piracy’ FT (4 October 2005) available at http://www.digmedia. org/content.cfm?id¼7240 (as at 18 October 2006). 43 See Electronic Frontier Foundation briefing paper on webcasting issues raised by the proposed WIPO Broadcasting Treaty, presented at the 13th session of the WIPO SCCR, November 21–23,2005 available at http://www.eff.org/IP/WIPO/broadcasting_ treaty/webcasting_issues.pdf#search¼%22%22multi-directional %20content%20forum%20with%20a%20high%20level%20of%20 public%20participation%22%22 (as at 17 October 2006). 44 James Love, ‘WIPO carves up the Internet (and the Broadcast Spectrum)’ The Huffington Post (4 May 2006) available at http:// www.huffingtonpost.com/james-love/wipo-carves-up-the-intern_ b_20336.html (as at 17 October 2006) and James Love, ‘Open Letter to members of the Yahoo! board of directors’ (7 October 2005) available at http://www.cptech.org/ip/wipo/bt/yahooletter.html (as at 17 October 2006).

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equipped to deal with the problem of signal piracy and unauthorised online redistribution. Third, James Boyle has highlighted the distinct lack of empirical evidence backing up alleged piracy risks.45 Boyle suggests that the wide ranging effects of intellectual property rights, notably on economic development and education, merit in-depth research into the need for, and effects of, proposed treaties; agreements should not be reached purely on the basis of the competing arguments of powerful and wellfunded pressure groups. He suggests that the US broadcasting industry has prospered despite the lack of broadcaster IP rights until this point.46 Fourth, others worry that the draft treaty will place another hurdle on the path to creativity. The interactive nature of the Internet allows for the widest possible dissemination of re-use of content. The concern with the proposed treaty is that it will create further levels of rights clearance even in respect of content that is in the public domain or licensed for re-use (e.g. under the terms of a Creative Commons licence). This will limit consumer’s options to access content that may only be available from one source and hinder owners of rights in the underlying works from achieving the widest possible dissemination of their works.47 All IPTV stakeholders should play close attention to the draft treaty and any future proposals in respect of simulcasting and webcasting. All the proposals being considered may be relevant depending on the type of IPTV service being offered. Those stakeholders that are both producers and consumers of broadcast content should, in particular, consider whether additional exclusive rights will ultimately benefit them.

2.4.

User generated content

User generated content simply refers to content created and promulgated by end-users rather than traditional content providers. YouTube’s rapid emergence as a billion dollar company rests on the back of the videos uploaded to its servers by users. Many other traditional broadcasting organisations are thinking about the best ways to make use of their

45 James Boyle, ‘More rights are wrong for webcasters’ FT.com (26 September 2005) available at http://www.ft.com/cms/s/ 441306be-2eb6-11da-9aed-00000e2511c8.html (as at 17 October 2006). 46 Boyle makes the same point in relation to database providers in the US who have flourished despite the lack of protection for databases following the Supreme Court’s decision in Feist v Rural (499 US 340 (1991)) and in spite of the protection afforded to European database providers under the Database Directive (96/9/EC). 47 For example, Mark Cuban (who owns $500m of copyrighted video works), amongst others, condemned the webcasting provisions in the May 2006 draft stating that ‘‘adding a new layer of intermediaries over and above copyright holders, for the re-use of information on the Internet, benefits no one – save those intermediaries’’. See ‘Statement of 20 technology companies and organisations on the inclusion of webcasting in the proposed broadcasting treaty’, presented by the Electronic Frontier Foundation to the SCCRR 12th Session (17–19 November, 2004) and 13th Session (21–23 November 2005), available at: http://www.eff.org/ IP/WIPO/broadcasting_treaty/webcasting_issues.pdf (as at 18 October 2006).

consumers productive capacity. The BBC, for instance, recently announced, as part of its Creative Future editorial blueprint, a greater focus on user generated content. ‘‘Audiences of all ages’’, the BBC states, ‘‘not only want the choice of what to watch and listen to when they want, they also expect to take part, debate, create and control. Interactivity and user generated content are increasingly important stimuli for the creative process’’.48 For IPTV providers who solicit user generated content there are two main copyright issues: (1) does the content itself infringe copyright; and (2) who owns the content? On the first question, IPTV providers who provide a forum for content hosting – e.g. content aggregators such as YouTube – may be able to benefit from the hosting provisions contained in the E-Commerce Regulations that benefit ‘‘information society services’’.49 The Regulations state that providers of these services are immune from damages (but not injunctive relief) for the act of ‘‘storage of information provided by a recipient of the service’’.50 This immunity is lost if the provider does not act expeditiously to remove or disable access to unlawful content when it has knowledge51 of the unlawfulness or in situations where the user was ‘‘acting under the authority or control of the service provider’’. The ‘‘acting under’’ proviso remains untested, and issues could arise in circumstances where an IPTV provider solicits particular types of content, as opposed to merely providing storage capacity and playback functionality. In any event, to comply with the hosting provisions, IPTV providers need to ensure that they have effective ‘‘notice and take down’’ policies in place for when complaints are received from rights holders.52 If an IPTV provider wishes to incorporate user generated content into its own scheduled programming, clearly the hosting provisions would be inapplicable. In this situation IPTV providers may be tempted to include a warranty or indemnity from the user in their website terms and conditions in respect of any infringement resulting from the

48 ‘Creative Future – BBC addresses creative challenges of on-demand’ (BBC press release, 25 April 2006) available at http:// www.bbc.co.uk/pressoffice/pressreleases/stories/2006/04_april/25/ creative.shtml (as at 18 October 2006). 49 Information society services are defined as ‘‘any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services’’ (Art 1(2) of Directive 98/34/EC as amended by Directive 98/48/ EC). This definition probably encompasses IPTV providers who solicit content from their users, but the position is not absolutely clear. 50 Electronic Commerce (EC Directive) Regulations 2002, regulation 19. 51 Actual knowledge in relation to criminal liability; constructive knowledge in relation to civil claims for damages. 52 YouTube, for example, has been sued for copyright infringement in the US on the basis of a video posted to the site. In answering the specific complaint YouTube has relied heavily on safe-harbours in the Digital Millennium Copyright Act (DMCA) that require adequate notice and take down procedures to be in place. See further Charles E. Petit, ‘Footprints’ Scrivener’s Error (12 October 2006) available at http://scrivenerserror.blogspot.com/ 2006/10/footprints.html (as at 18 October 2006).

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transmission of uploaded content.53 Given that website terms that are not explicitly presented to users prior to them using the services on offer may be unenforceable, risk averse companies should conduct a full rights clearance check before including this content. This is particularly the case where the content very obviously includes third party materials such as music or video. Turning to the question of who owns the content, some providers include provisions in their website terms and conditions vesting ownership of the content in the provider itself.54 The incorporation problems identified above also apply in this situation, and the safest course of action for IPTV providers who wish to own content themselves is to gain an express assignment of the rights in the content. Ideally this should occur at the point the user submits the content for upload. Others providers require the user to grant them a perpetual royaltyfree license to exploit the content on their websites55 or as part of their own services.56 Content aggregators who wish to benefit from the hosting provisions in the E-Commerce Regulations (or other analogous provisions57) tend to disavow any claims for ownership of user generated content.58 It remains untested, however, whether this strategy combined with licence-of-use approach maintains the protection offered by these provisions given that the IPTV provider has a degree of editorial control over the presentation of this content to users. Finally, on the technology side, several companies have developed software tools that analyse audio or video content 53

See, e.g. MTV ‘Content Submission Conditions’ available at http://www.mtv.co.uk/terms_conditions/content_submission (as at 18 October 2006) (‘‘You warrant that you are the sole and exclusive creator, author and owner of your Material, and no one else has any right to your Material, including in any underlying copyrights such as music, footage, artwork and other material. You warrant that you have obtained all rights, permissions and licenses necessary for MTVNE to use your Material as anticipated by these Submission Conditions.You agree to indemnify and hold MTVNE harmless from any claims, suits, losses (whether foreseeable or not), damages and expenses (including reasonable legal fees) that arise from any breach of these Submission Conditions regarding your Material’’). 54 See, e.g. Disney ‘Terms of Use’ available at http://registration. disney.co.uk/uk_bu_1files/terms.html (as at 18 October 2006) (‘‘[W]e shall exclusively own all now-known or hereafter existing rights to the Submissions of every kind and nature throughout the universe and shall be entitled to unrestricted use of the Submissions for any purpose whatsoever, commercial or otherwise, without compensation to the provider of the Submissions or any other person or entity’’). 55 See, e.g. YouTube ‘Terms of Use’ clause 5B available at http:// www.youtube.com/t/terms (as at 18 October 2006) (‘‘[Y]ou hereby grant YouTube a worldwide, non-exclusive, royalty-free, sublicenseable and transferable license to use, reproduce, distribute, prepare derivative works of, display, and perform the User Submissions in connection with the YouTube Website’’). 56 See MTV ‘Content Submission Conditions’, supra n53 (‘‘You agree that MTVNE has the right and license to transmit.material uploaded by you.on MTVNE television channels and MTVNE affiliated television channels worldwide.in perpetuity and gratis’’). 57 In the US these are set out in x 512 of the DMCA. 58 YouTube ‘Terms of Use’, supra n55, clause 5B (‘‘For clarity, you retain all of your ownership rights in your User Submissions’’).

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and compare the results against a database of known copyrighted content. Sites that aggregate user generated materials are increasingly using these applications to locate potentially infringing content and notify rights holders who can make a decision as to whether the content should be removed, licensed or permitted to remain on the site as it is.59 The technology is not foolproof given that someone singing a copyright song in a homemade video may sound very different from the original sound recording against which the comparison is made or because background content may be hard to pick up. Nevertheless, the use of such tools is likely to be popular amongst content aggregators who typically need a robust notice and take down policy to fall within various national safe-harbour provisions.

3.

Transmission issues

3.1.

The legal framework

All manner of copyrights are implicated in the transmission of IPTV content. At the outset it is important to remember that, in most cases, as well as a ‘‘broadcast’’ (where applicable – see below), there will be other protected elements of the programming including literary, artistic, dramatic and musical works, films and sound recordings. This section is designed to highlight what exclusive rights may be infringed by IPTV providers who fail to clear the necessary rights to the broadcast and the underlying works. Broadly, two sorts of activities are considered: (1) streaming programmes to end-users and (2) making programmes available to end-users for download. Particular issues concerning what end-users themselves are permitted to do with lawfully acquired content are considered in the next section. At the outset we should be clear on the difference between streaming and downloading. Streaming describes a technique for transferring data so that it can be processed as a steady and continuous ‘‘stream’’. Streaming has become popular as the Internet has grown because many users do not have fast enough Internet access to download large multimedia files quickly. With streaming, the client browser or plug-in can start displaying the data before the entire file has been transmitted. Downloading describes the electronic transfer of data from one computer to another. On the Internet, downloading is most generally from a remote host computer (such as a server or a separate ‘‘peer’’ in a P2P network) to the enduser’s local computer. At the end of the download process a complete file will be stored on the end-user’s computer, this being the key distinction between downloading and streaming. Prior to transmission (whether as a stream or as a download), IPTV providers may store copies of broadcasts and underlying works on content servers. The reproduction right includes ‘‘the making of copies which are transient or are incidental to some other use of the work’’ (s17(6) CDPA) and in 59

‘Anti-piracy technology could hurt YouTube’s rebel reputation’ SiliconValley.com (12 October 2006) available at http://www. siliconvalley.com/mld/siliconvalley/news/editorial/15742925.htm (as at 17 October 2006).

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the case of literary, dramatic, musical or artistic works ‘‘storing the work in any medium by electronic means’’ (s17(2) CDPA). These provisions undoubtedly capture the storage of a programme and its underlying elements on a content server from which the transmission or delivery of the work is effected.60 IPTV providers who stream IPTV content or offer it for download will likely be communicating this content to the public. This is a restricted act under Sections 16(1)(d) and 20 of the CDPA and replaces two previous exclusive rights: the broadcasting right and the cable programme right.61 The purpose of introducing the new right of communication to the public was to clearly capture on-demand communications via the Internet such as IPTV, as the position had previously been somewhat unclear. The communication to the public right actually encompasses two separate rights: (1) the right to broadcast a work and (2) the right to make works available to the public via electronic transmission in such a way that members of the public may access them from a place and at a time individually chosen by them. The definition of ‘‘broadcast’’ excludes ‘‘Internet transmissions’’ other than simulcasts, ‘‘a concurrent transmission of a live event’’ or a transmission that is part of a ‘‘programme service’’ offered by the person making the transmission (s6(1A) CDPA). This exclusion and its associated carve-outs are broadly intended to include within the definition of ‘‘broadcasts’’, transmissions that are analogous to traditional broadcasts and exclude, for example, the delivery of ordinary web pages.62 Put simply, the clearest way to think about the two components that make up the communication to the public right is that the broadcast component covers scheduled ‘‘point to multi-point’’ transmissions whereas the making available right covers ‘‘point to point’’ transmissions initiated at the request of the end-user. Both strands of the communication to the public right are potentially implicated through the provision of IPTV services and the distinction largely rests on the degree to which the end-user can select when he or she receives (e.g. by streaming or download) the specific content. The making available strand of the communication to the public right refers of ‘‘making available.by electronic transmission’’ so that ‘‘members of the public may access’’ content at a time and place of their choosing. This wording has three notable consequences. First, the exclusive right is breached upon mere availability from a website absent any evidence that the content was in fact streamed or downloaded. This makes proving infringement considerably easier for rights holders who in other contexts (e.g. P2P) have been required to identify and prove specific acts of infringement by known individuals.63 Second, because the content must be made available in such a way that members of the public may access it, this places the customer-facing entity in the firing line. For 60

Copinger x 7–19. See also UEFA v Briscomb [2006] EWHC 1268 (discussed further below). 61 These changes came into effect in the UK from 1 October 2003 following the transposition of the Information Society Directive (2001/29/EC) into UK law by way of the Copyright and Related Rights Regulations 2003. 62 Copinger x 3–99. 63 See, e.g. Polydor Ltd v Brown [2005] EWHC 3191, paras 2–4.

instance, ISPs and content aggregators or portals (such as YouTube) who are actually responsible for laying the content before end-users are likely to be committing the restricted act. This is significant for IPTV providers who operate through a chain of companies possibly located in various jurisdictions and for third parties who provide hosting and transmission services to IPTV providers. Third, the content must be made available to ‘‘members of the public’’. The meaning of ‘‘public’’ in this context has recently been considered by the European Court of Justice (ECJ) in a case concerning a hotelowner’s right to retransmit television broadcast signals to television sets in hotel rooms.64 Prior to the ruling by the ECJ, Advocate-General Sharpston stated that the key factors in determining whether a communication was ‘‘to the public’’ were ‘‘the extent of the circle of potential recipients of the communication and its economic significance for the author’’.65 Advocate-General Sharpston continued that ‘‘the cumulative effects of all communications of the same type must be taken into consideration’’ meaning that: all the clients in a hotel at a given time constitute the ‘‘public’’ within the meaning and for the purpose of copyright. In other words the ‘‘spatial discontinuity’’ of the individuals involved, who constitute the circle of addressees to which the work is made accessible by the person responsible for each act of secondary use, is not large enough to negate the economic importance of the new public reached.66 The ECJ, noting that ‘‘communication to the public must be interpreted broadly’’, essentially agreed with this interpretation, thereby establishing that limited subsets of the public such as the subscribers to a particular service or users of particular facilities can still amount to the public for the purposes of the communication to the public right.67 The reproduction right may also be implicated during the transmission process because small fragments of the work may be temporarily stored on various components during delivery. Third parties in control of these components should be able to benefit from the ‘‘mere conduit’’ provisions in the ECommerce Regulations provided that they do initiate transmissions, select the recipient of the transmission or select or modify the content of the transmission.68 Also, Section 28A of the CDPA which exempts certain ‘‘transient or incidental’’ copies may be relevant for third parties and IPTV providers (in the context of the reproduction right) if claims are brought for infringement of the underlying works (i.e. not the broadcasts themselves which are not covered by the provision) including films. Whether transmission by streaming or offering for download implicates the reproduction right in the first place, 64 Case C-306/05 Sociedad General de Autores y Editores de Espan˜a (SGAE) v Rafael Hoteles SL. (Judgment of the Court, 7 December 2006) paras 32–43. 65 Case C-306/05 Sociedad General de Autores y Editores de Espan˜a (SGAE) v Rafael Hoteles SL. (Opinion of Advocate-General Sharpston, 13 July 2006), para 54. 66 Ibid para 55. 67 SGAE v Rafael Hoteles (Judgment of the Court, 7 December 2006) paras 32–43. 68 Electronic Commerce (EC Directive) Regulations 2002, regulation 18.

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however, is open to debate given that the small fragments transferred and stored in a component’s RAM are unlikely to independently amount to a substantial part of the work. As copying a work requires the copying of the whole or a substantial part of the work before infringement is found to take place, the sending of a work in such small segments raises interesting questions about the nature of what comprises a substantial part for the purpose of the reproduction right. Given that the fragments can never be assembled into a coherent whole (or substantial part thereof) other than by the end-user following delivery of the download it seems unlikely that the threshold for a reproduction will be directly met by the IPTV provider.69 In short, the effects of the communication to the public right are likely to be more significant for IPTV providers. This application of the rights of communication to the public and reproduction in this context have recently been tested in the UK courts for the first time. In UEFA v Briscomb,70 a summary judgment application, the High Court ruled that website operators that streamed premium content (in this case live broadcasts of UEFA Champions League matches from www.sportingstreams.com) were liable for copyright infringement. The case concerned signal piracy which in this instance involved the website operators receiving a decrypted broadcast signal, converting it into a digital format using specialist software and forwarding it on to a server which then streamed a copy of the converted signal to end-users. The website operators in Briscomb charged £6 for two months access to three streams per match day and had thousands of subscribers. The claim brought by UEFA and BSkyB alleged that their rights in their broadcasts and the underlying works contained within them (e.g. graphics, logos, short films and music) were infringed by the defendants in three ways: (1) by a communication to the public in the UK of the works (s20 CDPA); (2) by copying the works on multiple occasions during the streaming process (s17 CDPA); and (3) by possessing in the course of a business an ‘article’ which was an infringing copy of the work – in this case a copy of the work in the memory of the defendant’s computer (s23 CDPA). Without considering the legal provisions in any great detail, Mr. Justice Lindsay ordered summary judgment in favour of the claimants. The evidence of infringement was ‘‘well substantiated’’ and he was ‘‘satisfied that the defendant’s have no real prospect of successfully defending the proceedings’’. The defendants were ordered to cease their infringing activities and provide evidence as to the profits that had been made so the claimants could elect for damages or an account of profits. This result in Briscomb is unsurprising given the clear violation of the rights of the broadcasters that had been acquired at considerable cost and the failure of the defendants to offer any form of defence. Future cases may be more borderline in which case the interaction between the exclusive rights, exceptions and third party defences, in the context of streaming

69 Although the IPTV provider could be found liable for having ‘‘authorised’’ the infringement contrary to Section 16(2) CDPA. See further text accompanying n91–92 below. 70 UEFA v Briscomb [2006] EWHC 1268. See also Stephen Sampson, ‘Streaming of live television broadcasts over the Internet found to infringe copyright’ [2006] 22 The Computer Law & Security Report 413.

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and downloading, may have to be more clearly enunciated by the courts.

3.2.

P2P distribution – a reminder

Many IPTV providers use or plan to use peer-to-peer technology (P2P) as a means of distributing content over the Internet. P2P is an efficient distribution method as it alleviates storage and bandwidth needs by facilitating the direct exchange of content by end-users (the ‘‘peers’’). The BBC (iPlayer), Sky (Sky by Broadband) and ntl (a movie download service71) all use (or plan to use) P2P in their IPTV products. P2P has been legally contentious given the huge losses in revenue the content industries (particularly the music industry) attribute to the popularity of P2P services such as Napster, KaZaA and BitTorrent. Legal action in the US culminated in the Grokster case in the Supreme Court, where the Justices avoided the question of the legality of the underlying technology itself by focussing instead on the culpability of the P2P provider in inducing its users to infringe copyright.72 In his concurring opinion, Justice Breyer did, however, consider whether P2P technology itself should be subject to the ‘‘staple article of commerce’’ doctrine formulated in the Betamax case that shields providers of technology ‘‘capable of substantial non-infringing use’’.73 Breyer emphasised the word ‘‘capable’’ in the Betamax formulation and identified a number of potential future uses for P2P technology that should be factored into the Betamax analysis.74 Given the likely future proliferation of non-infringing and the existing level (approximately 10%) of non-infringing uses, Breyer was sufficiently satisfied that P2P met the Betamax standard. Given the subsequent adoption of P2P by IPTV providers, Breyer’s position appears prescient. Nevertheless, there is still a common misconception that P2P technology is illegal. Particular uses of P2P can certainly be infringing but adoption of the technology itself as a means of powering Internet services raises no specific concerns for IPTV providers.

4. End-user issues and the impact on providers 4.1.

Technical protection measures75

In late 2005 the Digital Video Broadcasting Project – an industry-led consortium of over 260 organisations in over 35 71

‘BitTorrent to power ISP’s video service’ News.com (10 February 2006) available at http://news.com.com/BitTorrentþtoþpowerþ ISPsþvideoþservice/2100-1025_3-6038269.html (as at 17 October 2006). 72 Metro-Goldwyn-Mayer Studios, Inc v Grokster, Ltd (2005) 125 S. Ct 2764 (‘‘Grokster’’). 73 Sony Corp of America v Universal Studios, Inc (1984) 464 US 417. 74 Grokster, at 2790 (citing distribution of public domain films, open source software, Creative Archive content and works distributed under a Creative Commons licence as legitimate uses of P2P). 75 Parts of this section are adapted from Paul Ganley, ‘Digital Copyright and the New Creative Dynamics’ 12 International Journal of Law and Information Technology (2004) 282, 325–330.

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countries developing global standards for the delivery of digital television and data services – announced a set of technical specifications for the protection of digital television broadcasts. The specification, known as Content Protection and Copy Management (CPCM) is analogous to the ‘‘broadcast flag’’ system under consideration in the US and relies on instructions embedded in broadcast content to dictate to consumer electronics equipment what can and cannot be done with broadcast programming (e.g. ‘‘copy once’’ or ‘‘copy never’’).76 Without waiting for such international standards to develop, however, UK broadcasters such as the BBC, Channel 4 and Sky are or are planning to offer content for download with built-in usage restrictions. The BBC’s iPlayer proposals, for instance, will permanently disable access to content 7 days after it is first viewed or 13 weeks after it is downloaded. Other companies are experimenting with ‘‘digital watermarking’’ or ‘‘acoustic fingerprinting’’ to help identify and track copyright content that is uploaded by users to content aggregation sites.77 These restrictions are achieved using DRM technologies (also known as ‘‘technical protection measures’’ or ‘‘TPMs’’), the removal or ‘‘circumvention’’ of which is now contrary to UK copyright law as set out in Sections 296ZA to ZF of the CDPA. Section 296ZA prohibits a person doing anything which circumvents the TPMs knowing, or having reasonable grounds to know, that he is pursuing that objective. There are similar provisions designed to prevent the manufacture and distribution of devices and services designed to circumvent TPMs (s296ZB CDPA).78 TPMs are defined in s296ZF(1) as ‘‘any technology, device or component which is designed in the normal course of its operation, to protect a copyright work other than a computer program’’. However, such measures will only be protected if they are ‘‘effective’’, which will be the case where the work is controlled by the copyright owner through an access control process or a copy control mechanism ‘‘which achieves the intended protection’’. For TPMs to be protected by these provisions, it must be designed to prevent acts which are ‘‘restricted by copyright’’ (s296ZF(3)(a)). This would mean, for example, that TPMs applied to works in the public domain will not be ‘‘effective’’ and subject to the anti-circumvention provisions. Where TPMs are used to prevent acts ‘‘restricted by copyright’’ alongside acts that are not so restricted, they

76 See ‘Major milestone for content protection’ (DVB press release, 21 November 2005) available at http://www.dvb.org/news_ events/press_releases/press_releases/DVB_pr137%20CPCM%20Blue %20Book%20Release.pdf (as at 19 October 2006). 77 Bill Rosenblatt, ‘YouTube learns to live with content owners’ DRM Watch (12 October 2006) available at http://www. drmwatch.com/ocr/article.php/3637596 (as at 17 October 2006). 78 These provisions, for example, would make the creators and distributors of the ‘‘FairUse4WM’’ software – mentioned in the introduction in respect of the Sky by Broadband service – liable, along with the users of the software.

will still be deemed effective for the purposes of the Section 296ZF. This is in contrast to the original anti-circumvention language contained in Article 11 of the WIPO Copyright Treaty which provided that the act of circumvention would not be illegal if done to further the exercise of positive user privileges – e.g. fair dealing or other permitted acts – existing at national law. The focus of Section 296ZA, therefore, is on the nature of the TPMs, not the actions or intent of the user.79 As a result they do more than simply extend the reach of copyright; they provide rights holders with an entirely new and separate rights structure, sometimes referred to as para-copyright.80 Further provisions attempt to address the complex and controversial issue of the interaction between technical protection measures and user privileges. Article 6.4 of the Information Society Directive provides that: .in the absence of voluntary measures taken by right holders, including agreements between right holders and other parties concerned, Member States shall take appropriate measures to ensure that right holders make available to the beneficiary of an exception or limitation provided for in national law in accordance with [a limited number of exceptions provided for in the Directive] the means of benefiting from that exception or limitation, to the extent necessary to benefit from that exception or limitation and where the beneficiary has legal access to the protected work or subject-matter concerned. This provision has been transposed into UK law by Section 296ZE of the CDPA which sets out a process whereby users can apply to the Secretary of State who may issue a notice as appears to be ‘‘requisite or expedient’’ to ensure that either voluntary measures are in place or users otherwise have the means of carrying out certain permitted acts (s296ZE(3) CDPA). These ‘‘beneficiary’’ provisions are directed first and foremost at right holders who are encouraged to design their TPMs with certain exceptions in mind. They adopt a carrot and stick approach. The carrot lies in mandating that beneficiaries have legal access to the work in question (s296ZE(10) CDPA) and the foreclosure of any grounds for DIY circumvention. The stick manifests itself in the form of government intervention should right holders prove not to be up to the task. Superficially at least, this is a welcome stance. By attempting to ensure that exceptions operate in tandem with right holders exploitation – as opposed to an affirmative defence at the point of sanction for infringement – the

79 It is interesting to note that the anti-circumvention provisions contained in the CDPA prior to the transposition of the Information Society Directive aligned the prohibition on circumvention closely with the act of copyright infringement. See CDPA Section 296. 80 Only two reported cases has been brought under this provision: Sony Computer Entertainment v Owen [2002] EWHC 45 and Kabushiki Kaisha Sony Computer Entertainment v Ball [2004] EWHC 1738.

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beneficiary provisions attempt to instil user freedoms with a positive characterisation.81 For providers of IPTV services that wish to include TPMs this means that they must give serious thought to how users of their services will be able to make use of the content for legitimate purposes. For users of IPTV who download or stream content with a view to engaging in activities that would, absent DRM protection, fall within copyright’s exceptions there are, however, several critical problems with the approach adopted by the beneficiary provisions. Firstly, the enunciated exceptions to which the beneficiary provisions apply are limited to those set out in Schedule 5A of the CDPA. Covered, for example, are certain permitted acts relating to libraries, universities and broadcasting organisations and recording for the purposes of timeshifting. Excluded are exceptions for criticism, review and news reporting. This is an unfortunate division. Critical re-workings produce many benefits for the public at large, enhance discourse and generally should be encouraged. Leaving such uses to be determined wholly by the vagaries of a licensing regimes – through which a rational copyright owner would choose not to license critical re-workings, or, at the very least, charge supra-competitive licensing fees for the privilege – does not seem like a sensible policy. Secondly, reflecting the fourth subparagraph of Article 6.4 of the Copyright Directive, Section 296ZE does not apply ‘‘to copyright works made available to the public on agreed contractual terms in such a way that members of the public may access them from a place and at a time individually chosen by them’’ (s296ZE(9) CDPA).82 Given that ‘‘lawful access’’ is a precondition, the operation of the beneficiary provisions, present something of a paradox. Right holders who implement DRM solutions will typically license access and subsequent use at the same time. Therefore, when assenting to an End-user licence agreement to obtain access to IPTV content, a user may inadvertently be signing away the protection offered by the beneficiary provisions. Consider as an example the ‘‘agreed contractual terms’’ that apply to users who download an episode of Lost via the Channel 4 website. Channel 4 uses TPMs to restrict users to multiple viewings on a single PC for a 24 h period. It also applies a watermark to each piece of downloaded content and stores this alongside the transaction information. This is all described in the Channel 4 video terms and conditions which go on to provide:

81

See Severine Dussolier, ‘Exceptions and Technological Measures in the European Copyright Directive of 2001 – An Empty Promise’ (2003) 34 International Review of Intellectual Property and Competition Law 62, 70 (labelling the approach ‘‘fair use by design’’); Nora Braun, ‘The Interface Between the Protection of Technological Measures and the Exercise of Exceptions to Copyright and Related Rights: Comparing the Situation in the United States and in the European Community’ (2003) European Intellectual Property Review 496, 499 (contrasting the European approach with that taken by the US in the DMCA, ‘‘where the right holders can remain passive and x 1201 merely provides the alleged infringer with an exemption that excludes liability’’). 82 Recital 53 of the Information Society Directive clarifies that ‘‘non-interactive forms of online use should remain subject to [the beneficiary provisions]’’.

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Any copying, reproduction, lending or hiring, public performance, broadcasting or any other form of distribution of the content (including Peer-to-peer transfers) other than in accordance with these terms and conditions is prohibited and will constitute a copyright infringement.83 Now imagine that a teacher wishes to use a short clip from the show in a presentation to her students and in copying the content she removes the watermark applied by Channel 4 and shows the content to her students outside the original 24 h viewing slot. The teacher’s actions involves a reproduction and communication to the public for teaching purposes and is prima facie covered by the beneficiary provision. However, because the teacher agreed not to ‘‘copy’’ content at the time she purchased ‘‘access’’ to the content, the beneficiary provision is rendered redundant and the teacher would be liable for circumvention. Right holders and IPTV providers such as Channel 4 retain absolute discretion in TPM design at the point of access, through which they may themselves circumvent later user safeguards. The final objection to the type of beneficiary provision put in place in the UK concerns the use of an external decision maker such as the Secretary of State. This is undoubtedly costly in terms of time and money, but more fundamentally it is also likely to chill spontaneous transformative uses and compromise anonymity.84 It is interesting to note that the recently published Gowers Review of Intellectual Property notes that no complaint has been filed under these provisions.85 Alex Cameron describes the key ‘‘business driver’’ to those supplying content to IPTV providers is that ‘‘the entire distribution process [is] secured from end to end’’.86 DRM and TPMs are key components of this security. Nevertheless, DRM is much maligned given the widespread feeling that the technology is ineffective, can be used to compromise privacy, is costly, and is being used to trample on the express rights of users. In the music industry, content providers that have introduced ‘‘light touch’’ DRM – such as Apple with it is iTunes music store – seem to have fared better in the emerging digital market. Plenty of user groups are keeping a watching brief on developments in this area, and IPTV providers should carefully consider whether, when it comes to DRM and usage restrictions, less is in fact more.

4.2.

Complimentary technologies

One area of significant recent technological innovation is in the development of applications designed to provide individuals (together with their friends and family) the greatest 83

See ‘Channel 4 Video terms and conditions’ available at: http:// www.channel4.com/entertainment/tv/microsites/L/lost/vod/tcs. html (as at 17 October 2006). 84 See Dan L. Burk and Julie E. Cohen, ‘Fair use Infrastructure for Rights Management Systems’ 15 Harvard Journal of Law & Technology 41 (2001), 59–61. The system does, however, have the advantage of affording proposed uses a subjective determination of the sort ex ante technical constraints disfavour. 85 Gowers Review of Intellectual Property (December 2006) para 4.105, available at http://www.hm-treasury.gov.uk/media/583/ 91/pbr06_gowers_report_755.pdf (as at 11 January 2006). 86 Cameron, supra n14.

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possible scope to enjoy content at a time and in a manner of their choosing. The most popular example of these sorts of devices are PVRs such as Skyþ that allow users to easily record and store broadcast programming for later viewing. Other examples include ‘‘placeshifting’’ technologies like the Slingbox which attaches to a cable box, satellite receiver or TV monitor and allows viewers to route an incoming television signal or a recorded programme to a PC or a mobile phone via a broadband connection. Many IPTV providers are considering the ways in which these complimentary technologies can be incorporated into their product offerings. There are two principle issues that arise from a copyright perspective in respect of these technologies: (1) whether use of these devices by users would amount to an infringement of copyright; and (2) whether providers of the technology could be held liable for copyright infringement by virtue of the fact that their products might enable infringement. Regarding liability of the end-user, in certain circumstances he or she will be able to benefit from the time shift exception in Section 70 of the CDPA. This provides that: The making in domestic premises for private and domestic use of a recording of a broadcast solely for the purpose of enabling it to be viewed or listened to at a more convenient time does not infringe any copyright in the broadcast or in any work included in it. This exception is likely to assist users of PVRs but not placeshifting technology as the latter involves the onward transmission of broadcast signals outside ‘‘domestic premises’’ using the Internet (i.e. non-domestic use). In circumstances where this provision does apply there will be no direct infringement by the End-user, and the risk of the provider being held jointly liable disappears. In the context of PVRs, however, this provision is very specific as to what is required before a user can benefit from it. For example, recordings must be made on ‘‘domestic premises’’. This poses a problem for IPTV providers who wish to provide ‘‘virtual’’ PVR solutions whereby copies of recordings, although selected by the customer, are actually made by the provider and stored on a server maintained on commercial premises.87 Providers of ‘‘virtual’’ PVR solutions are also stumped by the fact that the subsequent playback to a customer will actually require a further transmission to the public, which removes the protection offered by the timeshifting exception.88 Even where IPTV providers offer PVR functionality ‘‘locally’’ using a set-top box installed in the customers home, there are several issues regarding the applicability of the timeshifting exception. Whereas local PVRs are becoming increasingly common in the UK and the timeshifting exception is critical in establishing the legality of these services, the legality has not yet been tested in court and doubts can be raised as

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The advantage of the ‘‘virtual’’ PVR solution for providers is that it alleviates the need for costly set-top-boxes to be distributed to consumers. 88 CDPA, Section 70(2)–(3) (subsequent ‘‘dealing’’ with a recording, including communicating it to the public, is ‘‘treated as an infringing copy’’).

to whether the timeshifting exception is broad enough to cover the new sorts of services being rolled-out. For instance, PVRs are often used to build libraries of content (as distinct from pure ‘‘timeshifting’’). As the law stands this is not fatal to the applicability of the exception. Indeed arguments can be made that ‘‘library building’’ is tolerated under the exception,89 primarily because when the exception was originally introduced in 1988 an express requirement that the recording must be destroyed within 28 days was dropped.90 Nevertheless, there is no guarantee that the tacit acceptance of this practice by rights holders will remain, particularly if, as appears to be happening, technology providers develop functionality that allows, for example, multiple copies of recordings to be made; the transfer of the recorded content to other (portable) devices; or the onward transmission of the recording to other people. These functions move the technology further and further away from the core ambit of the timeshifting exception and there may come a point where rights holders decide it is worth testing the parameters of the exception in court. If end-users are liable for primary infringement through the use of PVRs and placeshifting technologies, IPTV providers could find themselves liable for either: (1) primary infringement of copyright if a court considers that they ‘‘authorised’’ the end-user’s infringing use (s16(2) CDPA) or (2) ‘‘secondary infringement’’ if a court regards providers as selling equipment designed to make copies of the copyright works with the reasonable belief that it will be used for infringing purposes (s24 CDPA). The risk of being held liable for secondary infringement in this way is slight given the generally held view that these provisions are intended to outlaw dedicated copying equipment designed to make copies of particular copyright work rather than general purpose equipment capable of copying such as personal computers or set-top boxes – although this proposition does not appear to have been tested in court. The prospect of liability for ‘‘authorising’’, however, is greater. The scope of this provision was considered by the House of Lords in CBS Songs v Amstrad.91 Here it was held that the sale of twin deck tape recorders by Amstrad that allowed the copying of copyright works did not amount to an authorisation on the part of Amstrad for users to infringe copyright. It was held that to ‘‘authorise’’ an infringement of copyright meant to grant expressly, or by implication, the right to commit the infringing act. The House of Lords held that whilst Amstrad may facilitate illicit copying by users it did not authorise it. Whilst the House of Lords could change its mind – and this has to be a possibility given the radically

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See Laddie, Prescott and Vitoria The Modern Law of Copyright and Designs (3rd ed. 2000) at x 20.89 (remarking that ‘‘it is thus possible to build a home library’’ under the terms of Section 70) and Sony Music Entertainment (UK) Ltd and others v Easyinternetcafe Ltd [2003] EWHC 62 at para 41 (agreeing with the view expressed by Laddie et al.). 90 Richard Hudson, ‘Lip Service to Berne’ 138 New Law Journal 319 (1988). 91 C.B.S. Songs Ltd v Amstrad Customer Electronics plc [1988] A.C. 1013.

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altered technological landscape92 – IPTV providers who offer local PVRs or placeshifting functionality have some strong protection against infringement. They must of course be careful as to how they market their products and ensure that advertising for the product does not induce or invite the user to infringe copyright. Conversely, where IPTV providers themselves commit the core acts of infringement (e.g. in the case of a ‘‘virtual’’ PVR solution), the risk of being held liable for copyright infringement are much greater; though that risk can presumably be managed during licensing negotiations with rights holders. A final issue to consider in the context of certain complimentary technologies is the terms under which paid-for content is provided in the UK. Sky’s subscription contract, for instance, specifically states that customers ‘‘must not.copy (except as permitted under the Copyright, Designs and Patents Act 1988.), redistribute or relay any of the Channels or any part of them’’.93 Consumer electronics manufacturers who place certain timeshifting and placeshifting products in the hands of consumers could potentially be liable for committing the tort of inducing a breach of contract. This is a particular concern in the case of placeshifting where the copying involved – onward transmission over the Internet to a computer in a different location – would be unable to benefit from the timeshifting exception.

5.

Conclusion

Whilst it is undoubtedly a good time to be a couch potato, it is equally a very busy time for media lawyers as the broadcasting industry gets its collective head around the threats and opportunities presented by IPTV. The commercial and public interest in having as much audio-visual content available

92 The recent Grokster case in the US and Kazaa case in Australia regarding P2P file sharing, suggests that theories of liability may have to be reappraised in light of the emergence of digital networked technology where there is a high probability that it will be used for infringing purposes. See Grokster, supra n72; Universal Music Australia Pty Ltd v Sharman Networks Ltd, Nsd 110 of 2004, 2006 FCA 29; Paul Ganley, ‘Surviving Grokster: Innovation and the Future of Peer-to-peer’ (2006) European Intellectual Property Review 15. 93 See Sky subscription terms and conditions clause 9 available via http://shop.sky.com/ordersky/joinsky (as at 23 October 2006).

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across multiple platforms and devices, via intuitive user interfaces, and for a sensible price has to be weighed against the legitimate concern that online content is forever lost to ‘‘pirates’’. It is the role of copyright law to mediate this tension; but copyright law has trouble keeping track of the creative destruction that characterises so many new Internet services. Existing provisions are stretched to breaking point, new laws remain untested and proposed laws court controversy. It is against this backdrop that traditional broadcasters and young upstarts are seeking to make their way in the IPTV universe. The purpose of this article has been to provide an overview of some of the essential copyright issues that IPTV providers need to consider. Rights clearance and licensing are the biggest issues at present, particularly where premium content, archive footage, independent productions, or user generated content is concerned. Efforts, both legal and technical, to streamline this process are sure to gather momentum in the coming years. The other big battleground lies in complimentary technologies aimed at giving greater freedom to users. Cautious providers will undoubtedly negotiate with rights holders on these issues and seek to enforce their rights using the courts if necessary, but other companies may seek to rely on the narrow exceptions/defences contained in the CDPA or the E-Commerce Regulations. Expect to see plenty of legal activity in this area over the coming years. The world of IPTV is an exciting place to be. The possibilities seem endless, yet visions of the future are a long way from realisation. The desire to get there is unlikely to subside and the steps along the way are likely to keep many people very busy for a long time. Paul Ganley ([email protected]) is an associate in the IT/ Com Group at Baker & McKenzie LLP, London.