On 29 November 2017, the European Court of Justice (CJEU) handed down a decision on a video recording service that stores TV programmes online in a cloud (C-265/16 – VCAST). According to the Court, the cloud recording service has a dual function that enables its users to create reproductions on the one hand but also makes copyright protected works publicly available on the other. The means by which the TV program is communicated to the public differs from the means of the original transmission. Therefore, the transmission constitutes a communication to the public and the business model of a cloud recording service without the right holders consent is unlawful.
Linear TV that can only be watched at a specific time of the day is increasingly substituted by new business models that allow consumers to watch any programs whenever the consumers would like to. One of those business models is currently involved in a litigation in Italy: the cloud recording service of the British operator VCAST Limited. The cloud recorder enables its users to watch terrestrial “free to air” TV programmes by Italian broadcasters – and to store the content in a cloud instead of the private servers of the customers. VCAST did not obtain the right holders consent. By means of the cloud recorder, the Italian TV could also be watched outside of Italy.
The Italian Broadcaster RTI SpA claimed copyright infringement and sued VCAST. However, VCAST relied on the Italian private copying exception based on EU law. The Tribunale di Torino had doubts about the application of this provision on the cloud recording service and therefore submitted two questions that basically deal with the issue whether the cloud recording service is lawful in the light of Art. 5(2) lit. b of the InfoSoc Directive 2001/29.
The Advocate General Szpunar recently published his opinion on this topic and argued the cloud recorder is not covered by the exception for lawful private copies. Despite the fact that the users initiate the copyright relevant acts, it lacks of lawful access to the works. The Italian TV programs are distributed free-to-air and it is possible that some users do not possess an antenna nor a TV set. Therefore, some users may have access to works using the cloud recording service that they would not have otherwise. On that ground, the Advocate General denied the application of the exception.
The Judgement by the CJEU
The European Court of Justice agrees with the Advocate General on the conclusion that the use of the cloud recording service infringes copyright but the focus of the reasoning differs. Contrary to Szpunar, the CJEU focusses on the question whether a communication to the public in the sense of Art. 3(1) of the InfoSoc Directive is constituted. In this context, the Court emphasizes the dual functionality of the cloud recording service since it ensures both the reproduction and the making available of protected works. The latter one is not covered by the private copying exception.
While analysing, the CJEU examines the requirements for a communication to the public: (1) the “act of communication” of a work and (2) the communication of that work to a “new public”. Citing ITV Broadcasting and Others (C‑607/11), the Court states that if the means of the transmission of the protected works are different from the means by which the original transmission was made, the second transmission constitutes a communication to a different and therefore new public. Here, the Italian broadcaster communicates the TV program terrestrially, the cloud recording service uses a cloud and therefore the Internet. Concluding, the transmission by means of the cloud recording service constitutes a communication to the public and it is necessary to obtain the right holders consent.
After all, it is not overly surprising that the CJEU – just as Advocate General Szpunar in his opinion – found the cloud recording service at issue as infringing copyright. What is remarkable, however, is the fact that the CJEU and Szpunar chose different routes to get to their conclusions. This might be partly due to the role and nature of an Advocate General’s opinion which serves the purpose of providing the judges with a broader glance at the matter. In any case, the opinion of 7 September 2017 is indeed worth a read given that the Advocate General elaborates in quite some detail on aspects not or hardly picked up in the judgment. For instance, Szpunar discusses the relevance of the capture of free-to-air programmes in one region and the transformation into an Internet service that is not limited to the area the terrestrial signal was captured in first place and not to users that actually possess a terrestrial antenna.