Case No: HC10C01057
Neutral Citation Number: [2011] EWHC 2977 (Pat)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Rolls Building, London, EC4A 1NL

Date: 14/11/2011
Before :

THE HON MR JUSTICE FLOYD
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Between :

	(1) ITV BROADCASTING LIMITED
(2) ITV 2 LIMITED
(3) ITV DIGITAL CHANNELS LIMITED
(4) CHANNEL 5 BROADCASTING LIMITED
(5) ITV STUDIOS LIMITED	

Claimants	
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	TVCATCHUP LIMITED	Defendant	
	- and -		
	THE SECRETARY OF STATE FOR BUSINESS INNOVATION AND SKILLS	
Intervenor	
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James Mellor QC and Jessie Bowhill (instructed by Olswang LLP) for the Claimants
Martin Howe QC and Thomas St Quintin (instructed by Hamlins LLP) for the Defendants

Hearing date: 21 October 2011
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Judgment
Approved Judgment on question for CJEU and deferred issues
Mr Justice Floyd: 
1.	I handed down a judgment in this action on 18 July 2011 (“the July judgment”).  In the July judgment I expressed provisional views on certain issues, but decided to refer questions to the Court of Justice of the European Union (CJEU) before giving final judgment.  The questions to be referred concerned “communication to the public” of films and broadcasts and “reproduction of a substantial part” of broadcasts in memory buffers and on screens. This judgment concerns whether I should still refer those issues and, if I should, the terms of the questions to be referred. 
2.	In respect of other issues I said that I would defer giving judgment until the decision of the CJEU in Football Association Premier League v QC Leisure [2008] EWHC 1411 (Ch); [2008] FSR 32 (“FAPL”).  These other issues were “reproduction of a substantial part” of films in memory buffers and on screens, and the application of section 28A of the Copyright Designs and Patents Act 1988 (“CDPA”) to transient copies of films and broadcasts in buffers and on screens. The judgment of the CJEU in FAPL is now available: see Joined Cases C-403/08 and C-429/08 (Judgment 4 October 2011). Accordingly I need to decide those issues.  
3.	Finally, I held that section 73 of the Copyright Designs and Patents Act 1988 (CDPA) provided TVC with a partial defence in respect of “qualifying services”.  The claimants suggest that a question needs to be referred to the CJEU in relation to that section.
4.	I directed a further hearing on the form of order and the questions to be referred.  That further hearing occurred on 21 October 2011.  
Reference on communication to the public?
5.	At the further hearing the claimants submitted that the need for a reference in connection with “communication to the public” had disappeared, as the matter was now to be regarded as acte claire in the light of the decision of the CJEU in Joined Cases C-431/09 and C-432/09 Airfield NV and Canaal Digital NV v Belgische Vereniging van Auteurs, Compositien en Uitgevers CVBA (Sabam) and Airfield NV v Agicoa Belgium BVBA published on 13 October 2011 (“Airfield”).
6.	I addressed the issue of communication to the public at [80] to [104] of the July judgment. I considered that the guidance of the CJEU given in  relation to this issue in cases such as Case C-306/05: Sociedad General de Autores y Editores de Espana (SGAE) v Rafael Hoteles SL [2007] Bus LR 521 did not go far enough to enable me to decide the case.  
7.	In Airfield the CJEU had to consider the meaning of “communication to the public” in the Satellite Broadcasting Directive, Directive 93/83 EC, a different Directive to that which I had to consider for this part of the July judgment, namely the InfoSoc Directive, Directive 2001/29/EC.  Airfield was a Belgian satellite television provider which offered to the public a package of channels which could be viewed by the public by means of a satellite decoder.  The package included encrypted channels.  Customers entered into a subscription agreement with Airfield who provided them with a decoder card enabling them to view the encrypted channels.  Airfield concluded a series of agreements with broadcasting organisations, to obtain broadcast television programs for broadcast.  Through its technical services provider, Canaal Digital, Airfield leased capacity on the Astra Satellite for onward transmission of the signals via the satellite to its customers.
8.	The CJEU had to consider what it described as “indirect” as well as “direct” transmission of TV programmes.  Under indirect transmission, the broadcasting organisations sent the programmes via a fixed link to Canaal Digital, who compressed and scrambled them, sent them to their station in Netherlands from whence they were beamed, in encrypted form, to the Astra satellite.  Under a variation of this indirect method, the broadcasting organisations sent the programmes via satellite to Canaal Digital, who again beamed them up in encrypted form.  Airfield was authorised by the broadcasting organisations to do all this, and paid the broadcasting organisation a fee dependent on the numbers of subscribers.
9.	The direct method of transmission avoids the first link (either the fixed link or the satellite link) between the broadcasting organisation and Canaal.  The broadcasting organisation transmitted the encrypted programmes directly to the satellite.  Airfield and Canaal merely provided the key to the broadcasting organisations and to their subscribers so that the programmes are encrypted in a way which their subscribers can decode. 
10.	Various collecting societies brought actions in Belgium complaining that Airfield’s activities amounted to a re-broadcast of television programmes already broadcast by the broadcasting organisations, and that Airfield, therefore, could not benefit from the authorisation already granted to the broadcasting organisation. 
11.	The CJEU interpreted the questions asked by the Belgian court as asking, in essence, 
“whether Directive 93/83 must be interpreted as requiring a satellite package provider to obtain authorisation from the right holders concerned for a communication to the public of works that is effected in the course of the direct or indirect transmission of television programmes, such as the transmission at issue in the main proceedings.”   
12.	The Court pointed out at [44] to [48] that Directive 93/83 had to be interpreted in the light of other EU legislation in the field, including the InfoSoc Directive; that the factual context included the fact that the broadcasting organisations were making the television programmes available by other means, outside the Airfield package, such as by terrestrial broadcasting; and that it was common ground that, unlike the broadcasting organisations, Airfield and Canaal Digital had no authorisation.   
13.	At [51] to [70] of the judgment, the CJEU concludes that, following the special definition of “communication to the public” in Directive 93/83, the direct and indirect transmissions were single and indivisible acts of communication to the public. One might have thought that such a finding, coupled with the fact that the broadcasting organisations were authorised by the rights holders, would lead to the conclusion that Airfield and Canaal digital required no further authorisation.  However, at [70] the CJEU says this:
“That said, the indivisibility of such a communication, within the meaning of Article 1(2)(a) and (c) of Directive 93/83, does not however signify that the intervention of the satellite package provider in that communication can occur without the authorisation of the right holders concerned.”
14.	In the following paragraphs [71] to [80] the Court explains why.  At [71] the Court says that the copyright holders must authorise any communication to the public.  Then, at [72], the Court explains that there must be authorisation where a person intervenes in a communication to the public so that:
“he makes the protected works accessible to a new public, that is to say, a public which was not taken into account by the authors of the protected works within the framework of an authorisation given to another person” 
15.	The Court then explains the limits on the notion of intervention in a communication to the public so as to make the works accessible to a new public, at [74]:
“However, that authorisation does not have to be obtained by the person concerned if his intervention when the communication to the public is carried out is limited, in accordance with recital 27 in the preamble to Directive 2001/29, to the mere provision of physical facilities for enabling or making the communication.”
16.	The Court ultimately concludes that the acts of Airfield and Canaal Digital required authorisation.  The route to the conclusion that the satellite provider “expanded the circle of persons having access” and accordingly “enables a new public to have access” appears to be a multi-factorial assessment, taking into account: 
i)	The fact that the person intervening encrypts the communication or provides a key, and provides corresponding decoding devices, thus enabling the link to be established between the broadcasting organisation and the subscribers (see [78]);
ii)	The intervention is one without which the subscribers would not be able to receive the programmes, although physically within the area.  So the satellite package provider makes the work accessible to a public which is additional to the public targeted by the broadcasting organisation concerned (see [79]);
iii)	The intervention is an autonomous service performed for profit (see [80]);
iv)	The satellite provider provides a package of channels, not just those of one organisation (see [81]).
17.	Mr Howe QC for TVC submitted, firstly, that Airfield has no application to the interpretation of the InfoSoc Directive.  I cannot accept that submission.  As the Court makes very clear at [44] of its judgment:
“ … it should be borne in mind that Directive 93/83 is not the only European Union instrument in the field of intellectual property and that, in view of the requirements deriving from the unity and coherence of the legal order of the European Union, the terms used by that directive must be interpreted in the light of the rules and principles established by other directives relating to intellectual property, such as, in particular, Directive 2001/29 (see, by analogy, Case C‑271/10 VEWA [2011] ECR I-0000, paragraph 27).”
18.	Moreover, case law on the Infosoc Directive is cited in connection with the Court’s reasoning on this precise point at [72].  
19.	Mr Howe submits, secondly, that Airfield deals with a completely different point, namely the nature and scope of authorisations to transmit given to broadcasters under Directive 93/83.  Having decided that the direct and indirect transmissions were each indivisible acts of communication to the public, the Court went on to consider whether the authorisation given to the broadcasting organisation extended to the downstream supplier or intervener.  That was a different question to whether the intervention amounted to a communication to the public.
20.	Whilst Mr Howe’s submission is technically correct, I do not see how the Court could come to the conclusion that the intervening party requires an  authorisation unless it was satisfied that its activities amounted to a communication to the public. No other basis for requiring an authorisation is discussed.
21.	Mr Howe submits, thirdly, that the Court’s reasoning depends heavily on the factors I have mentioned above, not all of which are present in the instant case.  He stresses the fact that TVC’s service is free and made available to the same public in the same areas as ITV’s free to air services. 
22.	Mr Mellor QC for the claimants submits that it is now clear that the Court makes a distinction between (a) mere technical means to ensure or improve reception within the catchment area and (b) deliberate and intentional intervention without which customers are unable to enjoy the broadcasts, although physically within the catchment area.  He submitted that where an intervening party creates a new route of communication to the public of a broadcast programme, he makes the protected works available to a new public, especially where he makes a profit by so doing and creates his own audiovisual package.  
23.	Whilst the decision in Airfield is consistent with the provisional view which I expressed, I am not persuaded that the principle of law engaged in the present case is rendered acte claire by Airfield.   The Court’s multi-factorial approach does not make it easy to distil a clear principle as to what amounts to a communication to the public in this context. The extent to which the creation of a new link from the broadcasting organisation to the subscriber is to be equated, without more, with the creation of a “new public” is not clear.  It is also not clear whether the subscribers in the present case can be described as “unable to enjoy the broadcasts although physically within the catchment area”, given that they are entitled to  receive the original broadcast in their own homes and on their laptops without intervention from TVC.  Equally it is not clear whether the audience reached by these broadcasts is an audience which is additional to the public targeted by the broadcasting organisation concerned.
24.	I therefore intend to refer a question, notwithstanding Airfield.  The question I propose to send is as follows:
“Does the right to authorise or prohibit a "communication to the public of their works by wire or wireless means" in Article 3.1 of the Directive extend to a case where:
(i)	 Authors authorise the inclusion of their works in a terrestrial free‑to‑air television broadcast which is intended for reception either throughout the territory of a Member State or within a geographical area within a Member State;
(ii) A third party (i.e. an organisation other than the original broadcaster), provides a service whereby individual subscribers within the intended area of reception of the broadcast who could lawfully receive the broadcast on a television receiver in their own homes may log on to the third party's server and receive the content of the broadcast by means of an internet stream?
Does it make any difference to the answer to the above question if:
(a) The third party's server allows only a "one‑to‑one" connection for each subscriber whereby each individual subscriber establishes his or her own internet connection to the server and every data packet sent by the server onto the internet is addressed to only one individual subscriber? 
(b) The third party's service is funded by advertising which is presented "pre‑roll" (i.e. during the period of time after a subscriber logs on but before he or she begins to receive the broadcast content) or "in‑skin" (i.e. within the frame of the viewing software which displays the received programme on the subscriber's viewing device but outside the programme picture) but the original advertisements contained within the broadcast are presented to the subscriber at the point where they are inserted in the programme by the broadcaster? 
(c) the intervening organisation is:
(i) providing an alternative service to that of the original broadcaster, thereby acting in competition with the original broadcaster for viewers; or
(ii) acting in competition with the original broadcaster for advertising revenues?”
Reproduction of a substantial part of films in memory buffers and on screens
25.	I considered this question at [105] to [109] of the July judgment.  Since then the CJEU in FAPL has made it clear that the “rolling” approach to reproduction of Berne works is incorrect, and the question must be asked in relation to the transient fragments: see FAPL at [154] to [159].  In the light of the findings in the July judgment at [14] I conclude that there is a reproduction of a substantial part of the films in the memory buffers of TVC’s servers. The segments of the films stored in the buffers at any given time must be sufficient in my judgment to satisfy the tests in Infopaq as now explained in FAPL.  Absent any consideration of “rolling” copying, and consistently with Kitchin J’s judgment in FAPL, it is not established that there is reproduction of the films on the screens. 
Reference on reproduction of a substantial part of broadcasts in buffers and on screens
26.	I considered this question at [110] and [112] in the July judgment.   I concluded provisionally that there could only be reproduction of a substantial part of a broadcast if the “rolling” approach were adopted.  At that stage I considered that a reference to the CJEU might be necessary on this point. Mr Mellor submitted, firstly, that it was not clear what approach should be taken to “substantial part” of a broadcast, and, secondly, that it was arguable that a rolling approach applied to broadcasts, even though it had been held inapplicable to Berne works.  Mr Howe did not oppose a reference if the claimants could establish that there was an arguable point to be referred.  
27.	I cannot see any basis on which it can sensibly be argued that there is a reproduction of a substantial part of a broadcast except on the rolling basis.  Moreover I do not see how it can be rational to apply the rolling basis to broadcasts when it does not apply to films.  I therefore do not think it would be right to refer this question.  I am fortified in that view by the fact that (subject to the communication to the public point) a defence exists under Article 5(1), (see below).  If the claimants succeed on communication to the public, they will be entitled to relief under that heading, and the point of law raised here is academic.  If the claimants fail on communication to the public the defence under Article 5(1) succeeds and there will be again no need to determine the point of law raised here.
Defence under Article 5(1) 
28.	I dealt with Article 5(1) at [122] to [129] of the July judgment.  I formed the provisional view that the reproductions in the buffers had no independent economic significance, but that the position in relation to the screens was more arguable.  
29.	In FAPL at [174] to [177], the Court found as follows:
“174	So far as concerns, finally, the fifth condition laid down by that provision, these acts of reproduction carried out in the course of a technological process make access to the protected works possible. Since the latter have an economic value, access to them necessarily has economic significance. 
175    However, if the exception laid down in Article 5(1) of the Copyright Directive is not to be rendered redundant, that significance must also be independent in the sense that it goes beyond the economic advantage derived from mere reception of a broadcast containing protected works, that is to say, beyond the advantage derived from the mere picking up of the broadcast and its visual display.
176    In the main proceedings, the temporary acts of reproduction, carried out within the memory of the satellite decoder and on the television screen, form an inseparable and non-autonomous part of the process of reception of the broadcasts transmitted containing the works in question. Furthermore, they are performed without influence, or even awareness, on the part of the persons thereby having access to the protected works.
177    Consequently, those temporary acts of reproduction are not capable of generating an additional economic advantage going beyond the advantage derived from mere reception of the broadcasts at issue.” 
30.	Mr Mellor submits that the transient copies in the server memory in the present case have independent economic significance as, without them, TVC would not be able to attach its own advertising.  I am not able to accept this submission.  What is required is that the transient copies have economic significance independently of the advantage to be derived from the (lawful) technological process concerned.  To accept that the transient copies are a sine qua non of the advertising revenues, is to accept that those revenues are derived from and dependent on the technological process.  The revenues do not arise independently of the lawful processes, and therefore do not have independent economic significance.
31.	That does not mean that the defence succeeds: everything depends on whether the use was lawful.  That now depends on whether TVC’s activities amount to “communication to the public”: see [125] of the July judgment.
Reference on section 73.
32.	I dealt with section 73 at [130] to [140] of the July judgment. I did not consider that a reference to the CJEU was necessary.  Instead I decided the points which arose.  The claimants now suggest that a reference is necessary.  
33.	In reaching my conclusion I held that it was not possible to construe section 73, applying the Marleasing principle, as confined to analogue channels.  In that respect I held that section 73 failed to give effect to the InfoSoc Directive.  So, Mr Mellor says that this raises a question as to how the Marleasing principle applies.  
34.	As first drafted, the claimants’ question was:
“In the light of Article 5(3)(o) of the Directive, and the Court’s Judgment in Case C-106/89, Marleasing, is it necessary to construe the provision of national law as applying only to analogue channels, in so far as that is possible?”
35.	I do not consider that I need an answer to that question, as it is undoubtedly “yes”.  Indeed my judgment proceeds on the basis that the answer is “yes”.  However, I concluded that it was not possible to construe the provision in the manner contended for by the claimants.  No doubt prompted by Mr Howe’s written response, the claimants put forward an alternative question as follows:
“Can (and if so, must) the Marleasing principle be applied to part of a provision of national law? Specifically, when Art. 5(3)(o) of the Directive requires a defence to be limited to analogue services, and where the provision of national law contains a list of services, one of which is expressed to be digital and the others unspecified, does the Marleasing principle require the unspecified services to be interpreted as analogue only in order to comply with the Directive?”
36.	I think this is a veiled attempt to ask the CJEU to construe the provision of national law in the light of the Marleasing principle.  There is no real scope for doubt about what the Marleasing principle is. It has to be applied by domestic courts in a variety of different circumstances, in accordance with the authorities I reviewed in the July judgment.  I do not consider it appropriate to ask the CJEU for guidance on this point. 
Draft questions
37.	I propose only to refer the question on communication to the public set out in paragraph 24 above.  A Schedule to the order for reference will be handed down with this judgment.

SCHEDULE

(A)	THE PRELIMINARY REFERENCE AND PROCEDURAL REQUESTS 

1.	The High Court of Justice of England and Wales, Chancery Division, (Mr Justice Floyd) requests, pursuant to Article 267 of the Treaty on the Functioning of the European Union (“TFEU”), a preliminary ruling by the Court of Justice of the European Union on the interpretation of Directive 2001/29/EC of the European Parliament and the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society.

(B)	THE PARTIES 

2.	The Claimants in the action before the High Court are:-
(a)	ITV BROADCASTING LIMITED, a company registered in England,  whose registered office is The London Television Centre, Upper ground, London, SE1 9LT. 
(b)	ITV 2 LIMITED, a company registered in England, whose registered office is The London Television Centre, Upper ground, London, SE1 9LT. 
(c)	ITV DIGITAL CHANNELS LIMITED, a company registered in England, whose registered office is The London Television Centre, Upper ground, London, SE1 9LT.
(d)	CHANNEL 4 TELEVISION CORPORATION of 124 Horseferry Road, London, SW1P 2TX.
(e)	4 VENTURES LIMITED, a company registered in England, whose registered office is 124 Horseferry Road, London, SW1P 2TX.
(f)	CHANNEL 5 BROADCASTING LIMITED, a company registered in England, whose registered office is The Northern & Shell Building, Number 10 Lower Thames Street, London, EC3R 6EN.
(g)	ITV STUDIOS LIMITED, a company registered in England, whose registered office is The London Television Centre, Upper ground, London, SE1 9LT. 
3.	The solicitors for the Claimants are Olswang LLP of 90 High Holborn, London, WC1V 6XX, tel: 020 7067 3000, fax: 020 7067 3999 and reference: PAS/JAV/25100-5.  Counsel are Mr James Mellor QC and Ms Jessie Bowhill.
4.	The Defendant in the action is:-
TVCatchup Limited, a company registered in England, whose registered office is c/o Hamlins Solicitors, 273/287 Regent Street, London, W1B 2AD.
5.	The solicitors for the Defendant are Hamlins LLP of Roxburghe House, 273/287 Regent Street, London, W1B 2AD, tel: 020 7355 6000, fax: 020 7518 9100 and reference: 121/WMF/T08021/1.  Counsel are Mr Martin Howe QC and Mr James Whyte.
(C)	THE PROCEEDINGS BEFORE THE NATIONAL COURT 

6.	The action before the High Court arises out of an internet-based live streaming service operated by the Defendant, TVCatchup Limited (hereafter “TVC”).  This service permits its users to receive via the internet “live” (i.e. substantially in real time) streams of free-to-air television broadcasts (including free-to-air television broadcasts transmitted by the Claimants, as well as broadcasts of other commercial broadcasting organisations and the state-funded British Broadcasting Corporation).  
7.	The Claimants are commercial television broadcasters who own copyright under national law (1) in the television broadcasts themselves and (2) in films consisting of programmes and other items which are included in their broadcasts. They are funded by advertising carried in their broadcasts.
8.	The Claimants have sued TVC in the High Court for infringement of copyright in their broadcasts and in their films.  Having found the facts and having ruled on a number of issues of national law, the High Court has concluded that it is unable to determine certain points of EU law which are considered below.  Accordingly the High Court has stayed its proceedings and now refers the Questions set out in Section (J) to the Court of Justice for its opinion.
(D)	SUMMARY OF THE RELEVANT FACTS 

9.	Users of the TVC service must create an account with log-in details.  TVC endeavour to ensure that their viewers can only receive access to content which they are already legally entitled to watch by means of their television licence. The terms to which users must agree include the possession of a valid TV licence and a restriction of use to the country of residence.  The website has the facility to authenticate the user's location, and will refuse access where membership conditions are not satisfied.
10.	The TVC service is funded by advertising, by showing an audiovisual advertisement before the live stream is viewed.  The advertisements actually contained in the original broadcasts are retained unaltered and sent to the user as part of the stream. There is also "In‑skin advertising", which appears on the user’s computer or other device in the frame of the viewer which displays the TVC stream. The Court considers that TVC directly competes with the Claimants by selling and showing this advertising.
11.	The TVC service is administered on TVC’s behalf by a web hosting company, although all the servers involved are owned by or leased to TVC, and are located in England.  The servers are arranged in a sequence of four groups of servers, each group fulfilling a different function.  The server groups are called (i) acquisition, (ii) encoding, (iii) origin and (iv) edge. 
12.	The input signals used by TVC are the normal terrestrial and satellite broadcast signals transmitted by the Claimants.  The signals are captured via a single domestic TV aerial and a single satellite dish located in the Maidenhead area.  Only digitally broadcast TV channels are used.  Both digitally broadcast satellite signals and digitally broadcast terrestrial signals are received.  They are received in a compressed format known as MPEG‑2. The signals comprise multiple video streams.  Each stream represents a television channel.
13.	The signals are passed by the aerial to the acquisition servers. These servers contain conventional tuner cards which, in combination with software installed on the servers, extract individual video streams from the received signal.  The output from the acquisition servers is therefore a video stream in MPEG‑2 format, unaltered from the broadcast. 
14.	The output from the acquisition servers is passed to the encoding servers.  The encoding servers contain software which converts the incoming MPEG‑2 stream into an MPEG‑4 stream, that is to say a different compression standard. 
15.	The MPEG‑4 stream from the encoding servers is made available to the origin servers.  Commercial software called Wowza Media Server 2 is used to prepare streams of video for sending over the internet in a variety of formats.  Up to this point, all channels offered by TVC are processed.  Channels are, however, only processed beyond this point if at least one TVC subscriber has requested that channel.  If there is no request for a given channel, the signal is discarded. 
16.	Edge servers take the stream from the origin servers.  The edge servers also use the Wowza software.  These servers connect with a user's computer using the internet.  They can also make connection with a user's mobile phone, via the internet and then via the cabling inherent in the network operator's infrastructure, making the final link by wireless transmission from the mobile base station. 
17.	When an edge server receives a request for a channel from a user, then, unless it is already streaming that channel to a different user, the edge server connects to the origin server which streams that channel.  The Wowza software on the edge server creates a separate stream for each user who requests a channel through it.  Thus an individual packet of data leaving the edge server is addressed to an individual user, not to a class of users.  
18.	The streams provided by the edge servers can be in a variety of different formats.  The formats used are:
(a)	Adobe Flash streams.  These are deployed when the user is at a desktop or laptop computer.  These computers will have an Adobe Flash player to enable the signal to be displayed on the screen;
(b)	HTTP streams. These are for Apple mobile devices (iPhones and iPads);  These devices will use the Apple Quicktime software to display the signal on the mobile device;
(c)	RTSP streams.  These are used for Android and Blackberry mobile phones.  These devices have a media player able to display such a stream.
19.	A user who clicks on a channel logo on the TVC website causes the media player to connect to the TVC web server. The TVC web server checks that the user is logged in, is in the UK and not using a virtual private network.  If authentication is successful, the web server will return, if one is available, the URL of an advertisement to be displayed before the channel is received. For the playing of the stream, the user is provided with the URL of one of the TVC edge servers. 
20.	At no stage during the process is the whole or any part of the video stream stored on any disk or other permanent storage medium.  All processing takes place in volatile memory.  However, in each of the steps described a small amount of data from the video stream is held in the memory of the servers involved.  In the case of streaming for Apple devices the servers will hold the video stream in "play list" form".  At any one time the servers must hold three "play list" items of 10 seconds each, making a total of 30 seconds of stored video.  In fact rather more will be stored because of the need to prepare and store the next item.  So 30‑40 seconds of video are stored for Apple streaming.
21.	In the case of streaming to a Personal Computer, TVC's buffers have the capacity to hold up to 8 seconds of video streaming in memory.  The precise figure will depend on the load.  The figure of 1 to 5 seconds would normally be used, but the range could be exceeded in periods of very high load.  In the end the Court is of opinion that the precise figure does not make any difference to the legal issues.

(E)	THE CLAIMANTS’ CASE OF INFRINGEMENT AND TVC’s DEFENCES 

22.	The Claimants rely on two categories of copyright work: broadcasts and films.  Under UK national law, the word “copyright” is used for both the exclusive right conferred on works covered by the Berne Convention and also for other kinds of subject matter including broadcasts.  Copyright subsists in the broadcasts and films relied on and is owned by one or more of the Claimants. They allege that the copyright in each category of work has been infringed by (a) communication of the works to the public and (b) by making, or authorising the making of, transient copies of the works in TVC's servers and on the screens of users.  The Claimants do not allege that TVC’s acts amount to infringement by "broadcasting" as opposed to "communication to the public". 
23.	TVC contend that what they do is not a 'communication to the public' of the films or of the broadcasts.  As regards films, TVC contend that the acts which they carry out do not amount to a 'communication to the public' by TVC within the meaning of Article 3.1 of Directive 2001/29/EC (the "InfoSoc Directive"). The Directive was implemented in the UK by the Copyright and Related Rights Regulations 2003, which amended the Copyright Designs and Patents Act 1988 ("CDPA 1988") to give effect to Article 3.1 by conferring the right to restrict "communication to the public" on the owners of copyright in films and other Berne Convention works (see section 20(1), quoted below). In addition, those Regulations amended the CDPA 1988 so as to confer the right to restrict "communication to the public" on the owners of copyright in broadcasts.  TVC contend that the meaning of "communication to the public" of broadcasts is a matter governed by national law since it lies outside the scope of Article 3.1 of the Directive, and deny that what they do amounts to such a communication.
24.	The main defences relied on by TVC in relation to the allegation of making or authorising the making of transient copies of broadcasts and/or cinematographic films are, firstly, that the copies are not substantial parts of the works relied on and secondly that section 28A of the CDPA 1988 (temporary copies having no independent significance) applies.  Section 28A transposes into national law the defence against infringement laid down in Article 5.1 of the InfoSoc Directive.
25.	In addition to these main defences and in relation to some only of the channels which TVC stream to users, TVC contend that they have the defence afforded by section 73(2)(b) and 73(3) of the CDPA 1988.  These defences are a matter of national law and are not the subject of this preliminary reference.

(F)	INTERNATIONAL TREATIES AND NATIONAL LEGISLATION 

26.	The Berne Convention for the protection of Literary and Artistic Works does not deal with broadcasts as a subject of copyright.  However it deals with the restricted acts in the nature of broadcasting to be afforded to Berne Convention works in Article 11bis.  Article 8 of the WIPO Copyright Treaty (1996) requires the right of communication to the public by wire or wireless means to include “the making available to the public of their works in such a way that members of the public may access these works from a place and at a time individually chosen by them.”  Both these provisions form part of the background against which Article 3.1 of the InfoSoc Directive was adopted.
27.	Under section 6 of the CDPA 1988 (as amended by the 2003 Regulations), a “broadcast” is defined as including both wired and wireless transmissions.  Section 20 of the CDPA 1988 provides:
20 	Infringement by communication to the public

(1) 	The communication to the public of the work is an act restricted by the copyright in ‑

	(a)	a literary, dramatic, musical or artistic work,

	(b) 	a sound recording or film, or

	(c) 	a broadcast.

(2) 	References in this Part to communication to the public are to communication to the public by electronic transmission, and in relation to a work include ‑

	(a)     the broadcasting of the work;

	(b)	the making available to the public of the work by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them.

28.	The definition of communication to the public in section 20(2)(a) and (b) makes it clear, by the use of the word “include”, that it extends to the two particular cases identified, but also that it is not limited to those cases alone.
29.	As regards reproduction, section 17 of the CDPA 1988 provides:
17 Infringement of copyright by copying

(1) 	The copying of the work is an act restricted by the copyright in every description of copyright work; and references in this Part to copying and copies shall be construed as follows.

(2) 	Copying in relation to a literary, dramatic, musical or artistic work means reproducing the work in any material form.

This includes storing the work in any medium by electronic means.

...

(6) 	Copying in relation to any description of work includes the making of copies which are transient or are incidental to some other use of the work.

30.	In relation to parts of works, section 16(3) of the CDPA 1988 provides:
(3) 	References in this Part to the doing of an act restricted by the copyright in a work are to the doing of it

	(a)	in relation to the work as a whole or any substantial part of it, and

	(b) 	either directly or indirectly;

		and it is immaterial whether any intervening acts themselves infringe copyright.

(G)	COMMUNICATION TO THE PUBLIC 

31.	TVC maintain that they are not communicating the Claimants' broadcasts or films to the public by electronic transmission within the meaning of section 20 of the CDPA 1988.  For this purpose there is no need to distinguish between broadcasts and films, and no question of "substantial part" arises. 
32.	This Court considers that it is obliged to construe “communication to the public” (at least in relation to films) in section 20 of the national legislation consistently with the meaning of that concept in the InfoSoc Directive.  Recital (23) indicates that the communication to the public right should be understood in a broad sense.  That Recital reflects the use of the words "any communication to the public" in Article 11bis of the Berne Convention and Article 8 of the WIPO Copyright Treaty.  It is clear that the term is chosen to be technologically neutral.
33.	In Case C‑306/05: Sociedad General de Autores y Editores de Espana (SGAE) v Rafael Hoteles SL [2006] E.C.R. I-11519, the Court of Justice had to determine what was meant by "communication to the public" in a case concerned with the distribution by hotel proprietors of broadcast signals received by them to rooms within their hotels in which hotel guests can view Berne copyright works included in the broadcasts.  In that case the Audencia Provincial de Barcelona had asked the Court of Justice, in essence, whether the distribution of a signal through television sets in customers' hotel rooms constituted an act of communication to the public within the meaning of Article 3.1 of the InfoSoc Directive and whether the installation of television sets in hotel rooms constituted, in itself, an act of that nature.
34.	The Court observed, in reliance on recital (23), that communication to the public must be interpreted broadly.  Nevertheless, in view of recital (27), the mere installation of television sets did not constitute the act of communication to the public.  The core of the Court's reasoning is at [38] to [44].
35.	The Claimants focus on [40], and submit that whenever there is an intervention by a broadcasting organisation other than the original one, there is a communication to the public within the exclusive right of the copyright owner and which it is entitled to control.  The re‑transmitted signal will be to members of the public who are not the direct recipients of the signal.  Whilst the condition in the final sentence of [42] (inability to receive the signal without intervention) is not always met,  the recipients of a re‑transmitted signal will enjoy the broadcast work through a different route and only on account of the intervention of the re‑broadcaster. They submit that this is consistent with Article 11bis(1)(ii) in its reference to "communication … made by an organisation other than the original one", and with the Guide to the Berne Convention relied on by the Court.
36.	TVC point out that the question referred was based on the provision of TV sets by the hotel, and did not relate to a situation such as the present in which the intervening organisation does not own or control the equipment on which the member of the public chooses to view the broadcast.  They also focus on [42] which they contend appears to acknowledge that the mere provision of technical means to ensure or improve reception in the catchment area would not amount to a communication to the public. They point out that the Rome Convention Intergovernmental Committee at its 12th Session (Geneva, 5 to 7 July 1989) adopted a report by committees of governmental experts setting out a number of principles. Under "Cable distribution" it adopted:
		"Principle AW26. It does not amount to distribution by cable of the broadcast of the work concerned where the broadcast, received by an aerial larger than generally used for individual reception, is transmitted by cable to individual receiving sets within a limited area consisting of one and the same building or a group of neighboring buildings, provided that the cable transmission originates in that area and is made without gainful intent." 

37.	TVC submit that the point made here shows that not every physical act of distribution of a broadcast signal is an act of communication to the public.  Merely providing technical means which assist people more easily or readily to receive what they could in principle receive by other means does not amount to a communication to the public. 
38.	TVC refer in addition to a paragraph from the opinion of Advocate General La Pergola in Entidad de Gestion de Derechos de los Productores Audivisuales (Egeda) v Hosteleria Asturiana SA (Hoasa) Case C‑293/98) [2000] ECR I‑629 at [22] which is cited in the opinion of Advocate General Sharpston in Rafael Hoteles at [52]:
		"it is all too clear - given that such retransmission is not just a technical means to ensure or improve reception of the original broadcast in the catchment area, as in the case, for example, of the installation and use of transceivers – that [the hotel proprietor] gave the hotel guests access to the protected work. If [it] had not made secondary use of broadcasts, the clients - although physically within the satellite catchment area - would not have been able to enjoy the broadcast work in any other way; they therefore constitute, in this sense, a ‘new’ public that differs from the primary broadcast public."

39.	The Court has also been referred to the decision of the CJEU in Joined Cases C-431/09 and C-432/09 Airfield NV and Canaal Digital NV v Belgische Vereniging van Auteurs, Compositien en Uitgevers CVBA (Sabam) and Airfield NV v Agicoa Belgium BVBA published on 13th October 2011 (“Airfield”), a case concerned with the concept of communication to the public in Directive 93/83 EC.  The CJEU in that case ultimately concludes that the acts of an intervening satellite package provider required authorisation.  The route to the conclusion that the satellite provider “expanded the circle of persons having access” and accordingly “enables a new public to have access” appears to be a multi-factorial assessment, taking into account: 
(a)	The fact that the person intervening encrypts the communication or provides a key, and provides corresponding decoding devices, thus enabling the link to be established between the broadcasting organisation and the subscribers (see [78]);
(b)	The intervention is one without which the subscribers would not be able to receive the programmes, although physically within the area (see [79]);
(c)	The intervention is an autonomous service performed for profit (see [80]);
(d)	The satellite provider provides a package of channels, not just those of one organisation (see [81]).
40.	It follows from the authorities and other materials to which this Court has referred that it considers there is a distinction between an act which qualifies as a communication to the public, and the provision of: 
(i)	"just a technical means to ensure or improve reception of the original broadcast in the catchment area":  Rafael Hoteles  at [42] and La Pergola AG in Egeda ; or
(ii)	"an aerial larger than generally used for individual reception" for relaying the signal to  "individual receiving sets within a limited area consisting of one and the same building or a group of neighbouring buildings, provided that the cable transmission originates in that area and is made without gainful intent" : Rome principle AW 26.
41.	As the authors of Ricketson & Ginsburg "International Copyright and Neighbouring Rights" point out at paragraph 12.38, the character of an act of secondary communication can vary widely, from the provision of a simple community antenna to a highly sophisticated receiving station which distributes broadcast programmes over a wide geographical area.  They say:
		“In the first of these cases, however, it may be doubted whether there is a true secondary communication to the public in that the community antenna simply replaces a multitude of individual antennae on the same building or buildings and this is therefore no more than a reception of the primary broadcast.  It may also be argued that there is no 'organization' which makes the communication in such a case, apart from the body representing the owners or tenants of the building in question. It can therefore be concluded that such forms of distribution fall outside the scope of Article 11bis(1)(ii), and this is the view that has been taken on a national and international level."  

42.	The Court considers that what is less clear from the decisions of the Court of Justice in Rafael Hoteles and Airfield is whether there is a communication to the public when an intervening organisation, acting for its own profit, intervenes in full knowledge of the consequences of its acts and in order to attract an audience to its own transmission and advertisements, to communicate the original broadcast signal to members of the public who would in fact be able to access the original broadcast signal using their own television sets or laptops in their own homes.  Reading paragraph [40] of the judgment in Rafael Hoteles in isolation would give an affirmative answer.  But other passages in that case and in Airfield suggest that it is material to ask whether there is a "new public" and whether the viewers would have been able to access the broadcasts without the intervention.   This Court considers that the principles which it is possible to extract from Rafael Hoteles and Airfield do not go far enough to enable it to answer that question conclusively in the Claimants' favour.  Accordingly this Court is making this reference to the Court of Justice on this point. However, in case it is of assistance this Court will express its provisional view.
43.	Given the broad meaning which the Directive requires to be given to "communication to the public", it seems that any limitations on the natural meaning of the expression need to be kept within tight bounds.   In this Court’s judgement, these limitations are all concerned with excusing from liability acts whose purpose is purely supportive of the original broadcaster's intention to have its signal received in its catchment area.  Where, by contrast, the acts concerned are aimed in competition with the original broadcaster, and intended to attract the audience of the original broadcaster away from direct reception of its signals, they are within the notion of communication to the public.  In this way, a distinction is maintained between acts of third parties which are independent exploitations of the copyright and related rights, and acts which are merely supportive of the exploitation which is inherent in the original transmission of the work.
44.	Thus in Rafael Hoteles the hotel proprietor was merely relaying the signal, but he was doing it to a new audience not within the contemplation of the copyright owner when he licensed the original broadcast. This Court does not take from the case any principle that it is only in those circumstances that an intervening organization makes a communication to the public. There was clearly an independent exploitation of the works. In Airfield there was also an express finding that the satellite package provider made the works accessible to a public which is additional to the public targeted by the broadcasting organisation concerned.
45.	In Rafael Hoteles the Court felt that it did not have to decide whether a financial motive on the part of the intervening organisation was a necessary ingredient.  Sharpston AG plainly regarded the financial motive as a factor, but not necessarily a decisive one, in [51] of her Opinion. From the judgment of the Court at [44], it seems that it regarded benefit to the hotel proprietor as relevant as well. Airfield at [80] is to the same effect
46.	In this Court’s provisional view, the acts of TVC in intercepting the Claimants' broadcasts (and works comprised therein) and making them available via the internet amount to acts of communication to the public.  
47.	Firstly, TVC's intervention is plainly by an organisation other than the original broadcaster.  It is, prima facie, a "communication to the public".   It is necessary to see whether it can be brought within the limitations on that term.
48.	Secondly, there is no analogy with the case of the community antenna discussed in Rome principle AW 26.  Even in that case there was a proviso that the antenna was not provided with gainful intent.  So the analogy breaks down even before one considers the other factors.
49.	Thirdly, TVC do not in the Court’s judgement merely provide technical means to ensure or improve reception in the catchment area of the broadcast.  The service which TVC provide is an alternative service to that of the original broadcaster, including its own advertising content, and which is in competition with the service provided by the original broadcaster. It is operated for profit. It is intended to attract its own public audience.    Its activities are therefore, in this Court’s view an independent exploitation, of the works and other subject matter.  They are not merely supportive of the original exploitation of the work.
50.	Fourthly, this Court does not think that the fact that subscribers would be entitled to receive the broadcasts direct on their domestic televisions or computer screens means that the recipients of the TVC service are not a "new public".     The Directive and the Act require only that the communication be to "the public", subject to the narrow limitations which have been discussed.  If there is a communication to a new class of the public, then that is a clear indication that one is outside the exception.  But to go further and hold that every communication to the originally contemplated class is exempted, goes much further than warranted by authority.
51.	Fifthly, the aggregate of the individual communications which TVC make at any given time is properly to be regarded as a communication to the public, as opposed to a plurality of individual and private communications.  In Rafael Hoteles it was appropriate to consider the communications to the members of the public in their separate hotel rooms, and to consider as well the fact that the occupants of such rooms are regularly replaced.  In this Court’s judgement it is appropriate to look cumulatively at the communications in the present case, rather than regarding them as an aggregate of individual ones.  This Court also does not think it matters that the communications are initiated by the users.  It is true that user‑initiated communications are the subject of the “making available” right: but in this Court’s judgement such communications are a sub‑set of the notion of communication to the public, not an extension of it.   
52.	In connection with the correct approach to aggregating a number of private communications, TVC relied on a decision of the Court of Appeal of Singapore applying national legislation also based on Article 8 of WIPO Copyright Treaty: RecordTV Pte Ltd v MediaCorp TV Singapore Pte Ltd [2010] SGCA 43.   That case involved a service by which members of the public could request RecordTV to record broadcast programmes on their behalf, on Record TV’s servers. The Court held it was the end users rather than RecordTV who were making the copies of the broadcasts for the purposes of the reproduction right.  Accordingly the end users were able to take account of a time‑shifting defence.  So far as "communication to the public" is concerned, the Court held that there had not been any communications to "the public" and RecordTV was not the party who made the communications in any event.  At §26, the Court stated:
		"26 In any case, in view of the modus operandi of RecordTV's iDVR service, we find that any communications made by RecordTV to Registered Users who had requested the recording of a particular MediaCorp show were made privately and individually. We see no reason why the aggregate of the private and individual communications made to each of the aforesaid Registered Users should transform the nature of such communications into "public" communications. Although any member of the public could register with RecordTV to become a Registered User, he had no immediate access to all (or any) of the MediaCorp shows already recorded by RecordTV. This was because RecordTV's iDVR service was not a video‑on‑demand service whereby RecordTV shared a library of recorded works with Registered Users. Rather, a Registered User was only allowed to access and view time‑shifted recordings of the specific MediaCorp shows which he had requested to be recorded. Thus, each Registered User had to make a request for a particular MediaCorp show to be recorded for him, and only he could access the show recorded at his request."

53.	To the extent that this conclusion is inconsistent with one of the grounds for decision in Record TV, this Court respectfully differs from it.  Although the Singapore Court was applying a provision of Singapore law derived from the same international convention, it is difficult to reconcile the conclusion reached there with the reasoning in Rafael Hoteles and the obvious desire in the Directive to provide for a technologically neutral definition of communication to the public.   It would be an unfortunate result if a point‑to‑multipoint communication were to be actionable but a number of point to point transmissions were not.  
54.	Finally this Court should deal with a further point relied on by TVC.  That was that the absence of control by TVC over the equipment on which the signal is received by the viewer was a ground on which Rafael Hoteles could be distinguished. This Court was not persuaded by that submission.  Although it is fair to say that the case was one in which the intervening organisation did provide the reception equipment, it is clear from the judgment that the infringing act was the distribution of the signal and not the provision of the apparatus.

(J)	THE QUESTION REFERRED 

55.	In the light of the foregoing matters,  the High Court submits the following Question to the Court of Justice for a preliminary ruling:-
On the interpretation of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society ("the InfoSoc Directive"):

Question 1. Does the right to authorise or prohibit a "communication to the public of their works by wire or wireless means" in Article 3.1 of the Directive extend to a case where:
(i)	Authors authorise the inclusion of their works in a terrestrial free‑to‑air television broadcast which is intended for reception either throughout the territory of a Member State or within a geographical area within a Member State;
(ii)	A third party (i.e. an organisation other than the original broadcaster), provides a service whereby individual subscribers within the intended area of reception of the broadcast who could lawfully receive the broadcast on a television receiver in their own homes may log on to the third party's server and receive the content of the broadcast by means of an internet stream?
 Does it make any difference to the answer to the above question if:
a.	The third party's server allows only a "one‑to‑one" connection for each subscriber whereby each individual subscriber establishes his or her own internet connection to the server and every data packet sent by the server onto the internet is addressed to only one individual subscriber? 
b.	The third party's service is funded by advertising which is presented "pre‑roll" (i.e. during the period of time after a subscriber logs on but before he or she begins to receive the broadcast content) or "in‑skin" (i.e. within the frame of the viewing software which displays the received programme on the subscriber's viewing device but outside the programme picture) but the original advertisements contained within the broadcast are presented to the subscriber at the point where they are inserted in the programme by the broadcaster? 
c.	the intervening organisation is:
i.	providing an alternative service to that of the original broadcaster, thereby acting in direct competition with the original broadcaster for viewers; or
ii.	acting in direct competition with the original broadcaster for advertising revenues?