Cast Aside - Recording of TV Through the Cloud Infringes Copyright, Says CJEU

Many foreign nationals who have immigrated abroad yearn for a piece of home, either through food, music or TV and movies. Often this is done using online or on-demand services, and this interest can create opportunists who wish to capitalise on the home-sickness of ex-pats. Quite a few websites offer both legitimate and illegitimate means of doing so. In that vein, would the recording of TV shows for users, without copying it into your own servers, infringe copyright?

The case of VCAST Limited v RTI SpA concerns this question, where VCAST offered a service to users enabling them to record Italian television on-demand to an external storage provider of their choice. The user would select which show on which channel they would want to record, which VCAST then recorded for them onto their storage provider's servers. VCAST was subsequently sued by RTI, an Italian TV channel, for copyright infringement, ending up all the way at the CJEU.

The CJEU was posed two questions in the proceedings, which it subsequently merged into one, as they asked two sides of the same coin. The question was whether "…[the InfoSoc Directive], in particular Article 5(2)(b) thereof, precludes national legislation which permits a commercial undertaking to provide private individuals with a cloud service for the remote recording of private copies of works protected by copyright, by means of a computer system, by actively involving itself in the recording, without the rightholder’s consent". In other words, is it possible for national legislation to prevent the private copying of copyright protected works using a cloud recording service.

As set out by the Court: "…Article 5(2)(b) of Directive 2001/29, Member States may provide for exceptions or limitations to the reproduction right in respect of reproductions on any medium made by a natural person for private use and for ends that are neither directly nor indirectly commercial". So long this use doesn't conflict with the works' normal exploitation or prejudice the legitimate interests in the works, exceptions and/or limitations are allowed.

According to case law, the CJEU considered that copying by natural persons acting in a private capacity would be likely to cause harm to the rightsholders concerned if prior authorisation from them isn't sought. This position was developed further in ACI Adam where the Court allowed for rightsholders objecting to infringements that might accompany the making of private copies, even though the exception prohibits them from objecting to private copying. Finally, third-parties can be involved in the making of private copies, provided they are a precondition to it.

The distinction between a mere third-party copying content and VCAST is VCAST's provision of the programs themselves, which the user then selects from. They therefore both copy and make available the copyright protected works to the consumer.



The Cloud can makes emotions run high

Even though rightsholders are prohibited from preventing the private copying of copyright works, as discussed above, they are not prohibited from preventing access to the works that are desired to be privately copied. This allowed the Court to move onto the matter of communication to the public, which third-parties cannot do. The distinction between simply copying, where the entity does not make the content available in a wider scale, and making works available and then copying them on request, is important and requires the court to address this point.

When assessing 'communication to the public' Courts have to consider two cumulative criteria; an 'act of communication' that is done to a 'public'. The former is a transmission of protected works, irrespective of technical means, and the latter an undetermined amount, although impliedly large, of people as possible recipients.

Through their service VCAST records broadcasts of TV shows and makes them available for its users. The amount of users is clearly enough to constitute a 'public', while the original transmission through VCAST's service is transmitted to that public. The service therefore infringes the right to communication to the public, and would require the authorisation of RTI (and other relevant parties not involved in the litigation).

The CJEU concluded that VCAST's service does not fall under the scope of Article 5(2)(b). In different words, answering the question posed: "…Directive 2001/29, in particular Article 5(2)(b) thereof, precludes national legislation which permits a commercial undertaking to provide private individuals with a cloud service for the remote recording of private copies of works protected by copyright, by means of a computer system, by actively involving itself in the recording, without the rightholder’s consent".

The case is quite surprising, since the matter didn't involve communication to the public at the face of it, only private copying. Even so, the connection made between the two makes sense, and is a relevant consideration in the wider issue. Third-parties making copies for users is still very much allowed; however, the stumbling block will be the making available of that content to users as done by VCAST.

Database Error - UK High Court Takes on Copyright Infringement of Cloud Databases

Databases are a curious creature within the world of IP, existing on the fringes of protectability, at least when considering from the perspective of originality. Specific rights attach to databases outside of mere copyright protection, and the remit of those rights has been debated by the courts for some time. Since the advent of cloud computing, database rights in purely 'cloud-based' technologies haven't been debated much in the courts, and the question therefore arises: do you have database rights in a cloud database? The High Court took on this issue in a recent decision handed down in late August 2017.

The case of Technomed Ltd v Bluecrest Health Screening Ltd concerned electrocardiograms and the analysis of the data created through the ECG measurements. An ECG measures the movement of electricity through a patient's heart, giving details of its health to varying degrees based on the ECG technology used. Technomed supplied ECG equipment, systems and services, including an online ECG analysis and reporting system called "ECG Cloud". The platform allows for ECG information to be analysed externally (the information itself is reviewed remotely by a qualified cardiologist) when taking the readings, offering a simplified analysis using three colors to indicate the heart's health status. The analysis is done using resources in Technomed's database, including characteristics of ECG readings and their associated issues. Technomed licenced its technology to Bluecrest, and after a relationship breakdown proceedings were initiated to protect the rights in the database and its reporting format, which were passed onto a competitor (the second Defendant in the case) by Bluecrest.

The crux of the case revolved around sui generis rights in the database (protection of the money, time and effort put into the database, rather than), copyright in the database, copyright in the reporting software that produces the results from ECG Cloud in XML format, and copyright in various other peripheral elements of the system, e.g. images and explanatory materials.

After assessing the decision of Fixtures Marketing Limited v OPAP, Deputy Judge Stone concluded that Technomed's database was a database as defined under the Database Directive, meaning "…a collection of independent works, data or other materials arranged in a systematic or methodical way and individually accessible by electronic or other means". Even so, Technomed still had to establish a sui generis right in that database.

Sui generis rights are afforded to a database under the Directive, in essence, when the maker shows substantial investment in obtaining, verifying and presenting the data in the database, derived from pre-existing information. The Court quickly determined that there had been substantial investment in the above by Technomed (taking hundreds of hours to do so), affording them a sui generis right in the database.

Infringement of sui generis rights in databases falls under the Directive as well, happening when the data is 'extracted' and 're-utilized' by another party. As Bluecrest had extracted the whole database, which was then provided to the competitor, it infringed Technomed's right in the database. Additionally, should a party repeatedly and systematically reproduce the database, it will also infringe on the sui generis rights afforded. Bluecrest repeatedly produced the XML reports from the database, prejudicing Technomed's legitimate interests in the database until the reports were updated to no longer infringe in 2016.

Even databases have feelings

The Court then moved onto the matter of copyright in the database under section 3A of the Copyright, Designs and Patents Act 1988. As both parties agreed that the assessment for copyright protection is the same as for the sui generis right (as set in Football Dataco v Brittens), Judge Stone quickly concluded that the database had copyright in it. Similarly, as the sui generis right was infringed, the copyright in the database was also infringed. While he didn't need to address the alternate pleading in infringement of a literary work in the database, Judge Stone nonetheless concluded that the database was a literary work (a PDF copy of it) and that it was infringed by Bluecrest by copying the same.

Judge Stone then moved onto the other works, including the XML report format. For them to qualify as protected works, the works will have to be the "…author's own intellectual creation". Even though no rights were claimed in the XML format itself, the reports did, as agreed by Judge Stone, contain the personal stamp of its authors, and was protected by copyright. As Bluecrest had the report format copied by a competitor, it clearly was infringed as well.

The Court also decided that further documents, such as explanatory materials and patient definitions were also protected by copyright, but only the explanatory materials were infringed, as the patient definitions were only used as a starting point to create new definitions by the defendants.

Bluecrest did combat the infringement claims through an argument against causation, i.e. that they didn't cause any damage to Technomed through their alleged infringement. Judge Stone dismissed this out of hand, as through the clear infringement detailed above there would have been loss caused to Technomed.

Judge Stone concluded that all of the rights in the works had been infringed, but there would be no continuing threat of infringement.

While the case is by no means a landmark one, it is still a continuing reminder in database rights and their infringement, including copyright and sui generis rights. This writer always seems to forget about the strength of these rights, particularly as databases don't come across ones desk too often, so the case was an interesting and refreshing read.