Lorna Woods and Steve Peers
The extent of broadcasters’ rights is near the top of a long
list of controversial issues arising from the law of copyright. Equally
controversial is the extent of the EU’s exclusive external competence, which
(where it exists) prevents Member States from signing treaties and (usually) means
that they do not have a veto in the Council over the treaty concerned. These
two issues came together in the recent CJEU judgment in Case C-114/12 Commission v Council, which concerned the EU’s competence to negotiate the
Council of Europe’s draft treaty on the rights of broadcasting organisations.
Background
The regime covering mass electronic distribution of
audiovisual works is complex, reflecting the traditionally national nature of
broadcasting markets and the layered nature of intellectual property rights in
audiovisual works. In addition to the
content-based rights, which are often assigned or licensed to the broadcaster,
the broadcaster has rights in the signal itself (broadcasters’ neighbouring
rights). These rights are found in a number of international treaties,
including TRIPS. Similar rights relating to control over the fixation of the
signal, as well as the making available of the signal to the public were contained
in a number of directives variously implemented in the Member States, in
particular Directive 2006/115/EC on Rental and Lending Rights (codifying Directive 92/100) and Directive 93/83/EEC Satellite and Cable Directive, now codified as Directive 2006/116). These rules have tended to be technologically specific and
while Directive 2001/29 (the InfoSoc Directive) confirmed broadcasters’ rights whether
wireless or cable technology was used, questions remained, notably the issue of
identifying where the activity of ‘making available’ or ‘communicating to the
public’ is taking place, especially in an Internet age.
There has been considerable litigation on these directives
and how they operate in a new technical environment. Clearly something needed
to be done and broadcasters have for some time been lobbying for change.
Against this background, the Council of Europe agreed to start work on a
Convention that protected broadcasters’ neighbouring rights. According to a 2010 report, the aim of the
Convention was to agree on a set of exclusive rights of broadcasting
organisations, such as the right of fixation the right of reproduction, the
right of retransmission, the right of making available to the public, the right
of communication to the public and the right of distribution, in
technologically neutral terms. Other issues were also to be discussed: the
protection of pre-broadcast programme-carrying signals, the term of protection,
the need for a non-exhaustive list of limitations and exceptions, the
enforcement of rights and obligations concerning technological measures and
rights-management information.
As for the EU’s role in these talks, the Council and Member
States’ representatives adopted a single joint Decision authorising the joint
participation of the EU and its Member States in the negotiations for a
Convention. While the EU position would be represented by the Commission, the
Member States’ collective position (if they could reach one) would be
represented by the Council Presidency. If Member States could not reach a
collective position on matters falling within their competence, they would
negotiate individually.
The Commission disagreed with the Council’s decision on both
substantive and procedural grounds, and so brought an annulment action before
the Court of Justice.
Judgment
First of all, the Court quickly dismissed any doubt that the
action was admissible. Even though the act in question had been adopted by the
Member States alongside the Council, the Council was ‘involved’ in the entire
Decision because it was both conferring and receiving power pursuant to it.
As to the substance, the Court agreed with the Commission
that the envisaged treaty fell within the scope of the EU’s exclusive external
competence. This was the first case in which the Court interpreted Article 3(2)
TFEU (added by the Treaty of Lisbon), which provides that the EU has exclusive
competence to conclude an international agreement where ‘its conclusion is
provided for in a legislative act of the Union or is necessary to enable the
Union to exercise its internal competence, or in so far as its conclusion may
affect common rules or alter their scope’
.
The last of the three categories mentioned in Article 3(2) is
similar to the classic exposition of the EU’s exclusive external competence in
the ERTA judgment, although some
academic opinion has suggested that the Treaty drafters have not adequately
synthesized the judgment. On the other hand, some Member States intervening in
support of the Council in this case suggested that the TFEU provision narrows
the EU’s exclusive external competence, in particular in light of the Protocol to the Treaties on shared competences, which was also added by the Treaty of
Lisbon.
However, the Court stated simply that the Treaty provision
meant the same thing as the ERTA
judgment, as elaborated in the subsequent case law of the CJEU. The Protocol on
shared competences was irrelevant, since it only referred to Article 2(2) TFEU,
which defines the EU’s shared internal
competences.
The Court then summarised the key aspects of the ERTA case law: it is not necessary for
the international treaty and the EU legislation concerned to overlap fully; it
may be sufficient that the area concerned is ‘largely covered’ by EU rules; and
it is irrelevant that there is no contradiction between the treaty concerned
and the internal EU rules. To show whether external competence was exclusive on
this basis, there had to be a ’specific analysis of the relationship between’
the relevant international treaty and EU legislation. The Court added that the
party alleging that competence was exclusive had the burden of proving it.
Applying these principles to the facts of the case, the Court
summarised the relevant EU legislation (the five Directives referred to above),
stating that the intellectual property rights concerned ‘are the subject, in EU
law, of a harmonised legal framework which seeks, in particular, to ensure the
proper functioning of the internal market’, which integrated technological,
digital and information society developments, and which had ‘established a
regime with high and homogeneous protection’ for broadcasters as regards their
broadcasts. It was irrelevant that this
harmonisation appeared in different EU measures, which also regulated other
intellectual property rights.
So the area of law to be compared as between EU law and the
planned treaty was the neighbouring rights of broadcasters. On this point,
while there were some differences between the existing EU rules and the planned
treaty, any new rules on the planned treaty were liable to have a significant
impact upon the EU acquis. In
particular, the Court distinguished its prior case law which had held that
external competence was shared when the EU set minimum standards, on the grounds that in this area EU legislation
simply limited its scope instead.
Since the new treaty might extend the scope of the EU rules, its subject-matter
fell within the scope of the EU’s external competence. And on several points,
the Court did not believe there was enough evidence to support the claims of
the Council and some Member States that issues not covered by the EU acquis at all would be inserted into the
future treaty.
For example, one particular issue relates to the protection
of signals prior to their broadcast to the public – usually this occurs when
one broadcaster transmits a signal to another. This issue is not currently
covered by the EU rules. If the decision was taken to protect these signals, this
protection could be provided in a number of ways. The Court highlighted one option – the
extension of the term ‘broadcasts’ to cover pre-broadcast signals would have
horizontal effects through the regulatory system, and therefore impact on the
EU acquis. The other possible mechanisms noted (the
introduction of sui generis legal protection of pre-broadcast signals or
the application of the provisions dealing with ‘technical measures’ to the pre
broadcast signals) would not have such an effect. The Court emphasized that in
the absence of any reference to these approaches in the Council of Europe
preparatory documents ‘those approaches seem, at this stage, to be hypothetical
and cannot therefore be relevant to determining the exclusive or shared nature of
the competence of the European Union in the present case’ (para 99).
Having ruled in favour of the Commission on its substantive argument,
the Court ruled that it was not necessary to decide on the three alternative
procedural arguments which the Commission had made: such a ‘hybrid’ decision of
the Council and Member States was not permitted by EU law; the Council had
wrongly voted by unanimity, not qualified majority; and the Council had
breached the principle of sincere cooperation. The first two of these arguments
had been accepted by Advocate General Sharpston in her Opinion (she thought the
final argument was superfluous). However, unlike the Court, she had ruled
against the Commission on the substantive point, on the basis that the
Commission had argued that all of the
provisions of the draft Convention were closely linked to EU law, but had
failed to prove this on the facts.
Comments
First of all, as regards the admissibility of this action, the
Court’s ruling is convincing as regards the Council conferring power on
Commission, but arguably not as regards Member States conferring power on the Council
(since it would be operating outside the EU framework in that context), and
certainly not as regards Member States conferring power on Member States. The better
argument for the admissibility of this action is that if the Council and Member
States adopt a hybrid decision like this one, their action is indissociable.
Put another way, if the Council and Member States act together in this way, there’s
joint and several admissibility.
Secondly, as for the procedural points not addressed by the
judgment, the Advocate-General’s opinion is not convincing. Since mixed
agreements, ie agreements ratified by both the EU and its Member States, are a
common feature of EU law, then there should no problem with the idea that a
decision relating to negotiations on those agreements could in principle be a
hybrid decision. Conceptually, that’s no different from the nature of the final
mixed agreement.
As for the substantive competence issues, first of all it’s important
that the Court clarified the point that ERTA
and the case law elaborating upon it are still applicable to Article 3(2) TFEU,
in light of the doubt which some had expressed on this point. The judgment is
presumably relevant by analogy to the first two grounds for exclusive
competence listed in Article 3(2) TFEU (where competence is provided for in a
legislative act of the Union or is necessary to enable the Union to exercise
its internal competence). At the very least, it must follow that the Protocol
on shared competence is also irrelevant to those two other grounds, since as
the Court rightly said, that Protocol only refers to Article 2(2) TFEU.
Despite this important clarification, the application of the ERTA judgment itself remains complex and
seems highly fact dependent in each case, arguably making the prediction of
outcome difficult. Here, it is notable that the Court and the Advocate General
came to different conclusions in determining the key question of whether the
conclusion of the Convention affects common rules or alters their scope
(Article 3(2) TFEU). The Advocate
General and the Court both stated that the burden of proof was on the
Commission to show that exclusive competence had been established. As a
corollary it seems the default position is shared competence. To quote the
Advocate General:
if the analysis of the Convention and
EU rules on the basis of the information presently available shows that in
at least one respect Member States retain competence, the Commission’s plea
must be rejected. [para 143]
While the Court accepted this allocation of the burden of
proof, it is when we get to the specifics that differences emerge as can be
seen in a couple of examples. Article 8(3) of Directive 2006/115 states:
Member States shall provide for
broadcasting organisations the exclusive right to authorise or prohibit the
rebroadcasting of their broadcasts by wireless means, as well as the
communication to the public of their broadcasts if such communication is made
in places accessible to the public against payment of an entrance fee.
The Advocate General analyses the matter as follows: ‘Thus,
EU law does not yet regulate ‘at least’ the right of retransmission by wire or
cable, whereas the Convention might do so and the Member States are currently
authorised to provide for it in their own jurisdiction’ [para AG 150]. The Court accepts the same point but draws a
very different conclusion from it – that the proposed Convention, by
regulating areas currently outside EU competence, in itself might have an impact on
EU law. The Court does not explain how, merely adopting the Commission’s
position [92]. The fact that broadcasters are already partially covered by EU
law does not seem to address the point.
So, the Opinion seems more logical on this point.
In a number of the aspects of the Convention under
consideration, the question of whether there was impact would be affected by
the approach finally taken by the negotiators. For example, the scope of the
Convention would depend on its definition. While EU law does not have a
definition of the term ‘broadcasting organisations’ there would be some
confluence with the rights-holders under the various directives. The impact on
EU law is therefore uncertain. The
Advocate General concluded cautiously:
If the definition in the Convention
creates an absolute category that is wider than broadcasting organisations that
are rightholders under the said directives, the creation of that category might
possibly limit the European Union’s freedom to decide on its own definition.
That may not be the case if the definition in the Convention were
non-exhaustive and did not offer protection to entities other than existing
rightholders under EU law. [AG 156]
While in this case it was necessary to finally determine the
point as to whether there is impact on EU law or not, this then begs the
question of what to do in such a circumstance – do we assume that if there is a
possible interpretation that could affect EU law then the text is satisfied, or
is a higher standard of proof required?
The difference on this point can be seen in the respective
approaches of the Advocate General and the Court to pre-broadcast signals. It
is clear that currently EU law does not require the protection of such signals
and that the Convention proposed to afford protection to such signals. Given
the early stages of negotiations, it is unclear what sort of mechanism was
likely. Some possibilities might utilise techniques found in the existing legal
framework (for example extending the definitions, or applying the technical
measures rules to pre-broadcast signals). Since such an approach would have an
impact on EU law, then that would bring the issue within the exclusive
competence of the EU – appoint on which the Advocate General and the Court
agreed.
Another mechanism exists – the development of a sui generis right – which would not have
this effect. Here the Advocate General suggested that in such a situation there
would be no exclusive competence. In stark contrast, the Court dismissed other
approaches (including the sui generis
right) as hypothetical, and therefore focussed only on the approach that would
trigger exclusive EU competence [para 99].
No reason was given as to why the other approaches were more
hypothetical than the approach the Court selected. So while the Court and the Advocate General
agree on the principles, they differ in the application of those principles, and
it seems that the Court has tended to favour assessments that point towards
exclusive competence.
Finally, what are the broader implications of the judgment?
The Court of Justice has already ruled (in the Daiichi Sankyo judgment) that the WTO's TRIPs agreement falls within the
scope of the EU exclusive external competence over the common commercial (external
trade) policy (CCP), which was extended to cover trade-related intellectual
property fully by the Treaty of Lisbon. It has also ruled that a Council of Europe treaty relating to enforcement of audiovisual service providers’ rights falls within
the scope of the same competence, in light of the full extension of the CCP to
services by the same Treaty. Usually, the Member States have no veto as regards
CCP matters.
Now it seems that treaties relating to many other aspects of
intellectual property can fall within the scope of the EU’s exclusive external
competence, due to the exercise of the EU’s powers to adopt internal market
legislation. Again, this means that Member States usually lose their veto. This effect
is not absolute, given that the recent Marrakesh treaty on copyright exceptions
for the blind and the Beijing treaty on audiovisual performances are both mixed agreements (see the list of signatories for the former and latter treaties respectively).
However, the power of the EU (and the Commission in particular) in this field is
demonstrated by the Commission’s veto of a planned Council of Europe treaty on
cross-border broadcasting, at a late stage of negotiations.
More broadly, the Court’s pro-EU application of the test for
exclusive competence suggests that it would be easier to find such exclusivity
in other areas which the EU has only partly regulated, such as consumer law or
immigration law. The broadcasting rights judgment may, in time, prove to be nearly
as important as the ERTA judgment
which it reconfirms and elaborates upon.
Barnard & Peers: chapter 14, chapter 24
No comments:
Post a Comment