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The ECJ upheld the European Commission's imposition of a compulsory license on copyright owners to remedy a violation of Article 86 of the EEC Treaty. The violation consisted of the exercise by television broadcasters of their exclusive rights under national copyright laws to prevent potential publishers of weekly television guides from copying their copyrighted weekly television listings. This prevented potential competitors from entering the market for weekly television guides in a geographic area comprised of Ireland and Northern Ireland, a portion of the United Kingdom.
Appellant Radio Telefis Eireann (RTE), ITV and BBC broadcast television programming to most households in Ireland, and to 30%- 40% of households in Northern Ireland. Judgment at ¶6. RTE publishes its own weekly television guide and ITV publishes its weekly listings through appellant Independent Television Listings Ltd. (ITP). Id. at ¶8. At the time the original complaint was lodged with the Commission, there was no single comprehensive weekly television guide. Id. at ¶7.
Magill TV Guide Ltd. (Magill) attempted to fill that gap by publishing a comprehensive weekly television guide. RTE, ITP and BBC prevented Magill from doing so by obtaining injunctions under national copyright laws. Id. at ¶10. Magill complained to the Commission. The Commission initiated a proceeding, after which it adopted a decision finding that the copyright owners had breached Article 86 of the EEC Treaty. The Commission ordered the copyright owners to "put an end to that breach, in particular `by supplying . . . third parties on request and on a non-discriminatory basis with their individual advance weekly programme listings and by permitting reproduction of those listings by such parties.'" Id. at ¶¶11-12.
The copyright owners applied to the Court of First Instance (CFI) for annulment of the Commission decision. Id. at ¶14. The CFI ruled in favor of the Commission, and RTE and ITP appealed to the ECJ. Intellectual Property Owners, Inc. (IPO), a Washington, D.C. organization representing the interests of owners of intellectual property, sought and was granted permission to join the proceedings as an intervenor on behalf of the appellants. Id. at ¶¶15-23. In June 1994, the Advocate General of the ECJ handed down an opinion arguing that the rulings of the CFI should be overturned. The opinion rejected the view of the CFI that it was an abuse of dominant position to exercise copyright rights in pursuit of an obviously anti-competitive aim, since the objective of a copyright is to grant the copyright holder the ability to restrict competition. The Advocate General also criticized the premises that apparently underlay the CFI's holding that competition law in the European Union is supreme over national copyright laws.
The Court noted that mere ownership of an intellectual property right cannot confer a dominant position. Id. at ¶46. However, since the appellants were the only source of the information needed to allow an undertaking like Magill that wishes to publish weekly listings to do so, appellants had a "de facto monopoly over the information . . . . The appellants are thus in a position to prevent effective competition on the market in weekly television magazines" and thus occupy a dominant position. Id. at ¶47.
The court noted that "the arguments of appellants and IPO wrongly presuppose that where the conduct of an undertaking in a dominant position consists of the exercise of a right classified by national law as `copyright,' such conduct can never be reviewed in relation to Article 86 of the treaty." Id. at ¶48.
"[R]efusal to grant a license, even if it is the act of an undertaking holding a dominant position, cannot in itself constitute abuse of a dominant position." Id. at ¶49. "However, it is also clear . . . that the exercise of an exclusive right by the proprietor may, in exceptional circumstances, involve abusive conduct." Id. at ¶50.
The court agreed with the factors cited by the CFI in finding that the appellants had abused their dominant position:
1. There was "no actual or potential substitute" for the weekly television listings published by the appellants. Id. at ¶52. Appellants were "the only sources of the basic information on programme scheduling which is the indispensable raw material for compiling a weekly television guide." Id. at ¶53. Appellants' refusal to provide the information "prevented the appearance of new products . . . . Such refusal constitutes an abuse" under Article 86. Id. at ¶54.
2. "[T]here was no justification for such refusal either in the activity of television broadcasting or in that of publishing television magazines." Id. at ¶55.
3. Appellants thus monopolized "the secondary market of weekly television guides by excluding all competition in that market since they denied access to the basic information which is the raw material indispensable for the compilation of such a guide." Id. at ¶56.
The Court agreed with the CFI that the appellants actions had "modified the structure of competition" in a market consisting of Ireland and Northern Ireland, and thus affected trade between Ireland and the United Kingdom. Id. at ¶70. The Court was not swayed by evidence cited by the appellants that the effect on trade among Member States was minimal. "In order to satisfy the condition that trade between Member States must be affected, it is not necessary that the conduct in question should in fact have substantially affected that trade. It is sufficient to establish that the conduct is capable of having such an effect." Id. at ¶69.
The Court upheld the CFI's decision rejecting the appellants' claim that the Commission's actions violated Articles 9(1) (conferring a right of reproduction) and 9(2) (allowing limitations on the right of reproduction only in limited circumstances that do not conflict with the normal exploitation of a work and do not unreasonably prejudice the legitimate interests of an author) of the Berne Convention. The court noted the following:
1. The EC is not a party to Berne. Id. at ¶83.
2. Both Ireland and the U.K. were members of Berne prior to accession to the EC. Provisions of a pre-accession agreement cannot be relied on in intra-Community relations where the rights of non-Member countries are not involved. Id. at ¶84. Consequently Article 9(1) of Berne did not limit the Commission.
3. The U.K. acceded to the 1971 act of Berne, which amended Article 9(1) and introduced Article 9(2) after accession to the EC. Ireland never acceded to the 1971 act. Id. at ¶85. Since the EEC treaty can only be amended in accordance with Article 236, Article 9 of Berne convention cannot limit the powers of the Community.
Disclaimer: This summary is for the convenience of the reader only. It is not legal advice and may not be relied upon for any purpose.
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