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A Wii forward, not a load of DS: anti-copyright measures and proportionality in the Copyright Directive

01 November 2013. Published by David Cran, Partner

On 19 September 2013, Advocate General Sharpston gave an Opinion on questions referred to the Court of Justice of the European by the Tribunale de Milano (Italy) (Case C-355/12 Nintendo Co Ltd v PC Box Srl).

Her key recommendation was that Nintendo's use of protection measures on its Wii and DS consoles and accompanying games is protected by the Copyright Directive (2001/29/EC) if the protection measures are adjudged to be proportionate. Should the CJEU agree with the Advocate General, its ruling will be warmly received by those affected by copyright infringement and piracy in the computer games sector, as it will confirm that protection measures in consoles and games should be protected by the Copyright Directive even where their effect extends to blocking non-proprietary but lawful games, provided their use is proportionate.

Background

The protection measures in use on Nintendo's consoles and accompanying games use an encrypted "lock and key" verification process to prevent the use on its consoles of any game which has not been authorised by Nintendo. Nintendo's intention is that games which are pirated or otherwise infringe the copyright of authorised games cannot be used on its consoles. The Copyright Directive (specifically, Article 6) requires Member States to provide adequate legal protection against a variety of acts or activities which attempt to or do circumvent protection measures designed to prevent or restrict acts which are not authorised by rights holders. Nintendo sought an injunction in Italy against PC Box, a company which retailed modification chips and game copiers online. Modification chips and game copiers circumvent Nintendo's protection measures, allowing counterfeit games to be played and bypassing the verification tests contained on Nintendo's consoles. The central question for the Tribunale was whether Nintendo's protection measures benefit from protection from circumvention under the Copyright Directive, and it was on this question the Tribunale sought guidance from the CJEU.  

Which Directive?

Before embarking on her Opinion proper, the Advocate General noted the findings of the Tribunale on the nature of Nintendo's games and the applicable Directive. The Tribunale found that the Computer Programs Directive (2009/24/EC), which as its name suggests applies specifically to 'computer programs' and which contains less generous protection than the Copyright Directive, only takes precedence over the Copyright Directive where the protected material falls entirely within its scope. In this case, Nintendo's games, which are "complex multimedia works including intellectual works in narrative and graphic form" are not to be reduced to the status of computer programs, and instead fall within the scope of the greater protection offered by the Copyright Directive.  As such, even if arguable (which the Advocate General doubted) PC Box could not avail itself of any of the defences under the Computer Programs Directive.

A test of proportionality

In substance, the Tribunale received an Opinion on two questions it had referred to the CJEU:

The first question: protection measures – what if Nintendo could have achieved the same protection another way?

Firstly the CJEU was asked whether protection measures, within the meaning of the Copyright Directive, include both those physically linked to the copyright material (here, by incorporation in games) and those which are physically linked to devices required in order to use or enjoy that material (here, by incorporation in consoles).

The Advocate General found nothing in the wording of the Copyright Directive that excludes protection measures such as those in issue, which are incorporated partly in the games and partly in the consoles, and which involve interaction between the two. To excuse measures which are, in part, incorporated in devices other than those which house the copyright material itself would be likely to deny a range of TPMs the protection which the directive seeks to ensure.

Secondly, the CJEU was asked whether the protection measures benefit from protection under the Copyright Directive if their effect is to also preclude any use of that material with other devices or of other material with those devices.

Advocate General Sharpston found that the Tribunale must examine whether the use of the protection measures complies with the principle of proportionality to determine whether they are protected by the Copyright Directive. Specifically, it is necessary for the Tribunale to examine whether Nintendo could have protected authorised games without preventing or restricting the use of its consoles to play non-infringing 'homebrew' games.

The Advocate General suggested that the test of proportionality involves determining whether a protection measure pursues a legitimate aim, whether it is suitable to achieve that aim and whether it does not go beyond what is necessary to achieve it. In relation to these three aspects:

  1. Nintendo's aim of preventing or restricting acts not authorised by it was clearly a legitimate one and was encouraged by the Copyright Directive.
  2. The suitability of Nintendo's protection measures is linked to that of their effectiveness, which will be a matter for the Tribunale, but Nintendo's protection measures appear effective in at least restricting unauthorised reproduction of authorised games. Their effect is largely indirect in that regard (with the direct effect being to prevent the use of unauthorised copies on Nintendo's consoles), but the Copyright Directive in no way excludes indirect effect.
  3. The Tribunale must look at the degree of restriction of acts which do not require Nintendo's authorisation to determine whether the protection measures go beyond what is necessary. For instance, it may be relevant to take account of the relative costs of different types of protection measures available to Nintendo.

The second question: PC Box devices – what if they are primarily used for non-infringing purposes?

What is the relevance of "the particular intended use attributed by the rights holder to the product in which the protected content is inserted" (Nintendo's consoles) and "the extent, nature and importance of the uses of the devices against whose use protection is sought" (PC Box's modification chips and game copiers)?

The Advocate General commented that the relevant question was whether PC Box's devices fall within the scope of the Article 6(2) of the Copyright Directive, and to do this it is necessary for the Tribunale to adopt a quantitative approach and examine the extent to which modification chips and games copiers can be used for non-infringing purposes. If it can be established that they are used primarily for non-infringing purposes, there will be a strong indication that the protection measures are not proportionate. If it can be established that the devices are used primarily in such a way as to infringe rights, the converse is true. Qualitative criteria, such as the need to balance the importance of protecting copyright as against the right to carry out acts which require no authorisation may also be relevant when applying the test of proportionality, although such considerations were not put before the CJEU.

Comment

The Advocate General's Opinion indicates that protection measures in consoles and games should be protected by the Copyright Directive where the use of such measures is proportionate. To determine this, a court should firstly consider whether the protection measure in question pursues a legitimate aim, is suitable to achieve it and does not go beyond what is necessary to achieve it. In this assessment, a court is likely to place emphasis on whether protection measures which do not prevent non-infringing acts were available to a rights holder at the time. The second consideration is whether the primary purpose and use of the circumvention measures is to infringe rights or is for legitimate purposes. This would likely take the form of a quantitative analysis although qualitative criteria are still relevant.

As modification chips, games copiers and other circumvention devices appear to be primarily used for infringing purposes, the Advocate General's Opinion should please those affected by copyright infringement and piracy in the computer games sector. Games manufacturers, however, may find it difficult to adduce evidence of how a defendant's circumvention devices are actually used in practice.

The clarification on the relationship between the Copyright Directive and the Computer Programs Directive is also timely in the wake of the uncertainties which arose in Case C-128/11 UsedSoft v Oracle (3 July 2012), and will be welcomed by the computer games industry as it clarifies that computer games will usually benefit from the greater protection provided by the Copyright Directive.