CJEU rules that a cloud based service for remote recording is a communication to the public and so must obtain the rights holders’ consent

This is a further case which reinforces the importance and strength to rights holders of the right to communicate a copyright work to the public provided by Article 3 of the Copyright Directive (2001/29). The CJEU held that a cloud based remote recording service amounted to a communication to the public and could not fall under the private copy exemption, which was to be interpreted strictly, and therefore the rights holders’ consent was required. (Case – 265/16 VCAST v RTI SpA.).

Business impact

• This decision is good news for rights holders, as they will be able to take action against service providers who do more than simply provide copying services to users who are in turn relying upon a private copying exemption.
• The CJEU decision reiterates Reha Training (C-117/15) that the communication to the public is a key right which enables rights holders to exert control over their copyright works if a service provider provides a new and different technical means of transmission to a new public for which there is no consent.
• The case gives guidance to those providing recording services via the internet and cloud storage, and to rights holders, as to where the boundaries are to be drawn, and confirms the CJEU approach that the exceptions to copyright which can be provided by the Member States will be interpreted narrowly.
• Whilst the UK has no private copying exception enacted, the case provides a useful reminder of the CJEU’s strict approach to interpretation of exceptions to copyright.
• The VCAST decision continues the CJEU’s line of cases where interpretation of communication to the public has been interpreted broadly. In April we gave an update on the CJEU guidance on communication to the public following the Filmspeler decision (C-527/15) which was then applied in The Pirate Bay (C-610/16) (reported here). Similarly in the VCAST decision, the CJEU was clear that the provision of the service via the internet and cloud storage where initial broadcast was on territorial TV was sufficient to infringe, if the rights holder had not consented.

Decision

VCAST operates a remote recording system for terrestrial television programmes of Italian organisations, which picks up the television signal using VCAST’s antennas and records the customer’s choice into a cloud data storage space indicated by the customer. This makes a copy of the broadcasted programme available to the customer at a time of their choice via the internet.

In its reference to the CJEU, the District Court of Turin, Italy, sought a ruling as to the application of the private copy exemption on VCAST’s services. The private copy exemption allows natural persons to make copies for personal use, and the CJEU has acknowledged that the means to make the copy may be provided by a third party. However, the Italian Court were concerned as to whether the service provider’s commercial nature and the extent of their role in facilitating recording took the service outside the scope of the exemption, and if the service was legitimate, whether rights holders were sufficiently compensated, as required by the Copyright Directive.

In its decision, the CJEU identified that the role of VCAST was not just to provide a means for recording, but was also to provide access to protected works in the first place. The Court therefore found that the question was not simply one of applying the private copying exception and it approached the case by considering whether VCAST was making a communication to the public which is a right reserved to the copyright owner under Article 3 of the Copyright Directive.

The CJEU had no difficulty in concluding that VCAST was making a communication to the public because it was providing a retransmission to customers via the internet and cloud storage of protected works to a different public to which the same works had previously been broadcast on terrestrial TV. VCAST was therefore providing protected works through a different technical means to a different public and this constituted a communication to the public which required the consent of the rights holder, applying the test in Reha Training.

In Reha Training, a decision of the Grand Chamber of the CJEU which drew together the criteria for assessing whether there had been a communication to the public, the CJEU confirmed a two-prong approach requiring: (1) an act of communication being a transmission or retransmission of the protected work by any technical means, if that specific technical means had not already been authorised by the rights holder; and (2) the communication must be to a new public who would not enjoy the protected work without the intervention of the service provider.