Another decision on broadcasting rights and football matches. In Scottish pubs.
The Scottish Premier League ('SPL') holds the broadcasting rights to Scottish Premier League football matches and grants licences permitting the broadcast of matches both in Scotland and abroad.
This dispute related to the purchase and use of a decoder device and smart card from a Polish satellite broadcaster.
Lisini purchased these items from the Polish company with standard terms and conditions which made it clear that the use was limited to Poland. Nonetheless, Lisini used to broadcast several SPL matches using the Polish decoder in its pubs in Scotland.
SPL’s agents first wrote to Lisini at the end of 2006 alleging that possession of the decoder and card was unlawful under section 298 of the Copyright, Designs and Patents Act 1988 ('CDPA 1988') and use of such apparatus might also be considered a criminal offence.
In January 2007, following the raising of interdict/injunction proceedings, one of Lisini’s directors signed an undertaking on behalf of the company not to use or permit to be used in any of its premises any apparatus designed to access live SPL matches where the broadcaster did not have the right to grant such access.
In April 2007, further to the broadcast of another match in Scotland, an interim interdict was granted against Lisini on the basis of breach of various provisions of the CDPA 1988.
In this Scottish case the parties were aware that in Football Association Premier League v. QC Leisure (an English case involving public houses which used to broadcast live matches from the English Premier League) the High Court of England and Wales had reverted to the Court of Justice of the European Union, seeking clarification as to various issues. Pending this reference, the parties decided to put their case on hold until the Court of Justice issued its decision. The Scottish Judge summarised the QC Leisure ruling of the CJEU (on which see Kat post here) as follows:
“..the ECJ [now the CJEU] found that clauses prohibiting the use of foreign decoders and smart cards were void. They constituted a restriction on competition and the anti-competitive provisions of European law prevailed over the 1988 Act”.
In summer 2012, Lisini applied to recall the interim interdict and SPL did not oppose that application. Parties amended their pleadings to take account of the CJEU ruling and this led to this new Scottish ruling. This was a debate hearing which involved only the leading of legal arguments to determine the competence of the claims at issue.
Although SPL could no longer rely on copyright law to support an interdict, it still wished to obtain a permanent interdict based upon the contractual undertaking, essentially arguing that it was a free-standing undertaking which it could enforce and which had not been nullified by the QC Leisure ruling. By way of counterclaim, Lisini sought a declarator that the interim interdict granted in 2007 was wrongful and that SPL had acted in breach of Article 101 of the Treaty on the Functioning of the European Union ('TFEU'). Lisini also sought damages for over £1.7 million.
Lord Woolman dismissed the attractively simple argument that the undertaking was a free-standing contract on the basis that a purely literal interpretation would mean that Lisini had intended to be bound "come what may" regardless of unexpected legal or other changes. SPL was entitled at the time the action was raised to rely on the copyright legislation but that had now changed. The reality was that Lisini (as indeed would any defendant!) had only granted the undertaking on the basis of the alleged breached of the CDPA 1988 in both pre-action correspondence and in the court papers. It was artificial to separate things in this way and the undertaking implicitly fell at the same time as the interim interdict was withdrawn in July 2012. Therefore the principal action against Lisini was dismissed.
The court refused to dismiss the counterclaim and the next stage may be for the Scottish Court to rule upon the counterclaim and the level of any damages after trial. Basing its arguments upon various UK and European authorities and guidance, SPL argued that the Article 101 breach claim had to be dismissed as there were no clear and precise pleadings about the relevant market in which competition had allegedly been restricted. That was vital as to calculate the market share was necessary to determine the relevant market for the product.
Whilst Lord Woolman agreed that there was force in the argument that the definition of the market could not be left to inference, he found that everything had to be considered in light of the English QC Leisure case. The guidance on Article 101 TFEU from the ECJ was such that, where a licence agreement is designed to prohibit or limit the cross-border provision of broadcasting services, it is deemed to have as its object the restriction of competition, unless other circumstances falling within its economic and legal context justify the finding that such an agreement is not liable to impair competition. Lord Woolman ruled that the object of such licence agreements were to restrict competition and that was a sufficient basis to allow Lisini to proceed to trial on the counterclaim.
In light of the cold Scottish weather this issue may require detailed undercover investigation in various public houses in the near future …"
