Out-Law News 4 min. read

Anti-copyright infringement measures do not prevent the sale of ‘circumvention’ devices that have significant alternative uses, says top EU court

Software companies that use 'technological protection measures' (TPMs) to protect against copyright infringement will only benefit from legal protection against the sale of ‘circumvention’ devices if those measures do not go beyond what is "necessary" to achieve that purpose, the Court of Justice of the EU (CJEU) has said.

TPMs are deployed across devices and software to protect against copyright infringement. Their use "should not prohibit devices or activities which have a commercially significant purpose or use other than to circumvent the technical protection", the Court said.

Companies seeking to install TPMs to protect against copyright infringement should assess whether there are other ways to achieve "comparable protection" but which cause "less interference with the activities of third parties not requiring authorisation by the rightholder of copyright or fewer limitations to those activities".

Factors such as cost, technological and practical issues of implementation and a comparison of how effective alternative measures should be considered as part of this assessment, the CJEU said. It said that alternative measures may not need to be 100% effective to be considered as being a more suitable option than disruptive TPMs.

The suitability of alternatives should also be considered with reference to what "devices, products or components [are] capable of circumventing the protection of effective technological measures", it added.

How such devices, products or components are actually used will be relevant to determining the effectiveness of TPMs as a means of legal protection. “Legal protection is granted only with regard to technological measures which pursue the objective of preventing or eliminating ... acts not authorised by the rightholder of copyright”, the CJEU said.

The CJEU was ruling on the issue in a case referred to it from a court in Italy. In that case, Nintendo has sued PC Box, a company which sells mod chip and game copying devices that are capable of circumventing TPMs installed by Nintendo on its consoles and computer games. Deploying those products enable non-Nintendo manufactured or licensed games to be played on Nintendo consoles. The court in Italy has been assessing to what extent PC Box’s products are lawful.

Nintendo has claimed that the technical measures it has put in place benefit from legal protection afforded to TPMs and has claimed that PC Box's devices are mainly used for the purpose of circumventing those measures.

However, PC Box has said it sells software created by independent producers that work on Nintendo consoles in conjunction with the devices it sells. It claimed that Nintendo's TPMs should not prevent the sale of its products because the real purpose for which they were installed is to "prevent use of independent software which does not constitute an illegal copy of videogames, but which is intended to enable MP3 files, movies and videos to be read on consoles, in order to fully use those consoles", according to the judgment.

Copyright laws set out in the EU's Information Society Directive provide legal protection to rights holders to install TPMs to restrict unauthorised acts in relation to their copyrighted works. EU member states are obliged to ensure that they take "adequate legal protection against the circumvention of any effective technological measures" carried out by people who know, or have reasonable grounds to know, that they are pursuing that circumvention objective.

Member states need to adequately protect against the manufacture, import, distribution, sale, advertisement for sale or rental, or possession for commercial purposes of devices, products or components or the provision of services which: are promoted, advertised or marketed for the purpose of circumvention of any TPMs, or have only a limited commercially significant purpose or use other than to circumvent effective TPMs, or are primarily designed, produced, adapted or performed for the purpose of enabling or facilitating the circumvention of effective TPMs.

However, the Directive also explains that the legal protection technological protection measures should be given should not prevent the normal operation or technological development of electronic equipment, should be proportionate and should not prohibit devices or activities which have a commercially significant purpose or use other than to circumvent the technical protection. 

Separately, under the EU's Computer Programs Directive further provisions give computer program owners the right to pursue those that knowingly sell infringing computer programs or any means that’s sole purpose is to facilitate the unauthorised removal or circumvention of a technical device applied to protect a computer program.

The CJEU said that the ultimate decision on whether PC Box’s products are lawful and whether Nintendo’s TPMs should benefit from legal protection is an issue for the Italian court to decide on, based on the criteria set out in its judgment.

"It is for the national court to determine whether other measures or measures which are not installed in consoles could cause less interference with the activities of third parties or limitations to those activities, while still providing comparable protection of the rightholder’s rights," it said.

"Accordingly, it is relevant to take account ... of the relative costs of different types of technological measures, of technological and practical aspects of their implementation, and of a comparison of the effectiveness of those different types of technological measures as regards the protection of the rightholder’s rights, that effectiveness however not having to be absolute. That court must also examine the purpose of devices, products or components, which are capable of circumventing those technological measures," the CJEU said.

"In that regard, the evidence of use which third parties actually make of them will, in the light of the circumstances at issue, be particularly relevant. The national court may, in particular, examine how often those devices, products or components are in fact used in disregard of copyright and how often they are used for purposes which do not infringe copyright," it added.

The court also ruled that the legal protection extended to technological protection measures is not limited to only measures which restrict copying from the medium in which a copyright work is housed, but also to those which prevent access from multiple locations or devices.

"The concept of an ‘effective technological measure’ ... is capable of covering technological measures comprising, principally, equipping not only the housing system containing the protected work, such as the videogame, with a recognition device in order to protect it against acts which are not authorised by the holder of any copyright, but also portable equipment or consoles intended to ensure access to those games and their use," the CJEU said in its judgment.

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