In digital television, copyright-protected works are transmitted to the relevant audience in the form of video and audio signals.

This is often done via satellite broadcasting: broadcasters feed a broadcast stream with the programme content into a communication chain that sends the signal to the satellite (“uplink”). After being sent back from the satellite, receivers within the broadcast area can receive this stream and consume the programme. The uplink often takes place in a different EU member state than thereception of the broadcasts: Thus it happens that the signal is transmitted to a satellite in Belgium, but television viewers in Austria ultimately receive it.

In many cases – especially in the case of pay-TV – this process is supplemented by the activity of satellite bouquet providers: these bundle the programmes of the broadcasters and make them available to end customers as a programme package (“satellite bouquet”). The feed of the programme-carrying signal is still carried out by the broadcasting company. However, the programmes are encrypted with a code and must be decoded before use. With the consent of the broadcasting company, the satellite bouquet provider provides its paying customers with access keys in order to be able to watch the programme.

The Austrian collecting society AKM has brought an action against Canal+, one such satellite bouquet provider, in a test case: In Austria, the AKM administers the rights to works of musical art (i.e. pieces of music) which are part of the broadcast television programmes. According to the AKM, a satellite bouquet provider must have the (additional) consent of the rights holders in each receiving state in order to be allowed to provide its services. Otherwise, it would infringe the rights of the AKM in the receiving state Austria.

We countered on behalf of our client that the so-called sender-state-principle applies: consent is only required for the member state in which the uplink is carried out. Since this is always outside Austria in the present case, an infringement of rights in Austria is ruled out. The AKM can therefore neither demand an additional consent for Austria nor is it called upon to pursue any incorrect licensing in the uplink state. Otherwise, this would contradict the legislator’s intention of bundled rights management in one member state.

The first and second instance in the national legal dispute had still rejected our argumentation for the bouquet provider. The Austrian Supreme Court referred the question to the European Court of Justice (ECJ) for a decision. The latter now confirms our legal opinion: It holds that a satellite bouquet provider is not obliged to obtain the consent of the rights holders in the recipient state for a satellite broadcast in which it participates:

Both the direct and indirect transmission of television programmes via satellite were to be assessed as a single act of communication to the public. The sender-state-principle applied to this single act of communication to the public. Therefore, only the law of the member state broadcasted from applies to the entire communication. Both broadcasters and satellite bouquet providers must therefore obtain any necessary consent from the rights holders only in the broadcasting member state. It would be contrary to the unification concept of the directive if a satellite bouquet provider were also required to scure consent in other member states. This supports the legal opinion of the satellite bouquet provider that it cannot be held liable in the receiving state, in this case Austria.

The decision has great, Europe-wide significance: It ensures that an efficient, central granting of rights is possible in a member state and that there is no fragmentation of rights. The next step is for the Austrian Supreme Court to render its decision on this basis in the national proceedings.

Axel Anderl, Managing Partner and Head of the IP/IT and Data Protection practice and the Digital Industries Group, intervened on behalf of the satellite bouquet provider in the national proceedings and before the ECJ. He welcomes the clear words of the Court: “The ECJ now confirms the validity of the sender-state-principle in cross-border satellite broadcasts also for the activities of a satellite bouquet provider. The bouquet provider therefore requires consent of the rights-holders in the satellite broadcast of the broadcasting company only in the sending member state and cannot be held liable in the receiving state. This brings clarity and legal certainty for the entire industry in Europe.” Axel Anderl was assisted by Ida Woltran, Associate in his team.

26th May 2023

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