The VCAST case, C-265/16, has always about applying the right to make private copies when using a cloud-based video-recording service… or has it? The case was referred to the EU’s highest course by the Turin Court of First Instance, and the questions asked by the Italian court concerned the understanding and application of the private copying exception within Article 5(2)(b) of the InfoSoc Directive. Advocate General (AG) Szpunar responded by releasing his Opinion (more about that here), which also focused on the private copying exception. However, the Court of Justice of the European Union (CJEU) has now released its decision, and has taken a different view of the substance of the case.
Let’s start then and see why VCAST is not really – or at least is no longer – a case about the private copying exception.
The facts of the case are rather simple: basically, the Italian litigation revolves around the lawfulness of a cloud-based recording service, provided by VCAST, that allows its customers to make copies of terrestrial TV programmes broadcasts including, among other things, those of RTI.
Importantly, the possibility to make such recording is granted irrespective of whether customers can lawfully access the programmes terrestrially, ie offline. A clear instance is, as well explained by the AG in his Opinion, that for RTI programmes it is generally required that the user happens to be on the Italian territory.
Under Italian law it would appear that VCAST activity might be lawful, although the CJEU did not consider this a given. Nonetheless, the Court deemed it helpful to base its analysis on the assumption that Italian private copying exception applies to VCAST’s activities.
The question became therefore whether a national law of this kind is compliant with what Article 5(2)(b) of the InfoSoc Directive (read in combination with the three-step test in Article 5(5) therein) provides.
Private copying… but is VCAST’s service only about the making of copies?
After recalling that exceptions should be interpreted strictly, the Court confirmed the finding of the AG – which follows from the seminal Padawan decision – that for the private copying exception to apply it is not required that the beneficiary is the one who directly makes the copy of the copyright work at issue.
However – and this is the interesting part of the Court’s analysis – VCAST’s activity is not about reproductions or, at least, is not just about reproductions. Hence, the discussion around the private copying exception is not the whole story.
More fundamentally, in fact, VCAST does not only organize the recording of TV programmes for its customers but, instead, makes them available to them in the first place. It follows that VCAST’s activity cannot be assessed exclusively under the binary distinction reproduction/private copying. It is also necessary to take into account the making available part and, with it, Article 3 of the InfoSoc Directive.
What does all this lead to?
[A]lthough the private copy exception means that the rightholder must abstain from exercising his exclusive right to authorise or prohibit private copies made by natural persons under the conditions provided for in Article 5(2)(b) of Directive 2001/29, the requirement for a strict interpretation of that exception implies that that rightholder is not deprived of his right to prohibit or authorise access to the works or the subject matter of which those same natural persons wish to make private copies.
It follows from Article 3 of Directive 2001/29 that any communication to the public, including the making available of a protected work or subject matter, requires the rightholder’s consent, given that, as is apparent from recital 23 of that directive, the right of communication of works to the public should be understood in a broad sense covering any transmission or retransmission of a work to the public by wire or wireless means, including broadcasting. [39-40]
So, again, communication/making available to the public
The Court thus moved on to recall the requirements for an act of communication (or, rather, making available in this case) to the public. The judgment refers extensively to Reha Training, which – despite being a Grand Chamber ruling – has been quite neglected in decisions like GS Media, Filmspeler and Ziggo.
Interestingly, the CJEU stated that to have an ‘act of communication’ a transmission of a copyright work is required. The Court noted that there would be a transmission made by the broadcasting organisation, on the one hand, and a transmission made by VCAST, on the other hand. Both are done using a different means of transmission for the protected works, and are intended for different publics.
[W]ithout the rightholder’s consent, the making of copies of works by means of a service such as that at issue in the main proceedings could undermine the rights of that rightholder.
Accordingly, such a remote recording service cannot fall within the scope of Article 5(2)(b) of Directive 2001/29. [51-52]
This means that VCAST’s service cannot be provided without the prior authorization of the relevant rightholders, in that its activity also amounts to communication/making available to the public within Article 3 of the InfoSoc Directive.
The outcome of the VCAST case is not surprising, nor is the fact that the CJEU answered the questions referred by the national judge rephrasing them and considering issues other than those raised.
More generally, the decision highlights once again the absolute centrality of the right of communication/making available to the public, especially in the online environment.
While cloud-based video recording services per se are not to be regarded as unlawful, certainly the CJEU decision sets precise boundaries for designing a service that would be compatible with EU law.
The first condition, stressed in particular by the AG, is that users of a cloud-based recording service must have lawful access to the terrestrial programmes that they wish to record in the first place.
The second condition is that the provider of a video-recording service cannot elude the authorization of the relevant rightholders when what it wishes to provide is a service that allows the recording of content by making it available for recording in the first place. But is this asking for an impossible standard of proof? Possibly. If so, then cloud-based video recording services would likely need to be licensed to operate under EU copyright law without the risk of infringing third-party rights.