Rise and Fall of Online Digital Video Recorders - International Law Office

Online DVR Services
Summary Judgments
No Private Copying Exception
Legislative Lifebelt

A group of French television channels has recently won a series of copyright infringement claims against Wizzgo, the first provider of online digital video recording (DVR) services in France.

Online DVR Services

In May 2008 Wizzgo launched the first online DVR platform in France, allowing users to obtain free copies of programmes broadcast on domestic digital terrestrial television channels, limited by a monthly quota of hours and provided that the copy was ordered before the programme started.

According to Wizzgo, its services were no different from a traditional home-owned video cassette recorder or digital video recorder and therefore did not require prior authorization as they were covered by the private copying exception and paid for by the private copy levy.

The main difference from a standalone digital video recorder was that the user did not own the machine receiving the broadcast signal to create the copy.

Summary Judgments

By a series of summary proceedings instituted before the Paris Tribunal de Grande Instance, digital terrestrial television channels M6, W9,(1) France 2, France 3, France 4, France 5,(2) TF1(3) and NT1,(4) and their associated catch-up and video-on-demand services, obtained compensatory damages and injunctive relief (with penalties) ordering Wizzgo to discontinue its online DVR services.

In response to the television channels' claims for infringement of their exclusive programme copyrights, Wizzgo argued that it provided only a "technological platform generating a transient copy… that only the user transforms into a private copy". Wizzgo's reproduction of programmes was purported to be merely "temporary and transient or incidental", as meant by the exception provided by the Code of Intellectual Property,(5) since its sole purpose was to allow a user to generate his or her own private copy of a programme (also covered by French law as an exception to exclusive copyrights).(6)

The summary judgments rejected the benefit of these exceptions on mainly economic grounds (inspired by the three-step test,(7) although no reference was made to it), considering that no exception can be claimed when a copy, although delivered free of charge, has an obvious economic value, in this case being the asset necessary to Wizzgo's activity and to its remuneration through the sale of advertising space on its website.

No Private Copying Exception

Likewise, in its decision on the merits(8) the Paris Tribunal de Grande Instance ruled out the benefit of both exceptions by holding that there were not two separate copies - one made by Wizzgo and one by the user - but only one copy, made by Wizzgo for each individual user.

In such circumstances the benefit of the private copying exception could not be granted as French law requires that the copyist and the user of the copy be the same person.

This rule was set by a landmark case in 1984(9) relating to photocopying services offered by a shop where customers made copies of copyrighted works for themselves using a photocopier they paid to use. The shop - the owner and keeper of the machine - was considered to be the copyist, offering its services to third-party users; it was therefore not making the copies for its own private and domestic use.

French courts later applied the same rationale to refuse the benefit of the private copying exception to businesses that burn copies of audio CDs and CD-ROMs on demand,(10) as did the UK courts when refusing the application of the exception for time-shifting recording to an internet café that allowed clients to burn a CD of any data downloaded during their session.(11)

Wizzgo's service was therefore closer to a digital reproduction service than to a traditional digital video recorder. Moreover, to date none of the media on which the reproduction was made (Wizzgo's servers and each user's internal hard drive) are subject to the private copy levy in France - which could have ruled out the argument that remuneration was already provided to copyright holders.

The court ordered compensatory damages of more than €440,000 against Wizzgo for copyright infringement, which convinced other French online DVR platforms immediately to cease similar services.

In the United States, a comparable 'remote-storage DVR' system was provided by Cablevision without any licences from the relevant movie and television producers. The producers' copyright infringement claims were rejected.(12) The legal issues discussed were different from those of the Wizzgo Case as Cablevision did not claim fair use, but the technical functioning of this DVR service led the Second Circuit Court of Appeals to consider that each programme copy was made by the user - which would have met the French criteria for private copying.

Legislative Lifebelt

Relying on this US example, on the eve of its winding-up, Wizzgo wrote a letter to the French president and the Ministry of Culture, with the support of 80,000 petition signatories, to advocate the extension of the private copy exception to online DVRs. The letter has proven timely, as the Creation and Internet Bill is being discussed before Parliament.

However far-fetched this attempt to obtain the right to offer its services, Parliamentary rumours suggest that the government could be in favour of abandoning the notion of a 'copyist' and therefore allowing private copies to be made by a third party, as already allowed under German law (subject to a requirement that no payment be received as a result).(13)

If an amendment is suggested accordingly, then the television channels are likely to be vocal critics, as in their view such a service conflicts with the normal exploitation of their programmes considering the risk of illicit dissemination of copies, the international access given to their programmes and the unfair competition caused to their own catch-up television and video-on-demand services.

For further information on this topic please contact Philippe Allaeys at Nomos by telephone (+33 01 43 18 55 00) or by fax (+33 01 43 18 55 55) or by email (pallaeys@nomosparis.com).

Endnotes

(1) Paris Tribunal de Grande Instance, August 6 2008, Metropole Television v Wizzgo (Case 08/56275).

(2) Paris Tribunal de Grande Instance, November 6 2008, France 2 v Wizzgo (Case 08/58349).

(3) Paris Tribunal de Grande Instance, November 6 2008, TF1 v Wizzgo (Case 08/58348).

(4) Paris Tribunal de Grande Instance, November 10 2008, NT1 v Wizzgo (Case 08/58864).

(5) Articles L 122-5, 6° and L 211-3, 5°, implementing Article 5(1) of the EU Infosoc Directive (2001/29/EC).

(6) Articles L 122-5, 2° and L 211-3, 2° of the Code of Intellectual Property.

(7) Article 5(5) of the EU Infosoc Directive, the two last steps of which are expressly implemented in the Code of Intellectual Property.

(8) Paris Tribunal de Grande Instance, November 25 2008, Metropole Television v Wizzgo (Case 08/13347).

(9) Cour de cassation, 1^st Civil Chamber, March 7 1984.

(10) Grenoble Court of Appeal, January 18 2001.

(11) High Court, Chancery Division, January 28 2003, Sony Music Entertainment (UK) Ltd v Easyinternetcafe Ltd.

(12) Second Circuit US Court of Appeals, August 4 2008, The Cartoon Network v Cablevision (for further details please see "Second Circuit Rules in Cablevision, But Questions Remain").

(13) Article 53(1) of the Urheberechtsgesetzes dated September 9 1965.