On 23 January 2014, the Court of Justice of the European Union (ECJ) handed down its judgment on a preliminary reference from an Italian court (Tribunale di Milano), ruling that a manufacturer of game consoles is protected against the circumvention of its technical protection measures only if such measures seek to prevent the use of illegal videogames. The judgment follows the earlier opinion rendered by Advocate General Sharpston (See VBB on Competition Law, Volume 2013, No. 9, available at www.vbb.com).
The case pitted Nintendo, one of the world's largest videogame companies, against PC Box, a company that markets devices circumventing the technological protection measures placed on Nintendo games and consoles. Because these devices enable videogames other than those manufactured by Nintendo or independent producers licenced by Nintendo - including potential illegal videogame copies - to be used on Nintendo gaming consoles, Nintendo initiated proceedings against PC Box before the Italian court.
The Italian court stayed proceedings to request clarification from the ECJ on the extent of the legal protection on which Nintendo may rely on under Directive 2001/29 on the harmonisation of certain aspects of copyright and related rights in the information society (the "Copyright Directive") in order to fight the circumvention of technical measures put in place on its gaming consoles and videogames.
The ECJ first specified that videogames are broader than "computer programs" under Directive 2009/24 on the legal protection of computer programs. Indeed, while videogames take their functionality from a computer program, they also constitute complex matter comprising graphic and sound elements which are protected by copyright under the Copyright Directive. Accordingly, circumvention of technological measures protecting videogames is, in principle, prohibited pursuant to Article 6 of the Copyright Directive.
The ECJ considered that the expression "technological measures", as defined by Article 6(3) of the Copyright Directive, covers the specific technological measures implemented by Nintendo. Nintendo's protection measures consisted of the encryption of both the gaming console and the videogames. The ECJ held that such measures fall within the definition of "technological measures" under the Copyright Directive if their objective is to prevent or limit acts adversely affecting Nintendo's protected rights.
The ECJ furthermore held that the legal protection under the Copyright Directive is only granted to technological measures which pursue the objective of preventing or eliminating (i) the reproduction of works; (ii) the communication to the public of works; (iii) making the works available to the public; and (iv) the distribution of the original copies of works that are not authorised by the rightholder of copyright. With regard to these purposes, the ECJ established a proportionality test: the measures must be suitable for achieving the objective and must not go beyond what is necessary.
Based on this ECJ guidance, it is now for the Italian court to determine whether other technical protection measures could cause less interference with the legal activities of third parties while, at the same time, still providing comparable protection of the rightholder's rights. The Italian court may, in its assessment, take into account, inter alia, the relative costs, the effectiveness and the technical and practical aspects of different types of technological measures. The court should also examine whether PC Box's equipment is, in practice, frequently used in disregard of copyright (for illegal copies of videogames) or if it is used for purposes which do not infringe copyright (for example, PC Box equipment may be used as 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).
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