Pub Regulars Run Out of Stream as Scottish Court of Session Bars Pub’s Display of English and Scottish Premier League Matches

The Scottish Court of Session recently handed down judgment in an interesting broadcast copyright dispute, involving Sky Sports and the broadcast of both English and Scottish Premier League football in pubs.¹ Rejecting a pub’s defence that there was no “communication to the public” because those watching the matches were pub regulars who accessed the broadcasts via one of their Sky subscriptions, the court found that the pub infringed the copyright in Sky’s logo graphics contained in the broadcasts. The court granted Sky a perpetual interdict (equivalent to a permanent injunction in England) but, for reasons discussed below, declined to award damages for the infringement.

Dispute

The dispute arose after infringement investigators attended the Troll Inn pub in Dundee, finding monitors or televisions displaying football matches for which the pub did not have the relevant subscription. In evidence, it emerged that some of the regulars at the pub held Sky subscriptions, and with it, had access to Sky Go—an application allowing subscribers to access Sky TV content from mobile devices. These regulars had, with the permission of the pub’s owner, brought monitors or televisions into the pub which could be connected to the relevant devices, allowing the customers to watch matches together on the premises.

Sky’s claim was founded on the principles espoused in FAPL v QC Leisure ²—in particular, that communication of the broadcast to the public included communication of its copyright works (being, in the main, graphics and logos added to the broadcast by Sky’s production team and therefore visible to those watching). As such, by authorising the display of the matches—and therefore the graphics—so that anyone in the pub could see them, the pub had authorised communication of copyright works to the public, without the consent of the rights holder.

The pub’s defence was, in essence, that the display of the matches in the pub did not constitute communication to the public. Rather, a group of individuals who already knew one another (being the pub’s regulars) arranged to watch matches together via one of their Sky subscriptions. That they did so in the pub, rather than at one of their homes, did not mean that the communication was to the public. Notably, the pub’s owner suggested that the monitors would be adjusted, if necessary, to prevent strangers from watching the match; however, this did not accord with the evidence of the investigators, appeared impractical from the positioning of the monitors, and was ultimately not accepted by the court.

Decision

The Court of Session ruled that, by displaying the matches on a prominent screen which anyone in the pub could watch, the patrons were communicating the contents of the broadcast to the public, with the pub’s authority. The pub had therefore infringed Sky’s copyright and the court granted a perpetual interdict against the pub, requiring it to refrain from allowing the matches to be displayed in that fashion.

So far, so unsurprising. However, elements of the court’s  judgment  make  for  interesting reading—particularly given that it draws on principles decided in English and European case law, and the same reasoning might therefore be applied across wider jurisdictions. These are explored below.

Nature of the infringement

Consistent with QC Leisure, Sky did not pursue copyright infringement for communicating the footage of the game itself. Rather, the copyright works on which it founded its claim were Sky’s logo graphics, added to the broadcast by Sky and visible when watching on Sky Go. Sky made no claim to own the copyright in the broadcast, nor did it pursue its rights as exclusive licensee. This is likely because, as in QC Leisure, the pub had not charged anyone entry to view the games. As such, it potentially had a defence to infringement of copyright in the broadcast of the game itself under the Copyright, Designs and Patents Act 1988 (CDPA) s.72. However, the court in QC Leisure determined that additional graphics added to the broadcast (in that case, by the Premier League itself) were not covered by that exemption, allowing the Premier League—and equally, broadcasters such as Sky—to prevent unauthorised public broadcast through the courts.

Sky’s approach is interesting in itself. In 2016, an amendment was made to the CDPA s.72(1B) by the Copyright (Free Public Showing or Playing) (Amendment) Regulations 2016.³ This amendment provided, in effect, that if a broadcast was of “film”, the copyright in that film could potentially be infringed by its communication to the public, even if copyright in the broadcast was not. Shortly afterwards, the Premier League sought to pursue such a claim by amendment to existing pleadings (in FAPL v O’Donovan).⁴ However, the case did not progress to final judgment and whether such a claim would succeed (in circumstances where the broadcast is live, rather than a pre-recorded film), is yet to be determined in the courts.

The issue for Sky may have been locus standi. Sky has the exclusive licence for the live broadcast of specific matches in specific jurisdictions, but it does not own, nor have exclusive licence of, the copyright in the film of the match. If it did, the same footage could not be used by other broadcasters in other jurisdictions, or Match of the Day. In practice, only the owner of copyright in the film could bring a claim like that mooted in O’Donovan.

Sky also did not pursue any claims under the Sky Go terms and conditions. These were therefore not considered in the judgment, but they do (as of writing) preclude the showing of works to the public, whether or not they have paid admission. It is likely that Sky’s approach to the T&Cs was informed by the fact that Sky Go users are individuals and a contractual breach of the conditions has less far-reaching implications for protecting its rights. The action would have necessarily been against the individual(s) with a subscription, with the pub at best liable for tortious assistance in the breach. With the purpose of pursuing such claims, for a broadcaster, being to publicise its rights and its willingness to enforce them against infringers such as pubs and bars, a successful copyright claim is likely to have been more attractive to Sky.

Nonetheless, the limited nature of the infringement claimed led to conclusions which may be significant for future claims—as well as raising questions about whether the QC Leisure principle still offers adequate protection for broadcasters who do not own the film copyright in their broadcasts.

Damages and value of rights

In relation to quantum, Sky originally sought an account of profits made by the pub relating to the infringement. Perhaps realising (as the court suspected) the disproportionate amount of time, effort and cost that would go into attempting to calculate that account, Sky instead reverted to claiming damages for the infringement itself, on the basis of the “user principle” (broadly—that a rights holder may claim damages equivalent to the price that might fairly have been agreed for licensing the rights in a fair negotiation between the parties). Sky submitted that a sensible surrogate for these values would be the cost of the relevant subscription that the pub would have had to pay to broadcast the matches over the relevant period of infringement.

This, however, was not accepted by the Scottish court. As noted at the outset of its judgment, the appeal of the broadcast to the viewer plainly subsists in the match itself. However, the infringement relates only to the graphics, and as such, the court’s view was that any user damages must relate only to the value of showing those graphics (which, naturally, would be negligible)—though the court could not award any such damages, as it was not furnished with evidence of the value of those graphics. Ultimately, the court consequently declined to award damages for the infringement.

If the Scottish court is taken to be correct on the assessment of damages, this raises interesting questions about protection for broadcasters and other rights holders going forward. First, the disincentive to publicly broadcast standalone major sporting events—such as a world championship boxing bout or the final Saturday of the Olympics—would appear relatively limited. If, by an infringer opting not to charge entry to the public viewing, the rights holders’ claims are limited to the value of graphics added to the broadcast, then the damages payable on a user basis would potentially be negligible. It is similarly unclear how an account of profits would be calculated if the Scottish court is correct—if (for example) more food and drinks are sold due to the public communication of the broadcast, but it is accepted that the attendees were attracted by the match and not the graphics added during broadcast, what profits can be attributed to the infringement? Furthermore, the proposition for a would-be infringer is arguably a “no-lose” situation; if they are caught and asked to pay the portion of their profits attributable to the infringement, they would effectively break even on showing the broadcast. Rights holders may need to interest criminal investigatory agencies in order to scale up the consequences—but this is often easier said than done.

Similarly, the judgment suggests that rights holders cannot expect significant damages even where they find sustained infringement over a period of time. Where those damages are limited to the value of displaying (for example) Sky Sports logos on a pub screen, there will be little to be recovered. This gives rights holders added incentive to take the approach demonstrated by Sky in the present case—proactive and diligent policing of its rights to ensure that injunctive (or equivalent) relief can be obtained at an early stage against infringers.

Keep an AI on this …

The above is concerned with the consequences of the judge’s approach in the “traditional” infringement situation—where the exact broadcast, as it would appear on a television or other device, is communicated to the public without authority. However, recent years have seen an explosion in highly sophisticated video editing (including lifelike “deepfakes”), often powered by AI tools capable of automatically editing footage to achieve a desired audiovisual outcome, without obvious signs of the tampering.

Given how convincingly some of these tools can, for example, create fake footage of a speech by a prominent public figure, it is reasonable to ask whether an AI tool could be trained to recognise and remove overlayed graphics from a sports broadcast, without operating so far behind the live feed that viewers would not be interested. If that can be achieved, it raises the possibility of broadcasting the match without sound or graphics, in order to rely on the CDPA s.72 and communicate broadcasts to the public without infringing copyright. In that scenario, rights holders may have to try a new approach—potentially based on copies made by the AI in the process of producing the altered footage.

Company and rights structures

An interesting ancillary point raised in the Court of Session’s judgment relates to company structures and the impact it might have on claims. The claim was brought by two Sky entities together—Sky Ltd, a holding company and owner of the rights in the graphics, and Sky UK Ltd, a group company which provides the broadcast services associated with Sky in the UK.

The court noted that, though nothing was pleaded on the point, it was “not at all clear … on what basis [Sky UK] might claim to be entitled to damages for the infringement of [Sky Limited]’s copyright”. The judge went on to suggest that it “might have been possible to… mount some sort of argument based on the notion of transferred loss”, but expressed doubts as to the legal basis of such a claim. Rights holders seeking damages may therefore need to carefully address the manner in which payments flow through a company structure, in order to determine which entity might be said to have suffered loss, and the nature of that entity’s interest in the relevant rights.

With that said—Sky UK’s loss would have related to unpaid subscription fees. For the reasons explained above, the Scottish Court of Session considered that these fees could not be tied to the actual work infringed, and would not therefore form part of assessing damages. If other courts follow the reasoning of the Scottish Court of Session, it may be that only the copyright holder could, or should, bring any claim.

Conclusion

In the event, Sky got what it came for—an interdict preventing the pub from showing the broadcasts and the publication of that decision at the pub’s cost. It failed to get damages or significant costs recovery, in part because of the (understandably) limited time and resource put into pursuing the damages aspect of the claim. The clear commercial incentive for proceedings such as these is deterrence and the active protection (and public recognition) of its rights. Damages and costs, when proceeding against a small entity like a local pub, are naturally secondary to a large multinational.

However, that does not mean that the judgment should be ignored. In its analysis, it highlights some potentially critical issues for the future of broadcast rights protections. It remains to be seen whether another court would agree, or whether a more fully litigated, high-stakes case would produce new argument and different conclusions. However, if this case offers a glimpse into the current state of broadcast rights protection, there are lessons to be learned—and the real test may be whether broadcasters can learn them faster than would-be infringers.

[1] Sky Ltd v Airlie [2024] CSOH 22; 2024 S.L.T. 279.

[2] Football Assoc Premier League Ltd v QC Leisure [2012] EWHC 108 (Ch); [2012] 2 C.M.L.R. 16.

[3] Copyright (Free Public Showing or Playing) (Amendment) Regulations 2016 (SI 2016/565).

[4] Football Assoc Premier League Ltd v O’Donovan [2017] EWHC 152 (Ch); [2017] F.S.R. 31.

This material was first published by Thomson Reuters, trading as Sweet & Maxwell, 5 Canada Square, Canary Wharf, London, E14 5AQ, in Entertainment Law Review 2024 Vol.35 Issue 6, and is reproduced by agreement with the publishers. For further details, please see the publishers’ website.