How Kirtsaeng May Impact Anti-Piracy Policy Discussions Regarding Live Sporting Events
This past Sunday, several hundred million people around the world were treated to a feast of top-class European domestic football competition. The scheduling Gods aligned such that the Milan derby (Inter Milan v. A.C. Milan) in Serie A, Le Classique (Paris St. Germain v. Olympique Marseilles) in France, and El Clasico (Leonel Messi v. Cristiano Ronaldo – I mean F.C. Barcelona v. Real Madrid) in Spain. Unfortunately for many football fans in the United States, these matches were either not available, or as in the case of the Barcelona-Real Madrid match, available only on a Spanish language channel. (Author’s Note: In my humble opinion, the Spanish language broadcast is always more entertaining than the English language broadcast).
In the case of Spain’s top-flight La Liga, U.S. broadcast rights were sold to beIN Sports, owned by Al Jazeera and, as of August 2012, apparently only available to DISH Network and DirecTV’s network of 8 million subscribers. (for more, see here)
Fans of other sports, such as those who enjoy Ireland’s two major amateur sports, Gaelic football and hurling, have also faced roadblocks to view sports that are broadcast for free in their home countries.
Rights fees associated with the broadcast of live sporting events have skyrocketed over the last several decades. Revenues can easily climb into the hundreds of millions, or even billions in the case of the NFL and the Olympics, for leagues and teams. Broadcasters, therefore, have a strong interest in protecting their transmissions – particularly in circumstances where viewers are required to pay a fee either as a one time pay per view fee, or to obtain a particular channel not provided with their current cable or satellite television package.
In the United States, broadcasters and rights holders have relied on federal broadcast laws – 47 USC §§ 553 and 605 in particular to combat signal theft. These laws work well in the “traditional” signal piracy case where the unauthorized viewer has used a decoder to intercept and descramble the broadcaster’s signal. But with the availability of Slingbox and similar systems that allow the retransmission of television signals over the internet, and other streaming sites, traditional broadcast laws are failing leagues, teams and broadcasters.
Premium Sports understands clearly the challenges facing broadcasters today. Premium Sports is a U.S. based entity that is a virtual successor to bankrupt Setanta Sports, that offers live streaming of Ireland-based Gaelic Athletic Association (“GAA”) contests and the Turkish Super Lig soccer matches, among others. Premium Sports also offers these matches to bars at rates significantly higher than those charged to individuals. Increasingly, bars have turned to Slingbox and similar products that can be set up for a one-time fee of a few thousand dollars – FAR less expensive than the typical contract with Premium Sports would run. Once installed, the pub is able to receive and project almost any program that would be available to a person sitting in their living room in Tipperary.
GAA matches in Ireland are broadcast free to viewers, over terrestrial television. The pub does not descramble, or otherwise intercept the Premium Sports signal. The pub’s stream, therefore, originates from Ireland and not within the United States. Though copyright protection is available to sports leagues, the lack of a modern legal and regulatory framework has made enforcement of the broadcaster’s rights’ difficult, if not impossible to prevent unauthorized signal transmission – whether pirated or via other means. As perishable good, the value of the contents of the live broadcast are at their greatest when the results of the event remain unknown to all.
Here is where Kirtsaeng comes into play. The issue before the Court in Kirtsaeng is whether a copyright-protected work lawfully purchased abroad is subject to the “first sale doctrine.” In Kirtsaeng, Supap Kirtsaeng, a student at Cornell University, discovered that he could purchase the textbooks that he other students were required to buy in Thailand for amounts far below prices charged in U.S. bookstores. Along with family members, he built a business to import textbooks legally purchased in Thailand and to then resell them at a profit in the United States. Publisher John Wiley & Sons, who sets different prices for different countries argues that it should be allowed to prevent Kirtsaeng from importing books that, while legally purchased, where never intended to be distributed in the U.S. market. More than a dozen amici briefs have been filed in the case and are available at the SCOTUS Blog link, below.
A decision in favor of Kirtsaeng would strike a further blow to Premium Sports’s efforts to protect its broadcast contract with the GAA. The initial blow occurred in a case out of the Southern District of New York, where the Court found in favor of the defendant pub on a summary judgment order on grounds that the pub’s Slingbox system, unlike a “traditional” transmission piracy case did not constitute an “interception” of Premium Sports’ broadcast signal for purposes of 553 and 605. Based on this result, which Premium Sports is expected to appeal, the company has added copyright infringement claims in subsequent suits. However, should the U.S. Supreme Court find that the first sale doctrine does in fact apply to subject matter protected by copyright lawfully acquired abroad and imported into the United States, defendants to suits brought by Premium Sports would cite to Kirtsaeng in their dispositive motion. Defendants arguments would focus on the notion that the work allegedly subject to copyright, a free television broadcast, was acquired lawfully abroad and the subsequent “buyer” – the pub – acquired it from the lawful original “purchaser” in Ireland.
Additional Reading:
Kirtsaeng v. John Wiley & Sons, Inc. from the SCOTUS Blog, here.
Slides from the Seminar on Intellectual Property and Sport, organized by WIPO and the Jamaica Intellectual Property Office, here
WIPO websites targeting the issue of piracy of live sport broadcasts, here and here.