BRUSSELS (Reuters) - Europe's highest court dealt a blow to companies that retransmit free-to-air television programming over the Internet on Thursday, ruling that original broadcasters have the right to prohibit any such redistribution.
The case involves UK-based TVCatchup Ltd, which offers "live" streaming of free-to-air television shows, including programming by the BBC, ITV and Channel 4, Britain's three largest terrestrial broadcasters, and Sky.
TVCatchup is accessible only to subscribers with a valid British TV license who are in the United Kingdom, the same audience that could watch programs for free on terrestrial TV.
But the European Court of Justice ruled against TVCatchup, saying that under a 2001 EU law, original broadcasters are held to be "authors" with an exclusive right to authorize or prohibit any communication of their work to the public.
The ruling will be a boost to ITV, which brought the case, and to other domestic broadcasters whose potential audience is effectively being rerouted to a revenue-generating website -TVCatchup streams commercials before its programming.
"EU law seeks to establish a high level of protection for authors of works, allowing them to obtain an appropriate reward for the use of those works," the court said in a statement.
"Television broadcasters may prohibit the retransmission of their program by another company via the Internet," it said.
"That retransmission constitutes, under certain conditions, a 'communication to the public' of works which must be authorized by their authors."
The court's ruling was based on two lines of argument, first that TVCatchup is involved in communicating content, and secondly that it is reaching a broad public.
Because the website delivers program using a "specific technical means different from that of the original communication", the court said the transmission was a communication requiring approval from the original authors.
And because TVCatchup and similar services make their programs available to anyone in Britain with a TV license, "the retransmission is aimed at an indeterminate number of potential recipients and implies a large number of people."
As a result, the court said the Internet broadcaster was not adhering to the letter of the 2001 law, which deals with the harmonization of copyright in the European Union.
Intellectual property lawyers welcomed the ruling.
"Copyright issues connected with internet streaming are always complex. However ... the decision appears sensible," said Rebecca Swindells of Field Fisher Waterhouse in London.
"It would concern many in the media industry if companies like TVC were allowed to intercept broadcast signals without authority and retransmit them for commercial purposes.
Tony Ballard, broadcast lawyer and partner at London law firm Harbottle & Lewis, said the ruling would strengthen the rights of authors but imposed limits on how much copyright proprietors can charge as royalties.
"(It balances) the owners' rights against those of users."
Writing by Luke Baker; Editing by Rex Merrifield and Helen Massy-Beresford