B.B.C. Enterprises Ltd v Hi-Tech Xtravision Ltd
| Jurisdiction | England & Wales |
| Judge | THE VICE-CHANCELLOR,LORD JUSTICE STAUGHTON,LORD JUSTICE BELDAM |
| Judgment Date | 21 December 1990 |
| Judgment citation (vLex) | [1989] EWCA Civ J1221-4 |
| Court | Court of Appeal (Civil Division) |
| Date | 21 December 1990 |
| Docket Number | 89/1252 |
[1989] EWCA Civ J1221-4
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR. JUSTICE SCOTT)
Royal Courts of Justice.
The Vice-chancellor
(Sir Nicolas Browne-Wilkinson)
Lord Justice Staughton
Lord Justice Beldam
89/1252
CH 1989 B. No. 7325
MR. R. AIKENS, Q.C. and MR. S. BATE (instructed by Messrs. Allison & Humphreys) appeared on behalf of the (Plaintiffs) Appellants.
MR. M. TUGENDHAT, Q.C. and MR. J. BALDWIN (instructed by Messrs. Denton Hall Burgin & Warrens) appeared on behalf of the (Defendants) Respondents.
I will ask Lord Justice Staughton to give the first judgment.
BBC Enterprises Ltd. are a subsidiary of the British Broadcasting Corporation. Amongst other activities they arrange for the transmission to a satellite of the programmes which comprise the BBC Europe service. The satellite then transmits them again to earth, the footprint (as it is called) being in broad terms Western Europe. Before the initial transmission takes place, BBC Enterprises take the precaution of encoding (or encrypting) the programmes. The result is that the programmes are incomprehensible when they arrive once again at ground level, unless the receiver is equipped with a device that decodes or decrypts them.
BBC Enterprises have entered into two agreements with Space Communications (Sat-Tel) Limited. Thereby BBC Enterprises agree to use the scrambling technology of Sat-Tel in the encrypting process. They also agree that they will only authorise the use of decoders which are designed and made by Sat-Tel. For direct-to-home (DTH) reception the decoders will only be sold to the public by Sat-Tel or distributors authorised by them, save in special circumstances; and part of the sale price of each decoder will be paid by Sat-Tel to BBC Enterprises. This is £100 for each decoder up to 31st March, 1990, and £50 for each decoder sold after that date. Different arrangements apply to systems with the acronyms SMATV and CATV, which need not be explained in detail; those systems involve more than one television set per decoder. Thus it was hoped that BBC Enterprises would derive revenue from the project. The BBC Europe service is not intended for
reception in the United Kingdom. As all its programmes can be seen in this country without the benefit of decoding and encoding—save perhaps in parts of Wales—and without payment, it would be pointless to use the system here.
The plan, like many that are best laid, went awry. High-Tech Xtravision Ltd., the defendants in this action, discovered how to make decoders for themselves. Apart from recent legislation, we have not been told of anything in intellectual property law to stop them doing so. They have been making them in this country and selling them in Western Europe, at a price considerably lower than that charged by Sat-Tel or their distributors. Even so, they profess to be willing to pass on to BBC Enterprises the sum of £100 or £50 per decoder sold, although they do not regard themselves as legally obliged to do this. BBC Enterprises protest that the viability of the whole scheme is in peril, not to mention their exclusive agreement with Sat-Tel.
A writ was issued on 21st August, 1989. On 25th August a motion for interim relief came before Mr. Justice Morritt, and he accepted undertakings which were to last until a substantial (but not substantive) hearing could be arranged. That took place before Mr. Justice Scott in November. By then there was another motion on behalf of Hi-Tech to strike out the statement of claim as disclosing no cause of action.
The parties have sensibly agreed before us, and may have agreed before Mr. Justice Scott also, that the question of law whether BBC Enterprises have a good cause of action should be finally decided, aye or no, in these interlocutory proceedings. There is to be no escape by saying that the cause of action is open to question, but that pleadings should only be struck out in plain and obvious cases. As I said in an earlier appeal this week, there may often be merit in the course which the parties in this case have chosen to adopt by agreement, despite the plain-and-obvious-case rule.
The remaining issues at present are whether Hi-Tech have any other defence; and, if so, whether the balance of convenience is for or against an interim injunction. The only other defence suggested so far is based on European law and articles 85 and 86 of the Treaty of Rome.
Mr. Justice Scott held that the statement of claim should be struck out as disclosing no cause of action. Pending this appeal he granted BBC Enterprises further interim relief, of a more limited kind than the undertakings given to Mr. Justice Morritt. In this court we have heard full argument on the issue as to a cause of action, and, like the judge, we have not entered upon the issues of European law and balance of convenience, for two reasons. First, we do not have the benefit of the views of a judge at first instance upon those issues; and, much more significantly, we have no time left as it is now 2.10 p.m. on the last day of term. So I turn to the question whether BBC Enterprises have a cause of action.
Sections 297 to 299 of the Copyright, Patents and Designs Act 1988 came into force on 1st August, 1989. The material provisions are as follows:
"297(1) A person who dishonestly receives a programme included in a broadcasting or cable programme service provided from a place in the United Kingdom with intent to avoid payment of any charge applicable to the reception of the programme commits an offence and is liable on summary conviction to a fine not exceeding level 5 on the standard scale.
…
298(1) A person who (a) makes charges for the reception of programmes included in a broadcasting or cable programme service provided from a place in the United Kingdom, or (b) sends encrypted transmissions of any other description from a place in the United Kingdom is entitled to the following rights and remedies.
(2) He has the same rights and remedies against the person who (a) makes, imports or sells or lets for hire any apparatus or device designed or adapted to enable or to assist persons to receive the programmes or other transmissions when they are not entitled to do so, or (b) publishes any information which is calculated to enable or assist persons to receive the programmes or other transmissions when they are not entitled to do so as a copyright owner has in respect of an infringement of copyright.
(3) Further, he has the same rights under section 99 or 100, delivery up or seizure of certain articles in relation to any such apparatus or device as a copyright owner has in relation to an infringing copy.
299(1) Her Majesty may by order in Council (a) provide that section 297 applies in relation to the programmes included in services from a country or territory outside the United Kingdom, and (b) provide that section 298 applies in relation to such programmes and to encrypted transmissions sent from such a country or territory. (2) No such order will be made unless it appears to Her Majesty that provision has been or will be made under the laws of that country or territory giving adequate protection to persons making charges for programmes, including any broadcasting or cable programme services provided from the United Kingdom, or as the case may be, for encrypted transmissions sent from the United Kingdom."
It is agreed that the criminal offence established by section 297(1) is of no direct relevance to this dispute. That is because the criminal law of this jurisdiction is, for the most part, concerned only with conduct in England and Wales; Parliament is not assumed, in a criminal enactment, to have intended to regulate conduct outside this country. There are of course exceptions, but in the main the rule is as I have stated.
So a receiver in Spain who uses the Hi-Tech decoder without payment to or for the account of BBC Enterprises does not commit an offence for which he can be prosecuted under that section, even if he is found in this country. His position may be different if and when Spanish legislation is enacted, with a view to providing the "adequate protection" envisaged by section 299(2).
Mr. Justice Scott expressed doubts as to whether there could ever be dishonesty in making or buying one's own decoder in order to evade charges sought to be levied by the provider of an encrypted television service. It would follow that section 297 is wholly or largely ineffective. I do not wish to be associated with that doubt. Dishonesty in the criminal law is a topic which has been encumbered with some complication. When such a case arises, it should be decided.
It is on section 298 that BBC Enterprises base their claim. There is no dispute that they qualify as a person within subsection (1), being either one who makes charges for the reception of programmes included in a broadcasting service provided from a place in the United Kingdom, or one who sends encrypted transmissions of any other description from a place in the United Kingdom. There is, I think, no consensus as to which of those descriptions applies to BBC Enterprises; but that does not matter in this case.
The question then is whether Hi-Tech are a person who "makes, imports or sells or lets for hire any apparatus or device designed or adapted to enable or to assist persons to receive the programmes or other transmissions when they are not entitled to do so." They do make, and sell, decoders designed or...
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