England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY

		Royal Courts of Justice Strand London WC2A 2LL
		13 November 2008

MR JUSTICE KITCHIN:

Introduction

1. I have before me applications by Union des Associations Européennes de Football ("UEFA"), British Sky Broadcasting Limited ("Sky"), Setanta Sports S.a.r.l. ("Setanta"), Group Canal Plus SA ("GCP") and the Motion Picture Association ("MPA") to be joined as claimants in these actions pursuant to CPR 19.2 for the purpose of enabling them to make submissions to the European Court of Justice ("ECJ") on the questions referred by this court on 11 July 2008 following my judgment of 24 June 2008.
2. The applicants seek to be added as claimants, not in order to participate in the action before this court, but solely in order to take part in the reference before the ECJ. They have made it clear that they do not seek relief additional to that sought by the existing claimants and do not envisage playing any active part in the proceedings once the referred questions have been answered by the ECJ.
3. The applications are made to this court for the following reason. The preliminary reference procedure does not permit interventions by private parties. The only permissible interveners are the Member States and the Community institutions. The ECJ itself does not, therefore, have power to permit the applicants to intervene in the proceedings before it. The defendants were invited to consent to these applications but have declined to do so. They question whether I have jurisdiction to allow interventions of this kind at all and, if I do, whether it is appropriate to exercise my discretion to allow them in all the circumstances of this case.

General principles

4. It is convenient to begin with the general principles. It is well established that the only parties entitled to participate in the preliminary reference procedure by submitting written observations or appearing at the oral hearing are parties to the action pending before the national court. Moreover the question of whether or not a person is a party must be decided according to the criteria of national law: Case 9/74 Casagrande v Landeshauptstadt München [1974] ECR 773 at 775. The criteria of national law material to these applications are set out in CPR 19.2(2) which reads:

"(2) The court may order a person to be added as a new party if –

(a) it is desirable to add the new party so that the court can resolve all the matters in dispute in the proceedings; or

(b) there is an issue involving the new party and an existing party which is connected to the matters in dispute in the proceedings, and it is desirable to add the new party so that the court can resolve that issue."

5. The applications before me are all founded on sub-paragraph (a). This confers a jurisdiction to order that a person be added as a party where it is desirable to add that party so that the court can resolve all the matters in the dispute in the proceedings. It is to be noted that, in contrast to sub-paragraph (b), there need not be an issue involving a new party and an existing party. Further, if this jurisdictional requirement is satisfied then the court has a wide discretion which it must exercise in the light of all relevant circumstances.
6. At the outset I must therefore consider whether it is desirable that each of the applicants be joined so that the court can resolve all the matters in dispute. In the context of this case I think it helpful to ask myself whether the court, here the ECJ, would be assisted by submissions from each of the applicants. Assuming it would, then I must consider whether to exercise my discretion to order joinder by one or more of them and, if so, upon what terms.

Jurisdiction

7. This is, as I think all the existing parties recognise, an unusual case. The questions referred and their implications are of fundamental importance to the way programming rights are marketed, licensed and broadcast in the European single market and raise serious policy issues. As I said in paragraph [371] of my judgment:

"In my judgment this case raises very serious questions which, as both parties have urged upon me, are of the greatest importance to the European single market. The claimants submit the defendants' case is effectively a challenge to the way in which sports (and indeed virtually all) broadcast rights are licensed in the EU. The defendants say there are millions of expatriate workers in Member States who want to watch satellite television from their own country and that the claimants are seeking to bolster a system of barriers against the free circulation of decoder cards between Member States to the commercial advantage of programme providers and broadcasters who want to maintain price differentials between the markets in different Member States, to the serious detriment of consumers as regards both price and choice. Moreover, they continue, the whole trend of EC Directives in this field has been to try and create a single audiovisual area - a process which the claimants are trying to frustrate. These rival arguments raise serious policy issues and I believe it to be highly desirable they should be authoritatively decided by the Court of Justice as soon as possible."

8. Against this background I turn to consider the matters advanced by each of the applicants to justify joinder.
9. UEFA is the governing body of European football and has 53 members throughout the European continent. It is also the organiser of many international competitions, the most prestigious of which are the UEFA European Football Championships, the UEFA Champions League and the UEFA Cup. It is particularly concerned that success for the defendants in this case will adversely affect the application of Article 48 of the UEFA Statutes and the effective operation of the UEFA Broadcasting Regulations, which provide for the "closed period" during which no live football is shown on television, a concept which, it says, was cleared by the European Commission in 2001. UEFA is also concerned that success for the defendants will adversely affect the marketing of its rights in its tournaments and may impact on the core terms upon which it does business, the legitimacy of which was, it contends, explicitly recognised by the European Commission in 2003. Overall UEFA argues that, as the governing body of European football, it is uniquely placed to make submissions to the ECJ on the pan-European issues raised by the reference.
10. Sky's interest in these proceedings is apparent from my judgment and can be summarised very shortly. It was and remains the exclusive licensee for UK live broadcasts of many FAPL matches and is one of the most directly affected by the activities of the defendants and others like them. Moreover, as one of Europe's leading pay-TV broadcasters, Sky believes its submissions to the ECJ will be highly relevant to the policy issues which arise on the reference.
11. Setanta is an international sports broadcaster with operations in the UK, Ireland, Luxembourg, USA, Canada and Australia and it owns and operates premium sports TV channels which it makes available on a subscription basis to residential and commercial customers through satellite, cable, digital terrestrial, broadband and mobile distribution. It has over three million subscribers in all to its channels. Its strategy has been to develop sports programming services either as an addition or as an alternative to other channel packages available on all current and emerging digital distribution platforms. As part of that strategy, Setanta has recently secured two out of six available packages of FAPL matches, giving it the exclusive right to broadcast 46 FAPL games per season for three seasons commencing in August 2007. Setanta's bid of £392 million represents a massive increase in its funding requirements and required a fundamental change in its business plan. The possibility of third parties undermining its rights is therefore of great concern. Furthermore it says its ability to break into the market was a direct result of intervention by the European Commission. If, however, FAPL is not able to offer effective exclusivity in the future, this may have a detrimental effect on competition in the market going forward, exclusivity being a key part of Setanta's strategy in seeking to compete with Sky. In all these circumstances Setanta says it has a perspective on the law and policy questions raised by the reference which is different from everyone else, because it has an interest in protecting the ability of new entrants to break into and remain in the market.
12. GCP is another broadcaster with a substantial pay TV business in France and in Poland, offering a range of exclusive channels and content. It pays €357 million annually for the exclusive right to broadcast five of the six live packages of Ligue 1 football matches, the French equivalent to the English Premier League, over four seasons and has paid for the worldwide right to broadcast Ligue 1 and Ligue 2 matches outside France for eight seasons. It is also investing more than €22 million over three years for the exclusive right to broadcast FAPL matches in France. In addition to sports broadcasting, GCP holds and grants exclusive rights in France, and sometimes more generally in Europe, to an extensive film library of over 5,000 titles. Importantly, GCP's audiovisual activities are subject to various laws and regulations including those overseen by the French Audiovisual Council. Under its broadcasting licence, 60% of the audiovisual works and films broadcast by GCP must be European works and 40% of them must be original French language films. In addition, it tailors its sports programming to its French audience. So, for example, when broadcasting FAPL matches it devotes special attention to French players or clubs with a significant number of French players. GCP also claims to be one of the leading satellite broadcasters in Poland and, although the channel names are the same as those used in France, the content of its broadcasts is once again adapted and edited for the Polish market. GCP believes it is therefore particularly well placed to address the ECJ on the impact of the defendants' activities on a business which specifically targets the needs and interests of the territories where it broadcasts.
13. Finally I come to the MPA. This is a trade association representing the interests of six major producers and distributors of cinematograph films and home entertainment and TV programmes. It is concerned to emphasise that its member companies invest a great deal of time and money in producing films and other programmes and then licensing them to a wide variety of broadcasting platforms throughout Europe. Copyright is, it says, even more fundamental to the protection of these works than to sports programmes. Moreover, the way in which consumers view such works tends to be different to sports programmes in that they are frequently episodic in nature. The MPA is particularly concerned that rules developed in the context of live sporting events could wreak havoc in the market for episodic content. They could, for example, impair the ability of terrestrial broadcasters to air episodic programmes in a manner that fits into their own schedules without having episodes from other territories which may be on a different timeframe and at different points in the story enter their markets via satellite on an untimely basis. The MPA also points out that the questions referred raise fundamental questions concerning the protection of audiovisual works which it is well positioned to address on behalf of its members.
14. In the light of this review I have reached the conclusion that it is desirable to add each of the applicants to these proceedings as claimants because it will assist the court to resolve the fundamental law and policy questions to which the reference gives rise. Each of the applicants does, I believe, offer a perspective on those questions which is different from that of the other applicants and the existing parties. In my judgment the applicants do satisfy the jurisdictional requirement imposed by CPR 19.2(2).

Discretion

15. I must now consider whether it is appropriate to join each of the applicants in the exercise of my discretion and, if so, on what terms. In doing so I believe I must act in accordance with the duty of sincere co-operation enshrined in Article 10 EC and the overriding objective. I must endeavour to deal with the case justly and that includes, so far as practicable, ensuring the parties are on an even footing; saving expense; dealing with the case in ways which are proportionate; ensuring it is dealt with expeditiously and fairly; and allotting to it an appropriate share of the court's resources.
16. The defendants contend that in applying these principles there are a number of important factors which weigh against the exercise of discretion in favour of any of the applications. To the extent I consider it appropriate to allow one or more of them, the defendants invite me to do so subject to the imposition of conditions.
17. First the defendants submit that granting the applications would conflict with the ECJ's own approach to interventions. They say the applications are, in reality, applications to intervene in the reference procedure before the ECJ. As I have explained, that procedure does not envisage or permit interventions by private persons. Accordingly, the defendants say, I should be wary of an attempt to use CPR 19.2(2) as a means of circumventing that limitation. Moreover, where the European courts do have power to permit interventions in direct actions they exercise the power in a restrictive manner and allow interventions only by those persons able to establish a direct interest in the ruling on the specific act whose annulment is sought: Case C-186/02P Ramondin v Commission [2003] ECR 1-2415. If the law were not so, the Court of First Instance has explained the effectiveness and proper course of the procedure would be compromised. The defendants submit that the duty of co-operation implies that in determining applications such as the present the national court should be at least as restrictive as the ECJ's own rules on intervention.
18. In my judgment the defendants' submission goes too far. Taken to its logical conclusion it would mean that private persons could never be added to parties to proceedings the subject of a preliminary reference; yet Casagrande decides that the question of whether or not a person is a party is to be decided according to the criteria of national law. I feel reinforced in this conclusion by the fact that in judicial review proceedings the High Court has permitted an interested party to intervene specifically so as to allow it to make submissions to the ECJ: Case CO/1132/93 R v Minister of Agriculture, Fisheries and Food ex p. S.P. Anastasiou (Pissouri) [1994] COD 329. Nor, it seems to me, is it right to restrict the exercise of my discretion by limiting the circumstances in which an applicant may be added as a party to those which would satisfy the test imposed in direct action cases. This would be to replace the test imposed by CPR 19.2(2) with another and quite different test developed by the European courts in another context. Nevertheless, I recognise the importance of not overburdening the ECJ and of not allowing an application which might compromise the effectiveness of the preliminary reference procedure, and these are matters I have had well in mind in considering whether to allow these applications and, if so, upon what conditions.
19. The defendants then submit that granting the applications would place them at a procedural disadvantage for a number of reasons. They say there is already a vast inequality of resources as between the claimants and the defendants and that adding each of the applicants would add to that inequality. Moreover, written observations constitute the main opportunity for the parties to make submissions to the ECJ on how it should answer the referred questions. They are lodged with the ECJ simultaneously by all parties and there is no opportunity to reply other than by way of oral submission at the hearing. The defendants continue that they are in a position to anticipate to a large extent what the present claimants' observations are likely to say but, by contrast, they are not able to anticipate the arguments of the applicants. It must be assumed the applicants' written observations will differ from those of the claimants if they are to satisfy the test in CPR 19.2(2). It follows, the defendants say, that they will be placed in a position of being unable to respond effectively to the arguments presented against them and this would constitute a breach of the principle of equality of arms.
20. The defendants also point out that each party has a maximum of 30 minutes in which to make oral submissions. Granting the applications would mean each of the applicants being granted a slot of up to 30 minutes with the claimants' side consequently having up to three hours for their submissions whereas, by contrast, the defendants would be restricted to 30 minutes. In that time they would have to respond to all the written and oral submissions made by the applicants as well as the submissions made by the existing claimants and any intervening institutions and Member States. This, they say, would result in an obvious and grotesque unfairness.
21. In my judgment there is force in each of these submissions but I believe the procedural disadvantages upon which the defendants rely can be mitigated, if not entirely removed, by allowing the applications only on condition that first, the applicants each provide to the defendants 28 days advance notice of any written observations they intend to make, so that the defendants have a chance to respond to them in writing; second, the applicants each undertake to limit their oral submissions to a maximum of 15 minutes. In imposing this latter condition I recognise that it is for the ECJ to determine how long the parties are to be given to address the court orally and accordingly I impose it subject to any contrary direction by the ECJ. However I do believe that each of the applicants before me should need substantially less time than the defendants to put their points across in a meaningful way. I would add that UEFA offered to submit to both these conditions before the commencement of this hearing. Moreover, the claimants have indicated to me through counsel that they do intend to co-operate with the applicants and to provide them with draft observations. This is obviously desirable and should permit the applicants to avoid duplication and so reduce the length of any written observations they might otherwise have been minded to make.
22. The defendants next submit that allowing the applications would place a significant additional burden on the ECJ. The new sets of observations will require translation and the court will have to assimilate and consider them. I accept that the addition of the applicants as parties will impose an additional burden on the ECJ. However the questions I have referred are of the greatest importance to the European single market and I do not think the extra burden is such that it would be right to deny these applicants a voice which might assist in the resolution of the fundamental matters in dispute in these proceedings.
23. An allied concern expressed by the defendants is that granting these applications would result in delay and run counter to the objective of ensuring the proceedings are dealt with expeditiously and fairly. Further, they say it would be inconsistent with this court's request that the ECJ applies its accelerated procedure to the reference. I recognise that the addition of parties may cause some delay but I am doubtful that it will be substantial. Nor do I consider the addition of parties is inconsistent with the request for acceleration. Plainly if that request is acceded to then the condition I have imposed that the applicants must provide 28 days advance notice of their written observations may require modification and for that purpose I give the parties liberty to apply.
24. Finally, I come to the question of costs. The defendants submit that granting these applications would have a serious impact on their financial position. They say that they are already in a considerably weaker position than the claimants and this would be exacerbated if they were required to deal with a further five sets of observations. The defendants have suggested this could be mitigated by each applicant agreeing to pay the defendants' additional costs occasioned by its application. This is a course to which UEFA has agreed. The other applicants have offered to undertake they will not seek their costs of participating in the ECJ proceedings from any of the defendants, an undertaking I propose to accept, but they say it would be wrong in principle to make any other order at this stage. I think that is right. I have no evidence before me as to how the defendants are funded or to support a contention that, absent the order sought, they may be unable to continue with the proceedings. The defendants can apply for costs following determination of the preliminary reference.
25. For all these reasons and in the unusual circumstances of this case I have decided it is appropriate to grant these applications, subject to the conditions to which I have referred. I would add only this. Other persons should not be encouraged by this judgment to make similar applications in this case. On the materials before me at present I find it difficult to foresee how it could be desirable to add yet further parties at an even later stage and I would be very concerned that to do so might compromise the proceedings.