Swiss start-up re-broadcasting UK TV channels

'We're not doing anything illegal'

An internet start-up is re-broadcasting UK television from Switzerland without the stations' permission. It is re-broadcasting all five UK terrestrial channels online, but claims it is not breaking the law.

One legal expert, though, said the company's re-broadcasting could be short-lived, and that the Government could close the loophole at any time.

Zattoo.com has over two million registered users and has agreed rights deals for 190 channels in eight countries, it said. It makes money by showing adverts whenever users change channel. But it is re-broadcasting UK television without permission.

"We have not entered into any formal licence arrangements with Zattoo to re-distribute BBC channels," said a BBC spokeswoman.

The Zattoo service only re-broadcasts live TV as it happens, it does not archive programmes for later viewing. The company claims that it is not in breach of the UK's copyright legislation, and that a loophole allows for the live re-broadcast of material from public service broadcasters.

Zattoo chief executive Beat Knecht told the Financial Times newspaper that "Zattoo is not in conflict" with TV stations. "We feel we have legal title to retransmit," he said.

Channel 4 said it has also not been consulted. "We are are obviously concerned about any new platforms, online or otherwise, that use Channel 4 content without any agreements in place. We don't have any formal arrangements with Zattoo and we are looking in detail at the legal position," said a spokesman.

Five, too, is investigating its legal rights. "The inclusion of the Five service on Zattoo has not been authorised or licensed by Five and we are currently looking into the situation," said a statement.

The perceived loophole is section 73 of the Copyright, Designs and Patents Act 1988. It applies to the immediate re-transmission by cable of wireless broadcasts. It provides that, subject to certain conditions, the copyright in a broadcast is not infringed "if and to the extent that the broadcast is made for reception in the area in which it is re-transmitted by cable".

Zattoo could argue that delivery online is re-transmission by cable. If it restricts users of its online service by territory, to ensure that only online viewers in the UK can watch broadcasts made for the UK, it might succeed in its argument, according to Kim Walker, head of intellectual property law at Pinsent Masons, the law firm behind OUT-LAW.COM.

Walker said section 73 was designed to allow the sending of signals to remote parts of the country not reached by traditional transmission.

"It may be the case that they've found a loophole," he said. "The section appears to have been put in the Act to allow the old fashioned diffusion services to operate."

Diffusers took transmitted signals and passed them down wires to places that used to have difficulty receiving over-the-air signals.

"It was to enable the diffusers to do this without infringing copyright," said Walker.

Walker said that even if Zattoo has found a legitimate loophole, it may not be open for long.

"The Act says that the Secretary of State has the power to withdraw the permission at any time," said Walker. "If this is a loophole that as a matter of policy the Government isn't happy with people exploiting, then it would appear to be a relatively simple matter for the Secretary of State to say that the right does not apply to re-transmission online."

Walker said the owners of copyright in the programmes being broadcast also have rights. Section 73 states that such copyrights are not infringed "if and to the extent that the broadcast is made for reception in the area in which it is re-transmitted by cable".

But Walker said that the owners of the programmes could still argue before a court that section 73 was never intended to facilitate online delivery of broadcasts.

"When a US network like ABC or CBS sells a series to a UK broadcaster, its contract will inevitably address online distribution," said Walker. "That will either be forbidden by the contract or it will cost the broadcaster more money. So ABC is unlikely to sit back and let Zattoo operate, even if Zattoo is not a party to that contract. The network will either insist on the UK broadcaster taking action or it will go to court itself and demand an injunction.

"Fighting over loopholes is rarely straightforward but a court might decide that the commercial prejudice to the copyright holders, both broadcasters and producers, outweighs the benefit to Zattoo and its users," he said. "They might just say that this is something Zattoo should pay for."

Another provision of the 1988 Act, section 144A, gives the owner of copyright in a TV show the right to grant or refuse authorisation for cable re-transmission of a wireless broadcast from another European Economic Area (EEA) state in which the work is included. Switzerland, where Zattoo is based, is not a member of the EEA.

The BBC said it had conducted experiments in re-broadcasting live television and may allow third parties to re-broadcast online in the future. "We are currently reviewing our linear syndication policy following a number of trials around internet re-distribution of linear TV broadcasts," said the spokeswoman.

Copyright © 2008, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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