Manufacturers use technical ‘locks’ in their console hardware and software to stop console owners running unauthorised software. This is mainly achieved through an encrypted key carried by a game disc. The latter will not run on a console unless it has the correct key. Hardware has been developed that can effectively disable those locks, thus allowing other software, including pirated ones, to run on consoles.
EU law safeguards copyright holders’ efforts to protect their work through technological protection measures such as these encrypted codes. In terms of EU Directives, EU member states are required to give adequate legal protection against the circumvention of any effective technological measures. Furthermore, member states are required to provide protection against the manufacture and sale of any device that has the purpose of circumventing any effective technological measures, which has a limited commercially-significant purpose or use other than such, or which is primarily designed to do so.
The Court of Justice of the European Union (CJEU) recently ruled on the use of techno-logical measures to prevent third-party games being played on Nintendo consoles, and the sale of devices designed to circumvent such measures.
Nintendo, one of the world’s largest videogame companies, brought a case in the commercial courts of Milan against retailer PC Box, a company that markets devices circumventing the technological protection measures placed on Nintendo games and consoles. Because these devices enable videogames other than those manufactured by Nintendo or independent producers licensed by Nintendo – including potential illegal videogame copies – to be used on Nintendo gaming consoles, Nintendo initiated proceedings against PC Box before the Italian courts.
Nintendo consoles have recognition systems and encrypted codes that prevent the use of illegal copies of games. These locks also prevent programmes, games and multimedia content, other than Nintendo’s, from running on the consoles. The PC Box allows users to bypass these protections and enables the viewing of movies, videos and MP3 files on both Nintendo consoles.
In the case at stake, Nintendo claimed that the opponents were commercialising devices and software permitting to run non-agreed games and applications over Nintendo’s consoles. Nintendo maintained that the business of the opponents was based on the elusion of the technological measures established to protect its copyright.
PC Box did not deny that they were “cracking” such technological measures, but it claimed that the purpose of Nintendo’s techno-logical measures was to prevent use of independent software, not just illegal copies, on its consoles.
The Italian court sought guidance from the CJEU about the criteria that it should use to assess the scope of legal protection against circumventing techno-logical measures. Before the ruling, Advocate General Sharpston handed down her Opinion concerning the technological protection mechanisms widely relied upon by games and console manufacturers to combat piracy in the video games sector.
She proffered the view that technical locks incorporated in Nintendo devices are legal measures that can be employed by manufacturers in protecting their devices against acts of piracy. At the heart of this reasoning is the fact that videogames are not simply computer programmes but they are complex intellectual works as they contain significant amounts of other copyrighted material such as literary, artistic or musical works.
Unlicensed devices designed to circumvent console anti-piracy measures may ... be legal
In considering whether such devices can qualify for protection, the Advocate General stated that it was for the national court to verify whether the application of these technical protective measures comply with the principle of proportionality. In this assessment, one has to consider whether these measures can achieve their protective objective without disproportionately preventing or impeding the user’s ability to carry out what would otherwise be non-infringing acts on the consoles.
In its ruling, the Luxembourg court largely followed the Opinion of the Advocate General. The court ruled that the legal protection for technical locks covers only the technological measures intended to prevent or eliminate unauthor-ised acts of reproduction, communication, public offer or distribution. It was not unlawful for PC Box to offer devices that circumvent Nintendo’s protection measures because the content that can then be viewed on the consoles is not in and of itself illegal. Unlicensed devices designed to circumvent console anti-piracy measures may, in certain circumstances, be legal.
Although the ruling of the Court of Justice concerns a very specific case, the potential of this legal interpretation is wide and paves the way for important amendments to the European copyright framework that will be taking place in the upcoming years.
Josette Grech is adviser on EU law at Guido de Marco & Associates.