The Football Association Premier League Ltd v Luxton [2016] EWCA Civ 1097

Case No A3 2014 0759[2016] EWCA Civ 1097
IN THE COURT OF APPEAL (CIVIL DIVISION)
[2014] EWHC 253 (Ch)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
MRS JUSTICE ROSE DBE
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 09/11/2016
Before
LORD JUSTICE TOMLINSONLORD JUSTICE FLOYD
Between
THE FOOTBALL ASSOCIATION PREMIER LEAGUE LIMITEDClaimant/ANTHONY WILLIAM LUXTONDefendant/Appellant
Martin Howe QC (instructed by Molesworths Bright Clegg) for AppellantHelen Davies QC and Lindsay Lane (instructed by DLA Piper UK LLP) for RespondentHearing Hearing date: 11 October 2016
Judgment
[1]On 30 January 2014 Mrs Justice Rose granted summary judgment to the claimant and respondent, The Football Association Premier League (“FAPL”), in its action for infringement of copyright against the defendant and appellant Mr Anthony Luxton. Mr Luxton is the licence holder and designated premises supervisor of a public house called the Rhyddings at Brynmill Avenue in Swansea. The copyright works relied on were the on-screen graphics and logos which FAPL add to the live feed of Premier League Football matches which it provides to its licensed broadcasters around the world (“the copyright works”). Mr Luxton relays these live broadcasts incorporating the copyright works for display on screens in his pub. FAPL contend that he does this without their consent because the satellite decoder card which he uses for this purpose is one which only entitles the user to display the broadcasts in a domestic as opposed to a public or commercial setting.[2]Mr Luxton raises a defence under EU law. He says that FAPL are motivated in bringing this action by a desire to enforce strict territoriality in the reception of broadcasts of its live football matches. He says, in addition, that his use of a domestic card at the Rhyddings was a consequence of unlawful agreements or concerted practices between FAPL and the broadcasters to restrict the supply of foreign commercial cards outside the territory in which that broadcaster operates. He says that, in these circumstances, he has a reasonably arguable defence to the copyright infringement action brought by FAPL, or at least such a case for the remedy to be limited.[3]The judge did not consider Mr Luxton to have any arguable defence. She granted an injunction to restrain infringement of copyright and an inquiry as to damages. She refused permission to appeal. On 11 February 2015 I granted permission to appeal, after an oral hearing, having initially refused it on the papers.[4]On the appeal Mr Martin Howe QC argued the case on behalf of Mr Luxton. The case for FAPL was argued by Ms Helen Davies QC with Ms Lindsay Lane.

The facts

[5]FAPL grants licences to broadcasters in a number of different territories. One of its UK licensee is Sky. The broadcasts made by the licensee broadcasters are encrypted, and access to the broadcasts is enabled, on payment of a subscription, by the provision of decoder cards supplied by the broadcaster.[6]The satellite decoder card which Mr Luxton used at the Rhyddings was one sold by Viasat AS, a Danish broadcaster. Viasat was one of FAPL’s licensed foreign broadcasters for the 2012/2013 football season. There is no dispute that the subscription incorporated in the card was for domestic use only. Accordingly the holder of the card could not use it in order to relay Viasat’s broadcasts in commercial premises such as the Rhyddings.[7]Mr Luxton purchased his satellite decoder card in about November 2011 from UGC Limited. He exhibits to his witness statement an invoice from UGC Limited dated 12 December 2011 relating to a Viasat satellite viewing system card. The invoiced price was £1895 plus VAT.[8]The evidence before the judge included a statement of Mr Milan Ibrahim, the sole director of UGC Limited. He stated that in early 2010 he established a business relationship with an authorised reseller of Viasat packages, a Swedish satellite broadcaster. UGC purchased a number of domestic and commercial packages from this Viasat reseller which they sold on to domestic and commercial customers in fulfilment of orders. The relationship continued until around the end of September 2011. After that date, although he had overdue orders, the reseller was unable to obtain any further commercial cards. He repeatedly chased the supplier for more commercial packages. On each occasion his supplier told him he was still waiting for the commercial packages from Viasat, and that he in turn was chasing Viasat.[9]In about early November 2011 Mr Luxton had contacted UGC with an enquiry about purchasing a satellite television system for his pub that would show all of the Swansea City matches. Swansea City had recently been promoted to the Premier League. UGC advised Mr Luxton that the Viasat broadcasting service was most likely to broadcast all the matches that he required. Mr Luxton subsequently ordered a Viasat commercial system from UGC for use at the Rhyddings.[10]By the time UGC received Mr Luxton’s order they had run out of Viasat commercial packages and were still awaiting overdue orders from their Viasat reseller. Accordingly, in order to fulfil Mr Luxton’s order UGC installed a domestic Viasat card on 25 November 2011. They did so with the intention of exchanging it for a Viasat commercial package as soon as the outstanding order arrived. Mr Ibrahim says this was done without Mr Luxton’s knowledge. Mr Luxton therefore thought at all times that he had purchased a commercial package.[11]On 3 December 2011 Viasat terminated all of the live domestic cards that UGC had purchased from their suppliers.[12]The evidence adduced on behalf of Mr Luxton also detailed steps taken by Mr Ibrahim and also by Mr Luxton’s solicitor, Mr Dixon, to attempt to obtain foreign commercial decoder cards for use in the UK. None of the broadcasters approached were prepared to make such supplies.[13]The judge reviewed the material produced by Mr Dixon and concluded that it “certainly raised a prima facie case that the status quo is being maintained”. This was a reference to the decision of the European Court of Justice in joined cases C-403/08 and C-429/08 Football Association Premier League Ltd and others v QC Leisure and others; Murphy v Media Protection Services Ltd [2012] 1 CMLR 29 (“QC Leisure”). At the time that case was decided it was clear that the rights granted by FAPL to its individual foreign broadcasters purported to be exclusive territorial rights. The court held that national legislation which prohibited the importation of foreign decoding devices was a restriction on the freedom to provide services provided by Article 56 of the Treaty on the Functioning of the European Union ("TFEU”) unless it could be objectively justified (which it could not).[14]Ms Davies accepted before the judge and before us that this application should be approached on the assumption that there is an arguable case that foreign broadcasters are still behaving as if they are bound not to provide commercial cards outside their national territory. Likewise we should assume that the account of the purchase of the decoder card used by Mr Luxton given by him and Mr Ibrahim is true. To the extent that it matters, therefore, we should assume that Mr Luxton was not aware that the card with which he had been supplied was a domestic and not a commercial one. Ms Davies also accepts that, had Mr Luxton imported a commercial card instead of a domestic one, he would have had an arguable defence that it authorised him to communicate the copyright works to the public in the United Kingdom, notwithstanding that it was a foreign card. She makes it clear that her clients do not accept that the defence would be a good one.

The Treaty provisions relied on

[15]Mr Luxton relies on two provisions of the TFEU, Articles 56 and 101. These provide, so far as material: 16. Article 56 Within the framework of the provisions set out below, restrictions on freedom to provide services within the Union shall be prohibited in respect of nationals of Member States who are established in a Member State other than that of the person for whom the services are intended… Article 101 1. The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which:(a) directly or indirectly fix purchase or selling prices or any other trading conditions;(b) limit or control production, markets, technical development, or investment;(c) share markets or sources of supply;(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which by their nature or according to commercial usage, have no connection with the subject of such contracts. 2. Any agreements or decisions prohibited pursuant to this Article shall be automatically void… (a) directly or indirectly fix purchase or selling prices or any other trading conditions; (b) limit or control production, markets, technical development, or investment; (c) share markets or sources of supply; (d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which by their nature or according to commercial usage, have no connection with the subject of such contracts.

The suggested defences

[16]The suggested defence based on EU law is put in two ways. These have been referred to in argument as “nexus 1” and “nexus 2”, and I will continue to do so.[17]In nexus 1 it is suggested that the present proceedings are in reality an illicit attempt on the part of FAPL to preclude the use by Mr Luxton of a foreign decoder card to receive broadcasts from a foreign broadcaster within the EU. In commencing and pursuing the proceedings, FAPL is acting pursuant to a mutual understanding between the FAPL and its UK exclusive licensee, Sky, to ensure that customers in the UK are prevented from receiving and being able to decode broadcasts from foreign broadcasters. The effect was to isolate the UK market from the continental market. This was contrary to article 101 and/or article 56 TFEU.[18]Nexus 2 suggests that, based on the evidence of Mr Ibrahim, these illegal arrangements prevented Mr Luxton from being supplied with a foreign card such that there is a sufficient connection between the illegal arrangements and the infringement complained of. That connection is sufficient, it is argued, to prevent FAPL from exercising its copyright in the manner which it seeks to do in this case.[19]Although only nexus 1 appears from the defence served by Mr Luxton in these proceedings, no point was taken by Ms Davies based on this. She accepted that if we considered nexus 2 to be arguable then the right course was for it to be incorporated into the pleadings by appropriate amendment rather than to grant summary judgment on the claim.

The law on Euro-defences

[20]It has long been recognised that in some circumstances an intellectual property right may become unenforceable because what lies behind it is an attempt to divide up the market in the EU contrary to the provisions on free movement. It is not enough, however, merely to show that the claimant has been guilty of a breach of the Treaty. In Oracle of America Inc v M-tech Data Ltd [2012] UK ASC 27, [2012] one WLR 2026 (“Oracle”) Lord Sumption JSC explained at [30]: “Article 101 of the treaty prohibits agreements and concerted practices so far as they have as their object or effect the prevention, restriction or distortion of competition within the internal market. An intellectual property right is not itself an agreement or concerted practice capable of contravening article 101 of the treaty. But there are undoubtedly circumstances in which it may be unenforceable because there is a sufficient nexus between the exercise of the right and the agreement or concerted practice in question. The test, which dates back to the venerable but still authoritative decision of the Court of Justice in Sirena Srl v Eda Srl (Case 40/70) [1971] ECR 69, at para 9, is whether it is "the subject, the means or the result of a restrictive practice": see also Keurkoop BV v Nancy Kean Gifts BV (Case C-144/81) [1982] ECR 2853, at para 27 ("the exercise of that right may be subject to the prohibitions contained in the Treaty when it is the purpose, the means or the result of an agreement … or concerted practice."[21]That same case contains a warning about allowing defences of this kind to go to trial just because they raise problems of analysis. At paragraph 7 Lord Sumption said:
“'Euro-defences' of this kind have been deployed by alleged infringers of intellectual property rights for many years, and the English courts have varied in the robustness with which they approach them. The dilemma is that litigation devalues intellectual property rights, by increasing the cost and delay associated with their enforcement. It may also serve to confer on the alleged infringer a temporary immunity or an improvement of his bargaining power in settlement negotiations, to which he will turn out not to be entitled. The effect can often extend beyond the parties or transactions in issue, to many other cases in which similar questions might be raised. These factors mean that defences like the present one must be scrutinised with some care, even if that requires a certain amount of analysis. On the other hand, a defendant must be allowed to go to trial if it has raised a triable issue of fact which is relevant in point of law. For obvious reasons, this is especially important when the case is founded on fundamental principles of the European Union such as the free movement of goods and undistorted competition.”
[22]The alleged infringement in Oracle was of the claimant’s trade mark rights for computer hardware. The defendants fulfilled an order for disk drives from a UK customer with drives manufactured by the claimant which had never previously been marketed in the EEA. The defendants defended the action on the basis that it was impossible for them to tell whether the claimant’s drives had previously been marketed in the EEA, because the claimant withheld information which would enable the drives to be traced. They argued that the effect of enforcement would be to partition the EEA, because the claimant’s vigorous enforcement of its trade mark rights would deter independent resellers from dealing in goods which had been, as well as those which had not, been previously marketed in the EEA. Kitchin J (as he was then) granted summary judgment, but limited the injunction to goods which the claimants could (within a ten day notice period) confirm had not been placed on the market in the EEA with its consent.[23]Lord Sumption first pointed out, at [10] that it was important to recognise that the disk drives in question were imported from outside the EEA, and that the injunction was also limited to such disk drives. This was important because article 5 of the Council Directive 89/104 (“the Trade Mark Directive”) expressly conferred on the proprietor of a trade mark a right to prevent the first marketing of such goods within the EEA. The proprietor’s rights in relation to goods which had already been placed on the market in the EEA were much curtailed. They were to prevent “further commercialisation” only where there existed “legitimate reasons”. The case law in this connection is mainly concerned with repackaging rendered necessary on importation of branded goods so as to comply with national language and regulatory requirements in the destination market. The trade mark owner may only object to further commercialisation where he can justifiably complain that the rebranding could damage the condition of the goods or the reputation of the proprietor.[24]The Supreme Court rejected the defence advanced in Oracle based on free movement because it was clear that the unlawful conduct relied on was collateral to the particular right which the claimant was seeking to enforce: see per Lord Sumption at [24]. The reasons for this were in summary as follows: i) The right derived from its trademarks which the claimant was seeking to enforce was its right to control first marketing in the EEA. This was an exercise of rights which did not engage the principle of free movement of goods between member states. It affected only the entry of the goods into the EEA market and was specifically authorised by articles 5 and 7 of the directive which were part of an exhaustive code that fully reflected the free movement requirements of the TFEU: see [25]. ii) What produced the impediment to the free movement of goods was not the enforcement of the claimant’s right to control the first marketing of its products in the EEA. The act of a trademark proprietor in seeking to control the first marketing of his products in the EEA was in principle an ordinary exercise of the essential right conferred on him by articles 5 and 7 of the directive. The claimant could not be prevented from doing something which is in itself entirely lawful and consistent with the principle of the free movement of goods, simply because it proposed to do something else as well which was unlawful and inconsistent with that principle: paragraph [26]. iii) It did not advance the argument to say that the policy of withholding information about provenance is effective only because it is combined with a policy of “vigorously” enforcing trade mark rights. EU law expressly forbids the defendants from importing goods not previously marketed within the EEA. It cannot therefore follow that because Sun enforces its trade mark rights “vigorously” it should have no trade mark right to enforce: ibid. iv) It also did not advance the argument to refer to the enforcement of Sun’s trade mark rights as part of a “scheme” to eliminate the independent resellers from the secondary market. This is simply a pejorative way of making the same unsustainable point: ibid. v) Even if the case law concerning Article 7 of the Directive had any application it would not assist. That is because that case law only went as far as establishing that a proprietor could not claim a right under the Directive to oppose further commercialisation if the exercise of that right would itself unjustifiably impede the free movement of goods. The case law did not go as far as to say that rights which had no impact on trade between member states became non-existent or unenforceable because the exercise of those rights is accompanied by other acts which do: paragraph [27]. vi) The argument that Article 5 was limited in the way suggested by the defendants was an extreme one because it provided a defence to traders even if they are knowingly importing the claimant’s goods without their consent, or those who were industrial counterfeiters: paragraph [28].[25]Lord Sumption went on to point out that it might be that the defendants had a good cause of action against the claimant for damages for breach of the Treaty. The case was not however concerned with business the defendants had been prevented from doing, but that which they had in fact done.[26]The Supreme Court also rejected the defence based on Article 101 for these reasons: i) There was no relevant connection between the policy of withholding information about provenance and the prevention, restriction and distortion of competition by means of the distribution agreements: see paragraph [32]. ii) There was also no relevant connection between the policy of withholding information about provenance and the enforcement of the claimant’s right to control the first marketing of its trademark products in the EEA: ibid. iii) More generally neither the trademark rights nor the rights conferred on their proprietor by the directive can be characterised as the subject the means or the result of an agreement or concerted practice contravening article 101 TFEU: ibid.

The judgment of Rose J

[27]The judge considered the most important point to be whether there was a sufficient nexus between the unlawful conduct alleged against FAPL and the infringement by Mr Luxton. Having referred to Oracle, she went on to hold that the defence had effectively been decided against Mr Luxton by QC Leisure. She considered that if there was a sufficient link between the anti-competitive practices alleged against FAPL and the communication to the public in public houses using a domestic card acquired from a foreign broadcaster, then the result of QC Leisure would have been different.[28]At paragraph 32 of her judgment the judge accepted Ms Davies’ submission that FAPL had a lawful right to prevent the unauthorised communication of its copyright, whether that communication was effected by a domestic card issued by a UK broadcaster or by a foreign broadcaster. She added that an assertion that FAPL was exercising those rights as part of a scheme for supporting other alleged infringements did not provide a defence for the reasons set out by Lord Sumption in Oracle.[29]At paragraph 33 the judge concluded that the enforcement action in the present case was not the subject, the means or the result of the alleged unlawful arrangements between FAPL and its licensees.

The parties’ submissions

[30]Mr Howe submitted that on the assumptions which it is necessary to make at this stage, the necessary link or nexus was established. The FAPL were applying what he described as a pincer movement. One side of the pincer was formed by the assumed agreement and practices forcing supplies of foreign decoder cards to cease. The other side of the pincer was the prevention of use of the only available card, the domestic one, in a commercial context.[31]Mr Howe submitted that this case raised the question of the court’s approach in a case where an action had both a legitimate and an illegitimate purpose. The legitimate purpose was the enforcing of differential licensing rates between commercial and domestic use. The illegitimate purpose was the isolation of the UK market from that elsewhere in the EU. In such cases it might be wrong to deny the rights owner any relief at all: to do so would be to grant the user of the rights an immunity which, to use Mr Howe’s phrase, would “stick in the craw”. It might be appropriate in those circumstances for the national court to fashion a remedy which ensured that FAPL and its licensees received the correct remuneration for the reception of their broadcasts, whilst at the same time not allowing them to succeed in the illegitimate purpose of isolating the market. That could, for example, be achieved by granting the injunction only if the defendant declined to pay the difference between the commercial and domestic card subscription rates.[32]In developing his submissions, Mr Howe placed some reliance on the decision of this court in Sportswear SpA v Stonestyle Ltd. [2006] EWCA Civ 380; [2007] FSR 2. In that case the trade mark owners included codes on their garment labels which identified the distributors to which its garments had originally been sold. The defendants sold garments which had already been marketed in the EEA by the claimants or with their consent. The garments had been acquired after the codes had been removed. The claimants objected to the further commercialisation of the goods on the grounds that the condition of the goods had been damaged and this would affect their reputation. The defendants retaliated that the real purpose of the codes was to track down parallel trade in the goods, and that the reason the claimants had brought the action was to force the defendants to disclose the identity of the distributor who had originally been supplied with the goods. This, they said, would enable the claimants to cut off supplies to the defendant and partition the market.[33]The case contains, in the judgment of Lloyd LJ, with whom Longmore and Waller LJJ agreed, some discussion of whether a claimant who has both legitimate and illegitimate purposes could be prevented from enforcing his rights. It was argued on the basis of a passage in Case C-349/95 Loendersloot v George Ballantine & Sons ltd. [1997] ECR I-6227; [1998] FSR 544 at paragraphs 39 to 43 that, as the use of the codes could be attributed to both legitimate purposes and also purposes in breach of the Treaty, there was nothing to prevent the trademark owner from enforcing his rights, although he might be subject to separate sanctions from the opposing party or from the regulatory authorities for the breach. In short, the treaty provided the defendant with a sword but not a shield. At paragraph [71] Lloyd LJ said this:
“I do not regard it as clear that a breach of Art. 81 can only constitute a claim, not a defence, in any circumstances. It seems to me well arguable that to be able to prove that a relevant agreement is in breach of Art. 81 would give a defendant a stronger basis for saying that the claimant does not have legitimate reasons under s. 12(2). I do not decide that the defendant’s position on either of these points is necessarily right as a matter of law, even if the necessary facts can be established. But it does seem to me that the points are sufficiently arguable for it to be wrong to strike these paragraphs out of the Defence.”
[34]That case, of course, predates the decision of the Supreme Court in Oracle. Mr Howe submits, however, that it shows that it is reasonably arguable that the fact that an action to enforce an intellectual property right may have a legitimate purpose does not exclude the possibility of a defence based on the illegitimate purpose.[35]Mr Howe sought to distinguish Oracle on the grounds that the right in question there was the right to prevent importation from outside the EU, a factor reflected in the restriction on the injunction granted. The alleged connection in that case was therefore much more collateral than in the present case. He contended that the relief granted in Oracle which ensured that the injunction did not bite on goods freely on the market in the EEA, was an example of “nuanced” relief. Appropriately fashioned relief could also be granted in this case.[36]Mr Howe also submitted that the judge had been wrong to treat QC Leisure as determinative of the case. The issue raised in the present case had not been decided in QC Leisure, either by the Court of Justice or by Kitchin LJ when the case returned to him.[37]Ms Davies submitted that it was necessary to keep the two pleaded connections, nexus 1 and 2, separate. Nexus 1 relied essentially on FAPL’s motivation in bringing the proceedings, whilst nexus 2 relied on a factual chain of causation between the illegal activities and the infringement.[38]As to nexus 1, Ms Davies first stressed the consequences of the argument if it were correct. It would be available to prevent summary judgment in any case where FAPL brought proceedings against someone using a domestic decoder card issued in another member state. In such a case it would always be possible for the user to argue that at least part of FAPL’s purpose was to divide the market, and thereby avoid summary judgment. At the stage of final relief, if Mr Howe’s argument were accepted, FAPL would be able to recover only the difference between the commercial rate and the domestic rate, and no injunction. This was almost akin to a system of compulsory licensing of copyright.[39]Ms Davies went on to submit that this way of putting the defence was effectively precluded by the judgment of the Supreme Court in Oracle. FAPL’s right to prevent the communication to the public of the copyright works without their consent was a right which FAPL were entitled to exercise and which was consistent with the freedom to provide services in the EU. It did not become unlawful for FAPL to enforce that right merely because they were a party to agreements and concerted practices which were concerned with interfering with the freedom to provide services. Likewise it did not advance the argument to say that the enforcement of the lawful right was part of a scheme – Mr Howe’s pincer movement – to eliminate access to foreign commercial cards.[40]Ms Davies submitted that Sportswear v Stonestyle also provided no support for Mr Luxton. She made two points about Mr Howe’s reliance on that case. The first was that itwas decided before Oracle and could no longer be regarded as correct in the light of the Supreme Court’s decision in that case. In the decision of the Court of Appeal in Oracle it was held that an arguable defence existed where the exercise of the rights had more to do with partitioning the market than with the proper exercise of the right to control the first marketing of goods within the EEA: see per Arden LJ [2010] EWCA Civ 997 at [33]. That analysis could no longer be regarded as correct in the light of the decision of the Supreme Court in Oracle. If the exercise of the right was indeed proper and lawful, the fact that the rights owner was also doing something which was unlawful, or that he was enforcing rights as part of a scheme, did not provide a defence.[41]Ms Davies’ second point about that case was that it was part of the line of authorities, of which the re-packaging cases are the best known examples, concerned with the right to prevent further commercialisation of goods already marketed in the EEA. The claimant in those cases had to establish that there were legitimate reasons to object to further commercialisation of the goods. There was no prima facie right in play in those cases of the kind which was available to the FAPL, or was available to the claimant in Oracle. No case had decided that where the claimant has a prima facie right recognised by EU law, the right was defeated when its enforcement would have no impact on trade between member states.[42]Ms Davies also submitted that the cases of Sirena and Nancy Kean Gifts summarised by Lord Sumption at paragraph [30] of Oracle were distinguishable. In Sirena there had been a series of assignments of trade marks to companies in a variety of member states, so that the very existence of the right relied on depended on the unlawful purpose or agreement alleged. Nancy Kean was another case concerned only with legitimate reasons for opposing further commercialisation.[43]As to nexus 2, Ms Davies submitted that the chain of events which led to Mr Luxton’s use of the domestic card did not mean that the enforcement of the rights was the “subject, means or result” of the illicit agreements and practices. She submitted that at all times there were UK commercial cards available, and failing that, Mr Ibrahim could, and indeed should, simply have declined to supply Mr Luxton with a card at all. The absence of commercial cards was therefore not the effective cause of the infringement, it merely provided the occasion for Mr Ibrahim to choose to supply a foreign domestic card.[44]For similar reasons there was no analogy between the facts of Oracle and those in the present case which would lead to the imposition of more limited or nuanced relief. The facts of Oracle made it impossible for a trader who wished to deal in goods which were lawfully on the market in the EU to distinguish between such goods and those which were being placed on the market for the first time. There was no corresponding impossibility in the present case. Mr Ibrahim knew full well that the card he was supplying was a domestic card, and Mr Luxton’s ignorance of that fact was not the result of any policy of FAPL.[45]Ms Davies also drew our attention to British Sky Broadcasting Group v Duarte [2014] EWHC 111 (Ch); [2014] FSR 32, a case on very similar facts, where Birss J reached the same conclusion as that reached by the judge in the present case.

Discussion

[46]Before turning to the substance of the arguments, and in order to clear it out of the way, I will deal with the suggestion that the points argued by Mr Howe are foreclosed by the decision in QC Leisure. The short answer is that they are not. We were not taken to any passage in QC Leisure which expressly dealt with defences of this kind. The most that could be said is that, if the defences are valid, then one would have expected them to be run, and to have succeeded in that case. Whilst I can see some forensic force in that point, it cannot absolve the court from analysing the defences when we are called upon to decide them.[47]Although Mr Howe focused mainly on nexus 2, I will deal first with nexus 1. The underlying allegation is that the present proceedings are “in reality” an illicit attempt on the part of FAPL to preclude the use by Mr Luxton of a foreign decoder card to receive broadcasts from a foreign broadcaster within the EU.[48]I do not see how the present proceedings can sensibly be so described. The right relied on in the present case does not depend in any way on the card being used by Mr Luxton being a “foreign” card. The right relied on is the right of a copyright owner to prevent the unauthorised communication to the public of copyright works. That right would be enforceable against a person in the United Kingdom who used a domestic card issued by FAPL’s UK licensee, Sky. There would be nothing unlawful about an attempt to enforce that copyright against a person using a Sky domestic card to show FAPL’s copyright works in public. The enforcement of the right does not become unlawful, or to use Mr Luxton’s word “illicit”, if a foreign card is substituted for the UK card.[49]I can therefore understand why Mr Howe puts his case before us in a somewhat modified form, accepting for the purposes of the argument that FAPL may have had a lawful purpose in bringing the proceedings, namely to prevent the use of a domestic card for the communication to the public of their copyright works. However, Mr Howe goes on to say that FAPL also had a second purpose, namely the reinforcing of their allegedly unlawful agreements or practices restricting the reception of their broadcasts to the territories of their licensees.[50]I do not think this dual purpose argument holds water either. The right on which FAPL rely is not capable of reinforcing the unlawful agreements to partition the market precisely because it is not a right which depends in any way on the territory in which that use is being made. It is a right which depends on the absence of a relevant consent to the use which is being made of the card. There is no suggestion that FAPL or their licensees allow the use of domestic cards for commercial purposes to proceed unrestrained provided it occurs in the territory of the relevant broadcaster, and only objects where the use occurs outside that territory. All that can be said is that eliminating the use of this particular foreign domestic card in the UK is consistent with FAPL’s alleged policy of keeping the markets separate. That, in my judgment, is wholly insufficient to create a relevant nexus.[51]I do not think there is any support for nexus 1 in Sportswear v Sportstyle or indeed in any of the cases concerned with whether there are legitimate reasons for opposing the further commercialisation of goods already placed on the market in the EEA. As Lord Sumption recognised in Oracle at paragraph 27, that jurisprudence only goes as far as to say that the proprietor of the right may be prevented from exercising it if the exercise would itself unjustifiably impede free movement of goods. Whilst that could be said of the brand owner who uses his trade mark to prevent the importation of his own previously marketed goods without legitimate reasons, it cannot be said of the copyright owner who has a prima facie right to prevent the use of domestic cards for commercial purposes wherever that use may occur. That distinction makes it unnecessary for me to express a view on whether the provisional views expressed by this court in Sportswear v Sportstyle are correct.[52]I turn therefore to nexus 2, which is, in essence, that Mr Luxton’s use of the domestic card was the consequence of FAPL’s allegedly unlawful agreement and practices, and that, accordingly, FAPL cannot enforce their copyright against the use of the domestic card.[53]The fundamental difficulty with this way of putting the case is that I do not think it can accurately be said, except perhaps in the loosest possible sense, that Mr Luxton’s use of the domestic card was the consequence of FAPL’s agreements and practices. Let it be assumed that the effect of those agreements and practices was to starve the market of foreign commercial cards. Mr Luxton’s use of the foreign domestic card was still not a consequence of the agreement and practices, at least not a natural consequence. FAPL’s starvation of the market for foreign commercial cards undoubtedly has the effect that consent to commercial use of its copyright works by use of a foreign card is difficult or impossible to obtain. But it still makes no sense to describe Mr Luxton’s use of the copyright works without any consent at all as a consequence of FAPL’s acts. At most it provided, as Ms Davies submits, the occasion for such use.[54]I did not find Mr Howe’s pincer movement analogy helped his case. Rather, as it seemed to me, it illustrates the clear separation between the unlawful conduct of FAPL complained of – one arm of the pincer – and the other arm which is the enforcement of a lawful right.[55]The case is complicated by the fact that Mr Luxton set out to obtain a commercial card and was, unknown to him, supplied with a domestic card. I do not think that this circumstance can assist him, however. If Mr Luxton’s argument is correct, the agreements and practices prevent FAPL from enforcing their copyrights against foreign domestic cards however obtained. It follows that a publican who deliberately sought out a foreign domestic card would be in the same position as Mr Luxton.[56]I would accordingly hold that the infringing activity, and therefore the enforcement action taken to prevent it, are not the result of the unlawful agreements and practices relied on. Nexus 2 therefore does not provide Mr Luxton with a defence.[57]Finally I should say something about the possibility of granting more limited relief. Mr Howe’s suggestion was that Mr Luxton could be ordered to pay the difference between the commercial and the domestic card rate to FAPL or to Viasat. In the absence of any arguable nexus between the conduct of FAPL complained of and the infringing act, I do not think that this argument arises. As Ms Davies pointed out, the argument has far-reaching consequences. In effect, it seeks a retrospective and prospective compulsory licence to use the copyright works. It would be better to explore the possibility of such relief in a case where a nexus, at least arguably, arises.

Conclusion

[58]For those reasons, I would dismiss Mr Luxton’s appeal.[59]I agree.