Friday 24 January 2014

CJEU rules legal the technological measures preventing the use of homebrews on Nintendo consoles

The CJEU yesterday handed down a judgment (case C-355/12) resolving a request for preliminary guidance in a dispute that has arisen in Italy between the companies Nintendo and PC Box. The roots of the conflict were PC Box’s manufacture and sale of devices which, once installed in a Nintendo video game console, allow users to circumvent the piracy protection system and use counterfeit games. PC Box created the so-called homebrews expressly for use with Nintendo game consoles, and their aim is to deactivate technological protection measures so that consumers can play games by other manufacturers, listen to MP3s, and watch movies and videos.

The Italian court referred two questions to the CJEU. Firstly, whether the technological protection measures installed by Nintendo into its consoles to prevent the use of third-party programs, games and other content is in conformity with Community legislation, and, specifically, whether the concept of an effective technological measure set out in article 6 of EC Directive 2001/29 is applicable thereto. And, secondly, which criteria should be applied to evaluate the scope of legal protection against circumvention of effective technological protection measures.

(i) The first question is not without relevance, since the technological measures adopted by the complainant consist of an encryption system installed in the consoles and video games that prevents the use of video games lacking the encrypted code as well as the use of any other type of software, such as that aimed at reading MP3 files, videos or movies. According to PC Box, such technological measures go beyond the scope of the Directive, which excludes any type of interoperability between the console and equipment other than that of the company which produces the system. Recital 48 of the Directive states in this regard that the legal protection provided in respect of technological measures “should respect proportionality and should not prohibit those devices or activities which have a commercially significant purpose or use other than to circumvent the technical protection.”

Nintendo 3DS AquaOpenConsole
By Evan-Amos
Via Wikimedia Commons

However, according to the CJEU, there is nothing in EC Directive 2001/29 applicable to video games to suggest that Article 6.3 thereof does not refer to technological measures such as those used by Nintendo in its consoles. The concept of an effective technological measure is defined in a broad manner and also includes application of protection systems including encryption of the physical housing of video games such as the consoles themselves, which serves to prevent interoperability with equipment or devices lacking the encrypted code.

(ii) Secondly, the Italian court raises a question relating to the criteria or parameters in respect of which the scope of legal protection against the circumvention of technological protection measures should be assessed, and, specifically, whether account should be taken of the intended use attributed by the right holder to the product in which the protected content is inserted.

In this regard the Court holds that further to the said recital 48 of EC Directive 2001/29, the national court should take into account criteria such as the existence of other effective technological measures comparable to those adopted by the complainant, which would have caused less interference with the activities of third parties not requiring authorisation by the right holder, the costs of different types of measures, as well as other purposes of the devices used by the defendant aside from the circumvention of the technological measures and the frequency with which they are effectively used by third parties.

The fact is that a definite conclusion cannot be drawn from the CJEU’s judgment as to whether or not the homebrews manufactured and sold by PC Box are legal, since the assessment thereof is left in the hands of the national court depending on the proof of effective use provided by third parties. What has been clarified is that the concept of the effective technological measure set out in EC Directive 2001/29 also encompasses measures that serve to prevent the interoperability of a console with equipment, devices and software other than that of the company which produces the console.

By Maico Amorim
Via Wikimedia
Also of interest is the CJEU’s declaration relating to the legal definition of video games. In the Court’s opinion, video games constitute “complex matter”, comprising not only a computer program but also graphic and sound elements with a unique creative value, and should thus be protected by copyright together with the entire work, in the context of the system established by EC Directive 2001/29.

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