BREAKING NEWS: CJEU says that circumventing a protection system may be lawful (sometimes)

From The IPKat: BREAKING NEWS: CJEU says that circumventing a protection system may be lawful (sometimes)

Technological protection measures jokes
are simply the best
Probably there are just a few topics of conversation that are more charming and successful than videogames and technological protection measures. This said, today the Court of Justice of the European Union (CJEU) comes in your help with new conversation hints, by releasing its much-awaited judgment [UPDATE @11:05: the full judgment is now available here] in Case C-355/12 Nintendo.
This was a reference for a preliminary ruling from Italy seeking clarification as to the following:
1.    Must Article 6 of Directive 2001/29/EC be interpreted, including in the light of recital 48 in the preamble thereto, as meaning that the protection of technological protection measures attaching to copyright protected works or other subject matter may also extend to a system, produced and marketed by the same undertaking, in which a device is installed in the hardware which is capable of recognising on a separate housing mechanism containing the protected works (video games produced by the same undertaking as well as by third parties, proprietors of the protected works) a recognition code, in the absence of which the works in question cannot be visualised or used in conjunction with that system, the equipment in question thus incorporating a system which precludes interoperability with complementary equipment or products other than those of the undertaking which produces the system itself?
2.    If it should be necessary to consider whether or not the use of a product or component to circumvent a technological protection measure predominates over other commercially significant purposes or uses, may Article 6 of Directive 2001/29/EC be interpreted, including in the light of recital 48 in the preamble thereto, as meaning that the national court must apply criteria which give prominence to the particular intended use attributed by the rightholder to the product in which the protected content is inserted or, in the alternative or in addition, criteria of a quantitative nature relating to the extent of the uses under comparison, or criteria of a qualitative nature, that is, relating to the nature and importance of the uses themselves?’
Advocate General Sharpston released her Opinion [on which see here and hereback in September, holding the view that:
  1. ‘Technological measures’ within the meaning of Article 6 may include measures incorporated not only in protected works themselves but also in devices designed to allow access to those works;
  2. When determining whether measures of that kind qualify for protection pursuant to Article 6 where they have the effect of preventing or restricting not only acts which require the rightholder’s authorisation pursuant to that directive but also acts which do not require such authorisation, a national court must verify whether the application of the measures complies with the principle of proportionality and, in particular, must consider whether, in the current state of technology, the former effect could be achieved without producing the latter effect or while producing it to a lesser extent.
  3. When determining whether protection must be provided against any supply of devices, products, components or services pursuant to Article 6(2), it is not necessary to consider the particular intended use attributed by the rightholder to a device designed to allow access to protected works. By contrast, the extent to which the devices, products, components or services against which protection is sought are or can be used for legitimate purposes other than allowing acts which require the rightholder’s authorisation is a relevant consideration.
According to the relevant press release, this morning the CJEU ruled that the manufacturer of the console is protected against that circumvention only in the case where the protection measures seek to prevent illegal use of videogames.
The Court recalled that videogames constitute complex material comprising not only a computer program, but also graphic and sound elements which, although encrypted in computer language, have their own creative value. As an intellectual creation specific to their author, original computer programs are protected by copyright which is the subject of Directive 2001/29/EC.
This directive requires the Member States to provide adequate legal protection against the circumvention of any effective ‘technological measure’ intended to prevent or restrict unauthorised acts of reproduction, communication, public offer, or distribution. The directive is designed only to protect the copyright holder against acts which require his authorisation. 

Disclaimer: not a case of product placement

The Court noted in particular that, in accordance with the principal objective of the directive (namely to establish a high level of protection of authors), the concept of ‘effective technological measures’ must be understood broadly including the application of an access code or protection process (encryption, scrambling or any other transformation of the work). 
Consequently, technological measures which are both incorporated in the physical housing of videogames and in consoles and which require interaction between them, fall within the concept of ‘effective technological measures’ within the meaning of the directive if their objective is to prevent or to limit acts adversely affecting the rightholder’s rights. 
The Court then stated that the legal protection covers only the technological measures intended to prevent or eliminate unauthorised acts of reproduction, communication, public offer or distribution, for which authorisation from the copyright tholder is required. 
That legal protection must respect the principle of proportionality without prohibiting devices or activities which have a commercially significant purpose or use other than to circumvent the technical protection for unlawful purposes. 
The scope of legal protection of technical measures must not be assessed according to the use of consoles defined by the holder of copyright, but that rather it is necessary to examine the purpose of devices provided for the circumvention of protection measures, taking account, according to the circumstances at issue, of the use which third parties actually make of them.
The Court accordingly called on the referring court to determine whether other effective protection measures could cause less interference with the activities of third parties or lead to a reduced limitation to those activities, while still providing comparable protection of the rightholder’s rights. To that end, the referring court may take account of the costs of different types of technological measures, of technological and practical aspects of their implementation, as well as the comparison of their respective effectiveness in relation to the protection of the rightholder’s rights, it being understood that that effectiveness need not be absolute.