C-62/79

JUDGMENT OF 18. 3. 1980 — CASE 62/79

without his authority, by means of to a contract of assignment have cable diffusion if the film so exhibited agreed upon in order to protect the is picked up and transmitted after author and his assigns in this regard. being broadcast in another Member The mere fact that those geographical State by a third party with the consent limits may coincide with national of the original owner of the right. frontiers does not point to a different solution in a situation where television Indeed, whilst copyright entails the is organized in the Member States right to demand fees for any largely on the basis of legal broad- exhibition of a cinematographic film, casting monopolies, which indicates the rules of the Treaty cannot in that a limitation other than the geo- principle constitute an obstacle to the graphical field of application of an geographical limits which the parties assignment is often impracticable.

In Case 62/79

REFERENCE to the Court under Article 177 of the EEC Treaty by the Cour d'Appel [Court of Appeal], Brussels, Second Civil Chamber, for a preliminary ruling in the action pending before that court between

S.A. COMPAGNIE GÉNÉRALE POUR LA DIFFUSION DE LA TÉLÉVISION, CODITEL, Brussels,

S.A. CODITEL BRABANT, Brussels,

CHAMBRE SYNDICALE DES PRODUCTEURS ET EXPORTATEURS DE FILMS FRANÇAIS, Paris, respondents, in the presence of INTERMIXT, a public utility undertaking, Brussels,

UNION PROFESSIONNELLE DE RADIO ET TÉLÉDISTRIBUTION, Schaerbeek,

INTER-RÉGIES, an intercommunal co-operative association, Brussels,

interveners,

on the interpretation of Article 59 of the EEC Treaty,

THE COURT

JUDGMENT OF 18. 3. 1980 — CASE 62/79

The cable television companies appealed The Cour d'Appel ruled that that against that judgment. They relied, inter provision was applicable in the case alia, upon the incompatibility of the before it and declared that the cable exclusive right granted by La Boétie to television undertakings must be Ciné Vog and the exercise of that right considered as a body "separate" from with the provisions of the EEC Treaty the broadcaster of the film, namely the on competition (Article 85), on the one German broadcasting station, and that

CODITEL v CINÉ VOG FILMS

the communication of the film to Belgian film thus shown is picked up by the viewers was a communication "to the defendant in the said Member State public" as understood in the said after having been broadcast by a provision. third party in another Member State with the consent of the original owner of the right?" As regards Community law, the Cour d'Appel first of all held that a performing right is part of the specific subject-matter of copyright and that consequently The judgment making the reference was Article 85 of the Treaty did not apply. received at the Court on 17 April 1979.

JUDGMENT OF 18. 3. 1980 — CASE 62/79

II — Written observations sub- The effect of the case-law of the Court is mitted to the Court that the Treaty does not solely prohibit measures which prevent or which restrict the physical crossing of frontiers, but all measures, even if purely national, which are such as to affect trade between The first question Member States even if only indirectly.

CODITEL v CINÉ VOG FILMS

JUDGMENT OF 18. 3. 1980 — CASE 62/79

"The restrictions prohibited by Article 59 In such cases the restrictions which of the EEC Treaty are not only those produce such an effect may nevertheless which directly hinder the provision of be justified upon the basis of Articles 55 services between persons established in and 56 of the EEC Treaty. different Member States. On the

CODITEL v CINÉ VOG FILMS

On the other hand, if one regards the The cable television distributor, the service provided by the cable television person providing services in regard to its distributor in the manner chosen by the subscribers, is also the recipient of the Cour d'Appel, the transnational aspect is television signals from another contry. absent. Whilst the reasoning in respect of that relationship should not be any different As regards the "substance" of the from that regarding the relationship with service, it is difficult to accept it as a the ultimate recipients who are the criterion for determining the trans- television viewers, it must additionally be national nature of a service since its pointed out that the lack of any direct application would be problematical in remuneration is solely attributable to the practice. fact that for the moment television broadcasting stations in the continental When examining the service constituted countries bordering on Belgium have by the television signal itself, the waived a right which is expressly reserved condition requiring the existence of to them under the Strasbourg European remuneration must be considered pursu- Agreement of 22 June 1960 on the ant to the first paragraph of Arti- protection of television broadcasts and cle 60 of the Treaty, bearing in mind the Protocol to that Agreement of that the recipients of that service are 22 January 1965.

JUDGMENT OF 18. 3. 1980 — CASE 62/79

One possible objection, based upon the lack of a legal relationship between the The second question person providing the service, in this case the German broadcasting station, and the recipients of the service, in this case Coditei points out that the Court's the Belgian television viewers, is not a case-law on the application of Articles 30 crucial one. The provision of services and 36 to the exercise of industrial does not necessarily imply the existence property rights may reasonably be of a legal relationship between the applied mutatis mutandis to services. It provider and the recipient of a service; refers to Cases 15 and 16/74, Centrafarm furthermore, such a requirement is v Sterling Drug & Winthrop ([1974] ECR scarcely compatible with economic at pp. 1168 and 1199 to 120O), and reality in industries such as the 192/73, Hag ([1974] ECR 731 at p. 745). newspaper, radio and television industries in which revenue is often largely generated by advertising, which is nevertheless calculated according to the It emphasizes that Article 59 of the number of recipients actually reached. Treaty became directly applicable upon the expiry of the transitional period (Van Binsbergen judgment, cited above). It is also accepted that Article 59 has a In conclusion, Coditei proposes that the "horizontal direct effect" (judgment in Court should answer the second question Case 36/74, Walrave & Koch [1974] as follows: ECR 1405 at p. 1420; judgment in Case 13/73, Dona [1976] ECR 1333 at p. 1341; judgment in Case 90/76, Van Ameyde [1977] ECR 1091 at p. 1126), "It is not in accordance with the whereby private persons are, like provisions of the Treaty on freedom to Member States, bound to refrain from provide services for the assignee of the any measure which is liable to impede performing right in a cinematographic freedom to provide services. film in one Member State to rely upon

his right in order to prevent the showing State where the service is provided, of that film in that State by means of which do not apply to persons cable diffusion of television where the established within the national territory film thus shown has been broadcast in or which may prevent or otherwise another Member State by a third party obstruct the activities of the person with the consent of the original owner of providing the service" (cf. judgment in the right." Case 22/74, Van Binsbergen [1974] ECR 1299; judgment in Case 39/75, Coenen [1975] ECR 1547). The Union Professionnelle de Radio et Television feels that the effect of the case-law of the Court is that although The requirement that the licence of the the existence of an industrial property author be obtained is a general one; right or of a right akin to copyright provision is made for it in an inter- escapes as such from the prohibitions national agreement which binds inter alia laid down in the Treaty, the exercise the nine Member States and it does not thereof may still be covered by the entail any discrimination from the point prohibitions enacted by the Treaty. By of view of the nationality of the person relying upon copyright legislation Ciné providing the cable diffusion service or Vog cannot therefore re-create from the point of view of his place of restrictions which are incompatible with establishment. the Treaty. A person providing a service must make Ciné Vog and the Chambre Syndicale sure that the service he performs is itself Belge de la Cinématographie examine the lawful. For example, a cable television second question on a subsidiary basis distributor established in Belgium cannot only, since in their opinion the first limb diffuse over its network to its subscribers of the first question requires an answer a film the content of which has been in the negative. judged by a Belgian court to be offensive to public morality, whilst in neighbouring countries the film is shown freely creating the possibility that the They claim that if it is accepted that film may be transmitted by a broad- Article 59 of the EEC Treaty may in casting organization in a neighbouring principle apply here to the services Member State. provided by the cable television distri- butors, then it must be acknowledged that the requirement that the licence of The subject-matter of the service should the author or of his assign be obtained is cause the person providing it to ensure on no account a restriction prohibited by that he fulfils all the conditions for that Article 59 because that requirement does service to be lawful. In the present case not cause any discrimination which the the licence of the author is a condition provisions of Article 59 intended to which does not cause any discrimination abolish. intended to be abolished by Article 59 of the Treaty.

contract for this purpose with the Société movement of services at the organ- Belge des Auteurs, Compositeurs et izational level. Éditeurs (SABAM) [Belgian Association of Authors, Composers and Publishers]. According to Article 60 of the Treaty By that contract, renewed on 1 De- services transcending national boundaries cember 1977, they are obliged to pay a shall be provided "under the same fee of Bfrs 30 for each basic subscription conditions as are imposed by that State of Bfrs 2 000. on its own nationals". The fact that Articles 56 and 66 of the Treaty taken together leave Member States the power In conclusion, Ciné Vog and the to maintain discriminatory restrictions to Chambre Syndicale Belge de la the detriment of those who provide Cinematographic propose that the Court services extending beyond national should answer the second question as boudaries must be understood to mean follows: that Member States are all the more justified in adopting general rules which "The requirement that a licence be are not discriminatory. obtained from the owner of the television performing right in a film in If the entitlement of the owner of a right order to communicate that film to the to prohibit the re-transmission of films subscribers of a cable television diffusion were to be considered, contrary to the network in the Member State of that view of the German Government, as a owner when the film is broadcast by restriction upon the movement of television from another Member State is services within the meaning of Article 59 not a restriction upon the freedom to et seq., it would nevertheless be justified provide services such as was intended to by applying by analogy the combined be abolished by Article 59 of the EEC provisions of Article 36 and of Articles 56 Treaty. That licence does not in fact and 66 of the EEC Treaty. cause any discrimination to the detriment of the person providing the service and the necessity for it is derived from an The Government of the Federal Republic international agreement which is not of Germany states that it is not unaware incompatible with Article 59 of the EEC that, in the case of industrial and Treaty." commercial property rights held to be "of the same origin", the legal effect of the Court's case-law is that the holder of In the opinion of the Government of the the property right cannot avail himself of Federal Republic of Germany, the answer the right of prohibition given to him by to the second question should be in the national legislation in the context of affirmative. trade within the Community.

In the opinion of the Government of the ECR 1061).The effect of this is that the Federal Republic of Germany the answer holder of an industrial property right to the second question should therefore protected by the laws of a Member State be in the affirmative. may not rely upon those laws to resist the importation of a product which has been lawfully placed on the market in another Member State by the holder himself or with his consent. The Government of the United Kingdom is of the opinion that the very nature of copyright rights prevents them from being discriminatory and states that those rights are not the sort of restriction The reasons for this are primarily based struck down by Article 59 at all. It points upon the principle of the exhaustion of out that a specific subject-matter of an industrial and commercial property copyright protection is the entitlement of right which itself is based upon the view the proprietor to prevent the unauth- that the holder receives his remuneration orized use of his material for cable upon the sale of the protected product. television. That specific right is For this reason the right of the holder recognized by the Berne Copyright ceases from the moment when he places Convention to which all Member States the product on the market. are parties. It is inconceivable that Article 59 should destroy a part of the specific subject-matter of the copyright protection. When applying these principles to copyright it is important to bear in mind some particular features of literary and artistic property. Unlike exclusive industrial and commercial property rights The Commission considers that the such as patents and trade-marks, we are Court's interpretation of Article 36 in here concerned with the protection of a regard to the protection of industrial and personal creation (an immaterial right). commercial property rights must also The protection given by copyright takes apply to literary and artistic property account of this feature; it is both wider rights. and more varied. The concept of copyright comprises the prerogatives of the author, which are inalienable, rights of distribution when there is a material medium and of performance if there is The Court has interpreted Article 36 as no material medium. meaning that the existence of exclusive rights given by the legislation of Member States is not affected by the Treaty but that the exercise of those rights may, The application of the exhaustion however, fall within the scope of principle is justified as regards copyrights application of the Treaty rules on the whose subject-matter is the distribution free movement of goods and on of a material medium (written works, competition (judgment in Case 78/70, sound-recordings, films, artistic cre- Deutsche Grammophon v Metro-SB-Groß- ations). That involves goods which are märkte [1971] ECR 502; judgment in traded in and are scarcely any different Case 15/74, Centrafarm v Sterling Drug from products made under licence or [1974] ECR 1147; judgment in Case marketed under a trade-mark. The 119/75, Terrapin v Terranova [1976] author — like a patentee or the owner of

a trade-mark — receives his remun- The Commission shares that view. It eration upon the sale of his work in a states that whilst it is true that the material form. The Commission refers to provisions of the Treaty on the freedom the judgments in Cases 155/73, Sacchi to provide services do not contain any ([1974] ECR 428), and 78/70, Deutsche express reference to the protection of Grammophon ([1971] ECR 499). literary and artistic property, that omission may not however be interpreted as meaning that the authors - of the Treaty intended to remove from those On the other hand, that principle may rights the protection which they gave to not be applied to copyrights where there is industrial and commercial property in no material medium. These are essentially Article 36. Article 36 is in fact, as far as performing rights. If there is no material the guaranteed existence of those rights medium the criterion of marketing is concerned, the expression of a general cannot be used to determine the extent principle which is not confined to Title I, of the exclusivity of the right. Chapter 2, on the free movement of goods; it must also apply to the freedom to provide services to the extent to which literary and artistic property rights may Such copyrights are distinguished by the give rise to the provision of a service. fact that they are not exhausted at the first performance of the works they protect. The different forms of per- formance are independent of one The Commission feels that the question another and each performance giiœs rise referred to the Court is relevant only if to copyright and therefore to remuner- the cable diffusion of a film picked up ation. from a broadcasting station and simul- taneously transmitted to subscribers constitutes a broadcast which requires the authority of the owner of the right. The Commission observes that in general performing right is the author's preserve and that the exercise of that right is possible only if he gives his consent. If It gives a summary of the national laws consent is · not given the author may on the subject. prohibit the performance. The Com- mission thinks that the requirement of consent is intended to enable the author to negotiate a fair remuneration. Belgium and Luxembourg do not have legislation of their own. Those countries apply the Berne Convention in regard to nationals and foreigners alike. Since the use of the author's intangible rights give rise to the provision of services — and not to the movement of goods — the question arises whether the Case-law in the Federal Republic of exception laid down in Article 36 is Germany approaches the problem of applicable to them. Academic writers are cable diffusion of television from the virtually all agreed that the guarantee point of view of the television viewer. afforded to industrial and commercial Moreover, it gives weight to the fact that property rights in Article 36 of the cable diffusion of television provides Treaty must also apply to copyright. normal reception in areas where this

would not otherwise be possible because various Member States shows that the of the existence of buildings. question of the status of cable diffusion of television in regard to copyright remains largely unsettled. British and In the United Kingdom and Ireland Irish legislation basically denies to cable diffusion companies are authorized owners of broadcasting rights the right by law to transmit broadcasts by the to prohibit re-transmission by cable. national broadcasting organizations American legislation has adopted the without being obliged to pay any remu- same solution but makes provision for neration. In the case of the re- remuneration. Discussions within the transmission of broadcasts of foreign Berne Union, which have not yet broadcasting organizations, a decision by reached any clear outcome, are the Performing Rights Tribunal may continuing. They may be summarized as declare such re-transmission to be follows: in the case of the simultaneous exempt from payment, or grant the re-transmission of original broadcasts it is owner appropriate remuneration. accepted that it is left to each legislature to interpret what it understands by the concepts of "body other than the original one", "public" and "communi- In France Article 27 of the Law of 11 cation to the public" contained in March 1957 contains only a general paragraph (1) (ii) of Article 11 bis of the provision regulating the right to Berne Convention. As regards the re- broadcast which does not distinguish diffusion of national programmes, it has between a transmission and a re- been pointed out that in a case where a transmission. The interpretation of that broadcasting organization is subject to a provision is controversial. legal obligation to ensure reception of its programmes by all the nationals of the country in question, the act of diffusing In the Netherlands Article 12 (4) of the television by cable cannot be dissociated Law on Copyright provides that the from the act of broadcasting, even if the publication, by wire or otherwise, of a cable diffusion is carried out by an work diffused by radio or television is organization other than the original one. not to be considered as an independent However, the cable re-transmission of broadcast if it is made simultaneously foreign programmes must be regarded as a with the broadcast by the organization communication to the public within the which made the broadcast. meaning of Article 11 bis of the Berne Convention.

Community law. The latter requires that because Ciné Vog's right has its origin in restrictions on the free movement of a "legal situation under which it enjoys goods or, where appropriate, on freedom protection erga omnes", it falls outside to provide services are applicable without "the considerations pertaining to distinction to services provided within a contracts and concerted action to which Member State and to those provided the words of the Treaty refer". from another Member State. In the case However, in view of the case-law of the of the exception based upon copyright, it Court of Justice — inter alia in Case must be of general application since it 40/70, Sirena v Eda ([1971] ECR 82), in would otherwise be, in the words of which the Court clearly laid down the Article 36 of the Treaty, "a means of distinction to be made between the arbitrary discrimination" or "a disguised existence of an exclusive right conferred restriction on trade between Member by national law as a legal entity and the States". In an analogous situation contractual exercise of that right, parti- concerning trade-marks the Court cularly by means of licences — the underscored in Case 119/73, Terrapin v situation may also be viewed in a Terranova ([1976] ECR 1061), the different way. obligation upon Member States not to differentiate, as regards the application of legislation conferring an exclusive right, between the criteria which are valid within the Member State and those The content of the contract of 8 July which are applied to imports. 1969 shows in fact that La Boétie did not actually transfer its copyright to Ciné Vog. The producer authorized Ciné Vog The Commission concludes from this to exploit the film in question in Belgium that, on the basis of the options left to it and the Grand Duchy of Luxembourg. by the Berne Convention, the Cour That authorization covered a specific d'Appel, Brussels, cannot make a territory only, it was limited in time and distinction between the transmission by gave rise to payments to be made in cable of programmes of national proportion to the return obtained from television organizations (which cable cinema performances. That contract diffusion undertakings are obliged to therefore fulfilled all the requirements transmit in full) ' and the transmission by with regard to a licence contract. This cable of programmes coming from also holds good if Ciné Vog is regarded television organizations of another as the owner of the performing right for Member State. In the event that the Belgium. Cour d'Appel does not consider that the transmission by cable of Belgian television programmes is not a new broadcast giving rise to copyright, it cannot treat the transmission of In those circumstances it is not television programmes coming from impossible that the provisions of the another Member State in any other way. Treaty on competition, in particular Article 85, may be applicable. The Commission acknowledges that the Cour d'Appel, Brussels, has held that

to examine the contractual relationship by cable, are in fact known to the public between the original owner (La Boétie) only a short time before the broadcast and the German broadcasting organ- itself. Therefore it is generally impossible ization. It is necessary to know whether for cable diffusion companies to secure the consent given to German television the consent of the owners of the per- to broadcast the film also extended to forming rights. That means that as long the re-transmission of the broadcast by as Member States have not introduced a cable. In the event that the original system of obligatory licences into their owner gave his consent to re- national law or as long as there are transmission by cable, Ciné Vog could no copyright management companies no longer assert its performing right. exploiting cinematographic rights, the requirement of the authorization or the consent of the copyright owner in the event of the re-transmission by cable of a film being broadcast makes it impossible Finally, the Commission examines the to carry on this activity in many cases. feasibility of a Community solution, bearing in mind the special char- acteristics, in fact and in law, of cable television. These facts lead the Commission to ask whether this state of national copyright law must be accepted without more ado It considers that it is a matter of finding - at the Community level. In its opinion it a way of reconciling the principle of is first of all incumbent on the national legislatures to solve this problem. But it freedom to provide services with the is also possible to imagine the protection of the specific subject-matter Community taking steps to harmonize of the copyright in question. In doing national laws on the subject. These this it must be borne in mind that cable possibilities do not however deprive the television is a relatively new technique of Court of Justice of the jurisdiction to which the copyright laws in force in the determine — by interpreting the relevant different Member States, except in the provisions of Community law — whether United Kingdom and Ireland, have not the obstacle to freedom to provide been able to take account because they services in the Community constituted by came into force before this new the performing right in question is technique emerged. This is also true of justified by the specific subject-matter of the Berne Convention. Discussions both that right. The answer cannot be found in Member States and within the Berne in the laws of any one single Member Union demonstrate that the problems State. This question requires a general involved are far from finding definitive answer, based upon existing national solutions. laws, and taking account of the requirements of Community law.

At the sittings on 13 and 14 November 1979 oral observations were submitted by Coditei and Intermixt, represented by In conclusion, the Commission is of the G. Kirschen, A. Braun and M. Wael- opinion that in its answer to the second broeck, of the Brussels Bar: Ciné Vog question of the Cour d'Appel, Brussels, and the Chambre Syndicale Belge de la the Court should hold that the assignee Cinematographic represented by P. of the performing rights in a cinemato- Demoulin, of the Brussels Bar; La Boétie graphic film in Belgium, Ciné Vog, was and the Chambre Syndicale des not entitled to prohibit Coditei from Producteurs et Exportateurs de Films showing that film in that State by means Français, represented by J. Botson, of the of cable diffusion; on the other hand, Brussels Bar; the Union Professionnelle Belgian law may entitle the owner of the de Radio et Télédistribution, represented right in question to claim a fair re- by A. de Caluwe, of the Brussels Bar; muneration for the showing of the film Inter-Régies, represented by J. Dijck, of by means of cable re-transmission. the Antwerp Bar; the Government of the Federal Republic of Germany, represented by M. Seidel, acting as Agent; the Government of the United Kingdom, represented by R. Jacob, Barrister of Gray's Inn, instructed by Should the Court not share that A. D. Preston, of the Treasury Solicitor's conclusion and consider that Community Department, acting as Agent; and the law does not preclude the national law Commission of the European of a Member State from entitling the Communities, represented by M.-J. owner of a performing right in a film to Jonczy and E. Zimmermann, acting as prohibit simultaneous re-transmission by Agents. cable, the Commission proposes that the Court should make it evident in its answer that the rule of national law must be applied without distinction to all cable re-transmissions, to those of broadcasts by national television stations as well as During the sitting Coditei observed that to those of broadcasts from another when it is compelled to relay over the air Member State and, furthermore, that if broadcasts coming from a foreign station the original owner has given his consent when that station cannot be relayed, to the initial broadcast as well as to the received in Belgium and re-transmitted re-transmission by cable in another further afield, it has to fall back on radio Member State, the owner of the per- transmissions. Such relay broadcasts are

3 It is apparent from the file that the Coditei companies provide, with the authority of the Belgian administration, a cable television diffusion service

JUDGMENT OF 18. 3. 1980 — CASE 62/79

covering part of Belgium. Television sets belonging to subscribers to the service are linked by cable to a central aerial having special technical features which enable Belgian broadcasts to be picked up as well as certain foreign broadcasts which the subscriber cannot always receive with a private aerial, and which furthermore improve the quality of the pictures and sound received by the subscribers.

4 The court before which the claim was made, the Tribunal de Première Instance, Brussels, declared that it was unfounded as against Les Films le Boétie, but it ordered the Coditei companies to pay damages to Ciné Vog. The Coditei companies appealed against that judgment. That appeal was declared inadmissible by the Cour d'Appel to the extent to which it was brought against the company Les Films la Boétie, which is not now therefore a party to the dispute.

5 The facts of the case bearing upon the outcome of the dispute were summarized by the Cour d'Appel as follows. By an agreement of 8 July 1969 Les Films la Boétie, acting as the owner of all the proprietary rights in the film "Le Boucher", gave Ciné Vog the "exclusive right" to distribute the film in Belgium for seven years. The film was shown in cinemas in Belgium starting on 15 May 1970. However, on 5 January 1971 German television's first channel broadcast a German version of the film and this broadcast could be picked up in Belgium. Ciné Vog considered that the broadcast had jeopardized the commercial future of the film in Belgium. It relied upon this ground of complaint both against Les Films la Boétie, for not having observed the exclusivity of the rights which it had transferred to it, and against the Coditei companies for having relayed the relevant broadcast over their cable diffusion networks.

In the opinion of the appellant companies, Article 59 must be understood to mean that it prohibits restrictions on freedom to provide services and not merely restrictions on the freedom of activity of those providing services, and that it covers all cases where the provision of a service involves or has involved at an earlier stage or will involve at a later stage the crossing of intra-Community frontiers.

8 Believing that that submission bears upon the interpretation of the Treaty, the Cour d'Appel referred to the Court of Justice the following two questions :

" 1 . Are the restrictions prohibited by Article 59 of the Treaty establishing the European Economic Community only those which prejudice the provision of services between nationals established in different Member States, or do they also comprise restrictions on the provision of services between nationals established in the same Member State which however concern services the substance of which originates in another Member State?

2. If the first limb of the preceding question is answered in the affirmative, is it in accordance with the provisions of the Treaty on freedom to provide services for the assignee of the performing right in a cinemato- graphic film in one Member State to rely upon his right in order to prevent the defendant from showing that film in that State by means of cable television where the film thus shown is picked up by the defendant

JUDGMENT OF 18. 3. 1980 — CASE 62/79

in the said Member State after having been broadcast by a third party in another Member State with the consent of the original owner of the right?"

u In these circumstances the owner of the copyright in a film and his assigns have a legitimate interest in calculating the fees due in respect of the authori- zation to exhibit the film on the basis of the actual or probable number of performances and in authorizing a television broadcast of the film only after

CODITEL v CINÉ VOG FILMS

it has been exhibited in cinemas for a certain period of time. It appears from the file on the present case that the contract made between Les Films la Boétie and Ciné Vog stipulated that the exclusive right which was assigned included the right to exhibit the film "Le Boucheur" publicly in Belgium by way of projection in cinemas and on television but that the right to have the film diffused by Belgian television could not be exercised until 40 months after the first showing of the film in Belgium.

1 4 These facts are important in two regards. On the one hand, they highlight the fact that the right of a copyright owner and his assigns to require fees for any showing of a film is part of the essential function of copyright in this type of literary and artistic work. On the other hand, they demonstrate that the exploitation of copyright in films and the fees attaching thereto cannot be regulated without regard being had to the possibility of television broadcasts of those films. The question whether an assignment of copyright limited to the territory of a Member State is capable of constituting a restriction on freedom to provide services must be examined in this context.

15 Whilst Article 59 of the Treaty prohibits restrictions upon freedom to provide services, it does not thereby encompass limits upon the exercise of certain economic activities which have their origin in the application of national legislation for the protection of intellectual property, save where such application constitutes a means of arbitrary discrimination or a disguised restriction on trade between Member States. Such would be the case if that application enabled parties to an assignment of copyright to create artificial barriers to trade between Member States.

i9 It is clear from the answer given to the second question that Community law, on the assumption that it applies to the activities of the cable diffusion companies which are the subject-matter of the dispute brought before the national court, has no effect upon the application by that court of the provisions of copyright legislation in a case such as this. Therefore there is no need to answer the first question.

Costs

20 The costs incurred by the Government of the Federal Republic of Germany, the Government of the United Kingdom and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, costs are a matter for that court.

CODITEL v CINÉ VOG FILMS

On those grounds,

THE COURT,

O P I N I O N OF MR ADVOCATE GENERAL WARNER

(see case 52/79, p. 860)