Territorial Army

Duncan J. Morgan | January 2016

The jurisdictional nature of IP, Netflix, and the Battle of Britain by proxy.

Generally speaking, intellectual property rights are protected on a territorial basis. Whilst this can be frustrating for businesses hoping for an expeditious route to global protection, in the majority of cases rights are only exploited in a number of countries. Further, businesses often desire flexible means of controlling and exploiting their intellectual property assets, and national rights can provide an effective means of doing so. For example, trade mark owners may wish to market products in many countries under the same brand, though often through different distributors or channels, and often with different properties (e.g. to comply with differing regulatory standards between countries, or simply to aim at a different people in different areas).  The territoriality of their rights can make doing so a more straightforward process, and at Beck Greener we advise on and prepare such licencing agreements on a regular basis.

However, this territoriality can create problems in a global marketplace, perhaps nowhere more acutely than on the internet. Copyright holders in particular can struggle to maintain the value of their rights in the face of the ease with which territorial licences to access their material can be circumvented on the Internet.

The issue has been in the news this month in the context of subscription television services. The holders of copyright in various films, television programmes, musical recordings, etc. often license their copyright for distribution and/or broadcast on a country-by-country basis, so as to better control its use, or simply to maximise revenue. For example, we may assume that the rights to broadcast, transmit and/or distribute a documentary series about the Polish Handball Team are likely to be more valuable to a broadcaster or distributor in Poland than they may be in, say, Chile. Therefore, owners of the rights in such a series may wish to reach a separate deal with Polish broadcasters, rather than reach a broader agreement covering both territories which may reduce revenue.

This and other factors combine to create a situation in which the rights to broadcast, transmit and/or distribute individual films, television programmes and sound recordings do not always reside with the same businesses in different countries. As a result, on-demand streaming services such as Netflix of Amazon Prime are not always in a position to offer the same content to their customers in all the countries in which they operate. At the time of writing, Netflix UK allows access to less content than Netflix USA.  However, that is not to say that everything available on the service in Britain is available in the United States. For example, it appears all three “Toy Story” movies are available to Netflix customers in the UK, but not in the US. Further, whilst US subscribers have the opportunity to discover “The Battle of Britain; The Real Story”, their British counterparts must instead content themselves with being able to see “Beavis & Butt-Head Do America”.

In order to get around such anomalies, people sometimes use proxies to access content which is available to subscribers of streaming services outside their own country. Such behaviour is of significant concern to rights holders, as it compromises their ability to realise the value of their intellectual property as it varies between jurisdictions. Earlier this month, Netflix announced that they will be cracking down on the use of proxies to impair the ability of people accessing content they do not have a licence to distribute in the relevant territories. The firm states that long-term it hopes to offer the same content to its users in all countries.  In the meantime, the British public unconcerned about breaching their user agreements will likely be trying to find out what really happened at the Battle of Britain sooner rather than later.