Opinion ID: 671506
Heading Depth: 3
Heading Rank: 1

Heading: The German proceedings.

Text: 16 The appellants filed a declaratory judgment action against Turner in Germany, on April 29, 1993, seeking judicial support for their interpretation that the Agreement permitted the use of ASTRA 1B. The German action was filed in a German court of first consideration, the Landgericht Frankfurt am Main. 17 One of the key issues in the litigation concerned the term overspill, namely, whether (1) overspill applied to the reception of ARD broadcasts outside the licensed territory, (2) whether overspill applied to FSS satellites so that the ASTRA footprint created overspill, and (3) if overspill did apply to the use of ASTRA, whether the overspill of ASTRA's signal was legitimate. The appellants maintained that the oversized footprint of ASTRA 1B comports with the Agreement because overspill as defined in the Agreement applies reciprocally to licensee and licensor, 4 and that the overspill of ASTRA 1B is legitimate because (1) the broadcasts are in German and the licensed territory encompasses all viable markets for German television, rendering the overspill of German-language programming harmless, and (2) ARD receives no profit from the broadcasts. 18 The appellants made an alternative argument in the German court that the term overspill as used in the Agreement contemplated neither the new technology of FSS satellites nor the necessity of using them in order to obey the legal mandate that ARD reach the entire German population, and therefore that a gap exists in the contract. Appellants invited the German court to fill the gap in the contract, using the German doctrine of supplemental interpretation, by allowing ARD to broadcast Turner-licensed works via ASTRA, or alternatively to allow the broadcasts on ASTRA subject to the payment of an increased fee. 19 Turner argued that the Agreement's proviso allowing overspill did not apply reciprocally to licensee and licensor. 5 Therefore, according to Turner's interpretation of the Agreement, Turner and its licensees outside Germany can overspill into the licensed territory, but ARD is strictly limited to broadcasting within the territory, and cannot overspill outside the licensed territory. Turner also made an alternative argument to the German court that a gap in the contract existed concerning the present state of affairs in European television; however, contrary to the appellants' proposal, Turner invited the German court to fill the gap by disallowing the use of ASTRA 1B. 20 The German court heard argument on the merits of the declaratory judgment action in Germany, and rendered a judgment on the merits on November 25, 1993. The German court held that because of its extensive range, ARD had no absolute right under the Agreement to broadcast via ASTRA. App. to Supp. Brief of Appellants, Tab 4, 23-24. However, the court found that the parties had not contemplated the current circumstances involving the new technology and the fact that ARD was compelled as a practical matter to broadcast outside the licensed territory in order to fulfill its legal obligation to bring its telecasts to the German public. Id. at 24-27. Given this gap in the operation of the contract, the German court determined that it was bound to apply the doctrine of good faith dealing to the situation. Id. at 25. The court attempted a supplemental interpretation of the contract to determine a result that parties bargaining in good faith would have negotiated. 21 The German court determined that Turner should permit ARD to use the satellite in order to properly fulfill its legal obligations. Id. at 29. However, the court determined that ARD would have to pay an increased fee for the privilege, to be determined by that court at a later date. Id. at 30. The German court relied on several factors in making this decision. The court noted that Turner had not envisioned concretely any additional licensing of German-language programming outside the licensed territory. Id. at 29. Also, the court noted that the licensed territory covers such a large proportion of the German-speaking public that, in its opinion, no significant economic interest of Turner was obliterated by ASTRA. Id. More importantly, the court emphasized (1) the wide distribution of ASTRA reception equipment in the license territory, making ASTRA the best method for reaching a wide audience, and (2) the statutory mandate for ARD to reach the German public; and determined that the just result was the payment of increased fees in exchange for the privilege of broadcasting via ASTRA. Id. Both parties have appealed the German decision, and Turner obtained a delay in the fee hearings pending the German appeal. 22