1 BY A JUDGMENT OF 30 MARCH 1979 , WHICH WAS RECEIVED AT THE COURT ON 17 APRIL 1979 , THE COUR D ' APPEL , BRUSSELS , REFERRED TWO QUESTIONS TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY FOR A PRELIMINARY RULING ON THE INTERPRETATION OF ARTICLE 59 AND OTHER PROVISIONS OF THE TREATY ON FREEDOM TO PROVIDE SERVICES .
2 THOSE QUESTIONS WERE RAISED DURING AN ACTION BROUGHT BY A BELGIAN CINEMATOGRAPHIC FILM DISTRIBUTION COMPANY , CINE VOG FILMS S.A ., THE RESPONDENT BEFORE THE COUR D ' APPEL , FOR INFRINGEMENT OF COPYRIGHT . THE ACTION IS AGAINST A FRENCH COMPANY , LES FILMS LA BOETIE , AND THREE BELGIAN CABLE TELEVISION DIFFUSION COMPANIES , WHICH ARE HEREAFTER REFERRED TO COLLECTIVELY AS THE CODITEL COMPANIES . COMPENSATION IS SOUGHT FOR THE DAMAGE ALLEGEDLY CAUSED TO CINE VOG BY THE RECEPTION IN BELGIUM OF A BROADCAST BY GERMAN TELEVISION OF THE FILM ' ' LE BOUCHER ' ' FOR WHICH CINE VOG OBTAINED EXCLUSIVE DISTRIBUTION RIGHTS IN BELGIUM FROM LES FILMS LA BOETIE .
3 IT IS APPARENT FROM THE FILE THAT THE CODITEL COMPANIES PROVIDE , WITH THE AUTHORITY OF THE BELGIAN ADMINISTRATION , A CABLE TELEVISION DIFFUSION SERVICE 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 PREMIERE INSTANCE , BRUSSELS , DECLARED THAT IT WAS UNFOUNDED AS AGAINST LES FILMS LE BOETIE , BUT IT ORDERED THE CODITEL COMPANIES TO PAY DAMAGES TO CINE VOG . THE CODITEL 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 BOETIE , 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 8JULY 1969 LES FILMS LA BOETIE , ACTING AS THE OWNER OF ALL THE PROPRIETARY RIGHTS IN THE FILM ' ' LE BOUCHER ' ' , GAVE CINE 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 . CINE 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 BOETIE , FOR NOT HAVING OBSERVED THE EXCLUSIVITY OF THE RIGHTS WHICH IT HAD TRANSFERRED TO IT , AND AGAINST THE CODITEL COMPANIES FOR HAVING RELAYED THE RELEVANT BROADCAST OVER THEIR CABLE DIFFUSION NETWORKS .
6 THE COUR D ' APPEL FIRST OF ALL EXAMINED THE ACTIVITIES OF THE CABLE TELEVISION DIFFUSION COMPANIES FROM THE POINT OF VIEW OF COPYRIGHT INFRINGEMENT . IT CONSIDERED THAT THOSE COMPANIES HAD MADE A ' ' COMMUNICATION TO THE PUBLIC ' ' OF THE FILM WITHIN THE MEANING OF THE PROVISIONS APPLYING IN THIS FIELD AND THAT , AS REGARDS COPYRIGHT LAW AND SUBJECT TO THE EFFECT THEREON OF COMMUNITY LAW , THEY THEREFORE NEEDED THE AUTHORIZATION OF CINE VOG TO RELAY THE FILM OVER THEIR NETWORKS . THE EFFECT OF THIS REASONING BY THE COUR D ' APPEL IS THAT THE AUTHORIZATION GIVEN BY THE COPYRIGHT OWNER TO GERMAN TELEVISION TO BROADCAST THE FILM DID NOT INCLUDE AUTHORITY TO RELAY THE FILM OVER CABLE DIFFUSION NETWORKS OUTSIDE GERMANY , OR AT LEAST THOSE EXISTING IN BELGIUM .
7 THE COUR D ' APPEL THEN WENT ON TO EXAMINE IN THE LIGHT OF COMMUNITY LAW THE ARGUMENT OF THE CODITEL COMPANIES THAT ANY PROHIBITION ON THE TRANSMISSION OF FILMS , THE COPYRIGHT IN WHICH HAS BEEN ASSIGNED BY THE PRODUCER TO A DISTRIBUTION COMPANY COVERING THE WHOLE OF BELGIUM , IS CONTRARY TO THE PROVISIONS OF THE EEC TREATY , IN PARTICULAR TO ARTICLE 85 AND ARTICLES 59 AND 60 . AFTER REJECTING THE ARGUMENT BASED ON ARTICLE 85 , THE COUR D ' APPEL WONDERED IF THE ACTION UNDERTAKEN AGAINST THE CABLE TELEVISION DIFFUSION COMPANIES BY CINE VOG INFRINGED ARTICLE 59 ' ' IN SO FAR AS IT LIMITS THE POSSIBILITY FOR A TRANSMITTING STATION ESTABLISHED IN A COUNTRY WHICH BORDERS ON BELGIUM , AND WHICH IS THE COUNTRY OF THE PERSONS FOR WHOM A SERVICE IS INTENDED , FREELY TO PROVIDE THAT SERVICE ' ' . 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 CINEMATOGRAPHIC 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 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? ' '
9 ACCORDING TO ITS WORDING THE SECOND QUESTION IS ASKED IN CASE THE ANSWER TO THE FIRST LIMB OF THE FIRST QUESTION SHOULD BE IN THE AFFIRMATIVE ; BUT THE COUR D ' APPEL EVIDENTLY HAD IN MIND AN ANSWER STATING THAT IN PRINCIPLE ARTICLE 59 ET SEQ . OF THE TREATY APPLY TO THE PROVISION OF THE SERVICES CONCERNED BECAUSE ONLY IN THAT CASE CAN THE SECOND QUESTION HAVE ANY MEANING .
10 THE COURT OF JUSTICE WILL FIRST OF ALL EXAMINE THE SECOND QUESTION . IF THE ANSWER TO THIS QUESTION IS IN THE NEGATIVE BECAUSE THE PRACTICE IT DESCRIBES IS NOT CONTRARY TO THE PROVISIONS OF THE TREATY ON FREEDOM TO PROVIDE SERVICES - ON THE ASSUMPTION THAT THOSE PROVISIONS ARE APPLICABLE - THE NATIONAL COURT WILL HAVE ALL THE INFORMATION NECESSARY FOR IT TO BE ABLE TO RESOLVE THE LEGAL PROBLEM BEFORE IT IN CONFORMITY WITH COMMUNITY LAW .
11 THE SECOND QUESTION RAISES THE PROBLEM OF WHETHER ARTICLES 59 AND 60 OF THE TREATY PROHIBIT AN ASSIGNMENT , LIMITED TO THE TERRITORY OF A MEMBER STATE , OF THE COPYRIGHT IN A FILM , IN VIEW OF THE FACT THAT A SERIES OF SUCH ASSIGNMENTS MIGHT RESULT IN THE PARTITIONING OF THE COMMON MARKET AS REGARDS THE UNDERTAKING OF ECONOMIC ACTIVITY IN THE FILM INDUSTRY .
12 A CINEMATOGRAPHIC FILM BELONGS TO THE CATEGORY OF LITERARY AND ARTISTIC WORKS MADE AVAILABLE TO THE PUBLIC BY PERFORMANCES WHICH MAY BE INFINITELY REPEATED . IN THIS RESPECT THE PROBLEMS INVOLVED IN THE OBSERVANCE OF COPYRIGHT IN RELATION TO THE REQUIREMENTS OF THE TREATY ARE NOT THE SAME AS THOSE WHICH ARISE IN CONNEXION WITH LITERARY AND ARTISTIC WORKS THE PLACING OF WHICH AT THE DISPOSAL OF THE PUBLIC IS INSEPARABLE FROM THE CIRCULATION OF THE MATERIAL FORM OF THE WORKS , AS IN THE CASE OF BOOKS OR RECORDS .
13 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 AUTHORIZATION 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 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 BOETIE AND CINE 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 .
14 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 .
16 THE EFFECT OF THIS IS THAT , WHILST COPYRIGHT ENTAILS THE RIGHT TO DEMAND FEES FOR ANY SHOWING OR PERFORMANCE , THE RULES OF THE TREATY CANNOT IN PRINCIPLE CONSTITUTE AN OBSTACLE TO THE GEOGRAPHICAL LIMITS WHICH THE PARTIES TO A CONTRACT OF ASSIGNMENT HAVE AGREED UPON IN ORDER TO PROTECT THE AUTHOR AND HIS ASSIGNS IN THIS REGARD . THE MERE FACT THAT THOSE GEOGRAPHICAL LIMITS MAY COINCIDE WITH NATIONAL FRONTIERS DOES NOT POINT TO A DIFFERENT SOLUTION IN A SITUATION WHERE TELEVISION IS ORGANIZED IN THE MEMBER STATES LARGELY ON THE BASIS OF LEGAL BROADCASTING MONOPOLIES , WHICH INDICATES THAT A LIMITATION OTHER THAN THE GEOGRAPHICAL FIELD OF APPLICATION OF AN ASSIGNMENT IS OFTEN IMPRACTICABLE .
17 THE EXCLUSIVE ASSIGNEE OF THE PERFORMING RIGHT IN A FILM FOR THE WHOLE OF A MEMBER STATE MAY THEREFORE RELY UPON HIS RIGHT AGAINST CABLE TELEVISION DIFFUSION COMPANIES WHICH HAVE TRANSMITTED THAT FILM ON THEIR DIFFUSION NETWORK HAVING RECEIVED IT FROM A TELEVISION BROADCASTING STATION ESTABLISHED IN ANOTHER MEMBER STATE , WITHOUT THEREBY INFRINGING COMMUNITY LAW .
18 CONSEQUENTLY THE ANSWER TO THE SECOND QUESTION REFERRED TO THE COURT BY THE COUR D ' APPEL , BRUSSELS , SHOULD BE THAT THE PROVISIONS OF THE TREATY RELATING TO THE FREEDOM TO PROVIDE SERVICES DO NOT PRECLUDE AN ASSIGNEE OF THE PERFORMING RIGHT IN A CINEMATOGRAPHIC FILM IN A MEMBER STATE FROM RELYING UPON HIS RIGHT TO PROHIBIT THE EXHIBITION OF THAT FILM IN THAT STATE , WITHOUT HIS AUTHORITY , BY MEANS OF CABLE DIFFUSION IF THE FILM SO EXHIBITED IS PICKED UP AND TRANSMITTED AFTER BEING BROADCAST IN ANOTHER MEMBER STATE BY A THIRD PARTY WITH THE CONSENT OF THE ORIGINAL OWNER OF THE RIGHT .
19 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 .