Letter from Spain: Amendments to the Copyright Act and the Rise of E-Sports

Written on 23 Jan 2015

The Spanish Copyright Act (“SCA”) has been recently amended and introduced with some interesting changes. In particular, the re-defined private copy exception and the reinforcement of the enforcement powers by Spanish public authorities are expected to stir the ever melting pot of the copyright-related issues in the Spanish jurisdiction. However, the reform keeps steering away from the issue of the legal status of videogames as copyright-protected works.

Also, E-Sports and broadcasting of computer game content is finally coming to Spain – a huge opportunity even for English language content in a non-English-speaking country.

1. Private copy

In the Spanish video games industry the reform has been received with hope in as far as video games are traditionally among the most usual targets of piracy.

Until the reform was enacted, the private copy exception regime under the SCA had enjoyed quite a wide scope. With this reform, the Spanish legislator expands and clarifies the scope of the said exception by ascertaining its boundaries. From the reform onwards, the private copy exception can be relied upon in two scenarios: (i) where the copyright protected content has been acquired through a commercial purchase; or (ii) where it has been accessed through a legitimate act of communication. However, it is also limited by means of an exclusion from its material scope of application –in addition to databases and software– which refers to those works made available to the audience through a wired or wireless system in such a way that it allows access to the audience from everywhere at any time.

It must be also noted that the reproductions/copies made by individuals with ‘third-party assistance’ are not included within the scope of the exception. This constitutes an issue that is yet to be seen how it is actually interpreted by the doctrine and the relevant case law. At first glance it is not clear whether it refers to the use of any third-party device/software or it rather refers to the actual provision of reproduction/copying services to individuals. The actual approach to this issue could presumably affect a number of cutting-edge business models which are based on the idea of easing individuals’ use of the private copy exception and its potential ‘loopholes’.

As a consequence, in Spain there would be still room for individuals to pass on copyright protected content to ‘relatives and friends’ provided that they do not ‘publicly communicate’ the content. In this regard, it is worth noting that the concept of household –as a reference to set the limits of the private copy– and the concept of ‘public’ or ‘audience’ are among those that have specially drawn the attention of Spanish courts. However, uploading contents on internet platforms for exchange or using those contents in public places would stand for examples falling outside of the private copy exception.

In any event, the private copy exception reform does not seem to be born as an effective legal tool particularly addressed, among others, to tackle piracy problems in the video games industry.

2. Reinforced powers for the enforcement of the Second Section of the Spanish Copyright Commission

Within the European Union, Spain’s enforcement of copyright is regarded as poor, in particular when it comes to enforcement against individuals. Peer-to-peer systems in Spain are somehow endowed with an atmosphere of immunity, most likely because of the lack of a sufficiently powerful institution entirely devoted to pursuing illegal practices carried out by individuals. However, the Spanish legislator took advantage of the opportunity provided by the reform and introduced some interesting changes as regards information society service providers.

When it comes to the SCA reform, the second section of the Spanish Copyright Commission has been enabled to pursue the activities of not only websites containing hyperlinks providing users with direct access to copyright protected contents (regardless of the fact that those links may have been initially provided by users of the service) but also those websites providing access to other websites where the copyright protected contents can be accessed.

The reform of the SCA introduces changes in the enforcement procedure. It shall start after the right holder reports and demonstrates that has already asked the infringer to remove the alleged illegal contents. The second section of the Spanish Copyright Commission will be able to adopt interim measures as to stop the owner of the site allegedly infringing the copyrights of any given contents. The Spanish Copyright Commission may also pursue intermediaries, such as advertisers and electronic payment companies. If so, it may request the suspension or cancellation of the services provided including the blocking of the internet domain name should it be governed by the rules of the code corresponding to Spain (.es) or other top level domain name whose registration is established in Spain (.es).

The Second Section of the Spanish Copyright Commission is also entitled to block access to copyright-infringing websites, however, in this particular case, the authorisation of a National judge will be required. The judge power shall be limited to deciding whether or not to grant the authorisation but on no account shall the judge decide on the actual existence of the copyright infringement. In relation with website blocking, the SCA reform employs terms such as “proportionality and estimated effectiveness”, although a detailed definition of the specific meaning of these words is not actually set forth.

In addition, the reform has resulted in an increase of the fines for very serious infringements, which may amount up to € 600,000. The referred changes as well as the new measures upheld are expected to make copyright enforcement easier for public administrative authorities since they will be entitled to demand the collaboration of ‘third parties’ to effectively fight against copyright infringements.

3. Legal status of video games

Despite delivering interesting changes, the SCA reform fails to serve a defined legal status for video games as a single work and not a compound of them. Traditionally, video games have been rather approached as audiovisual works or, alternatively, as software. In Spain, video games tend to be regarded as software rather than as audiovisual works. The reason behind is simple: video games are usually created by a number of authors which assume the creation and development of various parts of it while audiovisual works cannot be subject to the regime of collective works but rather to the one of those works referred as ‘joint collaboration’. This fact entails that the producer of a video game -the one who is actually funding its creation- shall not retain all the rights conferred upon authors by the copyright laws but rather the video game shall be a compound of different works with different authors retaining their respective authorship rights (e.g. music composer, photography, software, etc.) from which the producer can obtain the exploitation rights but not the rights of authorship.

Video games are still lining up for a proper legal status in the hope that a reform will bring the long-wished changes. In this sense, it must be noted that in Spain a deep reform of the SCA is expected within the coming years and it is expected to grant the Spanish legislator with another opportunity to create a tailor-made regulation for video games. In the meantime, developers, producers, designers, composers and gamers will keep on interacting between themselves in a field full of new opportunities to be exploited.

4. Electronic Sports

Electronic sports (“E-Sports”) stand out among the fastest growing phenomena in the video game industry in recent times. These consist of strategy multiplayer video games played by hundreds of millions around the world and that bring about the novelty of being suitable for their broadcasting. For instance, in South Korea there are TV channels only broadcasting E-Sports-related content, sometimes related only to a single video game. Viewers’ figures in international tournaments of these video games are huge and outdoing everybody’s expectations. E-Sports truly give an opportunity for gamers to engage in competitions with both other amateur gamers and professional gamers.

It is worth noting that in Spain, a non-English-speaking country, the irruption of this phenomenon –which is only broadcasted in English– is finally becoming a reality. Therefore, the business opportunities in this regard are countless. The idea of linking online gambling and E-Sports is no longer new. However, it must be borne in mind that in Spain sports bets are restricted to a list of those sports which are already approved by the public authorities. This has sparked a movement among gamers to push for the recognition of E-Sports as sports, not only for online gambling purposes but also for having a legal status similar to traditional sports.