HOT off the press…

There are two television service providers in Israel, HOT and Yes. The Association of International Collective Management of Audiovisual Works (AGICOA) is an international copyright enforcement organisation founded in 1981 which collects and distributes royalties that lie beyond the reach of individual rights holders, specifically from rebroadcasting. The AGICOA considers any rebroadcasting that is more than one minute long to be fair game for collection of royalties.

In 2000 the AGICOA sued HOT for copyright infringement resulting from the bundling of a number of television channels from outside Israel by local cable television providers since bought out by Hot. The cable television providers accessed the channels by tracking the telecommunications satellites and receiving broadcast signals, and then sent the channels down cables to the end users.

The channels bundled were Sat.1, Sat.3, France 2, TV5, Canale 5, METVG (subsequently dropped) and various channels originating in Turkey, Hong Kong and Russia. Rather than suing the television channels, the AGICOA sued a group of seven major content providers: Warner, Buena Vista, MGM, Universal, Sony and PARAMOUNT.

The AGICOA alleged that around 35,000 programmes had been infringed as they were broadcast in Israel without paying royalties. It claimed compulsory damages of between NIS10,000 and NIS20,000 per programme, plus the court fees, up to a maximum of NIS20 million. The case was filed in 2000 in the overloaded Tel Aviv District Court, and in 2007 was transferred to the new Central District Court.

The facts were not in dispute. However, the counsel for HOT raised some interesting defences:

  • HOT was not the correct defendant, as if infringement had occurred, it had been committed by the companies bought by HOT.
  • The AGICOA had no standing to sue HOT without including the producers. 
  • The producers were not actually producers but rather distributors, and they did not own the copyright since the programmes and films were created by smaller companies and only distributed by the bigger players. 
  • Since in some cases the producers reserved the right to sue if the AGICOA was unsuccessful, it was not acting on their behalf. 
  • The deal between the producers and the channels included rebroadcasting rights. 
  • Having authorised the channels to transmit them, the rights in the broadcast films were exhausted.
  • The AGICOA was "double dipping" since the channels had already paid once. 
  • There was an implied licence for rebroadcasting. 
  • The number of infringing acts was the number of channels, not the number of programmes.
  • The organisation was a cartel and therefore illegal.
  • The royalties claimed were more than those claimed for in other countries.
  • HOT was sued but YES was not.

Judge Esther Shtemer's position was that the Supreme Court's decision in Tele-Event (which dealt with sports streaming) supported the argument that retransmission was copyright infringement. She dismissed all the arguments and essentially ruled that even though some of the points raised had been valid, there were still sufficient infringements to apply the bottom end of the scale (ie, awarding NIS10,000 per infringement).

Having awarded damages of NIS20 million, the judge halved this but then added NIS500,000 in legal fees. Due to the interest and inflation since 2000 when the case was first filed, the actual sum awarded was NIS19 million.

TA 4757-08-07 AGICOA v HOT Telecommunication Systems, 4th September 2011.

This is an Insight article, written by a selected partner as part of IAM's co-published content. Read more on Insight

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