By Alain Strowel, Michael Clancy and Hee-Eun Kim

On January 23, 2014, the Court of Justice of the European Union (CJEU) ruled on the legality of anti-circumvention measures or DRMs for video games (Case C-355/12 Nintendo v. PC Box).[1]  Here are the links to the full text of the judgment and the non-binding Advocate General’s opinion.

In the EU, DRMs are protected against circumvention under Article 6 of the Copyright Directive.  The plaintiff Nintendo’s DRM was capable of blocking not just illegal copies but also independent games, programs and other multimedia content.  A mod chip maker PC Box opposed it as being not “proportionate” under EU law.

The CJEU ruled that, although Article 6 of the Copyright Directive defines DRMs broadly, the legal protection applies to DRMs that are “proportionate” under EU law.[2]  To assess the proportionality of a DRM, according to the CJEU, it is necessary to ask whether a less restrictive technological measure, if any, could have achieved the same goal of protecting copyright without preventing legitimate activities.  For this assessment, the CJEU discussed the following factors.

Relevant factors for assessing the proportionality of a DRM:

  • Whether the DRM prohibit devices or activities which have a “commercially significant purpose or use other than to circumvent the technical protection (emphasis added)”;[3]
  • A comparison of the cost and effectiveness of the DRM versus available alternatives;
  • A survey of evidence on the purpose and actual use of a circumventing device:  namely how often the device was used for copyright-infringing purposes and other purposes;
  • The current state of technology;[4]
  • (The copyright holder’s particular intention of use is not relevant to the analysis.)[5]

What might be the consequences of a ‘disproportionate’ DRM?  A copyright holder with a ‘disproportionate’ DRM will not be able to rely on the legal protection of a DRM as a basis to challenge providers of mod chips or other circumvention devices.  According to the CJEU, legal protection is “granted only with regard to [DRMs] preventing or eliminating, as regards works, acts not unauthorized by the rightholder of copyright […]” and “[t]hose measures must be suitable for achieving that objective and must not go beyond what is necessary for this purpose.”[6]  Thus, “if such measures prevent also acts which do not require authorization then, if they could have been designed so as to prevent only acts which require authorization, they are disproportionate and do not qualify for protection (emphasis added).”[7]  In those circumstances, the right holder cannot rely on the DRM protection, but (s)he can of course still invoke a copyright violation.  Some questions, for example whether a ‘disproportionate’ DRM may lead to an antitrust or unfair competition claim, were not addressed by the CJEU.

The ruling contains an additional language which can support companies’ control over resale of game copies acquired through digital distribution e.g., by downloading.  In UsedSoft, the CJEU previously held that under the Software Directive the distribution right of lawfully downloaded software is exhausted after its first sale and that a user license for an unlimited period with a one-time payment is a sale which triggers exhaustion.  In addition, the CJEU in UsedSoft noted that the Software Directive constitute a lex specialis in relation to the Copyright Directive, which means that the applicability of the Software Directive is limited to software.

By reiterating the relationship between the two Directives, the CJEU appears to imply that the scope of the UsedSoft ruling is not extended to resale of a video game which is not ‘pure’ software.  The CJEU noted that original graphic and sound elements of a complex video game can be protected by copyright in the context of the Copyright Directive.


[1] Case C-355/12 Nintendo v. PC Box (January 23, 2014).

[2] This is not the first time that the proportionality principle is introduced to balance IP rights and other interests.  See e.g., Case C-128/11 UsedSoft v. Oracle (3 July 2012);  Case C-70/10 Scarlet v. SABAM (24 November 2011);  and Case C-403/08 Premier League (October 4, 2011).

[3] Recital 48 of the Copyright Directive.

[4] AG Opinion, Case C-355/12 Nintendo v. PC Box (September 19, 2013), para. 52.

[5] AG Opinion, Case C-355/12 Nintendo v. PC Box (September 19, 2013), para. 67.

[6] Case C-355/12 Nintendo v. PC Box (January 23, 2014), para. 31.

[7] AG Opinion, Case C-355/12 Nintendo v. PC Box (September 19, 2013), para. 52.