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Court of Justice of European
Union says no to "Privacy Please!"
A recent
decision of the CJEU on preliminary reference from the High
Court of Ireland has given further guidance as to the meaning of
"communication to the public" and when such an act will take
place. It may not be a surprise to learn that the broadcast
of sound recordings ("phonograms") by a hotelier to its guests via
televisions, radios or other apparatus in their rooms which might
enable them to play phonograms was held to constitute such a
communication requiring the hotelier to pay equitable remuneration
to the phonogram producer. However, there are some surprises
in the CJEU's reasoning and the contrast with the decision in a
related Italian reference
Societa Consortile Fonografici v Marco Del Corso Case C-135/10
("SCF") given on the same day.
The Reference
The reference arose from proceedings brought
by Phonographic Performance (Ireland) Limited ("PPL"), a collecting
society representing phonogram producers, against the Irish
Government. PPL's claim related to Article 8(2) of Council
Directive 2006/115/EC on the rental and lending right (the
"Directive") which requires member states to provide a right to
ensure that users who broadcast phonograms published for commercial
purposes or reproductions of such phonograms by wireless means or
undertake any communication of them to the public pay a single
equitable remuneration to the relevant performers and phonogram
producers.
PPL argued that a carve out in section 97 of
the Irish Copyright and Related Rights Acts 2000-2007 which
provided that copyright in a phonogram was not infringed if it was
broadcast to or caused to be heard in sleeping accommodation for
residents as part of amenities provided exclusively or mainly for
residents deprived them of the remuneration from hotels and
guesthouses broadcasting phonograms to their guests' rooms or
providing them with phonograms and apparatus on which to play
them. PPL sought a declaration that the Irish Government had
breached EU law and damages.
The Irish Court referred five questions to the
CJEU:
- Was a hotelier distributing broadcast signals
to televisions and radios in its guests' rooms "a user" making a
"communication to the public" of a phonogram under Article
8(2)?
- If the answer to 1 was yes, did Article 8(2)
require Member States to provide a right to equitable remuneration
from the hotelier in addition to the broadcaster for the playing of
the phonogram?
- If the answer to 1 was yes, did Article 10(1)
of the Directive which provides an exemption from the right the
equitable remuneration in Article 8(2) in the case of private use,
permit Member States to exempt hoteliers from the obligation to pay
such remuneration?
- & 5. The Court asked
question 1 and 3 again but in the context of a hotelier providing
apparatus (other than a TV or radio) and phonograms, both physical
or digital, which could be played on or heard from the apparatus in
its guests' rooms.
The Decision
Question 1 –
The hotelier was a user making a communication to the
public.
The CJEU said that following Article
8(2) anyone using a phonogram for broadcast or communication to the
public was 'user'. Whether there had been a communication to
the public was to be determined on the principles applied in
SCF. In that case, despite noting that communication to the public was a concept shared by
Article 3(1) of the Copyright Directive (2001/29/EC) relating to a
prohibitory rather than compensatory right (the exclusive right of
authors to prevent their works from being communicated to the
public), the CJEU nevertheless adopted criteria from Article 3(1)
case law in its assessment of communication to the public.
These criteria were complementary and interdependent
comprising:
(a)
Indispensible role of the user – The user made an act of
communication when it intervened, in full knowledge of the
consequences of its action, to give access to the broadcast
containing the protected work to its customers.
On the facts, the CJEU held the guests
were only able to listen to the sound recordings because the
hotelier had provided TVs and radios in their rooms to which it
distributed a broadcast signal.
(b) The Public –
The term 'public' described an indeterminate number of potential
listeners and a fairly large number of people. Although not
bound by the WIPO glossary definition of 'communication to the
public', the CJEU noted that it required making the work
perceptible to persons in general not specific individuals of a
private group. Regarding the number of people, it had been
established on the one hand that there was a de minimis threshold
below which groups would be too small or insignificant and on the
other that to determine the number required evaluation of how many
persons had access to the same work at the same time and how many
had access in succession.
On the facts, the CJEU held that the hotel guests were an
indeterminate number as access to the services of the hotel was the
guests' own choice and was limited only by the capacity of the
hotel. The guests were persons 'in general' would constitute a
fairly large number of persons.
(c)
Profit-Making
Nature – This was particularly relevant in the context of Article
8(2) which was a compensatory right. The public in issue had
to be targeted by the user and receptive to the communication
rather than merely caught by chance.
On the facts, the CJEU held that the
guests were targeted and receptive and access to broadcasts was an
additional service influencing the hotel's standing and the price
of its rooms, and may attract additional guests.
Question 2 -
The hotelier was obliged to
pay remuneration in addition to that paid by the initial
broadcaster
The CJEU again referred to the case law
under Article 3(1) and noted that a hotelier carrying out an act of
communication to the public was transmitting the work to a 'new
public.' The same analysis applied for Article 8(2). The
hotelier was using the phonogram in an autonomous way and
transmitting it to a public distinct from and additional to the one
targeted by the initial act of communication and from which it
derived an economic benefit independent of the remuneration
received the broadcaster or phonogram producer.
Question 3 -
The hotelier could not rely on the private use
exemption
The CJEU referred to the AG's opinion
that it was not the use by the guests in the privacy of their rooms
which was determinative of whether the hotelier could avail itself
of the private use exemption but rather whether the use made by the
hotelier itself was private. It was a contradiction in terms
to consider a communication to the public to be a private use and
the exemption could not apply in such circumstances.
Questions 4 & 5 – The
hotelier was also making a communication to the public by providing
phonograms and apparatus other than a TV or radio to guests so that
they could listen to the phonograms.
The CJEU explained that this question
needed to be determined with due regard for the concepts used and
objectives pursued in the WIPO Performances and Phonograms Treaty
which provided that communication involved making the sounds in a
phonogram audible to the public. By providing phonograms and
apparatus upon which to play them in guest bedrooms, the hotelier
made it possible for the phonograms to be audible to the
public. Without the hotelier's intervention the guests would
not have had access to these works. Applying the analysis and
findings from Question 1, the CJEU confirmed that the hotelier was
also making a communication to the public here and equitable
remuneration was payable.
The Last Song?
The decision clearly has significant
ramifications for hoteliers across the EU who broadcast signals to
televisions and radios in their guests' rooms or provide apparatus
such as pre-loaded MP3 players and may no longer be able to resist
compensation claims from collecting societies and phonogram
producers.
Whilst the CJEU's guidance on the
factors to be assessed when considering a communication to the
public under Article 8(2) and the consistency of its approach with
regard to the similar concept in Article 3(1) of the Copyright
Directive are welcome, the level of certainty offered by the
factors is questionable.
The decision contrasts with the
SCF decision, made on the same day, also concerning
Article 8(2). In that case, the CJEU held that a dentist who
broadcasted phonograms, free of charge, to patients, and which the
patients enjoyed without any choice on their part, was not making a
communication to the public. This was because the patients
formed a consistent determinate group of recipients, very few of
them would be in the surgery at the same time and the broadcast
would not attract new patients or enable the dentist to charge more
for treatments.
But what about the case of a dentist
with a large client list and large waiting room or multiple
treatment rooms in its practice? How big does a hotel have to be to
have an indeterminate number of listeners? What about a B&B
with only a few rooms? How important is the profit-making nature of
the broadcast? What about a large state owned hospital broadcasting
to its patients? These are questions national courts will
need to grapple with and may well mean that the CJEU's recent
decisions are not the last song.
Gwyllym
Tilbrook, Associate in IP Protection and IP Enforcement and
Litigation at Field Fisher Waterhouse
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