CJEU on communication to the public and national systems of collective rights management

Author: Eleonora Rosati (e-LAWnora—Copyright Law & Policy Consultancy)

Case C-351/12 Ochranný svaz autorský (OSA) pro práva k dílům hudebním o.s. v Léčebné lázně Mariánské Lázně a.s. (not yet published), 27 February 2014

Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu096, first published online: May 22, 2014

In this ruling the Court of Justice of the European Union held that TV and radio transmissions in spa guest rooms fall within the scope of the right of communication to the public, and that EU law does (or rather, did) not preclude per se national legislation that reserves the exercise of collective management of copyright and related rights in the territory of a certain Member State to a single copyright collecting society.

Legal context

This reference for a preliminary ruling from the Czech Republic concerned the following issues: (1) whether communication of protected works by a spa establishment through the intentional distribution of a signal by means of TV or radio sets in the bedrooms of its guests constitutes a communication to the public within the meaning of Article 3(1) of Directive 2001/29 (the ‘InfoSoc Directive’); (2) whether national legislations that exclude the right of authors to authorize or prohibit the communication of their works by a spa establishment, ie a business, through the intentional distribution of a signal by means of television or radio sets in the bedrooms of the establishment's guests are compliant with the InfoSoc Directive; (3) whether EU law—notably Article 16 of Directive 2006/123 and Articles 56 and/or 102 of the Treaty on the Functioning of the European Union—precludes national laws that reserve the exercise of collective management of copyright and related rights in the territory of a certain Member State to a single copyright collecting society, thus preventing users of works to choose a collecting society from another EU Member State.

Facts

Ochranný svaz autorský (OSA) is an authorized musical works copyright collecting agency in the Czech Republic. It also acts on behalf of other collecting agencies established in both the Czech Republic and a number of other Member States. Litigation ensued when a local health spa refused to pay the fees claimed by OSA in respect of works that the spa broadcast in its guest rooms by means of TV and radio sets. Among other things, the spa's refusal was based on the grounds that OSA had abused its monopoly position in the Czech Republic by charging fees that were higher than those charged in other Member States. The Plzeň Regional Court decided to stay the proceedings and seek guidance from the Court of Justice of the European Union (CJEU).

Analysis

After observing that the principal objective of the InfoSoc Directive is to provide a high level of protection of authors, the CJEU reviewed earlier case law on communication to the public. It concluded that communication of protected works by a spa establishment through the intentional distribution of a signal by means of television or radio sets in the bedrooms of its patients falls within the scope of Article 3(1) of the InfoSoc Directive.

The Court then held that the exhaustive nature of the Article 5 list of exceptions and limitations precludes national legislation that excludes the right of authors to authorize or prohibit the communication of their works by a spa establishment, ie a business, through the intentional distribution of a signal by means of TV or radio sets in the bedrooms of its guests.

Finally, the CJEU considered whether national monopolies for the collective management of copyright and related rights are compatible with EU law. Among other things, the court held that, although legislation of this kind constitutes a restriction on the freedom to provide services, such restriction may be justified to protect IP rights. Further, legislation of this kind also permits the effective management of rights and an effective supervision of their respect in a given territory by means of reciprocal representation agreements. Overall, the court believed that, as EU law stood at the time of this reference, there was no other method that would allow the same level of protection as territory-based protection and territory-based supervision of copyright and related rights.

Practical significance

The CJEU decision further clarifies the scope of the right of communication to the public under Article 3(1) of the InfoSoc Directive. This has been at the centre of numerous references for a preliminary ruling in recent times. It is sufficient to recall the decisions in Case C-466/12 Nils Svensson and Others v Retriever Sverige AB, 13 February 2014; Case C-607/11 ITV Broadcasting and Others v TVCatchup Ltd, 7 March 2013; Case C-135/10 SCF v Del Corso, 15 March 2012; and Case C-162/10 Phonographic Performance (Ireland) Ltd v Ireland and Attorney General, 15 March 2012.

The most interesting part of the judgment, however, concerns collective management of rights. Although the court upheld the validity of laws like the Czech law in respect of EU law, this judgment per se does neither invalidate earlier decisions, such as that of the General Court in Case T-442/08 International Confederation of Societies of Authors and Composers (CISAC) v European Commission, 12 April 2013 (although in her Opinion, Advocate General Sharpston somehow re-assessed—if not scaled down—the overall relevance of the decision), nor prevent the emergence of new legislative solutions that would allow for more effective collective management.

Following the vote of the European Parliament, the Council formally adopted Directive 2014/26 of the European Parliament and of the Council of 26 February 2014 on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online use in the internal market (the ‘CRM Directive’). Member States have until 10 April 2016 to transpose this directive into their national laws. This new piece of EU legislation sets requirements that are necessary to ensure the proper functioning of the management of copyright and related rights by collective management organizations. To this end, it intends to increase the transparency and efficiency of these organizations. The directive also provides for multi-territorial licensing by collective management organizations of authors′ rights in musical works for online uses.

Article 5 of the CRM Directive imposes on Member States an obligation to ensure that right holders have a number of rights, including the right ‘to authorise a collective management organisation of their choice to manage the rights, categories of rights or types of works and other subject-matter of their choice, for the territories of their choice, irrespective of the Member State of nationality, residence or establishment of either the collective management organisation or the rightholder.’ This means that national legislation like the Czech law at stake in OSA will be no longer allowed under EU law once the deadline for the national implementations of the CRM Directive has passed. Thus, while the CJEU decision might have saved the legitimacy and position of traditional collecting societies that operate in a monopoly regime granted by national laws, this scenario is bound to be short-lived.

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