The dental surgery, the hotel bedroom and ‘communication to the public’

Author: Alex Freelove and Joel Smith (Herbert Smith LLP, London)

Società Consortile Fonografici (SCF) v Marco Del Corso (Case C-135/10) and Phonographic Performance (Ireland) Ltd v Ireland and another (Case C-162/10), Court of Justice of the European Union (ECJ), 15 March 2012

Journal of Intellectual Property Law & Practice (2012) doi: 10.1093/jiplp/jps100, first published online: July 23, 2012

The ECJ has ruled in two cases on the meaning of ‘communication to the public’, finding that the free broadcasting of phonograms as background music in a private dental practice was not a ‘communication to the public’, but that the broadcasting of phonograms in a hotel bedroom was.

Legal context

The ECJ handed down judgment on the same day in relation to two cases, which required the ECJ to discuss the concept of ‘communication to the public’. The concept of ‘communication to the public’ appears not only in Article 8(2) of the Rental Directive (Directive 92/100), which provides for users of commercial phonograms to pay remuneration when they communicate them to the public, but also in Article 3(1) of the Copyright Directive (Directive 2001/29), which provides authors with the exclusive right to authorize or prohibit any communication to the public of their works.

The ECJ highlighted that the concept of ‘communication to the public’ in these two provisions is used in differing contexts and pursues objectives which, while similar, are different to some extent: Article 8(2) of Rental Directive is compensatory in nature, whereas Article 3(1) of the Copyright Directive is preventative in nature.

Facts

Società Consortile Fonografici v Marco Del Corso

This case was referred to the ECJ by the Turin Court of Appeal, Italy, following a dispute between a royalty collection agency for phonogram producers, Società Consortile Fonografici (‘SCF’), and Mr Del Corso, the owner of a private dental practice in which background music was played whilst patients were being treated.

SCF brought proceedings against Mr Del Corso seeking a declaration that his playing of background music constituted a ‘communication to the public’ of phonograms for the purposes of Article 8(2) of the Rental Directive and that therefore this activity required a royalty to be paid to SCF for distribution to its members.

Phonographic Performance (Ireland) Limited v Ireland and another

Phonographic Performance (Ireland) Limited (‘PPL’) is a collecting society which represents the rights which phonogram producers hold over sound recordings or phonograms in Ireland. PPL brought an action against Ireland seeking a declaration that Ireland had acted in breach of Union law in exempting hotel operators from the obligation to pay equitable remuneration for the use of phonograms in hotel bedrooms in Ireland.

The Irish High Court referred several questions, which required the ECJ to consider the concept of ‘communication to the public’ in relation to Article 8(2) of the Rental Directive in relation to sound recordings and phonograms heard by guests in hotel bedrooms.

Analysis

Società Consortile Fonografici v Marco Del Corso

As mentioned above, the ECJ highlighted that the concept of ‘communication to the public’ in Article 8(2) of the Rental Directive and in Article 3(1) of the Copyright Directive is used in differing contexts and pursues objectives which, while similar, are different to some extent.

Even though the reference from the Turin Court of Appeal related to Article 8(2) of the Rental Directive, the ECJ relied on recent ECJ judgments on Article 3(1) of the Copyright Directive to highlight relevant criteria in the assessment of whether a communication to the public has taken place:

• The indispensable role of the ‘user’: in light of ECJ judgments in SGAE v Rafael Hoteles (Case C-306/05) and FAPL v QC Leisure (Case C-403/08), the ECJ established that the operator of a hotel or public house makes a communication to the public within the meaning of Article 3(1) of the Copyright Directive when it intervenes, in full knowledge of the consequences of its action, to give access to a broadcast containing the protected work to its customers.
• The concept of ‘public’: the term ‘public’ (a) refers to an indeterminate number of potential listeners and (b) implies a fairly large number of persons. The ECJ suggested that the concept of ‘public’ encompasses a certain de minimis threshold, which excludes groups of persons which are too small or insignificant. In determining such a threshold, it is relevant not only to know how many persons have access to the same work at the same time, but also it is also necessary to know how many of them have access to it in succession.
• The profit-making nature of the communication: as the ECJ had previously held in FAPL v QC Leisure, this was a relevant consideration in determining whether a ‘communication’ had taken place. It is not enough for the communication to ‘catch’ the public by chance, the public must be both targeted by the user, and receptive to that communication.

In light of these criteria, the ECJ found that a dentist who broadcasts phonograms, free of charge, in dental practices for the benefit of his patients and enjoyed by them without any active choice on their part is not making a ‘communication to the public’. Such broadcasts did not therefore entitle the phonogram producers to the payment of remuneration.

Phonographic Performance (Ireland) Limited v Ireland and another

As seen in the ECJ's approach in SCF v Del Corso, even though reference from the Irish High Court related to the Rental Directive, the ECJ relied on its previous judgments that were based on Article 3(1) of the Copyright Directive in reaching its decision.

The ECJ referred to the criteria highlighted in SCF v Del Corso (above) and held that whether a hotel operator provided guest bedrooms with (a) televisions and/or radios to which it distributes a broadcast signal or (b) apparatus other than a television or radio and phonograms in a physical or digital format capable of being broadcast or heard by means of that apparatus, the hotel operator, in each case, was a ‘user’ making a ‘communication to the public’ of a phonogram.

The hotel operator was therefore obliged to pay ‘equitable remuneration’ under Article 8(2) of the Rental Directive for the transmission of those phonograms.

Practical significance

The ECJ handed down judgment on two cases brought by collecting societies representing phonogram producers that sought to collect equitable remuneration for the playing of phonograms. Whilst the playing of background music in a dental surgery was found not to be a communication to the public, the provision of televisions and/or radios to which a hotel operator distributes a broadcast signal was.

These cases, the latest in which the ECJ has discussed the concept of ‘communication to the public’ following the ECJ's decision in FAPL v QC Leisure in October 2011, show that ‘communication to the public’ should be construed broadly and that the courts are robust in finding that copyright infringement is established where a business is exploiting the work by communicating it to a number of people.