Installation of TV Sets and Transmitting Broadcasts in Public Places

In the preliminary ruling SGAE vs Rafael Hoteles, the CJEU has had the opportunity to clarify the term “communication to the public” as formulated in Article 3 of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 (InfoSoc Directive). The right of communication to the public of a work is an exclusive economic right of the author and also one of the main cornerstones of Copyright Law harmonised to a large degree at EU level. According to Article 3 of the Directive, an author has the right to prohibit or authorise every communication to the public of their works, regardless if it is achieved by wire or wireless means.

Referring to the 23rd recital in the preamble of Directive 2001/29 that ‘communication to the public’ must be interpreted broadly, the CJEU has ruled that the distribution of a signal by means of television sets by a hotel to customers staying in its rooms, whatever the technique used to transmit the signal is, constitutes communication to the public. Furthermore, the private nature of hotel rooms does not preclude such communication of a work from constituting communication ‘to the public’ within the meaning of Article 3(1) of Directive 2001/29, since the audience of the hotel rooms is periodically changed and non-persistent. The opposing would be in conflict with the provisions of Directive 2001/29 and of the WIPO Copyright Treaty, according to which the right of communication to the public covers the making available to the public of works in such a way that they may access them from a place and at a time individually chosen by them. The CJEU continues that the right of making available to the public and, therefore, of communication to the public would clearly be meaningless if it did not also cover communications carried out in private places.

Such an interpretation is in line with the principal objective of the InfoSoc Directive, which, as can be seen from its ninth and tenth recitals, is to establish a high level of protection of authors, allowing them to obtain an appropriate reward for each use of their works including uses as the one in the case in hand.

In a similar case, called Football Association Premier League and others, the administrator of the leading professional football competition in England – Premier League, marketed the television broadcasting rights for the league matches on a territorially exclusive basis. Each licence agreements of the licensor included a clause prohibiting the licensee from supplying decoder cards to persons wishing to view their programmes outside the Member State for which the licence was granted. What’s more, each broadcaster undertook the duty to encrypt its satellite signal and to transmit it, thus encrypted, by satellite only to the subscribers of the territory awarded to it. The case was brought before the CJEU regarding an attempt to circumvent this territorial exclusivity. Separate clients in the United Kingdom bought foreign decoder cards provided by a Greek broadcaster to subscribers resident in Greece. The defendants in the case carried out such a complicated scheme in order to access Premier League matches for a lower price than the one, charged by the right holder in the UK. Thus, an important clarification is that those clients were not using ‘pirated decoder cards’ but ‘foreign decoding devices’ which were reserved solely for use by residents of the State in which they were marketed under the clauses of the contractual license agreement.

Considering the factual background, the CJEU has found that the license clauses, which prohibit broadcasters from providing decoding devices outside the territory covered by the license, are in contradiction with the principles of EU Competition Law. Granting absolute territorial exclusivity in the area covered by a license and prohibiting the licensee from sub-licensing leads to the elimination of all competition between broadcasters. Moreover, such practice is also contrary to the free movement of services within the EU and cannot be justified either by the objective of protecting intellectual property rights or by the objective of encouraging the public to attend football stadiums.

In this respect, the Court has also pointed out that the purpose of intellectual property rights is to ensure for their holders the right to exploit commercially the protected subject-matter and therefore not to obtain the highest possible remuneration, but appropriate remuneration from them. However, the licensing practice in question opened doors for artificial pricing between national markets by restricting the free movement of services within the EU.

Nonetheless, according to the CJEU, the retransmission carried out by the UK clients by screening Premier League’s content constituted a ‘communication to the public’ within the meaning of the InfoSoc Directive.

Installation of Audio Systems and Playing Music in Public Places

In 2014, a Czech Court made a reference to the CJEU for a preliminary ruling regarding the legality of Czech legislation under which health establishments were exempt from paying copyright fees in certain conditions. OSA, the claimant in the main proceedings, is a copyright collecting society, which claimed that a health spa establishment had installed radio and TV sets in the bedrooms of its guests and had thus given them access to OSA-owned music without entering into any kind of licensing agreement with the proprietor of the works. The spa claimed that its conduct was completely legal and it didn’t owe any fees, since its activities were covered by one of the exceptions and limitations of copyright, transposed in the Czech national copyright provisions.

The Court ruled that by transmitting protected works by means of television and radio sets located in the bedrooms of its guests, a spa carries out a communication to the public of those works. Accordingly, such a communication must be before all authorised by the authors, who must, secondly, receive an adequate compensation. What’s more, the InfoSoc Directive does not include an exception or limitation to copyright allowing a spa to use a protected work by transmitting it to its guests without the authors’ permission or with no payment of fees. Consequently, the exception laid down by the Czech legislation is not in compliance with the Directive.

In Case No. C-151/15 Sociedade Portuguesa de Autores, the CJEU concluded that transmission, carried out by a café-restaurant, of musico-literary works broadcast by a radio broadcasting station by means of a radio connected to loudspeakers and/or amplifiers, to the customers present in the café also constitutes a ‘communication to the public.’

In conclusion, the CJEU has followed a line of broad interpretation of the term ‘communication to the public’ with the clear aim to ensure that the rights of copyright holders are guaranteed and the latter are fairly compensated for each use of their protected works.