The collective management of copyright entails the granting of authorisation to collecting societies by the copyright holders to commercially exploit their rights over their artistic works in a particular territory. In turn, such collecting societies grant licences to service providers who desire to use the copyright over that particular territory under their management against payment of a royalty.
In 2013, a dispute arose between Gema, the German collecting society, and Reha Training, an operator of a rehabilitation centre in Leverkusen offering post-operative rehabilitation treatment to accident victims. Following the installation of TV sets in its training and waiting rooms in order to entertain its patients with TV shows, Reha Training was sued by Gema for copyright infringement when Reha Training refused to pay royalty fees to the German collecting society.
Both parties were in agreement that television programmes contain copyright-protected works. Reha Training was, however, at loggerheads with GEMA over the latter’s view that television programmes shown in a private rehabilitation centre constituted a communication to the public. In terms of the EU InfoSoc Directive, which harmonises certain aspects of copyright and related rights in the information society, authors have the exclusive right of communication of their works and of making available their works to the public.
At first instance, the Local Court of Cologne ruled in favour of Gema. Dissatisfied with this decision, Reha Training filed for appeal, upon which the matter was referred to the Luxembourg Court for guidance on the interpretation of what constitutes communication to the public.
A business offering television or radio programmes is required to pay royalty fees if the programming provides a competitive advantage
In its defence, the training establishment argued there was no legal basis for demanding any money from it as there was no ‘communication to the public’ within the meaning of the EU Directive. It pointed out that patients watch television and its patients, being there for medical treatment, do not qualify as ‘the public’. In its favour Reha Training referred to another judgment of the CJEU that dealt with music played in a dental clinic. In that case, the court had ruled that music on the radio that was being played in a dentist’s waiting room did not constitute a ‘communication to the public’ because the people in the waiting room were a small and private group not willingly listening to music.
In the present case, however, the CJEU delivered a ruling in favour of Gema and established that a business offering television or radio programmes in its facilities is required to pay royalty fees to national collecting societies if the programming provides a competitive advantage to the business. Although profit-making does not conclusively determine the classification of a broadcast, an increase in the attractiveness of the business through the offering of, for example, television programmes in the facilities, might also increase the number of customers and therefore serve as a competitive advantage.
Motivating this conclusion, the CJEU referred to the fact that the broadcasting of the television programmes in the rehabilitation centre was intended to create a diversion to patients and therefore constituted an economic value-added by enhancing the standing and attractiveness of the business. The court also deemed it essential, for a communication to the public to occur, that the communication is made to an indeterminate public, not consisting of specific individuals belonging to a private set of people, and to a fairly large number of potential recipients. Additionally, a new public is required, meaning that the broadcast must be directed to people not taken into account by the authors of the protected works when authorising their use.
Applying these criteria, the CJEU held that Reha Training had communicated the broadcasts to the public.
The Luxembourg Court had previously ruled that a café-restaurant, hotel or spa make a ‘communication to the public’ if these intentionally broadcast protected works to their clients, as the public in such establishments is targeted. In its decision, the CJEU equated the rehabilitation centre to such establishments, but not to a dental clinic.
The use of entertainment and the receptivity of the customers may vary considerably depending on the individual business and circumstances. This rules out any sweeping inferences. The determining factors of each particular case depend on their factual circumstances. It will be up to the national courts to apply the criteria of the CJEU in each dispute individually.
jgrech@demarcoassociates.com
Josette Grech is adviser on EU law at Guido de Marco & Associates.