8 April 2020CopyrightRory O'Neill

Analysis: untangling the EU’s ‘communication to the public’ rule

Last week’s  Court of Justice of the European Union (CJEU) ruling in  Stim and SAMI v Fleetmanager put the spotlight firmly back on one of the more puzzling, and seemingly ever-evolving, concepts in EU copyright law—what is, and isn’t, a communication to the public?

In the April 2 judgment, the CJEU said that Swedish music copyright owners could not collect royalties from rental car companies just because their hire cars were fitted with radios.

That’s because, the court ruled, hiring out a car equipped with a radio, capable of receiving broadcasts featuring copyright-protected music, did not constitute a “communication to the public” on the part of the rental company.

Under EU law, copyright owners have the exclusive right to determine whether, and how, their work is communicated to the public.

On these grounds, the CJEU  ruled last December that the sale of second-hand e-books was illegal. Dutch e-book retailer  Tom Kabinet had argued that selling on e-book files was perfectly legal because the author’s right of distribution was exhausted at the point of initial sale.

That means that once a consumer purchases a book, they can sell that copy on without infringing copyright or having to pay royalties to a rights owner.

But while the right of distribution can be exhausted, the CJEU said at the time, the right of controlling communication of a work to the public cannot. According to the court, the re-sale of an e-book was more akin to an unauthorised broadcast of the copyright-protected work than a second-hand physical copy of a book.

The ruling marked the end of Tom Kabinet, which ceased operations after the CJEU “gave us too little room to follow our current path”.

Case law

What is and isn’t a communication to the public is not clearly defined, and has instead evolved through case law, primarily from the CJEU.

In 2006, the court ruled that outfitting hotel rooms with a television set and signal did constitute a communication to the public of copyright-protected broadcasts.

It’s worth pointing out that the communication doesn’t have to happen in a public place. As Sophie Goossens, partner at Reed Smith, explains, the “private nature of a hotel room was found not to preclude an act of communication to the public from occurring”.

This case,  SGAE v Rafael Hoteles, was the first concerning ‘communication to the public’ as defined by EU Directive 2001/29/EC (more commonly known as the InfoSoc Directive) to make it as far as the CJEU.

Crucially, the decision also established the relevance of the defendant’s profit-making intention, or in other words, the importance of the communication at issue to the defendant’s commercial activity.

Fitting hotels with TV sets able to receive broadcasts made the hotel more attractive than competitors that didn’t provide such a service, the court reasoned, meaning the communication to the public was profitable to the defendant.

Following a similar line of thought, the CJEU has also ruled that playing radio broadcasts in a dentist’s waiting room did not constitute a communication to the public, partly because it bore no relation to the dentist’s commercial activities.

These additional criteria introduced by the CJEU as to what isn’t and isn’t a communication to the public have largely been to the benefit of defendants in copyright infringement suits.

It’s easy to see how, without them, ‘communication to the public’ could become an over-powered tool in the hands of copyright owners.

The Stim and SAMI decision is in keeping with this approach, and is a “sensible” one, according to Eleonora Rosati, of counsel at Bird & Bird.

If the court had ruled in favour of the collecting societies, she says, it would have created a “very long chain of control back to the copyright owner”.

“The CJEU wants to create a sensible architecture around what is a communication to the public, where it doesn’t include everything,” Rosati adds.

Goossens says that Stim and SAMI marks another “useful” clarification to the concept.

According to Goossens, it underlines CJEU precedent that merely providing the physical facilities that enable a transmission doesn’t amount to communicating the transmission to the public.

“The key to determining whether a communication to the public has occurred, is the direct link between the user (here, Fleetmanager) and the protected works communicated, not between the user and the equipment that might be used to enable the communication,” she says.

One lawyer told WIPR that it was likely the Stim and SAMI lawsuit against the car hire companies was intended as something of a “test case”, to see how far the concept of ‘communication to the public’ could be stretched.

This makes sense because, while the market for copyright royalties on rental cars with radios may not be the most lucrative, more case law defining what constitutes a communication to the public could be valuable to copyright owners in terms of planning litigation and enforcement strategy.

It may not make headline news, but the notion of what is and isn’t a ‘communication to the public’ has been highly influential in day-to-day life. Whether it’s in a hotel room, dentist’s chair, or a rental car, the right to have background noise on the TV or radio has been fiercely contested.

We can expect more case law on the issue in the near future, this time dealing with more modern technology. Just last year, the German Federal Court of Justice asked the CJEU to provide clarity on whether YouTube’s services amount to a communication to the public, where infringing content is uploaded onto the platform. It’s not clear yet when the court will rule, but we can expect the judgment to mark another step in the evolution of a key concept in EU copyright law.

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