The European Court Of Justice by its recent decision issued on March, 152012 incase C – 135/10, (Società Consortile Fonografici (SCF) v Marco Del Corso), has made significant and one could say radical admissions in relation to:
(i) How the concept of “communication to the public” of phonograms should be interpreted in the context of public performance and,
(ii) In relation to the applicability of the Treaty of Rome (1961) for the protection of phonoprograph producers within the EU Member States.
The case was referred to the ECJ for preliminary ruling by the competentItalian Court. The Societa Consortile Fonografici, (SCF) that is the Collecting Society of phonogram producers inItaly, had sued Mr. Del Marco, a dentist, for the payment of royalties in relation to phonograms, which were broadcasted in his professional practice by means of radio receiver.
The European Court of Justice has specifically held that
(1) “as the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations, adopted at Rome on October 1961, does not form part of the legal order of the European Union it is not applicable there; however, it has indirect effects within the European Union. Individuals may not directly rely on that convention and,
(2) The concept of “communication to the Public” for the purposes of art. 8 (2) of Directive 92/100) must be interpreted as meaning “that it does not cover the broadcasting, free of charge, of phonograms within private dental practices engaged in professional economic activity, such as the one at issue in the main proceedings, for the benefit of patients of those practices and enjoyed by them without any active choice on their part. Therefore such an act of transmission does not entitle the phonogram producers to the payment of remuneration”.
At a first reading, the decision seems to be in contradiction with the definition given to the concept of public, (always in the context of public performance royalties) by the ECJ, previously but also in its decision of the same date (15/3/2012) with regards to hotel rooms in Case C-162/10 [(Phonographic Performance (Ireland) Limited v Ireland, Attorney General)], where it clearly held that hotel rooms are “public” and that, as a result the TV/Radio Broadcasting in hotel rooms with technical means provided by the hotel owner (TV sets, Radio receivers), constitutes public performance and is subject to royalty payment.
In the SFC –v- Del Marco Case the Court, probably for the first time in such a clear manner, reiterated that the criteria for the qualification of a performance as “public” and as a result subject to royalty payment are the following:
i. The specific role of the user or in other words, the role of the use made as such. In more simple terms is the use of music intended to increase client basis or to simply entertain clients?
ii. The indeterminate (but necessarily large) number of potential indirect users (clients). As it had done in previous occasions (judgements in “SGAE”, “Football Associations, Premier League and Others”, “MediaCable” and Lagerde Active Broadcast), but for the first time in such a straightforward and firm manner the ECJ stressed and has put emphasis on the need for a profit making nature of the use made for the latter to qualify as “public” and to be subject to the payment of a public performance royalty as a result.
In fact the ECJ has clearly held that “it cannot be disputed that, in a situation such as that in the main proceedings, a dentist who broadcasts phonograms, by way of background music, in the presence of his patients cannot reasonably either expect a rise in the numbers of patients because of that broadcast alone or increase the price of the treatment he provides. Therefore, such a broadcast is not liable, in itself, to have an impact on the income of that dentist”.
The Court also took into account that the clients “have access to music by chance and without active choice on their part”. One could therefore say that their listening to the broadcasted phonograms is simply “accidental”.
It is probably the first time that the ECJ clearly states that the “profit making” intention of the user. In the form of either increase of his fees or rise of his clientele as well as the “accidental” nature of the use (listening) made are preconditions for a public performance of a phonogram, by means of radio broadcast receiver, to qualify as subject to royalty payments and went on to confirm that “such a broadcast is not of a profit making nature and thus does not justify the criteria of the profit making nature”.
The authors are in full agreement with this decision, particularly since they have in the past published articles in the Greek Legal Press defending this position that was finally adopted by the ECJ. In addition to that, our firm, has in the past and in the context of Court representation of “similar” (to the Italian dentist) users (small retail shops of clothes etc), forwarded exactly the same argumentation (With Mr. Del Marco’s defence), with emphasis on the “non profit-making nature” of the broadcast and particularly the element of “accidental listening” which in fact were both adopted by the ECJ. Our argument was that “the broadcasting of protected phonograms by professionals/ small users in their private practice, where such broadcast is not made in exchange of payment and additionally cannot reasonably be said that it (the broadcasted music) plays an important role for the choice of service , since the clients are “accidental” listeners and do not make the choice of the music they listen to, does not constitute public performance, within the meaning of Greek Copyright Law and as a result is exempted from any payment of public performance royalty.
Our arguments were accepted in many occasions by court decisions of First Instance Courts particularly in Athens (First Instance court of Athens 6796/2005, 8147/2006, 5158/2007, 4647/2008, 4653/2008) but due to the lack of Court representation of a very large number of such small “users” due to the cost of legal dispute in many cases, the decisions issued were clearly against the contents and criteria of the above ECJ decision. This has created confusion in the relevant market inGreece, which is very likely to change in the light of this ad hoc ECJ decision and the wide publicity it received.
Mrs. Irini Daroussou – Partner
Mr.Kriton Metaxopoulos – Managing Partner