Broadcasting of background music – Equitable remuneration – Mere provision of physical facilities – Sound equipment on board trains and aircraft – Presumption of communication to the public as a result of possession of technical means – Implications on Greek case law and practice in relation to use of in-store/background music in business premises.

NATURE OF THE CASE

1. The above decisions dealt with requests for a preliminary ruling related to the interpretation of Article 3 of Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society.
2. The requests have been made in two sets of proceedings between, first, in Case C‑775/21, Blue Air Aviation SA (‘Blue Air’) and UCMR – ADA, a collective management organization handling music copyrights, concerning Blue Air’s obligation to pay royalties to the UCMR – ADA for the broadcasting of background musical works on board passenger aircraft and second, in Case C‑826/21, Uniunea Producătorilor de Fonograme din România (UPFR) and Societatea Naţională de Transport Feroviar de Călători (SNTFC) ‘CFR Călători’ SA (‘the CFR’), concerning the obligation to pay royalties for the provision on board trains of physical facilities capable of being used to carry out communication to the public of musical works.

FACTS

A. Case C‑775/21

• The UCMR–ADA is a collective management organisation that handles music copyright.

• On 2 March 2018, that body brought an action before the Regional Court of Bucharest against the air transport company Blue Air, seeking payment of remuneration for the communication to the public of musical works on board aircraft operated by Blue Air, for which Blue Air had not obtained a licence.

• Before that court, Blue Air submitted that it operates 28 aircraft and that, although it has the software necessary for the broadcasting of musical works in 22 of those 28 aircraft, it communicated to the public, after obtaining the required licence, only one musical work as background music, in only 14 of those aircraft.

• Following those clarifications, the UCMR – ADA expanded its requests for payment, taking the view that the existence of sound systems in approximately 22 aircraft justified the conclusion that protected works had been communicated to the public in all of the aircraft of Blue Air’s fleet.

• By judgment of 8 April 2019, the UCMR – ADA’s action was upheld.

• Blue Air appealed against that decision to the Court of Appeal (Bucharest) which is the referring court, claiming that it had not communicated background music on board the aircraft it operates for which no licence had been obtained, and that the mere existence of physical facilities did not amount to a communication to the public of musical works. It also added that, by broadcasting background music, it was not pursuing any profit motive. Lastly, it stated that the existence of sound systems in aircraft is dictated by safety reasons, in order to enable communication between members of the air crew and communication between that crew and the passengers.

• The Court of Appeal decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

(1) Must Article 3(1) of Directive 2001/29/EC … be interpreted as meaning that the broadcasting inside a commercial aircraft occupied by passengers of a musical work or a fragment of a musical work on takeoff, on landing, or at any time during a flight via the aircraft’s public address system constitute a communication to the public within the meaning of that provision, particularly (but not exclusively) in the light of the criterion relating to the profit-making objective of the communication?

If the answer to the first question is in the affirmative:

(2) Does the existence on board the aircraft of an address system required by air traffic safety legislation constitute a sufficient basis for making a rebuttable presumption as to the communication to the public of musical works on board that aircraft?

If the answer to that question is in the negative:

(3) Does the presence on board the aircraft of an address system required by air traffic safety legislation and of software that enables the communication of phonograms (containing protected musical works) via that system constitute a sufficient basis for making a rebuttable presumption as to the communication to the public of musical works on board that aircraft?’

B. Case C‑826/21

• The UPFR is a collective management organisation handling the related rights of phonogram producers.

• On 2 December 2013, that body brought an action against the CFR, a rail transport company, seeking payment of remuneration for the communication to the public of musical works on board passenger carriages operated by the CFR. It maintained, in that context, that the applicable railway legislation required some of the trains operated by the CFR to be equipped with sound systems and argued that the presence of such systems amounted to communication to the public of works within the meaning of Article 3(1) of Directive 2001/29.

• That action was dismissed by the Regional Court of Bucharest, which held that while the mere installation of a sound system that makes public access to sound recordings technically possible constitutes a communication to the public of musical works, it had not been proved that the trains in service had been equipped with such a system.
• The UPFR brought an appeal against that decision before the Court of Appeal (Bucharest) which is the referring court.

• The Court of Appeal (Bucharest) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

(1) Does a rail carrier that uses train carriages in which sound systems intended for the communication of information to passengers are installed thereby make a communication to the public within the meaning of Article 3 of Directive 2001/29/EC …?

(2) Does Article 3 of Directive 2001/29/EC … preclude national legislation that establishes a rebuttable presumption of communication to the public on the basis of the existence of sound systems, where those sound systems are required by other provisions of law governing the carrier’s activity?’

LEGAL CONTEXT

The provisions according to the ECJ decisions in question that were applicable to this case are the following:

1. Article 8 of the WCT provides that ‘authors of literary and artistic works shall enjoy the exclusive right of authorising any communication to the public of their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access these works from a place and at a time individually chosen by them.’
2. The Agreed Statement concerning Article 8 of the WCT which is worded as follows: ‘It is understood that the mere provision of physical facilities for enabling or making a communication does not in itself amount to communication within the meaning of this Treaty or the Berne Con…

According to the ECJ decision in question:

• The right of communication to the public should be understood in a broad sense covering all communication to the public not present at the place where the communication originates. This right should cover any such transmission or retransmission of a work to the public by wire or wireless means, including broadcasting. This right should not cover any other acts.” But

…

• “The mere provision of physical facilities for enabling or making a communication does not in itself amount to communication within the meaning of this Directive.”

…

• Article 3 of Directive 2001/29, entitled ‘Right of communication to the public of works and right of making available to the public other subject matter’, provides:

1. Member States shall provide authors with the exclusive right to authorise or prohibit any communication to the public of their works, by wire or wireless means, including the making available to the public their works in such a way that members of the public may access them from a place and at a time individually chosen by them.

2. Member States shall provide for the exclusive right to authorise or prohibit the making available to the public, by wire or wireless means, in such a way that members of the public may access them from a place and at a time individually chosen by them:

(a) for performers, of fixations of their performances;

(b) for phonogram producers, of their phonograms;

(c) for the producers of the first fixations of films, of the original and copies of their films;

(d) for broadcasting organisations, of fixations of their broadcasts, whether these broadcasts are transmitted by wire or over the air, including by cable or satellite.

3. The rights referred to in paragraphs 1 and 2 shall not be exhausted by any act of communication to the public or making available to the public as set out in this Article.’

Directive 2006/115/EC

• Article 8 of Directive 2006/115/EC, provides in paragraph 2:

Member States shall provide a right in order to ensure that a single equitable remuneration is paid by the user, if a phonogram published for commercial purposes, or a reproduction of such phonogram, is used for broadcasting by wireless means or for any communication to the public, and to ensure that this remuneration is shared between the relevant performers and phonogram producers. Member States may, in the absence of agreement between the performers and phonogram producers, lay down the conditions as to the sharing of this remuneration between them.

• Collective management organisations may monitor, through duly authorised representatives, the use of musical works as background music; those representatives shall have free access to any place where music is used as background music. Representatives of collective management organisations may use portable audio and/or video recording equipment in the premises where the musical works are used, and the recordings thus made shall constitute full proof of the use of the musical works as background music.’

• “Communication to the public of phonograms published for commercial purposes or reproductions thereof” shall mean the communication of such phonograms or reproductions in public places (whether closed or open), regardless of the manner in which the communication is made, by the use of mechanical, electro-acoustic or digital means (amplification systems, sound or audiovisual recording devices, radio receivers or televisions, IT equipment, and so on).

…

CONSIDERATIONS OF THE ECJ

• According to the ECJ,

It is clear that the broadcasting in a means of passenger transport of a musical work as background music by the operator of that means of transport constitutes an act of communication for the purposes of Article 3(1) of Directive 2001/29 since, in so doing, that operator intervenes, in full knowledge of the consequences of its conduct, to give its customers access to a protected work, in particular where, in the absence of that intervention, those customers would not, in principle, be able to enjoy the broadcast work.

As the referring court points out, it is not disputed, in the present case, that the work at issue in the main proceedings had actually been broadcast in half of the aircraft operated by Blue Air, during flights operated by that airline, with the result that the public in question consists in all the groups of passengers who, simultaneously or successively, took those flights, and such a number of persons concerned cannot be regarded as too small, or even as an insignificant number, within the meaning of the case-law referred to in paragraph 54 above.

• The ECJ held that the fact, mentioned by the referring court, that the profit-making nature of such a communication is highly debatable at any other time of the flight, is not decisive. A profit-making nature of that kind is not a prerequisite for finding that there is a communication to the public within the meaning of Article 3(1) of Directive 2001/29, since the Court has held that that nature is not necessarily an essential condition which determines the existence of a communication to the public, as is apparent from the case-law referred to in paragraph 50 above.

• The court said that the answer to the first question in Case C‑775/21 is that Article 3(1) of Directive 2001/29 must be interpreted as meaning that the broadcasting, in a means of passenger transport, of a musical work as background music constitutes a communication to the public within the meaning of that provision.

The second and third questions in Case C‑775/21 and the first question in Case C‑826/21

The ECJ decided it was appropriate to reformulate the questions referred for a preliminary ruling as follows (1).

• “Whether Article 3(1) of Directive 2001/29 and Article 8(2) of Directive 2006/115 must be interpreted as meaning that the installation, on board a means of transport, of sound equipment and, where appropriate, of software enabling the broadcasting of background music, constitutes a communication to the public within the meaning of those provisions.”

• The ECJ held that it is apparent from recital 27 of Directive 2001/29 – which reproduces, in essence, the Agreed Statement concerning Article 8 of the WCT, as the Court observed in the judgment of 22 June 2021, YouTube and Cyando (C‑682/18 and C‑683/18, EU:C:2021:503, paragraph 79) – that ‘the mere provision of physical facilities for enabling or making a communication does not in itself amount to communication within the meaning of this Directive’.

• In the light of those considerations, the ECJ held that the fact of having, on board a means of transport, sound equipment and, where appropriate, software enabling the broadcasting of background music does not constitute an act of communication for the purposes of Article 3(1) of Directive 2001/29 and Article 8(2) of Directive 2006/115, since it is a mere provision of physical facilities for enabling or making a communication.

• The ECJ noted that it had already ruled that the operators of a public house, a hotel, or a spa establishment perform an act of communication when they deliberately transmit protected works to their customers, by intentionally distributing a signal by means of television or radio sets which they have installed in their establishment. Similarly, the operator of a rehabilitation centre that intentionally transmits protected works to its patients by means of television sets installed in several places in that establishment carries out an act of communication.

• However, the ECJ decided the mere installation of sound equipment as a means of transport cannot be comparable to acts by which service providers intentionally transmit protected works to their customers by distributing a signal by means of receivers that they have installed in their establishment, allowing access to such works.

• In the light of all the foregoing considerations, the Court ruled that Article 3(1) of Directive 2001/29 and Article 8(2) of Directive 2006/115 must be interpreted as meaning that the installation, on board a means of transport, of sound equipment, and, where appropriate, of software enabling the broadcasting of background music, does not constitute a communication to the public within the meaning of those provisions.

The second question in Case C‑826/21 was

• In essence, whether Article 8(2) of Directive 2006/115 must be interpreted as precluding national legislation, as interpreted by the national courts, which establishes a rebuttable presumption that musical works are communicated to the public because of the presence of sound systems in means of transport.

• The Court held that acceptance of the proposition that a Member State may give wider protection to copyright holders by laying down that the concept of ‘communication to the public’ also includes activities other than those referred to in Article 3(1) of Directive 2001/29 would have the effect of creating legislative differences and thus, for third parties, legal uncertainty (judgment of 13 February 2014, Svensson and Others, C‑466/12, EU:C:2014:76, paragraph 34), or it follows that Article 3(1) of Directive 2001/29 must be interpreted as precluding a Member State from giving wider protection to copyright holders by laying down that the concept of communication to the public includes a wider range of activities than those referred to in that provision (judgment of 13 February 2014, Svensson and Others, C‑466/12, EU:C:2014:76, paragraph 41).

• Such an interpretation is, in the light of the ECJ case-law, applicable by analogy to the concept of ‘communication to the public’ within the meaning of Directive 2006/115.

• In the present case, it is apparent from the answer to the first question in Case C‑826/21 that Article 8(2) of Directive 2006/115 must be interpreted as meaning that the installation, on board a means of transport, of sound equipment and, where appropriate, of software enabling the broadcasting of background music for the benefit of travellers independently of their will, does not constitute a ‘communication to the public’ within the meaning of that provision.

• That provision therefore precludes national legislation which establishes a rebuttable presumption that there is a communication to the public because of the presence of such sound systems. Such legislation may have the consequence of requiring payment of remuneration for the mere installation of those sound systems, even in the absence of any act of communication to the public, contrary to the aforementioned provision.

• In the light of the foregoing considerations, the answer to the question referred is that Article 8(2) of Directive 2006/115 must be interpreted as precluding national legislation, as interpreted by the national courts, which establishes a rebuttable presumption that musical works are communicated to the public because of the presence of sounds systems in means of transport.

In summary the ECJ ruled that:

1. Article 3(1) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society must be interpreted as meaning that the broadcasting, in a means of passenger transport, of a musical work as background music constitutes a communication to the public within the meaning of that provision.
2. Article 3(1) of Directive 2001/29 and Article 8(2) of Directive 2006/115/EC of the European Parliament and of the Council of 12 December 2006 on rental right and lending right and on certain rights related to copyright in the field of intellectual property must be interpreted as meaning that the installation, on board a means of transport, of sound equipment, and, where appropriate, of software enabling the broadcasting of background music, does not constitute a communication to the public within the meaning of those provisions.
3. Article 8(2) of Directive 2006/115 must be interpreted as precluding national legislation, as interpreted by the national courts, which establishes a rebuttable presumption that musical works are communicated to the public because of the presence of sound systems in means of transport.

Implication of the decision in relation to Greek law had jurisprudence

Comments, implications on Greek case law and business practice

This extremely important decision of the ECJ is very likely to have an effect on the practice of Greek Courts in relation to the presumption arising out of the possession of TV or Radio sets.

In fact, Greek law does not provide such a presumption of “communication to the public” merely because of the possession of TV or Radio set. But the Greek Copyright Office (OPI) in a circular issued in 2017 clearly but obviously erroneously states that the possession of TV or Radio sets creates a presumption of use/communication to the public of works protected by the relevant CMOs.

This apparently erroneous, from a legal point of view, interpretation of the law has been accepted in various occasions by Greek Courts (more recent decision 495/2023. First Instance Court of Volos) who held that the “mere possession of a TV set creates a presumption of communication to the public of copyrighted works enjoying protection under the umbrella of local CMOs.

The reason why this “presumption” is obviously wrong is that the law itself does not introduce such a presumption, although it does so in other instances (for example presumption of representation of art. 7 of Law 4481/2017). The practical result of the Court adopting such a presumption which may seem as a reasonable assumption but does not constitute a presumption under the law is that the burden of proof is unjustifiably and illegally reversed.

Instead of the applicant CMOs having to prove the use of protected works by the users in the form of communication to the public the introduction and application of a “logical” but not legal presumption reserves the burden of proof and imposes to the defendant/alleged user the obligation to prove a negative fact, namely that despite the possession of a TV/Radio set he did not use protected musical works a reversal which, in our view, clearly violates basic principles of Greek civil procedural rules.

It is therefore extremely important that the ECJ considers such a presumption is being incompatible with EU law and it is expected that Greek Courts and the Greek Copyright Office will align itselves with this decision and comply with its contents and will as a result abstain from considering the mere possession of a TV/Radio set as a presumption of act of communication to the public of works “protected” by local CMOs.

An excerpt of this article was first published on www.lexology.com.