Hotel operators are likely to be required to make royalty payments for TV and radio broadcasts to hotel bedrooms.

The Court of Justice of the European Union today delivered its judgment in the Irish case of Phonographic Performance (Ireland) Limited v Ireland, Attorney General.

This was a reference for a preliminary ruling to the European Court of Justice from the Irish Commercial Court in relation to exemptions provided to hoteliers from making royalty payments in respect of broadcasts to guest bedrooms.

PPI is a copyright collection society which collects royalties in relation to phonogram producers' sound recordings. It sought a declaration that Section 97 of the Copyright and Related Rights Act 2000 was in breach of European law on the basis that it was not permissible to exempt hotels from liability to make royalty payments for the use, in hotel bedrooms, of PPI's phonograms as part of the service provided by the hotels. PPI claimed that this exemption infringed European Copyright Directives entitling phonogram producers to receive royalty payments when their sound recordings are used.

The Commercial Court referred the matter to the European Court of Justice which ruled that hotel operators providing televisions and/or radios in guest bedrooms to which it distributes a broadcast signal is a 'user' making a 'communication to the public' of a phonogram for the purposes of the Rental and Lending Rights Directive. Such hotel operators are obliged to pay royalty fees for the broadcasts, in addition to that paid by the broadcaster. If the hotel operator does not provide televisions or radios but instead provides other apparatus on which phonograms may be played or heard he is still considered a 'user' making a 'communication to the public' for the purposes of the Rental and Lending Rights Directive and is obliged to pay royalty fees for the transmission of those phonograms.

The legal limitation to the right to "equitable remuneration" provided for in the case of 'private use', does not allow Member States to exempt a hotel operator which makes a 'communication to the public', from the obligation to pay such remuneration as private use does not extend to "communication to the public".

The case has now been referred back to the Commercial Court in Dublin which will, in light of the ECJ's judgment, make a finding on the facts of this particular case. However, given the definitive nature of the ECJ's judgment, it will come as no surprise to anyone if hotel operators will be required to make royalty payments to PPI for broadcasts to hotel bedrooms.

Reference:

For further information, please contact your usual Eversheds contact or:
Kate Colleary
Intellectual Property and Media Group
Telephone: +353 1 6644321
Email: katecolleary@eversheds.ie

This briefing is correct as at 16 March 2012.

Footnotes

1 Section 97 of the Copyright and Related Rights Act 2000 provides:

'1. Subject to subsection (2), it is not an infringement of the copyright in a sound recording, broadcast or cable programme to cause a sound recording, broadcast or cable programme to be heard or viewed where it is heard or viewed:

(a) in part of the premises where sleeping accommodation is provided for the residents or inmates, and

(b) as part of the amenities provided exclusively or mainly for residents or inmates.

2. Subsection (1) does not apply in respect of any part of premises to which subsection (1) applies where there is a discrete charge made for admission to the part of the premises where a sound recording, broadcast or cable programme is to be heard or viewed.'

2 "1. A hotel operator which provides in guest bedrooms televisions and/or radios to which it distributes a broadcast signal is a 'user' making a 'communication to the public' of a phonogram which may be played in a broadcast for the purposes of 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.

2. A hotel operator which provides in guest bedrooms televisions and/or radios to which it distributes a broadcast signal is obliged to pay equitable remuneration under Article 8(2) of Directive 2006/115 for the broadcast of a phonogram, in addition to that paid by the broadcaster.

3. A hotel operator which provides in guest bedrooms, not televisions and/or radios to which it distributes a broadcast signal, but other apparatus and phonograms in physical or digital form which may be played on or heard from such apparatus, is a 'user' making a 'communication to the public' of a phonogram within the meaning of Article 8(2) of Directive 2006/115/EC. It is therefore obliged to pay 'equitable remuneration' under that provision for the transmission of those phonograms.

4. Article 10(1)(a) of Directive 2006/115, which provides for a limitation to the right to equitable remuneration provided for by Article 8(2) of that directive in the case of 'private use', does not allow Member States to exempt a hotel operator which makes a 'communication to the public' of a phonogram, within the meaning of Article 8(2) of that directive, from the obligation to pay such remuneration."

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