Tech & Rights

​Be Aware of Copyright Fees

In each Member State, debates are conducted on the need to pay copyright fees to a collecting society acting on behalf of authors. Every service provider or manufacturer that wishes to broadcast music to its employees or client needs to pay such a fee.

by Polish Helsinki Foundation for Human Rights

On 27 February 2014, the European Court of Justice assessed the Czech system of collection of copyrights fees. The claimant was a copyright collecting society, OSA, that holds an exclusive right in the Czech Republic to collect fees on behalf of authors, for the use of their musical works. The company Léčebné lázně Mariánské Lázně, which manages a spa, installed radio and television sets in the bedrooms of that establishment in order to make music pieces managed by OSA available to its guests. However, the spa did not conclude a licence agreement with OSA and refused to pay fees to it on the ground that, under the Czech legislation, health establishments may freely transmit protected works. OSA, being of the view that the national legislation is contrary to the EU Copyright Directive (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), brought an action before the Czech courts against the SPA.

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The Plzeň Regional Court during national proceedings referred to the Court of Justice with a request for preliminary ruling. The Court asked whether the Czech legislation under which health establishments are exempt from the payment of copyright fees is in accordance with the directive, taking into account that the directive does not provide for an exemption of that kind. The Czech court also enquired whether OSA’s monopoly over the collection of fees in the Czech Republic is compatible with the freedom to provide services and with competition law.

The Court's judgments responded to the first question by stating that broadcasting music covered by copyrights law in bedrooms of the spa guests carries out a communication to the public of those works. Such a communication must be authorised by the authors and they should receive remuneration for each broadcasting. The Court reiterated that the directive does not exempt a spa or health institution from the payment of fees where it transmits protected works to its guests. Consequently, the exemption provided by the Czech legislation does not comply with the directive.

As to the second question, the Court noted that the territorial monopoly granted to OSA constitutes a restriction on the freedom to provide services, as it does not allow users of protected works to choose the services of a collecting society established in another Member State. However, the Court found that the restriction in question is justified, since such a system enables an effective management of intellectual property rights. The Court concluded that the monopoly granted by the Czech legislation to OSA is compatible with the freedom to provide services.

In conclusion, the Court underlined that the fees collected by national copyright collecting society should not be higher than those charged in other Member States or excessive in comparison to the economic value of the service provided. Overrated prices may signal the abuse of a dominant position. Luxemburg judges left the decision to the Czech court to examine whether such a situation exists in the present case.

While the US is now working on reforms of the copyright law in order to adapt it to new (Internet) realities and to limit the monopoly of collecting societies and rights holders, the EU seems to prefer an outdated system.

Dominika Bychawska-Siniarska, lawyer at the Helsinki Foundation for Human Rights

Source: Judgment in Case C-351/12 Ochranný svaz autorský pro práva k dílům hudebním o.s. (OSA) v. Léčebné lázně Mariánské Lázně a.s

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