AND STILL THEY COME ...

TVs in hotel rooms: to pay, or not to pay?

More intellectual property excitement from the ECJ today. Advocate General Eleanor ("breath of fresh air") Sharpston has delivered her Opinion in Case C-306/05 Sociedad General de Autores y Editores de España (SGAE) v Rafael Hoteles SL.

SGAE, an intellectual property rights management society, sued the owner of the Hotel Rafael for copyright infringement, complaining that, between June 2002 and March 2003, acts of communication to the public were carried out involving works belonging to the repertoire managed by SGAE. These acts were carried out through television sets installed in the hotel rooms which enabled the guests to watch programmes on channels whose signals were received by the hotel main aerial and then distributed to each of the television sets in the various rooms. SGAE claimed that Rafael should be ordered to pay compensation. The trial court dismissed SGAE’s claim, holding that the use of TV sets in hotel rooms did not involve acts of public communication and that it was therefore not necessary for the hotel owner to obtain prior authorisation or pay a fee.

SGAE appealed to the Audiencia Provincial de Barcelona, which considers that the Spanish legislation and case-law may infringe the Copyright Directive. Specifically, it wondered whether the reception by the hotel of the TV signal, whether terrestrial or satellite, and its distribution by cable to hotel rooms, are acts of communication to the public for the purposes of the Directive. If the essence of communication to the public is rendering the work broadcast, in this case by TV accessible to a number of persons, this clearly occurs where the public is present at the same time, for example when there is a TV set in a hotel lobby. But what's the case when the public comprises a series of members present successively, as in the case of a hotel bedroom?

The Audiencia Provincial de Barcelona stayed the proceedings and referred the following questions to the Court for a preliminary ruling:

"(1) Does the installation in hotel rooms of television sets to which a satellite or terrestrial television signal is sent by cable constitute an act of communication to the public which is covered by the harmonisation of national laws protecting copyright provided for in Article 3 of Directive 2001/29?

(2) Is the fact of deeming a hotel room to be a strictly domestic location, so that communication by means of television sets to which is fed a signal previously received by the hotel is not regarded as communication to the public, contrary to the protection of copyright pursued by Directive 2001/29?

(3) For the purposes of protecting copyright in relation to acts of communication to the public provided for in Directive 2001/29, can a communication that is effected through a television set inside a hotel bedroom be regarded as public because successive viewers have access to the work?".

After a careful and painstaking analysis of the Directive itself, the Spanish legislation and case law, Advocate General Sharpston has offered the ECJ the following guidance:

"Question 1: the installation in hotel rooms of television sets to which a satellite or terrestrial television signal is sent by cable does not constitute a ‘communication to the public’ within the meaning of Article 3(1) of Directive 2001/29.

Questions 2 and 3: communication by means of television sets to which is fed a signal initially received by the hotel constitutes ‘communication to the public’ within the meaning of Article 3(1) of Directive 2001/29".

This is good news for copyright collecting societies, and also for those who receive a share of the money they collect. Hotel owners will presumably pass the cost on to the hotel's occupants. The IPKat wonders, however, about the basis for assessment of the hotel's fee. Merpel asks, does it take into account the fact that some people would pay good money to avoid having a TV in their bedroom?

Penalty shoot-out for Nokia

Another Opinion from Advocate General Eleanor Sharpston today comes in Case C-316/05 Nokia Corp. v Joacim Wärdell. It deals with Article 98 of the Community Trade Mark Regulation which states:

"1. Where a Community trade mark court finds that the defendant has infringed or threatened to infringe a Community trade mark, it shall, unless there are special reasons for not doing so, issue an order prohibiting the defendant from proceeding with the acts which infringed or would infringe the Community trade mark. It shall also take such measures in accordance with its national law as are aimed at ensuring that this prohibition is complied with".

Claming that Wärdell had imported into Sweden adhesive stickers intended to be attached to mobile telephones and bearing the mark NOKIA, Nokia sued him for infringing its Community trade mark (CTM) NOKIA. The trial court found that Wärdell had arranged for the import of the stickers into Sweden and that his dealings with the stickers were a trade mark infringement in the objective sense. There was a risk that he might infringe again. The court therefore issued a prohibition on continuing infringement with a penalty attached. Wärdell appealed to the Court of Appeal. He submitted that there was no reason to fear a repetition of the infringement since his use of the trade mark NOKIA had been neither deliberate nor negligent. According to that court, while Wärdell had infringed the trade mark and that there was some risk that he might do so again, since he had not previously committed a trade mark infringement and could not be accused of anything more than carelessness, there was no reason to regard the import of the stickers as part of a continuing trade mark infringement. The fact that it could not be wholly excluded that he might commit a fresh infringement of Nokia’s trade mark rights could not of itself justify a prohibition with a penalty attached. The appeal court therefore varied the trial court's ruling and dismissed Nokia's application.

Nokia appealed to the Supreme Court. It argued that the mere fact that Mr Wärdell objectively infringed the trade mark was sufficient to justify the prohibition sought, claiming that there was in any event a risk that Wärdell would commit a further infringement. That court, considering that this dispute turns on whether Article 98 of the CTM Regulation contains an obligation to issue a prohibition and attach a penalty to it which goes beyond Section 37a of the Swedish Law on trade marks, referred the following questions for a preliminary ruling:

"(1) Is the condition relating to special reasons in the first sentence of Article 98(1) of Council Regulation 40/94 to be interpreted as meaning that a court which finds that the defendant has infringed a Community trade mark may, irrespective of the other circumstances, refrain from issuing a specific prohibition of further infringement if the court considers that the risk of further infringement is not obvious or is otherwise merely limited?

(2) Is the condition relating to special reasons in the first sentence of Article 98(1) of the Regulation on the Community trade mark to be interpreted as meaning that a court which finds that the defendant has infringed a Community trade mark may, even if there is no such ground for refraining from issuing a prohibition of further infringement as contemplated in Question 1, refrain from issuing such a prohibition on the grounds that it is clear that a further infringement is covered by a statutory general prohibition of infringement under national law and that a penalty may be imposed on the defendant if he commits a further infringement intentionally or with gross negligence?

(3) If the answer to Question 2 is no, must specific measures, by which a prohibition is for example coupled with a penalty, be taken in such a case to ensure that the prohibition is complied with, even where it is clear that a further infringement is covered by a statutory general prohibition of infringement under national law and that a penalty may be imposed on the defendant if he commits a further infringement intentionally or with gross negligence?

(4) If the answer to Question 3 is yes, does this apply even where the conditions for adopting such a specific measure in the case of a corresponding infringement of a national trade mark would not be regarded as fulfilled?".

In response to these questions, AG Sharpston advises the ECJ to rule as follows:

"Questions 1 and 2: The condition relating to special reasons in Article 98(1) of Council Regulation 40/94 is not satisfied if a court which finds that the defendant has infringed a Community trade mark refrains from issuing a specific prohibition of further infringement (1) solely on the ground that it considers that the risk of further infringement is not obvious or is otherwise merely limited or (2) solely on the grounds that a further infringement is covered by a statutory general prohibition of infringement under national law and that a penalty may be imposed on the defendant if he commits a further infringement intentionally or with gross negligence.

Questions 3 and 4: It is for national law to determine the details of the specific measures which Article 98(1) of Regulation 40/94 requires a court which prohibits a defendant from continuing to infringe a Community trade mark to take to ensure that that prohibition is complied with. Such measures must be effective. The requirement in Article 98(1) is not satisfied on the sole grounds that (i) further infringement is covered by a statutory general prohibition of infringement under national law and (ii) a penalty may be imposed on the defendant if he commits a further infringement intentionally or with gross negligence. Specific measures must be taken to ensure that the prohibition is complied with even where the conditions for adopting such measures would not be regarded as fulfilled in the case of a corresponding infringement of a national trade mark".

The IPKat, somewhat groggy from all his ECJ reading today, is pleased that the AG has noted the content of IP Enforcement Directive 2004/48. He can't think of many good reasons, short of the infringer's death or dismemberment, for not ordering prohibition.