CJEU says that spas must pay copyright fees and that territorial monopoly of collecting societies is OK

Copyright + Spa = The perfect getaway
It seems it was just yesterday that Advocate General Eleanor Sharpston issued her Opinion in Case C-351/12 Ochranný svaz autorský pro práva k dílům hudebním, os (OSA) v Léčebné lázně Mariánské Lázně as [slightly more handily: OSA], a reference for a preliminary ruling from the Krajský soud v Plzni (Plzeň Regional Court, Czech Republic) concerning the ever-exciting right of communication to the public, effect of badly-implemented directives (by means of national exceptions or limitations), and collective rights management.

As the IPKat reported back in November, the background to the case was as follows.

Radio and TV sets in the bedrooms of a residential health spa establishment in the Czech Republic gave access to broadcast works

Under Directive 2001/29 (the 'InfoSoc Directive), holders of copyright in such works have the exclusive right to authorise their communication to the public pursuant to Article 3(1) of this directive and may claim fees for doing so. 

OSA, a copyright collecting society with exclusive rights to enter into licence agreements and collect fees on behalf of authors of musical works in the Czech Republic, claimed fees for such communication to the public by the establishment in question. 

The spa claimed that it did own no fees, since its activities were covered by the relevant exception as per Paragraph 23 of the Czech Copyright Law, which so states [or rather stated ...]

"[O]peration of the radio or television transmission of a work’ means making a work transmitted by radio or television available by means of devices technically suitable for receiving a radio or television transmission. However, it does not include making a work available to patients when providing health care in health establishments."
 [it should be noted that Article 5(2)(e) of the InfoSoc Directive allows Members States to provide solely for an exception to the right of reproduction in favour of social institutions pursuing non commercial purposes, not also to the right of communication/making available to the public]

Frustrated at several failed attempts
to pronounce the word 'Plzeň'
The spa also claimed that the service in question was not communication to the public and that the Czech collecting society’s territorial monopoly infringed the establishment’s right, derived from EU provisions on freedom to provide services, to enter into a licence agreement with a collecting society in another Member State – a problem which, it claimed, was exacerbated by the Czech society’s abuse of its national dominant position by charging excessive fees.

The Plzeň Regional Court decided to stay the proceedings and ask the Court of Justice of the European Union (CJEU) whether the Czech legislation under which health establishments were exempt from the payment of copyright fees was in accordance with the InfoSoc Directive, inasmuch as that directive does not provide for an exception or limitation of that kind. The Czech court also wished to know whether OSA’s monopoly over the collection of fees in the Czech Republic was compatible with the freedom to provide services and with competition law.

The following were the questions referred to the CJEU:
  1. Must 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 be interpreted as meaning that an exception disallowing remuneration to authors for the communication of their work by television or radio transmission by means of television or radio receivers to patients in rooms in a spa establishment which is a business is contrary to Articles 3 and 5 (Article 5(2)(e), (3)(b) and (5))?
  2. Is the content of those provisions of the directive concerning the above use of a work unconditional enough and sufficiently precise for copyright collecting societies to be able to rely on them before the national courts in a dispute between individuals, if the State has not transposed the directive correctly in national law?
  3. Must Article 56 et seq. and Article 102 of the Treaty on the Functioning of the European Union (or as the case may be Article 16 of Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market ) be interpreted as precluding the application of rules of national law which reserve the exercise of collective management of copyright in the territory of the State to only a single (monopoly) copyright collecting society and thereby do not allow recipients of services a free choice of a collecting society from another State of the European Union?
This morning the CJEU delivered its judgment, in which it held that a spa that transmits protected musical works to its guests by means of devices located in their bedrooms must pay copyright fees, and that the territorial monopoly granted to copyright collecting societies is not contrary to the freedom to provide services.

According to the relevant press release, the Court ruled as follows:
Kat-monopoly is fine and fun
  • By transmitting protected works by means of television and radio sets located in the bedrooms of its guests, a spa carries out a communication to the public of those works. Such a communication must be authorised by the authors [Merpel would say - more correctly - copyright holders], who must, in principle, receive adequate compensation. The InfoSoc Directive does not exempt a spa from the payment of fees where it transmits protected works to its guests. Consequently, the exception laid down by the Czech legislation does not comply with the directive [what is the legal consequence? The judgment does not say clearly, although - following the Opinion of AG Sharpston - this may be judicial disapplication of contrasting national provisions. For the sake of self-promotion, it is noted that this Kat discussed this very point here]
  • The territorial monopoly granted to OSA constitutes a restriction on the freedom to provide services inasmuch as it does not allow users of protected works to choose the services of a collecting society established in another Member State. However, the restriction in question is justified, since that system is appropriate and necessary for attaining the objective of the effective management of intellectual property rights. As EU law stands at present, there is no other method allowing the same level of copyright protection. Hence, the monopoly granted by the Czech legislation to OSA is compatible with the freedom to provide services. 
CJEU says that spas must pay copyright fees and that territorial monopoly of collecting societies is OK CJEU says that spas must pay copyright fees and that territorial monopoly of collecting societies is OK Reviewed by Eleonora Rosati on Thursday, February 27, 2014 Rating: 5


  1. What would happen if a guest brings his or her own radio equipment? Is supplying a receiving apparatus to your customers for use on your premises the key ingredient in communicating to the public? What if customers can rent them from you, or from a third party on the premises? How about customers who bring laptops and stream internet radio or video over the mobile network?

  2. > However, the restriction in question is justified, since that system is appropriate and necessary for attaining the objective of the effective management of intellectual property rights.

    The press release should be a bit more specific. This is all about copyright in particular, not about intellectual property rights in particular.

    Industry and the electronics industry in particular knows already for a very long time that effective management of intellectual property rights is served best by granting worldwide licences, establishing worldwide royalty collection schemes and no monopolies. In fact, a sole monopoly for licensing by a patent pool rather than by the patent proprietors is, as far as I recall, actually prohibited by competition law.

    Because such ways of licences cost the least amount of money. Imagine the cost of your Galaxy smartphone if Samsung was to do business with different patent licensing authorities in each and every separate country, with different levies in different countries.

    Makes no sense, right?

    Having said that, we all know copyright collection societies make a good deal of money - that does not flow to artist, text writers and composers - so they are best served by monopolies. And stick to the old systems - as do publishers with respect to troubling libraries who would like to digitise their collections.

    For copyright holders, there is a good deal to learn from patent licensing by companies like Interdigital, Ericsson, Philips, IBM, Qualcomm and need I name more...

    Please pardon me my rant to copyright, it may be because as a patent attorney I am an MSc rather than an LLM.

    But I just cannot get my head around copyright stakeholders not keeping up in the pace of technical developments...

  3. I am curious as to a possible divergent legal effect in the US.

    In the US, a hotel room is considered an extension of your home (a private and personal showing), and thus not a public showing at all.

    If the mechanism on the part of the hotel maintains a private per user connection, the liability for a 'public broadcast' is avoided.

  4. Anon @ 16:05,

    You are absolutely right. In the EU, a hotel room is a public space - as determined by the EU Court of Justice in C-306/05 (SGAE - Rafael Hoteles).


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