AG Szpunar advises CJEU to rule that car leasing companies are not ‘users’ that provide a communication to the public

Back in 2018, The IPKat reported that the Swedish Supreme Court had asked the Court of Justice of the European Union (CJEU) to clarify the scope of the right of communication to the public in Article 3(1) of Directive 2001/29 (InfoSoc Directive) and Article 8(2) of the Directive 2006/115 (Rental and Lending Rights Directive). In brief, the question before the CJEU is whether a car leasing company – by leasing cars equipped with radio receivers – can be considered a ‘user’ that performs a communication to the public.

Background

In 2018, Swedish collective management organisation STIM and the Swedish Artists’ and Musicians’ Interest Organisation, SAMI, brought separate proceedings against two companies that operate in the automobile leasing/renting industry. Both cases ensued from missed payment of yearly licensing fees to STIM and SAMI since 2014.

Eventually, the matter reached the Swedish Supreme Court, which stated that, according to CJEU case law, it is apparent that a communication to the public may take place – in the manner envisaged by Article 3(1) of the InfoSoc Directive – when transmissions are made by means of technical equipment to a nearby public (e.g. in a hotel, café, rehabilitation centre, or a spa). Furthermore, the CJEU has held that hotel operators carry out a “communication to the public” in light of Article 8(2) of the Rental Rights Directive, when hotel rooms are equipped with phonograms available in digital or physical form and which can be played or intercepted (Phonographic Performance Ireland, C-162/10). Nonetheless, the CJEU also came to the contrary conclusion regarding transmission of phonograms in a dentist’s waiting room (Società Consortile Fonografici, C-135/10). The Supreme Court was unsure how to treat the providers of rental cars. Thus, it asked the CJEU to answer the following questions:

1) Does the hiring out of cars which are equipped as standard with radio receivers mean that the person who hires the cars out is a user who makes a communication to the public within the meaning of Article 3(1) of Directive 2001/29 and within the meaning of Article 8(2) of Directive 2006/115?

2) What is the significance, if any, of the volume of the car hire activities and the duration of the hires?

Advocate General Szpunar’s Opinion

Last week Advocate General (AG) Szpunar delivered his Opinion (not yet available in English). The AG noted that, when assessing whether a communication to the public has taken place, the crucial role of the indispensable user must be considered (Stichting Brein, C‑527/15, paragraph 31). In particular, the user’s actions must concern the content of the communication, not the act of communication as such. The central factor to consider would thus be the direct relationship between the user’s actions and the protected works that have been communicated. This requirement is inherent to the very concept of ‘a communication to the public’, since the communication must relate to the protected works.

In this regard, the role of car rental companies is that of merely providing cars, equipped with radio receivers, that have been pre-installed by the respective car manufacturers. According to the AG, it is obvious that car rental companies do not directly intervene when works are being communicated through radio receivers. These companies merely provide their customers with cars, equipped with radio receivers, that have been pre-installed by the respective car manufacturer.

The only communication to the public that takes place, is the communication that has been made possible by the radio broadcasting companies. By enabling protected works to be transferred via radio, the customers of STIM and SAMI already took into account all users that have a radio receiver installed in cars, no matter how the cars are used. A communication to the public can only be found on basis of further actions taken by the user, which goes beyond the mere provision of the equipment for communicating the works in question (see recital 27 of the InfoSoc Directive).

Car rental companies can therefore not be considered to perform a communication to the public within the meaning of Article 3(1) of the InfoSoc Directive and Article 8(2) of the Rental and Lending Rights Directive.

Having considered that car rental companies do not perform a communication, AG Szpunar also considered that the answer to the second question can only be in the negative.

Let’s see what the CJEU will decide in a few months but, if it follows its AG, then the resulting decision might entail a significant rethinking of the scope of the right of communication to the public.