Another referral to the CJEU concerning communication to the public in hotel rooms (case C-723/22)

A new referral to the Court of Justice of the European Union (CJEU) has been recently made by the Higher Regional Court in Munich (OLG Munich) regarding the concept of “communication to the public” and its application to hotels’ activities.

Louis-Michel in his hotel room

The referral, which is reproduced below, concerns the interpretation of Art. 3(1) Directive 2001/29/EC as transposed into the German Copyright Act. § 15(2) of the German Copyright Act lists several rights, which fall within the broader right of communication to the public. This comprises § 20b “Retransmission” (including cable retransmission) and § 22 “Right of communication of broadcasts and of works made available to the public” (i.e. public film screening).

MPLC, plaintiff in the national proceedings, is a German collective management organization (CMO). It issues licenses for the communication to the public of cinematographic works on the basis of § 22 of the German Copyright Act.

MPLC has brought an action against Citadines, a hotel operator, alleging copyright infringement through communication to the public on the basis of § 22 of the German Copyright Act. Communication to the public would be committed by means of a broadcast via television sets installed by the defendant in the rooms and the fitness centre of its hotel in Munich, in so far as the transmission signal is transmitted to the television sets via coaxial or data cables.

Citadines objects that its activities would fall within § 20b of the German Copyright Act, cable retransmission, and not under § 22. It being so, Citadines would exercise its lawfully licensed rights to cable retransmission, on the basis of a licence with another German CMO, GEMA, which manages such rights. The lawsuit is currently considered by the OLG Munich.

As our readers surely remember, television sets in hotel rooms have been the object of attention since the very first preliminary ruling on communication to the public under the InfoSoc Directive in C-306/05 SGAE v Rafael Hoteles. There, the CJEU held that – while the mere provision of physical facilities does not as such amount to communication to the public in accordance with recital 27 – the installation of such facilities and the distribution of a signal by means of television sets by a hotel to customers staying in its rooms, whatever technique is used to transmit the signal, does constitute communication to the public within the meaning of Article 3(1) of Directive 2001/29/EC.

Since C-306/05, the definition of “communication to the public” in the CJEU jurisprudence has developed significantly. In subsequent case-law, the CJEU explained that the assessment of whether a communication to the public takes place must take into account several complementary criteria, which are not autonomous and are interdependent. One such criterion is the role of the user (i.e. the hotel). A hotel makes a communication to the public “when it intervenes, in full knowledge of the consequences of its action, to give access to a broadcast containing the protected work to its customers” (C-135/10, paras. 79 and 82, commented by The IPKat here; C-162/10, para. 30, commented by The IPKat here).

In its referral, OLG Munich recalled that the concept of “communication to the public” includes two cumulative criteria, namely an “act of communication” of a work and the communication of that work to a “public”. According to OLG Munich, the public character of the communication is established in the present case because the guests of a hotel constitute a fairly large group in succession.

However, OLG Munich is unsure about the existence of an “act of communication”. Relying on the aforementioned case-law concerning the user’s role and the deliberate nature of its intervention, OLG Munich observed that Citadines conduct was limited to the (a) exercise of its lawfully licensed rights to cable retransmission, and (b) the mere provision of physical facilities (i.e. television sets). For OLG Munich, it is doubtful that Citadines intended to perform an “act of communication”.

Under these circumstances, OLG Munich decided to stay the proceedings and ask the CJEU the following question:

Must Article 3(1) of the InfoSoc Directive be interpreted as precluding a national provision or practice according to which the provision of physical facilities for enabling or making a communication – such as television sets in hotel rooms or hotel fitness rooms – is regarded as communication to the public when, while the transmission signal, in addition, is retransmitted to the physical facilities via the hotel’s own cable distribution system, that cable retransmission takes place lawfully on the basis of a licence acquired by the hotel?

The request for preliminary ruling is now pending. Yet, OLG Munich will also have to consider another recent preliminary ruling in a case with very similar circumstances (C-716/20).

In this case, RTL (a German TV channel) required a Portuguese hotel company, Grupo Pestana, to pay a fee for making available to the public the RTL channel. RTL being a free-to-air channel for German-speaking public, any private viewer can receive its signal and watch it without any fee.

Grupo Pestana was receiving this signal through a satellite. It then distributed the satellite broadcasts of the TV channel, by means of coaxial cables, to the television sets installed in hotel rooms.

RTL sought licensing its TV programmes on the basis of its cable retransmission rights. The German broadcaster namely explained that it was a common practice on the German market and that numerous German hotels (including, as we remember, the defendant in Citadines case) concluded such agreements. Grupo Pestana refused, arguing that, under Portuguese law, their acts do not constitute cable retransmission.

The case reached the Portuguese Supreme Court, which sent a request for preliminary ruling. It inquired whether such acts constituted cable retransmission under Art. 1(3) of Directive 93/83 on satellite broadcasting and cable retransmission.

The CJEU answered in the negative. According to the Court, cable retransmission rights apply only where such retransmission is carried out by cable operators or cable distributors. Hotels are neither cable operators, nor cable distributors. Hence, they do not perform cable retransmission.

For the Citadines case (and, more broadly, for the German licensing market) this means that Citadines’ activities would not be even covered by a cable retransmission license.