CJEU considers legal standing of collecting societies

In a recent ruling, the Court of Justice of the European Union (CJEU) has interpreted Art. 4 of Directive 2004/48/EC, which lists natural and legal persons that may seek the application of civil enforcement measures (C-201/22). The Court clarified that Member States are not obliged to allow collective management organisations (CMOs) to bring, in their own name, actions for copyright infringement on behalf of the rightholders.

National proceedings

The referral originated from the Finish Supreme Court. In the national proceedings, a local CMO, Kopiosto, opposed an operator of cable television network, Telia.

Kopiosto manages and grants licences on behalf of authors, on the basis of mandates conferred on it by those authors. Kopiosto is also designated by Finnish authorities as a CMO authorised to issue extended licences for the retransmission rights of the works included in radio and television broadcasts. Thus, for such rights, Kopiosto is entitled to issue licensing not only on behalf of its members, but also on behalf of other authors.

In 2018, Kopiosto brought an action for copyright infringement against Telia over the retransmission of television broadcasts without Kopiosto’s authorisation. Kopiosto relied, primarily, on its capacity to issue extended licenses and, in the alternative, on its capacity as the agent of the authors who had entrusted it with the management of their rights. Telia contested Kopiosto’s legal standing to initiate proceedings in its own name as, according to Telia, such actions shall be reserved to the rightholders. The lawsuit reached the Finnish Supreme Court.

Questions referred for preliminary ruling

Under Art. 4(c) Directive 2004/48/EC, Member States shall recognise CMOs as entitled to seek civil enforcement measures “in so far as permitted by and in accordance with the provisions of the applicable law”. Recital 18 of the same Directive further clarifies that not only the rightholders shall be allowed to seek civil enforcement measures, but also certain other persons (including CMOs), provided they have a direct interest and a legal standing to do so.

While the Finnish law does not expressly grant such rights to CMOs, Kopiosto argued that its action was still admissible on the basis of Art. 4(c) Directive 2004/48/EC. The Finnish Supreme Court decided to stay the proceedings and refer to the CJEU three questions that can be summarised as follows:

1) Whether the legal standing under Art. 4(c) refers to the CMOs’ general capacity to be a party to legal proceedings or whether national law shall expressly grant such CMOs the right to bring legal proceedings in their own name on behalf of the rightholders.

2) Whether “direct interest” under Recital 18 is an autonomous concept of EU law and, if so, whether this entails that Member States shall recognise the CMOs’ entitlement to bring legal proceedings in their own name on behalf of the rightholders.

3) If the CMOs are indeed entitled to bring such legal proceedings, whether the analysis shall be different in the case of extended collective management, where certain authors have not authorised such CMO to manage their rights, notably in the context of authors’ right to property and right to an effective remedy and to a fair trial (as per Arts. 17 and 47 of the Charter of the Fundamental Rights).

Preliminary ruling

The Court first reminded that under Art. 4(c) the entitlement to seek civil enforcement measures depends on two cumulative requirements that shall be foreseen under national law: (1) the law shall allow CMOs to bring proceedings to that end, and (2) CMOs must be regarded by national law as having a direct interest in the defence of corresponding rights. This had already been clarified in an earlier ruling in case C-521/17 concerning the rights of professional defence bodies under Art. 4(d) of the same Directive.

Regarding the first requirement, the Court explained that the CMOs’ legal standing to act in their own name on behalf of the rightholders may result either from a specific provision in the national law, or from general procedural laws of that Member State. This interpretation answered the first question from the Finnish court.

Regarding the second requirement, the Court first established that Directive 2004/48/EC does not itself govern whether CMOs have a direct interest in the defence of intellectual property rights. Moreover, Directive 2004/48/EC does not oblige Member States to recognise that CMOs have such direct interest. The issue is solely governed by applicable national law and it is for the national court to determine whether, under said national law, CMOs have a direct interest in the defence of the rights of the authors whom they represents. This effectively answered the second question. 

Unfortunately, the Court did not address the third question, which concerned the standing of CMOs to bring legal proceedings also on the basis of extended licenses. According to the Court, it is apparent that, under Finnish law, Kopiosto lacks legal standing and recognised direct interest, which are both necessary to seek civil enforcement measures. Thus, there was no need to address the hypothetical situation of the treatment for non-members of Kopiosto whose rights are managed under an extended license.