Right of communication to the public returns to the CJEU: should the operator of a short-term rental apartment building pay a licence fee when they install TV sets in those apartments? Yes, says AG Szpunar

The IPKat's whiskers are natural antennae: 
but do they fall within
the scope of recital 27?

Where do you draw the line between the “mere provision of physical facilities”, which – in accordance with recital 27 of the InfoSoc Directive – falls outside the scope of the right of communication to the public under Article 3 therein, and the installation of such facilities, which – instead – is relevant under this exclusive right?

This vexed question is once more pending before the Court of Justice of the European Union (CJEU) in GEMA v GL, C-135/23.

The 'twist' this time is that the background proceedings concern the operator of a rental apartment building who instals TV sets in such apartments with indoor antennas able to receive broadcasts, but without a central reception being also provided. Should the building operator pay collecting society GEMA in such a case (which is prima facie different from, e.g., SGAE or Reha Training)?

Earlier this week, Advocate General (AG) Szpunar issued his Opinion, noting that the right of communication to the public “has undoubtedly received the lion’s share of attention in the case-law of the Court of Justice “ and advising the CJEU to rule that the operator of the apartment building should pay, unless the tenants establish their principal or secondary residence in those apartments. Let’s see how the AG reasoned.

AG Szpunar’s analysis

The AG began by offering a recap of the (abundant) CJEU case law on Article 3 of the InfoSoc Directive, also noting the importance of maintaining consistency and ensuring an appropriate balance of rights and interests.

Turning to the question referred by the German court, the AG noted that – at a superficial glance (is such a thing ever possible when speaking of the right of communication to the public though?) – the present case might be a “simple” one.

One could argue that the operator of the apartment building that (a) merely installs TV sets which are in principle able to receive broadcasts but (b) does not equip the system with a central reception falls under the scope of application of recital 27. Such a view, noted the AG, could “be perfectly defensible”.

However, “that approach does not seem wholly convincing from the point of view of the end result achieved”, in that it would create a “clear difference in treatment between rental apartments equipped with television sets with indoor antennas and hotel rooms equipped with television sets connected to a central antenna”.

Hence, according to the AG, the present case must be analyzed in light of SGAE. 

The parallel with SGAE

Like hotel guests, apartment tenants are away from their place of residence: without the intervention of the building operator they would not be able to receive the broadcasts that, instead, they access through the TV sets installed by such operator. In this sense, the fact that the building operator themselves does not transmit or retransmit broadcasts is immaterial:

By equipping the apartments with television sets with indoor antennas that are tuned to receive the signal from the terrestrial television broadcast available in the catchment area where its building is located, the operator allows tenants to receive specific television broadcasts inside the rented apartments during the rental period.

By urging to avoid overly formalistic interpretations of the law and stressing the need for technological neutrality, AG Szpunar concluded that, seen from this perspective, the case at issue is “very similar” to SGAE and still “perfectly in line with the Court’s case-law”, notably PPI, Airfield, and AKM.

Such a solution would not be at odds with STIM and Sami either given that, in that case, the installation of radio equipment was done by the car manufacturer while, here, the TV sets are installed by the building operator. 

Nor would it be in contrast with Blue Air [IPKat here], given that there the carrier does not make the sound system available to passengers, but retains control of its use and any transmission of protected works by means of that system, a transmission that, if it takes place, will only then be classified as a communication to the public.

In sum: in a case like the present one whether there is a central antenna or several indoor antennas to access broadcasts would not matter. Indeed, the building operator has gone beyond the mere provision of physical facilities and performed instead an act of communication that is directed at a ‘new public’.

Short- or long-term matters … to the ‘new public’ assessment

The AG also noted that whether the rentals are short- or long-term does matter:

• In the former situation, the tenants are like hotel guests: like in SGAE, they form a public in succession which was not considered by the rightholders when they authorized the initial broadcasting;
• In the latter scenario, the tenants would be considered the "owners of reception equipment" within the meaning of SGAE (irrespective of whether they actually own the TV set which would be, for example, the case in the event that the apartment was let furnished) and, therefore, as members of the public who were taken into account by the copyright holders when they authorized the initial communication.

Comment

In all its obscurity, it is said that recital 27 should (but could it?) be read in line with the joint declaration concerning Article 8 of the WIPO Copyright Treaty. Yet, what this short recital means remains very challenging to say with any acceptable degree of confidence.

AG Szpunar’s Opinion is testimony to all this also

Kat pondering recital 27
from the comfort of
a rented apartment

because it is construed in great part so as to avoid potential criticisms that his proposed answer would be at odds with existing case law. However, as the medieval wisdom might suggest to some cynical readers, in such a case the motto Excusatio non petita, accusatio manifesta could precisely come to mind 😅

That said, I find that the position advanced – notably the need to consider the end result rather than getting too ‘fixated’ with technological aspects – is in line with the functional approach adopted by the CJEU throughout its entire Article 3 jurisprudence. The Court has consistently reached its answers by considering more the outcome and implications thereof rather than other, more technical or legally 'orthodox' aspects. This, I believe, is crucial to accept if one wishes to understand CJEU case law on communication to the public. It is, in its entirety, a result-oriented and outcome-driven case law.

An aspect, however, which I think the AG could have omitted from his Opinion or approached differently because it lends its side to undue difficulties is the consideration of the ‘new public’ requirement. As I discuss here, if there is an act of communication on the side of the building operator undertaken through different technical means (as it appears to be the case here), then there is no need to consider if there is or not a new public. Plus, in the case at hand, it appears unconvincing to distinguish between short- and long-term tenants.

What I would have suggested is thus not to focus on the ‘new public’ requirement subsistence or lack thereof, but rather on the reasons for installing such TV sets. In other words: on the subsistence or not of a profit-making intention on the side of the building operator. After all, whether there is or not such an intention has led the CJEU to establish the subsistence or not (contrast, e.g., hotels and dentists) of an act of communication to the public. Yet, quite surprising, AG Szpunar does not meaningfully work with such an additional criterion often employed by the CJEU.

Admittedly, however, my proposed approach might lead to the conclusion that – unlike AG Szpunar – a distinction between short- and long-term rentals does not make a difference in itself (one could argue: why shoult it?). It could however make a difference, for example in the event that the tenant had the option to rent the apartment with or without a TV set provided by the building operator because it would serve to determine if there is an additional intervention by that user that is supported by a profit-making intention.

Let’s now wait to see what the CJEU says, though I suspect that the substantial result is likely to be eventually in line with what was recommended by AG Szpunar.