Spa patients as hotel guests - CJEU in case OSA (C-351/12) on copyright fees

27 February 2014: CJEU in case OSA (C-351/12)

In this case compliance of Czech law with the Copyright Directive 2001/29 was questioned, since Czech law allowed health establishments (which could include health spas) to transmit music in patients' rooms while they were being provided healthcare, without the need for the health establishments to pay copyright fees. AG Sharpston's opinion in this case (Silence is golden) was that this provision did not seem to fall under the exceptions provided for in the Copyright Directive and was rather covered by the general provision of art. 3(1). By transmitting protected works by means of television and radio sets located in the patients' rooms, a spa carries out a communication of these works to the public, taking into account that just like in any hotel the spa would provide services to many people throughout the year, even if spa patients occupy their rooms on average longer than hotel guests (par. 27-33). The CJEU agreed, therefore, with AG Sharpston that the exemption in Czech law did not comply with the Directive (par. 36, 41). The CJEU also mentions that while it is acceptable that a collecting society of copyright fees would have a monopoly within a given Member State to effectively manage IP rights' protection that does not entitle such a society to abuse its dominant position on the market. It should not, therefore, set copyright fees at a level that is much higher than in other Member States. It is for the national court to determine whether this situation took place in a given case (par. 86-90).

Music makes the EU come together

Last week, 4 February, the European Parliament also approved the new Directive on collective management of copyright and related rights and multi-territorial licensing - that are supposed to allow for easier streaming of music across the EU, exempting online music providers from having to apply for a license in every country they play music. Since only one of 500 licensed digital music services is available in all EU member states, these new rules may make this market more attractive for smaller competitors. (Licence to thrill...) This provided the online music provider will obtain a license from a collective management organisation representing authors' rights across borders. To facilitate this process national collective management organisations will be able to request other organisations to represent their repertoire (under the same conditions as applicable to their own repertoires) in countries for which they were not authorised to issue such licenses. The artists will need to be guaranteed their royalties not later than nine months from the end of the financial year in which the rights revenue was collected. Since the Directive was already informally agreed with the Council, the following Council's vote should just be a formality. (Copyright: cross-border licences for online music services)

Online music services

On Tuesday the Legal Affairs MEPs endorsed the new rules on copyrights that make it easier for online providers to obtain copyright licenses to stream music cross-border. This could be achieved by allowing online providers to obtain these licenses from a small number of authors’ collective management organizations  that operate across EU borders, instead of forcing them to obtain separate licenses from national organizations in every Member State they provide services to. The aim is that EU-wide online music services are made available to consumers, while at the same time music authors rights and their royalties are protected. 

Silence is golden - AG Sharpston in OSA (C-351/12)

14 November 2013: AG Sharpston in case OSA (C-351/12)

This case may concern copyrights but its effects will impact consumers in some Member States that is why we will briefly mention here recent opinion of AG Sharpston in it. 

Imagine you are in a health spa, trying to relax while bathing in medicinal springs and enjoying spending days in the provided by the spa accommodation, which includes TV and radio sets in your room. Obviously, in order to relax you may want to listen to your favourite bands on the radio or watch a nice movie, TV show, etc. What may stand in the way of that luxury are, however, high fees that the organisations who protect copyright in the given Member State claim from the health spa for transmitting their works. In Czech Republic OSA has a right to collect such fees and the health spa was obliged to obtain a licence from them. Czech law excludes from the need to pay such fees transmission that take place in patients' rooms when providing health care in health establishments, which could encompass a health spa. OSA claims that this exception is contrary to the Copyright Directive 2001/29 and AG Sharpston agrees therewith (classifying it as communication to the public - par.28). 

What may follow the judgement of the CJEU in this matter is either an increase in prices of health spa establishments or an increase of health spa meditation establishments, where silence is golden.

Collective copyrights management

The BEUC published also this week its response to a proposal for a Directive on collective management of copyright, related rights and the multi-territorial licensing for online musical works. In its response the BEUC explains consumers interests in this law (enjoying access to more diverse content, hopefully, under more competitive prices) as well as suggests ways to improve the proposal (esp. with regards to more effective enforcement mechanisms). For the document see here.

The times they are a-changin' - on digital music sales

No wonder digital agenda plays such a huge role in the current EU consumer policy, taking into account that e.g. in 2011 for the first time ever the digital music purchases (50,3% of all music sales in 2011) were higher than physical sales. As CNN reports (Digital music sales top physical sales) most consumers prefer nowadays to shop online, taking into account the internet offers (e.g. 99-cents-a-song iTunes deal) as well as being able to purchase one particular song, not necessarily the whole album. Add to it the raising sale of smartphones, which enable consumers to purchase music on-the-go, and it should not come as a surprise that digital music sells better than CDs. However, it does not seem to be the final step in the music sales, the future is seen as belonging to streamed (e.g. via Spotify) and not downloaded music. That means that consumers are seen as more willing to pay for access to music streaming services rather than purchasing songs in the future. It's not about possession but access. This news means that indeed more protection measures should be created for consumers concluding contracts online, paying online, etc.

Online music in Europe

This short video outlines problems that European regulators face with regard to creating a single market for transactions concerning online music. Illegal downloading, problems with online licensing, databases and copyrights are all mentioned.

Back to the sixties

On 12 September, a Directive was adopted that extends copyright of performing musicians from 50 years to 70 years after recording. The Directive somewhat narrows the gap between composers (who already enjoy copyright protection till 70 years after death) and performers, and is one of the outcomes of the European Commission's strategy on intellectual property rights. Good news for rock stars and for session musicians who were in danger of remaining without a pension? Critics point out that not all arguments in favour of copyright extension seem valid: a large share of the additional royalties are likely to go directly to record companies to which the rights on the recordings have been transferred, and there appears to be no conclusive evidence that an increased copyright term will encourage further investments in new music nor that it will make available more works. In this view, not creativity, but lobbying seems to be rewarded... (The European Commission's term extension proposal: Fair concern or fruit of industry lobbying?)

What does the extension of copyright mean for consumers? It is submitted that the new rules will not affect retail prices, since 'empirical studies show that the price of sound recordings that are out of copyright is not lower than that of sound recordings in copyright' (see the FAQ on the new Directive). Furthermore, according to the Commission, the answer to questions of intellectual property 'is in the single market'. In that context, it will be interesting to see whether rules on IP-protected digital content (e.g. downloaded music) will be included in a proposal for an instrument of European contract law.