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CJEU confirms no royalties due when hiring out cars with radio receivers

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United Kingdom

At the start of this month, the CJEU gave its latest judgment on what constitutes a "communication to the public" and is therefore an act of copyright infringement.

Background

Under Article 3(1) of Directive 2001/29/EC (the "Copyright Directive"), the owner of a copyright work has the exclusive right to authorise whether their work can be communicated to the public. The two cumulative criteria for this concept are that there must be:

  1. an 'act of communication'; and
  2. a communication to a 'public'.

This CJEU decision was in respect of a referral from the Supreme Court of Sweden in the combined case of Föreningen Svenska Tonsättares Internationella Musikbyrå u.p.a. (Stim) and Svenska artisters och musikers intresseorganisation ek. för. (SAMI) v Fleetmanager Sweden AB and Nordisk Biluthyrning AB (C-753/18).

The Swedish organisations that manage copyright in music and the related rights of performers (Stim and SAMI) brought these proceedings against Swedish motor vehicle rental companies claiming that they owed them royalties. The vehicles offered for hire by the defendants were equipped with radio receivers and the claimants alleged that this contributed to copyright infringements as these sound systems in the vehicles allowed musical works to be made available to the public without being authorised.

Referral

The Swedish court asked the CJEU to determine whether the hiring out of motor vehicles equipped with radio receivers constituted a communication to the public within the meaning of the Copyright Directive. They also queried if there was any significance in the volume of the hire car activities during the period of hire.

Decision

In summary, the court concluded that there was not an 'act of communication' and therefore the hire companies did not contribute to any copyright infringement.

The court referred to recital 27 of the Copyright Directive, which states: "the mere provision of physical facilities for enabling or making a communication does not in itself amount to a communication within the meaning of the directive". The court also emphasised the "indispensable role played by the user and the deliberate nature of his intervention" in an act of communication to the public.

In these circumstances, there was no intervention or role played by the hire company in any communication of the work. The hire companies merely supplied the vehicles with the integral radio receivers. The court distinguished this from cases where the service provider intentionally broadcasts the work to clients by distributing the signal. In this case, the hire companies were only providing physical facilities and did not carry out an act of communication.

On this basis, it was unnecessary to consider whether any communication was made to a 'new' public.
 
Comment

This is an area of law where there are frequent referrals from national courts to request clarification from the CJEU. This is due to its application to the latest technologies - from the normal operation of websites via browsing and hyperlinks to set-top boxes and internet streaming services. The courts have also considered potential communications in different places such as dentist waiting rooms, rehabilitation centres, hotels and spas.  It is therefore a very important area of law for the enforcement of copyright. The mechanism of referrals to the CJEU from Member States is useful to clarify the application to new technologies and situations that may not have been considered previously.

This case may seem more straightforward than other cases regarding communication to the public – the application of the law to the specific questions referred takes up four short paragraphs in this brief judgment. However, the case does help to clarify the role played by the user and the deliberate nature of an intervention to classify as a communication. Although rightsholders may see this as a narrow view of a 'communication', this seems a sensible and practical distinction between providing a physical facility and engaging in the act of communication itself. Rightsholders seeking to enforce their copyright should carefully consider the exact acts carried out by each potential infringer and focus any enforcement actions on those undertaking the deliberate act of communicating the work.

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