Out-Law / Your Daily Need-To-Know

CJEU: no copyright fees for radios in rental cars

Out-Law News | 21 Apr 2020 | 9:06 am | 3 min. read

Rental car companies do not have to pay copyright fees to collecting societies when their cars have radios, the EU's highest court has ruled. However, experts said there remain many open questions.

According to the Court of Justice of the European Union (CJEU), rental car companies do not commit a “communication to the public” of copyright works when their rental cars are fitted with radios. As a result, they do not have to obtain a copyright licence to account for music played via radio reception.

The Swedish Supreme Court had brought two cases before the CJEU. In the first case, the Swedish collective management organisation for music creators and publishers (Stim) and a Swedish car rental company were in dispute about copyright fees due. In the second case, a Swedish car rental company decided that it did not owe the Swedish performing rights society (SAMI) any such fees.

In the past few years, the concept of "communication to the public" under EU copyright law has been extended in case law. The trade of media player has previously been considered as an act of communication to the public in some cases.

One could argue that a car with radio can be considered a large media player. Nils Rauer, copyright expert at Pinsent Masons, the law firm behind Out-Law said: "However, this is to be distinguished from the provision of the mere reception infrastructure, which has so far not constituted an act of communication to the public under copyright law. The present decision is made in the light of this conflict."

With its decision, the CJEU made clear that rules for communication to the public under European law do not apply in this case, as car rental companies only provide equipment necessary for radio reception, but not the copyright works themselves. The equipment makes communication to the public possible, but providing it is not an act of communication to the public in its own, the CJEU said.

"The judgment is convincing in its result," Rauer said. "The term 'communication to the public' set out in Article 3(1) of the InfoSoc Directive should not be extended unduly, and a distinction should be maintained in relation to the mere provision of infrastructure required to communicate works of copyright."

Rauer said, though, that the CJEU did not provide appropriate information on the criteria that contrasts the cases of Stim and SAMI from other cases where an act of communication to the public had been confirmed. Clarity on the differentiation to the Filmspeler case from 2017 would have been useful in particular, Rauer said.

In the Filmspeler case, a company from the Netherlands sold streaming equipment that gave buyers direct access to content provided by illegal movie streaming services. The CJEU confirmed that this resembled an act of communication to the public.

"The CJEU could have hinted that, in the case of Filmspeler, the entire set-up of the equipment and the software installed were intended to provide illegal access to works protected by copyrights," Rauer said. "Of course, where rental cars are concerned, this is not the case."

Beyond that, the CJEU's decision does not mention how the InfoSoc Directive is to be interpreted in cases of hotels, dentists’ waiting rooms and rehabilitation training centres with TV or radio devices that provide their visitors with access to the program, Rauer said.

The CJEU has previously confirmed that acts of communication to the public are committed by the operators of the hotels, dentists’ waiting rooms and rehabilitation training centres. Those decisions emphasise that the central role of the user is to make the protected work accessible to persons who are within the broadcasting area of the channels but who cannot access it without the activity of the user. 

At a first glance, this explanation also applies to radios in rental cars, Rauer said: "It would have been desirable for the CJEU to express the differences in these cases more clearly. With regard to mobile homes equipped with radio and television, there is arguably a comparison to a hotel room. The most obvious difference is the fact that a hotel submits the signal to the room proactively. There is no need to do this with a car. Nevertheless, both situations are similar. Therefore the judges should have provided better explanation to their decision, although their decision in itself is agreeable."