Netherlands: Court Of Justice EU: No Compensation For Radio Music In Waiting Room

CJEU 15 March 2012, C-135/10, Del Corso

Things are brewing up at the European copyright collection societies, because the Court of Justice of the European Union has rendered a interesting judgment (in Dutch) on the mandatory remuneration for background music. An entrepreneur who turns on a radio in his building may become obligated to pay a compensation to the composer, musician and record company. This amount is not to be paid directly, but to the so-called copyright collection society responsible for the collection of this remuneration. Copyright law and neighboring rights law stipulate that the consent of the rightholder is required for the disclosure of a work. The Dutch collection societies (BUMA and SENA) are using (in Dutch) the following rather broad rule in order to determine what a disclosure of the work is: "Do you use music, TV images or copies from books, magazines, newspapers or other publications in your company? Then you will need a license (..)". This broad interpretation of the law has become questionable since the Court of Justice has determined that a dentist does not have to pay remuneration to play background music in his waiting room.

This does not mean that from now on businesses are released from the periodic claims for playing music. The judgment of the Court is rather specific and cannot simply be applied to other BUMA/SENA situations just like that. Firstly, there is a difference between the remuneration for the composer (on the basis of copyright) and the remuneration for the musician and record company (on the basis of the 'neighboring right'). In this judgment an explanation was requested only about the neighboring right of the musician and the record company. Secondly, national courts have a certain degree of freedom when interpreting a judgment of the Court of Justice. Therefore, the consequences of this development are not yet clear. We do know that the judgment has caused a lot of commotion.

Conclusion of the European Court of Justice

The matter concerned the Italian dentist Del Corso who refused to pay for the radio music he played in his waiting room. SCF, an Italian collection society for neighboring rights, disagreed and brought an action. This eventually led to the question of whether switching on the radio in the waiting room of Del Corso had to be regarded as a "communication to the public". This concept originates from the European Rental and Lending Directive, but also appears in other Directives regulating copyrights and neighboring rights. Within this context the Court of Justice already explained this concept. For instance, it has been determined that offering television broadcasts in a hotel room and broadcasting soccer matches in a bar are "communications to the public".

According to the Court, this is different in the case of radio music in waiting rooms. Even though the dentist deliberately allowed the listening to the radio music, his clientele and the number of simultaneous listeners are too limited to speak of a "public" within the meaning of European legislation. Moreover, the Court reasoned, the dentist did not switch on the radio for profit. The Court has therefore set three criteria: 1. The nature and scope of the clientele; 2. The number of simultaneous listeners; and 3. The profit motive of the broadcast. Of course, Dutch collection societies (BUMA and SENA) position that all entrepreneurs who broadcast music must pay a remuneration is what causes friction here. It is therefore not surprising that they have quickly issued a press release to justify their policy in the light of this judgment.

Reaction of BUMA and SENA

BUMA keeps it simple and argues (in Dutch) that the judgment only relates to the neighboring rights, for which its sister organization SENA is responsible. This conclusion might be too quick. It is correct that the Court has argued in this judgment that the European regulation for neighboring rights must be adjudicated in an "individualized" manner, and therefore in itself. However, the Court links a number of criteria from this regulation to identical criteria within copyright law, such as the concept of "public" that has already been explained in judgments about broadcasting and communication rights in a copyright-law sense. The conclusion of the Court that the public in waiting rooms does not meet this joint criterion is therefore, to a certain extent, also of interest to BUMA. In addition, BUMA has referred to the distinction made by the Court between the copyright as an exclusive right and the neighboring right as a right to remuneration. That is the reason why BUMA assumes that the profit motive only plays a role in the case of neighboring rights. It is still rather unclear how to deal exactly with the profit motive criterion. Within this context, it is at least innovative. For infringement the law does not consider the profit motive for unauthorized use. It is incorrect, however, that the criterion only plays a role within neighboring rights. In an earlier copyright-law judgment (in Dutch) (Premier League) the Court involved the profit motive in its adjudication and also referred to this consideration. Therefore, the criterion does have an influence on BUMA's policy.

SENA has taken (in Dutch) the position that in the end the Dutch Court must adjudicate whether the specific facts of a case meet the test laid down by the Court of Justice. SENA assumes that it must be examined on a case by case basis whether an entrepreneur has a profit motive by broadcasting music in his waiting room. SENA assumes that this is always the case. Regardless whether this assumption is correct, in addition to the profit motive the Court has also discussed other criteria, which SENA ignores. For instance, the Court's conclusion that a waiting room is too secluded to speak of a "public" might be of importance for SENA's policy.

In summary, from this judgment a minimum limit may be derived for the scope of the public for which a remuneration is due if a "communication" is made to them. Therefore, no remuneration has to be paid for a small number of listeners. In addition, it seems that the profit motive is going to play an even greater role in the use of copyright-law and neighboring-law-protected material, which may or may not be subject to remuneration. Incidentally, it is remarkable that in their reactions both SENA and BUMA have emphasized this profit motive criterion. The Court has attached at least the same importance to the small scope of the waiting room public. This criterion is more understandable and may have more impact on the remuneration policy. However, we are still in the dark as to the precise meaning. The judgment was made within the scope of neighboring rights and its final application depends on the interpretation of the Dutch Court. We now have to wait for the first Dutch dentist who will put up a defense against a remuneration payment claim of SENA.

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