Hotel television and copyright licences - a legal update

In answering questions referred to it by a Spanish court, the ECJ has confirmed that the transmission by hotel owners of broadcasts through television sets in hotel rooms is a “communication to the public”, and could therefore constitute an infringement of copyright under Article 3(1) of the Copyright Directive (2001/29 EC). The court held that the private nature of hotel rooms did not preclude the communication of works in these rooms from being a “communication to the public”, since the test was whether a communication had been made to “the public”, not whether a communication occurred in a public or private place.

This decision will be of concern to hotels and other businesses which share a television signal or video feed between a number of different locations without obtaining a licence from the copyright owner to do so.

The following provides analysis and comments on the ruling in Sociedad General de Autores y Editores de España v Rafael Hoteles SA.

Background

The right of communication to the public held by copyright owners is outlined in Article 3(1) of Directive 2001/29 EC (“the Copyright Directive”). It provides that:

“Member States shall provide authors with the exclusive right to authorise or prohibit any communication to the public of their works by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access them from a place and at a time individually chosen by them.”

Article 11bis (1) of the Berne Convention provides that:

“Authors of literary and artistic works shall enjoy the exclusive right of authorising -

(i) the broadcasting of their works or the communication thereof to the public by any other means of wireless diffusion of signs, sounds or images;

(ii) any communication to the public by wire or by rebroadcasting of the broadcast of the work, when this communication is made by an organisation other than the original one;

(iii) the public communication by loudspeaker or any other analogous instrument transmitting, by signs, sounds or images, the broadcast of the work.”

Facts

Sociedad General de Autores y Editores de España (SGAE), the body responsible for managing intellectual property rights in Spain, sued the owner of the Rafael Hoteles (Rafael) for copyright infringement, complaining that, between June 2002 and March 2003, acts of communication to the public were carried out involving works belonging to the copyright owners managed by SGAE. These acts were carried out through television sets installed in the hotel rooms which enabled the guests to watch programmes on channels whose signals were received by the hotel’s main aerial and then distributed to each of the television sets in the various rooms. SGAE claimed that Rafael should be ordered to pay compensation.

The trial court dismissed SGAE’s claim, holding that the use of TV sets in hotel rooms did not involve acts of public communication and that it was therefore not necessary for the hotel owner to have obtained prior authorisation or pay a fee.

SGAE appealed and the Provincial High Court of Barcelona subsequently stayed the proceedings on the basis that Spanish law, which was consistent with the trial court’s judgment, might infringe Article 3(1) of the Copyright Directive.

Reference to the ECJ

The Provincial High Court of Barcelona referred the following questions to the ECJ for a preliminary ruling:

“Do the following acts constitute a “communication to the public” under Article 3 of Directive 2001/29:

(1) the installation in hotel rooms of television sets to which a satellite or terrestrial television signal is sent by cable;

(2) the distribution of a signal, previously received by the hotel, which was fed through television sets placed in hotel rooms; and

(3) a communication that is effected through a television set inside a hotel bedroom because successive viewers have access to the work?”

AG Opinion

Advocate General (“AG”) Sharpston delivered her opinion on the case on 13 July 2006.

In relation to Question (1), she considered that the mere installation in hotel rooms of television sets did not constitute an act of communication to the public under Article 3(1) of the Copyright Directive. Recitals 23 and 27 of the Copyright Directive, which state that “The mere provision of physical facilities for enabling or making a communication does not in itself amount to communication within the meaning of this Directive” clearly showed that this was the intention of the Directive.

However, in respect of Questions (2) and (3), the AG considered that communication by means of television sets to which is fed a signal initially received by the hotel did constitute “communication to the public” within the meaning of Article 3(1) of the Copyright Directive. The AG noted that both (i) the extent of the circle of potential recipients of the communication, and (ii) the economic significance of the communication for the author, should be considered when determining whether a communication was “to the public”.

ECJ judgment

In its judgment of 7 December 2006, the ECJ largely followed the AG’s opinion, ruling that the distribution of a signal through television sets by an hotel to customers staying in its rooms, regardless of the distribution method used, constituted communication to the public within Article 3(1) of the Copyright Directive.

Meaning of “the Public”

In the absence of a definition within the Copyright Directive, the ECJ considered that the term “communication to the public” had to be interpreted broadly in order to establish a high level of protection for authors and to allow them to obtain an appropriate reward for the use of their works. As hotel customers quickly succeeded each other and would be comprised of a fairly large number of persons, the clientele of a hotel would therefore constitute a “public” for the purposes of the Copyright Directive.

Although it noted that the mere provision of physical facilities did not amount to communication within the meaning of the Copyright Directive, the court considered that the installation of such facilities could make public access to broadcast works technically possible. Thus, if the hotel distributed the signal to customers staying in its rooms by means of television sets installed in this way, a communication to the public would take place, irrespective of the technique used to transmit the signal. The court noted that the hotel was obtaining an economic benefit in providing access to the broadcasts, although it acknowledged that the pursuit of profit was not a necessary condition to a communication to the public.

The court further confirmed that the private nature of hotel rooms did not preclude the communication of works in those rooms from being a communication to the public. The court considered it to be clear from Article 3(1) of the Copyright Directive and from Article 8 of the WIPO Copyright Treaty that the private or public nature of the place where the communication took place was immaterial. Since the right of communication to the public by copyright owners covered the making available to the public of works in such a way that they could access them “from a place and at a time individually chosen by them”, the court held that this right would be meaningless if it did not also extend to communications carried out in private places.

Comment

In the absence of a definition for “the public” in the context of communications rights under the Copyright Directive and WIPO Copyright Treaty, this ruling provides some useful guidance on the scope of the term. Although a definitive meaning of the term “public” was not provided, the judgment suggests that the courts are likely to take an expansive view of the relevant “public” and will consider the cumulative effect of publication where work is available to a succession of individuals.

This ruling also illustrates the fact that communications in private places such as hotel rooms do qualify as communications to the “public” under Article 3(1) of the Copyright Directive. Although the ECJ has not fully clarified the circumstances in which communication in a private place would constitute communication to the public, its ruling strongly suggests that the “public” to which a broadcast may be communicated is narrow and is largely confined to private or family circles.

This decision will be of particular concern to hotels and other businesses which distribute a television signal or video feed between different locations without obtaining a licence from the copyright owner to do so. In so far as access to a copyright work has been made technically possible to members of the public, whether in a number of private areas or in a public space, the party providing such access could be liable for copyright infringement. Businesses, particularly those installing new systems or launching a new venture abroad, should therefore ensure that they consider whether additional copyright licences are necessary in order legally to distribute or display an audio or video signal to the “public”.