What Is True About A Hotel Room That Is "On Change"?

"When providing healthcare in healthcare facilities, in that location is no obligation to pay remuneration for communication to the public of copyright works. But, is a hotel room where occasionally health treatment is performed a healthcare facility?"

On 24 July 2012, Krajský soud v Plzni (Czech republic) lodged a reference for preliminary ruling with the CJEU in case C-351/12, Ochranný svaz autorský pro práva k dílům hudebním, o.south. (OSA) five Léčebné lázně Mariánské Lázně, a.s., referring iii questions dealing with split issues related to a case taking place between a Czech collecting society and a business organisation providing spa services, including both accommodation and healthcare services. Firstly, the court questions whether Czech national constabulary is opposite to provisions of Articles three and v of the Directive 2001/29/EC (the "InfoSoc Directive") when no remuneration to authors is required for advice of the works by idiot box or radio to patients in rooms in spa establishment which is a concern. Secondly, the court explores a possibility of directly application of the above mentioned provisions of the Directive before national courts where such provisions are allegedly wrongly transposed. And finally, information technology wonders whether a monopolistic position held by a collecting society which is in compliance with Member State'south national law could nonetheless be opposite to EU constabulary, in particular Articles 56 and 102 TFEU. At first sight, looking at the facts of the case it may seem to be quite a straightforward case only is it really the fact?

To the first outcome

The question referred is as follows: Must Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information club be interpreted as meaning that an exception disallowing remuneration to authors for the communication of their work by television or radio transmission past means of television or radio receivers to patients in rooms in a spa institution which is a business is reverse to Articles 3 and 5 (Article five(ii)(e), (three)(b) and (5))?

In the nowadays case the applicant, Ochranný svaz autorský pro práva k dílům hudebním, o.s. ("OSA"), is a Czech collective rights management society managing rights of the authors in musical works. The accused, Léčebné lázně Mariánské Lázně, a.south. ("LLML"), is a business concern providing comprehensive institutional too as convalescent patient intendance (preventive, curative and rehabilitative) using local natural healing resources in the area of Mariánské Lázně (a spa town in the Czech Democracy) and as well providing accommodation and other hospitality services.

The accused refused to enter into a licensing agreement and to pay any license fees for the communication of works by performing television or radio broadcast to the applicant. They argued that the exception stipulated in Article 23 of the Czech Copyright Human activity 2001 ("CCA 2001") (i) which provides for an exception in the case of apply of copyright works by healthcare facilities would apply to them.

Commodity 23 stipulates: "The performing of the radio or goggle box circulate of the work shall hateful making such broadcasted piece of work bachelor past means of a device technically capable of receiving the broadcasting. The author is entitled to remuneration for making the piece of work available by means of facilities technically capable to receive broadcasts to guests accommodated […]. Making the work available to patients in providing healthcare in the healthcare facilities shall non exist nether Article eighteen paragraph 3 deemed to be the performing of the radio and television broadcast (my emphasis)." (Article xviii paragraph 3 stipulates that "the communication of the work to the public shall non hateful the mere functioning of a facility enabling or facilitating such communication", pregnant that providers of communication services/networks and of devices securing functioning of such services do not communicate works to the public.

Information technology is worth mentioning hither that Czech copyright law breaks down the act of communication of a work to the public into dissever steps, stages or activities, if y'all similar, that can constitute communication of a work to the public. Thus, Czech Copyright Human activity, different the InfoSoc Directive, distinguishes within communication of a work to the public between acts of Life Performance of the Work and its Transmission (Art. 19 CCA 2001), Performance of the Work from a Recording and its Transmission (Art. 20 CCA 2001), Broadcasting (Art. 21 CCA 2001), Rebroadcasting and Retransmitting of the Circulate (Fine art. 22 CCA 2001), and Performing of the Broadcast (Art. 23 CCA 2001). Article 23 therefore deals specifically with devices technically capable of radio or idiot box broadcast, i.east. in plain language, TVs and radios placed where the public can (but does not necessarily have to) apply them, i.e. in pubs, restaurants or hotel rooms. Mandatory extended licensing scheme applies to this particular use of works. OSA is in accuse of collectively managing these rights. Not only does OSA manage this correct in relation to musical works but also acts on a contractual ground on behalf of collecting societies dealing with other protected content and on behalf of strange collecting societies when managing remuneration for communication to the public of works by television and radio when such devices are placed in hotel rooms.

Article five (2) east) InfoSoc Directive states that Fellow member States may provide for exceptions or limitations to the reproduction right provided for in Article 2 in the post-obit cases: …(east) in respect of reproductions of broadcasts made by social institutions pursuing non-commercial purposes, such as hospitals or prisons, on condition that the rightholders receive off-white compensation (my accent); Article v (3) b) states that Member States may provide for exceptions or limitations to the rights provided for in Articles 2 and 3 (i.e. reproduction and advice to the public) in the following cases: …(b) uses, for the benefit of people with a disability, which are directly related to the inability and of a non-commercial nature, to the extent required past the specific disability… (Typically this provision applies to works reproduced in Braille or special audio files, etc. Can 1 subsume the use of works in the present case nether this provision?).

The applicant's statement was that part of the provision of Commodity 23 that introduces an exception for healthcare facilities is not compliant with the provisions of the Directive 2001/29/EC. This is because no bounty to rightholders is provided for and because the exception is not express for non-commercial uses merely (provision of LLML's services is, in OSA's view, commercial). It appears that Commodity 23 is wrongly transposing Articles 3 and five of the InfoSoc Directive by not providing a fair compensation to rightholders for communication of their works to the public and for making reproductions of broadcasts available to the public.

Leaving aside for a moment the issue of wrong transposition of the Directive, another question that arises here is whether the defendant is a social institution pursuing non-commercial purposes and/or whether the uses are for the do good of people with a disability? The defendant claimed that they provide healthcare as a non-land provider of healthcare according to the law (two) and the healthcare services are covered fully or partially by the public health insurance (and therefore they qualify as providing healthcare in healthcare facilities within the pregnant of Commodity 23 even though they are a business organization). They likewise claimed that such healthcare inter alia is provided directly in clients'/patients' rooms and such care cannot be separated from providing accommodation in those patients' (hotel) rooms. Thus exception as stipulated in Article 23 last sentence does apply to them.

When applying Czech law, the healthcare services provided by the defendant are considered as non-commercial in the pregnant of the InfoSoc Directive. However, describing the related adaptation services as non-commercial is highly questionable. In improver, the defendant's argument that the healthcare services are provided in the patient'southward rooms in some cases and thus the exception applies, resembles a drowning person clutching at a straw. Even if occasionally healthcare is provided in the rooms, does it alter the nature of the accommodation services? Or in a reverse fashion of argument: if there is no television or radio in the room, does it alter anything nearly the nature or quality of the healthcare services? Probably non. But by placing a radio or television in the room does modify the quality of the accommodation services. It increases their bewitchery and as well competitiveness not simply for the "not-paying" guests but also for the regular commercial guests of the hotel (which is one of the applicant'south arguments). Why, in such situation, should the authors be left out from their compensation?

LLML also argued that no communication to the public would take place here since their patients would stay in the facilities for a longer menstruation than other hotel guests (on average for 22 days) and thus the ruling C-306/05, SGAE 5. Rafael Hoteldue south does not apply hither. The Czech courtroom questioned whether the SGAE five. Rafael Hotels decision applies to rooms in spa establishments which have a dissimilar purpose and whether the differentiation made from the SGAE v. Rafael Hotels in the Societa Consortile Fonografici case (C-135/10) was relevant in this case?

The problem is thus twofold. On the one manus, the accused needs to establish that since they provide healthcare in the rooms and such healthcare constitutes healthcare every bit defined in the special law, in the cases where such healthcare is covered past public wellness insurance funds (every bit oppose to services, possibly identical, provided to clients/patients paying for them privately) exception of Article 23 last sentence applies. When providing healthcare in healthcare facilities, there is no obligation to pay remuneration for communication to the public of copyright works. Simply, is a hotel room where occasionally wellness treatment is performed a healthcare facility? On the other hand, fifty-fifty if the defendant succeeded to establish this, information technology is not much of a assistance if the examined provision is found to exist non-compliant with the InfoSoc Directive for assuasive utilise of copyright works without fair compensation to rightholders.

Ane could argue that the referred question that the Court posed should have been worded slightly differently. Rather than asking whether information technology is contrary to [….] if the spa establishment is a concern, information technology should have asked whether it is reverse to [….] if the spa establishment is interim in the capacity of a business or (to stick to the InfoSoc Directive terminology) if the activeness is of a commercial nature.

To the second event

The question referred is as follows: Is the content of those provisions of the directive concerning the above apply of a work unconditional enough and sufficiently precise for copyright collecting societies to be able to rely on them before the national courts in a dispute between individuals, if the State has not transposed the directive correctly in national law?

Therefore the question is whether the diction of Article 3 and Article v(2)(e), (3)(b) and (5) of the InfoSoc Directive is "unconditional enough" and "sufficiently precise". As to the straight upshot, the applicant pointed out the ECJ's (as it was) decisions in case C-397/01, Pfeiffer (iii) as to estimation methods, and C-555/07, Seda Kücükdeveci v Swedex concerning the directly awarding of a non-transposed Directive betwixt individuals should such Directive utilize general principle of European Wedlock police. The question is whether a principle of off-white remuneration to authors/rightholders is a general principle of the European union police?

In the defendant'southward opinion, even if there was a discrepancy between the wording of Articles iii and 5 of the InforSoc Directive and wording of the transposed national provisions, one cannot claim that the Directive is to be applied directly in proceedings betwixt individuals.

The Court best-selling that Directives in full general do non have straight outcome unless specific conditions are met. Where the direct event of a Directive applies, information technology is not possible to claim such outcome of a wrongly transposed Directive where the proceeding takes places between individuals. In such cases the national provisions take to exist interpreted in court proceedings in conformity with Eu law.

In copyright law, at that place is a full general principle that authors are entitled to a fair remuneration. Such remuneration can be denied only exceptionally in justified cases. Such exceptions are listed every bit a mandatory dominion in the Directive 2001/29/EC. Is it therefore possible for a national court not to apply an exception that is contrary to this Directive during proceedings before them?

Also, given the nature of the applicant (being an system appointed by the Land), the Court held that it has a unlike position than an individual and thus maybe could be entitled to merits direct outcome of the Directive earlier court.

To the third upshot

The question referred reads: Must Article 56 et seq. and Article 102 of the Treaty on the Operation of the European Spousal relationship (or as the example may be Article xvi of Directive 2006/123/EC of the European Parliament and of the Council of 12 Dec 2006 on services in the internal marketplace ) exist interpreted as precluding the application of rules of national law which reserve the practice of collective management of copyright in the territory of the Land to only a unmarried (monopoly) copyright collecting society and thereby exercise not allow recipients of services a free option of a collecting society from another State of the European Union?

Krajský soud v Plzni refers in its evaluation to a finding of the Czech Constitutional Court (4), coming to a decision in a similar matter, that it will be necessary to clarify the relation between Czech national police and EU constabulary on this discipline in a preliminary ruling initiated by the third question.

In the present case, the bidder acts every bit a collective rights direction arrangement based on the permission granted to them by a conclusion of the Ministry building of Culture of the Czech republic. The system in the Czech republic is such that only entities approved/accredited(five) by the Ministry of Culture are allowed to act equally collecting societies, and there is only ane collecting social club dealing with a specific discipline thing(6) . Article 97 of the Czech Copyright Act 2001 stipulates that a collecting society is a non-for-turn a profit legal person that obtained a permission to deed equally a collecting society and in which are associated and/or participate persons that are rightholders of the respective works collectively managed past the society(7).

The accused pointed out that OSA is abusing their monopolistic position on the marketplace in that the fees collected are unduly high compared to equivalent fees nerveless past neighboring foreign collecting societies (Germany, Austria, and Slovakia) for the same use despite oftentimes higher living standards of their nationals, and that such situation is worsening LLML's position in the market and their power to compete with spa establishments in neighboring countries. (Could a fee of approximately £0,30 (radio) and £i,- (Television receiver) per room per calendar month really have such a dramatic issue?).

In add-on, the accused's establishments are likewise used by a foreign clientele and bespeak of foreign (German language) telly and radio broadcasts is received. The LLML claim that while they would like to enter into an agreement with a foreign collecting society (for instance Austrian) whose fees are lower, the provision of free services is restricted since OSA prohibits that. OSA claims that LLML cannot enter into a licensing agreement with an Austrian collecting society considering that is prevented by an agreement concluded betwixt the ii national collecting societies. Simply is such an understanding a legitimate instrument to prevent users or members from entering into negotiation with a foreign collecting society?

The Court of Justice will need to have a close expect at the constabulary on the purlieus of copyright and contest laws, in particular to inquire itself a question whether it is acceptable to accept just ane collective management organisation in charge of dealing with rights in 1 specific subject thing in the territory of one Fellow member Country? This is common practice in many European countries and is (in the blogger'due south opinion) justifiable by many aspects, including the size of the territory in question, a demand for a state regulation in lodge to secure consumer/user protection etc. But the problem (in the blogger'southward view) does not lie in the monopolistic position of the collecting order but in the way it uses the position.

The Czech courtroom'southward argument was that one cannot rule out that commonage direction of rights in copyright works can be considered to be a provision of services in the meaning of Article 56 TFEU and that activity of a collective direction organization ("CMO") can influence competition within the EU in the meaning of Manufactures 101 and 102 TFEU. The Court stated that it was not clear from the provisions of the Directive 2006/123/EC on services in the internal marketplace that it does not use to collective rights management in the copyright context and therefore fall exterior the realm of the Directive. The Directive specifies in paragraphs 8 to 35 of the Preamble which activities should or should not be covered by its scope. Paragraph 8 of the Preamble states that provisions of the Directive concerning the freedom of establishment and the gratis motion of services should apply only to the extent that the activities in question are open to competition, so it does not utilise to services of general economic interest (Fellow member States do not take to abolish existing monopolies for other activities or certain distribution services). In the to a higher place mentioned paragraphs collective rights management is not expressly listed. If information technology did fall inside the scope of the Directive the above mentioned provisions of the Czech Copyright Act 2001 could possibly, in the court'south view, exist opposite to Articles 16 (one) a) and 16 (2) a),b) or Article 14 (i) of the Directive on services in the internal market.

The author of this post is not aware of any Court of Justice decision dealing particularly with the issue of monopolistic collecting societies and is quite curious to observe out what the CJEU's answer will be. However, the Committee was dealing in the past with the Czech Commonwealth (and Hungary) regarding restrictions on the freedom of establishment and freedom of provision of services of CMOs (eight) . The Commission recommended a modify of the law but after an exchange of opinions between 2006 and 2009 aught has happened in the by four years.

In that location is, however, ample jurisprudence and other fabric available on potential anticompetitive behavior of collective management organizations under Manufactures 101 and 102 TFEU (e.m. CISAC and IFPI Simulcasting cases, Santiago Agreement). It seems that it is by now almost established principle that agreements betwixt different national collecting societies preventing its members and/or users of works in their realm from entering into agreement with foreign collecting society, peculiarly if that is justified past e.k. reception of a strange signal, are anticompetitive and thus in alienation of European competition rules.

Concluding remarks

There are approximately xv ongoing disputes betwixt the applicant, OSA, and various spa facilities across the state, all pending the CJEU's decision. It is worth mentioning here that at that place was a will on OSA's side to come to amicable terms in this instance, however authoritative solution was found to be desirable since it volition touch on the course of proceedings in all the related cases.

All three issues have relevance for other Member Satates' individuals and organizations and it volition be interesting to sentinel the evolution. An answer to the offset question may exist of involvement of national legislators who are unsure of their ain transposition of the InfoSoc Directive. On the answer to the second question depends whether a collecting society can continue to enforce its members' rights immediately following the CJEU's decision, or whether it has to wait for a prospective police force amendment or promise for right interpretation by national courts in conformity with the Eu police (at this moment, in that location have been few cases with the aforementioned facts pending in the Czech Republic where the courts ruled in the preceding instances in favour of the collecting club and some other instance where it ruled the opposite – thus unifying the approach is crucial.) In addition, if provisions of the InfoSoc Directive are constitute by the CJEU to be "unconditional enough" and "sufficiently precise" (does the reader too dubiousness that?) and a fair remuneration to authors is considered a general primary of European union police force, individuals of other Member States may rely on them where the Directive 2001/29/EC has not been transposed correctly into national constabulary. Probably the most intriguing, however, will exist to run into the development with regard to the third question.

(A PDF-version of this article can exist downloaded here).

(one) Act No. 121/2000 Coll., on Author's Rights, Related Rights, and on change of several acts as amended (please note that the diction provided in this link is not the near up-to-date; in detail wording of Article 23, relevant for this case, is outdated. The current wording contains additional two sentences dealing with remuneration in instance of television receiver and radio broadcasts communicated to guests in adaptation facilities, and with an exception for works communicated to such guests where this is role of provision of health services in health facilities, respectively (link).
(2) Act No. 20/1966 Coll., on public wellness care.
(3) C-397/01 Pfeiffer, para 113: Thus, when it applies domestic law, and in particular legislative provisions specifically adopted for the purpose of implementing the requirements of a directive, the national courtroom is leap to interpret national law, and then far as possible, in the lite of the wording and the purpose of the directive concerned in order to achieve the upshot sought by the directive and consequently comply with the third paragraph of Article 249 EC (see to that consequence, inter alia, the judgments cited to a higher place in Von Colson and Kamann, paragraph 26; Marleasing, paragraph 8, and Faccini Dori, paragraph 26; meet likewise Example C 63/97 BMW [1999] ECR I 905, paragraph 22; Joined Cases C 240/98 to C 244/98 Océano Grupo Editorial and Salvat Editores [2000] ECR I-4941, paragraph thirty; and Instance C 408/01 Adidas-Salomon and Adidas Benelux [2003] ECR I-0000, paragraph 21).
(4) Nález Ústavního soudu České republiky zed ne 29.xi.2011 sp. Zn. Two.ÚS 1658/2011.
5) Article 97 (1) of Act No. 121/2000 Coll., on Author's Rights, Related Rights, and on change of several acts every bit amended.
(6) Article 98 (vii) of Act No. 121/2000 Coll., on Author'southward Rights, Related Rights, and on change of several acts as amended.
(7) Commodity 97 (one) to (3) of Act No. 121/2000 Coll., on Writer'southward Rights, Related Rights, and on alter of several acts as amended.
(8) The Committee is listing it as a case of infringement of a treaties under No. 2006/4091. See for instance the 28th Annual Written report on Monitoring the Awarding of EU Law (2010) Annex Three, p.61.

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