INTELLECTUAL PROPERTY : DO HOTELS AND DENTISTS HAVE TO PAY RECORD COMPANIES?

What is the difference between a hotel and a dentist's office that both broadcast radio music? The hotel is obliged to pay royalties to record companies, while the dentist is under no such obligation. This is the essence of two separate rulings handed down by the EU Court of Justice, on 15 March, illustrating the institution's interpretation of "communication to the public" within the meaning of EU law.

The first case (C-162/10) concerns the Irish rights collecting society representing music producers (PPL), which brought an action before the High Court against Ireland, claiming the state had acted in breach of EU law by exempting hotel operators from paying fair remuneration for the use of phonograms in hotel bedrooms in Ireland. PPL also sought damages.

In the second case (C-135/10), SCF, the Italian rights collecting society, after failing to work out a compromise with the Association of Italian Dentists, brought an action against Marco Del Corso demanding payment of rights on radio music broadcast as background music in his private dental practice.

"COMMUNICATION TO THE PUBLIC"

The EU Court of Justice examined the two cases from the angle of the 2006 directive on rental and lending rights and certain rights related to copyright. The reasoning used in both cases was similar, but the conclusions are radically different. In both cases, the role of the user and the number of persons who are potential listeners were decisive factors.

In the case of the hotel, "the broadcasting of phonograms by a hotel operator is of a profit-making nature,"...