Analysis: “Clash of Performers and Producers at the Grand Chamber: the shares of remuneration each actor is entitled to when music is broadcast or played in public” by Enrique Arnaldos
On Tuesday 4 February, the Grand Chamber of the Court of Justice of the EU held its hearing in Recorded Artists Actors Performers (C-265/19), pursuant to a request for a preliminary ruling made by the High Court of Ireland.
That referring court had doubts on the interpretation of EU Law, namely Directive 2006/115 on rental right and lending right and on certain rights related to copyright in the field of intellectual property, in the context of proceedings between Recorded Artist Actors Performers Limited (the ‘Performers’) and Phonographic Performance (Ireland) Limited (the ‘Producers’).
Performers and Producers: must they always share equitable remuneration?
The dispute relates to the entitlement criteria for shares of remuneration from publicly playing or broadcasting recorded music for producers on the one hand, and performers, on the other.
Under the Irish Copyright and Related Act 2000 (‘CRA’), a performer is not entitled to claim a share of the equitable remuneration unless he or she is an Irish citizen or domiciled or resident in Ireland, or domiciled or resident in an EEA country. The main issue at stake in the proceedings is if excluding certain performers from the benefit of a share in equitable remuneration further to that national legislation which requires the performer to be resident is consistent with Article 8(2) of the Directive in circumstances where the producer will on the other hand be paid when the sound recording is first lawfully made available in Ireland or the EEA or if resident there.
Can the principle of ‘national treatment’ in international agreements apply?
In this context, the parties argued whether it was possible to interpret the Directive in the light of international agreements: the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (the ‘Rome Convention’) – of which the European Union is not a party – and the WIPO Performances and Phonograms Treaty 1996 (the ‘WPPT’). In particular, they raised the principle of ‘national treatment’, contained in both international instruments, which would entitle performers to a share of the remuneration for recorded music, even if domiciled outside the EEA.
Furthermore, and only if it was agreed that the provisions of the WPPT may be used to interpret the Directive, it was questioned, as suggested by the defendants, whether the Irish regime is to be understood as a reservation ex Article 15 WPPT, such as the reservation entered by the United States.
Arguments of the parties at the hearing
Throughout the hearing, the Performers submitted, inter alia, that the CJEU was competent to interpret the Directive in a way that considered the purposes of the WPPT and the fact that the WPPT forms part of the EU legal system, insofar the EU is a party to that treaty. Likewise, the competence of the CJEU to produce such an interpretation would derive from the EU’s exclusive competence on common commercial policy, in relation to its competence to enter into international agreements, both regulated under Article 3 TFEU. This interpretation would be in line with the CJEU’s Opinion on the Marrakesh Treaty (Opinion 3/15).
The Performers argued on that basis that a correct reading of Article 8(2) of the Directive should lead to the conclusion that the publication of a recording by a producer ‘triggers an automatic right’ for the performers. They submitted that the Irish system did not imply the existence of a reservation to WPPT, but an inadequate transposition of its obligations under WPPT: they argued that “no application of Article 4(2) cannot be categorised as a response” (…) “what Ireland has done is taken an indivisible share and divided it’”.
In turn, the Irish Government referred to the overturning of the Opinion of Advocate General Tizzano in SENA (C-245/00), and submitted that not only does the WPPT give rise to direct effect, but that the CJEU has expressly stated that the Rome Convention does not form part of the EU legal order. In this line, the Irish Government submitted that ‘if all performers were to receive a share in equitable compensation, this would have been expressly stated in the Directive’. The Irish Government underscored that, on the contrary, the drafters of the Directive used the term ‘relevant’ when referring to performers. Likewise, it was argued that the CJEU should not obtain interpretative assistance from a term [national treatment] that does not exist in the Directive and that the target of the Directive is economic actors within the EU and not outside the Community.
The Producer’s defence aligned with the views of the Irish State that the Performers ‘confuse the right and the qualification for that right’. It was also argued that the Member States were entitled to reservations as the approval of the WPPT concerned competences of both the Member States and the EU, and that there is no principle which allows for detailed provisions of the Rome Convention and the WPPT to be imported into the Directive.
Finally, the Commission’s support for the Performers deserves highlighting. The Commission’s agent argued that a third party national shall not be excluded from the equitable compensation and that this interpretation of the Directive goes in line with the obligations of the EU under the WPPT. The Commission also submitted that the CJEU has twice rejected that Member States have total freedom to act in the field on intellectual property: in the Opinion on the Marrakesh Treaty (Opinion 3/15) and in Commission v Council (C-114/12) and that such freedom had been in any case superseded by the adoption of the Directive. The Commission’s agent expressly stated that an interpretation of the Directive must not “fragment the internal market” and that “in the view of the Commission, it is a fundamental right to obtain fruits from your creative work” especially in the field of “highly protected rights” such as intellectual property rights.
The Advocate General’s Opinion is expected to be handed down in the following months.
Enrique Arnaldos is a litigation and dispute resolution attorney at Uría Menéndez. In addition to Spanish and international commercial litigation, he is dedicated to European Union Law and takes part in proceedings before the Court of Justice and the General Court of the European Union. He also lectures on European Union Law and European Union Procedural Law at the Instituto Superior de Derecho y Economía and is an Associate Professor of Comparative Contract Law at IE University.