The CJEU decides on the right of communication to the public in car rental with radio

Monday, 4 of May of 2020

The Court of Justice of the European Union (hereinafter CJEU) in its Judgment of 2 April 2020 (case C-753/18, STIM & SAMI vs. Fleetimanager & NB) has ruled on whether there is an act of communication to the public in those rental vehicles provided by radio.

The present case derives from two different proceedings handled before the Swedish Courts.

On the one hand, STIM (the Swedish organisation which collectively manages copyright in music) filed a claim against Fleetimanager (a motor vehicle rental companies established in Sweden) based on a copyright infringement. STIM claimed that Fleetmanager, by making available to third parties, namely motor vehicle rental companies, vehicles equipped with radio receivers for short-term hires to private clients, contributed to the infringements committed by those companies, which have made musical works available to the public without being authorised to do so. The Court of First Instance held that the hire of vehicles equipped with radio receivers involved a “communication to the public” of musical works so that the authors were entitled to receive a compensation. However, Fleetmanager had not participated in those copyright infringements. Therefore, the action brought by STIM was dismissed. That judgment was upheld on appeal and STIM brought an appeal against the judgment on appeal before the Swedish Supreme Court.

On the other hand, in the proceeding between SAMI (the Swedish organisation managing the related rights of performers) and NB, NB brought an action before the Swedish Patent, Trademark and Commercial Court seeking a declaration that NB was not required, on the basis of the fact that the vehicles which it hires to individuals and entrepreneurs are equipped with radio receivers and CD readers, to pay fees to SAMI for the use of sound recordings. The referred Court ruled that it constitutes a “communication to the public” within the meaning of Article 3.1 of Directive 2001/29, and declared that NB should pay compensation to SAMI. That judgment was overturned on appeal and SAMI brought an appeal against the judgment on appeal before the Swedish Supreme Court.

The CJEU establishes that In order to determine whether the hiring out of vehicles equipped with radio receivers constitutes an act of communication within the meaning of Directive 2001/29, it is necessary to carry out an individual assessment, in the light of a number of complementary criteria, which are not autonomous and are interdependent.

In this regard, the CJEU touch upon the recital 27 of Directive 2001/29, which reproduces, in essence, the joint declaration concerning Article 8 of the WCT confirming 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”.

Taking into consideration the above, the CJEU on a succinctly substantiation establishes that the supply of a radio receiver forming an integral part of a hired motor vehicle, which makes it possible to receive, without any additional intervention by the leasing company, the terrestrial radio broadcasts available in the area in which the vehicle is located differs from acts of communication by which service providers intentionally broadcast protected works to their clientele, by distributing a signal by means of receivers that they have installed in their establishment.

Finally, the CJEU confirms that this interpretation cannot be called into question by the argument that vehicle rental companies make available to their customers spaces which Stim and SAMI describe as ‘public’, namely the passenger compartments of hire vehicles, in which it is possible to enjoy protected works using the radio receivers with which those vehicles are equipped. The provision of such space does not constitute an act of communication. Therefore, the private or public criterion of the place where the communication takes place is irrelevant.

It is certainly surprising that the CJEU’s substantiation is weak and limited to the application of recital 27 of Directive 2001/29. Although it had previously been taken into account by the CJEU, the fact is that, contrary to the CJEU judgment of 26 April 2017 (Case C-527/15 Stichting Brein), the Court does not refer to the argument included in recital 23, in the sense of understanding this right of communication in a broad sense covering all communication to the public not present at the place where the communication originates.