Intellectual property and broadcasting organizations

Introduction

In previous blog entries, we discussed the transposition through Royal Decree-Law 24/2021, of November 2 (“RD-L 24/2021” or the “RD-L”), of Directive (EU) 2019/790, of 17 April 2019, on copyright and related rights in the Digital Single Market (“Directive 2019/790”). In particular, we addressed the transposition regarding the (i) limits to rights and the measures aimed at ensuring wider access to contents here; and (ii) measures seeking to ensure the proper functioning of the intellectual property rights market here.

RD-L 24/2021 did not only transpose Directive 2019/790, but also Directive (EU) 2019/789, of 17 April 2019, laying down rules on the exercise of copyright and related rights applicable to certain online transmissions of broadcasting organizations and retransmissions of television and radio programs (“Directive 2019/789” or the “Directive”). As with Directive 2019/790, most of the transposition of Directive 2019/789 can be found in title V, fourth chapter, of RD-L 24/2021 (articles 76 to 79), although some aspects of Directive 2019/789 have been implemented in article 66 and in the fourth transitional provision of the RD-L. Also, note that article 80 of RD-L 24/2021 modified article 20(2)(f) of the Consolidated Text of the Spanish Intellectual Property Act (“TRLPI”) to (i) include the new definition of “cable retransmission” stemming from article 9 of Directive 2019/789; and (ii) provide for the new mediation role of the first panel of the Intellectual Property Commission (“SPCPI”) in paragraph 5(d) of article 194 TRLPI. As a result, the SPCPI will now mediate the disputes arising from the negotiations about retransmission rights for television and radio programs.

The transposition of the Directive, as well as the Directive itself, revolves around three main matters: (i) the application of the “country of origin principle” to ancillary online services provided by broadcasting organizations; (ii) the exercise of retransmission rights for broadcasts other than cable retransmissions; and (iii) the transmission of programs through direct injection by broadcasting organizations. As evidenced by these contents, the transposition is an update of Directive 93/83/EEC, of 27 September 1993, on the coordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission (the “Satellite and Cable Directive”), which regulated certain forms of broadcasting from the pre-digital era. Updating this regulation was necessary to provide for (i) the broadcasters’ ancillary use of programs and other contents online; (ii) new forms of broadcasting beyond the concept of “cable;” and to clarify (iii) the notion of transmission of programs through direct injection.

Ancillary online services provided by broadcasting organizations

The provisions of Directive 2019/789 aim to enhance cross-border access to a greater number of television and radio programs, facilitating the clearance of rights for the provision of online services that are ancillary to the broadcast of certain types of programs. “Ancillary online services” are services in which broadcasting organizations provide to the online audience either certain radio or television programs, or material which is ancillary to them, simultaneously to or immediately after a broadcast for a defined period of time (articles 2(1) of the Directive and 66(7) of RD-L 24/2021). Recital 8 of the Directive clarifies that this ancillary material enriches or expands television and radio programs that have been broadcasted, by previewing, extending, supplementing or reviewing the relevant program. Therefore, the ancillary material is accessible before and after the broadcasts. Spanish lawmakers have not included any qualifications or nuances regarding the ancillary material.

The key aspect of the regulation (articles 76(1) RD-L 24/2021 and 3(1) of the Directive) is that, for the exercise of copyright and related rights, the acts of communicating and making available to the public any works or other protected subject matter, which take place when broadcasting organizations provide to the public any television and radio programs through ancillary online services, will be considered to occur solely in the Member State in which the broadcasting organization has its principal establishment. This rule covers any acts of reproduction necessary for the provision of, access to by the audience, or the use of, the online service for these programs.

This applies to all radio programs. However, regarding television programs, it only applies to news and current affairs programs and to the broadcasting organization’s fully financed own productions, excluding the broadcasts of sports events and works and other protected subject matter included in them. For regulating this matter, EU lawmakers have considered the specificities of the financing and licensing mechanisms for certain audiovisual works, which are often based on exclusive territorial licenses. The same applies to the rights to sporting events, and that is why they are expressly excluded.

According to recital 10 of the Directive, the concept of “broadcasting organizations’ own production” covers productions made by a broadcasting organization using its own resources, including public funds. However, the concept does not include productions commissioned by the broadcasting organization to independent producers or co-productions. Although they raise interpretative concerns, these are important matters that should have been provided in the RD-L.

The country of origin principle facilitates that broadcasting organizations acquire the rights they need to offer their ancillary online services. Since it is considered that the exploitation only occurs in the country in which the broadcasting organization has its principal establishment, there is no need for acquiring the rights in every Member State where the ancillary online service is available. However, Member States must ensure that, when setting the amount of the payment to be made for the rights, the parties consider features of the ancillary online service, e.g., the duration of online availability of the programs provided in that service, the audience-both in the Member State of origin and in the Member States from which the service can be accessed-and the language versions offered (articles 3(2) of the Directive and 76(2) of RD-L 24/2021).

Under article 3(3) of the Directive, the country of origin principle will not undermine the contractual freedom of rightholders and broadcasting organizations to agree, in compliance with EU law, on limits to the exploitation of these rights, including those laid down in Directive 2001/29/EC, on the harmonization of certain aspects of copyright and related rights in the information society (“Directive 2001/29”). In our opinion, Spanish lawmakers did not appropriately reflect this provision in article 76(3) RD-L 24/2021, since it only refers to the limits set out in the TRLPI, but it should have allowed for agreeing on any limits regulated by Member States, and particularly on the limits provided in Directive 2001/29/EC.

Retransmission of television and radio programs

EU lawmakers are aware that currently, aside from cable, operators of retransmission services broadcast by satellite, digital terrestrial, and mobile or closed circuit IP-based networks, as well as through the open internet. This is why Directive 2019/789?like article 66(7) of RD-L 24/2021?provides for a definition of retransmission covering any simultaneous, unaltered and unabridged retransmission, excluding cable distributions within the meaning of the Satellite and Cable Directive, for reception by the public, of an initial transmission from another Member State of television or radio programs, also for reception by the public, as long as: (i) the initial transmission, whether by wire or over the air, not be online; and (ii) a party other than the broadcasting organization which made the initial transmission carry out the retransmission. The concept of retransmission under Directive 2019/789 even covers retransmissions made through internet access services as defined in Regulation (EU) 2015/2120. However, in this case, the retransmission service must be provided through a “managed environment,” meaning an environment in which an operator of a retransmission service provides a secure retransmission to authorized users.

As it was for the Satellite and Cable Directive, the purpose for these new forms of retransmission other than cable is to ensure that rightholders exercise their right to grant or refuse authorization to a retransmission only through collective management organizations. As a result of this mandatory collective management regime, even if rightholders have not transferred the management of the right to a management organization, the collective management organization managing rights of the same category for the territory of the Member State for which the operator seeks to clear rights for a retransmission shall have the right to grant or refuse the authorization for a retransmission for that rightholder (not “to that rightholder” or “al mencionado titular” as wrongly stated in the Spanish version of the Directive and incorrectly reproduced in article 77(2)(I) of RD-L 24/2021).

If in a Member State there is more than one collective management organization managing rights of that category, it shall be for the Member State in which the operator of a retransmission service seeks to clear rights for a retransmission to decide which collective management organization or organizations have the right to grant or refuse the authorization for a retransmission. Article 77(3) of RD-L 24/2021 provides that, in this case, the Ministry of Culture and Sports will allocate the management “to any of the organizations by issuing a ministerial order.” Apparently, this excludes the possibility of transferring the management to more than one organization. Also, empowering the Ministry of Culture and Sports to make this decision without any statutory framework for the exercise of this decision-making power could lead to highly arbitrary decisions.

The mandatory collective management regime applies to any rightholders other than broadcasting organizations, since these rightholders should be able to exercise their rights to their broadcasts or retransmissions individually (articles 5 of the Directive and 78 RD-L 24/2021). The Directive does require broadcasting organizations and operators of retransmission services to negotiate in good faith.

The Directive seeks that Member States ensure the possibility of requesting assistance from one or more mediators if there is no agreement (i) between the collective management organization and the operator of a retransmission service when negotiating rights subject to mandatory collective management; or (ii) between the operator of a retransmission service and the broadcasting organization regarding an individual authorization for retransmission. In the Spanish legal system, this safeguard is implemented by allocating to the SPCPI the power to mediate in these cases (article 194(5)(d) TRLPI).

Article 7 of the Directive allows Member States to extend the Directive provisions regarding television and radio programs, as well as the relevant Satellite and Cable Directive provisions, to situations where both the initial transmission and the retransmission take place only within the territory of the same Member State. Under Spanish law, as in article 20(4)(d) TRLPI in compliance with article 9(3) of the Satellite and Cable Directive, there is a presumption that “when a rightholder authorizes the transmission, satellite broadcasting or initial transmission in Spain of a protected work, it will be considered that the rightholder has agreed not to exercise its cable retransmission rights individually, but to exercise them, if appropriate, for the retransmission of the work in accordance with this article” (article 77(4) TRLPI). This rebuttable presumption that the rightholder waives its retransmission right after it has authorized an initial transmission in Spain does not entail that mandatory collective management be extended automatically to the cases where the initial transmission takes place in the same Member State as the retransmission.

Keep in mind that article 77(4) RD-L 24/2021 only refers to the holder of rights to a “protected work,” so this provision will not apply directly to holders of related rights. Furthermore, the last indent of article 108(1) TRLPI and articles 116(1)(II), 122(1)(II) and the second paragraph of article 126(1)(e) TRLPI all refer to paragraphs 3 and 4 of article 20 TRLPI, i.e., they only cover retransmission by cable. Therefore, for retransmissions other than by cable, Spanish law does not provide for a presumption that rightholders waive the individual exercise of their retransmission rights after an author, performer, producer of phonograms or broadcasting organization have granted authorization for an initial transmission in Spain.

Transmission of programs through direct injection

Direct injection means a technical process by which a broadcasting organization transmits its program-carrying signals to an organization other than a broadcasting organization so that these signals are not accessible to the public during that transmission (see articles 2(4) of the Directive and 66(10) RD-L 24/2021). After receiving these program-carrying signals through direct injection, signal distributors will be in a position to transmit them to the public. Direct injection thus allows broadcasting organizations to indirectly transmit programs to the public. Strictly speaking this is not retransmission, since the initial broadcasting organization does not transmit the program-carrying signals directly to the public: direct injection entails a point-to-point and not point-to-multipoint transmission.

However, there is a strong analogy with retransmission. Therefore, under EU law, signal distributors may also benefit from a mandatory collective management mechanism to clear the rights they need for their transmission. So, according to article 8(2) of the Directive, Member States may provide that Articles 4, 5 and 6 of this Directive apply mutatis mutandis to the exercise by rightholders of the right to grant or refuse the authorization to signal distributors for a transmission carried out through any of the technical means provided in the Satellite and Cable Directive or in Directive 2019/789.

Spanish lawmakers have embraced this possibility, as shown in article 79(2) of RD-L 24/2021. Under this provision, for the granting of an authorization for transmission by a signal distributor, rightholders will exercise their rights exclusively through a collective management organization managing copyright. The provision refers to article 77 of the RD-L if the rightholders have not transferred their rights to a collective management organization. However, unlike article 8(2) of the Directive, the wording of article 77 RD-L 24/2021 does not clearly differentiate between the exercise of the right by broadcasting organizations (for which collective management is voluntary) and by the remaining rightholders (who are subject to mandatory collective management).

In any event, the starting point (articles 8(1) of the Directive and 79(1) RD-L 24/2021) is that when a broadcasting organization?both the Spanish version of the Directive and RD-L 24/2021 mistakenly refer to an “organismo de retransmisión”? transmits by direct injection its program-carrying signals to a signal distributor, without the broadcasting organization itself simultaneously transmitting those program-carrying signals directly to the public, and the signal distributor transmits those program-carrying signals to the public, it will be considered that the broadcasting organization and the signal distributor are participating in a single act of communication to the public regarding which they shall obtain rightholders’ authorization.

Recitals 20 and 21 of the Directive provide certain specificities that perhaps should have been included in the Spanish regulations.

• First, Recital 20 specifies that the participation of the broadcasting organization and the signal distributor in that single act of communication to the public should not give rise to joint liability.

• Second, Recital 20 points out that Member States remain free to arrange for obtaining authorization for this single act of communication to the public, including the relevant payments to be made to the rightholders concerned, considering the respective exploitation of the protected works, by the broadcasting organization and signal distributor, related to the single act of communication to the public.

• Third, Recital 20 notes that if signal distributors provide broadcasting organizations with mere technical means to ensure that the broadcast is received or to improve the reception of that broadcast, the signal distributors should not be considered to be participating in an act of communication to the public. The Directive refers to the Court of Justice of the European Union (“CJEU”) case law. Although it does not expressly mention them, we consider that the Directive refers to CJEU judgments of November 19, 2015, SBS Belgium NV and SABAM (C-324/15) and October 13, 2011, Airfield NV and Canal Digitaal BV v. SABAM (C-431/09) and Airfield NV v. Agicoa Belgium BVB (C-432/09).

• Finally, Recital 21 clarifies that, when broadcasting organizations transmit their program-carrying signals directly to the public, and also simultaneously transmit those signals to other organizations through direct injection, the transmissions by those other organizations constitute a separate act of communication to the public from the one carried out by the initial broadcasting organization.

Transitional regime

The country of origin principle could be avoided by extending the existing agreements on the exercise of the relevant rights for the provision of ancillary online services. Therefore, the Directive applies this principle also to any agreements in force, although providing for a waiting period to give some time to adapt these agreements. The Directive also provides for a transitional time period for broadcasting organizations, signal distributors and rightholders to adapt to the new rules on direct injection.

Article 11 of the Directive provides for a two-year transitional period, starting on June 7, 2021, to adapt to the country of origin principle any agreements in force at that time regarding the exercise of rights for acts of exploitation that take place during the provision of an ancillary online service. Accordingly, these agreements will become subject to the country of origin principle from June 7, 2023, even if they expired after that date. Any authorizations for acts of communication to the public that could be affected by the direct injection provisions in force by June 7, 2021, will become subject to those provisions from June 7, 2025, even if they had a longer term.

Spanish law has correctly implemented the second transitional Directive provision, but not the first. Note that the second paragraph of the fourth transitional provision of RD-L 24/2021 introduces the transitional regime for direct injection. However, the first paragraph of this provision inexplicably refers to the agreements mentioned in article 77 RD-L 24/2021, which are not the ones related to ancillary online services but to the exercise of retransmission rights by rightholders other than broadcasting organizations. The RD-L thus creates a transitional regime for a matter for which the Directive does not require any and, instead, fails to include a transitional regime for one of the two matters for which the Directive requires it.