Public display of videograms in commercial establishments

On April 10, 2024, the Intellectual Property and Competition, Regulation and Supervision Section of the Lisbon Court of Appeal ruled that commercial establishments must obtain authorization from producers before displaying videograms in their premises, further reinforcing this requirement.

The case in question pertains to the display of videograms in hotel rooms, which the court considers to be a communication to the public and a public performance under articles 178.1.a), 184.2 and 184.3 of the Portuguese Copyright and Related Rights Code (“CDADC”).

I.                    Background

What is a videogram?

A videogram is the recording of images—with or without sound—on a material medium, as well as a copy of cinematographic or audiovisual works (article 176.5 of the CDADC). Essentially, it serves as a medium for intellectual works such as films, series or soap operas, whether domestic or foreign.

Can videograms be used without authorization?

Regarding the producer’s authorization, articles 184.1 and 184.3 of the CDADC provide for the following:

“1. The producer of the phonogram or videogram holds the exclusive right to carry out or authorize, either themselves or through their representatives:

a)       the reproduction of the phonogram or videogram, whether directly or indirectly, temporarily or permanently, by any means and in any form; 

b)      the distribution of copies of phonograms or videograms to the public, the cinematographic display of videograms, as well as their import or export;

c)       the display of phonograms or videograms to the public via cable or wireless so that they can be accessed by anyone from any location and at any time of their choosing;

d)      any use of the phonogram or videogram in a different work;

e)      the communication of phonograms and videograms to the public, including broadcasting by any means and direct or indirect public display in a public place, as defined in article 149.3.

(...) 

3 - When a commercially published phonogram or videogram, or its reproduction, is used for any form of public communication, the user must pay, in return for the authorization provided for in subparagraph 1.e), an equitable and unique remuneration, to be divided equally between the producer and the artists or performers, unless otherwise agreed.

4 - The authorization for acts of public communication of works incorporated into commercially published phonograms or videograms, as provided for in articles 205.3 and 205.4, may be collectively managed, with extended effects, by the collective management entities that represent phonogram and videogram producers, applying for this purpose the provisions of articles 36-A and 36-B of Law 26/2015 of April 14, in its current wording.”

To summarize, if a commercial establishment displays a videogram to the public, the producers of that videogram are entitled to receive an equitable and unique remuneration, which is to be divided equally between the producers and the artists or performers, unless otherwise agreed.

The ruling specifically pertains to the display of videograms on televisions placed for public viewing in the rooms and public or common areas of a hotel. However, the same rule also applies to other commercial establishments that display videograms to the public.

II.                  To which entities does this obligation apply?

·       Hotels

·       Cafés

·       Restaurants

·       Ready-to-wear clothing stores

·       Supermarkets

·       Gyms

·       Other commercial establishments

In its ruling, the Lisbon Court of Appeal:

·       held that the distribution of a signal via televisions by a hotel to guests staying in the rooms of that establishment, regardless of the transmission technique used, constitutes an act of public communication, within the meaning of articles 184.1.c) and 184.3 of the CDADC;

·       considered that the private nature of hotel rooms does not prevent the communication of a work through televisions from constituting an act of public communication within the meaning of the same article, as it involves a new public audience that the hotel owner enables to hear or see the work for a profit and an economic benefit; and 

·       stated that it is not mandatory for the claimant, a collective management entity and representative of videogram producers, to prove which works of its members were specifically broadcast or which specific producers it represents, as it is sufficient to prove that the establishment in question publicly displays videograms—through televisions or other digital means—without the required authorization.

III.                What should be considered and what is reinforced with this ruling?

a)       The mapping of works protected by intellectual property rights (“IPR”), such as movies, TV series or soap operas (whether domestic or foreign), as well as music and software, and their use by commercial establishments in their various areas of activity, should be part of an integrated management strategy for IPR assets.

b)      If the user does not own the works, they must obtain a license or authorization from the videogram producers or their representatives, such as the Association for the Management of Authors, Producers and Publishers’ Rights (“GEDIP”), for the public display of videograms in their establishments, paying the corresponding equitable remuneration due.

c)       If applicable, use should be made of the protocols or agreements that the GEDIP has entered with certain tourism sector associations, as they may provide the most favorable conditions and rates for licensing the rights in question.

d)      If there is an inspection, it is crucial to cooperate with the inspection and verification activities carried out by the GEDIP or other collective management entities of copyright and related rights, providing them with any information and documentation they request.

e)      It is important to avoid using any technical means that may change, modify or reproduce videograms broadcast by television channels, as such actions may be considered a new use of the works, which requires separate authorization.