The CJEU declares that non-EU performers cannot be excluded from remuneration for the public communication of phonograms

In its resolution of September 8, the Court of Justice of the European Union (“CJEU”) examined whether, based on reciprocity, a Member State can exclude performers from States outside the European Economic Area (“EEA”) from the right to a single equitable remuneration, as recognized for phonogram performers and producers under Article 8.2 of Directive 2006/115 of the European Parliament and of the Council of 12 December 2006 on rental right and lending right and on certain rights related to copyright in the field of intellectual property (“Directive 2006/115”).

This issue arises in a dispute between two collective management entities in Ireland: Recorded Artists Actors Performers Ltd (“RAAP”), responsible for managing the rights of performers, and Phonographic Performance Ireland Ltd (“PPI”), which represents the rights of phonogram producers. Both entities entered into an agreement regulating how fees payable in Ireland by users to PPI for playing recorded music in public, in bars or other public establishments, or broadcasting it,  must be shared with performers and, consequently, be paid on by PPI to RAAP.

RAAP believes that, under Article 8.2 of Directive 2006/115, all the fees payable must be distributed between the phonogram producers and the phonogram performers, regardless of their nationality or place of residence, while PPI claims that, if RAAP’s position were accepted, all performers in third States would always receive equitable remuneration in Ireland, contradicting Irish intellectual property regulations, which do not permit it when Irish performers are not entitled to receive equitable remuneration in those third States (e.g., USA).

In this context, in the first two questions for a preliminary ruling, the referring Irish court raises whether, in light of the WIPO Performances and Phonograms Treaty (“WPPT”), Article 8.2 of Directive 2006/115 precludes Member States from excluding non-EEA performers from the right to a shared equitable remuneration between phonogram producers and performers in their national law, with the sole exception of performers living in the EEA and those whose contribution to the phonogram took place in the EEA.

The CJEU starts by clarifying that, since Directive 2006/115 does not refer to Member States’ right to determine the meaning of the term “relevant performers,” it must be interpreted autonomously and uniformly throughout the European Union in accordance with: (i) the wording of Article 8.2 of Directive 2006/115, which does not establish any requirement relating to performers’ nationality or place of residence; (ii) its context; and (iii) the objectives sought, including to harmonize the protection of performers in line with the international conventions in force. The WPPT requires the EU and its Member States to grant the right to a single equitable remuneration to performers and phonogram producers who are nationals of EU Member States as well as of other WPPT signatory states.

Accordingly, on the first two questions for a preliminary ruling, the CJEU ruled that in light of the WPPT, Article 8.2 of Directive 2006/115 precludes Member States from excluding non-EEA performers from the right to part of the shared single equitable remuneration.

Reservations to the WPPT and reciprocity

In the third question for a preliminary ruling, the Irish court asks whether the WPPT and Article 8.2 of Directive 2006/115 must be interpreted as meaning that the reservations notified by third States under the WPPT, limiting the right to a single equitable remuneration on their territories, as set out in Article 15.1 of the WPPT, mean that Member States can impose limitations on the rights of third state nationalsin the European Union, as established in Article 8.2 Directive 2006/115 .

The CJEU says it should not. It clarifies that reservations notified by third states do not in themselves lead to limitations of the right to a single equitable remuneration for those third state nationalsin the European Union. However, it reflects that, in these situations, reciprocity can be reasonable to preserve fair conditions of involvement in the recorded music business. After that right was recognized in Article 8.2 of Directive 2006/115, the decision on limitation is not up to national states; the EU has exclusive external competence to determine whether that limitation should be applied. 

Furthermore, the CJEU concludes that, under Directive 2006/115, the phonogram producer cannot be the only party to receive the remuneration set out in Article 8.2 without sharing it with the performer who contributed to the phonogram. Directive 2006/115 makes it clear that Member States may establish the conditions to make that distribution, but they must always do so.

Nora Oyarzábal and Paula Conde