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In its judgment in case C-147/19, the Court of Justice of the European Union (“CJEU”) concluded that users are not required to pay the single equitable remuneration as set out in Article 8, paragraph 2 of Directive 2006/115 (the “Directive”) for performers or phonogram producers when they publicly communicate audiovisual recordings containing the fixation of audiovisual works including phonograms or reproductions of phonograms.

When the Advocate General’s Conclusions were released, we published a post in this blog summarizing the facts and circumstances that gave rise to the main dispute and highlighting the doubts that led the Supreme Court to refer questions for preliminary ruling in this case. To make this post easier to follow, we summarize those questions below.

The case in which the questions were referred for preliminary ruling arose from a dispute between the collective rights management entities Asociación de Gestión de Derechos Intelectuales (“AGEDI”) and Artistas, Intérpretes o Ejecutantes, Sociedad de Gestión de España (“AIE”) and Atresmedia Corporación de Medios de Comunicación, S.A. (“Atresmedia”). According to AGEDI and AIE, the acts of public communication and reproduction of phonograms synchronized in movies broadcast by the television channels operated by Atresmedia constitute unauthorized acts of reproduction and public communication of these phonograms, and they requested 17 million euros in compensation.

After the case was escalated to the Supreme Court, it decided to refer two questions to the CJEU to clarify (i) the interpretation of the concept of “reproduction of a phonogram published for commercial purposes” under Article 8 of the Directive and, in particular, whether it includes the reproduction of a phonogram published for commercial purposes in an audiovisual recording containing the fixation of an audiovisual work; and (ii) whether a positive answer entails an obligation to pay a single equitable remuneration for those who perform those acts of public communication.

The CJEU clarifies that the issue disputed in this case is not the act of synchronization of phonograms in an audiovisual work itself, which took place in this case with the required authorization and prior payment of a remuneration. The question is whether the subsequent public communication of the audiovisual recordings containing the fixation of the audiovisual work in which the phonograms were included means the artists, performers and phonogram producers in question are entitled to receive a single equitable remuneration.

We recall that this obligation for users publicly communicating a phonogram published for commercial purposes to pay a single equitable remuneration is set out in Article 8, paragraph 2 of Directive 2006/115. According to the CJEU, first it must be determined whether a recording containing the fixation of an audiovisual work such as that of the main dispute should be classified as a phonogram.

Regarding the interpretation of the concept of “phonogram” within the meaning of the Directive and whether it includes the disputed audiovisual recordings, the CJEU states that this is an autonomous concept that must be interpreted autonomously and uniformly throughout the EU. The interpreting criteria will, therefore, be the wording of the provision, its context (i.e. its origin and international law) and the aims of the regulations of which it is a part. 

As the Advocate General did in his conclusions, the CJEU refers to the Rome Convention of 1961, which, although it is not part of EU law, has indirect effects. In the wording of Article 3, a phonogram is any “exclusively aural” fixation of sounds of a performance or of other sounds, from which the CJEU deduces that this does not include a fixation of images and sounds as in the concept of phonogram as it is not “exclusively aural.” Neither the extension of the concept of phonogram by the WPPT nor the agreed statement of the WIPO suggests that the fixation of sounds incorporated in a cinematographic or other audiovisual work is included in the concept of phonogram. 

In this context, the CJEU’s interpretation of the provisions is that a phonogram included in an audiovisual work loses its status as a phonogram insofar as it forms part of that work, that is, that it has been synchronized in it (which, we should not forget, must be done based on adequate contractual arrangements, as in the case discussed). The CJEU states that in no way does this affect any of the rights on those phonograms if they are used independently from the audiovisual works in which they were incorporated, which is not the case here.

The CJEU thus concludes that publicly communicating audiovisual recordings containing an audiovisual work in which phonograms have been synchronized does not generate a right — or a payment obligation for users — to a single equitable remuneration.

Perhaps aware of the significant consequences of this resolution for authors and users in the musical and audiovisual setting, or to justify its decision, before reaching this conclusion, the CJEU recalled that the interpretation performed in no case disregards the aims of the Directive, which seeks to guarantee the continuity of the creative and artistic work of authors, artists and performers, on the one hand, and the general interest in accessing and operating those phonograms, on the other. Again, the necessary balance that must be guaranteed between private and public interests is on the table. 

Authors: Marta Zaballos and Nora Oyarzabal

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