the matter at hand

Recorded Artists Actor Performers Ltd (“RAAP”) is a collective rights management organisation for performers, whereas the Phonographic Performance (Ireland) Ltd (“PPI”), is a collective rights management organisation for phonogram producers. RAAP and PPI entered into an agreement, which stipulates that fees payable in Ireland for the playing in public and broadcasting recorded music, are paid by the user to PPI and PPI pays the part meant for the performers to RAAP.

Irish law, the Copyright and Related Rights Act 2000 (“CRR Act”), provides that the user pays a single equitable remuneration to a collective rights management organisation which must be shared between the phonogram producer and the performer. RAAP and PPI are in disagreement about the fees paid to PPI in cases where the music played was performed by a person who was neither a national nor a resident of an EEA member state (“Third State Performers”). RAAP took the view that the nationality and residence of performers is irrelevant in this regard.

PPI, holds the view that Third States Performers are not entitled to receive a share of the fees in Ireland. Paying Third State Performers for the use in Ireland of phonograms to which they have contributed, would fail to have regard to the principal of international reciprocity. Third State Performers would be paid in Ireland in any event, although Irish performers do not (or to a very limited extent) receive equitable remuneration in those third states. Of particular relevance is that the US is not a contracting party to the Rome Convention. EU (and thus Irish) performers do not (or to a very limited extent) receive an equitable remuneration from the US. Furthermore, PPI’s view may give rise to remuneration for the producer which is not shared with the performer. As RAAP deemed the amounts paid to be inadequate, it initiated legal proceedings.

The High Court (Ireland) considered that Irish applicable law precludes Third State Performers, “with the result that the phonogram producers, including those established outside the EEA, receive the totality of those fees” (paragraph 38). However, the Hight Court doubted whether such national legislation was compatible with Article 8(2) of the Rental and Lending Rights DirectiveDirective 2006/115/EC of the European Parliament and of the Council of 12 December 2006 on rental rights and lending right and on certain rights related to copyright in the field of intellectual property 2006/115 and asked the ECJ for a preliminary ruling.

the judgment of the ecj

The first and second question, in essence raise the issue of how Article 8 of Directive 2006/115 should be interpreted in the light of the purpose and objective of the international agreements, the Treaty establishing the European Economic Community (“Rome Convention”) and/or the WIPO Performances and Phonograms Treaty (“WPPT”). In particular, whether this article precludes Member States to exclude as a relevant performer, performers who are nationals of States outside the EEA, with the sole exception of those who are domiciled or resident in the EEA and those whose contribution to the phonogram was made in the EEA.

First, the ECJ considers that Article 8(2) Directive 2006/115 entails a clear obligation to grant performers and producers the right to equitable remuneration to be shared between them. The provision refers to the 'relevant performers', but does not specify whether this refers only to Member State performers or also to Third State Performers.

The ECJ refers to i.e. the judgments HK Danmark (C-335/11, C-337/11) and reiterates that Article 8(2) of the Directive must be interpreted, as far as possible, in a manner consistent with the  WPPT (paragraph 62).

Article 4(1) WPPT provides that each contracting party must grant this right without distinction to its own nationals and to 'nationals of other Contracting Parties' within the meaning of Article 3(2) WPPT. The term ‘nationals of other Contracting Parties’ refers to those performers and producers who would meet the criteria for eligibility for protection provided under the Rome Convention and that the terms appearing in those criteria have the scope of ‘performers’ as defined in Article 2 of the WPPT (paragraph 64-65).

It follows that the right to a single equitable remuneration - stipulated in Article 8(2) of Directive 2006/115, which guarantees the application of Article 15(1) WPPT in EU law - cannot be limited by the national legislature solely to nationals of the Member States of the EEA (paragraph 68). This obliges the EU and its Member States to grant the right to a single equitable remuneration not only to performers and phonogram producers who are nationals of Member States of the European Union, but also to those who are nationals of other contracting parties to the WPPT. 

The ECJ holds that according to Article 15(3) WPPT contracting parties may give notification that it does not recognise the right to equitable renumeration or will limit the application thereof in its territory. The EU, its member states and a large number of third states which are contracting parties to the WPPT have not given such notifications. Consequently, they are mutually bound by Article 4(1) and Article 15(1) WPPT (paragraph 70).

Accordingly, the ECJ concludes that “Article 8(2) of Directive 2006/115 must, in the light of Article 4(1) and Article 15(1) of the WPPT, be interpreted as precluding a Member State from excluding, when it transposes into its legislation the words ‘relevant performers’ which are contained in Article 8(2) of the directive and designate the performers entitled to a part of the single equitable remuneration referred to therein, performers who are nationals of States outside the EEA, with the sole exception of those who are domiciled or resident in the EEA and those whose contribution to the phonogram was made in the EEA” (paragraph 75).

The third question addresses, in essence, whether Article 15(3) WPPT and Article 8(2) of Directive 2006/115 must be interpreted as meaning that reservations notified by third states (on the basis of Article 15(3) WPPT that have the effect of limiting on their territories the right to a single equitable remuneration, may lead in the European Union to limitations, in respect of nationals of those third states.  

This question specifically relates to the rights of US performers, as the US has declared on the basis of Article 15(3) WPPT that it does consider itself bound only to a limited extent by Article 15(1) WPPT (paragraph 78).

Article 4 (2) WPPT must be interpreted in the light of the relevant rules of international law that are applicable in the relations between the contracting parties. Those rules include the principle of reciprocity codified in Article 21(1) of the Vienna Convention on the Law of Treaties. The ECJ states that “under that principle, a reservation entered by a contracting party with regard to the other contracting parties modifies the provision of the international agreement to which it relates for the reserving State in its relations with those other parties and modifies that provision to the same extent for those other parties in their relations with the reserving State” (paragraph 79).

Pursuant to the relevant rules of international law, the European Union and its Member States are according to the ECJ not required to grant, without limitation, the right to a single equitable remuneration to nationals of a third State which, by means of a reservation notified in accordance with Article 15(3) of that international agreement, excludes or limits the grant of such a right on its territory, nor to nationals of a third State which is not a party to the WPPT (paragraph 80-81).

A this regard, the ECJ notes that the refusal of third states to grant a single equitable remuneration “may have the consequence that nationals of Member States who operate in the – frequently international – recorded music business do not receive an adequate income and have greater difficulty in recouping their investments”,  which constitutes “an objective in the public interest capable of justifying a limitation of this right provided for in article 8(2) of Directive 2006/1115”.

However, the Court explains that reservations notified by third states on the basis of Article 15(3) WPPT notified by third States do not in themselves limit the right of those performers from third States to a single equitable remuneration in the European Union.

The ECJ notes that the right to equitable remuneration is a right related to copyright and therefore protected by Article 17(2) of the CharterCharter of Fundamental Rights of the European Union [2000/C 364/01]. This entails that any limitation on the exercise of that right related to copyright must be provided for by law (Article 52(1) of the CharterCharter of Fundamental Rights of the European Union [2000/C 364/01]), which implies that “the legal basis which permits the interference with that right must itself define, clearly and precisely, the scope of the limitation on its exercise”. The mere existence of a reservation notified on the basis of Article 15(3) WPPT does not fulfill that requirement, as does not enable Third State Performers to ascertain in precisely “ what way their right to a single equitable remuneration would, consequently, be limited in the European Union”. For that purpose a clear rule of EU aw itself would be necessary (paragraph 87).

As a result, the ECJ rules that “reservations notified by third states (on the basis of Article 15(3) WPPT that have the effect of limiting on their territories the right to a single equitable remuneration, do not lead in the European Union to limitations of the right provided for in Article 8(2) of Directive 2006/115, in respect of nationals of those third States, but such limitations may be introduced by the EU legislature, provided that they comply with the requirements of Article 52(1) of the CharterCharter of Fundamental Rights of the European Union [2000/C 364/01].” Article 8(2) of Directive 2006/115 therefore precludes a Member State from limiting the right to a single equitable remuneration in respect of performers and phonogram producers who are nationals of those third States (paragraph 91).

In respect to the fourth question the ECJ concludes that if follows from the wording of Article 8(2) of Directive 2006/115, that both performers and phonogram producers are entitled to a single equitable remuneration and that the exclusion of certain categories of performers from enjoyment of any remuneration for the use of phonograms or reproductions thereof to which those performers have contributed necessarily compromises observance of that right (paragraph 93). Article 8(2) of Directive 2006/115 must thus be interpreted as “precluding the right to a single equitable remuneration for which it provides, from being limited in such a way that only the producer of the phonogram concerned receives remuneration, and does not share it with the performer who has contributed to that phonogram” (paragraph 96).