Everybody Needs Good Neighbours: Case 265/19 RAAP v PPI

Thursday 12 August 2021

Tessa Robinson
Gleeson McGrath Baldwin, Dublin

Eileen O’Gorman
Gleeson McGrath Baldwin, Dublin

On 8 September 2020 the Court of Justice of the European Union (Grand Chamber) delivered its judgment in Case C-265/19, Recorded Artists Actors Performers Ltd v Phonographic Performance (Ireland) Ltd and The Minister for Jobs, Enterprise and Innovation, Ireland and the Attorney General. This followed a request from the Irish High Court for a preliminary ruling under Article 267 of the Treaty on the Functioning of the European Union (TFEU).

The case considered neighbouring rights – in particular the right of performers to equitable remuneration shared with phonogram producers – and its applicability to performers who are nationals of third states.

The request for a preliminary ruling concerned the interpretation of Article 8 of Directive 2006/115/EC on rental right and lending right, as well as on certain rights related to copyright in the field of intellectual property, in light of the World Intellectual Property Organization (WIPO) Performances and Phonograms Treaty 1996 (WPPT) in particular.

The request was made during proceedings at the Irish High Court between Recorded Artists, Actors, Performers Ltd (RAAP) and Phonographic Performance (Ireland) Ltd (PPI) concerning the rights of nationals of third states to a single equitable remuneration when they have contributed to a phonogram that is then used in Ireland.

Article 8(2) of Directive 2006/115/EC states:

‘Member States shall provide a right in order to ensure that a single equitable remuneration is paid by the user, if a phonogram published for commercial purposes, or a reproduction of such phonogram, is used for broadcasting by wireless means or for any communication to the public, and to ensure that this remuneration is shared between the relevant performers and phonogram producers. Member States may, in the absence of agreement between the performers and phonogram producers, lay down the conditions as to the sharing of this remuneration between them.’

The plaintiff in the Irish High Court proceedings, RAAP, is a collective management organisation for performers. Formed by performers to represent their interests, it distributes royalties among its members and members of its affiliate associations. The first Defendant, PPI, collects royalties for the recorded music industry. The company collects the public performance royalties for the record industry and pays the performers’ share to RAAP for distribution.

The underlying dispute between the parties concerns interpretation of the contract entered into between RAAP and PPI. The contract purports to regulate how licence fees – that is, the equitable remuneration collected by PPI from the users of sound recordings, for example nightclubs, bars and broadcasters – are to be shared between producers and performers. The interpretation of that agreement, in turn, depends on the correct interpretation of the provisions of Irish law and their interaction with EU law and international agreements.

The dispute between the parties before the Irish Court largely centres on the treatment of licence fees collected in respect of sound recordings featuring non-European Economic Arena (EEA) performers. PPI maintains that such performers are not entitled to any share of the remuneration (notwithstanding that the sound recording itself does attract a licence fee). In effect, the remuneration is to accrue for the benefit of the producer alone. RAAP refutes this, and says that the correct criteria should be whether the sound recording attracts copyright protection: if it does, then any performer whose performance is fixed in that sound recording is entitled to a share of the remuneration – that is, the licence fee. (Judgment of Simons J, delivered on 19 January 2019, para 10).

The Court considered the legal context, citing:

  • the Vienna Convention on the Law of Treaties;
  • the International Convention for the Protection of Performers, Producers and Phonograms and Broadcasting Organisations concluded in Rome on 26 October 1961, which deals with ‘related rights’ or ‘neighbouring rights’, in particular Articles 2, 4, 5 and 17;
  • the WPPT, Articles 1(1), 2, 3, 4, 15, 23(1) and 33;
  • Directive 2006/115/EC; and
  • the Irish Copyright and Related Rights Act 2000.

Interpreting Article 8(2) of the Directive 2006/115/EC, the Court found that the provision does not explicitly state whether the words ‘relevant performers’ refer solely to performers who are nationals of a state in which that Directive applies or whether they equally refer to performers who are nationals of another state. The Court noted that it was clear from Recitals 5 to 7 that the Directive seeks to ensure further creative and artistic work of authors and performers, by providing for harmonised legal protection that guarantees the possibility of securing an adequate income and recouping investments ‘in such a way as not to conflict with the international conventions on which the copyright and related rights law of many member states are based’.

It follows that the concepts in the Directive must be interpreted in a manner consistent with the equivalent concepts contained in those conventions. The Court then noted that under Article 2(a) of the WPPT, the concept of ‘performers’ refers to all persons ‘who act, sing, deliver, declaim, play in, interpret or otherwise perform literary or artistic works or expressions of folklore’. In addition, according to Article 2(b) of the WPPT, a phonogram is, inter alia, the fixation of the sound of such a performance.

The Court found that Article 8(2) of the Directive confers on those persons a right that is compensatory in nature, triggered by communication to the public of the performance of the work fixed on a phonogram published for commercial purposes.

The Court noted that it follows from the provision that the legislation of each Member State must ensure:

(1) that a single equitable remuneration is paid by the user if a phonogram published for commercial purposes of a reproduction of such a phonogram is used for broadcasting by wireless means or for any communication to the public; and

(2) that this remuneration is shared between the performer and the phonogram producer.

The Court concluded that that compensatory right is a right related to copyright (paras 49– 57 of the Judgment of the Grand Chamber).

On the question of whether the performer or phonogram producer should be a national of any EU Member State or domiciled or resident in such state in order to be eligible for the compensatory right identified by the Court, the Court found that if the WPPT is not to be disregarded, Article 8(2) of the Directive cannot be implemented by a Member State in such a way as to exclude from the right to equitable remuneration all performers who are nationals of states outside of the EEA, with the sole exception of those who are domiciled or resident in the EEA or whose contribution to the phonogram was made in the EEA (para 71).

The Court concluded that in the EU, the right to a single equitable remuneration constitutes a right related to copyright. Accordingly, it is an integral part of the protection of IP enshrined in the Charter. Consequently, any limitation on the exercise of that right related to copyright must be provided for by law, which implies that the legal basis that permits the interference with that right must itself define, clearly and precisely, the scope of the limitation on its exercise (paras 85–86).

The decision has been hailed by performers and performers’ groups as a major win on the right to equitable remuneration, especially for United States artists. The RAAP described it as a major milestone for performers and predicted that the ruling would increase performers’ earnings from recordings by up to 30 per cent and could release millions of euro back to performers. The decision clearly has a significant impact for EU-based record companies and labels, which will have to adjust their distribution rules and practices.