July 20, 2020

Article 8(2) of the Related Rights Directive establishes (Directive 2006/115/EC) a remuneration right for performers and producers of phonograms when there is a communication to the public (CTTP) of phonograms published for commercial purposes (or of reproductions thereof).  The Spanish music CMOs AGEDI (which manages this right on behalf of producers) and AIE (which manages this right on behalf of performers) claimed such remuneration in respect of sound recordings embedded into audiovisual works on the grounds that use of such audiovisual works also constitutes use of any incorporated phonograms for the purposes of Article 8(2). The Spanish broadcaster Atresmedia took issue with the claim, arguing that the definition of ‘phonogram’ in Article 2(b) of the WIPO Performances and Phonograms and Treaty applies recordings of sounds only. Atresmedia argued that a phonogram loses its status as a phonogram when incorporated into an audiovisual work, and therefore the right to remuneration does not arise in such case. The Spanish music CMOs brought legal proceedings against Atresmedia for recovery of what they alleged are sums due. The Spanish court referred the question to the CJEU.

“Phonogram” is not defined in the Directive, but it is defined in the 1996 WIPO Performances and Phonograms Treaty (WPPT) as follows: “the fixation of the sounds of a performance or of other sounds, or of a representation of sounds, other than in the form of a fixation incorporated in a cinematographic or other audiovisual work.”

Advocate General Tanchev has advised the CJEU to reformulate the referring court’s questions concerning the fate of rights in a phonogram after it is incorporated into an audiovisual (AV) fixation (a recording of AV work), and to answer those questions as follows:

• The concepts of ‘phonogram’ and ‘reproduction of [a] phonogram’ in EU law do not include an audiovisual work into which a phonogram has been incorporated after authorisation from the relevant rightholder(s);
• When the audiovisual work is communicated to the public by a broadcaster, there is no use or communication to the public of the phonogram under EU law; and,
• As a result, the user does not have to pay a ‘single equitable remuneration’ to the rightholder(s) in the incorporated phonogram when the audiovisual work is communicated to the public under EU law.

The AG’s analysis essentially turns on an interpretation of Article 8(2) of the Related Rights Directive (which dates from 1992 but was codified in 2006) in light of the 1961 Rome Convention and the WPPT. The AG considered the process of “synchronisation” of music into an audiovisual fixation and whether this resulted in the audiovisual fixation being a ‘reproduction of a phonogram’, as well as the subsequent exploitation of that audiovisual fixation by a broadcaster. Further to arguments made by Atresmedia and the European Commission, which intervened in its support, the Advocate General placed significant weight on the fact that incorporation of music into films had to have taken place on the basis of a synchronisation licence.

The AG considered that the legislative history of Article 8(2) of the Related Rights Directive did not support the position of AIE and AGEDI. Moreover, an interpretation of this provision in light of the Rome Convention also did not support the proposition that EU Member States were required to provide a remuneration right for the communication to the public of an AV work into which a phonogram had been incorporated. The WPPT presented a somewhat more difficult analysis given longstanding arguments over the meaning of the definition of phonogram and an Agreed Statement in that instrument – although the legal doctrine was generally supportive of the Atresmedia position. In sum, the AG considered that “Articles 2(b) and 15 of the WPPT as well as the negotiations that led to the final form of those provisions do not support that interpretation or the counterintuitive notion that a phonogram while being part of an audiovisual work would also, at the same time and so incorporated, qualify as a ‘phonogram’”. Interestingly, the AG referred to supportive jurisprudence from the Canadian Supreme Court (while distinguishing potentially contrary caselaw from Australia). The AG also considered impact of the recent ECJ decision in Pelham (Case C-476/17); compared the concepts of reproduction under the Related Rights Directive and the 2001 Copyright Directive; and, turned to the everyday meaning of reproduction by reference to Death in Venice and The Graduate in support of his findings.