Go figure: It’s clear that there’s plenty of confusion to go around for those who might imagine that courts help society sort out its laws in some kind of common sense way. Just look at a recent ruling by the European Court of Justice, declaring that hoteliers now must pay royalties for broadcasting music in guest rooms. At the same time, though, the court handed down a separate ruling that exempted dentists from paying royalties for the music played in their offices.
European copyright law requires that royalties be paid to collection societies for the use of copyrighted music “in communication with the public.” Private use of copyrighted music is not subject to this requirement. This approach led the European Court to decide Irish hoteliers no longer are exempt from paying royalties for providing radios and TVs in guest rooms; they previously were understood to be private spaces. The action brought by Phonographic Performance Ireland Ltd, an Irish performing rights society, sought declaration that the exemption in Ireland was a breach of EU law. The European Court agreed and found that music is broadcasted to an “indeterminate number of potential listeners” for a “profit-making nature” in a hotel, therefore, use of copyrighted music in a hotel guest room should be considered “public” when evaluating royalties.
The court found that, by providing TV broadcasts and radios in guest rooms, hoteliers offered additional services that affect hotels’ reputation and price, thus, they should be required to pay royalties for such use. The Irish Hotel Federation has sharply disagreed with this decision because of the potential for operational costs to increase as much as 3 million Euros a year in Ireland. The recording rights society still must get the High Court to make its ruling final and to negotiate the tariff to be imposed, which the group’s chief executive, Dick Doyle, says should be 1 Euro or so per room per week.
Meantime, in a different action brought by Societa Consortie Fonografici, an Italian collection society, the European Court ruled that dentists need not pay royalties for playing music in their offices because this is a private broadcast. The court noted in its ruling that patients visiting a dental office go there to receive treatment and “the broadcasting … is not a part of dental treatment,” nor are such musical airings profit-making. The Italian Dental Association praised the ruling, saying this exemption could save some dentists as much as 800 Euros a year.
The two rulings hinge on the court’s interpretation of a “public” use, which can be summarized as a broadcast to an audience that cannot be measured accurately for the purpose of profit. Seeing these mixed rulings, smart money would look for an increase in actions brought by collection societies against different businesses that play music.