PPI, the official licensing and collection body for sound recording producers, is seeking a declaration that Ireland, by adopting section 97 of the Copyright and Related Rights Act 2000 (the “Act”), is in breach of its obligation to properly implement the Rental Directive, and seeks damages accordingly. The Act exempts hotels and guesthouses from having to make a payment to the owners of sound recordings where such recordings are made available to residents in bedrooms or as part of an amenity provided exclusively for residents. The exemption does not apply to recordings made available in areas accessible to the general public, such as a hotel bar, or areas for which there is a discrete admission charge, such as nightclubs. PPI alleges that, by allowing this exemption, Ireland has not complied with the obligations under the Rental Directive.

The Rental Directive requires that Member States give phonogram producers a right to claim a single equitable remuneration when a phonogram recording is communicated to the public. The primary issue to be decided by the High Court is whether a hotel or guesthouse which provides TV or radio sets in guest bedrooms and distributes a signal received centrally is a “user” making a “communication to the public” in terms of the Rental Directive.

PPI contended that the distribution by a hotel operator of a signal by means of television sets in guest bedrooms is a “communication to the public”. It relied on the decision in SGAE v Rafael Hoteles SA [2006] ECR I-11519 which ruled that a hotel’s distribution of a signal to guest bedrooms is a “communication to the public” within the meaning of the European Copyright in the Information Society Directive 2001/29/EC (the “Copyright Directive”) and argued that the High Court is obliged to interpret the concept and phrase “communication to the public” in a uniform way. The State argued that, as the interpretation of EU law must take into account the context of the provision and purpose of the legislation in question, the interpretation of “communication to the public” given in the Rafael Hoteles case is not applicable.

In addition, the State submitted that the right of the owner of a sound recording to a “single equitable remuneration” is already provided for as sound recording producers receive payment from broadcasters who use the works. The State also argued that the privacy exception provided for in the Rental Directive should apply to sound recordings made available in guest bedrooms.

The Court agreed with the State that there are significant differences between the rights being protected by the Rental Directive and the Copyright Directive. The Copyright Directive is concerned with the exclusive right of authors to authorise or prohibit any communication to the public of their works, including the “making available to the public” of their works. In contrast, the Rental Directive is concerned to ensure that sound recording producers have the right to receive equitable remuneration for use of their work. On this basis, the autonomous and uniform meaning of “user” and “making available to the public” must be determined with regard to the context in which they are used in the Rental Directive and the Court could not simply apply the interpretation given in the Rafael Hoteles case.

As such, the following questions were referred to the Court of Justice of the European Union for determination:

  1. Is a hotel operator which provides in guest bedrooms televisions and/or radios to which it distributes a broadcast signal a “user” making a “communication to the public” of a phonogram which may be played in a broadcast for the purposes of Article 8(2) of Codified Directive 2006/115/EC of the European Parliament and the Council of 12th December, 2006?
  2. 2. If the answer to paragraph (i) is in the affirmative, does Article 8(2) of Directive 2006/115/EC oblige Member States to provide a right to payment of equitable remuneration from the hotel operator in addition to equitable remuneration from the broadcaster for the playing of the phonogram?
  3. 3. If the answer to paragraph (i) is in the affirmative, does Article 10 of Directive 2006/115/EC permit Member States to exempt hotel operators from the obligation to pay “a single equitable remuneration” on the grounds of “private use” within the meaning of Article 10(1)(a)?
  4. 4. Is a hotel operator which provides in a guest bedroom apparatus (other than a television or radio) and phonograms in physical or digital form which may be played on or heard from such apparatus a “user” making a “communication to the public” of the phonograms within the meaning of Article 8(2) of Directive 2006/115/EC?
  5. 5. If the answer to paragraph (iv) is in the affirmative, does Article 10 of Directive2006/115/EC permit Member States to exempt hotel operators from the obligation to pay “a single equitable remuneration” on the grounds of “private use” within the meaning of Article 10(1)(a) of Directive 2006/115/EC?