AKM v. Zürs.net: a new threat for authors?

0

Abstract

The Court of Justice of the European Union (CJEU) is quickly changing the face of Intellectual Property
as we know it. The recent AKM v. Zürs.net case (C-138/16), by strictly narrowing the definition of “new
public” under Article 3(1) of Directive 2001/29/EC, has the potential of severely weakening the
exclusive nature of the right to communication to the public. The judgment has been heavily criticised,
as it stands in stark contrast with previous case law of the aforementioned Court (I.e. the ITV
broadcasting case). It remains to be seen whether it will preserve its role of legal game-changer in the
future or be quickly replaced by new case law.

The facts

The claimant, AKM, an Austrian copyright collecting society, filed the underlying lawsuit against
Zürs.net , a cable network provider which transmits radio and television broadcasts that have been
previously transmitted by other broadcasters, including the ORF (the national broadcasting
corporation). The proceedings were issued at a time in which the Respondent had 130 subscribers.
The trigger of the legal dispute was Zürs.net’s refusal to provide AKM with information on the number
of subscribers and the content of its own broadcasts. The Respondent based its position on Paragraph
17 (3)(2)(b) of the Austrian Law on copyright, which reads as follows: small broadcasting installations
of less than 500 subscribers cannot be regarded as new broadcasts and therefore do not require a
new authorisation from the rightsholder (in this case the copyright collecting society). The Applicant
challenged this argument by affirming the incompatibility of the cited Austrian provision with the
exclusive right of communication to the public protected by Articles 3(1) and 5 of Directive
2001/29/EC.
The Austrian Commercial Court was, therefore, confronted with the following twofold legal issue, that
it referred to the CJEU:
Are Articles 3(1) and 5 of Directive 201/29 to be interpreted as precluding a national provision, such
as Paragraph 17(3)(2)(b) of the Austrian Law on copyright, which provides that neither
1. A simultaneous and unaltered transmission of programmes broadcast by the national
broadcaster (in this case ORF) in the national territory, nor
2. A broadcast that reaches a number of subscribers that does not exceed 500
are subject to the exclusive right to communication possessed by the original author, and therefore,
do not require that an authorisation must be obtained from him or her before broadcasting the
protected content.

The analysis of the first issue

The Court tackled the underlying issue in two phases. Firstly, it determined whether a simultaneous
and unaltered transmission of broadcasts by the national broadcaster, such as that at issue in the case
at hand (the content of Zürs.net’s broadcasts was initially transmitted by the Austrian national
broadcaster) constitutes a communication to the public within the meaning of Articles 3(1) and 5 of
Directive 2001/29. Article 3(1) of Directive 2001/29 enshrines the exclusive right of authors to
authorise any communication to the public of their work when its communication is made by an
organisation other than the original one. This Article has been interpreted by the CJEU via a two-stage
test comprising two cumulative criteria: an “act of communication” must be made by the Respondent
and this communication must reach a “public”.
The Reha Training case (C-117/15) tells us that every transmission and re-transmission of the
protected works, irrespective of the means and process used, amounts as an act of communication.
As a consequence, the Court concluded that the broadcasting made by Zürs.net, being a retransmission,
qualified as an act of communication.
The paramount element of the dispute is embodied by the second step of this test: was the
communication at hand made to a public? The Court has increasingly expanded the definition of term
“public” in previous case law concerning re-transmissions, such as the one at hand, as follows: “an
indeterminate number of potential recipients which was not taken into account by the authors of the
protected works when they granted the original authorisation for the use of their works’ (Paragraph
45 of the Reha Training case). As a consequence, in order to consider this communication to be made
to a new public, the broadcasts transmitted by Zürs.net had to be aimed to reach a public different
from that for which the broadcasts made by the national broadcaster ORF were. The Court built up its
reasoning as follows: by authorising ORF to broadcast their works, the authors involved had taken into
account the fact that their work would reach all individuals within the Austrian territory. Since the
Respondent operates in Austria, it would have not been possibly reaching a new public because all its
subscribers are found within the national territory. By denying the existence of a new public, the
twofold test fails with the consequence that the re-transmissions of broadcasts made by Zürs.net do
not breach the right to communication to the public and, therefore, do not require an additional
authorisation to be obtained from the author of the works broadcast. This finding of the Court
shockingly steers in the opposite direction as that of the renowned ITV Broadcasting case , where the
Court labelled as a communication to a “new public” the retransmission made by an organisation other
than the original broadcaster by means of an internet stream made available to the subscribers of that
other organisation who may receive that retransmission by logging on to its server, even though
those subscribers are within the area of reception of that terrestrial television broadcast and may
lawfully receive the broadcast on a television receiver. Notwithstanding the freedom of the CJEU from
the principle of stare decisis, one may wonder why such diverging approaches have been employed in
strikingly similar cases and what this means in terms of legal certainty.
What does AKM v Zurs.net mean in practice for the authors involved? When finalizing their contractual
relationship to ORF, they were, without knowing it, automatically authorising an undetermined
number of other broadcasters to transmit their works, so long as these broadcasts would remain on
the Austrian territory. The fact that a contractual relationship between two legal entities was
considered to have spilled-over to other parties, has raised concern among authors and rightsholders
who feel their will to be blatantly disregarded by the Court.

The analysis of the second issue

For what concerns the second issue, the Court was called to determine whether the Austrian legal
provision mentioned above, which states that a small communal antenna installation of less than 500
subscribers is not regarded as a new broadcast, amounts to a “case of minor importance” within the
meaning of Article 5(3)(o) of Directive 2001/29.
The cited provision allows to derogate from Article 3(1) of Directive 2001/29 in cases of minor
importance and, therefore, lifts off the obligation of obtaining an authorisation for the broadcasting
of protected works. Surprisingly, the Court considered Paragraph 17(3)(2)(b) on the Austrian Law on
copyright to amount to an occasion for broadcasters to take advantage of multiple small antennae
installations at the same time by keeping the number of subscribers to 500. As a consequence, the
cumulative abuse of small antennae would lead to everything but a case of small importance and go
against recital 9 of the Directive, which sets out a high level of protection for copyright.
What we can observe in the analysis of the second issue of the case is the inconsistency that
characterized the approach of the Court. While the unaltered re-transmission of broadcasts that have
been previously transmitted by the national broadcaster does not breach the right of communication
to the public, the Court used the importance of protection to authors as the main argument for
rejecting Paragraph 17(3)(2)(b) of the Austrian Law on copyright as an example of exception under
Article 5(3)(o) of Directive 2001/29.

Conclusion

Albeit the complete different nature of the two legal issues, it is the principles invoked as being the
bases of the two reasonings that clash. On one hand we observe a decline in the level of protection to
authors, while on the other we read that the reason why the Austrian provision cannot be said to
apply to cases of minor importance because this would weaken the high level of protection that
authors should receive.
While the second issue relieved rightsholders in Austria, the conclusions drawn by the Court in regards
to the first legal issue have a negative impact on all authors within the Union.
Is the high level of protection that should be granted to the intellectual property of authors, in order
to stimulate the proliferation of creative content, breaking under the weight of this potentially gamechanging
judgment? That remains to be seen, but the absence of a doctrine of binding precedent
leaves some hope that the right of communication to the public will not lose its strength for good

Share this article!

Share.

About Author

Leave A Reply