Court of Appeal: Licence fees appeal by musicians’ body allowed



Court of Appeal
Court of Appeal

The Court of Appeal has allowed an appeal taken by the Recorded Artists Actors Performers Ltd (RAAP) in proceedings taken against a record companies organisation, Phonographic Performance (Ireland) Ltd, over calculation of music license fees.

Background 

The proceedings arose from a dispute as to the distribution of licence fees payable in respect of the playing of sound recordings in public, or the inclusion of a sound recording in a broadcast or a cable programme service. Issues as to the sharing of the licence fees as between the owner of the copyright in the sound recording, the producer, and the performers who have a parallel right in such recordings, referred to as the performer’s right to receive equitable remuneration, were raised in the case. 

The central issue concerned the statutory functions of the organisations which represent producers and performers respectively. RAAP acts on behalf of performers and Phonographic Performance represents producers. RAAP contended that the statutory obligation to determine the payments to be made by way of equitable remuneration to performers rests with it, and that it is entitled to receive all remuneration collected by Phonographic Performance due to performers and, upon receipt of same, to distribute those monies.

Directive 92/100/EEC was cited. This Directive provided for a shared right of equitable remuneration as between the owner of the copyright in a sound recording and the performers, and has been codified in the 2006 Directive on rights relating to copyright.  

The RAAP claimed that €11 million was collected each year in 2016 and 2017, with €2 million being paid to performers. Phonographic Performance claimed that it has a statutory duty to determine payments made to performs in copyright law. In the High Court, it was held by Mr Justice Garrett Simons that if the intent of the Oireachtas was to create a form of exclusive licence contended for by RAAP, it would have set out the criteria in the Copyright and Related Rights Act 2000, but that it had not done so.

He identified four functions conferred on a collecting society. The first, under s.208(2),is to collect the equitable remuneration payable to a qualifying performer. He held that this function may only be exercised by a collecting society in circumstances where the individual performer has assigned his or her right to the collecting society.  Secondly, he said that a collecting society has a related function of negotiating the manner in which the equitable remuneration is divided up between, in the first instance, performers and producers and secondly, as between performers inter se. He held that this right is derived from s.208(4) and, by implication, from the CRM Directive.

He found a collecting society is entitled to negotiate on behalf of its members and to collect the amounts payable in accordance with a scheme of distribution. However, such a body has no part to play in the final decision as to how licence fees are to be shared or distributed between performers and producers and between performers themselves. The court was of the view that this was a matter for the Controller of Patents and Designs. He held that the separate mechanical function of calculating the payments due to individual performers in accordance with a distribution scheme is a matter for the producer. 

Directive 2014/26/EU on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online use in the internal market was relied upon by RAAP in the High Court, and on appeal, in support of its position. That Directive arose out of recognition of the need to improve the functioning of collective management organisations (CMOs) for the benefit of right-holders of copyright and related rights. It sets out detailed provisions in relation to the authorisation, membership, management and conduct of CMOs. Importantly, while it recognises the benefit of CMOs for individual right-holders, it does not require that a right-holder manage his or her rights through a CMO. They may manage those rights individually. This is left up to the member states.

The Recorded Artists Actors Performers brought an appeal which was opposed by the Phonographic Performance Ireland.

Conclusion

Ms Justice Caroline Costello, giving the judgment of the court, allowed the appeal. The dispute between the two parties arose from what RAAP alleged was the unilateral decision of Phonographic Performance to alter the basis on which performers’ share of licence fees collected by Phonographic Performance was decided. RAAP said that the payments were substantially reduced and not at the usual European Union rates.

The judge said the Copyright Act does not place a statutory obligation on either RAAP or Phonographic to determine how much is paid to performers. RAAP has a role in calculating amounts payable to individual performers when it is authorised to act for them, and where it does so through the distribution scheme adopted by its members and right-holders. It was not for Phonographic Performance to calculate all payments due to all individual performers as appeared to be the implication of Mr Justice Simons’ judgment. 

“The performer’s right to payment of equitable remuneration is a right conferred on each performer. It is a property right. It is transmissible by testamentary disposal or by operation of law. Any person who legally acquires the right may assign it, or further transmit the right.”

Therefore, any agreement relating to amounts payable must be between Phonographic and RAAP. Where disagreements arise, the Copyright Act provides for dispute resolution mechanisms which may be invoked, and the Controller of Patents will determine the payments to be made. RAAP has no role in relation to remuneration payable to performers for whom they are not authorised, in cases where those individual performers are not subject to agreements stating who should act for them. The Appeal was allowed.

© Irish Legal News Ltd 2020



Other judgments by Ms Justice Caroline Costello