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32|Retail News|March 2014|www.retailnews.ie

Music Copyright

Landmark Decision on Music Licences In 2013, the Dublin District Court delivered an important judgement on the playing of music on the business premises that makes interesting reading for retailers, write Jennifer Heffernan and Michael Nuding of Denis Finn Solicitors. A RECENT District Court judgement dismissed a claim by Phonographic Performance Ireland Limited (PPI) against a shoe retailer for non-payment of royalties, in what could be an important judgement for other retailers throughout the country. PPI was established in 1968 to act on behalf of record company rights in the public performance, broadcasting and reproduction of their recordings. PPI also collects royalties on behalf of performers. In the case of PPI v Patrick Burke Shoes Limited, the issue before the court was the non-payment of royalties to the PPI.

Not only did the District Court judge dismiss the PPl’s claim against the shoe retailer, but also ordered them to pay the retailer’s costs for the case. The defendant retailer, who was represented by Denis I. Finn Solicitors, is the owner of shoe shops in Dublin’s Talbot Street and Donaghmede Shopping Centre. In both stores, there was a radio playing in the background for the benefit of staff during quiet trading periods. As a result of this, the shop owner was being sued by PPI for the unpaid royalties, which amounted to €2,046.52, while the PPI were also seeking aggravated and

punitive damages up to the maximum jurisdiction of the District Court, which at the time stood at €6,348. When the case came to court, evidence was given by employees of PPI who had visited the shops of Patrick Burke Shoes. Their evidence was that they heard certain named songs being played on the radio, in respect of which they said their client record companies own the copyright. Communication to the Public? In defending the shoe retailer, solicitors Michael Nuding and Jennifer


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Music Copyright Heffernan made legal submissions based on two judgements of the European Court of Justice (ECJ) on the issue of music copyright. The EU Directive, on which the Irish Copyright and Related Rights Act 2000 is based, entitles the copyright owner to seek remuneration from the broadcaster where there has been “a communication to the public”. The two judgements considered what amounts to “a communication to the public”. The first case concerned a referral by the Irish Court regarding an exemption for hotels under the 2000 Act to make copyright payments in respect of music broadcasts in guest bedrooms. The PPI sought a declaration that this section of the Act was a breach of the EU Directive. The second case concerned an Italian Dentist, Marco Del Corso of Turin, who had a radio playing in the reception area of his dental practice. The ECJ found that determining whether the hotel’s or the dentist’s broadcasts amounted to “a communication to the public” would require an individual, case-specific analysis focused on three overlapping factors: • The role of the user; • The concept of public, which refers to “an indeterminate number of potential listeners“ and

broadcast and ruled that the “patients are not ‘receptive’, but instead listened to the music by chance”. Accordingly, the ECJ ruled the dentist was not making a “communication to the public” for the purpose of the Directive and therefore was not required to pay royalties. However, it did find that the hotel’s broadcasting amounted to “a communication to the public” and held Ireland was incorrect to have exempted hotels from the requirement pursuant to the 2000 Act.

implies “a fairly large number”; • Whether the communication is of a profit making nature. European Court of Justice Rulings The cases had different outcomes. While both entities were found to be a user, the ECJ held the situations differed in relation to the second and third criteria. The ECJ found the hotel’s customers fitted the definition of “public” because they were of “indeterminate number” and were “a fairly large number of persons”. However, it ruled that the dentist’s clients were not a “public” because they formed

a consistent, determinate group, and because only a small number would be present in the practice listening to the broadcast at any one time. In relation to the third criteria, it held the hotel’s broadcast was, in fact, of a “profit-making nature” because it was “an additional service which has an influence on the hotel’s standing and, therefore, on the price of its rooms” and “is likely to attract additional guests who are interested in that additional service”. However, in relation to the dentist, the ECJ argued that it was not reasonable to expect a rise in the number of patients because of the

About the Authors THIS article was written by Jennifer Heffernan and Michael Nuding of Denis I. Finn Solicitors, 5 Lower Hatch Street, Dublin 2 (pictured). Dennis I. Finn is a full services law firm, committed to delivering legal excellence for over 35 years. With 24 employees, deep industry experience and a proven track record, Denis I. Finn offers legal services to private, corporate and institutional clients. For more information, see www. denisifinn.ie.

The Ruling Before Dublin District Court, Judge Mary Collins accepted Michael Nuding’s argument that the defendant shoe retailer was analogous to the Italian Dentist on the grounds that: a) Unlike a hotel, there is no large indeterminate number of persons present when the songs are being played; b) Also unlike a hotel, the shoe retailer’s customers come across the music by chance and not by choice; c) Again unlike a hotel, their decision to enter the shop and whether to buy shoes or the price of the shoes is not influenced by the radio being played in the background and accordingly, no economic benefit arises. Although the decision does have not precedential value in this jurisdiction and it was emphasised by the District Court that this case fell on its own facts, it may have some relevance for business owners faced with these annual levies. It has to be a comfort for retailers that this judgement resulted in a number of subsequent cases being withdrawn from the courts. If a retailer believes their case could avail of such a defence, then it could be worth while seeking legal advice before paying their PPI invoice. Denis I. Finn Solicitors would be happy to discuss the merits of this decision on a case-by-case basis.

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