NO MORE MUSIC ROYALTY PAYMENTS FOR OPHTHALMOLOGISTS?

Ophthalmologists may be able to avoid paying royalty fees for background music they play for patients in their private offices and clinics, under a new ruling by the EU’s highest court.

The potential savings follows a judgment by the European Court of Justice that an Italian dentist was not obligated to pay royalties for background music for his private dental patients. The court ruled that the payment of royalties did not arise because the playing of background music for private patients did not constitute “communication to the publicâ€.

In its judgment, handed down on March 15, the Court of Justice ruled that a dentist who plays background music tracks “free of charge in his dental practice, for the benefit of his clients and enjoyed by them without any active choice on their part, is not making a ‘communication to the public.’â€

As with all court decisions, however, ophthalmologists should consult with a lawyer to establish whether they may be able to take advantage of the judgment in their own country and avoid or reduce any royalty payments for the music they play in their private offices and clinics.

The Court of Justice case arose from a dispute between a dentist in Turin and the Societa Consortile Fonografici (SCF). The Italian-based SCF acts as a collecting agency to manage, collect and distribute the royalties of music producers.

The dispute followed the failure of negotiations between the SCF and Association of Italian Dentists. The SCF and Association had attempted to conclude a collective agreement to set an appropriate royalty fee for association members for any “communication to the public†of the background music they played in their private professional practices. In the industry, music tracks are often referred to as “phonogramsâ€.

Background music

After negotiations failed, the SCF, in June of 2006, brought an action before the Turin District Court against a local dentist, Dr Marco Del Corso. In its lawsuit, the SCF sought a declaration that Dr Del Corso should pay royalty fees for the playing of background music in his private dental practice in Turin.

The SCF based its lawsuit on its interpretation of national, EU and international law governing the payment of copyright royalties to performers. Under the 2001 EU Directive on the Harmonisation of Certain Aspects of Copyright and Related Rights in the Information Society, EU countries are obliged to “provide authors with the exclusive right to authorise or prohibit any communication to the public of their works.†The directive also requires EU countries to “provide for the exclusive right to authorise or prohibit†the communication of their works to the public.

In addition to the EU directive, the SCF relied on Italian copyright law, which provided that music performers and producers “shall be entitled to receive remuneration for the use for profit of the phonograms, by means of cinematography, radio and television broadcasting, including communication to the public, via satellite, at public dances, in public establishments and on the occasion of any other public use of the phonograms themselves.â€

In his defence, Dr Del Corso argued, among other things, copyright laws did not apply to his broadcast of music in his practice because the law only referred to the broadcast of music to the public in public places. On that basis, he argued that a private dental practice could not be classified as a public place, unlike public health facilities.

In 2008, the Turin District Court dismissed the SCF lawsuit for a number of reasons: there was no communication for profit, the type of music played in the practice did not influence the patients’ choice of dentist, and the dental practice was private and, as such, could not be equated with a public place or place open to the public.

Not part of treatment

SCF appealed against that judgment to the Court of Appeal in Turin.

Because the Appeal Court was unsure about whether the broadcasting of phonograms in private professional practices constituted “communication to the public,†it referred the case to the Court of Justice for a preliminary ruling.

The Court of Justice held that the term “public†within the meaning of the 2001 Directive “refers to an indeterminate number of potential listeners, and, in addition, implies a fairly large number of persons.†The court also relied on existing legal concepts employed by such world legal bodies as the World Intellectual Property Organisation. According to that organisation, the concept “communication to the public†exempted the broadcasting of music “to specific individuals belonging to a private group.â€

Having considered the legal principles surrounding the definition, the court then examined the facts before it. “As regards the patients of a dentist such as the one in the case in the main proceedings, it must be observed that they generally form a very consistent group of persons and thus constitute a determinate circle of potential recipients, as other people do not, as a rule, have access to treatment by that dentist.â€

The court also found that “in the case of the patients of a dentist, the number of persons is not large, indeed it is insignificant, given that the number of persons present in his practice at the same time is, in general, very limited.â€

The court also noted that there was little to be gained financially by the dentist in broadcasting the music tracks because “a dentist who broadcasts phonograms, by way of background music, in the presence of his patients cannot reasonably either expect a rise in the number of patients because of that broadcast alone or increase the price of the treatment he provides. Therefore, such a broadcast is not liable, in itself, to have an impact on the income of that dentist.â€

In addition, the court noted that the playing of music tracks did not by any definition, form part of their treatment. “The patients of a dentist visit a dental practice with the sole objective of receiving treatment, as the broadcasting of phonograms is in no way a part of dental treatment.â€

For more details about the case, SCF Consorzio Fonografici -v- Marco Del Corso, visit the European Court of Justice website at www.curia.eu.