C-127/73

JUDGMENT OF 30. 1. 1974 — CASE 127/73

Articles 85 and 86 is pleaded, from in application of Article 3 of giving judgment. The competence of Regulation No 17 such a court may, such a court to refer a request for a if it considers it necessary for reasons preliminary ruling to the Court of of legal certainty, stay the proceedings Justice cannot be fettered by Article 9 before it while awaiting the outcome of Regulation No 17. Nevertheless if of the Commission's action. the Commission initiates a procedure

In Case 127/73

Reference to the Court under Article 177 of the EEC Treaty by the Tribunal de première instance of Brussels for a preliminary ruling in the actions pending before that court between

1. BELGISCHE RADIO en Televisie,

and

SV SABAM and NV Fonior;

on the interpretation of Articles 86 and 90 (2) of the EEC Treaty,

THE COURT

composed of: R. Lecourt, President, A. M. Donner and M. Sørensen, Presi­ dents of Chambers, R. Monaco, J. Mertens de Wilmars, P. Pescatore, H. Kutscher, C. Ó Dálaigh and Lord Mackenzie Stuart (Rapporteur), Judges,

Advocate-General: H. Mayras Registrar: A. Van Houtte

gives the following

A — The facts of the case, the that the author assign exclusively to the subject-matter of the request and the BRT all his rights in the script, without views of the parties may be summarised any limitation, for a period of two years as follows: and, where the agreement was incompatible with contracts already concluded, the other parties to such prior contracts were to sign a declaration I — Facts and procedure permitting him to enter into this transaction with the BRT. The Belgian Association of Authors, Repeated broadcasts of the song took Composers and Publishers (hereinafter place on radio and television. referred to as 'SABAM'), is a cooperative association governed by Belgian law A contract concluded between BIEM, the Bureau International d'Édition with the object of exploiting, administering and managing, in the Mécanique (entrusted by SABAM with widest sense of those terms, all the task of managing the latter's copyrights and kindred rights, . . . on its repertoire as concerns the grant of own behalf, for its members and permission for mechanical reproduction) associates and for its clients and and NV Fonior gave to the latter the affiliated undertakings. nonexclusive right to exploit phono­ graphically works from the repertoire of SABAM concluded standard form BIEM including the song in question. contracts with the composer, Mr Davis, NV Fonior recorded on tape the words and with the song writer, Mr Rosenstraten, in 1963 and 1967; under of the song in question and marketed it in its own version on Decca records. these contracts they assigned and transferred to SABAM their copyrights in In March and April 1969 SABAM and all present or future compositions of the BRT attempted, in vain, to prohibit which they are or will be owners, and all NV Fonior from publishing the song in present and future rights as performers issue. SABAM and the BRT both and producers of gramophone records. commenced actions in 1969 before the Under these contracts SABAM had the Tribunal de premiere instance of right, without having to account for its Brussels seeking to have NV Fonior decision, to retain the rights which had condemned for this alleged illegal been assigned to it and to exercise them reproduction. for 5 years following the member's On 3 June 1970 the Commission withdrawal from the association. initiated, of its own motion, the On 11 March 1969 the Belgische Radio procedure under Article 3 of Regulation en Televisie (hereinafter referred to as No 17 in respect of GEMA (Germany), 'BRT') concluded a separate contract SACEM (France) and SABAM. By a with Mr Davis and Mr Rosenstraten by letter of 8 June 1970 the Commission which they assigned to the BRT certain informed SABAM of its objections copyrights relating to the words and the concerning especially the articles of the music of a song. The special provisions contracts dealing with the global of those contracts required in particular assignment of copyrights and the

duration of the period of management of establish the existence of factors the rights after withdrawal (5 years). indicating abuse if it appeared that This procedure is still in progress. SABAM binds its members by provisions The main dispute relates inter alia, to which are not necessary, by demanding, the ownership of copyrights. SABAM inter alia, a global assignment of all and the BRT both claim title to the rights and by making withdrawal of rights permitting the prohibition of members too difficult, by entailing reproduction of the records in question. possible financial loss. The order for reference was filed at the By its judgment of 4 April 1973 the Tribunal de premiere instance of Registry of the Court on 19 April 1973. Brussels decided to stay the proceedings In accordance with Article 20 of the and to ask the Court of Justice to give a Protocol on the Statute of the Court of preliminary ruling on the following Justice of the EEC written observations questions: were submitted on 31 July 1973 for the Commission of the European Communi

Jean Dasesse and Louis Chabert, of the abuse of a dominant position within Brussels Bar. the meaning of Article 86 of the EEC Treaty? By letter of 30 July 1973, the registrar of the Tribunal de Première Instance of 2. Can abuse of a dominant position Brussels notified the Court also consist in the fact that such an 'that the appeal brought by SABAM undertaking stipulates that an author against the judgment of the 12 Chamber shall assign his present and future of this court of 4 April 1973 suspends rights, and in particular in the fact the proceedings before the Court of that, without having to give an Justice (Articles 1068 and 1397 of the account of its action, that Code Judiciaire)'. undertaking may continue to exercise By letter of 18 September 1973 the the rights assigned for five of the association's years following the registrar of the said Tribunal informed the court that the Tribunal. withdrawal of the member? 'does not wish the examination of the

interpretation given by the Court of It appears from the grounds of the order Justice of the provisions of the Treaty for reference that the Tribunal can be useful to this Tribunal as well as considered that it would be possible to to the appeal court'.

The Court, having heard the report of its services in a manner which is not the Judge-Rapporteur and the opinion of necessary for the realization of the the Advocate-General, decided to open objects of the undertaking. That is the the oral procedure without any decision it gave in respect of the German preparatory enquiry. company GEMA (OJ L 134 of 20 June Observations submitted to the Court 1917). The provision in the contracts of Observations of the Commission of the assignment whereby the contracting European Communities party undertakes to assign all copyrights, without distinction, in all his present or As to the jurisdiction of the national future works according to an obligation court imposed by SABAM which is not absolutely necessary, constitutes an In May 1971 and 1973, following an abuse of a dominant position. exchange of views subsequent upon notification of the Commission's However, the Commission does consider that as radio and television stations and objections, SABAM amended its statutes the recording industry are in a position with the result that it is now possible for of strength within the market, it is in any member to decide whether to assign turn possible for them to exert undue his copyrights to SABAM for one or influence over authors, especially those more categories of form of exploitation who are in the services of a particular and whether to assign those rights for station or record company, and the fact the whole world or only for certain of their membership of an association countries. In the same way, the period of the Association's retention of those like SABAM protects them against abuses. rights after the withdrawal of a member was reduced from five years to three. The Commission draws up two lists, the first containing examples; of forms of The Commission is pursuing its exploitation which are' economically examination of these amendments and the procedure which it initiated has not different, the second containing forms of vet come to a close. exploitation divided into categories, which lend themselves to exercise by a The Commission considers that as the particular association, as for example the procedure under Article 3 of Regulation category consisting in 'sound and vision No 17 has been initiated the national broadcasting rights, including secondary authorities, including the national courts, reproduction rights'. are no longer competent, according to In its opinion, authors are justifiably Article 9 (3), to apply Article 86 of the Treaty. bound to cooperative management associations if they have, under the It is of the opinion that in this case statutes of such associations, the where it is clear that the national court possibility of limiting the assignment of has for the time being no jurisdiction, it their rights to certain forms of is as yet too early for the Court of exploitation or to certain categories. Justice to examine the questions referred This argument underlies the second by the court. GEMA Decision (OJ L 166/72).

those who operate within it (radio and which compensate for the particular task television companies, record companies), falling on them. These privileges may in an abuse of a dominant position within turn be subject to scrutiny as to their the meaning of Article 86. compatibility with Article 90 (2). But the fact that an undertaking possesses As to the second question privileges does not necessarily imply that it comes under the provisions of, Article The Commission considers that the 90 (2). assignment of existing and future rights With regard to the fourth question, is acceptable on condition that such which it considers to be irrelevant in assignment is also limited to certain view of the preceding comments, the forms of exploitation or to certain Commission refers to the Judgment of categories. the Court in Case 10/71, Port de Mertert Where an author is given the possibility (Rec. 1971, p. 723). of assigning his rights over particular forms of exploitation, the association's Observations of the BRT entitlement to the exercise of those rights for a period of three years after The BRT considers that a global

Article 86 of the Treaty. In this case, any reconcilable only with the activity of an requirement that the undertaking should independent author. account for its decision to continue to Where a piece of work is commissioned exercise the copyrights is irrelevant. for performance by a broadcasting company, a global and absolute As to the third and fourth questions assignment of copyrights to that company is necessary so that the authors The phrase 'undertakings entrusted with themselves are not tempted to use the the operation of services of general broadcasting company as a means of economic interest' which appears in advertisement for the work for which Article 90 (2) of the EEC Treaty must be they have already been remunerated. understood as referring to undertakings entrusted expressly, by means of a legal For many years the BRT has urged act, with the operation of those services. SABAM, in vain, to amend its statutes by providing an exception in the case of SABAM can in no respect assert that it is the works of persons bound to the BRT entrusted with a specific task by the under administrative regulations or by

If the

author wishes to withdraw from the out that this procedure is still in progress. association on the occasion of such a Following the Commission's inter commission, so as to be able to assign all vention, SABAM made considerable his copyrights to whoever has amendments both to its statutes and commissioned the work, he runs the risk general rules and to its contracts of that SABAM, under Article 15, will assignment. retain all the rights for a further five The Association considers that the years, without having to account for its Commission of the European Communi

The Commission also appeal has been brought against its considered that withdrawal does not decision, and that that appeal suspends affect the validity of contracts of the execution of the decision. assignment previously concluded by the withdrawing member. On 17 July 1973 SABAM brought an appeal against the order for reference of In its decision of 6 July 1972 the 4 April 1973 which, according to the Commsision accepted that a minimum Belgian Code Judiciaire, suspends the period of affiliation of 3 years is decision of 4 April 1973.

SABAM examines first the procedure exploit musical material, SABAM prescribed by Regulation No 17 for retained the right to make use, if it implementing Article 86, a procedure wished, of rights assigned for five of the which the Commission of the European association's years following an author's Communities has initiated, and points withdrawal. The amendment made to

Decisions, the referring Tribunal must at The Association does not believe that the very least recognize the legality of the definition given by the Court in the the contracts of assignment of SABAM Port Mertert case applies to it. in so far as they are consistent with the B — During the oral procedure, which GEMA Decisions. The right of SABAM was opened on 13 November 1973, to require the assignment of all the SABAM, the BRT, the Government of works of an author, within any one the Federal Republic of Germany and category, including his future works, is the Commission of the European perfectly legal. SABAM has the right to Communities submitted oral observa­ require the assignment of all rights in the tions. works of an author in one or more Me Dasesse, for SABAM, expressed the categories, such as broadcasting rights, opinion that the Court should stay the which would include the performing proceedings in respect of a preliminary rights of works broadcast on the radio, question when the appeal has the effect as well as reproduction and mechanical of broadcasting rights, including the performing rights of works reproduced 1. bringing the main action before a mechanically. The contracts of higher court having jurisdiction as to assignment which gave rise to the the facts; request for interpretation were conclud­ 2. giving the higher court jurisdiction to ed before the Commission had initiated decide that the questions should no the procedure in application of Article longer be referred; 86 against SABAM and before the 3. depriving the lower court of its Commission's Decisions in respect of authority to send additional GEMA. information to the Court: Case 31/68, The provisions of the contracts of Chanel v Cepeha, opinion of Mr Roemer. assignment of SABAM have recently been removed or modified. Consequent­ He maintains that under Belgian law an ly, the Court's interpretation of Article appeal against the order for reference 86 of the EEC Treaty, in relation to the has such an effect.

initiated a procedure in application of specific composition that an author can Article 86 of the Treaty the national better protect his copyright. authorities cease to be competent. All A finding that SABAM has abused its courts, even civil courts, are national dominant position is inevitable since it authorities within the meaning of that recognized this itself in amending its provision: Case 43/69, Bilger (Rec. 1970, statutes following the Commission's p. 127) and there is no further need to suggestions. re-examine that finding:

The not wish to include therein the civil facts of this case demonstrate the erosion courts which have the task of protecting of copyrights which is caused by citizens against abuse. If it was not so, broadcasting companies requiring from the direct effect of the rules of authors a global assignment of their competition in the Treaty would be rights in a particular composition for a considerably reduced. period of two years. If the civil court no longer had He contends, finally, that the fact that a jurisdiction once the Commission has copyright association requires the initiated a procedure in application of exclusive assignment of all rights in all Article 85 or 86 of the Treaty it would the works, both present and future, of not even be able to take interim an author where they fall into a measures.

proceedings before a civil court. Mr van der Esch, Legal Adviser to the He finds no legal basis in the Treaty Commission, points out that in the capable of justifying the conclusions of Order in Case 31/68, Chanel, the Court SABAM and the Commission as to the stayed the proceedings for two reasons: interpretation of Article 9 (3). the factual circumstances and the As to the substance of the questions he communication from the national court. maintains that, rather than by a That Judgment must be explained as sub-division into categories, it is by the meaning that the Court, having regard to temporary assignment of his rights in a the actual facts, had the impression that

that, for the duration of the procedure, 4. It emerges from a reading of Article no national authority exercises a 90 (2) and (3) as a whole, that the competence which is parallel to that of application of paragraph (2) can be 'if the Commission, which is temporary and necessary' facilitated by an appropri­ exclusive. In its opinion, Article 9 (3) ate directive or decision addressed to does not prevent the national court from Member States, but that the taking an interim decision to maintain application of paragraph (2) does not the status quo. in any way depend on the existence of such directive or decision. The existence of the appeal and the temporary lack of jurisdiction of the 5. Articles 85 to 90 lay down the general national court leads him to suggest, in rules applicable to undertakings: Case accordance with the principal 'festina 6/72, Continental Can (Rec. 1973, p. lente', that the Court should suspend its 215, 246). decision. Nevertheless, he suggests that 6. The fact that Article 90 refers more the Advocate-General should present his specifically to Articles 85 to 94 opinion in the meantime. inclusive does not exclude the fact

While supporting the conclusions of the that it refers to other provisions of Commission in its statement, he adds the Treaty. several arguments in favour of the direct Thus, in principle, 'undertakings' within applicability of Article 90 (2): the meaning of paragraph (2) must respect the provisions of the Treaty like 1. The general scheme of this provision all other undertakings. is similar to the provisions of Articles 7, 85 and 86: they are provisions C — The Advocate-General presented which govern all legal relations his opinion at the hearing on 12 rationi personae. December 1973.

5 It emerges from the preparatory enquiry into the case before the Court of Justice that the Commission decided on 3 June 1970 to initiate, of its own motion, the procedure under Article 3 of the said Regulation in respect of SABAM and informed the latter of this decision on 8 June 1970.

6 In the particular circumstances of this case it is necessary, before giving a ruling on the questions referred, first to examine the regularity of the reference to the Court.

As to the jurisdiction of the Court

7 The Court has jurisdiction to give judgment on a request for a preliminary ruling, within the meaning of Article 177, notified by a national court in accordance with Article 20 of the Protocol on the Statute of the Court of Justice.

8 The Treaty confers on national courts the right to judge whether a decision on a point of Community law is necessary for their judgments.

JUDGMENT OF 30. 1. 1974 — CASE 127/73

15 The competence of those courts to apply the provisions of Community law, particularly in the case of such disputes, derives from the direct effect of those provisions.

16 As the prohibitions of Articles 85 (1) and 86 tend by their very nature to produce direct effects in relations between individuals, these Articles create direct rights in respect of the individuals concerned which the national courts must safeguard.

BRT v SABAM

17 To deny, by virtue of the aforementioned Article 9, the national courts' jurisdiction to afford this safeguard, would mean depriving individuals of rights which they hold under the Treaty itself.

18 The fact that Article 9 (3) refers to 'the authorities of the Member States' competent to apply the provisions of Articles 85 (1) and 86 'in accordance with Article 88' indicates that it refers solely to those national authorities whose competence derives from Article 88.

19 Under that Article the authorities of the Member States — including in certain Member States courts especially entrusted with the task of applying domestic legislation on competition or that of ensuring the legality of that application by the administrative authorities — are also rendered competent to apply the provisions of Articles 85 and 86 of the Treaty.

On those grounds,

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the oral observations of the Commission of the European Com­ munities, the Government of the Federal Republic of Germany, the Belgische Radio en Televisie and SABAM; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Articles 85, 86, 88 and 177; Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community, especially Article 20; Having regard to Regulation No 17 of the Council of the European Economic Community, being the first Regulation implementing Articles 85 and 86 of the Treaty, especially Articles 3 and 9; Having regard to the Rules of Procedure of the Court of Justice of the European Communities;

THE COURT

hereby:

decides, before giving a ruling on the questions put, to hear the opinion of the Advocate-General.

Lecourt Donner Sørensen Monaco Mertens de Wilmars