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tition which impede the achievement and 4. In accordance with the above provisions proper functioning of the internal market; and, again, as far as is relevant to this case, the Directive provides for the harmonised protection of all related rights pertaining to phonograms, films and broadcasting, for the benefit of performers, producers and broadcasters, none of whom enjoy the protection of copyright.

whereas the creative and artistic work of 5. More particularly, Article 8 governs the authors and performers necessitates an activities of broadcasting and communi- adequate income as a basis for further cation to the public of 'performances' and creative and artistic work, and the invest- provides that: ments required particularly for the produc- tion of phonograms and films are especially high and risky; whereas the possibility for securing that income and recouping that investment can only effectively be guaran- teed through adequate legal protection of the rightholders concerned; '1. Member States shall provide for per- formers the exclusive right to authorise or prohibit the broadcasting by wireless means and the communication to the public of their performances, except where the performance is itself already a broadcast performance or is made from a fixation.

whereas the Community's legal framework on the rental right and lending right and on certain rights related to copyright can be 2. Member States shall provide a right in limited to establishing that Member States order to ensure that a single equitable provide rights for certain groups of right- remuneration is paid by the user, if a holders and further to establishing the phonogram published for commercial pur- rights of fixation, reproduction, distribu- poses, or a reproduction of such phono- tion, broadcasting and communication to gram, is used for broadcasting by wireless the public for certain groups of rightholders means or for any communication to the in the field of related rights protection.' public, and to ensure that this remuner-

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international conventions on which many authorisation: the broadcasting by wireless Member States' copyright and related means and the communication to the public rights laws are based.' of their live performance.

10. The international rules are essentially contained, in so far as is relevant to this case, in the TRIPS Agreement 3 and the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations, signed in 6. Any Member may, in relation to the Rome on 26 October 1961, to which all the rights conferred under paragraphs 1, 2 and Member States, except Portugal, are party, 3, provide for conditions, limitations, and to which the TRIPS Agreement refers. exceptions and reservations to the extent permitted by the Rome Convention...'.

11. Under Article 14 of the TRIPS Agree- 12. Article 7 of the Rome Convention itself ment, Members are required to ensure that: provides for a minimum level of protection which the contracting States must guaran- tee performers. It states in particular that:

' 1 . In respect of a fixation of their perform- '1. The protection provided for performers ance on a phonogram, performers shall by this Convention shall include the possi- have the possibility of preventing the fol- bility of preventing: lowing acts when undertaken without their

16. Article 7 provides:

14. The Convention lays down largely harmonised rules and, in addition, Articles 2, 4 and 5 contain rules on national treatment to which Article 1(3) of the TRIPS Agreement itself refers. According ' 1 . A phonogram produced for commercial to the latter, 'Members shall accord the purposes, or a reproduction thereof, may treatment provided for in this Agreement to be broadcast without the permission of the other Members'; and, so far as is relevant producer of the phonogram and the per-

4 — Footnote not televant to the English vetsion. 6 — The Nethetlands became a contacting patty to the Con- 5 — Footnote not televant to the English vetsion. vention with effect from 7 October 1993.

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forming artists or their successors in title or ting ter Exploitatie van Naburige Rechten otherwise made public, provided equitable ('SENA'), a Netherlands foundation repre- remuneration is paid therefor. senting the interests of performers and producers and an importer of phonograms, and the Nederlandse Omroep Stichting ('NOS'), the body that coordinates public broadcasting, and concerns the deter- 2. Failing an agreement concerning the mination of the equitable remuneration amount of equitable remuneration, the payable by NOS to SENA in accordance Hague District Court shall have exclusive with Article 7 of the WNR. jurisdiction at first instance to determine the amount of remuneration at the suit of the first party to make application in that regard.

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dissementsrechtbank te 's-Gravenhage ('the Directive. By introducing an autonomous Hague District Court') seeking an order concept of equitable remuneration, the that the equitable remuneration be set at Directive in fact required that the concept the level of NLG 7 500 000. The Hague be given a uniform interpretation in the District Court set the amount for 1995 at various Member States, but the judgment at NLG 2 000 000, and reserved judgment for issue would not permit that outcome. the subsequent years.

(a) what are the yardsticks for deter- 22. SENA appealed against that judgment, mining the amount of such equi- claiming that it was incompatible with the table remuneration?

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(b) should guidance be sought from equitable remuneration? Or is that the levels of remuneration which freedom subject to certain limits and, were agreed or were customary as if so, what are those limits?' between the organisations con- cerned prior to entry into force of the Directive in the relevant Member State? 24. In the proceedings before the Court of Justice, the Commission, the Netherlands, German, Finnish, Portuguese and United Kingdom Governments all submitted observations, in addition to the parties to (c) must or may regard be had to the the main proceedings. expectations of the persons con- cerned at the time of enactment of the national legislation implement- ing the Directive in regard to the amount of remuneration? Analysis

25. By its three questions, the national (d) should guidance be sought from court is in essence asking the Court of the levels of remuneration for Justice to rule whether or not the concept broadcasts paid under music copy- of 'equitable r e m u n e r a t i o n ' under right by broadcasters? Article 8(2) of the Directive is a Commu- nity concept and, whatever the conclusion, to set out the consequences for the purpose of determining the criteria to be used to calculate the level of that remuneration.

(e) must the remuneration be related to the potential numbers of lis- teners or viewers, or to actual numbers, or partly to the former and partly to the latter and, if so, in what proportions? Arguments of the parties

concept and, as such, must be interpreted NOS and the Portuguese and United King- on the basis of uniform parameters in all dom Governments in particular, to the the Member States. As well as being concept of justice in each individual case. dictated by the general principles of equal The Member States therefore retain a treatment and non-discrimination, that sol- substantial degree of freedom in interpre- ution follows above all from the aim of the ting that concept, particularly bearing in Directive and from the Rome Convention, mind that the Directive requires only on which the Directive is directly based. minimum harmonisation. Both have the same aim of securing effec- tive harmonisation, in order to compensate for the economic disadvantage performers or producers may suffer as a result of the broadcasting of their works. That outcome cannot be achieved unless the concept of equitable remuneration is interpreted uni- formly. That thesis is borne out a contrario, moreover, by Article 5 of the Directive which provides for derogations from the exclusive public lending right, provided 28. None the less, the fact remains, as both that the authors Obtain a remuneration'. the Commission and the Netherlands Gov- In those circumstances, the Directive spe- ernment point out, that the freedom of the cifically provides that the Member States States to expound the meaning of the are 'free to determine this remuneration concept at issue is not absolute but is taking account of their cultural promotion subject to limits deriving from the scheme objectives'; the fact that there is no similar of the Directive; that freedom must in fact proviso relating to the 'equitable remuner- be directed towards striking a fair compro- ation' under Article 8 demonstrates that mise between the interests of the producers here the Member States do not enjoy the and performers, on the one hand, and the discretion they are allowed in the circum- interests of third party users on the other. stances with which Article 5 is concerned.

In that connection, the Netherlands Gov- (b) The individual criteria for determining ernment draws attention in particular to equitable remuneration Van Duyn 8 and Rutili, 9in which the Court acknowledged that 'Member States con- tinue to be, in principle, free to determine the requirements of public policy in the light of their national needs. Nevertheless, the concept of public policy must, in the 31. Not all the participants in these pro- Community context, and where, in par- ceedings devote much attention to the ticular, it is used as a justification for criteria mentioned in Question 2(a), and, derogating from the fundamental prin- in any event, in the light of what I shall say ciples... be interpreted strictly, so that its below, I do not consider it necessary to scope cannot be determined unilaterally by dwell on the submissions made in this each Member State without being subject regard. I shall merely point out here that to control by the Institutions of the Com- the various participants do not consider it munity'. 10 appropriate for the Court to give a ruling on this point and, although the German Government discusses the individual crite- ria at length, it actually contests the admissibility of the question on the ground that it concerns not so much an interpre- tation of the Directive as the application of domestic law in the present case. Con- sequently, what is required is not a judg- ment by the Court but an expert opinion to 30. Finally, the German and Finnish Gov- be made available to the national court. ernments put forward a view which, though formally at odds with the positions adopted by the other governments that submitted observations, is in substance not dissimilar to them. Though they do not accept that equitable remuneration is a Community concept, they point out that this does not mean that the Member States enjoy unbounded freedom. According to Assessment the German Government in particular, the limits the national legal systems face in determining equitable remuneration derive from the sense and purpose of the Directive 32. From an examination of the questions itself and consist in the need to secure an submitted, it seems to me first of all adequate income for performers, as well as difficult to deny the Community character a distribution of profits commensurate with of the concept of 'equitable remuneration', the contribution of the authors or per- given that it is used in a Directive that formers. contains no — direct or indirect — refer- ence to the domestic legislation of the Member States for its interpretation. As 8 — Case 41/74 Van Duyn v Home Office [1974] ECR 1337. the Court itself has held on several occa- 9 — Case 36/75 Rutili v Ministre de l'Intérieur 11975] ECR sions, 'the need for uniform application of 1219. 10 — Rutili, paragraphs 26 and 27. Community law and the principles of

34. Consequently, it is not surprising, as I have already mentioned, that the concept of 'equitable remuneration' is not specifi- cally defined in the Directive. But it is worth pointing out that, as well as refrain- ing from providing such a definition, the Directive provides no — direct or indi- rect — pointers as to the possible criteria which may be usefully applied in assessing whether remuneration is 'equitable'. That contrasts, for example, with the provisions of the Directive relating to the assignment of rental rights. In that regard, at least one uniform — albeit fairly general — cri- terion is mentioned for determining the 33. That said, there is scant detail as to the equitable remuneration payable to authors definition of the concept in question, since and performers (Article 4(1)), 12 namely the the Directive merely refers to it but in no criterion based on the importance of the way defines it. That is hardly surprising, contribution to the phonogram or film bearing in mind that it is a concept based (17th recital). 13 on the idea of fairness, and, as almost all the parties have stated, albeit with differing emphases, fairness is by its very nature an 'open' concept conveying a general prin- ciple of appropriateness and balance, and leaving considerable discretion to whoever has to apply it. As has been underlined in the views expressed in this case (particu- 35. Directive 2001/29/EC on the harmon- larly by the Portuguese and United King- isation of certain aspects of copyright and dom Governments), the reference to fair- ness means that, except, of course, where there is agreement between the parties, the 12 — According to which: 'where an author or performer has court will take a decision on the parties' transferred or assigned his rental right concerning a phonogram or an original or copy of a film to a phonogram or film producer, that author or performer shall retain the right to obtain an equitable remuneration for the rental'. 1 1 — S e e , most recently, Case C-287/98 Unster [2000] ECR 13 — According to which: 'the equitable remuneration must take I-6917, paragraph 4 3 ; Case C-357/98 Yiadom [2000] ECR account of the importance of the contribution of the I-9265, paragraph 26; and, earlier, Case 327/82 Ekro authors and performers concerned to the phonogram or [1984] ECR 107, paragraph 11. film'.

38. That said, in general terms, it must also 14 — Directive 2001/29/EC of the European Parliament and the Council of 22 May 2001 (OJ 2001 L 167, p. 10). be made clear that this freedom is not 15 — It provides in particular as follows: 'When determining the unbounded, since it is none the less exer- form, detailed arrangements and possible level of such fair compensation, account should be taken of the particular cised in relation to the application of a circumstances of each case. When evaluating these circum- stances, a valuable criterion would be the possible harm t o Community concept and, consequently, is the rightholders resulting from the act in question. In cases subject to supervision by the Community where rightholders have already received payment in some other form, for instance as part of a licence fee, no specific or separate payment may be due. The level of fair compensation should take full account of the degtee of use of technological protection measures referred to in this 16 — Council Directive 93/83/EEC of 27 September 1993 on the Directive. In certain situations where prejudice to the coordination of certain rules concerning copyright and rightholder would be minimal, no obligation for payment rights related to copyright applicable to satellite broadcast- may arise'. ing and cable retransmission (OJ 1993 L 248, p. 15).

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Institutions, and by the Court of Justice in 40. In my view, similar considerations may particular. be applied to the concept of 'equitable remuneration' under Article 8 of the Direc- tive. Thus, the freedom accorded to the Member States in that connection must be exercised subject to control by the Com- munity Institutions, in accordance with the conditions and limits that flow from the Directive, as well as, more generally, the principles and scheme of the Treaty.

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43. Moreover, the scope of the prohibition Directive, and particularly Article 8(2) of discrimination on grounds of nationality thereof, is limited. in this area extends beyond the terms of Article 12 EC alone. In fact, as far as related rights are concerned, that prohib- ition encompasses a range of operators who, although citizens of third countries and therefore not protected under Article 12 EC, enjoy the protection provided by the World Trade Organisation TRIPS Agree- ment and the Rome Convention. 45. So much for the general principles. But I consider that factors likely to limit the discretion accorded to the Member States may also be inferred from the scheme of the Directive, and particularly the need to safeguard its effectiveness.

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47. I consider that view to be corroborated fixation right under Article 6, 21 the repro- by the terms of the seventh recital to the duction right under Article 7, 22 and the Directive, according to which the legal right in respect of live broadcasting and protection of performers and producers, communication to the public under provided for under the Directive as a Article 8(1) of the Directive. However, whole, is designed to guarantee an broadcasting or communication to the adequate income for the former and a public from a phonogram already pub- return on their investment for the latter. lished for commercial purposes is not Consequently, the remuneration mentioned covered by an exclusive right ('to authorise in Article 8(2) of the Directive must be such or prohibit', in the words of the Directive) as to make an effective contribution to of either the performer or the producer securing the profitability of artistic activity (Article 8(1)). Consequently, the right to and production. equitable remuneration provided for in such circumstances by Article 8(2) is merely an ancillary element in the system of guaranteeing profitability, in keeping with the 'weak' nature of that right as compared with the abovementioned exclusive rights.

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Conclusion

50. In the light of the foregoing, I propose that the Court answer the questions referred to it to the effect that the concept of equitable remuneration under Article 8(2) of the Directive is a concept of Community law, but that the Directive does not lay down uniform criteria for determining the level of that remuner- ation. Therefore, the Member States retain the freedom to determine those criteria, albeit in accordance with the aims of the Directive and the principles of Community law.

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