Earlier this month, the European Court of Justice (CJEU) held in a ground-breaking decision that all performers, regardless of nationality, are entitled to equitable remuneration, without exception.
The ruling stems from legal action taken by Irish collection society Recorded Artists Actors Performers (RAAP), representing performers, against Phonographic Performance Ireland (PPI), which collects the ‘equitable remuneration’ (i.e. public performance, broadcast and webcast royalties) on behalf of record labels. The basis for the legal action was PPI’s application of the Irish copyright act, enacted in 2000, that allows for the payment of a portion of the equitable remuneration to be conditioned on a performer’s nationality and the principle of reciprocity. In Ireland, as in many other European countries, the law made it illegal to share equitable remuneration with nationals of a country where the same right is not recognised for Irish performers.
This has historically had significant relevance for the United States, which does not operate a system of paying public performance or broadcast royalties to artists. In practice, this has meant that U.S. artists have been left out of other international systems for sharing in equitable remuneration payments (or similar local equivalents) not only in Europe, but also in Australia, Japan and elsewhere.
The ruling signals a significant shift in the system for U.S. performers and will have considerable practical implications for EU labels.
In January 2019, Recorded Artists Actors Performers Ltd (RAAP) challenged the legality of the Irish copyright act regarding the distribution of the equitable remuneration in the Irish High Court, alleging that the Irish law was contrary to EU law. The case was referred to the European Court of Justice (CJEU), which oversees the implementation of EU law. On 8 September 2020, the CJEU confirmed that EU law gives all recording artists the right to a share of the payments generated when their music is played on radio or in public premises in the EU, thereby inviting the Irish legislator to rewrite its law.
Background – what is equitable remuneration?
Equitable remuneration is a sum paid by broadcasters and other users of sound recordings (like shops and pubs) to “performers, or to the producers of the [sound recordings], or to both”1 for their use of those recordings.2 In practice, collecting societies representing labels and/or performers collect the remuneration from broadcasters before distributing it to the stakeholders they represent.
Equitable remuneration is a legal concept that derives from the 1961 Rome Convention. Upon its signing, the Rome Convention allowed a contracting state to declare that it would not apply the equitable remuneration system, entirely or in part, for certain uses, certain states or subject to certain reciprocity provisions. These are known as reservations. Other international treaties on copyright, including the WIPO Performers and Phonogram Treaty of 1996 (the WPPT), have since fine-tuned the concept, but all subsequent treaties continued to let contracting states apply reservations to this right.3