Court case means music royalty claims against retailers now in doubt

A recent court case could mean that record companies can no longer collect royalties from retailers who play music in their shops.

Irish copyright law, which is based on an EU directive, allows record companies to collect royalties where their music has been “communicated to the public”.

Phonographic Performance Ireland (PPI), which is licensed to collect royalties for labels such as EMI, Sony, Warner and other Irish and international companies, recently lost a district court claim for more than €2,000 in royalties against the owner of two shoe shops where staff played the radio during working hours.

Royalty claims
The ruling means that PPI, which bills large numbers of retailers for royalties, is unlikely to be able to enforce royalty claims against them in similar circumstances in the future.

PPI sued Patrick Burke Shoes Ltd, which runs shoe shops on Talbot Street and in Donaghmede Shopping Centre in Dublin, for €2,045 in unpaid royalty invoices and €6,348 in aggravated damages.

PPI staff had visited the shops and heard artists recorded by their client companies being played on the radio. The organisation subsequently invoiced the company for royalties on behalf of its members.

The company defended the claim and its lawyers, Michael Nuding and Jennifer Heffernan of Denis I Finn Solicitors, argued in Dublin District Court that PPI was not entitled to collect royalties. They relied on two European Court of Justice (ECJ) cases that dealt with key terms in the law such as "communicated to the public" and whether the music was being played for profit.

European cases
The first was an action by the PPI where the organisation succeeded in getting the court to overturn an exemption for hotels in Irish law covering music broadcasts to guests' bedrooms. The second was where the ECJ found against the Italian equivalent of the PPI which had pursued a dentist, Marco Del Corso of Turin, whose practice had a radio playing in its reception area.

Judge Mary Collins accepted Mr Nuding’s and Ms Heffernan’s arguments that Patrick Burke Shoes was similar to the dentist in that only small numbers of people were hearing the music at any one time.

In addition, the shops were not playing the music for profit and it was not a factor in influencing whether or not people entered the stores in the first place.

Judge Collins dismissed the PPI’s claim and ordered it to pay the company’s costs.

It was not possible to contact the organisation for a comment yesterday.