Collective Societies & Free Movement – A New Preliminary Reference to CJEU?

In November 2011, the Czech Constitutional Court, in its ruling II. ÚS 1658/11, canceled decision of the City Court in Prague and referred it back (due to breach of  a right to statutory judge), arguing that the court failed to ask the Court of Justice of European Union on issue of whether Czech Copyright Act, which sets out certain limits to operation of collective societies is compatible with free movement of services. The Constitutional Court specifically questioned whether monopoly of collective societies [in CzechR, one type of right can be administered by one subject only – § 98(6)(c)] and necessity to obtain authorization from the Czech Ministry, is still compatible with Art. 56 TFEU and/or Art. 14 and Art. 16 of Directive 2006/123/EC on services in the internal market.
The above questions arose in a ‘regular’ dispute of a collective society suing owner of a pub for unjust enrichment due to not paying license fees. The owner of the pub lost its case twice, and then filled petition to the Constitutional Court [Huťko still wonders how much contribution to copyright law pub owners in Europe can bring, see Football Association Premier League C-403/08].
The Constitutional Court mentioned that it is questionable whether Directive 2006/123/EC applies to the relationship between collective society and user of the work, and if so, the current wording of the Copyright Act might be in breach of following provision of Art. 16:
1. Member States shall respect the right of providers to provide services in a Member State other than that in which they are established. The Member State in which the service is provided shall ensure free access to and free exercise of a service activity within its territory. Member States shall not make access to or exercise of a service activity in their territory subject to compliance with any requirements which do not respect the following principles:

(a) non-discrimination: the requirement may be neither directly nor indirectly discriminatory with regard to nationality or, in the case of legal persons, with regard to the Member State in which they are established;

2. Member States may not restrict the freedom to provide services in the case of a provider established in another Member State by imposing any of the following requirements:

(a) an obligation on the provider to have an establishment in their territory [this was of relevance before the amendment of Czech Copyright Act in 18.5.2008, which required collective societies to be domiciled in the Czech republic];

(b) an obligation on the provider to obtain an authorisation from their competent authorities including entry in a register or registration with a professional body or association in their territory, except where provided for in this Directive or other instruments of Community law;

The Constitutional Court also briefly discussed possibility of applying competition law, Art. 101 and Art. 102 TFEU, pointing to recent decision in Football Association Premier League C-403/08 and Karen Murphy C-429/08. Lets see what is now going to happen on City Court in Prague. Huťko (with help of his friends & readers) will monitor the case closely.

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