Information Note on the Court’s case-law 198

July 2016

SIA AKKA/LAA v. Latvia - 562/05

Judgment 12.7.2016 [Section V]

Article 1 of Protocol No. 1

Article 1 para. 2 of Protocol No. 1

Control of the use of property

Court order requiring copyright manager to enter into licence agreement with two radio stations and to set an equitable royalty rate: no violation

Facts – The applicant organisation (SIA “Autortiesību un komunicēšanās konsultāciju aģentūra/Latvijas Autoru apvienība” – Copyright and Communication Consulting Agency Ltd./Latvian Authors Association) was an organisation responsible for managing the copyright of the musical works of a large number of Latvian and international a uthors. In the 1990s the applicant organisation failed to conclude new licence agreements with several broadcasting companies. Despite this, some of the broadcasters continued to use the protected musical works. In 2002 and 2003 the applicant organisation issued civil proceedings against several of the broadcasting parties, including claims against a private radio station and state-owned radio company, for copyright infringement. In both cases the applicant organisation and the two radio companies were ordered to conclude a licence agreement and to set an equitable royalty rate.

Law – Article 1 of Protocol No. 1

(a) Interference with the applicant organisation’s possessions – The applicant organisation held the rights transferred to it by its members, namely, the authors of musical works. Accordingly, the applicant organisation’s rights constituted possessions in the form of musical works and the economic interests deriving from them. The domestic courts had ordered it to conclude written licence agreements with the defendant organisations in the domestic proceedings and had set certain terms and conditions which in turn had entailed limits on its freedom to enter into contracts in relation to the broadcasting of music. Accordingly, there had been interference with the applicant organisation’s possessions in the form of a control of the use of property.

(b) Compliance – The domestic courts’ competence to order the impugned measures had had a basis in domestic law. The application of the relevant provisions had not been arbitrary, as the domestic courts had provided reasons regarding the setting of royalty rates and the legal basis for the conclusion of the licence agreements. The interference had therefore been prescribed by law. The measures had pursued a legitimate aim, as the domestic courts had endeavoured to maintain a balance between the rights of the applicant organisation to obtain equitable remuneration from the use of musical work and the defendants’ interest in obtaining a licence allowing them to legally broadcast rights-protected work.

As to whether a fair balance had been struck, the Court noted that the applicant organisation considered that the State’s actions constituted an unjustified interference, whereas the Government had contended that by adopting the contested decisions the State had carried out its positive obligations as enshrined by international and domestic copyright agreements and legislation. In this respect, by virtue of the Berne Convention for the Protection of Literary and Artistic Works and the domestic law as interpreted and applied by the domestic courts, where no agreement between the parties had been reached and no other authority had decided on this issue, it was for the courts to set an equitable royalty rate. In order to assess whether this mechanism had provided safeguards in the instant case to ensure that the functioning of the copyright protection system and its impact was neither arbitrary nor unforeseeable, the Court took into account the following elements.

Firstly, before laying down the royalty rate, the domestic courts had provided the parties with time to reach an agreement. When this did not prove possible, they had relied on the fact that in the first set of proceedings the parties had already reached an agreement on the method for calculation of the royalty rate. In the second set of proceedings the domestic courts referred to the method that had been used in licence agreements the applicant organisation had concluded with other broadcasters, and the rate set by the domestic courts was not considerably lower than the rate negotiated by the parties in their previous licence agreement.

Secondly, the domestic courts established that in circumstances where parties were in principle willing to enter into an agreement, banning the broadcast of the music would not suit the best interests of copyright holders to receive the maximum benefit from the works.

Thirdly, the orders to enter into a licence agreement were limited in scope and time. Accordingly, the parties had not been prevented from renegotiating the rate. It followed that the authorities had minimally restricted the right of the applicant organisation to renegotiate terms and conditions with the defendants and other broadcasting companies.

It followed that the domestic authorities had struck a fair balance between the demands of the general interest and the rights of the applicant organisation.

Conclusion : no violation (unanimously).

The Court also found, unanimously, that, since the national courts had acted in accordance with national law and had provided sufficient reasoning in their decisions, there had been no violation of Article 6 § 1 of the Convention.

© Council of Europe/European Court of Human Rights This summary by the Registry does not bind the Court.

Click here for the Case-Law Information Notes