Payment of royalties to SCF for music played in professional offices

The Court of Cassation, with Order No. 2468 of February 8, 2016, ruled that professional firms are not obligated to pay rights holders the compensation pursuant to Articles 73 and 73-bis of the Copyright Act. The Court addressed a case in which SCF – Società Consortile Fonografi (hereinafter SCF), which carries out collecting activities in Italy and abroad as the agent for the management, collection, and distribution of royalties from its member phonograph producers, had sued a dental practice, arguing that the background broadcasting of proprietary phonograms constitutes communication to the public under Italian copyright law, as well as international law consistent with European Community law, and was subject to the payment of fair compensation, to be determined in a separate proceeding. In practice, according to SCF, professional firms were required to pay copyright royalties.
The Court of Cassation, however, ruled the opposite. This is a particularly important ruling for the concept of the right of communication to the public, which triggers the obligation to pay copyright, especially considering that SCF had prevailed in both the first and second instance cases before the Court of Milan. The Court therefore established that the notion of the public referred to in Article 3, paragraph 1, of Directive 2001/29 on copyright concerns an indeterminate number of potential recipients and, moreover, includes a rather considerable number of individuals (ECJ ruling in ITV Broadcasting).
This concept cannot be applied to a professional practice such as a dentist's. The Supreme Court also clarified the role of Court of Justice rulings in our legal system, maintaining that these rulings constitute a further source of Community law, not in the sense that they create new Community law, but rather in that they indicate its meaning and the limits of its application, with effect erga omnes within the Community.
From this perspective, the Court also very clearly rejected the claims of constitutional violations raised by SCF and the possibility of appealing to the Court of Justice, deeming them manifestly unfounded, also ordering the consortium company to pay legal costs.