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What is the SGAE?
The General Society of Authors and Publishers is a non-profit association registered in the National Registry of the Ministry of the Interior.
The SGAE is an intellectual property rights management organization, whose regulation is found in Article 147 of Royal Legislative Decree 1/1996, of April 12, which approves the revised text of the Intellectual Property Law, regularizing, clarifying, and harmonizing the current legal provisions on the subject. In Spain, the SGAE is not the only management organization, although it is the most well-known.
The legal status of management entities is imposed by regulations, which require them to be non-profit entities. This means that, Copyright management entities cannot distribute profits among their partners (doesn’t mean they have it for us), but they can receive financial compensation.
What are intellectual property rights?
Articles 1 and 2 of the Royal Decree of the Intellectual Property Law establish that the intellectual property of a literary, artistic, or scientific work belongs to the author by the sole fact of its creation and is comprised of personal and property rights, which grant the author full disposition and the exclusive right to exploit the work.
Intellectual property rights arise with the creation of the work, however, although registration in the Intellectual Property Registry It is not mandatory, yes constitutes a qualified test for the protection of intellectual property rights, since it is presumed, unless proven otherwise, that the registered rights exist and belong to their owner in the manner determined in the respective entry of the registry, having an official title proving the ownership of the copyright.
Who can manage intellectual property rights?
Copyright belongs to the owner of the work, and the author himself is entitled to request the cessation of activities that infringe his intellectual property rights.
The author may use third parties to enforce his or her rights out of Court, without the need for a specialized professional, when he or she becomes aware that someone is exploiting his or her work without his or her authorization. However, to exercise his or her rights in court, the author will need to hire a lawyer and a solicitor to initiate legal proceedings before the Courts..
The reality is that many authors have management entities, as they are created specifically to investigate acts that infringe intellectual property, since it is particularly difficult to find out if someone is using the work without the author’s authorization.
Therefore, the SGAE employs staff dedicated exclusively to visiting businesses that may be exploiting works without the authors’ consent. These “inspectors” are not public authorities, nor can they impose fines., hence, Establishments are not required to show any type of documentation required by these workers, nor are they forced to provide them with data or answer their questions..
Do all businesses have to pay SGAE?
The obligation to pay SGAE will depend on the type of business in which music with copyrights managed by SGAE is being played and whether there is a “communication to the public.”
Regarding the concept of “communication to the public,” the Court of Justice of the European Union has held that the “public” must consist of an indeterminate number of potential recipients and a considerable number of persons. Regarding the “indeterminate” nature of the public, the Court of Justice has interpreted the concept as meaning “making a work perceptible in any suitable way, by persons in general, that is to say, without restricting it to certain individuals belonging to a private group.” Regarding the criterion relating to a “considerable number of persons,” the Court of Justice has specified that its objective is to indicate that the concept of the public implies a certain de minimis threshold, which excludes from it a plurality of interested persons that is too small or even insignificant.
Having explained the above, the CJEU has declared, in its Judgment of 15 March 2012, that a hotel establishment that provides television or radio sets in its guests’ rooms obtains economic benefits that are independent of those obtained by the broadcaster or by the producer of the phonograms, since the hotel establishment that carries out a communication to the public transmits a protected work to a new public, that is, to a public that does not coincide with the one envisaged by the authors of the protected work when they authorized its use for communication to the original public.
The hotel establishment’s intervention in giving its guests access to the broadcast work is a supplementary service provision that influences the hotel’s category and, therefore, the price of the rooms.. Consequently, the hotel establishment is obliged to pay royalties.
Similarly, the Court of Justice has declared that the transmission of broadcast works in a catering establishment It is done to attract customers and may impact the number of people who frequent the establishment and, ultimately, its financial results (in this regard, see the judgments cited above, SGAE, paragraph 44, and Football Association Premier League and Others, paragraph 205).
However, the CJEU, in the aforementioned judgment, has declared that a dentist does not carry out a “communication to the public” this is in terms of the magnitude of the number of people for whom the dentist broadcasts and allows to hear the same phonogram. In the case of a dentist’s patients, the number of these people is small, even insignificant, since the circle of people simultaneously present in his office is generally very limited. Furthermore, although patients follow one another, since they are present in shifts, they are not, as a rule, recipients of the same phonograms, especially in the case of broadcast ones. Patients come to a dental office for the sole purpose of being treated; the reproduction of music is not an additional service. They access certain phonograms, depending on the time of their arrival at the office and the length of their wait, as well as the nature of the treatment they receive, fortuitously and independently of their wishes. Therefore, it cannot be assumed that a dentist’s patient population will be receptive to the dissemination in question, therefore, the dentist will not have to pay royalties.
Consequently, the obligation to pay royalties will depend on the type of establishment where music with copyrights managed by SGAE is being played and whether there is a “communication to the public.”
Therefore, if music is played in our establishment to attract customers or as an additional service, we will have to pay the SGAE, but only in cases where we reproduce works by its members, since the SGAE does not own the rights of all artists, you can check their repertoire on the SGAE website itself, so any reproductions not included in their collection will not be subject to royalties from the SGAE.
If a representative of the SGAE is present, we recommend that you do not sign any documents provided to you without first consulting a professional.
