Background of the case

Fleetmanager Sweden AB and Nordisk Biluthyrning AB are motor vehicle leasing companies with their registered offices in Sweden. They offer vehicles equipped with a radio receiver for hiring, either directly or through intermediaries, in particular for periods not exceeding 29 days, which is regarded under national law as a short-term lease.

The two companies are being sued in two separate proceedings, the first by Föreningen Svenska Tonsättares Internationella Musikbyrå u.p.a. (Stim) (the Swedish organisation which collectively manages copyright in music), and the second by Svenska artisters och musikers intresseorganisation ek. för. (SAMI) (the Swedish organization managing the related rights of performers), on the grounds that the hiring out to third parties of vehicles equipped with a radio receiver for short-term leasing to private customers contributed to copyright infringement since musical works were made available to the public without authorization. 

In the first case, the judge stated at first instance that hiring out vehicles equipped with a radio receiver involved ‘communication to the public’ of musical works, and that the authors of those works should be compensated. However, it was found that Fleetmanager had not participated in the copyright infringement and therefore the lawsuit was dismissed. STIM subsequently brought an action before the Swedish Supreme Court, which is currently under assessment.

Regarding the second dispute between SAMI and NB, NB appealed the decision at first instance claiming that it was not under any obligation to pay a compensation to SAMI for the use of sound recordings in vehicles rented to private individuals and businesses for the mere fact that those were equipped with a radio receiver and a CD player. The Swedish Patents, Trade Marks and Commercial Court then ruled that the use of a phonogram referred to in Article 8(2) of Directive 2006/115 constitutes ‘communication to the public’ within the meaning of Article 3(1) of Directive 2001/29. It also held that the provision by NB of radio receivers in the leased vehicles enabled the occupants of those vehicles to listen to sound recordings and that it must therefore be regarded as constituting a ‘communication’. Furthermore, it considered that the other criteria determining whether there is a ‘communication to the public’ were also met. It therefore held that NB should pay a compensation to SAMI and dismissed the action brought by NB. That judgment was reversed on appeal and subsequently appealed by SAMI to the Swedish Supreme Court.

The preliminary ruling´s decision.

In those circumstances, the Högsta domstolen (Supreme Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

(1) Does the hiring out of cars which are equipped as standard with radio receivers mean that the person who hires the cars out is a user who makes a ‘communication to the public’ within the meaning of Article 3(1) of Directive 2001/29 and within the meaning of Article 8(2) of Directive 2006/115?

The Court states that a supply such as that referred to in the preceding paragraph differs from acts of communication by which service providers intentionally broadcast protected works to their clientele, by distributing a signal by means of receivers that they have installed in their establishment (judgment of 31 May 2016, Reha Training, C‑117/15, EU:C:2016:379, paragraphs 47 and 54 and the case-law cited).

Consequently, Article 3(1) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society and Article 8(2) of Directive 2006/115/EC of the European Parliament and of the Council of 12 December 2006 on rental right and lending right and on certain rights related to copyright in the field of intellectual property must be interpreted as meaning that the hiring out of motor vehicles equipped with radio receivers does not constitute a communication to the public within the meaning of those provisions. 

(2) What is the significance, if any, of the volume of the car hire activities and the duration of the hires?

There is no need to answer the second question.


Judgement of the Court of Justice of the European Union (Fifth Chamber) of April 2, 2020 in case C‑753/18.