Supreme Court sides with Telia, represented by Roschier, in copyright case involving a question of collective management organization’s standing to sue

Insights|September 30, 2024

The Finnish Supreme Court recently ruled in favor of Telia Finland Oyj in a copyright infringement case brought against Telia by the collecting society Kopiosto ry. The case concerned alleged retransmission of television broadcasts in Telia’s cable networks and whether Kopiosto has independent standing to sue in its own name for the infringement of the copyrights of the rights holders it represents. Following referral on the question of Kopiosto’s standing to sue to the Court of Justice of the European Union (“CJEU”), the Supreme Court ruled in agreement with Telia that Kopiosto does not have independent standing to bring such proceedings, and such standing cannot be effectively contractually delegated. The ruling provides an important precedent and clarification on the role of collective rights-management organizations in relation to the rights holders they represent, further defining their standing in copyright infringement cases.

Kopiosto ry is a Finnish collective rights-management organization that represents rights holders in relation to the collective licensing of retransmission rights for television broadcasts. In January 2018, Kopiosto brought proceedings against Telia in the Finnish Market Court for an alleged copyright infringement of the copyrights of rights holders represented by Kopiosto (MAO:285/19).

Kopiosto alleged that Telia had infringed upon the rights of the copyright holders because Telia had retransmitted television broadcasts without an extended collective license within the meaning of Section 25 h of the Finnish Copyright Act (tekijänoikeuslaki (404/1961)). Kopiosto also claimed that Telia was liable to pay Kopiosto remuneration for the retransmission of broadcasts within the meaning of Section 25 i of the Finnish Copyright Act, as well as compensation and damages due to the copyright infringement.

In the case, Kopiosto claimed to represent two groups of rights holders: one group who had expressly authorized Kopiosto to manage their rights by signing a written mandate, and a second group whom Kopiosto represents solely through its role as a collective rights-management organization. Kopiosto did not itemize the individual rights holders in either group but instead brought the copyright infringement claim in its own name.

Telia, represented by Roschier’s IP & Technology team, responded by arguing that Telia did not retransmit television broadcasts within the meaning of the Finnish Copyright Act, and, in any event, Kopiosto did not have standing to bring the proceedings on the infringement of the rights holders’ copyrights in Kopiosto’s own name.

In June 2019, the Market Court ruled favorably for Telia. The Market Court first concluded that Telia does not retransmit TV broadcasts in its cable networks. Secondly, the Market Court found that Kopiosto did not have standing to sue for copyright infringement in its own name, neither for the rights holders Kopiosto claimed to represent in its capacity as an extended collective rights-management organization nor based on the signed mandates some of the rights holders had issued to Kopiosto.

In August 2019, Kopiosto applied for leave to appeal from the Supreme Court regarding two questions: whether Kopiosto had standing to sue for copyright infringement in its own name, and whether Telia’s activities constituted retransmission of TV broadcasts. The Supreme Court granted Kopiosto leave to appeal on the question of Kopiosto’s standing to sue and deferred the second question until a later date.

In March 2022, the Supreme Court decided to refer the case to the CJEU, requesting a preliminary ruling on the interpretation of Article 4(c) of Directive 2004/48 on the enforcement of intellectual property rights (“Enforcement Directive”) in relation to the enforcement of intellectual property rights by a collective rights-management organization.

The CJEU gave its judgment in November 2023 (Case C-201/22), finding that Article 4(c) of the Enforcement Directive requires specific recognition in national law of a collective rights-management organization’s standing to bring proceedings in its own name regarding the defense of intellectual property rights. The CJEU concluded that standing to bring proceedings does not have to result from a specific provision of national law, but it may result from national general procedural principles. However, a mere capacity to bring legal proceedings in general under national law is not sufficient. Thus, it follows that EU law does not establish such standing for collective rights-management organizations solely deriving from their role as a collective rights-management organization. Additionally, the CJEU found that Article 4(c) of the Enforcement Directive requires collective rights-management organizations to have a direct interest in bringing copyright infringement proceedings in their own name to defend the exclusive rights of the rights holders they represent. EU law does not establish such an interest, but rather it must be recognized in national law. Importantly, Member States are not obligated to recognize such an interest. It was therefore left for the Supreme Court to decide whether Kopiosto had direct interest and standing to bring proceedings for an infringement action under Finnish national law.

The Supreme Court handed down its ruling on the matter on 20 September 2024 (KKO:2024:53). In its majority decision, the Supreme Court found that Finnish national law does not provide collective rights-management organizations with independent standing, in their own name, to bring proceedings on copyright infringement of the exclusive rights of the rights holders they represent. The Supreme Court identified the general principle in Finnish law regarding standing to bring proceedings in dispute matters to be that standing is provided to the parties of the legal relationship in dispute. In this case, Kopiosto was not considered a party to the legal relationship in question in the enforcement of exclusive rights in copyright infringement proceedings. It was also found that Finnish law does not recognize a direct interest for Kopiosto to bring proceedings in its own name. Therefore, the Supreme Court held, favorably for Telia, that Kopiosto does not have standing to bring proceedings in its own name. The Supreme Court also held in agreement with Telia that such standing cannot be effectively contractually delegated without the transfer of the copyright itself. The Supreme Court did not grant Kopiosto leave to appeal regarding the question of whether Telia’s activities constituted retransmission, and the Market Court judgment remains final in that respect.