STUDY ON THE CONDITIONS APPLICABLE TO CONTRACTS
RELATING TO INTELLECTUAL PROPERTY
IN THE EUROPEAN UNION
Final Report
Study contract No. ETD/2000 /B5-3001/E/69
By
Lucie Guibault
P. Bernt Hugenholtz
With the co-operation of
Marjanka Vermunt
Marieke Berghuis
Institute for Information Law
Amsterdam, The Netherlands
May 2002
"This study was commissioned by the European Commission's Internal Market
Directorate-General as part of its study program. It does not, however,
express the Commission's official views. The views expressed and all
recommendations made are those of the authors. Neither the Commission nor the
Consultants accept liability for the consequences of actions taken on the
basis of the information contained in the study."
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TABLE OF CONTENTS
LIST OF ABBREVIATIONS .............................................................................................X
CHAPTER 1. INTRODUCTION.................................................................................... 1
CHAPTER 2. GENERAL FRAMEWORK RELATING TO COPYRIGHT
CONTRACTS ................................................................................................................. 5
2.1 International framework ...................................................................................................5
2.1.1 Multilateral instruments...................................................................................................................6
2.1.1.1 Berne Convention........................................................................................................................6
2.1.1.2 Rome Convention........................................................................................................................6
2.1.1.3 TRIPS Agreement........................................................................................................................7
2.1.1.4 Proposal for a Treaty on the Protection of Audiovisual Performances...........................8
2.1.2 European Directives ........................................................................................................................8
2.2 General principles of law..................................................................................................11
2.2.1 Good faith........................................................................................................................................12
2.2.2 Imprecision ......................................................................................................................................14
2.2.3 Fairness and equity.........................................................................................................................15
2.3 Conclusion.......................................................................................................................20
CHAPTER 3. INTRODUCTORY REMARKS TO THE ANALYSIS OF COPYRIGHT
PROVISIONS .............................................................................................................. 23
3.1 Ownership of rights.........................................................................................................24
3.1.1 Creator doctrine..............................................................................................................................24
3.1.2 Works created under employment..............................................................................................25
3.1.3 Works created on commission ....................................................................................................26
3.1.4 Audiovisual works ..........................................................................................................................26
3.2 Forms of transfer of rights ..............................................................................................28
3.2.1 Assignment.......................................................................................................................................29
3.2.2 Licence..............................................................................................................................................29
3.2.3 Waiver ...............................................................................................................................................30
3.3 Requirements of form ..................................................................................................... 31
3.4 Restrictions on transfers of rights...................................................................................32
3.5 Determination of remuneration......................................................................................33
3.5.1 Proportional remuneration...........................................................................................................34
3.5.2 Equitable remuneration.................................................................................................................34
3.5.3 Lump sum........................................................................................................................................34
3.5.4 ‘Best-seller’ clause ...........................................................................................................................34
3.6 Interpretation of contracts ..............................................................................................35
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3.7 Effect of transfer in relation to third parties...................................................................35
3.8 Termination of contract..................................................................................................36
CHAPTER 4. COUNTRY-BY-COUNTRY ANALYSIS................................................ 37
4.1 Austria..............................................................................................................................37
4.1.1 Ownership of Rights......................................................................................................................37
4.1.1.1 Creator doctrine..........................................................................................................................37
4.1.1.2 Works created under employment .........................................................................................37
4.1.1.3 Works created on commission................................................................................................37
4.1.1.4 Audiovisual works......................................................................................................................38
4.1.2 Forms of transfers of rights..........................................................................................................38
4.1.2.1 Assignment..................................................................................................................................38
4.1.2.2 Licence..........................................................................................................................................39
4.1.2.3 Waiver...........................................................................................................................................39
4.1.3 Requirements of form ...................................................................................................................40
4.1.4 Restrictions on transfers of rights...............................................................................................40
4.1.4.1 Limits of scope, time, and place..............................................................................................40
4.1.4.2 Future forms of exploitation....................................................................................................40
4.1.4.3 Future works ...............................................................................................................................40
4.1.5 Determination of remuneration ..................................................................................................41
4.1.6 Interpretation of contracts............................................................................................................41
4.1.7 Effect of transfer in relation to third parties.............................................................................42
4.1.7.1 Right to transfer acquired rights..............................................................................................42
4.1.7.2 Standing to sue............................................................................................................................42
4.1.7.3 Right to pledge, secure or seize acquired rights...................................................................42
4.1.8 Termination of contract................................................................................................................42
4.1.8.1 Non-use of rights .......................................................................................................................42
4.1.8.2 Bankruptcy of exploiter ............................................................................................................43
4.2 Benelux ............................................................................................................................45
4.2.1 Ownership of Rights......................................................................................................................45
4.2.1.1 Creator doctrine..........................................................................................................................45
4.2.1.2 Works created under employment .........................................................................................45
4.2.1.3 Works created on commission................................................................................................47
4.2.1.4 Audiovisual works......................................................................................................................47
4.2.2 Forms of transfers of rights..........................................................................................................48
4.2.2.1 Assignment..................................................................................................................................48
4.2.2.2 Licence..........................................................................................................................................49
4.2.2.3 Waiver...........................................................................................................................................49
4.2.3 Requirements of form ...................................................................................................................50
4.2.4 Restrictions on transfers of rights...............................................................................................50
4.2.4.1 Limits of scope, time, and place..............................................................................................50
4.2.4.2 Future forms of exploitation....................................................................................................51
4.2.4.3 Future works ...............................................................................................................................52
4.2.5 Determination of remuneration ..................................................................................................53
4.2.5.1 Proportional remuneration.......................................................................................................53
4.2.5.2 Equitable remuneration ............................................................................................................56
4.2.5.3 Lump sum....................................................................................................................................58
4.2.5.4 ‘Best-seller’ clause.......................................................................................................................58
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4.2.6 Interpretation of contracts............................................................................................................59
4.2.7 Effect of transfer in relation to third parties.............................................................................60
4.2.7.1 Right to transfer acquired rights..............................................................................................60
4.2.7.2 Standing to sue............................................................................................................................60
4.2.7.3 Right to pledge, secure or seize acquired rights...................................................................61
4.2.8 Termination of contract................................................................................................................61
4.2.8.1 Non-use of rights .......................................................................................................................61
4.2.8.2 Bankruptcy of exploiter ............................................................................................................61
4.2.8.3 Other circumstances..................................................................................................................62
4.3 France...............................................................................................................................63
4.3.1 Ownership of Rights......................................................................................................................63
4.3.1.1 Creator doctrine..........................................................................................................................63
4.3.1.2 Works created under employment .........................................................................................63
4.3.1.3 Works created on commission................................................................................................64
4.3.1.4 Audiovisual works......................................................................................................................65
4.3.2 Forms of transfers of rights..........................................................................................................65
4.3.2.1 Assignment..................................................................................................................................65
4.3.2.2 Licence..........................................................................................................................................65
4.3.2.3 Waiver...........................................................................................................................................65
4.3.3 Requirements of form ...................................................................................................................66
4.3.4 Restrictions on transfers of rights...............................................................................................67
4.3.4.1 Limits of scope, time, and place..............................................................................................67
4.3.4.2 Future forms of exploitation....................................................................................................67
4.3.4.3 Future works ...............................................................................................................................68
4.3.5 Determination of remuneration ..................................................................................................69
4.3.5.1 Proportional remuneration.......................................................................................................69
4.3.5.2 Equitable remuneration ............................................................................................................71
4.3.5.3 Lump sum....................................................................................................................................72
4.3.5.4 ‘Best-seller’ clause.......................................................................................................................72
4.3.6 Interpretation of contracts............................................................................................................72
4.3.7 Effect of transfer in relation to third parties.............................................................................72
4.3.7.1 Right to transfer acquired rights..............................................................................................72
4.3.7.2 Standing to sue............................................................................................................................73
4.3.7.3 Right to pledge, secure or seize acquired rights...................................................................73
4.3.8 Termination of contract................................................................................................................73
4.3.8.1 Non-use of rights .......................................................................................................................73
4.3.8.2 Bankruptcy of exploiter ............................................................................................................74
4.3.8.3 Other circumstances..................................................................................................................74
4.4 Germany...........................................................................................................................75
4.4.1 Ownership of Rights......................................................................................................................75
4.4.1.1 Creator doctrine..........................................................................................................................75
4.4.1.2 Works created under employment .........................................................................................75
4.4.1.3 Works created on commission................................................................................................76
4.4.1.4 Audiovisual works......................................................................................................................76
4.4.2 Forms of transfers of rights..........................................................................................................77
4.4.2.1 Assignment..................................................................................................................................77
4.4.2.2 Licence..........................................................................................................................................77
4.4.2.3 Waiver...........................................................................................................................................78
4.4.3 Requirements of form ...................................................................................................................78
4.4.4 Restrictions on transfers of rights...............................................................................................78
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4.4.4.1 Limits of scope, time, and place..............................................................................................78
4.4.4.2 Future forms of exploitation....................................................................................................79
4.4.4.3 Future works ...............................................................................................................................80
4.4.5 Determination of remuneration ..................................................................................................80
4.4.5.1 Fair compensation......................................................................................................................80
4.4.5.2 ‘Best-seller’ clause.......................................................................................................................82
4.4.6 Interpretation of contracts............................................................................................................82
4.4.7 Effect of transfer in relation to third parties.............................................................................83
4.4.7.1 Right to transfer acquired rights..............................................................................................83
4.4.7.2 Standing to sue............................................................................................................................84
4.4.7.3 Right to pledge, secure or seize acquired rights...................................................................84
4.4.8 Termination of contract................................................................................................................85
4.4.8.1 Non-use of rights .......................................................................................................................85
4.4.8.2 Bankruptcy of exploiter ............................................................................................................85
4.4.8.3 Other circumstances..................................................................................................................86
4.5 Greece ..............................................................................................................................87
4.5.1 Ownership of Rights......................................................................................................................87
4.5.1.1 Creator doctrine..........................................................................................................................87
4.5.1.2 Works created under employment .........................................................................................87
4.5.1.3 Works created on commission................................................................................................88
4.5.1.4 Audiovisual works......................................................................................................................88
4.5.2 Forms of transfers of rights..........................................................................................................88
4.5.2.1 Assignment..................................................................................................................................88
4.5.2.2 Licence..........................................................................................................................................88
4.5.2.3 Waiver...........................................................................................................................................89
4.5.3 Requirements of form ...................................................................................................................89
4.5.4 Restrictions on transfers of rights...............................................................................................89
4.5.4.1 Limits of scope, time, and place..............................................................................................89
4.5.4.2 Future forms of exploitation....................................................................................................90
4.5.4.3 Future works ...............................................................................................................................90
4.5.5 Determination of remuneration ..................................................................................................90
4.5.5.1 Proportional remuneration.......................................................................................................90
4.5.5.2 Equitable remuneration ............................................................................................................91
4.5.5.3 Lump sum....................................................................................................................................91
4.5.5.4 ‘Best-seller’ clause.......................................................................................................................93
4.5.6 Interpretation of contracts............................................................................................................93
4.5.7 Effect of transfer in relation to third parties.............................................................................93
4.5.7.1 Right to transfer acquired rights..............................................................................................93
4.5.7.2 Standing to sue............................................................................................................................93
4.5.7.3 Right to pledge, secure or seize acquired rights...................................................................93
4.5.8 Termination of contract................................................................................................................94
4.5.8.1 Non-use of rights .......................................................................................................................94
4.5.8.2 Bankruptcy of producer............................................................................................................94
4.5.8.3 Other circumstances..................................................................................................................94
4.6 Italy...................................................................................................................................95
4.6.1 Ownership of Rights......................................................................................................................95
4.6.1.1 Creator doctrine..........................................................................................................................95
4.6.1.2 Works created under employment .........................................................................................95
4.6.1.3 Works created on commission................................................................................................95
4.6.1.4 Audiovisual works......................................................................................................................96
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4.6.2 Forms of transfers of rights..........................................................................................................96
4.6.2.1 Assignment..................................................................................................................................96
4.6.2.2 Licence..........................................................................................................................................96
4.6.2.3 Waiver...........................................................................................................................................96
4.6.3 Requirements of form ...................................................................................................................97
4.6.4 Restrictions on transfers of rights...............................................................................................97
4.6.4.1 Limits of scope, time, and place..............................................................................................97
4.6.4.2 Future forms of exploitation....................................................................................................98
4.6.4.3 Future works ...............................................................................................................................98
4.6.5 Determination of remuneration ..................................................................................................98
4.6.5.1 Proportional remuneration.......................................................................................................98
4.6.5.2 Equitable remuneration ............................................................................................................98
4.6.5.3 Lump sum....................................................................................................................................99
4.6.5.4 ‘Best-seller’ clause.......................................................................................................................99
4.6.6 Interpretation of contracts............................................................................................................99
4.6.7 Effect of transfer in relation to third parties.............................................................................99
4.6.7.1 Right to transfer acquired rights..............................................................................................99
4.6.7.2 Standing to sue..........................................................................................................................100
4.6.7.3 Right to pledge, secure or seize acquired rights.................................................................100
4.6.8 Termination of contract..............................................................................................................100
4.6.8.1 Non-use of rights .....................................................................................................................100
4.6.8.2 Bankruptcy of the publisher...................................................................................................101
4.6.8.3 Other circumstances................................................................................................................101
4.7 Spain and Portugal........................................................................................................ 103
4.7.1 Ownership of Rights....................................................................................................................103
4.7.1.1 Creator doctrine........................................................................................................................103
4.7.1.2 Works created under employment .......................................................................................103
4.7.1.3 Works created on commission..............................................................................................105
4.7.1.4 Audiovisual works....................................................................................................................106
4.7.2 Forms of transfers of rights........................................................................................................107
4.7.2.1 Assignment................................................................................................................................107
4.7.2.2 Licence........................................................................................................................................108
4.7.2.3 Waiver.........................................................................................................................................108
4.7.3 Requirements of form .................................................................................................................109
4.7.4 Restrictions on transfers of rights.............................................................................................110
4.7.4.1 Limits of scope, time, and place............................................................................................110
4.7.4.2 Future forms of exploitation..................................................................................................111
4.7.4.3 Future works .............................................................................................................................111
4.7.5 Determination of remuneration ................................................................................................112
4.7.5.1 Proportional remuneration.....................................................................................................112
4.7.5.2 Equitable remuneration ..........................................................................................................113
4.7.5.3 Lump sum..................................................................................................................................114
4.7.5.4 ‘Best-seller’ clause.....................................................................................................................114
4.7.6 Interpretation of contracts..........................................................................................................114
4.7.7 Effect of transfer in relation to third parties...........................................................................115
4.7.7.1 Right to transfer acquired rights............................................................................................115
4.7.7.2 Standing to sue..........................................................................................................................116
4.7.7.3 Right to pledge, secure or seize acquired rights.................................................................116
4.7.8 Termination of contract..............................................................................................................116
4.7.8.1 Non-use of rights .....................................................................................................................116
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4.7.8.2 Bankruptcy of exploiter ..........................................................................................................116
4.7.8.3 Other circumstances................................................................................................................117
4.8 Nordic Countries............................................................................................................119
4.8.1 Ownership of Rights....................................................................................................................119
4.8.1.1 Creator doctrine........................................................................................................................119
4.8.1.2 Works created under employment .......................................................................................119
4.8.1.3 Works created on commission..............................................................................................119
4.8.1.4 Audiovisual works....................................................................................................................119
4.8.2 Forms of transfers of rights........................................................................................................120
4.8.2.1 Assignment................................................................................................................................120
4.8.2.2 Licence........................................................................................................................................120
4.8.2.3 Waiver.........................................................................................................................................121
4.8.3 Requirements of form .................................................................................................................121
4.8.4 Restrictions on transfers of rights.............................................................................................122
4.8.4.1 Limits of scope, time, and place............................................................................................122
4.8.4.2 Future forms of exploitation..................................................................................................122
4.8.4.3 Future works .............................................................................................................................122
4.8.5 Determination of remuneration ................................................................................................122
4.8.5.1 Proportional remuneration.....................................................................................................122
4.8.5.2 Equitable remuneration ..........................................................................................................123
4.8.5.3 ‘Best-seller’ clause.....................................................................................................................124
4.8.6 Interpretation of contracts..........................................................................................................124
4.8.7 Effect of transfer in relation to third parties...........................................................................124
4.8.7.1 Right to transfer acquired rights............................................................................................124
4.8.7.2 Standing to sue..........................................................................................................................124
4.8.7.3 Right to pledge, secure or seize acquired rights.................................................................125
4.8.8 Termination of contract..............................................................................................................125
4.8.8.1 Non-use of rights .....................................................................................................................125
4.8.8.2 Bankruptcy of exploiter ..........................................................................................................125
4.8.8.3 Other circumstances................................................................................................................125
4.9 United Kingdom and Ireland ....................................................................................... 127
4.9.1 Ownership of Rights....................................................................................................................127
4.9.1.1 Creator doctrine........................................................................................................................127
4.9.1.2 Works created under employment .......................................................................................127
4.9.1.3 Works created on commission..............................................................................................128
4.9.1.4 Audiovisual works....................................................................................................................128
4.9.2 Forms of transfers of rights........................................................................................................129
4.9.2.1 Assignment................................................................................................................................129
4.9.2.2 Licence........................................................................................................................................129
4.9.2.3 Waiver.........................................................................................................................................129
4.9.3 Requirements of form .................................................................................................................129
4.9.4 Restrictions on transfers of rights.............................................................................................130
4.9.4.1 Limits of scope, time, and place............................................................................................130
4.9.4.2 Future forms of exploitation..................................................................................................130
4.9.4.3 Future works .............................................................................................................................130
4.9.5 Determination of remuneration ................................................................................................131
4.9.6 Interpretation of contracts..........................................................................................................131
4.9.7 Effect of transfer in relation to third parties...........................................................................131
4.9.7.1 Right to transfer acquired rights............................................................................................131
4.9.7.2 Standing to sue..........................................................................................................................131
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4.9.7.3 Right to pledge, secure or seize acquired rights.................................................................132
4.9.8 Termination of contract..............................................................................................................132
CHAPTER 5. PRIVATE INTERNATIONAL LAW..................................................... 133
5.1 Proprietary aspects of a transfer of rights .................................................................... 133
5.1.1 The subject matter of copyright ................................................................................................134
5.1.2 Copyright ownership....................................................................................................................134
5.1.3 Works created under employment............................................................................................134
5.1.4 Assignment or license..................................................................................................................135
5.2 Contractual aspects of transfer of rights ...................................................................... 135
5.2.1 Convention on the law applicable to contractual obligations .............................................135
5.2.2 Freedom of choice........................................................................................................................135
5.2.3 Applicable law in the absence of a choice...............................................................................137
5.2.4 Provisions for certain consumer contracts and individual employment contracts.........138
5.2.5 Mandatory rules.............................................................................................................................138
5.2.6 Rome Convention and copyright contracts............................................................................140
5.3 Formal aspects of transfer of rights...............................................................................141
5.4 WIPO Audiovisual Performances Treaty .................................................................... 142
CHAPTER 6. LEGISLATIVE DIFFERENCES AND THEIR IMPACT ON THE
INTERNAL MARKET.................................................................................................... 147
6.1 Summary of legislative differences............................................................................... 147
6.2 Impact of differences on the Internal Market...............................................................151
6.3 Scope for harmonisation ............................................................................................... 153
CHAPTER 7. CONCLUSIONS AND RECOMMENDATIONS ................................. 157
COMPARATIVE TABLE OF LEGISLATION............................................................... 159
BIBLIOGRAPHY........................................................................................................... 163
National Laws on Copyright and Related Rights .................................................................. 163
Monographs and articles.......................................................................................................... 164
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List of abbreviations
AA Ars Aequi
AGBG Gesetz über den Allgemeinen
Geschäftsbedingungen
AfP Archiv für Presserecht
ALAI Association Littéraire et Artistique
Internationale
AM Auteurs en Media
AMI Auteurs, Media- en Informatierecht
ARRvS Afdeling rechtspraak Raad van State
BC Berne Convention
BGB Bürgerliches Gesetzbuch
BGBl Bundesgesetzblatt
BGH Bundesgerichtshof
BIE Bijblad bij de Industriële Eigendom
BUMA Vereniging Buma (previously: Het Bureau
voor Musiek – auteursrecht)
BverfGE Bundesverfassungsgerichtsentscheidungen
CDPA Copyright, Design and Patent Act (UK)
CD-ROM Compact Disk Read Only Memory
CPI Code de la Propriété Intellectuelle
EEA European Economic Association
EC European Community
ECHR European Convention on Human Rights
ECR European Court Reports
EIPR European Intellectual Property Review
FCC French Civil Code
FuR Film und Recht
GEMA Gesellschaft für musikalische Aufführungsund
mechanische Vervielfältigung
GG Grundgesetz
GRUR Gewerblicher Rechtsschutz und
Urheberrecht
GRUR Int. Gewerblicher Rechtsschutz und
Urheberrecht Internationaler Teil
Gw Grondwet
HR Hoge Raad
IIC International Review of Industrial Property
and Copyright Law
JCP Juris-Classeur, Pratique
M&R Medien und Recht (Österreich)
NBW Nederlandse Burgerlijk Wetboek
NCCUSL National Conference of Commissioners on
Uniform State Laws
NJ Nederlandse Jurisprudentie
NJB Nederlandse Juristenblad
NJCM-Bulletin Nederlands Tijdschrift voor Mensenrechten
NJV Nederlandse Juristenvereniging
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OJ Official Journal
OLG Oberlandsgericht
RIDA Revue Internationale de Droit d’Auteur
TRIPS Agreement on Trade-Related Aspects of
Intellectual Property Rights
UFITA Archiv für Urheber-, Film-, Funk- und
Theaterrecht
UK United Kingdom
UNIDROIT International Institute for the Unification of
Private Law
UWG Gesetz gegen den unlauteren Wettbewerb
VG Wort Verwertungsgesellschaft Wort
WIPO World Intellectual Property Organisation
ZUM Zeitschrift für Urheber- und Medienrecht
Chapter 1. Introduction
The cross-border exploitation of copyrighted works or performances has increased dramatically in
recent years. This development is evident in respect of such ‘borderless’ media such as broadcasting
and information services provided online. However, more traditional sectors of the information and
entertainment industries, such as book publishing and film production, are also undergoing a
process of rapid internationalisation, particularly within the European Union. As a consequence,
contractual relationships between authors or performers on the one hand, and publishers,
broadcasters or producers on the other hand, are increasingly taking on an international dimension.
In view of the differences that presently exist at the national level regarding the law applicable to
copyright contracts, this process of internationalisation has, inevitably, prompted the question
whether some form of harmonisation at the European level is called for. This is the central question
of this study.
Authors and performing artists rarely are in a position to commercially produce and distribute their
own works or performances. In order to bring their creations to the market, they often have no
other choice but to enter into agreements with those businesses or entities that are willing and able
to exploit and distribute these works and performances, such as book, sound recording and software
publishers, radio and television broadcasters, film producers, record companies, museums and
galleries, show business promoters, advertising agencies, et cetera. The relationships between
authors or performing artists on the one hand, and publishers, broadcaster or producers on the
other hand are usually governed by individual contracts, in which the transfer of rights in favour of
the exploiter constitutes a key provision.
Authors and performing artists have long been recognised as the weaker party to transactions
relating to the exploitation of their productions, for whom protective measures are necessary to
prevent that they be unfairly or unreasonably disadvantaged. It is indeed no use granting rights to
authors and performing artists if the latter are unable to draw from the exploitation of these rights all
the benefits to which they are entitled under the law. In addition to the general principles of
contract law, many Member States have implemented a number of specific measures designed to
protect authors and performing artists in their contractual relations with publishers, broadcasters,
and producers. Such measures of protection range from default rules applicable to publishing
contracts, such as those codified in the early 20th
century in Germany, to the imperative rules for the
protection of authors and performers, found in France, Belgium and other countries of the droit
d’auteur tradition. In addition, several Member States provide for general rules protecting authors
and performers against over-broad transfers of rights. Conversely, economic and practical reasons
have inspired many legislatures in the world to create rules of allocation or interpretation that
concentrate the rights in works created under employment or audiovisual works in the hands of the
employer or of the film producer.
The globalisation and the new methods of exploitation of protected works and performances have
put the existing rules of copyright contracting1
under a new light. For example, courts in various
Member States of the European Union and even in the United States have recently ruled on the
question whether contracts between authors and publishers, which were concluded in ‘analogue’
times, also cover new electronic uses, such as the right to communicate works on-line.
1
Note that the scope of this study encompasses both copyrights (authors’ rights) and neighbouring (related) rights. In the context
of this study the term ‘copyright contract’ will be used as shorthand refer to contractual relations dealing with both categories of
rights.
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In practice, existing disparities in the law relating to copyright contracts may lead to different
outcomes depending on which national law applies to the initial allocation of rights and further
transfer of rights in international copyright cases. This issue has come up, with a vengeance, during
the preparatory discussions on a WIPO Treaty on Audiovisual Performances.
Because copyright contracts are primarily governed by the national laws of the Member States,
existing disparities might have an adverse effect on the working of the internal market. The
possibility to transfer rights according to several mechanisms, the existence in some Member States
of presumptions of transfer and of waiver of rights and the varying degrees of regulation applicable
to contractual practices in the field may all bear consequences for the exploitation of works and
performances within the European Community. In light of this study’s findings, these are all
elements that the European Commission will have to consider when assessing the need to
harmonise the laws of Member States on this issue. At a time when the modes of exploitation
converge inside the digital environment, the legislature is asked to weigh the publishers’ and
producers’ need for legal certainty in obtaining a broad transfer of rights against the social and
economic impact that extensive transfers of rights will have on authors and performers.
First and foremost, the aim of this study is to determine whether disparities in the national law
actually exist to such a degree that a harmonisation initiative would be justified. To this end, the
study will examine in detail the law existing in the Member States as it relates specifically to contracts
concluded between authors or performers and their counterparts. It will focus on individual
contracts of exploitation and on the ensuing transfers of rights. The law governing transfers to
collecting societies is outside the scope of this study, as is the law applicable to copyright contracts
concluded between right holders other than authors or performers, such as book club agreements,
film distribution contracts, merchandising deals, et cetera. Also, this study will not deal with the new
database right or other rights of intellectual or industrial property.
This brings us to the legal terminology employed in this study. The term ‘transfer’ is to be
understood in its broadest sense as including all possible forms of alienation of rights. The term
‘assignment’ is used to indicate a cession of one or more proprietary interests. The term ‘license’
indicates an authorisation to use one or more economic (exploitation) rights, or parts thereof. The
term ‘waiver’ refers to the renunciation of a right, in most cases, of a moral right.
The study is divided into seven chapters, including the present introduction. Chapter 2 starts off
with a survey of the main obligations of Member States under the relevant international instruments,
such as the Berne and the Rome Conventions, with respect to transfers of rights. Not surprisingly,
these and other international instruments have very little to offer in terms of copyright contract law.
Next, we undertake a similar exercise in respect of existing Community law. Indeed, several
directives in the area of copyright and neighbouring rights contain rules and references relating to
contractual practices. Chapter 2 proceeds with an examination of general principles of contract law
that may be relevant to contractual relationships between authors or performers and publishers or
producers, respectively. Here, we concentrate on such omnipresent, often unwritten rules as the
principles of good faith, of imprecision, and of fairness and equity.
Chapter 3 serves as an introduction to the analysis presented in the following chapter. In this
chapter, we give a general overview of the different concepts and issues relating to the ownership
and transfer of rights, as well as relating to the formation and content of copyright contract. More
particularly, we try to explain the reasoning behind the imposition of certain rules, like those
governing formalities, restrictions on transfers, remuneration, interpretation (scope) of contracts,
effect of transfer in relation to third parties, and termination of contract. The structure of this
introductory chapter also serves as skeleton for the presentation of Chapter 4.
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3
Chapter 4 constitutes the pièce de resistance of the study. Here, we will present a detailed countryby-country
review of specific rules relating to copyright contracts. Many of these rules are found in
national laws on copyright and related rights. In some countries, special laws on (certain classes of)
contracts exist. In reviewing this rather complicated body of law, we first examine the existing rules
on ownership of rights. As we shall see, most Member States provide for exceptions to the basic
rule that authorship implies ownership (the ‘creator doctrine’), particularly with respect to works
made under employment and audiovisual works. The second part of this chapter describes the
legislative and practical differences that exist between the various forms of transfer, i.e. assignment,
licence, and waiver. Next, we distinguish between rules governing formalities, restrictions on
transfers, remuneration, interpretation (scope) of contracts, effect of transfer in relation to third
parties, and termination of contract. Because of time limits, this report does not present an in-depth
country-by-country account of case law relating to copyright contracts. However, we have
attempted to illustrate our description of statutory law with case law, as much as is practically
possible.
Chapter 5 deals with the private international law aspects of trans-national copyright contracting. To
what extent does the existing Rome Convention on the law applicable to contractual obligations
apply in this context? Is there scope for introducing a special rule of private international law
relating to copyright contracts?
Chapter 6 gives a summary of the main differences that exist in the legislation of the Member States
regarding copyright contracts. On the basis of our findings, we then discuss the effect of these
differences on the functioning of the internal market and consider whether or not there is room for
harmonisation in this field at the European level. However, the limited time and means to produce
this study did not allow for an assessment of the economic impact (i.e. effect on the functioning of
the internal market) of disparities in national laws on copyright contracts. Our remarks on the
impact of legislative differences on the Internal Market therefore remain subject to ulterior
confirmation by means of an economic survey.
In Chapter 7, we draw a number of conclusions and recommendations that may be considered when
assessing the need for Community action and this field.
This study was produced by the Institute for Information Law of the University of Amsterdam, on
commission by the European Commission, DG Internal Market. The Institute for Information Law
carries complete responsibility for the contents of the study and its recommendations. Nothing in
this study, therefore, may be interpreted as imputing an opinion or policy of the European
Commission.
The principal author of the study is Dr. Lucie Guibault. Most of the research underlying Chapters 2
and 4 was undertaken by Marjanka Vermunt, who also produced the table of comparison appended
to this study as Annex I. Chapter 6 was researched and drafted by Marieke Berghuis. Prof. P. Bernt
Hugenholtz supervised the study, and drafted its final chapter. We wish to thank the following
people for their precious contribution to this report:
Ms. Marina Benassi (Law Office, Venetia, Italy),
Mr. Alexandre Dias Pereira (University of Coimbra, Portugal),
Mr. Leonidas Kanellos (Law Office, Greece),
Dr. Marjut Salokannel (University of Helsinki)
Dr. Raquel Xalabarder Plantada (Universitat Oberta de Catalogna, Spain)
Final Report
4
Chapter 2. General Framework Relating to Copyright Contracts
Authors and performing artists rarely are in a position to commercially produce and distribute their
own works or performances. In order to bring their creations to the market, they have often no
other choice but to come into contact with those businesses or entities that might be willing to
exploit and distribute these works and performances, such as book, sound recording and software
publishers, radio and television broadcasters, movie producers, museums and galleries, show
business promoters and different public or private corporations.2
The relationships between authors
or performing artists on the one hand, and exploiters on the other hand are usually governed by
individual contracts, in which the transfer of rights in favour of the exploiter constitutes one of the
key provisions. In principle, authors and performing artists are thus free to dispose of their right as
they see fit, i.e. to enter into the contracts that will lead to the best allocation of those rights and to
the best use of their work. An agreement concluded in the true spirit of the principle of freedom of
contract normally presupposes that it has been reached at the close of a free and voluntary
negotiation process conducted in good faith between equal and perfectly informed contracting
parties. As De Freitas points out however, ‘there is recognition that the 19th
century views on
freedom to negotiate and sanctity of contract are, certainly in today’s world, unrealistic’.3
Indeed,
most of the time, copyright contracts are not concluded between equal and perfectly informed
contracting parties. Severe inequalities of bargaining power, of practical experience and of technical
knowledge may have an impact on the authors’ and performing artists’ capacity to express consent at
the time of conclusion of the contract.
4
In practice, exploiters have the tendency to demand broad transfers of rights from authors and
performing artists, arguing that broad transfers give them the legal certainty necessary to make the
required investment for the production and distribution of protected works and other subject
matter. The fact is however that, in their contractual relations with exploiters, authors and
performing artists regularly find themselves in a weaker bargaining position.5
The risk therefore
exists that exploiters take unfair advantage of their stronger position. The question arises whether
international copyright law and the general rules of civil law can provide some form of protection to
authors and performing artists in their contractual relationships with exploiters. To this end, we
examine what protection, if any, the several multinational instruments in the field of copyright and
related rights offer to authors and performing artists in their contractual relationships with
exploiters. In the following section, we draw a portrait of the general rules of law applicable to
copyright contracts, with specific examples taken from French, German, Dutch, and United
Kingdom law. To this end, we enquire whether and to what extent the general principles of law,
such as the principle of good faith, of imprecision, and of fairness and equity, allow courts in
different jurisdictions to interpret or revise contractual terms that might be deemed unfair to the
author or the performer.
2.1 International framework
What are, if any, the Member States’ legal obligations in the area of copyright and related rights both
under the relevant multilateral instruments and the European directives? In this section, we draw a
brief overview of the relevant provisions of the Berne Convention, the Rome Convention, the
Agreement on Trade Related Aspects of Intellectual Property (TRIPS Agreement), and the Proposal
for a WIPO Treaty on the Protection of Audiovisual Performances. Finally, we have a short look at
the few relevant provisions included in the European directives on copyright and related rights.
2
Dessemontet 1998, p. 48. These various people and entities can be collectively referred to as ‘producers’.
3
De Freitas 1991, p. 257.
4
Hugenholtz 2000b, p. 79; Ghestin 1993, p. 117; and Hartlief 1999a, p. 33.
5
Hugenholtz 2000, p. 11.
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6
2.1.1 Multilateral instruments
2.1.1.1 Berne Convention
The Berne Convention of 1886 on the protection of literary and artistic works initially contained no
mention of the alienability of the author’s economic rights. In fact, the importance of the exercise
and protection of one’s author’s rights was only recognised during the Berlin revision Conference
held in 1908.
6
At that time, Contracting Parties agreed to the introduction of article 5 in the
Convention, which proclaimed that both the enjoyment and the exercise of the rights granted under
the Convention must not be subject to any formality, and that ‘such enjoyment and such exercise are
independent of the existence of protection in the country of origin of the work’. However, in
application of the principle of freedom of contract, the Berne Convention did not extend beyond
the regulation of questions relating to the enjoyment of author’s rights. After a century of successive
revisions, the final text of the Berne Convention contains only two references to the transferability
of the rights granted therein. A first reference can be found in Article 6bis of the Convention, which
was inserted during the Stockholm revision Conference of 1967. It states that ‘independently of the
author’s economic rights, and even after the transfer of the said rights, the author shall have the right’ to
retain her moral rights’ (Emphasis added).
A second reference to the transferability of economic rights and to copyright contracts can be found
in Article 14bis(2)(b) of the Convention, concerning cinematographic works. As Ricketson explains,
the exploitation of rights in cinematographic works at the international level began in the early
1950’s to cause great concern to authors and film-makers. The problems stemmed from the
different approaches that had been adopted in national laws. There were two extremes: the film
copyright system, which was found mainly in the common law countries and which granted
ownership of the rights on the film to its producer, and those systems, which accorded copyright
protection to the authors or intellectual creators of the cinematographic work.7
This provision led to
intense discussions during the Stockholm revision Conference. Finally, ownership of copyright in a
cinematographic work was left for determination at the national level. Article 14bis(2)(b) established
a compromise by providing that in the absence of any contract to the contrary, authors who have
undertaken to bring contributions to the making of a cinematographic work, may not object to
reproduction, distribution and other uses of the work. The application of this rule may be limited
according to the provisions of Article 14bis(3) as far as certain key authors of the work are concerned
and may be further limited by national legislation. At the national level, legislative solutions with
respect to authors’ rights vary from the system of so-called ‘film copyright’ to rebuttable or nonrebuttable
presumptions of assignment of authors’ right to the maker or producer of the film. The
state purpose of these provisions was the production of a uniform international code to regulate the
exploitation of cinematographic works so as to promote the free circulation of films. As Ricketson
reports, this objective was hardly achieved, and the provisions adopted are the most obscure and
least useful in the whole Convention.8
2.1.1.2 Rome Convention
The International Convention for the Protection of Performers, Producers of Phonograms ad
Broadcasting Organisations, otherwise known as the Rome Convention of 1961, sets the minimum
level of protection in the field of related rights. The Rome Convention contains three important
provisions relating to the conclusion of contractual agreements between performers on the one hand
6
Boytha 1991, p. 209.
7
Ricketson 1987, p. 573.
8
Id., p. 582.
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7
and producers or broadcasting organisations on the other hand. Remarkably, not only do these
provisions not offer any protection to the performing artists in the conclusion of exploitation
contracts, but they also have the effect of reducing the scope of the protection granted under the
Convention. Article 7.1 of the Convention grants performers the possibility of preventing the
following acts:
1) the broadcasting and the communication to the public, without their consent, of their performance,
except where the performance used in the broadcasting or the public communication is itself already a
broadcast performance or is made from a fixation;
2) the fixation, without their consent, of their unfixed performance;
3) the reproduction, without their consent, of a fixation of their performance:
a. if the original fixation itself was made without their consent;
b. if the reproduction is made for purposes different from those for which the performers gave
their consent;
c. if the original fixation was made in accordance with the provisions of Article 15, and the
reproduction is made for purposes different from those referred to in those provisions.
As the Guide to the Rome Convention points out, the second paragraph of Article 7 decreases the
minimum protection enjoyed by performers as far as their relations with broadcasting organisations
are concerned. Indeed, sub-paragraphs (1) and (2) of paragraph 7.2 allow a Contracting State to
regulate certain questions in favour of broadcasting organisations once the performer has consented
to have his performance broadcast. These cover re-broadcasting, fixation for broadcasting purposes
and reproduction of such a fixation for broadcasting purposes. However, sub-paragraph (3)
provides that the domestic law shall not operate to deprive performers of the ability to control, by
contract, their relations with broadcasting organisations.
Article 12 of the Rome Convention contains the second mention made in the text of contractual
agreements. This provision is seen as the most important provision in the Convention and deals
with ‘secondary uses’ of phonograms. When a phonogram which has been published for
commercial purposes is used directly for broadcasting or communication to the public, Contracting
States have three possibilities. These are to assure the payment by the user of an equitable
remuneration (i) to the performers or (ii) to the producer of the phonogram or (iii) to both. In any
case, the payment is a single one to be shared if necessary. The last part of the provision states that
‘domestic law may, in the absence of agreement between these parties, lay down the conditions as to
the sharing of this remuneration’. As the Guide to the Rome Convention points out, the accent is
on agreement and, in many countries, this has in fact been achieved both as to collection and
distribution of the sums due for secondary uses of phonograms. In view of the sums involved, one
should not underestimate the possible conflicts that may arise around the sharing of the
remuneration due for secondary uses of phonograms. Finally, article 19 of the Rome Convention
states that performing artists’ rights cease to be applicable ‘once a performer has consented to the
incorporation of his performance in a visual or audio-visual fixation’. All in all, none of these
provisions strengthen the position of the performing artist in his relationship with producers or
broadcasting organisations.
2.1.1.3 TRIPS Agreement
The final version of the TRIPS Agreement contains no provision on the transfer or exercise of
copyrights or related rights.
9
Gervais reports that, in the course of the negotiations, a provision on
9
World Trade Agreement 1994 (establishing the WTO and including GATT Uruguay 1994), Marrakech, April 1994, Annex 1C.
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8
transfer of rights had been proposed for inclusion in the section on copyright of the Draft of July
23, 1990 of the TRIPS Agreement.
10
The text proposed read as follows:
‘Protected rights shall be freely and separately exploitable and transferable. [Assignees and exclusive licensees
shall enjoy all rights of their assignors and licensors acquired through voluntary agreements, and shall be
entitled to enjoy, exercise and enforce their acquired exclusive rights [in their own names]]’.
Finally, no consensus was reached on the wording of this provision and it was altogether withdrawn
from the final text of the Agreement. In our opinion however, such a provision would not have
added much to the existing situation regarding copyright contracts.
2.1.1.4 Proposal for a Treaty on the Protection of Audiovisual Performances
The first attempt to include audiovisual performers into an international agreement, namely the
Rome Convention of 1961, resulted in a far-reaching exclusion of protection for audiovisual
performers upon their mere consent to the incorporation of their performance into a visual or
audiovisual fixation. The issue was raised once more, unsuccessfully, in the context of the WIPO
Performers and Phonograms Treaty (WPPT) of 1996, to resurrect again in the context of the
proposed WIPO Treaty on the Protection of Audiovisual Performances. But the efforts of the
Diplomatic Conference held in December 2000 towards the adoption of the treaty have remained
unsuccessful.11
Among other objectives pursued by the Treaty was to strike a proper balance
between the need for exploiters to secure the necessary business certainty for the distribution and
exploitation of audiovisual fixations and the objective to strengthen the international legal
framework for protection of performer’s rights, while preserving the potential for bargaining. To
this end, Article 12 of the Basic Proposal contained three alternative solutions on the subject of the
transfer of rights of performing artists. This provision proved to be the most controversial of all
issues dealt with during the Diplomatic Conference and eventually turned out to be the deal breaker.
At the close of the Diplomatic Conference, the lack of consensus among the delegations on the
issue of the transfers of rights ultimately led to the failure to adopt the Treaty on the Protection of
Audiovisual Performances. Considering that the crucial issue regarding legal provisions on transfer
has extensively been discussed during more than five years in WIPO Committees without success,
the possibilities for a compromise would seem to have been exhausted for the time being.12
2.1.2 European Directives
Licensing contracts and contractual relations concerning copyright and related rights have not
been subject to overall harmonisation within the Community.13
The European legislator has until
now refrained from intervening on the issue of transfers of rights and of contractual agreements
between authors or performing artists on the one hand and exploiters on the other hand, because
contractual and civil matters have traditionally fallen under the exclusive competence of the Member
States.14
Member States have so far enjoyed the freedom to adopt under their own national legal
systems protective measures to the benefit of authors or performing artists regarding either the
scope of transfer of rights or the formation, execution, and interpretation of contracts concluded
with broadcasters, publishers and other producers.
10
Gervais 1998, p. 102.
11
Heevel 2001, p. 61; and Cohen Jehoram 2001, p. 296.
12
For a discussion on the international private law provisions of the Proposal, see section 5.4 infra.
13
Commission of the European Communities, Communication from the Commission to the Council and the European Parliament on European
Contract Law, Brussels, 11 July 2001, COM(2001) 398 final, Annex 1, p. 38.
14
Von Lewinski 1996, p. 49.
Final Report
9
On the other hand, rights administration or licensing in general and the issue of collective
management in particular has been addressed in several Community instruments. For instance, the
Directive on the legal protection of computer programs15
addresses issues of contractual relations by
granting minimum rights to users. In particular, the right for any lawful user of a computer program
to make a back-up copy of the program, ‘insofar as it is necessary for that use’, may not be set aside
by contract (Article 5(2)). The possibility to observe, study, or test the functioning of the program
(Article 5(3)) cannot be prevented by contract. Furthermore, the Computer Programs Directive
provides that any contractual provisions contrary to the de-compilation exception (Article 6) are null
and void. The sui generis right granted under the Directive on the legal protection of databases may
be transferred, assigned, or granted under contractual licence (Article 7(3)).16
The Directive also
contains a provision similar to that in Directive 91/250/EEC on the legal protection of computer
programs (Article 8). In particular, any contractual agreement contrary to the possibility for the
lawful user to extract and re-utilise insubstantial parts of the database for any purposes whatsoever,
shall be null and void.
As we have established in section 2.1.4 above, article 2(2) of the EC Directive on the Public Lending
and Rental Rights17
designates the principal director of a cinematographic or audiovisual work as its
author or as one of its authors. Articles 2(5) and (6) grant Member States the possibility to establish
a presumption of transfer of rights from the authors and performers to the producer of the
audiovisual work. Article 4 of this European Directive establishes a new concept with respect to the
rental of protected material, which could be qualified as a limited transferability. The article reads as
follows: ‘Where an author or performer has transferred or assigned his rental right concerning a
phonogram or an original or copy of a film to a phonogram or film producer, that author or
performer shall retain the right to obtain an equitable remuneration for the rental. The right to
obtain an equitable remuneration for rental cannot be waived by authors or performers.’ The
adoption of article 4 of the Rental and Lending Rights Directive has been justified by the fact that it
is usually not sufficient simply to determine who should be the initial owner of a right on a work.
The legislation must in addition ensure that the first rights owner is actually able to benefit from his
or her right. As Reinbothe and von Lewinski explain, the provision is designed to deal with the
situation that authors and performing artists, due to their weak bargaining position in relation to
producers, will often not be able to benefit adequately from their exclusive rental rights.18
Thus,
even after the transfer of the exclusive right, the author or performer retains an unwaivable right to
equitable remuneration.
The provisions of the Rental and Lending Rights Directive have been implemented in various ways
by the Member States. Several countries have incorporated them word for word in the national
legislation, establishing a presumption of transfer of rights from the authors and performers to the
producer of the audiovisual work but providing authors, including the principal director, and
performers with an unwaivable right to remuneration for the rental of the work.19
Other times, like
under the Swedish Copyright and Related Rights Act or the French CPI, no presumption of
transfer of the rental or lending rights is established, making it therefore unnecessary to provide for a
corresponding right to remuneration. In other countries, like Germany, the law allows for a
voluntary transfer of the authors’ or the performers’ rental right to the producer of an audiovisual
work, in exchange for which the latter are to benefit from a remuneration right. Thus, although
15
Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs, O.J.C.E. L 122/42, 17 May 1991.
16
Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal protection of databases,
O.J.C.E. L 077/20, 27 March 1996.
17
O.J.C.E. L 346/61, 27 November 1992.
18
Reinbothe and von Lewinski 1993, p. 65.
19
See for example: Belgian Copyright and Related Rights Act, art. 24; Danish Copyright and Related Rights Act, art. 58a and 65(5);
Spanish Copyright and Related Rights Act, art. 109(2); and United Kingdom CDPA, art. 93B(1) and 191G.
Final Report
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there is no legal presumption of transfer of the author’s rental right, article 27 of the German Act
grants the authors of a cinematographic work an unwaivable right to remuneration, applicable in
cases where the author has granted to the producer of an audio recording or a film the rental right
(Article 17) with regard to that video or audio recording. The Greek provisions are to the same
effect. As we have seen in section 2.1.4 above, there is no legal presumption with respect to the
author’s rights under Italian law, but there is one with respect to the performer’s rights.
Nevertheless, just like the performer has an unwaivable right to equitable remuneration for the rental
of an audiovisual work under article 84(2) of the Act, the author is entitled to an unwaivable right to
fair remuneration if he assigns his right of rental to a producer of phonograms or cinematographic
or audiovisual works or of sequences of moving images. Under article 109(2) of the Spanish
Copyright and Related Rights Act, the performer who has transferred or assigned to a producer of
phonograms or audiovisual recordings his rental rights in a phonogram, or an original or copy of an
audiovisual recording, retains the unwaivable right to receive equitable remuneration for the rental
thereof. Such remuneration is payable by those who conduct the operations of rental to the public
of phonograms or audiovisual recordings in their capacity as successors in title to the owners of the
corresponding rights to authorize such rental.
The laws of two Member States would appear not to be in complete compliance with the provisions
of the Rental and Lending Rights Directive. In Austria, the lending of a work is subject, under
article 16a(2) of the Copyright Act, to the payment of an equitable remuneration to the author. In
addition, where a film producer authorises the rental or lending of an audiovisual work against the
payment of remuneration, article 16a(5) grants to the author of such a film an unwaivable right to an
equitable part of that remuneration. Article 16a(5) adds that if another person has a right to
remuneration under the law or a contract, the author has an unwaivable right to an equitable part of
this remuneration. Contrary to the Rental and Lending Rights Directive, the payment of an
equitable remuneration to the author of an audiovisual work only arises under article 16a(5) of the
Copyright Act if the rental occurs against the payment of remuneration. Moreover, contrary to the
Rental and Lending Rights Directive, the Austrian Copyright and Related Rights Act provides for no
kind of right to equitable remuneration either in favour of the principal director of the audiovisual
work or in favour of the performers.20
In Finland, whereas the Copyright and Related Rights Act
does establish a presumption of transfer of the performer’s rental right,21
it is interesting to note that
the provisions which grant performers and producers a right to remuneration are not applicable to a
‘film or any other device on which moving images have been recorded’. The Finnish solution would
therefore appear to be in contradiction with the requirements of the Rental and Lending Rights
Directive.
Although the contractual practices regarding the transfer of the authors’ and performers’ rights to
exploiters are generally not regulated at the European level, the importance of contractual
agreements as a means to determine the conditions of use of protected works and performances
clearly transpires from the text of some of the directives adopted in the field of copyright and related
rights law. For instance, Recital 9 of the Cable and Satellite Directive22
proclaims that ‘the
development of the acquisition of rights on a contractual basis by authorisation is already making a
vigorous contribution to the creation of the desired European audiovisual area’ and that ‘the
continuation of such contractual agreements should be ensured and their smooth application in
practice should be promoted wherever possible’. More importantly, Recital 19 of the same Directive
sets out a number of principles of interpretation of international co-production agreements.
According to the European lawmakers, international co-production agreements are to be interpreted
in the light of the economic purpose and scope envisaged by the parties upon signature. It was also
20
Walter 2001, p. 379.
21
Finnish Copyright and Related Rights Act, art. 45(3rd par.).
22
O.J.E.C. L 248/15, 6 October 1993.
Final Report
11
felt at the time of the adoption of the Directive that a clear rule was necessary in cases where the
international co-production agreement does not expressly regulate the division of rights in the
specific case of communication to the public by satellite within the meaning of the Directive. Be
that as it may, the Directive contains no particular rule of interpretation for contracts pertaining to
the division of rights between co-producers. Recital 30 reaffirms the need to promote contractual
arrangements regarding the authorisation of cable retransmission. The only provision included in
the text of the Cable and Satellite Directive regarding contractual agreements is article 12(1),
according to which Member States are required to ensure by means of civil or administrative law, as
appropriate, that the parties enter and conduct negotiations regarding authorisation for cable
retransmission in good faith and do not prevent or hinder negotiations without valid justification.
The new Directive on the harmonisation of certain aspects of copyright and related rights in the
information society23
contains a number of references to the conclusion of contractual arrangements
as a means to determine the conditions of use of protected works and subject matter. Recital 30 of
the Directive confirms that ‘the rights referred to in the Directive may be transferred, assigned or
subject to the granting of contractual licences, without prejudice to the relevant national legislation
on copyright and related rights’. With respect to the limitation on copyright adopted in favour of
non-profit making establishments such as publicly accessible libraries and archives, Recital 40
specifies that such limitation should not cover uses made in the context of on-line delivery of
protected works or other subject matter. Therefore, the conclusion of specific contracts or licences
should be promoted which, without creating imbalances, favour such establishments and the
disseminative purposes they serve. Recital 45 further declares that ‘the exceptions and limitations
referred to in Article 5(2), (3) and (4) should not, however, prevent the definition of contractual
relations designed to ensure fair compensation for the rights holders insofar as permitted by national
law’.24
Recital 53 and article 6(4) of the Directive both deal with the use of technological measures to
ensure a secure environment for the provision of interactive on-demand services. Without going
too deep into the relationship between technological measures, contractual agreements and
limitations on copyright under the Directive, suffice it to say that the provisions of a contractual
agreement that governs an on-line service have been given precedence over the limitations set out in
the Directive.
2.2 General principles of law
The field of copyright and related rights law must not be considered in isolation. Admittedly, the
core provisions regulating the transfer of rights from authors and performers to exploiters are to be
found in the copyright and related rights acts. However, the field of copyright and related rights law
is not hermetic, as show numerous references made in the copyright acts to the general principles of
law. In fact, the general principles of contract law complement the rules laid down in the copyright
and related rights legislation to regulate aspects of the transfer of rights and of the formation,
execution, and interpretation of copyright contracts that cannot be addressed in the specific
legislation on copyright and related rights.25
However, like in the field of copyright law, the rules on
contract law have yet to be fully harmonised at the European level. The approximation of certain
specific areas of contract law has covered an increasing number of issues. The EC legislator has
followed a selective approach adopting directives on specific contracts or specific marketing
techniques where a particular need for harmonisation was identified. So far, the harmonisation
efforts have led to the publication of the Principles of European Contract Law Parts I and II, which cover
the core rules of contract, formation, authority of agents, validity, interpretation, contents,
performance, non-performance (breach) and remedies. These Principles have been drawn up by an
23
O.J.C.E. L 167/10, 22 June 2001.
24
The last part of the Recital most probably refers to the Austrian and German ‘monist’ systems.
25
Götting 1995, p. 55.
Final Report
12
independent body of experts from each Member State of the European Union under a project
supported by the European Commission and many other organisations. The Principles of
European Contract Law are intended to be applied as general rules of contract law in the European
Communities if the parties so choose. Before turning in chapter 4 to the study of the specific
provisions contained in national copyright and related rights acts, we first examine whether the
general principles of law as laid down in the Principles of European Contract Law and in national
civil law would allow courts to interpret or revise contractual terms that might be deemed unfair to
the author or the performer. We focus here on such principles as the principle of good faith, of
imprecision, and of fairness and equity.
2.2.1 Good faith
Interestingly, article 12(1) of the Cable and Satellite Directive demands that Member States ensure
‘by means of civil or administrative law, as appropriate, that the parties enter and conduct
negotiations regarding authorisation for cable retransmission in good faith and do not prevent or
hinder negotiations without valid justification’. This provision directly refers to the principle of good
faith as a criterion to be followed when parties negotiate licensing terms and enter into contract. In
some jurisdictions, this provision has been transposed literally in the copyright act,26
while in other
Member States no implementation was deemed necessary because the principle of good faith is such
a fundamental concept that it pervades the entire legal system. Be that as it may, it is not usual to
come across direct references to the principle of good faith in the copyright acts of the Member
States. Good faith is synonymous to sincerity, candour, and more globally to loyalty.27
Most
systems make a distinction between subjective good faith and objective good faith. Subjective good
faith is usually defined as a subjective state of mind: not knowing or having to know of a certain fact
or event. Objective good faith by contrast, is usually regarded as a standard of conduct of
contracting parties. Objective good faith is the concept to which most statutory provisions refer
either in general terms or in specific terms like Treu und Glauben in Germany, or redelijkheid en
billijkheid in the Netherlands. Parties are thus free to enter into a contract and to determine its
contents, subject to the requirements of good faith and fair dealing.28
Moreover, each party must act
in accordance with good faith and fair dealing.29
Good faith and fair dealing must be observed
throughout the life of the contract, beginning with its negotiation. It will apply to those contractual
duties, which may continue after the main duties have been performed, such as a duty to keep trade
secrets.
The principle of good faith in contractual relationships is expressly laid down in the Belgian,
French, and Luxembourg Civil Codes, where article 1134 of the French Civil Code provides for
example that ‘contracts must be performed in good faith’. A similar rule, found in article 1375 of the
Italian Civil Code, provides that the obligor and the obligee shall behave according the rules of
fairness. The Spanish, Portuguese, and Greek civil codes also have provisions, which oblige the
parties to behave in accordance with the requirements of good faith. In the Nordic countries the
good faith principle has been recognized by courts and legal scholars. Although it has not been
expressed in general terms in the statutes, several statutory provisions presuppose its existence, like
article 36 of the Uniform Nordic Contract Act which gives the courts power to set aside unfair
contract clauses.30
The District Court of Bruges (Belgium) referred to the principle of good faith to
interpret the obligations of a sound producer that flowed from a contract with an artist.31
The
26
See for example: Dutch Copyright Act, art. 26b.
27
Hesselink 1998, p. 288; Ghestin 1993, p. 231; Smits and Wijers 1995, § 2.1; and Palandt 2000, § 242, p. 227.
28
Principles of European Contract Law, art. 1:102.
29
Principles of European Contract Law, art. 1:201(1).
30
Lando 1996, § 3.
31
Rb. Brugge (1e k.), 6 December 1995, (Megadisc v. Waut et al.), A&M 1996/1, p. 156.
Final Report
13
dispute concerned a clause in the contract according to which the producer undertook the obligation
to make a specific number of recordings within six months from the date of termination of the
contract or to pay the artist a lump sum as compensation if he was not in state of doing so. The
Court struck the contractual clause down, because it contained a purely potestative condition, and
pointed out that contracts must be executed in accordance with the principle of good faith. In a
case against a copyright collecting society, the French Cour de Cassation also relied on the principle of
good faith to hold that the collection of payments from foreign subsidiaries for ‘technical assistance’
and ‘editorial fess’ did not correspond to any tangible service from the publisher. Such payments
had in fact no other cause than the transfer of the publishing rights and served only to reduce the
author’s rights. The Court concluded that the publisher had failed to execute in good faith the
obligations flowing from the publishing contract.32
In Germany and the Netherlands, the principle of objective good faith is generally recognised as
allowing courts to bring correctives to the application of other legal norms, when in certain concrete
circumstances, their harshness would need to be mitigated. Traditionally, courts have used the
principle of good faith as an instrument to interpret, correct, and supplement the obligations flowing
from a contractual agreement. Article 242 of the German Civil Code states that ‘the obligor must
perform his duty in accordance with good faith and fair dealing having regard to commercial
practices’. By contrast, article 6:248 of the Dutch Civil Code provides that ‘a rule binding upon the
parties as a result of the contract does not apply to the extent that, in the given circumstances, this
would be unacceptable according to the criteria of reason and equity’. The principle of good faith
may thus be applied to control the behaviour of the contracting parties both during the precontractual
phase and at the time of the execution of the contractual obligations. Therefore, as for
any other type of contract, parties to a contract providing for the assignment, licence, or waiver of
the author's rights have the obligation under continental European civil law to negotiate in good
faith and are bound by all the consequences that equity, custom, or law give to the obligation
depending on the nature of the contract.33
The parties must execute their contractual obligations in
good faith.
The requirement of good faith in contractual relationships has also been interpreted in Germany and
the Netherlands as imposing a duty on each party to take one another’s interest into account.
34
In
other words, the principle of good faith reflects the general recognition that parties have an
obligation of loyalty and co-operation vis-à-vis one another whose degree may be defined by the
legislator or by the courts according to the usage and good contractual practices.35
In application of
article 6:2 of the Dutch Civil Code, a contract term, which would normally be binding upon the
parties, will not be so to the extent that, given all relevant circumstances, this would be unacceptable
according to criteria of objective good faith. This provision clearly adopts the view that even express
terms of contract can be set aside whenever their enforcement would be grossly unjust. The term
‘unacceptable’ indicates that such a decision should be reserved for exceptional situations.36
Paragraph 242 of the German Civil Code, which lays down the principle of Treu und Glauben, has
received a similar interpretation from German courts.37
Hence, an unreasonably burdensome
obligation could be declared invalid as contrary to the general principle of good faith and to the
standard of good contractual practices.
32
Cass. 11 January 2000 (Ed. Dargaud v. Uderzo and SNE), Case No. Y 98-20-446, decision No. 64 P – non published. See Kéréver ,
‘Chronique de jurisprudence’ RIDA 2001/187, p. 227.
33
Gautier 1999, p. 185 referring to art. 1134 and 1135 of the French Civil Code.
34
Asser-Hartkamp 1997, p. 285; Smits 1995, p. 101; and Dutch Civil Code, art. 6:2(1).
35
Ghestin 1993, p. 239.
36
Hartkamp 1999, p. 126.
37
Fikentscher 1985, p. 139.
Final Report
14
By contrast, the doctrine of objective good faith in contracts as an overriding principle of fair dealing
never took root in British common law. The modern view is that, in keeping with the principles of
freedom of contract and the binding force of contracts, in English contract law good faith is in
principle irrelevant.38
The fairness of terms in a contract becomes a relevant question when courts
apply the principles of ‘construction’ (e.g. interpretation). Hence, ‘modern principles of
construction require courts to have regard to the commercial background, the context of the
contract and the circumstances of the parties, and to consider whether, against that background and
in that context, to give the words a particular or restricted meaning would lead to an apparently
unreasonable and unfair result’.39
For instance, English courts have refused on a few occasions to
enforce a contract assigning copyright because its provisions were unduly restrictive or because it
constituted an unconscionable bargain in view of the inequality in bargaining power.40
But this line
of jurisprudence has not been widely followed so that the doctrines of unconscionability and undue
influence remain an exceptional remedy.41
In principle, any covenant in restraint of trade is prima
facie unenforceable at common law and is enforceable only if it is reasonable with reference to the
interests of the parties concerned and of the public.42
The leading authority on the application of the
restraint of trade doctrine to copyright agreements is now the decision of the House of Lords in
Schroeder v. Macauley.43
In that case, the plaintiff, a young and unknown song-writer, entered into an
exclusive five year agreement with the defendants. The plaintiff assigned the copyright for the whole
world for every work created by him during the period of the agreement. The five years was
extended to 10 years if the plaintiff’s royalties exceeded £5,000. The defendants had no obligation
to exploit any of the compositions of the plaintiff. Moreover, defendants could terminate the
agreement at any time on one month’s notice and could assign the benefit of it, but no such right
was given to the plaintiff. The House of Lords unanimously held that the agreement imposed an
unreasonable restraint on trade because the bargain made was neither fair nor reasonable.44
2.2.2 Imprecision
According to article 5:101(1) of the Principles of European Contract Law, a contract is to be
interpreted according to the common intention of the parties even if this differs from the literal
meaning of the words. In Germany, article 157 of the German Civil Code states that contracts are
to be interpreted in accordance with good faith and fair dealing having regard to commercial
practices. In such a case, the courts must seek to reach a fair and reasonable outcome based on all
the facts before them, taking into account the circumstances attending the formation of the contract.
Although not expressly formulated in statutes, the Dutch and the Nordic rules on interpretation are
equivalent to the German rules. The Civil Codes of Belgium, France, Italy, and Spain contain
provisions on the interpretation of contracts. These provisions give the common intention of the
parties the priority. However, the French Cour de Cassation has held that the wording of a clear and
unambiguous contract term cannot be disregarded in favour of an interpretation that would bring
about a more reasonable result. This rule on ‘les clauses claires et precises’ has not been found in
German and Dutch law but is in accordance with British rules of interpretation.45
In cases where
the court is unable to establish a common intention, the contract is to be interpreted according to
38
Chitty 1999, p. 13.
39
Cargill International SA v. Bangladesh Sugar and Food Industries Corp., [1998] 1 Weekly Law Reports 461, at p. 468.
40
Clifford Davis Management Ltd. v. WEA Records Ltd., [1975] 1 Weekly Law Reports 61 (Court of Appeals); and O’Sullivan v.
Management Agency and Music Ltd., [1985] 3 All England Reports 351.
41
Brownsword 1998, p. 313. See: John v. James, [1991] Fleet Street Reports 397.
42
Chitty 1999, p. 875.
43
[1974] 1 Weekly Law Reports 1308 (HL). See: Bentley 2000, p. 58 (footnotes 66 – 70); Soetenhorst 1993, p. 157; Cornish 1998,
p. 230 – 233; Laddie a.o. 1991, p. 896-901; Pilny 1989, p. 140-147; Cornish 1995, p. 657-661.
44
Sterling and Carpenter 1986, p. 805; and Chitty 1999, p. 877.
45
Lando 1996, § 4.
Final Report
15
the meaning that reasonable persons of the same kind as the parties would give to it in the same
circumstances.46
The Principles on European Contract Law list a number of factors that may be
taken into consideration by courts when trying to establish the common intention of the parties or
the meaning that reasonable persons might give to the contract. Among the factors mentioned are
the circumstances in which the contract was concluded, including the preliminary obligations, the
subsequent conduct of the parties, and the relevant commercial practices and usages.47
However, where there is doubt about the meaning of a contract term that has not been individually
negotiated, an interpretation of the term against the party who supplied it is to be preferred.48
The
contra proferentem rule of interpretation constitutes one instrument in the hands of judges, from both
the civil and common law traditions, that is designed to elicit or ‘construct’ the meaning that a
reasonable person would accord to an ambiguous contract clause.49
This rule provides that, when
the meaning of a term included in a contract is unclear, that term will generally be interpreted against
the party who has stipulated it and in favour of the party who has contracted the obligation.50
Under
the contra proferentem rule, the risk of ambiguity in a contract clause is placed on the party who could
more easily avoid it, that is, on the party who selected or drafted the clause, rather than on the party
to whom it was presented. But the use of this rule of interpretation is subject to two requirements:
first, it must be clear which party formulated the clause in question; and second, the clause must be
ambiguous. While the drafting of terms can hardly be attributed to one particular party in the case
of fully negotiated contracts, the drafting of standard terms will usually originate with the party who
presents them ready-made for acceptance by the other party. The contra proferentem rule is thus
applied with particular rigour in the context of standard form contracts. But the second requirement
of the rule poses greater difficulty. In a system where private autonomy prevails, judges should in
principle refrain from interpreting clauses whose meaning is clear and unambiguous. Nevertheless,
in their eagerness to protect weaker parties from unfair terms, the courts have proved remarkably
imaginative at discovering ‘ambiguities’ in standard form contracts.51
2.2.3 Fairness and equity
In application of the principle of freedom of contract, parties are free to conclude any agreement
that they perceive to be in their best interest, as long of course as their agreement does not go
against public order and good morals. Since parties are presumed not to contract against their own
interests, courts have traditionally refused to leave room, in their determination of the parties' legal
obligation under a contract, for any inquiry into the fairness of the exchange.52
The court’s refusal to
intervene with respect to the fairness of the agreement’s terms is known as the iustum pretium
doctrine. To suggest that contracts might be revised for the fairness of the legal obligation would
constitute a serious encroachment upon the freedom of contract and would endanger the certainty
of the legal system, since parties would no longer be able to rely on the given word.53
Another
justification given for the refusal to look at the fairness of a contractual bargain rests on the
mechanism of self-correction in a free and competitive market. If goods are overpriced, other
entrepreneurs will receive the signal and respond themselves to the incentive to enter the market,
with the desirable result that supply increases and prices fall. If contracts were invalidated just
46
Principles of European Contract Law, art. 5:101(3).
47
Principles of European Contract Law, art. 5:102.
48
Principles of European Contract Law, art. 5:103.
49
Chitty 1999, p. 667.
50
French Civil Code, art. 1162; BGB, § 133, 157 and AGBG, § 5; Dutch Supreme Court, decision of 1 July 1977, NJ 1978, p. 125
and Dutch Supreme Court, decision of 28 Sept. 1989, NJ 1990, p. 583; see: Hijma 1999, p. 462.
51
Kötz and Flessner 1997, p. 115.
52
Hartlief 1999a, p. 10; and Atiyah 1986, p. 329.
53
Hartlief 1999b, p. 246.
Final Report
16
because the price was too high, this mechanism would be disturbed and its signalling function
weakened.54
Despite a traditional reluctance to introduce the iustum pretium doctrine in the national
legal order, courts have at times resorted to rather imaginative ways in order to intervene with
respect to the general fairness of a contract. For example, a court may find that the respective
manifestation of assent of the parties justifies some scrutiny under the general rules of interpretation
of contracts. If circumstances are such that one of the parties was incapable at the time of the
conclusion of the contract to express a clear and well-informed consent to be bound by the
contract’s terms. A contract may therefore be declared invalid if one of the parties does not have
the legal capacity to contract, either because of immaturity or of mental incompetence.55
Moreover,
it is generally admitted that no valid consent exists where a person gives her assent only by mistake
or where consent is extorted by fraud or duress (otherwise known as ‘undue influence’ in the United
Kingdom). In such circumstances, the party’s consent would be neither free nor voluntary and the
contract would therefore be invalid. The disadvantageous character of a contract is insufficient in
itself to justify judicial review; only when the disadvantage is marked by a lack of consent can it be
disputed, not because of the disadvantage, but because of its involuntary nature.56
In principle, the same rule would apply for the interpretation of terms included in a standard form
contract. A party who accepts another party’s standard terms is bound by those terms irrespective
of whether or not she actually has knowledge of their content in detail or fully understands their
implications. But where the circumstances indicate that one party did not, or could not, fully
comprehend the meaning of the contract, arguments have been made in favour of a judicial enquiry
into the fairness of terms included in a standard form contract. The use of standard form contracts
has been the object of regulation and judicial review for several years in Germany and the
Netherlands. In fact, the German Gesetz über den Allgemeinen Geschäftsbedingungen (AGBG) was the
source of inspiration for the provisions on standard form contracts that were introduced in section
6.5.3 of the Dutch Civil Code in 1987.57
Consequently, both acts show definite similarities. They
both apply to stipulations that are drafted by one party to be included in standard form contracts
and used with another party, to the exception of terms that pertain to the main subject matter of the
contract.58
The ‘main subject matter’ of a contract must be assessed according to objective criteria:
parties have in principle no authority to qualify the terms of their contract as ‘essential’, so as to
withdraw them from the judicial review provided under articles 6:233 and following of the Dutch
Civil Code. Under the German AGBG, this principle is expressed in an opposite way: instead of
excluding terms that pertain to the main subject matter of the contract, the fair and reasonable test is
said to apply only to those terms included in general conditions, which modify or complete the rules
of law. Under both acts, a stipulation included in general conditions may be declared invalid, if it is
unreasonably onerous to the other party or if it is ‘surprising’, i.e., if it is so unusual that the other
party does not have to take it into account.59
Furthermore, both acts contain two lists, a ‘black list’
of terms that are always invalid because they are considered to be unreasonably onerous to the other
party and a ‘grey list’ of terms that, unless proven otherwise, are presumed to be unreasonably
onerous.60
The terms enumerated in these lists are meant to apply only in consumer relations, while
the open norms set out in § 9 of the AGBG and article 6:233 of the Dutch Civil Code may also be
invoked under certain conditions in relations between professionals.61
However, the provisions set
54
Kötz and Flessner 1997, p. 135.
55
French Civil Code, art. 1124; Dutch Civil Code, art. 3:34; and German Civil Code, art. 104 and f.
56
Lucas and Lucas 2001, p. 394; and Hartlief 1999a, p. 10.
57
Act of 18 June 1987, Official Gazette of the Netherlands No. 327.
58
AGBG, § 8; NBW, art. 6:231(a).
59
AGBG, § 9; NBW, art. 6:233(a).
60
NBW, art. 6:236 and 237; AGBG, §§ 10 and 11.
61
Smits and Mijers 1995, p. 54.
Final Report
17
out in the AGBG or in section 6.5.3 of the Dutch Civil Code do not apply to individuals bound
either by an employment contract or by a collective bargaining agreement.62
In the field of copyright, agreements passed between exploiters, whether publishers, or sound or
film producers on the one hand and authors and performing artists on the other hand often take the
form of standard form contracts. The question therefore arises whether a transfer of rights and
other exploitation contract effectuated through a standard form contract could be invalidated on the
basis of its unfairness or unreasonable character towards the author or the performing artist. In
order to apply the provisions of the AGBG and of section 6.5.3 of the Dutch Civil Code to
copyright contracts, one must first determine whether the author or artist is bound by an
employment contract,63
whether the disputed clause touches on the main obligations of the contract
and whether that obligation is unreasonably onerous to the other party. Whether an assignment of
right is to be considered as pertaining to the main subject matter of the contract is open for
discussion. In our opinion, the assignment of rights will in most cases be regarded as pertaining to
the main subject matter of the contract, since it sets out the quid pro quo of the contract: on the one
side, the remuneration to be paid by the exploiter, and on the other, the extent of the transfer of
rights granted by the author or the performing artist. Besides a clause that effectuates the transfer of
rights however, copyright contracts contain a number of clauses that will generally not be considered
essential to the performance of the contract. This might be the case for clauses that relate to the
length of the contract or to the territory covered by the transfer that will be amenable to judicial
review under the regulations on standard form contracts. In any case, the fairness of a term is
assessed by referring, at the moment of the conclusion of the contract, to all the circumstances that
surround its conclusion, to the mutually apparent interests of the parties, to the common usage of
the trade, as well as to all other clauses of the contract.64
The provisions of the AGBG have been invoked on at least two occasions to control the adequacy
of the author’s obligations flowing from a standard form copyright contract.65
However, the Federal
Supreme Court has taken a particularly restrictive approach in the application of the provisions of
the AGBG to the cases before it.66
In the ‘Honorarbedingungen: Sendevertrag’ case, which involved a
broadcasting organisation’s use of standard form tariffs with freelance authors and other workers,
the Court declared that there exists limits to the abstract control of the general conditions of the
broadcasting organisation. The Court insisted that there should reign an almost unlimited freedom
of contract. In the opinion of the Court, only a few general principles of law also applied to the field
of copyright contract law.67
However, the Court did invalidate a clause, on the basis of article 9(2) of
the AGBG, which granted the broadcasting organisation the power to conclude a licensing contract
in the name of the contracting partner – i.e. the author or performing artist – with a yet to be
determined exploiter. In the ‘Synchronisationsprecher’ case, the Federal Supreme Court considered that
a clause in a film synchronisation contract, according to which the author transferred not only the
synchronisation right but also the sound recording right, was not surprising in the sense of article 3
of the AGBG. Of course, if the criterion followed to assess whether a clause is surprising or not is
the frequency with which it appears in similar contracts then, such a clause is indeed not surprising
since such broad transfers of rights are a common feature in copyright contracts. Generally
speaking, however, it has been argued that the restrictive approach taken by the Federal Supreme
Court is to be attributed to the fact that a transfer of rights in a copyright contract is considered to
62
AGBG, § 23; NBW, art. 6:245. The reason given for this is that employment contracts and collective bargaining contracts are
already the object of extensive regulation.
63
Kuck 2000, p. 286.
64
BGB, § 157 and AGBG, § 24a(3); NBW, art. 3:12, 6:233a).
65
Götting 1995, p. 56.
66
BGH GRUR 1984, 45, p. 47 ‘Honorarbedingungen Sendevertrag’; BGH GRUR 1984, 119, 120 ‘Synchronisationsprecher’.
67
BGH GRUR 1984, 45, p. 48 ‘Honorarbedingungen Sendevertrag’.
Final Report
18
pertain to the main subject matter of the contract and is therefore excluded from judicial review.68
On the other hand, a full transfer of rights by means of a clause in a standard form contract has been
regarded at least on one occasion as contrary to articles 3 and 9 of the AGBG and article 29 of the
Copyright Act, according to which authors’ rights are inalienable.69
More recently, the Court of Appeal of Düsseldorf ruled that a clause in a standard form agreement
used by a broadcasting organisation with independent film producers was invalid under article 9(1)
of the AGBG, on the ground that it unreasonably prejudiced the producer.70
In this case, the Court
of Appeal held that a clause in the standard form contract concerning the transfer of the right to
broadcast a work on television did not infer the transfer of the right to exploit that work on video.
The obligation put by the broadcasting organisation on the film producer to refrain from exploiting
his work on video on the basis of a transfer of the right to broadcast is disproportionate. Moreover,
such an interpretation of the clause would be contrary to the ‘purpose-of-transfer’ rule. The Federal
Supreme Court confirmed the applicability of the rules of the AGBG to the standard form contract
used by the collecting society GEMA for the adhesion of music composers and lyricists as members
of the society.71
In this case, the dispute revolved around the clause of the contract pertaining to the
distribution of royalties among the members of the society. The Court ruled that a clause which
provides for a transfer of rights of certain members in favour of the society but which precludes
them from receiving royalties on the basis that they can only create a work with the help of another
person causes an unreasonable prejudice to these members, contrary to article 9 of the AGBG.
In contrast with Germany and the Netherlands, the regulation of standard form contracts is, in many
jurisdictions, relatively succinct, thereby granting authors and performers little protection against the
use of abusive clauses. In France, the regulation of standard form contracts was confined for a long
time to the general principles of law and to the provisions of the Act No. 78-23 of January 10, 1978
concerning the protection of consumers against abusive clauses. The protection afforded under the
Act of 1978 still applies to contracts concluded between a professional and a consumer or a nonprofessional.
However, it is in fact of a very narrow scope, for courts will generally refrain from
invalidating abusive clauses that have not been declared so by decree of the Conseil d'État or by nonbinding
recommendation of the Commission des clauses abusives. Only one decree has ever been
adopted pursuant to the Act.72
A clause in a contract between a professional and a non-professional
or a consumer is considered abusive in the three following circumstances: 1) if it has the object or
the effect of binding the other party to terms that did not appear in the contract; 2) if it has the
object or the effect of suppressing or limiting the other party's right to damages in case of failure by
the professional to perform any of her obligations; and 3) if it has the object or the effect of
reserving to the professional the right to unilaterally modify the characteristics of the good to deliver
or of the service to render.73
In the United Kingdom, unfair contractual terms have been subject to judicial review since the
adoption of the Unfair Contract Terms Act (UCTA) of 1977.74
This Act subjects the use of certain
clauses in both consumer and commercial contracts to considerable restrictions. The provisions of
the UCTA essentially aim to control such clauses as exclusions or restrictions of liability, exclusions
or restrictions of rights and remedies in respect of the liability, exclusions or restrictions of rules of
evidence or procedure, and unreasonable indemnity clauses. But while the Act also imposes a
68
Kuck 2000, p. 288.
69
OLG Frankfurt am Main, 8 December 1983 (AGBG – Übertragung von Nutzungsrechten), GRUR 1984/07, pp. 515-516.
70
OLG Düsseldorf, 23 October 2001 (Videorechte an Fernsehproduktionen), ZUM 2002/3, p. 221.
71
BGH, 13 December 2001 (Klausurerfordenis), I ZR 41/99.
72
French Decree No. 78-464 of March 24 1978, O.J. April 1st, 1978.
73
Sinay-Cytermann 1996, p. 249.
74
Unfair Contract Terms Act 1977, 26 October 1977, c. 50.
Final Report
19
requirement of reasonableness concerning these specific clauses, it fails to provide a system of
control on the basis of fairness general to all or most other types of contract terms.75
More
importantly, all contracts relating to the creation or the transfer of a right or interest in any copyright
have been expressly excluded from the scope of application of certain sections of the Act.76
Modelled after the Dutch and German laws, the European Directive on unfair terms in consumer
contracts was adopted in 1993.77
Contrary to the Dutch or German provisions however, the scope
of application of the Directive is exclusively limited to transactions involving consumers, that is, ‘any
natural person who, in contracts covered by this Directive, is acting for purposes which are outside
his trade, business or profession’.78
Article 3 of the Directive generally prohibits the use in nonnegotiated
contracts of terms, which contrary to the requirement of good faith, cause a significant
imbalance in the parties' rights and obligations arising under the contract, to the detriment of the
consumer. For more certainty, the Directive contains an indicative and non-exhaustive ‘grey list’ of
clauses, which may be regarded as unfair. Inspired by the requirement of good faith, the unfairness
of contractual terms is to be assessed according to the nature of the goods or services for which the
contract was concluded, to all the circumstances attending the conclusion of the contract, as well as
to all the other terms of the contract. However, no judicial review is permitted under the Directive
for terms that deal with the definition of the main subject matter of the contract or with the
adequacy of the price and remuneration in relation to the goods or services supplied, insofar as these
terms are in plain intelligible language. The Directive establishes therefore a minimum level of
protection for consumers confronted with standard form contracts.
The application to copyright contracts of the provisions of the European Directive on unfair
contract terms is in most cases uncertain at best. The fact that the provisions of the Directive only
apply to ‘consumer’ contracts, that is, to contracts concluded by a ‘natural person who (…), is acting
for purposes which are outside his trade, business or profession,’ constitutes a first hurdle for
authors and performing artists. Indeed, it could be argued that an author or a performing artist
dealing with a producer in view of the exploitation of his work or other subject matter are in fact
acting for purposes that are within his trade, business, or profession, thereby excluding the
application of the Directive. But the question is open to debate since, to our knowledge, no national
court has yet pronounced itself on whether authors and performing artists can be considered
‘consumers’ in the sense of the Directive. The second hurdle to overcome relates to the fact that,
under the Directive, a clause in a standard form contract is only open to judicial review if it does not
pertain to the ‘main subject matter of a contract’. Assuming that the standard contract presented by
the exploiter is concluded with a consumer and that the term under review does not touch on the
essence of the performance, would a term be regarded as unfair under the Directive? Let us recall
that a term is generally considered unfair if, contrary to the requirement of good faith, it causes a
significant imbalance in the parties' rights and obligations arising under the contract, to the detriment
of the consumer.
The list presented in annex to the Directive is meant to give an indication of what clauses may be
regarded as abusive or unfair. Among the clauses enumerated in the list that could apply in the
context of an overbroad transfer of rights, is the one that has the effect of ‘irrevocably binding the
consumer to terms with which he had no real opportunity of becoming acquainted before the
conclusion of the contract’. This type of clause relates more to the formation of the contract and to
the accuracy of the consumer's assent to the obligations contained therein, than to the fairness of the
contractual obligations themselves. Other clauses that may be considered unfair under the Directive
75
Chitty 1999, p. 735.
76
Unfair Contract Terms Act 1977, 26 October 1977, c. 50, Schedule 1, sec. 1(c).
77
Directive on Unfair Terms in Consumer Contracts, 93/13/EEC, of 5 April 1993, O.J. L 95/29.
78
Id., art. 2(b).
Final Report
20
are ones that make the provision of services by the exploiter subject to a condition whose realisation
depends on his own will alone; that give the exploiter the right to determine whether the goods or
services supplied are in conformity with the contract; or that give him the exclusive right to interpret
any term of the contract. This would be the case for example, if the publisher reserved the sole right
under the publishing contract to assess the manuscript, before publication, to see if it corresponds to
‘public demand or good taste’ and to decide thereafter not to publish it.79
Any clause that would
have the object of authorising the exploiter to dissolve the contract on a discretionary basis without
giving the same option to the ‘consumer’ would also be deemed unfair under the Directive.
Likewise, a clause enabling the exploiter to alter unilaterally without a valid reason any characteristics
of the product or service to be provided would be regarded as unfair. Another type of clause, which
is presumed unfair under the Directive, is the one that obliges the ‘consumer’ to fulfil all his
obligations where the exploiter does not perform his.
Also modelled after the German and Dutch provisions, article 4:110(1) of the Principles of
European Contract Law states that ‘a party may avoid a term which has not been individually
negotiated if, contrary to the requirements of good faith and fair dealing, it causes a significant
imbalance in the parties' rights and obligations arising under the contract to the detriment of that
party, taking into account the nature of the performance to be rendered under the contract, all the
other terms of the contract and the circumstances at the time the contract was concluded’. Like in
German and Dutch law, the rule laid down in the Principles does not apply to ‘a term which defines
the main subject matter of the contract, provided the term is in plain and intelligible language; or to
the adequacy in value of one party's obligations compared to the value of the obligations of the other
party’.80
However, contrary to German and Dutch law, the Principles do not expressly exclude
individuals bound either by an employment contract or by a collective bargaining agreement. In
addition, contrary the Directive on unfair contract terms, the Principles of European Contract Law
do not restrict the application of this principle only to ‘consumers’. The Principles of European
Contract Law would therefore seem to offer the courts greater leeway to review the terms of a
standard form contract, to the extent of course that the parties have agreed to incorporate them into
their contract or that their contract is governed by them. It remains to be seen what attitude the
national courts will adopt when applying the Principles for the interpretation of clauses in standard
copyright contracts.
Incidentally, it is interesting to mention the existence of article 29 of the Finnish Copyright and
Related Rights Act, which states that ‘the provisions of the Contracts Act shall apply to the
amendment of an unfair clause in an agreement on the transfer of copyright’. A similar provision
has been incorporated in article 36 of the Swedish Act on Contracts and other Legal Transactions in
the Field of Property Rights, which allows for the modification or nullification of unreasonable
contract terms.81
This last provision replaced the former article 29 of the Swedish Copyright and
Related Rights Act. The Danish Act on Contracts provides the same rule.
2.3 Conclusion
All in all however, a review of the international instruments reveals that the main treaties and
directives in the field of copyright and related rights offer little or no protection to authors and
performing artists regarding the conclusion of exploitation contracts, nor do they contain any rule
regarding the formation, execution, and interpretation of exploitation contracts. They merely imply,
without more, that the economic rights of authors and performing artists may be freely transferred
79
Lucas and Lucas 2001, p. 408; and Kuck 2000, p. 287.
80
Principles of European Contract Law, art. 4:110(2).
81
Levin and Kur 1995, p. 744, 745; Karnell 2000, p. 28, 29; Nyh 1998, p. 299, 301; and Strömholm 1968, p. 17.
Final Report
21
to third parties. In some cases, these instruments have even the effect of operating a presumption of
transfer of rights to the benefit of certain categories of exploiters.
Moreover, while the general rules of civil law can, in certain circumstances, be of some use to soften
the harshness of restrictive agreements, these rules are generally not sufficient to protect the interests
of authors and performing artists in their contractual relations with exploiters. It is therefore not
surprising to note that a number of national legislators have filled the gaps left by private law with
the adoption of measures to protect authors and performing artists in their contractual relations
concerning the exploitation of their works and other subject matter.
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Chapter 3. Introductory Remarks to the Analysis of Copyright Provisions
Authors and performing artists have long been recognised as the weaker party to transactions
relating to the exploitation of their works or other subject matter, for whom protective measures are
necessary to prevent that they be unfairly or unreasonably disadvantaged.82
It is indeed no use
granting rights to authors and performing artists if the latter are unable to draw from the exploitation
of these rights all the benefits to which they would be entitled. In addition to the general principles
of contract law, several Member States have implemented a number of specific measures designed to
protect authors and performing artists in their contractual relations with exploiters. Although the
basic principle of freedom of contract persists, the law establishes a number of mandatory rules,
which condition the exercise of this freedom to requirements of form and content. Many of the
principles laid down in the copyright acts are thus familiar concepts of civil law that have been
tailored to fit the copyright scheme and to meet the specific situation of authors and performing
artists. This chapter serves as an introduction to the analysis presented in the following chapter. In
this chapter, we give a general overview of the different concepts and issues relating to the
ownership and transfer of rights, as well as relating to the formation and content of copyright
contract. More particularly, we try to explain the reasoning behind the imposition of certain rules,
like those governing formalities, restrictions on transfers, remuneration, interpretation (scope) of
contracts, effect of transfer in relation to third parties, and termination of contract. Note that the
structure of this chapter also serves as a skeleton for the presentation of the country-by-country
analysis in Chapter 4.
The first section of this analysis gives a brief overview of how the law allocates the initial ownership
of rights on different subject matter. To this end, we discuss the allocation of ownership under the
traditional creator doctrine, as well as the attribution of ownership of works created under
employment, works created on commission, and audiovisual works. The second section of this
chapter examines the most common forms of transfer of rights that are authorised under the
legislation of the Member States, and more particularly the assignment, the licence and the waiver of
right.83
The third section of this chapter concerns the requirements of form set by law either for the
validity or the evidence of a contract concluded with an author or an artist. The fourth section deals
with the crucial issue of the scope of transfer of rights allowed under the copyright and related rights
act. Most laws require indeed that transfers of rights be limited in time and place and that they
clearly enumerate the rights covered by the contract. Moreover, transfers of rights with respect to
future forms of exploitation and future works are in most countries strictly regulated. The fifth
section studies the mechanisms set in the law for the determination of the remuneration due to
authors and performing artists for the exploitation of their work or other subject matter. In certain
cases, the law prescribes that the remuneration must be proportional or equitable, or that it may take
the form of a lump sum. Some acts also contain a provision according to which, in case of the
unexpected commercial success of the work, the author may request the renegotiation of the
contract if the remuneration initially paid appears disproportionate. The sixth section examines the
principles of interpretation of contracts that are specifically laid down in the copyright legislation of
the Member States. Next, we consider the effect of a transfer of right in relation to third parties.
Does the transferee obtain under the law the right to further transfer the acquired right to another
party? Does the transferee have standing to sue a third party for infringement? Is the transferee
entitled to pledge, secure, or seize the acquired right? Finally, we examine the circumstances under
which the parties to a copyright contract are allowed to terminate the contract. The termination of
the contract may occur automatically after expiration of a certain period of time, or it may be granted
82
Hugenholtz 2000, p. 11.
83
For the comparative analysis of the provisions on transfers of copyrights and related rights in the legislation of the Member
States, see chapter 4 of this study.
Final Report
24
in case of non-use of the rights by the transferee. We also examine whether the copyright legislation
regulates the consequences for the rights transferred of the bankruptcy of the exploiter.
3.1 Ownership of rights
No author or performing artist can transfer more rights that he or she actually owns in respect of a
particular subject matter. The issue of the transfer of rights cannot, therefore, be analysed without
first examining the legislative provisions dealing with the initial allocation of ownership of rights on
protected subject matter. The rules regarding the ownership of rights in fact vary from one Member
State to the next, depending essentially on the country's conception of the foundation and objectives
of the copyright regime. On the one hand are the Anglo-Saxon countries, like Great Britain and
Ireland, where copyright protection is said to follow utilitarian objectives. There, the initial
ownership of rights may be conferred, depending on the circumstances, either on the natural person
who created the work or on the legal person who invested in its production, like an employer or a
film producer. On the other hand are most countries of continental Europe, where copyright
protection is based on natural rights principles. In these countries, only the natural person who
created the work can be considered the author, on whom the initial ownership of the copyright is
generally conferred following a principle known as the ‘creator doctrine’. However, this rule has
suffered a number of exceptions over the years.84
Like in Great Britain and Ireland, legal entities
may in certain situations be conferred initial ownership or may even be presumed to be the author of
a work, as is often the case regarding particular categories of works like audiovisual works, collective
works, computer programs and databases.
85
3.1.1 Creator doctrine
Virtually all copyright acts in force in the Member States provide that, in principle, the initial owner
of copyright in a work is the natural person who created it. This rule of initial ownership by the
physical person of the author is known as the ‘creator doctrine’. It originates from the belief that the
process of creating literary, artistic, or musical works brings into play only the intellectual faculties
and personal qualities of the writer, sculptor, or composer and that such works are purely the
expression of their author’s own thought and genius. Over the years, this vision of creativity has lost
some of its forcefulness as a result of the inclusion of the authors’ rights in the realm of economics
and competition. In Anglo-Saxon countries, the principle can easily be set-aside in circumstances
where a work is created in course of employment or according to the instructions of a exploiter. By
contrast, the creator doctrine plays in most continental European countries a fundamental role in the
allocation of ownership of rights on a work. Certain differences do exist on this point among
countries of continental Europe, where some countries apply the creator doctrine more strictly than
others. For example, under the copyright acts of a few Member States, someone other than the
natural person who created the work can be presumed the author of the work and the owner of the
rights therein only in one instance: in the case of anonymous or pseudonymous works.
With respect to the performance of a performing artist, it appears from the explanatory
memorandum accompanying the Rental and Lending Rights Directive,86
that the European legislator
considers that, in view of the nature of the subject matter, it must necessarily be ab initio a physical
person who executes the artistic performance that is the object of the protection.87
This
interpretation corresponds also with the definition of ‘performer’ included in the Rome Convention
84
See: Seignette 1994, p. 1; Strowel 1993, p. 323.
85
Katzenberger 1996, p. 43.
86
Council Directive 92/100/EEC of 19 November 1992 on rental right and lending right and on certain rights related to copyright
in the field of intellectual property, O.J.C.E. L 346/61, 27 November 1992.
87
Brison 2001, p. 245.
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25
of 1961, which includes actors, singers, musicians, dancers, and other persons who act, sing, deliver,
declaim, play in, or otherwise perform literary or artistic works. Nevertheless, most – if not all – the
laws of the Member States regarding neighbouring rights are silent on the question of the initial
ownership of the related rights.
3.1.2 Works created under employment
Copyright law establishes a presumption of ownership in favour a natural or legal person other than
the natural person who created the work in the case of anonymous, pseudonymous, collective, or
derivative works. However, the presence of multiple or unidentifiable authors is not the only
instance where a legal entity may be recognised as the first owner of the rights on a work. It may
also be the case for works created under employment. The basis for the attribution of the initial
ownership of rights to the employer is that since the latter assumes the major financial,
organisational, and associative risks involved in the creation and publication of the work, he should
have full control, including with respect to third parties, over the exploitation of that work.88
In
these circumstances, the author receives compensation for his intellectual creation not in the form of
an exclusive economic right on the work – which is presumed transferred to the employer, but in the
form of a salary or any other form of agreed remuneration. This departure from the creator doctrine
is not uniformly accepted in the national legislation of the Member States. While the ownership of
rights by a legal entity may correspond to the utilitarian objectives of certain European copyright
systems, it may collide with the natural rights principles at the basis of a number of continental
European authors' rights regimes. Many continental European legislators are thus very reluctant to
grant to the employer or a legal entity the initial ownership on a work created in the course of an
author's employment.
Nevertheless, there seems to be a growing tendency at the European level to recognise, either
statutorily or judicially, the existence of a presumption of ownership in favour of the employer,
when a work is created by an employee in the execution of his duties or following the instructions
given by the employer. This movement may partly be the result of the European Union's
harmonisation efforts in the area of copyright law. Pursuant to article 2 of the Computer Programs
Directive, the author of a computer program is deemed to be the natural person or group of natural
persons who has created the program or, where the legislation of the Member State permits, the
legal person designated as the rights holder by that legislation. Where collective works are
recognized by the legislation of a Member State, the person considered by the legislation of the
Member State to have created the work is deemed to be its author. Moreover, under paragraph 2(3)
of the Directive, the employer is considered the first owner of all economic rights on a work created
by an employee in the execution of his duties or following the instructions given by the employer,
unless otherwise provided by contract.89
The same provision was included in the first draft of the
EC Directive on the legal protection of databases. However, it was withdrawn from the final
version of the Directive.90
Recital 29 only states that ‘nothing prevents Member States from
stipulating in their legislation that where a database is created by an employee in the execution of his
duties or following the instructions given by his employer, the employer exclusively shall be entitled
to exercise all economic rights in the database so created, unless otherwise provided by contract’.91
Consequently, national legislation deals with the question of the employer's ownership of rights in
either one of two ways: either the copyright act contains a general and express presumption of
88
Seignette 1994, p. 115.
89
Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs, Official Journal L 122 ,
17/05/1991 p. 42- 46, art. 2(3). See: Katzenberger 1996, p. 44.
90
Gaster 1999, p. 79.
91
Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal protection of databases,
Official Journal L 077, 27/03/1996 p. 20- 28, Recital 29.
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26
ownership in favour of the employer, which is sometimes accompanied by special rules; or, the act
only regulates the ownership of specific categories of works created under employment, such as
computer programs and databases. In the latter case however, courts have in certain circumstances
read in the employment contract an implicit transfer of rights.
Given the strength of the creator doctrine in a number of countries of the European Union,
legislators have often limited themselves to the implementation of the mandatory provision of the
Computer Programs Directive, which allocates to the employer the initial ownership of rights on the
computer programs created by employees in the execution of their duties or following the
instructions given by their employer.92
Some legislators have found ways to implement this
mandatory provision in a way that does not contradict the creator doctrine. Other legislators have
also extended the rule of initial ownership of the employer to the case of databases created under
employment and to certain other specific categories of works created under employment.
Nevertheless, in the absence of a general presumption of ownership of rights in favour of the
employer, the basic rule is that no transfer of rights occurs. In some of the Member States however,
the courts have read in the employment contract an implicit transfer of rights in favour of the
employer. Even in countries where the creator doctrine is strictly applied, courts have accepted the
employer has at least the right to exercise certain powers over the work created under his
employment but only to the extent necessary for the exercise of his customary business activities.
As we shall see in the following chapter, some courts have accepted the idea that an employer may,
within his field of activities, use the works that have been created as a result of duties under the
employment contract, but only for purposes that could be foreseen at the time the work was
created.93
3.1.3 Works created on commission
In principle, the legislator must in the attribution of ownership on works created on commission
take into account the same opposing interests as for works created under employment. One might
argue that since the commissioner of a work assumes the major financial, organisational, and
associative risks involved in the creation and publication of the work, he should have full control,
including with respect to third parties, over the exploitation of that work.94
Others might argue that,
contrary to an employer-employee relationship, the commissioner-creator relationship endures only
until delivery of the commissioned work and does not entail the existence of a position of
dependence on the part of the creator vis-à-vis the commissioner. Therefore, the creator doctrine
should apply. In fact, the copyright acts of most European Member States are essentially silent on
the issue of the ownership of works created on commission. In the absence of any legislative
provision on the subject, courts generally conclude that the owner of the rights in a work created on
commission is the physical person who created it. In several Member States, courts have accepted
the argument that, despite the silence of the law, the commissioner should be able to use the works
within the limits of the object and purpose of the contract. Where the legislation expressly addresses
the issue, the law has most often confirmed the application of the creator doctrine.
3.1.4 Audiovisual works
Audiovisual or cinematographic works, which include cinema films, films made for broadcasting
organisations and any other film work such as videos, present a particular challenge to the creator
doctrine. The reason is that such works come into being thanks to the input of an important
92
Karnell 2000, p. 24, 25; and Schönning 2000, p. 33.
93
In various sectors standards have developed. See: Muldin 1997, p. 169; Karnell 2000, p. 25.
94
Seignette 1994, p. 115.
Final Report
27
number of contributors. These contributors may be roughly classified as investors, producers, coauthors,
performers, and technicians. Among the possible co-authors of an audiovisual work are the
authors of the scenario, dialog and adaptation, the composer and, the author of a pre-existing work,
if any.95
The ownership of rights on audiovisual works therefore raises combined issues of multiple
authorships and of creation under employment and/or commission. Legislators have had to grapple
in the past with the difficult question of reconciling the creator doctrine, where every co-author
should be recognised as such under the law and thereby obtain an exclusive right on his or her
creative contribution, with the need to ensure economic efficiency, where the exploitation rights
would more efficiently be held by the producer. Apart from considerations of economic efficiency,
the question of who is granted the status of author of an audiovisual work is also of considerable
importance for the determination of the term of protection. Although this section focuses on the
problem posed by audiovisual works, the creator doctrine in fact faces similar problems with respect
to the initial ownership of rights on sound recordings.
The only category of works for which the rules of initial ownership have been harmonised at the
European level is that of audiovisual works. This occurred with the adoption of the Rental and
Lending Rights Directive,96
where the adoption of a single rule of ownership with respect to
audiovisual works proved to be one of the most controversial issues of the entire Directive.97
Essentially, article 2(2) of the Directive provides that the principal director of a cinematographic or
audiovisual work is to be considered as its author or as one of its authors. Apart from the principal
director, Member States are free to designate other contributors as the work's co-authors. In other
words, contributors to a film, such as the screenplay writer, the cameraman, the editor, or the
producer, may be considered as its co-authors under national legislation. This rule of authorship has
in fact been reiterated in two subsequent directives.98
The implementation of the Rental and
Lending Rights Directive into national law meant that at least three Member States had to amend
their copyright acts, which until then had provided that the producer was the only person to be
considered as the author of an audiovisual work.99
However, the Rental and Lending Rights Directive further grants Member States the possibility to
establish a presumption of ownership in favour of the producer of the audiovisual work.100
‘5. Without prejudice to paragraph 7, when a contract concerning film production is concluded, individually or
collectively, by performers with a film producer, the performer covered by this contract shall be presumed, subject
to contractual clauses to the contrary, to have transferred his rental right, subject to Article 4.
6. Member States may provide for a similar presumption as set out in paragraph 5 with respect to authors.
7. Member States may provide that the signing of a contract concluded between a performer and a film
producer concerning the production of a film has the effect of authorizing rental, provided that such contract
95
Kernochan 1995, p. 271.
96
Council Directive 92/100/EEC of 19 November 1992 on rental right and lending right and on certain rights related to copyright
in the field of intellectual property, Official Journal L 346, 27/11/1992 p. 61 – 66, art. 2(2).
97
Reinbothe and von Lewinski 1993, p. 47.
98
Council Directive 93/83/EEC of 27 September 1993 on the co-ordination of certain rules concerning copyright and rights
related to copyright applicable to satellite broadcasting and cable retransmission, Official journal NO. L 248, 06/10/1993, p. 15-
21, art. 1(5); and Council Directive 93/98/EEC of 29 October 1993 harmonizing the term of protection of copyright and certain
related rights, Official journal NO. L 290, 24/11/1993, p. 9-13, art. 2(1).
99
United Kingdom, Ireland, and …
100
Council Directive 92/100/EEC of 19 November 1992 on rental right and lending right and on certain rights related to copyright
in the field of intellectual property, O.J.C.E. L 346/61, 27 November 1992. Recital 19 states: ‘Whereas the provisions of Chapter
II do not prevent Member States from extending the presumption set out in Article 2 (5) to the exclusive rights included in that
chapter; whereas furthermore the provisions of Chapter II do not prevent Member States from providing for a rebuttable
presumption of the authorization of exploitation in respect of the exclusive rights of performers provided for in those articles, in
so far as such presumption is compatible with the International Convention for the Protection of Performers, Producers of
Phonograms and Broadcasting Organizations (hereinafter referred to as the Rome Convention)’.
Final Report
28
provides for an equitable remuneration within the meaning of Article 4. Member States may also provide that
this paragraph shall apply mutatis mutandis to the rights included in Chapter II’.
These paragraphs deal with the presumption of transfer of the rental right in a comprehensive and
exhaustive way. As Reinbothe and von Lewinski report, the provisions concern not only the
presumptions that must be provided, but also those that may be provided. Outside the areas
expressly mentioned by the Directive, and beyond the specified conditions, no presumption of
transfer of the performer’s or author’s exclusive rental right may be provided. With respect to the
performer’s rights, article 2(5) applies equally to performers acting under an employment, service, or
similar contract, but only insofar as the parties have not agreed to the contrary. This presumption of
transfer is thus rebuttable and may affect not only the performer’s rental and lending rights but also
any other exclusive rights of performers provided for in the Directive, in so far as such presumption
is compatible with the Rome Convention.101
While the presumption of transfer of the performer’s
rights operates as soon as the requirements and conditions of article 2(5) of the Directive are met,
Member states are free to establish the presumption of transfer of the author’s rights under article
2(6). The presumption of transfer is thus rebuttable and may affect not only the author’s rental and
lending rights but also any other exclusive rights depending on the implementing legislation.102
As a
result, the copyright acts of – almost – all Member States designate at least the principal director of
the audiovisual work as one of the authors of the work. Several legislators have taken advantage of
the possibility to designate other co-authors of an audiovisual work, including in certain cases the
film producer. Most copyright acts also provide for a rebuttable presumption of transfer of rights in
favour of the producer, not only from the performers but also from the several co-authors of the
audiovisual work. However, the rights of certain co-authors of the audiovisual work have been
expressly excluded from the presumption of transfer.
3.2 Forms of transfer of rights
The previous section shows that the natural author who creates a work is far from being always
considered as the initial owner of the copyright on a work, in application of the creator doctrine.
The same remark holds true for performers who make a contribution to an audiovisual work. Even
when authors and performers are considered to be the first owners of the rights on the subject
matter they created, they must nevertheless agree to some form of transfer of rights for the
commercial exploitation of their creation. The scope of rights that are assigned, conferred, or
otherwise transferred through contract by authors or performing artists to exploiters constitutes one
of the key aspects of the legal relationship involved in the exploitation and distribution of works and
performances. Such transfers generally pertain to the creator’s economic rights: these are undeniably
the most relevant rights to obtain in view of the commercial exploitation and distribution of a
protected subject matter. Indeed, without some form of transfer of right or of permission to
perform certain acts with respect to the protected subject matter, the exploiter would be committing
an infringement of the creator’s right every time that he would reproduce, communicate, display or
distribute the subject matter to the public. However, the creator' exercise of certain attributes of his
or her moral right may also have an impact on the exploiter's capacity to exploit the work efficiently.
For example, the exercise of the creator's right of integrity may restrict the exploiter’s ability to bring
certain alterations to the subject matter that are considered necessary for its commercialisation.
Therefore, the exploiter may require that the author or performer not only agree to a transfer of his
or her economic rights, but also to a waiver of certain attributes of his or her moral rights. In
addition, authors and performers are sometimes asked to waive the right to remuneration that the
law grants them instead of an exclusive right on their subject matter. Before we examine which
101
See subsection 3.2.1.2 infra.
102
Reinbothe and von Lewinski 1993, p. 62.
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29
measures have been adopted to protect authors and performing artists in their contractual
relationships with exploiters, we present, in the following pages, a brief overview of the most
common forms of transfer of rights and their main characteristics. More particularly, we analyse the
notions of assignment, licence, and waiver of rights.
3.2.1 Assignment
An assignment of right (e.g. ‘cession’, ‘overdracht’, or ‘Übertragung’) is generally understood as the
complete transfer of the rights in the protected subject matter from the initial author or performer to
another party. The assignment can be either total or partial in the sense that it can be limited so as
to apply to one or more, but not all, of the acts that the rights owner has the exclusive right to
perform. It can also be limited so as to apply to part, but not the whole, of the period for which the
copyright subsists.103
In addition, an assignment may be limited to certain forms of exploitation of
the subject matter, so that the author or performing artist may contract separately for every right that
constitutes his entire privilege.104
An assignment, which could be compared to a sale, confers on the
assignee a real or absolute right in the copyright on the work. Consequently, once the rights are
assigned to another party, the initial owner loses all claims on these rights and, therefore, may no
longer perform the acts covered by the rights transferred without the assignee’s consent. In most
Member States, copyrights may be subject to an assignment. Although continental European
author’s rights systems are in principle all based on natural rights principles, the alienability of an
author’s economic interests essentially depends on each country’s approach on this issue.
3.2.2 Licence
In all European Member States, authors and performers may grant exploiters a licence for the use of
their work or other subject matter. A licence (e.g. ‘concession’, ‘licentie’, ‘Einräumung von Nutunzsrechte’) is
defined as the permission to do an act, which without that permission would be an infringement of
copyright or related right.105
Just like an assignment of right, a licence may cover all of the acts that
the rights owner has the exclusive right to perform or it may be limited only to some of them. Its
application may also be limited to certain forms of exploitation, to a specific duration, or to a
geographical territory. A licence may be exclusive or non-exclusive, express or implied. An implied
licence will be deemed to exist for example when, ‘viewing the facts objectively, the words and
conduct of the alleged licensor, as made known to the alleged licensee, in fact indicated that the
licensor consented to what the licensee was doing’.106
A licence will be deemed exclusive if it
authorises the licensee to the exclusion of all other persons, including the person granting the
licence, to exercise a right, which would otherwise be exercisable exclusively by the copyright owner.
Generally, the holder of an exclusive licence has the same rights against a successor in title who is
bound by the licence as he has against the person granting the licence.
In practice, an exclusive licence and an assignment of rights have similar economic consequences for
the author or performer and the exploiter, since the licensee – like the assignee – is empowered to
exercise to the exclusion of all other persons, including the grantor of the licence, the right granted
to him under the licence. To explain the difference between the licence and the assignment, an
analogy is sometimes made with the difference that exists between a sale and a lease.107
The essential
103
Visser 1999, p. 117. See for example: Swedish Copyright Act, art. 27.
104
See for example: French CPI, art. L. 122-7, 2nd and 3rd phrases, which state that: ‘The transfer of the right of representation does
not imply that of the right of reproduction. The transfer of the right of reproduction does not imply that of the right of
representation’.
105
Visser 1999, p. 118.
106
Redwood Music Ltd. v. Chappell and Co. Ltd., [1982] RPC 109, at p. 128.
107
Visser 1999, p. 119.
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difference between the licence and the assignment lies therefore in the fact that, contrary to the
assignee, the licensee cannot be considered the owner of the right to use the protected subject
matter. Another indication of the nature of the transfer is given by the consequences attached to the
death of the transferee: where the licensee dies, the permission to use the subject matter may
terminate, but the death of an assignee will not, in absence of specific provision, terminate the
assignment.108
The undeniable similarity between an exclusive licence and an assignment has led
some authors to conclude that the distinction is in fact more academic than practical.109
In support
of their argument, Lucas and Lucas hold for example that in countries like France, where both types
of transfers are admissible, the legislator has not always been consistent in its use of the terms
assignment (e.g. cession) and licence (e.g. concession), which would suggest that the concepts are
somewhat interchangeable. To complicate the matter, the language used by the parties in their
contractual agreements relating to the use of copyrights or related rights does not always clearly
indicate whether the intent is to grant a licence or an assignment of right. Hence, the courts have
sometimes treated the transfer described by the parties in terms of a ‘licence’ as an assignment,
especially in cases where the contract either expressly or by necessary implication constituted a grant
exclusive of all persons including the grantor.
110
The distinction between an assignment and a licence
of rights bears particular importance in ‘monist’ countries like Austria and Germany. In view of the
fact that the authors’ rights are not assignable, authors must then be given the possibility to license
their rights either on an exclusive or non-exclusive basis. In the remaining Member States, where
the distinction between an assignment and a licence is less important, the national legislation
contains provisions on the licensing of rights that vary from one Member State to the next and from
one type of work to the other.
3.2.3 Waiver
The protection granted to authors and performers not only extends to protecting their economic
interest, in the form of economic rights, but also to protecting their personal interest in the form of
moral rights. Whether implicitly or expressly, moral rights are generally considered inalienable
because they generally serve to protect the author’s or the performer’s honour and reputation.
Consequently, a global waiver of an author’s or the performer’s moral rights is generally declared null
and void.111
However, moral rights are not absolute. They are subject to limitations in scope and
conditions of good faith exercise that are designed to give weight to competing interests of
transferees, other users, and the public. Thus while the global renunciation of the creator’s moral
rights would be deemed invalid, the Copyright and Related Rights Acts of several Member States do
allow that, in certain circumstances, authors and performers waive certain attributes of their moral
rights.112
Indeed, it is not unusual, in practice, to come across agreements for the commercial
exploitation of works or performances, in which the author or performer agrees not to object to the
exploiter’s performance of acts that, without such agreement, would violate his moral right. An
exploiter may request that the author or the performer waives certain of the attributes of his moral
rights for reasons of commercial expediency. For example, the film or record producer may wish to
be able to decide when would be the most appropriate time for the release of a new film or sound
recording. They may also wish to have some degree of freedom to alter a work, which forms part of
a collective work, provided that such alterations are made according to fair practice. National
legislation varies significantly on the question of the renunciation to some of the creator’s moral
rights, particularly due to the fact that the laws do not all recognise the same attributes to the
authors’ and performers’ moral rights and do not all put the same weight on each of these attributes.
108
Sterling and Carpenter 1986, p. 185.
109
Lucas and Lucas 2001, p. 390; Rahmatian 1998, p. 102.
110
In Great Britain: Young v. Odeon Music Pty. Ltd., [1978] R.P.C. 621, at p. 629; and in France, see: Boytha 1991, p. 201.
111
Belgian Copyright Act, art. 2(2).
112
Strowel 2000, p. 45, 46; Dauwe 1996, p. 241; Vanhees 1996, p. 346.
Final Report
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The most common attributes recognised to authors and performers under the law as part of their
moral rights are the right of disclosure, the right of attribution or paternity, the right of integrity or
adaptation, the right of access and the right of withdrawal.113
Sometimes, authors and performers are not only asked to waive certain attributes of their moral
rights, but they are also required to forego the payments that would normally flow from the
remuneration rights granted to them under the copyright act. The rights to remuneration granted to
authors and performers arise either by the simple application of the law, or through the conclusion
of a juridical act. An example of the first type of remuneration right is the one due to authors and
performing artists for the reproduction of sound or audiovisual works for private use. To be
payable, the remuneration for home copying implies no transfer of right in favour of the user. It is
usually paid automatically – by simple application of the law – to a collecting society by the
importers and manufacturers of recording devices outside of any contractual relationship with the
author. The remuneration for the reprographic reproduction of works occurs on a similar basis.
The law is generally silent regarding the possibility for an author or performing artist to waive such
right. However, the question whether an author or performing artist may waive the benefit of this
type of remuneration right is less pressing than in the case of a remuneration right that originates
from the conclusion of a juridical act. An example of the latter type of remuneration right is the one
that users of protected works or other subject matter, like broadcasting organisations, cable
retransmission entities, or sound or film producers, must pay under the law upon acquiring the
exclusive rights of the creators. Admittedly, such transfer of right to the producer may occur either
by voluntary agreement or by legal presumption, depending on the provisions of the copyright act.
The main difference between the first type of remuneration right and the latter is that the exploiter is
deemed in the latter case to be the owner of the rights on the work or other subject matter, which
brings as consequence that the creator is entitled to receive a remuneration.114
Whether the remuneration rights granted by law to compensate for the transfer of the author’s or
performer’s exclusive right may be validly waived, essentially depends on the provisions of the
copyright act. Except with respect to the authors’ and performers’ remuneration right for the rental
of audiovisual works,115
the national legislation of the European Member States regarding the
imperative character of the remuneration rights has not been harmonised. As a result, authors and
performers may waive their remuneration right in some countries but not in others, and may waive
their rights with respect to one act but not to another. In some cases, the legislator has expressly
provided that the right to remuneration granted to authors and performers in compensation for the
implied or voluntary transfer of their exclusive rights may not be renounced to or waived by the
persons entitled to it. It would be indeed no use granting a right to remuneration to the author or
the performing artist, if exploiters were able to request a contractual waiver of its application.
However, most laws are silent regarding the waivable character of a remuneration right. One must
therefore conclude that the remuneration due to authors, performers, and exploiters for most acts of
reproduction or communication to the public may be waived.
3.3 Requirements of form
The principle of freedom of contract is generally entails the parties’ freedom to choose the form of
their agreement. Unless the law says otherwise, the parties to a contract are free to decide whether
they wish to conclude a contract under oath, in writing, orally or even tacitly. When the law imposes
the requirement that a contract be put in writing, it is generally in pursuance of three different
objectives. First, it is meant to offer some reflection time to the parties who sign the contract, so
113
Salokannel, Strowel, and Derclaye 2000, p. 248.
114
See: Rossbach 1990.
115
See section 3.2.2 infra.
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that none of them has to suffer from the disadvantageous consequences of an impulsive gesture.
Second, it ensures that all relevant information pertaining to the transaction is transmitted to both
parties at the time of conclusion of the contract. Third, a contract put in writing facilitates the proof
of the parties’ intention regarding the content of the contract. This last objective coincides in fact
with the general rules of civil evidence, which often impose much stricter requirements of proof on
an informed or professional party claiming the execution of an obligation, than on a nonprofessional
or weaker party owing that obligation. In view of the persisting uncertainties regarding
the content of copyright contracts and of the frequent inequalities of bargaining power that come
between contracting parties, the copyright legislation of all Member States demands the existence of
a written contract for the transfer of rights. This requirement sometimes serves as a condition of
validity of the transfer of rights, but most often as a means to prove the transfer.116
In most cases,
the failure to meet the requirement of form can be raised only by the party who benefits from the
protection of the law, in this case by the author or the performing artist. In other words, the failure
to meet this requirement is usually met with the relative nullity of the contract.117
3.4 Restrictions on transfers of rights
One of the most important measures adopted for the protection of authors and performers, aside
from the provisions on the payment of remuneration, is the restriction on the scope of the transfer
of rights. As Lucas and Lucas point out, the author’s monopoly may be divided at will, particularly
with respect to the modes of exploitation.118
Not only can the transfer be limited to the right of
reproduction or to the right of communication to the public, or to one of their corollary like the
right to make a translation or adaptation, but the parties may at their discretion also limit the scope
of the transfer. A restriction of the transfer to one right, to one exploiter, to one geographical
territory or to a limited duration gives the author or performing artist the possibility either to
exercise these rights personally or to transfer them to other exploiters who are in a better position to
further exploit the work. If the scope of an initial transfer is too broad, it not only risks depriving
the creator of an eventual income in the event that the first transferee fails to exercise the rights, but
it also risks depriving him of the freedom to choose another contracting partner who might make a
better exercise of his rights.
Some acts require that the contract should set out explicitly, for each mode of exploitation, the
author’s remuneration, the geographical scope and the duration of the assignment. Only a few of
the European Member States expressly regulate the transfer of rights relating to forms of
exploitation that are not known or foreseeable at the time the copyright contract was concluded.
Like in the case of the transfer of rights in future forms of exploitation, the national legislation of the
Member States varies quite a lot with respect to the possibility to transfer rights on future works.
Some countries strictly prohibit the transfer of rights in future works. Others allow such transfers to
take place unconditionally, while yet other Member States put a mandatory time limit on contracts of
the sort.
It is also worth pointing out that authors and performing artists that are bound by an employment
contract do not always have the full benefit of these provisions. Hence, many of the rules that
restrict the scope of transfers of rights, and the possibility to transfer rights for future forms of
exploitation or rights on future works, either do not apply at all or apply only in part to employees.
The reason for this special treatment is not only that employments contracts are regulated under
labour law, but also that the employer-employee relationship generally implies the existence of an
116
The copyright acts of Austria, Denmark, Finland, and Sweden contain no requirement of form for the transfer of rights.
117
Dietz 1984, p.40; Lucas 2000, p. 59; Von Lewinsky 1995, p. 692, 716.
118
Lucas and Lucas 2001, p. 393.
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on-going relationship during which time the employee might create a number of works that might
be exploitation in a number of ways.
3.5 Determination of remuneration
Ensuring the author’s and the performing artist’s participation in the profits generated by the
exploitation of their work or other subject matter certainly constitutes the primary objective of any
copyright and related rights regime. However, if there is one area where the interests of authors and
performing artists on the one hand, and those of exploiters on the other hand, are likely to collide, it
is with respect to the payment of remuneration to creators. The hope of authors and performing
artists of receiving a proportional or at least a fair remuneration for the use of their work or other
subject matter regularly comes into conflict with the exploiter’s intent to exploit the work or
performance at the lowest cost possible. In view of the inequality of bargaining power known to
exist between authors or performing artists on the one hand, and exploiters on the other hand, there
is a risk that authors and performers be deprived of their fair share of the profits. The determination
of the amount of remuneration to be paid to the author or performing artist is therefore one of the
key issues behind the regulation of copyright contracts. The amount of remuneration to be paid to
authors and performing artists was also the main focus of the recent modifications to the German
Copyright Act. Admittedly, since the copyright reform of 1965, authors have had the power to ask
the courts for a revision of the terms of a copyright contract if the remuneration they received
proved to be grossly disproportionate in relation to the revenues made from the exploitation of the
work. However, such control has been deemed insufficient for a number of reasons. First, because
courts are often reluctant to find a gross disproportion between the revenues made and the
remuneration paid. Second, because such revision always takes place ex post instead of protecting
creators ex ante in their contractual relationships. And third, because such revision in no way ensures
the payment of a fair remuneration to authors and performers who do not or cannot achieve
commercial success. In the following pages, we examine the prescriptions of the law regarding the
amount of remuneration due to authors and performers, with a look in the last subsection at a
provision present in some of the copyright acts known as the ‘best-seller clause’.
A majority of copyright acts have left the amount of remuneration to be paid to the author or
performing artist to be determined by the contracting parties. In fact, only the countries most
dedicated to the protection of the authors’ rights provide measures in this respect, i.e. Belgium,
France, Greece, Germany, Italy, Portugal, and Spain. There are numerous ways to calculate the
amount of remuneration to be paid to the author or performing artist for the use of his work or
other subject matter. The payment of remuneration generally takes either one of three forms: it can
be proportional, equitable, or lump sum. The proportional remuneration is the mode of calculation
that offers the greatest assurance of fairness to the commercially successful author or performing
artist, since it is usually based on the revenues generated from the exploitation of the work or
performance. However, for all the performing artists or authors who do not necessarily achieve a
significant commercial success – i.e. authors of scientific works and orchestra musicians – or whose
works cannot be distributed on the mass market – i.e. architectural works, or paintings – a
proportional remuneration would be the guarantee of a miserable livelihood.119
In such
circumstances, the payment of an equitable remuneration would certainly be more indicated. As a
protective measure, the law may provide that the authors and performing artists will receive an
equitable remuneration or it may authorise the payment of a fixed lump sum.
119
Lucas and Lucas 2001, p. 424.
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3.5.1 Proportional remuneration
As advantageous as it may seem for authors and performing artists, the determination of a
proportional remuneration often faces two rather technical difficulties: first, determining the basis on
which the percentage must be calculated; and second, determining which measures of control must
be used without revealing sensitive corporate information.120
Unless the parties come to an
agreement or unless the legislator clearly specifies the basis of calculation of the remuneration and
puts an obligation on the exploiter to give account of the receipts generated by the exploitation of
the work, the courts must deal with these delicate issues. Ideally, the proportional remuneration paid
for the public performance of a work would be based on the price, exclusive of tax, paid by the
public to receive communication of the work, i.e. the entry price at the theatre, the movies, and the
like. The proportional remuneration paid for the publication of a book would be based on the retail
price, exclusive of tax, of the book, magazine, newspaper, or other publication. Optimally, the
exploiter should have the obligation to render account periodically to the author or performing artist
on the receipts generated by the exploitation of the work or other subject matter.121
3.5.2 Equitable remuneration
If the definition of a basis for the payment of a proportional remuneration poses certain difficulties,
the determination of what constitutes an ‘equitable’ remuneration is an even thornier question. On
what basis are the contracting parties to establish what is equitable or fair, if it is not proportional to
the revenues made from the exploitation of the work? Is there not a risk that the ‘fairness’ of a
remuneration be determined solely by the party having the greatest bargaining power, in most cases
the producer? In fact, apart from the provisions implementing article 4 of the Rental and Lending
Directive, which grants authors and/or performers an unwaivable right to equitable remuneration
for the rental of phonograms and films, the option of an equitable remuneration in exchange for the
transfer of rights has been retained only in very limited instances. Generally, the law provides no
definition of what is to be considered an equitable remuneration in the circumstances. If the
contracting parties cannot agree on an equitable remuneration, such remuneration may then be fixed
by a mediator or competent authority.
3.5.3 Lump sum
The rules that authorise the payment of lump sum are generally formulated as exceptions to the
basic right of the author to receive a proportional remuneration, that is when such proportional
remuneration is impossible to calculate or not justifiable in view of the nature of the contribution.
In other words, the regulation of lump sum remuneration is usually paired in the national legislation
with the regulation of proportional remuneration. On the basis of the iustum pretium doctrine, the
courts would probably be very reluctant to review the percentage agreed to by the parties for the
payment of a proportional remuneration, for fear of encroaching upon the parties’ freedom of
contract and private autonomy.
3.5.4 ‘Best-seller’ clause
The copyright acts of only five of the European Member States expressly allow authors to ask for a
modification of the contract, if the remuneration agreed upon is disproportionate to the income
generated from the use of the work. The conditions under which this right may be invoked differ
per country. Such a revision is generally permitted only if the author or performer received a lump
120
Koumantos 1996, p. 314.
121
Bentley 2002, p. 51.
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sum.
3.6 Interpretation of contracts
Under the copyright law of most European Member States, the courts give a restrictive
interpretation to clauses in copyright contracts that operate the transfer of rights from an author or
performing artist to a exploiter. Such a restrictive interpretation may flow from an express provision
in the copyright act or it may derive from the general principles of interpretation that are applicable
in civil law matters. Thus, the legislation of some Member States give the courts the express or
implied instruction to interpret a grant of rights as encompassing only those rights that are required
by the purpose pursued in the transfer at issue. Under the legislation of several other Member
States, a written document must mention the duration, place of exercise, and the amount of
remuneration for each of the rights transferred. On the basis of this provision, the courts generally
consider that if the contract does not enumerate each right individually then, any right that does not
appear in the list is not covered by the transfer.
3.7 Effect of transfer in relation to third parties
What consequence, if any, is attached to the author’s transfer of rights? Can the transferee transfer
in turn his right to a third party? Does he have standing to institute proceedings against a possible
infringer? The answer to these questions does not depend solely on the nature of the transfer,
whether assignment or licence, but depends also on the law of each Member State. Indeed, even if
the assignee would, in principle, have greater rights than a licensee, national law may contain
provisions for the protection of authors and artists requiring their consent for the further transfer of
rights. The same holds true for the institution of proceedings against possible infringers: the
national law often reserves to the sole author or performing artist the power to enforce his rights.
Such measures allow authors and performers to retain some control over the exercise of the rights
transferred, and in particular to make sure that their moral rights are respected.
In almost all European Member States, the transferee is entitled to transfer the rights he acquired to
a third party, provided that the author has given his consent to the transfer. One exception is the
transfer of rights that occurs as part of the sale of the whole or part of the exploiter’s business. In
this case, the prior consent of the author or performing artist is usually not required.
The question of whether the exploiter has standing to sue for copyright infringement is regulated
only in a minority of Member States. In general, the assignee and the holder of the right of an
exclusive exploitation right are permitted to sue in his own name for copyright infringement. By
contrast, the holder of a non-exclusive license is not entitled to institute proceedings in his own
name. In the absence of any legislative provision on this issue however, it is very difficult to give a
definite answer to the question of whether the assignee and the licensee have standing to institute
proceedings in copyright infringement cases. In these circumstances, one should look at the
provisions on civil procedure of each Member State. Such an enquiry would, however, take us far
beyond the scope of our study.
In the legislation of eight Member States, the copyright act contains a provision dealing specifically
with the possibility for the transferee to pledge, secure, or seize the acquired rights. In some
countries, such possibility is expressly forbidden, while in others such practice would be accepted.
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3.8 Termination of contract
It is generally accepted in contract law that, unless the parties have stipulated otherwise, contracts
that are concluded for a fixed period of time may only be terminated at the end of their term.
However, a party is entitled to ask for the termination of the agreement if the other party has
substantially violated his obligations under the contract. For instance, the majority of the copyright
laws of the European Member States give the author the right to terminate the contract in the event
that the exploiter does not exploit the transferred rights. The conditions under which termination
may be invoked by the author vary. Only a few legislators have expressly admitted the exploiter’s
bankruptcy, judicial liquidation, or declaration of insolvency as a ground for the resiliation of the
transfer of rights. Besides non-use of rights and bankruptcy, the copyright acts of some Member
States allow the author to terminate the contract in a number of other circumstances.
Chapter 4. Country-by-Country Analysis
4.1 Austria
4.1.1 Ownership of Rights
4.1.1.1 Creator doctrine
In Austria, someone other than the natural person who created the work can be presumed the
author of the work and the owner of the rights therein only in one instance: in the case of
anonymous or pseudonymous works. In principle, the person whose name or generally known
pseudonym or signature appears in the usual manner on copies of the work or when it is disclosed
to the public, is deemed, in the absence of proof to the contrary, to be its author. However, if a
work is published without any indication of the name of the author, the editor, if he is named, or
otherwise the publisher, is deemed to represent the author.122
4.1.1.2 Works created under employment
It is of settled jurisprudence of the Austrian Supreme Court that, in application of the creator
doctrine, a legal person may never be deemed to be the initial owner of the copyright on a work.
123
In fact, in view of the strength of the creator doctrine, the legislator has chosen to implement
paragraph 2(3) of the Computer Programs Directive in a way that does not contradict the
fundamental principle according to which the author of a work is the physical person who created it.
Instead of granting to the employer the initial ownership of the rights in the works made under
employment, article 40b of the Austrian Copyright Act grants him an unrestricted licence to exploit
the work (unbeschränktes Werknutzungsrecht), unless the parties have agreed otherwise.124
There is thus
no express presumption of ownership of rights in favour of the employer under Austrian copyright
law, not even in the case of computer programs. The same rule applies to databases created by one
or more employees in the course of duties entrusted to them or following instructions from their
employer.125
However, the Austrian courts have held that the employer may, unless otherwise
agreed, exploit the rights in the works that are created in the exercise of the duties arising out of the
employment contract. This implicit transfer is strictly limited to the rights in works that are created
within the scope of the contract and the business.126
4.1.1.3 Works created on commission
The Austrian Copyright and Related Rights Act contains no express provision concerning the
ownership of works created on commission. In line with the creator doctrine, the Austrian Supreme
Court has reaffirmed the principle that the author of the publicity slogan ‘Auf bald – beim Wienerwald’,
even if created on commission, belonged to the person who created it and not to the commissioner
122
Austrian Copyright Act, art. 10(1).
123
See for example: OGH, 24 November 1998, No. 4Ob292/98i; OGH, 18 February 1992, No. 4Ob127/91.
124
Austrian Copyright Act, art. 40b which reads as follows: ‘Wird ein Computerprogramm von einem Dienstnehmer in Erfüllung
seiner dienstlichen Obliegenheiten geschaffen, so steht dem Dienstgeber hieran ein unbeschränktes Werknutzungsrecht zu, wenn
er mit dem Urheber nichts anderes vereinbart hat. In solchen Fällen ist der Dienstgeber auch zur Ausübung der in § 20 und § 21
Abs. 1 bezeichneten Rechte berechtigt; das Recht des Urhebers, nach § 19 die Urheberschaft für sich in Anspruch zu nehmen,
bleibt unberührt.’
125
Austrian Copyright Act, art. 40f(3).
126
Dillenz 1999, p. 105, 106: OGH 16.6.1992, MR 1992, 244 (Übungsprogramme) and MR 1992, 247 (249).
Final Report
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of the work.127
However, the Austrian courts have held that the commissioner of a work may, unless
otherwise agreed, exploit the rights in the work created on commission. This implicit transfer is
strictly limited to the rights in works that are created within the scope of the contract and the
business.128
4.1.1.4 Audiovisual works
In Austria, the exploitation rights in a professionally (“gewerbsmäßig”)129
produced audiovisual work
vest under article 38(1) of the Copyright Act, automatically in the producer (“Filmhersteller”), i.e. in
the physical or legal person whose name is indicated as such in the work (article 38(3)).130
This
specific rule of ownership does not apply to pre-existing works incorporated in the work. As the
Austrian Supreme Court once pointed out, the double nature of commercially produced audiovisual
works, as intellectual creation and as commercial product, justifies the application of different rules
and in particular that the ownership of the exploitation rights be vested in the producer who took all
the financial risks necessary for the completion of the project.131
Article 69(1) of the Austrian
Copyright Act provides that, where a performer has signed a contract for the production of a film or
other cinematographic work, his or her authorisation is not needed for the film’s reproduction and
distribution. The provisions of the Austrian Copyright Act on the authorship and ownership of
audiovisual works and the equitable remuneration due to authors and performers do not appear to
be in full compliance with the Rental and Lending Rights Directive, or with the Cable and Satellite
Directive or the Duration of Protection Directive, for that matter. Contrary to the requirements of
the Directive, the Copyright Act nowhere expressly designates the principal director as the author or
as one of the co-authors of an audiovisual work. Moreover, article 38(1) does not constitute a
rebuttable presumption of transfer of rights – cessio legis, as it is called in Austria – but establishes
instead a rule of initial ownership from which contracting parties are not allowed to deviate under
the law.132
The cessio legis of article 38(1) of the Act is in fact not only contrary to the requirements of
the Directive, but it is also contrary to the generally accepted conception of the creator doctrine in
Austria.
4.1.2 Forms of transfers of rights
4.1.2.1 Assignment
Austria differs from most countries of continental Europe in that it follows a ‘monist’ approach to
author’s rights. Under this approach, the author’s economic and moral rights are considered to be
so thoroughly intertwined that the economic aspect of the right cannot be dissociated from the
right’s personality aspect.133
Following the monist approach, copyright is a unitary right that protects
the author with respect to intellectual and personal relations to his work, as well as with respect to
the exploitation of his work. The Austrian Copyright and Related Rights Act allows authors to grant
licences to use their works, but does not permit transfer of ownership, except by testamentary
disposition.134
The exploitation of the author’s economic interest (Verwertungsrechte) occurs therefore
127
OGH, 18 February 1992, No. 4Ob127/91 (Auf bald Wienerwald), GRUR Int 11/1992, p. 838.
128
OGH, 12 August 1996 – No. 4 Ob 2161/96 (Buchstützen), GRUR Int.. 1997/12, p. 1030.
129
Professionally means: “Works that were at least created with the intention of an exploitation within the framework of the
economic market”. OGH October 18, 1994, M&R 1995, p. 101, (Oskar Werner).
130
OGH February 13, 2001, M&R 2001/5, p. 298 (VDFS II).
131
OGH December 9, 1997, M&R 1998, 66, (Kunststücke).
132
Walter 2001, p. 293.
133
Schricker 1999, p. 553.
134
Austrian Copyright Act, § 23 (3); German Copyright Act, § 29.
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39
only through the grant of ‘privileges’ to use the work (Nutzungsrechte), which can be exclusive
(Werknutzungsrecht) or non-exclusive (Werknutzungs-bewilligung).135
The ownership of the authors’
economic rights may therefore not be transferred, except by way of testamentary disposition. A
mention in contract to a transfer of the rights of ownership in a work by way of a security pledge has
been interpreted as an unrestricted privilege to use the work.136
Although an author may grant a
global licence of all exploitation rights in a work, upon termination of the licence for any reason, all
rights revert to the author. In Austria, the monist approach also applies to the performers’ rights,
whereby performing artists are also precluded from assigning the right of reproduction of their
performances on video- and audiocassettes.137
4.1.2.2 Licence
According to article 24(1) of the Austrian Copyright Act, an author may grant ‘exclusive exploitation
rights’ (Werknutzungsrecht) or ‘non-exclusive permissions’ to exploit a work (Werknutzungs-bewilligung).
The ‘exclusive right’ or ‘non-exclusive permission’ granted by the author may affect one or all of the
rights recognised under the Act. Pursuant to article 24(2), a non-exclusive permission granted to one
party before the grant of an exclusive exploitation right to another party remains valid with respect
to the holder of the exclusive exploitation right, unless agreed otherwise with the holder of the nonexclusive
permission. The Act contains however a number of additional safeguards for authors who
grant exclusive exploitation rights. According to article 34 and 35, the author who grants an
exclusive exploitation right retains the right to include his works of literature, music, or art in a
compilation of his works, after a period of twenty years have elapsed from the date of publication of
the work (Gesamtausgabe). An author whose work is included in a periodical may still reproduce and
distribute his work, unless the parties have agreed otherwise or unless it is to be inferred from the
circumstances that the publisher of the periodical has acquired the exclusive right to exploit the work
(article 36(1)). Where an exclusive exploitation right is implied to exist with respect to a contribution
in a newspaper, such transfer expires as soon as the article is published. If the publisher or editor of
a periodical accepts a work as a contribution to a compilation but without concluding an agreement
regarding the delays of publication and distribution, the publisher or editor is in case of doubt under
no specific obligation. In such circumstances however, the author may declare the publisher’s
exploitation right extinguished, when the contribution has not appeared in the compilation within
one year from its delivery. Article 74(7) of the Austrian Act specifies that the rules laid down in
article 36 are deemed to apply correspondingly to photographs.
4.1.2.3 Waiver
Under Austrian copyright law, the author enjoys the right of paternity, the right of attribution and
the right of integrity. Although as a rule, moral rights are in principle not transferable, article 40(1)
of the Austrian Copyright Act states that the transfer of a producer’s exploitation rights on a
professionally produced audiovisual work may include the acquirer’s right to designate himself as
producer of the film. Moreover, in the case of computer programs, the employer is expressly
entitled by law to exercise the right of attribution and the right of integrity.
135
Strowel 1993, p. 356; and Boytha 1991, p. 201.
136
BGH, 20 January 1994 (Holzhandelsprogramm) IIC 1995/05, p. 720.
137
Austrian Copyright Act, §§ 67(2) and 74(2);
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4.1.3 Requirements of form
The Austrian Copyright and Related Rights Act contains no specific provision requiring the use of
an instrument in writing as a condition for validity or evidence. The provisions of the Allgemeines
bürgerliches Gesetzbuch (AGBG) apply to copyright contracts, as to any other type of contract.138
4.1.4 Restrictions on transfers of rights
4.1.4.1 Limits of scope, time, and place
The Austrian Copyright and Related Rights Act contains no express provision requiring that
transfers of rights be limited in scope, in time, or in place. Parties are thus free to conclude any
agreement in the field.139
4.1.4.2 Future forms of exploitation
The Austrian Copyright and Related Rights Act contains no explicit rule restricting the transfer of
rights in future forms of exploitation. However, the courts have held such transfers of rights in
future forms of exploitation invalid on the basis of the general rules of copyright law. The Supreme
Court had to consider whether a transfer of publishing rights also covered the author’s ‘electronic
rights’.140
In a publishing contract signed in 1984, the widow of an author of literary works had
assigned the exclusive publishing rights in the works to a publisher. Under the contract, exclusive
rights had been granted, inter alia, for the reproduction and commercial distribution of the work, for
reproduction on microfilm, and for uses in compilations. In 1997, another publisher had used parts
of the author’s works in an art catalogue (on the ‘Wiener Gruppe’) for the Venice Biennale art festival,
to be published both in printed form, on CD-ROM, and over the Internet. The publisher, however,
had failed to secure the right owner’s prior permission. Before the courts, the defendant (the
publisher of the art catalogue) argued that the grant of rights in the publishing contract was limited
to print media, and did not extend to uses in electronic form. The Austrian Supreme Court agreed.
The language in the publishing agreement suggested that the plaintiff had acquired only such rights
as were necessary for exploiting the work in printed form. The Court added that, at the time of
signing the contract in 1984, the use of works on the Internet and on CD-ROM was unknown
media, or at least, they were such that the author could not foresee the economic impact. In sum,
the Court concluded that no electronic rights had been granted to the publisher.141
4.1.4.3 Future works
In Austria, article 31(1) of the Copyright Act allows the grant of licenses with respect to works not
yet created. The rights in such works arise at the moment the work is completed.142
However, if an
author grants rights of exploitation in future works for a period of more than five years and without
specifying the works licensed, this contract may be terminated on request of any party (article 31(2)).
These rules also apply to the reproduction of performances on video- and audiocassettes and
photographic works (article 67(2), 74(7) and 76(6)). In addition to this time limit, article 31(2) of the
Austrian Copyright Act grants authors the unwaivable right to terminate a contract on future works
that are not described in detail or designated only with respect to their genre, if such contract relates
138
See AGBG, §§ 883 to 886.
139
OGH, 18 February 1992 – No. 4 Ob 106/91 (Videokassetten), GRUR Int 1992/12, p. 932.
140
OGH, 12 August 1998 (Wiener Gruppe), M&R 1999, p. 275.
141
Hugenholtz and de Kroon 2000, p. 16.
142
OGH, 18 October 1994(Oskar Werner), M&R 1995, p. 101.
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to all the works that the author might create during his lifetime or during a period exceeding five
years. The contract may be terminated after a period of five years from the conclusion of the
agreement. This provision also applies to the reproduction of performances on video- and
audiocassettes (article 67(2)). The publisher of a periodical has acquired the exclusive right to exploit
the work (article 36(1)). The moment this exclusive right ends depends on the type of periodical
(article 36(2)).
4.1.5 Determination of remuneration
The Austrian Copyright and Related Rights Act contains no provision regulating the amount of
remuneration to be paid to authors or performers in consideration for the exclusive or non-exclusive
licence of the right to use their work or other subject matter, whether the payment of such
remuneration is calculated on a proportional, equitable or lump sum basis. The parties are thus free
to determine for themselves the amount and mode of calculation of the remuneration. There are
however a number of provisions in the Austrian Act that grant authors and performers a right to
remuneration for the unauthorised use of their works or other subject matter, such as for the
reproduction of sound or audiovisual works for private use, or for the reproduction of works by
libraries.143
These different rights to remuneration are not further analysed in the context of this
study, first because they do not arise as a result of the transfer of rights from the author or
performer to the exploiter, and second because they do not contain any prescription regarding the
mode of calculation and payment of the sums of money owed.
4.1.6 Interpretation of contracts
In Austria, according to article 33(1) of the Copyright Act, the grant of a license to use a work does
not cover the making of a translation or adaptation thereof. Likewise, the grant of a reproduction or
broadcasting right does not include the right to make (audio)visual recordings thereof. The
provisions of article 33(1) apply correspondingly to the reproduction of performances on video- and
audiocassettes and photographic works (article 67(2), 74(7), and 76(6)). In view of the wording of
this provision, the Austrian courts have interpreted copyright contracts in such a way that the user,
in case of doubt, only acquires such rights, as the practical purpose of the licensing contract
requires.144
However, in its interpretation of this rule, the Supreme Court has expressly referred to
the ‘purpose-of-transfer’ rule, judging for example that:
Auch ein Widerspruch zur Rechsprechung, wonach das Ausmaß der Befugnisse des
Werknutzungsberechtigten im Zweifel nicht weiter reicht, als es für den praktischen Zweck der ins
Auge gefassten Werknutzung erforderlich ist, liegt nicht vor, und zwar auch dann nicht, wenn dem
Rechtssatz auch entnommen wird, dass die Rechtseinräumung jedenfalls so weit reicht, als es der
Zweck der Werknutzung erfordert. Werden nämlich – wie hier – die Werknutzungszweck
eingeräumt (Katalog und Folder), dann kann es schon begrifflich zur Erfüllung dieses Zweck nicht
erforderlich sein, das Werk auch für einen davon unahabhängigen Zweck – Verwendung im
Internet – zu nutzen .145
143
See for example: Austrian Copyright and Related Rights Act, art. 86.
144
OGH, 2 June 1981 (Hiob), GRUR Int. 1982/138; Court of Appeal Innsbruck May 25, 1998 (Living in a world), M&R 1989, p. 25;
Court of Appeal of Innsbruck, January 10, 1989, M&R 1989, 210; OGH, 16 June 1992 (Übungsprogramme), M&R 1992, p. 244.
145
OGH, 21 March 2000 (Für Katalog und Folder), GRUR Int. 2001/2, p. 186-187. See also: OGH, 23 March 1993 (Corporate IdentityProgramm),
GRUR Int. 1994/08-09, p. 758.
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4.1.7 Effect of transfer in relation to third parties
4.1.7.1 Right to transfer acquired rights
In Austria, the holder of an exclusive exploitation right may, with the consent of the author, transfer
this right to a third party (article 27(2)). An author may only refuse his consent if he has important
reasons to do so. The author’s consent to the transfer is presumed given if the author has not
responded within two months to a written request for consent from the holder of the exclusive
exploitation right or the third party. After the transfer, the second transferee of an exclusive
exploitation right is bound by all legal obligations flowing from the contract, including the payment
of the remuneration to the author, even if the user and the third party agreed otherwise (article 27(3)
and (4)). The holder of an exclusive exploitation right may, without the consent of the author, grant
non-exclusive licences.146
Consent is also not required if the transfer of the exploitation rights occurs as a
result of the transfer of the business company that owns the rights (article 28(1)). Or if the author
and the holder of the exclusive exploitation right have agreed so.147
In case of audiovisual works, the
user may transfer exploitation rights without the consent of the exploiter, unless otherwise agreed
(article 40(2)). The same rule applies in the case of computer programmes (article 40c)). The
provisions of article 27 and 28(1) apply correspondingly to the reproduction of performances on
video- and audiocassettes and to photographic works (article 67(2)).
4.1.7.2 Standing to sue
There is no provision in the Austrian Copyright Act concerning the licensee’s standing to sue for
copyright infringement. However, the Austrian courts have held that only the holder of the right of
an exclusive exploitation right is permitted to institute proceedings in his own name against a
possible infringer, and that the author retains his right to institute independent proceedings.148
The
holder of the non-exclusive exploitation right is not admitted to institute copyright infringement
proceedings in his own name.149
4.1.7.3 Right to pledge, secure or seize acquired rights
There is no provision in the Austrian Copyright Act concerning the transferee’s power to pledge,
secure, or seize the acquired rights.
4.1.8 Termination of contract
4.1.8.1 Non-use of rights
Article 29(1) of the Austrian Copyright Act grants the author the right to terminate the contract in
case of non-use or inadequate use of the rights transferred, inasmuch as such non-use or inadequate
use causes serious injury to the author’s legitimate interests. The author must grant the user, by
explicit notification150
, a reasonable extension of time sufficient to exercise the right. An extension is
not required if the exercise of rights is impossible, if the user refuses to exercise the rights, or if an
extension will endanger the author’s primary interests (article 29(2)). In case the user does not reject
146
Only the author himself is entitled, not a legal entity. VwGH 19.4.1995, AnwBL 1995, 6076. Gräser a.o. 1999, p. 97.
147
Gräser a.o. 1991, p. AUS 5-148.
148
Supreme Court August 26, 1955, Öbl 1956, 20, (Ziegel als Baustoff). See for other case law on this topic Gräser a.o. 1991, p. AUS 5-
144 (footnote 26).
149
Dillenz 1999, p. 81.
150
Supreme Court November 3, 1959, ÖBl 1960, 55, (Edition Bristol I).
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the author’s statement of termination within fourteen days after its receipt, the right reverts to the
author automatically (article 29(4)).151
This right of termination may not be waived in advance for a
period of more than three years (article 29(3)). The Austrian Supreme Court has confirmed that,
under article 29 of the Copyright Act, the reversion of the author’s rights for non-use by the
publisher occurs automatically, even in the absence of a respite from the publisher, when the latter
has not rejected the statement of termination within fourteen days after its receipt.152
These rules also apply to the reproduction of performances on video- and audiocassettes (article
67(2)), but do not apply to exclusive exploitation rights in audiovisual works (article 40(3)) or to
computer programmes (article 40c). In the cases described in article 28(2), the author is only
permitted to terminate the contract if the user is under the obligation to exercise the rights granted
(article 30(1)). According to article 37, if the publisher or editor of a periodical accepts a work as a
contribution to a compilation but without concluding an agreement regarding the delays of
publication and distribution, the publisher or editor is in case of doubt under no specific obligation.
In such circumstances however, the author may declare the publisher’s exploitation right
extinguished, when the contribution has not appeared in the compilation within one year from its
delivery. Pursuant to article 74(7), this rule also applies to photographs.
4.1.8.2 Bankruptcy of exploiter
Article 32 of the Austrian Copyright Act allows the author to terminate the contract by which
exclusive exploitation rights are granted, in case of bankruptcy of the user, provided that the user has
not yet started with the exploitation of the work. The user may ask the liquidator (‘Konkurskommissär’)
to set a limit within which the author is entitled to request the termination.
151
It is not necessary for the author to call the user’s attention to the fact that he intends to terminate the contract (Supreme Court
April 26, 1960, ÖBl 1961, 16, (Quelle & Meyer)). A court decision is not required for the reversion of rights to the author
(Supreme Court November 3, 1959, ÖBl 1960, 56, (Edition Bristol II)).
152
OGH, 26 January 1999 (Sternenklang), GRUR Int. 1999/12, p. 1068.
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4.2 Benelux
4.2.1 Ownership of Rights
4.2.1.1 Creator doctrine
In Belgium, while article 6(1) of the Belgian Copyright Act provides that the initial owner of
copyright in a work is the natural person who created it, article 6(2) establishes a rebuttable
presumption of ownership in favour of the person whose name appears on the work. In the past,
Belgian courts have extended the benefit of this provision to legal entities.153
With respect to
anonymous or pseudonymous works, the rule established under the Belgian Copyright Act is
essentially the same as the one described above: the editor is, in relation to third parties, presumed to
be the author of the work.
In the Netherlands, article 1 of the Dutch Copyright Act provides that copyright is the exclusive
right of the author of a work. As a rule, the mere authorship of a work implies initial ownership of
copyright therein.154
Pursuant to article 4 of the Act, authorship accrues to the person (i.e. ‘de maker’)
who is named as author in or on the work or, in the absence of such an indication, to the person
who is named as the author when the work is communicated to the public, unless there is proof to
the contrary. In the absence of any clear indication to the contrary, this provision would seem to
grant the authorship of a work, and thereby its ownership, to the ‘person’ whose name appears on
the work whether this person is a natural or a legal person. In addition, article 8 of the Dutch Act
expressly provides that when a public institution, association, foundation or company lawfully
communicates a work to the public as its own, without naming any natural person as the author
thereof, this entity is presumed to be the author of that work.
In Luxembourg, article 7 of the new Copyright Act provides that ‘the quality of author is
conferred, unless proven otherwise, on the one or the ones (à celui ou à ceux) under whose name(s)
the work is disclosed to the public. The editor of an anonymous or pseudonymous work is
presumed, in relation to third parties, to be the representative of the author.’ Although the
expression ‘à celui ou à ceux’ commonly refers to a natural person, it might also be said to refer to a
legal person. This argument is reinforced by the fact that the new Luxembourg Copyright Act
expressly grants the initial ownership to a legal person in the case of works created under the
direction of another person, where article 6 of the Act states that ‘the economic and moral rights on
works made under the direction of a physical or moral person are presumed, unless a contract
stipulates otherwise, to vest in the physical or legal person under whose name the work has been
disclosed’.
4.2.1.2 Works created under employment
Under the Belgian Copyright and Related Rights Act, the economic rights in works created by an
author under an employment contract may be transferred to the employer only on condition that the
transfer of such rights is explicitly agreed upon155
and that the creation of the work falls within the
scope of the contract.156
In other words, the basic rule according to which the author of a work is
153
Brussels January 28, 1997, AM 1997/3, 262; Corbet 2000 and Cass. June 12, 1998, Ing. Cons. 1999/100 (Bigg’s c. Kenwood); Strowel
2000, p. 27.
154
Seignette 1994, p. 6.
155
Either in the employment contract or in a separate contract. Vanhees 1996, p. 337; Wachter 1996.
156
Belgian Copyright and Related Rights Act, art. 3(3)(1).
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46
the physical person who created it also applies to works created under employment and there is no
presumption of transfer of rights in favour of the employer. To adapt the creator doctrine to the
needs of the employment context, some of the requirements of form normally imposed for the
validity of copyright contracts have been soften with respect to the transfer of rights in works
created by employees. Moreover, paragraph 3(3)(4) of the Act states that where an employee agrees
to transfer the rights on future works, such transfer must be express and must foresee the
employee’s participation in the profits generated by the exploitation of the work. A similar rule
applies to performances given within the scope of an employment contract, pursuant to paragraph
35(3)(1) of the Belgian Act. In practice, private undertakings find it burdensome to negotiate the
transfer of rights for every work created in the course of each worker’s employment and to comply
with the formalism imposed by the Act. Furthermore, uncertainty is said to arise under this regime
with respect to the ownership and the exploitation of the rights in a work created under employment
after the employee has left the enterprise.157
Only two exceptions to the creator doctrine have been
introduced in Belgian law. The first one relates to computer programs created by an employee in the
course of duties entrusted to him or following instructions from the employer, as laid down in article
3 of the Belgian Act of 30 June 1994, which implements word for word paragraph 2(3) of the
Computer Programs Directive.158
The other exception appears at article 20ter of the Act, which
establishes a presumption of ownership in favour of the employer, on databases created by one or
more employees in the course of duties entrusted to them or following instructions from their
employer. It is worth pointing out however that the presumption of ownership is applicable only to
databases created in the non-cultural industry.
Under article 7 of the Dutch Copyright Act, the employer is deemed to be the author of works that
are created ‘in the service of another person’, i.e. where there exists an employer-employee
relationship characterized by authority and salary. Accordingly, for the employer to be deemed the
author of the work, the employee must have received directions from the employer and must not
have produced the work on his own initiative.159
Nevertheless, the parties may agree otherwise.
There has been an ongoing controversy in the legal literature whether, as a consequence of this rule
of ownership, the ‘maker’ – i.e. the employer or other legal entity – only acquires the economic rights
in the work, or whether he also acquires the moral rights in the work created by the employee.
Spoor and Verkade observe that while the Dutch employer ownership system differs from the one
in force in the neighbouring Member States, namely in France, Germany and Belgium, it has not led
to any significant problem in practice. The limited application of article 7 of the Dutch Copyright
Act can be explained by the fact that parties are free to agree otherwise, that the possibility exists to
imply certain terms from the employment contract and that employers have followed a sound policy
in this respect. 160
With respect to the ownership of rights in a performance given pursuant to an
employment contract, the employer is entitled to exploit the rights in the performance of his
employee, either if it has been agreed upon by the parties, if it results from the nature of the
employment contract or usage, or if it is required by fairness and equity. In any case, the employer
must pay an equitable remuneration to the performer for each form of exploitation of his rights and
must respect the performer’s moral rights.161
In Luxembourg, the only provision dealing with the ownership of works created under
employment is the provision that implements the mandatory provision of the Computer Programs
Directive, which allocates to the employer the initial ownership of rights on the computer programs
157
Carneroli 2001, p. 57.
158
Loi du 30 juin 1994 transposant en droit belge la directive européenne du 14 mai 1991 concernant la protection juridique des
programmes d’ordinateur, Moniteur Belge, 27 juillet 1994.
159
HR, 19 January 1951, NJ 1952, 37 (In de Amsterdamse Jordaan). Cohen Jehoram 2000, p. 33.
160
Spoor and Verkade 1993, p. 34.
161
Dutch Related Rights Act, art. 3.
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created by employees in the execution of their duties or following the instructions given by their
employer.162
4.2.1.3 Works created on commission
In Belgium, articles 3(3)(2) and 35(3)(2) of the Belgian Copyright Act provides that if a work or a
performance is created by an author or performer on commission, the economic rights may be
transferred to the person who has given the commission on condition that this is explicitly agreed
upon and that the commissioner’s activities are in a non-cultural field or in advertising, and the work
is intended for such activity.163
The term ‘non-cultural field’ encloses all enterprises except those that
produce ‘cultural goods’ and insofar these enterprises act within the framework of a non-cultural
activity.164
If the commissioned work does fall under a cultural field, then the creator doctrine
applies.
The Dutch Copyright Act would seem to be the only statute of the European Union to clearly grant
the ownership of works made under the supervision of another person to the commissioner of the
work. According to article 6 of the Copyright Act, if a work has been made according to the
conception and under the guidance and supervision of another person, only the main author, i.e. the
supervisor and not his assistants, is deemed to be the author of the work. However, this provision
only concerns works that are intellectually conceived, planned, created, and arranged by one person
and executed – more or less technically – by one or more assistants. Rubens and his disciples are
given as typical examples of such a creative process.165
In practice, this provision has had a rather
limited application. For example, because not all the requirements of article 6 of the Copyright Act
were met in the circumstances of the case, the Dutch Supreme Court decided to grant joint
ownership of the exploitation rights in a photograph to the a freelance photographer who had
created it and to the publisher who commissioned it.166
The new Luxembourg Copyright and Related Rights Act contains no provision regulating the
ownership of works created on commission. One must therefore conclude that, in such
circumstances, the creator doctrine applies and that the author is the physical person who created
the work.
4.2.1.4 Audiovisual works
In Belgium, articles 14 to 20 of the Copyright and Related Rights Act contain specific provisions
regarding audiovisual works. Article 14 states that, in addition to the principal director, the natural
persons who participated in the creation of an audiovisual work are deemed authors thereof.
Among the possible co-authors, the provision lists the authors of the screenplay, the adaptation, the
words, the graphics, the musical compositions and, the author of a pre-existing work incorporated in
the audiovisual work. Pursuant to article 18 of the Act, the authors, with the exception of the music
composer, are presumed to have transferred to the producer their exclusive exploitation rights,
including the right to subtitle or dub the work, unless the parties have agreed otherwise. Such a
transfer of rights only occurs if the author has authorised the use of his contribution.167
Article 36(1)
contains a similar rule relating to performers, namely that unless they have agreed otherwise,
162
Luxembourg Copyright and Related Rights Act, art. 32(2).
163
See: Civ. Bruxelles (cess.), 20 February 1998, (S.A. Magnésium c. A..S.B.L. Institut Belge de la Sécurité Routière), A&M 1998/3, p. 239.
164
Corbet 1997, p. 24. According to Strowel, it remains to be seen “how case law will interpret this rather vague condition”; Strowel
2000, p. 31.
165
Spoor and Verkade 1993, p. 25.
166
Hoge Raad 1 juni 1990, nr. 13 854 (Kluwer Publiekstijdschriften BV v. Lamoth), NJ 1991/377.
167
Blomme and Hendrix 1996, p. 26.
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performers are deemed to have transferred to the producer their exclusive exploitation rights in their
performance, including the right to subtitle or dub the work. A Belgian Court has ruled that the
presumption of transfer of rights only exists if there is a direct contractual relationship of production
between the performer and the producer, which, however, does not require any written
instrument.168
The Dutch Copyright Act defines a cinematographic work as ‘a work consisting of a sequence of
images, with or without sound, irrespective of the manner of fixation, if it is fixed’.169
This definition
covers all types of audiovisual works, including live television broadcasts.170
According to article
45a(2) of the Act, the natural persons who have made a contribution of a creative nature to the
making of such a work are considered to be the authors thereof. Unless the parties have agreed
otherwise, the authors are presumed by statute to have transferred their main economic rights to the
producer of the audiovisual work, defined as the natural or legal person responsible for the making
of the work with respect to its exploitation.171
This presumption excludes the authors of the music
and the song texts, as well the right to adapt the work, apart form subtitling and synchronization.
However, the presumption of transfer of the right to communicate the works to the public does
include the rental and lending rights of the audiovisual work.172
Each of the authors may, unless
otherwise agreed in writing, exploit his contribution that can be separated from the audiovisual work
(article 45g). Article 4 of the Dutch Related Rights Act provides that these rules also apply to the
performance that is intended as a contribution to the making of an audiovisual work.
In Luxembourg, article 21 of the Act provides that the authors of an audiovisual work are the
producer and the principal director. Following article 2(5) of the Rental and Lending Rights
Directive, article 24 of the Act states that ‘in the absence of contrary stipulation, the authors and
other creators of an audiovisual work are presumed to have transferred to the producer all exclusive
rights of exploitation of the audiovisual work, to the exception of the creators of the musical
compositions. Authors are presumed to have transferred to the producer their exclusive
exploitation rights, including the right to subtitle or dub the work.’ This rule does not extend to the
adaptation, the arrangement and the use of a pre-existing work, which are subject to the
authorization of their author. Moreover, authors retain the exclusive right to authorize the rental
and lending of their works.173
Article 51 establishes a similar presumption of transfer of the
performers’ exploitation rights to the producer of an audiovisual work. Contrary to the regime
created for authors, article 52 specifies that ‘except for contrary stipulation, the performer is
presumed to have transferred his rental right to the producer, provided that a contract signed
between the performer and the producer foresees the payment of an equitable remuneration, as
prescribed by article 64 of the Act.’
4.2.2 Forms of transfers of rights
4.2.2.1 Assignment
Belgium, the Netherlands and Luxembourg follow a ‘dualist’ approach, whereby the author’s
right is considered to consist of two separate elements: the pecuniary element, or ‘economic right’,
and a personality element, or the ‘moral right’. In dualist systems, economic rights can be freely
168
It also decided that if the producer does not respect the obligation to pay remuneration to the performer, the contract would not
be null and void. Brussels June 25, 1998, A & M 1999/2. For a critic of this decision, see: Corbet 2000, p. 210.
169
Dutch Copyright Act, art. 45a(1).
170
Cohen Jehoram 2000, p. 30, 31.
171
Appellate Court Den Bosch October 25, 1989, NJ 1990, 99.
172
Dutch Copyright Act, art. 12(3).
173
Luxembourg Copyright and Related Rights Act, art. 3(4).
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assigned, either inter vivos or mortis causa, while moral rights are considered to be inalienable.174
The
same remark also holds true with respect to the performers’ rights, where the economic element of
the right can be assigned, but not its moral element.
4.2.2.2 Licence
Article 3(1) of the Belgian Copyright Act and article 12, second sentence of the Luxembourg
Copyright Act simply state that economic rights may be alienated or granted under simple or
exclusive licence. Article 2(1) of the Dutch Copyright Act is to the same effect.
4.2.2.3 Waiver
The Belgian Copyright Act grants authors the rights of disclosure, paternity, and integrity, while
performers only enjoy the rights of paternity and of integrity. Moral rights are expressly declared
inalienable under Belgian law and the overall renunciation of the future exercise of the moral rights
is null and void. However, a partial waiver of right is possible, under certain conditions, except for
the right of integrity, which is absolute.
In the Netherlands, the Dutch Copyright Act recognizes in article 25(1) and (4) four types of moral
rights: the right to paternity; right to object to modification of the work; the right of integrity of the
work; and, the right to modify the work. Paragraph 25(3) of the Dutch Copyright Act of 1912
explicitly allows the waiver of the author’s right to oppose the communication of his work without
acknowledgement of his name or other indication as author, as well as his right to oppose certain
alterations of the work. Paragraph 25(4) further specifies that if the author of the work has assigned
his copyright, he shall continue to be entitled to make such alterations to the work as he may make
in good faith in accordance with social custom. But the author may not relinquish his right to
oppose any distortion, mutilation, or other impairment of the work that could be prejudicial to his
name or reputation or to his dignity as such. In other words, the possibility for an author to
renounce by contract to certain components of her moral right would be limited by the general
principles of law.175
If a waiver of right were prejudicial to the author's name, reputation, or dignity,
such waiver would most likely be invalidated for running afoul of the general principles of objective
good faith, and of public order and good morals.176
With respect to the authors of an audiovisual
work, article 45(e) provides some detailed rules on the author’s right to be named. According to
article 45(f), the authors of an audiovisual work are assumed to have waived their right to oppose to
alterations in their contributions vis-a-vis the exploiter, unless otherwise agreed in writing. These
articles apply likewise to the performances incorporated in the work (article 4 Dutch Copyright Act).
Article 5 of the Dutch Related Rights Act recognizes to performers the right to paternity, the right to
object to the modification of the performance, and the right of integrity of the performer. A
performer may waive his right to paternity and his right to object to the modification of a
performance, but not his right to oppose any distortion, mutilation or other impairment of the
performance that could be prejudicial to his name or reputation or his dignity as a performer.
Authors have, under article 11 (first sentence) of the new Luxembourg Copyright Act, the
inalienable rights of paternity and integrity over their work. Contrary to most other copyright acts
however, article 11 (second sentence) of the new Act declares that the author may waive or transfer
174
Belgian Copyright Act, art. 3.
175
Spoor and Verkade 1993, p. 304.
176
In France: Gautier 1999, p. 185 referring to art. 1134 and 1135 of the CC; in the Netherlands: Spoor and Verkade 1993, p. 304;
and in Germany: Osenberg 1979, p. 21.
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50
all or part of his moral rights, provided that his honour and reputation are not affected. The same
rule applies to the moral rights of the performing artist.177
4.2.3 Requirements of form
In Belgium, article 3(1)(2) of the Copyright Act provides that a written instrument is necessary to
prove contract terms against the author. Consequently, the author can prove contract terms by all
legal means, whereas the exploiter must rely on a written instrument or proceed under oath or by
confession, never by way of witness testimony or presumptions.178
Since this provision constitutes a
rule of evidence rather than a condition for the validity of a transfer of rights, authors and
performing artists can thus validly transfer their rights without any written instrument. If a contract
fails to meet the requirement of a writing, the author is the only party authorised to ask the court to
declare the contract void. Article 35(2) contains the same requirement with respect to contracts
relating to performers’ rights.179
In the particular case of publishing contracts, the written document
must also indicate the minimum number of copies that make up the first printing, unless the
contract fixes a guaranteed minimum of royalties to be paid by the publisher (article 25).
Under Dutch copyright law an assignment can only be effectuated by means of a deed, i.e. a written
instrument intended for this purpose180
, signed by the author181
(article 2(2)). For licensing contracts,
the Copyright Act imposes no formal requirement. However, article 9 (3rd sentence) of the Dutch
Related Rights Act demands a written instrument for the validity of the transfer of neighbouring
rights, i.e. the assignment as well as the licensing. These requirements do not state that a deed is, in
any case, the only means to prove the transfer of rights.182
With respect to audiovisual works, article
45d and 45f of the Copyright Act provide that if the parties’ intention is that the rights in the work
remain wholly or partially with the author, this should be done in writing. Likewise, the equitable
remuneration the exploiter has to pay to the authors must be agreed in writing. Article 4 of the
Dutch Related Rights Act provides that these rules apply mutatis mutandis to the performance that is
intended as a contribution to the making of an audiovisual work. Lastly, article 5(3) of the Related
Rights Act states that a performer may waive some of his moral rights only in writing. With the
exception of the rights referred to in article 5, paragraph 1, these are assignable wholly or in part.
The delivery required by whole or partial assignment must be effectuated by means of a deed of
assignment. The assignment must comprise only such rights as are recorded in the deed or only
those that necessarily derive from the nature or purpose of the title.
Under article 12 of the new Luxembourg Copyright Act, a written instrument is necessary to prove
contract terms against the author. Article 49(1) of the Act provides that the assignment or the
waiver of the performing artist's right must be evidenced by a written document.
4.2.4 Restrictions on transfers of rights
4.2.4.1 Limits of scope, time, and place
In Belgium, article 3(1)(4) of the Copyright and Related Rights Act requires that the agreement
concluded by the author and the user set out explicitly, for each mode of exploitation, the author’s
177
Luxembourg Copyright and Related Rights Act, art. 42 (3rd sentence).
178
Vanhees 1996, p. 296. See also Frequin and Vanhees 1999, p. 104.
179
However, the law does not require the writing to be executed before the performance takes place. Civ. Turnhout January 7,
1999, AM 1999/2, 232.
180
Dutch Civil Code, art. 3:95.
181
Supreme Court December 9, 1927, NJ 1928, 331.
182
Spoor and Verkade 1993, p. 350, 351.
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remuneration, the geographical scope and the duration of the assignment. What the ‘modes of
exploitation’ are depends on the type of rights transferred, the technical means of exploitation, and
the form in which the work is marketed.183
Article 31(1) provides that performance contracts must
be concluded for a limited duration or for a specific number of communications to the public.
According to 31(2), the transfer afforded by the author with respect to live performances may not
validly exceed three years. The term ‘live performances’ is very broad: it includes direct
performances, such as theatrical performances and concerts. If a period of more than three years is
agreed upon, the contract will not be regarded void, but the user will only acquire rights for a
maximum period of three years.184
Besides article 2(2) of the Dutch Copyright Act, which states that ‘the assignment shall comprise
only such rights as are recorded in the deed or necessarily derive from the nature or purpose of the
title’, the Copyright Act contains no further provision requiring that transfers of rights be limited in
scope, time, or place. In practice however, the parties to a copyright contract generally regulate the
scope of the transfer of rights inside their agreement.185
According to articles 15 and 19 of the Luxembourg Copyright Act, publishing contracts and
contracts for the production of live performances must provide for a time limit for the fulfillment of
the exploiter’s obligations.
4.2.4.2 Future forms of exploitation
Article 3(1)(6) of the Belgian Copyright Act expressly declares null and void any transfer of rights in
respect of future forms of exploitation, notwithstanding any provision to the contrary. The nullity,
which only the author is permitted to raise, affects only the clause in question, and not the entire
contract.186
This rule does not apply to works created under employment or on commission. With
respect to performers’ rights, similar rules are laid down in article 35(2)(4) and 35(3)(3)) of the Act.
With respect to works created by an author under employment, article 3(3)(4) provides, in addition,
that the clause affording to the user the right to exploit a work in a future form must be explicit and
the contract must lay down participation in the profits obtained from such exploitation. If these
requirements are not met, the future forms of exploitation are considered not been transferred.187
The Brussels Tribunal de Première Instance has decided an important case on the issue of the
transfer of future rights. On 16 October 1996, the Brussels court ruled in favour of the Belgian
association of professional journalists (AGJPB) and others in a test case concerning the electronic
re-utilization of press articles. According to the Court, the journalists' copyrights were infringed by
the unauthorized use of their copyrighted works in the Central Station database, which was jointly
operated by a number of Belgian newspaper publishers.188
In the Netherlands, article 2 of the Copyright Act merely states that ‘the assignment shall comprise
only such rights as are recorded in the deed or necessarily derive from the nature or purpose of the
title’. Opinions are divided in legal literature whether copyright can be assigned in its entirety and
therefore cover rights in future forms of exploitation. Some authors have argued that article 3:97 of
the Dutch Civil Code could be interpreted as permitting the transfer of such rights.189
On the other
hand, article 45d of the Copyright Act provides that the producer of an audiovisual work has to pay
183
Strowel 2000, p. 33.
184
Vanhees 1996, p. 327.
185
Frequin and Vanhees 1999, p. 108.
186
Strowel 2000, p. 34.
187
Vanhees 1996, p. 340.
188
Hugenholtz and de Kroon 2000, p.
189
Koelman 1998, p. 76, 78, 79.
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an equitable remuneration to the authors if he ‘effects exploitation in a form that did not exist or was
not reasonably foreseeable at the time referred to in article 45c or if he gives the right to effect such
exploitation to a third party’. Article 4 of the Dutch Related Rights Act provides a similar rule for
performers in the audiovisual work.
The question of whether a transfer of rights covered forms of exploitation still unknown at the time
of conclusion of the contract did arise before a Dutch court, in a matter relating to the distribution
of journal articles on the Internet. In the ‘Volkskrant’ case,190
three freelance journalists brought a
copyright infringement action against a major daily newspaper, De Volkskrant, for having posted a
selection of articles from its printed version on its Internet web site, and produced quarterly CDROM
compilations containing all newspaper copy in full-text - without securing the journalists’
permission. Apart from an occasional letter, no contract in writing was ever concluded between the
journalists and the commissioning newspaper publisher. The plaintiffs argued that the (implied)
licenses granted by the journalists included only one-time print rights, and no electronic uses were
implied. The Amsterdam District Court held for the plaintiffs. According to the Court, the
unauthorised republication of articles on CD-ROM and over the World Wide Web constituted
restricted acts, subject to the right holders’ prior authorisation, for both the CD-ROM compilations
and the web site differed substantially, qua content and lay-out, from the original printed version of
the newspaper. The CD-ROM and Internet versions of De Volkskrant are not simply extensions or
substitutes of existing archival or documentary media; they constitute independent means of
reproduction and communication to the public in different media, for which additional permissions
must be secured. The Court focused next on the scope of the licences granted by the journalists.
Did the print licences imply a right of electronic re-use? Tacitly applying the rule of article 2 (2), the
Court rejected the principal argument put forward by De Volkskrant, that the journalists had
implicitly granted permission for electronic uses, by submitting their articles for publication in the
journal. In the 1980’s, when the licences where initially granted, plaintiffs could not have foreseen
their contributions would be included in a CD-ROM or web site. Interestingly, the Court found
infringement not only of the authors’ pecuniary rights, but of their moral rights as well. The Court
ruled that the authors’ moral right of first publication (‘droit de divulgation’) effectively covers first
publication in every separate (new) medium. In other words, the journalists had the moral right to
decide over electronic republication, which right had been violated by the newspaper..
Pursuant to articles 13 and 49(2) of the new Luxembourg Copyright and Related Rights Act, an
author or a performer may transfer his rights on unknown forms of exploitation, only if it is subject
to the payment of a specific remuneration.
4.2.4.3 Future works
Article 3(2) of the Belgian Copyright Act states that the transfer of economic rights relating to
future works is valid only for a limited, but undetermined, period of time and only if the types of
works to which the transfer applies are specified. This rule does not apply to works created under
employment or on commission. Articles 35(2)(5) and 35(3)(3) of the Belgian Copyright and Related
Rights Act lay down similar rules for performers. Future works are not only understood as works
that do not yet exist and for which the author does not yet know what form or content they will
have, but also as works the creation of which has not yet begun but for which the author does know
what form or content they will have.191
Future works are in fact creations upon which no copyright
is yet granted.
190
District Court of Amsterdam, 24 September 1997 (De Volkskrant), in Informatierecht/AMI 1997, p. 194.
191
Frequin and Vanhees 1999, p. 118.
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53
In the Netherlands, the Copyright Act contains no relevant provision on this issue. Some
commentators have argued that authors and performing artists could, on the basis of article 3:97 of
the Dutch Civil Code, transfer their rights in future works or performances provided that the work is
sufficiently specified with respect to the content and the type of the work or performance
involved.192
In other words, a global transfer on all future of works of an author would probably be
held invalid for it would probably not qualify as a transfer with respect to a work the content and
type of which are sufficiently ‘specified’.
The new Luxembourg Copyright and Related Rights Act is also silent on the possibility for authors
and performing artists to transfer their rights with respect to future works. One must therefore
conclude that a transfer of rights in relation to not yet created works could be possible under
Luxembourg law.
4.2.5 Determination of remuneration
4.2.5.1 Proportional remuneration
Of the three countries of the Benelux, only the Belgian Copyright and Related Rights Act requires
that authors receive a proportional remuneration for the use of their work. Article 26(2)(1) of the
Act provides that a publisher should pay to the author, unless otherwise agreed, a remuneration that
is proportional to the gross receipts. This provision is imperative. Pursuant to article 28 of the Act,
and notwithstanding any agreement to the contrary, the publisher must communicate to the author,
at least once a year, a statement of sales, revenue, and assignments for each type of exploitation. In
the case of audiovisual works, articles 17, 19 and 36(3) lay down similar rules that give the authors of
and the performers in the audiovisual work, and the author of pre-existing work incorporated
therein, the right to proportional remuneration, unless another type of remuneration is stipulated.
Thus, the authors of an audiovisual work are entitled to a separate remuneration for each mode of
exploitation of the work that is proportional to the gross revenue obtained from exploitation. The
exploiter has the obligation to communicate to all authors, at least once a year, a statement of
revenue he has obtained for each mode of exploitation. With respect to article 36(3), the Court of
Appeals of Brussels ruled that, in this case, the failure to mention the remuneration payable did not
make the audiovisual production contract null and void.193
Audiovisual works belonging to the noncultural
field or to advertising are excluded from this right to remuneration (article 19). It has been
argued however that although article 3(1)(4) of the Belgian Copyright Act provides that the contract
must set out the remuneration explicitly for each mode of exploitation, this rule does not prohibit
the parties to agree upon a transfer with no remuneration whatsoever, on the condition that this is
explicitly laid down in a written instrument.
194
Neither the Dutch or the Luxembourg Copyright and Related Rights Acts contain any provision,
which requires that authors and performing artists receive a proportional remuneration for the use
of their works or other subject matter. In the Netherlands, model contracts concluded between
associations of authors and exploiters govern the contractual relations in several sectors of the
copyright industry, and regulate the royalties to be paid to the author. In the many branches of the
Dutch publishing industry, specific model contracts have been set up for example with respect to
translators, photographers, book illustrators, and authors of children’s or school books.195
Most of
these model contracts provide that authors are to receive a proportional remuneration based on the
sales price of each book. Of course, the percentage of royalties paid to authors vary from one
192
Spoor and Verkade 1993, p. 360, 361; and Koelman 1998, p. 76, 77.
193
Brussels June 25, 1998, A&M 1999/2, 212.
194
Vanhees 1996, p. 303.
195
Frequin and Vanhees 1999, p. 112.
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branch to the other and depend on various factors, such as the production costs associated with
each edition (i.e. hardcover v. paperback, colour v. black and white), the number of copies printed
and the like. Some model contracts also provide that the royalty rate increases with the number of
copies sold. The recent agreement reached between literary publishers and authors is a good
illustration of such a model contract.196
The percentage of royalties for paperback editions increases
from 5 to 8 percent, depending on the amount of exemplars sold. The percentage for mid-price
editions, over which an agreement is reached for the first time, varies from 9 to 12,5 percent. In
exchange for the higher royalty percentage, the publishers get the guarantee that they can retain the
right to the full exploitation of the work for an unspecified period of time. This way, the publishers
have the certainty that, in the long term, they would be able to recoup their costs. Model contracts
are slowly emerging in the music industry as well, for example, between music writers and lyricists
on the one hand and music publishers or recording companies on the other hand.197
It is also worth
reminding the reader that, under Dutch law, the employer is presumed to be the initial owner of the
rights on a work created by salaried authors, like journalists. A number of trade unions regrouping
salaried creators have been able to conclude collective bargaining agreements with their employers,
which lay down the conditions of use of the creator’s works as well as the circumstances under
which the employer owes particular remuneration for uses that are not covered by the agreement.198
Not all sectors of the Dutch publishing or music industry are governed by model contracts however.
The remuneration of freelance journalists is one example where, so far, the representatives of the
freelance journalists and of the daily press publishers have not been able to reach an agreement on a
model contract. The determination of the remuneration due to freelance journalists for the reutilisation
by newspaper publishers of the journalists’ works on a CD-ROM compilation or in a
databank accessible via the Internet has given rise to two decisions from the District Court of
Amsterdam. The first case comes in the wake of the District Court of Amsterdam’s decision in De
Volkskrant’s case, where three freelance journalists had brought an action for copyright infringement
against the publishers of the newspaper for having made their articles available on a CD-ROM and
via the Internet without their consent.199
Let us recall that the Court had ruled in favour of the
plaintiffs, recognising that there had been infringement of their economic and moral rights and
ordering the publisher to pay damages in an amount that the parties were instructed to negotiate
among themselves. At the end of 1998, the Association for the Dutch Daily Press (Vereniging De
Nederlandse Dagbladpers) (hereinafter ‘NDP’) unilaterally set up a model contract concerning the re-use
of works of freelance journalists written for daily newspapers. This model contract provided for the
annual payment of a compensation in the amount of 2% of the remuneration paid for the single use
of the journalists’ articles in the newspaper. Neither the plaintiffs nor the Dutch Association for
Journalists (hereinafter ‘NVJ’), to which it had been submitted, accepted this proposal for a model
contract. The parties were thus unable to reach an agreement on the amount to pay in
compensation for the re-use of the freelance journalists’ works. Moreover, it was established that, in
the months that followed the first judgement of the District Court of Amsterdam, which had held
De Volkskrant liable for copyright infringement, the newspaper continued to make articles available
on a CD-ROM and via the Internet without the journalists’ consent. As a result, the latter brought
another action asking the Court once again to enjoin the newspaper publisher from continuing the
acts of infringement and to set the amount of remuneration owed to them.200
196
‘Modelcontract voor auteurs vernieuwd’, NRC Handelsblad, 21 May 2002.
197
The model contract developed under the auspices of the Professionele Auteurs Lichte Muziek, (PALM) or the BV POP / FNV
KIEM, where BV POP is the section for pop musicians of the trade union FNV KIEM (for Arts, Information and Media).
198
Hugenholtz 2000, p. 25-26.
199
District Court of Amsterdam, 24 September 1997 (De Volkskrant), in Informatierecht/AMI 1997, p. 194. See subsection 4.2.4.2
above.
200
District Court of Amsterdam, 22 December 1999 (De Volkskrant), LJ N-number: AA3995, No. P. 3.1769.
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Regarding the compensation owed to the freelance journalists for the subsequent use of their
articles, the District Court of Amsterdam agreed with the publisher that the amount should be
determined in function of the remuneration paid to the journalists for the single publication of their
articles in the newspaper. The Court pointed out however that the remuneration concerned in this
case was to be seen as damages for the infringing use of works on a CD-ROM and via the Internet
and not the remuneration owed under an agreement for the future re-utilisation of works with the
authors’ consent. Instead of the 2% remuneration proposed by De Volkskrant, the Court ordered,
with respect to the use of articles on a CD-ROM, the payment of 4% of the journalists’ annual
remuneration for the first edition of the CD-ROM and of 2% for each subsequent edition of the
same CD-ROM. With respect to the making available of articles via the Internet site of the
newspaper, the Court ordered the payment of 3% of the journalists’ annual remuneration for the
first year where the works are put on the website, and of 1,5% for each year during which the works
continue to appear on the website.
The second case also involved freelance journalists and the newspaper publishing concern PCM
Uitgevers NV (hereinafter ‘PCM’), which is the unique shareholder, manager, and publisher of four of
the major daily newspapers in the Netherlands (De Volkskrant, NRC Handelsblad, Trouw, Het Parool),
as well as owner of the independent company, Media Resultant BV (hereinafter ‘Media Resultant’).201
Since July 1998, the contributions made to each individual newspaper had been regrouped in one
electronic archive system containing all contributions of the newspapers’ respective journalists. The
administration of the Centralised Database was entrusted to Media Resultant. The company not
only made the archives available to the employees of each individual newspaper, but it is also made
them available to the employees of all the newspapers owned by PCM, as well as offered them to the
general public on a commercial basis, for example via Lexis Nexis, the whole without prior
authorisation from the freelance journalists. PCM and Media Resultant instituted proceedings
before the District Court of Amsterdam, asking it to declare that the different uses of works
included in the Centralised Database was lawful and did not constitute copyright infringement. The
Court concluded that the use of works in the electronic archives by the employees of each individual
newspaper was implicitly covered by the authorisation given for the single publication of the works
in the newspaper. However, the implicit licence to use of the works included in the electronic
archive did not extend to their use by the employees of all other newspapers of the PCM concern or
by the general public. In the absence of explicit authorisation from the freelance journalists, such
uses constituted an infringement of copyright. Therefore, PCM had to pay damages to the four
freelance journalists for the continued use of their works included in the Centralised Database. Like
in the previous case, the Court pointed out that the remuneration concerned in this case was to be
seen as damages for the infringing use of works included in the Centralised Database and not the
remuneration owed under an agreement for the future re-utilisation of works with the authors’
consent. Unfortunately, the Court did not fix the amount of compensation to be paid to the
freelance journalists, but ordered PCM to pay damages, as they will be assessed with respect to the
infringing period on the basis of the revenues generated by the storage and exploitation of the
journalists’ contributions. In essence, the question of the determination of the amount of
remuneration due to freelance journalists for the re-utilisation by newspaper publishers is still
unresolved and left to the parties for negotiation. As it currently stands, the respective positions of
freelance journalists and publishers are still deeply divided concerning the NDP’s proposal for a
model contract allowing for the annual payment of remuneration in the amount of 2% of the
remuneration paid for the single use of the journalists’ articles in the newspaper.
201
District Court of Amsterdam, 9 August 2000 (PCM Uitgevers), LJN-number AA6716, No. H 99.1595.
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4.2.5.2 Equitable remuneration
Neither the Belgian nor the Luxembourg Copyright and Related Rights Act contain any provision
requiring the payment of an equitable remuneration to authors or performing artists. By contrast,
the Dutch Copyright Act provides several instances where authors should be paid an equitable
remuneration for the use of their work. Article 12a of the Act provides that ‘if the author assigns
[his] rental right (…), in respect of a literary, scientific or artistic work fixed on a phonogram to the
producer thereof, the latter is indebted an equitable remuneration to the author for the rental’.
Authors are also entitled to receive an equitable remuneration in the Netherlands for the public
lending of their works,202
for the reproduction of parts of works made for use as illustrations for
teaching purposes, for home taping activities,203
and for the reproduction of works by means of
reprography.204
The level of the equitable remuneration owed for the public lending of works, the
home taping and the reproduction by means of reprography is determined by a designated
foundation, the board of which is so composed as to represent in a balanced manner the interests of
the authors or the successors in title and the persons liable for payment. The level of the equitable
remuneration owed for the reproduction of works as illustrations for teaching purposes is
determined by order in council.
In addition, article 45(d) of the Dutch Copyright Act states that ‘the producer is indebted an
equitable remuneration to the authors or their successors in title for all forms of exploitation of the
cinematographic work. The producer is also indebted an equitable remuneration to the authors or
their successors in title if he effects exploitation in a form that did not exist or was not reasonably
foreseeable at the time referred to in article 45c or if he gives the right to effect such exploitation to a
third party’. In Poppenk v. NCF,205
the District Court of Amsterdam was recently asked to interpret
the notion of ‘equitable remuneration’ under article 45(d) of the Dutch Copyright Act. For a
number of years, the plaintiff, Mr. Poppenk, worked on a freelance basis mainly as film editor for
the defendant, Nature Conservation Films B.V. (hereinafter ‘NCF’). This dispute concerns the
‘equitable remuneration’ paid to the plaintiff for work done regarding the editing of a documentary
film entitled ‘Serengeti A to Z’, on the animals in the Serengeti National Park in Tanzania. The final
English version of the film not only licensed for broadcast by Canal+ in the countries of the
Benelux, Norway, Sweden, Denmark, Finland, and Poland, but it has also been shown in the
Naturalis museum in Leiden and has been translated in the Dutch language and licensed for
broadcast in the Netherlands by the Evangelische Omroep. The plaintiff worked approximately 100
days on the editing of the film and received a fee of fl. 600 per days work, after presentation of
related invoices. The plaintiff asked the Court to order NCF to pay him an equitable remuneration
for each of the three modes of exploitation mentioned above, in accordance with article 45(d) of the
Copyright Act. The District Court first pointed out that the invoices contained no mention of the
payment of an equitable remuneration for each mode of exploitation and that no agreement to that
effect could be inferred from them. The Court agreed with the plaintiff that the fairest method of
calculation would be to base the amount of remuneration on the gross receipts generated by the
exploitation of the film. Therefore, the Court ordered NCF to produce evidence, and preferably
accounting documents, regarding the receipts generated by the exploitation of the film and gave the
parties the opportunity to present arguments about the appropriate percentage of the gross receipts.
In this case, the ‘equitable remuneration’ turned out to be the equivalent of a ‘proportional
remuneration’, which seems to correspond to the relevant provision in the Dutch Directors’ Guild
model contract.
202
Dutch Copyright Act, art. 15c).
203
Dutch Copyright Act, art. 16(c).
204
Dutch Copyright Act, art. 16(1)(a)5˚ and (b)5˚.
205
District Court of Amsterdam, 24 October 2001 (Poppenk v. NCF), AMI 2002-1, p. 17.
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According to article 3 of the Dutch Related Rights Act, the employer is entitled to exploit the rights
of a performer, where such has been agreed between the parties or derives from the nature of the
employment agreement concluded between them, from usual practice or the demands of fairness
and equity. However, where otherwise agreed or where it otherwise results from the nature of the
agreement, from usual practice or from the demands of fairness and equity, the employer shall owe
to the performer or his successor in title equitable remuneration for each form of exploitation of his
rights. Article 4 of the same Act states that articles 45a to 45g of the Copyright Act apply mutatis
mutandis to the performance of a performer that is intended as a contribution to the making of a
cinematographic work. Implementing article 8(2) of the Rental and Lending Rights Directive, article
7 of the Dutch Related Rights Act provides that performing artists and phonogram producers must
receive an equitable remuneration for the broadcasting of commercially published phonograms or
reproductions of the same.
In 2000, a dispute arose concerning the interpretation of the term ‘equitable remuneration’ under
article 8(2) of the Rental and Lending Rights Directive and under article 7 of the Dutch Related
Rights Act.206
The case opposed the Foundation for the Exploitation of Neighbouring Rights (SENA),
organisation charged with the collection and distribution of equitable remuneration for performing
artists and phonogram producers, to the Netherlands Broadcasting Corporation (NOS). The question put
to the Courts concerned the amount of equitable remuneration that the NOS owed the SENA for
the radio and television broadcast of the music fixed on the sound recordings. More particularly, the
SENA asked the Court to consider whether the concept of ‘equitable remuneration’ constitutes an
autonomous community law concept, which should be interpreted uniformly in the Member States.
The dispute eventually reached the Dutch Supreme Court. Instead of deciding the issue, the
Supreme Court referred the whole matter to the European Court of Justice. The Dutch Supreme
Court submitted the following questions to the appreciation of the European Court:
1. ‘Is the term ‘equitable remuneration’ used in Article 8 paragraph 2 of the Directive a
community term that should be interpreted and applied in the same manner in all Member
States of the European Union?
2. If so:
a. according to what standards should the amount of equitable remuneration be
determined?
b. should alignment be sought with compensation amounts agreed or customary
between the organisations involved in the relevant Member State prior to the
coming into force of the Directive?
c. should or could the expectations concerning the compensation created for
interested parties upon the realisation of national legislation for the implementation
of the Directive be taken into account?
d. should alignment be sought with the amount of compensations paid on the basis of
performing rights in musical works concerning broadcasts by broadcasting
corporations?
e. should compensation be related to the potential audience of listeners or viewers, or
to the actual number of listeners or viewers, or partially on the aforementioned
potential and partially on the latter audience, and in the latter case, in which ratios?
3. If the reply to question (1) is negative, does this mean that the Member States are entirely
free in the determination of the standards according to which the amount of the equitable
remuneration should be determined? Or are there limits to that freedom, and if so, what
are they?’207
206
HR 9 June 2000 (SENA v. NOS), NJ 2001/1569.
207
Van den Bergh and Huisman 2001, p. N-34.
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At this time, the European Court of Justice must still render decision in this case, which will
undeniably have an impact in all Member States on the future negotiations between authors and
performing artists one the one hand and exploiters on the other hand, regarding the amount of
equitable remuneration to be paid. Following the decision of the Dutch Supreme Court, it has been
observed that if the European Court gives a positive answer to the first question, it will have an
opportunity to clarify the vague concept of ‘equitable remuneration’. However, if the European
Court finds that the term ‘equitable remuneration’ is not a community standard, one can only hope
that the Court will nevertheless bring some elements of response to give national courts a stronger
foothold concerning the meaning of the term.208
4.2.5.3 Lump sum
In Belgium, the payment of a lump sum is permitted under article 26(2)(2) of the Copyright and
Related Rights Act in the context of a publishing contract. Neither the Dutch or Luxembourg
Copyright and Related Rights Acts contain any provision, which regulates the instances where a
lump sum may be paid to authors or performing artists for the use of their works or other subject
matter.
4.2.5.4 ‘Best-seller’ clause
In Belgium, article 26(2)(2) of the Copyright and Related Rights Act states that if the author has
assigned rights to the publisher under conditions such that, in view of the success of the work, the
lump sum remuneration agreed upon proves to be manifestly disproportionate to the profits
(‘manifestement disproportionnée’) obtained from exploitation of the work, the publisher is required, at the
request of the author, to agree to modification of the remuneration to afford the author an equitable
share in the profits. This provision is only applicable in case a lump sum remuneration is agreed
upon. Authors may not waive the benefit of this right in advance and a clause that provides
otherwise may be declared, upon the author’s request, void. Nevertheless, the author may waive this
right at the moment the conditions to exert this right are fulfilled.209
There is no time limit provided
within the author has to invoke this right.210
Article 32(2) of the Copyright Act contains a similar
provision with respect to a lump sum payment made pursuant to a contract relating to the public
presentation of a live performance.
Neither the Dutch or Luxembourg Copyright and Related Rights Acts contain any provision,
which expressly gives authors or performing artists the right to request a revision of the terms of the
contract in case the lump sum paid proves to be grossly disproportionate in relation to the proceeds
generated from the exploitation of the work. In practice, a number of model contracts concluded in
the Netherlands between associations of authors and publishers avoid this problem by providing
that the royalty rate will increase with the number of copies sold. Moreover, some remedy can be
found in such a case under the general provisions of the Dutch Civil Code. Commentators argue
that article 6:258 of the Dutch Civil Code, which is a mandatory provision applicable to all contracts,
allows the judge, at the request of a party, to change or invalidate a contract, partially or totally, even
with retroactive effect if necessary. The judge may revise or change the contract on the basis of the
concept of ‘unforeseeable circumstances’, if the circumstances are such that the other party in all
fairness and equity should not expect the continuation of the contract.211
The ‘unforeseeable
208
Id.
209
Vanhees 1996, p. 319.
210
Wachter 1996, p. 36.
211
Dutch Civil Code, art. 6:258. See Frequin and Vanhees 1999, p. 116.
Final Report
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circumstance’ in question must not be such that it would, according to the nature of the contract or
according to the usual practice or the demands of fairness and equity, fall under the responsibility of
the person who invokes the provision. One could reasonably argue that an action based on this
provision of the Dutch Civil Code could be open in the circumstances covered by the ‘bestseller
paragraph’ of the Belgian Copyright Act.
4.2.6 Interpretation of contracts
Article 3(1)(3) of the Belgian Copyright Act provides that contractual provisions relating to
copyright and to its modes of exploitation must be restrictively interpreted. If there is any doubt
about the scope of a transfer, the contract must be interpreted in favour of the author and,
therefore, against the user.
212
Consequently, in that case the author is presumed to have transferred
as few rights as possible.213
Article 35(2)(2) contains a similar provision regarding the interpretation
of performers’ contracts and states that ‘the contractual provisions relating to the rights of
performers and to their exploitation modes shall be interpreted restrictively. Assignment of an
object incorporating a fixation of a performance shall not constitute a right to exploit that
performance’.
The Dutch Copyright Act states in article 2(2)(2nd
sentence): ‘The assignment shall comprise only
such rights as are recorded in the deed or necessarily derive from the nature or purpose of the title’.
According to this rule, an assignment is to be interpreted restrictively, in favour of the author.214
Even if the wording of this provision is similar to article 31 (5) of the German Copyright Act,
controversy in Dutch legal doctrine persists as to whether the purpose-of-grant rule has effectively
been codified in the Dutch Act and whether it requires that all the modes of exploitation be
specified in the contract. One current of opinion puts the emphasis on the word ‘necessarily’, where
only the powers that are specified in the contract or that correspond to the primary intention of the
parties fall under the transfer. Consequently, a complete transfer of rights would be impossible,
especially if such a transfer were to extend to new forms of exploitation. A second current of
opinion puts the emphasis on the purpose of the contract, which may encompass a complete
transfer of rights as well as forms of use that are not so accurately described in the contract.215
The
Dutch courts have not yet rendered a decisive ruling on this issue. It does appear, however, that in
case of doubt, a contract will be interpreted in favour of the author, and therefore will be given a
restrictive interpretation.216
Moreover, it is not entirely clear whether this rule applies by analogy to
licensing contracts.217
An agreement in support of that interpretation is given by article 9 (4th
sentence) of the Dutch Related Right Act, which reads as follows: ‘a transfer comprises only those
authorizations that are recorded in the instrument or which necessarily derive from the nature or
purpose of the title’. This latter provision applies indeed to both the assignment and the licence of
the performers’ rights. According to Frequin and Vanhees, a licence is usually interpreted more
restrictively than an assignment because, by choosing to licence his rights, the author indicates that
he intends to retain his rights. It is therefore only logical that the permissions to use the work be
explicitly enumerated in the contract.218
212
Vanhees 1993, p. 165-167.
213
Frequin and Vanhees, 1999, p. 105; Dauwe 1996, p. 262; and Strowel 2000, p. 33
214
Spoor and Verkade, p. 357.
215
Koelman 1998, p. 69-73; Seignette 1994, p. 69-72; Spoor and Verkade 1993, p. 358-360 provide references to different opinions
on this topic. Cohen Jehoram 2000, p. 36 (footnote 47) enumerates case law.
216
Frequin and Vanhees 1999, p. 100.
217
Koelman concludes that this cannot be inferred either from case law or legal history. However, the interpretation of licensingcontracts
is influenced by the principle of reasonableness and fairness, which is laid down in the Civil Code. Koelman 1998, p. 77,
79. See also Grosheide 1998, p. 270 (footnote 46).
218
Frequin and Vanhees 1999, p. 105.
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Article 12 of the new Luxembourg Copyright and Related Rights Act specifies that ‘against the
author, a contractual assignment and a transfer of economic rights must be proven by a writing and
must be interpreted restrictively in his favour’. Article 49 of the same Act lays down the same rule
with respect to the performing artist.
4.2.7 Effect of transfer in relation to third parties
4.2.7.1 Right to transfer acquired rights
According to article 26(3) of the Belgian Copyright and Related Rights Act, a publisher cannot
assign the acquired rights without the author’s consent, except in the event of the simultaneous
transfer of the whole or a part of his enterprise. The author may invoke the nullity of the contract if
the rights are transferred without his consent.
219
Article 31(3) provides a similar rule with respect to
performance contracts, which states that ‘the holder of a performance contract may not assign that
contract to any other person without the consent of the author save in the event of a simultaneous
transfer of whole or a part of his enterprise’.
The Dutch Copyright Act contains no express provision on this issue. Opinions are divided as to
whether the rights acquired by assignment may be transferred to a third party without the author’s
consent. Some commentators believe that the further transfer of the rights is possible, on the basis
of article 3:83(1) of the Civil Code..220
Others argue that the relationship between The licensee is, in
general, also permitted to transfer his license to a third party, unless this is not appropriate
considering the nature of the licensing-contract or in case the parties agreed so.221
In Luxembourg, the publisher may not transfer the publishing contract to a third party without the
consent of the author, except in the event of concomitant transfer of whole or part of his company.
Similarly, the recipient of a contract of representation of live performances cannot transfer it in
whole or in part to a third party without the consent of the author, except in the event of
concomitant transfer of whole or part of his company.222
4.2.7.2 Standing to sue
There is no provision in the Belgian or Luxembourg Copyright Acts concerning the assignee’s
standing to sue for copyright infringement.
In the Netherlands, article 27(1) of the Copyright Act states that ‘notwithstanding the assignment
of his copyright wholly or in part, the author shall retain the right to bring an action for damages
against persons who infringe the copyright’. The assignee is thus entitled to sue for infringement
independently from the author. Article 27a(2) of the Copyright Act provides that the author may
claim damages on behalf of a licensee. The licensee is, in general, dependent on the author whether
he will or will not take measures against infringement by third parties or on the licensing contract
that may give the user the authority to file a claim. According to article 28(7), the licensee shall have
unless otherwise agreed, the right to exercise the rights referred to in paragraphs 1 up and to
included 6 in so far as their purpose is to protect the rights he is entitled to exercise. Article 16(2)
219
Vanhees 1996, p. 321.
220
Spoor and Verkade 1993, p. 364, 365. This may also be derived from Book 3, article 83(1) of the Civil Code.
221
Cohen Jehoram 2000, p. 35; Spoor and Verkade 1993, p. 365.
222
Luxembourg Copyright and Related Rights Act, art. 18 and 19(3).
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and 17(4) of the Dutch Related Right Act provide similar rules relating to the holder of a license on
neighbouring rights.
4.2.7.3 Right to pledge, secure or seize acquired rights
Neither the Belgian, Dutch or Luxembourg Copyright and Related Rights Act contains any
provision concerning the transferee’s power to pledge, secure, or seize the acquired rights.
4.2.8 Termination of contract
4.2.8.1 Non-use of rights
In Belgium, article 3(1)(5) provides the obligation of the user to exploit the work in accordance
with the fair practice of the profession.
223
It is controversial whether this rule entitles the author to
terminate the contract in case the user does not exploit the work.224
In any case, an author may,
according to article 26(1)(3), recover his rights, after notification, if the publisher has not
manufacture the copies of the work within the stipulated time limit, without a legitimate reason. If
no time is laid down by contract, the period of time will be defined in accordance with fair practice
in the profession (article 26(1)(2). Article 31(2) states that a performance contract terminates
automatically after a period of two consecutive years without a performance being carried.
The Dutch Copyright Act imposes on the exploiter no obligation to exploit the work either in
accordance with the fair practice or within a specific time frame. In practice however, contracting
parties usually agree that if one of the parties fails to fulfil his obligation under the contract, such as
the non-exploitation of the work by the exploiter, the other party has the right to terminate the
contract.225
In Luxembourg, article 15 of the new Act provides that publishing contracts must contain a
mention regarding the first print and the date when the copies of this first print will be put on the
market. This time limit may not extend unreasonably beyond the date of acceptation of the work to
publish. This acceptation must come within the twelve months from the signature of the contract,
or the author may immediately resiliated the publishing contract. Where the work is out of print, the
author may terminate the publishing contract and recover his rights, if the work is not available on
the market within twelve months following a notice sent to the publisher requesting him to re-print
the work.
4.2.8.2 Bankruptcy of exploiter
In Belgium, article 20(1) of the Copyright Act states that bankruptcy of the exploiter of an
audiovisual work, legal settlement, or liquidation of his enterprise does not imply termination of the
contracts with the authors of the work. Nevertheless, each author may ask for termination of the
contract if the exploiter’s activities have been terminated for more than twelve months or the work
is not sold to a third party within this period of time (article 20(6)). In case of bankruptcy, legal
settlement, or liquidation of the publisher’s enterprise, article 30(1) provides that the author is
permitted to terminate the contract with immediate effect. If the publisher declares bankruptcy and
if the author decides to terminate the contract, then all copies of works upon which copyright
subsists must be offered for sale in priority to the author. The copies must be purchased at a price
223
This rule does not apply to works created under employment or on commission in the non-cultural field (article 3(3)(3)).
224
Vanhees 1996, p. 307, 308; Dauwe 1996, p. 283, 284.
225
Frequin and Vanhees 1999, p. 110.
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agreed to between the author and the curator. In the absence of agreement, the price is fixed by a
competent judge.226
In the Netherlands, the right of the author to terminate the contract in case of bankruptcy of the
exploiter is not regulated under the Copyright Act, but under article 21(1) of the Bankruptcy Act,
which states that copyright remains outside of the bankruptcy insofar as it is not susceptible to
sequestration.
With respect to publishing contracts, article 17 of the Luxembourg Copyright and Related Rights
Act contains a similar provision, which reads as follows:
En cas de faillite, d'octroi d'un concordat, de mise en liquidation ou de décès de l'éditeur, l'auteur peut résilier
immédiatement le contrat d'édition par pli recommandé à la poste. Tous les exemplaires, copies ou
reproductions qui font l'objet des droits d'auteurs doivent être offerts à l'achat à l'auteur par priorité,
moyennant un prix qui, en cas de désaccord, est déterminé par le tribunal. L'auteur perd son droit de priorité
s'il n'a pas fait connaître au curateur ou au liquidateur sa volonté d'en faire usage dans les 30 jours de la
réception de l'offre’.
The rule differs with respect to the bankruptcy of an audiovisual producer:
La faillite du producteur, l'octroi d'un concordat ou la mise en liquidation de son entreprise n'entraîne pas
la résiliation de la cession des droits au producteur.
En cas de cession de tout ou partie de l'entreprise ou de liquidation, le liquidateur ou le curateur est tenu
d'aviser à peine de nullité chacun des autres producteurs de l'œuvre ainsi que le réalisateur. L'acquéreur est
tenu des obligations du producteur dont les droits sont cédés ou vendus.
Les coproducteurs ou, à défaut, le réalisateur possèdent un droit de priorité pour acquérir les droits sur l'œuvre
dont le prix d'achat est fixé par décision de justice à défaut d'accord.
4.2.8.3 Other circumstances
Under Belgian copyright law, the author may require termination of the publishing contract if the
publisher has carried out the destruction of all copies.227
226
Frequin and Vanhees 1999, p. 109.
227
Belgian Copyright and Related Rights Act, art. 29(1).
4.3 France
4.3.1 Ownership of Rights
4.3.1.1 Creator doctrine
The creator doctrine constitutes a fundamental principle of the French authors’ rights regime. The
French Intellectual Property Code (French CPI) departs from the traditional creator doctrine not
only with respect to anonymous or pseudonymous works, but also with respect to collective works.
Collective works are works that are created by more than one author on the initiative of a single
principal, i.e. a legal entity or a natural person, under whose name the work is disclosed to the public
and in which the personal contributions of the various authors who participated in its production are
merged in the overall work for which they were conceived, without it being possible to attribute to
each author a separate right in the work as created.228
‘Collective works’ must be distinguished from
‘works of collaboration’, which are understood as works created by more than one natural person
and which are the joint property of their authors. Article L. 113-5 establishes a rebuttable
presumption of ownership of rights in a collective work in favour of the physical or the legal person
under whose name the work has been disclosed to the public. The authors' rights in a collective
work are vested in this physical or legal person. Commentators insist that the regime of the
‘collective work’ represents a departure from the general principle that the rights on a work belong
to the physical person who has created it.229
The term ‘collective work’ therefore tends to be
interpreted restrictively to prevent employers from circumventing the fundamental principle that
copyright vests in the creator.230
The distinction between a work of collaboration and a collective
work, and consequently to the allocation of ownership of rights on the individual contributors or on
the legal entity, has given rise to an abundant jurisprudence. Typical collective works are
encyclopaedias and newspapers, i.e. works composed of the contributions of several authors that are
purposefully assembled and arranged by an editorial team to form one collective work.
With respect to performers, the French CPI contains no rule on the initial ownership of the related
rights of performing artists. It can be inferred from the definition of ‘performer’ that the performing
artist is always ab initio the physical person who executes the performance, where ‘performer’
includes persons who act, sing, deliver, declaim, play in or otherwise perform literary or artistic
works, variety, circus or puppet acts. The law is also silent regarding the presumption of ownership
of rights on performances.231
4.3.1.2 Works created under employment
In France, the first paragraph of article L. 111-1 of the CPI states that ‘the author of a work of the
mind shall enjoy in that work, by the mere fact of its creation, an exclusive incorporeal property right
which shall be enforceable against all persons’. The third paragraph of the same article confirms that
‘the existence or conclusion of a contract for hire or of service by the author of a work of the mind
shall in no way derogate from the enjoyment of the right afforded by the first paragraph’. The strict
formulation of article L. 111-1 of the CPI has led to certain problems in practice, which the French
courts have solved by attenuating them in favour of employers. Despite the provisions of the CPI,
the Cour de Cassation has read in the employment contract an implicit transfer in favour of the
228
French CPI, art. L. 113-2(3).
229
Gautier 1999, p. 573.
230
Lucas 2000, p. 49; Dreier 1995, p. 12.
231
Brison 2001, p. 611.
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employer of the rights in the works that the employee creates in the course of his employment, to
the extent needed to conduct the employer’s business.232
The court partly based its decision on the
civil law notion of possession. It ruled that an enterprise exploiting a work under its name
accomplishes acts of possession which, in the absence of any contrary claim on the part of the
natural person having created the work, are of such a nature as to raise the presumption, in relation
to infringing third parties, that the enterprise is the owner of the author’s incorporeal property right
on these works, whatever their qualification.233
This presumption is subject to two essential conditions: first, the legal person must exploit the work
under its name; and second, there must be no contrary claim on the part of the natural person
having created the work. This judicial construction also has the merit of avoiding to qualify the
work as a collective work, a work of collaboration or otherwise. However, the presumption is only
admissible against potential infringers, thus not against the authors themselves or against noninfringing
third parties, like a bank, or a co-producer.234
Of course, the presumption is only valid if
the employee’s consent was not obtained by mistake, fraud or undue influence at the time of
signature of the employment contract.235
Nevertheless, not all French courts share this current of
opinion.236
Apart from this judicial presumption of ownership for the benefit of the employer, the
only express exception to the creator doctrine recognised under French copyright law is the
provision relating to the creation of a computer program by one or more employees, adopted in
conformity with the Computer Programs Directive. Unless otherwise provided by law or by
contract, the economic rights in the software and its documentation created by one or more
employees in the execution of their duties or following the instructions given by their employer shall
be the property of the employer and he exclusively shall be entitled to exercise them.237
It is worth pointing out that, in addition to the provisions of the Intellectual Property Code, the
status of the professional journalist is regulated under article L. 761-2 of the Labour Code, which
establishes a presumption of employment for professional journalists, who are hired against
remuneration by a press agency. Similarly, the status of performing artists is regulated pursuant to
article L. 762-1 of the Labour Code, which establishes a presumption of employment for performing
artists, who are hired against remuneration for the production of a show.
4.3.1.3 Works created on commission
The French CPI generally recognises the applicability of the creator doctrine with respect to works
created on commission: the owner of a work created on commission is in principle the person who
created it. The only exception to this principle is set out in article L. 132-3(1) of the French CPI,
which concerns works made on commission for use in advertising. A contract relating to such a
work, between an exploiter238
and a French resident239
, implies, unless otherwise provided, an
assignment to the exploiter of the exploitation rights in the work.
232
Cass. Civ. 1ère, 24 March 1993 (Société Aréo), RIDA 1993/158, p. 200; Cass. Civ. 1ère, 28 March 1995 (Société Termopac), RIDA
1995/165, p. 327.
233
Lucas 2000, p. 53, 54; and Goutal 1998, p. 73.
234
Goutal 1998, p. 79.
235
See: Court of Appeal of Paris (4e Ch.) – 12January 2000 (Kannas c. Larousse-Bordas) in RIDA 2000/186, p. 280.
236
Court of Appeal of Paris (4e Ch.) - 18 February 2000 RIDA 2000/186, p. 292.
237
French CPI, art. L. 113-9. See: Cour d’appel de Versailles, 12e Ch., 7 October 1999 (Silas Bakary-Gando c./ Sté Fiat Auto France),
RIDA 2001/187.
238
Producer is the party financing the advertising campaign, not the advertising agency that controls the creative process. Lucas
2000, p. 76.
239
Lucas 2000, p. 77. Cour de Cassation (1ère Ch. Civ.) – 20 mars 2001, RIDA 2001/189
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4.3.1.4 Audiovisual works
According to article L. 113-7(1) of the French Intellectual Property Code, the authors and initial
owners of right on an audiovisual work are the physical persons who created it. In the absence of
proof to the contrary, the following contributors are presumed to be joint authors of an audiovisual
work: the authors of the script, the adaptation, the dialogue, and the musical compositions, the
principal director, and the author of the pre-existing work, if any (article L. 113-7(2)). Other persons
may also be considered among the authors if they made a creative contribution to the film.240
Article
L.132-24 establishes a presumption of transfer of all audiovisual rights from the authors to the
producer, defined as the person who takes the initiative and responsibility for making the work
(article L. 132-23).241
The presumption of transfer of rights applies neither to the author’s rights on
the musical composition nor to the graphic and theatrical rights on the audiovisual work itself. As a
result of this presumption of transfer of rights, the producer is said to obtain all the prerogatives
necessary for the normal exploitation of the work. Of course, contracting parties are free to agree
otherwise and for the presumption to apply, there must exist a contract between the authors and the
producer.242
Regardless of the presumption of transfer of rights to the producer, the authors may
exploit their contributions individually as long as these are separable and of different genres and the
exploitation does not prejudice that of the whole work (L.132-29). With respect to performers,
article L. 212-4 of the CPI provides that the signing of a contract between a performer and a
producer for the production of an audiovisual work entails the authorisation to fix, reproduce and
communicate to the public the performer’s performance.
4.3.2 Forms of transfers of rights
4.3.2.1 Assignment
France follows a ‘dualist’ approach, whereby the author’s right is considered to consist of two
separate elements: the pecuniary element, or ‘economic right’, and a personality element, or the
‘moral right’. In dualist systems, economic rights can be freely assigned, either inter vivos or mortis
causa, while moral rights are considered to be inalienable.243
The same remark also holds true with
respect to the performers’ rights, where the economic element of the right can be assigned, but not
its moral element.
4.3.2.2 Licence
Article L. 132-8 of the French Intellectual Property Code differs from the provisions of other
Member States in that it provides that the author must guarantee the publisher the exclusive exercise
of the rights assigned, unless otherwise agreed.
4.3.2.3 Waiver
In France, where the protection of the author's personality right is a paramount element of the droit
d’auteur regime, the waiver of some attributes of an author's moral right has been made possible,
either in the French Intellectual Property Code (CPI) or in the jurisprudence. Hence, the transfer of
an author's adaptation right implies a partial renunciation to exercise the right of integrity, to the
240
Lucas 2000, p. 46.
241
See: Tribunal de Grande Instance de Paris (3e Ch.) – 23 March 2001, RIDA 2001/189.
242
Tribunal de Grande Instance de Strasbourg (2e Ch.) – 16 November 2001 (SNJ c. Plurimedia), available : <www.juriscom.net>
243
French Intellectual Property Code, art. L. 122-7; Belgian Copyright Act, art. 3.
Final Report
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extent necessary for the adaptation of the work to another medium.
244
The CPI also provides that,
‘[translation] except contrary stipulation more favourable to the author of a computer program, the
latter cannot oppose the modification of the program by its lawful acquirer if such modification is
harmful neither to her honour or her reputation, nor can she exercise her right of repent or of
withdrawal’.
245
With respect to audiovisual works, the waiver of the author's right of integrity would
also be admissible under the French CPI, provided that such a waiver is necessary to ensure the
completion of the works.246
The presumption of transfer of rights from the joint authors of an
audiovisual work to the producer also entails the formers’ waiver of their right of disclosure.247
Article L. 121-4 provides the author’s right to withdraw a work from public circulation, which exists
‘notwithstanding assignment of his right of exploitation’. Article L. 212-2 of the Code contains
similar provisions with respect to the waiver of the performers’ moral rights. There is extensive
jurisprudence in France on the question of the waiver of the author’s moral rights. In general, the
courts tend to be very protective of authors, especially with respect to the author’s right of disclosure
and right of integrity.248
4.3.3 Requirements of form
Article L. 131-2 of the French Intellectual Property Code (CPI) provides that a performance,
publishing and audiovisual production contract, as well as a ‘free performance authorization’, must
be in writing. The same rule applies to the assignment of the right of audiovisual adaptation of a
work (article L. 131-3(3)).249
According to article L. 131-2(2) of the CPI, the form of all other types
of contracts is regulated by articles 1341 to 1348 of the Civil Code. With respect to publishing
contracts, article L. 132-7 requires the personal and written consent of the author, even in the case of
legally incompetent authors. This rule does not apply however, to authors who are physically unable
to give consent or when the contract is concluded by the author’s successor in title. Furthermore,
publishing contracts must state the minimum number of copies to be printed, unless the publisher
has agreed to pay a guaranteed minimum of royalties (article L.132-10). Pursuant to article L. 132-11
of the CPI (second sentence), a publisher may not, without the written consent of the author, bring
any modifications to the work. These provisions have been interpreted as establishing a rule of
evidence rather than a condition for the validity of a transfer of rights. If a contract fails to meet the
requirement of a writing, the author is the only party authorised to ask the court to declare the
contract void.250
With respect to performances, article L. 212-3 of the French CPI requires a written authorization
from the performing artist for the fixation, reproduction, and communication to the public of such
fixation, as well as for the separate use of sounds or images. The Court of Appeal of Paris recently
had the opportunity to interpret the requirement set by article L. 212-3 of the Code in a case
opposing Sony Music Entertainment to the collecting society SPEDIDAM and the union of artists
SNAM.251
The case involved the rights of four musicians who had participated in the recording of a
song for a commercial phonogram produced by Sony Music, but who had not authorised the
making of a video-clip. The facts of the case revealed that each of the four musicians had signed a
‘presence sheet’ before the start of the recording sessions. On the front-side of this sheet was
244
Colombet 1997, p. 114.
245
French CPI, art. L. 121-7.
246
Von Lewinsky 1995, p. 688, 689; Dreier 1995, p. 18.
247
Gautier 1999, p. 500.
248
Salokannel, Strowel, and Derclaye 2000, p. 249.
249
Lucas 2000, p. 59.
250
Lucas and Lucas 2001, p. 396.
251
Court of Appeal of Paris (1st Ch.), 11 January 2000 (Sony Music Entertainment v. SPEDIDAM and SNAM), RIDA 2001/187, p.
286.
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written the mention ‘Destination: Phonogram published for commercial purposes’. In the opinion
of the Court of Appeal, this mention entailed on the part of the musicians who signed the document
the authorisation to fix their performance on a phonogram, but it did not entail the authorisation to
proceed to the reproduction of their performance for other purposes, such as the making of a videoclip.
The requirement of article L. 212-3 of the CPI of a written instrument had not been fulfilled
and the reproduction of the musician’s performance for the purpose of making a video-clip was
therefore unlawful.
4.3.4 Restrictions on transfers of rights
4.3.4.1 Limits of scope, time, and place
Article L. 131-3(1) of the French CPI states that the contract must enumerate each form of
exploitation transferred and that the field of exploitation must be defined to ‘its scope and purpose
as well as to place and duration’. This provision has been declared mandatory by the Courts, on a
number of occasions.252
The sanction attached to the failure to fulfil these requirements is the
relative nullity of the contract, which is deemed to be better suited to protect the interests of the
author than the sanction of absolute nullity.253
Article L. 132-19 of the CPI provides that a
performance contract must be limited in time or to a specific number of performances.
Furthermore, it states: ‘the validity of the exclusive rights afforded by a playwright may not exceed
five years’. Agreements between the organizations representing the performers, the phonogram
producers, and the persons using phonograms as laid down in items 1) and 2) of Article L. 214-1
shall be of between one and five years.
4.3.4.2 Future forms of exploitation
In France, article L. 131-6 of the CPI allows to transfer ‘the right to exploit a work in a form that is
unforeseeable and not foreseen on the date of the contract’, provided that two conditions are met:
first, the transfer must be explicit and second, the contract must provide ‘participation correlated to
the profits from exploitation’.254
French courts have issued a number of decisions over the past few
years on the issue of ‘unknown forms of exploitation’, particularly regarding electronic rights.255
In
the case of Plurimédia,256
a number of journalists and their trade unions had brought legal action, not
against ‘their’ newspaper publisher, but directly against the provider of the online information
service concerned (Plurimédia). The case concerned the online dissemination of news items, both
from printed sources (the newspaper Dernières Nouvelles d’Alsace), and from television (news
programmes broadcast by channel FR3). The newspaper publisher and the television station had
given Plurimédia prior permission to re-use the printed and televised news on the Internet.
Permission of the (employed) journalists had not been sought. The Court of Strasbourg observed
that, according to the rules of ownership of rights on ‘collective works’, the newspaper publisher was
deemed the owner of the copyright in the newspaper. However, on the basis of article L 761-9 of
the Labour Code and article 7 of the journalists’ collective bargaining agreement, the grant of rights
by a journalist is limited to the article’s first publication. The right to publish a work in more than
one newspaper or magazine must be agreed upon expressly, and the express agreement must define
the conditions for reproduction. The Court considered the medium of a newspaper in print to be
different from the medium of an online newspaper, because online distribution requires certain
252
Cour d'appel de Paris (4ème Ch.) - 1er juillet 1998 (Editions Cercle d’Art c. Pierrel, et Ruiz-Picasso), RIDA 1999/179, p. 390.
253
Lucas and Lucas 2001, p. 402; and Von Lewinsky 1995, p. 693.
254
See: Lucas 2000, p. 65.
255
Hugenholtz and de Kroon 2000, p. 16.
256
Plurimédia, Regional Court Strasbourg, 3 February 1998, Légipresse 149-I, p. 19 and 149-III, p. 22.
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technical manipulations; the online product is different from a newspaper, and a new means of
communication is involved. Therefore, there had been publication in more than one newspaper or
magazine. The journalists’ collective agreement was signed in 1983, at which time Internet uses
could not have been foreseen. Therefore, no express agreement was found, and the online
reproduction of articles previously published in the newspaper was subject to the journalists’ prior
authorisation. In respect of the televised news items, the Court came to similar conclusions, even
though the journalists’ employment agreements with FR3 did not contain any relevant provisions.
The Court concluded that the journalists could not have granted the rights required because Internet
use was unknown at the time the employment agreements were entered into.257
The Tribunal de grand instance of Paris came to similar conclusions in the Figaro case.258
Le Figaro,
a major French daily newspaper, offered to the public the possibility of consulting its electronic
archives containing news articles published in the past two years, and to obtain copies thereof.
Journalists and a trade union complained that Le Figaro had not asked their permission. The Court
prohibited the service, concluding that, in the absence of an express agreement to the contrary, the
journalists’ grant of reproduction rights only covers the first publication in the form agreed upon by
the parties. In yet another case on ‘electronic rights’, the journalists of the newspaper Le Progrès,
supported by the national union of journalists (SNJ), took the newspaper publisher to court for
putting their articles on the Internet and on Minitel without their consent.259
The Court of Appeal of
Lyon ruled in favour of the plaintiffs invoking the Labour Code and the collective bargaining
agreement of journalists.260
The Court held that the online publication and archiving on a server
could not be considered an extension of the distribution on paper, particularly since the typographic
layout and the presentation of an article in a publication corresponding to a current of ideas upheld
by its author at the time the contract was concluded, had disappeared. Moreover, the newspaper’s
readership was extended and the duration of the publication was different. The Court further noted
that article L 121-8 of the CPI provides that, unless the parties provide otherwise, the author of a
work published in a newspaper or magazine may reserve the right to reproduce and exploit his work
in whatever form, provided that the reproduction or exploitation does not compete with that of the
newspaper or magazine.261
Absent the express consent of the employed journalists, the re-use of
their articles on the Internet and on the Minitel could not occur without the authors’ prior
authorisation.
4.3.4.3 Future works
Article L. 131-1 of the Intellectual Property Code states that ‘a total transfer of future works shall be
null and void’. Although the text of the provision may suppose otherwise, this rule also applies to
the partial assignment of rights as well as assignment of rights in some of the future works to be
created by the author.262
Non-compliance with this rule leads to relative nullity. Consequently, a
valid agreement transferring rights in ‘future’ works is presumed to exist unless the author raises the
irregularity of the contract. The prohibition on the transfer of rights on future works has been
applied with some flexibility, whereby the courts have recognised the validity of a transfer of rights
on a work that is sufficiently specified with respect to its type or content.263
This is the case, for
257
Hugenholtz and de Kroon 2000, p. 17.
258
Le Figaro, Tribunal de grand instance Paris, 14 April 1999, Légipresse 162-I, p. 69 and 162-III, p.81.
259
Le Progrès, Tribunal de grand instance Lyon, 21 July 1999, Légipresse 166-I, p. 132 and 166-III, p. 156; and Court of Appeal of
Lyon, 9 December 1999, Légipresse 168-I, p. 9 and 168-III, p. 7.
260
Hugenholtz and de Kroon 2000, p. 17.
261
See section 2.1.2 supra.
262
Von Lewinsky 1995, p. 698; Lucas 2000, p. 63.
263
Lucas and Lucas 2001, p. 413.
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example, of rights transferred with respect to a series of stories having the same main characters.264
The prohibition on the transfer of rights on future works is subject to two exceptions. First, article
L. 132-4 permits the author, under specific circumstances, to grant a right of preference to a
publisher for publication of his future works. Second, a professional body of authors may grant,
pursuant to article L. 132-18, to an entertainment promoter the right to perform, for the duration of
the contract, the existing or future works constituting the repertoire of such body under the
conditions stipulated by the author or his successors in title. In that case, the requirements of article
L. 131-1 may be waived.
In practice, the prohibition of article L. 131-1 of the CPI on the transfer of rights in future works
invariably raises problems in connection with the conclusion of labour contracts with salaried
creators. As a result, it is not uncommon to observe that a number of collective bargaining
agreements do not comply – entirely – with this requirement. In the sector of professional
journalism for example, Vercken reports that some collective agreements between newspaper
publishers and associations of journalists try to circumvent the problem by subjecting the terms of a
collective agreement to the express consent of each journalist with respect to the works that he will
be creating in the future or by modifying the labour contract by means of an endorsement, the
writing of which has been submitted for approval by the parties to the collective contract.265
Some
of these express consent forms and endorsements provide that the parties must periodically list the
works that are created and that fall under the scope of the agreement. Another solution to the
problem caused by the strict application article L. 131-1 of the CPI could lie in the grant to the
publisher of a right of preference, pursuant to article L. 132-4. Here again, practical problems arise,
since such a right of preference applies, with respect to works of the same genre, only to the next
five works created by the journalist, or to the production of the author realised within a period of
five years from the date of signature of the contract. One can easily imagine how complex and
burdensome such a solution is for an enterprise that has numerous journalists on its payroll.
4.3.5 Determination of remuneration
4.3.5.1 Proportional remuneration
French copyright law imposes a system of proportional remuneration to authors (article L. 131-4, L.
132-5 and L. 132-25), including authors of works created under employment.266
The proportional
remuneration must be based on the price, exclusive of tax, paid by the public to buy or receive
communication of the work. This system is also applicable to works created under employment. It
is a matter of settled case law that the provisions of articles L. 131-4 and L. 132-25 of the CPI are to
be given a mandatory character.267
However, the Cour de Cassation has held that any infringement of
the provisions of article L. 131-4 is punishable by relative nullity, rather than absolute nullity, and can
only be invoked by the author.268
Moreover, an action based on article L. 131-4 is limited by a
period of five years.269
The second paragraph of article L. 132-25 provides that ‘subject to the provisions of Article L. 131-
264
Cour de Cassation, (1ere Ch. Civ.), 6 November 1979, RIDA 1980/3, p. 167.
265
Vercken 2001, p. 151.
266
Von Lewinsky 1995, p. 693, 694.
267
Tribunal de grande instance de Paris (3e Ch.) - 30 November 1999, RIDA 2000/185; Court of Appeal of Paris (1ère Ch.) - 13
October 1998 RIDA 1999/180, (Audiovisual works: production contract – proportional remuneration – moral rights of the coauthors);
Court of Cassation (1ère Ch. Civ.) - 16 July 1998, RIDA 1999/178 (Audiovisual works: videographic exploitation proportional
remuneration); and Court of Appeal of Paris (1st Ch.) - 27 March 1998, RIDA 1999/178.
268
Cour de Cassation, (1ere Ch. Civ.), 9 January 1996 (Pactet v. SA Masson editeur et al.), IIC 1998/08, p. 950.
269
Cour de Cassation (1ere Ch. Civ.), 11 February 1997, RIDA 1997/173, p. 279.
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4, where the public pays a price to receive communication of a given, individually identifiable
audiovisual work, the remuneration shall be proportional to that price…’ Although this provision
was initially drafted to apply to the exploitation of films in cinemas, it also covers the exploitation of
films on videos.270
The Paris Court of Appeal confirmed that the remuneration payable to the
authors of a film for video exploitation is subject to the mandatory rules set out in Articles L. 131-4
and L. 132-25 CPI. Consequently, in a dispute between the producer’s legal successors and the
successors in title of one of the authors of a film, the Court has stated that as a matter of law the
remuneration due for video exploitation must be set as a percentage of the selling price to the public,
exclusive of tax, of the video recordings of the film, thus ruling out a calculation basis formed by the
‘producer’s receipts’.
271
By law, the publisher, the entertainment promoter, and the film producer are
all required to render accounts.272
Besides the provisions of the CPI, the payment of remuneration owed to professional journalists is
subject to the provisions of articles L. 761-8 and L. 761-9 of the Labour Code. The first provision
essentially states that any work not foreseen by the terms of the hiring contract between the
publisher of a newspaper or periodical and a person mentioned in article L. 761-2 must be subject to
special remuneration. The second provision states that any work commissioned or accepted by the
publisher of a newspaper or periodical must be remunerated even if it has not been published. The
right to publish in a newspaper or periodical the articles or other literary or artistic works created by
a person mentioned in article L. 761-2 must obligatorily be subject to an express agreement which
specifies the conditions under which the reproduction is authorised. In practice, the collective
agreements signed in recent years between newspaper publishers and associations of journalists
would seem to depart from the mandatory requirements of the CPI, according to which the
remuneration paid must be either proportional or lump sum, while still complying with the
provisions of the Labour Code.273
The remuneration paid to the journalists under most collective
agreements is based on a premise accepted by both sides: the salary paid to the journalist covers at
least the first exploitation of the work. The re-use of the journalists’ works gives rise to additional
remuneration established either as a fixed sum or as a percentage of the revenues generated by the
exploitation. The sums are then distributed either on the basis of the number of years during which
the journalist has been present in the enterprise or, if it concerns a freelance journalist, on the basis
of the number of contributions submitted.
With respect to performers, article L. 212-4 of the CPI provides that a contract signed for the
production of an audiovisual work must fix a distinct remuneration for each mode of exploitation of
the work. Article L. 212-5 completes this rule by stating that if neither the contract nor a collective
bargaining agreement mentions the remuneration due for one or more modes of exploitation, the
level of remuneration is determined by reference to the tariffs established by way of specific
agreement concluded, in each sector of activity, between the organisations of salaried workers and
employers representing the profession. The remuneration due to performers is also regulated by
articles L. 762-1 and L. 762-2 of the Labour Code, subject to the provisions of article L. 212-6 of the
CPI. Article L. 762-2 of the Labour Code reads as follows:
N'est pas considérée comme salaire la rémunération due à l'artiste à l'occasion de la vente ou de l'exploitation
de l'enregistrement de son interprétation, exécution ou présentation par l'employeur ou tout autre utilisateur dès
que la présence physique de l'artiste n'est plus requise pour exploiter ledit enregistrement et que cette
rémunération n'est en rien fonction du salaire reçu pour la production de son interprétation, exécution ou
présentation, mais au contraire fonction du produit de la vente ou de l'exploitation dudit enregistrement.
270
See Kéréver, ‘Chronique de jurisprudence’, RIDA 2000/186, p. 259;
271
Cour de Cassation (1ere Ch. Civ.) 25 January 2000, (Barlet c. Temal and Bougeault), RIDA 2000/186, p. 267.
272
French CPI, art. L. 132-13, L. 132-21 and L. 132-28.
273
Vercken 2001, p. 152.
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However, article L. 762-2 of the Labour Code only applies to that part of the remuneration paid in
accordance with the contract that exceeds the bases laid down in the collective agreement or specific
agreement. The provisions of the agreements concluded, in each sector of activity, between the
organisations of salaried workers and employers representing the profession may be made
compulsory within each sector of activity for all the parties concerned by order of the responsible
Minister.
However, article 214-1 of the CPI states that ‘where a phonogram has been published for
commercial purposes, neither the performer nor the producer may oppose: 1) Its direct
communication in a public place where it is not used in an entertainment; and 2) Its broadcasting or
the simultaneous and integral cable distribution of such broadcast. Such uses of phonograms
published for commercial purposes entitle the performers and producers to remuneration whatever
the place of fixation of such phonograms. Such remuneration is paid by the persons who use the
phonograms published for commercial purposes under the conditions set out in items 1) and 2) of
the article. It is based on the revenue from exploitation or, failing that, calculated as a lump sum in
the cases laid down in Article L. 131-4. It shall be shared half each between the performers and the
phonogram producers. Subject to the international conventions, this right to remuneration shall be
shared between the performers and phonogram producers for phonograms fixed for the first time in
France. The schedule of remuneration and the conditions of payment of the remuneration shall be
laid down by specific agreements for each branch of activity between the organizations representing
the performers, the phonogram producers and the persons using phonograms as laid down in items
1) and 2) of Article L. 214-1. Such agreements shall set out the terms under which the persons using
phonograms under such conditions shall satisfy their obligation to furnish to the royalty collection
and distribution societies the precise program of the uses which they make and all the documentary
elements that are indispensable for distributing the royalties. The provisions of such agreements
may be made compulsory for all the parties concerned by order of the Minister responsible for
culture. The term of such agreements shall be of between one and five years. If no agreement has
been reached on expiry of the preceding agreement, the schedule of remuneration and the
conditions for paying the remuneration shall be decided by a Committee, according to the
prescriptions of article 214-4 of the CPI.
As an exception to the principle laid down in articles 212-3 and 213-1 of the CPI, which proclaims
the exclusive right of the performer to authorise or prohibit the communication to the public of
their performances fixed on a phonogram, article 214-1 must be interpreted restrictively.274
The acts
enumerated in this article, and which fall outside the scope of the exclusive rights, cover the
broadcast of ‘commercial phonograms’ only. Consequently, this provision does not encompass the
communication to the public of a sound recording incorporated into a cinematographic work. In
this case, the act of communication to the public is subject to the author’s prior authorisation.
4.3.5.2 Equitable remuneration
The French Intellectual Property Code contains no provision requiring the payment of an equitable
remuneration to authors or performers. Note that the provisions of the CPI that relate to the
payment of remuneration to authors or performers all talk about ‘remuneration’ as such without
qualifying it as equitable. The method of calculation of the remuneration prescribed in the CPI is in
fact either proportional or lump sum. Nevertheless, the French legal doctrine very often refers to
the concept of ‘equitable remuneration’ in relation to the sums to be paid authors or performers in
accordance with the provisions of the Code.
274
Kéréver 2002, p. 241.
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4.3.5.3 Lump sum
Article L. 131-4 of the French Intellectual Property Code sets out the first list of exceptions to the
system of proportional remuneration. A lump sum payment is permitted in four circumstances:
• Where it is impossible or too expensive to calculate the remuneration;
• Where the author’s contribution is not significant enough;
• In case of computer programs.
Article L. 132-6(1) lists a number of additional circumstances where the payment of a lump sum is
authorised in the context of a publishing agreement. It provides that in the case of trade editions of
specific types of works the author’s remuneration for the first edition may also be in the form of a
lump sum, subject to the express agreement of the author. In the case of works of the mind
published in newspapers and periodicals of any kind and by press agencies, the remuneration of an
author bound to the information enterprise by a contract for hire or of service may also be laid
down as a lump sum. Finally, according to L. 132-6(2) of the CPI, this type of remuneration is
permitted in case the assignment is granted ‘by or to a person or enterprise established abroad’. All
lump sum agreements may be revised under French law.
4.3.5.4 ‘Best-seller’ clause
Under French law, a revision of the amount of remuneration stipulated in the contract is admissible
only in the case of lump sum payment. Moreover, according to article L. 131-5 of the French CPI,
the author may demand the review of the contract if he suffered a loss of more than seven-twelfths
of the compensation to which he is entitled and if this loss is the result of either a burdensome
contract or an insufficient advance estimate of the proceeds from the work.
4.3.6 Interpretation of contracts
Articles L. 122-7(2) and (3) of the French Intellectual Property Code specify that the transfer of
either the performance or the reproduction right does not imply the transfer of the other right.
According to article L. 122-7(4), a complete transfer of rights is limited to the exploitation modes
specified in the contract. French Courts have repeatedly held that the general rule regarding the
authors’ or the performers’ transfer of rights is that the scope of transfer is limited to the rights
expressly mentioned in the juridical act. For example, publishing rights, which are not needed for
the production of a TV series, cannot be deemed to have been assigned by the author upon entering
a TV production contract.275
4.3.7 Effect of transfer in relation to third parties
4.3.7.1 Right to transfer acquired rights
Article L. 132-16 of the French Intellectual Property Code permits the publisher to transfer the
acquired rights, but only after he has obtained the consent of the author. The consent of the author
is not required, however, in cases where the rights in the contract are transferred along with the
publisher’s business.276
In such circumstances however, the author may terminate the contract. The
275
Paris Court of Appeal (4th Ch.), 19 December 1991 (BELBO Films Production v. Editions B. Barrault and D. Cohn Bendit) [1993] 5
Ent. L.J. E-94.
276
Lucas 2000, p. 74.
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consent of the performer or his representative is also required in case of transfer of a performance
contract to a third party (article L. 132-19(4)).
4.3.7.2 Standing to sue
There is no provision in the French Intellectual Property Code concerning the assignee’s or the
licensee’s standing to sue for copyright infringement.
4.3.7.3 Right to pledge, secure or seize acquired rights
The only reference in the French CPI to the right of the assignee to pledge, secure, or seize acquired
rights relates to the pledge of rights on computer programs. Article L. 132-34 of the CPI provides
that ‘notwithstanding the provisions of the Law of March 17, 1909, on the Sale and Mortgaging of
Businesses, the right of exploitation of an author of software, as defined in Article L. 122-6, may be
pledged subject to the following conditions:
• The pledge shall be set out in writing on pain of nullity.
• The pledge shall be entered, failing which it shall not be invokable, in a special
register kept by the National Institute of Industrial Property. The entry shall state
precisely the basis for the security and, particularly, the source codes and operating
documents.
• The ranking of entries shall be determined by the order in which they are requested.
• The entries of pledges shall lapse, unless renewed beforehand, on expiry of a period
of five years.
Implementing conditions for this article are laid down in a Decree by the Council of State.
The rights on a cinematographic work may also be subject to a pledge or a security, according to
article 36 of the French Code on the Cinematographic Industry.277
Whether the rights on other types of works may be subject to a pledge or a security under French
law is unclear. The legal literature tends to accept the possibility without discussing the issue any
further. It has been argued that, because of the intangible nature of the right and the impossibility
for the owner to transfer the possession of the right to the grantor of the security, any pledge or
security taken on a copyright should be registered. Since there is no such general register – outside
of the special register held for computer programs and cinematographic works – the requirement of
publicity can hardly fulfilled.278
4.3.8 Termination of contract
4.3.8.1 Non-use of rights
The right of an author or performer to put an end to a contract because the exploiter failed to use
the rights acquired is closely linked to the latter’s obligation to exploit such rights. The French CPI
277
Article 36 of the French Code on the Cinematographic Industry reads as follows: ‘Sauf dispositions contraires portées au contrat
et inscrites au registre public, le bénéficiaire d'un des droits visés aux alinéas 2° et 3° de l'article 33 dûment inscrit, et sur
production de l'état prévu à l'article 37, encaisse seul et directement, nonobstant toute opposition autre que celle fondée sur un
privilège légal, à concurrence de ses droits et suivant l'ordre de son inscription, le montant des produits du film, de quelque nature
qu'ils soient, et ce, sans qu'il soit besoin de signification aux débiteurs cédés qui seront valablement libérés entre ses mains’.
278
See: Lucas and Lucas 2001, p. 399.
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74
imposes an obligation to exploit the rights on a work only on the publisher (article L. 132-12) and
the producer of audiovisual work (article L. 132-27). It is an obligation of means and not of result.
In any case, a publishing contract terminates automatically if, upon formal notice by the author
fixing a reasonable period of time, the publisher has not proceeded to the publication of the work.
The same rule applies when the publisher does not republish a work of which two orders for
delivery of copies have not been met within three months (article L. 132-17). Article L. 132-19(3)
provides that in case of an interruption of performances for two consecutive years, the performance
contract is automatically terminated.279
In a case involving the contractual obligations of a record producer, the Cour de Cassation has
recognised the obligation of the producer to exploit the performances on the basis of article 1315 of
the French Civil Code. However, the Court further declared that it is up to the beneficiary of an
obligation of means to provide evidence of the default of the person owing the obligation. The
breakdown of a negotiation is not sufficient to reverse the burden of proof and to establish a breach
by the producer. This is precisely where lies the difference between an obligation of means and an
obligation of result. In practice, the solution seems severe, for it will be almost impossible for the
performer to establish default by the producer. Since the French CPI is silent on the possibility for a
performer to put an end to a contract for non-use of his rights, it is a matter falling under the
provisions of the French Civil Code whether a performer is entitled to unilaterally end a contract
under such circumstances.
4.3.8.2 Bankruptcy of exploiter
Article L. 132-15 of the French Intellectual Property Code provides that an author may request
termination of a publishing contract if ‘the activities of the enterprise have ceased more than three
months earlier or where judicial liquidation is pronounced’. Article L. 132-30 provides a similar rule
for audiovisual production contracts. It is unclear whether these rules may be applied by analogy to
other types of contracts.280
4.3.8.3 Other circumstances
Under French copyright law, the author may require termination of the publishing contract if the
publisher has carried out the destruction of all copies.281
279
Cour d’appel de Paris (1ère Ch.) - 8 June 1999 (Audiovisual works : Obligation to exploit of the distributor), RIDA 2000/183, p.
311.
280
Von Lewinsky 1995, p. 715. See: Cour d’appel de Paris (3e Ch.) - 7 May 1999 (Audiovisual works: liquidation of the assignee of
the rights - consequences for the author’s rights), RIDA 2000/183, p. 299.
281
French Intellectual Property Code, art. L. 132-17(1).
4.4 Germany
At the outset, mention must be made of the recent legislative developments concerning copyright
contract law in Germany. After almost three decades of discussions, the German Parliament has
finally adopted in the first months of 2002 a number of substantive modifications to the German
law on copyright contracts.282
These amendments are meant to improve the situation of authors and
performing artists and focus primarily on the rules of interpretation of copyright contracts, on the
determination of remuneration to authors and performing artists, and on collective bargaining.
4.4.1 Ownership of Rights
4.4.1.1 Creator doctrine
The creator doctrine (Schöpferprinzip) constitutes a fundamental principle of the German authors’
rights regime. Someone other than the natural person who created the work can be presumed the
author of the work and the owner of the rights therein only in one instance: in the case of
anonymous or pseudonymous works. In principle, the person whose name or generally known
pseudonym or signature appears in the usual manner on copies of the work or when it is disclosed
to the public, is deemed, in the absence of proof to the contrary, to be its author. However, if a
work is published without any indication of the name of the author, the editor, if he is named, or
otherwise the publisher, is deemed to represent the author.283
With respect to performers, the
German Copyright and Related Rights Act contains no rule on the initial ownership of the related
rights of performing artists. German commentators share the unanimous opinion that the
performing artist is always ab initio the physical person who executes the performance. The law is
also silent regarding the presumption of ownership of rights on performances.284
4.4.1.2 Works created under employment
The only exception to the creator doctrine recognised under German law is paragraph 69b of the
Copyright Act which implements article 2(3) of the Computer Programs Directive concerning the
employer’s ownership of software created by employees in execution of their duties or following
given instructions. For all other works created under employment, the ownership of rights vests in
the physical person who created the work in accordance with the principle laid down in paragraph 7
of the German Copyright Act. According to paragraph 43 of the Copyright Act however,
paragraphs 31 to 42 of the Act relating to the exploitation of rights apply ‘if the author has created
the work in execution of his duties under a contract of employment or service provided nothing to
the contrary transpires from the terms or nature of the contract of employment or service’. As
examined in greater detail in Chapter 4 of this study, paragraphs 31 to 42 of the Act in fact contain
measures designed to protect the author in his or her contractual relationship with entities that
exploit his or her work under a licence. For paragraph 43 to apply there must exist an employeremployee
relationship, i.e. one characterised by the employer’s possibility to exercise control over the
employee's actions.285
This requirement therefore excludes any application of paragraph 43 of the
Act to freelancers, independent and autonomous workers, and the like. On the basis of this
provision, German courts have constantly held that author employees have an obligation to grant
282
Gesetz zur Stärkung der vertraglichen Stellung von Urhebern und ausübenden Künstlern, BGBl. I, No. 21, 28 March 2002, p. 1155.
283
German Copyright Act, art. 7.
284
Brison 2001, p. 611.
285
Kraßer 1995, p. 89.
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their employer a licence of exploitation so as to give the latter the necessary powers to use the work
to carry out his normal business activities.286
The German Copyright Act contains a similar provision applicable to performers bound by an
employment contract. Paragraph 79 provides that ‘if a performer has given a performance in
execution of his duties under a contract of employment or of service, the extent and conditions
under which his employer may use it or authorize others to use it shall be determined, if not
otherwise agreed, by reference to the nature of the contract of employment or service’. According
to this paragraph, unless the parties agree otherwise, the performer is deemed to have granted his or
her employer an implied licence for the use of the performance in accordance with the employer’s
normal business activities.287
4.4.1.3 Works created on commission
The German Copyright and Related Rights Act contains no provision regulating the ownership of
works or other subject matter created on commission. One must therefore conclude that, whenever
a work is created on commission, the creator doctrine applies and the actual author is recognised as
having the ownership of the rights on the work thus created.
4.4.1.4 Audiovisual works
Articles 88 to 94 of the German Copyright and Related Rights Act set out special rules on
cinematographic works (“Filmwerke”).288
According to the creator doctrine, codified in article 7 of
the Act, authors of a cinematographic work are the natural persons who have contributed to the
creation of the work.289
Thus, all rights are primarily conferred to the physical persons making a
creative contribution to the audiovisual work. In order to exploit the work, the exploiter must
therefore acquire the rights from the different co-authors. According to article 89(1), any person
who undertakes to participate in the production of a film is deemed, in doubt, to have granted to the
producer of the film an exclusive right to utilize (Nutzungsrechte) the cinematographic work as also
translations and other adaptations or transformations of the cinematographic work in any known
manner. This presumption does not apply to authors of pre-existing works, such as novels,
screenplay and film music (article 89(3)). These authors have the right to use their works for other
cinematographic purposes after the expiration of ten years from the conclusion of the contract.
With respect to performers, article 92(1) provides that, in case of doubt, a contract between a
performer and a producer constitutes assignment of the right to record, reproduce and broadcast the
performance. However, contrary to what articles 2(5) and (6) of the Rental and Lending Rights
Directive allows, the German Copyright Act establishes no legal presumption of transfer of the
rental right from the authors or performers to the producer of the audiovisual work. In other
words, authors of all kinds as well as performing artists and producers dispose of an exclusive rental
right under German law.
286
Dietz 2000, p. 50. See also BGH, September 27, 1990, GRUR 1991/ 523 (Grabungsmaterialien).
287
Rojahn 1999, p. 1219.
288
Cinematography is defined by the Court of Berlin as “the recording and communication to the public of moving pictures, by
which pictures are recorded and projected very fast, in analogues order”. LG Berlin, March 17, 1998, 16 O 93/98. See Haupt
1999, p. 901. According to article 95, the rules of article 88, 90, 91, 93 and 94 apply likewise to moving pictures (“Laufbilder”), i.e.
“sequences of images and to sequences of images and sounds which are not protected as cinematographic works”.
289
Depending on the question whether the work can be separately exploited, a creator is deemed author of a joint work (article 8) or
author of a compound work (article 9). Ulmer 1980, p. 200, 201; Dietz 2000, p. 48, 49.
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4.4.2 Forms of transfers of rights
4.4.2.1 Assignment
Germany differs from most countries of continental Europe in that they follow a ‘monist’ approach
to author’s rights. Under this approach, the author’s economic and moral rights are considered to
be so thoroughly intertwined that the economic aspect of the right cannot be dissociated from the
right’s personality aspect.290
Following the monist approach, copyright is a unitary right that protects
the author with respect to intellectual and personal relations to his work, as well as with respect to
the exploitation of his work. The German Copyright and Related Rights Act allows authors to grant
licences to use their works, but do not permit transfer of ownership, except by testamentary
disposition.291
The exploitation of the author’s economic interest (Verwertungsrechte) occurs therefore
only through the grant of ‘privileges’ to use the work (Nutzungsrechte), which can be exclusive
(Werknutzungsrecht) or non-exclusive (Werknutzungs-bewilligung).292
The ownership of the authors’
economic rights may therefore not be transferred, except by way of testamentary disposition. A
mention in contract to a transfer of the rights of ownership in a work by way of a security pledge has
been interpreted as an unrestricted privilege to use the work.293
Although an author may grant a
global licence of all exploitation rights in a work, upon termination of the licence for any reason, all
rights revert to the author. In Germany, the monist system’s strong personal rights foundation does
not extend to the protection of the rights of the performing artists. Contrary to the protection
afforded to authors, where neither the exploitation nor the moral rights may be assigned, the
German Copyright Act expressly provides that a performing artist may freely transfer his
exploitation rights to third parties.294
In other words, performing artists may transfer the right to
consent to transmission by screen or loudspeaker, recording, reproduction and distribution,
broadcasting and communication to the public. In practice, artists must often transfer all their rights
to the exploiter, with the exception of the protection against distortion.295
4.4.2.2 Licence
In Germany like in Austria, an author may grant an exclusive exploitation right, which entitles the
exploiter to use the work to the exclusion of all other persons, including the author. Where the
license is non-exclusive, the exploiter uses the work concurrently with the author or any other
entitled person (article 31(2)). However, according to the recently modified article 33 of the
Copyright Act,296
the exclusive exploitation right and the non-exclusive permission to use remain
opposable to subsequent holders of licences. The same applies when the rights holder who granted
the right to use changes or when he waives his right. Article 38(1) provides that if the author
consents to the inclusion of his work in a periodical, the publisher or editor is deemed, in case of
doubt, to have acquired an exclusive right of reproduction and distribution. According to article
38(2), the publisher or editor is deemed to have acquired a non-exclusive exploitation right if the
contribution is made to a newspaper. If the author of the contribution granted an exclusive
exploitation right, he may, unless otherwise agreed, nevertheless use the work immediately after the
appearance of the contribution. Article 2(1) of the Publishing Act provides that the author must,
during the subsistence of the contractual relationship, refrain from all such exploitation of the work
290
Schricker 1999, p. 553.
291
German Copyright Act, § 29.
292
Strowel 1993, p. 356; and Boytha 1991, p. 201.
293
BGH, 20 January 1994 (Holzhandelsprogramm) IIC 1995/05, p. 720.
294
German Copyright Act, § 78. See: Nordemann and Schierholz 1998, p. 83.
295
Nordemann and Schierholz 1998, p. 83.
296
Gesetz zur Stärkung der vertraglichen Stellung von Urhebern und ausübenden Künstlern, Deutscher Bundestag, 14. Wahlperiode, Drucksache
14/8058, 25 January 2002, Bundesrat, Drucksache 74/02, 8 February 2002.
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78
as is prohibited to any third party during the subsistence of the copyright. However, article 2(2) of
the Publishing Act holds an extensive list of rights that the author is deemed to retain. These are the
right to: translate the work; reproduce a novel in the form of a drama, or vice versa; adapt a musical
work; reproduce the work mechanically for the ear; and, to make a pictorial representation of the
work. Moreover, article 2(3) states that the author may use his work in a compilation twenty years
after the work was published. Article 8 states the author’s obligation to secure the publisher the
exclusive right to multiplication and distribution.
4.4.2.3 Waiver
In a ‘monist’ country like Germany, the author’s economic and moral rights are considered to be so
thoroughly intertwined that the economic aspect of the right cannot be dissociated from the right’s
personality aspect. In principle, neither the economic nor the moral rights of authors are
transferable. Article 11 affirms the principle that copyright protects the author’s intellectual and
personal relationship to his work. In particular, the Copyright Act recognises the following three
attributes to the author’s moral rights: the right of first publication (article 12); the right to paternity
(article 13); and the right of integrity (article 14). According to article 39, the holder of an
exploitation right may make such alterations to the work and its title that the author cannot
reasonably refuse. Article 62 enumerates circumstances under which alterations are permissible with
respect to the use of works, which use falls within the limitations on copyright provided by the
Code. Finally, article 93 explicitly limits the moral right provided in article 14, with respect to
cinematographic works, to gross distortion to or other gross mutilation of the author’s contribution.
German courts use the balance of rights test for almost each right and will enforce a waiver of rights
to the extent that it corresponds to practical needs and to a fair weighing of interests.
297
4.4.3 Requirements of form
In general, German copyright law fixes no formal requirement for the validity or the evidence of a
transfer of rights. The form of the contract is thus free subject to the application of the general rules
of civil law laid down in the Bürgerliches Gesetzbuch (BGB).298
Article 40 of the Copyright Act states,
however, that agreements by which an author undertakes to grant exploitation rights in future works
which are in no way specified or only referred to by type shall be in writing. In the absence of an
instrument in writing, the agreement is null. Not all contracts are covered by this provision
however. The only contracts that are regulated by this provision are contracts that pertain to works
that are not specified or only referred to by type, such as contracts of agency, contracts of
preference, and contracts of employment. For example, a contract that relates to the creation of a
catalogue of the works of a particular painter has been considered not to fall under the scope of
article 40 of the Act.299
In this case, the Court of Appeal of Frankfurt upheld the validity of an oral
contract regarding the publication of the catalogue since it concerned one work that was not yet
created but the type and content of which was sufficiently determined.
4.4.4 Restrictions on transfers of rights
4.4.4.1 Limits of scope, time, and place
Article 31(1) of the German Copyright Act provides that an author may grant another person a
licence on one or all of his rights to use the work. A licence may be exclusive or non-exclusive and
297
Dietz 2000, p. 94.
298
Schricker 1999, p. 650.
299
OLG Frankfurt, 12 July 1990 (Werkverzeichnis), GRUR 1991/08, p. 601.
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may be limited in respect of place, time, or purpose. The mention in the contract of the scope of the
transfer of rights with respect to the place, time, and purpose of the intended use is not an
obligation. However, the consequence of the failure to mention each right to use with respect to
each independent means of exploitation is that such right will not be deemed included in the licence.
For instance, the Federal Supreme Court has ruled, in application of article 31 of the Copyright Act,
that the owner of an exclusive licence to publish a ‘paperback’ edition of a book is not entitle to
prevent a third party from publishing a special, cheap hard-cover edition of the same work.300
4.4.4.2 Future forms of exploitation
Article 31(4) of the German Copyright Act states that ‘a licence purporting to grant rights with
respect to unknown means of utilisation, and any obligation with respect thereto shall have no
effect’. Obviously, under the rule of article 31 (4) the moment of knowledge of a novel use is crucial
in determining the scope of a license. German courts must consider whether the language used in
the contract may or may not have contemplated the specific use at issue.301
Generally, ‘future or
unknown forms of exploitation’ have been defined as those forms of use that are not technically
possible or, even if so, the economic relevance of which is not known at the time of conclusion of
the contract. Hence, a form of use is deemed to be new, when it is a clearly distinguishable
economic and technical mode of exploitation of a work. In turn, a mode of exploitation is
distinguishable from others when it permits a better quality or a larger quantity of use. These
concepts were developed by the German Federal Supreme Court in a series of cases, known as
Videozweitauswertung cases, which pertained to the secondary exploitation of films on video.302
More recently, the District Court of Hamburg had to decide whether the use of photographic works
in an annual CD-ROM compilation of news magazine Der Spiegel infringed the rights of freelance
photographers.303
The annual CD-ROM, which contained the full texts and illustrations of the
printed volumes (not including advertisements), started to appear in the spring of 1993. The
photographers had granted no express permission for electronic uses. According to FreeLens, an
association of some 70 freelance news photographers, the licences previously granted by its
members to Der Spiegel, either in oral or in written form, did not extend to re-uses on CD-ROM.
According to the District Court, at the time the licences were granted (in 1989 or later) CD-ROM
was a known use, even if market success for the new medium came only later. Thus, the
photographers could not invoke article 31(4). In interpreting the licences, the District Court noted
that the photographers had never previously objected to republication of their works in printed
compilations, or in microfilm versions of the same. Accepting Der Spiegel’s argument, the District
Court observed that the CD-ROM edition was merely a substitute for previous paper or microfilm
editions. The licences were deemed to include the right to republish the photographs on CD-ROM.
On appeal, the FreeLens decision was overturned.304
The Court of Appeal of Hamburg considered
that the CD-ROM, compared to the magazine, the bound volume, and the microfilm, constituted a
new independent means of exploitation, since a CD-ROM allows for a more intensive use, and is
not merely a new technique for transmission. Moreover, consumers perceive CD-ROM as a
medium different from print or microfilm.305
300
BGH, 12 December 1991 (Taschenbuch-Lizenz), IIC 1993/03, p. 416.
301
For case law on this topic, see Dietz 2000, p. 53 (footnotes 26, 27). See also Soetenhorst 1993, p. 112 for literature on this topic.
302
BGH, 11 October 1990 (Videozweitauswertung I), GRUR 1991, p. 133, English translation in IIC 1991, p. 574; BGH, 26 January
1995 (Videozweitauswertung III), GRUR 1995, p. 212; see also: BGH, 13 May 1982 (Altverträge), GRUR 1982, p. 727.
303
LG Hamburg, 19 August 1997 (FreeLens), M&R 1998, p. 44.
304
OLG Hamburg, 5 November 1998 (FreeLens), M&R 1999, p. 225.
305
Hugenholtz and de Kroon 2000, p. 18.
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In July 2001, the Federal Supreme Court upheld the decision of the Court of Appeal in the SpiegelCD-ROM
case.306
In essence, the Supreme Court ruled that the publisher had no right to reproduce
the photographs in a CD-ROM without the author’s consent and that a permission to make such a
use of the photographs had neither expressly nor tacitly been licensed. Moreover, even if the CDROM
did not constitute a new form of exploitation at the end of 1988 when the plaintiff first
licensed the rights in his photographs, such rights had not been transferred to the publisher insofar
as they were not expressly and individually mentioned in the contract. The Court added that even if
the commercialization of the CD-ROM edition of the Spiegel did not yield the economic revenues
expected, this edition was suitable to encompass a new independent market of exploitation, because
in comparison with the printed and microfilm editions of the compilation, the CD-ROM had an
entirely different market potential.
4.4.4.3 Future works
Article 40 of the German Copyright Act permits the grant of exclusive exploitation rights with
respect to future works. Under the circumstances described in the first paragraph, the grant of rights
must be in writing. Agreements on future works may be terminated after a period of five years. If
no shorter period has been agreed, six months notice of termination shall be given. This right to
terminate may not be waived (‘verzichtet’) in advance (article 40(2)). Termination of the agreement by
which the future rights are granted means that the provision regarding these works shall cease to
have effect in respect of works that have not yet been supplied at that time (article 40(3)).
4.4.5 Determination of remuneration
4.4.5.1 Fair compensation
The recent modifications to the German Copyright Act constitute a significant exception to the
noticeable reluctance of European legislators to rely on the principle of ‘fair compensation’ as a
usable mode of determination of the compensation due to authors and performing artists, instead of
proportional remuneration or lump sum payments.307
Article 32 of the new Act, entitled ‘fair
compensation’, contains extensive protection measures guaranteeing authors the payment of a fair
remuneration for the exploitation of their work. According to the first paragraph, ‘the author has a
right, for the grant of an exclusive exploitation right and the non-exclusive permission to use, to the
contractually agreed remuneration. If the amount of the remuneration is not specified, the parties
are presumed to have agreed to a fair remuneration. If the agreed compensation is not fair, the
author may request from his co-contractor the authorisation to modify the contract so that a fair
compensation is guaranteed.’ The second paragraph establishes a presumption according to which a
compensation fixed in the context of collective agreement is fair. This presumption is to be read in
conjunction with the new article 36, on collective bargaining, which is described below. If there is
no collective bargaining agreement in force in a particular branch, the compensation is deemed fair if
it corresponds at the time of conclusion of the contract – and not at the time the claim is made – to
what is usual and fair in the practice, having regard to the nature and scope of the rights to use, and
to all circumstances in particular the duration and the scope of the use. In other words, as Lenselink
points out: “‘fair’ is what is common in a particular branch, provided that it is fair!”308
Pursuant to
paragraph three of article 32, an agreement that deviates from the first two paragraphs to the
disadvantage of the author is held invalid. Moreover, the prescriptions of the first paragraph are also
306
BGH, 5 July 2000, AfP 2002/1, p. 35.
307
Gesetz zur Stärkung der vertraglichen Stellung von Urhebern und ausübenden Künstlern, Deutscher Bundestag, BGBl I, No. 21, 28 March
2002, p. 1155.
308
Lenselink 2002, p. 36.
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applicable when other arrangements apply. However, the author may grant anyone a free nonexclusive
permission to use his work.309
According to the fourth paragraph, the author may not ask
for the revision of the contract, if the remuneration paid for the use of his work is regulated under a
collective bargaining agreement.
According to some commentators, this new provision may lead to some difficulties in practice.
First, it has been observed that the notion of ‘fair compensation’ is an entirely new concept in
German copyright law, which the courts have yet to interpret. As Schippan points out, ‘although a
certain insecurity is implied in all grey legal concepts, the new regulation might lead to a large
number of legal proceedings because in practice authors and producers will have extremely different
considerations in regard to the fairness of the compensation in a single case’.310
Furthermore, the
fact that the fair compensation applies in addition to any other sum that the author or performing
artist might receive under a contractual arrangement may affect the current contractual practice of
some exploiters, like film and broadcast producers, and not always to the advantage of the author or
performer. Indeed, it is not uncommon in this branch for authors and performing artists to be paid
on the basis of a buy-out-contract. According to this remuneration scheme, the producer pays
authors and performers receive a lump sum, which allows him to calculate his risks accordingly.
With the introduction of article 32, the producer may be caught in a situation where he can no
longer assess the risk in a reasonable manner as he does not know what the authors and performers
participating in the production of the work will claim as their fair compensation in the future years in
addition to the already paid contractual remuneration. As a consequence, producers will probably
lower the basic contractual remuneration paid to authors and performers, letting them share the risk
of the production, which may ultimately have a negative impact on their financial position.311
The new German Copyright Act also introduces, at article 36, unique provisions on collective
bargaining, also known as ‘overall agreements’, according to which associations of authors or
performers may conclude general agreements with associations of exploiters regarding rules of
remuneration. The law encourages therefore the parties to negotiate collective agreements. It
follows in this sense the American example, where groups of authors and performing artists and
groups of exploiters successfully negotiate collective agreements, also known as Guild Agreements, on
the conclusion of exploitation contracts.312
These ‘overall agreements’ will contain certain ‘common
remuneration rules’ building the basis for the single contracts with authors and performers.313
Where
the parties fail to reach an agreement, articles 36 and 36a also set up an arbitration procedure open
to all parties, for the determination of a fair compensation. German copyright law further sets out a
number of specific instances where authors must receive a fair remuneration. According to the
wording of article 22(1) of the Publishing Act, there exists an implied obligation of the user to pay
remuneration if, ‘under the circumstances, the delivery of the work could not be expected except for
payment’. If the amount of payment is not specified, the parties are presumed to have agreed to ‘an
appropriate payment in money’ (article 22(2)). Where the compensation is fixed in accordance with
the number of copies sold, the publisher shall render annually to the author an account for the
preceding business year, and shall permit the inspection of the books of his firm, so far as is
necessary for the examination of such account. Article 86 of the German Copyright Act states that
‘if a published audio recording on which a performance has been fixed is used for public
communication, the producer of the audio recording may claim from the performer a fair
participation in the remuneration which the performer receives pursuant to Article 76(2) and Article
77’.
309
This provision is aimed to allow the ‘open source licensing’ phenomenon. See: Lenselink 2002, p. 36.
310
Schippan 2002, p. 172.
311
Ibid.
312
Lenselink 2002, p. 36.
313
Schippan, p. 173.
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4.4.5.2 ‘Best-seller’ clause
Until recently, the principle known as the ‘bestseller clause’ was laid down in article 36(1) of the
German Copyright Act. According to this principle, if an author had granted an exploitation right
on conditions which caused the agreed remuneration to be grossly disproportionate to the income
from the use of the work, the user could be required, at the demand of the author, to assent to a
change in the agreement ‘such as will secure for the author a fair share of the income having regard
to the circumstances’. This claim expired two years from the time the author obtains knowledge of
the circumstances that gave rise to the claim or after ten years, irrespective of such knowledge
(article 36(2)). Authors could not waive or renounce (“verzichtet”) this claim in advance (article 36(3)).
In practice, this clause has never been of great importance, because the courts were too reluctant in
the factual circumstances presented to them to find the existence of a gross disproportion.314
Moreover, authors of cinematographic works had, according to article 90(2) of the Act, no right to
demand revision of their contract under article 36. Moreover, it was unclear whether performing
artists could invoke the application of article 36(1) of the Act and request the revision of their
contract.
With the adoption of the recent amendments to the German Copyright Act, authors and performing
artists now have the right to request the modification of the copyright contract according to article
32a of the Act. Paragraph one states that where the author grants a right to use under such
conditions that, taking account of the entire relationship between the parties, there exists an obvious
disproportion between the agreed consideration and the proceeds and benefits flowing from the use
of the work, the other party is under the obligation to allow, at the author’s request, the modification
of the contract to ensure a fair participation. Whether the contracting party had or could have
foreseen the amount of the actual proceeds or benefits is irrelevant. Where, as a result of the
contracting party’s transfer of his right to use or further grant of non-exclusive licenses, an obvious
disproportion in the proceeds and benefits of a third party occurs, the author may hold the latter
directly liable as provided in the previous paragraph, but taking the chain of contractual relationships
in consideration. The liability of the initial contracting party falls.315
The author may not renounce
in advance the rights granted under these two paragraphs. The author may not ask for the revision
of the contract under paragraph 32a(1), if the remuneration paid for the use of his work is regulated
under a collective bargaining agreement or a collective wage agreement and expressly provides for
the payment of a fair participation in the circumstances described in the first paragraph. Most
importantly, the provisions of article 32 and 32(a) have been declared mandatory under article 32(b)
of the Act, whenever German law is declared applicable to the contract in the absence of a clause on
choice of law, or when the subject-matter of the contract falls under the scope of the Copyright Act.
4.4.6 Interpretation of contracts
Contrary to the law of a number of other Member States, German copyright law does not follow the
rule ‘in dubio pro auctore’. Article 31(5) of the German Copyright Act codifies the so-called ‘purposeof-transfer’
rule (Zweckübertragungslehre). This provision has been recently modified to add a second
paragraph setting out the factors to consider in the evaluation of the scope of the transfer. It now
reads as follows: ‘If the types of use to which the exploitation right extends have not been
specifically designated when the right was granted, the scope of the exploitation right shall be
determined in accordance with the purpose envisaged in making the grant. Appropriate factors to
consider for the question of whether a right to use is granted, is whether it concerns a simple or
exclusive right to use, how far extend the right to use and the right to prohibit and what restriction
314
Nordemann and Schierholz 1998, p. 93. For case on law this provision, see Dietz 2000, p. 61 (footnotes 60-62).
315
Id., art. 32a(2).
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affect the right to use’.316
According to this rule, if the contractual terms do not specifically
enumerate the uses for which the rights are transferred, the author will not be deemed to have
granted more extensive rights than would be required by the purpose pursued in the transfer at issue.
The application of this rule of interpretation has led to a number of important decisions from the
Federal Supreme Court.317
In the Spiegel CD-ROM case,318
the Supreme Court observed that, thanks
to the ‘purpose-of-transfer’ rule, the copyright powers have the tendency to remain as far as possible
with the author so that the latter can take part in appropriate way in the profits generated from his
work. The Court added that the purpose of transfer rule is not only useful to determine whether the
questionable use concerns an type of use specifically designated when the right was granted, but is
also useful to establish the boundaries of the right to use with respect to a particular type of use.
For a long time, it remained unclear whether the purpose-of-transfer rule applied to contracts
concluded by performing artists. In the absence of an express provision in the German Copyright
Act, the Federal Supreme Court eventually held, in the White Christmas decision,319
that the purposeof-transfer
rule did apply to the transfer of right by a performing artist and that consequently, each
intended use must be explicitly enumerated in the contract. In view of the persisting uncertainty
regarding the interpretation of performers’ contracts, the German legislator has recently amended
the Copyright Act, in order to make article 31(5) of the Act expressly applicable to performing
contracts.320
The Copyright Act provides additional interpretation rules of interpretation, which only apply in case
there is doubt about the scope of rights transferred. Article 37 provides therefore that ‘if an author
grants to another an exploitation right in his work, he shall be deemed in case of doubt to have
retained his right to authorize the publication or exploitation of any adaptation of the work’.
Similarly, if an author grants to another the right to reproduce his work, he shall be deemed, in
doubt, to have retained his right to record his work on video or audio mediums. The same
presumption applies where an author grants to another the right to communicate his work to the
public. In doubt, the licensee is not presumed to be entitled to make the communication perceivable
to the public by screen, loudspeaker, or other similar technical device other than at the event for
which it is intended. Articles 88(2), 89(1), and 92(1) contain special provisions relating to audiovisual
works. The Publishing Act provides in article 4 that a publisher is not entitled to exploit a single
work as part of a collective work, or to exploit part of a collective work as a separate edition.
4.4.7 Effect of transfer in relation to third parties
4.4.7.1 Right to transfer acquired rights
In principle, nothing precludes a transferee from further transferring the acquired rights to a third
party.321
Following the recently modified article 33 of the German Copyright Act, the exclusive
exploitation right and the non-exclusive permission to use remain effective against subsequent
licences of use. The same rule applies, when the rights holder, who has transferred the right to use,
changes or when he has waived his right. According to article 34(1) of the Act, the holder of an
exploitation right may, with the consent of the author, transfer this right or grant non-exclusive rights
316
See Dietz 2000, p. 54 (footnote 34) for relevant case law and also Donle 1993.
317
BGH, 5 July 2001 (Spiegel CD-ROM), AfP 2002/1, p. 35; BGH 131, p. 8 (Pausshale Rechtseinräumung); BGH 137, p. 387 (ComicÜbersetzungen
I).
318
BGH, 5 July 2001(Spiegel CD-ROM), AfP 2002/1, p. 35.
319
BGH, 23 February 1979 (White Christmas), GRUR 1979, p. 637.
320
Gesetz zur Stärkung der vertraglichen Stellung von Urhebern und ausübenden Künstlern, BGBl. I, No. 21, 28 March 2002, p. 1155, art. 14.
321
See: OLG München, 8 February 1996 (Accatone), GRUR 1996/12, p. 972 (the license of television broadcast rights of a film
‘within the territory of the licence’ may be validly transferred to a third party ‘outside’ of that territory).
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84
to use to a third party. However, the author may not unreasonably withhold his consent. An
exploitation right may be transferred without the author’s consent when the transfer occurs in the
context of the sale of whole or part of an enterprise. However, the author is entitled to redeem his
right, if he cannot be expected to agree to the exploitation of his work by the purchaser in good
faith. The author is also entitled to redeem his right if the participation rates of the company owning
his exploitation rights are changed fundamentally (new article 34(3)).322
The rules concerning the right transfer of exploitation rights have been further improved in favour
of the author. The transferee of an exploitation right is thus jointly and severally liable for
discharging the transferor’s obligations pursuant to his agreement with the creator, when the author
has not expressly and individually consented to the transfer of the exploitation right (new article
34(4)). The author may not waive in advance the right to redeem his right nor the liability of the
subsequent acquirer. In all other respects, the holder of the right to use and the author may agree
otherwise (new article 34(5)).323
However, the grant of non-exclusive licenses solely for the
administration of the author's interests does not need the author’s consent (article 35(1)). Articles 34
and 35 of the Act are not applicable to the transfer of the right to produce a cinematographic work
and, after the shooting of the film has begun, to the transfer of the right to make a cinematographic
adaptation of an existing work (new article 90). It is worth pointing out that, although a proposal in
this sense had been made in an earlier draft of the Bill, the protection granted under articles 34 and
35 of the Act has not been extended to performing artists who make a contribution to a
cinematographic work. Finally, until the recent amendments to the German law of copyright
contracts, the Publishing Act provided in article 28(1) that, the rights of the publisher could be
transferred, provided the transfer had not been precluded by stipulation between the author and
publisher. The publisher could not, however, transfer his rights respecting a specific work without
the consent of the author. Consent could only be refused for an important reason and would be
considered given if the author had not reacted within two months after the publisher’s request. This
provision has been revoked.
4.4.7.2 Standing to sue
Although the German Copyright Act is silent on this point, the Federal Supreme Court has held that
neither the licensee of an exclusive copyright exploitation right, who himself grants an exclusive sublicence,
nor the author of the work in question, when granting exclusive licences, loses his right to
sue, insofar as the former has a personal interest, which is worthy of protection, in prosecution.
This interest can be based on an impairment of his claim to licence fees.324
In addition, article 9(2) of
the Publishing Act provides that the publisher is entitled, as far as is required for the protection of
the right of publication, to exercise the rights provided by the law for the protection of copyright,
against the author as well as against third parties.
4.4.7.3 Right to pledge, secure or seize acquired rights
There is no provision in the German Copyright Act concerning the transferee’s power to pledge,
secure, or seize the acquired rights.
322
Schippan 2002, p. 173.
323
Lenselink 2002, p. 37.
324
BGH, 17 June 1992 (Alf)), IIC 1993/04, p. 539.
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4.4.8 Termination of contract
4.4.8.1 Non-use of rights
Under German law, an author has the right to revoke (‘zurückrufen’) the exploitation right if the
holder does not exercise the right or exercises it insufficiently on the condition that the non-use
causes serious injury to the author’s legitimate interests and is not due to circumstances that the
author can remedy (article 40(1) of the Copyright Act). The author may exercise this right after
expiration of two years from the date of transfer or delivery. In case of a contribution to a
newspaper this period is three months, for periodicals appearing at monthly intervals or less: six
months and for contributions to other periodicals: one year (article 40(2)). The holder shall be
notified and afforded an additional period of time adequate to sufficiently exercise the right (article
40(3)). The author must indemnify the person affected by the revocation if, and to the extent
required by equity (article 40(6)). This right may not be waived in advance and its exercise may not
be precluded in advance for more than five years (article 40(4)). A number of contributors to a
cinematographic work do not have this right of termination (article 90).
Article 17 of the German Publishing Act provides that the author may rescind the contract if the
publisher does not exercise his right to publish a new edition after expiration of an appropriate term.
According to article 32, the author may rescind the contract if the work is not exploited in the
manner stipulated in the contract. Article 35(1) states that until multiplication has begun, the author
is entitled to rescind the contract of publication when circumstances arise which could not have
been foreseen at the time of making the contract, and which would have kept the author from
publishing the work if he had known the facts and reasonably evaluated the case. Where the
publisher is authorized to issue a new edition, the foregoing provisions shall apply mutatis mutandis.
Where the author rescinds the contract in accordance with the provisions of subsection (1), he must
compensate the publisher for expenses incurred by him. Where the author publishes the work
elsewhere within one year from the rescission, he shall be liable for damages for non-fulfilment; but
such liability for damages shall not arise where the author has subsequently offered the publisher to
fulfil the contract, and the publisher has not accepted such offer. The provisions of Section 346 and
356 of the Civil Code, relative to the rescission of contracts, shall apply to the right of rescission
provided in Sections 17, 30, 35 and 36. Where rescission takes place through a circumstance for
which the other party is not to be held responsible, such party shall be liable only in accordance with
the provisions relative to restitution for unjust enrichment. Where a contract of publication is
rescinded after the work has been delivered in whole or in part, the question whether the contract is
to remain in force partially is to be determined by the circumstances. It is in principle immaterial
whether the rescission takes place on the basis of the statute or in pursuance of a reservation in the
contract. In case of doubt, the contract remains in force in so far as it related to copies, which are
no longer within the control of the publisher, as well as to former instalments of the work, and
previous editions. If the contract remains in force, the author may claim a proportionate part of the
payment. These provisions also apply where the contract is rescinded in some other manner.
Finally, article 45 gives the author of a contribution the right to terminate the contract if his work is
not exploited within one year from the date it was delivered to the publisher.
4.4.8.2 Bankruptcy of exploiter
Article 36(3) of the German Publishing Act provides in that the author may rescind the publishing
contract, if, at the time of commencing the bankruptcy proceedings, the reproduction had not
begun.
Final Report
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4.4.8.3 Other circumstances
Article 42 of the German Copyright Act provides that the author may revoke an exploitation right if
the work no longer reflects his conviction. The author must equitably indemnify the holder of the
exploitation right. Certain contributors to a cinematographic work do not have this right (article 90).
The Publishing Act describes in article 18, 30 and 31 three circumstances that give the publisher the
right to terminate the contract. These circumstances are: the purpose that the work was to serve
ceases to exist; the work is not delivered in due time; or, the work is not of the nature stipulated in
the contract. An author has the right to terminate the publishing contract until the moment the
multiplication of the first or a new edition has begun, when circumstances arise which could not
have been foreseen at the time of making the contract, and which would have kept the author from
publishing the work if he had known the facts and reasonably evaluated the case (article 35(1)). The
author has to compensate the publisher and he may not publish the work elsewhere within one year
from the rescission or else he is liable for damages for non-fulfilment (article 35(2)).
4.5 Greece
4.5.1 Ownership of Rights
4.5.1.1 Creator doctrine
Articles 6 of the Greek Copyright Act325
incorporates the creator doctrine, when it states that ‘the
initial holder of the economic rights and the moral rights in a work shall be the author of that work’
and that ‘the above-mentioned rights shall be vested in the author of a work without resort to any
formality’. However, paragraph 10(1) of the Act establishes a rebuttable presumption of authorship
in favour of the ‘person whose name appears on a copy of a work in the manner usually employed
to indicate authorship’. In turn, paragraph 10(2) establishes a rebuttable presumption of ownership
in favour of the natural or legal person whose name or title appears on a copy of a collective work, a
computer program, or an audiovisual work. Article 11 of the Act designates, in relation to third
parties, the publisher of an anonymous or pseudonymous work as the initial holder of the economic
and moral rights in that work. When the true author of the work reveals his or her identity, he or
she acquires these rights in the state that they are as a result of the actions taken by the fictitious
rights holder.
4.5.1.2 Works created under employment
Article 8 of the Greek Copyright Act has been modified in 1997 to provide that the economic rights
in works created by an employee are transferred automatically to the employer in the absence of any
agreement to the contrary and to the extent that the transfer is necessary to achieve the purpose of
the employment contract.
326
In the same direction, article 40 of the Act states that proprietary rights
on computer software developed in the framework of a work contract belong to the employer,
unless otherwise provided by contract327
. However, the latter limitation, which was intended initially
to cover all employees, does not apply to works created in the course of the performance of duties
arising from the employee’s function where the employer is the State or a legal entity governed by
public law. In other words, not only the economic rights ‘necessary to achieve the purpose of the
employment contract’ are transferred to the State or the public entity, but the whole economic
component of the copyright in the work.328
Like the Irish and Spanish Acts, article 38(5) of the
Greek Act provides, with respect to the ownership of photographs published in a newspaper or
periodical, that these cannot be lent or published it in a book or album by the employer without the
employee’s consent. With regard to performers bound by an employment contract, article 46(3)
states that a performer is presumed to authorise all the acts listed in article 46(2), including the first
fixation of his live performance, the reproduction of fixations of his performance, the distribution of
the recording of that performance, and its broadcasting and the communication to the public.
325
Law No 2121/1993 as amended by Laws 2173/93, 2435/1996, 2557/1997, 2819/2000.
326
Act No. 2557/1997, art. 8, par. 17.
327
Kanellos in Copyright software protection in the EC, Kluwer 1993, p. 106
328
Koumantos 2000, p. 18, 19.
Final Report
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4.5.1.3 Works created on commission
The Greek Copyright and Related Rights Act contains no provision regulating the ownership of
works created on commission. One must therefore conclude that, whenever a work is created on
commission, the creator doctrine applies and the actual author is recognised as having the ownership
of the rights on the work thus created.
4.5.1.4 Audiovisual works
Under the Greek Copyright Act, the author of an audiovisual work is its principal director.
Nevertheless, other creators may also be deemed authors of the work. The Act contains a nonexhaustive
list of persons who are considered to be the creators of such contributions: the author of
the screenplay, author of the dialogues, composer of the music, director of photography, set
designer, costume designer, sound engineer and editor.329
According to article 10(2) of the Greek
Copyright Act, in the case of collective works, computer programs or audiovisual works, the natural
or legal person whose name or title appears on a copy of the work in the manner usually employed
to indicate the right holder shall be presumed to be the right holder of the copyright in the particular
work. Article 34(2) of the Act specifies that ‘the contract between the producer of an audiovisual
work and the creators of individual contributions incorporated in the work, shall specify the
economic rights which are transferred to the producer. If the aforementioned provision is not met,
the contract between the producer and the authors of individual contributions, other than the
composers of music and writers of lyrics, shall be deemed to transfer to the producer those powers
under the economic right, which are necessary for the exploitation of the audiovisual work, pursuant
to the purpose of the contract. Where the contributions to an audiovisual work are capable of
separate use, the economic right in relation to other uses shall remain with their authors’. Thus, if a
contract between a producer and an author does not specify the economic rights to be transferred, it
is presumed that only the rights necessary for the exploitation of the work are transferred to the
producer.330
The author of an audiovisual work has the right to receive a separate remuneration for
each form of exploitation of the work (article 34(3)). Article 46(2) provides that performers shall
have the right to authorize or prohibit: (a) fixations of their live performances on a visual or sound
or audiovisual recording; and (b) the direct or indirect reproduction of fixations of their
performances as well as the distribution of the recording via a transfer of ownership, a rental
arrangement or public lending. There is therefore no presumption of transfer of ownership from
the performer to the producer under Greek law.
4.5.2 Forms of transfers of rights
4.5.2.1 Assignment
Greece follows a ‘dualist’ approach, whereby the author’s right is considered to consist of two
separate elements: the pecuniary element, or ‘economic right’, and a personality element, or the
‘moral right’. In dualist systems, economic rights can be freely assigned, either inter vivos or mortis
causa, while moral rights are considered to be inalienable. The same remark also holds true with
respect to the performers’ rights, where the economic element of the right can be assigned, but not
its moral element.
4.5.2.2 Licence
329
Koumantos 1999b, p. 78.
330
Marinos 1999, p. 18.
Final Report
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The author of the work may conclude contracts, by which he entrusts economic rights to the other
contracting party (exploitation contracts). The other party to the contract undertakes the obligation
to exercise the rights thus entrusted. The author of the work may authorize another person to
exercise economic rights (exploitation licenses). Exploitation contracts and licenses may be
exclusive or non-exclusive. Exclusive exploitation contracts and licenses shall empower the other
contracting party to exercise the rights conferred by the contract or license excluding any third
person. Non-exclusive exploitation contracts and licenses shall give the right to the other
contracting party to exercise the rights conferred by the contract or license in parallel to the author
and other contracting parties. In the absence of an agreement to the contrary, the other contracting
party shall be entitled in his own name to seek legal protection against illegal infringements by third
parties of the rights he exercises. In case of doubt, article 13(4) of the Act specifies that the license is
non-exclusive.331
4.5.2.3 Waiver
According to article 12(2) of the Greek Copyright Act, moral rights are not transferable. Article 4(1)
sets out a non-exhaustive list of moral rights, which are: the right of disclosure (article 33(7) and
38(4)); the right of integrity (article 34(1); the right of access to the work; and, the right of withdrawal
of the work from public. The granting of consent by an author for something that would otherwise
constitute an infringement of his moral right is regarded to be a form of exercise of his moral right,
and is binding upon him (article 16). Performers have, during their lifetime, the right to full
acknowledgment and credit of their status and the right to prohibit any form of alteration of their
performances. According to article 50 of the Act, the moral rights of performers are not
transferable but may be waived, just like those of authors.
4.5.3 Requirements of form
In Greece, the transfer of an author’s economic rights must be concluded in writing. The absence
of a written instrument is met with the relative nullity of the contract.332
The same rule applies to a
waiver of moral rights. Article 52(a) provides that ‘agreements concerning performers’ rights shall
be valid legal agreements only when concluded in writing’. It is unclear, however, whether in the
latter case the absence of an instrument in writing leads to an absolute or a relative nullity.333
4.5.4 Restrictions on transfers of rights
4.5.4.1 Limits of scope, time, and place
Under Greek law, article 15(1) states that the transfer of the economic right and exploitation
contracts or contracts licensing the exploitation of that right may restrict the rights they confer, their
scope and duration, the geographical application and the extent or the means of exploitation.
Following article 15(2) of the Greek Copyright Act, if the contract does not fix the duration of the
rights transferred and nothing else derives from conventional usage334
, the duration of the contract is
limited to five years. Similarly, if the geographical application of the transfer or of the exploitation
contract or license is unspecified, the said legal acts shall be deemed to apply to the country in which
they were concluded.
331
However, Koumantos [1996, p. 312] maintains that in case of doubt a licence is to be deemed exclusive.
332
Greek Copyright Act 1993, art. 14.
333
Marinos 1999, p. 23; Koumantos 1996, p. 313.
334
Koumantos 2000, p. 20.
Final Report
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4.5.4.2 Future forms of exploitation
Article 13(5) of the Greek Copyright and Related Rights Act prohibits the licensing of rights for uses
which do not exist or which are unknown at the time of the conclusion of the contract. As
Koumantos explains, the contracts that authors and performing artists conclude to transfer their
rights and to ensure or allow their exploitation should not bind their personality exaggeratedly nor
put a brake on their creativity.335
This would be the case if a contract referred to forms of
exploitation of works that was still unknown at the time of conclusion of the contract and for which
the author was not in a position to assess the economic impact of such a clause. In all likelihood, the
courts could already invalidate such a clause on the basis of article 179 of the Greek Civil Code,
according to which ‘is null, in particular as contrary to the good morals, the juridical act which
excessively hinders the freedom of the person’. During the copyright reform of 1993, the Greek
legislator wanted to make things even clearer and introduced an express provision to this effect in
the Copyright and Related Rights Act. The question of which forms of exploitations are covered by
the contract remains a matter of interpretation however.336
4.5.4.3 Future works
The Greek Copyright Act states in article 13(5) that ‘a contract or license may in no circumstance
confer any total right over the future works of the author’.
4.5.5 Determination of remuneration
4.5.5.1 Proportional remuneration
The copyright reform of 1993 has introduced in Greek copyright law an obligation to pay a
proportional remuneration to the author applicable to all juridical acts concerning copyright, whether
assignments or licences, unless the contract deals with works created under employment, computer
programs or advertisement in any form. Article 32(1) reads as follows:337
The fee payable to the author by the other contracting party to legal agreements relating to the transfer of all or
part of the economic right, the granting of the exploitation or for the exploitation license shall be obligatorily
determined as a percentage, agreed freely between the parties. The computation of the percentage shall be based
on gross revenues without exception or the gross expenditure or on the combined gross revenues and expenditure
realized from the activity of the other contracting party in the course of the exploitation of the work.
Although the intention was commendable, the wording of this provision has raised a lot of criticism.
The prescribed method of calculation is indeed very obscure: it can be either on the gross revenues
without exception or the gross expenditure or on the combined gross revenues and expenditure
realized from the activity of the other contracting party in the course of the exploitation of the
work.338
Commentators wonder what accounting expert would be able to make sense of this rule:
the revenues and expenses may be added, or the expenses may be subtracted from the revenues.
And what are the expenses that derive from the exploitation of the work? In the case of publishing
contracts or of any contract that involves the production of copies, the rule may be easy to apply: the
335
Koumantos 1996, p. 319.
336
Liakopoulos 1999, p. 74 referring to art. 173 and 200 of the Greek Civil Code.
337
Magliveras 1994, p. 304.
338
Koumantos 1996, p. 313.
Final Report
91
remuneration is then based on the sales price of each copy. Outside of these circumstances, like in
the case of public performance contracts, commentators argue that the mode of calculation, as it is
written in the Act, makes the application of the rule impossible.339
The obligatory percentage
arrangement of the fee prescribed in the first sub-paragraph must be implemented in all
circumstances, provided that the Act does not stipulate otherwise, and provided that it does not
concern works created by employees in the execution of the employment contract, computer
programs or advertisement in any form.
Articles 33 to 37 contain detailed rules on the minimum remuneration due to authors of specific
categories of works. Any clause containing less favourable arrangements for the author is
considered null and void (article 39). The question of whether the ensuing nullity is relative or
absolute must be examined in each particular case. 340
In the case of a literary works published in
book form in its original language, the fee payable to the author by the publisher after the sale of
thousand books cannot be less than ten percent of the selling price of all books sold (article 33(1)).341
Where the author’s fee is fixed as a percentage of retail sales, and unless some other method of
monitoring is agreed, each of the copies to be sold is signed by the author. In case of an audiovisual
work, the author is entitled to a separate proportional remuneration for each form of exploitation of
the work (article 34(3)). The film producer has the obligation once a year to give the author of the
work all information concerning the exploitation of the work, in writing, showing him also all
relevant documents. Composers of the music of films that are shown to the public in cinemas have
the right to receive one percent of gross receipts (article 37). Although, the re-broadcasting of a
work by the broadcasting organization does not require consent from the author additional to that
granted for the first broadcast, the broadcasting organization must pay an additional fee to the
author. For the first rebroadcast, unless provided otherwise, the fee must be at least fifty percent of
the fee for the first broadcast, and for each subsequent broadcast, the additional fee shall be twenty
percent of the initial fee (article 35(1)). Writers of playwrights are entitled to receive a minimum of
twenty-two percent of the gross receipts of the performances in state theatres and ten percent for
performances in private theatres. For translations of contemporary international plays, the
minimum fee is set at five percent (article 36).
4.5.5.2 Equitable remuneration
According to article 46bis(3) of the Greek Copyright Act, if the distribution rights on an audiovisual
work are assigned to the producer, the translators of a cinematographic work are entitled to an
equitable remuneration for every use of the work from the distributing organization or those
persons exercising the exploitation rights. This right to remuneration may not be waived (article
46bis(4)). Article 49 states that when sound or audiovisual recordings are used for a radio or
television broadcast by any means, such as wireless waves, satellite or cable, or for communication to
the public, the user must pay a single and equitable remuneration to the performers whose
performances are carried on the recordings and to the producers of the recordings.
4.5.5.3 Lump sum
Article 32(1) (3rd
sentence) of the Greek Copyright and Related Rights Act states that the
remuneration to the author may, by way of exception, be paid as a lump sum,
339
Koumantos 1996, p. 314.
340
Koumantos, 1994, p. 254.
341
Article 33(1)(*) provides examples of literary works. Pocketbook editions are excluded. In case of more than one author, the
percentage is, in accordance with their contribution, spread among them (article 33(3)).
Final Report
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(a) When it is practically impossible to establish the basis for the calculation of a
percentage fee or when there are no means of monitoring the implementation of a
percentage arrangement;
(b) When the expenditure required for the calculation and the monitoring is likely to be
out of reasonable proportion to the fee to be collected;
(c) When the nature or the conditions of the exploitation make the implementation of a
percentage impossible, notably when the author’s contribution is not an essential element in
the intellectual creation as a whole, or when the use of the work is secondary in relation to
the object of the exploitation.
While some of the exceptions listed in this section may be readily justified, for example when there
are no means of monitoring the implementation of a percentage arrangement or when the
expenditure required for the calculation and the monitoring is likely to be out of reasonable
proportion to the fee to be collected, the exception presented in sub-paragraph (a) raises particular
concerns. Indeed, some commentators fear that, considering the obscure formulation of the rule set
out in article 32(1) (1st
sentence) on the proportional remuneration, the exception allowing the
payment of a lump sum when ‘it is practically impossible to establish the basis for the calculation of
a percentage fee’ will become the rule instead of remaining the exception.
In addition, article 33(2) of the Act provides that the fee payable to the author may be agreed as a
lump sum, when the work is any of the following:
(a) Collective works;
(b) Encyclopaedias, dictionaries or anthologies of works of others;
(c) Schoolbooks;
(d) Albums, calendars, agendas, instructional books, printed games and educational
items such as maps or atlases;
(e) Prefaces, comments, introductions, presentations;
(f) Illustrations or photographic material in printed editions;
(g) Non-literary picture books for children;
(h) Luxury editions of a limited number of copies;
(i) Magazines or newspapers.
According to article 38(1) of the Copyright Act, the author has the right to the payment of a fee
equal to half the current fee, in case of a subsequent publication of a photograph in a newspaper,
periodical or other mass medium the author has the right to payment of a fee equal to half the
current fee. Performers retain at all times the right to remuneration for the communication to the
public of their live performances or an illegal fixation of their performances; and, the fixation of
their live performances and the reproduction and distribution thereof (article 46(3) (2nd
sentence)).
Final Report
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4.5.5.4 ‘Best-seller’ clause
There is no provision in the Greek Copyright and Related Rights Act, which expressly gives authors
the right to request a revision of the terms of the contract in case the lump sum paid proves to be
grossly disproportionate in relation to the proceeds generated from the exploitation of the work. In
such a case however, the disadvantaged author or performer could probably claim reparation under
the general rules of contract law, and more particularly, he could probably argue that the gross
disproportion between the remuneration paid and the revenues generated are against public order
and good morals.
4.5.6 Interpretation of contracts
Greek law follows the ‘purpose-of-transfer’ rule, laid down in general terms in article 15(4) of the
Act, and in more specific terms in article 34(1) and (2), which relate to audiovisual works.342
Hence,
article 15(4) of the Greek Act states that if the extent and the means of exploitation which the
transfer concerns or for which the exploitation or the exploitation license is agreed are unspecified, it
shall be deemed that the said acts refer to the extent and the means that are necessary for the
fulfilment of the purpose of the contract or license. Moreover, article 15(3) provides that if the
contract does not specify the geographical reach of the transfer, its reach is limited to rights effective
within the country where the contract was concluded.
4.5.7 Effect of transfer in relation to third parties
4.5.7.1 Right to transfer acquired rights
Under Greek law, a licensee may not transfer any of the rights he has acquired without the consent
of the author (article 13(6)). This rule does not apply in case of works created under employment
(article 8 and 40).343
Article 35(2) provides a similar rule on contracts between authors and
broadcasting organizations. Unless provided otherwise, such agreements do not empower the
organisation to permit third parties to (re)broadcast the work that is the object of the contract.
4.5.7.2 Standing to sue
In Greece, article 13(3) (4th
sentence) of the Copyright and Related Rights Act recognises the right
for the licensee to seek legal protection, in his own name, against infringements by third parties of
the rights he exercises, unless provided otherwise.344
This rule also applies in case of assignment of
rights.345
4.5.7.3 Right to pledge, secure or seize acquired rights
Articles 64- 66 of the Greek Copyright Act allow the transferee to pledge, secure, or seize the
acquired rights in case there is an alleged breach of copyright or neighbouring rights. In such a case,
the First Instance Court may order interim measures such as conservative seizure or the detailed
listing of the infringing material according to articles 687 (1) and 691 (2) of the Civil Procedure
Code. Said provisions also apply to protect the sui generis right existing on databases.
342
Kotsiris, 1996, p. 522
343
Marinos 1999, p. 16.
344
Koumantos 1996, p. 317.
345
See Koumantos, 1994, p. 248.
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4.5.8 Termination of contract
4.5.8.1 Non-use of rights
Under Greek law, the producer is under the obligation to exercise the rights that were entrusted to
him. With respect to exploitation contracts, this obligation is stated in article 13(1)(2nd
sentence) of
the Greek Copyright and Related Rights Act. In case of assignments and exclusive exploitation
licenses, article 15(5) provides that the user shall ensure that, within a reasonable period of time, the
work is accessible to the public via an appropriate form of exploitation.346
According to general
contract law, the author has the right to rescind the transfer of rights if the other party does not fulfil
his obligations.347
4.5.8.2 Bankruptcy of producer
There is no provision in the Greek Copyright Act concerning the right of the author to terminate
the contract in case of bankruptcy of the producer. However, termination may be obtained on the
basis of other provisions of civil or commercial law.
4.5.8.3 Other circumstances
Under Greek law, the author of a literary or scientific work may rescind a contract, if he considers
this necessary for the protection of his personality because of a change in conviction or in
circumstances. The recession takes effect after the author has paid material damages to the
producer. If, after the rescission, the author decides to transfer the right in the work, he must give,
in priority, the former user the opportunity to reconstitute the old contract under similar terms
(article 4(1)(e) and (2)).
346
Marinos thinks that the legislator, in article 15(5), has forgotten to provide an obligation on part of the user to actually use the
granted rights in case of exploitation contracts. Marinos 1999, p. 16.
347
Articles 382-387 Greek Civil Code. Koumantos 2000, GRE-21.
4.6 Italy
4.6.1 Ownership of Rights
4.6.1.1 Creator doctrine
Chapter 2 of the Italian Copyright Act deals with the ownership of rights in a copyrighted work,
including provisions concerning the ownership of collective, derivative, pseudonymous, and
anonymous works. According to article 6, copyright is acquired on the creation of a work that
constitutes the particular expression of an intellectual effort. Articles 7 to 10 establish a presumption
of ownership of rights in favour of ‘any person’ who publishes or performs the collective, derivative,
pseudonymous, or anonymous work respectively. The formulation of these provisions would seem
to suggest that only natural persons could be presumed copyright owners. However, according to
article 11 of the Act, the copyright in works created and published under the name and at the
expense of the State, the provinces, or the communes belongs to them. In the absence of an
agreement to the contrary with the authors of the works published, the same right also belongs to
private legal entities of a non-profit-making character, as well as to academies and other public
cultural organizations, in respect of records of their proceedings and their publications.348
4.6.1.2 Works created under employment
In Italy, the creator doctrine has been set aside with respect to the ownership of three categories of
works created under employment: computer programs, databases and photographs. Under article
12bis of the Italian Copyright Act, the economic rights in a computer program and a database349
created by one or more employees in the execution of their duties or following the instructions given
by their employer are the property of the latter. In practice, there is a cessio legis of the economic
rights. The onus of proving an agreement to the contrary lies with the employee. Thus, in contrast
to the general rule, the burden of proof rests with the author.350
In addition, article 88 of the Act
states that if a photograph is produced in the execution of a contract of employment, the exclusive
right belongs to the employer within the limits of the object and purpose of the contract. Note that
this is true only insofar as the very activity of the photograph is described in the contract of
employment. The Courts accept only a restrictive interpretation of this article.351
4.6.1.3 Works created on commission
In Italy, except for article 88 of the Copyright Act, which grants to the commissioner the ownership
of rights in photographs made on commission, the law is otherwise silent with regard to the
ownership of other categories of works created on commission. Opinions vary as to whether the
commissioning of a work does in itself give rise to a legal presumption of copyright ownership in
favour of the commissioning party.352
There is a similarity with the employee-situation, but the
348
Fabiani 2000, p. 34. It is controversial whether these legal entities also own the moral rights. See Von Münchhausen 1988, p. 78
and footnote 11.
349
Art. 12bis of the Italian Copyright Act was modified by Legislative Decree of 6 May 1999, No. 169 implementing EC Directive
96/9/CE concerning the legal protection of databases, Official Gazette No. 138 of 15 June 1999.
350
Fabiani 1998, p. 100.
351
Corte Cassazione (Supreme Court) 28.06.1980, n. 4094, Corte Cassazione 04.07.1992, n.8186, Corte Cassazione 07.05.1998, n.
4606 and 06.05.1998, n. 4557.
352
According to Fabiani further questions about the vesting, extent and durations of the commissioning party’s rights have been
subject to debate. Fabiani 2000, p. 36.
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96
presumption of ownership is much less strict in the case of a work created on commission.
Nevertheless, the Italian Supreme Court did rule that the commissioner has the right to use the
works ‘within the limits of the object and purpose of the contract. 353
In any case, even if the
commissioner is presumed to be the owner of the rights in a work created on commission, the moral
rights in such work rest with the author.
4.6.1.4 Audiovisual works
Articles 44 to 50 of the Italian Copyright Act contain special rules relating to ‘cinematographic
works’, which are considered to be works in collaboration. It is common opinion that these rules
also apply to other types of audiovisual works, such as television or video works.354
Joint authors of a
cinematographic work are: the author of the subject matter; the author of the scenario; the composer
of the music; and, the artistic director (article 44). The leading opinion among commentators holds
that this list is non-exhaustive, considering in particular that any creative contribution would be
protected under the copyright regime. Article 45 provides a cessio legis of exploitation rights to the
producer. However, the authors of the literary or musical parts may exploit these in any manner,
‘provided no prejudice is caused to the exploitation rights belonging to the producer’. Moreover,
article 18bis states that ‘the author shall have the exclusive right to authorize rental or lending by
third parties’. By contrast, article 84(1) of the Italian Copyright Act states that ‘unless otherwise
agreed by the parties, performers shall be presumed to have assigned the rights of fixation,
reproduction, broadcasting (including communication to the public by satellite) and distribution, and
also the right to authorize rental, on the conclusion of the contract for the production of a
cinematographic or audiovisual work or sequence of moving images’.
4.6.2 Forms of transfers of rights
4.6.2.1 Assignment
Italy follows a ‘dualist’ approach, whereby the author’s right is considered to consist of two separate
elements: the pecuniary element, or ‘economic right’, and a personality element, or the ‘moral right’.
In dualist systems, economic rights can be freely assigned, either inter vivos or mortis causa, while moral
rights are considered to be inalienable. The same remark also holds true with respect to the
performers’ rights, where the economic element of the right can be assigned, but not its moral
element.
4.6.2.2 Licence
Under Italian law, publishing contracts may be exclusive or non-exclusive. But in the absence of a
stipulation to the contrary, it shall be presumed that the rights transferred are exclusive (article
119(2nd sentence). Article 136 of the Italian Copyright Act provides that contracts by which an
author grants the right to perform a work intended for performance in public are, unless provided
otherwise, non-exclusive.
4.6.2.3 Waiver
The Italian Copyright Act recognises four attributes to the moral rights. The first attribute is the
right to attribution of authorship, which is laid down in article 20, and which is applicable to all types
353
Fabiani 2000, p. 37, footnote 22.
354
See: Sordelli, L’Opera dell’ingegno, pp 244, 245. And Greco – Vercellone, I Diritti sulle Opere d’Ingegno, in ‘Trattato di diritto
civile italiano’, red. F. Vassalli, UTET. Se also caseTribunale di Roma, 01.09.1980; and Fabiani 2000, p. 32.
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97
of works. Special provisions apply regarding authors of anonymous and pseudonymous works
(article 21); authors of newspaper articles (article 40); and, authors and performers of works recorded
(article 62). The second attribute is the right to the integrity of the work (article 20) or the
performance (article 81). Exceptions to this right are stated in article 20(2nd
, 3rd
and 4th
sentence)
(works of architecture); article 41 (articles in newspaper); and, article 63 (records). The third attribute
is the right of disclosure (article 111, 112). Fourth, the author enjoys the right to withdraw a work
from the market (article 142, 143). As a principle, moral rights are inalienable.355
However, article
22(2nd
sentence) provides that if the author is aware of and has accepted modifications to his work,
he is not entitled “to intervene to prevent the performance thereof or to demand its suppression”.
4.6.3 Requirements of form
Article 110 of the Italian Copyright Act states that ‘the transfer of exploitation rights shall be set out
in writing’.356
This requirement applies to assignments as well as licenses.357
The requirement of an
instrument in writing for the licence of reproduction is a formality ad probationem, not ad substantiam.358
Publishing contracts should also specify, according to article 122 of the Act, the minimum number
of copies of each edition. If a specified minimum is not provided, the contract is considered null
and void. A further formality consists in the transcription of the transfer in the public registers
maintained by the ‘Public Registry of Protected Works’, a Ministerial Office, as set out by art.104 of
the Italian Copyright Act. For film productions and computer programs the Italian Collecting
Society SIAE maintains a special register, in accordance with article 103 (2) and (4) of the Copyright
Act.
4.6.4 Restrictions on transfers of rights
4.6.4.1 Limits of scope, time, and place
In Italy, the duration of a publishing contract ‘by period’ may not exceed twenty years (article 122). If
a longer term is agreed upon or the contract provides no term at all, than the maximum term of
twenty years applies. If, however, this term has been concluded as an essential clause of the contract,
the contract is considered void (article 1419 of the Civil Code).359
This maximum term does not
apply to contracts concerning certain categories of works. These are: encyclopedias and dictionaries;
illustrations and photographs for industrial use; cartographical works; and, dramatico-musical and
symphonic works, i.e. all works for which the author’s remuneration usually and normally origins
from a relationship of employment or commission, or works for which the market-penetration
involves a considerable amount of time.360
Article 120 provides a rule relating to publishing contracts
and future works. The second paragraph of this article states that, without prejudice to the rules
governing contracts for works made under employment, such contracts may not extend for a term
in excess of ten years. This period is the term within the author is obliged to transfer the rights in the
works to be created to the publisher. After the rights are transferred, the contract can be considered
as a regular publishing contract, subject to the twenty years-term of article 122.361
355
Fabiani 2000, p. 59.
356
See also article 2581 of the Italian Civil Code.
357
Von Münchhausen 1988, p. 165 (footnote 1).
358
Case n. 3463, Corte di Cassazione (Supreme Court), 07.09.1957.
359
Von Münchhausen 1988, p. 180, 181.
360
Fabiani 2000, p. 40, 41.
361
According to the Court of Cassation of May 11, 1959 (nr. 1371). Von Münchhausen 1988, p. 187, 188.
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4.6.4.2 Future forms of exploitation
Article 119(3rd sentence) of the Italian Copyright Act states that ‘future rights which may be
afforded by subsequent laws and which provide copyright protection of wider scope or longer
duration may not be included in the transfer’. 362
The vast majority of the doctrine holds that this
provision protects authors from assigning or licensing their rights with respect to forms of
exploitation that are not yet technically possible at the time of conclusion of the contract.363
The
Courts have also adopted this view.364
4.6.4.3 Future works
Italian copyright law also permits the conclusion of agreements concerning the transfer of rights in
future works. Article 120 sets out three rules relating to future works and publishing contracts. First,
any such contract is null and void if it concerns all the works or all the works of a certain category
that the author may create, without limitation in time. Secondly, without prejudice to the rules
governing employment contracts and contracts for services, such contracts may not exceed ten
years. If the work to be created has been specified, but the delay within which such work must be
delivered has not been determined, the publisher may at any time request the court to fix such term.
If a term has been set, the court may extend it.365
4.6.5 Determination of remuneration
4.6.5.1 Proportional remuneration
In Italy, article 130 of the Copyright Act provides that in case of publishing contracts the author's
remuneration consists of a share of the proceeds, calculated, unless otherwise stipulated, as a
percentage of the retail price of the copies sold. If the contract does not provide a proportional
remuneration, the publishing contract is void.
366
However, if the contract does not contain any
provision with regard to a possible exclusion of the remuneration and nothing on this subject is
mentioned, the author maintains the right to the share he normally applies on similar works.367
With
respect to the remuneration paid under a publishing contract, the retail price is set by the publisher,
after having given the author sufficient notice. The author may object to the price set or altered by
the publisher if it would gravely prejudice the interests of the author or the dissemination of the
work. With respect to audiovisual works, the Italian Copyright Act provides in article 46 that the
authors of the music and the lyrics are entitled to receive separate remuneration directly from
persons publicly showing the work. Authors of the subject matter and the scenario and the artistic
director are entitled to receive, if they do not receive a proportional remuneration, additional
remuneration when the level of receipts agreed upon is reached.
4.6.5.2 Equitable remuneration
In Italy, article 46bis(1) of the Act states that where the distribution rights are assigned to the
producer, the authors of cinematographic or assimilated works are entitled to equitable remuneration
362
Von Münchhausen 1988, p. 49 (footnote 6) ; Fabiani 2000, p. 44, 45.
363
Cian-Trabucchi, Commentario breve della concorrenza, CEDAM, Padua 1997 and Piola Caselli, Codice del Diritto d’Autore,
1927, Turin.
364
Corte di Cassazione, case n. 2621, 10.11.1961.
365
In these cases the contract term may extend ten years. Von Münchhausen 1988, p. 188.
366
Article 1419 CC. Von Münchhausen 1988, p. 250.
367
Greco-Vercellone II, p. 287-288
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from the distributing organizations for every use of the work that takes the form of communication
to the public by electromagnetic waves, cable or satellite. For every use of cinematographic or
assimilated works that is different from that provided for in paragraph (1) above and paragraph (5)
of Article 18bis, the authors of the said works are entitled to equitable remuneration from those
exercising the exploitation rights for each separate act of exploitation. Authors are also entitled to
receive equitable remuneration for every use of cinematographic or assimilated works of which the
original language is not Italian. This right to equitable remuneration may not be waived. Moreover,
article 88 provides that photographs created on commission belong to the commissioner of the
work, subject to the payment of equitable remuneration to the photographer by any person who
commercially utilises the reproduction.
4.6.5.3 Lump sum
According to article 130 of the Italian Copyright Act, a lump sum payment is allowed with respect to
publishing contracts in case of works produced in collaboration, translations, articles in newspapers
and magazines, speeches or lectures, scientific works, cartographical works, musical or dramaticomusical
works, and, works of figurative art.
4.6.5.4 ‘Best-seller’ clause
There is no provision in the Italian Copyright Act, which expressly gives authors the right to request
a revision of the terms of the contract in case the lump sum paid proves to be grossly
disproportionate in relation to the proceeds generated from the exploitation of the work.
4.6.6 Interpretation of contracts
According to article 119(5th sentence) of the Italian Copyright Act, ‘in the absence of an agreement
to the contrary, the transfer of one or more of the exploitation rights shall not imply the transfer of
other rights which are not necessarily dependent on the right transferred, even if they are included
(…) in the same category of exclusive rights’.368
4.6.7 Effect of transfer in relation to third parties
4.6.7.1 Right to transfer acquired rights
Under Italian law the publisher is not allowed, unless otherwise provided, to transfer the acquired
rights to a third party without consent of the author (article 132).369
Although consent is not
required if the transfer occurs as part of the transfer of the publisher’s enterprise, the publisher may
not transfer the acquired rights if this were prejudicial to the reputation of the author or to the
dissemination of the work.370
The author’s consent is also required in case of transfer of a license.371
Article 136 provides that a contract by which an author grants the right to perform a work in public
is, unless provided otherwise, not transferable and non-exclusive.
368
Corte d’Appello di Milano (Milan court of Appeal), 21.05.1985
369
The same rule applies in case of transfer of the publishing contract (article 1406 CC).Von Münchhausen 1988, p. 258.
370
It is controversial whether this rule also applies in case of partial transfer of the publisher’s enterprise. Von Münchhausen 1988, p.
259, 260.
371
Von Münchhausen 1988, p. 263.
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4.6.7.2 Standing to sue
There is no provision in the Italian Copyright and Related Rights Act (explicitly) concerning the
assignee’s or the licensee’s standing to sue for copyright infringement. Nevertheless, the doctrine
extends the rules concerning the assignment of rights to the grant of licences. More specifically, the
doctrine considers that article 20 and 165 of the Copyright Act are applicable to licences: the author
maintains his right to protect his rights against infringements even when the action is initiated by the
licensee or the assignee.372
4.6.7.3 Right to pledge, secure or seize acquired rights
Article 111 of the Italian Copyright Act states that the right of publication of an intellectual work
and the exploitation rights of a published work, insofar as they belong personally to the author, may
not be the subject of any pledge, seizure or sequestration, either by contractual act or by way of
forced execution. Copies of the work and the proceeds of exploitation may, on the other hand, be
the subject of a pledge, or be seized or sequestered, in accordance with the Code of Civil Procedure.
4.6.8 Termination of contract
4.6.8.1 Non-use of rights
The Italian Copyright Act allows the termination of a contract for non-use of rights with respect to
newspaper and magazine articles, audiovisual works and publications. Article 39 of the Act deals
with articles sent to magazines or newspapers. If, in the absence of a prior contractual agreement, a
person who is not a member of the editorial staff sends an article to a magazine or newspaper, she
may recover the right to dispose of it unrestrictedly if she does not receive notice of acceptance
within one month of sending the article or, if it is not reproduced, within six months of the notice of
acceptance. If the article is furnished by a member of the editorial staff, the director of the magazine
or newspaper may defer reproduction beyond the mentioned periods. However, once a period of six
months as from delivery of the manuscript has expired, the author shall be entitled to utilize the
article for reproduction in a volume or as an offprint in the case of newspaper, and also in any other
periodical in the case of a magazine. Article 50 states that if the producer of an audiovisual work
fails to complete the work within a period of three years from the delivery of the literary or musical
parts, or does not show the completed work within three years from its completion, the authors of
those parts shall be entitled to dispose of the part of the work representing the very contribution
itself without restriction. As a result, the producer does not loose his right – as a matter of fact, he
remains entitled to dispose of the contribution in question but he simply looses the exclusivity of
this right.
Articles 124, 127 and 128 of the Italian Copyright and Related Rights Act concern publishing
contracts. According to article 124, the publishing contract terminates in case the publisher has
stated that he does not intend to proceed with a new edition or if he does not do so within a period
of two years from the notification of such declaration. The author is entitled to damages for the
failure to make a new edition, unless the publisher shows a valid explanation.373
Article 127 provides
that the publication or reproduction of the work must take place within the period laid down in the
contract, which may not exceed two years from the date of delivery to the publisher of the work. If
no period is agreed upon, publication or reproduction of the work must take place within two years
following a written request to the publisher. This maximum period does not apply to collective
372
V.M De Sanctis – M. Fabiani, ‘I contratti nel Diritto d’Autore’ Giuffrè, Milano 2000.
373
Von Münchhausen 1988, p. 246, 247.
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101
works. If the work is not published within the agreed period, the author is entitled to terminate the
contract. Courts may grant the user an extension of time. However, this extension may not exceed
one half of the above-mentioned period and is subject, where necessary, to a suitable guarantee
(article 128). The court is entitled to set a shorter period if justified by the nature of the work or by
any other special circumstances. The provisions of Articles 127 and 128 also apply to performancecontracts
(article 139).374
Fourth, article 140 provides another rule relating to performances. In case
the user fails to continue to perform the work after a first (cycle of) performance(s), the author of
the musical or literary part who proves that the user is at fault is entitled to request the termination
of the contract.
4.6.8.2 Bankruptcy of the publisher
Under Italian law, as a rule, the bankruptcy of the publisher does not bring about termination of the
publishing contract (article 135 together with article 83 Bankruptcy Law n. 267). However, the
publishing contract terminates if the liquidator, within one year of the declaration of bankruptcy,
does not continue the activities of the publishing business or does not transfer it to another
publisher. The judge normally excludes the applicability of this norm to phonographic
reproductions. When bankruptcy of a phonographic producer occurs, articles 72 and 74 Bankruptcy
Law are applicable and all the different contributions can be sold.
4.6.8.3 Other circumstances
Article 134 of the Italian Copyright Act lists a number of circumstances under which a publishing
contract may be terminated. The most important are the expiration of the contractual period, the
death of the author before completion of the work, the impossibility to exploit the work by reason
of a judicial decision or a provision of law, and the lack of success of the work. The
unsuccessfulness of the work may only result from the work itself, and not from the publisher’s
failure to fulfil his duties towards the author. In principle, this ground to terminate the contract may
be invoked twenty-four months after the first edition, or eighteen months after a subsequent edition
is published.
375
The accidental loss of the original work, provided the impossibility to retrieve it or
substitute it is another valid reason for the termination of the contract. A possible financial
aggravation on the side of the producer or the occurrence of economic problems does not constitute
a valid cause of termination.376
374
The period referred to in the second paragraph of Article 127 is increased to five years in the case of dramatico-musical works.
375
Von Münchhausen 1988, p. 274, 275.
376
Corte d’Appello di Bologna 27.04.1976, IDA 77, 219.
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4.7 Spain and Portugal377
4.7.1 Ownership of Rights
4.7.1.1 Creator doctrine
The Spanish and Portuguese Copyright Acts contain somewhat diverging provisions concerning the
creator doctrine and the initial ownership of works, such as collective works, where the creator
doctrine would seem to play a greater role in Portugal than Spain. Article 8 of the Spanish Texto
Refundido de la Ley de Propiedad Intelectual (TRLPI) provides that, in the absence of agreement to the
contrary, the rights in a collective work vests in the person who publishes it and discloses it in his
name.378
According to Bondía Román, this provision does not mean that a legal entity may claim
authorship by virtue of the fact that the collective work was published under its name.379
Moreover,
the natural persons who participate in the creation of a collective work may reserve their rights, in
which case the rights in the collective work will vest in them. In this commentator’s opinion, article
8 of the TRLPI ‘confines itself to conferring the rights in a collective work, in the absence of
contractual agreement, without going into considerations as to who owns the rights initially, this
being the authors of the various contributions forming the collective work’.380
In droit d’auteur systems like the Portuguese one, the principle of authorship or Urheberschaftsgrundsatz
or Schöpferprinzip is a fundamental principle. Under the Portuguese Copyright
Code, the author is thus the creator of the work; legal persons cannot be assimilated to authors,
despite the strict wording of some provisions.381
According to well-established case law, the creation
of the work is the only ‘constituting factor’ for the grant of author’s rights. Examples of collective
works recognized by the jurisprudence are not only newspapers and other periodicals, but also
encyclopaedias, dictionaries, painting albums. Their typical characteristic is the coordination of the
contributions of several authors within an undertaking.382
Following article 19 of the Code,
collective works are not to be understood as an exception to the creator doctrine. Rather, it must be
interpreted in restrictive terms, according to which it only provides for a legal assignment (cessio legis)
of the economic rights. Furthermore, it could be added that computer programs and databases
created within an undertaking are deemed to be collective works (see Art 3(2) of Decree-Law n.
252/94 of 20 October; Art. 5(2) of Decree-Law n. 122/2000 of 4 July).
4.7.1.2 Works created under employment
Paragraphs 51(1) to (3) of the Spanish TRLPI provide that, unless a written employment contract
states otherwise, the economic rights are presumed transferred to the employer, to the extent
necessary for the exercise of the customary activity of the employer.383
However, in no event may
the employer exploit the work in a manner or for purposes different from those deriving from the
377
The Institute for Information Law wishes to thank Mr. Alexandre Dias Pereira (Portugal) and
378
Spanish Copyright and Related Rights Act, art. 8; and Portuguese Copyright and Related Rights Act, art. 19.
379
Bondia Roman 1997, p. 14.
380
Id., p. 16.
381
Dias Pereira 2001, p. 274 et seq. “§ 27. Autoria e Titularidade”.
382
See for example: Decision of the Supreme Court of Justice (STJ) of 14 December 1995, in CJ, Year XX, III, p. 163.
383
According to art. 51(4) of the Spanish Copyright and Related Rights Act, “the remaining provisions of this Law shall apply
mutatis mutandis to the aforesaid assignments insofar as the purpose and subject matter of the contract so determine”. This
paragraph seems to presuppose a written contract. In all probability, the rule means that fundamental principles of the Spanish
Copyright Act relating to transfer of rights also apply in case of transfer of rights from the author to his employer. Bercovitz and
Bercovitz 2000, p. 33; Dietz 1990, p. 72
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customary activity of the employer. Like in Ireland, article 52 of the Spanish Act provides that the
authors of works reproduced in periodical publications retain, in the absence of contractual
stipulation to the contrary, their right to make use of those works in any form that does not
prejudice the normal exploitation of the publication in which they have been inserted. With respect
to computer programs, paragraph 97 (1) grants the authorship, and thereby the initial ownership, to
the person or group of natural persons who has created the computer program, or to the legal
person designated as the rights holder in the circumstances expressly defined by the Act. By
granting authorship of a computer program to a legal entity, this provision departs from the creator
doctrine recognized in other sections of the Spanish TRLPI.384
The breach made in the general
intellectual property system is a significant one, which commentators find all the harder to explain
that it was not imposed by the Computer Programs Directive.385
In compliance with paragraph 2(3)
of the Directive however, paragraph 97(4) of the Spanish TRLPI provides that, unless otherwise
agreed, the ownership of the exploitation rights in the computer program created by an employee in
the course of duties entrusted to him or following instructions from his employer belongs
exclusively to the employer, including the source and the object codes. In the case of a performance
made under an employment contract, article 110 of the Spanish TRLPI establishes a presumption
according to which the employer acquires the right to reproduce and communicate to the public the
performance realised by the employee.
Article 14(1) of the Portuguese Copyright and Related Rights Code states that the ownership
(‘titularidade’) of the copyright in a work created ‘on behalf of another person, either in fulfilment of
official duties or under an employment contract’ must be determined on the basis of the agreement
concluded between the parties. In the absence of an agreement, the employee is presumed to own
the copyright in his work, unless the work is published without indication of the name of the
creator.386
Article 15 provides that the employee who owns copyright may, however, not make use
of the work that prejudices the purposes for which it was produced. The moral rights always remain
with the creator.
387
However, paragraph 2(3) of the Computer Programs Directive has been
incorporated at article 3(3) of the Implementation Act, which states that ‘when a computer program
is created by an employee in the exercise of its functions, or following instructions from the
employer, or on commission, the rights in the program belong to the employer, unless there a
stipulation to the contrary or unless the nature and object of the contract dictate otherwise’.388
The
same rule has been made to apply to databases created under employment.389
Article 165 contains a
special rule with respect to photographic works. According to this provision, the copyright belongs
originally to the employer and the author is entitled to an equitable remuneration when the
photograph is used for commercial purposes. It’s not undisputed whether the provisions regarding
software, databases, and photographs created under employment provide an exception to the creator
doctrine. Some commentators argue that these are cases of cessio legis, since legal persons cannot
have the initial ownership of ‘copyright’, because they cannot be creators of works. The Software
and Databases Directives do not require such a «copyrightalisation» of the Portuguese system; on
the contrary, they clearly leave room for the creator doctrine.390
The same remark has been made
with respect to article 174 of the Portuguese Code, which establishes a special regime for journalists,
making a distinction between freelancers and salaried journalists. Article 174 grants to freelance
journalists the ownership of rights on their individual works, including texts, sounds, images, or
384
Rodríguez Tapia and Bondía Román 1997, pp. 36-37, 47-48, and 357-361; Delgado 1996, p. 124.
385
Bondía Román 1997, p. 10.
386
Portuguese Copyright and Neighbouring Rights Code, art. 14(2) and (3).
387
Rebello 1986, p. 18.
388
Decreto-Lei No. 252/94, 20 October 1994.
389
Decreto-Lei No. 122/2000, 4 July 2000, art. 5(3).
390
Dias Pereira 2001, pp. 492 et seq.
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drawings, while such right is granted to salaried journalists, only if their works are signed. If the
works are not signed, then the ownership is presumed transferred to the enterprise.391
4.7.1.3 Works created on commission
In Spain, commentators392
and the relevant case law393
hold that there is no presumption of transfer
of rights that derives from the commission of a work alone.394
However, the transfer of rights can
be explicitly stipulated in the commissioning contract, or it can be implicitly inferred from it taking
account of its nature and its purpose. Indeed, in the case of a work created on a commissioned
basis, like a computer program, the author does not have a relationship of dependence with the
person who commissions it and the service concerns only a particular creation. Considered as
contracts for services, contracts for the commission of a work are subject to articles 1588-1600 of
the Spanish Civil Code. Under such a contract for services, the author undertakes to deliver the
work and possibly, if provided in the contract, to assign certain exploitation rights.395
In any case, it
is generally accepted that in application of the principle of good faith, the commissioning party
acquires at least the right to use the work, even if there is no provision to this effect in the contract.
Thus, unless the commissioner obtains a transfer of copyright on the work he has commissioned, he
will only acquire the tangible property of the work (and, of course, the right to ‘use’ it), but no
exploitation rights on it. This may be ‘solved’ by means of art.1258 of the Civil Code :
Art.1258 CC : « Los contratos se perfeccionan por el mero consentimiento, y desde entonces obligan no sólo al
cumplimiento de lo expresamente pactado, sino también a todas las consecuencias que, según su naturaleza, sean
conformes a la buena fe, al uso y a la ley. »
A contract obliges not only to what has been expressly agreed, but also to ‘all other consequences which,
according to their nature, are according with good faith, custom and the law’.
It could be argued that despite the fact that no licence of exploitation rights was agreed upon when
commissioning the work, such a license should be inferred from it because it is the custom and it is
fair (in good faith) to expect that the commissioner will not only acquire the property of the work
but also (at least, some) exploitation rights on it. So far, there is no case law applying art.1258 to
maintain the existence of a copyright license.
With respect to the ownership of performances made on commission, article 110 of the Spanish
TRLPI is more explicit. It states that ‘where the performance is given in compliance with an
employment or commission contract, it shall be understood, unless otherwise specified, that the
employer or commissioning party acquires therein such exclusive rights to authorize reproduction
and communication to the public as are provided for under this Title and may be deduced from the
nature and subject of the contract’.
In Portugal for example, article 13 of the Code declares that ‘any person who has in any way either
totally or partially subsidized or financed the preparation, conclusion, disclosure, or publication of a
work shall not thereby obtain any of the powers derived from the copyright, unless there is written
agreement to the contrary.’ Consequently, the ownership of the copyright in a work carried out on
commission must be determined on the basis of an agreement concluded between the parties. In
the absence of any agreement, it shall be deemed that ownership of copyright in a work carried out
391
Rebello 2001, p. 227.
392
Rodríguez Tapia and Bondía Román 1997, p. 251-252.
393
Sentencia del Tribunal Supremo de 12 de diciembre de 1988.
394
The more reason to be surprised with the presumption of transfer provided for commissioned performances in art. 110.
395
Bondía Román 1997, p. 48.
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on behalf of another person belongs to the intellectual creator. However, where the name of the
creator is not mentioned in the work or is not shown in the customary place, it shall be deemed that
the copyright remains the property of the person or entity on whose behalf the work is carried out.396
In rare cases however, the ownership of specific works created on commission has been awarded to
the commissioner of the work instead of to its physical creator. The qualification under the Civil
Code of a commissioning contract is disputed. Case law of the Supreme Court has balanced from a
contract for work to a sui generis services contract.397
However, the nature of the contract has no
influence on the ownership of rights, since the provisions of the Copyright Code are to be
considered, in systematic terms, as special rules.
4.7.1.4 Audiovisual works
Article 87 of the Spanish TRLPI contains an exhaustive list of co-authors of audiovisual works,
which are the director, the authors of the script, the adaptation, the scenario, and the dialogue, and
the musical compositions.398
Article 88 establishes a presumption according to which the author
assigns to the producer, by signing an audiovisual contract, the exclusive rights of reproduction,
distribution, and communication to the public, as well as the rights of synchronization or subtitling
of the work.399
Only as far as cinematographic works are concerned, this presumption does not
include the right to distribute copies of the work for use within the family circle or broadcasting
(article 88(1)(2nd
sentence).400
Furthermore, authors of audiovisual works may make use of their
individual contributions separately, if this does not prejudice the normal exploitation of the
audiovisual work and absent provisions to the contrary (article 88(2)). The same rules apply to
contracts with authors of pre-existing works incorporated in the audiovisual work (which are denied
co-authorship status on the audiovisual work), although such authors retain their right to graphic
publication or stage performance of the work and they, in any event,401
may make use of the work
for any other audiovisual work after a period of fifteen years (article 89(2)). Article 109 provides,
with respect to performers, that where the performer, either individually or with others, concludes
contracts with a producer of audiovisual recordings, for the production of such recordings, it shall
be presumed that, unless otherwise agreed in the contract and subject to the unwaivable right to the
equitable remuneration (…), he has transferred his rental rights’.
396
Portuguese Copyright Code, art. 14(1) to (3).
397
See Ac. STJ, 3.11.1983, in: BMJ n° 331, 1983, p. 489; Ac. de 2.2.1988, BMJ n° 374, 1988, p. 449.
398
Müller 1997, p. 12.
399
It is interesting to mention one possible “mishap” between this presumption of transfer in favour of the producer and the
exploitation rights granted to the producer of an audiovisual recording under art. 120. It is true that according to the EU
Directive definition, an audiovisual recording does not necessarily incorporate an audiovisual work. However, arts. 120 et ss.
grant the audiovisual producer several exploitation rights on the recording (basically, reproduction, public communication and
distribution), regardless of whether that recording incorporates an audiovisual work or not. As a result, this premise holds
impossible when the recording incorporates an audiovisual work and the producer has not been granted any exploitation rights
by the audiovisual authors (or at least, the rights presumed to be transferred by virtue of article 87) on the audiovisual work, or
also (though quite unlikely) when the producer of the audiovisual work and the producer of the audiovisual recording do not
coincide. In other words, when the recording incorporates an audiovisual work, the rights granted to the producer of the
audiovisual recording by the provisions in these arts. 120 et ss. will depend upon the same rights (this time, on the audiovisual
work) having been transferred to him by the audiovisual authors (notice that the author of the pre-existing work upon which the
audiovisual work embodied in the recording is based, should also be taken into account -see article 88); otherwise, they will be
completely ineffective.
400
Paragraph 2 in article 88.1 is specially, and exclusively, intended for cinematographic (theatrical) works later exploited on
television or by means of video copies; co-authors must expressly consent to any of this kind of exploitation, though nothing
forbids that such consent be granted in the production contract. The presumption of transfer of rights on an audiovisual work
which is not “cinematographic” (for instance, a TV program or a musical video-clip) will cover the full extent of art. 88.1 (1st
sentence).
401
“in any event” seems to imply that this is not subject to contrary agreement; yet no case law on the issue exists so far.
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In Portugal, copyright in audiovisual works belongs to all those who collaborated therein (article
17(1)). According to article 22 of the Portuguese Copyright Code, authors in this joint work are: the
director and, the authors of the script, the dialogue, the music and the adaptation of a pre-existing
work. Nevertheless, despite the fact that the authors of the script, the dialogue, and the music are
considered by the Code to be authors of ‘audiovisual works’, commentators argue that only the
director is the author stricto sensu of such works. Accordingly, the concept of composite work or
‘Gesamtkunstswerk’ would not apply to audiovisual works. The issue is, however, very controversial.
All these authors are the owners of separate rights on the work (article 20(2)). However,
presumptions laid down in Chapter III, Section IV of the Code give the producer exclusive
exploitation rights to produce copies of, and distribute and project the cinematographic work.
According to article 125(2), where the author has specifically or implicitly authorized the film's
projection, the exercise of the rights of economic exploitation of the cinematographic work shall
belong to the producer. In addition, authorization for cinematographic production shall imply
authorization for the distribution and presentation of the film in cinemas open to the public, as well
as for its economic exploitation by this means, without prejudice to payment of the agreed
remuneration. According to article 140, these provisions apply likewise to works produced by any
process analogous to cinematography. The author’s permission is still required for cinematographic
production (article 124) and for other forms of exploitation, such as broadcasting and video
reproduction (article 127).402
Furthermore, authors of the literary and musical parts may exploit their
parts separately, provided that this does not prejudice the exploitation of the work as a whole (article
135). The authors are entitled to a proportional remuneration for the exploitation of their work
(article 131). The producer is, as stated in article 126: ‘the impresario of the film and the person who
organizes the execution of the cinematographic work, guarantees the necessary means, and assumes
the corresponding technical and financial responsibilities’. He is the representative of the authors in
order to defend their rights. The exclusive rights of the producer lapse twenty-five years after
conclusion of the contract, unless otherwise provided.403
Interestingly, the Portuguese Copyright
and Related Rights Code would seem to contain no specific provision concerning the ownership of
the performers’ contribution to an audiovisual work. One can only assume that such issues as
transfers of exclusive exploitation rights from the performer to the producer occur solely on a
contractual basis.
4.7.2 Forms of transfers of rights
4.7.2.1 Assignment
Spain and Portugal follow a ‘dualist’ approach, whereby the author’s right is considered to consist of
two separate elements: the pecuniary element, or ‘economic right’, and a personality element, or the
‘moral right’. In dualist systems, economic rights can be freely assigned, either inter vivos or mortis
causa,404
while moral rights are considered to be inalienable. The same remark also holds true with
402
Portuguese Copyright Code, art. 125(2), 127 and 128. According to Dietz articles 124 and 127 both use the broad definition of
“author”. This includes not only authors within the meaning of article 22, but also authors of pre-existing works incorporated in
the film. Dietz 1990, p. 63.
403
Portuguese Copyright Code, art. 128(2).
404
By any ‘means recognized in law’, which means wills, legacy, inheritance. The transfer of an author's rights mortis causa is only
allowed as to the exploitation rights (they may be transferred mortis causa either in whole or in part, and they may refer to all the
author's works or to specific works...). Moral rights may only be "exercised" by somebody other than the author after his death,
according to articles 15 and 16. However, there seems to be no reason to exclude the "other" economic rights from being
transferred mortis causa: the remuneration for private copying (article 25) is "unrenounceable" but nothing is said against a transfer
mortis causa. The same may be applied to the remuneration rights for public communication and for rental granted to the authors
of audiovisual works (article 90) which are subject to different treatment (while the remuneration for communication to the
public is expressly "unrenounceable and non-transferable by inter vivos transactions", the remuneration for rental is only
"unrenounceable"), and finally, the droit de suite may be transferred ‘solely by succession mortis causa’ (article 24.3).
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respect to the performers’ rights, where the economic element of the right can be assigned, but not
its moral element.
4.7.2.2 Licence
According to article 48 of the Spanish TRLPI, the licensing of exclusive rights gives the user the
right to exploit the work to the exclusion of any other person, including the author. In the case of
non-exclusive licenses, the user has the right to use the work in competition with other users and the
author (article 50(1)). Article 22 states that a license with respect to a certain work does not prevent
the author from publishing that work in a compilation of his works.
In Portugal, licenses are considered non-exclusive (article 41(2)). However, the licence given by
authors for the production of a cinematographic work, whether it has been specially created for this
form of expression or has been adapted to it, imply the granting of exclusive rights (article 128(1)).
The publishing licence prevents the authors from making or authorising another edition of the work
in the same language until the exhaustion of the first edition or the end of the term of the contract,
unless new circumstances may prejudice the interest of the edition and require the updating of the
work (Art. 88(3)). Contracting parties may, however, stipulate otherwise, and, in any case, the author
keeps the right to contract the complete edition of his works (Art. 103).
4.7.2.3 Waiver
Article 14 of the Spanish TRLPI recognises the following attributes to the moral rights: the right of
disclosure; the right to determine the name under which the work is disclosed; the right of paternity;
the right of integrity; the right to alter the work; the right to withdraw the work from circulation for
reasons of changed convictions; and, the right of access to the sole or a rare copy of the work when
it is in another person's possession, for the purposes of the exercise of any applicable right. In case
of audiovisual works, article 93(1) provides that the moral rights of authors may only be exercised in
relation to the final version of the audiovisual work.405
Article 113 gives the performer the right to
have his name mentioned and to object to any act in relation that might adversely affect his standing
or reputation. Furthermore, this article provides that the express authorization of the performer is
necessary for the synchronization of his performance in his own language. Given that article 14
declares moral rights to be “unrenunceable and inalienable”, they cannot be waived. According to
Bercovitz and Bercovitz, it remains to be seen how the courts will apply this principle.406
In Portugal, according to article 9(3) of the Copyright Code, the author has, independently of
economic rights, moral rights in his work that persist even after their transfer or expiration. In
addition, article 56 states that ‘independently of rights of an economic nature, and even if they have
been assigned or transferred for payment’ the author enjoys the right to claim authorship of his
work407
and the right of integrity.408
These rights are ‘perpetual, inalienable and imprescriptible’. In
405
This provision clearly restricts the authors’ moral rights on the audiovisual work: they can only exercise their moral rights upon
the final version of the work. It means that authors can only object to alterations to the final version, not to alterations of their
contributions before the setting of the final version; yet, no case law exists on the issue, so far. Besides, according to art. 92, the
‘final version’ is decided (and approved) as agreed upon by the director and the producer; this may most likely keep all
contributors (and most co-authors) away from deciding the final version. According to paragraph 2, unless otherwise agreed
upon, the producer may allow any transformation which is ‘strictly dictated by the manner of programming’ the television
broadcast. No case law exists regarding the limits of that definition: does it only mean commercial cuts? or also timecompression,
panning and scanning, etc.?
406
Bercovitz and Bercovitz 2000, p. 54.
407
The right of attribution of authorship is also laid down in the articles 60(3) (right to deny paternity in cases of modified works of
architecture); 97 (publishing contracts); 115(4) and 121(2) (performances and recitation and performance); 134 (audiovisual
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addition, articles 62 and 114 give the author the right to withdraw a work from circulation. Several
authors agree with the opinion expressed by Dietz that the Copyright Code indirectly recognises
authors a ‘right of disclosure’ of their work.409
Like in all Member States, moral rights are intended in Portugal to protect the honour and
reputation of the author as such. This means, for example, that the right to modify the work can be
limited to certain consented modifications, although it cannot be waived.410
On the other hand,
since moral rights are one dimension of the general right of personality (Art. 70 of the Civil Code), it
is acceptable to recognize specific moral rights other than those expressly provided in the Code. In
this sense, most of the moral rights of the Spanish legislation are recognized by doctrine. However,
opinions are not unanimous on this point.
4.7.3 Requirements of form
Under article 45 of the Spanish TRLPI, any transfer of rights must be evidenced in writing. This
does not mean, however, that non-written licenses are not valid. According to article 48, ‘the transfer
of exclusive rights shall be granted with an express statement of that character’. Both articles have been construed
in the sense that written form is only required for exclusive licenses. Thus, a non-exclusive license
may be granted (and valid) without written form. If, after having been formally called upon to do
so, the transferee fails to meet this requirement, the author may choose to terminate the contract. If
the author is comfortable with the non-written form and/or does not wish to terminate (when the
transferee fails to formalize it in writing when required), the license still exists and is valid. The
licensing of rights for each of the various modes of exploitation must also be evidenced in
independent documents (article 57 (2nd
sentence)). According to article 51(1) of the TRLPI, the
transfer to the exploiter of the exploitation rights in a work created under employment must be
made in writing. In the absence of an agreement in writing, it is presumed that the exploitation
rights have been granted exclusively and with the scope necessary for the exercise of the customary
activity of the exploiter at the time of the delivery of the work made by virtue of the said
employment relations. Articles 60 to 63 of the Spanish TRLPI lay down special rules for publishing
contracts. These contracts must be in writing, and establish the modes and dates of distribution and
the proportional remuneration. Any contract that is not made in writing, and a contract that does
not specify the maximum and minimum numbers of copies for each edition (not required for
musical works) and the remuneration to be paid to the author shall be null and void.411
It is not clear
whether it is only the author or also the editor who are legitimated to consider the contract null and
void. It seems that the minimum contents is set to protect the author rather than the publisher, and
therefore, only the former should be allowed to request the annulment of a publishing contract that
does not fulfil it. In case of publication of a work in book-form the contract shall also specify: the
language of publication; where appropriate, the advance royalties to be paid by the publisher; and,
the form(s) of publication. Book publishing contracts must also fulfil some additional minimum
requirements of content (article 62): they must specify the language (failure to state it will only allow
publication in the original language), the amount of any advance payment – if applicable -, and the
works); 142 (phonograms and videograms); 154 (broadcasting); 160(3) (art); 161 (architecture); 167(1) and 168(2) (photographs);
171 (translations and other transformations).
408
The right of integrity of the work is also laid down in the articles 59(1) (in general); 93 (publishing contracts); 115(3) and 121(2)
(performances and recitation of performance); 129(1) (audiovisual works); 146 (phonograms and videograms).
409
Nevertheless, according to Dietz, the articles 7(4), 58, 101(2), 116, 195(2) can be regarded as such. Dietz 1992, p. 14.
410
Dias Pereira 2001, p. pp. 339 et seq.
411
Both the written form and the minimum contents is ad solemnitatem. Other “omissions” may be simply covered either by means of
other articles in the LPI and the circumstances involving the contract (for instance, exclusivity will be decided according to article
48, territorial scope according to article 43.2, manner of distribution according to articles 43.2 and 48); the omission of the time
limits in paragraphs 6 (which does not apply to publishing contracts concerning the works listed in article 63!) and 7 simply allows
both parties to compel each other to rectify it.
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form of publication. When the editor fails to fulfil all publications he contractually agreed upon
within 5 years, the author may ‘partially’ terminate the contract.
Article 106 of the TRLPI grants the performer the exclusive right to authorize the fixing of his
performances, the direct or indirect reproduction of fixations, and the communication of his
performances to the public, except where any such performance constitutes in itself a performance
transmitted by broadcasting or made from a previously authorized fixation. Such authorizations
must be granted in writing. Article 111 of the TRLPI further specifies ‘that Performers who
collectively take part in one and the same performance, such as the members of a musical ensemble,
choir, orchestra, ballet troupe or theatre company, shall designate one of their number to be their
representative for the grant of the authorizations mentioned under this Title. For such designation,
which shall be set down in writing, the majority consent of the performers shall prevail’.
In Portugal, article 41(2) states the rule that a license has to be granted in writing. Article 41(3)
provides that ‘the written authorization must show specifically the authorized form of disclosure,
publication and use, as well as the relevant conditions governing duration, place and remuneration”.
Case law of the Portuguese Supreme Court of Justice holds that the requirement of an instrument in
writing for the licence of reproduction is a formality ad probationem, not ad substantiam.412
According
to article 43(2), the partial assignment of rights requires a written document bearing signatures. Case
law of the District Court of Lisbon states that it is a formality ad substantiam.413
A total and permanent
assignment of economic rights requires a public deed (‘escritura pública’) identifying the work, as well
as the relevant remuneration.
414
Article 109 contains a similar provision with respect to performing
contracts. In addition, article 111 provides that the competent authority shall be given documentary
proof that the author has agreed to its performance. Publishing contracts must also be laid down in
a written document to be valid. The requirement of writing is clearly a formality ad substantiam.
According to article 87 of the Act, the resultant nullity of the lack of instrument in writing is
presumed attributable to the publisher and can be invoked only by the author. Moreover, publishing
contracts must mention the number of editions concerned, the number of copies for each edition,
and each copy's sale price to the public. Article 87 also applies to contracts regarding
cinematographic production or an analogous process, phonographic and video-graphic fixation and
broadcasting.
4.7.4 Restrictions on transfers of rights
4.7.4.1 Limits of scope, time, and place
Under article 43(1) of the Spanish TRLPI, the transfer of the author’s exploitation rights in a work
is limited to the right or rights transferred, to the means of exploitation expressly provided for and
the duration and territorial scope specified. Failure to mention the duration shall limit the transfer
for five years, and failure to mention the territorial scope shall limit it to the country in which it is
effected. Where the conditions governing the exploitation of the work are not mentioned specifically
and categorically, the transfer shall be limited to such exploitation as is necessarily deduced from the
contract itself and is essential to the fulfilment of the purpose of the contract. With respect to
performers, the exclusive transfer of the performance right must be for a maximum of five years
(article 75(1)). However, article 69(3) of the TRLPI provides exceptions to this rule that only apply
to publishing contracts. According to this provision publishing contracts end after a period of ten
years in case of first editions of dictionaries, anthologies, encyclopaedia, annotations, introductions,
412
Ac. STJ, 21/4/88.
413
Ac. RL, 26/3/98.
414
Portuguese Copyright Code, art. 44.
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scientific works, illustrations, translations, and reduced-price popular editions. According to article
69(4) publishing contracts end, in any event, fifteen years after the author has placed the publisher in
a position to carry out the reproduction of the work. It is still unsettled whether the interpretation
rules of article 43 (as to term, territory and means of exploitation) must apply to the presumption of
transfer of art.88 (and alike); it would not make much sense to do so, but there still no caselaw on
the issue. The presumption of transfer may be subject to contrary agreement (granting the producer
more or less rights), and in that case (where there’s an express license) article 43 would clearly apply.
In Portugal, article 68(3) of the Copyright Code proclaims the author’s ‘bestimmingsrecht’ or ‘droit de
destination’, according to which the copyright holder has the right to freely choose the processes and
the conditions of use and exploitation of the work. Article 68(4) proclaims the principle of
autonomy and speciality, according to which the different types of use of works are independent one
from another and the adoption of any of them does not preclude the exercise of the others. In
addition, article 43(3) of the Code requires that the duration, place of exercise and, where payment is
involved, the amount of remuneration, be laid down in the document for each of the rights
transferred. Article 43(4) states that, if an assignment is temporary and no duration has been fixed,
the duration of the assignment is considered to be twenty-five years in general and ten years in the
case of works of photography or applied art.
4.7.4.2 Future forms of exploitation
Article 43(5) of the Spanish TRLPI provides that ‘the transfer of exploitation rights shall not apply
to methods of use or means of dissemination that do not exist or are unknown at the time of the
transfer’. With respect to computer programs created by employees in the course of their duties or
following instructions from the employer, commentators believe that the employer cannot acquire
the rights for forms of exploitation, which do not exist at the time of the assignment.415
Such
acquisition would be contrary to article 43(5) of the TRLPI, which is considered to be applicable to
any transfer of rights, whether by contract or by law.
Article 68 of the Portuguese Copyright Code provides that the use and exploitation of a work can
take place by any means presently known or later developed. The Code contains further no
provision concerning the transfer of rights in relation to unknown or future forms of exploitation.
Some commentators argue that this silence of the legislator could be interpreted in the following
way: concerning licences and partial assignments of rights, such transfers would not be possible
since the law requires that contracts determine the process of use or exploitation (1). However, the
total assignment of rights might be said to naturally include the transfer of rights in relation to
unknown or future forms of exploitation (2).416
4.7.4.3 Future works
Article 43(3) and (4) of the Spanish TRLPI renders null and void any ‘global transfer of exploitation
rights in all the works that the author may create in the future’ and ‘stipulations whereby the author
undertakes not to create any work in the future’. Furthermore, according to article 59(1) of the
TRLPI, future works may not be the object of a publishing contract. Agreements to create works
under employment or on commission in the future are permitted, as would be any transfer of
exploitation rights in a specific work to be created in the future (what is forbidden is the global
transfer of rights in all future works created by an author).417
415
Bondía Román 1997, p. 41.
416
Dias Pereira 2001, pp. 303 et seq.
417
Bercovitz and Bercovitz 2000, p 43.
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In Portugal, the assignment of rights relating to future works is allowed. According to article 48 of
the Copyright Code, the contract for the assignment of rights in future works must provide a time
limit to constitute a valid agreement. The assignment may only apply to works to be produced by
the author within a maximum period of ten years. If a contract concerns works produced over a
longer period of time, its effect is reduced to a maximum period of ten years. Article 85 specifies
that publishing contracts may have as their object one or more existing or future, published or
unpublished works. According to article 104(1), the provisions of article 48 are said to apply also to
publishing contracts. Where the publication of a future work has been agreed to without the
contract specifying the time limit for handing the work over to the publisher, the latter shall have the
right to request the judicial authorities to fix the time limit for this purpose. Subject to valid reasons,
the time limit fixed in the contract may be legally extended at the author's request. The same rule
applies to contracts concerning the exploitation of cinematographic works or works of analogue
process, phonograms and videos, and broadcasting.418
4.7.5 Determination of remuneration
4.7.5.1 Proportional remuneration
Article 46(1) of the Spanish TRLPI lays down the general rule that the licensing of rights entitles the
author to a proportional share in the proceeds of exploitation, the amount of which agreed upon
with the user. Under certain conditions, a lump sum can be agreed upon (article 46(2)). Article 108
(2) provides that the equitable remuneration for the communication to the public which both the
performer and the producer of the phonogram are entitled to will be divided into two equal parts if
they do not agree otherwise. The co-authors, and the authors of a pre-existing work incorporated in
an audiovisual work, which is not of promotional character, have a non-transferable right to receive
a percentage of the proceeds from the person who shows the work in public (article 90(1)). In case
the work is exported, the authors may receive a lump sum (article 90(2)). All the co-authors and the
author of the incorporated work have a right to proportional remuneration for each of the
authorized forms of exploitation (article 90(1)).419
In addition, co-authors and authors of pre-existing
works, are also entitled to remuneration :
- For public communication of the work in public places; remuneration will vary depending on
whether an admission charge is required (in that case, remuneration will be a percentage of the
proceeds) or not (flat fee remuneration). Where the work is exported, the proportional
remuneration may be substituted by a flat fee, also according to article 46. All remuneration for
the communication of works in public places is non-renounceable and non-transferable inter
vivos.
- For rental of copies of the work. This right only accrues when the audiovisual work is embodied
in an audiovisual recording (otherwise, if the work is not recorded somehow, no copies to be
rented may be derived from it). Rental remuneration is also non-renounceable and equitable.
Notice that this second paragraph in article 90 not only states the remuneration for rental, but it
also provides for a rebuttable presumption of transfer of this rental right from the co-authors
(and authors of pre-existing works) to the producer of the audiovisual recording.
All these remuneration rights must be exercised by collecting societies.
418
Portuguese Copyright Code, art. 139(1), 140, 147(1) and 156(1).
419
Thus, complying with article 46. Yet, what is the point of providing for a presumption of transfer, and still obliging parties to set a
remuneration for each means of exploitation transferred?
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According to article 91(2) of the Portuguese Copyright Act, the grant of a license to publish a work
is in principle subject to payment, which may consist of a fixed lump sum, a percentage of the selling
price of each sample, the attribution of a number of samples, or any other remuneration, according
to the nature of the work, or a combination of those modalities of remuneration. The author of a
published work has the right to a minimum remuneration of twenty-five percent of the proceeds
from each copy sold, unless otherwise provided (article 91(3)). This rule also applies to contracts
concerning cinematographic production or analogue process works, phonograms and videograms,
and broadcasting.420
Pursuant to article 108(3) of the Act the transfer of a performing artist’s right
to perform is also deemed to be subject to payment, unless that right is transferred to amateurs.
Article 131 provides that ‘remuneration due to authors of cinematographic works may consist of a
fixed lump sum, a percentage of the receipts derived from the film's projection, a specified sum for
each projection, or any other form agreed upon with the producer’.
If an employee is not the initial owner of the economic rights in the work or if the work is created
outside the responsibility or task entrusted, or if it is used for purposes or generates profits not
foreseen in the agreement on remuneration, article 14(4) of the Code states that the employee is
entitled to special remuneration in addition to the agreed remuneration. Where ownership of the
economic rights belongs to the person on whose behalf the work was carried out, the intellectual
creator shall be entitled to special remuneration, in addition to the agreed remuneration and whether
or not the work is disclosed or published, in the following cases: (a) when the intellectual creation
has been carried out with all due care but clearly goes beyond the responsibility or task entrusted; (b)
when benefits or uses not foreseen in the agreement on remuneration arise.
Article 135 of the Portuguese Code provides that the remuneration of authors of cinematographic
works may consist in a fixed global amount (1), or a percentage of a receipts of the exhibition and a
certain amount for each exhibition (2), or any other form agreed with the producer (3).
4.7.5.2 Equitable remuneration
Under Spanish law, the co-authors and the authors of a pre-existing work incorporated in an
audiovisual work, which is not of promotional character, have a right to remuneration for each of
the forms of exploitation authorized (article 90(1)). As a principle, this remuneration is proportional.
However, if an audiovisual work is shown without admission charge the authors have the right to
collect such remuneration as is appropriate according to the general tariffs laid down by the
corresponding administration entity (article 90(3)). If the parties nevertheless agree to a commission,
the remuneration agreed upon is considered as an advance on the royalties accruing to the author
from publication.
In Portugal, where the author has assigned his right of rental over a phonogram etc to the producer
he is entitled to an unwaivable right to equitable remuneration. In addition, article 144 of the
Copyright Code provides that ‘musical works and corresponding texts that have been the subject of
commercial phonographic fixing without opposition by the author may be fixed anew’. In this case,
the author retains the right to equitable remuneration and, in the absence of agreement between the
parties, the Ministry of Culture determines the fair amount. In relation to photographic works,
article 165(3) states that ‘any person who uses a photographic reproduction for commercial purposes
shall pay the author equitable remuneration’. Authors are also entitled to equitable remuneration on
the basis of their «droit de suite» (Art. 54), as well as for reproductions of works for private purposes
(Art. 82).
420
Id., art. 139(1), 140, 147(1) and 156(1).
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4.7.5.3 Lump sum
Pursuant to articles 46(2) and 52 of the Spanish TRLPI, authors may receive a lump sum
remuneration under the following special circumstances:
• If it is difficult to calculate or verify the proceeds;
• If the use of the work is of minor importance; or
• If the work is used in periodicals and first editions of dictionaries; anthologies;
encyclopaedia; annotations; introductions; presentations; scientific works; illustrations;
translations; and, reduced-price popular editions.
The lump sum contract may be reviewed.421
The authors of an audiovisual work may agree upon a
lump sum if the work is exported and it is impossible or extremely difficult for the authors to
exercise their right to a proportional remuneration effectively in the importing country (article 90(2)).
Article 91 of the Portuguese Copyright and Related Rights Code provides that the grant of a licence
to publish a work entitles the author to proportional or lump sum remuneration or ‘payment on
some other basis, according to the nature of the work, and a combination of such forms may be
used’. Article 110(1) and 131 provide similar rules for performers and authors of cinematographic
works. Article 170 provides that where the publisher, impresario, producer, or other entity uses a
translation for purposes additional to the conditions agreed upon or established in the Code, the
translator shall have the right to additional compensation.
4.7.5.4 ‘Best-seller’ clause
Under Spanish law, article 47 allows the court to review a lump sum contract, if the remuneration is
manifestly out of proportion with the profits obtained by the user. The court is entitled to award an
equitable remuneration in the light of the circumstances of the case. This right may only be
exercised within ten years following the transfer.
Under Portuguese copyright law, the intellectual creator or his successors in title may claim
additional compensation in case there is an evident disproportion between the remuneration
received for the assignment of their rights and the profits earned by the transferee of the rights
(article 49(1)). If nothing is agreed upon concerning the additional compensation, this amount of
compensation is fixed, taking into account the normal results of exploitation of all the author's
similar works (article 49(2)). This right lapses, if it is not exercised within a period of two years from
date of becoming aware of the grave economic prejudice suffered (article 49(4)). For equitable
reasons, the Code also provides a complementary compensation for translators where their work has
been used beyond the licence or the Code (Art. 170).
4.7.6 Interpretation of contracts
The German ‘Zweckübertragungslehre’ has, to some extent, also influenced the adoption of article 43(2)
(2nd sentence) of the Spanish TRLPI.422
This provision states that where the conditions governing
the exploitation of the work are not mentioned specifically and categorically, the transfer shall be
limited to such exploitation as is necessarily deduced from the contract itself and is essential to the
fulfilment of the purpose of the contract. Article 43(2) provides that if the territorial scope is not
421
Within ten years, if the remuneration is manifestly out of proportion to the profits obtained by the licensee, the author may apply
for a review of the contract and – failing and agreement – may go to court to seek an equitable remuneration (art.47).
422
Dietz 1990, p. 183; Schlatter and Götz 1995, p. 793.
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laid down in the contract, this scope is limited to the country in which the license is effectuated. As
a result, neither the nationality of the contracting parties, nor their place of residence is important,
but only the place in which the agreement is concluded.423
The same is true for article 51(2), relating
to the presumed transfer of rights to the employer. Article 76 of the Spanish TRLPI provides that if
a contract does not specify the types of performance licensed, it shall be limited to performances for
which a sum of money is charged for admission.
The general rules set out in articles 236 to 239 of the Portuguese Civil Code apply to the
interpretation and integration of copyright contracts. However, the ‘Zweckübertragungslehre’ has been
adopted by Portuguese literature.424
This particular rule of interpretation has also been expressly
codified in article 11(3) of the Software Act, apparently according to the Computer Programs
Directive. However, it can also be derived from articles 41(1) and 88(1) of the Portuguese Copyright
Act, which provide that a license granted to a third party to disclose, publish, or exploit a work does
not in any way imply the transfer of copyright in the work. In addition, according to article 43(1),
‘the sole object of a partial assignment shall be the forms of use designated in the relevant
agreement’. Article 86(2) and 88(2) provide special rules of restrictive interpretation relating to
publishing contracts. According to these provisions, a publisher is licensed to produce one edition,
in the case the number of editions is not contractually stipulated. Furthermore, a license does not
give the publisher the right to translate, transform, or adapt the work to other types and forms of
use. These rules also apply to contracts concerning cinematographic production or analogue process
works, phonograms and videos and broadcasting.425
4.7.7 Effect of transfer in relation to third parties
4.7.7.1 Right to transfer acquired rights
According to article 48 of the Spanish TRLPI, the holder of an exclusive license may, unless
otherwise agreed, grant non-exclusive licenses to third parties. The holder of an exclusive license
may transfer her exclusive right to a third party, with the explicit consent of the author. In the
absence of consent, the user and the third party are jointly responsible towards the author for the
obligations arising out of the contract (article 49(2)). It is also a ground to terminate a publishing
contract. Consent is not required if the licensing occurs as a result of the liquidation or a change in
the ownership of the corporate user (article 49 (1) and (3)). Non-exclusive licenses do not give the user
the right to transfer the acquired rights, except in case of liquidation or change of ownership of the
corporate user (article 50).
In Portugal, article 40 of the Copyright Code lays down the general rule that the assignee may only
with the consent of the author transfer his rights. No consent is required however, if the transfer is
the result of the liquidation or a change in the ownership of the corporate user, in case of publishing
contracts (article 100(1)), performance contracts (article 118), and, phonographic and fixations on
video (article 145). The producer of a cinematographic work is allowed to transfer rights, but he
remains responsible towards the author for the fulfilment of the contract (article 133).426
One can
reasonably argue that this rule also applies a fortiori to licences of exploitation.
423
Schlatter and Götz 1995, p. 793.
424
Dias Pereira 2001, pp. 337, n. 587, 598, n. 996, 605, n. 1007, with the references therein.
425
Portuguese Copyright Code, art. 139(1), 140, 147(1) en 156(1).
426
These rules also apply to contracts concerning cinematographic production or analogue process works, phonograms and
videograms and broadcasting (articles 139(1), 140, 147(1) en 156(1)).
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4.7.7.2 Standing to sue
According to article 48 of the Spanish TRLPI, the licensing of exclusive rights gives the user the
right to institute proceedings for violations that affect the powers given to him.
There is no provision in the Portuguese Copyright Act concerning the assignee’s or the licensee’s
standing to sue for copyright infringement.
4.7.7.3 Right to pledge, secure or seize acquired rights
According to the Portuguese Copyright Code, copyright – except moral rights – can be can be
given as pledge (security of movable things) and can be object of seizure and apprehension, except
for unpublished works, which require, in principle, the author’s consent (Arts. 46, 47 and 48).
However, while the acquisition of copyright does not require register; the contractual pledge and
judicial seizure and apprehension must be registered (Arts. 213 and 215).
The Spanish TRLPI contains no provision concerning the right of the transferee to pledge, secure
or seize the acquired rights.
4.7.8 Termination of contract
4.7.8.1 Non-use of rights
Under Spanish law, an author may terminate the publishing contract if the publisher fails to
produce the edition of the work in the agreed time and under the agreed conditions (article 68(1)(a)).
The author may also terminate the publishing contract if the publisher fails to exploit the work
continuously and distribute the work conforming the usual practice in the publishing profession, in
spite of an express demand from the author calling on him to do so (article 68(1)(b)). The author
has the same right if the last edition produced is out of print, i.e. when the number of unsold copies
is less than five percent, and in any event if it is below hundred, and the publisher does not produce
the next edition within one year of having been called upon to do so by the author (article 68(1)(e).
In case of stage and musical performance contracts, article 81(1) provides that these contracts may
be terminated by the author in case the producer who has acquired exclusive rights, after having
started public performances of the work, suspends them for a year. This rule does not apply to
broadcasting of the performance (article 84(1)).
Under Portuguese law, the author may terminate the publishing contract in case the publisher does
not conclude the edition to within the term specified in the contract, unless the failure to publish is
justified for reasons of force majeure (Art. 106(1)(c)). In relation to cinematographic works, article 136
provides that if the producer fails to complete the production of the work within a period of three
years from the date of handing over the literary and musical parts, or fails to have the finished film
projected within a period of three years from the date of its termination, the author or co-authors
have the right to cancel the contract.
4.7.8.2 Bankruptcy of exploiter
Article 68(1)(f) of the Spanish TRLPI entitles an author to terminate the publishing contract in the
event of ‘the liquidation or change of ownership of the publishing firm, insofar as the reproduction
of the work has not been put in hand’. Under these circumstances, the courts may, according to
paragraph 2, ‘at the author's instigation, set a period for the resumption of such exploitation’. The
publishing contract terminates if the resumption does not occur.
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Under Portuguese law, the situation of bankruptcy of the publisher may be considered to imply the
termination of contract (Art. 102).
4.7.8.3 Other circumstances
Under Spanish law, an author is, in general, entitled to terminate the contract if the user fails, after
having been formally called upon to do so, to prove the transfer in writing (article 45). In case of
publishing contracts, the author is entitled to terminate the contract if the publisher fails to submit
proofs from the print-run to the author or to fails remit to the author the remuneration specified,
after called upon to do so (article 68(1)(b)). Furthermore, the author is entitled to terminate the
publishing contract, which does not relate to musical works, if the publisher proceeds to destroy the
remaining copies of an edition without meeting the requirements of article 67 (article 68(1)(c) and
article 71(3)). Finally, the author may terminate the contract when the user transfers his rights to a
third party without the author’s consent (article 86(1)(d)). In case of stage and musical performance
contracts, the author is entitled to terminate the contract, according to article 81(3), if the exploiter,
after having been called upon to do so, fails either:
• ‘to effect the communication without subjecting the work to alterations that have not been
agreed to by the author, and under technical conditions that do not prejudice the latter's
moral rights’ (article 78(2));
• ‘to allow the author the inspect the performances and attend them free of charge’ (article
78(3)); or
• ‘to submit to the author or to his representatives the exact program of communications to
the public, and, when the remuneration is proportional, a statement of proceeds’ (article
78(5)).
Note that, according to article 82, these contracts expire at the moment that the first performance of
a work has been clearly rejected by the public.
In Portugal, article 100(1) and (2) provide the author’s right to terminate the publishing contract in
case the transfer of rights by the publisher to a third party is the result of the selling and other acts of
disposition of the undertaking and this disposition leads to moral prejudice of the author. This right
must be invoked within six months from the date on which the author is informed of the
disposition. The publisher has the right to claim compensation for damages. Article 104(5) states
that where the author exceeds the limits of length of volumes or instalments mentioned in the
contract without the prior consent of the publisher, he shall not have any right to additional payment
and the publisher may refuse to publish the additional volumes, instalments or pages. The author
shall however retain the right to cancel the contract, compensating the publisher for the expenditure
incurred and the anticipated profits. Where the work has already been sold in part, the results
obtained shall form the basis for calculating compensation. Furthermore, article 106 provides a list
of occasions in which a publishing contracts may be cancelled, such as in case of a prohibition
imposed on the publisher; the death of the individual publisher; and, in general, where it is proven
that any of the contractual clauses or the direct or supplementary legal provisions applicable have
not been fulfilled. These rules also apply to contracts concerning cinematographic production or
analogue process works, and, phonograms, videograms, and broadcasting.427
Article 120 provides a
427
Portuguese Copyright Code, art. 139(1), 140, 147(1) en 156(1).
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similar provision relating to performance. In addition, article 120(1)(c) states that the contract may
be cancelled in case the public obviously and continuously does not attend the performances.
4.8 Nordic Countries
4.8.1 Ownership of Rights
4.8.1.1 Creator doctrine
In the Nordic Countries, someone other than the natural person who created the work can be
presumed the author of the work and the owner of the rights therein only in one instance: in the
case of anonymous or pseudonymous works. In principle, the person whose name or generally
known pseudonym or signature appears in the usual manner on copies of the work or when it is
disclosed to the public, is deemed, in the absence of proof to the contrary, to be its author.
However, if a work is published without any indication of the name of the author, the editor, if he is
named, or otherwise the publisher, is deemed to represent the author.428
4.8.1.2 Works created under employment
The Copyright and Related Rights Acts of the Nordic countries contain no provision regulating the
ownership of works created under employment, with the exception of the provision concerning the
creation of a computer program by an employee as a part of his tasks or following instructions by
the employer.429
Under Finnish law, the provisions relative to the transfer of rights in a computer
program created by an employee to the employer also apply to the transfer of rights relative to a
database created by an employee in an employment relationship (Article 40b). In general, the courts
would seem to have accepted the idea that an employer may, within his field of activities, use the
works that have been created as a result of duties under the employment contract, but only for
purposes that could be foreseen at the time the work was created.430
In Finland, there is currently a
government appointed expert whose task is to examine whether special provision with regard to
transfer of rights in employment relationship is needed in Finnish copyright law.
4.8.1.3 Works created on commission
The Copyright and Related Rights Acts of the Nordic countries contain no provision regulating the
ownership of works created on commission. One must therefore conclude that, whenever a work is
created on commission, the creator doctrine applies and the actual author is recognised as having the
ownership of the rights on the work thus created.
4.8.1.4 Audiovisual works
In the Nordic countries, the authors of an audiovisual work are the natural creators thereof.
However, article 39 of both the Swedish and the Finnish Copyright Acts establishes a presumption
of transfer of the right to produce a work, which includes the right of the producer to make the
work available to the public, by showing the film in cinemas, on television or by any means, as well
as subtitle or dub that work.431
This presumption does not apply to musical works. In Finland, the
interpretation of the presumption is somewhat unclear. According to the strictest interpretation, it
would only apply to performing rights in the film and would not convey any reproduction rights to
428
Danish Copyright Act, art. 1; Finnish Copyright Act, art. 1; Swedish Copyright Act, art. 1.
429
Danish Copyright Act, art. 59; Finnish Copyright Act, art. 40b; and Swedish Copyright Act, art. 40a.
430
In various sectors standards have developed. See: Muldin 1997, p. 169; Karnell 2000, p. 25.
431
Levin and Kur 1995, p. 734.
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the producer. The travaux preparatoires of the law would, however, indicate that it covers all
exploitation rights in the film.432
Article 40 of both Acts imposes on the producer the duty to
produce the cinematographic work and to make it available to the public within a reasonable time.
According to article 27 of both Acts, the provisions governing the transfer of copyright apply only in
the absence of an agreement to the contrary. While the provisions of the Swedish and Finnish Acts
guarantee the same treatment to authors of audiovisual works, they give their national performers a
different treatment. According to article 45 of the Swedish Copyright Act, article 39 first sentence is
applicable to performances, whereby a presumption of transfer of the right to record a performance
includes the right of the producer to make the work available to the public, by showing the film in
cinemas, on television or otherwise, as well as subtitle or dub that work. The same provision
specifies that the transfer of a copy of a recording within the European Economic Area does not
confer a right to make available to the public copies of recordings, through rental or other similar
legal acts, or copies of a film or other material support on which moving images have been recorded,
through lending. In other words, rental and lending rights in audiovisual works are not subject to
exhaustion by first transfer of ownership of the copy of the work within the European Community.
Since, under Finnish law, the performers are not conferred the same spectrum of rights with regard
to their performances fixed in audiovisual works as is done under Swedish and Danish laws,
performers rights are not subject to the presumption of transfer of rights under § 39 of the Finnish
Copyright Act. However, according to Article 45 of the law ‘the transfer of the right to film a
performance shall, unless otherwise agreed, include the right to distribute the recorded performance
to the public by rental’. This means that only rental rights of performers with regard to their
performances fixed in audiovisual works are subject to the presumption of transfer of rights to the
producer.
In Denmark, article 58 of the Copyright Act contains a similar, but more elaborate presumption of
transfer of rights from the author to the producer. The first paragraph provides that an agreement
to participate in the recording of a film implies that the author neither has the right to oppose to
reproduction, distribution and performance in public of the film or copies thereof, nor has the right
to oppose to the subtitling or dubbing of the film. According to the second paragraph, this
presumption does not apply to authors of pre-existing works, scriptwriters, composers, nor to the
principal director. In relation to performing artists, article 65(3) of the Danish Copyright and
Related Rights Act enounces that ‘an agreement between a performing artist and a film producer to
take part in the recording of a film implies that in the absence of any opposite agreement the
performing artist is assumed to have assigned his right to the rental of the film to the producer’.
4.8.2 Forms of transfers of rights
4.8.2.1 Assignment
Under the Copyright and Related Rights Acts of Denmark and Finland, authors’ rights are
assignable or transferable, in whole or in part.433
4.8.2.2 Licence
The authors’ and the performers’ rights are transferable, in whole or in part, in the three Nordic
countries. In Finland and Sweden, article 30 of the Copyright Act specifies that the transfer of the
right to perform a work in public will be regarded as a non-exclusive license, unless otherwise
provided. If the agreement by which the rights are transferred provides exclusivity, the author may
432
Salokannel, Ownership of rights in audiovisual productions, Kluwer Law Internationa 1997,, pp. 229-235.
433
See Danish Copyright Act, art. 53(1); and Finnish Copyright Act, art. 27.
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nevertheless perform the work himself or transfer the right of performance to others if those rights
are not exercised for a period of three years.
Besides the traditional licences between an individual author or performer on the one hand and a
producer on the other hand, authors and performers license their rights under a system known in
the Nordic countries as the ‘extended collective agreement’. An extended collective agreement
license applies to the use of works in a specific manner, mainly in the context of unauthorised uses
of works or other subject matter, when an agreement has been concluded concerning such a use
with an organization which represents a substantial number of local authors or performers in the
field concerned. The extended collective agreement license gives the user the right to use works of
the type referred to in the agreement notwithstanding the fact that the authors of those works are
not represented by the organization. The extended collective license gives the user the right only to
exploit the unrepresented works in the manner and on the terms that follow from the agreement
made with the organisation and from the provisions mentioned above. Some extended collective
license provisions give the unrepresented authors the right to prohibit the use of their works under
the applicable extended collective license regime, and some do not. In the latter case, when the
unrepresented authors do not have the right to veto the use of their works, the extended collective
license provision amounts to a legal license with regard to use of their works.
4.8.2.3 Waiver
Article 3 of the Swedish and the Danish Copyright Acts grants the author the right of paternity and
the right of integrity. According to the last sentence of this article, the author may waive his moral
rights only ex ante434
with regard to ‘uses limited as to their character and scope’. Consequently, a
non-specific waiver of moral rights is not binding upon the author. Article 28 of the Swedish and
56(1) of the Danish Copyright Act provide that an assignment of copyright does not give the user
the right to alter the work. However, it also provides that the author and user may agree
otherwise.435
In addition, only the Danish Copyright Act states that the ‘usual or obviously
presumed’ alteration of the work is permitted. The same rules apply to the exploitation of the
recordings of performances (article 45(4) Swedish and 65(4) Danish Copyright Act).
Similarly, article 3 of the Finnish Copyright Act states that when copies of a work are made or when
the work is made available to the public in its entirety or in part, the name of the author must be
stated in the manner required by proper usage. Furthermore, a work may not be altered in a manner
that is prejudicial to the author’s literary or artistic reputation or to his individuality, nor may it be
made available to the public in such a form or context as to prejudice the author in the manner
stated. However, the author may waive his rights under this article with binding effect only in
relation to use that is limited as to the type and extent of use.
4.8.3 Requirements of form
The Copyright and Related Rights Acts of the Nordic Countries contain no specific provision
requiring the use of an instrument in writing as a condition for validity or evidence. The validity and
evidence of oral and written copyright contracts concluded by individual parties in Denmark,
Finland, and Sweden is regulated under the general rules of civil law pertaining to the formation of
contracts. However, it is worth pointing out that, according to the Danish rules on extended
collective agreements, rights holder organisations that make agreements on simultaneous and
unaltered retransmission of broadcasts or on the public performance of a musical work must be
434
Rosén 1993, p. 367.
435
Levin and Kur 1995, p. 741.
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approved by the Minister of Culture. Agreements concluded in contravention of this requirement
are null and void.436
4.8.4 Restrictions on transfers of rights
4.8.4.1 Limits of scope, time, and place
None of the Copyright Acts of the Nordic countries contains a rule limiting the transfer of rights in
scope or geographical territory. However, article 30 of the Finnish and Swedish Copyright Acts
does limit the transfer of the right to perform a work in public to a period of three years. If a longer
period is agreed upon or if exclusive rights are transferred then the author may perform the work
himself or transfer the right to another person if these rights have not been exercised for a period of
three years. This provision does not apply to cinematographic works.437
4.8.4.2 Future forms of exploitation
None of the Copyright Acts of the Nordic countries contains a rule regarding the assignment of
rights in future forms of exploitation. One could therefore conclude from the legislator’s silence
that a transfer of rights in relation to unknown or future forms of exploitation could be possible
under the laws of the Nordic countries. Nevertheless, some commentators have argued that, in case
of doubt, the transfer of rights does not extend to forms of exploitation of the work that are not yet
known at the time the agreement was signed.
438
4.8.4.3 Future works
None of the Copyright Acts of the Nordic countries contain a rule regarding the assignment of
rights in future works. Hence, nothing precludes the transfer of rights in future works, subject of
course to the judicial review of unfair contract terms.439
4.8.5 Determination of remuneration
4.8.5.1 Proportional remuneration
The Copyright and Related Rights Acts of the Nordic countries all contain the requisite provision
regarding the unwaivable right to remuneration for authors of audiovisual works and authors of
works fixed in a phonogram. Under Finnish (Article 29) and Danish (Article 58a) laws, the
remuneration has to be paid by the producer. The Swedish law leaves this open (Article 29).
However, while article 35 of the Finnish and Swedish Act does not regulate the form of
remuneration to be paid to authors, it does put an obligation on the publisher to give account of the
receipts. Thus, if during the fiscal year sales have taken place for which the author is entitled to
remuneration, the publisher must render account to him within nine months from the end of the
year, stating the number of copies sold during the year and the number in stock at the end of the
year. At his request, the author is also otherwise entitled to obtain a statement of the number in
stock by the end of the year. Similarly, article 57(1) of the Danish Copyright and Related Rights Act
does specify that ‘if the author's remuneration depends on the assignee's turnover, sales figures, etc.,
the author may demand that settlement is made at least once a year. The author may likewise
436
Danish Copyright and Related Rights Act, art. 50(3) and (4).
437
Levin and Kur 1995, p. 736.
438
Schönning 2000, p. 33.
439
Karnell 2000, p. 28; Strömholm 1987, p. 25; Schönning 2000, p. 33. See section 3.2.3 supra.
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demand that the settlement be accompanied by satisfactory information on the circumstances
forming the basis of the calculation of the remuneration’. In addition, article 57(2) states that the
author may demand that the accounts, bookkeeping and inventory together with certifications by the
party who has exploited the work in connection with the annual settlement according to subsection
(1) be made available to a state-authorized public accountant or registered accountant appointed by
the author. The accountant shall inform the author of the correctness of the settlement and of
irregularities, if any. The accountant shall otherwise observe secrecy about all other matters that
become known to him in connection with his review. The parties to a contract may not deviate to
the detriment of the author from the protection granted under these provisions.
4.8.5.2 Equitable remuneration
A number of provisions in the Copyright and Related Rights Acts of the three Nordic countries
grant authors and performers a right to remuneration for specific unauthorised uses of their works
or other subject matter. In Denmark, uses that are subject to the terms of an extended collective
agreement concern the reproduction of works for educational activities, the reproduction of works
by business enterprises, the making by governmental or municipal institutions and other social or
non-profit institutions of reproduction of works for the visually handicapped and hearing-impaired
persons, the use of works of fine art in a generally information presentation, and the broadcast and
retransmission of works.440
In such circumstances, the conditions concerning the use of the works
that result from the extended collective agreement, apply.441
As regards remuneration deriving from
the agreement and as regards other benefits from the organization, which are essentially paid for out
of the remuneration, the author shall be treated in the same way as those authors who are members
of the organization. Without prejudice to what has now been stated such authors have, however,
always a right to remuneration in respect of the utilization provided that they claim such a
remuneration within three years from the year in which the use took place. Unrepresented authors
may claim an individual remuneration although such a right appears neither from the agreement with
the user nor from the organisation’s rules on remuneration. The amount of the individual
remuneration may be fixed according to the provision of Section 47(1). Claims for remuneration
may be directed only against the organization. In the absence of any result of negotiations on the
making of extended collective agreements, each party may request mediation following the
procedure set out in article 52 of the Act.
Certain uses of works by means of reprography, for educational purposes, and for radio and
television broadcasts, are subject in Finland and Sweden to the conditions laid down in the
applicable extended collective agreement. Article 26 of the Finnish Copyright Act states that any
agreement that the organization representing a large number of Finnish authors in a certain field may
have concluded regarding the apportionment of remuneration for the reproduction or broadcasting
of a work among authors represented by the organization, or regarding the use of the remuneration
for the joint purposes of those authors, shall apply accordingly to authors who are not represented
by the organization. If the provision made by the organization and referred to above does not
include the right to individual remuneration for the authors represented by the organization an
author not represented by the organization does however have the right to claim individual
remuneration. The remuneration shall be paid by the organization referred to in the first paragraph.
The right to individual remuneration shall have lapsed, however, where no claim concerning it has
been verifiably submitted within three years from the end of the calendar year in which the
reproduction or broadcasting of the work took place. Similarly, article 26i of the Swedish Act
provides that as regards remuneration deriving from the agreement and as regards other benefits
440
Danish Copyright and Related Rights Act, art. 13, 14, 17(5), 23(2), 30 and 35.
441
Danish Copyright and Related Rights Act, art. 50.
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from the organization, which are essentially paid for out of the remuneration, the author shall be
treated in the same way as those authors who are members of the organization. Without prejudice
to what has been stated such authors have, however, always a right to remuneration in respect of the
utilization provided that they claim such a remuneration within three years from the year in which
the use took place. Claims for remuneration may be directed only against the organization.
4.8.5.3 ‘Best-seller’ clause
While none of the Copyright and Related Rights Acts of the Nordic countries contains a specific
‘best-seller’ clause, article 29 of the Finnish Copyright and Related Rights Act does state that ‘the
provisions of the Contracts Act shall apply to the amendment of an unfair clause in an agreement on
the transfer of copyright’. A similar provision has been incorporated in article 36 of the Swedish Act
on Contracts and other Legal Transactions in the Field of Property Rights, which allows for the
modification or nullification of unreasonable contract terms.442
This last provision replaced the
former article 29 of the Swedish Copyright and Related Rights Act. The Danish Act on Contracts
provides the same rule. One could therefore argue that
4.8.6 Interpretation of contracts
While the Finnish and Swedish Copyright Acts contain no special provision on the interpretation of
copyright contracts, the Danish Copyright Act states in article 53(3) that ‘where a right to exploit
the work in a specific manner or through specific means has been assigned, the assignment does not
give the assignee the right to exploit the work in any other manners or through any other means’
than stipulated. This provision clearly calls for a restrictive interpretation of transfers of rights.
4.8.7 Effect of transfer in relation to third parties
4.8.7.1 Right to transfer acquired rights
Under Finnish and Swedish law, the assignee of rights does not have, unless provided otherwise,
the right to transfer the acquired rights to third parties without the consent of the author (article 28).
This rule applies to the partial as well as a full assignment of economic rights443
and to the transfer of
performing rights.444
However, if the copyright forms part of a business, it may be transferred
together with the business or part thereof, but the user remains liable to the author for the fulfilment
of the contract.
Article 56(2) of the Danish Copyright Act states that ‘the assignment of copyright does not give the
assignee any right to reassign copyright unless the reassignment is usual or obviously presumed’. If
the user transfers his acquired rights, he will remain liable for the performance of the contract with
the author. This rule applies correspondingly to performers’ performances and recordings of such
performances (article 65(4)).
4.8.7.2 Standing to sue
There is no provision in the Copyright Acts of the Nordic Countries concerning the assignee’s or
the licensee’s standing to sue for copyright infringement. One must therefore refer to the general
principles of civil procedure.
442
Levin and Kur 1995, p. 744, 745; Karnell 2000, p. 28, 29; Nyh 1998, p. 299, 301; and Strömholm 1968, p. 17.
443
Levin and Kur 1995, p. 742.
444
Swedish Copyright Act, art. 45(4), 47(3), and (4).
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4.8.7.3 Right to pledge, secure or seize acquired rights
Article 42 of the Finnish and Swedish Copyright Acts states that ‘copyright shall not be subject to
legal seizure as long as the copyright remains vested in the author or in any other person who has
acquired the copyright by virtue of marital entitlement to property, inheritance or testamentary
provision. The same rule applies to manuscripts and works of art that have not been exhibited,
placed on sale or otherwise authorized for dissemination’. One can therefore conclude from this
provision that a copyright may be subject to legal seizure once it has been transferred – by
assignment or licence – to a third party.
There is no provision in the Danish Copyright Act concerning the assignee’s or the licensee’s power
to pledge, secure or seize acquired rights.
4.8.8 Termination of contract
4.8.8.1 Non-use of rights
Article 34 of the Finnish and Swedish Copyright Acts gives the author the right to terminate the
publishing contract in case of non-use of the transferred rights and to keep the remuneration
received. In case of literary or artistic works, the period of non-use is more than two years from the
time when the author has delivered the work, and four years in case of musical works. The same rule
applies when the publisher fails to exercise his right to publish a new edition, within one year from
the time of the request by the author to do so. These rules do not apply to contributions to
newspapers or periodicals, and contributions to other composite works (article 38). Article 40 of
both Acts provides that in case the producer does not produce the film and make it available to the
public within a reasonable time, the author is entitled to terminate the contract, keep the
remuneration received and request compensation for incurred damages. If the work has not been
produced within five years from the time when the author fulfilled his obligations, the author has the
same rights even if the non-use is not the fault of the producer.
More generally, article 54 of the Danish Copyright Act provides that the assignee is under an
obligation to exploit the work. The author may terminate the contract if the user has not exploited
the work within a reasonable time or, at the latest, five years after the time where the obligation
arising out of the contract have been fulfilled by the author. The author is also entitled to terminate a
contract, subject to a reasonable notice, provided that the contract does not expressly specify the
individual forms of exploitation assigned, if the user does not implement one or more unspecified
forms of exploitation within three years from the time the author fulfilled his obligations arising out
of the contract. Articles 54 and 55 apply correspondingly to performances and recordings thereof
(article 65(4)).
4.8.8.2 Bankruptcy of exploiter
There is no provision in the Copyright Acts of the Nordic Countries concerning the right of the
author to terminate the contract in case of bankruptcy of the exploiter.
4.8.8.3 Other circumstances
According to article 33 of the Finnish and Swedish Copyright Acts, the author may terminate the
publishing contract if the publisher fails to distribute the work in the usual manner, and to follow up
the publishing to the extent determined by marketing conditions and other circumstances. The
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author may keep the remuneration received, and the publisher must compensate the damages
suffered by the author.
4.9 United Kingdom and Ireland
4.9.1 Ownership of Rights
4.9.1.1 Creator doctrine
Articles 11(1) of the British Copyright Design and Patent Act and 21(1) of the Irish Copyright and
Related Rights Act define the ‘author’ as the person who creates a work. But the rule contains
several exceptions, according to which the ‘author’ includes:
a) in the case of a sound recording, the producer;
b) in the case of a film, the producer and the principal director;
c) in the case of a broadcast, the person making the broadcast or in the case of a
broadcast which relays another broadcast by reception and immediate
retransmission, without alteration, the person making that other broadcast;
d) in the case of a cable programme, the person providing the cable programme service
in which the programme is included;
e) in the case of a typographical arrangement of a published edition, the publisher;
f) in the case of a work which is computer-generated, the person by whom the
arrangements necessary for the creation of the work are undertaken;
g) in the case of an original database, the individual or group of individuals who made
the database; and
h) in the case of a photograph, the photographer.
4.9.1.2 Works created under employment
Article 11(2) of the British Copyright Design and Patent Act states that where an employee creates a
work in the course of his employment, the employer is the first owner of the copyright in the
work.445
The test conducted to determine whether an employer-employee relationship exists has
traditionally been to enquire whether the employer is entitled to exercise control over his employee's
actions.446
Nowadays, the test used by the courts is whether the work undertaken forms an integral
part of the business, whether it is integrated into the business or whether it is only an accessory to
that business.447
In other words, where the work is created on the ‘employee’s’ own account, it does
not arise out of the employment relationship.448
Article 11 requires the work to be made ‘in the
course of employment’. Important factors to determine whether this requirement has been met, is
to examine whether the work is made during business hours and whether it is the type of work
which the employee might be expected to undertake for his employer.449
Parties may agree, before
the work is created, that the employer is not the copyright owner.450
Similarly, article 23(1)(a) of the Irish Copyright and Related Rights Act states that where an
employee creates a work in the course of his employment, the employer is the first owner of the
copyright in the work. However, article 23(2) of the Act specifies that ‘where a work, other than a
445
Although the employer is treated as the first owner, he is not deemed to be the author. So, for example the duration of copyright
is measured by reference to the life of the creator. Cornish 1995, p. 650 and Cornish 1998, p. 228.
446
Laddie a.o. 2000, p. 819, 820; Skone James a.o. 1991, p. 88; and Bentley 2000, p. 53.
447
Stephenson Jordan v. McDonald & Everans (1951) 69 R.P.C. 10, at 22 (Denning L.J.).
448
Market Investigations Ltd v Minister of Social Security (1969), 2 QB 173. See Laddie a.o. 2000, p. 819-821.
449
For examples provided by case law see Bentley 2000, p. 53, 54 (footnote 33 – 35); Skone James a.o. 1991, p. 90-91; Laddie et al.
2000, p. 823-825.
450
Laddie et al. 2000, p. 833.
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computer program, is made by an author in the course of employment by the proprietor of a
newspaper or periodical, the author may use the work for any purpose, other than for the purposes
of making available that work to newspapers or periodicals, without infringing the copyright in the
work’.
4.9.1.3 Works created on commission
The United Kingdom’s CDPA contains no special provisions relating to works created under
commission.451
However, under the so-called doctrine of ownership in equity, the commissioner
may acquire certain the exploitation rights by way of implied transfer of rights.452
The Irish Copyright and Related Rights Act contains no provision regulating the ownership of
works created on commission. One must therefore conclude that, whenever a work is created on
commission, the creator doctrine applies and the actual author is recognised as having the ownership
of the rights on the work thus created.
4.9.1.4 Audiovisual works
According to article 9(2)(ab) of the United Kingdom CDPA, the authors of a film are the producer
and the principal director.
453
The term ‘producer’ is defined in article 178 as ‘the person by whom
the arrangements for the making of the film are undertaken’, with particular judicial emphasis on
such aspects as the initiation of the project, its organization, and the arrangement of location.454
Films are regarded as works of joint authorship unless the producer and the principal director are the
same person (article 10(1) and (1A)). According to article 93A(1), an author of a film is presumed to
have assigned to the producer any rental right in relation to the film. This provision does not apply
to the authors of the screenplay, the dialogue or the music (article 93A(3)). Article 191F contains a
similar provisions for performers, which states that ‘where an agreement concerning film production
is concluded between a performer and a film producer, the performer shall be presumed, unless the
agreement provides to the contrary, to have transferred to the film producer any rental right in
relation to the film arising from the inclusion of a recording of his performance in the film’.
In Ireland, the rules of ownership of audiovisual works laid down in the Copyright and Related
Rights Act essentially incorporate in Irish law the provisions of the Rental and Lending Rights
Directive. Article 21(b) provides that the author of a film is the person who created it and includes
the producer and the principal director. According to article 124(1) and (2) of the Irish Act, where
an agreement concerning film production is concluded between an author and a film producer, the
author is presumed, unless the agreement provides to the contrary, to have transferred to the film
producer any rental right in relation to the film arising by virtue of the inclusion of a copy of the
work of the author of the film. An identical provision has been adopted with respect to performers
in article 297(1) and (2) of the Copyright Act.
451
Under the CA 1911 and 1956 there were special provisions about commissioned works. Skone James a.o. 1991, p. 82; Laddie
2000, p. 827-831.
452
For the requirements on ownership in equity see Laddie a.o. 2000, p. 842-845. For case law see Bentley 2000, p. 54 (footnote 40).
453
This provision is incorporated in the Copyright Design and Patent Act by Statutory Instrument 1996, no. 2967 “The Copyright
and Related Rights Regulations 1996”, that came into force on July 1, 1994. Prior to this date the author of a film was the person
by whom the arrangements necessary for the making of the film are undertaken.
454
Bentley 2000, p. 52.
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4.9.2 Forms of transfers of rights
4.9.2.1 Assignment
Under the Anglo-Saxon copyright system, which is said to follow utilitarian objectives, assignments
of copyrights and related rights are clearly authorised. Pursuant to sections 90(1) of the United
Kingdom CDPA and 120(1) of the Irish Copyright and Related Rights Act, a ‘copyright is
transmissible by assignment, by testamentary disposition or by operation of law, as personal or
moveable property’. Following the same approach, the rights granted to performers under the
United Kingdom and Irish acts are freely assignable to third parties.455
4.9.2.2 Licence
Article 122(1) of the Irish Copyright and Related Rights Act defines ‘exclusive licence’ as ‘a licence in
writing which is signed by or on behalf of an owner or prospective owner of the copyright which
authorises the licensee, to the exclusion of all other persons, including the person granting the
licence, to exercise a right which would otherwise be exercisable exclusively by the copyright owner
and references to an exclusive licensee shall be construed accordingly’. An exclusive licensee has the
same rights against a successor in title who is bound by the licence as he or she has against the
person granting the licence.
4.9.2.3 Waiver
The British CDPA and the Irish Copyright and Related Rights Act recognise the following
attributes to the author’s moral rights: the right to be identified as author of a work; the right to
object to derogatory treatment of work; and the right to prevent false attribution. Sections 94 of the
British CDPA and 118 of the Irish Act specify that moral rights are not assignable. However, both
copyright acts expressly provide that it is not an infringement of any of the rights conferred to do
any act to which the person entitled to the right has consented. Thus, an author may waive any of
the attributes of the moral right defined in the Act, which are the right to attribution of authorship,
the right of integrity of the work, and the right against false attribution, provided that such waiver is
made by instrument in writing signed by the person giving up the right.456
The waiver may relate to a
specific work, to works of a specified description or to works generally, and may relate to existing or
future works. It may also be conditional or unconditional, and may be expressed to be subject to
revocation. If the waiver is made in favour of the owner or prospective owner of the copyright in
the work to which it relates, it is presumed to extend to his licensees and successors in title unless a
contrary intention is expressed. The same rules apply to the waiver of a performer’s ‘non-property
rights’.457
4.9.3 Requirements of form
The United Kingdom’s Copyright Design and Patent Act and the recent Irish Copyright and
Related Rights Act contain almost identical rules regarding the form of copyright contracts.
According to articles 90(3) and 191B(3) of the British CDPA and articles 120(3) and 293(3) of the
Irish Act, an assignment in whole or in part of an author’s copyright or of a performers’ property
rights is not effective unless it is in writing and signed by or on behalf of the assignor. Article 178 of
455
Irish Copyright Act, sect. 293; UK Copyright and Related Rights Regulations 1996, Statutory Instrument 1996, No. 2967, sect.
191B.
456
British CDPA, sec. 87(2); and Irish Copyright Act, sec. 116.
457
British CDPA, sec. 193; and Irish Copyright Act, sec. 302.
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the British CDPA and article 2(1) of the Irish Act define a ‘writing’ as including ‘any form of
notation or code, whether by hand or otherwise and regardless of the method by which, or medium
in or on which, it is recorded’. The same rule applies to the grant of an exclusive license,458
as well as
to the waiver of moral rights.459
Commentators generally agree that, although other types of
transfers may not meet these requirements, they may nevertheless have some effect between the
parties.460
Moreover, secondary evidence has been admitted under certain conditions to establish the
existence and content of the writing.461
In at least one case, the British Court of Appeal has upheld
the validity of a publishing contract concluded over the telephone, whereby the author had engaged
himself to bring corrections and improvements to a manuscript and the publisher had agreed to pay
a fair royalty.462
4.9.4 Restrictions on transfers of rights
4.9.4.1 Limits of scope, time, and place
Neither the British CDPA nor the Irish Copyright and Related Rights Act contain any provision
restricting the transfer of rights in relation to scope, time or geographical territory. The parties are
thus free to determine the scope of the transfer.
4.9.4.2 Future forms of exploitation
The copyright laws of the United Kingdom and Ireland contain no general prohibition either on
the transfer of rights regarding future forms of exploitation. In practice, authors and performing
artists who sign contracts for the transfer of rights following the laws of Great Britain or Ireland are
often asked to transfer ‘the whole of the property, copyright and interest, present or future, vested or
contingent.’ This language is indeed broad enough to include any form of exploitation, including
future forms of exploitation.463
4.9.4.3 Future works
In the United Kingdom and Ireland, agreements can be made regarding future works or future
recordings of performances.464
The holder of a performer's non-property rights or recording rights
may also give his consent to the transfer of rights on future performances.465
In addition, both acts
expressly authorise the waiver of moral rights with respect to future works.466
However, it is worth pointing out that a court could refuse to enforce a covenant according to which
the author would transfer his rights on all future works, on the ground that such covenant is in
458
British CDPA, art. 92(1) (copyright ) and art. 191D (related rights); and Irish Copyright and Related Rights Act, art. 122(1)
(copyright), and art. 295(1) (related rights).
459
British CDPA, art. 87(2) (copyright ); and Irish Copyright and Related Rights Act, art. 116(2) (copyright), and art. 316(2) (related
rights)
460
Cornish 1995, p. 652, 653; Cornish 1998, p. 234; Skone James a.o. 1991, p. 107; Pilny 1989, p. 133.
461
Springsteen v. Flute International Ltd. & ors. (1999), E.M.L.R. 180.
462
Malcolm v. Chancellor, Masters and Scholars of the University of Oxford, Court of Appeal, 18 December 1990, [1991] 1 Entertainment Law
Review p. E-9.
463
See Redwood Music Ltd. V. B. Feldman & Co. Ltd. & Ors. (1979) R.P.C. 385 at 394. Laddie a.o. 2000, p. 877, 878; Cornish 1998, p.
237; and Skone James a.o. 1991, p. 106, 107.
464
UK CDPA, art. 91(1) (copyright) and art. 191C (performances); and Irish Copyright and Related Rights Act, art. 121(4)
(copyright) and art. 294(1) (performances).
465
UK CDPA, art. 193(1); and Irish Copyright and Related Rights Act, art. 302(1).
466
UK CDPA, art. 87(3)(a); and Irish Copyright and Related Rights Act, art. 116(3)(a)
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restraint of trade.467
The leading authority on the application of the restraint of trade doctrine to
copyright agreements is now the decision of the House of Lords in Schroeder v. Macauley.468
In that
case, the plaintiff, a young and unknown song-writer, entered into an exclusive five year agreement
with the defendants. The plaintiff assigned the copyright for the whole world for every work created
by him during the period of the agreement. The five years was extended to 10 years if the plaintiff’s
royalties exceeded £5,000. The defendants had no obligation to exploit any of the compositions of
the plaintiff. Moreover, defendants could terminate the agreement at any time on one month’s
notice and could assign the benefit of it, but no such right was given to the plaintiff. The House of
Lords unanimously held that the agreement imposed an unreasonable restraint on trade because the
bargain made was neither fair nor reasonable.469
4.9.5 Determination of remuneration
Neither the British CDPA nor the Irish Copyright and Related Rights Act contain any provision
regulating the amount of remuneration to be paid to authors or performers. The parties are thus
free to determine for themselves the amount and mode of calculation of the remuneration.
4.9.6 Interpretation of contracts
Neither the British CDPA nor the Irish Copyright and Related Rights Act recognizes any special
rule of interpretation of copyright contracts. In absence of specific rules, copyright contracts are
therefore construed according to the general rules of interpretation of contracts applied under
common law.
4.9.7 Effect of transfer in relation to third parties
4.9.7.1 Right to transfer acquired rights
By contrast, the user is regarded, in the United Kingdom and Ireland, as the full owner of the
rights that are assigned to him. He is able to transfer those rights freely.470
The licensee, however,
may not transfer exclusive licences, to third parties without the consent of the author.471
The holder
of a non-exclusive license is also not allowed to transfer this license.472
4.9.7.2 Standing to sue
In the United Kingdom and Ireland, a global assignment of rights entitles the transferee to
institute proceedings in his own name against a possible infringer.473
An exclusive licensee may also
institute proceedings. However, he only has the same rights as the author in relation to third parties.
Furthermore, the licensee and the author may only institute proceedings together. This rule does
not apply in case the author is dead or untraceable. The same provisions apply with respect to
performers’ property rights.
467
Chitty 1999, p. 875.
468
[1974] 1 Weekly Law Reports 1308 (HL). See: Bentley 2000, p. 58 (footnotes 66 – 70); Soetenhorst 1993, p. 157; Cornish 1998,
p. 230 – 233; Laddie a.o. 1991, p. 896-901; Pilny 1989, p. 140-147; Cornish 1995, p. 657-661.
469
Sterling and Carpenter 1986, p. 805; and Chitty 1999, p. 877.
470
Laddie a.o. 2000, p. 894.
471
Pilny 1989, p. 131.
472
Pilny 1989, p. 132.
473
Pilny 1989, p. 127.
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4.9.7.3 Right to pledge, secure or seize acquired rights
Neither the British CDPA nor the Irish Copyright and Related Rights Act contain any provision
concerning the right of the transferee to pledge, secure or seize the acquired rights.
4.9.8 Termination of contract
Neither the British CDPA nor the Irish Copyright and Related Rights Act contain any provision
regulating the termination of contracts. Parties may therefore put an end to their contractual
relationship in the circumstances allowed under the general rules of common law.
Chapter 5. Private International Law
Conflicts of laws are resolved differently if the matter at hand involves a copyright contract or if it
arises simply from an act of infringement. In the latter case, the applicable law is determined
according to the provisions of the Berne Convention and/or national rules on conflicts of law,
whereas the law applicable to an international copyright contract is established, in Europe, following
the rules set by the EC Convention on the law applicable to contractual obligations.474
Moreover,
although an assignment and a licence of copyright may have similar effects in practice, an important
distinction must be made between the two forms of transfers of rights when determining which law
is applicable to an international contract. Whereas an assignment has proprietary, contractual, and
formal aspects, a license differs in that it lacks any proprietary aspect. Copyright is incorporeal
property, falling under the category of property known as jura in re propria, in that the owner has full
ownership over an immaterial good, which can thus be invoked against third parties. A copyright
can only be invoked against third parties provided that the object of the assignment is unequivocal
and that the assignor is competent. These questions concerning the proprietary aspects of copyright
are examined in the first subsection of this chapter. Proprietary aspects differ from the sole
contractual and formal aspects and have their own rules of conflict. This means that an assignment
of copyright can in principle be subject to three legal regimes, although the line between the three
groups are sometimes fluid. The Rome Convention contains rules relating to the contractual and
the formal aspects of the assignment and the license contract. Not all commentators agree that the
proprietary aspects must be subject to a separate rule of conflict, and when they do, there is no
consensus about the rule of conflict that applies. Nevertheless, there is an observable tendency to
apply only one law to a contract, instead of dividing the contract into small pieces that are each
governed by a different law.
This chapter focuses on the private international law aspects of assignment and licence contracts,
examining first the rules on proprietary aspects of transfers of rights. Next, we consider the rules on
contractual and formals aspects of both an assignment and a license contract, which are determined
according to the provisions of the Rome Convention. In the last subsection, we present an
overview of the discussions that took place in December 2000 regarding the Proposal for a WIPO
Audiovisual Performances Treaty. This unsuccessful attempt at negotiating a Treaty gives a clear
illustration of the increasing importance of the rules on conflict of laws for intellectual property
matters in general, and for transfers of rights in particular. In this case, the negotiations broke down
because the United States and the European Union could not agree on the scope of rights to be
granted to performers on their audiovisual performances and tried to solve this issue on the basis of
private international law provisions.
5.1 Proprietary aspects of a transfer of rights
Before one can determine which law is applicable to an assignment or a licence contract, one must
first establish what exactly is the subject matter of the assignment or the licence. For example, it is
not uncommon in an international situation that the law that is deemed applicable to the contractual
assignment does not protect the work that is the object of the assignment of copyright. Another
problem may be that the assignor is not deemed the owner of the copyright, and therefore not
competent to assign, according to the law which governs the contract. .
474
Signed in Rome on 19 June 1980 [hereinafter referred to as ‘Rome Convention’]. This Convention is not to be confused with the
Rome Convention for the Protection of Performers, Phonograms, and Broadcasting Organisations of 1961.
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5.1.1 The subject matter of copyright
The principle of territoriality, on which the Berne Convention and the Universal Copyright
Convention are based, holds that a work is protected by the law of the country where protection is
sought. This means that authors effectively own a ‘bundle’ of national copyrights, as many as there
are Member States.475
This principle does not offer a pure rule of conflict, but it has been argued
that the lex protectionis can be inferred from this principle.476
The lex protectionis is the law of the
country where protection has to be effective, i.e. the law of the country for which protection is
sought.
The question whether the subject matter is protected, can thus be answered by the lex protectionis, the
law of the country where protection has to be effective. It follows that a work that may be protected
in one country, but not necessarily in another.
5.1.2 Copyright ownership
The question of which law is applicable to determine who is the initial owner of a copyright receives
no definite answer. According to Ulmer, the lex protectionis decides this issue.477
One advantage of
the lex protectionis is that courts can apply their own law, in most cases.478
Other arguments in favour
of this principle are that potential users of the work know exactly what is allowed and that copyright
infringements within one country will be judged uniformly.
Lately however, it has been argued that the lex originis should applied to decide who is the original
holder of a copyright in an international situation. The lex originis is the law of the country where the
work originates. This could be for example where the work is created or where the actual creator
has his habitual residence. The most important argument for this principle is legal certainty. When
the lex protectionis is applicable, it is not clear for the actual creator where exactly he is indeed
considered the author or the holder of the right. If the actual creator wanted to assign his copyright,
he would first have to determine whether he is the author in the country where he assigns his right.
Article 5(4) of the Berne Convention states that the country of origin is the country where the work
is published for the first time. When the work is not published, article 5(4)(c) points to the country
of which the author is a citizen. A problem arises here, since this establishing authorship is exactly
the question to be answered. To solve this conundrum De Boer proposes to apply a secondary
connecting factor, for example the common country of residence or the country where the work
was created for the largest part. If this still offers no practical solution, the lex fori could perhaps be
applied.479
5.1.3 Works created under employment
The question of initial ownership of copyright on a work created under employment is answered
differently depending on the European Member States analysed. It could be argued that ownership
in such cases is best determined by applying the law of the country that governs the employment
contract.480
This offers some protection against a choice of law that would not be favourable to the
employee. The connection is not subject to factors that can be influenced by one of the parties,
475
Van Lingen 1998, p. 207.
476
Quaedvlieg 1997, p. 155; Lucas & Lucas 2001, p. 884.
477
Ulmer 1980a, p. 45.
478
Although not in all cases: the lex protectionis can differ from the lex fori.
479
De Boer 1977, p. 691.
480
Ulmer 1980a, p. 47; De Boer 1977, p. 692; Seignette 1990, p. 198.
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since in a contract of employment a choice of law made by the parties shall not have the result of
depriving the employee of the protection afforded to him by the mandatory rules of the law which
would be applicable under paragraph 2 in the absence of choice. In this case, article 6 of the Rome
Convention contains rules of conflict to determine the applicable law on the employment contract.
The application of the lex originis rule raises the problem with respect to unpublished works that the
country of origin of cannot be determined without determining the nationality of the actual creator.
With respect to published works, in general, the law of the country where publication took place is
applicable. Since the employer most often determines the country of publication of the work, there
is a risk that the employer might choose a country known for its lower level of protection for
employees, which would lead to undesirable results.481
The principle of functional allocation, on
which article 6 of the Rome Convention is based, would contradict this result insofar as it would
deprive the actual creator of the protection he would get under the law of the country in which he
habitually carries out his work or in which his employer has his place of business.
5.1.4 Assignment or license
Whenever it is unclear whether a contract must be qualified as an assignment or a license, the most
important factor to consider is whether the contract operates against third parties. De Boer suggests
that, in international situations, the law that would decide upon the proprietary aspects if the
contract were an assignment of rights would be best suited to answer this question. This would be
the lex protectionis.482
5.2 Contractual aspects of transfer of rights
5.2.1 Convention on the law applicable to contractual obligations
On June 19, 1980, the Convention on the law applicable to contractual obligations was signed in
Rome. On April 1, 1991, the Rome Convention entered into effect in Belgium, Germany, Denmark,
France, Greece, Luxembourg, Italy, and the United Kingdom. In the Netherlands, the Rome
Convention entered into effect on September 1, 1991 and in Ireland on January 1, 1992. In the
Dutch Antilles and Aruba, it entered into effect on January 1, 1993. Spain and Portugal signed a
treaty that held implementation of the Rome Convention on September 1, 1993. This treaty entered
into effect in Spain on September 1, 1993 and in Portugal on September 1, 1994.483
When the
Convention was signed on 29 November 1996 by Austria, Finland, and Sweden, a consolidated
version was drawn up and published in the Official Journal in 1998.484
Article 2 of the Rome Convention states that it is universal in scope, which means that any law
specified by the Convention shall be applied whether or not it is the law of a Member State.485
5.2.2 Freedom of choice
The parties’ freedom of choice is codified in Article 3 of the Convention. Before the Rome
Convention took effect, the principle of autonomy of the parties was already a common principle in
some areas of private international law, in Member States of the European Union as well as in
481
De Boer 1977, p. 691
482
De Boer 1977, p. 709.
483
Bertrams & van der Velden 1999, p. 5.
484
Official Journal C 027/34 , 26 January 1998.
485
Bertrams & van der Velden 1999, p. 13.
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numerous other countries. The principle of autonomy of the parties can also be found in other
treaties, such as the Hague Convention of 14 March 1978 on the law applicable to agency.486
Article 3 reads as follows:
‘A contract shall be governed by the law chosen by the parties. The choice must be expressed or demonstrated
with reasonable certainty by the terms of the contract or the circumstances of the case. By their choice the
parties can select the law applicable to the whole or a part only of the contract.’
It follows from Article 2 that parties face no restrictions in choosing the applicable law. The parties
can also choose a law that does not have any connections with the case. The last sentence of the
first paragraph of Article 3 provides that parties are free to choose the applicable law for the whole
of the contract or to only part thereof. Neither the text of Article 3, nor legal doctrine states
whether severability is allowed.487
Against severability, it has been argued that the parties can deny
rules of mandatory law. On the other hand, it has also been argued that Article 7 of the Rome
Convention – that lays down the principle of mandatory rules – can meet this objection.488
According to the second paragraph of Article 3, the parties may at any time agree to subject the
contract to a law other than that which previously governed it, whether as a result of an earlier
choice under this Article or of other provisions of this Convention. Any variation by the parties of
the law to be applied made after the conclusion of the contract shall not prejudice its formal validity
under Article 9 or adversely affect the rights of third parties.489
The third paragraph of Article 3 states that the choice of foreign law shall not, where all other
elements relevant to the situation at the time of the choice are connected with one country only,
prejudice the application of mandatory rules of the law of that country. At the time of negotiations,
there was fear in some countries that this provision would limit the freedom to choose too severely,
especially in cases where the choice of law is made in good faith.490
The existence and validity of the consent of the parties as to the choice of the applicable law is
determined in accordance with the provisions of Articles 8, 9 and 11 of the Convention. Article 8(1)
of the Convention provides that the law, which would govern it under the Convention if the
contract or term were valid, determines the existence and validity of a contract or of any term of a
contract. Nevertheless, a party may rely upon the law of the country in which he has his habitual
residence to establish that he did not consent if it appears from the circumstances that it would not
be reasonable to determine the effect of his conduct in accordance with the law specified in the
preceding paragraph. Similarly, article 9(1) provides that a contract concluded between persons who
are in the same country is formally valid if it satisfies the formal requirements of the law, which
governs it under the Convention or of the law of the country where it is concluded.
486
Article 5 provides that “the internal law chosen by the principal and the agent is to govern the agency relationship between
them.”
487
Severability means that different aspects of the contract are subject to different law. The question here whether this is allowed
only sees on the choice for several systems of law that are applicable on the contract. As a result of article 6 for example,
severability could also occur.
488
Giuliano & Lagarde 1980, p. 17.
489
Id., p. 18.
490
Id., p. 18-19.
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5.2.3 Applicable law in the absence of a choice
In absence of a choice of law, the applicable law is determined by article 4 of the Rome Convention.
The first paragraph of article 4 sets as applicable the law of the country to which the contract is most
closely connected. Article 4(2) provides that the contract is presumed to have the closest connection
with the country in which the party who is to perform the obligation, which is characteristic of the
contract has his habitual residence at the time when the contract is concluded. In the case of a body
corporate or un-incorporate, the country in which it has its central administration. If the contract is
concluded in the course of that party's trade or profession, that country shall be the country in which
the principal place of business is situated or, where under the terms of the contract the performance
is to be effected through a place of business other than the principal place of business, the country in
which that other place of business is situated. The application of the fifth paragraph of Article 4 can
set aside the presumption of the second paragraph.
The characteristic performance is not always clear, for example in bilateral contracts where the
performance of one party does not take the form of money. When the characteristic performance
cannot be determined, according to the fifth paragraph, the second paragraph does not apply. In
this case, the first paragraph applies and the law of the country to which the contract is most closely
connected will govern the contract. Although the relevant factors cannot be identified in advance,
Wadlow mentions some factors that are likely to be relevant in relation to intellectual property
contracts: the domicile, residence or nationality of parties, the situs of the principal or only right
involved, the place and manner of execution, the language of the agreement and any special legal
terminology, the presence of terms meaningful only under a particular system of law, the specified
currency and place of payment of any moneys which are to be paid, any specified place of
jurisdiction or arbitration, the proper law of any related agreement, and the place of performance of
the contract if one can be identified.491
The structure of the article raises questions of interpretation, more particularly how paragraph 1 and
2 interact with one another. Is the doctrine of the characteristic performance an exception to the
entirely open-ended rule of the first paragraph or is paragraph two the general rule to which the first
paragraph can make an exception?492
The latter is the generally accepted opinion. Only when
paragraph 5 applies, attention should be paid to paragraph 1.493
The Dutch Supreme Court explicitly
accepted the second method of interpretation. In the Balenpers case, the Supreme Court decided that
paragraph 2 can be considered as the basic rule, to which paragraph 1 makes an exception. One is
only allowed to deviate from the basic rule when, depending on the facts of the case, the place of
habitual residence of the party who is to perform the obligation, which is characteristic of the
contract, does not have actual connecting value.494
Paragraph 5 of Article 4 establishes that, besides the rule that when the characteristic performance
cannot be determined the second paragraph does not apply, the presumptions of the second, third
and fourth paragraph can be set aside when the circumstances show that the contract is more closely
connected to another country. When this occurs, the law of that other country applies. The
question of whether such circumstances exist is left for the most part to the judge’s discretion.495
491
Wadlow 1998, p. 436.
492
Strikwerda 2000, p. 165.
493
Fawcett & Torremans 1998, p. 572.
494
HR 25 September 1992, NJ 1992, 750 (Balenpers)
495
Giuliano & Lagarde 1980, p. 24.
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Article 4 (3) provides that the presumption laid down in paragraph 2 does not operate to the extent
that the subject of the contract is a right in immovable property or a right to use immovable
property.
5.2.4 Provisions for certain consumer contracts and individual employment contracts
Article 5 establishes a specific conflict rule for certain contracts made by consumers. Article 6 does
the same for individual employment contracts. Both articles reflect the lawmakers’ intention to
provide for a more appropriate arrangement in matters where contracting parties have diverging
interests, and at the same time to secure a more adequate protection for the party who, from a socioeconomic
point of view, is regarded as the weaker party in the contractual relationship.496
In the
framework of this study however, Article 5 is not of much interest.
Based on the principle of functional allocation, the connecting factor in Article 6 is determined by
the person to be protected.497
The first paragraph limits the freedom of choice:
‘Notwithstanding the provisions of Article 3, in a contract of employment a choice of law made by the parties
shall not have the result of depriving the employee of the protection afforded to him by the mandatory rules of
the law which would be applicable under paragraph 2 in the absence of choice.’
The second paragraph states that the employment contract, in the absence of a choice of law and
notwithstanding Article 4, is governed by the law of the country in which the employee habitually
carries out his work in performance of the contract, even if he is temporarily employed in another
country. If the employee does not habitually carry out his work in any one country, the law of the
country in which the place of business through which he was engaged is situated, is applicable.
This does not mean that when the law applicable on the ground of the second paragraph is more
protective than the chosen law, the choice looses effect. In principle, the chosen law is applicable.
This rule only steps back when the provisions of the law that is applicable pursuant to paragraph 2
give employees better protection than the chosen law. The rule in Article 6 also covers the case of
invalid contracts and de facto employment relationships.498
Article 6, however, does not apply to
collective agreements.
5.2.5 Mandatory rules
Article 7 contains provisions concerning mandatory rules. This term is used by the Rome
Convention to describe rules of law which are intended to override the contractual freedom of the
parties and which are capable in at least some circumstances of taking effect irrespective of the
parties’ choice of applicable law.499
In the French, German, and Dutch text, these rules are
respectively called ‘lois de police’, ‘zwingende Vorschriften’ and ‘bepalingen van bijzonder dwingend recht’.
Mandatory rules are the same as what is called in France ‘lois d’application immédiate’, in Germany
‘Eingriffsnormen’, in the Netherlands ‘voorrangsregels’ and in Italy ‘leggi di applicazione necessaria’.500
Wadlow
argues that the term ‘internationally mandatory rules’ is preferable over ‘mandatory rules’. The
norms contemplated under articles 7(1) and 7(2) are those that are not only mandatory in the sense
of overriding the parties’ agreement, but also in the stronger sense that they are intended to apply
496
Giuliano & Lagarde 1980, p. 27.
497
Strikwerda 2000, p. 38.
498
Giuliano & Lagarde 1980, p. 28.
499
Wadlow 1998, p. 455.
500
Strikwerda 1995, p. 102.
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139
irrespective of the applicable law of the contract and perhaps the presence of substantial connecting
factors with a foreign legal system.501
Article 7 codifies principles that were already part of the legal system of several Member States and
other countries. For example, the Dutch Supreme Court, before the Convention took effect,
recognized the principle of mandatory law in the Alnati case.502
The Court stated that although the
law applicable to contracts of an international character is that, as a matter of principle, which the
parties themselves have chosen:
‘it may be that, for a foreign State, the observance of certain of its rules, even outside its own territory, is of
such importance that the courts must take account of them, and hence apply them in preference to the law of
another State which may have been chosen by the parties to govern their contract.’
The first paragraph of Article 7 provides that when applying the law of a country under the
Convention:
‘effect may be given to the mandatory rules of the law of another country with which the situation has a close
connection, if and in so far as, under the law of the latter country, those rules must be applied whatever the law
applicable to the contract. In considering whether to give effect to these mandatory rules, regard shall be had to
their nature and purpose and to the consequences of their application or non-application.’
There must be a genuine connection for the requirement to be fulfilled. A merely vague connection
is not sufficient. A case is closely connected to a certain country when for example a contract has to
be executed in that other country or when a party has its place of business in that country. The
contract should be connected as a whole to a country other than the one to which the contract is
submitted. When interpreting the requirement of connection, the nature and the purpose of the rule
must be taken into account, as well as the consequences of application or non-application.503
The second paragraph of the article gives precedence to the mandatory rules of the lex fori:
‘Nothing in this Convention shall restrict the application of the rules of the law of the forum in a situation
where they are mandatory irrespective of the law otherwise applicable to the contract.’
Certain delegations were concerned they would not be able to safeguard the rules of the law of the
forum, without this provision. Mandatory rules of the lex fori are subject to less strict requirements
than mandatory rules of third countries, as covered by the first paragraph. Lex fori mandatory rules
are already applicable when they are binding in a case.504
Article 7 pertains to mandatory rules of special significance. It is clear that this group consists of
rules that have some special importance for a country to avoid uncertainty that could arise if, for
example, courts were to ignore the provisions of a chosen law too easily by applying other
mandatory rules. However, it is not clear which rules have this mandatory character and which do
not have it. It has been argued that provisions that serve a public interest, such as regulations
concerning social and economic life, meet this test.505
501
Wadlow 1998, p. 456.
502
HR 13 May 1966, NJ 1966, 3 (Alnati)
503
Giuliano & Lagarde 1980, p. 30.
504
Strikwerda 2000, p. 70.
505
Bertrams & van der Velden 1999, p. 51.
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Mandatory rules are generally accepted as an important means to redress unequal bargaining power
and to promote the social or economic policies of the state in question. In dealing with mandatory
rules affecting the ownership of intellectual property rights, the first reason for adoption of
mandatory rules seems to weigh more than the second. In the droit d’auteur countries, copyright is
not seen as a pure economic right but can also has important social and cultural implications which
might be subject to mandatory rules in the general public interest.506
Article 22 of the Convention offers the possibility for Member States to make a reservation to this
article. Germany, Ireland, Luxembourg, United Kingdom, and Portugal have made such
reservations.
5.2.6 Rome Convention and copyright contracts
As stated above, the Rome Convention only provides rules for the contractual and the formal
aspects of a contract. This means that it does not establish rules for the proprietary aspects of the
assignment of rights, as described above.
When a choice of law in a contract concerning a transfer of copyright is made, generally few
difficulties arise. In the absence of a choice of law, Article 4 applies. In the case of an assignment of
copyright, it might not always be obvious what is to be regarded as the characteristic performance.
In the simplest contracts, the assignee of the right does nothing more than pay the agreed sum of
money, which cannot be regarded as the characteristic performance.507
According to Ulmer, this
changes when the assignee of the rights commits himself to exploit the work or to manage the right.
When an exclusive right to exploit the work is being granted, this can be different as well.508
When
the person who obtains the right commits himself to exploit the work, the centre of gravity is the
place of business of the corporation as being the centre of exploitation.509
An example is the
contract between an author and a publisher. The publisher commits himself to reproduce the work
and to distribute it.510
This is also true for contracts that do not hold an explicit obligation to exploit,
but where it can be inferred that this obligation exists. When an implied agreement is possible, the
judge who has to decide the case has to treat the question of whether an obligation to exploit exists,
as a preliminary question and apply the lex fori, according to Ulmer.511
Ulmer argues that when the author assigns an exclusive right to exploit the work, the place of
business of the assignee is decisive. An example is the contract to assign copyright to a collective
rights organisation. The organisation supplies the characteristic performance, by exploiting and
enforcing the copyright.512
Refraining from exercising the exclusive right can have a blocking effect
for the author. The centre of gravity lies in this case with the assignee, being the centre of the
exploitation acts.513
When works of several authors are published, the reference to the place of business of the publisher
might be desirable, in that it results in only one applicable law.514
One could argue that this is not a
consequent interpretation of the Rome Convention, since the Convention explicitly states that the
506
Wadlow 1998, p. 456.
507
Fawcett & Torremans 1998, p. 573.
508
Ulmer 1980a, p. 59.
509
Ulmer 1980a, p. 59.
510
Fawcett & Torremans 1998, p. 573.
511
Ulmer 1980a, p. 52.
512
Fawcett & Torremans 1998, p. 573.
513
Ulmer 1980a, p. 59-60.
514
Ulmer 1980a, p. 60.
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second paragraph is not applicable when the characteristic performance cannot be determined. In a
situation as stated above, it is possible to determine the characteristic performance (namely: the
authors/assignors), but the result is not favourable (several applicable systems of law). When
paragraph 1 applies through paragraph 5, the rule is the law of the country to which the contract is
most closely connected. This does not have to be the law of the country where the publisher has its
normal place of business, but this can also be the law of the country for which the right is being
assigned, the lex protectionis.515
However, not too much weight should be attached to the question of whose performance is the
characteristic one, since this doctrine only applies as a presumption. If, in an international situation,
it is impossible to determine the characteristic performance, paragraph 5 of Article 4 refers back to
paragraph 1.
Even if a contract were governed by a law that is determined either by the parties’ choice or by
Article 4, it is still possible that a court would favour a rule that protects the author, giving it the
status of a mandatory rule as in Article 7. There is no case law confirming this possibility nor is
there much literature on this subject. Ulmer writes that Article 7(1) is applicable to copyright
contracts, and specifically to contracts where a choice is made for a law that differs substantially in its
level of protection from the law of the country that is most closely connected to the contract.516
Katzenberger is of the opinion that Articles 5 and 6 codify a general principle that can also be
applied to copyright contracts. Authors can be compared to consumers and employees in their need
for protection.517
5.3 Formal aspects of transfer of rights
Article 9 of the Rome Convention lays down the rule concerning the formal aspects of contracts and
acts intended to have legal effect. This last group consists of acts intended to have legal effect that
are connected with already concluded contracts (for example termination of a contract), as well as
acts relating to the pre-contractual phase, for example the offer and acceptance of the offer. A
definition of formal aspects cannot be found in Article 9. The Giuliano-Lagarde Report gives a
possible definition:
“Every external manifestation required on the part of a person expressing the will to be legally bound, and in
the absence of which such expression of will would not be regarded as fully effective.”518
Article 9 distinguishes contracts concluded between parties located in the same country and
contracts concluded between parties that are located in different countries. Paragraph 1 states that
the first group of contracts is formally valid when the formal requirements of alternatively the lex
causae519
or the lex loci actus520
are met. The second paragraph lays down the rule for contracts
concluded by parties in different countries. For this group there are three possibilities: the lex causae
or the law of the country in which one of the parties resides. The fourth paragraph provides that an
act intended to have legal effect relating to an existing or contemplated contract is formally valid if it
satisfies the formal requirements of the lex causae or the law of the country where the act was done.
Paragraph 5 and 6 contain special provisions for consumer contracts and contracts the subject
matter of which is a right in immovable property or a right to use immovable property. No
515
Fawcett & Torremans 1998, p. 574.
516
Ulmer 1980, p. 62
517
Katzenberger 1988, p. 739.
518
Giuliano & Lagarde 1980, p. 32-33.
519
The lex causae is the law that applies on the material part of the contract.
520
The lex loci actus is the law of the country in which the contract is concluded.
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exception is made for the employment contract. The reason for this is that Article 6 is more flexible
than the article concerning consumer contracts. If the lex causae were to determine the formal
validity, in numerous cases, it would not be clear at the time of conclusion of the contract, which law
applies to the form of that contract. The Giuliano-Lagarde Report does state that, thanks to Article
7, mandatory rules regarding formal validity laid down by the law of the country where the work is
to be carried out can apply.521
If more than one law is applicable, for example in the case of a choice for different systems of law,
determining the applicable law for the form of the contract can be complicated. Giuliano and
Lagarde point out that in such a case it might be preferable to apply the law that governs the part of
the contract with which the litigious formal aspect is most closely connected to.522
When the
contract is concluded between parties that are located in different countries, difficulty arises as well.
Article 9(2) states that when a contract is concluded between persons in different countries, it is
formally valid if it satisfies the requirements as to form laid down by the law of one of those
countries or of the law governing the substance of the contract. Paragraph 3 indicates that when a
contract is concluded through the offices of one or more agents, the place to be taken in
consideration is where the agents are acting at the time when the contract is concluded. When the
agents agree to meet in a third country to conclude the contract, the first paragraph applies.
Similarly, if the agents are in different countries at the time when they conclude the contract, this
contract is considered, within the meaning of paragraph 2, to be concluded between persons in
different countries even if both the parties represented were in the same country at the time.
A national court can, by applying Article 7, set aside the alternatives of Article 9, the lex causae and
the lex loci actus. Certain formal requirements of a country to which the contract is closely connected,
can be of such a mandatory nature that they can be applied even though the law of that country is
not one of those which would normally determine formal validity under Article 9. The GiulianoLagarde
Report gives the example of the requirement that a non-competition clause should be in
writing, even though the oral form is permitted by the law of the place where the contract was
concluded or under the law chosen by the parties.523
5.4 WIPO Audiovisual Performances Treaty
During the 1996 WIPO Conference, as described in Chapter 3.1.1.4, no consensus could be reached
on the protection of performers in audiovisual productions. A resolution was accepted that held
that the ‘WIPO Performances and Phonograms Treaty’ (WPPT) would be supplemented with a
Protocol about the protection of performing artists of audiovisual works. Late 2000, a new
conference was held in Geneva aimed at the adoption of a treaty for the protection of performing
artists concerning their contributions to audiovisual productions. Beforehand, some scepticism
existed about the result to be reached: the interests of the European Union and the United States
would lie in different directions.524
Although agreement could be reached on several subjects,525
the
assignment of rights and the law applicable thereto turned out to be crucial obstacles for adoption of
the treaty.
The assignment of the performing artist’s rights was discussed in the context of Article 12 of the
Treaty. The general opinion on the subject in the United States differed greatly from the view
521
Giuliano & Lagarde 1980, p. 36
522
Id., p. 34.
523
Id., p. 35.
524
Cohen Jehoram 2000, p. 352-355.
525
Among these, sensitive subjects as the granting of exploitation rights and moral rights. In fact, on 19 out of 20 articles agreement
was reached.
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prevailing in continental-Europe. The United States argued for the transfer ex lege of the
performer’s rights to the producers, whereby actors would share in the exploitation proceeds of a
motion picture under collective agreements between actors (represented by the Screen Actors Guild)
and film producers. Europe, except for the United Kingdom, was strongly opposed to such a
transfer of rights.526
This became clear already from the opening speech on behalf of the European
Union:
“The protection of producers is not the target of this Protocol. Its objective is and should be the protection of
performers, balanced, of course, against the legitimate interests of producers. In this context, a mandatory
transfer of performers' rights at international level would be just as unacceptable as a rule which would provide
for the extra-territorial application of a Contracting Party's national law.”
The United States argued for the transfer provisions of the country where the motion picture is
produced to have extraterritorial application. This could have led to the application of the doctrine
of ‘work made for hire’ to American motion pictures marketed in the European Union.
The Basic Proposal contained four alternative proposals for article 12:
Alternative E - Transfer Once a performer has consented to the incorporation of his performance in an
audiovisual fixation, he shall be deemed to have transferred all exclusive rights of authorization provided for in
this Treaty with respect to that particular fixation to its producer, subject to written contractual clauses to the
contrary.
Alternative F - Entitlement to Exercise Rights In the absence of written contractual clauses to the
contrary, once the performer has consented to the audiovisual fixation of his performance, the producer shall be
deemed to be entitled to exercise the exclusive rights of authorization provided for in this Treaty with respect to
that particular fixation.
Alternative G - Law Applicable to Transfers
(1) In the absence of any contractual clauses to the contrary, a transfer to the producer of an
audiovisual fixation of a performance, by agreement or operation of law, of any of the exclusive rights of
authorization granted under this Treaty, shall be governed by the law of the country most closely connected
with the particular audiovisual fixation.
(2) The country most closely connected with a particular audiovisual fixation shall be
(i) the Contracting Party in which the producer of the fixation has his headquarters or
habitual residence; or
(ii) where the producer does not have his headquarters or habitual residence in a
Contracting Party, or where there is more than one producer, the Contracting Party of which the majority of
performers are nationals; or
(iii) where the producer does not have his headquarters or habitual residence in a
Contracting Party, or where there is more than one producer, and where there is no single Contracting Party
of which a majority of the performers are nationals, the principal Contracting Party in which the
photography takes place.
Alternative H
[No such provision]
Alternative E provided for a rebuttable presumption of transfer of rights. Alternative G contained a
rule of conflict that, in the absence of written agreements to the contrary, appointed the law of the
526
Heevel 2001, p. 61
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144
country most closely connected with the fixation. Alternative H embodied a proposal not to
regulate the transfer and the applicable law at all.
The European Commission appeared willing to include a provision that would make transfer
possible. To this provision, an Agreed Statement would have been added stating that the applicable
law would be determined by existing rules of conflict, without prejudice to the mandatory rules of
the country where protection was sought. Mandatory rules that would preclude a transfer, would
therefore still apply. The text of the Agreed Statement did not give a definite answer on the question
whether this would be the lex fori or the lex protectionis.527
Article 12 Transfer Contracting Parties may provide that exclusive rights of authorization provided for in
this Agreement are transferred, with respect to a particular audiovisual fixation, from the performer to the
producer of that particular fixation.
Agreed statement concerning the law applicable to a transfer by agreement Without
prejudice to international obligations, the understanding is hereby confirmed that a transfer by agreement of
exclusive rights of authorization granted under this Agreement shall be governed by the law of the country
chosen by the parties or, to the extent that the law applicable to the contract has not been chosen, by the law of
the country most closely connected with it, without prejudice to any mandatory rules, including on inalienability
and unwaivability of rights, in the law of the country where protection is sought.
The wording of the Agreed Statement is unclear as to whether the term ‘mandatory rules’ refers to
mandatory rules in the sense of Article 7 of the Rome Convention. Note that in other languages
than English, mandatory rules in the sense of Article 7 are indicated with a different term than
mandatory rules in general.528
The United States did not agree with the European Union’s proposal . The proposal of the United
States stated a rule of conflict that would have extended to both the transfer of rights and the power
to exercise the rights transferred:
Article 12 Transfer and Exercise of Exclusive Rights of Authorization
(1) Contracting Parties may provide that exclusive rights of authorization provided for in this Treaty are
transferred from the performer to the producer of an audiovisual fixation, or may be exercised by the producer
with the consent of the performer to the fixation.
(2) Without prejudice to international obligations and to public or private international law a transfer by
agreement of exclusive rights of authorization granted under this Treaty, or [an agreement to exercise such
rights] [an entitlement to exercise such rights based on the consent of the performer to the fixation], shall be
governed by the law of the country chosen by the parties or, to the extent that the law applicable to the
agreement between the performer and the producer has not been chosen, by the law of the country with which
the agreement is most closely connected.
Agreed statement concerning Article 12 It is understood that Article 12 applies only to exclusive
rights of authorization, consequently it does not apply to moral rights and rights of equitable remuneration.
This proposal was unacceptable for the European Union and from this point on the negotiations
reached an impasse; the negotiations effectively broke down on Article 12. In September 2001,
527
Like article 5(2) of the Berne Convention, it is not clear whether the passage should be read as ‘for which protection is sought’
which would mean that the lex protectionis would apply, instead the lex fori.
528
In Dutch for example, the ‘article 7 rules’ are called ‘bepaling van bijzonder dwingend recht’’.
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another WIPO assembly was held, but without result. A new meeting of the WIPO assemblies,
where this topic will be discussed again, is scheduled for September 2002.
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Chapter 6. Legislative Differences and their Impact on the Internal
Market
In this study, we have first examined the current international framework, only to discover that is
has little to offer in terms of copyright contract law. We have also seen the same is true at the
European level. Although several directives in the area of copyright and neighbouring rights contain
a few rules and references relating to contractual practices, an acquis communautaire in this field hardly
exists. Subsequently, we have looked at the general principles of contract law that are relevant to
copyright contracts, including such old favourites as the doctrines of good faith, imprecision, and
fairness and equity. The core of this study, Chapter 4, then provided a detailed country-by-country
review of specific rules relating to copyright contracts. As we have seen, these provisions can be
divided into several distinct categories: rules on ownership of rights, forms of transfer (i.e.
assignment, licence, and waiver), rules governing formalities, restrictions on transfers, rules regarding
remuneration, rules of interpretation (scope) of contracts, rules governing the effect of transfer in
relation to third parties, and rules on termination of contracts.
6.1 Summary of legislative differences
A first glance at the provisions in force in the fifteen Member States of the European Union
concerning copyright contracts reveals a picture full of contrasts. In six countries, France,
Belgium, Italy, Luxembourg, Spain, and Portugal, the copyright act contains extensive measures
of protection, which, in addition to a number of principles of general application, lay down specific
rules of form and content relating to publishing contracts, public performance contracts, advertising
contracts, and contracts for the production of audiovisual works. In another three countries,
Germany, Austria, and Greece, the measures of protection are limited to a number of general
principles of interpretation of copyright contracts. In the remaining six Member States, the United
Kingdom, Ireland, the Netherlands, and the Nordic countries, the copyright acts contain only
scarce measures apart from the few provisions flowing from the implementation of European
Directives or from the general principles of law. Nevertheless, as will be apparent from the
following summary, the differences observed in the legislation of the Member States regarding
copyright contracts may not be as significant as one might tend to believe.
Ownership of rights
All Copyright Acts in force in the Member States provide that, in principle, the initial owner of
copyright in a work is the natural person who created it. A few Copyright Acts designate a natural
or legal person other than the natural person who created the work as the author of that work, for
example in the case of anonymous, pseudonymous, collective, or derivative works. In the remaining
Member States however, the copyright law merely establishes in these circumstances a presumption
of ownership in favour a natural or legal person other than the natural person who created the work.
Similarly, the copyright acts of only five of the fifteen Member States contain a general and express
presumption of ownership in favour of the employer for works created in the course of an
employee’s functions. In some of the Member States, the courts have read in the employment
contract an implicit transfer of rights in favour of the employer. Even in countries where the creator
doctrine is strictly applied, courts have accepted the employer has at least the right to exercise certain
powers over the work created under his employment but only to the extent necessary for the
exercise of his customary business activities.
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The copyright acts of most European Member States529
are silent on the issue of the ownership of
works created on commission. In the absence of any legislative provision on the subject, courts
generally conclude that the owner of the rights in a work created on commission is the physical
person who created it. However, in several Member States, courts have accepted the argument that,
despite the silence of the law, the commissioner should be able to use the works within the limits of
the object and purpose of the contract.
With the implementation of the provisions of the Rental and Lending Rights Directive, the
copyright acts of – almost – all Member States designate at least the principal director of the
audiovisual work as one of the authors of the work. Several legislators have taken advantage of the
possibility to designate other persons as co-authors of an audiovisual work, including in certain cases
the film producer. However, the legal provisions relating to the transfer of ownership of rights in a
cinematographic work differ widely between Member States. In the Copyright Acts of about half of
the Member States, a rebuttable presumption of transfer of the performer’s and, in some cases, the
co-author’s rights in an audiovisual work is established in favour of the producer, under the
condition that an unwaivable and equitable remuneration be paid. The Copyright Acts of the
remaining Member States only provide that if the author transfers his rights, he is entitled to an
unwaivable and equitable remuneration.
Forms of transfer of rights
Even when authors and performers are considered to be the first owners of the rights on the subject
matter they created, they must nevertheless agree to some form of transfer of rights for the
commercial exploitation of their creation. In most Member States, copyrights may be subject to an
assignment. Germany and Austria are the two exceptions, where the Copyright Acts allow authors
to grant licences to use their works, but do not permit the transfer of ownership, except by
testamentary disposition. In all European Member States, authors and performers may grant
exploiters a licence for the use of their work or other subject matter, licence which may be exclusive
or not. In addition, while the global renunciation of the creator’s moral rights would generally be
deemed invalid, the Copyright and Related Rights Acts of most Member States do allow that in
particular circumstances authors and performers waive certain attributes of their moral rights.
Finally, except with respect to the authors’ and performers’ remuneration right for the rental of
audiovisual works, the national legislation of the European Member States regarding the imperative
character of the remuneration rights has not been harmonised. As a result, authors and performers
may waive their remuneration right in some countries but not in others, and may waive their rights
with respect to one act but not to another.
Requirements of form
The legislation of almost all Member States requires the existence of a written contract for the
transfer of copyright and related rights. This requirement is generally a formality ad probationem, not
ad substantiam, i.e. it serves as a rule of evidence in the hands of the author or performer to prove the
existence and scope of the transfer, rather than as a condition of validity of the transfer of rights.
When the obligation to put the contract in writing constitutes a condition of validity of the contract,
the failure to comply with this requirement can only be invoked by the author or the performer and
is generally met with the relative nullity of the contract. Only the laws of Austria and the Nordic
countries do not expressly require the use of a written instrument for the validity or the evidence of
a transfer of rights.
529
Austria, Denmark, Finland, Greece, Germany, Ireland, Italy, Luxembourg, Spain, Sweden, and United Kingdom.
Final Report
149
Scope of transfer
The Copyright Acts of ten of the fifteen Member States impose certain obligations on the
contracting parties regarding the scope of the transfer of rights. Thus, a number of Copyright Acts
require that a contract pertaining to the assignment or the licence of rights specify the duration, place
of exercise and, where payment is involved, the amount of remuneration, for each of the rights
transferred. On the other hand, while they impose no specific obligations regarding the scope of the
transfer of rights, other Copyright Acts do put an express time limit on the fulfilment of the
producer’s obligation to exploit the work.
More than half of the European Member States expressly regulate the transfer of rights relating to
forms of exploitation that are not known or foreseeable at the time the copyright contract was
concluded. The laws of six Member States, i.e. Belgium, Germany, Greece, Italy, and Spain,
contain an explicit prohibition on the transfer of rights in respect of forms of exploitation unknown
at the time the contract is concluded. In Austria and the Netherlands, the copyright and related
rights legislation contains no explicit rule restricting the transfer of rights in future forms of
exploitation. However, the courts have held such transfers of rights in future forms of exploitation
invalid on the basis of the general rules of copyright law. In France and Luxembourg, a transfer of
rights in future forms of exploitation is allowed provided that the contract foresees the payment of a
separate remuneration for these forms of exploitation.
Like in the case of the transfer of rights in future forms of exploitation, the national legislation of the
Member States varies quite a lot with respect to the possibility to transfer rights on future works.
The Copyright Act of two Member States, Ireland and the United Kingdom, expressly allows such
transfers to take place without any restriction. The legislation of five Member States makes no
reference to the transfer of rights in future works, which leads us to believe that the transfer of rights
in future works could take probably place. The Copyright Acts of five other Member States allow
authors and performing artists to transfer rights in works or other subject matter that are not created
at the moment the contract is concluded, under certain conditions. In most cases, such transfer is
possible subject to a limitation in time. Finally, three countries, France, Greece, and Spain, strictly
prohibit the transfer of rights in future works, however, non-compliance with this rule usually leads
only to relative nullity. A valid agreement transferring rights in ‘future’ works is presumed to exist
unless the author raises the irregularity of the contract.
Determination of remuneration
Rules on (equitable, proportional or lump-sum) remuneration vary from one Member State to the
next. In the Nordic countries, Ireland and the United Kingdom, no such rule exists at all. The
law of only six Member States, namely of France, Belgium, Greece, Italy, Spain, and Portugal,
specifically grant authors and/or performing artists the right to receive a proportional remuneration
for the use of their works or other subject matter. In most cases, the proportional remuneration
paid for the public performance of a work is based on the price, exclusive of tax, paid by the public
to enjoy the work. In the case of publishing contracts or of any contract that involves the
production of copies, the remuneration is then based on the sales price of each copy. When the law
requires that authors and performing artists receive proportional remuneration, it usually also puts an
obligation on the exploiter to render accounts on the receipts generated from the exploitation of the
work. The provisions that authorise the payment of a lump sum are generally formulated as an
exception to the basic right of the author to receive proportional remuneration, that is when such
proportional remuneration is impossible to calculate or not justifiable in view of the nature of the
contribution. In other words, the regulation of lump sum remuneration is usually paired in the
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150
national legislation with the regulation of proportional remuneration, and can therefore be found in
the laws of France, Belgium, Greece, Italy, Spain, and Portugal. Except for Greece, the
copyright acts of these Member States expressly allow authors to ask for a modification of the
contract, if the remuneration agreed upon is disproportionate to the income generated from the use
of the work. The circumstances under which this right may be invoked differ per country.
However, such a revision is generally permitted only with regards to the payment of a lump sum. In
other countries, the author or performer who is disadvantaged by a grossly disproportionate
remuneration may find some remedy in the general principles of law, such as the principle of good
faith, of public order and good morals, or unfairness.
Apart from the measures implementing the provisions of the Rental and Lending Directive, which
grants authors and/or performers an unwaivable right to equitable remuneration for the rental of
phonograms and films, the option of an equitable remuneration in exchange for the transfer of
rights is retained only in very specific and limited instances. The recent modifications to the
German Copyright Act constitute a significant exception to the noticeable reluctance of European
legislators to rely on the principle of ‘fair compensation’ instead of proportional remuneration or
lump sum payments. When the law does specify that an equitable remuneration or fair
compensation should be paid to the author or the performer, it generally also provides that, if the
contracting parties cannot agree on an equitable remuneration, the level of such remuneration will be
established by a mediator or competent authority. In most cases, the law provides no definition of
what is to be considered an ‘equitable’ or fair remuneration in the circumstances. In this respect, the
legal community of every Member State awaits the forthcoming decision of the European Court of
Justice in SENA v. NOS case with much anticipation, hoping that the Court will give some
indication as to the meaning of ‘equitable remuneration’ and as to the proper method of calculation
of such remuneration.
Interpretation of contracts
According to the Copyright Act of eleven of the fifteen European Member States, the courts must
strictly interpret clauses in copyright contracts that provide for the transfer of rights from an author
or performing artist to an exploiter. The legislation of some Member States give the courts the
express or implied instruction to interpret grants of rights as encompassing only those rights that are
required by the purpose pursued by the contracting parties. This rule of interpretation is also known
as the ‘Zweckübertragungslehre’. Under the legislation of several other Member States, a written
document must mention the duration, place of exercise, and the amount of remuneration for each
of the rights transferred. On the basis of this provision, the courts generally consider that, when in
doubt, a contract must be interpreted in favour of the author or the performer, according to the
maxim in dubio pro auctore. Thus, if the contract does not enumerate each right individually, any right
that does not appear in the list, is not covered by the transfer. In the four countries where the
Copyright Act contains no express provision on the interpretation of copyright contracts, the
obligation to give a restrictive interpretation may nevertheless derive from the general principles of
interpretation that are applicable to civil law matters.
Effect of transfer with respect to third parties
In almost all European Member States, the law provides that the transferee is only entitled to
transfer the rights he acquired to a third party, provided that the author has given his consent to the
transfer. One exception to this general rule is the transfer of rights that occurs as part of the sale of
the whole or part of the exploiter’s business. In this case, the prior consent of the author or
performing artist is usually not required. The question of whether the exploiter has standing to sue
for copyright infringement is regulated in less than half of the Member States. In general, the
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151
assignee is permitted to sue for copyright infringement in his own name. By contrast, the holder of
a non-exclusive license is not entitled to institute proceedings without the consent of the author. In
the absence of any legislative provision on this issue, it is difficult to give a definite answer to the
question of whether the assignee and/or the licensee have standing to institute proceedings in
copyright infringement cases. The Copyright Acts of about half of the fifteen Member States
contain express provisions concerning the right of the transferee to pledge, secure, or seize the
acquired rights. However, the rules are far from uniform: in some countries, the right may be
offered as a security, and in others not.
Termination of contract
It is generally accepted in contract law that, unless the parties have stipulated otherwise, contracts
that are concluded for a fixed period of time may only be terminated at the end of their term.
However, a party is entitled to ask for the termination of the agreement if the other party has
substantially violated or failed to fulfil his obligations under the contract. The majority of the
copyright laws of the European Member States – all but Ireland, the Netherlands and the United
Kingdom – give the author the express right to terminate the contract in the event that the exploiter
does not exploit the transferred rights within a specified timeframe, since this is the exploiter’s main
obligation under the contract. More than half of the Member States have expressly admitted the
exploiter’s bankruptcy, judicial liquidation, or declaration of insolvency as a ground for the resiliation
[juiste term?] of the transfer of rights. However, the conditions under which termination may be
invoked by the author vary from one Member State to the other.
6.2 Impact of differences on the Internal Market
It is impossible, without conducting an economic survey among the stakeholders, to assert with any
certainty whether the existing differences in the law of copyright contracts in the Member States of
the European Union affect the functioning of the Internal Market. The limited time and means to
produce the present study did not allow for such an assessment. Intuitively, we would tend to
believe that the disparities we found may not be so important as to affect the efficient functioning of
the Internal Market. A first indication that the impact on the Internal Market may be somewhat
limited is that, to our knowledge, neither the European Court of Justice nor the national courts have
had to decide a case where the application of the rules on copyright contracts of one Member States
raised problems in another Member State. A second indication comes from the fact that there
appears to be a general consensus among Member States on a number of important issues. For
example, the requirement of form of a transfer of right should cause no problem, since all but two
Member States require formalities of some sort (usually a written deed) for assignments or licenses
to be valid, or validly proven. With respect to the substance of the contract, contracting parties can
also rely on the fact that a majority of States only permit the subsequent transfers of rights to third
parties, if the author has given his consent, unless such subsequent transfer is part of the sale of the
whole or part of the exploiter’s business. A majority of Member States allow for the termination of
contracts in case the transferred right is not used within a certain period. All countries also permit
the waiver of certain attributes of the authors’ or the performers’ moral rights in the context of
copyright contracts, subject to certain conditions and restrictions. In most Member States, even
those of the copyright tradition, courts are instructed or inclined to interpret transfers of right in a
restrictive manner. The restrictive interpretation of copyright contract may be based on an express
provision laying down the in dubio pro auctore principle or the ‘purpose-of-transfer’ rule, or on the
general principles of contract law, such as bona fides (good faith), fairness and equity, or the generally
accepted notion that the law has a duty to protect the weaker party.
Final Report
152
The greatest uncertainty that contracting parties may have to face in the context of cross-border
activities arises from differences in rules on the ownership of rights on works created under
employment, rules on the scope of the transfer and the ability of transferring right in future works or
unknown modes of exploitation, and rules on remuneration. Uncertainty may also arise from the
fact that, in some instances, author-protective measures constitute mandatory rules that may not be
set aside by contract, while in other countries, they are merely default rules. To illustrate this point,
the British Music Rights Society, which represents British composers, songwriters, music publishers,
and their collecting societies, has given the following example:
‘UK law requires the assignment/ exclusive licence to be in writing (ss 90 (3) and 92 (1) CDPA
respectively). In contrast, under German law it is not possible to assign copyrights (§ 29 UrhG), and a licence
cannot encompass any form of exploitation not in existence at time of the granting of the licence (§ 31 (4)
UrhG). This example shows the difficulty in harmonising this aspect of contract law, regardless of the complex
nature and finesse of copyright law. Additionally, in our experience there has been no evidence of problems
caused by this difference in law’.
530
The lack of legal certainty due to disparities in national laws may to some extent be compensated by
the fact that parties have the freedom to choose the law applicable to copyright contracts. This
freedom, however, may not – and perhaps should not – be without limitation. As explained in
Chapter 5, the Rome Convention of 1980 governs most aspects relating to copyright contracts,
except clearly non-contractual issues such as the determination of authorship and ownership. We
have also seen that the freedom to choose the law applicable to contracts is central to the
Convention, albeit subject to certain limitations: rules of mandatory law may not be circumvented;
priority rules prevail. Whether and to what extent national rules on copyright contracts qualify as
such is debatable. In the end, this is for the courts to decide.
A third indication of the limited impact on the Internal Market of legislative differences in the area
of copyright contract law could be inferred from the discussions that have recently taken place
concerning the need for European Action in the area of general contract law.531
Several documents
originating from governmental bodies, businesses, and consumer groups were submitted in response
to the European Commission’s Communication on European Contract Law.532
Generally speaking,
the governmental bodies dealing with the implications for the internal market of diversities of
contract law affirmed that there are problems, or at least that there may be. However, only a
minority of contributions mentioned specific problems. Among the potential problems that might
arise are the information costs resulting from different national contract laws, which create an
obstacle to cross-border transactions, and the difficulties associated with the institution of crossborder
litigation. It has also been suggested that the complexity of the current legal situation and the
problem of the applicable law cause substantial obstacles. One government accepted that the
internal market may not be functioning perfectly, but considered that the extent of any such
problems would vary from sector to sector. However, other governmental bodies were of the
opinion that the co-existence of different national contract laws was not in itself necessarily inimical
to the functioning of an internal market.
The responses submitted by businesses differ from one sector to the other. One of the problems
mentioned by representatives of the media industry who took part in the consultation was said to
530
British Music Rights Response to the Communication from the Commission to the Council and the European Parliament On
European Contract Law, London, 24 October 2001, p. 2.
531
Communication from the Commission to the Council and the European Parliament on European Contract Law, (COM(2001)
398 final), Brussels, 11 July 2001.
532
See: European Commission, Summary of the responses to the Commission's Communication on European
contract law (COM(2001) 398 final), Brussels, 29 April 2002.
Final Report
153
arise as a result of the diversities in the implementation of directives and the different applicable laws
and jurisdictions, which can prove to be a very real hindrance to cross-border trade. A specific
example of these problems concerns the definition of terms: ‘equitable remuneration’ is, they say, a
meaningless term in the UK legislation implementing the directive on rental, lending and other rights
relating to copyright.
533
This problem is neither specific to UK legislation nor specific to the
implementation of the Rental and Lending Rights Directive. For example, the meaning of the
expression ‘equitable remuneration’ raises problems in all Member States, where reference is made to
the notion of ‘equitable remuneration’, as the SENA v. NOS case illustrates so blatantly. Moreover,
the implementation of most if not all directives leads to some discrepancies between the Member
States. Indeed, such discrepancies are almost unavoidable, for Member States are in principle free to
implement European directives as they see fit. Interestingly, the need for harmonising existing rules
on copyright contracts was not mentioned at all during the consultations.
6.3 Scope for harmonisation
Considering the rather limited impact that the legislative differences in the area of copyright contract
law are suspected to have on the Internal Market, there may be little scope for harmonisation of the
rules on copyright contract across the European Member States at this stage. The harmonisation of
this body of rules may be unnecessary and even undesirable for two additional reasons. First, any
harmonising measure in the field of copyright contract law must rest on a solid bedrock of
harmonised substantive copyright law. Although the European legislature has been successful in
approximating important aspects of the law of copyright and related rights, most recently by
adopting of the Directive on the harmonisation of copyright and neighbouring rights in the
Information Society, important areas of the law remain un-harmonised. This is particularly true for
two main pillars of copyright that are particularly relevant, and in fact, directly related to the field of
copyright contracting: initial ownership of rights and moral rights. It is hard if not impossible, to
imagine harmonisation of copyright contract law without prior, or simultaneous, approximation of
rules on moral rights and ownership, which have not been harmonised at the European level, with
the exception of the rules of ownership on audiovisual works. The collective administration of
rights constitutes another aspect of the exploitation of copyright that is yet to be addressed at the
European level. It is a known fact that the nature and scope of the agreements signed between
members and collective societies vary considerably from one society to the next and from one
country to the next.534
In other words, to effectively address the issue of copyright contracts, the
European legislator would have to intervene in copyright law on a very broad scale, or run the risk
of adopting piece-meal and less satisfactory measures. In addition, any further harmonisation of the
rules on copyright would risk leading to similar inconsistencies of implementation at the national
level as the ones previously observed, whereby the expected level of harmonisation would fail to be
achieved.
Second, the principle of subsidiarity provides a strong argument against harmonisation. Most
aspects of copyright contract law fall indeed within the exclusive competence of the national
legislatures. Copyright contract law is, strictly speaking, part of the law of contracts, in general. In
addition, the legal protection granted to authors and performing artists derives, in many jurisdictions,
from labour and social law. Moreover, many aspects of copyright contract law are predicated, at
least in part, upon cultural considerations, such as the desire to protect independent authorship
against increasingly dominant media and entertainment conglomerates. At present, apart from a few
areas of special European concern, such as consumer law, commercial agency, and electronic
533
Id., p. 10.
534
See: Guibault 1997, p. 84.
Final Report
154
commerce, contract law firmly remains a matter of the national legislatures.535
Whereas the principle
of subsidiarity is a central element in matters of pure contract law, it is particularly compelling in
matters of social and cultural policy. In view of the fact that there seems to be no real indication that
the functioning of the common market urgently requires the approximation of the laws of Member
States in this area, it is therefore questionable whether an action from the European legislator
towards the harmonisation of the rules on copyright contracts would be consistent with article 5 of
the Treaty establishing the European Community.
The discussions that have recently taken place concerning the need for European Action in the area
of general contract law give additional support to our last argument against harmonisation. In its
Communication to the Council and the European Parliament on European Contract Law, the
European Commission proposed four different courses of action:
1. No Community action;
2. To promote the development of common contract law principles leading to more
convergence of national laws;
3. To improve the quality of legislation already in place; or
4. To adopt new comprehensive legislation at Community level.536
In the few responses submitted by industries in the media sector, Option 1 found broad support.
Generally, contributors from the media opposed Option 2, where the development of guidelines,
codes of conduct or standard contracts by the European institutions were considered not to be the
best approach, especially if such instruments were likely to become binding and represent a
limitation on freedom of contract. Such instruments should be promoted only by economic
operators. There was a diversity of opinion in the media sector on Option 3. Some contributors
supported comprehensive legislative improvement consisting in the removal of inconsistencies while
others thought that an analysis of existing directives must be conducted on a case-by-case basis and
improvement should be achieved by legislation targeting discrete areas of law rather than complete
harmonisation. Regarding Option 4, most of the contributors from the media do not see any need
for intervention by the Commission by way of a new instrument. Some associations are opposed to
any fixed contract conditions for business contracts because at the present time there is no need for
the creation of a European civil code.
In sum, we believe that issues of copyright contract law are best addressed at the national level, since
the national legislator is in the best position to reconcile the principles of copyright law, with those
of contract law, labour law, and social law, while taking account of the relevant cultural
considerations. In our opinion, the demand expressed within some Member States for a more
adequate protection for creators against abusive contractual practices may indeed be quite justified.
Nevertheless, we wish to emphasise the fact that the conclusion of collective agreements between
representatives of authors or performers on the one hand and publishers, broadcasters or producers
on the other, tends to provide the most satisfactory solution for all parties involved. Recent
experience shows that satisfactory collective agreements are often reached in the absence of any
author-protective measure, like in the Netherlands,537
but also sometimes despite the very existence
of elaborate author-protective measures, like in France.538
Finally, it should be stressed that, in
535
See Communication from the Commission to the Council and the European Parliament on European Contract Law, Brussels, 11
July 2001, COM(20001) 398 final. Annex I of the Communication provides an overview of the Community acquis in the field of
contract law.
536
Communication from the Commission to the Council and the European Parliament on European contract law 2001/C
255/01).
537
See for example: ‘Modelcontract voor auteurs vernieuwd’, NRC Handelsblad, 21 May 2002.
538
Vercken 2001, p. 149.
Final Report
155
deference to the principle of freedom of contract, the most sensitive and crucial issue in a copyright
contract should always remain exempt from any type of legislative intervention: the actual amount of
remuneration paid to the author or performer. Consequently, collective bargaining offers perhaps
the only guarantee that the interests of authors and performing artists will be duly taken into account
when the time comes to determine the level of remuneration.
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156
Chapter 7. Conclusions and Recommendations
If this study has demonstrated anything, it is that the law pertaining to copyright contracts does not
constitute a coherent body of law. Instead, the law of copyright contracts is an amalgam of rules
found in general contract law, copyright law, and special laws. By the same token, the rationales of
copyright contract law are a mixtum compositum of arguments based primarily on social welfare
(protect the weaker party) and economic efficiency (concentrate rights in the exploiter, promote legal
security).
The question, which is central to this study, is whether disparities in the national laws of the Member
States exist to such a degree that a Community initiative would be justified. To this end, we have
examined in detail the law currently in force in the Member States as it relates specifically to
contracts concluded by authors or performers on the one hand and publishers, broadcasters or
producers on the other.
Recommendation 1:
In light of our findings and for the various reasons mentioned in subsections 6.2 and 6.3 above, a
Community initiative on the harmonisation of the rules on copyright contracts may be, at the
present stage, wholly premature.
Of course, a Community initiative in this field need not necessarily be of a legislative nature. As the
European Commission has indicated in its Communication on European Contract Law, various
forms of ‘soft’ harmonisation, including the development of industry codes or standards, may
present viable alternatives to legislation. In many Member States model or standard contracts
negotiated bilaterally, and fairly, between representatives of authors or performers on the one hand
and publishers, broadcasters or producers on the other, have effectively made statutory laws on
copyright contracting redundant. In the Nordic countries and the Netherlands for example, the
conclusion of collective agreements between associations of authors and performers on the one
hand and associations of exploiters on the other hand, constitutes an important element for the
protection of the interests of authors and performing artists, even if the law provides little or no
express measure in this sense. Collective agreements play an important role in the protection of
authors and performing artists even in countries where copyrights contracts are extensively
regulated, like France and Germany. The new provisions of the German Copyright Act offer an
interesting illustration of this point. While the new Act contains several measures regarding
individual exploitation contracts, it also encourages parties to negotiate collective bargaining
agreements, by establishing a legal presumption according to which the compensation agreed to in a
collective agreement is fair. The legislative measures concerning the composition and procedure of
the arbitration committee constitute a guarantee in this sense. Admittedly, the success of the new
provisions of the German Copyright Act depends for a large part on the willingness of all
contracting parties to enter into collective agreements.539
In any case, the main advantage of this
form of (self)regulation is that it respects the parties’ freedom of contract, while providing
specifically tailored solutions for the different sectors of the copyright industry, in which authors and
performers are working.
539
Schippan 2002, p. 174; and Lenselink 2002, p. 37.
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158
Recommendation 2:
It is strongly recommended that the European Commission promote, at the Community level, the
conclusion of model contracts between representatives of authors or performers on the one hand
and publishers, broadcasters or producers on the other.
Moreover, assuming that the rules on copyright contracting will, in most cases, not qualify as either
mandatory or priority rules according to the rules of private international law, the parties to a
copyright contract remain free to choose the law they wish to apply. In the light of the structural
imbalance in bargaining power between author or performer, on the one hand, and publishers,
broadcasters, or producers on the other, this freedom may result in a choice of the law of a country
(within or outside the EC) that offers little or no contractual protection to authors or performers.
The Rome Convention of 1980 leaves open the possibility of totally circumventing the wellestablished
body of author-protective copyright contract law in nearly all Member States.
Interestingly, the Rome Convention does provide for special protective rules for certain classes of
structurally weaker parties, such as consumers and employees. Both categories are guaranteed
protection according to their ‘own’ (i.e. national) mandatory law, even if foreign laws are chosen to
apply. Arguably, a similar rule benefiting authors and performers in contractual relationships would
deserve serious consideration.
Recommendation 3:
The future incorporation of the norms of the Rome Convention into a Community Regulation
would present the perfect opportunity of introducing a set of rules of private international law
specifically relating to copyright contracts.
Comparative Table of Legislation
Initial
Ownership
Audiovisual
works
Transfer of
rights
Creator doctrine Employer Commissioner Rights vest in
author
General cessio legis to
producer
Cessio legis -rental
& lending
Right to
remuneration
Assignment License Waiver (attr.
moral right)
Austria 10(1) 40(b) n/a 38(1) 69(1) n/a 16(a) 23(3), 67(2),
74(2)
24(1) 40(1)
Belgium 6(1) 3(3)(1)
35(3)(1)
3(3)(2)
35(3)(2)
14 18, 36(1) n/a 24 3 3(1) 1(2)
Denmark 1 59 n/a 1 58 65(3) 58(a) 53(1) 53(1) 3
Finland 1 40(b) n/a 1 39 45 n/a 27 27 3
France 113-1 111-1
113-9
132-3(1) 113-7 132-24
212-4
n/a n/a 122-7 132-8 121-4, 212-
2
Germany 7 69(b) n/a 7 89(1), 92(1) n/a 27 29, 78 31 39, 62, 93
Greece 1(1), 6(1) 8 n/a 9 34 n/a 34(4) 13(1) 13(2) 16, 50
Ireland 21, 23(1) 23(1)(a) n/a 21(b) n/a 124(1),
297(1)
125(1),
298(1)
120(1), 293 122, 295 118, 302
Italy 6 12bis 88 44 45, 84(1) 18bis, 84(1) 46bis, 84(2) 107 119, 136 22
Luxembourg 7 32(2) n/a 21 24, 51 52 64 12 12 11
The
Netherlands
1 7; 3
RRA540
6 45(a)(2) 45(d); 4 RRA 45(d); 4
RRA
45(d)(3); 4
RRA
2(1) 2(1) 25, 45; 5(3)
RRA
Portugal 19 14(1), 165,
174
13 22 125(2) n/a 131 40 41(1),
128(1)
56
Spain 8 51(1)-(3) 110 87 88 109 90(1),
109(2)
48 48, 50(1) 14
Sweden 1 40(a) n/a 1 39 45 n/a 27 30 3
United
Kingdom
11(1) 11(2) n/a 9(2)(ab) n/a 93A(1),
191F
93B, 191G 90(1), 191B 92, 191D 94, 193
540
RRA = Dutch Related Rights Act.
Final Report
160
Written
instrument
Limitations
on transfer
Remuneration
Scope, time, place Future forms Future works Proportional Equitable Lump sum Best-seller clause
Austria n/a n/a n/a 31(1) n/a 86 n/a n/a
Belgium 3(1)(2), 35(2) 3(1)(4) 3(1)(6) 35(2)(4) 3(2), 35(2)(5) 17, 19, 26(2)(1),
36(3)
n/a 26(2)(2) 26(2)(2),
32(2)
Denmark n/a n/a n/a n/a n/a 58a n/a n/a
Finland n/a 30 n/a n/a n/a n/a n/a n/a
France 131-2, 212-3 131-3(1) 131-6 131-1 131-4, 132-5, 132-
25, 212-4 to 8
n/a 122-11, 131-4,
132-5, 132-6,
214-1, 311-3
131-5
Germany 40 31(1) 31(4) 40 n/a 32, 32a, 36, 36a, 86 n/a 32a
Greece 14 15, 34(2) 13(5) 13(5) 32-37 18(3), 34(4), 46(3), 49 32(1), 33(2) n/a
Ireland 120(3), 293(3) n/a n/a 121(4), 294(1) n/a n/a n/a n/a
Italy 110 119, 122 119 120 46, 130 46bis, 88 130 n/a
Luxembourg 12, 49(1) 15, 19 13 n/a n/a n/a n/a n/a
The
Netherlands
2(2), 45(d); 9
RRA
n/a 2(2), 45(d); 4
RRA2
n/a n/a 45(d); 4, 7 RRA n/a n/a
Portugal 41, 43, 44,
109
43(3) n/a 48, 104 14(4), 91, 131 76(1)(b), 144, 150,
165(3)
91, 110(1), 131 49(1)
Spain 45, 51(1), 106 43(1) 43(5) 43(3),(4) 46(1), 90(1),
108(2)
25(1), 33(1), 90(2),
108(3), 109(3), 116(2),
122(2)
46(2), 52, 90(2) 47
Sweden n/a 30 n/a n/a n/a n/a n/a n/a
United
Kingdom
90(3),
191B(3)
n/a n/a 91(1), 191C n/a 6A(1), 93B n/a n/a
Final Report
161
Interpretation
Of contract
Rights vis-à-vis
third parties
Termination
Zweckübertragungs-
lehre
in dubio pro auctore Right to transfer Standing to sue Right to secure,
pledge, or seize
Non-use of rights Bankruptcy Other
Austria n/a 33(2) 27(2), 40(2) n/a n/a 28, 29, 37, 40,
74(7)
32 n/a
Belgium n/a 3(1)(3), 35(2)(2) 26(3), 31(3) n/a n/a 3(1)(5), 26(1),
31(2)
20(1), 30(1) 29(1)
Denmark n/a 53(3) 56(2) n/a n/a 54, 55, 65(4) n/a n/a
Finland n/a n/a 28 n/a 42 33, 34 n/a 33
France n/a 122-7 132-16, 132-19 n/a 132-34 132-17, 132-19 132-15, 132-30 132-17
Germany 31(5), 75(4) n/a 33, 34 9(2) PA541
n/a 40, 45 CA; 17, 32,
45 PA2
36(3) PA 42 CA; 18, 30, 31
PA
Greece 15(4), 34(2) n/a 13(6), 35(2) 13(3) n/a 13(1), 15(5) n/a 4(1)(e) and (2)
Ireland n/a n/a n/a 122 n/a n/a n/a n/a
Italy n/a 119(5) 132 n/a 111 39, 50, 124, 127,
128, 139, 140
135 134
Luxembourg n/a 12, 49 18, 19(3) n/a n/a 15 17, 25 n/a
The Netherlands n/a 2(2) n/a 27(1), 27a(2),
28(7); 16(2),
17(4) RRA
2(3) n/a 43 CA; 21(1)
BA542
n/a
Portugal n/a 41(1), 88(1) 40, 100(1), 118,
145
n/a 46, 47 43(5), 136 102(1), 100, 104(5), 106,
120, 139(1), 140,
147(1), 156(1)
Spain 43(2) 43 48, 49, 50(1) 48 53(1) 68(1), 81(1) 68(1)(f) 45, 68(1),81(3),
86(1)
Sweden n/a n/a 28 n/a 42 33, 34 n/a 33
United Kingdom n/a n/a n/a 101, 102 n/a n/a n/a n/a
541
PA= German Publishing Act; CA= Copyright Act, when no mention is made then the reference is made to the Copyright Act.
542
BA=Bankruptcy Act.
Final Report
162
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