Copyright law is lagging behind reality due to the interminable development in the field of modern technology. This widespread prejudice is confirmed by a study recently released on behalf of the European Parliament (the "Study").1
The content of the Study is an analysis of the different copyright provisions, the contractual legal principles and the jurisdiction in eight Member States in respect of their sufficiency to protect the rights of creators in a fast changing digital environment.
Summing up, the Study arrives at the conclusion – based on an analysis of different selected issues – that the existing legal protection of creators is insufficient or inadequate in order to prevent the creators from being unduly deprived of their rights over their creation as well as of a fair remuneration. One of the analyzed issues which shows the insufficient protection of creators through existing laws and regulation is the digital exploitation, which is further described in this article.
A widely discussed issue in connection with the digital exploitation in times of the internet and digital revolution is the question of the ownership (or usage right) of “digital rights” (for example making available of works for downloading or streaming, webcasting, video-on-demand) and the respective remuneration. Point of origin is that the forms of digital exploitation and therefore the rights to digital forms of exploitation can hardly be foreseen due to the constantly changing digital environment. Therefore, it might often be the case that digital rights are not included in transfer of rights or license contracts which are dating back to a time before the respective form of digital exploitation existed. This can be illustrated by the example of musical work as follows: 10 years ago, the contracting parties were maybe able to foresee the potential of downloading music online and could therefore include respective provisions on the exploitation of the work through online downloading and respective remuneration in the contract. However, they might not have seen all the possible modes of exploitation like streaming and subscription-based services as currently provided for example by the music platform Spotify.
Nevertheless, in case the contract contains a comprehensive transfer/license of rights (so called buy-out contract) the transferee might consider that all rights, including digital rights have been duly acquired or licensed and are covered by the originally agreed remuneration. This does however not give consideration to the right of the creator to receive a fair remuneration for the dynamic modes of exploitation and the change in the revenues' streams generated by different modes of digital remuneration.2 Due to non-existing legal provisions in many Member States, non-existing case law and lack of concrete wording of the contracts it is difficult for courts in these cases to decide on the true ownership (or usage right) of digital rights and the correct remuneration to be paid to the creator.
In order to make the exploitation and remuneration foreseeable for the authors at the time of contracting, some Member States require the explicit stipulation of the "modes of exploitation" in creators' contracts.3 A mode of exploitation may be defined as a concrete and independent use of the work, economically and technically.4 Examples are: the right to make original copies of the works, the right to communicate the work in movies, or the right to communicate the work on TV. Background of this proposal is to prohibit the transfer of unknown forms of exploitation and to make creators conscious of transferring their rights as well as to enable them to negotiate their remuneration according to this. However, this means, that anytime a new form of exploitation appears, the creator and the transferee would have to enter into a new contract which brings inflexibility for both the creator and the transferee.
As a compromise between the difficulty to foresee new forms of exploitation and the flexibility for the transferee for example the German Copy Right law authorizes the creator to also transfer usage rights for new/unknown forms of exploitation.5 Contracts dealing with unknown types of exploitation have to be in a written form and creators have the right to revoke the transfer of the rights for unknown types of exploitation within a period of three months after the transferee informed the creator about the new form of exploitation.6 Further, in Germany the authors can claim for an adequate remuneration, particularly when the transferee gets disproportionate benefits in comparison with the contractual agreement and when the transferee wants to undertake a mode of exploitation that was not foreseen when the contract was concluded.7 This compromise enables not only contract flexibility, but also that the contracting parties do not have to discuss new contracts each time a new form of exploitation arises.
Another possibility is to fix the remuneration for digital exploitation by collective bargaining, i.e. creators take part in professional bodies that represent their interest and facilitate the dialogue with their transferees. For example in Germany, a collective agreement between journalists' trade unions and public broadcasters stipulates that journalists shall receive 4.5 % additional remuneration for the digital use of work.8
However, comparable legal provisions do not exist in all Member States. The Study not only shows the various problems in the framework of digital exploitation, but also illustrates the legal difference in the individual Member States handling with this topic. Hence there is in particular a need for a uniform legal regulation. The German model could be an important example here, since the German Copy Rights Act already provides for legal standards for unknown forms of exploitation and respective remuneration.
1 - Contractual Arrangements Applicable to Creators: Law and Practice of Selected Member States http://www.europarl.europa.eu/RegData/etudes/etudes/join/2014/493041/IPOL-JURI_ET%282014%29493041_EN.pdf.
2 - Contractual Arrangements Applicable to Creators: Law and Practice of Selected Member States p. 11.
3 - Contractual Arrangements Applicable to Creators: Law and Practice of Selected Member States 3.1.2. p.69.
4 - Definition is adapted from the German Bundesgerichtshof definition ( 5 June 1985, GEMA- Vermutung I: GRUR 1986, p. 62.
5 - See § 31a UrhG.
6 - See § 31a UrhG.
7 - See § 32a UrhG – so called best-seller clause.
8 - Contractual Arrangements Applicable to Creators: Law and Practice of Selected Member States 3.1.2. p.74.