2002 saw Germany adopt unique copyright legislation with the aim to strengthen the economic situation of authors and artists by vesting them with a claim for equitable remuneration. A multitude of legal battles erupted, model cases were litigated, about fair and adequate remuneration, disclosure obligations regarding revenues, adjustments of individual fee and collective agreements.Forward to 2015 and the German legislator thought he had seen enough quarrelling. And now passed a reform reforming the reform. The new act also seeks to deal with the dramatic impact of the VG Wort vs. Vogel litigation (excluding the publishers from the distributions by collecting societies).
2002 saw Germany adopt unique copyright legislation with the aim to strengthen the economic situation of authors and artists by vesting them with a claim for equitable remuneration. A multitude of legal battles erupted, model cases were litigated, about fair and adequate remuneration, disclosure obligations regarding revenues, adjustments of individual fee and collective agreements.
Forward to 2015 and the German legislator thought he had seen enough quarrelling. And now passed a reform reforming the reform. The new act also seeks to deal with the dramatic impact of the VG Wort vs. Vogel litigation (excluding the publishers from the distributions by collecting societies).
The law’s main part is introducing means to improve the enforcement of claims for adequate remuneration and strengthen the overall statutory position of authors and performing artists. The regulatory concept seems driven by a game theory-like concept of "avoiding the burdensome". In several instances, the law allows the industry to escape potentially burdensome statutory obligations by setting-up and entering into guild or collective bargaining-type arrangements – the so called "Joint Remuneration Rules".
To cut down unwanted buy-out agreements, if a buy-out is agreed, the duration of an exclusive grant of rights is limited to ten years, subject to certain exceptions:
- where the copyrighted contribution is of subordinate nature for the work, product or service;
- an architectural work or draft is concerned;
- the work is used for a trademark, design or community design; or
- the work is not intended for publication.
The above limitation on the duration of exclusivity can only be deviated from by Joint Remuneration Rules or collective bargaining agreements. However, certain carve-outs are made for works used for films, but namely deals on remake rights remain subject to the 10-year rule.
Authors and artists have the express right, once a year, to request from their contracting partner disclosure of and accounting for the extent of the exploitation of the work and the revenues and benefits obtained therefrom based on information usually available in the course of a regular business operation.
The disclosure and accounting obligations extend to third parties as well, at least to such party (i) which has "substantially determined the process of exploitation along the chain-of-title" or (ii) whose revenues and benefits have rendered the agreed remuneration to become obviously disproportionate. To make the enforcement of such claims easier for authors and artists, it suffices if facts capable of review render indications for either of these situations.
Again, none of the above can be waived by individual contract unless agreed in a Joint Remuneration Rule or collective bargaining agreement. In addition, associations of author’s and users of works are provided with improved enforcement powers for Joint Remunerations Rules.
The entry into force should be expected around March 2017, i.e. three months after official publication. It is important to note that the law with only a few exceptions has no retro-active effect, but applies for all agreements to be entered into in the future. What is also expressly carved out is the application of the new rules to any computer programmes.
For most creatives industries the new rules may be a nuisance, but probably not necessarily "the end of the world". It surely makes sense to review and implement an appropriate set up to be able to comply with the new reporting requests. Considering the conclusion of Joint Remuneration Rules or collective bargaining may be advisable as well. Last but not least, properly adapted model agreements and templates should be used going forward.
A further chapter in the law changes the Act on Collective Rights Management. A new rule allows that after publication or registration of a work with a collecting society, the author may approve distribution of revenues for statutory claims for remuneration (e.g. the German private copying levy) by the collecting society also to the publisher.
Maybe this last piece made the political compromise happen a bit quicker than expected as publishers were facing an immense commercial hit from the recent CJEU and Federal Supreme Court rulings banning distribution to publishers which made the collecting societies claiming back those funds which were distributed to the publishers in the course of the last three years, which total well above EUR 100 million.