German courts make two (very important) copyright references to the CJEU

Eleonora Rosati writing on the IPKat

This morning the Bundesgerichtshof (BGH, the German Federal Court of Justice) has referred not one - but two - copyright cases to the Court of Justice of the European Union (CJEU) for guidance, respectively, on:

• To what extent EU copyright allows sampling, ie the taking of part of a sound recording for re-use as an instrument or sound recording in a different song or piece [readers with an interest in hip-hop will know that sampling in this genre is very frequent and in the US has caused quite a few IP-related headaches to the likes of Kanye West and Jay Z]; and
• What role fundamental rights play in the copyright sphere. More specifically, what is the relationship between copyright protection, freedom of the press, and freedom of information?

WARNING: I do not speak German, and have tried to make a sense of these new cases by reading the relevant press releases; please let me know if I have misunderstood anything.

Sampling, free use, a 'right' to quote, and fundamental rights

The first reference (I ZR 115/16 - Metal auf metal III) has been made in the context the longstanding and complex [at some point the case even ended up in front of the German Constitutional Court] Metall auf Metall litigation concerning the unauthorised sampling by music producer Moses Pelham of a 2-second rhythmic sequence from Kraftwerk's 1977 song 'Metall auf Metall' for use in his own 1997 'Nur Mir'. The sample features in 'Nur Mir' (performed by Sabrina Setlur) as a continuous background loop.

Following a number of lower courts' decisions [the first one was issued in 2004], as well as the already mentioned instalment before the Constitutional Court, the case is now pending before the BGH.

Today, this court decided to stay the proceedings and seek guidance from the CJEU on the correct interpretation of EU law. More specifically - and as explained in the relevant press release - the BGH is asking:

• Guidance on the notion of reproduction in part in relation to phonograms as per Article 2(c) of the InfoSoc Directive [readers will recall that the CJEU has already interpreted generously the notion of 'reproduction in part' in its seminal decision in Infopaq] in order to determine whether a 2-second sample may fall within the scope of the right of reproduction; and 
• whether a phonogram sampling an earlier phonogram is a copy of it within the meaning of Article 9(1)(b) of the Rental and Lending Rights Directive.

Moses Pelham

Should the answer be in the affirmative, then the BGH is asking:

• Whether the widely discussed German 'free use' exception within Section 24(1) of the German Copyright Act ("An independent work, created in the free use of the work of another person, may be published and exploited without the consent of the author of the work used.") is compatible with EU law; 
• Should the defendants be unable to rely on the 'free use' exception, whether the quotation exception within Article 5(3)(d) of the InfoSoc Directive might nonetheless shield them from liability [readers with an interest in this defence will be aware that there is hardly an EU quotation exception, as different Member States have transposed Article 5(3)(d) in very different ways: see for instance this discussion of whether GIFs could be regarded as quotations]. In particular, the defendants in the national proceedings are arguing that quotation is a 'right', rather than just an exception. Although I am only relying on the press release, I suspect that the defendants' argument might be also based on the language of Article 10(1) of the Berne Convention, which - especially in its French version - seems to suggest a mandatory quotation exception [see further here, pp 19 ff];
• What role the rights granted by the Charter of Fundamental Rights of the European Union plays: in particular, what is the relationship between copyright protection (Article 17(2)) and freedom of the arts (Article 13)? 

Can freedom of the press and freedom of information trump copyright protection?

The second reference (I ZR 139/15 - Afghanistan Papiere) has been made in the context of litigation between the German Government and German newspaper WAZ over the unauthorised publication by the latter of the so called 'Afghanistan Papers', ie confidential military reports on the operations of the Germany armed forces in the region in the period 2005-2012.

According to the relevant press release, the BGH has stayed the proceedings and asked the CJEU to clarify whether and to what extent the assessment of prima facie copyright infringement and the applicability of the exceptions in favour of the press (Article 5(3)(c) of the InfoSoc Directive) and for quotation (Article 5(3)(d) of the same directive) is informed by a fundamental rights analysis. 

In particular, can copyright protection bet trumped by the need to safeguard freedom of the press and freedom of information? Or can fundamental rights be even directly invoked to prevent enforcement of copyright?

There is probably no need to note that this question goes to the very heart of copyright protection, and will revive the longstanding discussion around the scope of protection. 

Posted By Eleonora Rosati to The IPKat on 6/01/2017 02:11:00 pm. Background can be found here: http://www.musiclawupdates.com/?p=5257

Higher Regional Court of Düsseldorf applies CJEU Mc Fadden decision

1709 Blog readers will recall that last September the Court of Justice of the European Union (CJEU) issued its decision in the important Mc Fadden case [here and here], a reference for a preliminary ruling from Germany.

The CJEU ruled that the provider of a password-free, free WiFi can be requested to have his internet connection secured by means of a password. 

Via 1709 Blog friend Mirko Brüß (Waldorf Frommer Rechtsanwälte) comes the news that a German court (though not the one that had made the Mc Fadden reference) has recently applied the CJEU judgment, and the principles laid down therein [Mirko also wishes to let readers know that a new reference on the right of communication to the public and filesharing was made by the Regional Court of Munich on 17 March last (Case No. 21 S 24454/14): details are not yet available on the Curia website, but as soon as they are this blog will provide relevant information].

Here’s what Mirko writes:

In a judgment on 16 March 2017 the Higher Regional Court of Düsseldorf requested the operator of an open WiFi (and a TOR exit node) to take action against repeated copyright infringements by users of his IP-addresses (case no. I-20 U 17/16). 

This appears to be the first time a German court has dealt with such a case after the CJEU handed down its Mc Fadden decision on 15 September 2016 ... At least, this is the first publicly available decision. 

The ruling of the court does have wide implications for the operators of open WiFi networks, so-called hotspots.

Tobias McFadden

Factual background

The defendant was an operator of five so-called hotspots, ie access points that can be used by anybody to log into the internet using the defendant‘s internet connection. It remained disputed between the parties whether the defendant operated his network commercially or privately, and whether or how users needed to register themselves to be able to use the network. The defendant claimed that users were asked to refrain from ‘illegal activities’, but did not explicitly ask users to refrain from sharing copyright-protected material via peer-to-peer networks. The defendant also operated a ‘TOR exit-node’ on his IP-address, thus enabling anonymous users to access the internet via his IP address (see this infographic on general TOR functionality).

The claimant is the owner of copyright in a computer game. He had noticed the defendant’s IP-address on several occasions as being the source of an infringing download offer of other works via a BitTorrent network. After obtaining knowledge of the defendant‘s name and address via the court proceedings provided for such cases in Germany (§ 101 Abs. 2, 9 Urheberrechtsgesetz, = UrhG, German copyright code), the claimant sent several cease-and-desist letters to the defendant in 2011, asking him to stop the infringing activities.

However, further infringements were found in 2013, even after the cease-and-desist letters were served to the defendant. At this point, the claimant took matters to court, and obtained a judgment of the District Court of Düsseldorf, that enjoined the defendant from aiding third parties to make available to the public the claimant’s game via peer-to-peer networks and via his own IP-addresses. The court also ordered the defendant to pay the claimant's out-of-court costs for EUR 651,80 (judgment on 13 January, 2016, case no. 12 O 101/15).

The defendant appealed the decision. He claimed that unknown users of his network were the culprits, and he had no way to identify them and no obligation to stop their activities.

View of Düsseldorf

The Higher Regional Court‘s decision

The Higher Regional court of Düsseldorf rejected the appeal and upheld the first decision. While the Regional Court’s judgment was issued before the CJEU decided Mc Fadden, the Higher Regional Court had knowledge of this decision and applied it to the case.

In so doing, the court found that it did not matter whether the defendant operated the hotspots commercially or privately. Furthermore, it did not matter to the court whether the copyright infringements were committed by users of the Hotspots or users of the TOR exit-node.

In all scenarios, the defendant was liable for the infringements and was requested to take reasonable measures to prevent further infringements. To justify this, the court cited Mc Fadden, especially paras 80 – 96. The judges found that, because of the earlier infringements, the operator should have taken reasonable measures to ensure that his users would not continue to infringe third-party copyrights. With regards to the WiFi network, the court sided with the CJEU and ruled that password-protecting the internet connection may dissuade the users of that connection from infringing copyright, provided that such users are required to reveal their identity in order to obtain the required password and may not therefore act anonymously. If this could have been asked of the defendant irrespective of earlier infringements was left undecided by the court.

With regards to the TOR exit-node being the possible source of the infringements, the court found that the defendant could have and should have taken measures against copyright infringements by disabling peer-to-peer communication via the TOR network. It remained undisputed between the parties whether this is technically possible, so the court took such a measure for granted.” 

The CopyKat

Maurice Ravel in 1925

There were a myriad of reports that almost 90 years after it was first performed in Paris, the copyright in Maurice Ravel's "Bolero" expired on May 1st. Ravel died in 1937.  Written in 1928 and performed on November 22nd of that year at Paris' Opera Garnier, the symphonic work, which grows steadily louder as it progresses, was originally a ballet piece ordered by Russian dancer Ida Rubinstein, a friend and sponsor of the French composer Ravel and famously was danced to by Olympic gold medal winning ice skaters Torvill & Dean in 1984.  More here. HOWEVER ...... France’s Society of Authors, Composers and Music Publishers (SACEM) has now been presented with a dossier which seeks to take advantage of a legal loophole which could extend Bolero’s international copyright - worth an estimated €1m a year - for another 20 years. The challenge is based on the fact that Bolero was originally a score for a ballet and whilst it is not disputed that Ravel wrote the music, the challengers claim that the original choreographer, Bronislava Nijinska, and the director and scene-maker, Alexandre Benois should be credited as joint authors. As Benois died in 1960 - the argument is thus the final term of copyright must run from HIS death? SACEM, the body that administers copyright payments in France, said that it had rejected the claims as baseless. The copyright of Bolero belonged to the composer Ravel alone, the organisation told the Independent.

Germany's lower house of parliament, the Bundestag, overwhelmingly passed a bill for a new Act on Collective Management Organisations (CMO Act) on Thursday, April 28. The new law replaces the 50-year-old Copyright Administration Act. More here. 

Canadian singer/songwriter Nelly Furtado, who has sold more than 40m records worldwide is the latest artiste to hit out at Google's seeming reluctance to 'play fair' with payments to artistes from YouTube streaming - rightly pointing out that as a technology company YouTube has been fairly poor at developing software that can identify and remove infringing content. In a blog the Grammy Award-winner discusses the recent wave of artists standing up to YouTube over royalty payouts – and adds her name to the cause. 

The US Supreme Court has agreed to hear Star Athletica, LLC v. Varsity Brands, Inc. where the court will rule on the appropriate test to determine when a feature of a useful article is protectable under section 101 of the Copyright Act [text]. The case deals with designs on cheerleader uniforms, but the case is expected to have a broader impact. The US Court of Appeals for the Sixth Circuit had ruled that Varsity Brand's designs were copyrightable. Image by Jeff Hitchcock from Vancouver, BC, Canada.

A new bill in the U.S. House of Representatives is being introduced in Congress this week which would give producers, engineers and mixers a piece of the digital royalty pie. The Allocation for Music Producer Act, or AMP Act (H.R. 1457), is being formally introduced by congressmen from both sides of the aisle: Reps. Joe Crowley (D-New York) and Tom Rooney (R-Florida). The AMP Act would create a statutory right for producers to receive royalties that would be managed through CMO SoundExchange.

An Australian government commission, the Productivity Commission, has published a new reports on copyright exploring how well Australia's intellectual property laws are working. Titled  "Copy(not)right" you can probably guess that the report is not very sympathetic to current regime and holds the opinion that Australia’s copyright arrangements are "weighed too heavily in favour of copyright owners, to the detriment of the long-term interests of both consumers and intermediate users. Unlike other IP rights, copyright makes no attempt to target those works where ‘free riding’ by users would undermine the incentives to create. Instead, copyright is overly broad; provides the same levels of protection to commercial and non-commercial works; and protects works with very low levels of creative input, works that are no longer being supplied to the market, and works where ownership can no longer be identified."  More on TechDirt. 

The New York Appellate Court has agreed to rule on the case which Flo & Eddie from 60's band The Turtles have brought against Sirius XM Radio over the issue of whether the copyright owners of recordings made before 1972 have a common law right to make radio stations and others pay for their use. The case has been referred to the Court of Appeals from a federal appeals court. Federal law established limited copyright protections to recordings after Feb. 15, 1972, while preserving state law property rights on earlier recordings.

Green members of the French National Assembly have voted to strike Hadopi from France's lawbooks - and with just 7 MPs in the house, they had  enough members to see the motion to remove the law from the statute books in 2022 passed. It's unlikely the motion will pass the Senate, but the Greens have used the opportunity to call attention what they say is the "uselessness and expense of Hadopi." French President François Hollande called for the end of Hadopi before his election, a position he later retracted.


The leaders of two major Android app piracy groups have pleaded guilty to copyright infringement charges. Aaron Blake Buckley (22) and Gary Edwin Sharp II (29), ran the Applanet and SnappzMarket groups before they were shut down by the FBI in 2012. U.S. District Judge Timothy C. Batten Sr. of the Northern District of Georgia will pass sentence in August.

And finally - The CopyKat's profound thanks to qurgh lungqIj who made some wise and lucid comments, correcting my headline for the article on the Klingon Language. I have never been advised on and in Klingon - thankfully this time with translations into English! Forbes have also published a very interesting article on WHY the film companies behind the Star Trek series and films (CBS and Paramount) are taking action - having previously ignored or tolerated fan fiction, fan films and the like. 

The CopyKat - its good to share - isn't it?

Bruno Mars

MusicMetric says that Bruno Mars appears to be the most-stolen-from singer of the year, with 5.8 million illegal downloads. Rihanna came in a close second with an estimated 5.4 million songs downloaded illegally, Daft Punk, Justin Timberlake and FloRida also made the top 10. With films, The Hobbit - An Unexpected Journey, Django Unchained and Fast & Furious Six top the pirate charts.

Formats they are a-changin'

Interesting statistics from the USA and UK's recorded music sector show just how the legal market is changing: Sales of digital music dipped in the USA in 2013, the first time since iTunes launched in 2003. Nielsen say that US digital single tracks dropped from 1.34 billion in 2012 to 1.26 billion last year. The drop is being blamed on the success of music streaming sites. In the UK a similar pattern emerged: The British record industry achieved revenues of £1 billion-plus in 2013 according to statistics published by record label trade body the BPI and the Official Charts Company. The figures also reveal, for the first time, the value of the subscription streaming market in the UK which now generates £103 million a year, up from £77 million in 2012. The BPI/OCC say that in 2013 twice as many tracks were streamed overall than in 2012, totalling 7.4 billion. This includes music consumed on both subscription and ad-funded platforms - with Spotify, Deezer, YouTube and Vevo all included - though revenues generated by the advertising-based services are in addition to the £103 million in subscription sales. As with the USA, the number of digital singles sold in 2013 was down on 2012, with 175.6 million tracks downloaded, compared to the record breaking 183.3 million in 2012. But digital album sales were up again, by 6.8%, to 32.6 million units. Traditional revenue streams held up well, despite the downsizing of the UK's biggest high street retailer for music, HMV, and the closure of Amazon's main online competitor Play.com.  CD sales did to decline, by 12.8% in 2013, but the decline has slowed and sales of this format still accounted for 64% of all albums sold during the year, some 60.6 million units. The UK's vinyl revival continued in 2013, with sales of seven-inch singles, twelve-inch singles and vinyl LPs up 34%, 60.3% and 100.8% respectively, although overall numbers of units sold is very small in comparison to CDs and digital.

Suddenly The Republic of The Gambia is in the in the CopyKat's sights. First off,  Fatou Mass Jobe-Njie, The Gambia’s minister of tourism and culture, has said that copyright must be strengthened in the digital environment in order to prevent infringements. The minister told The Gambia Tourism and Hospitality Institute that creative works such as music can now be easily exploited on the internet via downloads and streaming, posing great challenges to both content creators and users saying “Sadly, in many of our countries in the sub-region, creators still cannot benefit from the sweat of their creations,” she said. “It is only through initiatives such as the Observatory that the creative community in our ECOWAS sub-region can start to live in a dignity befitting creators, and to allow our governments to also get returns from the investments in cultural infrastructure.” She said that in 2004, her ministry managed to have a new copyright law for The Gambia to replace the colonial law of 1913, which was "grossly inadequate". And in separate news, The director of Culture, Education, Science and Technology of the ECOWAS Commission informed stakeholders that the ECOWAS Regional Copyright Observatory (RCO) will present some computers and other office equipment to the Gambian Copyright Office at the National Council for Arts and Culture, to strengthen their capacity. Professor Abdoulaye Maga made this disclosure Monday at the Gambia Tourism and Hospitality Institute  during the opening of a five-day training workshop for copyright administrators and members of the Collecting Society of The Gambia. On Monday a week-long training workshop for Gambia copyright stakeholders started at the Gambia Hotel School in Kanifing.

The training, organised by the National Centre for Art and Culture (NCAC) and funded by ECOWAS, is aimed at bringing a responsive copyright system in the country.


Wildly popular TV series The Simpsons have tackled copyright infringement and the issues surrounding the illegal downloading of movies - after Homer Simpson illegally downloads the movie 'Radioactive Man' from Bootleg Bay with the help of his son, Bart. Having been thrown out of the cinema as a paying customer during the said film, Homer takes to pirating movies so much that he sets up his own backyard movie theatre for friends and neighbours, showing them a pirated screener movie so they don’t have to pay a high ticket price and put up with rudeness and commercials while watching the movie! The episode is called 'Steal This' and it is in series 25 - there are some clips on the Simpson's Facebook page here. One reviewer called the episode "a perfect animated version of the great copyright debate on movie piracy".

A nest of sexy beasts?

In the USA, a Des Moines company is suing Google, demanding it remove a copyrighted photo from a private blog that mocks corporate headshots. ARAG North America and Ann Dieleman, a senior vice president and chief marketing officer for the insurance company, filed the copyright lawsuit  in the federal court and ARAG said Google has denied its requests to remove the photo, which was posted on SexyExecs.blogspot.com in 2009. The author of the private blog is not known, but the blog is hosted through Blogger, a company owned by Google, just like the 1709 blog itself. 

And finally, in our globe trotting round up of all things shared, Germany’s highest court has ruled  that parents are, in principle, not liable if their adult children use the family Internet connection for file sharing. The decision follows a November 2012 verdict where the Federal Court of Justice ruled that parents are not liable for those aged under 18 who file share, as long as they warned their child that unauthorized downloading and sharing of copyrighted material online is illegal and they were unaware their child violated this prohibition. The court has now said that where children are adults (18+), parents don’t have to warn them in order to avoid liability: here the stepson of a home owner used the family's internet connection to share 3,749 music recordings on the Internet. Record companies had tried to recover €3,454 (about US$4,700) in damages from the stepfather who owned the connection, rather than from the stepson. Whilst the stepfather signed an agreement that his Internet connection would not be used for that purpose again, he refused to pay, saying that he was not liable for his stepson’s deeds: In 2010 the Regional Court of Cologne and subsequently the Higher Regional Court of Cologne in 2011 both ruled that the stepfather was liable for the copyright infringement. He was ordered to pay €2,841 to the record companies by the Higher Regional Court. The German Federal Court of Justice have now overruled this, although the court did say that if the owner of the Internet connection had a specific reason to suspect that family members are using the connection for rights violations, he or she should take necessary measures to prevent infringements.

Old Czech composers, current German MS owners and restrictions on use: can you help?

From the Concerto for Oboe and Bassoon in F major
by Antonín Reichenauer, who died in Prague in 1730

One of the 1709 Blog's readers has written to ask as follows:

"I am a musicologist and occasional performer of pre-1800 music. Copyright is seldom an issue in dealing with old musical manuscripts as the copyright protection (on the whole) has long since expired on such musical works. I understand that the owners of musical manuscripts, for example, maintain some rights on the reproduction of those documents in facsimile. I have been in contact with the music manuscript department at a well-known library and in terms of recordings, they couldn't find a reason that owning a music manuscript from the 18th century afforded the owner any copyright protection (at least under UK law) for an audio recording.

Here's my question: what is the legal status of the modern German owner of a musical manuscript that was composed by a Czech composer in the 1730s (without any kind of legal bequest from the composer to the owner)? The owner of this manuscript made a facsimile of that manuscript available to the public (in a public library in Germany) but with the explicit understanding that no audio recording would be made without the owner's permission. However, I don't see that the owner (despite demanding such a signature in order to get a photocopy) has a legal leg to stand on. If there is no copyright on the music and no physical reproduction has been made (facsimile or modern transcription), could the German owner conceivably sue someone in the UK for making an audio recording of this music?"

Readers' responses are very much welcome -- on the understanding, naturally, that they do not constitute legal advice.

German "ancillary copyright" bill: news aggregators may use short excerpts

Readers may remember that last summer this blog reported that German legislators were considering a proposed "ancillary copyright" which would require news aggregators to pay royalties on excerpts of news stories that they link to.
Bloomberg now reports that the Bundestag has agreed a bill which provides that:

- News aggregators may display "single words or very small text excerpts" from to publishers' websites free of charge, however it does not define what constitutes a small excerpt.

- Publishers will be given one year during which they have the sole rights to commercially use their journalistic content. Presumably the above exception applies during this year - perhaps a German-speaking reader could clarify this?

- Mere linking cannot be prohibited.

The bill, which was passed with 293 votes in favor, 243 against and three abstentions, still needs to be ratified by the upper house of the German parliament, the Bundesrat. If it is passed it will be a much weaker version of what German publishers had originally lobbied for, however the European Publishers' Council ignored that in its statement of 1 March, saying that it:

"welcomes today’s decision by the German Bundestag to approve an ancillary copyright for news publishers in law that means that search engines and other aggregators who commercialise publishers' content will no longer be able to do so without permission. The "Leistungsschutzrecht," as it is known in German, will pave the way for commercial negotiations between the parties on the price for the commercial use of publishers' content."

Google has said:

"As a result of today's vote, ancillary copyright in its most damaging form has been stopped. However, the best outcome for Germany would be no new legislation because it threatens innovation, particularly for start-ups. It’s also not necessary because publishers and Internet companies can innovate together, just as Google has done in many other countries."

Predictably neither side appears thrilled with the bill, and this is undoubtedly not the last we will hear of it.

Should parents be responsible for their teenager's actions?

I should rephrase that as: should parents be legally responsible for their teenager's actions? As we all know, teenagers are a law unto themselves. The thought of being legally responsible for one is pretty frightening. Fortunately, yesterday the German Federal Court, der Bundesgerichtshof, handed down a decision saying that the parents of a 13 year-old file-sharer could not be held responsible for their son's infringement. Further, they could not be required to monitor or hinder his activity online. Phew.

The Bundesgerichtshof released a press release, in German, saying that the parents could not be held responsible as they had taught their son that file-sharing was illegal and had not known that their son was file-sharing.

The case was brought by various record producers who, back in 2007, found that a particular IP address was linked to the illegal download of 1,147 audio files. The IP address was traced to this teenager's family home, specifically to a computer belonging to the teenager himself. The computer was subsequently seized and the authorities found that "Morpheus" and "Bearshare" had been installed, with the "Bearshare" icon appearing on the desktop.

The record producers sued the parents of the teenager citing a violation in their duties of parental supervision, and claimed damages of €2,380.80. The district court found in favour of the record producers, and the family's subsequent appeal to the appellate court was unsuccessful. The appellate court found the parents liable for damages caused by their son's illegal file sharing because they failed to properly supervise him. The court relied on under s.832(1) BGB which says [my rough translation assisted by Google Translate]:

"Any person legally required to supervise a legal minor or a  person requiring supervision due to a mental or physical condition, will be liable for any damage caused by the person subject to supervision. The supervising person is excluded from liability if he meets his duty of supervision or if the damage would have occurred had he met his duty of supervision."

The appellate court said that the parents should have installed a firewall and security program, and that they could have seen by checking the computer that their son had installed file-sharing programs.

However the Bundesgerichtshof found yesterday that given that the parents had taught their son that file-sharing was illegal, they had met their "parental obligation to supervise a normally developed 13-year-old child". They were not required to go so far as to monitor or obstruct their son's use of the internet nor to conduct checks on the computer. The court held that such measures would only be required if parents had reasonable grounds for suspecting their child of infringing use.

Of course this raises the question of how much any parent knows about what their teenage child does on a computer but overall this seems to be the right decision. Parents should teach their children the do's and don't of the internet but cannot, practically, be required to monitor their child's every move.

TorrentFreak  labels this decision a "blow to rightsholders in their quest to clamp down on illicit file-sharing". This seems a step too far; in a world where teenagers often know much more about computers than their parents do it would be unfair to make them responsible for activities that they may know nothing about.

TorrentFreak also notes that Germany is the toughest jurisdiction in the world when it comes to enforcing laws against on file-sharers, as legislation means that internet account holders are almost always found liable for activities taking place on their connections. Further, Columbia University recently noted that most people in Germany think that it is wrong to file-share (other than with friends or family). It sounds to this blogger like German law is heading in the right direction, by prioritising education and personal responsibility but clamping down on file-sharing by finding individuals liable when it has to.

Validity of sublicence upon lapse of principal licence

When I was perusing this summer’s judgments added to the online database of the Bundesgerichtshof (BGH), I came across two particularly interesting cases on copyright licences. In its Take Five and M2Trade decisions of 19 July 2012 (case references: I ZR 24/11 and I ZR 70/10 respectively), the BGH deliberated a hotly debated issue, namely what happens with a copyright sublicence if the principal licence lapses.

Since M2Trade concerned software and Take Five music, which I find more interesting than software, I will set out the facts of Take Five and refer to M2Trade only where there is a difference in legal reasoning:

The claimant is a music publisher that owns the worldwide copyrights in Paul Desmond’s musical composition “Take Five”. In 1960, it granted an exclusive licence in the work to a European music publisher for musical publishing in Europe. In 1961, the European music publisher granted an exclusive sublicence for the territories of Germany and Austria to the defendant’s legal predecessor, in exchange for recurrent royalty payments. In 1986, the claimant and the principal licensee agreed to terminate the publishing contract concerning the musical work “Take Five”, and that any sublicences would be terminated also.

Apparently, nothing happened for a long time afterwards, apart from the fact that the sublicensee directed its royalty payments to the copyright owner from the effective date of the termination agreement between the copyright owner and the principal licensee. Eventually, the copyright owner granted a new exclusive licence to another European music publisher, and a dispute over the German and Austrian rights ensued.

The BGH held that the sublicensee retained the German and Austrian publishing rights in spite of the termination of the principal licence. This is the next step up from the position the BGH developed in its Reifen Progressiv decision (26 March 2009, case reference: I ZR 153/06). In that case, the principal licensee had granted a non-exclusive licence to a sublicensee in exchange for a lump sum payment. The copyright owner successfully revoked the principal licence due to non-exercise in accordance with § 41 German Copyright Act (UrhG), but the sublicence was held to be valid.

In Take Five, BGH highlighted the principle of protecting the successor in title (“Sukzessionsschutz”) as an important part of intellectual property law (cf. § 33 UrhG). Therefore, the sublicensee’s interest in the continued validity of his licence will typically trump any competing interests of the copyright owner, even in case of an exclusive sublicence or a non-exclusive long-term licence.

In Take Five, United States law governed the contract between the claimant and the principal licensee and it was held that, either by implied contractual agreement or ipso iure, the claimant was entitled to cession of the principal licensee’s royalty claims against the sublicensee. Under German law, which governed M2Trade, the claim for royalty payments against the sublicensee automatically revests in the copyright owner when the principal licence lapses (in M2Trade, the court overruled its previous position established in Die Privatsekretärin, 15 April 1958, case reference: I ZR 31/57). It was held in both cases that this sufficiently takes the copyright owner’s interests into account and leaves no ground for declaring the sublicence invalid.

The reason why the principal licence lapsed (revocation due to non-exercise as in Reifen Progressiv, termination of contract by mutual agreement as in Take Five, termination of contract due to default of payment as in M2Trade, or any other reason) was also declared to be of small significance, if any.

Take Five and M2Trade have clarified the legal situation not only with regard to copyright sublicences, but to sublicences in other areas of intellectual property as well. Both judgments inform us that Senate X of the BGH, which is inter alia competent to decide patent cases, has no objections against the principle that sublicences will typically remain valid when the principal licence lapses.

Law firm gets sued over threats to name and shame alleged downloaders

Undoubtedly moved by the conviction that the only bad press you can get is your obituary, Bavarian law firm Urmann + Collegen (U + C) have threatened to publish a list of its clients’ opponents in “open and pending” matters. U + C are charmingly referred to as "Porno-Anwälte" ("porn lawyers") by a local media outlet (here), not because of any alleged moonlighting activities in the adult entertainment industry, I hasten to add, but because they are notorious for representing copyright owners from said industry.

U + C rely on a recent decision by the Bundesverfassungsgericht (Federal Constitutional Court, BVerfG), where the judges held that a law firm may in principle publish lists of companies or notable individuals it has acted against (12 December 2007, 1 BvR 1625/06, available here). The case concerned a list of commercial entities, mainly banks and insurance companies, which was used as an advertising tool to attract new clients – look at all the big names we have sued (or who have sued our clients…)! The BVerfG contended that there is nothing dishonourable about being involved in a legal dispute, so the mere mention that the firm has acted against a certain company, without even claiming to have won the dispute, cannot shed a dubious light on that company.

It is more than doubtful that the BVerfG would detect an advertising function in naming private individuals that have no claim to any fame whatsoever, especially if the law firm in question is primarily associated with acting against alleged filesharers/downloaders of porn and software. The only conceivable aim of announcing the publication of a list of opponents is to shame John or Jane Smith (who may well be no more than the ISP subscriber and never have actually downloaded anything) signing a cease and desist undertaking and paying the lawyers’ fees, which would clearly contravene privacy and data protection laws.

This view is shared by the Landgericht (Regional Court) Essen and the Amtsgericht (District Court) Regensburg, both of which issued injunctions restraining U + C from publishing the respective applicant’s name (LG Essen, 30 August 2012, 4 O 263/12, available here; for a report on the AG Regensburg injunction, see here). The Bayerisches Landesamt für Datenschutzaufsicht (Bavarian State Office for Data Protection Supervision, BayLDA) also issued a preliminary order enjoining U + C to desist from publishing a list of opponents (see press release here).

U + C have grudgingly declared that they will not publish a list of opponents for the time being, but complain that they were not heard before the BayLDA, that the BayLDA was wrong on both the facts and the law, and that they will take matters to the competent administrative court (see U + C website here). According to the BayLDA’s press release, U + C were informed in advance of the planned order and given the opportunity to respond, but failed to meet the prescribed deadline.

Interestingly, U + C have not publicly responded to the civil court injunctions – maybe they do not want to put ideas into the heads of the hordes of people who received warning letters from them (allegedly up to 150,000; see report here). Imagine thousands of people taking out injunctions against the firm – which would have to bear the costs of all those proceedings…