1

Opinionofthe

EuropeanCopyrightSociety

inrelationtothependingreferencebeforetheCJEUin

CaseC-476/17,HuttervPelham

1. Background

[1.1] The reference arises from a long-running lawsuit in Germany which has already been

consideredbytheBundesgerichtshof(GermanFederalCourtofJustice)in2008and2012and

the Bundesverfassungsgericht (German Federal Constitutional Court, Supreme Court in

mattersofconstitutionallaw)in2016.

[1.2]Theunderlyingclaimwasbroughtbythe iconicGermanelectronicmusicpioneers,Kraftwerk.

Theyasserted copyrightandphonogramproducer rightsagainst theunauthorizeduseofa

rhythmic sound fragment of two seconds in a continuous rhythmic sequence of Sabrina

Setlur’ssong“Nurmir”.Thesoundfragmentstemmedfromthepiece“MetallaufMetall”in

Kraftwerk’s1977album“TransEuropaExpress”.In“Nurmir”,thesoundfragmentisslowed

down(by5%)andrepeated.

[1.3] In its first two decisions in theMetall aufMetall saga,1 theBundesgerichtshof had held that

sound sampling fell outside the scope of permitted free use (Article 24 of the

Urheberrechtsgesetz (German Copyright Act)) and amounted to infringement of the

neighbouring right of the phonogram producer if the unauthorized userwould have been

abletoproducethedesiredsoundfragmenthim-orherself.2Inafurtherdecision,theCourt

hadspecified that this criterion requiredanassessmentofwhethera soundproducerwith

average equipment and talent, at the time of unauthorized use,would have been able to

1 ForamoredetaileddiscussionoftheMetallaufMetalldecisionsinGermany,seeRupprechtPodszun,‘Postmoderne Kreativität im Konflikt mit dem Urheberrechtsgesetz und die Annäherung an “fair use”’,Zeitschrift fürUrheber-undMedienrecht2016,606;MatthiasLeistner, ‘Die“MetallaufMetall“-Entscheidung

2 Bundesgerichtshof, Case I ZR 112/06, 20 November 2008, “Metall auf Metall I”, 15, published in:GewerblicherRechtsschutzundUrheberrecht2009,403;and, inEnglish,at(2009)56JournaloftheCopyrightSocietyoftheUSA1017,1034.

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producearecordingwhich,fromtheperspectiveofthetargetaudience,couldbeconsidered

tobeequivalenttotheoriginalsoundfragment.3

[1.4] In its decision in this case, theBundesverfassungsgericht held that the jurisprudence of the

Bundesgerichtshof, according to which in principle even smallest samples of phonograms

reproduce a protected “part” of a phonogram and thus infringe the related rights of

phonogramproducers,isincompatiblewiththefreedomoftheartsasguaranteedbyArticle

5(3), sentence 1, of the Grundgesetz (German Basic Law). The Bundesverfassungsgericht

found that thereought tobe room forartistic sampling,and thatneither thepossibilityof

acquiringalicence(“Getalicenceordonotsample”)4northefreedomtoimitatethesample

by recording similar sounds provide adequate alternatives for the unauthorised

reproduction,distributionandotheruseofsamplesforartisticpurposes.5

[1.5]TheBundesverfassungsgerichtalso foundthatthecriterionadoptedbytheBundesgerichtshof

fortheapplicationofArticle24oftheUrheberrechtsgesetzencroachedupontheguarantee

offreeartisticexpressionbecauseitcreatedtoomuchlegaluncertainty.TheCourtexpressed

thefearthat

“evenincaseswheretheproductionofanequivalentrecordingisnotpossible,artisticcreatorsmayrefrainfromuse–eventhoughthiswouldbepermissibleaccordingtotheapproachoftheGermanFederalCourtofJustice–becausetheeffortnecessarytoprovideevidencethattherewerenoavailablemeanstoproducethesamesoundsandthe legal risk involved appear too big. The criterion based on the feasibility ofproducinganidenticalsoundthushasadeterrenteffectwhichrequiresaparticularlyefficientcontrolinthelightofconstitutionallaw.”6

Asa result, theCourt indicated that thedeterrenteffect thatarises from legaluncertainty

surroundingapermittedusemustbefactoredintotheassessmentof itscompatibilitywith

basicrights.

3 Bundesgerichtshof, Case I ZR 182/11, 13 December 2012, “Metall auf Metall II”, 16, published in:Gewerblicher Rechtsschutz und Urheberrecht 2013, 614; and, in English (2017) International Review ofIntellectualPropertyandCompetitionLaw343.

4 Cp.theUScaseofBridgeportMusic,Inc.v.DimensionFilms,410F.3 d792(6thCir.2005);butseeVMGSalsoul,LLCv.Ciccone,824F.3 d871(9thCir.2016).

5 Bundesverfassungsgericht, Case 1 BvR 1585/13, 31 May 2016,ECLI:DE:BVerfG:2016:rs20160531.1bvr158513,MetallaufMetall,paragraphs[95]etseq.

6 Bundesverfassungsgericht, Case 1 BvR 1585/13, 31 May 2016,ECLI:DE:BVerfG:2016:rs20160531.1bvr158513,MetallaufMetall,”,para.[100].

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[1.6]TheCourtdidnot,however,decidehowthis fairbalancebetweentheproperty interestsand

the artistic interests at stake in this case should be implementeddoctrinally. Rather it left

two possible options, which are now before the Court of Justice: either the freedom of

artisticsamplingistoberealizedviaareadingofthelimitationsandexceptions,inparticular

thequotationright,inlightofthefreedomofthearts(seeinfra,question4),orthatfreedom

istobesecuredviaapurposivereadingoftheexclusiverightsofphonogramproducers.7

[1.8]TheBundesgerichtshof,initsorderforreference,8

(i)reiteratesitsposition,accordingtowhichthereproductionofeventhesmallestpartsofa

phonogram may amount to a reproduction in the sense of Article 2(c) of Directive

2001/29/ECandArticle9(1)(b)ofDirective2006/115/ECaseventhesesmallestpartsofthe

phonogramwouldrepresentthenecessaryinvestmentoftheproducer;

(ii)statesthattheprovisiononpermittedfreeuses(Article24GermanCopyrightAct),which

isdirectlyapplicableonlytocopyrightcases,couldneverthelessbeappliedbyanalogytothe

phonogramproducer'sright,solongasthenewphonogrammaintainedasufficientdistance

fromtheearlierprotectedphonogram;.

(iii)arguesthatthelimitationsandexceptionsprovidedunderArticle5ofDirective2001/29

are not available to the defendant in these proceedings. The requirements of “quotation”

(Article 5(3)(d)), “incidental inclusion” in anotherwork (Article 5(3)(i)) and/or “caricature,

parodyorpastiche”(Article5(3)(k))arenotmetbythedefendant'suseinthisinstance;

(iv)concludesthatthefundamentalrightsprotectedundertheEuropeanUnion’sCharterof

Fundamental Rights (CFR) (Articles 17(2) and 13) do not justify a different decision in this

case.

[1.9]Nevertheless,beforecomingtoafinaldecision,theBundesgerichtshofdecidedtoreferseveral

questions to the CJEU. It did so, in particular, because the exclusive rights of phonogram

producers, as well as the limitations and exceptions to those rights, are harmonised by

Directives2001/29/ECand2006/115/EC.

7 Bundesverfassungsgericht, Case 1 BvR 1585/13, 31 May 2016,ECLI:DE:BVerfG:2016:rs20160531.1bvr158513,paragraphs[110]-[111]–MetallaufMetall.

8 BundesgerichtshofcaseIZR115/66,1June2017,“MetallaufMetallI”,15,publishedin:GewerblicherRechtsschutzundUrheberrecht2017,9895-900.ForadetaileddiscussionoftheorderseeOhly,GewerblicherRechtsschutzundUrheberrecht2017,964-969.

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[1.10]TheEuropeanCopyrightSociety,9which isnot fundedbyandhasnoconnectionwitheither

party, comprises a group of scholars expert in European copyright law and offers here its

viewastotheappropriateanswertothosequestions.

2. InterpretationofRightsandExceptionsinthelightoftheCharter

Question6

InwhatwayarethefundamentalrightssetoutintheCharterofFundamentalRightsoftheEuropean

Uniontobetaken intoaccountwhenascertainingthescopeofprotectionof theexclusiverightof

the phonogram producer to reproduce (Article2(c) of Directive 2001/29/EC) and to distribute

(Article9(1)(b) of Directive 2006/115/EC) its phonogram and the scope of the exceptions or

limitations to those rights (Article5(2) and (3) of Directive 2001/29/EC and Article10(2), first

sentence,ofDirective2006/115/EC)?

Answer

[2.1] EU secondary legislationmust always be interpreted in amanner that ensures compatibility

with the fundamental rights protected under the Charter of Fundamental Rights of the

EuropeanUnion (CFR). Under Article 6(1) of the Treaty on the EuropeanUnion (TEU), the

CharterhasequivalentstatustothefoundingEUTreaties.Fundamentalrightsaretherefore

always relevantwhen theCourt,or aMemberState court, seeks toestablisheither (i) the

scopeofaphonogramproducer’sreproductionanddistributionrightsor(ii)thescopeofthe

exceptionsorlimitationstothoserights.

[2.2]TheCourthasalreadyrecognisedthat theCharter rightsare relevant to the interpretationof

the scope of the exclusive rights provided for authors (Case C-160/15, GS Media BV

ECLI:EU:C:2016:644, [44]-[46])andtothe interpretation,andapplication,ofexceptionsand

limitations to those rights (C-201/13, Deckmyn ECLI:EU:C:2014:2132, [25]-[32])10.

Fundamentalrightsmustalsoberelevanttoequivalentassessmentsinthecaseofprotected

9www.europeancopyrightsociety.org

10 SeeformoredetailsontheinterpretationofexceptionsandlimitationstocopyrightinaccordancewiththeCharter,inparticularfreedomofexpression,thepreviousOpinionoftheEuropeanCopyrightSociety,LimitationsandExceptionsasKeyElementsoftheLegalFrameworkforCopyrightintheEuropeanUnion–OpinionoftheEuropeanCopyrightSocietyontheJudgmentoftheCJEUinCaseC-201/13Deckmyn(2015)_46InternationalReviewofIntellectualPropertyandCompetitionLaw93;andwww.europeancopyrightsociety.org

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rightsrelatedtocopyright, includingtherightsofphonogramproducers.Ininterpretingthe

legislativeacquisoncopyrightandrelatedrights,theCourthasrepeatedlynotedtheneedto

ensurea“fairbalance”betweencompetingrights(see,forexample,C-275/06,Promusicae,

ECLI:EU:C:2008:54;C-201/13,DeckmynECLI:EU:C:2014:2132[27]).

[2.3]Onfactssuchas thoseunderconsiderationhere,11 themostobviously relevantCharter rights

are, in support of the phonogram producer,12 the right of property (including the right of

intellectual property) (CFR, Art 17) and, in support of the user of the phonogram, the

freedomofthearts(CFR,Art13).Therightoffreedomofexpressionandinformation(CFR,

Art11)supportsthe interestsofboththeuserof thephonogramandtheaudienceforthe

newmusicalworkcontainingasamplefromthephonogram.13Thescopeoftheserightsisto

be interpreted inaccordancewithequivalentrights in theEuropeanConventiononHuman

RightsandinaccordancewithconstitutionaltraditionscommontoMemberStates.14

[2.4]Inthenationalproceedings,theBundesverfassungsgerichtdecidedthatafairbalancebetween

competing rightswouldnotbeachieved through theapplicationofa ruleunderwhich the

unlicenseduseofaverysmallsampleofaphonogramwillinfringetheexclusiverightsinthat

phonogram.Inparticular,itheldthatsucharulewouldviolatethefreedomofartisticactivity

underArticle5oftheGrundgesetz(GermanBasicLaw).Anassessmentofthe“fairbalance”

betweencompetingCharterrightsinacasesuchasthisleadsustoconcludethatthesame

outcomeoughtalsotobereachedinEuropeanUnionlaw.

11 QuestionsrelatingtothenatureoftherelationshipbetweenthecopyrightacquisandthefundamentalrightsprotectedundertheCharterhavealsobeenreferredtotheCourtbytheBundesgerichtshofinC-469/17FunkeMedienNRWGmbH(referenceof4August2017)andC-516/17SpiegelOnline(referenceof25August2017).

12 Forthesakeofclarity,itshouldbenotedthattheEuropeanUnion’slegalsystemalsorecognisesdistinctlytherightsofthecomposerinthemusicalwork,andtherightsofperformerswhoseworksareembodiedintherecordings,andnationallaws,whileinternationallawsrequireMemberstatestorecognisethemoralrightsofcomposers(asauthors)andperformers.Here,theCourtissolelyconcernedwiththerightsgrantedtophonogramproducers.

13 Boththeright-holderinthephonogramandthepersonusingthesampleofthephonogrammightconceivablyalsobeentitledtorelyontherighttoconductabusinessunderArt16,CFR.However,suchreliancewouldbeunlikelytoshiftthebalancebetweencompetinginterestsdescribedbelow.

14 CFR,Art52(3),(4).

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[2.5]Creativeexpression,encompassing the right toaccesscreativeexpression, isprotectedunder

bothArticles11and13of theCharter.15 Onfactssuchasthoseat issuehere, thoserights

weighheavily in thebalance.Thesamplingofextracts fromphonograms in thecreationof

newmusicalworksisacontemporaryculturalformofacknowledgedsignificance16.Valuable

creative activity would be deterred if (i) short samples could only be used with the

permissionoftheright-holderinthephonogramand/or(ii)sampleshadtoberecreatedab

initio by the user. In such circumstances, harm to the public interest in access to culture

wouldoccur.

[2.6]Bycontrast,thephonogramproducer’sclaimbasedontherightofproperty(includingtheright

of intellectual property) underArticle 17 of the Charter is less compelling in this instance.

The rightofpropertymustalwaysbeexercised inaccordancewith its social function.17On

facts such as those at issuehere, the essenceof the right of property is not affected. The

right-holderwillsufferminimal,ifany,economicharmasaresultoftheuseofaverysmall

15 Todate,limitedguidanceisavailableontheinterpretationofthefreedomoftheartsundertheCFR.SeeSPeersetal,TheEUCharterofFundamentalRights:aCommentary(HartPublishing,2014)380.Onitsscopeininternational,regionalhumanrightsinstrumentsandinnationalconstitutions,seeChristopheGeiger,FreedomofArtisticCreativityandCopyrightLaw:ACompatibleCombination?,CentreforInternationalIntellectualPropertyStudiesResearchPaperNo.2017-08;8/3U.C.IrvineL.Rev.(forthcoming2018),availableathttps://ssrn.com/abstract=3053980

16 Onthehistoryofmusicalsampling(aswellasitscopyrightimplications),seetheinterestingearlyarticlebyRobertM.Szymanski,‘AudioPastiche:DigitalSampling,IntermediateCopying,FairUse’,(1996)3(2)UCLAEnt.L.Rev.273;InesDuhanic,‘CopythisSound!TheCulturalImportanceofSamplingforHipHopMusicinCopyrightLaw-ACopyrightLawAnalysisoftheSamplingDecisionoftheGermanFederalConstitutionalCourt’,11GRURINT.1007,1008(2016)(asthisauthorrightlyputsit,“nosampling,noHipHop.Andthatwouldbeunacceptableforademocraticsocietygovernedbytheruleoflawandtheresultingfreedomforartiststoexpressthemselvesartistically”);OlufunmilayoB.Arewa,‘FromJ.C.BachtoHipHop:MusicalBorrowing,CopyrightandCulturalContext,’(2006)84N.CarolinaL.Rev.547(2006);DavidSanjek,‘“Don’tHavetoDJNoMore”Samplingandthe“AutonomousCreator”’,(1992)10CardozoArts&Ent.L.J.607(1992);ChristopheGeiger,FreedomofArtisticCreativityandCopyrightLaw:ACompatibleCombination?,supran.14.Fordetailedstudies,seeJOkpaluba,Digitisation,CultureandCopyright:DigitalSampling,ACaseStudy(PhD,King’sCollege,UniversityofLondon,2000);KembrewMcLeod&PeterDiCola,CreativeLicense:TheLawandCultureofDigitalSampling(2011)(ethnographicstudy).Foradiscussionofdifferentformsofsampling,seeD.M.Morrison,‘BridgeportRedux:DigitalSamplingandAudienceRecoding,’(2008)19FordhamIntellectualProperty,MediaandEntertainmentLawJournal75.

17For further discussion of a limited nature of the right to property in general and intellectual property inparticular,seeAlexanderPeukert, ‘TheFundamentalRightto(Intellectual)PropertyandtheDiscretionoftheLegislature’, inC.Geiger (ed.),ResearchHandbookonHumanRights and Intellectual Property (2015) 132; J.GriffithsandL.McDonagh,‘FundamentalRightsandEuropeanIPLaw:thecaseofArt.17(2)oftheEUCharter,’inCGeiger(ed.),ConstructingEuropeanIntellectualProperty:AchievementsandNewPerspectives,(2913)75;ChristopheGeiger, ‘TheSocialFunctionof IntellectualPropertyRights,orhowEthicscanInfluencetheShapeandUseofIPLaw,’inGDinwoodie(ed.),IntellectualPropertyLaw:MethodsandPerspectives(2013)153.

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extract from a protected phonogram as a sample in a subsequent musical work.

Consequently, the Court should conclude that a fair balance between competing

fundamentalrightswillonlybesecuredifsuchsamplingofverysmallextractsispermitted.

[2.7]Onthisbasis,theCourtcanensurecompatibilitywiththeCharterby(i)interpretingthescope

oftherightsofaphonogramproducerasexcludingtheirapplicationincasesofsamplingof

short extracts and/or (ii) interpreting the quotation exception under Article5(3)(d) of

Directive 2001/29/EC as covering such sampling activity. The former approach avoids a

situationinwhichtheuserofaphonogramwouldberequiredtoprovethattheuseofavery

smallextractiscoveredbyanexceptionorlimitation.Inasituationinwhichtheapplication

of theCharter favours creative freedom, suchan incidenceof theburdenofproofmaybe

inappropriate.Asindicatedabove,theBundesverfassungsgerichthighlightedtheriskoflegal

uncertainty having a chilling effect on artistic creativity in this case.A solutionbasedon a

restrictive interpretation of the exclusive right of phonogram producersmight have some

advantages from this perspective. It relieves sound samplers of the legal uncertainty that

may arise from the obligation to convince a judge of the applicability of an exception or

limitation.

3. TheMeaningof‘Part’and‘Copy’

Questions1and2

Question1: Isthereaninfringementofthephonogramproducer’sexclusiverightunderArticle2(c)

ofDirective2001/29/ECtoreproduceitsphonogramifveryshortaudiosnatchesaretakenfromits

phonogramandtransferredtoanotherphonogram?

[3.1] In the opinion of the Bundesgerichtshof, the subject matter of the exclusive rights of the

phonogram producer is not the phonogram itself but the economic, organizational and

technical effort to produce the first fixation, in other words, the investment into this

product.18Althoughthisapproachcorrectlyidentifiesthepurposeoftherightsofphonogram

producers,itisnotinlinewiththeclearwordingofArticle2(c)ofDirective2001/29/EC)and

Article9(1)(b)ofDirective2006/115/EC.Theseprovisionssetout thatMemberStatesshall

18 Bundesgerichtshof, Request for a preliminary ruling, Pelham GmbH and others, Case C-476/17,paragraph[18].

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providefortheexclusivereproductionanddistributionright“forphonogramproducers,[in

respect] of their phonograms”. Correspondingly, recital 10, second sentence, of Directive

2001/29/EC provides that the investment required “to produce products such as

phonograms”isconsiderable.Thus,andincontrasttothesuigeneris(sic!)rightfordatabase

producers, the related rightofphonogramproducersdoesnotattach to the investment in

thephonogram,buttotheendproductassuch.19TheBundesgerichtshof thereforeasks, in

essence,whatconstitutesaprotected“part…of[a]phonogram”accordingtoArticle2(c)of

Directive 2001/29/EC. This question resembles the issue posed in the Infopaq case with

regardtoprotectedpartsof“works”underArt.2(a)ofDirective2001/29/EC.20

[3.2] In providing a definition of a “part of a phonogram” in the sense of Art. 2(c) of Directive

2001/29/EC, theCourt should takenoteof theprovisionsof international law.Neither the

Rome Convention,21 nor theWIPO Performers and Phonograms Treaty,22 refer to “partial”

reproductionofphonograms.RatherliketheBerneConventiononauthorsrights,23thetwo

Conventions leavethedeterminationof thethresholdof liability toMemberStates.Having

said that, it is clear from the proceedings of the WIPO 1996 Treaty (where there was a

proposalto introducearighttocontrol ‘modifications’) thatmanyMemberStatesconsider

19 Article3(b)oftheRomeConventiondefinesaphonogramasanexclusivelyauralfixationofsoundsofaperformanceorofothersounds;whichArticle2(b)oftheWIPOPerformersandPhonogramsTreatydefinesaphonogramaseitherafixationofsoundsofaperformance,orofothersoundsorofarepresentationofsounds.

20 Case C-5/08 Infopaq International, ECLI:EU:C:2009:465, [2009] ECR I-6569, paragraphs [30] et seq.;Leistner,GRUR2016,772(775).

21 RomeConventionfortheProtectionofPerformers,ProducersofPhonogramsandBroadcastingOrganisations,Art10(„Producersofphonogramsshallenjoytherighttoauthorizeorprohibitthedirectorindirectreproductionoftheirphonograms.“)(athttp://www.wipo.int/wipolex/en/treaties/text.jsp?file_id=289757)DuringtheDiplomaticConference,aBelgianproposalexplicitlytoextendthewordingofthereproductionrighttocoverpartialreproductionwasrejected.

22 WIPOPerformersandPhonogramsTreaty,Art11(„Producersofphonogramsshallenjoytheexclusiverightofauthorizingthedirectorindirectreproductionoftheirphonograms,inanymannerorform„)(athttp://www.wipo.int/wipolex/en/treaties/text.jsp?file_id=295578)

23 SamRicketson&JaneCGinsburg,TheBerneConventionandBeyond,(Oxford:OUP,2006),[11.26],644(„Bernedoesnotdictatethestandardforfindinginfringement.Itdoesnotinstructmemberstatesastowhetherthereisathresholdofsubstantialitythatthedefendant’scopyingmustcrossbeforeitcanbeheldliable“)

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aninfringementoftherightsinaphonogramtooccuronlywherethereisareproductionofa

‘substantialpart’thereof.24

[3.3]Nevertheless,theGenevaPhonogramsConvention(GPC),towhichmostEUMemberStatesare

bound,offerssomeguidance.25AccordingtoArticle2oftheGPC,eachContractingStateshall

protectproducersofphonogramswhoarenationalsofotherContractingStatesagainstthe

making of duplicates without the consent of the producer and against the importation of

such duplicates, provided that any such making or importation is for the purpose of

distribution to thepublic,andagainst thedistributionof suchduplicates to thepublic.The

crucialnotionof“duplicate”isdefinedinArticle1(c)oftheGPCasfollows:

“For the purposes of this Convention, ‘duplicate’ means an article which contains

sounds takendirectly or indirectly froma phonogramandwhich embodies all or a

substantialpartofthesoundsfixedinthatphonogram”.26

WhereasitistruethatArt.7(1)GPCproclaimsthattheGPCshallinnowaybeinterpretedas

limitingorprejudicingtheprotectionotherwisesecuredtoproducersofphonogramsunder

anydomesticlaw,theCourtofJusticeshould,forthefollowingreasons,interpret“part…of

aphonogram”inlightofArticle1(c)oftheGPC.

[3.4] Firstly, the GPC attaches, like EU copyright law, to the phonogram and thus the fixation of

sounds (and not the investment). Secondly, using Art. 1(c) GPC as a point of reference

guarantees that EU copyright law is interpreted in conformity with relevant international

24 RecordsoftheDiplomaticConferenceonCertainCopyrightandNeighbouringRights,Geneva1996(Geneva:WIPO,1999),Vol2,665,[228],[230],[232],[235](discussionofproposedArticles8and15,9Dec1996).

25 ConventionfortheProtectionofProducersofPhonogramsAgainstUnauthorizedDuplicationofTheirPhonograms(1971),http://www.wipo.int/wipolex/en/treaties/text.jsp?file_id=288582#P61_6005.

26 Bundesgerichtshof, Request for a preliminary ruling, Pelham GmbH and others, Case C-476/17,paragraph [16]. See further 'ReportPresentedby theGeneralRapporteur,'paragraph [40], inRecordsof theInternational Conference of States on the Protection of Phonograms, Geneva, October 18 to 29, 1971(WIPO/UNESCO,1975)35,38(substantialityexpressesaqualitative,notjustaquantitative,assessment;inthisrespect 'quite a small part may be substantial'); Commentary on the Draft Convention (adopted by theCommitteeofGovernmentalExperts),Phon.2/4,[55],ibid,159,167(givingasexampleofapartcomprisingawhole track); Summary Minutes (Main Commission), paragraphs [668]-[688.1] in ibid, 74, at 101-103(discussingthedrafttext,andadoptingtheterm'substantial'toensurethereproductionofatrackfromanLPwas covered) and [918.3], [923]-[937] at 126-7 (deciding not to re-open discussion of the requirement ofsubstantiality);WIPOGuidetotheRomeConventionandPhonogramsConvention(Geneva:WIPO,1981)97-98(accessible online at http://www.wipo.int/edocs/pubdocs/en/copyright/617/wipo_pub_617.pdf) (’nationallawsandcourtshavethefinaldecisionwhenasufficientpartistakentomakethisdamageareality.’)

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law.27Thirdly,theapplicationoftheGPCthresholdof“substantiality”wouldallowtheCourt

of Justice to subject the related right of phonogram producers, like any other intellectual

property right, including in particular copyright, to a minimum requirement of protection

that reflects the purpose of the respective right.28 Derogations from the principle of free

movementandlimitationsontheexerciseoffundamentalrights(suchasthefreedomofthe

arts) through intellectual property rights are permitted only to the extent that they are

justified for the purpose of safeguarding the specific subject-matter of the intellectual

propertyconcerned.Arightholderisnotguaranteedtheopportunitytodemandthehighest

possible remuneration.29 To this end, the Court could extrapolate from its jurisprudence

regardingArticle7(1)oftheDatabaseDirective.30Whereasthepointofattachmentofthesui

generisrightindatabasesandtherelatedrightsofphonogramproducersdiffer(investmentv

phonogram), the purpose of both rights is the same: databases like phonograms require

substantial investment, and the possibility of recouping that “especially high and risky”

investment can be effectively guaranteed only through adequate legal protection of the

right-holders concerned.31 According to Article 7(1) of the Database Directive, 96/9/EC,

“MemberStatesshallprovideforarightforthemakerofadatabasewhichshowsthatthere

hasbeenqualitativelyand/orquantitativelyasubstantialinvestmentineithertheobtaining,

verification or presentation of the contents.” As the Court held in The British Horseracing

Board Ltd and Others, this threshold implies “significant human, technical or financial

investment”.32

[3.5] In contrast to the suggestionof theBundesgerichtshof in its request for a preliminary ruling,

every sample of a phonogram does not automatically represent a quantitatively or

27 Bundesverfassungsgericht, Case 1 BvR 1585/13, 31 May 2016,ECLI:DE:BVerfG:2016:rs20160531.1bvr158513,paragraph[111]–MetallaufMetall.

28 v. Ungern-Sternberg, GRUR 2014, 209 (216); Hoeren, MMR 2009, 253 (257); contraBundesgerichtshof,Requestforapreliminaryruling,PelhamGmbHandothers,CaseC-476/17,paragraph[19].

29 CJEU Joined casesC-403/08andC-429/08,FootballAssociationPremier LeagueandKarenMurphy,ECLI:EU:C:2011:631,paragraphs[106],[108].

30 Ohly,GRUR2017,964(966).

31 Directive96/9/EC,Recital40;Directive2001/29/EC,recitals4s.1,10s.2;Directive2006/115,recital5.

32 CaseC-203/02,TheBritishHorseracingBoard LtdandOthers vWilliamHillOrganization Ltd [2004]ECRI-10415,paragraph[71].

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qualitatively substantial investment in the aforementioned sense.33 In the light of the

available digital technologies for the recording and mixing of audio tracks, it is factually

incorrecttoassumethatevery independentlyrecordedaudiotrack, letaloneatwosecond

sound sample of such an audio track, requires significant human, technical or financial

investment. Whether that is so depends upon the circumstances of the case, taking into

accountboththeplaintiff’sandthedefendant’sphonogram:

[3.6] Furthermore, Article 7(1) of the Database Directive demonstrates that the requirement of a

“substantial investment” not only informs the decision whether a part of a phonogram

qualifies for protection in the first place, but also the scope of the rights in a protected

phonogram.Anextractionand/orre-utilizationofthecontentsofaprotecteddatabasewill

infringeonly if thisuseconcerns“thewholeor…asubstantialpart,evaluatedqualitatively

and/or quantitatively, of the contents of that database” (Database Directive, 96/9/EC, Art

7.1). As the Court of Justice has explained, a user extracts and/or re-utilises such a

quantitativelyorqualitativelysignificantpartofthecontentsofadatabase“iftheinvestment

intheextractedorre-utilisedpartis,proportionately,…substantial”.34Iftherulesthathave

evolvedinthefieldofdatabaseprotectionaretakenasareferencepointfordealingwiththe

corresponding question of protecting investment in a phonogram, it may be said that a

protected phonogram is reproduced in part only if the copying free-rides on a substantial

investment. It is thusmistaken automatically to equate a short samplewith the complete

phonogram.35Again,everythingdependsuponthecircumstancesofthecase.

[3.7] The approach advocated by the Bundesgerichtshof also ignores the concrete effects of the

sampleontheprotectedinterestsofthephonogramproducerinthecaseathandandthus

fails to take intoaccount thepurposeof the related right inquestion.Thispurpose isonly

affected if a reproduction and/or distribution of a part of a phonogram prevents the

phonogram producer from recouping a substantial investment.36 In this regard, the

Bundesverfassungsgericht,initsdecisioninthiscaseof31May2016,requiredafindingthat

33 ContraBundesgerichtshof,Requestforapreliminaryruling,PelhamGmbHandothers,CaseC-476/17,paragraph[18].

34 CaseC-203/02,TheBritishHorseracingBoard LtdandOthers vWilliamHillOrganization Ltd [2004]ECRI-10415,paragraphs[69]-[71].

35 ContraBundesgerichtshof,Requestforapreliminaryruling,PelhamGmbHandothers,CaseC-476/17,paragraph[18].

36 Supranote31(recitals).

12

the use of the sample significantly prejudices the economic interests of the phonogram

producerbythreateningtoreducethenumberofsales/licensesoftheoriginal.37This,inturn,

isonlythecaseifthesamplesubstitutesfortheoriginalphonogram.38

[3.8] Because such a substitutive effect will be rare in the case of a short sample, a purposive

interpretationoftheconceptof“part”ofa“phonogram”willensurealsothatafairbalance

isstruckbetweenthefundamentalrighttointellectualproperty(CFR,Art.17(2)CFR)andthe

fundamentalrighttoartisticfreedom(CFR,Art.13firstsentence).

[3.9] Sampling ought to encroach upon the exclusive rights of a phonogram producer only if it

significantly prejudices the economic interests of the right holder, i.e. if it prejudices the

prospectofrecoupingasubstantialinvestmentintheproductionofthephonogram,through

substitutionoftheoriginal.39

Question2

Is a phonogramwhich contains very short audio snatches transferred from another phonogram a

copyoftheotherphonogramwithinthemeaningofArticle9(1)(b)ofDirective2006/115/EC?

[3.10]Seeanswertoq1.

4. TheScopeoftheQuotationException

Question4

37 Bundesverfassungsgericht, Case 1 BvR 1585/13, 31 May 2016,ECLI:DE:BVerfG:2016:rs20160531.1bvr158513,paragraphs[101]etseq.–MetallaufMetall

38 Ohly,GRUR2017,964(966).

39 Bundesverfassungsgericht, Case 1 BvR 1585/13, 31 May 2016,ECLI:DE:BVerfG:2016:rs20160531.1bvr158513, paragraph [110] – Metall auf Metall; HanseatischesOberlandesgericht,Case3W38/91,GRURInt.1992,p.390(391);HanseatischesOberlandesgericht,Case3U237/90,NJW-RR1992,p.746 (748);Gelke,Mashups imUrheberrecht,2013,pp.128et seq.;Häuser, Soundund Sampling, 2002, pp. 109 et seq.; Leistner, Juristenzeitung 2014, 846 (849); Salagean, Sampling imdeutschen,schweizerischenundUS-amerikanischenUrheberrecht,2008,pp.231etseq.

13

Can itbesaid thataworkorothersubjectmatter isbeingused forquotationpurposeswithin the

meaningofArticle5(3)(d)ofDirective2001/29/ECif it isnotevidentthatanotherperson’sworkor

anotherperson’ssubjectmatterisbeingused?

Answer:

[4.1]UnderArt5(3)(d),MemberStatesmayprovideforanexceptiontotheauthor’sexclusiveright

ofreproductionofhisworkinrespectof

(i) quotationsforpurposessuchascriticismorreview,providedthat

(ii) they relate to a work or other subject-matter which has already been lawfully made

availabletothepublic;

(iii) theiruse is inaccordancewith fairpractice, and to theextent requiredby the specific

purpose.

(iv) the source, including the author’s name, is indicated, unless this turns out to be

impossible.

[4.2] The terms of the provision reflect those of Article 10(1) of the Berne Convention. However,

while theprovision is presented as optional forMember States, it is important toobserve

thatunderArticle10(1)ofthatConvention,anexceptionforuseinquotationismandatory

formembersoftheBerneUnion.40Indeed,inthetravauxtotheStockholmRevisionofBerne

(whenArticle10(1)was introduced), theprovision iscommonlydescribedas thequotation

right.41

40 Onitsface,theArticlecreatesanobligationonMembersoftheUniontopermitquotationincaseswheretheconditionsaremet.Itstatesthat‘itshallbepermissible…‘[italicsadded].Theuseoftheword‘shall’inthiscontextisimperative.Article10(1)usesquitedifferentlanguagefromthatusedinotherprovisionsconcerningexceptions.Forexample,Article10(2),states,inrelationtoexceptionsforeducation,that‘itshallbeamatterforlegislationinthecountriesoftheUnion...topermit...’SimilarlanguageisfoundinArticle10bisinrelationtoreportingcurrenteventsandArticle9(2),whichallowsexceptionstothereproductionright‘incertainspecialcases’.ThelanguageofArticle10(1)isdistinct,andclearlyreadsasmandatoryratherthanpermissive.SeeSamRicketson&JaneCGinsburg,TheBerneConventionandBeyond,(Oxford:OUP,2006),788-9,[13.42];PaulGoldsteinandBerntHugenholtz,InternationalCopyright:Principles,Law,Practice(Oxford:OUP,2010)379,[11.4.1];GraemeB.DinwoodieandRochelleC.Dreyfuss,ANeo-FederalistVisionofTRIPS(OUP,2012),185(‘amandatoryquotationright’);RaquelXalabarder,StudyonCopyrightLimitationsandExceptionsforEducationalActivitiesinNorthAmerica,Europe,Caucasus,CentralAsiaandIsrael(WIPO,2009).

41 WIPO,RecordsoftheIntellectualPropertyConferenceofStockholm,June11toJuly14,1967,VolI,(WIPO,1971)116(BIRPIStudyGroup),117(DocumentS/1,‘ProposalsforRevisingtheSubstantiveCopyrightProvisions,Arts1-20(PreparedbytheGovernmentofSwedenwiththeAssistanceofBIRPI)’).

14

[4.3] As already observed, one key aim of Article 10(1) and Article 5(3)(d) is to ensure that the

copyrightsystemactsasanengineof,ratherthananimpedimentto,freedomofexpression.

It is therefore important for the exception to be interpreted and applied in the light of

Articles11and13oftheCharter42.Freedomofexpressionrequiresthatauthorsarefreeto

use pre-existing materials where such use is proportionate to the aim pursued and in

accordancewithfairpractice.

[4.4] As a result, the restrictive approach to the interpretation of exceptions and limitations first

adoptedinC-5/08InfopaqInternationalA/SvDankeDagbladesForeningECLI:EU:C:2009:465

[56]-[58] cannot prevail in circumstances in which the use of a work is protected by a

fundamentalrightundertheCharter,suchasArticles11or13.

[4.4]TheonlyoccasiononwhichtheCJEUhasexaminedtheoperationofArticle5(3)(d)todatewas

in its first Judgment in Case C-145/10, Eva-Maria Painer v. Standard VerlagsGmbH,

ECLI:EU:C:2011:798.43 In that Judgment, the Court treated Article 5(3)(d) as requiring a

balancingoftherightsofownerandusers:

[132]AsregardsthecontextsurroundingArticle5(3)(d)ofDirective2001/29,itisimportant

tonotethat,asstatedinrecital31inthepreambletothatdirective,a‘fairbalance’mustbe

safeguarded between, on the one hand, the rights and interests of authors, and, on the

other,therightsofusersofprotectedsubject-matter

..

[134] Article 5(3)(d) of Directive 2001/29 is intended to strike a fair balance between the

righttofreedomofexpressionofusersofaworkorotherprotectedsubject-matterandthe

reproductionrightconferredonauthors.

[4.5]NeithertheDirectivenortheBerneConventionofferadefinitionof“quotation”.Accordingly,

thewordshouldbegiven itsordinarymeaning, taking intoaccount thecontext inwhich itoccurs.

One importantaspectof that context is that the right toquote isnot limited toparticular cultural

genres.Article5(3)(d)appliestoallworksandsubjectmatterofrelatedrights,justasArticle10(1)of

42 SeeEuropeanCopyrightSociety,LimitationsandExceptionsasKeyElementsoftheLegalFrameworkforCopyrightintheEuropeanUnion–OpinionoftheEuropeanCopyrightSocietyontheJudgmentoftheCJEUinCaseC-201/13Deckmyn,supra.

43 [2011]ECRI-12533,[2012]ECDR(6)89(ECJ,ThirdChamber).

15

Berne applies to all works.44 The significance of this is that the right to quote is not limited to

quotationoftextorintext.Print-basedparadigmsofquotationshouldnotbethesoleconsideration

wheninterpretingtheconceptofquotation.

[4.6]Discussionof re-useofmusic,art,architectureand filmas“quotation” isverycommon.45For

thiscase,itisimportanttoobservethattheterm“quotation”isalsowidelyusedtoreferto

the re-use of recordings of music.46 Digital sound sampling has often been described as

“quotation”.47

[4.7] In theparadigmaticcaseof textualquotation inanother text, theconvention is todistinguish

thequotedmaterialfromthequotingmaterial.Thisisdoneusingquotationmarks,insetting,

and other devices. However, given that the right to quote applies to all material

encompassed by authors’ rights and related rights, it is inappropriate to import such

conventions into the definition of “quotation.” Otherwise, the meaning of quotation in

Article5(3)(d)wouldnotcomportwithitsuseasadescriptionofpracticesoftextualre-usein

other cultural sectors, such as art, film, music and recorded music. Instead, the use of

conventional devices such as “quotation marks” to delineate quoted text is more readily

incorporated through the condition that permitted quotation must accord with “fair

44 OpeningdiscussioninMainCommitteeIattheintergovernmentalConferenceonJune16,1967,Cavin,theSwissrepresentative,saidhisdelegationapprovedtheprincipleofextendingtherightofquotationto‘allthecategoriesofprotectedworks’:Minutes,para.[761],inWIPO,RecordsoftheIntellectualPropertyConferenceofStockholm,June11toJuly14,1967,VolI,(WIPO,1971)860.Later,GeorgeStraschnovobjectedtoaproposaltolimittheexceptionto‘short’quotationsonthebasisthatthiswouldraiseparticularproblemsinrelationtothequotationofartisticworks,wheremoralrightswouldbeimplicatedifonlypartwasused:Minutes,para.[769],Records,861.

45 See,forexample,therecentspecialissue,(2014)33(2)ContemporaryMusicReviewonMusicBorrowingandQuotation.

46 OneexampleisVladimirUssachevsky’sre-useofarecordingofa1951performanceofWagner’sParsifalinhisavant-gardesoundcollage,entitledWirelessFantasy(1960)(AvailableviaYouTube:https://www.youtube.com/watch?v=bEShy2QIj4U(accessed23Sept2017)),whichcombinedtheperformancewiththesoundsofMorse-codesignalsbeingtappedout.SeeRichardBeaudoin,‘CounterpointandQuotationinUssachevsky’sWirelessFantasy,’(2007)12(2)OrganisedSound143-151,esp.147-149.

47 MarkKatz,Capturingsound:howtechnologyhaschangedmusic(Berkeley:UniversityCaliforniaPress,2010),140-1(referringtosamplingas“performativequotation”,thatis,“quotationthatrecreatesallthedetailsoftimbreandtimingthatevokeandidentifyauniquesoundevent“);KevinHolm-Hudson,‘QuotationandContext:SamplingandJohnOswald'sPlunderphonics,’(1997)7LeonardoMusicJournal17-25,17(describingdigitalsamplingas“timbralquotation”andexplainingthat“thesamplefunctionsasaquotethatisrecontextualizedbutthatneverthelessbearstheweightofitsoriginalcontext”);SergeLacasse,‘IntertextualityandHypertextualityinRecordedPopularMusic’inMichaelTalbot(ed),TheMusicalWork:RealityorInvention?(LiverpoolUniversityPress,2000),Ch2(describingsamplingasatypeof“autosonicquotation.”)

16

practice”and/orthatthesource,includingtheauthor’sname,mustbeindicated,unlessthis

turnsouttobeimpossible.

[4.8]Asaresult,theanswertoQuestion4isthataworkmaybeusedforquotationpurposeswithin

themeaningofArticle5(3)(d)ofDirective2001/29/ECeven if it isnotevidentthatanother

person’sworkoranotherperson’ssubjectmatterisbeingused.Tosatisfytherequirementto

indicateanauthor’sname,itissufficienttoincluderelevantinformation–totheextentthat

this possible48 – in the description of the derivativework inwhich the pre-existing source

materialhasbeenincorporated.

5. HarmonizationandFreedomofMemberStatesinImplementingtheDirective

Question5

DotheprovisionsofEU lawonthereproductionrightandthedistributionrightof thephonogram

producer(Article2(c)ofDirective2001/29/ECandArticle9(1)(b)ofDirective2006/115/EC)andthe

exceptions or limitations to those rights (Article5(2) and (3) of Directive 2001/29/EC and

Article10(2),firstsentence,ofDirective2006/115/EC)allowanylatitudeintermsofimplementation

innationallaw?

Answer

[5.1]Wedonotthinkitnecessaryintheseproceedingstoanswerthesequestionsintheabstractor

categorically,astheanswerstothepreviousquestionsshouldbesufficienttodeterminethe

proceedings.However,weoffersometentativeguidance.

WithrespecttotherightsinArts2and4

[5.2]Inaccordancewithprecedent,itisclearthattheconceptsof“reproduction”and“distribution”

areautonomousconceptsofEuropeanlaw.TheCourthasconsistentlyheldthattheneedfor

uniform application of EU law and the principle of equality demand that the terms of a

provisionofEUlawwhichmakesnoexpressreferencetothelawoftheMemberStatesfor48 Astocollagesamplingwhichincludesawidevarietyofsound“snippets”,seeD.M.Morrison,“BridgeportRedux:DigitalSamplingandAudienceRecoding”,(2008)19FordhamIntellectualProperty,MediaandEntertainmentLawJournal75.Arguably,collagesamplingusingaveryhighnumberofpre-existingsoundsisanexampleofaderivativeworkwheretheindicationofthenameoftheauthorsofallsourcematerial“turnsouttobeimpossible”inthesenseofArticle5(3)(d).

17

thepurposeofdetermining itsmeaningandscopemustnormallybegivenanautonomous

anduniforminterpretationthroughouttheEuropeanUnion,havingregardtothecontextof

the provision and the objective pursued by the legislation in question. See, for example,

C-467/08,Padawan,EU:C:2010:620,[32].

[5.3] The effect is that Member States are not permitted to deviate from the terms of those

provisions:CaseC-466/12,Svensson, ECLI:EU:C:2014:76, [33]-[41] (onDirecive2001/29/EC,

Art3).

[5.4] However, as already noted, it is also clear that the interpretation and application of these

provisionsmusttakeaccountoftheCharter.Responsibilityforprovidingguidanceastosuch

interpretation liesultimatelywith theCJEU,butapplying theprovisions isamatter for the

courtsoftheMemberStates.

[5.5]TheresponsibilityforsoensuringinterpretationandapplicationinlinewiththeCharterliesnot

justwiththeCJEUbutalsowiththeCourtsofMemberStates.InCaseC-275/06,Promusicae

[2008],ECLI:EU:C:2008:54,at [70], theCJEUstatedthat"when implementingthemeasures

transposing… directives, theauthorities and courts of theMember Statesmust not only

interprettheirnationallawinamannerconsistentwiththosedirectivesbutalsomakesure

that they do not rely on an interpretation of them which would be in conflict with those

fundamental rights or with the other general principles of Community law, such as the

principleofproportionality".

Articles5(2),(3)(exceptionsandlimitations)

[5.6] In most instances, Member States have the choice whether to implement the optional

exceptions, but the list of suchexceptions is exhaustive:Member Statesmaynotmaintain

anyotherexceptionsorlimitations.SeeDirective2001/29/EC,Recital32.

[5.7]However,asalreadynoted,atleastArticle5(3)(d)oftheDirectiveismandatoryasamatterof

international law on authors’ rights (Berne Convention, Art 10(1)). The interpretation and

applicationofEUprovisionsmustbeincompliancewithsuchinternationalobligations(SGAE

/Rafaelhotels,ECLI:EU:C:2006:764, [2006]ECR I-11519paragraphs[35], [40], [41]andCase

C-403/08 and Case C-429/08, Football Association Premier League and Karen Murphy,

ECLI:EU:C:2011:631,[2011]ECRI-9083,paragraph[189]).

18

[5.8] In the case of optional exceptions, the freedom that is left to Member States varies from

provisiontoprovision..Someexceptionsseemtoenvisagesomefreedom;othersdonot.

[5.9] In some cases, Member States do have limited freedom as to the implementation of an

exception.TheclearestexampleisArt5(3)(o),whichallowsforexceptionsincasesof‘minor

importance’ provided they only concern ‘analogue uses.’ Another is Art 5(3)(e). In Case C-

145/10, Eva-Maria Painer v. Standard VerlagsGmbH, ECLI:EU:C:2011:798, the Court (at

[101]) noted that the provisions of Directive 2001/29/EC do not expressly address the

circumstancesinwhichtheinterestsofpublicsecuritycanbeinvokedwithaviewtotheuse

ofaprotectedworkand,therefore,that‘theMemberStateswhichdecidetoenactsuchan

exceptionenjoyabroaddiscretioninthatrespect…’Itaddedthat‘suchadiscretionis,first,

in accordance with the idea that each Member State is best placed to determine, in

accordance with its national needs, the requirements of public security, in the light of

historical,legal,economicorsocialconsiderationsspecifictoit’[102].

[5.10] InCaseC-462/09,StichtingdeThuiskopie , theCourtconsideringArt5(2)(b), stated (at [23])

that:

Withregardtotheanswertothequestionofthe identificationofthepersonwhomustbe

regarded as responsible for paying the fair compensation, the provisions of Directive

2001/29 do not expressly address the issue ofwho is to pay that compensation,meaning

thattheMemberStatesenjoybroaddiscretionwhendeterminingwhomustdischargethat

obligation.

[5.10] Inothercases,nosuchfreedomexists:CaseC-510/10,DR,TV2DanmarkA/Sv.NCB-Nordisk

Copyright Bureau, EU:C:2012:244, paragraph [36]. In C-201/13, Deckmyn ECLI:EU:C:2014:2132,

paragraph[16],theCJEUstated

‘An interpretation according towhichMember States that have introduced that exception

are free to determine the limits in an unharmonised manner, which may vary from one

MemberStatetoanother,wouldbeincompatiblewiththeobjectiveofthatdirective.’

[5.11]Evenwheresome“latitude”exists,principlesofEuropean lawshould informtheexerciseof

discretion:Opinion 3/15, (MarrakeshOpinion),ECLI:EU:C:2017:114, paragraphs [122]-[127]

(ECJ,GrandChamber). These include theneed to safeguard thehierarchyofnormsand to

19

ensure compliance with fundamental rights (C-275/06, Promusicae, ECLI:EU:C:2008:54, at

paragraph[70]),aswellascompliancewithinternationalobligations.

Question3

CantheMemberStatesenactaprovisionwhich—inthemannerofParagraph24(1)of theGesetz

über Urheberrecht und verwandte Schutzrechte (German Law on Copyright and Related Rights)—

inherently limitsthescopeofprotectionofthephonogramproducer’sexclusiverighttoreproduce

(Article2(c)ofDirective2001/29/EC)and todistribute (Article9(1)(b)ofDirective2006/115/EC) its

phonogram in suchaway thatan independentworkcreated in freeuseof itsphonogrammaybe

exploitedwithoutthephonogramproducer’sconsent?

[6.1]Aswewillexplain,wetreatthisquestionlastbecauseweconsideritunnecessarytodetermine

thequestionintheseproceedings.

[6.2]Webeginby reminding theCourt that it isbeingasked to consider the interpretationof two

Directives.AccordingtoArticle288oftheTreatyontheFunctioningoftheEuropeanUnion,a

Directiveisbinding“astotheresulttobeachieved”leavingtoMemberStates“thechoiceof

formandmethods.”Itthusseekstorespectnationaltraditionsandapproachestostructure,

categorisation,formandinterpretation.Whatisimportantistheresult.

[6.2]Question3concernsaparticularityofGermanandAustriancopyrightlawinitsrelationtothe

EU copyright acquis, namely the provision on “free use” in Article 24 of the

UrheberrechtsgesetzandArticle5(2)oftheAustrianUrheberrechtsgesetz(AustrianCopyright

Act).49 Dutch copyright law sets forth a similar rule in Article 13 of theAuteurswet (Dutch

Copyright Act), namely that adaptations constituting a new, original work fall outside the

scope of the right of adaptation.50 According to Article 24(1) of the German

Urheberrechtsgesetz, an independentwork created in the free useof thework of another

personmaybepublishedorexploitedwithouttheconsentoftheauthoroftheworkused.

Paragraph two setsout that the ruleon “freeuse” shall not apply to theuseof amusical

49 AstotheapplicationofthisAustrianfreeuseruleinthelightoffundamentalrightsandfreedoms,see,forinstance,ObersterGerichtshof(AustrianSupremeCourt),13July2010,case4Ob66/10z,“Lieblingshauptfrau”.

50 ForamoredetaileddiscussionoftheDutchprovision,seeMartinR.F.Senftleben,’Quotations,ParodyandFairUse,’in:P.BerntHugenholtz,AntoonA.QuaedvliegandDirkJ.G.Visser(eds.),ACenturyofDutchCopyrightLaw–Auteurswet1912-2012,(Amstelveen:deLex,2012),359.

20

workinwhichamelodyisrecognisablytakenfromtheworkandusedasthebasisforanew

work.AsfollowsfromthewordingandthecontextofArticle24oftheGermanCopyrightAct,

which forms part of a subchapter on the exploitation rights of an author, the provision

regulatesthe“freeuse”ofworks,notthefreeuseofphonogramsandothersubjectmatter

ofrelatedrights.TheBundesgerichtshofisoftheopinion,however,thatArticle24(1)German

CopyrightActcanbeappliedbyanalogytotherelatedrightofphonogramproducers.51Itis

thereforeworthemphasisingfromtheoutsetthattheansweroftheCourtofJusticetothis

question will have implications for copyright and related rights other than the rights of

phonogramproducersunderGermanlaw.

[6.3] In assessingquestion3, it is furthermore important tonote thatArticle 24(1)of theGerman

Copyright Act is applied by German courts in two separate categories of cases, and that

question 3 only concerns one of those, namely the situation where a copyright work has

beenmadeuseofmerelyasaninspirationforanotherexpression,whichissodifferentinits

outer appearance from the original that the expression of the original work has faded

(“äußerer Abstand, verblassen”).52 It is this classical doctrine of “free use” that the

Bundesgerichtshof refersto inparagraphs22to27of itsreferraldecision.53 Inapplyingthe

doctrineinthiscase,theBundesgerichtshofisoftheopinionthatthemusicalpiece“Nurmir”

hasindividualfeaturesofitsownwhichdepartfromthetwosecondsamplecopiedfromthe

1977 Kraftwerk phonogram to such an extent that “Nur mir” is to be considered an

“independentcreation”underArticle24(1)oftheUrheberrechtsgesetz,asappliedbyanalogy

tophonograms.54

[6.4]Theobviousproblemwiththisreasoningisthatitcompares,ontheonehand,thedefendant’s

completepieceofmusicwith,ontheotherhand,thetwosecondexcerptfromtheplaintiffs’

phonogram. International,EUandGermancopyright lawsdonotoperate,however,onthe

basis of a holistic concept of a “piece ofmusic”. Instead, they strictly distinguish between

51 Bundesgerichtshof, Request for a preliminary ruling, Pelham GmbH and others, Case C-476/17,paragraph[24].

52 Theothercategoryconcernsuseforthepurposeofcaricature,parodyorpastiche,andthuscasesofArt. 5(3)(k) Directive 2001/29; see Bundesgerichtshof, Request for a preliminary ruling, Pelham GmbH andothers,CaseC-476/17,paragraphs[38]-[39],andinfra.

53 Bundesgerichtshof, Request for a preliminary ruling, Pelham GmbH and others, Case C-476/17,paragraphs[22]-[27].

54 Bundesgerichtshof, Request for a preliminary ruling, Pelham GmbH and others, Case C-476/17,paragraph[26].

21

musicalworks(thecomposition),literaryworks(thelyrics),theperformanceofvocalistsand

instrumentalists, the phonogram onwhich all these expressions have been fixed, and the

respective copyrights and related rights therein. The musical composition, the lyrics, and

most of the performances fixed on the phonogramof the defendant do not reproduce or

otherwise use the two second sample at stake in the case. As such, these creative

expressionsdonotencroachupontheexclusiverightsoftheplaintiffs“intheirphonograms”

(cf. Article 2(c) of Directive 2001/29/EC) and Article 9(1)(b) of Directive 2006/115/EC)

becausetheydonotincorporatepartsoftheoriginalphonogram.

[6.5] What the Bundesgerichtshof therefore asks, in essence, is whether the aforementioned

distinction betweenworks, performances, and fixed sounds remains valid if the combined

fixationofallthoseindependentsubjectmatter includesafragmentofanotherphonogram

that, in the overall impression of the piece ofmusic and its artistic features, plays such a

subordinate role that thecreativeexpressionof thederivativeworkclearly supersedes the

creative expression of the incorporated fragment and, as a result, can be deemed

independentand“free”.Onitsmerits,this“freeuse”privilegerequiresthederivativework

tohavenewfeaturesofitsownthatmaketheindividualfeaturesoftheincorporatedsource

materialfadeaway.55Iftheclaimantswereentitledtoinjunctivereliefandfurtherremedies

asregardsthereproductionanddistributionofthesong“Nurmir”,theywouldbeentitled,

on the mere basis of their rights in their phonogram, to authorize or prohibit the use of

musicalcompositions, lyrics,performancesand (partsof)phonogramsthatmakenouseof

theirprotected subjectmatterwhatsoever. It is this kindofoverreach thatArticle24(1)of

theGermanCopyrightActasappliedbytheBundesgerichtshof ismeanttoprevent.Sucha

“freeuse”ofaphonogramisausethatdoesnotreproduceordistributeprotectedpartsofa

phonogrambecause it displays somany individual, expressive features of its own that the

takingfrompre-existingsourcematerialisnolongerdiscernible.

[6.6] In our view, this reading of German copyright law is in line with Article 2(c) of Directive

2001/29/ECandArticle9(1)(b)ofDirective2006/115/ECbecausethescopeofprotectionof

the phonogram producer’s exclusive rights is inherently limited to uses of this particular

phonogram,i.e.the(partial)reproductionofthisfixationandtheuseofthosereproductions.

55 Foramoredetaileddiscussionofthisfreeuseprivilegeagainstthebackgroundofinternationalobligations,seePaulEdwardGeller,’AGermanApproachtoFairUse:TestCasesforTRIPsCriteriaforCopyrightLimitations?,’,(2010)57JournaloftheCopyrightSocietyoftheU.S.A.901.

22

Thisinherentlimitationoftheexclusiverightsfollowsbothfromthewordingandpurposeof

Article 2(c) of Directive 2001/29/EC and Article 9(1)(b) of Directive 2006/115/EC, which

attachtophonogramsandaimatprotecting the investmentnecessary for theirproduction

(see infra, questions 1 and 2). These rights do not entitle the phonogram producer to

authorizeorprohibitthecreationandexploitationofindependentworks,performances,and

fixationsofsounds.Thisistrueirrespectiveofthefactthattheseobjectsarecombinedwith

a partial reproduction of a protected phonogram. Rightly understood, the German rule of

“free”use,therefore, isameansof identifyingformsofusewhichfalloutsidethescopeof

theaforementionedexclusiverightsfromtheoutset.

[6.7]Whether such a partial reproduction of a protected phonogram and the distribution of this

reproductionaspartofanothersonginfringetherightsofthephonogramproduceristhusa

questionwhichonlyarisesifthetakinghasbeensubstantialenoughtoremainadiscernible,

individual feature of the derivative work. In cases where the expressive features of the

derivative work are sufficiently strong to make the features of an incorporated sound

fragment fade away, however, the unauthorized taking does not reach a level of intensity

thatjustifiestheinvocationoftheexclusiveright.Onlyifthederivativeworkdoesnothave

sufficiently strong features of its own, the taking is substantial and the assessment of

infringementdependsuponwhetherthesampleconstitutesaseparatelyprotectedpartofa

phonogram(questions1and2)and,ifyes,whetherthereproductionanddistributionofthis

sample is subject to a limitation or exception under Article 5 of Directive 2001/29/EC and

Article10ofDirective2006/115/EC(question4).Wehavealreadyconsideredthosematters.

23

DraftingCommittee:

• Prof.LionelBently,Professor,UniversityofCambridge,UnitedKingdom• Prof. Christophe Geiger, Director, Centre d’Etudes Internationales de la Propriété

Intellectuelle(CEIPI),UniversityofStrasbourg,France• Prof.JonathanGriffiths,Professorof IntellectualPropertyLaw,SchoolofLaw,QueenMary

UniversityofLondon,UnitedKingdom• Prof. AxelMetzger, Professor of Civil and Intellectual Property Law, Humboldt-Universität

Berlin• Prof.AlexanderPeukert,Goethe-UniversitätFrankfurtamMain,Germany• Prof. Martin Senftleben, Professor of Intellectual Property, VU University Amsterdam,

Netherlands

Signatories:

• Prof.P.BerntHugenholtz,Director,InstituteforInformationLaw,UniversityofAmsterdam,Netherlands

• Prof. Estelle Derclaye, Professor of Intellectual Property Law, University of Nottingham,UnitedKingdom

• Prof. Thomas Dreier, Director, Institute for Information and Economic Law, KarlsruheInstituteofTechnology(KIT),Germany

• Prof.SéverineDusollier,Professor,SchoolofLaw,SciencesPo,Paris(France),andCentredeRechercheInformation,DroitetSociété(CRIDS),UniversityofNamur(Belgium)

• Prof. Reto Hilty, Director, Max Planck Institute for Innovation and Competition, Munich,Germany

• Prof.Marie-ChristineJanssens,ProfessorofIntellectualPropertyLaw,UniversityofLeuven,Belgium

• Prof.MartinKretschmer,ProfessorofIntellectualPropertyLaw,UniversityofGlasgow;andDirector,CREATe,UnitedKingdom

• Prof.MarcoRicolfi,ChairofIntellectualProperty,TurinLawSchool,Italy• Prof. Ole-Andreas Rognstad, Professor of Law, Department of Private Law, University of

Oslo,Norway• Prof.AlainStrowel,Professor,UCLouvainandUniversitéSaint-Louis,Belgium• Prof.TatianaSynodinou,Professor,UniversityofCyprus• Prof. Raquel Xalabarder, Chair on Intellectual Property, Universitat Oberta de Catalunya,

Barcelona,Spain