DIRECTORATE GENERAL FOR INTERNAL POLICIES POLICY DEPARTMENT C: CITIZENS' RIGHTS AND CONSTITUTIONAL AFFAIRS LEGAL AFFAIRS CONTRACTUAL ARRANGEMENTS APPLICABLE TO CREATORS: LAW AND PRACTICE OF SELECTED MEMBER STATES STUDY Abstract This report discusses the legal framework applicable to copyright contracts as well as the practices in artistic sectors. A careful revision of the copyright provisions, contractual law principles and case law in 8 Member States is presented together with a more specific analysis of a set of issues particularly relevant nowadays, such as collective bargaining, digital exploitation, imbalanced contracts, and reversion rights, among others. A set of recommendations aiming at improving the level of fairness in copyright contracts is proposed at the end of the study. PE 493.041 EN This document was requested by the European Parliament's Committee on Legal Affairs AUTHORS Séverine Dusollier, CRIDS (University of Namur) Caroline Ker, CRIDS (University of Namur) Maria Iglesias, KEA – European Affairs Yolanda Smits, KEA – European Affairs NATIONAL REPORTS CONTRIBUTIONS Séverine Dusollier, Belgium, France Caroline Ker, Belgium, France Maria Iglesias, Spain Thomas Hoeren, Germany Antonina Bakardjieva, Sweden Anna Hammaren, Sweden Péter Mezei, Hungary Maciej Barczewski, Poland (assisted by Mr Michal Cieszewski) Estelle Derclaye, United Kingdom SPECIAL ACKNOWLEDGMENTS Tudy Bernier Konstantina Karameri All organisations and experts participating in our survey (see Annex II) RESPONSIBLE ADMINISTRATOR Rosa RAFFAELLI Policy Department C: Citizens' Rights and Constitutional Affairs European Parliament B-1047 Brussels E-mail: [email protected] LINGUISTIC VERSIONS Original: EN ABOUT THE EDITOR To contact the Policy Department or to subscribe to its newsletter please write to: [email protected] European Parliament, manuscript completed in January 2014. Brussels, © European Union, 2014. This document is available on the Internet at: http://www.europarl.europa.eu/studies DISCLAIMER The opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the official position of the European Parliament. Reproduction and translation for non-commercial purposes are authorized, provided the source is acknowledged and the publisher is given prior notice and sent a copy. 2 Contractual arrangements applicable to creators: law and practice of selected Member States _______________________________________________________________________________ CONTENTS LIST OF ABBREVIATIONS 5 EXECUTIVE SUMMARY 6 INTRODUCTION 16 1. THE COPYRIGHT CONTRACTS IN CONTEXT 19 1.1. Methodology 19 1.2. Definitions 20 1.3. The context of exploitation of creative works 22 1.3.1. The contractual bargain in copyright contracts 22 1.3.2. The contractual process: from negotiation to termination 23 1.3.3. Copyright contract and remuneration 24 1.3.4. The copyright contract in context 24 2. LEGAL PROVISIONS PROTECTING THE AUTHOR IN COPYRIGHT CONTRACTS 28 2.1. Copyright Law 28 2.1.1. Restrictions related to the form of transfer of rights 28 2.1.2. Form requirements 30 2.1.3. Determination of the scope of rights transferred 31 2.1.4. Determination of remuneration 36 2.1.5. Obligations of the parties 40 2.1.6. Interpretation of contracts 41 2.1.7. Termination of contract 42 2.1.8. Transfer of contracts 42 2.1.9. Specific contracts 43 2.1.10. Conclusion 49 2.2. Contractual Law 50 2.2.1. Good faith, Fairness, Equity, Usages 51 2.2.2. Rules of interpretation 53 2.2.3. Doctrine of defect of consent and other conditions for the formation of a contract 55 2.2.4. Legal provisions on unfair terms 56 2.2.5. Undue influence, unconscionability, restraint of trade 58 2.2.6. Revision of contract given unforeseen circumstances 60 2.2.7. Conclusion 60 2.3. The protection of authors in practice: collective agreements 61 2.3.1. Collective agreements: a way to reinforce authors’ position 61 2.3.2. Collective agreements to ensure “adequate remuneration”: the case of Germany 62 2.3.3. Coping with new exploitations: the French Framework Contract on e-publishing 63 2.3.4. Conclusion 64 3 Policy Department C: Citizens' Rights and Constitutional Affairs _______________________________________________________________________________ 3. SELECTED ISSUES 66 3.1. Digital exploitation 66 3.1.1. Introduction 66 3.1.2. The uncertain ownership of digital rights 66 3.1.3. Existing legal and contractual approaches to associate authors to the digital exploitation of their works 68 3.1.4. Conclusion 75 3.2. Rights reversion 77 3.2.1. Reversion in Europe 77 3.2.2. “Recapture Rights” in the USA 79 3.2.3. Conclusion 80 3.3. The imbalance as to the scope of the waiving and the envisaged exploitation 81 3.3.1. Far-reaching assignments 81 3.3.2. The problem of the so-called buy-out contracts 84 3.3.3. Conclusion 86 3.4. The contractual waiving of rights to remuneration 86 3.4.1. Introduction 86 3.4.2. The Luksan case 87 3.4.3. Conclusion 89 3.5. Articulation between transfer of rights in audiovisual works and collective management 89 3.5.1. Contractual transfer of rights and collective management 89 3.5.2. Presumption of transfer of exploitation rights to the producer of an audiovisual work 90 3.5.3. Existing legal or contractual approaches to maintain collective management 92 3.5.4. Conclusion 94 3.6. Dual licensing 94 3.6.1. The Issue 94 3.6.2. Some advantages of individual licensing 95 3.6.3. Conclusion 99 4. CONCLUSION AND RECOMMENDATIONS 100 REFERENCES 106 ANNEX I: NATIONAL REPORTS 111 ANNEX II: ORGANISATIONS PARTICIPATING IN THE SURVEY/INTERVIEWS 161 ANNEX III: EXAMPLES OF COLLECTIVE AGREEMENTS 164 ANNEX IV: EXAMPLES OF MODEL CONTRACTS NEGOTIATED BETWEEN REPRESENTATIVES OF BOTH AUTHORS AND EXPLOITERS 164 4 Contractual arrangements applicable to creators: law and practice of selected Member States _______________________________________________________________________________ LIST OF ABBREVIATIONS BGB Bürgerliches Gesetzbuch, German Civil Code CDPA Copyright Designs and Patents Act, United Kingdom CJEU Court of Justice of the European Union CMO Collective Management Organisation CPI Code de la Propriété Intellectuelle, French Copyright Code EU European Union HCA Hungarian Copyright Law IP Intellectual Property KC Kodeks postępowania cywilnego, Polish Civil Code LDA Loi relative au droit d'auteur et aux droits voisins, Belgian Copyright Law LDMA Literary, musical, dramatic and artistic Work LPI Ley de la Propiedad Intelectual, Spanish Copyright Law MOU Memorandum of Understanding PECL European Principles of Contract Law SzJSzT Hungarian Copyright Expert Board UPAPP Ustawa roku o prawie autorskim i prawach pokrewnych, Polish Copyright Law UrhG Urheberrechtsgesetz, German Copyright Law URL Lag om upphovsrätt till litterära och konstnärliga verk; Act on Copyright in Literary and Artistic Works, Sweden VerlG Verlagsgesetz, German Law for Publishing contracts VOD Video on demand 5 Policy Department C: Citizens' Rights and Constitutional Affairs _______________________________________________________________________________ EXECUTIVE SUMMARY One of the first relevant acts accomplished by the author, after the creation of an original work, is to entrust a publisher or producer to exploit commercially her rights, hence to give up some part of control over her work, in order to obtain access to the market. This first contract transferring copyright over an artistic work might be a tricky episode for creators as they will in most cases be in a weaker bargaining position, due to their inexperience, lack of information or will to be published or produced at any cost. Whereas copyright contracts could contribute to secure the financial autonomy of creators, granting them a fair remuneration, they might, if they are imbalanced in favour of the undertakings exploiting the works, fail to provide a fair share in the financial return deriving from the exploitation of copyrighted works. This study assesses the rules and legal provisions applicable in the European Union that purport to protect creators in their contractual dealings. Failing a European harmonisation of the legal provisions related to creators’ contracts, the matter is left to national laws that are largely diverging, from very detailed provisions to inexistent ones. A first part of the study gives preliminary background on the methodology and definitions, and explains the context of the exploitations of works and of the contractual relationships pertaining thereto. Indeed, while the contractual relationship that is examined in this study is the one between the author and the first publisher or producer, the work is often the object of a whole chain of contracts, allowing its full exploitation (for instance, through broadcasting or streaming). The second part analyses the relevant national legal provisions offering protection to creators, including both specific provisions of national copyright laws and the general principles of contract law. A third part is devoted to the analysis of some specific issues arising in the contemporary world where the author might appear to lack some protection, in order to assess the efficiency of the legal protection in practice in particular contexts. Some recommendations for further action, namely in the legislative field, to better protect authors are proposed at the end of the study. The copyright contracts in context This study is limited to an analysis of the legal framework (contractual law principles and copyright provisions) applicable to