The legal position and enforceability of remuneration for authors, writers and freelance creatives is set to improve this year. In mid-December 2016, the Bundestag passed a reform of copyright contract law in the form of the “Act to improve the enforcement of authors’ claims to appropriate remuneration” .
The changes, which in particular strengthen the rights of the authors themselves, came into force on March 1, 2017.
Reform of copyright contract law to strengthen the position of authors
The reform of copyright contract law is primarily intended to improve the individual legal position of individual authors and creative minds. Up to now, they have sometimes had to agree to contractual terms under which they had to surrender all rights to the work or their services in return for inappropriate remuneration (“total buy-outs”). The reform is intended to prevent these cases in particular in future.
Important and noteworthy changes are
1. reasonable remuneration, § 32 UrhG: Frequency and extent
A central point in copyright law is the appropriateness of the remuneration for the author. The provision in Section 32 UrhG assures him that he will be paid appropriately and fairly for (commercial) exploitation. The reformed law emphasizes the principle of reasonable participation in every use. In order to assess the appropriateness, Section 32 para. 2 UrhG has therefore been amended:
Otherwise, the remuneration is appropriate if it corresponds to what is customary and reasonable in business transactions at the time of conclusion of the contract in terms of the type and scope of the usage option granted, in particular the duration, frequency, extent and time of use, taking into account all circumstances.
The addition of the words “frequency” and “extent” clarifies that both the number of uses as well as the manner and intensity are important for determining the appropriate and fair remuneration. These additional criteria are intended to take particular account of the exploitation of copyrights in online media. The more varied the use, the higher the appropriate remuneration will be.
In addition, para. 2a was added, which was already common practice:
A common remuneration rule can also be used to determine the appropriate remuneration for contracts that were concluded before its temporal scope of application.
2. right to information and accountability, § 32d UrhG
Section 32d UrhG introduces another interesting innovation to the law. In order to provide the author with sufficient information about the extent of the use of his works and the resulting income, the reform of copyright law now grants the author comprehensive rights to information vis-à-vis the contractual partner and even vis-à-vis third parties – irrespective of a claim under Sections 101, 101a UrhG or Section 242 BGB.
The author is entitled to the right to information once a year. If the contractual partner has resold the licenses as sublicenses, the right to information shall also extend to the sublicense holders.
Individual contractual deviations from the obligation to provide information and accountability to the detriment of the author are largely excluded.
3. right to other exploitation after ten years with flat-rate remuneration, Section 40a UrhG
Insofar as the author has granted his contractual partner an exclusive right of use in return for a lump-sum payment, the author has not been able to transfer his rights any further.
This will change with the new reform of copyright contract law. In future, authors will be allowed to exploit their rights of use elsewhere after 10 years. The exclusive license is therefore no longer an exclusive license after 10 years, but only a simple right of use. After five years, however, the parties can agree on the continuation of exclusivity.
The right to use the work for other purposes after ten years with flat-rate remuneration should not apply to employment and service relationships. This should be understandable. The employee receives his remuneration regardless of the success of the (individual) work and therefore does not bear the economic risk. At the same time, it would also make no sense if the employee were allowed to exploit his work independently against the will of the employer.
4. additional remuneration of the performer for subsequently known types of use, Section 79b para. 1 UrhG
If a performer and an exploiter have concluded a license agreement that grants the exploiter far-reaching licenses, the artist may demand additional appropriate remuneration in individual cases. Such an individual case exists in particular if the exploiter takes up a new type of use which is covered by the contract but was not yet known at the time the contract was concluded.
5. injunctive relief in the event of infringement of joint remuneration rules, Section 36b UrhG
In the event that contractual provisions have been agreed that deviate from the common remuneration rules to the detriment of the author, the authors or authors’ associations should have the right to sue for injunctive relief.
It is also possible for the author to enforce consent to the amendment of the contract by means of a lawsuit
6. special regulations for computer programs and software
Computer programs and software are generally excluded from the changes resulting from the reform of copyright contract law, Section 69a para. 5 UrhG. In future, this will increasingly lead to the courts having to decide what exactly falls under the definition of computer programs and software. A legal definition is not yet available as the legislator fears that it will be overtaken too quickly by technical developments.
Criticism from the field
The extensive changes are not only met with approval in practice. The right to information is particularly problematic. It is an enormous administrative burden for the exploiters and the companies that make use of such licenses (Dr. Ory in NJW 2017, 753; Lucas-Schloetter, GRUR 2017, 235, 237).
Furthermore, there is a suspicion that the right to information could affect companies in their right to their established and exercised business operations. This is because there is a risk that the exploiter could be obliged to disclose trade secrets, according to Mr. Haar in IX-Magazin.
However, old contracts will not be affected by the new copyright regulations. They will continue to be governed by Section 132 para. 3a n. F. UrhG, the copyright law as it was in force before March 1, 2017 will continue to apply to them. The buy-out provisions already agreed remain effective – unless other reasons for ineffectiveness arise.