BREAKING: CJEU rules that unauthorized (non-trasformative) sampling can infringe a phonogram producer’s rights and German free use is against EU law

http://ipkitten.blogspot.com/2019/07/breaking-cjeu-rules-that-unauthorized.html

Moses Pelham
As announced, the Court of Justice of the European Union (CJEU) has just issued 3 important copyright judgments, including one – Pelham, C-476/17 [Katposts here and here], also known as the Metall auf Metall case – which concerns the important and contentious issue of whether sampling, that is the copying of the sounds fixed in a phonogram, requires a licence from the relevant phonogram producer.
In his Opinion last December, Advocate General (AG) Szpunar had advised the CJEU to rule that indeed a licence is required.
He noted that, when it comes to phonograms, the concept of ‘reproduction in part’ within Article 2 of the InfoSoc Directive does not require that the part copied be original (unlike ‘works’). The AG explained that, while it is incorrect to think (as some of the interveners had argued) of a quantitative threshold to protection, in the sense that only fragments long enough to represent the investment made by producers should be entitled to it, a phonogram is not subject to any originality requirement.
In my view, AG Szpunar was correct in his assessment and the CJEU should have reasoned along the same lines.


Today’s judgment

In today’s judgment the CJEU ruled that unauthorized, non-trasformative sampling may infringe a phonogram producer’s rights.

According to the press release issued by the Court,

In today’s judgment, the Court states, first of all, that phonogram producers have the exclusive right to authorise or prohibit reproduction in whole or in part of their phonograms. Consequently, the reproduction by a user of a sound sample, even if very short, taken from a phonogram must, in principle, be regarded as a reproduction ‘in part’ of that phonogram so that such a reproduction falls within the exclusive right granted to the phonogram producer.  

However, the Court notes that, where a user, in exercising the freedom of the arts, takes a sound sample from a phonogram in order to embody it, in a modified form unrecognisable to the ear in another phonogram, that is not a ‘reproduction’. In that context, the Court underlines that to regard such use of a sound sample taken from a phonogram as a reproduction subject to the authorisation of the phonogram producer would run counter, in particular, to the requirement to strike a fair balance between, on the one hand, the interests of the holders of copyright and related rights in the protection of their intellectual property rights guaranteed by the Charter and, on the other hand, the protection of the interests and fundamental rights of users of protected subject matter, which are covered by the freedom of the arts, also enshrined in the Charter, as well as the public interest.  

Next, the Court finds that an article which reproduces all or a substantial part of the sounds fixed in a phonogram amounts to a copy of that phonogram, in relation to which the phonogram producer enjoys an exclusive right of distribution. However, the Court adds that an article which, as is the case in the main proceedings, merely embodies sound samples, where relevant in a modified form, transferred from that phonogram for the purposes of creating a new and distinct work from that phonogram does not amount to such a copy.  

The Court also considers that the exceptions and limitations to the rights of rightholders provided for in EU law already reflect the fact that the EU legislature has taken into account the interests of the producers and users of protected subject matter and the public interest. Furthermore, those exceptions and limitations were determined exhaustively in order to ensure the proper functioning of the internal market for copyright and related rights. Consequently, the German legislation, which, notwithstanding that the abovementioned exceptions and limitations are listed exhaustively, provides for an exception or limitation not referred to under EU law allowing a distinct work, created in the free use of a protected work, in principle, to be published and exploited without the consent of the rightholders, is not in conformity with EU law.  

As regards the exceptions and limitations to rightholders’ exclusive rights of reproduction and of communication which the Member States have the option of enacting under EU law in relation to quotations from a protected work, the Court finds that the use of a sound sample taken from a phonogram allowing the work from which that sample was taken to be identified may, subject to certain conditions, amount to a quotation, in particular, provided that such use is aimed at entering into a ‘dialogue’ with the work in question. However, use of that sample if it is not possible to identify the work in question is not a quotation.  

Lastly, the Court notes that, where the action of the Member States is not entirely determined by EU law, the Member States may, in applying EU law, apply national standards for the protection of fundamental rights, provided, in particular, that the application of such fundamental rights does not compromise the level of protection laid down in the Charter. However, the substantive law relating to a phonogram producer’s exclusive right of reproduction has been the subject of full harmonisation so that such national standards are, in that regard, inapplicable. 

A more detailed analysis will follow as soon as the text of the judgment becomes available: stay tuned!

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