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European IP Bulletin, Issue 33, July 2006 - Copyrights

COPYRIGHTS

3. New French Copyright Law

On 30 June 2006, the French Assemblée Nationale voted in favour of the new copyright bill. The ‘iTunes’ law  as it is popularly known is intended to compel Apple to make music purchased from its online store and the iPod music player compatible with music and players sold by rival companies. Currently, anyone who purchases music from iTunes can only play the music on the iPod player which cannot play music purchased from other online stores. In this way, Apple has been able to maintain its position in determining the price of music sold through iTunes. The law now:

• requires companies like Apple to provide for interoperability of their technical devices
• establishes a regulatory authority to ensure that companies comply with requests from competitors to licence their exclusive formats.

There is a clause in the new law, however, which allows artists to object to their music being transferred into other formats. This allows Apple to circumvent the provision regarding licensing their exclusive formats by striking deals with various record companies and artists to ensure that their music sold on iTunes is not converted into other formats. Thus interoperability is still mandated but may not have to be enforced.

The bill may only come into force after the challenge brought by the Socialists and Greens has been exhausted.  The new law pits copyright law against competition law as the technological measures adopted by Apple are viewed as an impediment to competition while Apple maintains a monopoly over iTunes and iPod. Apple have threatened to withdraw from the French market. The passing of the law could have a far reaching effect on other countries in Europe where Apple has a leading market share of online music downloads. Denmark, Sweden and Norway have already taken Apple to task over the non-operability of iTunes and the iPod.

4. Collective Management of Cable Retransmission Rights

In Uradex SCRL v Union Professionnelle de la Radio et de la Télédistribution (RTD) and Société Intercommunale pour la Diffusion de la Télévision (Brutele) Case C-169/05, the European Court of Justice (ECJ) interpreted the scope of the powers of a collecting society under Article 9(2) of the EC Directive on copyright and related rights with regard to cable retransmission (Council Directive 93/83/EEC).

Uradex, a Belgian collecting society, brought an action against two cable operator companies, RTD and BRUTELE, to restrain the cable operators from retransmitting by cable the performances of artists within its catalogue without their permission, in violation of Articles 51 and 53 of the Belgian Law. Uradex was unsuccessful in the Belgian lower and appellate courts, which held that although the collecting societies managing the related rights held the exclusive retransmission right, this was subject to the actual transfer of those retransmission rights to the societies. Thus, Article 53(2) of the Belgian Law, which transposes Article 9(2) of the EC Directive, does not allow a collecting society to exercise the rights of artists who have not mandated them to the collecting society. The Belgian lower courts further held that the term “manage” was limited to collection of remuneration on behalf of the artists only, and the management of retransmission rights on behalf of artists was beyond the power of collecting societies, even in the cases where artists had transferred their rights to these societies.

The Belgian Supreme Court referred the matter to the ECJ for a preliminary ruling on the scope of the powers of collecting society under Article 9(2) of the Directive particularly when the cable retransmission rights have not been transferred by the artist to the society.

The ECJ held that: (i) Article 9(1) had entrusted the collecting societies to grant or refuse the retransmission rights on behalf of the copyright owners/holders, and that collecting societies were ‘to be deemed to be mandated to manage such rights’; (ii) the scope of management of the rights provided in Article 9(2) was not limited only to financial aspects but included all aspects of cable retransmission rights, as evident from the heading of Article 9: ‘Exercise of the cable retransmission right’; and (iii) the Directive did not prevent the copyright owners from exercising their contractual rights as provided in this case under Article 36(1) of the Belgian law and they were thus free to sever all links with collecting societies following any assignment of their rights.

This decision is of substantial significance for two reasons in particular. First, it enables cable operators to understand the scope of their potential negotiating rights with the collecting societies while acquiring the cable retransmission rights. Second, it provides guidance on the attempts to harmonise the national laws relating to the collective management of copyright and related rights within the Community in the wake of technological changes affecting such rights and thus furthering the aim of fostering cultural creativity in the single market.

5. TV Adverts Infringe Moral Rights in Film

On 12 April 2006, a Swedish Court of Appeal held that a TV channel breached the moral rights of the directors and the scriptwriters of two films when the presentations of the films were interrupted in 2002 by commercial breaks without the authors’ permission.

The Swedish television company, TV4, had broadcast two films by directors Vilgot Sjöman and Claes Eriksson which were interrupted with advertising breaks. The two movies in question were made before Swedish broadcasting laws allowed commercial stations to interrupt movies with advertisements.  The directors, who had also written the screenplays in their respective films, sued TV4 for violating their moral rights. They claimed that the five minute long breaks were interruptions prejudicial to their reputation and individuality as authors. The TV company denied the claims and stated that the authors had waived their rights in this respect when granting the broadcasting rights to a commercial television channel.

The Swedish Court of Appeal upheld the earlier decision of the Stockholm District Court in favour of the claimants. The Court of Appeal explained that whilst the main rule in the Radio and Television Act, which is based on the EU Television Without Frontiers Directive (89/552/EEC), is that advertising breaks should be placed between programmes, since they may also in certain circumstances be placed during a film. However, this is only permitted in a way that does not harm the integrity and value of the programme, or the legal rights of the rights holder. More significant changes require the consent of the rights holder.

The Court held that the authors had not waived their moral rights by granting broadcasting rights to a commercial television channel. Although the authors were obliged to allow small changes to their works, in these cases the commercial breaks were significantly long. It was obvious that the breaks interrupted the continuity and dramaturgy of the films and, in addition, incorporated subject matter which was foreign to the film. In one particular instance the intended dramatic effect of the transition between two scenes was destroyed.

The Court made it clear that a blanket waiver of moral rights is not valid. The mere fact that broadcasting rights are granted to a commercial broadcasting company does not automatically over ride the moral rights of authors. As advertising is the main component part of the business of commercial television broadcasters this case may force some companies to review their standard licence agreements, if they haven’t done so already, to include express consent from authors of programmes regarding advertising breaks.

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