CJEU stays in tune with phonogram producers - sampling without permission can infringe a phonogram producer's rights, subject to certain conditions
Locations
So the CJEU is out for the summer but it seems that the 15 judges of the Grand Chamber were keen to leave us IP enthusiasts with a little light reading for the holidays! Three important copyright decisions (Pelham (C-476/17), Spiegel Online (C-516/17) and Funke Medien (C-469/17)) were published on the same day on 29 July 2019 and all sharing a common theme - the interplay between copyright and fundamental rights and freedoms. A press release was also published for each case, highlighting their importance in the copyright arena.
This blog looks at the reasoning in the case of Pelham, which explores whether the popular modern day phenomenon of sampling in the music industry can constitute an infringement of a phonogram producer's rights. In a nutshell, the CJEU ruled that 'sampling without authorisation can infringe a phonogram producer's rights…. unless that sample is included in the phonogram in a modified form unrecognisable to the ear'.
Re-cap of the facts
We published on Advocate General Szpunar's Opinion in December 2018 (AG Opinion brings music to the ears of phonogram producers) and here is a reminder of the background to the case:
Kraftwerk is a German band formed in 1970 by Ralf Hütter and Florian Schneider-Esleben who are considered by many in the music industry to be the pioneers of electronic music. In 1977, Hütter and Schneider-Esleben produced and performed a phonogram featuring the song 'Metall auf Metall'. Hütter and Schneider-Esleben claimed that music producer, Moses Pelham, copied, by means of sampling, approximately two seconds of a rhythm sequence (in a continuous loop) from the song 'Metall auf Metall' to incorporate in his own song, 'Nur mir'.
The case has been rumbling on for many years with the German courts fluctuating between finding firstly that using a short sample from a Kraftwerk song without permission was copyright infringement and then, overturning that decision for failing to take into account Pelham's artistic freedom. Eventually the case found its way to the Court of Justice of the European Union (CJEU) to determine.
Mini glossary
For those not accustomed to hip hop and rap, luckily the press release and the judgment clarify the meaning of some of the technical musical terms:
'Sampling' - a technique consisting in taking, by means of electronic equipment, extracts from a phonogram in order to use those elements for a new composition in another phonogram'.
'Phonogram producer' - someone who finances the creation of phonograms or the person who first fixes the sounds of a performance or other sounds.
'Phonogram' – any exclusively aural fixation of sounds of a performance or of other sounds.
Questions referred
The German Federal Court of Justice referred various questions to the CJEU on copyright and related rights and fundamental rights and this blog focusses on the following:
- Is it an infringement of a phonogram producer's exclusive reproduction right (under Article 2 of the InfoSoc Directive 2001/29) if very short audio snatches are taken from his/her phonogram and transferred to another phonogram?
- Is a phonogram containing very short audio snatches from another phonogram a 'copy' (within the meaning of Article 9(1)(b) of the Rental and Lending Directive 2006/15).
- Can a Member State rely on a provision under its national law that limits the scope of a phonogram producer's protection under EU law?
- Can a user taking a sample from another phonogram rely on the quotation exception (Article 5(3)(d) of the InfoSoc Directive)?
- In what way are the fundamental rights set out in the Charter of Fundamental Rights in the European Union ('the Charter') to be taken into account when considering the scope of protection allowed to phonogram producers and the scope of the applicable exceptions?
The ruling
Taking each bullet in turn:
Is it an infringement of a phonogram producer's exclusive reproduction right if very short audio snatches are taken from his/her phonogram and transferred to another phonogram?
The CJEU concluded that a phonogram producer (in this case Hütter and Schneider-Esleben) has the right to prevent another person (in this case Pelham) from taking a sound sample of his/her phonogram, even if very short, to include in another phonogram unless that sample is in a modified form unrecognisable to the ear.
Reasoning
Article 2(c) of the InfoSoc Directive provides that phonogram producers have the exclusive right to authorise or prohibit direct or indirect, temporary or permanent reproduction by any means and in any form, in whole or in part of their phonogram. The Directive does not define 'reproduction in part' but the CJEU determined that it is clear from the wording of the Article that the reproduction by a user of a sound sample, even if very short, must in principle be regarded as a reproduction 'in part'. That literal interpretation also reflects the general objective of the Directive (as outlined in the recitals) which is to establish a high level of protection of copyright and related rights and of the exclusive right of the phonogram producer to protect his/her investment. It is important to bear in mind that the investment required to produce phonograms is 'considerable' and producers need to guarantee satisfactory returns on their investments.
The CJEU also considered it appropriate to address the question on fundamental rights with this question. The CJEU confirmed that the technique of sampling is a form of artistic expression, which is covered by freedom of the arts as protected in Article 13 of the Charter. A fair balance must be struck, to safeguard, especially in the electronic environment, on the one hand the interests of the holders of copyright and related rights and on the other hand, the protection of the interests and fundamental rights of users. Therefore, when a user exercises his right to freedom of the arts, and modifies the sound sample in a new work so it is unrecognisable to the ear and produces a distinct artistic creation, it is not a 'reproduction'.
Is a phonogram containing very short audio snatches from another phonogram a 'copy'?
The CJEU concluded that a phonogram containing a sample from another phonogram cannot be considered a 'copy' because it does not reproduce 'all or part' of that phonogram.
Reasoning
Article 9(1)(b) of the Rental and Lending Directive allows phonogram producers to prevent copies of their phonograms being made available. Again, the Directive does not define 'copy' and so the meaning must be considered in light of what the law actually sets out to do. In this case, the provision exists to allow a producer the possibility of recouping the investments made to produce the phonogram, 'since those investments can prove to be especially high and risky'. The CJEU's view was that one of the main aims of the Directive is to prevent piracy, which is a huge threat to phonogram producers in today's technological era and can have a very damaging effect on their revenue stream. However, as pointed out by Advocate General Szpunar in his Opinion, only an article which reproduces 'all or a substantial part' of the sounds fixed in a phonogram is intended to replace lawful copies of that phonogram and can therefore be considered a 'copy'. This is not the case, however, when an article merely embodies sound samples from a phonogram, where relevant in modified form, for the purposes of creating a new and distinct work.
Can a Member State rely on a provision under its own national law that limits the scope of a phonogram producer's protection under EU law?
The CJEU concluded that a Member State cannot lay down an exception or limitation other than those provided for in Article 5 of the InfoSoc Directive.
Reasoning
The German law on copyright and related rights (9 September 1965) states that an independent work created in the free use of the work of another person may be published and exploited without the consent of the author of the work used. However, this does not apply to the use of a musical work in which a melody is recognisably taken from the work and used as the basis for a new work.
Pelham's view was that the German right to free use should apply because it is not a derogation from copyright as such but simply introduces an additional limitation (under German national law) to the scope of protection allowed to a phonogram producer and recognises the fact that it is not possible to come up with a cultural creation 'without that creation building upon the previous work of other authors'.
The CJEU, however, concluded that the exceptions and limitations set out under EU law already take into account the interests and fundamental rights of both the producers and users or protected subject matter and the public interest. The list of exceptions and limitations under Article 5 of the InfoSoc Directive is aimed at ensuring the proper functioning of the internal market and that list is and should be an exhaustive list.
Therefore, it follows that the German 'free use' legislation that provides for an exception or limitation not listed under Article 5 of the InfoSoc Directive, which allows a distinct work, created in the free use of a protected work to be published and exploited without authorisation from the rightsholder, does not comply with EU law.
Can a user taking a sample from another phonogram rely on the quotation exception?
The CJEU concluded that it is not possible to rely on the quotation exception in circumstances where it is not possible to identify the work concerned by the quotation in question.
Reasoning
This CJEU firstly confirmed that this exception would only come into play in a situation where infringement had been found. In order to rely on the quotation exception, certain conditions must to be satisfied as set out in Article 5(3)(d) of the InfoSoc Directive. Quotations must be, 'for purposes such as criticism or review, provided that they relate to a work or other subject matter which has already been lawfully made available to the public, that, unless this turns out to be impossible, the source, including the author’s name, is indicated, and that their use is in accordance with fair practice, and to the extent required by the specific purpose'.
Importantly, the CJEU followed the AG's Opinion that this exception can apply to the use of a protected musical work, despite it ordinarily being used in relation to literary works.
Rather unhelpfully again, the term 'quotation' is not defined in the InfoSoc Directive so the meaning has to be determined by considering its usual meaning in everyday language coupled with the legislative context and purpose of the relevant rules.
The CJEU summed up the essential characteristics of a quotation as 'the use, by a user other than the copyright holder, of a work or, more generally, of an extract from a work for the purposes of illustrating an assertion, of defending an opinion or of allowing an intellectual comparison between that work and the assertions of that user, since the user of a protected work wishing to rely on the quotation exception must therefore have the intention of entering into ‘dialogue’ with that work'.
Taking the above into account and applying it to the scenario at hand, where the creator of a new musical work uses a sound sample from a phonogram which is recognisable to the ear in that new work, the use of that sample may, depending on the facts, amount to 'quotation', provided that 'that use has the intention of entering into dialogue with the work from which the sample was taken' and the conditions set out in Article 5(3)(d) are met. There will be no such 'dialogue', however, if it is not possible to identify the work concerned by the quotation at issue.
Comment
The ruling will hopefully provide some clarity for the music industry by confirming that if you take a sample of someone else's music track and use it in another music track, unless the sample is modified and unrecognisable to the ear, then a licence will be required to use it. It remains to be seen whether difficulties will arise in determining whether a sample is indeed 'unrecognisable to the ear'. Some say this is a win for Kraftwerk because the sample used by Pelham is recognisable as originating from the 'Metall auf Metall' track, but that will ultimately be for the German court to decide.
The CJEU's analysis of the interplay between copyright and related rights and fundamental rights and freedoms is also of interest as is the importance the CJEU placed on striking the right balance between the interests of a producer of a phonogram in protecting their intellectual property rights, whilst at the same time, protecting the rights of users of protected subject matter covered by freedom of the arts, as well as the public interest.
It is also useful to have some analysis on when the quotation exception can come into play and confirmation of the conditions that need to be satisfied in order to rely on it.
Now we have this guidance from the CJEU, it will be interesting to see the effect it has on the remix industry. Will artists continue their practice of sampling but ensure that they modify it sufficiently to avoid liability, or will this guidance act as a deterrent and discourage them from actively engaging in the technique going forward? Time will no doubt tell.