Honey to the Bee

Money

Honey

In the famous song "Money Honey", written and composed by Jesse Stone, Elvis Presley laments different kinds of money troubles, from demanding landlords to stingy girlfriends and heartless gold diggers, culminating in the demand "I want money, honey!" Elvis Presley Enterprises, LLC, which holds the economic rights in Elvis's estate, shares that sentiment and has been trying to get at the honeypots of Elvis Presley's German record company, Arista Music.

On 23 November, Landgericht München I (Regional Court of Munich I - yes, for whatever reason Munich has two of those, but copyright enthusiasts need not bother with the second one) handed down its judgment in the case. The claim was struck out, but apparently for different reasons than the ones I suspected in my previous post on the matter (see here). According to the suitably entertaining press release (as always, the written judgment will be some time coming), entitled "I want Money, Honey!" and available here, the claimant mainly relied on two arguments:

Additional Remuneration due to Extended Term of Protection

First, the German term of protection for sound recordings (protected under a neighbouring right, not copyright) was extended in 1990 from 25 to 50 years after first publication. Accordingly, the term during which money could be made (and presumably used to buy, among other things, honey...) suddenly doubled. The claimant argued that nobody had seen this development coming in 1973 and that in hindsight the remuneration Elvis received was therefore much too low. The claimant also pointed out that the new provisions explicitly introduced a right to additional remuneration because of the extension of the term of protection.

This claim refers to § 137f (4) UrhG, a transitional provision I admittedly overlooked in my previous post. The provision reads:

"If prior to 1 July 1995 an exploitation right concerning the subject matter of a neighbouring right that continues to be protected under this Act has been granted or assigned to another, in the event of doubt such grant or assignment shall be deemed to cover the period by which the term of protection has been extended. ²The application of sentence 1 shall be subject to payment of equitable remuneration.

It seems like rather a good idea to invoke § 137f (4) UrhG, but the court disagreed. It held that the 1973 buy-out contract between Elvis and the record company was valid. The wording of the contract explicitly covered any claims for additional payments arising out of any extensions of the duration of protection. The claim for additional remuneration that was introduced at the same time as the term extension did not lead to a different result. According to the court, the claim for additional remuneration is not mandatory and unwaivable. Contractual agreements that derogate from the provision are possible, and the contract between Elvis and his record company was such a contract.

Fairness Compensation

Secondly, the claimant argued that since 2002 there has been a legal obligation to pay additional "fairness compensation" if the consideration the artist received is strikingly disproportionate to the profits made from exploiting the work or performance, and that the requirements were met in the case at hand. That claim was based on §§ 32a, 79 (2) UrhG (also see previous posts here and here).

According to the view of the court, however, the provision governing the effects of term extension (§ 137f (4) UrhG) is lex specialis to the general duty of those who exploit the work to remunerate the artist adequately (§§ 32a, 79 (2) UrhG). In other words, §§ 32a, 79 (2) UrhG are not applicable.

Comment

The court's solution as apparent from the press release is certainly elegant, but I think there is a chance the OLG (court of appeal) or the BGH (Federal Supreme Court) might see things differently. I am not entirely sure that the right to equitable remuneration pursuant to § 137f (4) UrhG really could be waived in advance. In my opinion, there are good arguments for both sides, though, so I wouldn't bet any money (or honey) on claimant's chances.

However, I have difficulty seeing § 137f (4) UrhG as lex specialis to §§ 32a, 79 (2) UrhG. In any event, the claim should in my view still fail for he reasons given in my previous post. I would also be interested in some judicial insight as to whether the claimant actually had legal standing in the § 137f (4) UrhG claim - i.e. whether like the § 32a UrhG right the right to equitable remuneration pursuant to § 137f (4) UrhG is incapable of being waived or transferred in advance - because in that case Elvis's daughter would be the right holder, and not Elvis Presley Enterprises, LLC.

The good news is that we may actually receive answers to any or all of these questions because counsel for claimant have already announced that they will appeal the judgment and take the case all the way to the BGH if necessary.


Honey Money here
Honey and the Money here
Honey to the Bee here
Pooh's Hunny Hunt here

German concert promoters look to neighbouring rights

The German Association of Concert Promoters (bdv) has said that it has applied to the German Patent & Trade Mark Office to set up a new collection society to collect revenues it believes its members are due as a ‘neighbouring right’ under Section 81 of the German Copyright Act arising from recordings made at live events. Bdv President, lawyer Jens Michow says that the new Society,Verwertungsgsgesellschaft fur Wahrnehmung von Veranstalterrecheten, plans to negotiate with broadcasters, record labels and other users of live recordings to set tariffs to compensate event promoters.

In January 2011 IQ magazine published an article by Dr Johannes Ulbricht, a German lawyer in Hamburg at Michow and Partner, about the German ‘neighbouring rights of the concert promoter’ – identifying these an overlooked potential revenue source from Germany where it seems possible that those who stage events which are filmed or recorded (anywhere in the World) could collect a payment if the recording of that concert is then exploited in Germany. You can find a pdf of that article here on page 10.

http://issuu.com/gregiq/docs/iq_issue_33?mode=embed&layout=http%3A//skin.issuu.com/v/dark/layout.xml&showFlipBtn=true

Image (C) The Television Company (London) Ltd 2011

Metall auf Metall II – The Curious Case of Free Use and Sampling



Kraftwerk album 'Trans Europa Express'

Sabrina Setlur single 'Nur Mir'

I have only now got around to reading and reporting on ‘Metall auf Metall II’ – a case on free use and sampling decided by the Higher Regional Court of Hamburg (OLG Hamburg) on 17 August (case reference 5 U 48/05). The facts of the case are as follows:

The claimants are members of famous German band ‘Kraftwerk’. In 1977, they released a record that included the title ‘Metall auf Metall’ (‘metal on metal’), which they also produced.

Twenty years later, German rapper Sabrina Setlur had a hit with her title ‘Nur Mir’ (which in context translates as ‘to me only’). The defendants are the producer and the composers of ‘Nur Mir’. They sampled a sequence of two seconds from ‘Metall auf Metall’, put it on a loop and used it as the continuous rhythmic layer for Ms Setlur to rap over on ‘Nur Mir’.

According to the claimants, this constitutes an infringement of their neighbouring rights as producers of the sound recording ‘Metall auf Metall’ (§ 85 (1) (1) UrhG; German law provides no author’s right protection for sound recordings).

The case has already been all the way to the Federal Supreme Court (BGH), was reversed and remanded, and now the OLG Hamburg has granted leave to appeal on legal grounds again because the judges don’t seem too sure they have reached the right conclusion this time round.

In a nutshell, the conclusion they did reach was that ‘Nur Mir’ constitutes an infringement because it would not have been unreasonably cumbersome to produce a ‘sound-alike’ rhythm sequence.

In the decision that reversed and remanded the earlier judgment by the OLG, the BGH held that § 24 UrhG on free use applies mutatis mutandis to neighbouring rights. § 24 UrhG reads:

 

(1)   An independent work created by free use of the work of another person may be published and exploited without the consent of the author of the used work.

(2)   Paragraph (1) shall not apply to the use of a musical work where a melody has been recognisably borrowed from the work and used as a basis for a new work.

According to the BGH, § 24 (1) BGH does not apply if it is possible to produce the sampled sound sequence independently, or if the sampled sequence is protected as a melody under § 24 (2) UrhG.

Independent Work

In order to be an independent work created by free use for the purposes of § 24 (1) UrhG, the new work must keep sufficient distance to the borrowed original traits of the used work, to the extent that the original traits of the elder work fade into the background in view of the originality of the new work (established BGH case law). Quite when that is the case is a bit of a mystery, though. Especially in cases on parody, courts and commentators do rather a lot of squirming and modify the requirement of ‘fading to the background’. It is said to suffice if the new work keeps a great ‘inner distance’ to the work from which it borrows, especially if an ‘artistic engagement’ (‘künstlerische Auseinandersetzung’) with the borrowed work takes place, but also if the ‘inner distance’ is realised by some other means in the view of an independent observer who knows the elder work but also possesses the intellectual understanding required for the new work. In principle, though, the standard is a strict one. Are you confused yet?

In any case, the OLG found that ‘Nur Mir’ possessed an entirely different character from ‘Metall auf Metall’, even though the rhythm sequence was clearly audible throughout the track. Making allowances for the hip hop genre, the judges stated that it would be asking too much if one were to demand a rhythmic figure in a hip hop track to fade to the background in such a way as to be barely recognisable. The additional elements were deemed enough to turn ‘Nur Mir’ into an independent work according to § 24 (1) UrhG.

Rhythm vs Melody

Fans of Stomp or will be disappointed to learn that a rhythm section does not qualify as a melody for the purposes of § 24 (1) UrhG. Unequivocally rejecting musicologist definitions as too vague and nondescript, the OLG judges reiterated the case law definition of melody as a ‘self-contained and ordered sequence of notes’ (‘in sich geschlossene und geordnete Tonfolge’). § 24 (2) UrhG does not preclude the borrowing of harmonies, rhythms, original instrumentations or special sound effects because such features do not constitute a melody. They held that the short sequence from ‘Metall auf Metall’ was a ‘rhythm surface’ (‘Rhythmusfläche’) comprised of overlapping ‘shreds of notes’ (‘Notenfetzen’). The result may be original and attract copyright protection as a musical work, but it is not a melody. The court also mentioned that § 24 (2) UrhG is a very controversial piece of legislation anyway and as such should be interpreted narrowly.

Possibility of Producing a Sound-Alike

So far so good for the defendants, but their case dies here. The BGH did not provide any guidance as to the criteria that should be met to find for a possibility of producing a sound-alike, so the OLG came up with its own definition. Given that ‘Nur Mir’ was produced professionally and for commercial purposes, the skills and technological possibilities open to a music producer with average equipment are decisive; the reference point is the time when sampling took place (1997 in the case at hand).

According to the OLG, it is not necessary that the sound be identical, but that it would be regarded as equivalent by prospective consumers that are familiar with and possess a certain amount of sensitivity for musical issues without being extraordinarily exacting. Expert witnesses managed to produce an equivalent sound-alike to the ‘Metall auf Metall’ sequence in less than two days. The court held that this was a reasonable amount of time to ask before permitting someone to encroach upon another’s rights without having to seek permission and free of charge. The judges were not entirely certain whether they got these criteria right, though, which is why they granted leave to appeal on legal grounds to the BGH once more.

Conclusion

It strikes me as a bit odd that it constitutes an infringement of neighbouring rights if something that may easily be replicated is sampled, but if something very elaborate that is difficult or impossible to replicate (and probably more original) is sampled, that’s OK. What do you think, dear readers?