As you may have already heard, the higher regional court of Berlin ruled on 14 November 2016 that GEMA may no longer automatically distribute to GEMA publishers on the basis of the existing distribution rules because the distribution rules do not sufficiently take into account the flow of rights or the provisions of the individual publishing contract.
Background: Two GEMA composers claimed in court that GEMA’s distributions to publishers (i.e. publishers’ share of the mechanical and performing rights, as well as publishers’ share of private copying levy compensation) is in breach of law. It was argued that by virtue of the exclusive assignment of rights to GEMA, their publishers are de jure not holder of any rights and therefore cannot benefit from GEMA distributions.
The court sided with the composers.
The case is very interesting as it analyses in a very clear manner the legal relationship and authors’ assignment of rights to the CMO. The court studied the publishing contract of the composer and held that the composer as a matter of fact did not assign any of his exclusive rights to the publishers. The contract only stated that if the exclusive rights are managed by a collecting society, then the author and the publisher will receive distributions of the CMO as decided by the CMO internal distribution mechanisms.
The court held explicitly that the publisher only holds the graphic rights for the sheet music and synchronisation rights, which are licensed and exploited directly by the publisher and not by the CMO.
Below is the English translation of the respective paragraphs of the publishing contract:
‘Unless agreed otherwise in the following (provisions), the author concedes all his rights of use and rights of exploitation on his present contractual works and the ones that will be created in the future within the contract period, to the publisher for all types of use and exploitation for the duration of the respective valid term of copyright, only and as long as these (rights) have not been managed by the collecting societies in a fiduciary capacity.
If individual exploitation rights and rights of use are being managed by a collecting society, like GEMA, then authors and publishers will get a share of the profits which are connected to the utilisation of the relevant rights according to the respective collecting society’s distribution plan.’
The ruling is interesting to read. It holds convincingly that as the publisher does not bring any rights to GEMA through its affiliation (in fact there is no neighbouring right for the publisher and the publisher does not represent any rights from the authors), GEMA acts against the interest of its members, i.e. authors and composers who have assigned rights to GEMA, and therefore breaches the law when distributing the ‘publishers’ share to publishers and not to writers.
However, the court also makes clear that publishers can participate, where a publisher directly assigns rights to GEMA (as it would usually be the case for Anglo-American mechanical rights) or where a publisher can rely on a clear and valid agreement with the author, e.g. in the publishing contract. The latter issue must be checked on a case by case basis.
Consequently, GEMA will not pay out the publisher’s shares in our distribution per 1 January 2017. Distributions to authors and foreign societies (including publisher’s shares) per 1 January 2017 will happen as usual, but are delayed.
GEMA and German publishers are now circulating a draft contract to GEMA composers and songwriters to be signed by GEMA writers and their publishers, which basically states that the author agrees that the publisher gets their publishers share from GEMA. Composers and songwriters will therefore be requested to sign the contract to make sure that GEMA has legal certainty that GEMA can continue distributing the publishers’ share to publishers.
We reviewed the publishing contracts we received during the evidence gathering for the ECSA complaint against coercive publishing. I also reviewed contracts we received in February 2016 in light of our work for the copyright directive.
Contracts we received from Holland, Austria and France have to some extend similar segments with regards to rights assignment and CMO membership as the two paragraphs set out above. It must therefore be anticipated that publishers and some CMOs will reach out to composers and songwriters in other countries as well (I assume Austria at first instance) and ask them to sign a similar contract in which the author agrees that publishers are entitled to the distribution of the publishers’ share.
In navolging van de European Composer & Songwriter Alliance adviseert de BCMM een contract in de volgende gevallen niet te ondertekenen:
- Als het uitgavecontract onder dwang getekend moet worden, bijvoorbeeld wanneer de componist wordt gedwongen om een contract te tekenen om een commissie te krijgen om muziek te componeren voor een specifieke productie.
- Als je als componist niet gelooft dat de uitgever aan zijn verplichtingen om de componist te promoten en het werk te exploiteren zal voldoen.
- Als de uitgever geen interesse vertoont in het verder promoten van activiteiten van de componist.
Het is van belang te weten dat er geen wettelijke verplichting is om een uitgavecontract te ondertekenen.