Exploitation rights in film
Under EU legislation, the principal director of a cinematographic or audiovisual work is considered as its author or one of its authors. Steps taken at EU level have strengthened the position of the principal director. Following suit, member states amended domestic legislation in line with EU law.
An interesting preliminary ruling regarding authorship of cinematographic works and the exploitation rights that arise from such authorship was recently delivered by the Court of Justice of the European Union (CJEU).
The case involved the director and producer of a German documentary movie on photography during World War II (“Fotos von der Front”). Mr Luksan and Mr van der Let had concluded an agreement through which Luksan agreed to write a script and direct the film, while van der Let’s role was to produce and exploit the film. The agreement thus recognised the parties’ respective roles as film director and film producer, and assigned to the film producer the copyright and related rights in the movie. Excepted from such rights were some methods of exploitation such as the making available to the public on digital networks and the broadcasting by closed circuit TV and pay TV, which had been the paid separately. The agreement did not specify anything relating to the statutory right to remuneration.
The dispute was triggered when the film director and author of the screenplay discovered that the film producer made available the movie online, which could thus be downloaded from a website by means of video on demand. The director claimed that this method of exploitation had been reserved to him by contract, and that, therefore, the contract and his copyright had been violated. The film producer, instead, claimed that all the exclusive exploitation rights had been assigned to him.
Proceedings were instituted by the filmmaker in the Austrian court claiming breach of copyright among others, and the question arose whether the granting of rights to exploit a film solely to the film producer was in line with EU law. Given that an interpretation of EU legislation was raised, the Austrian court requested guidance from the CJEU by means of the preliminary ruling procedure. The CJEU had to determine whether under EU law, member states are allowed to provide for an exclusive grant of exploitation rights to the film producer.
Referring to the applicable EU directives, the court noted that they do not provide a complete harmonisation of the notion of authorship but as a compromise designate the principal film director as the author or one of the authors of a cinematographic work. This lack of harmonisation, however, did not hamper the court from affirming that rights to exploit cinematographic work vest, directly and originally,in the director.
Consequently, since the author is the principal director of a cinematographic work, he could not be denied exploitation rights in a work. Provisions of national legislation that presume a transfer of exploitation rights exclusively to the producer are therefore incompatible with EU law. The court rejected the defence brought by the Austrian government that its domestic legislation was in line with the Berne Convention. It affirmed instead that authors’ intellectual property rights are lawfully acquired pursuant to EU law.
The court further stated that, in his capacity as author, the director is entitled, by operation of law, to the right to fair compensation. In the face of Austrian law that granted full statutory right to compensation to the film producer, the court ruled that the author’s right could not be waived as the goal of fair compensation is to compensate right-holders for the prejudice sustained.
The ownership of exploitation rights has been a controversial issue in copyright law for many years. With this ruling the Luxembourg-based court, seemingly intent on protecting the film director, clarifies that EU law guarantees exploitation rights to directors and writers, who are also entitled to fair compensation from the revenue of their work. This ruling comes in advance of a hotly anticipated EU directive on collective rights, expected to tighten legislation on authors’ rights across the board.
Dr Grech is an associate with Guido de Marco & Associates and heads its European law division.