Bundesverfassungsgericht

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Constitutional complaint directed against the allocation of proceeds by copyright collecting societies is inadmissible 

Press Release No. 43/2018 of 05 June 2018

Order of 18 April 2018
1 BvR 1213/16

In an order published today, the Third Chamber of the First Senate of the Federal Constitutional Court did not admit for decision a constitutional complaint lodged by a publisher. The constitutional complaint had been directed against a judgment rendered by the Federal Court of Justice (Bundesgerichtshof). In the challenged decision, the Federal Court of Justice held that it was not permissible for collecting societies (Verwertungsgesellschaften) to allocate part of the proceeds from exercising rights and claims arising under copyright law to publishers, as these proceeds were payable only to the authors. The constitutional complaint is already inadmissible as it does not satisfy the requirements pertaining to the sufficient substantiation of the alleged violations of fundamental rights. The complainant failed to substantiate on what grounds the challenged judgment violated, inter alia, its fundamental rights under Art. 14(1) first sentence, Art. 3(1) as well as Art. 101(1) second sentence of the Basic Law (Grundgesetz – GG).

Facts of the case:

The complainant is a publisher that has published, inter alia, works created by the plaintiff in the initial proceedings. The defendant in the initial proceedings is a collecting society. By way of an agency agreement, the plaintiff had transferred his claims to statutory remuneration for all existing and future works payable to him as the author to the defendant, who was to recover the remuneration in a fiduciary capacity. The agency agreement furthermore contained an allocation plan, providing that the publisher would also receive part of the collected proceeds in accordance with a specified allocation key. The plaintiff filed a declaratory action before the Regional Court (Landgericht) seeking a declaration that the allocation practice was unlawful, which was for the most part granted. In its reasoning, the Regional Court stated that the allocation practice was arbitrary and violated § 7 of the Act on Copyright and Related Rights (Urheberrechtsgesetz – UrhG). The judgment was, for the most part, upheld by the Higher Regional Court (Oberlandesgericht); following the defendant’s appeal on points of law, the Federal Court of Justice also found for the plaintiff. It held that the defendant, as fiduciary, was not entitled to distribute the collected proceeds to persons other than the rights holder. A claim to the proceeds [on the part of the complainant] could neither be derived from § 63a second sentence, second alternative UrhG nor from § 8 of the Act on Publishing Rights (Gesetz über das Verlagsrecht) or provisions of European Union law. The complainant had intervened in the appeal proceedings as a third party in support of the defendant (Nebenintervention). With its constitutional complaint, the complainant claims, inter alia, a violation of the right to property and the right to one’s lawful judge.

Key considerations of the Chamber:

The constitutional complaint is inadmissible as it does not satisfy the requirements pertaining to the substantiation of fundamental rights violations.

1. The complainant failed to sufficiently substantiate a violation of Art. 14(1) GG in relation to its right of reproduction and distribution.

a) The legislature intended that authors be the exclusive beneficiaries of statutory remuneration claims. The fact that the remuneration is initially recovered by a collecting society before it is paid to the author has no bearing in this regard. The established practice that publishers participate in copyright proceeds does also not give rise to a legal claim on the part of the complainant.

b) The complainant indirectly challenges the limitations of the fundamental right to property that are statutorily defined in copyright law (urheberrechtliche Schrankenbestimmungen) as such. It did not clarify, however, which of these limitations allegedly affect the complainant individually; nor did the complainant make any submission as to the distinction between existing limitations that had already been in place when the publishing rights were acquired, and limitations that restrict these rights retroactively.

c) In its judgment, the Federal Court of Justice held that it is, in principle, possible for publishers to participate in the rights and claims of authors, provided that the relevant claims have been transferred with legal effect by way of assignment (Abtretung). The assignment will be without legal effect, however, if the relevant rights and claims had previously been transferred to a third party such as the defendant. The complainant did not substantiate on what grounds it were nevertheless entitled to invoke claims derived from the author.

2. As regards the alleged violation of Art. 3(1) GG on the grounds that the complainant were treated unequally in comparison to record and film producers, the complainant did not sufficiently substantiate how and to what extent the services provided by publishers are comparable to the services of record and film producers; it also did not make any submission as to why the legislature decided to afford ancillary copyright protection to the latter but not to the former.

3. Moreover, the complainant failed to sufficiently substantiate that the decision of the Federal Court of Justice to refrain from requesting a preliminary ruling of the Court of Justice of the European Union pursuant to Art. 267(3) of the Treaty on the Functioning of the European Union violated its right to one’s lawful judge. The standard of review applicable in the proceedings before the Federal Constitutional Court is limited to whether the Federal Court of Justice assessed, in a tenable manner, its duty to submit a request for a preliminary ruling. In the case at hand, this standard has been met. Based on the judgment rendered by the Federal Court of Justice, it is ascertainable that the court did not have doubts as to interpreting § 63a second sentence, second alternative UrhG in conformity with the relevant directive of European Union law. The complainant failed to demonstrate that the case-law of the Court of Justice of the European Union were incomplete in relation to other relevant provisions of European Union law, which would have given rise to a duty to request a preliminary ruling.