Author: Thomas Jochheim (Klinkert Zindel, Partner)
Higher Regional Court of Cologne, file no 6 W 255/12, 1 February 2013; Higher Regional Court of Cologne, file no 6 W 254/12, 23 September 2013
Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu051, first published online: April 10, 2014
The granting of rights regarding the German-language version of a cinematographic work may entitle the licensee to take legal action against the illegal download of another language version of that work in Germany.
According to German law, a copyright is not transferable, unless it is transferred in execution of a testamentary disposition. The author may grant a right to another person to use the work in a particular manner or in any manner (exploitation right). An exploitation right may be granted as a non-exclusive right or as an exclusive right, and may be limited in respect of place, time and content.
A non-exclusive exploitation right entitles the licensee to use the work in the manner permitted to him. An exclusive exploitation right also entitles the licensee to use the work in the manner permitted to him, but to the exclusion of all other persons, including the licensor. As a matter of fact, the exclusive licensee not only has a ‘positive right’ to use the work, but also a ‘negative right’ of prohibition. He is therefore entitled to take legal actions to assert his claims against infringements as stipulated in s 97 of the German Copyright Act (‘Any person who infringes copyright or any other right protected under this Act may be required by the injured party to eliminate the infringement or, where there is a risk of repeated infringement, may be required by the injured party to cease and desist’).
It is moreover recognized within Germany that the scope of protection of exclusive exploitation rights can be broader than the positive right conferred by them. In a decision of 1999 for instance, the German Supreme Court (Laras Tochter, file no I ZR 65/96—29 April 1999) stated that the right holder of the exclusive exploitation right to reproduce and disseminate a literary work was entitled to prohibit the reproduction and dissemination of an adaptation of that work, even though he was not himself entitled to use the work in this manner.
In 2013, the Higher Regional Court of Cologne had to decide on two matters regarding illegal downloads of a movie in several foreign-language versions (the ‘Higher Regional Court of Cologne, file no 6 W 255/12, 1 February 2013’) and in the Russian language-version (the ‘Higher Regional Court of Cologne, file no 6 W254/12, 23 September 2013’) via a peer-to-peer network in Germany.
In both cases, the plaintiffs were the licensees of the exclusive exploitation rights of a movie in Germany, including the original English-language version as well as the German version. However, in the first case, the plaintiff′s licence agreement included an additional clause stating that the licensor was not entitled to exploit any language versions other than those licensed to the plaintiff in Germany.
The plaintiffs asserted their claim for disclosure. The request was granted in the first case and denied in the second one.
The Cologne Higher Regional Court stated in both cases that the exclusive exploitation right encompasses a negative right of prohibition, as stipulated in s 97 of the Germany Copyright Act. The court agreed that the claim for disclosure was an auxiliary claim linked to the right of prohibition (s 97 of the Germany Copyright Act). It therefore appeared necessary to make the claim for disclosure dependent on the condition that s 97 of the Germany Copyright Act was fulfilled.
The court further agreed that in order to ensure effective protection, the right of prohibition may be broader than the right holder′s positive right of use. A right holder may therefore be entitled to prohibit a certain use, if that use has an economic impact on its positive rights of use.
As a result, the court found that the plaintiff in the first case had the right to prohibit the foreign-language versions. In particular, it plaintiff referred to the additional clause in the licence agreement and stated that the scope of this clause was to enable the exhaustive and best possible exploitation of that movie in Germany. This scope would, however, be significantly impaired, if people downloaded the movie illegally, especially in foreign-language versions that were widespread in Germany, instead of buying it.
However, in the second case the court denied the plaintiff's right to prohibit the Russian-language version in Germany. Although the plaintiff had the exclusive right to exploit the movie in English, German and also Flemish and Dutch, there was no basis to conclude that he could prohibit all other versions of the movie in Germany. To ensure this, he should have had added an appropriate clause to his licence agreement, but this had not happened.
Moreover, in the court's opinion, it was not evident that the Russian-language version of the movie had any economic impact on the plaintiff's rights. Even though about one million people in Germany have Russian roots, a significant percentage of those people were born in Germany and were unlikely to have a sufficient grasp of Russian to watch a movie in that language. For this reason alone, such people could not be considered interested in the Russian-language version, so the plaintiff's exclusive rights could not be affected by that part of the population. On the other hand, people based in Russian-speaking areas who were interested in the Russian-language version of the movie would not consider buying it in English, German, Flemish or Dutch.
The court rightly concludes that the possibility to illegally download a movie in a language version other than the exclusively licensed language version may still have an economic impact on the positive rights of use of the specific right holder.
However, the denial of any economic impact in the second case is not fully convincing. Many people prefer to watch movies in their original version, particularly if this is the English one. Many cinemas offer both original and dubbed versions of foreign movies. Moreover, unlike in Germany or France, it is not common in Eastern Europe to dub all movies, so a significant percentage of the people there are accustomed to watching movies in English. It is therefore unclear why people from Russian-speaking countries would not be at least interested in the original language version of the movie in this case—which would have an economic impact on the plaintiff's rights.
The decisions demonstrate the importance of drafting licence agreements carefully. This applies all the more as s 31(5) of the German Copyright Act states that, if the types of exploitation are not specifically designated when an exploitation right is granted, the types of use to which the right extends shall be determined in accordance with the purpose envisaged by both parties to the contract. This also applies, among other things, to the questions of whether an exploitation right has in fact been granted, whether that right is exclusive or non-exclusive, and how far the exploitation right and the right of prohibition extend. As a result, if not specifically stated otherwise in the agreement, copyright tends to remain with the author.