The Marrakesh Treaty judgment: the ECJ clarifies EU external powers over copyright law

Gesa Kübek, PhD candidate at the law faculty of the University of Passau.

On 14th February 2017, the European Court of Justice (ECJ) concluded, in Opinion 3/15, that the European Union (EU) is exclusively competent to conclude the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired, or Otherwise Print Disabled (hereafter: Marrakesh Treaty). Its decision in Opinion 3/15 mirrors, at first sight, Advocate General (AG) Wahl’s Opinion, which equally argued that the EU has exclusive competence to conclude the Marrakesh Treaty. A closer look at Opinion 3/15, however, reveals that the Court opted for a much stricter interpretation of the scope of the EU’s Common Commercial Policy (CCP) – ie the EU’s international trade powers – than the AG. Moreover, the Court’s answer to the question of exclusivity does not clarify the correct choice of legal basis.

The following blog post provides an overview of the Court’s Opinion 3/15 and a short analysis thereof. The first part describes the conflict at stake and the arguments of the parties. The second part outlines the Court’s position. The final section discusses some of the implications of Opinion 3/15 for EU treaty-making.

The conflict at stake: Questions of exclusivity and the choice of legal basis

In June 2013, the World Organisation on Intellectual Property (WIPO) finalised the negotiations of the Marrakesh Treaty, which aims to facilitate access to published work for persons who are blind, visually impaired or otherwise print disabled (hereafter: “beneficiary persons”). The Marrakesh Treaty stipulates two separate, but interrelated instruments to fulfil its objectives. First, it obliges its contracting parties to provide for an exception or limitation to the rights of reproduction, distribution and making available to the public in order to make format copies more readily available for beneficiary persons. Second, it facilitates the cross-border exchange of accessible format copies.

In April 2014, the EU Council decided to sign the Marrakesh Treaty for the European Union based on Article 207 TFEU (the EU’s CCP power) in conjuncture with Article 114 TFEU (the EU’s internal market power, which is the basis for harmonising copyright law within the EU, among other things). The subsequent Commission proposal for the conclusion of the agreement was, however, rejected by the Member States as represented in the Council, which caused fierce institutional debate over the choice of legal basis. According to the Commission, Arts. 207 and 114 TFEU were correctly selected. In the alternative, the Marrakesh Treaty may be based on the CCP alone, which the Lisbon Treaty confirms as an exclusive competence (Art. 3 (1) (e) TFEU). In any event, the Commission argued that the rights and obligations comprised by the Marrakesh Treaty were largely harmonized by EU internal legislation. As a result, it asserted that exclusive EU competence can be implied (Art. 3 (2) TFEU). 

The eight intervening Member States rejected the assumption of EU exclusivity. Instead, in their view, the competences to conclude the Marrakesh Treaty ought to be shared, which may result in the conclusion of a “mixed agreement” that lists both the EU and the Member States as contracting parties. Given the persisting institutional conflicts, the Commission asked the Court to clarify whether the EU has the exclusive competence to conclude the Marrakesh Treaty.

As was stated above, AG Wahl supported the Commission’s quest for exclusive EU treaty-making powers. Somewhat surprisingly, the AG, however, determined that the Marrakesh Treaty should be concluded on the basis of Art. 207 TFEU on the CCP and – as contended by numerous Member States - Art. 19 (1) TFEU, the EU’s power to adopt many non-discrimination laws. The latter provision underlines the Marrakesh Treaty’s objective to promote non-discrimination, equal opportunity, accessibility and participation of disabled persons in the society. Despite the implication of exclusivity, the choice of Art. 19 (1) TFEU entails important procedural consequences: As the provision stipulates that the adoption of EU legislation requires unanimity in the Council, EU treaty-making under the anti-discrimination power equally grants the Member States veto powers in the Council (Art. 218 (8) TFEU).

The Court‘s position in Opinion 3/15

In order to answer the preliminary question, the Court, first, examined whether the Marrakesh Treaty, in full or in part, falls within the scope of the CCP. Thereafter, the ECJ analysed whether exclusivity can be implied within the meaning of Art. 3 (2) TFEU.

The reach of “commercial aspects of intellectual property rights”

To start with, the Court recalled that according to settled case-law, an EU act falls within the CCP “if it relates specifically to international trade in that it is essentially intended to promote, facilitate or govern trade and has direct and immediate effects on trade” (Daiichi Sankyo). Conversely, the mere fact that an EU act is liable to have implications on international trade is not enough for it to be concluded under the CCP.

In its subsequent reasoning, the Court outlined that neither one of the aforementioned instruments of the Marrakesh Treaty intends to promote, facilitate or govern international trade. The Court’s Opinion is particularly striking with regard to the import and export of format copies, as “there is no doubt that those rules relate to the international trade of such copies” (para 87). Nevertheless, the Court stated that the cross-border exchange specified by the Marrakesh Treaty cannot be equated with international trade for commercial purposes. On the one hand, the objective of the circulation and exchange of format copies is non-commercial in nature. The Marrakesh Treaty solely uses cross-border transactions as a mean to improve access of beneficiary persons to accessible format copies and not to promote, govern or facilitate trade. On the other hand, the Marrakesh Treaty’s non-commercial character results from the fact that it does generally not stipulate trade for profit.

Indeed, the Marrakesh Treaty provides that trade in format copies covers only authorised entities, which operate on a non-profit basis and provide their service to beneficiary persons alone. According to AG Wahl, the non-profit basis of trade in format copies, is, however, irrelevant for the application of the CCP. To that extent, the AG proposed a very broad definition of commercial aspects of intellectual property rights (IPR), which Article 207 (1) TFEU expressly includes within the scope of the CCP. In his view, the CCP does not exclude from its ambit transactions or activities of a non-commercial nature as the mere exchange of goods and services implies that they are being traded. Instead, Art. 207 (1) TFEU excludes non-commercial aspects of IPR, i.e. issue areas that are not strictly or directly concerned with trade in their entirety, such as moral rights.

The Court, however, rejected the claim that commercial aspects of IPR carve out only those rules relating to moral rights. Such a broad interpretation would, in the eyes of the Court, “lead to an excessive extension of the field covered by the common commercial policy by bringing within that policy rules that have no specific link with international trade.” (para 85) Consequently, the ECJ concluded that the Marrakesh Treaty falls outside the ambit of the CCP.

Implied exclusivity and the “ERTA doctrine”

Subsequently, the Court analysed whether exclusivity can nevertheless be implied via the well-known “ERTA doctrine” (referring to the Court’s ERTA judgment), which is codified in Article 3 (2) TFEU. According to this doctrine, EU obtains exclusive treaty-making powers where the conclusion of an international agreement “may affect common rules or alter their scope”.  In its ERTA line of case law, the Court has developed a two-level test for establishing external Member State pre-emption: First, it conducts a “comprehensive and detailed analysis” to determine whether the provisions of the envisaged agreement are largely covered by common EU rules (Opinion 2/91). Second, it determines whether the conclusion of the international agreement affects the “uniform and consistent application” of these common EU rules “and the proper functioning of the system which they establish.” (Opinion 1/13, discussed here).

There was little disagreement between the parties that the Marrakesh Agreement had to be implemented within the framework of Directive 2001/29 on the harmonisation of certain aspects of copyright and related rights in the information society.  The Court, however, pointed out that “it is clear (..) that the EU legislature brought about only a partial harmonisation of copyright and related rights, given that the directive is not intended to remove or to prevent differences between national laws which do not adversely affect the functioning of the internal market.” (para 115) Indeed, Directive 2001/29 provides, within its harmonized legal framework, for considerable Member State discretion as regards the implementation of exceptions and limitations to distribution for the benefit of people with disabilities. Does such a residual Member State competence mean that the Marrakesh Treaty is not largely covered by common EU rules, and therefore prevent implied exclusivity?

The Court answered this question in the negative. Directive 2001/29 subjects the Member States’ remaining competence to a number of conditions. The Member States’ discretion can therefore only be exercised within the limits enjoined by EU law, so that the Member States “are not free to determine, in an un-harmonised manner, the overall boundaries of the exception or limitation for persons with a disability.” (para 122) Moreover, the Marrakesh Treaty – unlike Directive 2001/29 – imposes an obligation on the contracting parties to provide for an exception or limitation. The Member States are therefore mandated to comply with the restraints imposed by EU law. As a result, the Court concludes that independent external Member State action would affect common EU rules. The EU is therefore exclusively competent to conclude the Marrakesh Treaty.

Opinion 3/15 and EU treaty-making: A short analysis

As stated in the introduction, the Court’s finding of (implied) exclusivity does not come as a surprise to many observers. Neither does the broad interpretation of the “largely covered” part of the ERTA-test. After all, the Court already confirmed in Opinion 1/03 and, more recently, in Green Network, that considerable Member State discretion in the implementation of EU legislation does not rule out exclusivity. Nevertheless, as was pointed out by AG Wahl, the case law “begs the question: when is an area sufficiently covered by EU rules to exclude Member State competences to act externally?” (para 130 of the opinion) By inference, to what extent does the EU have to exercise its internal competence to trigger the “ERTA effect”?

Green Network and Opinion 3/15 suggest that the Court will place much greater emphasis on the effects of international agreements on common EU rules, rather than on the extent of their material overlap. Even if the EU law in place specifies residual Member State powers, and is therefore, arguably, not largely harmonised, (adverse) affects on the EU’s internal legal framework suffice to trigger implied exclusivity within the meaning of Art. 3 (2) TFEU. However, if the Member States may be pre-empted where an agreement is only partially covered by EU internal legislation, may they be also pre-empted where the EU cannot exercise its internal competence at all, provided always that the envisaged agreement clearly affects the EU law in force? The Court is expected to answer this question in its pending Opinion 2/15 on the conclusion of the EU-Singapore Free Trade Agreement (discussed here). Here, among other things, the Court is asked to determine whether the “ERTA effect” may exceptionally be triggered by EU primary law provisions.

The Court’s clarification of the scope of Art. 207 (1) TFEU, and in particular, “commercial aspects of IPR”, might also have some impact on future EU treaty-making. Opinion 3/15 shows that the mere exchange of goods or services cross-border is not enough to equate a measure with international trade for commercial purposes. Instead, a link with trade implies that the transaction or activity aims at fulfilling a commercial objective. By inference, using trade as a mean to fulfil non-commercial objectives is not enough to bring a measure within the scope of the CCP. While the Court did not entirely exclude that “commerce” may, on a case-by-case basis, include trade on a non-profit basis, it contrasted AG Wahl’s suggestion that Art. 207 TFEU generally encompasses transaction or activities of a non-commercial nature. In view of Opinion 2/15, which also raises this issue, it may be noted that the Court did not dispute the AG’s claim that moral rights fall outside the scope of the CCP.

When returning to the Marrakesh Treaty, Opinion 3/15 leaves another pressing question unanswered: What is the correct legal basis for the agreement’s conclusion? The Court only clarifies that the Council Decision on the signature of the Marrakesh Treaty was wrongfully based on Art. 207 TFEU, but does not further elaborate on the correct choice of legal basis. It is true that the Commission’s preliminary question is confined to the exclusive nature of the agreement. The choice of legal basis, nevertheless, qualifies the modus operandi of (exclusive) EU treaty-making. In particular, the Court refrains from discussing AG Wahl’s reference to Art.  19 (1) TFEU, and, more broadly, the effects of the non-discrimination principle on EU external action. Whilst clarifying the EU’s capacity to conclude the agreement alone, the choice of legal basis – and therefore the choice of procedure – is left to the discretion of the EU institutions. Throughout the proceedings, the Commission continued to assert that the Marrakesh Treaty should be based on Art. 114 TFEU instead of Art. 19 TFEU. Conversely, the majority of the intervening Member States sided with the AG. As the use of Art. 19 (1) TFEU would trigger unanimous Council voting, and therefore Member State veto powers in the Council, institutional debate over the conclusion of the Marrakesh Treaty might continue.

Barnard & Peers: chapter 24

Photo credit: 1709 Blog

EU copyright law: Is the REDA report a leap forward for the parody exception?

 

By Sabine Jacques

 In mid-January, Julia Reda (Pirate Party MEP) communicated a draft of her report on the implementation of the Information Society Directive (‘InfoSoc Directive) 2001/29/EC (it’s lengthy, but a summary can be found here). Described as ‘the most progressive official EU document on copyright since the first cat picture was published on the web’, but also as being ‘surprisingly extreme’ and even being ‘inacceptable’, this report attracted widespread interest and statements of support from different digital rights organisations.

While the report rightly urges for an ever-increasing ‘internet-friendly copyright law’, the report might have gone too far in relation to parodies. Article 5.3(k) of the InfoSoc Directive currently provides the possibility for EU Member States to introduce a parody exception for the purposes of parody, pastiche and caricature to the exclusive right of reproduction in their national copyright laws (this opportunity was seized by the UK which now includes a parody exception in section 30A CDPA). This provision was interpreted by the Court of Justice of the European Union in the Deckmyn case, guiding national courts in their application of the exception to particular facts (for comments on this decision see here and the AG’s opinion see here).

At 17 on page 6 of the report, Julia Reda suggests ‘that the exception for caricature, parody and pastiche should apply regardless of the purpose of the parodic use’. Without further explanations, such a broad exception raises concerns.

The parody exception is an exception to the right-holder’s exclusive right of reproduction. As such, international treaties subject it to the application of the three-step test (Berne Convention art. 9(2), TRIPS Agreement arts. 9(1) and 13; and, WCT arts. 1(4) and 10). This test requires any exceptions in national legislation to be limited to ‘certain special cases, provided that such reproduction does not conflict with a normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author’. The French authorities’ response appropriately expresses concerns that a parody exception applicable outside any purpose of parody is unlikely to meet the first step of ‘certain special cases’. As this requirement means that a shapeless provision exempting broad series of uses should not be tolerable and reflects the need for legislators to reconcile opposing interests.

The exception for the purpose of parody, caricature or pastiche aims to provide the possibility for parodists to copy copyrighted works in limited circumstances. The current parody exception is the result of a compromise in light of the objectives underlying the exception. The issue opposes the interests of right-holders (who are entitled to be rewarded for their creation) against the interest of the users (who need to reproduce prior works to create the new work). Removing its purpose is likely to amount to a shapeless exception rebuffed by international obligations.

Yet, La Quadrature du Net interprets Julia Reda’s proposal as: ‘to admit the parody exception for non-humorous creations’. If this is her aim, this could be achieved through the current wording of the exception for the purpose of parody.

The Court of Justice of the European Union has defined ‘parody’ through its requirements in Deckmyn. At para 20, the Court notes that a parody needs: ‘to evoke an existing work while being noticeably different from it, and, secondly, to constitute an expression of humour or mockery’.

The expression of humour or mockery does not exclude the expression of criticisms. By requiring the parodist to have a humorous intent, it is suggested that a broad interpretation should prevail as to include playful, homage or serious expressions (a glimpse at French case law which knows a long history of the application of the parody exception shows evidence of serious expressions and the inclusion of satire). The limit being that the expression should refrain from being prejudicial to the person of the author or his work(s). The failure to meet this requirement enables the right-holder to enforce his or her moral rights (especially the integrity right). Additionally, where an individual is defamed, this person can bring an action under defamation law.

Also, the primary justification to the introduction of a parody exception is to facilitate the exercise of one’s freedom of expression. While freedom of expression is already considered in the current InfoSoc Directive (Recital 3 reads: ‘The proposed harmonisation will help to implement the four freedoms of the internal market and relates to compliance with the fundamental principles of law and especially of property, including intellectual property, and freedom of expression and the public interest.’) and the interpretation of the parody exception in Deckmyn (at para 25), the report (recitals C and D) confirms the importance of the relationship between copyright and related rights and freedom of expression both protected under the Charter of Fundamental Rights of the European Union (respectively enshrined in article 17(2) and 11).

Yet, the concerns expressed by Julia Reda concerning the likelihood of achieving harmonisation of the exceptions throughout the EU territory under the current InfoSoc Directive (at 10) are shared. Additionally, her wish to make copyright exceptions mandatory is welcomed (at 11) and would certainly contribute to the objective of harmonisation desired.

To conclude, it must be reminded that this report is merely a draft. This one will now be handed over to the Legal Affairs Committee and to the Internal Market and Culture committees. Overall, the report makes important proposals but there is still room for improvement. Against this backdrop, care must be taken regarding the details of each provision such as for the parody exception to ensure that the impact of the exception applicable outside parody uses does not disrupt the balance desired between the interests of right-holders and parodists.

Copyright: anything left of Member States’ external competence?

Lorna Woods and Steve Peers

The extent of broadcasters’ rights is near the top of a long list of controversial issues arising from the law of copyright. Equally controversial is the extent of the EU’s exclusive external competence, which (where it exists) prevents Member States from signing treaties and (usually) means that they do not have a veto in the Council over the treaty concerned. These two issues came together in the recent CJEU judgment in Case C-114/12 Commission v Council, which concerned the EU’s competence to negotiate the Council of Europe’s draft treaty on the rights of broadcasting organisations.

Background

The regime covering mass electronic distribution of audiovisual works is complex, reflecting the traditionally national nature of broadcasting markets and the layered nature of intellectual property rights in audiovisual works.  In addition to the content-based rights, which are often assigned or licensed to the broadcaster, the broadcaster has rights in the signal itself (broadcasters’ neighbouring rights). These rights are found in a number of international treaties, including TRIPS. Similar rights relating to control over the fixation of the signal, as well as the making available of the signal to the public were contained in a number of directives variously implemented in the Member States, in particular Directive 2006/115/EC on Rental and Lending Rights (codifying  Directive 92/100) and Directive 93/83/EEC Satellite and Cable Directive, now codified  as Directive 2006/116). These rules have tended to be technologically specific and while Directive 2001/29 (the InfoSoc Directive) confirmed broadcasters’ rights whether wireless or cable technology was used, questions remained, notably the issue of identifying where the activity of ‘making available’ or ‘communicating to the public’ is taking place, especially in an Internet age.

There has been considerable litigation on these directives and how they operate in a new technical environment. Clearly something needed to be done and broadcasters have for some time been lobbying for change. Against this background, the Council of Europe agreed to start work on a Convention that protected broadcasters’ neighbouring rights.  According to a 2010 report, the aim of the Convention was to agree on a set of exclusive rights of broadcasting organisations, such as the right of fixation the right of reproduction, the right of retransmission, the right of making available to the public, the right of communication to the public and the right of distribution, in technologically neutral terms. Other issues were also to be discussed: the protection of pre-broadcast programme-carrying signals, the term of protection, the need for a non-exhaustive list of limitations and exceptions, the enforcement of rights and obligations concerning technological measures and rights-management information.

As for the EU’s role in these talks, the Council and Member States’ representatives adopted a single joint Decision authorising the joint participation of the EU and its Member States in the negotiations for a Convention. While the EU position would be represented by the Commission, the Member States’ collective position (if they could reach one) would be represented by the Council Presidency. If Member States could not reach a collective position on matters falling within their competence, they would negotiate individually.

The Commission disagreed with the Council’s decision on both substantive and procedural grounds, and so brought an annulment action before the Court of Justice.

Judgment

First of all, the Court quickly dismissed any doubt that the action was admissible. Even though the act in question had been adopted by the Member States alongside the Council, the Council was ‘involved’ in the entire Decision because it was both conferring and receiving power pursuant to it.

As to the substance, the Court agreed with the Commission that the envisaged treaty fell within the scope of the EU’s exclusive external competence. This was the first case in which the Court interpreted Article 3(2) TFEU (added by the Treaty of Lisbon), which provides that the EU has exclusive competence to conclude an international agreement where ‘its conclusion is provided for in a legislative act of the Union or is necessary to enable the Union to exercise its internal competence, or in so far as its conclusion may affect common rules or alter their scope’

.  

The last of the three categories mentioned in Article 3(2) is similar to the classic exposition of the EU’s exclusive external competence in the ERTA judgment, although some academic opinion has suggested that the Treaty drafters have not adequately synthesized the judgment. On the other hand, some Member States intervening in support of the Council in this case suggested that the TFEU provision narrows the EU’s exclusive external competence, in particular in light of the Protocol to the Treaties on shared competences, which was also added by the Treaty of Lisbon.

However, the Court stated simply that the Treaty provision meant the same thing as the ERTA judgment, as elaborated in the subsequent case law of the CJEU. The Protocol on shared competences was irrelevant, since it only referred to Article 2(2) TFEU, which defines the EU’s shared internal competences.

The Court then summarised the key aspects of the ERTA case law: it is not necessary for the international treaty and the EU legislation concerned to overlap fully; it may be sufficient that the area concerned is ‘largely covered’ by EU rules; and it is irrelevant that there is no contradiction between the treaty concerned and the internal EU rules. To show whether external competence was exclusive on this basis, there had to be a ’specific analysis of the relationship between’ the relevant international treaty and EU legislation. The Court added that the party alleging that competence was exclusive had the burden of proving it.

Applying these principles to the facts of the case, the Court summarised the relevant EU legislation (the five Directives referred to above), stating that the intellectual property rights concerned ‘are the subject, in EU law, of a harmonised legal framework which seeks, in particular, to ensure the proper functioning of the internal market’, which integrated technological, digital and information society developments, and which had ‘established a regime with high and homogeneous protection’ for broadcasters as regards their broadcasts.  It was irrelevant that this harmonisation appeared in different EU measures, which also regulated other intellectual property rights.

So the area of law to be compared as between EU law and the planned treaty was the neighbouring rights of broadcasters. On this point, while there were some differences between the existing EU rules and the planned treaty, any new rules on the planned treaty were liable to have a significant impact upon the EU acquis. In particular, the Court distinguished its prior case law which had held that external competence was shared when the EU set minimum standards, on the grounds that in this area EU legislation simply limited its scope instead. Since the new treaty might extend the scope of the EU rules, its subject-matter fell within the scope of the EU’s external competence. And on several points, the Court did not believe there was enough evidence to support the claims of the Council and some Member States that issues not covered by the EU acquis at all would be inserted into the future treaty.

For example, one particular issue relates to the protection of signals prior to their broadcast to the public – usually this occurs when one broadcaster transmits a signal to another. This issue is not currently covered by the EU rules. If the decision was taken to protect these signals, this protection could be provided in a number of ways.  The Court highlighted one option – the extension of the term ‘broadcasts’ to cover pre-broadcast signals would have horizontal effects through the regulatory system, and therefore impact on the EU acquis.  The other possible mechanisms noted (the introduction of sui generis legal protection of pre-broadcast signals or the application of the provisions dealing with ‘technical measures’ to the pre broadcast signals) would not have such an effect. The Court emphasized that in the absence of any reference to these approaches in the Council of Europe preparatory documents ‘those approaches seem, at this stage, to be hypothetical and cannot therefore be relevant to determining the exclusive or shared nature of the competence of the European Union in the present case’ (para 99).

Having ruled in favour of the Commission on its substantive argument, the Court ruled that it was not necessary to decide on the three alternative procedural arguments which the Commission had made: such a ‘hybrid’ decision of the Council and Member States was not permitted by EU law; the Council had wrongly voted by unanimity, not qualified majority; and the Council had breached the principle of sincere cooperation. The first two of these arguments had been accepted by Advocate General Sharpston in her Opinion (she thought the final argument was superfluous). However, unlike the Court, she had ruled against the Commission on the substantive point, on the basis that the Commission had argued that all of the provisions of the draft Convention were closely linked to EU law, but had failed to prove this on the facts.

Comments

First of all, as regards the admissibility of this action, the Court’s ruling is convincing as regards the Council conferring power on Commission, but arguably not as regards Member States conferring power on the Council (since it would be operating outside the EU framework in that context), and certainly not as regards Member States conferring power on Member States. The better argument for the admissibility of this action is that if the Council and Member States adopt a hybrid decision like this one, their action is indissociable. Put another way, if the Council and Member States act together in this way, there’s joint and several admissibility.

Secondly, as for the procedural points not addressed by the judgment, the Advocate-General’s opinion is not convincing. Since mixed agreements, ie agreements ratified by both the EU and its Member States, are a common feature of EU law, then there should no problem with the idea that a decision relating to negotiations on those agreements could in principle be a hybrid decision. Conceptually, that’s no different from the nature of the final mixed agreement.

As for the substantive competence issues, first of all it’s important that the Court clarified the point that ERTA and the case law elaborating upon it are still applicable to Article 3(2) TFEU, in light of the doubt which some had expressed on this point. The judgment is presumably relevant by analogy to the first two grounds for exclusive competence listed in Article 3(2) TFEU (where competence is provided for in a legislative act of the Union or is necessary to enable the Union to exercise its internal competence). At the very least, it must follow that the Protocol on shared competence is also irrelevant to those two other grounds, since as the Court rightly said, that Protocol only refers to Article 2(2) TFEU.

Despite this important clarification, the application of the ERTA judgment itself remains complex and seems highly fact dependent in each case, arguably making the prediction of outcome difficult. Here, it is notable that the Court and the Advocate General came to different conclusions in determining the key question of whether the conclusion of the Convention affects common rules or alters their scope (Article 3(2) TFEU).  The Advocate General and the Court both stated that the burden of proof was on the Commission to show that exclusive competence had been established. As a corollary it seems the default position is shared competence. To quote the Advocate General:

if the analysis of the Convention and EU rules on the basis of the information presently available shows that in at least one respect Member States retain competence, the Commission’s plea must be rejected. [para 143]

While the Court accepted this allocation of the burden of proof, it is when we get to the specifics that differences emerge as can be seen in a couple of examples. Article 8(3) of Directive 2006/115 states:

Member States shall provide for broadcasting organisations the exclusive right to authorise or prohibit the rebroadcasting of their broadcasts by wireless means, as well as the communication to the public of their broadcasts if such communication is made in places accessible to the public against payment of an entrance fee.

The Advocate General analyses the matter as follows: ‘Thus, EU law does not yet regulate ‘at least’ the right of retransmission by wire or cable, whereas the Convention might do so and the Member States are currently authorised to provide for it in their own jurisdiction’ [para AG 150].  The Court accepts the same point but draws a very different conclusion from it – that the proposed Convention, by regulating areas currently outside EU competence, in itself might have an impact on EU law. The Court does not explain how, merely adopting the Commission’s position [92]. The fact that broadcasters are already partially covered by EU law does not seem to address the point.  So, the Opinion seems more logical on this point.

In a number of the aspects of the Convention under consideration, the question of whether there was impact would be affected by the approach finally taken by the negotiators. For example, the scope of the Convention would depend on its definition. While EU law does not have a definition of the term ‘broadcasting organisations’ there would be some confluence with the rights-holders under the various directives. The impact on EU law is therefore uncertain.  The Advocate General concluded cautiously:

If the definition in the Convention creates an absolute category that is wider than broadcasting organisations that are rightholders under the said directives, the creation of that category might possibly limit the European Union’s freedom to decide on its own definition. That may not be the case if the definition in the Convention were non-exhaustive and did not offer protection to entities other than existing rightholders under EU law. [AG 156]

While in this case it was necessary to finally determine the point as to whether there is impact on EU law or not, this then begs the question of what to do in such a circumstance – do we assume that if there is a possible interpretation that could affect EU law then the text is satisfied, or is a higher standard of proof required?

The difference on this point can be seen in the respective approaches of the Advocate General and the Court to pre-broadcast signals. It is clear that currently EU law does not require the protection of such signals and that the Convention proposed to afford protection to such signals. Given the early stages of negotiations, it is unclear what sort of mechanism was likely. Some possibilities might utilise techniques found in the existing legal framework (for example extending the definitions, or applying the technical measures rules to pre-broadcast signals). Since such an approach would have an impact on EU law, then that would bring the issue within the exclusive competence of the EU – appoint on which the Advocate General and the Court agreed.

Another mechanism exists – the development of a sui generis right – which would not have this effect. Here the Advocate General suggested that in such a situation there would be no exclusive competence. In stark contrast, the Court dismissed other approaches (including the sui generis right) as hypothetical, and therefore focussed only on the approach that would trigger exclusive EU competence [para 99].  No reason was given as to why the other approaches were more hypothetical than the approach the Court selected.  So while the Court and the Advocate General agree on the principles, they differ in the application of those principles, and it seems that the Court has tended to favour assessments that point towards exclusive competence.

Finally, what are the broader implications of the judgment? The Court of Justice has already ruled (in the Daiichi Sankyo judgment) that the WTO's TRIPs agreement falls within the scope of the EU exclusive external competence over the common commercial (external trade) policy (CCP), which was extended to cover trade-related intellectual property fully by the Treaty of Lisbon. It has also ruled that a Council of Europe treaty relating to enforcement of audiovisual service providers’ rights falls within the scope of the same competence, in light of the full extension of the CCP to services by the same Treaty. Usually, the Member States have no veto as regards CCP matters.

Now it seems that treaties relating to many other aspects of intellectual property can fall within the scope of the EU’s exclusive external competence, due to the exercise of the EU’s powers to adopt internal market legislation. Again, this means that Member States usually lose their veto. This effect is not absolute, given that the recent Marrakesh treaty on copyright exceptions for the blind and the Beijing treaty on audiovisual performances are both mixed agreements (see the list of signatories for the former and latter treaties respectively). However, the power of the EU (and the Commission in particular) in this field is demonstrated by the Commission’s veto of a planned Council of Europe treaty on cross-border broadcasting, at a late stage of negotiations.

More broadly, the Court’s pro-EU application of the test for exclusive competence suggests that it would be easier to find such exclusivity in other areas which the EU has only partly regulated, such as consumer law or immigration law. The broadcasting rights judgment may, in time, prove to be nearly as important as the ERTA judgment which it reconfirms and elaborates upon.

Barnard & Peers: chapter 14, chapter 24 

‘We can laugh at everything, but not with everyone!’ Parody and limits to freedom of expression: the CJEU decision in the Deckmyn case

By Sabine Jacques

PhD student focussing on the parody exception 

at the School of Law, University of Nottingham (UK)

Since the Advocate-General’s opinion (still not available in English; but this opinion has been commented upon here), parody has attracted a lot of attention. Today, the Court of Justice of the European Union (CJEU) issued its judgment which is likely to attract twice as much attention. As a reminder, the eventful introduction of a parody exception in UK copyright law is scheduled to enter into force on 1^st October 2014.

The facts

This dispute concerns copyright and more specifically the interpretation of Article 5(3)(k) of the Infosoc Directive which allows Member States to introduce an exception to the reproduction right (Article 2 of the Directive) and the right of communication to the public (Article 3 of the Directive) for the purpose of caricature, parody or pastiche. The facts relate to a calendar parodying a well-known Spike and Suzy (Suske and Wiske) album cover to promote a political message of the Vlaams Belang’s party (Flemish nationalist political party). The two works are illustrated above.

Against this background, the Belgian court of first instance granted an interim injunction preventing further distribution of the calendar. Subsequently, the defendants appealed this decision and the Brussels Court of Appeal decided to refer to the CJEU.

The Court’s judgment

First of all, the CJEU ruled, in conformity with the analysis of the Advocate-General in his opinion, that that ‘parody’ is an autonomous concept of EU law, which should be given uniform interpretation throughout the Union. The optional character of the exception does not rule out the principle of uniform application of EU law (see Padawan, C-467/08, paras 32-33).

Moving to the interpretation of the parody exception, the CJEU begins by reminding us that where no definition is provided, the usual meaning of terms is to be preferred. Expanding on the meaning of the term ‘parody’, the Court holds that ‘the essential characteristics of parody are, first, to evoke an existing work while being noticeably different from it, and, secondly, to constitute an expression of humour or mockery’.

Furthermore, the national court had asked if there were further requirements applicable before the parody exception could be invoked. The CJEU answered that parody does not have to be original (besides carrying apparent differences with the original work it is borrowing from), the new work does not have to be attributable to somebody else than the author of the original work nor does it have to relate to or mention its source.

Finally, the CJEU repeats the application of strict interpretation of exceptions to the rights of reproduction and communication, as these are derogations from exclusive rights. However, strict interpretation must enable the effectiveness of the exception (see recital 31 of the Directive, Football Association Premier League and Others, C‑403/08 and C‑429/08, para 163). The CJEU indicates that a fair balance needs to be achieved between the interests of authors and the users’ rights (see Padawan, C-467/08, para 43 and Painer, C-145/10, para 132). This means that courts must balance the exclusive rights of rightholders with the users’ freedom of expression.

To that end, the court takes the example of the facts before it. The drawing at issue presenting original characters distorted as to convey a discriminatory message is likely to have the effect of associating the message with the protected work. If the national court finds that such association is plausible, the court needs to balance freedom of expression with the principle of non-discrimination based on race, colour and ethnic origin (Article 21(1) of the Charter of Fundamental Rights) as rightholders have a legitimate interest in not having their work associated with such a message.

The ball is now in the Belgian court to first determine whether the alleged infringing work falls within the meaning of the Directive and whether the fair balance between rightholders and users is preserved.

Comments

It is not surprising that the Court ruled that parody is an autonomous concept. This is consistent with the CJEU’s case law on the other provisions of the Directive (most notably in Padawan, C-467/08). However it is interesting to see how the Court grasps the concept of parody. By referring to the ordinary meaning of the word, the Court acts as if parody has a similar meaning throughout the Member States. This is absurd as there are so many controversies as to the ordinary meaning of the term already within a single jurisdiction. As a reminder, parody is a multivalent term covering among others satire, pastiche, caricature, spoof, irony and burlesque.

This being said, the Court also established the only two requirements attached to the definition of ‘parody’ under the Directive. Firstly, the new work has to invoke the earlier work while being noticeably different. Essentially, this is the very nature of parody. Through the parody, the parodist aims to bring into the public’s mind the work it is based on without confusing the public as to its creative origin. By the distance operated, the parodist intends to avoid artistic confusion (whereby the public might believe that the new work is a continuation of the protected work) and economic confusion (signifying the public believes that the new work was authorised by the rightholder). In any case, parasitism is excluded.

According to the second requirement, parodies must have a humoristic character. Being a subjective term, this condition could be problematic in practice and calls for further case law. How should ‘humour’ be interpreted? Some jurisdictions have interpreted this concept strictly, but some have quite broadly expanded it to encompass homage and criticism.  Additionally, will this condition be interpreted based on the parodist’s intent or the reaction of the public exposed to the new work? Lastly, the target of the humoristic expression is not specified. Does it have to be the earlier work? The original author? A third subject? Following this, the humoristic element appears difficult to define.

Consequently, it is apparent that other conditions must be set aside. This means that the parodist does not have to acknowledge the borrowings, and the amount reproduced from the original, the motivation of the parodist (such as commercial exploitation), the encroachment of the rightholder’s economic rights, the possible alternatives to the dealing (such as the likelihood to acquire a license) and the originality (understood as the level required to attract copyright protection) are not conditions to the application of the parody exception as enshrined in the Directive.

If the above paragraph is not likely to arouse passion, the developments of the CJEU regarding the balance between the interests of rightholders and the users’ freedom of expression certainly will. The CJEU established that rightholders had a legitimate interest not to have their protected work associated with offensive messages conveyed by the parody. It is dubious how this will be interpreted in practice and whether this will annihilate the effectiveness of the exception. Parody has worn many coats since its origin in Ancient Greece from being playful to dark and acerbic. Today, some of these are likely to be jeopardised.

*The translation of the title quotation is mine. Quotation of Pierre Desproges (French comedian known for his acerbic and dark humour): “On peut rire de tout, mais pas avec tout le monde”.

Barnard & Peers: chapter 9, chapter 14

Is it a parody? The Advocate-General’s opinion in the Deckmyn case

By Sabine Jacques

PhD student focussing on the parody exception 

at the School of Law, University of Nottingham (UK)

As was expected, the Advocate-General’s opinion (not yet available in English) in the Deckmyn case was released this morning. This dispute involves interesting questions such as the interpretation of the parody copyright exception, the requirements attached thereto and its relationship with other fundamental rights. 

The provision concerned is Article 5(3)(k) of the Infosoc Directive which allows Member States to introduce an exception to the reproduction right (Article 2 of the Directive) and the right of communication to the public (Article 3 of the Directive) for the purpose of caricature, parody or pastiche.

As the English introduction of a parody exception is being currently delayed, along with the continuation of criticism surrounding the Infosoc directive, the AG’s opinion is very much welcome. Additionally, as Member States have the habit of tailoring copyright exceptions to their legal traditions, the AG’s opinion (despite its lack of binding effect) is a meaningful clarification of the meaning and scope of the parody exception at EU level and provides insight as to its interplay with other fundamental rights. 

The facts 

The facts are pretty straightforward and concern the distribution of a calendar of which the front page reproduces a well-known Spike and Suzy (Suske and Wiske) album cover distorted in a way to promote a political message of the Vlaams Belang’s party (Flemish nationalist political party). Unequivocally, the alleged infringing work represents the City of Ghent’s Mayor, Mr Termont, wearing a white tunic with a belt displaying the Belgian colours, distributing money to people from different backgrounds. This calendar was distributed during the party’s New Year’s Eve reception and later, in brochures as well as on the party’s website. Consequently, the heirs and rightholders of Mr Willebrord Vandersteen (the author of the comic albums) claim infringement of their copyright in the comic albums against Mr Johan Deckmyn (member of the Vlaams Belang’s party) and the Vrijheidsfond, the association responsible for the party’s funding and promotion.

The two works: 

                       

The applicants argue that the alleged infringing drawing reproduces the general aspect of the original cover and other typical elements of the Spike and Suzy album covers such as the orange colour, font, characters, and title. The main differences between the two works lie in the substitution of the Spike and Suzy’s character for a depiction of Ghent’s Mayor joined to the characters chosen to pick up the coins conveying a discriminatory message and the addition of a handwritten statement “Fré freely in the style of Vandersteen”.

At national level, the court of first instance granted an interim injunction preventing further distribution of the calendar. Subsequently, the defendants appealed arguing that the work is allowed as it falls under the parody exception. The applicant also appealed to prohibit the political party to use the protected works in any manner.

After recognising the absence of uniformity in the legal tests applicable to the parody exception, the Brussels Court of Appeal decided to refer to the Court of Justice of the European Union (CJEU).

The questions referred to the CJEU

1.    Is the concept of 'parody' an independent concept (read “autonomous concept”) in European Union law?

2.    If so, must a parody satisfy the following conditions or conform to the following characteristics:

-    the display of an original character of its own (originality);

-    and such that the parody cannot reasonably be ascribed to the author of the original work;

-    be designed to provoke humour or to mock, regardless of whether any criticism thereby expressed applies to the original work or to something or someone else;

-    mention the source of the parodied work?

3.    Must a work satisfy any other conditions or conform to other characteristics in order to be capable of being labelled as a parody?

The opinion

Preliminary remarks

Before turning to the analysis of the questions referred by the Belgian court, the AG notes what is not asked of the court and consequently, what is left out of the opinion.

Firstly, as moral rights are excluded from the scope of the directive (recital 19), their ensuing violation is left to the assessment of national judges.

Secondly, the interpretation of the three-step test enshrined in Article 5(5) of the directive requiring copyright exceptions to be applied “in certain special cases which do not conflict with a normal exploitation of the work or other subject-matter and do not unreasonably prejudice the legitimate interests of the rightholder” is also left out of the questions referred. Accordingly, the AG emphasises the role of the national judge to verify whether these conditions are met in the dispute.

Finally, the AG observes that the Belgian Court does not ask the CJEU to evaluate the Belgian limit to the exception whereby the exception is applicable if the work is created in accordance with honest practices (see Article 22(1)(6) of the Belgian Copyright Act 1994).

The analysis of the questions referred

In relation to the first question referred, the AG states that “parody” is an autonomous concept of EU law, because the Directive refrains from defining or expressly referring to the Member States for the definition of that concept. This being said, the AG adds that when EU law does not provide sufficient guidelines, the nature of an autonomous concept does not preclude Member States from having a large margin of appreciation to determine the requirements attached to the exception.

Turning to the two other questions referred, the AG decides to address these together as they relate to the requirements for invoking the exception. Firstly, the AG notes that there is no significant distinction between the three concepts mentioned in the provision (parody, pastiche and caricature) and considers them together as they all share the common feature of being an exception to copyright. After consulting dictionaries to grasp the ordinary meaning of parody and its Greek etymology, the AG establishes common features to any parody. These comprise structural and functional features.

Structural features of parodies

A parody is simultaneously copy and creation. The nature of parody requires borrowing elements from earlier works. These elements borrowed can consist in essential elements of the original work as for the parody to be successful the earlier work must be recognisable to the public. But the parody is also creation as the parodist distorts the original work and it is in his interest that the public does not confuse the new work with the original work.

Against this backdrop, the AG attributes to Member States the duty to determine whether the new work incorporates enough new elements to not constitute a mere copy of the original with little modification. In light of the foregoing, the AG notes that Member States can adopt different requirements such as the absence of confusion, sufficient detachment or whether more elements are copied than necessary.

In a nutshell, the parody needs to be original in a sense that it must not be confused with the original work it borrows from.

Functional features of parodies

To break down the reasoning, the AG distinguishes between its subject, effect and content.

Firstly regarding the subjects (or targets) of parodies, the AG supports that parody works can either target the earlier work or its author, or a third subject external to the work it borrows from.

Secondly, the effect of the parody must be humorous. However, the AG leaves the assessment of the kind of comical effect required to Member States which bear an important margin of appreciation to determine whether the parody meets this threshold.

Thirdly in relation to the content of parody and the influence of fundamental rights, the AG examines the relationship between copyright (Article 17(2) of the Charter of fundamental rights) and the parodist’s freedom of expression (article 11(1), EU Charter of Fundamental Rights). The national judges must bear in mind the importance of preserving the freedom of expression, an essential feature of any democratic societies. This being said, this right is not absolute. Besides the limits on the right set out in Article 10(2) of the European Convention on Human Rights, the Charter protects other values which may conflict with the freedom of expression such as human dignity (Article 1 of the Charter) and non-discrimination based on cultural, religious and linguistic diversity (Article 22 of the Charter). Based on this, the AG notes that the parody exception should not be refused just because the author of the original work does not approve the comment made through the parody. Nevertheless, the AG suggests an important limit upon the application of the exception by stating that the exception is inapplicable where the parody conveys “a message radically contrary to the deepest values of a particular society” (this quote is translated from the French version by the author of this post). In conclusion, national judges must weigh the different fundamental rights in relation to the circumstances of the particular case.

Comments

As this is the first parody case referred to the CJEU, this dispute is likely to attract a lot of attention and possibly, criticisms. By making “parody” an autonomous concept of EU law, the AG follows the CJEU’s consistent approach endorsing the need for a uniform application of EU law. For example with the Padawan decision in relation to the autonomous concept of “fair compensation”, the Court stated : “according to settled case-law, the need for a uniform application of European Union law and the principle of equality require that the terms of a provision of European Union law which makes no express reference to the law of the Member States for the purpose of determining its meaning and scope must normally be given an independent and uniform interpretation throughout the European Union; that interpretation must take into account the context of the provision and the objective of the relevant legislation” (See Padawan at para 32).

Interestingly, when it comes to defining what parody consists of, the AG chooses not to distinguish the three terms parody, caricature and pastiche. This appears to be in line with the nature of parody which is seen as a multivalent term covering among others satire, pastiche, caricature, spoof, irony and burlesque.

By the structural feature, the AG acknowledges the particular nature of parody which requires both copying and creation. The AG infers that national judges have to weigh whether the parody comprehends enough creation to exclude representing a slavish imitation of the original. Ultimately, this is where the difficulty lies as parodist needs to copy enough elements to trigger the memory of the original work in the public and simultaneously, supply enough new elements to avoid confusion. Against this backdrop, the AG requires the parody to be original rather than a mere copy with little alteration of the original. One is allowed to wonder what kind of originality is required. Are we talking of the ordinary meaning of originality or the copyright law meaning (i.e. “original” enough to trigger copyright protection)? On this question, the AG seems to leave the assessment to the national judges.

Moving on to the functional features of parody, the AG appears to allow the application of the exception to both target (commenting either on the work it borrows from or its author) and weapon parodies (using the parody to comment on a third subject). This approach departs from the US distinction made in the landmark Campbell decision where the US Supreme Court held fair use applicable only to target parodies. This being said, this brings the EU closer to other jurisdictions such as Australia and Canada where legislators rejected the distinction between target and weapon parodies in the wording of the provision. 

The effect of parody needs to be humorous. The assessment of the required comical effect is left to the national judges and depends on the particular circumstances of the case. However, the AG appears to be in favour of a liberal interpretation as the parody exception relies heavily on freedom of expression considerations. This being said, one wonders whether the effect equals the result of the parody itself. Indeed problems could arise if it is the effect of the parody on the public which is required. This is explained by the fact that this effect relies on several accounts such the talent of the parodist but also relies on the public exposed to the parody.

Finally and surprisingly, the AG appears to let the Member States (and especially the national courts) assess the content of parodies. By weighing the different fundamental rights at stake, the courts can limit the application of the parody exception where the message is radically contrary to the fundamental values of a particular society such as xenophobia, racism and homophobia but could be extended to other cultural diversities as long as these are considered by national courts jeopardised by the parody. This last point promises to attract many criticisms as it is an open door to a kind of censorship.

In conclusion, much leeway is left to national judges and it is not given that this interpretation amounts to harmonisation among the Member States. Finally, whether the approach of the AG will be followed by the CJEU remains to be seen.

Barnard & Peers: chapter 9