Protecting rights of film directors: the ECJ rules

Last week the Court of Justice of the European Union gave a ruling in Case C-277/10, Martin Luksan v Petrus van der Let.  This was prompted by a reference for a preliminary reference from Austria.  In short, the court has affirmed that EU law requires Member States to ensure that their national law gives the principal director of a cinematographic work the initial ownership of the right to exploit it commercially, along with the initial entitlement to the right to fair compensation in respect of private copying.

Member States can establish a legal presumption that such exploitation rights will be automatically transferred to the producer of the film, so long as the parties are able to opt out of this transfer by agreement.  The right to fair compensation, however, cannot be the subject of an automatic presumption of transfer to the producer -- whether such a presumption is rebuttable or not.

The active part of the Court's ruling runs as follows:

"1. Articles 1 and 2 of Council Directive 93/83 ... on the coordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission, and Articles 2 and 3 of Directive 2001/29 ... on the harmonisation of certain aspects of copyright and related rights in the information society in conjunction with Articles 2 and 3 of Directive 2006/115 ... on rental right and lending right and on certain rights related to copyright in the field of intellectual property and with Article 2 of Directive 2006/116 ... on the term of protection of copyright and certain related rights, must be interpreted as meaning that rights to exploit a cinematographic work such as those at issue in the main proceedings (reproduction right, satellite broadcasting right and any other right of communication to the public through the making available to the public) vest by operation of law, directly and originally, in the principal director. Consequently, those provisions must be interpreted as precluding national legislation which allocates those exploitation rights by operation of law exclusively to the producer of the work in question.

2. European Union law must be interpreted as allowing the Member States the option of laying down a presumption of transfer, in favour of the producer of a cinematographic work, of rights to exploit the cinematographic work such as those at issue in the main proceedings (satellite broadcasting right, reproduction right and any other right of communication to the public through the making available to the public), provided that such a presumption is not an irrebuttable one precluding the principal director of that work from agreeing otherwise.

3. European Union law must be interpreted as meaning that, in his capacity as author of a cinematographic work, the principal director thereof must be entitled, by operation of law, directly and originally, to the right to the fair compensation provided for in Article 5(2)(b) of Directive 2001/29 under the ‘private copying’ exception.

4. European Union law must be interpreted as not allowing the Member States the option of laying down a presumption of transfer, in favour of the producer of a cinematographic work, of the right to fair compensation vesting in the principal director of that work, whether that presumption is couched in irrebuttable terms or may be departed from".

This ruling marks what some will see as a further drift of harmonised European Union law away from its initial basis in the operation of rights in the marketplace and into the territory of the allocation of rights as between creators and entrepreneurs.