Wednesday 30 November 2011

Honey to the Bee

In the famous song "Money Honey", written and composed by Jesse Stone, Elvis Presley laments different kinds of money troubles, from demanding landlords to stingy girlfriends and heartless gold diggers, culminating in the demand "I want money, honey!" Elvis Presley Enterprises, LLC, which holds the economic rights in Elvis's estate, shares that sentiment and has been trying to get at the honeypots of Elvis Presley's German record company, Arista Music.

On 23 November, Landgericht München I (Regional Court of Munich I - yes, for whatever reason Munich has two of those, but copyright enthusiasts need not bother with the second one) handed down its judgment in the case. The claim was struck out, but apparently for different reasons than the ones I suspected in my previous post on the matter (see here). According to the suitably entertaining press release (as always, the written judgment will be some time coming), entitled "I want Money, Honey!" and available here, the claimant mainly relied on two arguments:

Additional Remuneration due to Extended Term of Protection

First, the German term of protection for sound recordings (protected under a neighbouring right, not copyright) was extended in 1990 from 25 to 50 years after first publication. Accordingly, the term during which money could be made (and presumably used to buy, among other things, honey...) suddenly doubled. The claimant argued that nobody had seen this development coming in 1973 and that in hindsight the remuneration Elvis received was therefore much too low. The claimant also pointed out that the new provisions explicitly introduced a right to additional remuneration because of the extension of the term of protection.

This claim refers to § 137f (4) UrhG, a transitional provision I admittedly overlooked in my previous post. The provision reads:
"If prior to 1 July 1995 an exploitation right concerning the subject matter of a neighbouring right that continues to be protected under this Act has been granted or assigned to another, in the event of doubt such grant or assignment shall be deemed to cover the period by which the term of protection has been extended. 2The application of sentence 1 shall be subject to payment of equitable remuneration.
It seems like rather a good idea to invoke § 137f (4) UrhG, but the court disagreed. It held that the 1973 buy-out contract between Elvis and the record company was valid. The wording of the contract explicitly covered any claims for additional payments arising out of any extensions of the duration of protection. The claim for additional remuneration that was introduced at the same time as the term extension did not lead to a different result. According to the court, the claim for additional remuneration is not mandatory and unwaivable. Contractual agreements that derogate from the provision are possible, and the contract between Elvis and his record company was such a contract.

Fairness Compensation

Secondly, the claimant argued that since 2002 there has been a legal obligation to pay additional "fairness compensation" if the consideration the artist received is strikingly disproportionate to the profits made from exploiting the work or performance, and that the requirements were met in the case at hand. That claim was based on §§ 32a, 79 (2) UrhG (also see previous posts here and here).

According to the view of the court, however, the provision governing the effects of term extension (§ 137f (4) UrhG) is lex specialis to the general duty of those who exploit the work to remunerate the artist adequately (§§ 32a, 79 (2) UrhG). In other words, §§ 32a, 79 (2) UrhG are not applicable.


The court's solution as apparent from the press release is certainly elegant, but I think there is a chance the OLG (court of appeal) or the BGH (Federal Supreme Court) might see things differently. I am not entirely sure that the right to equitable remuneration pursuant to § 137f (4) UrhG really could be waived in advance. In my opinion, there are good arguments for both sides, though, so I wouldn't bet any money (or honey) on claimant's chances.

However, I have difficulty seeing § 137f (4) UrhG as lex specialis to §§ 32a, 79 (2) UrhG. In any event, the claim should in my view still fail for he reasons given in my previous post. I would also be interested in some judicial insight as to whether the claimant actually had legal standing in the § 137f (4) UrhG claim - i.e. whether like the § 32a UrhG right the right to equitable remuneration pursuant to § 137f (4) UrhG is incapable of being waived or transferred in advance - because in that case Elvis's daughter would be the right holder, and not Elvis Presley Enterprises, LLC.

The good news is that we may actually receive answers to any or all of these questions because counsel for claimant have already announced that they will appeal the judgment and take the case all the way to the BGH if necessary.

Honey Money here
Honey and the Money here
Honey to the Bee here
Pooh's Hunny Hunt here


Francis Davey said...

Thanks for this post. Can I say that I am really pleased that the 1709 blog does cover other EU jurisdictions than the UK. I can just about keep up with the UK by dint of my own efforts, but for the EU I really need an informative blog.

Monika said...

Thank you Francis!