19 september 2019

After the Kraftwerk ruling: Narrower limitations and exceptions for EU and EEA?

EU-domstolen avsa 29.7.19 dom i C-476/17 Pelham, som omhandlet sampling av to sekunder fra «Metall auf Metall» av den kjente elektronikaduoen Kraf­twerk (tidligere omtalt av Simon Skarstein Waaler her). Alan Hui har tidligere skrevet PhD om opphavsrett og sampling av musikk, og skriver her et gjesteinnlegg om saken

Alan er for tiden postdoktor ved Universitetet i Oslo, hvor han jobber på MASHED-prosjektet ved RITMO Senter for tverrfaglig forskning på rytme, tid og bevegelse. Han har tidligere arbeidet som Assistant Director i den australske forvaltningen, hvor han har rådgitt den australske regjeringen om The Copyright Amendment (Online Infringement) Act av 2018 og generelt med modernisering av den australske opphavsrettsloven.


The recent EU Court of Justice’s preliminary ruling in the Kraftwerk case (Pelham v Hütter, C-476/17) clarifies the nature and scope of exceptions and limitations in the EU, and the EOS (EEA) by virtue of the EFTA. Many have discussed the case, including Simon Skarstein Waaler in this blog (see also a Google Translate version in English). Here, we delve deeper into implications for limitations and exceptions beyond remixes and consider how the this ruling should be read with other authorities.

What is “unrecognisable to the ear”?

Ralph Hütter i Kraftwerk
Foto: Miroslav Bolek, CC BY SA 3.0
In the Kraftwerk ruling, the Court of Justice sets out a new test for infringement in relation to a phonogram sample and a phonogram producer’s rights. A sample infringes the phonogram producer’s right unless it is “in a modified form unrecognisable to the ear” (or in German, “in geänderter und beim Hören nicht wiedererkennbarer Form”, C-476/17, 31). But what does this mean? How is it different from other tests in EU copyright and related rights law that separate existing material from new material?

First of all, the test places the burden on the potential user to demonstrate the use is unrecognisable. The Court of Justice chose not to place the burden on rightholder to demonstrate, which could have been achieved with a “recognisable to the ear” test. In doing so, it created a different burden to other threshold tests, such as the “substantial part” test which places the burden on the rights holder to prove that a substantial part has been taken.

A second difference is that the test does not consider the new work as a whole. It only considers the sample taken out of the context of the new work. This contrasts with other concepts, such as parody, independent work and adaptation. For example, the parody test from Deckmyn which includes a requirement to “evoke an existing work while being noticeably different” (C 201/13, 20).

We should also consider, as a third matter, that the words “to the ear” tie the test to human sense and human perception. As the Court of Justice clarified in European Central Bank v Federal Republic of Germany, “Although an interpretation of a provision of an Agreement ‘in the light’ of its legal context is possible in principle to resolve a drafting ambiguity, such an interpretation cannot have the result of depriving the clear and precise wording of that provision of all effectiveness.” (C-220/03, paragraph 31). “To the ear” unambiguously points to the human ear. However, this seems difficult to adapt to the scale and nonhuman nature of automated systems for online platform regulation.  Though audio content identification is increasingly tailored to musical and sonic features which stand out to human perception, it does not enable perfect replication of or substitution for that perception.

Fourthly, it is not yet clear what kind of ear or what kind of listener the test refers to. Is the test attempting an objective standard of what a listener ought to have recognised, or a subjective standard based on a listener’s good faith belief? Is the test based on an expert listener (such as a musicologist or a musician familiar with the relevant styles of music), or a lay listener? Can the listeners be aided by studio monitor speakers, content recognition software or a music sampling?

Despite the test’s complexity, it clearly rules out some uses. This includes certain types of sampling which set out to highlight the sources are “unrecognisable to the ear”. Examples include mashups, long-form DJ mixes and mixes which select the recognisable parts of popular songs on music charts or within a genre. It also rules out unmodified uses, which might be relevant when sampling highly repetitive, minimalist or short phonograms.

Are free use, new work and independent work limitations inconsistent with EU law?

Foto: Zacks/Pixabay
The Court of Justice implies that free use and independent work limitations (such as the German Urheberrechtsgesetz § 24 (1), the Norwegian åndsverklov § 6, the Swedish upphovsrättlag § 4) are not consistent with relevant EU law. It writes, “A Member State cannot, in its national law, an exception or limitation other than those provided for in Article 5 of Directive 2001/29 to the phonogram producer’s right provided for in Article 2(c) of that directive” (C-476/17). The German § 24 (1) provision is such an exception or limitation not provided for in Article 5 of the InfoSoc Directive.

However, a free use or creation of an independent work may nonetheless avoid infringing a phonogram producer’s rights. When considering the phonogram producer’s exclusive right to authorise or prohibit reproduction (2001/29/EC, Article 2(c)), the court says, “where a use, in exercising the freedom of the arts, takes a sound sample from a phonogram in order to use it, in a modified form unrecognisable to the ear, in a new work, it must be held that such use does not constitute ‘reproduction’” (C-476/17, emphasis added).

So, in some circumstances, the use of a sample to make a new work does not infringe the phonogram producer’s exclusive right. In these circumstances, the use is not a reproduction covered by a limitation or exception; it is not a reproduction at all. The Court of Justice helpfully provides one set of circumstances: in exercising the freedom of the arts, modifying a phonogram to the point of unrecognisability to the ear. Perhaps this might extend to modifying other related rights material (such as broadcasts, films, and performances) to the point of unrecognisability for the relevant senses. If “unrecognisable to the ear” is the objective of the test, and the “modifying” is only a means, then other ways of achieving unrecognisability may also suffice. One could take a sample that is unmodified but nonetheless unrecognisable. One could also take an unmodified sample, but place it in a context which makes it recognisable, for example being obscured by other layers of sound, or by syncopation.

There are some circumstances that make a new work, but nonetheless infringe the phonogram producer’s exclusive right. In the Kraftwerk case, use of a sample “as a continuous loop, with minimal modifications and in such a way as to be recognisable, as a rhythm sequence” (Advocate-General’s opinion, C-476/17, 25) was infringing. To give another example, the taking of a photograph of a painting was ruled to be a new and independent work (upphovsrättlagen § 4) by the Swedish Supreme Court in J.L v M.A. (T- 1963-15), as the painting was a criticism of society, while the photograph was a portrait. However, the Kraftwerk court would rule this is infringement as the photograph would not be “unrecognisable to the eye”.

New frontiers or barriers for quotation

The Kraftwerk ruling introduces two interesting tests for determining whether a use qualifies for the quotation exception: “enter into dialogue” and “possible to identify the work”. A use must “enter into dialogue” with the used work, amongst other conditions, to be a quotation. The Court of Justice explains the text means that “the essential characteristics of a quotation are the use, by a user other than the copyright holder, of a work or, more generally, of an extract from a work for the purposes of illustrating an assertion, of defending an opinion or of allowing an intellectual comparison between that work and the assertions of that use” (C-476/17, 71). The court does not specify how or whether these characteristics relate to “criticism or review”, which are the two illustrative purposes set out in the Information Society Directive (InfoSoc Directive, 2001/29/EC, Article 5(3)(d)).

Moses Pelham
Foto: Stefan Brending, CC-BY-SA-3.0
According to the Kraftwerk court, there is only quotation if there is an “intention of entering into dialogue”, and “there can be no such dialogue where it is not possible to identify the work concerned by the quotation at issue” (C-476/17, 72-73). What does “possible to identify the work” mean? Presumably, it sets a different bar what is unrecognisable to the ear. One interpretation is that it is possible by any means, human or otherwise, to identify the work sampled. This may set a lower bar, for it seems that a work is more likely to be identified or recognised if the standard is not tied to the ear.

These additional tests from the Court of Justice ruling make the quotation exception more complex for music sampling artists, and creators of memes and GIFs who also rely on quotation.

Implementing the Kraftwerk ruling

Following the Kraftwerk ruling, EU and EEA states may need to implement changes in their phonogram rights, exceptions and limitations. There are at least two options for national jurisdictions to implement the Kraftwerk ruling: to update the statute or leave implementation for courts. A range of factors could influence a member state’s view about the merits of statutory or case law approaches, including how closely national statutory provisions mirror EU provisions.

Updating the statute could be desirable where statute is unclear on its face, following the Kraftwerk ruling. For example, an independent work or free use exception may be interpreted to cover too broad a range of uses, beyond those specified in EU limitations and exceptions. Amending the statute to clarify how it does not go beyond those specified by EU law would improve the clarity of statute when read as a standalone authority. It would also avoid uncertainty hindering copyright exceptions and limitations, an issue the German Constitutional Court highlighted in its earlier Pelham v Hütter ruling(Bundesverfassungsgericht, Case 1 BvR 1585/13, 31 May 2016, paragraph 100).

Leaving the statute unamended might be appropriate in cases where it is unclear how the Kraftwerk ruling interacts with the statute. Quotation exception statutes provide one set of examples. For example, “in dialogue with [the protected work]” (Kraftwerk ruling, 71) could be read to clarify “quotation” or “purposes such as criticism or review” (InfoSoc Directive, article 5(3)(d)). Given the InfoSoc Directive does not mention “in dialogue with, it may be preferable to leave it out of the statute. If the statute remains unamended, this would leave EU and EEA national courts to decide when it is necessary to consider whether a quotation for purposes such as criticism or review is in dialogue with the protected work. In such cases, waiting until the national courts apply the Kraftwerk ruling’s precedents could be prudent.

Foto: Carlotta Silvestrini/Pixabay
While there is generally some flexibility about whether and how to amend statutes to accommodate the Kraftwerk ruling, this is not the case when it comes to online content-sharing service providers like YouTube and SoundCloud. Here, the path for statutory reform following the Kraftwerk ruling is less certain but arguably more urgent. Ordinarily, a new interpretation of statutory provisions may not require urgent statutory reform and could apply to uses and disputes as they arise. However, EU states must comply with the Digital Single Market Directive by 7 June 2021 (DSM Directive, EU 2019/790, article 29) which require online content-sharing service providers to anticipate uses and avoid disputes by judging the nature of the uses upon upload. EOS states would need to comply in a similar timeframe. The DSM Directive requires authorisation for uses (article 17 (4)(a)) where “no exception or limitation applies” (preamble, paragraph 8). In addition, it requires “best efforts to ensure unavailability” where there is no authorisation (article 17(4)(b)). It also requires states to ensure reliance on certain exceptions and limitations for uses on online content-sharing services (article 17(7)).

Accommodating both the Kraftwerk ruling and the DSM Directive is a large-scale task that brings some challenges. Many content platforms already use automated tools, known as content ID systems, to identify use of popular phonograms in the millions of uploads happening each day and assist with copyright enforcement. Unfortunately, Content ID systems used are not always accurate at detecting use of phonograms and as a French research mission confirms (Copyright Protection on Digital Platforms, page 21), it is not cost-efficient to identify all copyright materials. In the MASHED project at the University of Oslo, we have been interviewing and surveying mashup producers to understand their experience of copyright and platform regulation. We are also speaking with content platforms and content ID providers about how they balance copyright, creativity and the scale of their activities, especially as laws change in this space. Countries and online service providers will need to walk a fine line between underblocking unauthorised and infringing uses and overblocking uses permitted by limitations and exceptions. Some parts of the Kraftwerk ruling which are difficult to translate into automated regulation systems —particularly the “unrecognisable to the ear” test—seem difficult to implement.

Towards harmonisation

The Kraftwerk ruling is another attempt by the EU Court of Justice to harmonise copyright and related rights. Together with the Deckmyn v Vandersteen ruling (that EU copyright and related rights concepts have “autonomous meaning”, C 201/13), it challenges EU and EOS states to adapt their laws to be closer to EU concepts. Because the EU Court of Justice is continuing to articulate and clarify the nature of copyright and related rights, and associated limitations and exceptions, national reforms may continue for some time as gaps are closed and concepts are clarified. Although the Kraftwerk case started with a single music remix in Germany, its future impact will be felt throughout the EU, the EOS and online content platforms.

Alan Hui

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