Phil Collins v. Imtrat Handelsgesellschaft mbH (Case C

Phil Collins v. Imtrat Handelsgesellschaft mbH
(Case C-92/92)
Patricia Im- und Export Verwaltungsgesellschaft mbH
and Another v. EMI
Electrola GmbH
(Case C-326/92)
Before the Court of Justice of the European
Communities
ECJ
(Presiding, Due C.J.; Mancini, Moitinho de Almeida and
Edward PP.C.; Joliet,
Schockweiler, Grévisse, Zuleeg and Murray JJ.) Mr.
Francis Jacobs, Advocate
General.
20 October 1993
References from Germany by the Landgericht München I (Provincial Court,
Munich
I) and by the Bundesgerichtshof (Federal Supreme Court) respectively, under
Article 177 EEC.
Provision considered:
EEC 7(1)
Community law and national law. Property rights. Intellectual property.
Copyright.
In the present state of Community law, and in the absence of Community
measures or the harmonisation of national law, it is for the member-States to
specify the conditions and rules for the protection of literary and artistic property,
subject to complying with the relevant international agreements. [19]
EMI Electrola GmbH v. Patricia Im- und Export Verwaltungsgesellschaft mbH
(341/87): [1989] E.C.R. 79, [1989] 2 C.M.L.R. 413, followed. *774
FN1 The judgment in this case has been translated by us. The English wording
of the questions put by the national court and of the European Court's ruling is,
however, taken from the English text published in the Official Journal. The
Advocate General's Opinion was in English in the original.--Ed.
Copyright.
The specific purpose of copyright (including neighbouring rights), as governed by
national law, is to protect the moral and economic rights of its owners. [20]
Community law and national law. Copyright.
While the commercial exploitation of copyright is a source of remuneration for the
owner, it also constitutes a form of control on marketing exercisable by the
owner, the copyright management societies acting in his name, and the grantees
of licences. From that viewpoint the commercial exploitation of copyright raises
the same problems as that of any other industrial or commercial property right
and as such is subject to the requirements of Community law. [21]-[22]
Discrimination. Copyright.
Copyright and neighbouring rights fall within the scope of application of the EEC
Treaty. They are directly subject to the general principle of non- discrimination
laid down by Article 7(1) EEC, which applies to them directly without the need
for mediation via the free movement Articles 30, 36, 59 or 66 EEC. [27]-[28]
Copyright. Bootleg recordings. Discrimination. Nationality.
Where a member-State's national law grants to its nationals, being authors or
performers and their assigns, the right to prohibit the marketing within that State
of a bootleg recording of their performances, even if the performance was given
outside that State, but refuses that right to performers who are nationals of
another member-State, there is discrimination based on nationality which is
forbidden by Article 7(1) EEC. [33]
Discrimination. Nationality. Direct effect.
Article 7(1) EEC has direct effect. [34]
The Court interpreted Article 7(1) EEC in the context of actions brought by or on
behalf of two British pop singers, Phil Collins and Cliff Richard, against the
distribution in Germany of bootleg (unauthorised) recordings of concerts which
Phil Collins had given in the United States and the unauthorised distribution in
Germany of recordings made by Cliff Richard in Britain respectively, relief in such
circumstances being available in Germany under sections 96(1) and 125(1) of
the Copyright Act to German nationals, but being refused under section 125(2) to
(6) to non-Germans, neither plaintiff therefore having a remedy in German law
because of his nationality, to the effect that Community law applied to the
exercise of copyright and neighbouring rights, that Article 7(1) EEC applied
directly to such rights, that Article 7(1) had direct effect, that the nationality
distinction made by section 125 of the German Copyright Act constituted
nationality discrimination contrary to Article 7(1), and therefore that that
discrimination infringed Community law.
Representation
*775 In Case C-92/92
Ulrike Hundt-Neumann, of the Hamburg Bar, for the plaintiff.
Sabine Rojahn and Kukuk, both of the Munich Bar, for the defendant.
Claus-Dieter Quassowski, Regierungsdirektor in the Federal Ministry for
Economic Affairs, and Alfred Dittrich, Regierungsdirektor in the Federal Ministry
of Justice, for the German Government as amicus curiae.
Nicholas Paines, of the English Bar, instructed by John E. Collins, of the
Treasury Solicitor's Department, for the British Government as amicus curiae.
Henri Etienne, Legal Adviser to the Commission, and Pieter van Nuffel, of the
Commission's Legal Service, for the E.C. Commission as amicus curiae.
In Case C-326/92
Hartwig Ahlberg, of the Hamburg Bar, for the plaintiff.
Daniel Marquard, of the Hamburg Bar, and Rudolf Nirk, of the Bundesgerichtshof
Bar, for the defendant.
Claus-Dieter Quassowski, Regierungsdirektor in the Federal Ministry for
Economic Affairs, and Alfred Dittrich, Regierungsdirektor in the Federal Ministry
of Justice, for the German Government as amicus curiae.
Henri Etienne, Legal Adviser to the Commission, and Pieter van Nuffel, of the
Commission's Legal Service, for the E.C. Commission as amicus curiae.
The following cases were referred to in the judgment:
1. Heineken Brouwerijen BV v. Inspecteur der Vennootschapsbelasting (91/83 &
127/83), 9 October 1984: [1984] E.C.R. 3435, [1985] 1 C.M.L.R. 389. Gaz:91/83
2. EMI Electrola GmbH v. Patricia Im- und Export Verwaltungsgesellschaft mbH
(341/87), 24 January 1989: [1989] E.C.R. 79, [1989] 2 C.M.L.R. 413. Gaz:341/87
3. Musik-Vertrieb Membran GmbH v. GEMA (55/80 & 57/80), 20 January 1981:
[1981] E.C.R. 147, [1981] 2 C.M.L.R. 44. Gaz:55/80
4. GVL v. E.C. Commission (7/82), 2 March 1983: [1983] E.C.R. 483, [1983] 3
C.M.L.R. 645. Gaz:7/82
5. Deutsche Grammophon Gesellschaft mbH v. Metro-SB-Groβmärkte GmbH &
Co. KG (78/70), 8 June 1971: [1971] E.C.R. 487, [1971] C.M.L.R. 631. Gaz:78/70
6. Walt Wilhelm v. Bundeskartellamt (14/68), 13 February 1968: [1969] E.C.R. 1,
[1969] C.M.L.R. 100. Gaz:14/68
7. Cowan v. Tresor Public (186/87), 2 February 1989: [1989] E.C.R. 195, [1990]
2 C.M.L.R. 613. Gaz:186/87
The following further cases were referred to by the Advocate General in his
Opinion:
8. Die Zauberflöte (Bundesgerichtshof), 20 November 1986: [1987] GRUR 814.
9. Re Ownership of Landed Property: E.C. Commission v. Greece (305/87), 2
February 1989: [1989] E.C.R. 1461, [1991] 1 C.M.L.R. 611. Gaz:305/87 *776
10. Höfner & Elser v. Macrotron GmbH (C-41/90), 23 April 1991: [1991] I E.C.R.
1979, [1993] 4 C.M.L.R. 306. Gaz:41/90
11. Thieffry v. Conseil de l'Ordre des Avocats A la Cour de Paris (71/76), 28 April
1977: [1977] E.C.R. 765, [1977] 2 C.M.L.R. 373. Gaz:71/76
12. Gravier v. City of Liege (293/83), 13 February 1983: [1985] E.C.R. 593,
[1985] 3 C.M.L.R. 1. Gaz:293/83
13. Ministere Public v. Mutsch (137/84), 11 July 1985: [1985] E.C.R. 2681, [1986]
1 C.M.L.R. 648. Gaz:137/84
14. SA Cnl-Sucal NV v. Hag GF AG (C-10/89), 17 October 1990: [1990] I E.C.R.
3711, [1990] 3 C.M.L.R. 571. Gaz:10/89
15. Walrave & Koch v. Union Cycliste Internationale (36/74), 12 December 1974:
[1974] E.C.R. 1405, [1975] 1 C.M.L.R. 320. Gaz:36/74
16. Thetford Corporation v. Fiamma SpA (35/87), 30 June 1988: [1988] E.C.R.
3585, [1988] 3 C.M.L.R. 549. Gaz:35/87
17. Conegate v. H.M. Customs & Excise (121/85), 11 March 1986: [1986] E.C.R.
1007, [1986] 1 C.M.L.R. 739. Gaz:121/85
18. Reyners v. Belgian State (2/74), 21 June 1974: [1974] E.C.R. 631, [1974] 2
C.M.L.R. 305. Gaz:2/74
19. Van Binsbergen v. Bestuur Van de Bedrijfsvereniging voor de
Metaalnijverheid (33/74), 3 December 1974: [1974] E.C.R. 1299, [1975] 1
C.M.L.R. 298. Gaz:33/74
20. Kenny v. Insurance Officer (1/78), 28 June 1978: [1978] E.C.R. 1489, [1978]
3 C.M.L.R. 651. Gaz:1/78
21. Blaizot v. University of Liege (24/86), 2 February 1988: [1988] E.C.R. 379,
[1989] 1 C.M.L.R. 57. Gaz:24/86
22. Barra v. State (Belgium) (309/85), 2 February 1988: [1988] E.C.R. 355,
[1988] 2 C.M.L.R. 409. Gaz:309/85
23. Raulin v. Minister of Education and Science (C-357/89), 26 February 1992:
[1992] I E.C.R. 1027. Gaz:357/89
24. Donà v. Mantero (13/76), 14 July 1976: [1976] E.C.R. 1333, [1976] 2
C.M.L.R. 578. Gaz:13/76
The following additional cases were referred to in argument:
25. Bob Dylan (Bundesgerichtshof), 14 November 1985: [1986] GRUR 454.
26. Bundesverfassungsgericht, 23 January 1990: 81 BVerfGE 208.
27. Re Students' Rights: European Parliament v. E.C. Council (C-295/90), 7 July
1992: [1992] I E.C.R. 4193, [1992] 3 C.M.L.R. 281. Gaz:295/90
28. Hochstrass v. European Court of Justice (147/79), 16 October 1980: [1980]
E.C.R. 3005, [1981] 2 C.M.L.R. 586. Gaz:147/79 *777
29. Forcheri v. Belgium (152/82), 13 July 1983: [1983] E.C.R. 2323, [1984] 1
C.M.L.R. 334. Gaz:152/82
30. Kühne v. Finanzamt München III (50/88), 27 June 1989: [1989] E.C.R. 1925,
[1990] 3 C.M.L.R. 287. Gaz:50/88
31. Haug-Adrion v. Frankfurter Versicherungs-AG (251/83), 13 December 1984:
[1984] E.C.R. 4277, [1985] 3 C.M.L.R. 266. Gaz:251/83
TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT
DISPLAYABLE
Facts
LEGAL BACKGROUND
International conventions
Berne Convention of 9 September 1886 for the protection of literary and artistic
works, last revised by the Paris Act of 14 July 1971 ('Berne Convention')
The Berne Convention constitutes a Union among the countries to which it
applies for the protection of the rights of authors in their literary and artistic works
(Article 1). The Convention, to which the 12 member-States and the United
States have adhered, protects literary and artistic works in all the countries of the
Union (Article 2(6)) and authors who are nationals of one of the countries of the
Union (Article 3(1)(a)).
Pursuant to Article 5(1) of the Convention:
Authors shall enjoy, in respect of works for which they are protected under this
Convention, in countries of the Union other than the country of origin, the rights
which their respective laws do now or may hereafter grant to their nationals, as
well as the rights specially granted by this Convention.
Article 11(1) of the Convention provides as follows:
Authors of dramatic, dramatico-musical and musical works shall enjoy the
exclusive right of authorising: (i) the public performance of their works, including
such public performance by any means or process; (ii) any communication to the
public of the performance of their works.
Rome Convention of 26 October 1961 for the protection of performers, producers
of phonograms and broadcasting organisations ('Rome Convention')
This Convention has the object, inter alia, of protecting the rights (so-called
neighbouring rights) of performers, i.e. actors, singers, musicians, dancers and
other persons who perform, sing, recite, *778 declaim, play or execute in any
other way literary or artistic works. Eight member-States, including Germany and
the United Kingdom, have acceded to this Convention, but the United Sates has
not.
Article 4 of the Convention provides for the application of the national treatment
rule to artists who are nationals of the Contracting States, provided that the
performance takes place in one of those States (a) or that the phonogram has a
connection with one of them (b).
Article 7(1) of the Convention provides as follows:
The protection provided for performers by this Convention shall include the
possibility of preventing: ...
(b) the fixation, without their consent, of their unfixed performance;
(c) the reproduction, without their consent, of a fixation of the unfixed
performance:
(i) if the original fixation itself was made without their consent.
Community law
In addition to Article 7 EEC, with which the question referred to the Court is
concerned, the existence of the following measures, which are subsequent to the
main actions, should be noted:
. The Council Resolution of 14 May 1992 on increased protection for copyright
and neighbouring rights, [FN2] noting that the member-States undertake 'to
become parties, if they have not already done so, to the Paris Act of the Berne
Convention and the Rome Convention before 1 January 1995 and to ensure
compliance with them in their internal legal systems.'
FN2 [1992] O.J. C138/1.
. Council Directive 92/100 of 19 January 1992 on rental right and lending right
and on certain rights related to copyright in the field of intellectual property, [FN3]
which gives artists the exclusive right to authorise or prohibit recordings of their
performances (Article 6(1)), the reproduction of recordings of their performances
(Article 7(1), and an exclusive right to distribute them (Article 9).
FN3 [1992] O.J. L346/61.
National law
In Germany copyright and related rights are governed by the Copyright Act
(Urheberrechtsgesetz, 'UrhG.' [FN4])
FN4 [1965] I BGB1. 1273.
(a) Copyright proper
Section 120(1) UrhG provides that 'German nationals shall enjoy the protection
attaching to copyright for all their works, irrespective of whether they have been
published or not and wherever publication may have taken place.' In defining the
rights of foreign authors, section121 UrhG *779 takes account of, inter alia, the
place of publication of the work and the fact that the author is either a national of
a State which has adhered to the Berne Convention or another international
treaty, or a national of a State offering equivalent protection to German nationals.
(b) Related rights of performing artists
Pursuant to section 75 UrhG, 'a performance by a performing artist may be
recorded on a sound or visual support only with his consent. The visual or sound
supports may be reproduced only with his consent.' Section 96(1) UrhG provides
in turn that 'copies obtained by means of a process of reproduction in a manner
contrary to the right shall not be broadcast or used in transmissions to the public.'
Section 125 UrhG clarifies the ambit of the artist's protection by making a
distinction according to nationality. Artists of German nationality have the full
protection granted by sections 73 to 84 UrhG 'for all their performances
irrespective of the place of performance.'
The protection given to foreign artists is defined by section 125(2) to (6) UrhG as
follows:
(2) Foreign nationals shall enjoy such protection for all their performances if the
place of performance is within the ambit of this Act, without prejudice to
subsections (3) and (4).
(3) If performances by foreign nationals are lawfully recorded on visual or sound
supports and if those recordings have been published, the foreign nationals shall
enjoy, in relation to such visual or sound supports, the protection granted by
sections 75, sentence 2, 76(2) and 77 where publication of the visual or sound
supports takes place within the ambit of this Act, unless the said supports are
published outside that territory more than 30 years before publication within the
ambit of this Act.
(4) In the case of the lawful radio or television broadcasting of performances of
foreign nationals, they shall enjoy protection against the recording of the
broadcast on visual or sound supports (section 75, sentence 1) and the repetition
of sound or television broadcasts (section 76(1)), as well as the protection given
by section 77, if the radio or television transmission was broadcast within the
ambit of this Act.
(5) In addition, foreign nationals shall enjoy the protection arising from treaties ...
(6) Foreign nationals shall enjoy the protection provided for by sections 74, 75,
sentence 1, and 83 for all their performances even where the conditions referred
to by subsections 2 to 5 are not fulfilled.
These provisions, particularly section 125(2) and (6) UrhG, have been strictly
interpreted by the German courts, which have taken the view that foreign artists,
unlike German artists, could not, subject to *780 contrary stipulations of
international agreements, legally prevent the marketing in Germany of a
phonogram made without the artist's consent, if the performance was given
outside Germany (Bundesgerichtshof, judgment of 14 November 1985, Bob
Dylan [FN5]; Bundesverfassungsgericht, judgment of 23 January 1990. [FN6]
FN5 [1986] GRUR 454.
FN6 81 BVerfGE 208.
FACTS OF THE CASES
Case C-92/92
In 1983 Phil Collins, a singer and composer of British nationality, gave a concert
in the United States which was recorded without his consent. The recording was
distributed in Germany by Imtrat Handelsgesellschaft mbH ('Imtrat') in the form of
a compact disc entitled 'Phil Collins--Live USA.' The singer brought a summary
action before the Regional Court, Munich I, for an injunction restraining Imtrat
from marketing the disc and for the seizure of copies which had not been
distributed.
In an interlocutory injunction of 4 March 1992 the abovementioned court found
that the Rome Convention was not applicable to the case as the Convention had
not been ratified by the United States, where the performance was given. The
court was in doubt regarding the compatibility with Community law of the
abovementioned provisions of section 125 UrhG which, in the present case,
prevented the plaintiff artist from resisting the marketing of a recording made
without his consent.
Under these circumstances the Regional Court, Munich I, by the
abovementioned order of 4 March 1992, which was received by the Court
Registry on 23 March following, decided to stay the proceedings and seek a
preliminary ruling from the Court pursuant to Article 177 EEC on the following
questions:
1. Is copyright law subject to the prohibition of discrimination laid down in Article
7(1) EEC?
2. If so: does that have the (directly applicable) effect that a member-State which
accords protection to its nationals for all their artistic performances, irrespective
of the place of performance, also has to accord that protection to nationals of
other member-States, or is it compatible with Article 7(1) to attach further
conditions (i.e. section 125(2) to (6) of the German Urheberrechtsgesetz of 9
September 1965) to the grant of protection to nationals of other member-States?
Case C-326/92
EMI Electrola GmbH ('EMI Electrola') owns the exclusive right to exploit in
Germany recordings made by the British singer Cliff Richard in Great Britain in
1958 and 1959.
EMI Electrola contends that Patricia Im- und Export Verwaltungsgesellshcaft
('Patricia') marketed, in breach of its *781 exclusive rights, phonograms
containing recordings by Cliff Richard. It is said that the contested phonograms
were originally produced in Germany for a Danish company. They are said to
have been exported to Denmark and then reimported to Germany.
Patricia and its managing director, Mr. Kraul, deny having had any part in the
production and marketing of the phonograms.
The Regional Court and, on appeal, the Regional Court of Appeal, granted the
applications by EMI Electrola. On appeal on a point of law, the Federal Supreme
Court rejected the appeal court's reasoning, which was based on the Copyright
Act in force before 1966 and on the Berne Convention. According to the Federal
Supreme Court, the action affects the neighbouring rights which are governed by
the UrhG alone, and not by the Berne Convention, which relates only to
copyright, or the Rome Convention, which cannot be applied retrospectively to
recordings made in 1958 and 1959.
The national court, although proposing to reply in the negative, raises the
question whether, in the absence of Community harmonisation, copyright and
neighbouring rights fall within the ambit of the Treaty and whether the plaintiff can
rely on Article 7 EEC in order to claim the protection which is accorded to
nationals by the UrhG.
Under these circumstances the Federal Supreme Court, by order of 30 April
1992, received by the Court Registry on 30 July following, has stayed the
proceedings and referred the following questions to the Court pursuant to Article
177 EEC:
1. Is the national copyright law of a member-State subject to the prohibition of
discrimination laid down in Article 7(1) EEC?
2. If so, are the provisions operating in a member-State for the protection of
artistic performances (section 125(2) to (6) of the Urheberrechtsgesetz)
compatible with Article 7(1) EEC if they do not confer on nationals of another
member-State the same standard of protection (national treatment) as they do on
national performers?
REPLY TO THE COURT's QUESTION
The Commission was asked to inform the Court of the member-States which, as
provided for by the Council Resolution of 14 May 1992 on increased protection
for copyright and neighbouring rights, [FN7] have ratified the Paris Act amending
the Berne Convention, and the Rome Convention.
FN7 [1992] O.J. C138/1.
Commission's reply
The Berne Convention of 9 September 1886, revised at Paris on 24 July 1971,
has been ratified by ten member-States.
Belgium and Ireland ratified the Berne Convention in the version signed at
Brussels on 26 June 1948. These two member-States are also bound by the
version signed in Stockholm on 14 July 1967 with regard to Articles 22 to 38 of
the Convention.
*782 The Rome Convention has been ratified by nine member-States (Denmark,
Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, United Kingdom). It
was ratified by Greece after the abovementioned Council Resolution of 14 May
1992 (ratification took effect on 6 January 1993).
Opinion of the Advocate General (Mr. Francis Jacobs)
Two German courts have requested preliminary rulings on the questions whether
copyright and related rights fall within the ambit of the EEC Treaty and whether a
member-State which allows its own nationals to oppose the unauthorised
reproduction of their musical performances must grant identical protection to
nationals of other member-States, in accordance with the prohibition of
discrimination on grounds of nationality laid down in Article 7 EEC.
Case C-92/92
The plaintiff in Case C-92/92 is Phil Collins, a singer and composer of British
nationality. The defendant--Imtrat Handelsgesellschaft mbH ('Imtrat')-- is a
producer of phonograms. [FN8] In 1983 Mr. Collins gave a concert in California
which was recorded without his consent. Reproductions of the recording were
sold in Germany by Imtrat on compact disc under the title 'Live and Alive.' Mr.
Collins applied to the Landgericht München I for an injunction restraining Imtrat
from marketing such recordings in Germany and requiring it to deliver copies in
its possession to a court bailiff.
FN8 'Phonogram' is a generic term covering vinyl records, compact discs and
audio cassettes. It is defined by Article 3(b) of the Rome Convention of 26
October 1961 for the Protection of Performers, Producers of Phonograms and
Broadcasting Organisations as meaning 'any exclusively aural fixation of sounds
of a performance or of other sounds.'
It appears that if Mr. Collins were a German national his application would
undoubtedly have succeeded. Section 75 of the Gesetz über Urheberrecht und
verwandte Schutzrechte (Law on copyright and related rights, hereafter '
Urheberrechtsgesetz' [FN9]) provides that a performing artist's performance may
not be recorded without his consent and recordings may not be reproduced
without his consent. Section 125(1) of the Urheberrechtsgesetz provides that
German nationals enjoy the protection ofsection 75, amongst other provisions,
for all their performances regardless of the place of performance. However,
foreign nationals have less extensive rights under the Urheberrechtsgesetz.
Under section 125(2) they enjoy protection in respect of performances which take
place in Germany, and under section 125(5) they enjoy protection in accordance
with international treaties. The Landgericht München I refers to the Rome
Convention of 26 October 1961 for the Protection of Performers, Producers of
Phonograms and Broadcasting Organisations, but deduces from its *783 terms
that Germany is required to grant foreign performing artists the same treatment
as its own nationals only in respect of performances that take place within the
territory of a Contracting State; since the United States has not acceded to the
Rome Convention, section 125(5) of the Urheberrechtsgesetz is of no avail to Mr.
Collins in the circumstances of the present case. However, Mr. Collins argued
that he was entitled to the same treatment as a German national by virtue of
Article 7 EEC. The Landgericht München I therefore decided to refer the
following questions to the Court:
FN9 [1965] I BGB1. 1273.
[The Advocate General repeated the questions, and continued:]
Case C-326/92
The plaintiff and respondent in Case C-326/92--EMI Electrola GmbH ('EMI
Electrola')--produces and distributes phonograms. It owns the exclusive right to
exploit in Germany recordings of certain works performed by Cliff Richard, a
singer of British nationality. The defendants and appellants are Patricia Im-und
Export Verwaltungsgesellschaft mbH ('Patricia'), a company which distributes
phonograms, and Mr. L. E. Kraul, its managing director. EMI Electrola applied for
an injunction restraining Patricia and Mr. Kraul (together with other persons) from
infringing its exclusive rights in recordings of certain performances by Cliff
Richard. The recordings were first published in the United Kingdom in 1958 and
1959, apparently by a British phonogram producer to which Cliff Richard had
assigned his performer's rights in the recordings. That company subsequently
assigned the rights to EMI Electrola.
The Landgericht granted EMI Electrola's application and that decision was
confirmed on appeal. Patricia and Mr. Kraul appealed on a point of law to the
Bundesgerichtshof, which considers that, under German law, EMI Electrola
would be entitled to an injunction if Cliff Richard were of German nationality but is
not so entitled because he is British. It is not entirely clear from the order for
reference how or why the Bundesgerichtshof arrived at the view that German law
provides for such a difference of treatment. The reason appears to be that the
performances in question took place before 21 October 1966, on which date the
Rome Convention came into force in Germany, and that Germany is only
required to grant 'national treatment' to foreign performers, under the Rome
Convention, in respect of performances that take place after that date. [FN10]
FN10 See the judgment of the Bundesgerichtshof of 20 November 1986, Die
Zauberflöte: [1987] GRUR 814.
It is in any event common ground that a difference in treatment, depending on
the nationality of the performer, exists in German law. The Bundesgerichtshof
therefore referred the following questions to the Court:
[The Advocate General repeated the questions, and continued:]
*784 The issues raised by the two cases
Both cases raise essentially the same issues: (a) whether it is compatible with
Community law, in particular Article 7 EEC, for a member-State to grant more
extensive protection in respect of performances by its own nationals than in
respect of performances by nationals of other member-States and (b) if such a
difference in treatment is not compatible with Community law, whether the
relevant provisions of Community law produce direct effect, in the sense that a
performer who has the nationality of another member-State is entitled to claim, in
proceedings against a person who markets unauthorised recordings of his
performances, the same rights as a national of the member-State in question.
I note in passing that, although both the national courts refer to copyright, the
cases are in fact concerned not with copyright in the strict sense but with certain
related rights known as performers' rights.
The prohibition of discrimination on grounds of nationality
The prohibition of discrimination on grounds of nationality is the single most
important principle of Community law. It is the leitmotiv of the EEC Treaty. It is
laid down in general terms in Article 7 of the Treaty, the first paragraph of which
provides:
Within the scope of application of this Treaty, and without prejudice to any
special provisions contained therein, any discrimination on grounds of nationality
shall be prohibited.
That general prohibition of discrimination is elaborated upon in other, more
specific provisions of the Treaty. Thus Article 36 permits certain restrictions on
the free movement of goods, provided that they do not constitute 'arbitrary
discrimination' or a disguised restriction on trade. Article 48(2) requires the
'abolition of any discrimination based on nationality between workers of the
member-States as regards employment, remuneration and other conditions of
work.' Under Article 52(2), nationals of one member-State may work in a selfemployed capacity in another member-State 'under the conditions laid down for
its own nationals.' Under Article 60(3), a person providing a service may
temporarily pursue his activity in the State where the service is provided ' under
the same conditions as are imposed by that State on its own nationals.'
It is not difficult to see why the authors of the Treaty attached so much
importance to the prohibition of discrimination. The fundamental purpose of the
Treaty is to achieve an integrated economy in which the factors of production, as
well as the fruits of production, may move freely and without distortion, thus
bringing about a more efficient allocation of resources and a more perfect
division of labour. The greatest obstacle to the realisation of that objective was
the host of discriminatory rules and practices whereby the national governments
traditionally protected their own producers *785 and workers from foreign
competition. Although the abolition of discriminatory rules and practices may not
be sufficient in itself to achieve the high level of economic integration envisaged
by the Treaty, it is clearly an essential prerequisite.
The prohibition of discrimination on grounds of nationality is also of great
symbolic importance, inasmuch as it demonstrates that the Community is not just
a commercial arrangement between the governments of the member-States but
is a common enterprise in which all the citizens of Europe are able to participate
as individuals. The nationals of each member-State are entitled to live, work and
do business in other member-States on the same terms as the local population.
They must not simply be tolerated as aliens, but welcomed by the authorities of
the host State as Community nationals who are entitled, 'within the scope of
application of the Treaty,' to all the privileges and advantages enjoyed by the
nationals of the host State. No other aspect of Community law touches the
individual more directly or does more to foster that sense of common identity and
shared destiny without which the 'ever closer union among the peoples of
Europe,' proclaimed by the preamble to the Treaty, would be an empty slogan.
Much has been written about the relationship between Article 7 and the other
provisions of the Treaty which lay down more specific prohibitions of
discrimination on grounds of nationality (e.g. Articles 48(2), 52, second
paragraph, and 60, third paragraph). There is also a substantial body of case law
on that relationship. The generally accepted position seems to be that recourse is
to be had to Article 7 only when none of the more specific provisions prohibiting
discrimination is applicable. [FN11] Thus one of the main functions of Article 7 is
to close any gaps left by the more specific provisions of the Treaty. [FN12]
FN11 See for example Grabitz, in Kommentar zum EWG-Vertrag, by E. Grabitz
(ed.), paragraph 20 on Article 7; see also Case 305/87, E.C. Commission v.
Greece: [1989] E.C.R. 1461, [1991] 1 C.M.L.R. 611, at para. [13].
FN12 See B. Sundberg-Weitman, Discrimination on Grounds of Nationality
(1977) p. 14.
It is sometimes said that, where rules are compatible with the specific Treaty
Articles prohibiting discrimination, they are also compatible with Article 7.
[FN13] It would perhaps be more accurate to say that, if a national provision
discriminates in a manner that is positively permitted by one of the more specific
Treaty Articles, it cannot be contrary to Article 7. Thus, since Article 48(4) of
the Treaty allows nationals of other member-States to be excluded from
employment in the public service in certain circumstances, such a practice
cannot be contrary to Article 7 notwithstanding its manifestly discriminatory
nature. It would, however, be wrong to say that a rule discriminating against
nationals of other member-States cannot be contrary to Article 7 simply because
it is not caught by the specific provisions of Articles *786 48, 52, 59 and 60 of
the Treaty. Otherwise Article 7 would cease to perform its gap-closing function.
FN13 See, for example, Case C-41/90, Höfner and Elser v. Macrotron: [1991] I
E.C.R. 1979, [1993] 4 C.M.L.R. 306, at para. [36].
In the circumstances of the present cases I do not think that it is necessary to
explore more fully the relationship between the general prohibition of Article 7
and the more specific prohibitions laid down elsewhere. There cannot be any
doubt that Article 7, either alone or in conjunction with other provisions of the
Treaty, has the effect that nationals of a member-State are entitled to pursue any
legitimate form of economic activity in another member-State on the same terms
as the latter State's own nationals.
That simple observation is probably sufficient in itself to resolve the fundamental
issues raised by the present cases. In so far as intellectual property rights assist
the proprietor thereof to pursue the economic freedoms granted by the Treaty, in
particular by Articles 30, 52 and 59, a member-State must accord the nationals
of other member-States the same level of protection as it accords its own
nationals. If, for example, a member-State granted patents only to its own
nationals and refused to grant patents to the nationals of other member-States, it
could not seriously be argued that such a practice was compatible with the
Treaty.
Indeed, such discrimination was specifically identified by the Council in 1961 in
the General Programme for the Abolition of Restrictions on Freedom to Provide
Services [FN14] and in the General Programme for the Abolition of Restrictions
on Freedom of Establishment. [FN15] Both those programmes call for the
abolition of 'provisions and practices which, in respect of foreign nationals only,
exclude, limit or impose conditions on the power to exercise rights normally
attaching to the provision of services [or to an activity as a self-employed person]
and in particular the power ... to acquire, use or dispose of intellectual property
and all rights deriving therefrom. [FN16] It may be noted that the General
Programmes provide 'useful guidance for the implementation of the relevant
provisions of the Treaty.' [FN17]
FN14 O.J. Spec. Ed., Second Series IX, p. 3.
FN15 O.J. Spec. Ed., Second Series IX, p. 7.
FN16 Title III.A, third paragraph, indent (e).
FN17 Case 71/76, Thieffry v. Conseil de L'Ordre des Avocats A la Cour de Paris:
[1977] E.C.R. 765, [1977] 2 C.M.L.R. 373, at para. [14].
There are many ways in which the proprietor of intellectual property rights may
seek to exercise those rights in pursuit of the economic freedoms guaranteed by
the Treaty. A performer may for example have phonograms embodying his
performance manufactured in his own country and export those goods to another
member-State, in which case he is in a situation covered by Article 30. Or he
may set up a company or branch in that other member-State and have
phonograms manufactured there for sale in that country, in which case he is
exercising his right of establishment under Article 52. Or again--and *787 this is
no doubt the commonest method of exploiting performers' rights and is the
method used in the present cases--he may license another person to
manufacture and sell phonograms embodying his performance in the other
member-State; in that case he will doubtless receive a royalty for each sale and
will be able to obtain further royalties by licensing a copyright management
society (or, more accurately, a performers' rights management society) to
authorise public performances of his recordings. Such licensing activities will
constitute services which are provided across national frontiers and are as such
covered by Article 59 EEC.
Whichever way a performing artist chooses to exploit his performances for
commercial gain in another member-State, he will be in a situation covered by
Community law. As such, he will be 'within the scope of application of the Treaty'
and will be entitled to invoke the prohibition of discrimination on grounds of
nationality laid down in Article 7 EEC. Indeed the Court has gone much further
than that. It has held that a tourist who travels to another member-State may, as
a recipient of services, benefit from a scheme for compensating the victims of
violent crime on the same terms as nationals of that member-State [FN18]; that a
person who goes to another member-State for the purpose of receiving
vocational training may not be required to pay a registration fee if no such fee is
payable by nationals of that member-State [FN19]; and that a migrant worker
who is prosecuted in a criminal court is entitled to the same treatment, with
regard to the use of languages in judicial proceedings, as a national of the host
country. [FN20] It would be extraordinary if those who exercise the fundamental
freedoms guaranteed by the Treaty were entitled to equality of treatment in
relation to matters that are-- while not without importance--peripheral and
essentially non-economic in nature, but were to be denied equality of treatment in
the field of intellectual property rights, the economic importance of which is
considerable.
FN18 Case 186/87, Cowan v. Tresor Public: [1989] E.C.R. 195, [1990] 2
C.M.L.R. 613.
FN19 Case 293/83, Gravier v. City of Liege: [1985] E.C.R. 593, [1985] 3
C.M.L.R. 1.
FN20 Case 137/84, Ministere Public v. Mutsch: [1985] E.C.R. 2681, [1986] 1
C.M.L.R. 648, at para. [12] in particular.
Certainly there can be no doubt about the economic importance of the
performing artist's exclusive right to authorise the reproduction and distribution of
recordings embodying his performance. The exercise of that right is essential to
the commercial exploitation of a performance. The sale of unauthorised
recordings damages the performing artist in two ways: first, because he earns no
royalties on such recordings, the sale of which must inevitably reduce the
demand for his authorised recordings, since the spending power of even the
most avid record collector is finite; secondly, because he loses the power to
control the quality of the recordings, which may, if technically inferior, adversely
affect his reputation. The latter point was argued forcefully, but to no avail, by the
'world-famous Austrian *788 conductor' who was unable to prevent the sale of
unauthorised recordings in the Zauberflöte case referred to above.
Performers' rights also play a rôle in the field of consumer protection: the
consumer doubtless assumes that recordings made by well-known, living
performers are not released without the performer's authorisation and that such
persons would not jeopardise their reputation by authorising the distribution of
low-quality recordings; that limited guarantee of quality is lost entirely if
recordings may be distributed without the performer's consent. It may thus be
seen that performers' rights operate in much the same way as trade marks, the
economic significance of which was recognised by the Court in the Hag II case.
[FN21]
FN21 Case C-10/89, Cnl-Sucal v. Hag GF: [1990] I E.C.R. 3711, [1990] 3
C.M.L.R. 571.
The defendants in both the present cases advance a number of arguments
purporting to show that the contested German legislation is not contrary to the
prohibition of discrimination on grounds of nationality. I shall briefly summarise
the main arguments and state why, in my view, none of them is convincing.
Both defendants contend that the discrimination lies outside the scope of
application of the Treaty. Imtrat reaches that conclusion on the grounds that the
performance in question took place outside the territory of a member-State and
that the existence of intellectual property rights is a matter for national law by
virtue of Article 222 EEC. That cannot be correct. The place where the original
performance took place is irrelevant; what matters is that Phil Collins and his
licensees are denied protection, in an overtly discriminatory manner, when they
attempt to exploit--or prevent others from exploiting--the performance in a
member-State. [FN22] The argument based on Article 222 EEC is equally
untenable. That Article, which, it will be recalled, provides that the Treaty shall in
no way prejudice the rules in member-States governing the system of property
ownership, clearly does not authorise member-States to grant intellectual
property rights on a discriminatory basis. It might just as well be argued that a
member-State could prohibit the nationals of other member-States from buying
land for business use.
FN22 In Case 36/74, Walrave v. Union Cycliste Internationale: [1974] E.C.R.
1405, at para. [28], the Court stated that 'the rule on non-discrimination applies in
judging all legal relationships in so far as these relationships, by reason either of
the place where they are entered into or of the place where they take effect, can
be located within the territory of the Community.'
It is contended on behalf of Patricia and Mr. Kraul that the absence of
Community legislation harmonising the laws of member-States on copyright and
related rights removes such matters from the scope of the Treaty entirely. That
argument is of course doomed to failure. The application of the principle of nondiscrimination is not dependent on the harmonisation of national law; on the
contrary, it is precisely in areas where harmonisation has not been achieved that
the principle of national treatment assumes special importance.
*789 It is true that the Court has several times held that in the absence of
harmonisation it is for national law to determine the conditions governing the
grant of intellectual property rights; see, for example, Thetford v. Fiamma. [FN23]
But that does not mean that member-States are free to lay down discriminatory
conditions for the grant of such rights. That much is clear from the Thetford
judgment itself (at para. [17]), in which the Court attached importance to the nondiscriminatory nature of a provision of United Kingdom law relating to the grant of
patents, there being 'no discrimination based on the nationality of applicants for
patents'; the Court clearly implied that a patent granted on the basis of a
discriminatory provision could not be relied on to justify a restriction on trade
between member-States under Article 36 EEC. Moreover, the Council has also
recognised, in the General Programmes referred to above, that the grant and
exercise of intellectual property rights are matters falling within the scope of the
Treaty and are therefore subject to the prohibition of discrimination.
FN23 Case 35/87: [1988] E.C.R. 3585, [1988] 3 C.M.L.R. 549, at para. [12].
Also relevant in this context is the Court's judgment in GVL v. E.C. Commission,
[FN24] in which the Court held that a performers' rights management society
abused its dominant position, in breach of Article 86 EEC, by refusing to
manage the rights of foreign performers not resident in Germany. The decision
[FN25] in issue in that case was based partly on Article 7 EEC. As the
Commission has pointed out, it would be very strange if undertakings were
prohibited from discriminating on grounds of nationality, in the field of intellectual
property, but member-States were allowed to maintain in force discriminatory
legislation. The United Kingdom also cites GVL v. E.C. Commission and submits,
rightly in my view, that that judgment clearly shows that the management and
enforcement of performers' rights are matters falling within the scope of the
Treaty.
FN24 Case 7/82: [1983] E.C.R. 483, [1983] 3 C.M.L.R. 645.
FN25 Commission Decision 81/1030/EEC [1981] O.J. L370/49; see, in particular,
para. 46 of the decision.
It is in any event not true to say that the Community legislature has been
completely inactive in the field of copyright and related rights. Several measures
have been adopted; notably, Council Directive 91/250 of 14 May 1991 on the
legal protection of computer programs [FN26] and Council Directive 92/100 of 19
November 1992 on rental right and lending right and on certain rights related to
copyright in the field of intellectual property. [FN27] It is interesting to note that
the 18th recital in the preamble to the latter directive states that measures based
on Article 5 of the directive, which permits derogations from the exclusive lending
right created by Article 1 of the directive, must comply with Article 7 of the
Treaty. Mention may also be made of the Council Resolution of 14 May 1992 on
increased protection for copyright and *790 neighbouring rights. [FN28] Article 1
of that resolution notes that the member-States undertake to become parties to
the Berne Convention for the Protection of Literary and Artistic Works of 24 July
1971 (Paris Act) and to the 1961 Rome Convention. In the circumstances, the
view that copyright and related rights lie outside the scope of the Treaty is clearly
untenable.
FN26 [1991] O.J. L122/42.
FN27 [1992] O.J. L346/61.
FN28 [1992] O.J. C138/1.
The only argument advanced by either of the defendants that has some
plausibility is the one based on the Rome Convention, on which great reliance is
placed by Imtrat. According to that argument, all questions concerning the level
of protection to be granted to foreign performers are to be resolved in the context
of the Rome Convention, which has established a delicate balance based on
considerations of reciprocity. The connecting factor, under the Rome Convention,
is not nationality--which would be unworkable because many performances are
given by groups of performers who may have different nationalities--but place of
performance. Imtrat points out further that both Germany and the United
Kingdom were bound by the Rome Convention before they became mutually
bound by the EEC Treaty (presumably on 1 January 1973, when the United
Kingdom acceded to the Communities) and argues that the Rome Convention
should therefore take precedence over the EEC Treaty by virtue of Article 234 of
the latter. Imtrat suggests that dire consequences would ensue if Article 7 of the
Treaty were applied in the field of copyright and related rights: authors from other
member-States would, for example, be able to claim in Germany the long term of
protection (70 years after the author's death) provided for in German law,
whereas under Article 7(8) of the Berne Convention Germany is not required to
grant them a longer term of protection than the term fixed in the country of origin
of the work.
In response to those arguments the following points may be made. First, even if
the Rome Convention had been concluded before the EEC Treaty, Article 234 of
the latter would not give precedence to the Convention as regards relations
between member-States. Article 234 is concerned solely with relations between
member-States and non-member-States. [FN29]
FN29 See, for example, Case 121/85, Conegate v. H.M. Customs and Excise:
[1986] E.C.R. 1007, [1986] 1 C.M.L.R. 739, at para. [24].
Secondly, there is in any event no conflict between Community law and the
Rome Convention. That Convention merely lays down a minimum standard of
protection and does not prevent the Contracting States from granting more
extensive protection to their own nationals or to nationals of other States. That
much is clear from Articles 21 and 22 of the Convention. Article 21 provides:
The protection provided for in this Convention shall not prejudice any protection
otherwise secured to performers, producers of phonograms and broadcasting
organisations.
*791 Article 22 provides:
Contracting States reserve the right to enter into special agreements among
themselves in so far as such agreements grant to performers, producers of
phonograms or broadcasting organisations more extensive rights than those
granted by this Convention or contain other provisions not contrary to this
Convention.
The Rome Convention does not prevent Germany from granting performers more
extensive protection than the minimum provided for in the Convention. However,
Article 7 of the Treaty requires that, if more extensive protection is granted to
German performers, the same level of protection should be available to nationals
of other member-States.
Thirdly, if nationality is unworkable as a connecting factor on account of the
problem of multinational ensembles, it may well be asked why German law uses
nationality as a connecting factor at all, as of course it clearly does since it grants
differing levels of protection depending on whether the performer is German or of
some other nationality. Moreover, even if only one member of an ensemble has
German nationality, it seems that the performance is protected. [FN30] That
constitutes a very simple criterion for resolving the difficulties supposedly caused
by multinational ensembles; it would be equally workable where one member of
an ensemble had the nationality of another member-State.
FN30 See Möhring-Nicolini, Urheberrechtsgesetz, commentary on section 125,
at pp. 694 and 695.
Fourthly, as regards the consequences of applying the principle of nondiscrimination to copyright law in general and to the question of the term of
protection, it may well be the case that Article 7 of the Treaty requires each
member-State to grant all Community nationals the same term of protection as its
own nationals, even though the latter receive a shorter term of protection in other
member-States. Clearly, the prohibition of discrimination will often have the
effect, in the absence of complete harmonisation, that nationals of member-State
A will be better protected in member-State B than vice versa. But the issue does
not fall to be decided in these cases and it is clear that no serious consequence
would ensue (except for the manufacturers of unauthorised recordings) if the
protection granted to German performers, in respect of performances given in the
territory of a State that is not a party to the Rome Convention or in respect of
performances given before that Convention's entry into force, were extended to
performers who are nationals of other member-States.
The direct effect of Article 7(1)
I turn now to the issue of direct effect. In my view, it is clear from the
considerations set out above that the Treaty provisions which prohibit
discrimination must be capable of being invoked by performers in the
circumstances of the present cases. There is of course no doubt that the *792
prohibition of discrimination laid down in Articles 52(2) and 60(3), produces
direct effect: see as regards the former Reyners v. Belgium [FN31] and as
regards the latter Van Binsbergen v. Bedrijfsvereniging Metaalnijverheid. [FN32]
Those cases show that the adoption of legislative measures was superfluous, as
far as concerns the prohibition of discrimination on grounds of nationality, in view
of the direct effect of the Treaty provisions. [FN33]
FN31 Case 2/74: [1974] E.C.R. 631, [1974] 2 C.M.L.R. 305, at paras. [24] and
[25].
FN32 Case 33/74: [1974] E.C.R. 1299, [1975] 1 C.M.L.R. 298, at para. [27].
FN33 See para. [30] of Reyners and para. [26] of Van Binsbergen.
The Court's case law also suggests that Article 7(1) has direct effect in so far as
it prohibits discrimination within the scope of application of the Treaty. In Kenny
v. Insurance Officer [FN34] the Court described that provision as being 'directly
applicable' (meaning, presumably, that it has direct effect), while in Blaizot v.
University of Liege [FN35] the Court referred expressly to the direct effect of
Article 7. More importantly, it is clear from a number of judgments, including
Cowan, [FN36] Barra v. Belgium [FN37] and Raulin, [FN38] that national courts
are under a duty to disapply national provisions that are contrary to Article 7. It is
equally clear that that duty arises not only in proceedings against the State but
also in litigation between individuals. [FN39]
FN34 Case 1/78: [1978] E.C.R. 1489, [1978] 3 C.M.L.R. 651, at para. [12].
FN35 Case 24/86: [1988] E.C.R. 379, [1989] 1 C.M.L.R. 57, at para. [35].
FN36 See note 10.
FN37 Case 309/85: [1988] E.C.R. 355, [1988] 2 C.M.L.R. 409, at paras. [19] and
[20] in particular.
FN38 Case C-357/89: [1992] I E.C.R. 1027, at paras. [42] and [43].
FN39 See Case 13/76, Dona v. Mantero: [1976] E.C.R. 1333, [1976] 2 C.M.L.R.
578, at paras. [17] to [19]; see also A. Arnull, The General Principles of EEC Law
and the Individual (1990) p. 18.
A factual difference between Case C-92/92 and Case C-326/92
A final issue that remains to be explored is whether any significance attaches to
an obvious factual difference between Case C-92/92 and Case C-326/92: in the
former case the performer, Phil Collins, has remained the proprietor of the
performer's rights and has granted an exclusive licence to a producer of
phonograms to exploit those rights in Germany; in the latter case the performer,
Cliff Richard, has assigned his rights to a British company, which has reassigned
them to a German company. I am satisfied that that difference is not relevant to
the issue of discrimination. Although in Case C-326/92 the direct victim of the
discriminatory German legislation is a German company, the indirect victim will,
on the assumption that royalties are paid to the performer by EMI Electrola, be
Cliff Richard himself. Even in the case of an outright assignment without any
provision for the payment of royalties, it would be wrong in principle to
discriminate on the basis of the nationality of the performer and original right-
holder. If such discrimination were permitted, it would mean that the exclusive
right granted to a German performer would be an assignable asset, *793
potentially of considerable value, while a British performer's exclusive right would
have virtually no assignable value, since it would be extinguished on assignment.
Thus the indirect victim of the discrimination would always be the performer
himself. It would in any case be illogical, in the circumstances of the present
cases, to distinguish between a performer's right which has been the subject of
an exclusive licence and a performer's right which has been the subject of an
assignment.
Conclusion
I am therefore of the opinion that the questions referred to the Court by the
Landgericht München I in Case C-92/92 and the Bundesgerichtshof in Case C326/92 should be answered as follows:
By virtue of Article 7(1) of the Treaty, the courts of a member-State must allow
performing artists who are nationals of other member-States to oppose the
unauthorised reproduction of their performances on the same terms as the
nationals of the first member-State.
JUDGMENT
[1] By order of 4 March 1992, received by the Court on 23 March following and
registered under no. C-92/92, the Regional Court, Munich I, referred to the Court
for a preliminary ruling under Article 177 EEC two questions relating to the
interpretation of Article 7(1) EEC.
[2] By order of 30 April 1992, received by the Court on 30 July following and
registered under no. C-326/92, the Federal Supreme Court also referred to the
Court for a preliminary ruling under Article 177 EEC two questions relating to the
interpretation of the same provision.
[3] The questions referred by the Regional Court, Munich I, in Case C-92/92,
have arisen in connection with an action brought by Phil Collins, a British singer
and composer, against a phonogram distributor, Imtrat Handelsgesellschaft mbH
('Imtrat') concerning the marketing in German territory of a compact disc
containing a recording, made without the singer's consent, of a concert given in
the United States.
[4] Sections 96(1) and 125(1) of the German Copyright Act of 9 September 1965
(Urheberrechtsgesetz, 'UrhG') grant a performing artist of German nationality the
protection accorded by sections 73 to 84 of the Act for all his performances,
particularly the right to prohibit the distribution of performances by him which are
reproduced without his authorisation, irrespective of the place of performance.
On the other hand, it follows from section 125(2) to (6) UrhG, relating to foreign
artists and as interpreted by the Federal Supreme Court and the Federal
Constitutional Court, that foreign artists cannot rely on *794 the abovementioned
provisions of section 96(1) if the performance was given outside Germany.
[5] On an application by Phil Collins to the Regional Court, Munich I, for an
injunction to prohibit the marketing of the recordings in question, the national
court found, firstly, that section 125 UrhG was applicable to the case, excluding
in particular the Rome Convention of 26 October 1961 for the protection of
performers, producers of phonograms and broadcasting organisations, to which
the State where the performance had been given, the United States, had not
acceded, and, secondly, questioned whether the national provisions were
compatible with the principle of non-discrimination laid down by Article 7(1) EEC.
[6] Under these circumstances the Regional Court, Munich I, stayed the
proceedings and referred the following questions to the Court for a preliminary
ruling:
1. Is copyright law subject to the prohibition of discrimination laid down in Article
7(1) EEC?
2. If so: does it have the (directly applicable) effect that a member-State which
accords protection to its nationals for all their artistic performances, irrespective
of the place of performance, also has to accord that protection to nationals of
other member-States, or is it compatible with Article 7(1) to attach further
conditions (i.e. section 125(2) to (6) of the German Urheberrechtsgesetz
[Copyright Act] of 9 September 1965) to the grant of protection to nationals of
other member-States?
[7] The questions in Case C-326/92 have been referred by the Federal Supreme
Court in connection with an action brought by EMI Electrola GmbH ('EMI
Electrola') against Patricia Im- und Export Verwaltungsgesellschaft mbH
('Patricia') and its managing director, Mr. Kraul, concerning the marketing in
Germany of phonograms containing recordings of performances given by Cliff
Richard, a British singer, in Great Britain in 1958 and 1959.
[8] EMI Electrola owns the exclusive rights in Germany to exploit recordings of
these performances. It contends that Patricia has infringed its exclusive rights by
marketing without its consent phonograms reproducing those recordings.
[9] On appeal on a point of law in this action, the Federal Supreme Court took the
view that it fell within section 125(2) to (6) UrhG, to the exclusion of the Berne
Convention of 9 September 1886 for the protection of literary and artistic works,
last revised by the Paris Act of 24 July 1971, which concerns copyright proper
and the related rights of performing artists, and of the Rome Convention, which
cannot be applied retrospectively to performances given in 1958 and 1959.
[10] In the reasoning of the order making the reference, the Federal Supreme
Court, which was aware of the questions referred to the Court by the Regional
Court, Munich I, indicates that, in the absence of Community measures and in
the absence, save on certain points, of the harmonisation of national law,
copyright and related rights do not *795 appear to come within the ambit of
Community law, particularly Article 7 EEC.
[11] Under these circumstances the Federal Supreme Court stayed the
proceedings and referred the following questions to the Court for a preliminary
ruling:
1. Is the national copyright law of a member-State subject to the prohibition of
discrimination laid down in Article 7(1) EEC?
2. If so, are the provisions operating in a member-State for the protection of
artistic performances (section 125(2) to (6) of the Urberrechtsgesetz) compatible
with Article 7(1) EEC if they do not confer on nationals of another member-State
the same standard of protection (national treatment) as they do on national
performers?
[12] Reference is made to the Report for the Hearing for a fuller account of the
facts of the main actions, the procedure and the written observations submitted
to the Court, which are mentioned or discussed hereinafter only in so far as is
necessary for the reasoning of the Court.
Subject-matter of references
[13] The Court, when ruling in the framework of Article 177 EEC, cannot give
decisions on the interpretation of national law or regulations or on their
compatibility with Community law. Consequently it cannot interpret the UrhG or
assess its compatibility with Community law. The Court can only give the national
court guidance on interpretation under Community law which will enable it to
resolve the legal problem before it: Cases 91/83 & 127/83, Heineken
Brouwerijen. [FN40]
FN40 [1984] E.C.R. 3435, [1985] 1 C.M.L.R. 389.
[14] The orders making the references mention the national rules applying to
copyright and section 125 UrhG, which governs the rights of performing artists,
the so-called 'neighbouring rights.' It is not for the Court to decide whether the
main actions concern one or the other of these two types of rights. As the
Commission proposes, the questions submitted should be regarded as relating to
the rules applying to both.
[15] The questions refer to Article 7(1) EEC, which lays down the general
principle of non-discrimination on grounds of nationality. As the Article expressly
states, such prohibition applies only within the scope of application of the Treaty.
[16] The questions must therefore be regarded as seeking in essence to
establish whether:
. copyright and related rights are within the scope of application of the Treaty
within the meaning of Article 7(1) and whether the general principle of nondiscrimination laid down by that Article consequently applies to those rights;
. if so, whether Article 7(1) prevents the law of a member-State *796 from
refusing authors and performing artists of other member-States and their
successors in title the right, which is granted by the same law to nationals, to
prohibit the marketing in national territory of a phonogram made without their
consent, if the performance in question was given outside national territory;
. whether Article 7(1) EEC can be relied upon directly before a national court by
an author or artist of another member-State or his successor in title in order to
obtain the protection given to nationals.
Application of the Treaty to copyright and related rights
[17] The Commission, the German and British Governments, Phil Collins and
EMI Electrola contend that copyright and related rights, in so far as they are
economic rights determining the conditions under which works and performances
by artists can be exploited commercially, fall within the scope of application of the
Treaty, as shown by the Court's judgments applying Articles 30, 36, 59, 85 and
86 EEC to those rights and by the intense legislative activity concerning them in
the Communities. In the rare cases where a specific provision of the Treaty does
not apply, the general principle of non-discrimination laid down by Article 7(1)
EEC must in any case be applied.
[18] Imtrat contends, on the contrary, that the conditions for according copyright
and related rights affect the existence, and not the exercise, of those rights and
are not within the scope of application of the Treaty, as shown by Article 222
EEC and the Court's settled case law. Patricia and Mr. Kraul, repeating on this
point the findings of the Federal Supreme Court, argue in particular that copyright
and related rights were not, in the absence of Community rules or harmonisation
measures at the time of the acts with which the main action is concerned,
governed by Community law.
[19] In the present state of Community law, and in the absence of Community
measures or the harmonisation of national law, it is for the member-States to
specify the conditions and rules for the protection of literary and artistic property,
subject to complying with the relevant international agreements: Case 341/87,
EMI Electrola. [FN41]
FN41 [1989] E.C.R. 79, [1989] 2 C.M.L.R. 413.
[20] The specific purpose of these rights, as governed by national law, is to
protect the moral and economic rights of their owners. The protection of moral
rights enables authors and artists to resist any distortion, mutilation or other
alteration of the work which would be prejudicial to their honour or reputation.
Copyright and related rights also have economic characteristics in that they
provide for the possibility of commercially exploiting the marketing of the
protected work, particularly in the form of licences granted in return for the
payment of royalties: Cases 55 & 57/80, Musik-Vertrieb Membran. [FN42]
FN42 [1981] E.C.R. 147, [1981] 2 C.M.L.R. 44.
[21] As the Court observed at paragraph [13] in the last-mentioned *797
judgment, while the commercial exploitation of copyright is a source of
remuneration for the owner it also constitutes a form of control on marketing
exercisable by the owner, the copyright management societies acting in his name
and the grantees of licences. From this viewpoint the commercial exploitation of
copyright raises the same problems as that of any other industrial or commercial
property right.
[22] Like other industrial and commercial property rights, the exclusive rights
conferred by literary and artistic property are such as to affect trade in goods and
services, as well as competition in the Community. For this reason, as the Court
has consistently held, these rights, although governed by national law, are
subject to the requirements of the Treaty and therefore fall within the scope of
application.
[23] Consequently they are subject to, for example, Articles 30 and 36 EEC on
the freedom of movement of goods. As the Court has previously held, musical
works are incorporated in phonograms which are goods trade in which in the
Community is governed by the abovementioned provisions: Cases 55 & 57/80,
cited above.
[24] In the same way the activities of copyright management societies are subject
to Articles 59 and 66 EEC, relating to the freedom to provide services. As the
Court observed in Case 7/82, GVL v. E.C. Commission, [FN43] these activities
must not be conducted in such a way as to have the effect of impeding the free
movement of services, particularly the exploitation of the rights of performers, to
the extent of partitioning the Common Market.
FN43 [1983] E.C.R. 483, [1983] 3 C.M.L.R. 645.
[25] Finally, the exclusive rights conferred by literary and artistic property are
subject to the Treaty provisions concerning competition: Case 78/70, Deutsche
Grammophon. [FN44]
FN44 [1971] E.C.R. 487, [1971] C.M.L.R. 631.
[26] In addition, subsequently to the main actions, the Council adopted Directive
92/100 of 19 November 1992 on rental right and lending right and on certain
rights related to copyright in the field of intellectual property [FN45] on the basis
of Article 57(2), 66 and 100a EEC precisely in order to avoid the risk of
obstacles to trade and distortions of competition.
FN45 [1992] O.J. L346/61.
[27] It follows from what has been said that copyright and related rights, which fall
within the scope of application of the Treaty particularly by reason of their effects
on trade in goods and services in the Community, are necessarily subject to the
general principle of non-discrimination laid down by Article 7(1) EEC, and there
is no requirement to attach them to the specific provisions of Articles 30, 36, 59
and 66.
[28] Therefore the reply to the question referred must be that copyright and
related rights are within the scope of application of the Treaty within the meaning
of Article 7(1); the general principle of *798 non-discrimination laid down by that
Article is consequently applicable to those rights.
Discrimination within the meaning of Article 7(1) EEC
[29] Imtrat and Patricia contend that the distinction made in the cases referred to
by the national courts between German nationals and nationals of other memberStates is objectively justified by the differences in national laws and by the fact
that not all the member-States have yet acceded to the Rome Convention. Under
these circumstances, it is said, the distinction is not contrary to Article 7(1) EEC.
[30] The Court has consistently held that Article 7 does not apply to differences
in treatment and distortions which affect persons and enterprises under the
jurisdiction of the Community and which may arise from differences in the laws of
the member-States if such differences affect all persons to whom they apply,
according to objective criteria and without regard to nationality: Case 14/68,
Wilhelm. [FN46]
FN46 [1969] E.C.R. 1, [1969] C.M.L.R. 100.
[31] Therefore, contrary to the arguments of Imtrat and Patricia, neither the
differences in national laws relating to the protection of copyright and related
rights nor the fact that not all the member-States have yet acceded to the Rome
Convention can justify an infringement of the principle of non-discrimination laid
down by Article 7(1) EEC.
[32] By prohibiting 'any discrimination on grounds of nationality,' Article 7 EEC
requires that persons in a situation governed by Community law be placed on a
completely equal footing with nationals of the member-State: Case 186/87,
Cowan. [FN47] Where this principle applies, it precludes a member-State from
making the grant of an exclusive right subject to the condition of being a national
of that State.
FN47 [1989] E.C.R. 195, [1990] 2 C.M.L.R. 613.
[33] Consequently the reply to the question must be that Article 7(1) EEC must
be interpreted as meaning that it prevents the law of a member-State from
refusing, under certain circumstances, authors and performing artists of other
member-States and their successors in title the right, which is granted by the
same law to nationals, to prohibit the marketing in national territory of a
phonogram made without their consent, if the performance in question was given
outside national territory.
Effects of Article 7(1)
[34] As the Court has consistently held, the right to equal treatment laid down by
Article 7(1) EEC is conferred directly by Community law: Case 186/87, cited
above. The right can therefore be relied upon before the national court when
asking it to set aside the discriminatory provisions of a national law which refuses
nationals of other member-States the protection accorded to nationals of the
State in question.
*799 [35] Therefore the reply to the question is that Article 7(1) EEC must be
interpreted as meaning that the principle of non-discrimination which it lays down
can be relied upon directly before the national court by an author or artist of a
member-State or his successor in title in order to seek the protection given to
national authors and artists.
Costs
[36] The costs incurred by the German Government, the Government of the
United Kingdom and the E.C. Commission, which have submitted observations to
the Court, are not recoverable. As these proceedings are, in so far as the parties
to the main proceedings are concerned, in the nature of a step in the actions
pending before the national courts, the decision on costs is a matter for those
courts.
Order
On those grounds, THE COURT, in answer to the questions referred to it by the
Regional Court, Munich I, by order of 4 March 1992, and by the Federal Supreme
Court by order of 30 April 1992,
HEREBY RULES:
1. Copyright and related rights are within the scope of application of the Treaty
within the meaning of Article 7(1); the general principle of non-discrimination laid
down by that Article is consequently applicable to those rights.
2. Article 7(1) EEC must be interpreted as meaning that it prevents the law of a
member-State from refusing authors and performing artists of other memberStates and their successors in title the right, which is granted by the same law to
nationals, to prohibit the marketing in national territory of a phonogram made
without their consent, if the performance in question was given outside national
territory.
3. Article 7(1) EEC must be interpreted as meaning that the principle of nondiscrimination which it lays down can be relied upon directly before the national
court by an author or artist of a member-State or his successor in title in order to
seek the protection given to national authors and artists.
(c) Sweet & Maxwell Limited
[1993] 3 C.M.L.R. 773
END OF DOCUMENT