A very engaging and thought-provoking report on the ‘Contractual Arrangements Applicable to Creators’ was completed in January 2014 and recently published. The study, authored by members of CRIDS and KEA, and requested by the European Parliament Committee on Legal Affairs, explores and compares relevant legal provisions under copyright and contract law in eight European jurisdictions. It thereby seeks to draw conclusions on the extent to which the existing legal framework of Belgium, France, Germany, Hungary, Poland, Spain, Sweden and the UK sufficiently addresses the special circumstances of creators, in particular their weaker bargaining position, when they undertake contractual obligations to exploit their rights.
The study expressly limits its focus to the initial contract between the author and the first publisher or producer, acknowledging that the later chain of contractual agreements, between the publisher and third parties, which allows for the full exploitation of the work, significantly impacts on the ultimate position of creators.
In the first part, the authors of the study provide some background information on the context of exploiting works. Next, they look at provisions, available under copyright or general contract law, which offer protection to creators in their contractual dealings. This is followed by an analysis of a selection of contemporary issues, which pose particular challenges to the protection of authors and the fair exploitation of their rights.
The study provides a very insightful account of the issues concerning authors’ contracts and ample food for thought in its concluding section, which discusses and offers recommendations on how to tackle some of the identified challenges. Within the second part, the review of the legal provisions protecting the author in copyright contracts, what struck me most was the frequent recurrence of a set of synonymous phrases: “With the exception of the UK”, “There are no rules in the UK”, “The UK has no rules”, “The UK differs from other countries”, etc. Interestingly, all these phrases are used to describe the present state of UK copyright law, in comparison to the other examined jurisdictions, with regard to provisions which could arguably reinforce the position of authors in their contractual dealings.
Having come across these phrases a few times, I decided to make a list of the areas identified in the study, where, in comparative terms, UK copyright law appeared to be lagging behind in authors’ protection. Although my list became quite lengthy, I will now outline some of the issues.
The first set of differences relate to the broader issue of determining the scope of rights transferred (at 2.1.3) in the copyright contract. The study identifies that a number of countries have introduced mandatory contractual provisions in their copyright laws, in order to ensure that particularly the transferees, a term used in the report to designate the other party to the contract, draft the actual scope of the rights to be transferred more precisely. With regard to future works (at 22.214.171.124) for instance, i.e. works which have not yet been created and the form and content of which are still unknown to the author herself, contract clauses which license the use of an unlimited number of future works are null and void in Belgium, France, Hungary, Spain and Poland. In the UK, on the other hand, case law permits the assignment of future rights and there are not rules limiting the transfer of future works to protect the interests of authors.
Similarly, strict rules limit the possibility of parties to sign a contract transferring all unknown forms of exploitation (at 126.96.36.199) in Belgium, France, Hungary, Poland and Spain, while German copyright law allows such clauses but grants authors the right to demand adequate remuneration. With new, often unpredictable, business models constantly springing up in the digital marketplace, the want of transferees for abstract contractual clauses enabling them to tap on such new revenue streams in the future, is more than understandable. However, so is the interest of authors to be able to control and benefit appropriately from future uses of their works. In this respect, again, the UK has no provisions under copyright law, regulating the transfer of rights for future and unknown forms of exploitation.
Restrictions on the transfer of moral rights (at 188.8.131.52) also fall under the category of compulsory contractual provisions determining the scope of rights transfer. In this context, the UK is once more described as an exception to the general case within other jurisdictions where moral rights cannot be waived entirely, while partial and limited waivers may be possible.
The study further reveals that, with the exception of the UK, the countries reviewed have a number of rules dealing with the remuneration of authors and recognise in their legislation that the author has a right to be remunerated for the transfer of her rights (at 2.1.4). Also, some jurisdictions have an “in dubio pro autore” rule in place for the interpretation of unclear contractual clauses. Accordingly, if a right or a form of exploitation does not appear in the contract, it is presumed to not be covered by the transfer. A similar rule, favouring authors, exists in German copyright law. It is known as the “purpose-of-transfer” rule, according to which uses which were not envisaged at the time the contract was signed remain outside its scope. Again, the study informs, UK copyright law differs from other countries as it lacks any author-friendly rule on the interpretation of unclear contractual terms.
What puzzles me is that current UK copyright law clearly appears to leave much room for improvement when it comes to author-friendly provisions. Reports, such as the 2013 Global Intellectual Property Index, which compares 36 jurisdictions and ranks UK copyright law at the very top, drive attention away from this problem and possibly even send the wrong message to the UK legislator.
When it comes to copyright contracts on the island, policy makers can at least uphold the principle of freedom of contract… but doesn’t this principle presuppose equality among the contracting parties?