Yesterday, the German Federal Supreme Court issued yet another decision in the music record sampling case known as “Metall auf Metall” resulting in a bizarre split: sampling of small sections before 22 December 2002 was generally lawful without consent in Germany – from that date, however, sampling artists need the approval of the original phonogram producers to the extent the sample is “recognisable”. From a practical point of view, it is doubtful whether this solution found by a collaboration of the Federal Supreme Court, the Federal Constitutional Court and the EU’s Court of Justice is really the best approach to reconcile conflicting interests – and still the question remains: who will have the final say in this case?

If Moses Pelham, German rap musician and producer, had known in 1997 that by underlaying Sabrina Setlur’s song “Nur mir” with the loop of a 2-second rhythm sample he would cause a legal dispute, lasting for more than 20 years, involving at least ten decisions by five different Courts[1] – would he still have used it?

The short section of metallic percussion sounds was created by Kraftwerk – pioneers of electronic music – for their 1977 song “Metall auf Metall”. Kraftwerk members Ralf Hütter and Florian Schneider-Esleben, who had licensed many samples of their records to other artists before, sued Pelham in 1999 for an injunction and damages, claiming their rights as phonogram producers were infringed by the unauthorized use of the sample.

Phonogram producers’ rights capture the sampling of even the smallest parts of their sound recordings to the extent they remain recognizable

Both the Regional Court of Hamburg as well as the Hamburg Court of Appeal considered Kraftwerk’s phonogram producer rights to be encroached. The Federal Supreme Court, in its first two rulings of 2008 and 2012, established that even the “smallest shreds of sounds” are subject to the exclusive rights of phonogram producers irrespective of their length, quality or whether they are protected by the author’s copyright. While the rights of a song’s composer concern his or her personal intellectual creation, the phonogram producers’ rights (so-called “related” or “neighbouring” rights) are thought to protect their financial, organisational and technical efforts in creating the record. In 2016, the Federal Constitutional Court, while confirming in principle this wide scope of the phonogram producers’ rights, emphasised that Pelham’s freedom of art supercedes the economic interests of the phonogram producers.

However, since the phonogram producers’ exclusive reproduction right has been harmonized within the EU by Art. 2 of the InfoSoc-Directive (2001/29/EC), its scope ultimately lies within the authority of the EU’s Court of Justice (CJEU). In its ruling of 29 July 2019 (Case C-476/17), the CJEU found that this right – even in the light of the sampling artist’s freedom of art as guaranteed under Art. 13 of the EU Charter of Fundamental Rights – allows the phonogram producer to prevent sampling of even “very short” parts of his or her phonogram, “unless that sample is included in the [new] phonogram in a modified form unrecognisable to the ear”, i.e., to the average listener. In yesterday’s decision, the German Federal Supreme Court applying the CJEU’s criteria found that Pelham’s sample falls under the scope of Kraftwerk’s rights since the sequence, although having been slightly modified, is still recognisable to the average listener of the song “Nur mir”.

Sampling does not fit into the European copyright regime of exceptions and limitations

Another question to be considered is whether there are any statutory copyright limitations or exceptions allowing Pelham to use Kraftwerk’s rhythm sequence. In its 2016 ruling, the Federal Constitutional Court– quashing the previous rulings of the Hamburg Court of Appeal and the Federal Supreme Court– stressed that Pelham’s freedom of art must be taken into due account, at least, when construing the “free-use” exception under Sec. 24(1) of the German Copyright Act. This provision allows the creation of an independent work through free use of someone else’s work. Accordingly, using very short samples of phonograms in new recordings may under strict conditions qualify as permitted without the rightsholder’s consent.

However, the CJEU in 2019 made clear that the InfoSoc-Directive does not recognize any such “free-use” exception. Therefore, the legal situation outlined in the previous section is limited to reproductions made before 22 December 2002. From that date, only the exhaustive catalogue of European exceptions provided in Art. 5 of the InfoSoc-Directive can restrict the phonogram producers’ rights. To the extent the German free-use exception goes beyond the European limitations, it is not compliant with European law and must not be applied. The Federal Supreme Court, in this latest ruling, also clarified that the requirements of other exceptions in the InfoSoc-Directive, such as quotations, parodies or incidental inclusions, are not met by Pelham’s use of the sample. In particular, Pelham did not intend to discuss or interact with Kraftwerk’s work.

Conclusions

Despite this clear legal guidance, the Federal Supreme Court finally remits the case once more to the Hamburg Court of Appeal for clarifying, among other things, whether Pelham was responsible for any reproductions of the sample made from 22 December 2002. Considering the complexity of the case, we cannot rule out the possibility that it might even return to the Federal Supreme Court for a fifth time.

This decades-long dispute has long since become the ultimate showdown between phonogram producers’ rights in records and sampling as a free and creative art form. With yesterday’s ruling, however, life has not become easier for music sampling artists nor for phonogram producers. While reproductions of very short samples made in Germany before 2002 were generally allowed without consent of the original phonogram producers, sampling under the regime of the InfoSoc-Directive requires an individual assessment of how the average listener will perceive the sample within the new work. The latest discussions between the parties of the dispute show that CJEU’s criterion – “recognisability” of the sample – will not be easy to apply in practice. New disputes seem almost inevitable.

A more practice-oriented approach to reconcile the conflicting interests could be the introduction of a specific sampling exception subject to payment of fair compensation. This would allow artists to use samples without the consent of the original record’s producers, while ensuring that the phonogram producers receive a fair share of their profits. However, such a solution could only be introduced at the unified European level.

[1] For a detailed analysis of the Federal Supreme Court’s first and second ruling, see Niemann, Fabian / Mackert, Lea Neomi (2013). Limits of Sampling Sound Recordings: The German Federal Court of Justice’s Metall auf Metall I and II Holdings in Light of the US Jurisprudence on Digital Sampling 35 E.I.P.R., Issue 6: 53–57.

Christoph is an associate in Bird & Bird's commercial team in Düsseldorf where he specialises in copyright, media, unfair competition and advertising law, advising clients in the media and entertainment industries as well as in the consumer products and healthcare sectors.
As Counsel in our Commercial and Intellectual Property Practice Groups, and our Media, Entertainment & Sport and Technology & Communications Sector Groups in Düsseldorf, Lea advises domestic and international clients in contentious and non-contentious IT, media and commercial matters, with detailed practical knowledge and experience in copyright topics.
As a lawyer in the Commercial Group based in our Frankfurt office, Simon advises, in particular, on unfair competition, media and copyright law and on industry-related regulatory issues.

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