The CJEU Pelham decision: only recognizable samples as acts of reproduction?

Moses Pelham

Earlier this week, The IPKat reported [here, here, here] on three new, seminal copyright decisions of the Court of Justice of the European Union (CJEU) and promised a more detailed analysis. 

It also noted that these referrals had at least three things in common: they all concerned (to a greater or lesser extent) the interplay between copyright and fundamental rights; the same Advocate General (AG Szpunar) had delivered an Opinion in all the cases; and they were decided by the Court in a Grand Chamber composition (15 judges, instead of the usual chambers of 3 or 5 judges). Now that the decisions are available, there is a fourth element of identity between them, and that is that they also share the same Judge Rapporteur (Judge Ilešič). 

Let’s get started with the first judgment, the one concerning sampling of musical content: Pelham, C-476/17 (also known as the Metall auf Metall case). 

For a summary of the factual background and of the AG Opinion, see here and here. 

The issues 

The referral in this litigation that began approximately 20 years ago concerned two key issues (even if the questions referred were actually 6): 

1. Is it a potential infringement of a phonogram producer’s exclusive right of reproduction under Article 2(c) of the InfoSoc Directive to take “very short snatches” (2 seconds of a rhythm sequence in the background proceedings) from a phonogram and use it in another phonogram without authorization [translated: does sampling require a licence?]? If so, can quotation in Article 5(3)(d) of that directive be nonetheless successfully invoked by the defendant? [translated: if so, can unauthorized sampling still be considered non-infringing?] 
2. Are national exceptions beyond what is allowed under EU law (in this case, German ‘free use’ within Paragraph 24(1) UrHG) compatible with EU law? More generally, what freedom do Member States enjoy in areas harmonized at the EU level?

1. Sampling and copyright 

Sampling falls within the scope of the right of reproduction

The CJEU began its analysis by considering Article 2(c) of the InfoSoc Directive and noting that there is no definition of ‘reproduction … in whole or in part’ as such. Hence, this concept must be determined by considering the usual meaning in everyday language, while also taking into account the context in which it occurs and the purpose of the rules of which it is part. With regard to the latter, it is worth recalling that the InfoSoc Directive is aimed at guaranteeing a high level of protection. 

(I would also add that the concept of reproduction must be regarded as an autonomous concept of EU, since no reference is made to Member States’ laws in the directive: it follows that the same concept of ‘reproduction … in whole or in part’ must be envisaged across the EU.) 

All the above leads to the conclusion that: 

the reproduction by a user of a sound sample, even if very short, of a phonogram must, in principle, be regarded as a reproduction ‘in part’ of that phonogram within the meaning of the provision, and that such a reproduction therefore falls within the exclusive right granted to the producer of such a phonogram under that provision. (para 29) 

The Court noted that this finding is consistent with the objective of guaranteeing a high level of protection and safeguarding the specific objective of the exclusive right of the phonogram producer, referred to in Recital 10, “which is to protect a phonogram producer’s investment” (para 30). 

Does it matter if the sample is recognizable? ... Yes

All this said, the Court noted that: 

where a user, 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’ within the meaning of Article 2(c) of Directive 2001/29. (para 31) 

This would be consistent with Recitals 3 and 31 of the directive and the objective of guaranteeing a fair balance of different rights and interests. With particular regard to the Charter and recognition of IP (and, so, copyright) as a fundamental right, the CJEU recalled that nothing in the wording of Article 17(2) of the Charter suggests that its protection should be absolute. Rather, IP protection should be weighed against other fundamental rights and freedoms, including freedom of the arts (Article 13) and freedom of expression (Article 11 and Article 10(1) ECHR), the latter two being relevant to sampling. 

The Court reasoned as follows: 

to regard a sample taken from a phonogram and used in a new work in a modified form unrecognisable to the ear for the purposes of a distinct artistic creation, as constituting ‘reproduction’ of that phonogram within the meaning of Article 2(c) of Directive 2001/29 would not only run counter to the usual meaning of that word in everyday language, within the meaning of the case-law set out in paragraph 28 above, but would also fail to meet the requirement of a fair balance set out in paragraph 32 above.  

In particular, such an interpretation would allow the phonogram producer to prevent another person from taking a sound sample, even if very short, from his or her phonogram for the purposes of artistic creation in such a case, despite the fact that such sampling would not interfere with the opportunity which the producer has of realising satisfactory returns on his or her investment. (paras 37-38) 

Sampling not within the scope of the Rental and Lending Rights Directive 

Turning to Article 9(1)(b) of the Rental and Lending Rights Directive, the Court noted that protection under that piece of EU legislation is aimed at fighting piracy (Recital 2) and contrasting the production and distribution to the public of counterfeit copies of phonograms, that is articles which reproduce all or a substantial part of the sounds fixed in a phonogram to replace lawful copies of a phonogram. 

The is not the case of sampling, which – as a result – should not be considered a copy of a phonogram within the meaning of Article 9(1) of the Rental and Lending Rights Directive. This conclusion would be also supported by Article 1(c) of the Geneva Convention. 

Quotation and sampling: defence only available for recognizable samples 

Finally, with regard to quotation, the CJEU noted that Article 5(3)(d) of the InfoSoc Directive requires a quotation be made “in accordance with fair practice, and to the extent required by the specific purpose”. This means that “the use at issue for the purposes of quotation must not be extended beyond the confines of what it necessary to achieve the informatory purpose of that particular quotation.” (para 69) 

Similarly to ‘reproduction’, the InfoSoc Directive does not define the concept of ‘quotation’. The Court found that the essential characteristics of quotation in accordance with its meaning in everyday language are (para 71): 

1. use, by a user other than the copyright holder, of a work or, more generally, of an extract from a work
2. 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 user, 
3. as such, the user of a protected work wishing to rely on the quotation exception must have the intention of entering into ‘dialogue’ with that work. 

It follows that the user of a sample might invoke the quotation defence in principle (if available under the relevant national law), but only in relation to a sample that is recognizable to the ear (para 72). The Court stated that there can be no dialogue between the original phonogram and the one that samples from it where it is not possible to identify the work concerned by the quotation at issue (para 73). 

2. National freedom beyond the InfoSoc Directive 

Exceptions beyond the InfoSoc catalogue 

Turning to the issue of whether EU Member States may envisage exceptions beyond the catalogue allowed under EU law (ie the InfoSoc Directive, since sampling does not fall within the scope of the Rental and Lending Rights Directive: para 57), the CJEU (unsurprisingly) answered that such possibility does not exist. 

The list provided in the InfoSoc Directive is in fact exhaustive. It is true that Recital 32 mandates a ‘fair balance’, but the balancing mechanisms are envisaged within the directive itself, by harmonizing exclusive rights and relevant exceptions and limitations. Also the three-step test in Article 5(5) contributes to such balancing goal. 

The referring court was of the view that German ‘free use’ should not be regarded as an exception, but rather as an ‘inherent’ limitation to the scope of copyright protection, “based on the idea that it is not possible to conceive of a cultural creation without that creation building upon the previous work of other authors.” (para 56) 

The CJEU did not agree, and stated that both the very goals of harmonization (see also Recital 31) and the principle of legal certainty would be defeated if Member States were free to derogate from an author’s exclusive rights going beyond the exceptions and limitations in Article 5 of the InfoSoc Directive. 

National transpositions of EU law provisions 

The Court had been also asked whether the InfoSoc and Rental and Lending Rights Directive allow any latitude in terms of implementation in national law. 

To answer this question, the Court recalled that the principle of primacy of EU law means that rules of national law, even of a constitutional order, cannot be allowed to undermine the effectiveness of EU law in the territory of that State. This said, in situations in which action of the Member States is not entirely determined by EU law, national legislatures retain some discretion and national authorities and courts remain free to apply national standards of protection of fundamental rights, provided that the level of protection provided for by the Charter and the primacy, unity and effectiveness of EU law are not compromised (para 80). 

However, no freedom is left under Article 2(c) of the InfoSoc Directive: “that provision is not qualified by any condition, nor is it subject, in its implementation or effects, to any measure being taken in any particular form.” Hence, “Article 2(c) of Directive 2001/29 constitutes a measure of full harmonisation of the corresponding substantive law” (para 85). 

The IPKat's favourite use
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Comment 

The CJEU Pelham decision is not surprising, and I agree with most of the analysis carried out by the Court. 

Recognizable and unrecognizable samples

The bit in relation to which I have some doubts relates to the distinction that the Court makes between a sample that is recognizable to the ear (which falls within the scope of Article 2(c) of the InfoSoc Directive) and a sample that is not and, as such, is not to be regarded as a reproduction. 

The reason why I find it difficult to understand this distinction is twofold. 

First, in both cases there is the taking of an extract from a third-party phonogram. Hence, in both cases there is the doing of a restricted act. In principle this entails the need for a licence from the relevant rightholder. 

It should not matter what the purpose of the use (non-transformative or transformative) is to determine whether there is a reproduction or not. It seems to me that a reproduction would be made in both instances. 

The difference would be that, in the case of a transformative reproduction, the original sample might become unrecognizable. But is such lack of recognition enough to exclude that the relevant rightholder had a right to control reproductions of their subject matter? 

If the use of the original sample was required, even to create something that ends up being very different from the original, then the rightholder’s reproduction right would be relevant. If the original sample was not needed to create something the sounds differently, then why taking from the original phonogram in the first place? 

Second, I find it contradictory on the side of the Court to say at the outset that a non-recognizable sample is not an act of reproduction, and then conduct an assessment as to whether the quotation defence would nonetheless apply. The consideration of exceptions and limitations should follow from a finding of prima facie liability as resulting from the unauthorized doing of a restricted act: if the Court thinks that an unrecognizable sample is not an act of reproduction, then there is no need to consider exceptions and limitations. 

Protection of phonograms

The Court avoided engaging in a comparison between the right of reproduction as applied to works and the right of reproduction as applied to other subject matter (in this case, phonograms). This way, it avoided tackling the effects of the Infopaq string of cases, which – instead – AG Szpunar had considered in his Opinion (receiving widespread, yet in my view misplaced, criticism). Despite this, the Court’s analysis appears to endorse the analysis of its AG, which in my view was correct. 

This means that, while for works there is an act of reproduction in part when what is reproduced is sufficiently original, for other subject matter (eg, phonograms), there is no need to consider whether what has been taken is original.

Further points

Other points of interest are the following. 

First, the Court confirmed that the EU copyright framework does not leave Member States the freedom that, clearly, they thought they had. Case law issued over the past few years has been consistent in this sense, and the holding in Pelham is not different. The EU copyright framework is an (in)flexbile, rather than a flexible, one.

Second, the Court had the chance to elaborate a bit further on the concept of quotation (it first tackled it in Painer), and clarified that, indeed, a quotation cannot be for any reason. If we transfer this reasoning to the UK, a country that only in 2014 introduced a quotation defence taking advantage of the possibility in Article 5(3)(d) of the InfoSoc Directive, it follows from Pelham that, even if section 30(1ZA) CDPA does not specify the purpose of the quotation at issue for the defence to be available in principle, if an opportunity arises for UK courts to interpret this provision, then the fair dealing assessment will need to take into account the guidance provided by the CJEU: a quotation must be indeed justified by its purpose.