France: Presumption of ownership extended to neighbouring rights

The French Intellectual Property Code deals with copyright and neighbouring rights separately. As regards copyright, the French case law has long established a presumption of ownership to facilitate infringement proceedings initiated by natural or legal persons who exploit copyrighted works against alleged infringers.

On the grounds of article L.113-5 of the Intellectual Property Code, which provides that “A collective work shall be the property, unless proved otherwise, of the natural or legal person under whose name it has been disclosed”, the French Supreme Court has ruled that in the absence of any adverse claim by the author of the work, the exploitation of the work by a natural or legal person under its name creates a presumption that the said person is the owner of the work, with respect to third parties against whom an infringement case is brought (Cour de cassation, 24 March 1993, 91-16543 and 22 February 2000, 97-21098). Case law has also based this presumption on the grounds of article L.113-1 of the Intellectual Property Code which provides that “Authorship shall belong, unless proved otherwise, to the person or persons under whose name the work has been disclosed” (Court of Appeal of Paris 6 February 2004, JCP G 2005, I, 101, note Ch. Caron). On 28 November 2012, the Supreme Court ruled that the claims made by an author over his work before a foreign court do not prevent the application of the presumption for the benefit of a legal person before the French courts.

In a ruling of 14 November 2012, the Supreme Court extends this presumption for the first time to the field of neighbouring rights.

In this case, the Court of Appeal of Paris dismissed three companies exploiting jazz and pop music recordings that had brought an infringement case against a company that had reproduced and sold these recordings without any authorisation. The plaintiffs, who proved that they had been exploiting the recordings for some time, declared that they were the producers of the recording in the meaning ofarticle L.213-1 of the Intellectual Property Code, which provides that “The natural or legal person who takes the initiative and responsibility for the initial fixation of a sequence of sounds shall be deemed the phonogram producer” (this means that the producer has to prove that he invested in the creation of the recording, in order to be granted rights in the recording). Moreover, the plaintiffs were unable to produce evidence that the performing artists had assigned their rights to them.

In its judgement of 14 November 2012, the Supreme Court annuls the ruling of the Court of Appeal and implements the presumption in the field of neighbouring rights: in the absence of any claim from the phonogram producer, or its assigns, the natural or legal person who publicly, peacefully and unambiguously exploits recordings, is deemed to be the holder of the rights in the recordings as regards third parties against whom an infringement case is brought.

This presumption will benefit not only to the phonogram producers, but also to the other beneficiaries of neighbouring rights in their infringement cases: performing artists, videogram producers,audiovisual communication companies and broadcasters.

Brad Spitz, YS Avocats

France: Radioblog condemned to damages for over €1 million

The French Supreme Court (“Cour de Cassation”) has upheld, in a ruling of 25 September 2012, a judgment of the Court of Appeal of Paris condemning Radioblog and its managing directors to the payment of damages amounting to over €1 million, in addition to a suspended prison sentence of nine months and a €10,000 fine.

The case is interesting for two reasons: the gigantic amount of damages and the application, for the first time, of new provisions of the French Intellectual Property Code condemning the provision of software applications intended to be used for infringing copyright.

The facts are the following: the website Radioblog provided a software called ‘RadioBlogClub’ to Internet users that enabled them to create a music player on an Internet page and to broadcast musical files in the form of playlists accessible to anyone (via streaming). This system did not however allow the Internet users to download the musical files. Moreover, the device enabled the Internet users to research music by title or by artist from a database available on the website radioblog.fr.

Software manifestly intended to communicate unauthorised works to the public

The Court of Appeal of Paris, in its decision dated 22 March 2011, condemned Radioblog and its managing directors, not only (very classically) for communicating protected recordings to the public in violation of Article L. 335-4 of the Intellectual Property Code, but also on the grounds of Article L. 335-2-1 of the same code, which punishes anyone who “publishes, makes available or communicates to the public, knowingly and in any form whatsoever, software manifestly intended to communicate unauthorised works or protected objects to the public” with up to 3 years imprisonment and a fine of up to €300,000.

The Supreme Court upholds the ruling of the Court of Appeal Paris, which had considered that these provisions were applicable in this case, since the website offered to Internet users the possibility of listening to recordings, most of which were protected by intellectual property” and since “the accused, who are professionals in a very specialised field, could not ignore the obligation to ensure compliance with the rights of the right owners, before allowing the public to broadcast the works”.

Punitive damages

The ruling of the French Supreme Court is also very interesting in that it upholds the judgement of the Court of Appeal, which awarded over €1 million in damages to the two unions representing French record producers, which took action against Radioblog (SCPPand SPPF). This amount of damages is based on the amount of profits that were made by the websites through publicity. The Court of Appeal based its decision on paragraph 1 of Article L. 331-1-3 of the Intellectual Property Code which provides that “To award damages, the court takes into account the negative economic consequences, including lost profits suffered by the injured party, the profits made by the infringer and the moral prejudice caused to the holder of these rights because of the infringement”.

The Cour de Cassation upheld the Court of Appeal’s judgment, ruling that the assessment of damages is left to the discretion of the lower courts. This is however questionable. Even though the Supreme Court is not the judge of the facts, the way in which the Court of Appeal of Paris assessed the prejudice of the plaintiffs should be considered as breaching the law, since the French judges are not supposed to indemnify beyond the actual prejudice. Indeed, the Court of Appeal did not define the prejudice actually suffered by the plaintiffs. The two French above-mentioned unions certainly do not represent the entire musical production, as well as the authors, publishers, performing artists, etc. In a way, the Court of Appeal of Paris applied serious punitive damages (see Axel Saint Martin, Radioblog – Peine privée pour contrefaçon, RLDI 2009, 53), and the Supreme Court approved the Court of Appeal in the negative, by simply ruling that it is not the judge of the facts.

YS Avocats, Law Firm