This is due to the fact that, in accordance with Art. 32d UrhG (German Copyright Act), licensees are now obliged to proactively provide authors with annual information about the extent of the work’s use as well as the amount of income and benefits they have derived from the work. Previously, such obligation only existed in case of a corresponding request by the author.
EU Copyright Directive’s expiry and deadlines
The change in copyright law is based upon the implementation of Art. 19 of the European Union’s Directive on Copyright and Related Rights in the Digital Single Market. The Copyright Act’s national amendment was already adopted by the German Bundestag in June 2021. Previously, the information requirement based upon Art. 32d UrhG only applied to new contracts on the use of copyright-protected works concluded after June 7, 2021.
Contracts concluded prior to such date were subject to a transitional period which ended on June 7, 2022, cf. Art. 133 (3) UrhG. Thus, from the end of June 7, 2023, the information obligation also becomes due for older contracts.
In light of the above, companies using third-party copyrights should get an overview of their existing contracts as quickly as possible in order to discover any associated information obligations that already exist or will exist in the future. The following three steps should be taken into account:
Step 1: Which paid uses of copyrighted works exist and since when?
Generally, all existing paid uses are relevant. Only constellations where (a) the author is also the contractual partner’s employer, (b) the relevant work is a computer program pursuant to Art. 69a (5) UrhG, or (c) a third party is involved as intermediary in the license relationship (case of Art. 32d (1a) UrhaG) are excluded.
In case of license agreements concluded only after June 7, 2021, and not being subject to one of the aforementioned exceptions, you should act immediately as the obligation to provide information applies in such case already one year after the contract’s conclusion, i.e., it might already be applicable. In case of other existing contracts, the obligation will not become due until the end of June 7, 2023.
Step 2: Is a ground for exclusion pursuant to Art. 32d (2) UrhG admissible?
An obligation to proactively provide information can be excluded pursuant to Art. 32d (2) UrhG “to the extent the author has made only a secondary contribution to a work, product or service, [No. 1] or the claim on the contracting party is disproportionate for other reasons, in particular if the effort involved in providing the information would be disproportionate to the income generated from the use of the work” [No. 2]. The assessment whether or not such exemption applies depends on the circumstances of the individual case.
Step 3: What is the extent of the work’s use? How much income is generated from the use, or what benefits are derived from the work?
In order to be able to meet the information obligations, you should strive for an accurate documentation. For this purpose, it is advisable to keep a complete and transparent overview containing all works and their relevant scope of use as well as any proceeds/benefits generated from such use.
Impending consequences for failure to provide information
If there is an obligation to provide information to authors and if your company does not comply with such obligation or does not comply with it in due time, your company may be threatened with copyright warnings and/or the assertion of the respective claims in court.
If you should be unsure or do not know whether your company is affected by an obligation to provide information to authors or whether an exemption could apply, we recommend consulting a specialized lawyer. Professional advice protects you from legal consequences. We can advise you on these and all other copyright-related questions.