Proposal for new copyright law weakens the legal position of authors

TONO CEO, Cato Strøm, is not satisfied with the government's proposal for a new copyright law.

• News

 / 09/05/2017 / codex

Here you can read what TONO thinks about the government's proposal for a new copyright law. The text below was presented to the members of the Storting's Family and Culture Committee on Tuesday, May 9th.

Photo above: CEO of TONO, Cato Strøm (Photo: TONO/Willy Martinsen)

TONO's main conclusions:

• The bill strengthens the interests of users at the expense of the authors. The purpose of the legislative revision has been deviated from 
• §71 is a dramatic weakening of contractors' copyright
  • The proposed provision has been significantly expanded following the consultation note, and the proposal has thus not been subject to consultation.
  • The proposed provision differs from current law, and from current law in other comparable countries 
• The consequences are so serious that we ask that a decision in the Storting be postponed until a thorough impact analysis has been carried out.

The purpose of the statutory audit has been deviated from
When the Ministry of Culture released a proposal for a new copyright law for consultation in 2016, the Minister of Culture stated:

"It is of crucial importance that the filmmaker, author and artist you like have their rights protected so that they can continue to create and communicate art. This is what the Copyright Act, our most important cultural law, is supposed to ensure," and further:  "Creative and performing artists are often in a weak position when it comes to selling what they have created. The government is therefore proposing several rules that strengthen their position." (Sources: The Minister of Culture's op-ed in Aftenposten and press release 17 March 2017).

The final bill violates these statements.

The bill weakens the position of authors in relation to the bill that was sent for consultation in 2016, and to some extent also in relation to current law. After the consultation, significant parts of the bill have been transformed from a cultural law to a commercial law. If the bill is adopted, it will be more difficult for composers and lyricists of musical works to have their rights protected. This cannot be reconciled with what is stated as a main goal of the Copyright Act (Prp 104 L p. 9): “ […] to secure income for copyright holders. The law is a key instrument for the government's goal of ensuring that creative and performing artists can make a living from their work to a greater extent.”

Changes to the detriment of copyright holders – examples
In the consultation note, the Ministry of Culture put forward a number of specific proposals that would strengthen the position of copyright holders. These proposals were also strongly highlighted in the press release. There have been dramatic changes from the consultation note to the final bill. A number of specific proposals that would strengthen the position of authors have been reversed or severely limited.

TONO points out in particular the following:

• Proposals in the consultation note: The purpose of the law is to ""secure the rights of those who contribute to our culture" and "to a certain extent limit the rights." Such a provision would provide the author with stronger protection. It was emphasized that technological developments have weakened the position of copyright holders, and that the purpose of the consultation proposal was “to restore this balance and strengthen the rights of creative and performing artists” (…) (Source: Press release from the Minister of Culture, 17 March 2016)
  Result in the proposition: The law is intended to “grant rights” to those who create and invest in intellectual property, and “delimit (copyright) rights with the aim of maintaining a reasonable balance between rights holders and users” – i.e. the stated purpose is to contribute to equality of the interests of copyright holders and users.
• Proposals in the consultation note: Burden of proof rule that "the acquirer has the burden of proof" for rights to be transferred. Such a rule would give the author stronger protection.
  Result in the proposition: No burden of proof rule.
• Proposals in the consultation note: Agreements should In case of doubt, it is interpreted in favor of the author. (the specialty principle). Such a rule would give the author stronger protection.
  Result in the proposition: The specialty principle is weakened compared to the proposal in the consultation. The principle should only apply to unclear agreements, and it is emphasized, among other things, that there is no reason to apply the principle to collective rights management, which is in practice the most important scheme for clearing copyrights.
• Proposals in the consultation note: Legislation of right to reasonable remuneration upon transfer of rights. Such a rule would give the author stronger protection.
  Result in the proposition: The right to reasonable remuneration is significantly weakened in the wording of Section 69, second paragraph, and statements in the bill,

According to the consultation proposal, when assessing what constitutes reasonable remuneration, emphasis should be placed on recognised principles such as “the extent of the transfer” and “the economic value to the transferee”. In the bill, these principles have been replaced with new elements following demands from several large commercial players. In the comments to the provision, the Ministry states that the provision will have “less significance in the case of collective rights management” and that investment considerations and the distribution of economic risk should be taken into account in the assessment. These elements lack support in Norwegian case law and international directive obligations. The proposed elements should also apply when determining reasonable remuneration for infringement of rights. The proposed provision will probably contribute to weakening the economic position of authors. The provision must therefore not be adopted before the financial and legal consequences of the bill have been assessed.

• Proposals in the consultation note: Codification of the current principle that all intellectual works created in working conditions accrues to the employer.
  Result in the proposition (§71): Intellectual property created in assignment conditions (not only in employment relationships) belongs to the client unless otherwise agreed, and the client also has the right to modification and redistribution of the work

Particularly regarding the proposal regarding the transfer of rights in assignment relationships (§ 71)
The proposed § 71 places self-employed authors in a dramatically weaker negotiating position towards broadcasters, producers and other professional buyers. The consultation note proposed codifying the current principle that intellectual property created in an employment relationship belongs to the employer, where the employment relationship presupposes that intellectual property is created, and a transfer is necessary and reasonable. However, in §71 of the bill, the provision is extended to also include commissioned work, and also allows for sub-assignment. This is an extension in relation to current law, and which in practice will contribute to shifting the already uneven balance between commercial actors and self-employed contractors in favour of the commercial actors. It is surprising and reprehensible that such a provision is proposed to be introduced without consultation. The fact that a transfer of copyright, unless otherwise negotiated in each individual assignment, is now defined as a basic principle is very serious. A self-employed composer who delivers a commissioned work will now have to negotiate to be allowed to retain his copyright to his work. The fact that copyright no longer remains with the person carrying out the assignment, unless otherwise agreed, constitutes a clear breach of Norwegian and Nordic legal tradition.

None of our neighboring countries' copyright legislation, or other comparable countries, has such a provision. The legal situation in the other Nordic countries corresponds to the current law in Norway. Both Sweden, Denmark and Finland have investigated whether the transfer of copyright in employment and assignment relationships should be legislated, with the result that such provisions have not been implemented. In previous studies (Ot.prp.nr. 15 (1994-1995) and NOU 1985:6) the Norwegian authorities have stated that it may be appropriate to consider a change to the current law.[i]f the other Nordic countries, during the ongoing investigation, were to arrive at approximately uniform rules in this area". The ministry does not comment on why they are now choosing to do the opposite, namely to introduce a special rule for Norway.

When it is left to the individual author to negotiate their copyright in each individual assignment, it entails a fragmentation of the rights picture that weakens the entire collective management model. This model has been the rights holders' strongest card in achieving fair, reasonable remuneration. The Ministry has not taken into account what practical consequences the proposal will have for artists' everyday lives when it is shown that the provision can be waived by agreement. If the proposal is adopted, the clients will have a significant vested interest in no agreement being concluded.

Following the consultation, the provision has also been expanded to include the right to sub-assign. This means that both the employer and the client are free to transfer or license the copyright to third parties without consent and without compensation to the author. The proposal thus further contributes to strengthening the employer's, and especially the client's, interests at the expense of the author. It is unacceptable that the proposed § 71 is presented as a bill without it having been consulted.

Against this background, TONO requests that the Storting postpone the introduction of the law until the consequences of the bill have been sufficiently investigated.