C-92/92

1. Two German courts have requested pre- liminary rulings on the questions whether copyright and related rights fall within the ambit of the EEC Treaty and whether a Member State which allows its own nationals to oppose the unauthorized reproduction of their musical performances must grant iden- tical protection to nationals of other Member States, in accordance with the prohibition of 3. It appears that if Mr Collins were a Ger- discrimination on grounds of nationality laid man national his application would undoubt- down in Article 7 of the Treaty. edly have succeeded. Paragraph 75 of the Gesetz über Urheberrecht und verwandte Schutzrechte (Law on copyright and related rights, hereafter 'Urheberrechtsgesetz', Case C-92/92 BGBl. 1965 I, p. 1273) provides that a per- forming artist's performance may not be recorded without his consent and recordings may not be reproduced without his consent. Paragraph 125(1) of the Urheberrechtsgesetz 2. The plaintiff in Case C-92/92 is Phil Col- provides that German nationals enjoy the lins, a singer and composer of British nation- protection of Paragraph 75, amongst other ality. The defendant — Imtrat Handelsgesell- provisions, for all their performances regard- schaft mbH ('Imtrat') — is a producer of less of the place of performance. However, phonograms. 1 In 1983 Mr Collins gave a foreign nationals have less extensive rights concert in California which was recorded under the Urheberrechtsgesetz. Under Para- without his consent. Reproductions of the graph 125(2) they enjoy protection in respect recording were sold in Germany by Imtrat of performances which take place in Ger- on compact disc under the title 'Live and many, and under Paragraph 125(5) they Alive'. Mr Collins applied to the Landgericht enjoy protection in accordance with interna- tional treaties. The Landgericht München I refers to the Rome Convention of 26 Octo- ber 1961 for the Protection of Performers, " Original language: English. 1 — 'Phonogram' is a generic term covering vinyl records, com- Producers of Phonograms and Broadcasting pact discs and audio cassettes. It is defined by Article 3(b) of Organizations, but deduces from its terms the Rome Convention of 26 October 1961 for the Protection of Performers, Producers of Phonograms and Broadcasting that Germany is required to grant foreign Organizations as meaning 'any exclusively aural fixation of performing artists the same treatment as its sounds of a performance or of other sounds'.

2. If so: does that have the (directly applica- ble) effect that a Member State which accords protection to its nationals for all 5. The Landgericht granted EMI Electrola's their artistic performances, irrespective of the application and that decision was confirmed place of performance, also has to accord that on appeal. Patricia and Mr Kraul appealed on protection to nationals of other Member a point of law to the Bundesgerichtshof, States, or is it compatible with the first para- which considers that, under German law, graph of Article 7 to attach further condi- EMI Electrola would be entitled to an tions (i. c. Paragraph 125(2) to (6) of the injunction if Cliff Richard were of German German Urheberrechtsgesetz of 9 September nationality but is not so entitled because he 1965) to the grant of protection to nationals is British. It is not entirely clear from the of other Member States?' order for reference how or why the Bundes- gerichtshof arrived at the view that German law provides for such a difference of treat- ment. The reason appears to be that the per- Case C-326/92 formances in question took place before 21 October 1966, on which date the Rome Convention came into force in Germany, and that Germany is only required to grant 'national treatment' to foreign performers, 4. The plaintiff and respondent in Case under the Rome Convention, in respect of C-326/92 — EMI Electrola GmbH ('EMI performances that take place after that date. 2 Electrola') — produces and distributes pho- nograms. It owns the exclusive right to exploit in Germany recordings of certain 2 — Sec the judgment of the Bundesgerichtshof of 20 November works performed by Cliff Richard, a singer 1986 ('Die Zauberflote'), GRUR 1987, p. 814.

'Within the scope of application of this The issues raised by the two cases Treaty, and without prejudice to any special provisions contained therein, any discrimi- nation on grounds of nationality shall be prohibited.'

7. Both cases raise essentially the same issues: (a) whether it is compatible with Community law, in particular Article 7 of That general prohibition of discrimination is the EEC Treaty, for a Member State to grant elaborated upon in other, more specific pro- more extensive protection in respect of per- visions of the Treaty. Thus Article 36 permits formances by its own nationals than in certain restrictions on the free movement of respect of performances by nationals of goods, provided that they do not constitute other Member States and (b) if such a differ- 'arbitrary discrimination' or a disguised ence in treatment is not compatible with restriction on trade. Article 48(2) requires Community law, whether the relevant provi- the 'abolition of any discrimination based on sions of Community law produce direct nationality between workers of the Member

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COLLINS A N D OTHERS

11. The prohibition of discrimination on 13. It is sometimes said that, where rules are grounds of nationality is also of great sym- compatible with the specific Treaty articles bolic importance, inasmuch as it demon- prohibiting discrimination, they are also strates that the Community is not just a commercial arrangement between the gov- ernments of the Member States but is a com- mon enterprise in which all the citizens of 3 — Sec for example Grabilz, in Kommentar zum EWG-Vertrag, by E. Grabitz (ed.), paragraph 20 on Article 7; see also Case Europe arc able to participate as individuals. 305/87 Commission v Greece [1989] ECR 1461, at paragraph The nationals of each Member State are enti- 4 — See B. Sundberg-Weitman, Discrimination on Grounds of tled to live, work and do business in other Nationality, 1977, p. 14.

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O P I N I O N O F MR JACOBS — J O I N E D CASES C-92/92 A N D C-326/92

16. Indeed, such discrimination was specifi- 7 notwithstanding its manifestly discrimina- cally identified by the Council in 1961 in the tory nature. It would, however, be wrong to General Programme for the Abolition of say that a rule discriminating against nation- Restrictions on Freedom to Provide Servic- als of other Member States cannot be con- es 6 and in the General Programme for the trary to Article 7 simply because it is not Abolition of Restrictions on Freedom of caught by the specific provisions of Articles Establishment. 7 Both those programmes call 48, 52, 59 and 60 of the Treaty.

Treaty. A performer may for example have 15. That simple observation is probably suf- phonograms embodying his performance ficient in itself to resolve the fundamental manufactured in his own country and export issues raised by the present cases. In so far as those goods to another Member State, in intellectual property rights assist the propri- which case he is in a situation covered by etor thereof to pursue the economic free- Article 30. Or he may set up a company or doms granted by the Treaty, in particular by branch in that other Member State and have Articles 30, 52 and 59, a Member State must accord the nationals of other Member States 6 — OJ, English Special Edition, Second Series IX, p. 3. 7 — OJ, English Special Edition, Second Series IX, p. 7. 8 — Title III. A, third paragraph, indent (e). 5 — Sec, for example, Case C-41/90 Höfner and Elser v Mac- 9 — Case 71/76 Thieffry v Conseil de l'Ordre des Avocats à la rotron [1991] ECR I-1979, at paragraph 36. Cour de Paris [1977] ECR 765, at paragraph 14.

19. Certainly there can be no doubt about the economic importance of the performing artist's exclusive right to authorize the repro- duction and distribution of recordings 18. Whichever way a performing artist embodying his performance. The exercise of chooses to exploit his performances for com- that right is essential to the commercial mercial gain in another Member State, he exploitation of a performance. The sale of will be in a situation covered by Community unauthorized recordings damages the per- law. As such, he will be 'within the scope of forming artist in two ways: first, because he application of the Treaty' and will be entitled earns no royalties on such recordings, the to invoke the prohibition of discrimination sale of which must inevitably reduce the on grounds of nationality laid down in Arti- demand for his authorized recordings, since cle 7 of the Treaty. Indeed the Court has the spending power of even the most avid gone much further than that. It has held that record collector is finite; secondly, because a tourist who travels to another Member he loses the power to control the quality of State may, as a recipient of services, benefit the recordings, which may, if technically from a scheme for compensating the victims inferior, adversely affect his reputation. The of violent crime on the same terms as nation- latter point was argued forcefully, but to no als of that Member State; 10 that a person avail, by the 'world-famous Austrian con- who goes to another Member State for the ductor' who was unable to prevent the sale purpose of receiving vocational training may of unauthorized recordings in the 'Zauber- not be required to pay a registration fee if no flöte' case referred to above (in paragraph 5). such fee is payable by nationals of that

22. Both defendants contend that the dis- crimination lies outside the scope of applica- 24. It is true that the Court has several times tion of the Treaty. Imtrat reaches that con- held that in the absence of harmonization it clusion on the grounds that the performance is for national law to determine the condi- in question took place outside the territory tions governing the grant of intellectual of a Member State and that the existence of property rights; see, for example, Thetford v intellectual property rights is a matter for Fiamma. 15 But that does not mean that national law by virtue of Article 222 of the Member States are free to lay down discrim- Treaty. That cannot be correct. The place inatory conditions for the grant of such where the original performance took place is rights. That much is clear from the Thetford irrelevant; what matters is that Phil Collins judgment itself (at paragraph 17), in which and his licensees are denied protection, in an overtly discriminatory manner, when they attempt to exploit — or prevent others from 14 — In Case 36/74 Walrave v Union Cycliste Internationale exploiting — the performance in a Member [1974] ECR 1405, at paragraph 28, the Court stated that 'the rule on non-discrimination applies in judging all legal relationships in so far as these relationships, by reason cither of the place where they are entered into or of the place where they take effect, can be located within the ter- ritory of the Community'. 13 — Case C-10/89 CNL-Sucal v HAG GF [1990] ECR I-3711. 15 — Case 35/87 [1988] ECR 3585, at paragraph 12.

the Court attached importance to the non- 26. It is in any event not true to say that the discriminatory nature of a provision of Community legislature has been completely United Kingdom law relating to the grant of inactive in the field of copyright and related patents, there being 'no discrimination based rights. Several measures have been adopted; on the nationality of applicants for patents'; notably, Council Directive 91/250/EEC of the Court clearly implied that a patent 14 May 1991 on the legal protection of com- granted on the basis of a discriminatory pro- puter programs 18 and Council Directive vision could not be relied on to justify a 92/100/EEC of 19 November 1992 on rental restriction on trade between Member States right and lending right and on certain rights under Article 36 of the Treaty. Moreover, the related to copyright in the field of intellec- Council has also recognized, in the General tual property. 19 It is interesting to note that Programmes referred to above (in paragraph the 18th recital in the preamble to the latter 16), that the grant and exercise of intellectual Directive states that measures based on Arti- property rights are matters falling within the cle 5 of the Directive, which permits deroga- scope of the Treaty and are therefore subject tions from the exclusive lending right created to the prohibition of discrimination. by Article 1 of the Directive, must comply with Article 7 of the Treaty. Mention may also be made of the Council Resolution of 14 May 1992 on increased protection for copyright and neighbouring rights. 20 Article 1 of that Resolution notes that the Member States undertake to become parties to the Berne Convention for the Protection of Lit- erary and Artistic Works of 24 July 25. Also relevant in this context is the 1971 (Paris Act) and to the 1961 Rome Con- Court's judgment in GVL v Commission, 16 vention. In the circumstances, the view that in which the Court held that a performers' copyright and related rights lie outside the rights management society abused its domi- scope of the Treaty is clearly untenable. nant position, in breach of Article 86 of the Treaty, by refusing to manage the rights of foreign performers not resident in Germany. The decision 17 in issue in that case was based partly on Article 7 of the Treaty. As the Commission has pointed out, it would be very strange if undertakings were prohibited from discriminating on grounds of national- 27. The only argument advanced by either ity, in the field of intellectual property, but of the defendants that has some plausibility Member States were allowed to maintain in is the one based on the Rome Convention, force discriminatory legislation. The United on which great reliance is placed by Imtrat. Kingdom also cites GVL v Commission and According to that argument, all questions submits, rightly in my view, that that judg- concerning the level of protection to be ment clearly shows that the management and granted to foreign performers are to be enforcement of performers' rights arc mat- resolved in the context of the Rome Conven- ters falling within the scope of the Treaty. tion, which has established a delicate balance

based on considerations of reciprocity. The 29. Secondly, there is in any event no con- connecting factor, under the Rome Conven- flict between Community law and the Rome tion, is not nationality — which would be Convention. That Convention merely lays unworkable because many performances are down a minimum standard of protection and given by groups of performers who may does not prevent the Contracting States from have different nationalities — but place of granting more extensive protection to their performance. Imtrat points out further that own nationals or to nationals of other States. both Germany and the United Kingdom That much is clear from Articles 21 and were bound by the Rome Convention before 22 of the Convention. Article 21 provides: they became mutually bound by the EEC Treaty (presumably on 1 January 1973, when the United Kingdom acceded to the Com- munities) and argues that the Rome Conven- tion should therefore take precedence over 'The protection provided for in this Conven- the EEC Treaty by virtue of Article 234 of tion shall not prejudice any protection other- the latter. Imtrat suggests that dire conse- wise secured to performers, producers of quences would ensue if Article 7 of the phonograms and broadcasting organisations.' Treaty were applied in the field of copyright and related rights: authors from other Mem- ber States would, for example, be able to claim in Germany the long term of protec- tion (70 years after the author's death) pro- vided for in German law, whereas under Article 22 provides: Article 7(8) of the Berne Convention Ger- many is not required to grant them a longer term of protection than the term fixed in the country of origin of the work. 'Contracting States reserve the right to enter into special agreements among themselves in so far as such agreements grant to perform- ers, producers of phonograms or broadcast- ing organisations more extensive rights than those granted by this Convention or contain other provisions not contrary to this Con- vention.' 28. In response to those arguments the fol- lowing points may be made. First, even if the Rome Convention had been concluded before the EEC Treaty, Article 234 of the lat- ter would not give precedence to the Con- The Rome Convention does not prevent vention as regards relations between Member Germany from granting performers more States. Article 234 is concerned solely with extensive protection than the minimum pro- relations between Member States and non- vided for in the Convention. However, Arti- member States. 21 cle 7 of the Treaty requires that, if more extensive protection is granted to German performers, the same level of protection should be available to nationals of other 21 — See, for example, Case 121/85 Conegate v HM Customs and Excise [1986] ECR 1007, at paragraph 24. Member States.

30. Thirdly, if nationality is unworkable as a into force, were extended to performers who connecting factor on account of the problem are nationals of other Member States. of multinational ensembles, it may well be asked why German law uses nationality as a connecting factor at all, as of course it clearly does since it grants differing levels of protec- The direct effect of Article 7, first paragraph tion depending on whether the performer is German or of some other nationality. More- over, even if only one member of an ensem- ble has German nationality, it seems that the performance is protected. 22 That constitutes 32. I turn now to the issue of direct effect. a very simple criterion for resolving the dif- In my view, it is clear from the consider- ficulties supposedly caused by multinational ations set out above that the Treaty provi- ensembles; it would be equally workable sions which prohibit discrimination must be where one member of an ensemble had the capable of being invoked by performers in nationality of another Member State. the circumstances of the present cases.

ber States. Clearly, the prohibition of dis- crimination will often have the effect, in the absence of complete harmonization, that 33. The Court's case-law also suggests that nationals of Member State A will be better the first paragraph of Article 7 has direct protected in Member State B than vice versa. effect in so far as it prohibits discrimination But the issue does not fall to be decided in within the scope of application of the Treaty. these cases and it is clear that no serious con- In Kenny v Insurance Officer26 the Court sequence would ensue (except for the manu- described that provision as being 'directly facturers of unauthorized recordings) if the applicable' (meaning, presumably, that it has protection granted to German performers, in direct effect), while in Blaizot v University of respect of performances given in the terri- Liège 27 the Court referred expressly to the tory of a State that is not a party to the Rome Convention or in respect of perfor- mances given before that Convention's entry 23 — Case 2/74 [1974] ECR 631, at paragraphs 24 and 25. 24 — Case 33/74 [1974] ECR 1299, at paragraph 27. 25 — Sec paragraph 30 of Reyners and paragraph 26 of Van Bins

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OPINION OF MR JACOBS — JOINED CASES C-92/92 AND C-326/92

direct effect of Article 7. More importantly, discrimination. Although in Case C-326/92 it is clear from a number of judgments, the direct victim of the discriminatory Ger- including Cowan, 28 Barra v Belgium 29 and man legislation is a German company, the Raulin, 30 that national courts are under a indirect victim will, on the assumption that duty to disapply national provisions that are royalties are paid to the performer by EMI contrary to Article 7. It is equally clear that Electrola, be Cliff Richard himself. Even in that duty arises not only in proceedings the case of an outright assignment without against the State but also in litigation any provision for the payment of royalties, it between individuals. 31 would be wrong in principle to discriminate on the basis of the nationality of the per- A factual difference between Case C-92/92 former and original right-holder. If such dis- and Case C-326/92 crimination were permitted, it would mean that the exclusive right granted to a German 34. A final issue that remains to be explored performer would be an assignable asset, is whether any significance attaches to an potentially of considerable value, while a obvious factual difference between Case British performer's exclusive right would C-92/92 and Case C-326/92: in the former have virtually no assignable value, since it case the performer, Phil Collins, has remained would be extinguished on assignment. Thus the proprietor of the performer's rights and the indirect victim of the discrimination has granted an exclusive licence to a producer would always be the performer himself. of phonograms to exploit those rights in Ger- It would in any case be illogical, in the many; in the latter case the performer, Cliff circumstances of the present cases, to Richard, has assigned his rights to a British distinguish between a performer's right company, which has reassigned them to a which has been the subject of an exclusive German company. I am satisfied that that licence and a performer's right which has difference is not relevant to the issue of been the subject of an assignment.