Supreme Court (finally) rules on article 45d of the Copyright Act

Article 45d of the Dutch Copyright Act (hereinafter DCA) contains the presumption of transfer: unless the parties agree otherwise in writing, the authors of a film are presumed to have transferred their exploitation rights to the producer. The scope of this article has been the subject of discussion for years. Authors and collective management organisations (hereinafter CMOs) have always argued that the presumption of transfer would not hold if the author had assigned the rights in their contribution to a CMO before that contribution was completed. As early as 2011 [link], I remarked that I found this view inconsistent with the text and scope of the Copyright Act as well as with the Berne Convention. On 2 October the Dutch Supreme Court gave judgment in Lira v Ziggo. The Supreme Court confirmed my long-standing position.

Article 45d DCA provides that, unless the authors and the producer have agreed otherwise, the authors are deemed to have transferred to the producer, from the moment of completion, their rights to make a film available to the public and to reproduce it within the meaning of article 14 DCA. That moment of completion is defined in article 45c DCA as the moment a film is ready for display. Authors and CMOs have read that moment of being ready for display as also being the moment at which rights transfer under article 45d DCA. On that reading, they took the view that before the film was ready for display authors were free to assign the rights in their contribution to a third party, such as a CMO. Lira, the CMO for screenwriters, accordingly sought an injunction restraining cable operators from making the copyright-protected films it represents (that is, the films to whose scripts its screenwriters had contributed) available to the public without its permission. The question was, however, whether Lira held those copyrights in the first place.

“In my opinion, this view undermines article 45d DCA, and it does not do justice to the rationale behind it,” I said of Lira’s position. The Act explicitly states that only a written agreement between author and producer can displace the rule. An agreement between an author and a third party simply does not meet that requirement.

I also argued that article 45d DCA was introduced to implement article 14bis of the Berne Convention, which aims to safeguard uninterrupted international exploitation of films, unhindered by authors’ rights to prohibit use.

On 2 October the Supreme Court gave judgment in this case and ruled as follows:

(i) an advance transfer to a third party, made before the author and the producer agree that the author will contribute to the film, has no legal effect unless the author has entered into a written agreement with the producer departing from article 45d DCA; and

(ii) the transfer does not occur at the moment of completion; the presumption of transfer in article 45d DCA applies from the moment the author agrees with the producer to contribute to the film.

The moment of completion matters only for determining from what point the producer may exercise those rights.