For the first time, the CJEU has been askedto clarifythetemporal applicabilityofthe right to“appropriate and proportionate remuneration” laid down inArticle 18 ofDirective (EU) 2019/790 on copyright and related rights in the Digital Single Market(“DSMDirective”). The Belgian Council of State would like to knowwhethera Belgiandecreein whichperformersare deemed to have transferred their rightsrelated to copyrightto their employer for a fixed lump sum payment violatesthe right ofthose performersto “appropriate and proportionate remuneration”under theDirective.The Council of Statehasalsoaskedthe Belgian Constitutional Court:is such a transferwithout the performers’ consentconstitutional?

Background

In 2016, the Belgian National Orchestra(“NBO”), a state orchestra, launched negotiations with its members’ unions in view of a global agreement regarding the transfer of and remuneration for the exploitation of the musicians’ related rights. This issue had previously been addressed on a case-by-case basis. In 2020, no agreement had yet been reached. Tension continued to rise when 32 musicians brought an action before the Brussels Court of First Instance, which successfully halted the NBO’s distribution of various recordings published on different platforms. As a consequence, the NBO requested that the Belgian government determine by Royal Decree the remuneration to which the performers would be entitled for the exploitation of their related rights. On 4 June 2021 (that is, one working day before the expiry of the DSM Directive’s implementation deadline), aRoyal Decree regarding therelatedrights of the artistic personnel of the Belgian National Orchestra(“Decree”) was published in the Belgian Official Gazette. The new Decree entered into force on the same day.

Under Article 2 of the Decree, the orchestra’s artistic personnel are deemed to have transferred to their employer (the NBO) all related rights linked to their performances within the scope of their services for the orchestra. Article 3 clarifies that this transfer includes the right of communication to the public and the right of reproduction and distribution. It also adds that the transfer is valid for the whole world and for the duration of the entire term of the rights. The remuneration provided for the assignment consists of an annual allowance of €24 gross per service, which equates to €600 gross for those who have been working an entire year (25 services/year), as well as several other allowances proportional to the NBO’s net income from the exploitation of the related rights.

It is notable that the Decree explicitly claims, in its preamble, that it provides for an “appropriate and proportionate remuneration” taking into account “the specific characteristics of the sector, the profits generated by the exploitation of the related rights of the musicians of theBelgianNational Orchestra and the remuneration of related rights applied in Belgian orchestras of comparable size and legal status”.

Legal issues

The musicians are challenging the Decree before the Belgian Council of State. In their view, the Decree violates their fundamental right to property, enshrined in Article 16 of the Belgian Constitution and Article 1 of the ECHR. They point out that, under Article XI.203 of the Belgian Code of Economic Law (“CEL”), rights related to copyright may only be transferred in accordance with the Civil Code. This means the performers’ consent is required. Moreover, they argue that Article XI.205 § 4 of the CEL, which points out that performers employed under an employment contract or a statute are allowed to transfer their intellectual property rights to their employer (provided that such a transfer is explicitly stipulated and falls within the scope of the contract or statute), implies that these rights can only be transferred by virtue of a contract or a collective agreement. Such a transfer is therefore subject to the rights holder’s consent. The Decree, a unilateral act, deprives them of their related rights without their consent.

Furthermore, the musicians claim that the Decree violates Articles 18 to 23 of the DSM Directive, which harmonise the authors’ and performers’ right to receive fair remuneration in the framework of exploitation contracts. Under Article 18, where authors or performers transfer their exclusive rights for the exploitation of their works or performances, they are entitled to receive “appropriate and proportionate”remuneration. In their opinion, the remuneration laid down in the Decree is not line with this article. The Belgian state, for its part, contends that the DSM Directive does not apply to musicians with a “civil servant” status. Indeed, the NBO’s musicians are not employed on a contractual basis. The musicians disagree, claiming that they are to be regarded as employees in the sense of the DSM Directive and, so, are not explicitly excluded from its scope of application.

The preliminary questions asked by the Belgian Council of State

On 31 August 2023, the Belgian Council of State submitted several questions for a preliminary ruling to the CJEU and the Belgian Constitutional Court.

The Council of State has asked the Constitutional Court whether interpreting Article XI.205 § 4 CEL as allowing a regulation (i.e.the Decree) to transfer related rights without the rights holders’ (in this case, the performers’) consent is contrary to the fundamental right of property as laid down in Article 16 of the Belgian Constitution and Article 1 of the ECHR.

The Council of State has also turned to the CJEU and asked whether Articles 18 to 23 of the DSM Directive must be interpreted as precluding the transfer by legal or regulatory provisionof related rights of performers under a “civil servant” status where such transfer falls within the scope of the statute. In addition, the Council of State refers a second question to the CJEU regarding transitional law. Article 26 of the DSM Directive provides that the Directive applies to all works and other subject matter protected by national law in the field of copyright on or after 7 June 2021 (which marks the expiry of the DSM Directive’s implementation deadline) and without prejudice to any acts concluded and rights acquired before 7June 2021. The Council of State therefore wonders if the terms“acts concluded”and“rights acquired”are to be interpreted as including the transfer of related rights through legislation adopted before 7 June 2021. As already mentioned, the Decree was made effective from 4 June 2021, which, according to the musicians, attested to the Belgian legislature’s intention to attempt to circumvent the application of the DSM Directive.

Now that this delightful prelude has reached the double bar line, we cannot wait to hear the Belgian Constitutional Court and the CJEU perform their intermezzos. Their answers to the Council of State’s questions will set the tone for the finale of this unfinished symphony. In the meantime, please do not hesitate to contact our IP team for further information or guidance.