Author-Protective Laws in International Dimension

Prof. Jane C. Ginsburg, Columbia University School of Law
June 15, 2015

Copyright generally vests in the author, the human creator of the work.  But because, at least until recently, most authors have been ill-equipped to commercialize and disseminate their works on their own, the author has granted rights to intermediaries to market her works.  Since most authors are also the weaker parties to publishing, production, or distribution contracts, the resulting deal may favor the interests of the intermediary to the detriment of the author’s.

Many national copyright laws have introduced a variety of corrective measures, from the very first copyright act, the 1710 British Statute of Anne, which instituted the author’s reversion right (still in force, albeit much modified, in U.S. copyright law¹) discussed in previous columns here, here, and here, to detailed limitations on the form and scope of grants found in many continental European copyright laws.²  As discussed in my last column, The Netherlands and France have amended their copyright laws to reinforce author-protective provisions; the French reforms particularly envision the publishing contract in the digital environment.

But many author contracts, especially in the digital environment, grant rights for multiple territories: How does the international dimension of these agreements affect the practical ability of individual countries to regulate authors’ contracts with respect to exploitations occurring within their borders?  If, on the one hand, “lawmakers tend to be provincial in developing copyright-contract rules, remaining focused on largely local parties and interests rather than on policies common to many jurisdictions,”³ and, on the other, general principles of private international law leave to the parties the determination of the law applicable to their contract, may the parties simply avoid “provincial” protections of authors’ economic interests by choosing (or the stronger party imposing) the law of a less author-interventionist jurisdiction to govern the full territorial extent of the transfer?

Let’s recall some general rules of private international law and copyright contracts.  The determination of applicable law first turns on the characterization of the issue.  Matters of substantive copyright law, including the rights conveyed by the contract, are governed by the lex protectionis, or law of the country for which protection is sought.⁴  Matters of contract are submitted to the law chosen by the parties to the contract (if the contract includes a choice of law provision) or to the law of the country in which the contractual relationship is localized.  In the EU, the Rome I Regulation⁵ establishes criteria for identifying the law governing the contract (lex contractus).

In the case of copyright contracts, defining which matters come within the domain of a national copyright law and which fall within the domain of the law of the contract is in fact an exercise fraught with controversy, because the respective rights of the parties to the contract may resolve differently depending on which law applies.  In particular, if national law prohibits the transfer of certain rights, for example of moral rights,⁶ or of rights to modes of exploitation unknown at the time of the contract’s conclusion,⁷ may an author nonetheless grant the right for all territories if she and her co-contractant choose the law of a country that permits such transfers?

Or suppose the national copyright law conditions the validity of a transfer of rights on compliance with obligations respecting the mode of payment or of execution of the contract.  For example, as we have seen in the new French law on publishing contracts, the law provides for a reversion of rights if the grantee fails to exercise them within a given period,⁸ or, as in both the Dutch⁹ and the French laws,¹⁰ national copyright laws may permit the grant of rights in new modes of exploitation, but require additional payment in return.  Or suppose the national law conditions the validity of the transfer on compliance with certain formal prerequisites, such as that the contract be in writing and signed by the author,¹¹ or that the contract distinctly identify each mode of exploitation for which it transfers rights.¹²  Or suppose the national copyright law sets out a rule of interpretation calling for strict construction of copyright contracts, as we have seen in the Dutch law.¹³

Are all of these issues mere modalities subject to the lex contractus, rather than questions so closely related to the substantive copyright right as to come within the same choice of law rule, the lex protectionis?  Are some more tightly intertwined with substantive copyright norms than others, so that some issues would come under the lex protectionis and others under the lex contractus?¹⁴  Choosing a law applicable to the contract does not permit the parties to derogate from the rule that the law applicable to the scope of the substantive rights under copyright is the law(s) of the country(ies) where the work is exploited.  But stating the rule does not help us ascertain which aspects of an international agreement should be classified as coming within the author’s “substantive rights.”

One might distinguish between the domains of each law by stating that national copyright laws govern what may be granted (alienability vel non falls under the lex protectionis), while the law of the contract determines how the right may be granted, and therefore covers questions of form, of means, and of interpretation.¹⁵  While appealing in the abstract, a what/how dividing line may be less well defined than first appears, and, more importantly, seems unduly formalistic.  After all, effective protection of the author as the weaker party to the contract (the raison d’être of these laws) may turn as much on the scope and interpretation of the grant, or on how the author is remunerated for the rights she alienates, as on whether she may grant the right at all.  From that perspective, the law of the country for which rights are granted should determine not only the transferability of those rights, but also substantive conditions that the State imposes on the scope and form of the transfer.¹⁶

Arguably, if limitations on the substance or means of alienability, or formal requirements regarding the drafting of the contract advance important State policies, then national courts can acknowledge a broad application of the lex contractus, but reject that choice of law in particular cases, by applying the corrective of public policy (ordre public).  Resort to the safety valve of ordre public in the context of authors’ contracts, however, risks both over use, particularly in the context of ensuring the application of recent local author-protective legislation, and injecting unpredictability into the multiterritorial commercialization of a work, because the parties (or the commercial intermediary) must anticipate which national courts would apply local law on grounds of ordre public, and if so, which national law dispositions are likely to bear the weight of expressing a public policy so strong that its avoidance by resort to the law of another State with a connection to the parties or their deal would offend deeply held policies of international as well as domestic public order.

Outcomes may be more predictable if it is clear from the outset whether the issue is characterized as one of substantive copyright law, or instead as one of contract law.  But, in addition to the difficulties, already evoked, of distinguishing the respective domains, general rules of private international law inject a further complication: Characterization typically comes within the judicial competence of the forum, and different national courts may adopt different characterizations of the same issue (with consequently different results).  One can anticipate that, as the stronger party, the exploiter might avoid the application of author-protective copyright laws by imposing a choice-of-forum clause that will ensure the competence of a court likely to characterize the dispute as one of contract rather than of substantive copyright law.

National copyright laws, however, might remove this layer of analysis by anticipating the international dimension of copyright transfers and articulating when the national law will nonetheless apply, in effect designating the national author-protective rules as of mandatory application.  This technique will instruct local courts as to which law governs.  If the question of the scope of the contract comes before another jurisdiction, those courts’ application of the foreign rule will depend on whether the relevant jurisdiction acknowledges another state’s mandatory rules.¹⁷  The new Dutch copyright law offers an example of this approach; by contrast, the French law does not clearly specify its application in the international ambit.  As we will see in a future column, the answers to the questions whether local authors (or indeed foreign authors as well) will obtain the protections of local law when their works are exploited within a given territory may differ based on those countries’ (and foreign fora’s) approaches to identifying the applicable law.