German Federal Supreme Court: Publishers are not entitled to 50% of monies distributed by collecting society to rights holders

Published 27 April 2016 by SKW Schwarz Rechtsanwälte

The German Federal Supreme Court today put an end to a collective distribution practice established for decades. The defendant, collecting society VG Wort, collects amongst others the copyright levies for private copying. Distributions are split 50/50 between the respective authors (of literary works) and their publishers. The Court held that distributing this share to publishers is not justifiable at law. Distributions can only be made to holders of respective rights and claims from copyright. Publishers regularly have no such position under German copyright law. The distribution of a share of the sums collected by VG Wort also to publishers disregards whether and to which extent the receipts collected stem from the administration of rights granted by the publishers. Relying on the argument that the publishers facilitate the exploitation of published works in the first place would not justify to distribute a share to publishers. 
Notes: This landmark decision may have substantial ramifications for the operation of collecting societies. Any distribution to entities which have no entitlement of their own right under copyright, but rely on assigned or transferred rights and claims, may be affected. The argument not only applies to VG Wort and literary works, but in principle to any work protected by copyright and the distribution of the respective royalties. Film and record producers, however, different from publishers under German copyright are granted a neighboring right in their own right for which they too are entitled to receive copyright royalties.

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