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Update on German Copyrights and Related Rights

1. Brief introduction

We were asked to prepare an expert opinion on the topic of "the protection afforded by German law to holders of copyrights and related rights, especially with regard to music, film and similar works.

In particular, clarification was requested on the following aspects:
 

How are copyrights and related rights regulated in Germany and what is their scope of application?

2. Copyrights and connected rights in Germany and their scope of application

a. In general

Copyrights and connected rights in Germany are regulated by the Copyright Act(Urheberrechtsgesetz, kurz: UrhG, Nr. 51 from the 16.09.1965). In this law they especially protect the copyright holder and their works, for example their music or films.

Their works must be personal intellectual creations and have to be externally manifested. However,the works do not have to be published or entered in an official register.

b. The copyright

The protected area includes the personal right of the copyright holder and the right of exploitation. 

Regarding the personal right the copyright holder can decide on their own if and how the work should be published, he can demand recognition of authorship and he can prohibit disproportionate changes at his creation.

Regarding the right of exploitation, the copyright holder can conclude license contracts with third parties and can give them rights of use in exchange for money. Examples are that third parties get the permission to copy the work, offer it to other third parties or publish it.

Copyright protection lasts up to 70 years after the death of the copyright holder.

c. The connected rights

Not only the copyright holders can assert their rights, but other people who get in contact with the creations. This is what we understand as connected rights. For example, actors, singers or musician, who reproduce the work of the copyright holder, or also light creators, producers of sound recordings, broadcasters or press publishers. 

They have a right of recognition and also rights regarding to the reproduction of their own work, so a recording may only be used further with the consent of the artist. Further they have a right to receive an appropriate compensation (e.g. § 79a I UrhG).

3. The owner of these rights

The creator of the work is the owner of the copyright. In Germany only natural persons, i.e. humans, can be copyright holders. Fundamentally the copyright is non-transferable. However the copyright owner can transfer rights of use to third parties, even to legal entities, through a license contract. This possibility is stated in § 31 UrhG.

4. Collecting societies

a. In general

In Germany, just as in Italy, there are collecting societies, who manage the rights of the copyright owners. 

Any use of a copyright-protected work generally requires the permission of the copyright holder. However, it is nearly impossible for the copyright holder to obtain such permission individually, especially in case of mass use. In addition, the copyright holders are often unaware of the respective use and therefore cannot claim appropriate remuneration. For this reason, collecting societies manage the rights of the copyright holders collectively.

Joining a collecting society is voluntary, but it makes it easier for copyright holders to receive appropriate remuneration for the use of their works.

The collecting societies are private-law associations. They operate nationwide, regardless of the location of the copyright holder and of the collecting society.

Their tasks, based on authorization contracts with the copyright holders, are to grant licenses for the works they manage, monitor the following use of the works and collect license fees in order to distribute the revenue to the copyright holders on the basis of distribution plans.

The collecting societies are subject to state supervision by the German Patent and Trademark Office (DPMA in Munich). It makes sure that the collecting societies comply with legal requirements, especially with the Collecting Societies Act (Verwertungsgesellschaftengesetz, kurz: VGG, Nr. 24from the 24.05.2016).

 
b. The collecting societies in Germany

In Germany there are fourteen collecting societies, which are organized according to different topics, so that they have a de facto monopoly in their field.

Collecting Societies in Germany

 
c. In detail

Please note that although, it seems as if there are lots of societies regarding music and films, theyhave different tasks: 

1. GEMA: GEMA has the task of representing the rights of musicians such as composers and lyricists. They manage these rights and represent them against music users (e.g., record companies, broadcasters, or public event organizers). Anyone who wants to perform, reproduce, or duplicate music have to pay a fee and receives a license from GEMA. Therefore, GEMA protects the right of performance of the copyright holder. Television broadcasters must obtain licenses from GEMA in order to use copyrighted music in their programs, and GEMA ensures that copyright holders are compensated for the use of their works.

2. GVL: GVL does not represent copyright holders in the strict sense, but rather holders of connected rights. These are individuals or companies who do not create their own works but are involved in a performance or production, for example by singing, playing, or recording. So, it represents especially singers, actors and dancers.

3. VG Wort: VG Wort represents authors and publishers of texts and linguistic works. This refers in particular to copyrights for literary, journalistic or dramatic works that are used physically (e.g., in books or newspapers) or digitally (e.g., as texts on the Internet).

4. VG Bild-Kunst: VG Bild-Kunst represents artists who create works in the visual sector, such as painting, photography, or sculpture. If somebody wants to print an image on a poster or in a book, he needs a license to do so. The same applies to the use of such images in film screenings or on websites.

5. VG Music Edition: VG Music Edition works close with GEMA. VG Music Edition is responsible for the reproduction of sheet music and grants licenses for copying, scanning, or printing sheet music. For example, a choir that wants to copy sheet music for a song for all its members needs a license from VG Music Edition.

6. GÜFA: GÜFA is a collecting society for erotic and pornographic films that are shown in sex shops or rented out in video stores and it represents the rights of those producers.

7. VFF: VFF manages the rights of film and television production companies. So, it represents the productions of public broadcasters, private broadcasters and commissioned producers in general.VFF takes care of the rights to distribute and reproduce the works.

8. VGF: VGF takes care of the rights of film producers, co-producers, directors, and distributors for cinema films only. It collects fees for the distribution of those films.

9. GWFF: GWFF also takes care of the rights of the film and television producers, but regarding to the secondary use of films, i.e. DVDs or media libraries.

10. AGICOA: AGICOA manages the rights of copyright holders of audiovisual works, especially film and television productions, broadcasted on cable television. It works closely with collecting societies such as VFF and VGF, but focuses on the protection and management of copyrights worldwide.

11. Corint Media: Corint Media represents the copyrights of the private media industry, including major TV stations such as ProSieben and Sat.1. It manages and exploits these rights, for example in  case of the retransmission of programs by cable providers and IPTV, those who make television programs available via an internet connection. This may be the case when broadcasts are played in gyms, hotels, or restaurants.

12. TWF: TWF represents director and editors of advertising films. The focus of this society is on commercials.

13. GWVR: GWVR protects the rights of concerts and event organizers in case of live recording. In this way, organizers receive a profit of the income generated by broadcasting concert recordings, for example, on digital platforms, on the radio, or on television.

14. VHG: VHG has the task of ensuring that computer games developers receive a financial compensation for the legal private copying.

5. Payment and rates

a. In general

First of all, there are some cases in which a person can use the creations without permission and therefore also free of charge, for example if it is only for private use, or if it is for legal/administrative proceedings.

However, the main purpose of the Copyright Act is to ensure that the copyright holders receive appropriate remuneration for the use of their work.

The collecting society grants licenses to third-party users and collects the fees for copyright holders. If the user is a company, it will pass on the fees to the end consumer, who will ultimately pay.

b. How the collecting society interacts with copyright holders

i. Gaining the membership as a copyright holder

Membership in such collecting societies generally requires the payment of subscription fee. For instance, GEMA — a collecting society operating in the field of music — requires an annual membership fee of 50 €, in addition to a one-time admission fee of 90 € (net). These fees constitute a prerequisite for the copyright holder to be represented by the society in the management and enforcement of their rights.

ii. Determination of remuneration

The determination of remuneration within collective society systems follows a structured and centralized process designed to ensure fairness and transparency. Under a distribution plan, the society defines the criteria and methods according to which the income derived from license fees is allocated among its members. This distribution plan, adopted by the general meeting of members ( the copyright holders), is binding upon all participants and serves as the principal instrument for regulating internal remuneration practices.

Individual members do not possess the authority to negotiate or modify their own remuneration terms. By signing the authorization agreement, the copyright holder transfers to the collecting society the right to license their works and to collect and distribute the corresponding royalties. Consequently, remuneration and tariff levels are determined collectively rather than individually. This centralized negotiation process enables the collecting society to secure equitable and uniform conditions for all rights holders, avoiding disparities that could otherwise arise in direct licensing.

From a legal standpoint, the amount of compensation remains governed by the principle of reasonable remuneration, as codified in § 32 I 1–2 UrhG: “The copyright holder is entitled to the contractually agreed remuneration for granting rights of use and permission to use the work. If the amount of remuneration is not specified, reasonable remuneration shall be deemed to have been agreed.”

Accordingly, while the system respects contractual freedom, the remuneration must always be fair and proportionate to the extent of the rights granted. To guarantee predictability and consistency, collecting societies—in accordance with § 27 I VGG—are required to adopt fixed rules that preclude arbitrary revenue distribution. These internal mechanisms, embodied in the distribution plan, ensure that royalties collected from license agreements are allocated transparently and equitably among the represented authors, composers, and publishers.

iii. Distribution of revenue between the collecting society and the copyright holder

A central question in the functioning of collective societies organizations concerns the distribution of the revenues collected from users between the society itself and the copyright holders it represents. In this respect, the collecting society retains a certain percentage of the total income generated through the licensing of musical works in order to cover its operating expenses. This percentage is referred to as the total cost rate, which is disclosed annually in the society’s financial report to ensure transparency.

By way of illustration, in 2016 GEMA’s total cost rate amounted to 15.4% of total revenue. This percentage is than deducted from the total revenue and the result (74,6% of the revenue, in our example above)  paid out to the members of the “ collective” (copy mark holders) on base and terms of the distribution plan.

The total cost rate serves to cover several categories of expenditure, including:

To provide a concrete example, if GEMA collects 100 € from users in a given year, the total cost rate of approximately 15.4% is deducted to finance its operational functions. Consequently, 15,40 € would be retained by GEMA, while the remaining 84,60 € would be distributed among its members- composers, lyricists, and publishers - according to the criteria set out in its distribution plan.

c. How the collecting society interacts with users

i. Relationship between collecting societies and users

The interaction between collecting societies and the users of protected works is highly regulated and centralized. Individual users, including large platforms, cannot unilaterally determine the amount they pay for the use of copyrighted works. Instead, organizations such as GEMA negotiate  agreements with these users associations and establish standardized license fees. A prominent example is the agreement with video-on-demand providers, including Netflix and Amazon Prime, which sets the license fee for using the rights at 2.5% of net revenues.

The society establishes fixed tariffs that correspond to different types of music use. These tariffs, published in the GEMA tariff list, are standardized to promote transparent and equitable remuneration. Direct negotiation of individual prices is generally not provided. Pursuant to § 38 VGG, the collecting society determines the tariffs “for the remuneration it demands on the basis of the rights it manages,” but must do so in compliance with statutory provisions, in particular the Collecting Societies Act (VGG) and the Copyright Act (UrhG).

The tariffs must also be reasonable, as required by § 34 I 1 VGG, which obliges the society to grant access to its rights on fair terms. The basis for calculating rates is further defined in § 39 I–II VGG, emphasizing the proportion of the work’s use within the overall exploitation process and the economic value of services provided by the collecting society. Accordingly, rates are differentiated by type of work (e.g., music, film, text) and mode of use (e.g., public performance, reproduction, online distribution).

In the case of music, GEMA has developed specific categories: live performances, online usage, film screenings, and reproduction of programs. Each category is further subdivided - for instance, the reproduction of programs includes radio and film programs. Tariffs for film programs used by television broadcasters are calculated as a percentage based on the proportion of music in the program and the turnover generated. Similarly, Corint Media has established groups for TV live streaming and program reproduction, also applying percentage-based rates according to usage volume and revenue.

Based on these tariffs, GEMA concludes license agreements with users in accordance with § 35 VGG, which obliges the society to enter into comprehensive agreements on reasonable terms with user associations. Within these agreements, remuneration rates can be modified in practice, provided that § 36 I 1 VGG is observed, requiring that “the collecting society and the user shall negotiate in good faith regarding the rights managed by the collecting society.”

ii. DPMA – dispute’s solutions

If the collecting society and the user argue about the fees and cannot find an agreement, legal provisions regulate who settles the dispute and how. They have to call the conciliation office of the DPMA and that will decide on the issue.

§ 92 I VGG states “The conciliation office may be called upon by any party involved in a dispute involving a collecting society and concerning one of the following matters: 1. the use of works or services protected under copyright law, 3. the conclusion of a comprehensive agreement”. The conciliation office tries to settle disputes out of court. If one party disagrees with the decision of the conciliation office, there is still the possibility of a court review (§ 128 ff. VGG).

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