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From the 2021 Annual Report: From law-making to implementation

The «Regulations» division is responsible for SUISA’s legal affairs. This starts with its involvement in political law-making activities, runs through tariff negotiations and drafting the distribution rules, and ends with the implementation of rules and regulations in case of disputes. In 2021, the division dealt with a number of key issues. Text by Vincent Salvadé

From the 2021 Annual Report

The 2021 Annual Report contains all the relevant figures and information relating to the previous financial year at SUISA (cooperative and group). (Photo: SUISA)

1. Legislation

In last year’s Annual Report, we mentioned the initiative of National Councillor Philippe Nantermod demanding an exception to copyright law for protected works used in hotel rooms and similar facilities. This parliamentary initiative was revisiting a provision that the National Council and the Council of States had rejected in September 2019 as part of the revision of the Copyright Act. On 3 March 2021, the National Council accepted the parliamentary initiative. For us, that was inadmissible. There was no good reason to revise the Copyright Act after such a short time, especially since it was the fruit of a compromise. Cultural circles had made significant concessions to reach a solution. They would have been cheated if certain elements were to have been changed unilaterally. Moreover, the initiative was inconsistent with international law. As a result, either Switzerland would have been exposed to economic sanctions, or, to avoid violating international agreements, it would have had to apply the exception only to the works and performances of Swiss nationals. That would have blatantly discriminated against Swiss artists compared with those of other countries. Fortunately, the initiative was rejected by the Council of States in early March 2022, and the matter was definitively shelved.

The revision of the Swiss Code of Civil Procedure also kept us busy. For a while, it seemed that conciliation would be made mandatory before any legal action could be brought to enforce royalty payments of less than CHF 30,000. During legal proceedings, it is often worthwhile to seek an arrangement. However, collective management organisations must respect the principle of equal treatment, and their tariffs are binding. It follows that they have limited leeway for proposing or accepting out-of-court settlements. Under the circumstances, we argued in favour of a voluntary conciliation procedure which would avoid unnecessary costs when an out-of-court arrangement appears to be out of reach. The matter seems to be on the right track, although the revision of the Code of Civil Procedure is yet to be completed as this report goes to press.

Just before Christmas, the Federal Council published a report in response to a motion requesting an evaluation of the effectiveness of the revised Copyright Act (which came into force on 1 April 2020). On the whole, the Government is relatively positive. It noted that the anti-piracy measures seemed to have had a dissuasive effect and that there was less criticism from rightholders. On the other hand, the Federal Council was more reserved about the new extended collective licence model: the latter should enable collective management organisations to issue global licences for an entire repertoire (even on behalf of rightsholders that they do not represent contractually) but was still to realise its full potential. In this context, we welcome Switzerland’s intention to follow the international talks: regulation at international level will be necessary to ensure that the extended collective licence is also used in multi-territorial operations.

2. Tariffs

In terms of tariff negotiations, we concluded two significant agreements in 2021.

The first was an agreement with our international partners on a new Tariff 4i regulating private copying on digital storage media. This agreement extends the levy scheme to include laptops and external hard drives. The new tariff is currently before the Federal Arbitration Commission for approval and is expected to enter into force on 1 July 2022. This will significantly increase our revenues from the blank media levy. Moreover, in 2022 we will pursue talks on a new tariff for private copying on the Cloud (i.e. on remote servers). The talks had been suspended in autumn 2021 pending a decision by the European Court of Justice on a similar levy scheme applied in Austria. The ECJ handed down a ruling favourable to rightholders at the end of March 2022.

In 2021, in a different context, we finalised negotiations on a new Common Tariff Z regulating circuses. The objective had been to achieve a better delimitation between this tariff and Common Tariff K which regulates concerts and certain other types of shows. Henceforth, Common Tariff Z, with more advantageous rates, will apply only to certain well-defined shows. The Federal Arbitation Commission approved the new tariff on 8 November 2021.

3. Distribution Rules

In spring 2021, the amendments to the Distribution Rules decided by SUISA’s Board at the end of 2020 were all approved by the Federal Institute of Intellectual Property (IPI). The new distribution system for private copies was implemented for the first time in September 2021.

Moreover, SUISA’s Board adopted three amendments to the Distribution Rules concerning online rights. The first applies to situations where an online platform does not report sufficient information on the works it uses: in this case, distribution is made based on the information obtained from other platforms using a similar repertoire. The second amendment concerns «residuals», namely the amounts paid by online providers «in final settlement» for works that have not been claimed by any rights management organisation. As of the end of 2021, these residuals are distributed to entitled parties in the form of supplemental payments on their settlements for current uses. The third and last amendment concerns «Play Suisse», the video on demand (VoD) platform of the SRG-SSR (Swiss Broadcasting Corporation). The Board decided that a portion of the amounts paid by the SRG-SSR under Tariff A would henceforth be allocated to distribution category 22S covering VoD. This portion is calculated based on the share of costs invested in «Play Suisse» as against SRG-SSR’s total costs.

This third amendment still requires IPI approval. The latter has first requested an addition to Tariff A. The SRG-SSR agreed, and the matter was referred to the Arbitration Commission in spring 2022: we are looking forward to a favourable outcome soon.

4. Regulatory authority

Finally, two cases are pending on which IPI, our regulatory authority, and SUISA hold divergent views. Both cases concern the relationship between «conventional» collective rights management, which is under federal oversight, and the liberalised management of online rights. In the first case, IPI opposes the granting of guarantees by SUISA to secure a bank loan to MINT, the joint venture company with SESAC for the management of online rights. In the second case, IPI opposed a cross-selling initiative undertaken by SUISA to inform its Tariff 3a (background music) customers that they would have to obtain an additional licence for the use of music on their websites or social media pages.

In both cases, we filed an appeal with the Federal Administrative Court. In the first case, we argued that the proper functioning of MINT was in the best interest of SUISA’s members. After all, the aim of the joint venture is to bring the Swiss repertoire together with other repertoires to achieve greater bargaining power in our dealings with giants like Google, Apple, or Spotify. The guarantees granted to MINT will be submitted to the 2022 General Meeting and the matter will thus be closed. In the second case, IPI deemed that data protection requirements disallow the communication of this information by SUISA, and that the information is misleading since conventional rights management and the management of online rights are governed by different rules. We believe that IPI exceeded its competence in this context and has disregarded the realities of collective management in its interpretation of statutory rules. We are now awaiting the decision of the Federal Arbitration Court.

Both these cases address an important question: how far can SUISA go to respect its obligations as a monopolistic organisation in certain areas while coming to terms with a liberalised market in others? We need the regulatory authority to provide a practical answer to this question. Otherwise, SUISA’s members may have to suffer the consequences.

2021 Annual Report
The 2021 Annual Report contains all the relevant figures and information relating to the previous financial year at SUISA (cooperative and group). Informative articles shed light on income, political developments and tariff negotiations in the past year. Once again, 2021 was dominated by the coronavirus pandemic and its impact on the music industry. You can find out what this meant for SUISA’s members and customers in the 2021 Annual Report.
www.suisa.ch/annualreport
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The «Regulations» division is responsible for SUISA’s legal affairs. This starts with its involvement in political law-making activities, runs through tariff negotiations and drafting the distribution rules, and ends with the implementation of rules and regulations in case of disputes. In 2021, the division dealt with a number of key issues. Text by Vincent Salvadé

From the 2021 Annual Report

The 2021 Annual Report contains all the relevant figures and information relating to the previous financial year at SUISA (cooperative and group). (Photo: SUISA)

1. Legislation

In last year’s Annual Report, we mentioned the initiative of National Councillor Philippe Nantermod demanding an exception to copyright law for protected works used in hotel rooms and similar facilities. This parliamentary initiative was revisiting a provision that the National Council and the Council of States had rejected in September 2019 as part...read more

Remuneration for private copying – new CT 4i as of 1 July 2022

Copying music, videos and e-books for their personal entertainment: Consumers in Switzerland have been enjoying this freedom for a very long time. For several years, rightsholders have been paid royalties for copies made on smartphones and tablets. Starting this summer, they are now also going to receive remuneration for copies on laptops and external hard drives. Text by Anke Link

Remuneration for private copying – new CT 4i as of 1 July 2022

With the expansion of Common Tariff 4i, rightsholders will also receive remuneration for private copies of their works on laptops and external hard drives from July 2022. (Photo: Rawpixel / Shutterstock.com)

Some 30 years ago, the fact that you could make tons of music copies on audio cassettes kicked off private copying levies to be anchored into legislation. Since then, it has been permitted in line with the Swiss Copyright Act to make copies of protected works for the use in people’s private circles or home lives. The range of blank media subject to a licence fee has increased in the course of technological developments; today, digital storage built into devices such as smartphones, tablets and laptops is predominantly relevant.

In return for the many ways in which music, films and other works can be stored, authors and performers of music, filmmakers, writers, etc. are entitled by law to remuneration for these private copies.

Such a levy must be paid by the manufacturers and importers of the recording and storage devices. The collective management organisation regularly negotiate with the associations of these companies about the level of the levy and for which memories it must be paid. The licence fee for private copying is then collected by SUISA according to so-called “Common Tariffs” for all Swiss collective management organisation and distributed to the respective rightsholders.

Levy for private copies on laptops and external hard disks

In the summer of last year, the associations agreed with the collective management organisation that from 1 July 2022 memory in laptops and notebooks as well as external hard drives is also going to be considered blank media subject to a mandatory levy. These storage facilities therefore now also fall within the scope of Common Tariff 4i (CT 4i). In the case of external hard disks, it does not matter whether they are magnetic hard disks (hard disk drives) or contain another storage technology (solid state drive or a combination of both). It only matters that they are intended for connection to personal computers (desktop computers, laptops, notebooks or tablets). Connections like these can be made via cable (e.g. USB or Firewire) and via ports such as BUS and PCI slots of personal computers. External hard disks are all storage extensions for personal computers, regardless of whether they are connected or installed outside of the computer. However, so-called “server grade” hard disks, which are intended for the server infrastructure of companies, are exempt from the obligation to pay a fee.

In contrast to the previous CT 4i, which still provided for different fees according to the equipment category, uniform remuneration rates will apply to almost all storage facilities covered by the tariff from 1 July 2022. The fees were based on the corresponding price of the devices and external hard disks, and the proportion of the respective storage devices used in connection with private copying. On this basis, uniform fees were calculated and negotiated, which are now only dependent on storage capacity and apply per device or per external hard disk. Only MP3 players are still subject to separate levies:

For MP3 players and the like:

Storage capacity per device
up to and including 4 GB CHF 2.40
up to and including 8 GB CHF 4.20
up to and including 16 GB CHF 4.70
up to and including 32 GB CHF 7.80
more than 32 GB CHF 12.40

For all other devices covered by the CT 4i or for external hard disks:

Storage capacity per device/hard disk
over 16 GB up to and including 32 GB CHF 2.10
up to and including 64 GB CHF 2.90
up to and including 128 GB CHF 3.85
up to and including 256 GB CHF 4.80
up to and including 512 GB CHF 5.60
up to and including 1 TB CHF 6.50
up to and including 2 TB CHF 7.50
more than 2 TB CHF 8.30

With the exception of MP3 players, the fees are only due for devices or external hard drives with a storage capacity of more than 16 GB. For external hard disks, a maximum fee of CHF 4.50 also applies, even if the storage capacity is very high. This takes into account the fact that the prices of external hard drives are lower compared to the other devices covered by the levy. Value-added-tax is owed in addition in each case.

Registration of storage devices subject to a mandatory levy

Even though there is such a uniform levy for almost all storage devices, it is important in the context of the correct distribution of the collected amounts to the rightsholders that the manufacturing and importing companies distinguish between the device categories when registering their storage devices that are subject to a mandatory levy. This is due to the fact that films and movies are copied to laptops, tablets and external hard drives more frequently than to smartphones, for example. Levies collected for these memories must thus be split in a different way than the fees collected for smartphones. Only in this way is the money allocated to the correct creators and any other rightsholders who are entitled to it. SUISA will provide its clients with corresponding reporting forms from July 2022, which will form the basis for invoicing.

This extension of CT 4i ensures that consumers can continue to copy their favourite works to the devices of their choice without having to have a guilty conscience and that those who create these works are compensated for doing so.

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Copying music, videos and e-books for their personal entertainment: Consumers in Switzerland have been enjoying this freedom for a very long time. For several years, rightsholders have been paid royalties for copies made on smartphones and tablets. Starting this summer, they are now also going to receive remuneration for copies on laptops and external hard drives. Text by Anke Link

Remuneration for private copying – new CT 4i as of 1 July 2022

With the expansion of Common Tariff 4i, rightsholders will also receive remuneration for private copies of their works on laptops and external hard drives from July 2022. (Photo: Rawpixel / Shutterstock.com)

Some 30 years ago, the fact that you could make tons of music copies on audio cassettes kicked off private copying levies to be anchored into legislation. Since then, it has been permitted in line with the Swiss Copyright Act to make...read more

Background on SUISA Digital’s lawsuit against Snapchat operators

Today, SUISA Digital Licensing (SUISA Digital) announced that it is suing Snap for copyright infringement. Snap operates the successful platform Snapchat. In a written interview, Fabian Niggemeier, CEO of SUISA Digital, comments on the background of the lawsuit. Interview by Giorgio Tebaldi

Background on SUISA Digitalʼs lawsuit against Snapchat operators

Snapchat offers its users the possibility of adding music to their messages. Very few authors receive any remuneration from Snap, the operator of Snapchat, for this. (Photo: Postmodern Studio / Shutterstock)

Fabian Niggemeier, why is SUISA Digital suing Snap?
Like every online platform that makes music available to its users, Snap also requires a license for Snapchat in order to be able to use this music commercially. However, Snap does not own a license for our repertoire and does not pay any compensation to the creators and publishers we represent for the music in the videos on Snapchat. Thus, Snap is clearly in violation of copyright law, which is why we filed a lawsuit against the company.

Was there no other way to get Snap to pay copyright royalties?
Unfortunately, there was no other option. We conduct contract negotiations with every online music provider – we now have such contracts with around 80 providers. We have also been trying to negotiate such a contract with Snap for about two years. So far, the attempts have been unsuccessful. Snap takes the position that they do not use any of our authorsʼ and publishersʼ songs. But we can prove that this statement is false. In fact, there are thousands of songs available on Snapchat that have been composed and written by creators and publishers who have entrusted us with their rights.

Snap introduced the new “Sounds” feature for Snapchat – embedding music in Snaps – some time ago. At launch, Snap stated that it had entered into licensing agreements with rights holders for this offering. Does Snap not pay any royalties to other collecting societies? Is SUISA Digital an isolated case?
Unfortunately, we donʼt know. We only know that Snap offers the works of numerous authors and publishers, who are represented by us, to users on the Snapchat service and thus reproduces them publicly. Snap has not acquired a license for this.

How much compensation does Snap have to pay for the use of the works of the authors and publishers represented by SUISA Digital?
We are yet to calculate the exact amount. Unfortunately, we currently lack the necessary information for this. One demand of our lawsuit is therefore that Snap discloses Snapchatʼs revenues and streaming figures without restriction and without gaps. Based on these figures, we will calculate the actual amount of compensation owed.

What does this lawsuit mean for Snapchat users? Will the repertoire represented by SUISA Digital be blocked?
There is no reason for a blocking of the repertoire we represent as long as Snap abides by the rules. So far, our repertoire can only be accessed illegally on Snapchat. We appeal to Snap, for the benefit of its users, to talk to us about licensing our repertoire and not to escalate the situation any further.

SUISA Digital is a Liechtenstein company owned by a Swiss cooperative, but the lawsuit is being brought before the Hamburg Regional Court. Why?
There are several reasons. SUISA Digital represents copyrights not just for uses in Switzerland and Liechtenstein but for the whole of Europe. Therefore, it is possible to institute proceedings in a large German-speaking country. The markets in Switzerland and Liechtenstein are too small for a lawsuit to have any external effect here. Lastly there is always the risk in a small market like Liechtenstein that Snap would take its service off the market. This scenario is extremely unlikely in the case of a lawsuit in Germany.

PRESS RELEASE: SUISA Digital suing Snapchat for copyright infringement

SUISA Digital Licensing
The music licensing organisation SUISA Digital Licensing (SUISA Digital for short) is a subsidiary of SUISA, the cooperative society for authors and publishers of music in Switzerland and Liechtenstein. SUISA Digital, having its registered office in Vaduz, Liechtenstein, represents the online rights to musical works by composers, lyricists and publishers from 15 copyright societies and several publishers worldwide. SUISA Digital licenses internet platforms worldwide and has contracts with over 80 online service providers, amongst others Youtube, Spotify, Apple Music or Meta (formerly Facebook).
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All comments will be moderated. This may take some time and we reserve the right not to publish comments that contradict the conditions of use.

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Today, SUISA Digital Licensing (SUISA Digital) announced that it is suing Snap for copyright infringement. Snap operates the successful platform Snapchat. In a written interview, Fabian Niggemeier, CEO of SUISA Digital, comments on the background of the lawsuit. Interview by Giorgio Tebaldi

Background on SUISA Digitalʼs lawsuit against Snapchat operators

Snapchat offers its users the possibility of adding music to their messages. Very few authors receive any remuneration from Snap, the operator of Snapchat, for this. (Photo: Postmodern Studio / Shutterstock)

Fabian Niggemeier, why is SUISA Digital suing Snap?
Like every online platform that makes music available to its users, Snap also requires a license for Snapchat in order to be able to use this music commercially. However, Snap does not own a license for our repertoire and does not pay any compensation to the creators and publishers we represent for the...read more

Small rights and grand rights: who does what?

If there is one matter that regularly triggers heated debate, it is the distinction between small rights and grand rights. Small rights relate to non-theatrical musical works and fall within SUISA’s sphere of competence, while grand rights relate to dramatico-musical works and certain types of ballet and are managed by the Société Suisse des Auteurs (SSA) or directly by publishers. Text by Vincent Salvadé

Small rights and grand rights: who does what?

In deciding whether a work is a dramatico-musical work or a non-theatrical work, the key question is whether the work has a storyline and whether it involves persons playing roles. What does this abstract definition of small rights and grand rights mean in practice? (Photo: Elnur / Shutterstock.com)

The distinction is frequently at issue because it relies on imprecise criteria which must be construed on a case-by-case basis. Our purpose here is to shed light on this rather hazy subject.

The legal framework

The legal authority granted to SUISA by the Federal Institute of Intellectual Property (IPI) relates to “non-theatrical musical works”. This concept was clarified by an ordinance issued by the Federal Department of Justice and Police on 23 February 1972. Today, that ordinance is no longer formally in force, but the Federal Court deemed that the principles contained therein could still be relied upon to determine what a non-theatrical musical work is: in this regard, current law has simply taken over the former legal provisions (case 2A_180/1994, Judgment of 10 May 1995). SUISA incorporated the criteria of the 1972 ordinance into its General Terms and Conditions of Rights Administration which are part of the contractual documents signed with its members.

Simplifying slightly, one could say that the non-theatrical music in SUISA’s sphere of competence consists of all musical works with the exception of dramatico-musical works and certain ballet musical works. These exceptions give rise to what are known as “grand rights”.

What is the scope of application of grand rights?

There is an abstract definition for grand-rights creations: these are “works with a storyline portrayed by persons playing set roles, which rely on music to such an extent that they cannot generally be used without it”.

No doubt … but what does that mean in practice?

  1. Firstly, the work must have a storyline. But not just any storyline: SUISA is always responsible for concerts, even if there are dancers accompanying the artist, or a light show, costumes, or other staging elements. etc. For grand rights to be attached to a work, there must be persons playing set roles. That is why the rights in operas, operettas and musicals are not managed by SUISA.
    The requirement of “persons playing roles” is basically fulfilled when a story unfolds with performers on stage. But that may not always apply: “abstract ballets” for example, do not have a script but rely on expression through dance. For a work to be deemed a grand-rights work, the dancers would have to play set roles even if they do not “tell” a story. For example: one dancer represents good and the other evil, one symbolises earth, another the moon. This “role-play” needs to bear a significant weight in the representation of the work, it cannot merely be secondary to the music.
  2. Moreover, the storyline must depend heavily on the music. A relatively widespread misconception needs to be clarified in this regard: whether or not the music was especially composed for the staged work is not decisive. Certain pre-existing musical works may become integral parts of a dramatico-musical work (with permission from the authors) if the staged performance relates to grand rights; conversely, however, music that has been especially composed for the stage (for example) will remain a non-theatrical work under certain circumstances. What counts basically is how closely intertwined the music is with the storyline.
    It is customary for lawyers to say that a dramatico-musical work cannot be performed without music, or with different music. This statement may be an over-simplification, but it has the merit of pointing the way: for example, when the lyrics are sung, it is hard to imagine the work could be staged without music or with different music. This is why operas, operettas, and musicals are grand-rights works. Conversely, if a play contains a scene where an actor listens to a song by U2, it is totally conceivable for the same play to be staged with another song by another ‘80s rock group. The U2 song, therefore, is and remains a small-rights work.
    Nevertheless, there are cases where it is more difficult to distinguish between these two extremes. A composer who writes music especially for a show obviously has a clear artistic result in mind when he is composing. The result would not be the same with any other music. The pertinent question is rather the following: if you change the music does the storyline have to be fundamentally changed when the work is staged? Only if the answer is yes can the music and the staging be deemed closely enough intertwined for the work to qualify as a dramatico-musical work.

No choice between SUISA and the SSA

These questions and the implications of the answers to them are important: the management of small rights by SUISA is supervised by the State; that is not the case for the grand rights exploited by the SSA and publishers. It follows that the rights management rules are different, notably in the matter of remuneration. Authors and organisers may be tempted to take advantage of these differences: the former to obtain better remuneration, the latter to pay less.

But they have no choice who to deal with: either the work is a small-rights work, in which case SUISA is responsible, or the work is a grand-rights work and the SSA, or the publishers are. (In practice, there are certain rare exceptions, for example in the case of authors who manage their own rights or publishers who assign special mandates to SUISA relating to grand-right works.) If the SSA or a publisher were to intervene in an area which is subject to federal supervision and for which SUISA is responsible, they would be violating Article 70 of the Copyright Act and committing a criminal offence; conversely, if SUISA were to grant a licence without disposing of the necessary rights, the licence would not be valid, and the organisers would not be released from their liability under copyright law.

From the legal point of view, therefore, the respective spheres of competence of the intervening parties must be observed. In cases of uncertainty, SUISA and the SSA cooperate and work together to find solutions to maximise legal certainty.

Register your grand-rights music with SUISA just the same!

SUISA members who compose music for grand-rights works should still register their works with SUISA. In certain situations, SUISA may well be responsible for managing the music rights, including in the following cases:

  1. the music is used without the storyline, for example in the case of ballet music performed without dancers, or of a dramatico-musical work played in a concert version;
  2. only extracts of a grand-rights work are used, in particular for the radio or TV: under certain conditions, those extracts may be considered non-theatrical music and thus fall into SUISA’s sphere.

By registering their works with SUISA, the necessary steps will have been taken to ensure that the composer’s rights are managed effectively. If alongside, management of the grand rights has been entrusted to the SSA or if a publisher is responsible for it, it will be for the various stakeholders to do their best to resolve any legal difficulties …

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All comments will be moderated. This may take some time and we reserve the right not to publish comments that contradict the conditions of use.

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If there is one matter that regularly triggers heated debate, it is the distinction between small rights and grand rights. Small rights relate to non-theatrical musical works and fall within SUISA’s sphere of competence, while grand rights relate to dramatico-musical works and certain types of ballet and are managed by the Société Suisse des Auteurs (SSA) or directly by publishers. Text by Vincent Salvadé

Small rights and grand rights: who does what?

In deciding whether a work is a dramatico-musical work or a non-theatrical work, the key question is whether the work has a storyline and whether it involves persons playing roles. What does this abstract definition of small rights and grand rights mean in practice? (Photo: Elnur / Shutterstock.com)

The distinction is frequently at issue because it relies on imprecise criteria which must be construed on a case-by-case basis. Our...read more

The revised copyright law has come into force

The coronavirus pandemic has naturally eclipsed this event. Yet the amended Federal Copyright Act came into force on 1 April 2020 after the Pirate Party failed its attempt to launch a popular referendum. Text by Vincent Salvadé

The revised copyright law has come into force

The updated Federal Copyright Act came into force on 1 April 2020. (Photo: Manu Leuenberger)

This concluded the efforts of ten years’ work. The revision was initiated in 2010 when State Concillor Geraldine Savary, who subsequently joined SUISA’s Board, filed a postulate titled “Does Switzerland need a law against unlawful downloading of music?”

How will the new law affect SUISA’s activity? The following points are noteworthy:

The law introduces new anti-piracy measures:
Under certain conditions, hosting platforms are henceforth obliged to durably prevent unlawful content from being remade available through the use of their services (stay down obligation, Article 39d CopA); moreover, rightholders may process personal data insofar as this is essential for the purpose of criminal prosecution (Article 77i CopA).

Certain measures are designed to improve collective rights management:
Users must provide the collective rights management organisations with the necessary information in an electronic form allowing for automatic data processing (Article 51(1) CopA); collective rights management organisations are entitled to exchange the information provided by users with one another (Article 51(1bis) CopA); accelerated procedure for tariff appeals before the Federal Administrative Court (Article 74(2) CopA); and the Federal Arbitration Commission responsible for approving tariffs is now entitled to hear witnesses (see new Article 14(1)(h) of the Federal Act on Administrative Procedure).

Lastly, the notion of an “extended collective licence” has been introduced into Swiss law (Article 43a CopA):
Collecting societies can now grant a blanket authorisation for certain uses, even for rightholders they do not represent contractually; this enhances the legal certainty for users and secures additional remuneration for rightholders. This option applies to uses which cannot be individually controlled by rightholders; collecting societies would act as an “insurance” (of a sort) for users. This is a welcome innovation (already applied in Scandinavian countries) which underscores the role of “facilitator” often played by collective rights management organisations.

SUISA accompanied the entire legislative process. Not all these innovations are spectacular. But we believe that, globally, they will facilitate the performance of our mission in the service of rightholders.

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  1. Eva David says:

    Merci aux mandataires de Suisa dont le travail patient et tenace a permis d’aboutir à cette solution satisfaisante.

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The coronavirus pandemic has naturally eclipsed this event. Yet the amended Federal Copyright Act came into force on 1 April 2020 after the Pirate Party failed its attempt to launch a popular referendum. Text by Vincent Salvadé

The revised copyright law has come into force

The updated Federal Copyright Act came into force on 1 April 2020. (Photo: Manu Leuenberger)

This concluded the efforts of ten years’ work. The revision was initiated in 2010 when State Concillor Geraldine Savary, who subsequently joined SUISA’s Board, filed a postulate titled “Does Switzerland need a law against unlawful downloading of music?”

How will the new law affect SUISA’s activity? The following points are noteworthy:

The law introduces new anti-piracy measures:
Under certain conditions, hosting platforms are henceforth obliged to durably prevent unlawful content from being remade available through the use of their services (stay down obligation, Article...read more

Penny-pinching in digital music distribution

Business in the online sector has been subject to constant change – not only for copyright societies. In the second part of the interview, SUISA CEO Andreas Wegelin reports on the status quo and provides an outlook on the scenarios that are being discussed. Interview by guest author Silvano Cerutti

Penny-pinching in digital music distribution

Music is now consumed rather differently to how it was consumed 15 years ago: From the turnover of the Digital Service Providers, about 12 to 15 percent are allocated to authors, which results in royalties at a micro-penny -level per play. (Photo: LikeBerry)

Andreas Wegelin, let’s talk about proportions and size ratios. Streaming service providers such as Spotify, for example, pay composers micro-penny -amounts per play. If you extrapolate this, what is the percentage of the turnover?
Andreas Wegelin: If you only consider authors’ rights, that is about 12 to 15 percent of about 70% of the service provider’s total turnover. The rest is allocated to the recording, the producer, the artist. This roughly corresponds to the offline situation in Switzerland. Copyright for authors is governed by state-approved tariffs there. They are actually slightly lower. A monopoly thus does not bring about a better result for authors.

Why is there so little that comes together for the author? Without the author, the piece would not even exist for others to perform.
I completely agree with you. If a composer happens to be a good singer as well and thus performs his own songs, he gets more. But this is the same case for the offline sector. A singing author gets more from his record company than from us – because the producer provides the service provider with the music recording which can be played. It is not SUISA that does that but companies such as Sony, Universal etc. which therefore also hold the relevant market power.
Furthermore: Let’s compare the situation to the radio broadcasters: Radio addresses a multitude of listeners, streams one individual listener. If you break down the radio remuneration to listener levels, the amount is not much higher than that for streaming. A reason why streaming is even lower is that I nearly only have mainstream music on the radio. The selection of songs is therefore limited. In the case of streaming services, I also have niche repertoire. In other words (please don’t quote me on the figures), I have a “heavy rotation” on the radio with about 50 songs per month, and 1,000 songs on Spotify.

Can I assume that a service such as YouTube pays out to a similar extent as Spotify?
In the case of YouTube, one question needs to be asked which is difficult to answer: What do the 12 to 15 percent relate to? Spotify has subscription fees while YouTube only has advertising income: Is it thus 12 to 15% of the advertising revenue which has been generated in a specific country for a specific video during a specific period of time? And if there is no advertising shown on the video, is there no money, irrespective of how many thousands of clicks are shown in total?

With YouTube, you have the additional problem that everyone can upload everything without having to supply any rights information. How can you find out what belongs to whom?
YouTube’s approach is automation. This works to some extent, but there are also blatant mistakes with regards to the allocations. For such data volumes, however, it is only possible to do so by way of automation. For a total control, you would have to be able to track all sound files.

Does this mean, the future must be the upload filter?
There’s a huge debate on this topic at EU level. So far, the “safe harbor” principle has been applied in the EU, which said: A Digital Service Provider (DSP) is not responsible for the contents which are uploaded to their platforms. The regulation stems from 2002 and was intended to promote the development of the online data exchange. YouTube did not exist in those days. YouTube could then benefit from this regulation even though masses of protected contents are distributed via YouTube. In the meantime, the protection of the author has been enjoying greater importance again. YouTube, however, threatens now to block contents arguing it would be too complicated to provide for a settlement of the rights in each case. That way, certain contents would no longer be available and this would be a grave restriction of freedom of opinion.

Are there any alternatives?
You could introduce a statutory compensation claim for authors, similar to blank media levies for private copies. This would mean: YouTube is allowed to distribute contents but YouTube would have to pay for it by law. In the case of the blank media levy, the argumentation used to be: You cannot control what someone records onto a music cassette, so a blanket solution is required and it could be that you pay a remuneration of e.g. 5 Rappen for each blank medium per hour in favour of the authors. Something like this would also be possible for online usages but it is a topic that is highly controversial.

Which solution would be better for the authors?
For authors of our scale, a blanket arrangement would be better, for bigger rights holders, the right of interdiction currently in force would be better. It gives them enough power to negotiate with YouTube or Google directly. Google cannot just ignore them. We, however, had to first become active ourselves in order to speak with YouTube about a licence. That was also a reason for our Joint Venture and our approach to expand the repertoire we represent.

How long does it take to negotiate an agreement with a platform of such a magnitude?
Since we have been part of the Joint License and have been processing via Mint, we could shorten the duration. Depending on the provider, it lasts between one and eight months. And if you want to renew an agreement, you are looking at four to five months.

What kind of strategy does SUISA pursue in cases where agreement negotiations with a provider fail?
In such a case – it is rather rare, because, among reasonable business partners, you do find a solution – we must fight in court to get the recognition and the adequate remuneration for the use of the rights of our members.

How many DSPs are there in total?
Actually, there are too many (laughs). There are dozens. Of course, you start with the most important ones, i.e. the biggest. There are about 15. But Mint is planning to expand into other territories. In India, for example, the two big telecoms companies are also important music providers which results in new and different constellations.

I am a cooperative member of SUISA, may I see such agreements?
No. A provider wants to prevent competitors seeing their contracts. That is why there is always a confidentiality clause. SUISA cooperative members do, however, see what they get in the end. If they do not like this situation, they can always assign their rights to someone else. I doubt very much that they will be given access to such contracts there. That is a result of the competitive market.

In December 2019, it became known that Gema has bought a majority stake in Zebralution GmbH, a digital distributor. What does this development mean for SUISA?
Gema tries this way to be increasingly active in the business with data for the works of its members. By cooperating with a digital distributor, Gema can succeed in providing its members with 360-degree-service, which does not just include the management of copyright but also neighbouring rights. SUISA is also going to consider what kind of steps are sensible for a rather comprehensive service to its members in the digital music distribution sector.

Züri West has earned money with “I schänke dir mis Härz”, whereas “079” by Lo & Leduc has yielded much less, even though it is at least as successful.
That may well be the case. This difference does not just apply to Lo & Leduc but for all, worldwide, because music consumption is different to what it was 15 years ago. That is why concerts have become more important and that is why the entire broadcasting sector is so important because we still have relatively stable conditions there …

But?
The problem is that more and more advertising is moving towards the internet. Licensing fees for broadcasting rights depend on the turnover of the broadcaster, and that turnover mainly comes from advertising. The income is falling drastically because advertising is shifting more and more towards the internet.

A similar scenario as we had it in the newspaper sector.
Exactly. This is hard to manage. The next online agreements will need to focus more on that. It is actually very fascinating. And of course we do not always succeed immediately, sometimes it takes tough negotiations and, if necessary, even legal proceedings. We also had this situation in the 70ies and 80ies when the task at hand was to collect remuneration for cable retransmission. New developments and types of services for music keep popping up. We need to keep an eye on them and it is our exciting and rewarding task to negotiate remunerations on behalf of our members.

To the first part of the interview: “Brave new world”

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Switzerland finally has a new copyright law!Switzerland finally has a new copyright law! On 27 September 2019, both the National Council and the Council of States at last held a final vote approving the partial revision of the Swiss Federal Copyright Act, ending a process initiated in 2010 with a postulate by Géraldine Savary. It is now for the Federal Council to determine when the modernised Copyright Act will come into force – unless a referendum is successful. Read more
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  1. Rolf Hug says:

    Very interesting. Also to mention that the big publishing companies don’t play by the code of conduct and
    can get away with anything.

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Business in the online sector has been subject to constant change – not only for copyright societies. In the second part of the interview, SUISA CEO Andreas Wegelin reports on the status quo and provides an outlook on the scenarios that are being discussed. Interview by guest author Silvano Cerutti

Penny-pinching in digital music distribution

Music is now consumed rather differently to how it was consumed 15 years ago: From the turnover of the Digital Service Providers, about 12 to 15 percent are allocated to authors, which results in royalties at a micro-penny -level per play. (Photo: LikeBerry)

Andreas Wegelin, let’s talk about proportions and size ratios. Streaming service providers such as Spotify, for example, pay composers micro-penny -amounts per play. If you extrapolate this, what is the percentage of the turnover?
Andreas Wegelin: If you only consider authors’...read more

Switzerland finally has a new copyright law!

On 27 September 2019, both the National Council and the Council of States at last held a final vote approving the partial revision of the Swiss Federal Copyright Act, ending a process initiated in 2010 with a postulate by Géraldine Savary. It is now for the Federal Council to determine when the modernised Copyright Act will come into force – unless a referendum is successful. By Vincent Salvadé, Deputy CEO

Switzerland finally has a new copyright law!

On 16 September 2019, the National Council finally agreed to remove from the bill the disputed exception for the reception of radio and TV broadcasts in hotel rooms. This cleared the way for the two Houses to approve the revision on 27 September 2019. (Photo: Parliament Services, 3003 Bern)

At long last! The revised Copyright Act has been signed, sealed and delivered. The last differences between the National Council and the Council of States were eliminated on 16 September 2019 and the bill was adopted in a final vote at the end of the autumn parliamentary session. A long process has thus come to an end, with a satisfactory outcome for music authors and publishers.

A compromise and intense debates

A short look back: in 2012, Federal Councilor Simonetta Sommaruga created the working group AGUR12 which was instructed to prepare proposals for the revision of the Federal Copyright Act. Representing all stakeholders (authors, users of works, consumers, etc.), AGUR12 made a series of proposals, embodied in a compromise solution at the end of 2013. Unfortunately, the bill submitted by the Federal Council in 2015 deviated from this compromise solution.

In the face of the heavy criticism expressed during the consultation procedure, the Federal Council reversed its position and submitted a new bill to Parliament at the end of 2017, this time based entirely on the AGUR12 compromise. After intense debate, both Houses finally decided to espouse the compromise, even if that meant deferring consideration of a number of new issues (such as the protection of press publishers and journalists).

SUISA actively involved in the revision

SUISA accompanied the legislative process throughout the entire seven years. Firstly, by participating actively in the work of AGUR12 as part of the Suisseculture delegation. And then, by informing Members of Parliament during committee hearings, and through letters, position papers and argumentation.

With what outcome? Overall, copyright protection has been increased and modernised thanks to new anti-piracy measures and improvements in rights management in particular. No doubt one could have gone further on certain points. But a compromise is a compromise …

Finish one revision, start the next

It would be wrong to lower our guard. The “Pirate Party” has now launched a referendum against the revised Copyright Act. Moreover, the last question debated in Parliament was whether hotels which offer their guests the means to watch television, play films and listen to music in their rooms should be exempted from their obligations towards authors. The National Council eventually shelved this idea, but the debate shows that creators’ vested rights are regularly subject to attack. We must ensure we avoid … a re-revision of the revision of the law to the detriment of authors and publishers! Everything is an eternal recurrence …

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Your email address will not be published.

On 27 September 2019, both the National Council and the Council of States at last held a final vote approving the partial revision of the Swiss Federal Copyright Act, ending a process initiated in 2010 with a postulate by Géraldine Savary. It is now for the Federal Council to determine when the modernised Copyright Act will come into force – unless a referendum is successful. By Vincent Salvadé, Deputy CEO

Switzerland finally has a new copyright law!

On 16 September 2019, the National Council finally agreed to remove from the bill the disputed exception for the reception of radio and TV broadcasts in hotel rooms. This cleared the way for the two Houses to approve the revision on 27 September 2019. (Photo: Parliament Services, 3003 Bern)

At long last! The revised Copyright Act has been signed, sealed and delivered. The...read more

Sampling and Remixes

The articles about arrangements in the “Good to know” series have so far focused on “conventional” arrangements of musical works. Sampling and remixes are two additional and specific forms of arrangement. What rights need to be secured when existing recordings are used to produce a new work? What agreements have to be contracted? Text by Claudia Kempf and Michael Wohlgemuth

Sampling and Remixes

From the copyright point of view, remixes and sampling are specific forms of arrangement. (Photo: Tabea Hüberli)

Sound samplings come in many different forms and techniques. But they all have one thing in common: they incorporate parts of a musical recording into a new work. This regularly raises the question whether such parts of works or samples are protected by copyright or – especially in the case of very short sound sequences – whether they may be used freely.

In the case of a remix, an existing production is taken and re-arranged and re-mixed. This may involve taking apart a whole work and putting it together again with the addition of new elements. Theoretically, the degree of re-arrangement in a remix may range from a simple cover version to a completely new arrangement. As a rule, a remix is simply an arrangement. Remixes generally keep a work’s existing title and add a tag which refers either to the form of use (radio edit / extended club version, or similar) or the name of the remixer (generally a well-known DJ).

By contrast with conventional arrangements, in addition to using an existing work to create a derived work or arrangement, samples and remixes also use an existing sound recording. Therefore, one must distinguish between two categories of rights: the rights of the authors of the original work on the one hand (copyrights), and the rights of the performing artists and producers of the recording on the other (neighbouring rights).

Securing the copyrights

In principle, copyright law protects entire works of music, as well as parts of works which meet the qualifying criteria, provided the term of protection of 70 years (after the death of the last deceased author) has not yet expired. The melody, a solo or other elements of a work can therefore be protected and may not be freely used if they qualify as a work of an individual character. This must be determined on a case-by-case basis. The more marked the characteristics of the sampled element, the less likely you will be able to use that element for free. The notion that two bars, nine notes or two seconds of music can be used for free is only a rumour since, regrettably, there is no clear delimitation defining when a part of a work has an individual character.

So if a protected part of a third-party composition is sampled and incorporated into a new work, and the part concerned has an individual character, the arrangement rights in the original work must be secured from the publisher or, in the case of unpublished works, the author. This is done through a sampling agreement or an arrangement licence.

In the case of a remix, a distinction is made depending on who creates the remix: the author of the original work or a third party. For copyright purposes, the original author is essentially free to create remixes of his own work. If, however, the original work was composed by several people, he will need permission from his co-authors to create a remix; and if the original work was published by a label, he will need the permission of the label to use the sound recording (neighbouring rights).

If the remix was created by a third party, a distinction must be made depending on whether the remix was commissioned or made on the remixer’s own initiative. In the latter case, the rights must be secured from the author or his publisher by means of an arrangement license (often referred to as a “remix agreement”).

Securing neighbouring rights

Since sampling and remixes borrow from pre-existing sound recordings, the rights in the recording and the artists’ performances must also be secured. As a rule, the rights of the performing artists are assigned to the record producer or the label when the production is made. These rights are also limited by a term of protection. Currently, the term of protection for recordings in Switzerland is 50 years after the first publication, provided that the recording is actually published for the first time within 50 years of the recording date. Otherwise, the recording date is decisive for the expiry of the term of protection. In the EU, however, the term of protection is 70 years. In the framework of the revision of the Copyright Act currently before the Swiss Parliament, it has been proposed to increase the term of protection under Swiss law in line with that of the European Union.

If the term of protection is still valid, the rights in the recording have to be secured. The rumour that “two seconds are fair use” is fundamentally false. However, there is controversy as to whether recording protection applies to the shortest sound sequences. The European Court of Justice is currently examining this very matter in “Kraftwerk vs. Pelham: Metall auf Metall”.

The rights in a recording are normally held by the record producer, i.e. by the party who bears the economic risk of the recording. The producer can be an artist himself (own productions), a record company (“label”) or a broadcasting company, and the corresponding rights must be secured accordingly. Colloquially, the rights in the recordings are often referred to as “master rights”.

NB. A work’s term of protection may have expired while the recording is still protected. In this case, the rights in the work no longer need to be secured, but the rights in the recording still do. This would also apply to recordings of natural sounds and animal cries, for example, which are not protected by copyright. In this case, the recording, as the economic output of the producer, is protected just the same.

Main points of a sampling agreement

Depending on the circumstances, the sampling agreement (also referred to as a “sample clearance agreement”) regulates the rights in a work and its recording. When these rights are all held by the same party, a single agreement can be made. As a rule, however, two agreements will be concluded: one with the author or his publisher, and the other with the record label. The following points must be covered:

  • Name and address of the contracting parties (pseudonyms if applicable)
  • Subject of agreement: work and/or recording. Duration of the sample. How exactly may the sample be used? Can it be altered?
  • Scope of licence: what rights are granted? Is the licence exclusive or non-exclusive? For which territory and for how long?
  • Rights splitting/licence shares: in most cases, rights are determined by the shares of the participants in the work. The authors of a new work and the rightholders of the original work are all entitled to a share in the new work. The sampling agreement must in any event indicate the splitting. In addition to this rule which depends on the economic success of the new production, the original rightholders may demand a lump-sum fee for the arrangement right. Moreover, the royalty for the use of the recording usually takes the form of a percentage per sold copy of the new production, or of a lump-sum fee.
  • Distribution timetable: when and how often are rights settled?
  • Warranties: the rightholder must warranty that he holds all the relevant rights in the sample.
  • Place, date, signature of rightholder
  • Governing law and jurisdiction

Main points of a remix agreement

A remix agreement must specify whether the remix is commissioned or the remixer is acting on his own initiative and applying for a remix licence. Depending on the premises, the agreements can be quite different. Moreover, in the case of a remix and depending on the circumstances, the rights in the work and the recording also have to be regulated. When these rights are all held by the same party, a single agreement can be concluded. As a rule, however, two agreements have to be made: one with the author or publisher, and the other with the performing artist or record label. The following points must be covered:

  • Name and address of the contracting parties (pseudonyms if applicable)
  • Subject of agreement: work and/or recording. Duration. Title of the remix. Credits.
  • Production terms: delivery date, special requirements (if commissioned)
  • Scope of licence: what rights are granted? Is the licence exclusive or non-exclusive? For which territory and how long?
  • Fees: as a rule, a lump-sum fee is agreed, more rarely a participation in sales and other licence fees such as sync fees.
  • Rights splitting: as the arranger of the newly created work, the remixer is usually (but not necessarily) given a share. Accordingly, the arrangement percentage indicated in SUISA’s Distribution Rules is applicable (see article “Arranging works protected by copyright”). In rare cases, if, for example, the remixer’s contribution to the new work is very significant, he will be granted co-authorship status in the remix. In these cases his participation may also be higher.
  • Distribution timetable: when and how often are rights settled?
  • Place, date, signature of rightholder
  • Governing law and jurisdiction

When does a remix or a work containing samples have to be registered with SUISA?

When filing an application to register a work with samples excerpted from a protected work, the sampling agreement (which does not have to be expressly designated as such) must be enclosed or – in the case of online registration – uploaded. The rights splitting must be clearly indicated in the sampling agreement. Otherwise, the new work cannot be registered.

NB. In contrast to conventional arrangements where the arranger is registered as such for the new work, it is general practice for works with samples to list all the authors as co-authors of the work. The authors and, if applicable, publishers of the work from which the samples are taken thus become co-rightholders of the new work. When applying to register a work, it is important to list all rightholders of the work from which the samples are excerpted or at least to clearly state which original work was sampled.

When filing an application to register a remix of a protected work, the remix agreement (which does not have to be expressly designated as such) must be enclosed or – in the case of online registration – uploaded. The remixer will only be granted a share of the earnings if the remix agreement clearly indicates that he is entitled to a share. If no percentage is specified, the remixer will be entitled to the share allotted to the arranger under the Distribution Rules. If no reference is made to any share, SUISA will record the name of the remixer in the original version with the comment that the remix is approved but the remixer is not entitled to any share. If a publishing house registers a remix of a work which it published in the original, SUISA waives the need for a remix agreement since the publisher can always secure the arrangement rights directly from its author.

Summary

In addition to the arrangement rights (copyright), remixes and sampling always also affect neighbouring rights, since they use existing recordings (containing the rights of performing artists). The rights in the recording may be held by the same rightholder as the arrangement rights (author or publisher), or by a third party (often a record company or label), and must be secured even for very short sequences. The more rightholders involved, the earlier one should start enquiring and securing the rights. Likewise, remix and sampling permissions should always be recorded as written agreements (which also facilitates registration of the works with SUISA) and should clearly indicate how rights are split.

SUISA assists its members in locating the rightholders. In the case of published works, it provides the publisher’s particulars so that he can be contacted directly. In the case of unpublished works, it forwards enquiries to the authors or their heirs. Enquiries should be addressed to: publisher (at) suisa (dot) ch Details of the producers of a recording can be found under the ℗ note on the recording itself.

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  1. Franco S. says:

    Wow, cooler Artikel, hab nach Infos zu einem Sampling-Vertrag gesucht und hier alle Antworten bekommen die ich gesucht habe.
    Besten Dank dafür und viele Grüße

Leave a Reply

All comments will be moderated. This may take some time and we reserve the right not to publish comments that contradict the conditions of use.

Your email address will not be published.

The articles about arrangements in the “Good to know” series have so far focused on “conventional” arrangements of musical works. Sampling and remixes are two additional and specific forms of arrangement. What rights need to be secured when existing recordings are used to produce a new work? What agreements have to be contracted? Text by Claudia Kempf and Michael Wohlgemuth

Sampling and Remixes

From the copyright point of view, remixes and sampling are specific forms of arrangement. (Photo: Tabea Hüberli)

Sound samplings come in many different forms and techniques. But they all have one thing in common: they incorporate parts of a musical recording into a new work. This regularly raises the question whether such parts of works or samples are protected by copyright or – especially in the case of very short sound sequences –...read more

Adapting federal copyright law to digital usage

On 26 March 2019, after months of protest on the streets and in the Internet community, the European Parliament approved the proposal for a new EU Directive on Copyright in the Digital Single Market. Revision of copyright law in Switzerland and the EU: where are the similarities, where are the differences? Text by Andreas Wegelin

Adapting federal copyright law to digital usage

In the EU member states, the reform of copyright law has driven mainly young internet users to protest on the internet and in the streets. Fired up by social media platforms, it is alleged that freedom of expression was seriously at risk because of the new copyright. (Photo: Emmanuele Contini / NurPhoto via Getty Images)

On 12 March 2019, a few days before the decision of the EU Parliament, the Council of States referred the bill for the revision of Swiss copyright law back to the advisory Committee for Science, Education and Culture (CSEC) with instructions to take into account current developments in the EU.

Despite the carefully balanced compromise fostered in the Working Group on Copyright (AGUR) by Federal Councillor Sommaruga, Minister of Justice at the time, the copyright law revision is now threatened by further delays, not to mention the risk that special interests, which had been set aside as part of the compromise, may surface anew.

The main revisions in the EU Directive

The European Directive contains two fundamental improvements in copyright protection which are particularly controversial:

the liability of platform providers for the sharing of content uploaded by consumers
This provision mainly concerns the major social media platforms (Google, Apple, Facebook and Amazon, or GAFA for short). Under existing EU law, platform operators can argue that they are merely service providers and are not responsible for the content made available on their platforms. This position is rooted in the EU’s e-commerce directive of 2000, which had limited the liability of service providers (under what was termed the “safe harbour” principle) with a view to stimulating the digital economy.

In the meantime, it has been rightly recognised that the uploading of protected content by private persons infringes copyrights. Even providers such as Google have sought contact with major rights owners and collecting societies because of Youtube, but only offered financial compensation on a “voluntary” contractual basis. It is precisely because content-sharing platforms like Youtube make available practically all existing content that they are so popular with growing numbers of music and film enthusiasts.

Article 17 of the new Directive (Article 13 of the original draft) provides that EU Member States must enact rules stipulating that service providers are liable for the content shared (uploaded) on their platforms.

As a result, GAFAs will be obliged either to conclude licence agreements with all rightholders, or to introduce technical mechanisms (upload filters) to prevent altogether the uploading of protected content. It was this latter prospect which inflamed the Internet community and led to demonstrations in front of the EU Parliament against what was feared would lead to drastic restrictions on the freedom of expression and artistic freedom.

Protecting press publishers from the publication of their articles on internet platforms
Article 15 (formerly 11) of the new Directive also proved very controversial in the parliamentary debates. The proposed neighbouring rights protection was designed to grant publishers a participation in the dissemination of their content, e.g. on Google News. Interestingly, however, the simple reference to Google News can serve to increase a press publisher’s reach, and news per se cannot be protected by copyright. Similar regulations in individual EU countries have proved ineffective, particularly because major publishers prefer to benefit from free advertising on Google News rather than threaten Google News with a licence claim and risk being ignored.

The key points of the Swiss revision

Different legal situation compared to the EU
The Federal Copyright Act (FCA) and Switzerland’s legal situation are considerably different to EU law and the copyright legislation of the individual EU Member States. The EU Directive of 2000 on the single market is not applicable in Switzerland. GAFAs cannot invoke the “safe harbour” principle here. In principle, platform operators are already liable for the content shared by their users, but enforcing a liability claim is a complex and hazardous process. Switzerland’s copyright legislation also recognises the principle that, relying on private copying rules, consumers are entitled to use content from the Internet regardless whether or not the source is licensed to make it available. This liberal approach reflects the acknowledgement that only the provider can reasonably license the mass consumption of content from the Internet, certainly not the consumer.

The AGUR compromise
The AGUR compromise was adopted in March 2017 in the context of the Swiss legal framework described above. Relying on that compromise – which contained some grey areas disadvantageous to authors – the Federal Council submitted a revised bill to Parliament. The bill contained a “stay down” obligation designed to reinforce the liability of online content-sharing service providers: once content is qualified as illegal, providers must keep it off their platforms permanently. In addition to other important improvements for authors, which we have already reported elsewhere, the Federal Council’s proposal contains changes for digitisation, such as a “scientific” exception or limitation for text and data mining, and licensing simplifications through extended collective licensing. The last two proposals are also part of the recently adopted EU Directive (Articles 4 and 12).

Remuneration for journalists and neighbouring rights for publishers
On 12 February 2019, the Committee of the Council of States proposed to introduce an entitlement to remuneration for journalists and neighbouring rights protection for publishers whose work is used on Internet platforms. The introduction of an entitlement to remuneration for journalists would certainly be welcome, and might even suffice if journalists, as the original creators, would involve their publishers in the claims. This would avoid having to introduce a controversial neighbouring right with the dubious effect described above.

Exception for libraries
At the last minute, the Committee of the Council of States also proposed to exempt public libraries from the obligation to pay remuneration for the rental of works – a provision in force since 1993. Public libraries lobbied actively for this exemption; under the existing tariff, libraries do not have to pay a fee on the rental of works provided they charge an annual fee rather than individual fees when they rent out works. Whatever the case, the truth of the matter is that libraries make books, DVDs, CDs or music streaming available to their users for a small fee, in competition with the markets concerned.

Exception for reception in hotel and guest rooms
As with public libraries, the exception for guest rooms deviates from the AGUR compromise to the detriment of authors. Intensive lobbying by the hospitality industry had already led the National Council to propose an exception for the reception of programmes in hotel rooms and holiday flats in December 2018. Moreover, the exception was extended to rooms in institutions and prison cells. This demand also stems from a tariff dispute with the collecting societies. In 2017, the Federal Supreme Court ruled that the use of works in such premises did not qualify as private use if the hotelier or landlord arranges reception and makes the corresponding equipment available. In this case, both are acting with the intent of making a profit, i.e. the provision of reception facilities for protected content is a sales argument for landlords and influences their turnover. Artists should not be required to subsidise the hospitality industry through this exception; their situation would then be significantly worse than under existing copyright law.

Switzerland needs updated copyright legislation now – without any new exceptions!

Switzerland has been struggling to modernise its copyright law since 2010. The AGUR compromise made some progress in adapting the law to the contemporary environment. Individual interests that run counter to this modernisation are liable to emerge in parliamentary debates and may even lead to a worsening in the existing law. This must not be allowed to happen. The situation is somewhat different for journalists: the re-use of press products on the Internet must be seriously examined when the law is updated. Maybe the time is not yet ripe. This was also acknowledged by the Committee of the Council of States in its second consultation on copyright law on 29 April, and it called on the Federal Council, by way of a postulate, to examine the development of copyright law in Europe.

In its 2019 summer session, Parliament would be well-advised to adopt the copyright law revision on the basis of the AGUR compromise without any new exceptions for public libraries or the hospitality industry.

Cautious take-over and adaptation of the EU Directive to Swiss specificities

The new EU Directive could nevertheless serve as a model for additional changes to Swiss law in the future. As mentioned above, the CSEC of the Council of States has asked the Federal Council to produce a report on the situation of journalists and newspaper publishers in particular; in this context, the liability of online content-sharing service providers should be examined more closely. What is more, the sharing or uploading of protected content on the Internet is even less controllable than private copying. The EU Directive therefore rightly establishes a liability on the part of GAFAs, because they are the ones who make sharing possible and attractive in the first place. However, it will be difficult for GAFAs to license each uploaded contribution from the individual rightholders.

One option might be to oblige the platforms to remunerate rightholders on a lump-sum basis for the sharing of content on their platforms. Anything demanding unreasonable technical effort to control should generally be allowed; on the other hand, online content-sharing service providers would be obliged to compensate authors and other rightholders via the collecting societies under a legal licence similar to private copying. In the next few years, the Swiss Parliament will have to revisit these issues again in more depth with a view to implementing the EU Directive across the borders.

Post-revision is pre-revision

Swiss copyright legislation is likely to remain a work in progress for some time to come. Digitisation, the easy global exchange of protected works on the Internet, and technological advances such as artificial intelligence or machine learning mean that legal standards will have to be reviewed again. The current revision of Swiss copyright law, hopefully to be completed in June 2019 based on the AGUR compromise, is not final but merely the prelude to the next revision.

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On 26 March 2019, after months of protest on the streets and in the Internet community, the European Parliament approved the proposal for a new EU Directive on Copyright in the Digital Single Market. Revision of copyright law in Switzerland and the EU: where are the similarities, where are the differences? Text by Andreas Wegelin

Adapting federal copyright law to digital usage

In the EU member states, the reform of copyright law has driven mainly young internet users to protest on the internet and in the streets. Fired up by social media platforms, it is alleged that freedom of expression was seriously at risk because of the new copyright. (Photo: Emmanuele Contini / NurPhoto via Getty Images)

On 12 March 2019, a few days before the decision of the EU Parliament, the Council of States referred the bill for the...read more

Copyright law revision: compromise is the key to success – no exceptions for hotel rooms

The revision of the existing Copyright Act is entering the decisive phase this year. After seven years’ preparatory work, parliamentary debates have now started. The revised act could come into force on 1.1.2020 if both federal houses respect the delicate compromise. Text by Andreas Wegelin

Copyright law revision: compromise is the key to success – no exceptions for hotel rooms

The jurisprudence in Switzerland and Europe is clear: when a hotel receives radio or television broadcasts and retransmits them into its guest rooms, it is a use which is relevant for copyright purposes. (Photo: Piovesempre / iStock)

The long road to a minor partial revision started nine years’ ago: in 2010, State Councillor Géraldine Savary asked the Federal Council to propose solutions to prevent the use of illegal online offers. The Federal Council rejected the request arguing that authors could simply give more concerts to make up for the loss in earnings caused by the slump in CD sales. This answer outraged musicians, and rightly so: not all composers can perform their own works.

In summer 2012, Federal Councillor Sommaruga responded to the protests by creating a working group to prepare proposals for the revision of the Copyright Act. AGUR12, as the working group was called, submitted its recommendations in December 2013. Based on those recommendations and on a wealth of additional unacceptable proposals, the Federal Council produced a preliminary bill in 2015 which met with widespread criticism in the consultation process. FC Sommaruga was obliged to reconvene the AGUR in autumn 2016. AGUR12 II concluded its work in March 2017 with a compromise. At the end of 2017, relying largely upon this compromise, the Federal Council submitted a revised bill to Parliament.

Main points of the revised bill

The relevant key elements of the compromise for musical authors are:

  • Obligation for the hosting provider to remove illegal content and to prevent further uploading of such content (Article 39d); provision for processing personal data to facilitate prosecution of illegal uploading of protected music (Article 77i). Additional demands by authors and producers, e.g. to block access to illegal offers on the Internet, met with strong resistance from consumers and network operators, and were disregarded in the compromise. In this context, one should also consider that such blocking in the musical field would in any event have come ten years too late. Thanks to a wide range of affordable, legal and easy-to-use music streaming services, file-sharing networks and illegal services in the musical field have been greatly reduced.
  • SUISA’s right to information from users in tariff negotiations and accelerated procedure for the approval of copyright tariffs (Articles 51 and 74(2))
  • Extended collective licence (Article 43a): this provision, for instance, enables users to obtain a licence from the collecting societies for publications from archives.

Remuneration for video on demand – unnecessary for composers

The Federal Council also proposed to introduce a remuneration claim for music with regard to video on demand (Articles 13a and 35a). Music creators do not, however, need this: Article 10(2) already entitles them to authorise or refuse the use of their works (in this case, film music). SUISA has already concluded licence agreements for VoD services with all main providers. No new remuneration claims are needed. The existing legislation is adequate.

The VoD remuneration claim was primarily designed to enable Swiss filmmakers to receive fair compensation when their films are viewed on new platforms like Netflix. This would reduce the “value gap” that filmmakers suffer because they participate neither in the direct “pay per view” revenue nor in the platforms’ indirect revenues from advertising and the sale of usage data. Conversely to film music composers who are well organised in rights’ management organisations worldwide, Swiss filmmakers have very limited bargaining power and are therefore dependent on this new remuneration claim.

Against the recommendations of AGUR12 II, the Federal Council extended this claim to music authors who, as mentioned above, do not need this special entitlement. Regrettably, the National Council did not follow our reasoning in the detailed discussion of the law in December 2018 and failed to provide for an exception for music authors. The last hope now lies with the Council of States, which will probably deal with the subject in its March session.

New exemption from the obligation to pay remuneration for radio and TV reception in hotel rooms?

In December 2018, the National Council decided, via the back door so to speak, to follow the parliamentary initiative of Valais FDP MP Nantermod and add a new clause in Article 19(1)(d) FCA providing that the retransmission of radio and TV broadcasts, but also of music or video channels, on demand in hotel rooms, rented holiday apartments, hospital rooms and prison cells, are exempted from copyright fees. As a result, authors would be in a worse position than under the existing legislation, and the revision of the law would work largely to their disadvantage.

What is at stake? If a hotel retransmits radio or TV broadcasts to its guest rooms, the retransmission qualifies as a “rebroadcast” within the meaning of Article 10(2)(e) FCA. This was decided by the Federal Supreme Court in 2017. The providers of TV sets and audio players in guest rooms are hoteliers, landlords of holiday apartments, or hospital operators. All of them operate for profit. Such usage does not, therefore, qualify as private use. The jurisprudence in Switzerland and Europe is clear: this is a relevant usage under copyright law.

The decisions are based on the Bern Convention, the most important international treaty in copyright law, and on other international treaties such as the WCT and the WPPT. Switzerland cannot disregard these treaties. If it did, it would expose itself to sanctions because the obligations under the Bern Convention are also enshrined in the WTO Agreement on the Protection of Intellectual Property (TRIPS). To avoid sanctions if Switzerland were to incorporate this new exception into its law, the exception could only apply to the works of Swiss authors – a totally unacceptable discrimination.

“Hotel rooms would hardly be cheaper if the small copyright fee was eliminated.”

What does it cost hoteliers today? Fees are calculated based on the surface area covered by the TV/audio usage. Up to 1000 m2, the monthly licence fee is CHF 38. Hotels with up to 50 rooms of 20m2 each pay less than CHF 1 per room per month. The rate is slightly higher for larger areas. Hotels with 100 rooms pay CHF 91.80, which is still less than CHF 1 per room per month. The cost for hotels is therefore modest. However, all things being equal, the shortfall for authors and other rightholders would add up to some CHF 1 million per year.

Hoteliers pay their other suppliers for all other services delivered to their hotels. These range from electricity and cleaning to soap in the bathrooms. These goods and services are not provided free of charge – they are part of the hotel supply chain. Hoteliers run their hotels for profit, and in-room entertainment contributes to the price of a room and, therefore, to the added value of the hotel. Why should hoteliers who offer this service to their guests not have to pay the music and film rightholders? Exempting hotel rooms from the copyright remuneration obligation would discriminate against authors and other rightholders compared with other suppliers. And consumers would not even benefit from the exemption because hotel rooms would hardly be cheaper if the small copyright fee was eliminated.

The compromise and the FCA revision both at jeopardy

As mentioned above, the compromise bill for the revision of copyright law put together by AGUR12 II and the Federal Council is now on the finishing straight. If Parliament were to significantly worsen authors’ situation by introducing the hotel room exception, authors would feel slighted and might present further demands for revision. With the risk that no new law is adopted and nearly nine years’ revision efforts will all have been for nothing in the end.

If the revision were to deprive them of the right to allow their works to be rebroadcast in hotel rooms against remuneration, music authors would probably be better off under the existing law.

It is essential that we defend the delicate compromise in the coming months and impress on the Councils that no further changes to the detriment of authors are admissible.

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All comments will be moderated. This may take some time and we reserve the right not to publish comments that contradict the conditions of use.

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The revision of the existing Copyright Act is entering the decisive phase this year. After seven years’ preparatory work, parliamentary debates have now started. The revised act could come into force on 1.1.2020 if both federal houses respect the delicate compromise. Text by Andreas Wegelin

Copyright law revision: compromise is the key to success – no exceptions for hotel rooms

The jurisprudence in Switzerland and Europe is clear: when a hotel receives radio or television broadcasts and retransmits them into its guest rooms, it is a use which is relevant for copyright purposes. (Photo: Piovesempre / iStock)

The long road to a minor partial revision started nine years’ ago: in 2010, State Councillor Géraldine Savary asked the Federal Council to propose solutions to prevent the use of illegal online offers. The Federal Council rejected the request arguing that authors could simply give more concerts to make up for...read more