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CROSS-BORDER COPYRIGHT LICENSING

Law and Practice

CARLO SCOLLO LAVIZZARI, RENÉ VILJOEN

Copyright Licensing can no longer be considered purely from the perspective of the licensor’s home territory. This practical and wide-ranging reference work provides comprehensive coverage of the law and practice of cross-border licensing in a number of major territories, including China, the EU, India, Mexico, Russia, Singapore, South Africa, and the USA. The book, written by expert authors with insight from practice and from their home jurisdictions, focuses on both copyright licensing and competition law and, specifically, the inter-relation between these legal fields. The book is uniquely structured to provide both thematic coverage and detailed analysis of each territory’s applicable laws and regulations, highlighting and addressing the legal issues that are most critical in and relevant to licensing practice. Cross-Border Copyright Licensing is an essential starting point for anyone considering or advising on the implementation or enforcement of a copyright licensing program, in either developed and emerging markets.
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EXTENDED TABLE OF CONTENTS

List of contributors

Preface

Acknowledgements

Table of cases

Table of legislation

1   China

    Thomas Pattloch

1. Legal framework   1.01

1.1 National laws, judicial interpretations and administrative regulations   1.07

(a) Copyright statutes issued at the national level   1.07

(b) Administrative regulations   1.07

(c) Important judicial interpretations   1.07

(d) General laws impacting licensing of rights   1.07

1.2 International conventions and conflict of law principles   1.08

(a) International treaties in relation to copyright   1.08

(b) Conflict of law principles   1.10

2. The object of liCenSing: copyright in China   1.16

3. Legal nature of licenSe contracts   1.31

3.1 Licenses   1.32

3.2 Assignment   1.46

4. Market access and possible scope of cross-border activities by foreign right owners   1.50

4.1 Investment barriers   1.52

4.2 Example of market access control: publication contracts   1.58

4.3 Impact of prohibited or restricted market access on license agreements   1.60

4.4 Work-arounds and legal risks   1.63

5. Important issues and principles for cross-border copyright contracting   1.64

5.1 Determination of copyright ownership   1.65

5.2 Jointly owned works   1.70

5.3 Service works and ownership   1.73

5.4 Commissioned work contracts (works made for hire)   1.77

5.5 Copyright registration   1.79

5.6 Copyright assignment agreements   1.83

5.7 Copyright licensing contract   1.88

(a) Form of copyright licensing contract   1.88

(b) Scope of license   1.90

(c) Royalty and remuneration   1.95

(d) Other important clauses   1.96

(e) Restrictions in copyright licensing   1.99

5.8 Contractual claims   1.104

(a) Non-performance, faulty performance and debtor’s delay   1.104

(b) Pre-contractual or post-contractual breaches   1.107

(c) Liability exemption and liquidated damages   1.108

(d) Protection of confidential information   1.111

5.9 Application of law in the absence of essential clauses   1.113

(a) Lack of clear stipulation on license fee   1.113

(b) Statutory grounds for termination of contract   1.115

5.10 Collective administration of copyright   1.117

5.11 Enforcement of licensing contracts   1.122

(a) Right to sue   1.123

(b) Courts and administrative enforcement   1.128

6. Case law: typical critical issues in copyright contracts used in China   1.131

7. Anti-monopoly law and licensing in China   1.140

7.1 Relevant laws and regulations   1.142

(a) SAIC Provisions   1.148

(b) Refusal to license   1.151

(c) Prohibition against tying arrangements   1.152

(d) Prohibited restrictive conditions   1.154

7.2 State Council Anti-Monopoly Commission: Anti-Monopoly Guideline on Intellectual Property Abuse   1.155

(a) IP agreements (horizontally or vertically)   1.157

(b) Abuse of dominant market position   1.162

7.3 Outlook   1.164

2  European Union

    Brigitte Lindner and Jan Bernd Nordemann

Introduction 2.01

PART A – Copyright and contract law issues 2.08

1. Harmonization in the copyright field   2.08

1.1 The European ‘copyright acquis’   2.09

1.2 Specific cross-border rules in the area of copyright   2.14

1.3 Round up: copyright legislation in the EU   2.15

2. Contract   2.16

2.1 Contractual formalities and requirements: contract formation and negotiation   2.20

(a) Form requirements   2.21

(b) Specification requirements   2.23

(c) Conduct of negotiations   2.25

2.2 The licensing contract: parties and content   2.27

(a) Parties   2.27

(b) Rights   2.28

(c) Remuneration   2.30

(d) Duration   2.32

(e) Termination   2.33

(f) Data protection   2.37

2.3 Interrelation between technology and contract   2.39

2.4 Exceptions and the interrelation between exceptions and contract   2.45

3 Copyright ownership   2.49

3.1 General ownership requirements   2.50

(a) Authorship   2.51

(b) Ownership   2.59

3.2 Works by employees   2.64

3.3 Eligibility for protection   2.67

3.4 Orphan works   2.68

3.5 Allocation of rights through transitional provisions on copyright   2.71

4. Individual licensing   2.72

4.1 Concept of individual licencing   2.73

4.2 Legal nature of entitlement   2.77

(a) Exclusive licences   2.78

(b) Non-exclusive licences   2.79

(c) Transfer of licences   2.80

(d) Remedies   2.81

4.3 Restrictions to licensing   2.83

(a) Exhaustion   2.84

(b) Restrictions in national copyright law   2.88

4.4 Moral rights   2.89

(a) Scope   2.90

(b) Term   2.91

(c) Transferability   2.92

(d) Sector-specific provisions   2.94

(e) Unpublished works   2.95

5. Collective licensing   2.96

6. Choice of law, jurisdiction and dispute resolution   2.101

6.1 Choice of law   2.102

6.2 Jurisdiction   2.111

6.3 Alternative dispute resolution   2.112

7. Conclusions   2.116

PART B Individual copyright licensing and European competition law 2.120

1. Introduction   2.120

1.1 Applicability of the competition rules: license between undertakings   2.123

1.2 Fair balance between use of intellectual property rights and competition law   2.124

1.3 The specific subject matter of copyright and related rights   2.125

1.4 Consequences for the legal evaluation of licensing contracts   2.128

2. Individual licensing in copyright and related rights (Art. 101 TFEU)   2.132

2.1 Block exemption of licensing agreements for copyright and related rights   2.132

2.2 Restraints of competition by licence agreements (Art. 101(1) TFEU)   2.137

(a) Rights grants in exclusive licence agreements and restraints of competition   2.138

(b) Binding conditions for third party contracts in licensing agreements   2.155

(c) Price agreements in licensing agreements   2.158

(d) Exchange of information in licensing agreements   2.161

(e) Licences in the case of the sale of undertakings   2.162

(f) Licensing agreements: joint marketing and joint purchasing (sports rights)   2.164

2.3 Appreciability (de minimis rule) and inter-state nature of restrictions ofcompetition (Art. 101(1) TFEU)   2.165

2.4 Individual exemption of licensing agreements which restrict competition (Art. 101(3) TFEU)   2.167

2.5 Sanctions   2.173

3. Abuse of a dominant market position, especially the right to conclude a licensing agreement (Art. 102 TFEU)   2.174

3.1 Market dominance (Art. 102 TFEU)   2.175

3.2 Abuse of a dominant position   2.180

(a) Exploitative abuse   2.181

(b) Exclusionary abuse   2.183

3.3 Sanctions, especially the right to a licence   2.189

3  India

    Binny Kalra, Tanvi Misra and Suzanne Rab

1. Contractual formalities and requirements, contract formation and negotiations   3.01

1.1 Licensing as a contract   3.08

1.2 Inter-relation between technology and contract   3.17

2. Copyright   3.22

2.1 Ownership requirements   3.22

2.2 Exceptions and the interrelation between exceptions and contract   3.30

(a) First owner exception   3.30

(b) Right to receive royalty exception   3.31

(c) Future works exception   3.32

(d) Moral right exception   3.33

(e) Term and territory exception   3.34

(f) Copyright society exception   3.35

(g) Copyright and design overlap exception   3.36

(h) Infringement exception   3.37

(i) Authorship in underlying works in a sound recording exception   3.38

(j) One-year reversion exception   3.39

(k) Fair dealing exception   3.40

2.3 Works by employees   3.41

2.4 Transitional (temporal) provisions on copyright and how they affect licensing   3.43

2.5 International conventions/economic blocs/free trade agreements   3.48

2.6 International customs and ‘narrative soft laws’ applicable to licensing contracts   3.50

2.7 Moral rights   3.52

3. Individual licenSing   3.57

3.1 Validity and legal nature of entitlement   3.57

3.2 Assignment as an alternative to licensing   3.63

4. Competition law   3.67

4.1 Introduction   3.67

4.2 Institutional framework   3.71

(a) Competition Commission of India   3.71

(b) Competition Appellate Tribunal and Supreme Court   3.73

(c) Sector regulators   3.74

4.3 Economics-based approach   3.76

(a) ‘Appreciable adverse effect’   3.77

(b) Relevant market   3.78

4.4 Agreements and copyright licensing   3.81

(a) Agreements – legal framework of Indian competition law   3.81

(b) Agreements – international dimension and comparisons   3.84

(c) Case law experience   3.99

4.5 Abuse of dominance and copyright licensing   3.103

(a) Abuse of a dominant position: legal framework of Indian competition law   3.103

(b) Abuse of dominance – international dimension and comparisons   3.107

(c) Case experience   3.117

4.6 Merger control and copyright licensing   3.131

4.7 Sanctions and remedies   3.134

(a) Administrative sanctions   3.134

(b) Impact on contracts   3.139

(c) Private enforcement   3.140

4.8 Case law experience and enforcement trends   3.143

5. Duration, renewal, termination and insolvency laws   3.146

6. Remedies   3.150

6.1 Civil remedies   3.151

(a) Interlocutory / interim injunctions 3.152

(b) Monetary remedies 3.153

(c) Special remedies 3.154

6.2 Criminal remedies   3.155

6.3 Administrative remedies   3.156

7. Collective licenSing, voluntary, mandatory licences, etc.   3.157

7.1 Upstream phase   3.160

7.2 Downstream phase   3.161

8. Bespoke licences   3.163

8.1 Ownership of copyright   3.164

8.2 Licence agreements   3.171

8.3 Right to receive royalty   3.172

8.4 Dual remuneration   3.173

8.5 Resale royalty   3.174

8.6 Moral rights   3.175

8.7 Right to sue   3.176

9. Choice of law, jurisdiction and dispute resolution   3.177

10. Tax aspects   3.187

10.1 Double tax agreements   3.187   

10.2 Sales tax   3.190

10.3 Service tax   3.191

10.4 Values added tax (VAT)   3.192

4  Mexico

    Kiyoshi Tsuru, Deyanirr Solorio Nocetti and Patricio González Granados

1. Contract law 4.01

1.1 Introduction   4.01

1.2 Formation   4.03

(a) Consent   4.05

(b) Object (subject matter)   4.06

1.3 Formalities   4.08

1.4 Void and voidable contracts (contract nullity theory)   4.25

1.5 Modalities   4.26

1.6 Contract interpretation   4.27

1.7 Governing law and forum selection   4.31

2. Special requirements of copyright contracts   4.34

2.1 Formation   4.36

(a) Writing   4.37

(b) Consideration   4.38

(c) Term   4.41

2.2 Formalities   4.42

2.3 Special provisions   4.43

3. Copyright   4.44

3.1 Source of laws   4.44

3.2 Formalities   4.49

3.3 Subject matter and scope of copyright   4.54

3.4 Ownership   4.56

(a) Work for hire rules   4.57

(b) Audio-visual works   4.62

(c) Joint ownership   4.63

(d) Patrimonial rights   4.65

(e) Moral rights   4.69

3.5 Transfer of copyright   4.71

(a) Formalities   4.72

(b) Types   4.73

(c) Modalities of copyright transfer   4.77

4. Choice of law   4.82

5. Tax aspects   4.84

5.1 Value added tax   4.85

5.2 Income tax   4.86

6. Antitrust matters   4.88

5  Russia

    Roman Lukyanov and Ksenia Sysoeva

1. Contractual formalities and requirements, contract formation and negotiations   5.01

1.1 Requirements for licence agreements   5.06

1.2 Requirements for assignment agreements   5.10

1.3 Contract formation and negotiations   5.15

2. Licensing as a contract   5.23

2.1 Parties   5.23

2.2 Types of exclusive rights   5.25

2.3 Plagiarism   5.36

2.4 Protection of information and data   5.37

(a) Protection of unpublished works   5.40

(b) Confidentiality and trade secrets   5.41

2.5 Ethical issues   5.51

2.6 Inter-relation between technology and contract   5.56

3. Copyright ownership   5.63

3.1 Ownership requirements   5.63

(a) Age of rightholders   5.67

(b) Citizenship of rightholders   5.68

(c) Exclusive right to works (copyright)   5.69

(d) Exclusive right to performances, phonograms and other IP objects (related rights)   5.73

3.2 Exceptions and the interrelation between exceptions and contract   5.80

(a) Special copyright regime for drafts of official documents/symbols/signs   5.80

(b) Permitted ways of use of IP objects without author’s consent and/or the payment of remuneration   5.82

3.3 Works by employees   5.90

3.4 International conventions/economic blocs/free trade agreements   5.95

3.5 International customs and ‘narrative soft laws’ applicable to licensing contracts   5.98

3.6 Moral rights   5.101

4. Individual licensing   5.108

4.1 The role of licensing and mixed contracts (lease, supply of public domain, electronic access agreements, etc.)   5.108

4.2 Validity and legal nature of entitlement   5.115

(a) Compulsory licensing   5.115

(b) Free use: rightholder’s statement on permission to use IP objects   5.116

(c) Open licence   5.124

4.3 Assignment as an alternative to licensing   5.131

4.4 Licensing and competition law   5.132

(a) Russian legislation on competition law   5.132

(b) State body controlling competition law in Russia   5.135

(c) Details from Russian legislation regulating competition law   5.144

(d) Applicable law   5.148

(e) Antimonopoly legislation and collecting societies   5.151

4.5 Duration, renewal, termination and insolvency laws   5.156

4.6 Remedies   5.168

(a) Civil remedies under the Civil Code of the Russian Federation   5.168

(b) Administrative remedies under the Code on Administrative Offences of the Russian Federation   5.192

(c) Criminal remedies under the Criminal Code of the Russian Federation   5.194

(d) Intellectual Property Court   5.195

5. Russian collective licensing: voluntary and mandatory   5.198

6. Bespoke licences   5.215

6.1 Works by employees   5.216

(a) Works made under agreement on order for creation of a work   5.218

(b) Works created under customer’s order   5.220

(c) Works created under contractor’s agreements or during the fulfilment of jobs under agreement (including agreements for scientific and research jobs, development/design or technical jobs)   5.221

(d) Works of science, literature and art created under state or municipal order   5.222

6.2 Publisher’s licence agreement   5.224

6.3 Alienation of original copy or original work   5.225

6.4 Rights of a person depicted in a work of visual art or in a photograph   5.229

6.5 Author’s right to access   5.230

6.6 Resale of work and droit de suite   5.232

6.7 Rights of authors of architecture, urban development or garden/park art   5.234

6.8 Rights to works included in complex objects (movies, audio-visual works, theatrical shows, multimedia products and data bases)   5.235

7. Choice of law, jurisdiction and dispute resolution   5.238

7.1 Applicable law   5.241

7.2 Courts and jurisdiction   5.242

8. Tax aspects   5.248

6  Singapore

    Lam Chung Nian and Andrew Riseley

1. Contractual formalities and requirements   6.01

1.1 Contract   6.01

1.2 Licensing as a contract   6.07

1.3 Inter-relation between technology and contract   6.12

2. Copyright   6.17

2.1 Ownership requirements   6.17

2.2 Exceptions and the inter-relation between exceptions and contract   6.22

2.3 Works by employees   6.28

2.4 Transitional (temporal) provisions on copyright and how they affect licensing   6.30

2.5 International conventions/economic blocks/free trade agreements   6.33

2.6 International customs and ‘narrative soft laws’ applicable to licensing contracts   6.35

2.7 Moral rights   6.37

3. Individual licensing   6.38

3.1 The role of licensing and mixed contract   6.38

(a) Collaboration agreements   6.40

(b) Software distribution contracts   6.42

(c) Electronic access agreements   6.44

(d) Miscellaneous   6.45

3.2 Validity and legal nature of entitlement   6.46

3.3 Assignment as an alternative to licensing   6.49

4. Licensing and competition law   6.56

4.1 Background   6.56

(a) Legislative and administrative framework   6.56

(b) Vertical agreements exclusion   6.66

(c) Sectoral exclusions: media   6.69

(d) IPR Guidelines   6.81

4.2 Restrictive agreements: the section 34 prohibition   6.86

(a) General framework   6.86

(b) IPR Guidelines   6.90

(c) Specific types of licensing restraints or arrangements   6.98

4.3 Abuse of a dominant position: the section 47 prohibition   6.103

(a) General framework: dominance   6.105

(b) General framework: abusive conduct   6.109

(c) Specific categories of abuse   6.114

5. Duration, renewal, termination and insolvency laws   6.116

6. Remedies   6.117

7. Collective licensing voluntary, mandatory   6.123

8. Choice of law, jurisdiction and dispute resolution   6.128

9. Tax aspects   6.136

10. Conclusion   6.142

7  South Africa

    Herman Blignaut and Alexis Apostolidis

1. Contractual formalities and requirements, contract formation and negotiations   7.01

1.1 Introduction   7.01

1.2 Licensing as a contract   7.06

1.3 Interrelation between technology and contract   7.09

2. Copyright ownership   7.16

2.1 Ownership requirements   7.16

2.2 Exceptions and the interrelation between exceptions and contract   7.18

2.3 Work by employees   7.21

2.4 Transitional (temporal) provisions in copyright and how they affect licensing   7.25

2.5 International conventions/economic blocks/free trade agreements   7.28

2.6 Moral rights   7.30

3. Individual licensing   7.34

3.1 The role of licensing and mixed contracts   7.34

3.2 Validity and legal nature of entitlement   7.40

3.3 Assignment as an alternative to licensing   7.44

4. Licensing and competition law   7.50

4.1 Introduction: South African competition law   7.50

(a) The South African Competition Act 89 of 1998   7.50

(b) The South African competition authorities   7.53

4.2 The structure of the Competition Act   7.56

4.3 Copyright and competition law   7.60

(a) Market definition   7.61

(b) Copyright: licensing   7.66

(c) Copyright: distribution   7.73

(d) Copyright: abuse of dominance   7.80

(e) Copyright: collecting societies   7.84

4.4 Contraventions of the Competition Act   7.91

5. Duration, renewal, termination and insolvency laws   7.93

6. Remedies   7.102

7. Collective, voluntary and mandatory licensing   7.105

8. Bespoke licenses   7.109

9. Choice of law, jurisdiction and dispute resolution   7.110

10. Tax aspects   7.115

8  United States of America

    William S. Strong, Eric Hochstadt and Kayleigh Golish

1. Licensing   8.01

1.1 Copyright ownership   8.02

1.2 Registration and notice   8.15

1.3 Scope of copyright rights   8.19

(a) Limitations on copyright rights   8.29

(b) Moral rights and analogous statutes   8.33

(c) Contract as a surrogate for copyright   8.36

1.4 Creating a license: general principles of contract formation; external rules   8.41

1.5 Individually negotiated licenses: the rights of licensor and licensee   8.51

1.6 Recordation and security interests   8.56

1.7 Bankruptcy considerations   8.59

1.8 Termination, remedies and dispute resolution   8.66

1.9 Collective licensing   8.74

1.10 Tax considerations   8.76

2. Antitrust law: legal, statutory and regulatory framework   8.77

2.1 US Copyright Act   8.77

2.2 US antitrust law   8.78

(a) Sherman Act   8.78

(b) Dual system of public and private enforcement   8.82

2.3 Intersection of copyright law and antitrust law   8.86

(a) Lawful right to exclude v anticompetitive conduct   8.86

(b) Limited shields from potential antitrust liability   8.88

2.4 Case study: music industry   8.96

(a) Rights holders and rights users   8.97

(b) Antitrust issues raised by a PRO-based licensing scheme   8.99

(c) Regulatory enforcement and judicial treatment of select PRO licensing practices   8.102

(d) Conclusion   8.114

Appendix

Index