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CJEU Ruling in Pelham v. Hutter : If Sample Recognizable, Then It Infringes, No Matter How Small!

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Recently, the Court of Justice of the European Union (CJEU) issued a ruling as relates to copyright in music. A short media summary of the ruling can be viewed here and the full text can be viewed here. The decision was issued in context of a song created by the group ‘Kraftwerk’. Kraftwerk claimed that that a song ‘Nur Mir’ used a small sample (2 seconds) of their work in continuous loop.  The CJEU held in Kraftwerk’s favour holding, “Sampling without authorisation can infringe a phonogram producer’s rights.  However, the use of a sound sample taken from a phonogram in a modified form unrecognisable to the ear does not infringe those rights, even without such authorisation.
The song ‘Metal auf Metall’ by Kraftwerk can be heard on You Tube here and the work by Nur Mir here. The riff is very distinct and recognizable as it is played over in a loop.
This post summarizes the CJEU decision and compares it with a previous decision issued by the House of Lords in the case Fisher v. Brooker involving the song ‘A Whiter Shade of Pale’ by the band ‘Procol Harum’, followed by an overall analysis.
In Fisher v. Brooker, the issue was that a particular riff made the entire song identifiable and for the purposes of copyright, the creator was able to claim copyright after decades simply because of the fact that people identified the song because of the riff. In my view, the song is remembered only because of the riff, and not the other way around.
The song ‘Whiter Shade of Pale’ can be heard on You Tube here. The riff is the initial piece for the first 30 seconds.
Brief Facts 
In 1977, the group Kraftwerk published a record featuring the song Metall auf Metall.  About 20 years later, Mr. Pelham & Mr. Haas published a song Nur Mir which “sampled” about 2 seconds of the rhythm featured in Metall auf Metall.  Kraftwerk members, Mr. Hutter and Mr. Schneider-Esleben of didn’t appreciate Mr. Pelham sampling their piece and they accordingly sued for infringement of their rights in the work Metall auf Metall.  Basically, they wanted an injunction, damages and surrender of all records of Nur Mir so that they may be destroyed.
Procedural History
Mr. Hutter and Mr. Schenider-Esleben brought action before the Landgericht Hamburg (Regional Court, Hamburg, Germany) claiming infringement, and resultant damages, etc.  They won the first round and Mr. Pelham appealed before the Oberlandesgericht Hamburg (Higher Regional Court, Hamburg, Germany) which appeal was also dismissed.
Mr. Pelham took recourse to a revision (case involving fundamental issue of law) before the Bundesgerichtshof (Federal Court of Justice, Germany), and the judgment of the Oberlandesgericht Hamburg (Higher Regional Court, Hamburg) was overturned and the case was referred back to that court for re-examination.
The Higher Regional Court, Hamburg dismissed Pelham’s second appeal. The Bundesgerichtshof (Federal Court of Justice) once again dismissed Pelham’s appeal as sent back.  This decision was overturned by the Bundesverfassungsgericht (Federal Constitutional Court, Germany), which referred the case back to the referring court.
After two rounds of back and forth, the Constitutional court takes note that the outcome of the revision proceedings before the Federal Court) turns on the interpretation of:
i. Whether there is infringement:  …[W]hether, by using Hutter’s sound recording in producing…his own phonogram, Pelham encroached on the exclusive right of Hütter … to reproduce and distribute the phonogram (per Article 2(c) of Directive 2001/29 and Article 9 of Directive 2006/115).
The Court also discussed that it must be determined whether such an infringement can be found where, as in the present case, 2 seconds of a rhythm sequence are taken from a phonogram then transferred to another phonogram, and whether that amounts to a copy of another phonogram within the meaning of Article 9(1)(b) of Directive 2006/115.
ii. Whether the taking can be termed as fair use:  …If …there has been an infringement of the phonogram producer’s right, …whether Pelham may rely on the ‘right to free use’…
The referring court notes, in that context, that that provision has no express equivalent in EU law and therefore asks whether that right is consistent with EU law in the light of the fact that that provision limits the scope of protection of the phonogram producer’s exclusive right to reproduce and distribute his or her phonogram.
As per the case-law of the Bundesverfassungsgericht (Federal Constitutional Court), national legislation which transposes an EU directive must be measured, as a rule, not against the fundamental rights guaranteed by the Grundgesetz für die Bundesrepublik Deutschland (Basic Law for the Federal Republic of Germany) of 23 May 1949 (BGBl. 1949 I, p. 1), but solely against the fundamental rights guaranteed by EU law, where that directive does not allow the Member States any discretion in its transposition. That court also harbours doubts as to the interpretation of those fundamental rights in circumstances such as those at issue in the main proceedings.
Ruling Issued by the CJEU
I focus only on the two issues of infringement and fair use and reproduce the ruling of the CJEU.
Whether there is infringement?:  The Court held yes, there was an infringement:
“37.  Thus, to regard a sample taken from a phonogram and used in a new work in a modified form unrecognisable to the ear for the purposes of a distinct artistic creation, as constituting ‘reproduction’ of that phonogram within the meaning of Article 2(c) of Directive 2001/29 would not only run counter to the usual meaning of that word in everyday language, within the meaning of the case-law set out in paragraph 28 above, but would also fail to meet the requirement of a fair balance set out in paragraph 32 above….
38. In particular, such an interpretation would allow the phonogram producer to prevent another person from taking a sound sample, even if very short, from his or her phonogram for the purposes of artistic creation in such a case, despite the fact that such sampling would not interfere with the opportunity which the producer has of realising satisfactory returns on his or her investment.
39. In the light of the foregoing considerations, the answer to the first and sixth questions is that Article 2(c) of Directive 2001/29 must, in the light of the Charter, be interpreted as meaning that the phonogram producer’s exclusive right under that provision to reproduce and distribute his or her phonogram allows him or her to prevent another person from taking a sound sample, even if very short, of his or her phonogram for the purposes of including that sample in another phonogram, unless that sample is included in the phonogram in a modified form unrecognisable to the ear.”
Whether the taking can be termed as ‘fair use’: The Court held that the taking even of 2 seconds, was not covered under fair use.  Here, the court considers that if the part is recognizable, it is immaterial whether it is of 2 seconds, it would be an infringement.
“66. By its fourth question, which concerns a situation in which it is found that there has been an infringement of the phonogram producer’s exclusive right provided for in Article 2(c) of Directive 2001/29, the referring court asks, in essence, whether Article 5(3)(d) of that directive must be interpreted as meaning that the concept of ‘quotations’, referred to in that provision, extends to a situation in which it is not possible to identify the work concerned by the quotation in question….
71.  As regards the usual meaning of the word ‘quotation’ in everyday language, it should be noted that the essential characteristics of a quotation are the use, by a user other than the copyright holder, of a work or, more generally, of an extract from a work for the purposes of illustrating an assertion, of defending an opinion or of allowing an intellectual comparison between that work and the assertions of that user, since the user of a protected work wishing to rely on the quotation exception must therefore have the intention of entering into ‘dialogue’ with that work, as the Advocate General stated in point 64 of his Opinion.
72. In particular, where the creator of a new musical work uses a sound sample taken from a phonogram which is recognisable to the ear in that new work, the use of that sample may, depending on the facts of the case, amount to a ‘quotation’, ….provided that that use has the intention of entering into dialogue with the work from which the sample was taken, within the meaning referred to in paragraph 71 above, and that the conditions set out in Article 5(3)(d) are satisfied.
73. However, as the Advocate General stated in point 65 of his Opinion, there can be no such dialogue where it is not possible to identify the work concerned by the quotation at issue.
74. In the light of the foregoing considerations, the answer to the fourth question is that Article 5(3)(d) of Directive 2001/29 must be interpreted as meaning that the concept of ‘quotations’, referred to in that provision, does not extend to a situation in which it is not possible to identify the work concerned by the quotation in question.”
Interested readers can read the opinion of the Attorney General covering these issues in greater detail here. Interestingly, the AG differs from the de-minimis approach taken by US Courts. See VMG Salsoul, LLC v. Ciccone (9th Circuit, 2016).
Ruling in Fisher v. Brooker (selected extracts from the House of Lords decision):
32…Mr Fisher composed the familiar organ solo at the beginning of the work, and the organ melody which is a counterpoint throughout most of the four minutes during which the work lasts. The recording of the work was released on 12 May 1967 as a “single” record on the Decca label, under Essex’s licence, and it became an instant “hit”. …
38. Quite apart from the first recording, the work has been extraordinarily successful over the 38 years since it was first released. It has been the subject of many articles and interviews, and has a dedicated following, as can be seen from the number of websites devoted to the work and the band. There are over 770 versions of the work performed by other groups, and themes of the work (especially the introductory bars) are available, and popular, as mobile telephone ring tones.
39. During April and May 2005, Mr Fisher, through his solicitors wrote to Essex and Mr Brooker (together “the respondents”) notifying them of his claim to a share of the musical copyright in the work, explaining the grounds for his claim, threatening proceedings if his claim was not acknowledged, and putting forward terms of settlement. Those terms were rejected; accordingly, Mr Fisher began proceedings on 31 May 2005, and they came before Blackburne J, who gave a judgment which was largely favourable to Mr Fisher – [2005] EWHC 3239 Ch. However, on appeal, the respondents substantially succeeded: Mummery LJ and Sir Paul Kennedy set aside two of the three declarations made at first instance, although David Richards J dissented – [2008] Bus LR 1123…
47. However, the judge granted declarations in these terms:  1. [Mr Fisher] is a co-author of … ‘A Whiter Shade of Pale’ as recorded by … Procol Harum (‘the work’) and released as a single on 12 May 1967.  2. [Mr] Fisher is a joint owner in the musical copyright in the work, with a share of 40%.
Analysis
Is it sufficient that human ear recognizes the similarity between two pieces of music or should a different test be adopted given the way music is created today – sampling / mixing / recreating?
A joint reading of the above two cases establishes that it is important that the music is recognizable.  In both, Pelham and Fisher, copyright was recognized precisely because of this reason. But this is where the similarity ends: The piece in Fisher is long enough to be a distinct creation capable of standing on its own – however, Pelham is a two second piece, albeit played on a loop.  In my view, it is this playing the 2 second sample on a loop made it significant enough to attract the (wrong sort of) attention.
This brings me to the next issue – the answer to the question above involves determining ‘what is music’ – an undeniably difficult task, followed by the even more difficult ‘what is copyright for music’?
To a great extent the definition of music is reasonably broad. See Hyperion Records Ltd. v. Dr. Lionel Sawkins.
Music is not the same as mere noise. The sound of music is intended to produce effects of some kind on the listener’s emotions and intellect. The sounds may be produced by an organised performance on instruments played from a musical score, though that is not essential for the existence of the music or of copyright in it.  Music must be distinguished from the fact and form of its fixation as a record of a musical composition.  The score is the traditional and convenient form of fixation of the music and conforms to the requirement that a copyright work must be recorded in some material form. But the fixation in the written score or on a record is not in itself the music in which copyright subsists. There is no reason why, for example, a recording of a person’s spontaneous singing, whistling or humming or of improvisations of sounds by a group of people with or without musical instruments should not be regarded as “music” for copyright purposes. 
Now that the definition of music is somewhat clearer, the next question relevant for today is how to treat the way music is created?  Today, it is an undeniable fact that most, if not all music, is not created from scratch.  A previous underlying composition may be suitably modified by computers so that it is not recognizable as the previous to the human ear.  In those cases, even though there is a taking, whether de-minimis or not, the question then is whether to treat it as a separate composition (it can stand on its own) or whether to treat it as a taking as such (given that it is based on the original).
If one follows the CJEU decision in Pelham – the answer would be in negative as the human ear is not able to distinguish between the original and later music.  But the fact is that the later composition is based on the original, and hence there is a copy.
See a 2010 Chris Wilson’s article – ‘I’ll be Bach – A computer program is writing great, original works of classical music. Will human composers soon be obsolete?’ available on slate.com here.
See also 2018 Dani Deahl’s article – ‘How AI generated music is changing the way hits are made’ available here.
It is in this context that the test laid down (recognizable to human ear) seems inapplicable to the current context where music is created using many digital techniques.  Perhaps it is time to evolve a new test to determine whether there is copying based on the way music is created using artificial intelligence / programs?
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P.S. My last discussion with Shamnad Ustad was on this post.  I was quite hesitant in putting it out as I am not that familiar with copyright laws.  And it has been possible because of his hand holding and guidance.
I write this in the hope that we all continue to honour his memory by doing what he would have encouraged us to do and continue with his unfinished tasks as ours. RIP Shamnad Ustad!

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