On 24 October 2024, the Advocate General at the CJEU handed down his opinion on the two prejudicial questions that the Belgian Council of State had referred on 31 August 2023^(a) regarding the right to appropriate and proportionate remuneration in the context of related rights, as enshrined in the DSM Directive. The Advocate General is of the opinion that the Belgian government was not entitled to assign such related rights via regulation when the adoption and content of that regulation do not have the prior consent of those performers or of their duly authorized representatives.

I. Background of the case

The opinion was handed down in a dispute between the musicians of a Belgian musical organization and the Belgian State about the legality of a Belgian Royal Decree that imposed a transfer of the related rights (also known as “neighboring rights”) of these musicians as civil servants to the Belgian musical organization in return for a fixed remuneration. The Royal Decree was adopted after the failure of negotiations about such remuneration. 

The musicians requested before the Belgian Council of State (an administrative court having competence to annul legislative acts or administrative decisions) the annulment of this Royal Decree because this Degree does allegedly not comply with article XI.205, § 4 of the Belgian Economic Code, providing that when a performer provides a performance under an employment contract or a statute, the related rights arising from that performance may be transferred to the employer insofar as that transfer of rights is expressly provided for and insofar as the performance falls within the scope of the employment contract or statute. That provision was implemented into Belgian law from Articles 18 to 23 of Directive (EU) 2019/790 on copyright and related rights in the Digital Single Market (the “DSM Directive”).

The musicians argued that the transfer of such rights is only possible via consent and that the unilaterally imposed Royal Decree could not be based on the aforementioned provision in the Belgian Code of Economic Law, as construed under the DSM Directive.

II. Prejudicial questions

Since the litigious provision in the Belgian Royal Decree was based on the DSM Directive, the Belgian Council of State decided to stay the national proceedings and to ask the CJEU the following prejudicial questions regarding the interpretation of articles 18-23 of the DSM Directive:

• Are these articles to be interpreted as precluding the transfer by law of the related rights of statutory employees for services performed in the context of the employment relationship?
• If so, should the terms “acts performed” and “rights acquired” in Article 26(2) DSM Directive be interpreted as including, in particular, the transfer of related rights through legislation enacted before 7 June 2021?

The second question relates to the applicability ratione temporis of the Directive and the national legal provisions based thereon, since in this particular case most musicians were already working at the Belgian musical organization and had already made performances prior to the adoption of the Belgian Royal Decree that operated the transfer of their related rights retroactively.

III. The approach of the Advocate General

In his opinion of 24 October 2024, the Advocate General recommends first of all that the prejudicial question of the Belgian Council of State should be re-formulated in that there is not only clarification needed about articles 18 to 23 of the DSM Directive, but also of other provisions in other community law instruments such as in Directive 2001/29 of 22 May 2001 on the harmonization of certain aspects of copyright and related rights in the Information Society and in Directive 2006/15 of 12 December 2006 on rental rights and lending rights and on certain rights related to copyright in the field of intellectual property that also deal with related rights of performers.

The Advocate General therefore recommends that the CJEU should examine whether each of these community law provisions – that according to him cannot be interpreted in isolation from each other – preclude the assignment by regulation, in favor of the employer, of the related rights of performers who are statutory agents, for performances carried out in the context of the employment relationship.

This recommendation is important because it illustrates that although many Community laws emphasize in their introductory recitals that they do not impact or alter previously existing Directives or Regulations, this appears afterwards incorrect and even unavoidable. Especially in the field of copyright, several EU-legislative texts have been adopted during the past two decades and these texts must be interpreted together and not separately. This is certainly not the only occasion where this principle will need to be applied in the EU copyright field.

Applicability ratione personae: no distinction between employees and public servants

The Advocate General observed further that by using the neutral term “performers” – which must be interpreted uniformly throughout the European Union – the European legislator did not make the applicability of these Directives dependent on the performer’s situation of employment. Hence, the distinction as to whether performers are employees or public servants is irrelevant.

This conclusion is positive because the opposite would have left all public authorities in the European Union that employ public servants who exercise and generate related rights in a legal vacuum. This conclusion seems also to have a general reach and is not limited to the specific facts of this case at hand. It is useful that the CJEU confirms this conclusion in its future ruling.

Application ratione temporis

The second question to the CJEU relates to the applicability ratione temporis of article 26(2) of the DSM Directive. On this point, the Advocate General recommends that the Directive can only apply to rights existing on the date that the Directive took into effect and to related rights that existed already at that time, i.e. performances carried out since 7 June 2021. It does according to him not apply to performances carried out before that date, nor to future performances to be carried out after that date, or after the coming into force of the Belgian Royal Decree. A Member State could not rely on any “acquired rights” in order to thwart the effectiveness of the Directive.

Limitations and exceptions to the exclusive rights of performers

The rights of performers are exclusive, and their use requires in almost every case the performer’s consent. There are only a limited number of exceptions that can be qualified as compulsory licenses where the performer does not need to give his consent but needs only to receive an equitable remuneration. The most notable example is that of broadcasting and communication to the public of performances that have been previously recorded on a phonogram and that have been published for commercial purposes. This exception was already contained in the Rome Convention of 1961 and in the Performances and Phonograms Treaty adopted by WIPO in Geneva in 1996 and maintained in the EU-legislation. The Advocate General reminds that the specific exceptions in the EU Directives cannot result in turning all the exclusive rights of a category or of a group of performers into a right of remuneration via such compulsory assignments.

Meaning of the terms “contract” and “consent”

The Opinion also points out that the consent needed for the transfer or exploitation of related rights does not need to be given in a specific licensing or assignment contract related to such rights but can also be contained in more general agreements such as employments agreements that offer remuneration in return for the required consent. It states that the DSM Directive takes such situation as a given and that the word “contract” must therefore be understood as referring to any licensing or exploitation or transfer of exclusive rights, including related rights and including employments agreements or agreements with public servants. 

The Advocate General also observed that there could be no “implicit” or “implied consent” in this case that deals with the general assignment of the related rights of a group of performers, since earlier decisions of the CJEU emphasize that the conditions for implicit consent are very strictly defined. In the case at hand, implicit consent was impossible or hypothetical.

Conclusion of the Advocate General

Since the exceptions to the general principle should therefore be narrowly construed and are listed exhaustively, the Advocate General concluded that the broad transfer of the related rights of the musicians working at the Belgian musical organization – as imposed by the Belgian Royal Decree – was not compliant with article 26(2) of the DSM Directive.

To understand his conclusion, it is important to read the other considerations that led the Advocate General to reach his opinion. He observed that the Belgian Royal Decree is akin to a compulsory assignment that was decided, as it were, by the Belgian Government for its own benefit, that was opposed by the musicians with whom no collective agreement could be reached, and that applied even retro-actively to musicians who were already member of the Belgian musical organization long before the Decree was adopted. 

These three factual circumstances help to understand why the Belgian Royal Decree was found not to be compliant with the aforementioned Directives. The conclusion of the Advocate General must therefore be read against this specific background.

IV. Further news expected from the CJEU

It is now up to the CJEU to decide on the matter and to give its binding interpretation. The decision from the CJEU can have consequences for other types of national regulations where transfer of related rights was organized by lack of consensus amongst the various stakeholders. But it seems that there is no reason to worry that the specific role and function of a public servant as performing artist could play a role in this discussion, as was feared when this case started.

This article was published in the first edition of the IP newsletter of 2025 from KPMG global.

_{(a) A question was also addressed to the Belgian Constitutional Court but given the global nature of this newsletter, this aspect will not be discussed further.}