According to a 24IP Law Group News Flash last week, the German Bundesgerichtshof has ended a dispute between artists and music publishers on the one side and professional ringtone providers on the other, concerning an additional royalty for ringtone arrangements of popular music songs.According to the most recent decision, it is usually sufficient to pay the royalty to GEMA (the Society for musical performing and mechanical reproduction rights) in order to obtain a licence to convert a musical song into a ringtone. The precedent for this is a dispute between Frank Kretschmer (composer of the Jeanette Biedermann hit single “Rock my Life”) and the German ringtone provider Telemedia. After Kretschmer demanded a separate royalty for the conversion of his song into a ringtone, Telemedia stated that it purchased a licence from GEMA in which the conversion of the song into a ringtone was included.
The Regional Court of Hamburg initially decided in favour of Kretschmer (18 January 2006, file 5 U 58/05), holding that ringtone providers were obliged to pay a separate licence fee for the conversion of musical songs into ringtones and observing that the musical compositions are shortened and digitally edited to a few beats for the use as a ringtone. The songs were thus transformed into a signal which did not include the composer’s initially intended musical and sensual experience. The Court compared the conversion of a musical song into a ringtone with a form of merchandising use that required the composer’s approval.
The recent decision of the Bundesgerichtshof has now made it clear that the amendments to the GEMA agreement of 2002, 2005 and 2007 included the assignment of rights concerning the conversion of musical compositions into ringtones and required no further assignment of rights by the composer or music publisher. The Court said it was obvious that the conversion of a musical song into a ringtone required shortening and digital editing. The musical song is transformed into a signal which is cut off by answering the phone. Furthermore it is obvious that a ringtone consists of the repetition of a small section of the respective musical song which does not necessarily need to include the beginning of that particular song. Telemedia still had to pay a royalty to Kretschmer though, since his GEMA contracting agreement was signed in 1996, before the amendments for the conversion of musical songs into ringtones were included.
This recent decision will have a tremendous financial impact on both ringtone providers and the composers and the publishing industry. Ring tone providers may seek to claim a refund of royalties already paid in respect of songs of composers who signed the GEMA agreement's 2002 version.
