Buy-out of author rights: valid when the contributions are accessory

Paris Court of appeal, Pôle 5 ,Ch. 2, January 19,2018

One of the main principles under French copyright law is that authors (writers, directors, animation designers, drawers, etc.) must receive a remuneration that is proportional to the revenues generated by the exploitation of the work they contributed to.

However, the French Intellectual Property code also sets out a list of limited exceptions to this principle.

In particular, the remuneration of the author may be a lump sum when “the nature or the conditions of the exploitation makes it impossible to apply the proportional remuneration rule”. This is the case when the contribution of the author does not constitute one of the essential elements of the work, or when the use of said contribution is accessory to the work being exploited.

In this matter, a French producer had hired authors in the frame of the production of animation films, for the design and drawing of secondary characters, props and sets of the films.

In consideration for the assignment of their rights on their designs, it was agreed that the producer would pay them a lump sum  on the basis that their contribution was accessory to the work.

Later on, the authors introduced an action against the producer, claiming the nullity of their agreements on the grounds that the payment of a lump was in breach of the proportional remuneration’s principle.

The Tribunal who first ruled on the case back in January 2016 had initially considered that the authors’ request was well-founded.

However, the Court of appeal of Paris overturned this judgement considering that the Tribunal was wrong in assessing that the creations of the authors were not accessory. The Court found that the elements provided by the parties did not permit to demonstrate that the fixed remuneration paid to the authors was illicit. The Court thus ruled that the contracts at stake were valid despite the absence of a proportional remuneration.

This ruling is rather important as it shows in which circumstances the exception to the proportional remuneration principle may be applied by producers.