Month: January 2017

The Freedom of Creation, Architecture and Heritage Act[1], sometimes described as a “catch-all” Act, contains new measures relating to the theatrical and television industry. Transparency for production and exploitation accountings, obligation to ensure a continuing exploitation and prior notice for the assignment of writer, director and composer agreements, are ones among the many changes which modify the current legal scheme and which we have summarized below. This summary is only a glimpse of the numerous measures adopted.

Production and exploitation accountings must be transparent: The Parliament decided to increase transparency in the motion picture and television sectors, following the implementation in 2010 and 2011, of regulations to harmonize and define the motion picture production cost and the recoupment of said production costs vis a vis directors, writers and composers (collectively “authors”). This reinforced obligation has been extended to apply to producers responsible for the completion and delivery of the applicable work (“producteurs délégués”) as well as distributors, and applies both upstream on the production accountings and downstream on the exploitation accountings. Authors are no longer the sole beneficiaries of such transparency and the list of the works concerned has also been expanded as these obligations apply to motion pictures and certain television works (including live action and animation) which are eligible for production subsidies from the CNC. In order to ensure compliance with these new obligations, administrative sanctions were established, such as financial penalties based on the turnover, or a reduction or reimbursement in the financial subsidies initially awarded.

A decree should be issued within the next few months to set forth the specific terms and conditions of these transparency rules, thereby delaying the effective implementation thereof.

With respect to the production accountings: this is new to the industry – in essence, the law now requires that producers must prepare and complete production accountings (comprising all expenses incurred for the preparation, production and postproduction of the work) within a specific timeframe, and must provide such accountings to coproducers and any third parties contractually entitled to a share of receipts after recoupment of the production costs (including the authors).

The Act provides that the definition of the type of accounting, the different categories of expenses and the nature of the financing sources should be determined by sectorial collective bargaining agreement[2] which agreement may be extended to bind all players in the audiovisual industry. However, in order to encourage collective discussion (which better reflects the interests of the different stakeholders involved) and ensure the rapid implementation of the law, definitions of the foregoing will determined by decree over the next few months[3].

The foregoing obligation must be included in all agreements which producer enters into with concerned parties, although it appears that the Act does not provide for any administrative sanction if the producer fails to include such language.

With respect to exploitation accountings: the Act requires that distributors and licensees complete and provide the “producteur délégué” with the exploitation accountings within specific deadlines in order for the latter to be able to provide such accountings to, inter alia, the authors and other co-producers of the work[4]. Such rule is consistent with the objective of harmonization by introducing common rules, such as the indication, on accounting statements, of the minimum guarantee recoupment status and the allocation of receipts between the media and territories.

Once again, in order to better assess and take into account the different interests at stake, the law provides that certain elements (including the type of accounting, the definition of gross receipts, distribution costs, etc.) shall be determined by sectorial collective bargaining agreement[5], which may also be extended to bind all players of the industry. The Conseil d’Etat will establish such definitions by decree in the absence of an industry-wide binding collective bargaining agreement within one year from this Act.

Distribution and licence agreements must include the aforementioned obligation to provide exploitation accountings, but it appears that no administrative sanction applies in the event of the parties fail to include such language.

Despite the negative impact on contractual negotiation, this transparency goal has at least the advantage of harmonizing the various elements used to prepare accounting statements, thereby facilitating and accelerating the calculation of sums due.

Producers shall ensure a continuing exploitation of their works in compliance with industry practice: Until July 2016, producers were required to ensure “an exploitation (of the work) in compliance with industry practice”. However, the law did not define what was encompassed by “industry practice”, making it difficult for concerned parties to avail themselves of such legislation.

The new Act reinforces this obligation by adding the term “continuing”, that is, producers must now ensure a continuing exploitation of their works. The scope and conditions for implementing such obligation are to be defined by sectorial collective bargaining agreement, which may be extended by decree to bind all relevant players of the industry and become industry-wide.

As a result, a sectorial collective bargaining agreement has been concluded on October 3, 2016[6], and extended by decree dated October 7, 2016[7] to bind all motion picture and television production companies, distributors and licensees.

These texts govern certain French theatrical and television works for which an author agreement is governed by French law, and apply as of October 7, 2016, although an adjustment period has been provided for with respect to the pre-existing works (i.e. those exploited before October 7, 2016).

The obligation for producers to ensure a continuing exploitation of their works is solely a means-driven obligation and not a result-driven obligation. Accordingly, the producers are solely required to undertake their best efforts to allow the work to be exploited in France and/or abroad, either by exploiting said work themselves, or through distributors or licensees. This obligation affects distributors as well, as the law consequently requires them to make their best efforts to enable producers to fulfill their obligations in respect of a work’s continuing exploitation.

Upon written request of the author or its authorized representative, producers are required to provide information relating to efforts undertaken and possible reasons that prevent producer from fulfilling this obligation. Producer may request the distributors and licensees to furnish information with respect to any exploitation that they have acquired the right to do.

These provisions are obligatory for producers and are particularly favorable to authors, although the industry-wide binding collective bargaining agreement has established compliance presumptions for the producers. For instance, the obligation is presumed to be satisfied when the work is subject to one or more license granting rights for no less than two among five forms of exploitation specifically laid out by the collective bargaining agreement. However, one form of exploitation in France only will suffice for television works, as well as theatrical works which are older than 8 years.

Grounds for exemption have also been provided under certain conditions, including in the event that producer faces an impossibility to renegotiate any exploitation rights constituting a legal obstacle to comply with this obligation.

Such system can be compared to the legal scheme applicable to publishers of literary works which are required to ensure permanent and continuing exploitation of said works, otherwise their assignment of rights can be terminated. However, although the binding collective bargaining agreement strongly encourages recourse to mediation, sanctions applicable to the motion picture and television industry for failure to comply with the continuing exploitation obligation have not been clearly defined.

It should be noted that this industry-wide binding collective bargaining agreement also establishes other obligations and undertakings applicable, inter alia, to producers, authors, distributors and licensees, including a measure which we find particularly promising and which compels authors and producers to negotiate in good faith in order to “encourage the renewal and/or renegotiation of agreements entered into for a limited duration, under conditions preventing the split of authors’ rights and neighboring rights in respect of a work for speculative purposes”.

Notification is now required prior to assigning of author agreements: In the event of an assignment by a producer of an author agreement to a third party, the Act now requires prior notice to co-authors, which notice shall take place no later than one month before the effective date of the assignment. Accordingly, author agreements must include appropriate language regarding the right of prior notice.

Certain conditions (such as form of the prior notice and scope of the assignment) in respect of this new measure are not very precise, and compliance with this obligation will undoubtedly be challenged in the short term given that assignments of contracts and catalogues occur every day in this industry. It would appear that any failure to so notify will affect the validity of the assignment. Corporate transactions, legal due diligence and assignment of catalogues are significantly affected by this new measure and particular attention must be paid to any future developments which will certainly help refine the conditions of this new obligation.


The Act contains many other terms and provisions, including in respect of assignment of authors’ rights agreements, agreements entered into between performers and phonogram producers, music mediator, publishing agreements, private copying, etc.

In view of the wide and important changes resulting from this Act, it is strongly encouraged to update all relevant agreements and/or seek specific advice.



[1] Act n°2016-925 dated July 7, 2016 regarding Freedom of Creation, Architecture and Heritage

[2] For audiovisual works, it seems that one or more sectorial collective bargaining agreements could establish such definitions, including the details for recoupment of production cost.

[3] It should be noted that a sectorial collective bargaining agreement has been entered into on February 16, 2016 between certain producers, distributors and broadcasters re: transparency in production accountings in the audiovisual industry, but such agreement has not been extended yet.

[4] It should be noted that specific provisions apply when the « producteur délégué » directly exploits the work.

[5] For audiovisual works, it seems that one or more sectorial collective bargaining agreement(s) could establish such definitions.

[6] Agreement entered into between a mojority of producers and publishers organizations, certain television channels and certain authors organization (including SACD and SCAM) for a tacitly renewable three-year period

[7] Arrêté dated October 7, 2016 pursuant to Article L. 132-27 of the French Intellectual Property Code and extending the Accord dated October 3, 2016 re: the continuing exploitation obligation for theatrical and television works


After more than four years of negotiation, the new regulation on personal data (the “Regulation”) has finally been adopted on May 24, 2016[1]. However, it shall take effect only as of May 24, 2018. Data controllers and processors will have until this date to comply with the Regulation, including for those processing of data already implemented up until this date.

The purpose of the Regulation is to adapt the rules on personal data to the digital world and to harmonize said rules within the European Union (EU) member states. This text will replace the existing regulation.

Its scope is broad: it will apply when (i) personal data collected relate to a citizen residing in the EU, whether or not the data controller is established in such territory; (ii) the data controller or its processor resides in the EU, i.e. the Regulation would apply to a non-European citizen whose data would be collected or processed by a EU company. The place of establishment of the data controller, used until the new Regulation comes into effect to define the law applicable to data processing, has been significantly expanded. The aim is particularly to enable a regulation of data processing carried out over the Internet when one of the persons involved in the processing (the data controller/processor or the person whose data are processed) is located outside the European Economic Area.

The following essential points of the Regulation should be noted:

  • It establishes a high level of protection and control of citizens over their personal data, particularly by creating a right to data portability and enshrining a “right to be forgotten”;
  • It fundamentally modifies the liability regime. For instance, data controllers are no longer subject to the declaration obligation (however, the authorization scheme is maintained for certain cases) and will have to demonstrate that they have complied with the provisions of the Regulation; legal obligations will now apply to data processors;
  • Administrative penalties have been strengthened in the event of non-compliance with these rules: such penalties could range up to 4% of the annual worldwide turnover of the company and up to 10 or 20 million euros in other cases.

More particularly, among the obligations placed on companies processing personal data, the latter shall now:

  • Implement appropriate technical and organizational measures and be able to demonstrate such compliance with the Regulation at any time (the “accountability principle”). In this respect, data controllers should for instance guarantee the confidentiality of the data processing or ensure that, by default, only those data strictly necessary with regard each purposes be processed (the “minimization principle”);
  • If a company has more than 250 employees (subject to certain exceptions), maintain a record of processing activities comparable to an inventory of processing operations;
  • Appoint a data protection officer if the company belongs to the public sector, if its core activities consist of processing operations which require systematic monitoring of data on a large scale or if its core activities consist of processing (still on a large scale basis) “sensitive” data or data relating to criminal convictions;
  • Notify security flaws to the authorities (and the persons concerned if such breach is likely to result in a high risk to the rights and freedoms of a person) within a 72 hours delay after having become aware of it.

Given that the Regulation will apply to processing of data already implemented in May 2018, companies have an incentive to make the necessary changes as soon as possible in order to abide by these new rules which imply reshaping a new organization, particularly for data processors bound by legal obligations for the first time.


[1] Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC


Team Reager AB, a company governed by the laws of Sweden, specialized in designing products and services for mobile phones, created an innovative “hands-free kit” called “Moobitalk”.

In order to ensure the sustainability of this product’s exploitation, the company filed the Community word mark “Moobitalk” on October 19, 2010.

However, it noticed that Mr. X, head of certain companies offering communication services grouped around the suffix “moobi” in the Middle-East and more particularly in Yemen, registered the domain name “” on April 17, 2011 (that is to say after the aforementioned “Moobitalk” trademark) and accordingly requested transfer for its benefit of said domain name to WIPO in the course of a UDRP proceeding.

Such transfer was granted to the company Team Reager AB pursuant to a decision dated July 29, 2013.

Mr. X appealed to the Paris Court of Appeal which reversed the WIPO decision and recalled that if the use of a distinctive sign as a domain name over the Internet can constitute a use in the course of trade within the meaning of article 9 of the European Council Regulation (EC) n°207/2009 dated February 2009 (necessary condition to constitute the act of infringement), such use can only constitute an act of trademark infringement provided that the intended audience of the litigious website is located in the European Union territory.

In accordance with this principle and noting that, despite the identical feature of the “Moobitalk” trademark and the disputed domain name, the website associated with this domain name (i) is drafted in English or Arabic and (ii) offers eight versions each aimed at consumers of eight countries of the Near and Middle-East (Jordan, Kuwait, Iraq, United Arab Emirates, Palestine, Saudi Arabia, Morocco and Mauritania), the Court of Appeal ruled that the public located within the European Union territory was not a target of the website and that infringement was therefore not established.

The Court of Appeal further specified that the “.com” extension is common to all countries and accordingly does not convey any geographical indication. It does not necessarily reflect a willingness to reach the public everywhere in the world and more particularly in the European Union territory.

Whereas this decision is settled and established case law, it does stress to the right holders the limits of trademark law which are closely linked to its territoriality. In order to avoid similar inconveniences, it appears essential to establish a strong strategy for protecting trademarks and domain names portfolio. The trademark owner could have registered the domain name corresponding to its brand in different extensions (including .com, .eu, .biz, etc.) and/or plan to file its trademark in more appropriate territories.