Introduction

Based on the entry into force of the Creation Act in July 2016, Article L132-27 of the IP Code now states that "the producer is bound to look for a continued exploitation of the audiovisual work that is compliant with industry standards".

The scope and conditions for applying this revised obligation are defined in a professional agreement between representatives of both authors and producers, which was finally signed on October 3 2016. Its application was further extended by an October 7 2016 ministerial order.

Professional agreement

The professional agreement covers audiovisual and cinematographic works initiated by a French delegate producer, for which the major part of the financing was provided by French individuals or entities. In particular, it applies to feature films that have obtained a definitive exploitation visa and short films or audiovisual works (eg, fiction, animation, documentaries and adaptations of live shows) that benefit from the subsidies offered by the National Centre for Cinema or by local collectivities.

While the agreement also introduces several obligations for producers, the majority of its provisions concern the implementation of the obligation to look for a continued exploitation.

Obligations around continued exploitation

It is expressly stated that the obligation to look for a continued exploitation is one of means (versus an obligation of results) – that is, the producer must seek to ensure that a work is exploited in France and/or abroad by finding distributors, operators or broadcasters, or by exploiting the work itself.

Producers are also subject to information obligations. First, they must forward receipt statements (for each mode of exploitation) to authors on at least a yearly basis. Second, on the request of the author or its representative, a producer must provide them with information relating to the efforts that it has undertaken and the potential grounds that have prevented it from complying with its obligation. In this context, broadcasters and distributors are also subject to an obligation to forward information to the producer in order for the latter to perform its own information obligation.

Moreover, the professional agreement sets out several types of presumption to the benefit of producers, depending on the age of the works concerned. For recent works that is, works which are still within their first five years of exploitation (starting with theatrical releases or television exploitations only, thus excluding potential first releases on video-on-demand) – the producer's obligation will be considered to have been met if the work has been exploited within the past three years through either:

  • French cinemas;
  • French television;
  • audiovisual media services accessible in France or the European Union, if the work is available there for at least six months;
  • online communication to the public service accessible in France, if the work is available there for at least six months; or
  • videograms available in France.

This obligation will also be considered to have been met if the work is subject to a mandate or assignment of rights agreement which is being executed for the purpose of exploiting the work in two of these media (the six-month timeframe for audiovisual media services and online communication to the public services does not apply here).

Finally, some exceptions to the continued exploitation obligation have been specified in the professional agreement, such as if the producer faces legal difficulties preventing a renegotiation of the work's exploitation rights or where the balance between potential costs and receipts is unfavourable.

Comment

In case of a conflict regarding the application of these new provisions, the professional agreement recommends that authors and producers use mediation.

French producers must consider this new professional agreement when negotiating co-production, pre-buy, distribution or licence agreements in order to comply with their new obligations (and to be able to justify the same).

EU authors' societies are likely to lobby for this obligation to be extended to other EU member states – particularly because revisions to the EU Copyright Directive and the implementation of other texts are being discussed by EU institutions.

For further information on this topic please contact Camille Burkhart at Nomos by telephone (+33 01 43 18 55 00) or email (cburkhart@nomosparis.com). The Nomos website can be accessed at www.nomosparis.com.

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