In a recent ruling, the Finnish Supreme Court held that Sections 56a and 57 of the Finnish Copyright Act (which set out penal and compensatory sanctions for infringement of copyrights and related rights) do not extend to violations of the prohibition on unauthorized re-transfers of such rights as set out in Section 28. The Supreme Court had to consider whether the sale of video cassettes and the simultaneous unauthorized transfer of the rental rights to the video cassettes were infringements of the Copyright Act .

The defendant, on behalf of a video rental company, sold a batch of video cassettes to another company. He simultaneously transferred the rental rights of the works without the permission of the copyright holder. The transfer of the rental rights had thus been carried out in violation of Section 28 of the Copyright Act. Section 28 prohibits the transferee of copyright or rental rights from transferring such rights to others without the original transferor's authorization. The defendant was charged with a copyright offence under Section 56a of the Copyright Act, and was also pursued for reasonable compensation and damages under Section 57 of the Copyright Act.

Under Section 56a of the Copyright Act, a wilful violation of a provision issued for the protection of copyright is punishable as a copyright offence. Under Section 57, the copyright owner is also entitled to fair compensation for any unauthorized use of the work. When such use is wilful or results from negligence the infringer must also pay damages for any other loss.

The Supreme Court stated that Section 28 should be read as a rule of interpretation in respect of transfer agreements rather than as a provision aimed at protecting the rights of a copyright owner. The court held that (i) the sale by the defendant did not constitute unauthorized use (by way of distribution to the public) of the works; and (ii) the defendant made an unauthorized transfer of the rental rights of the works. This was contrary to the provisions in the Copyright Act (which governs such transfers) and was therefore invalid, but due to the nature of Section 28 it did not constitute a violation of the provision issued for the protection of copyright.

The defendant's sale of the video cassettes was not considered a distribution of the works to the public as referred to in Section 2 of the Copyright Act. Also, by entering into an agreement for the assignment of the rental rights in violation of Section 28, the defendant had not violated any provision for the protection of copyrights nor used the works in violation of the Copyright Act. The charges of copyright misdemeanour and the claims for reasonable compensation and damages were dismissed.

For further information on this topic please contact Rainer Hilli at Roschier Holmberg, Attorneys Ltd by telephone (+358 9 228 551) or by fax (+358 9 664 303) or by e-mail ([email protected]).
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