The European Court of Justice (ECJ) stipulated in a preliminary ruling that phonograms are protected in all EU-member states for a term of 50 years after their first recording if they were protected in at least one EU-member state on or before July 1, 1995. Such protection ranges over all EU-member states, even over those in which the phonogram was never protected by national law and benefits both EU and non-EU producers of phonograms. Sony Music Entertainment Germany GmbH v. Falcon Neue Medien Vertrieb GmbH, Case No. C-240/07, (ECJ, Jan. 20, 2009).

The ruling of the ECJ was made in referral proceedings according to Article 234 Treaty of the European Union initiated by the German Federal Court of Justice (FCJ) on occasion of a law suit between Sony and Germany-based Falcon. Falcon distributed two CDs with music recordings of Bob Dylan. A U.S. producer of phonograms previously published those recordings in 1964 and 1965 on phonograms, for which he acquired rights inter alia in the United Kingdom, but not in Germany. Those rights were later on transferred to Sony. Sony sued Falcon in Germany and claimed entitlement to injunctive relief and damages.

The competent German local court of first instance and the competent German court of appeal both dismissed the claims because phonograms that were manufactured prior to the effective date of the German Copy Right Act (Jan. 1, 1966) were not protected in Germany. In the final proceedings on appeal before the German FCJ, the court concluded that the claim depended on whether Sony may successfully refer to the 50-year term of protection of producers of phonograms set forth in Art. 3 para. 2 sent. 1 of the EC directive 2006/116/EC of Dec. 12, 2006. According to Art. 10 para. 2 No. 1 of that directive, the term of protection applies to all phonograms that were protected by national law in at least one EU-member state on or before July 1, 1995. The FCJ therefore suspended the proceedings and referred the matter to the ECJ asking whether such protection applies to EU-member states in which the phonogram was never protected by national law and/or to non-EU producers of phonograms. The ECJ answered in both questions in the affirmative, referring to the wording of Art. 10 para. 2 No. 1 of directive 2006/116/EC and to the general purpose of that directive to harmonize the national protections of copyrights and related rights in the EU-member states.