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The transparency obligation in § 32d UrhG implements Article 19 of Directive (EU) 2019/790 (Directive on copyright and related rights in the digital single market – DSM Directive). It establishes a proactive reporting obligation of the contractual counterparts of authors and performing artists who have licensed or transferred their rights against payment. At least once a year, considering industry-specific specificities, the contractual counterpart must provide comprehensive information on the exploitation (scope, revenues, and all benefits) of the works or performances. § 32d (3) sentence 2 UrhG further requires at least a comparable degree of transparency to be ensured if the information is provided for in collective agreements between associations of authors or performers and companies exploiting their works or performances.

The new obligation is designed to enable authors and performers to enforce claims to appropriate remuneration. To assess the economic value of their rights, they need information on the scope of exploitation of their works and on the revenues and benefits generated from them. With the new provision, the right to information, which already had to be fulfilled on request in the past, is now transformed into a proactive reporting obligation towards all authors and performing artists.

All contractual counterparts (or their legal successors) to whom authors and performing artists have licensed or transferred their rights are obliged to provide information, insofar as they have been granted these rights against payment. This means that all companies in the creative industry are affected, whether they are film or music producers, book publishers, photo platforms, etc. The obligation to provide information is linked to every work subject to copyright protection, so that e. g. longer advertising texts or photos can also be covered. The information must be provided without being requested. The situation is different in the case of licensing by third parties: Here, the contractual partner must only provide information about the name and address of the sublicensee at the request of the author or the performing artist.

The contracting party, e.g., the film or music producer, must provide information to all authors or performers from whom it has obtained licensing rights against payment. However, the duty to provide the information needed does not apply to authors or performers with no significant contribution to the overall work or performance (see below exceptions to the transparency obligation).

In principle, the contracting party must report all revenues and benefits derived from the use of a copyrighted work. This includes all worldwide sources of revenues of the contracting party relevant for the respective work. All types of use are to be covered according to the DSM Directive, including revenues from merchandising.
The proactive obligation to provide information does not apply to information from the exploitation of the work by third parties in the licensing chain, insofar as it is not available to the contracting party. However, the contractual party shall – at the request of the author or performing artist – provide the name and address of its sublicensee.
According to § 32d (1) sentence 2 UrhG the respective information must be provided based on the data which is usually available in the ordinary course of business. Conversely, this means that the duty to provide information does not generally go beyond the data that is usually available.

The information must be provided at least once a year, in principle for the first time one year after the commencement and for the entire period of use of the work. Referring to the transitional provision of § 133 (3) UrhG the transparency obligation under § 32d UrhG does not only apply to contracts with authors and performing artists concluded after the entry into force of the provision (after June 7, 2021). Rather, the obligation to provide information is also to apply to all license agreements concluded before June 7, 2021. For these license agreements, the legislator has granted a transitional period, according to which the obligation under § 32d UrhG will not apply until June 7, 2022. For the use of cinematographic works or motion pictures, this permissible “non-genuine retroactivity” only applies until January 1, 2008. It follows that revenue information on the use of cinematographic works or motion pictures, whose underlying license agreements had been closed before January 1, 2008, must only be provided upon request.

The obligation to provide information does not apply if one of the circumstances listed in § 32d (2) UrhG applies, namely if the contribution of the author or performer to the copyrighted work (film, music title, etc.) is subordinate (see above) or if the administrative effort to implement the information duty is disproportionate.
According to § 32d (2) No. 1 UrhG, a merely subordinate contribution is deemed to exist if it only slightly influences the overall impression of a work or the nature of a product or service. This is the case, for example, if it is not part of the typical content of a work, product, or service. This exception does not apply, however, if the author demonstrably needs the information to be able to assert a contractual adjustment.
The disclosure of data by the contracting party pursuant to § 32d (2) No. 2 UrhG would be disproportionate, in particular, if the effort involved were disproportionate to the revenues generated from the use of the work. However, the DSM Directive points out that this can only apply in a duly justified individual case. Even then, however, the contracting party remains obliged to provide information within a scope that can reasonably be expected of it.
How these exceptions, in particular the proportionality clause, will be interpreted by the courts in the future remains to be seen.

In this regard, the recitals of the DSM Directive clarify that information must be presented in a manner that is understandable to creators and must be up-to-date and accurate to enable creators to form an accurate picture of the economic value of the rights in question.

The transparency obligation can be enforced in court by copyright associations. § 36d UrhG provides for injunctive relief for authors’ associations in the event of systematic failure to provide data pursuant to § 32d UrhG. This applies for an exploiting company which fails to comply with its duty to provide information under § 32d UrhG in several identical or similar cases. The claim can only be asserted by associations that are representative, independent, and authorized to establish joint remuneration schemes and thus have active legitimacy. The right of the associations to take legal action is intended to preserve the anonymity of the individual authors and performers concerned, and to protect them from so-called “blacklisting”. If such rulings are disregarded, the company faces administrative fines, and above all, losing in court could cause a considerable damage to its image.

In principle, every company must examine the nature and scope of its realized copyrighted works for which contractual licensing rights have been transferred to it in return for remuneration by authors or performers.
For new license agreements concluded after June 7, 2021, the necessary information relating to the work should be kept available. The first report on the revenues generated must then be made available one year after the first use of the work in accordance with § 32d UrhG.
A corresponding listing of the necessary data must also be carried out for all contracts concluded before June 7, 2021, that are still being exploited (exception: contracts for cinematographic works concluded before January 1, 2008, see above). This listing must include, in particular, each individual work or performance together with its contributing authors and performers, reporting periods and dates, as well as the necessary information on the modes and scope of the exploitation of the work and the revenues generated and the remuneration due. The above-mentioned principle applies here that only data that is usually available in a proper business operation can be disclosed.

CORLIMA is a cloud-based legal tech solution that provides the companies concerned with a legally secure, intuitive structure for organizing the respective data and automated information retrieval to meet the requirements of § 32d UrhG and more generally according to Article 19 of the DSM Directive (all EU Member States are obliged to implement the provision). Different functions, interfaces and automated processes reduce the complexity of the administrative effort a company would have to do to implement the new legal requirements. This can save personnel, time, and thus considerable costs, as well as reducing legal risks.