The never-ending case? 

Kraftwerk v. Pelham

Posted by hak the lawyer on 8 June 2021

In a nutshell:

  • Sampling is a legitimate means of music production.
  • Sampling can be lawful, but also unlawful.
  • Lawful sampling requires either having a license or using the sample as "raw sound material" to create a new sound which cannot be identified as sample of the original song anymore.
  • Moses Pelham's way of sampling Kraftwerk was unlawful.
  • Kraftwerk v. Pelham resulted in die abandonment of the free use right in Section 24 German Copyright Act due to EU law.

[Average reading time: 15 minutes]

Sampling and what it is all about

"In music, sampling is the reuse of a portion (or sample) of a sound recording in another recording. Samples may comprise elements such as rhythm, melody, speech, sounds, or entire bars of music, and may be layered, equalized, sped up or slowed down, repitched, looped, or otherwise manipulated. They are usually integrated using hardware (samplers) or software such as digital audio workstations."

That's a pretty good description of sampling and why it's used for this blog post. But why does it matter and why did a two second long sample create one of the longest cases in history?

Simply put, sampling without the permission of the owner can be copyright infringement. However, this depends on various factors, including the scope of sampling, the way the sample is processed (if at all), and its specific use in another musical work.

Since there was no legally binding definition of sampling and no binding precedent, German and European courts had to decide about the underlying copyright questions in the case Kraftwerk v. Moses Pelham

The background and beginning of the case

It all started 1977 when Kraftwerk produced and recorded the song "Metall auf Metall" ("Metal on Metal"). Metal on Metal was released by Kraftwerk on their album Trans Europe Express first in 1977, re-released in 1993, and remastered and released again in 2013. In 1977, there was no digital sound hardware or computer recording hardware available. Instead, Kraftwerk used analog synthesizers and tape recorders to record the sounds they created with their analog machines. Similarly, sounds created from their surroundings, such as hitting metal on metal, were recorded on tape and further processed with expensive audio equipment.  

Kraftwerk licensed their musical works, including samples, to other musicians, producers and studios. Royalties have been an important source for Kraftwerk for a long time.

In 1997, Moses Pelham produced the song "Nur mir" with the singer Sabrina Setlur on the album "Die neue S Klasse". For the production and recording of the song "Nur mir", Moses Pelham used a two second long sample of the song "Metal on Metal" by Kraftwerk. The speed of the sample was decreased by 5% and played repeatedly throughout the song (as a loop). Pelham did not ask Kraftwerk for a license to use the sample. In fact, he claimed it his right to copy sounds form other songs. According to Pelham, music genres like Hip-Hop/Rap would not be possible without sampling.

Below, you can first listen to an excerpt of the song "Metall auf Metall" by Kraftwerk with the metal on metal sample:

... followed by the use of the metal on metal sample in the song "Nur mir" by Sabrina Setlur produced by Moses Pelham:

The various court decisions at a glance

2004: Kraftwerk first sued Moses Pelham with the Regional Court of Hamburg (Landgericht Hamburg) for copyright infringement in 1999, seeking injunctive relief (among other claims) based on their excluisve rights of phonogram producers. In 2004, the Regional Court of Hamburg decided in favor of Kraftwerk: copyright infringement. 

2006: On appeal, the Higher Regional Court of Hamburg (Oberlandesgericht Hamburg) also decided in favor of Kraftwerk: copyright infringement.

2008: On further appeal, the Federal Court of Justice (FCJ), sometimes referred to as the Federal Supreme Court (Bundesgerichtshof) also decided in favor of Kraftwerk: (i) copyright infringement even occurs with short samples, (ii) use of samples is only permissible when it is actually impossible to reproduce the sample in an equivalent way. The FCJ, however, did not render a final decision. Instead, the court referred the case back to the Higher Regional Court of Hamburg to assess the "free use" doctrine. The decision is known as "Metall auf Metall" (I ZR 112/06 of 20 November 2008).

2011: Following the legal guidelines prescribed by the Federal Court of Justice, the Higher Regional Court of Hamburg, based on a court appointed expert and two private legal opinions, decided again in favor of Kraftwerk: copyright infringement.  

2012: On further appeal, the Federal Court of Justice decided in favor of Kraftwerk again and granted an injunction. Based on that injunction, the records with the song "Nur mir" produced by Moses Pelham for Sabrina Setlur were not allowed to be distributed any longer. The decision is known as "Metall auf Metall II" (I ZR 182/11 of 13 December 2012).

2016: Moses Pelham filed a constitutional complaint with the Federal Constitutional Court (Bundesverfassungsgericht) of Germany, invoking his constitutional right of artistic freedom, among others. The complaint was joined by several other musicians/artists, including the singer Sabrina Setlur, Sarah Connor, rapper Bushido, and reggae musician Gentleman, but dismissed due to inadmissibility for all but Moses Pelham. With regards to Pelham, the Federal Constitutional Court rendered a surprising but balanced decision. The court stated that sampling does not constitute copyright infringement per se, in other words: sampling does not always lead to a violation of copyrights. With respect to the specific case, the Federal Constitutional Court stated that the decision "Metall auf Metall II" by the FCJ violated the artistic freedom of Moses Pelham. The court further stated that the "free use" doctrine (laid down in former Section 24 of the German Copyright Act) must be interpreted constitutionally. Furthermore, the court decided that the legal review suggested by the FCJ whether a sample can be reproduced in an equivalent way is not sufficient for determining copyright infringement. Since the Federal Constitutional Court did not have the authority to decide the case, the case was referred back to the FCJ for another, its third decision. The court also suggested that the German legislator may introduce an obligation to pay royalties for commercially successful musical works which are based on samples of third parties. So far, this has not been implemented in German/EU copyright law. The decision is 1 BvR 1585/13 of 31 May 2016 and available in English language.

2017: Despite the legal guidance of the Federal Constitutional Court, the Federal Court of Justice (FCJ) stated that the case Kraftwerk v. Pelham involves questions on EU law, in particular, the EU Copyright Directive and constitutional rights of music producers and artists. Hence, the FCJ decided to refer the case to the Court of Justice of the European Union (CJEU). The decision of the FCJ is known as "Metall auf Metall III" (I ZR 115/16 of 1 June 2017).

2019: As a general court, the Court of Justice of the European Union (CJEU) did not have to decide upon the specific case, but provided answers to the legal questions which arose in the Kraftwerk v. Pelham case. The CJEU rendered a balanced decision stating that sampling may infringe upon the rights of others, even if the sample is rather short. However, the CJEU stated that there is no infringement if the sample is processed and used in another musical work in a way which makes it impossible to be recognized as such. In other words: Sampling is (a) unlawful if the sample is used 1:1 in a new song, and (b) can be lawful if the sample is used to have sound material which is further processed and used as such, i.e., as raw sound material rather than a sample of another song. It seems that the logic behind the CJEU decision is such that sampling can be legal if the sample is not used to benefit from the individual characteristics of the sample. In fact, by substantive processing a sample is deprived of its character as (recognizable) sample, thus making it a mere source of sound material. However, this was not the case with the 'metal on metal' sample of Kraftwerk used by Moses Pelham. Apart from slowing it down 5%, Pelham did not change the sound characteristics of the sample. The CJEU further decided that national exceptions which grant artists more rights than under the harmonized EU copyright law are not compliant with EU law and must not be applied. Since the phonogram producer's exclusive reproduction right has been harmonized in the EU, an exception such as the German free use right must no longer be applied. The decision of the CJEU is C-476/17 of 29 July 2019.

2020: Following the CJEU decision, the Federal Court of Justice (FCJ)  decided that sampling can be unlawful if the sample is used in a new musical work in a way that the average consumer recognizes the origin of the sample. With respect to distributions prior to 22 December 2002, the deadline for implementing the EU InfoSoc Directive (2001/29/EC) by the Member States of the EU, the case was referred back once again to the appeals court because the Federal Constitutional Court not only lifted the decision of the FCJ in Metall auf Metall III, but also the findings of the appeals court. With respect to distributions after 22 December 2002, the FCJ also could not finally decide whether the use of Kraftwerk's sample in the song "Nur mir" was lawful or unlawful because of missing facts to be provided by the court of appeal, but stated that, considering the CJEU decision, the Kraftwerk sample is used in a nearly unmodified way and that it can be recognized by the average listener. Hence, it seems likely that distributions of the song "Nur mir" after 22 December 2002 are also unlawful. The decision is known as "Metall auf Metall IV" (I ZR 115/16 of 30 April 2020).

Let us dig a little deeper

Kraftwerk v. Pelham involves fundamental questions on German and European copyright law and artistic freedom which is protected both by the Basic Law of Germany and the Charter of Fundamental Rights of the EU. 

On the one hand, phonogram producers such as Kraftwerk have the exclusive reproduction right. Both German and EU copyright law acknowledge and protect the investments of phonogram producers. German law grants producers of audio recordings the exclusive reproduction rights (see Section 85(1) German Copyright Act). There is no requirement of a certain level of creativity as a threshold for originality as is the case with original works under copyright law. While short samples may not be protected as original works, they are legally protected for the phonogram producer because the phonogram producer is investing substantial resources for the production of records. This is in line with EU law which requires the Member States of the EU to implement an exclusive right of phonogram producers (see Article 2(c) InfoSoc Directive and further below).

On the other hand, musicians and other artists enjoy fundamental rights such as the artistic freedom (see Article 5(3) German Basic Law and Article 13(1) Charter of Fundamental Rights of the EU). Without the possibility to create new works based on existing works, there would be little room for new music. Furthermore, creating derivative works based on pre-existing works can reveal new perspectives and show the real potential of an artist. For example, remixes of songs are often even better than the original work. However, there needs to be the right balance between what is generally allowed and covered by the artistic freedom (without any financial compensation) and what requires the prior consent of the original author/ phonogram producer (with appropriate compensation).

As a general rule, both the copyright owner and the phonogram producer enjoy exclusive rights and have the right to stop others from using their works. Any exception to these exclusive rights must be justified with fundamental rights such as the artistic or economic freedom. The German free use right (formerly in Section 24(1) German Copyright Act) is an exception to the otherwise exclusive copyright of producer of an audio recording guaranteed by Section 85(1) German Copyright Act. Hence, there needs to be a legal justification for such exception. Due to the harmonized legal framework on copyrights in the EU, the CJEU decided that national exceptions such as the German free use right are not compatible with EU law and must not be applied, at least not after the deadline for implementing the respective EU law has lapsed. The InfoSoc Directive which harmonized the EU copyright law entered into force on 22 June 2001 and had to be implemented by the Member States of the EU by 22 December 2002.

So what does the InfoSoc Directive actually say? The 
Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society
 known as the InfoSoc Directive provides a legal framework with minimum standards addressed to the Member States of the EU. The InfoSoc Directive does not directly grant individual rights to copyright owners and phonogram producers but had to be implemented by the Members States into their national copyright laws by 22 December 2002. The copyrights to be implemented are stated in Article 2 and the exceptions are stated in Article 5 of the InfoSoc Directive:

Article 2 - Reproduction right:
Member States shall provide for the exclusive right to authorise or prohibit direct or indirect, temporary or permanent reproduction by any means and in any form, in whole or in part:
(a) for authors, of their works;
(b) for performers, of fixations of their performances;
(c) for phonogram producers, of their phonograms;
(d) for the producers of the first fixations of films, in respect of the original and copies of their films;
(e) for broadcasting organisations, of fixations of their broadcasts, whether those broadcasts are transmitted by wire or over the air,  including by cable or satellite.

Article 5 - Exceptions and limitations
1. Temporary acts of reproduction referred to in Article 2, which are transient or incidental, which are an integral and essential part of a technological process and the sole purpose of which is to enable:
(a) a transmission in a network between third parties by an intermediary, or
(b) a lawful use of a work or other subject-matter to be made, and which have no independent economic significance, shall be exempted from the reproduction right provided for in Article 2.
2. Member States may provide for exceptions or limitations to the reproduction right provided for in Article 2 in the following cases:
(a) in respect of reproductions on paper or any similar medium, effected by the use of any kind of photographic technique or by some other process having similar effects, with the exception of sheet music, provided that the rightholders receive fair compensation;
(b) in respect of reproductions on any medium made by a natural person for private use and for ends that are neither directly nor indirectly commercial, on condition that the rightholders receive fair compensation which takes account of the application or non-application of technological measures referred to in Article 6 to the work or subject-matter concerned;
(c) in respect of specific acts of reproduction made by publicly accessible libraries, educational establishments or museums, or by archives, which are not for direct or indirect economic or commercial advantage;
(d) in respect of ephemeral recordings of works made by broadcasting organisations by means of their own facilities and for their own broadcasts; the preservation of these recordings in official archives may, on the grounds of their exceptional documentary character, be permitted;
(e) in respect of reproductions of broadcasts made by social institutions pursuing non-commercial purposes, such as hospitals or prisons, on condition that the rightholders receive fair compensation.
3. Member States may provide for exceptions or limitations to the rights provided for in Articles 2 and 3 in the following cases:
(a) use for the sole purpose of illustration for teaching or scientific research, as long as the source, including the author's name, is indicated, unless this turns out to be impossible and to the extent justified by the non-commercial purpose to be achieved;
(b) uses, for the benefit of people with a disability, which are directly related to the disability and of a non-commercial nature, to the extent required by the specific disability;
(c) reproduction by the press, communication to the public or making available of published articles on current economic, political or religious topics or of broadcast works or other subject-matter of the same character, in cases where such use is not expressly reserved, and as long as the source, including the author's name, is indicated, or use of works or other subject-matter in connection with the reporting of current events, to the extent justified by the informatory purpose and as long as the source, including the author's name, is indicated, unless this turns out to be impossible;
(d) quotations for purposes such as criticism or review, provided that they relate to a work or other subject-matter which has already been lawfully made available to the public, that, unless this turns out to be impossible, the source, including the author's name, is indicated, and that their use is in accordance with fair practice, and to the extent required by the specific purpose;
(e) use for the purposes of public security or to ensure the proper performance or reporting of administrative, parliamentary or judicial proceedings;
(f) use of political speeches as well as extracts of public lectures or similar works or subject-matter to the extent justified by the informatory purpose and provided that the source, including the author's name, is indicated, except where this turns out to be impossible;
(g) use during religious celebrations or official celebrations organised by a public authority;
(h) use of works, such as works of architecture or sculpture, made to be located permanently in public places;
(i) incidental inclusion of a work or other subject-matter in other material;
(j) use for the purpose of advertising the public exhibition or sale of artistic works, to the extent necessary to promote the event, excluding any other commercial use;
(k) use for the purpose of caricature, parody or pastiche;
(l) use in connection with the demonstration or repair of equipment;
(m) use of an artistic work in the form of a building or a drawing or plan of a building for the purposes of reconstructing the building;
(n) use by communication or making available, for the purpose of research or private study, to individual members of the public by dedicated terminals on the premises of establishments referred to in paragraph 2(c) of works and other subject-matter not subject to purchase or licensing terms which are contained in their collections;
(o) use in certain other cases of minor importance where exceptions or limitations already exist under national law, provided that they only concern analogue uses and do not affect the free circulation of goods and services within the Community, without prejudice to the other exceptions and limitations contained in this Article.
4. Where the Member States may provide for an exception or limitation to the right of reproduction pursuant to paragraphs 2 and 3, they may provide similarly for an exception or limitation to the right of distribution as referred to in Article 4 to the extent justified by the purpose of the authorised act of reproduction.
5. The exceptions and limitations provided for in paragraphs 1, 2, 3 and 4 shall only be applied in certain special cases which do not conflict with a normal exploitation of the work or other subject-matter and do not unreasonably prejudice the legitimate interests of the rightholder.

In Kraftwerk v. Pelham, the CJEU found that Article 2(c) of the InfoSoc Directive, must be interpreted as meaning that the phonogram producer’s exclusive right allows him to prevent another person from taking a sound sample, even if very short, of his phonogram for the purposes of including that sample in another phonogram, unless that sample is included in the phonogram in a modified form unrecognizable to the ear. While the Kraftwerk sample used in "Nur mir" is slightly modified (speed reduced by 5%), it is still recognizable for the average listener. Hence, the inherent exception as stated by the CJEU does not apply to the Kraftwerk v. Pelham case.

That leads us to the question of whether there are or are not other exceptions which could be applied in our case. As you can see, the list of exceptions in Article 5 of the InfoSoc Directive is quite long. This raises the question whether this is a comprehensive list of exceptions. The CJEU, in Kraftwerk v. Pelham (C-476/17) decided that the list of exceptions in Article 5 of the InfoSoc Directive is exhaustive and that a Member State cannot, in its national law, implement an exception or limitation, other than those provided for in Article 5 of the InfoSoc Directive. This means that the Member States of the EU, including Germany, must not implement or maintain exceptions other than those stated in Article 5 of the InfoSoc Directive. Consequently, the free use right according to former Section 24(1) German Copyright Act which cannot be based on any of the exceptions or limitations provided by Article 5 of the InfoSoc Directive can no longer be applied by German courts.

The only possible exception in the Kraftwerk v. Pelham case could be Article 5(3)(d) of the InfoSoc Directive (highlighted above). However, the CJEU stated the obvious, namely that the concept of "quotations" in Article 5(3)(d) must be interpreted as meaning that it does not extend to a situation in which it is not possible to identify the work concerned by the quotation in question. Since Moses Pelham did not quote Kraftwerk when using their sample, the use of the sample in question in Kraftwerk v. Pelham cannot be justified by the exception provided under Article 5(3)(d) of the InfoSoc Directive.

Where do we stand now?

More than twenty years after Kraftwerk brought an action for copyright infringement against Moses Pelhalm and Sabrina Setlur, there is still no final decision on the merits. The case is currently pending with the Higher Regional Court of Hamburg (the court of appeal). Based on EU law and the Kraftwerk v. Pelham decision by the CJEU, there are good chances that Kraftwerk will finally win their case with the competent German courts.

In parallel, the German legislator has implemented a new copyright legislation which lead to the abandonment of the free use right formerly available in Section 24 of the German Copyright Act, thus making it compliant with EU law (following the CJEU decision in Kraftwerk v. Pelham). The Act to adapt copyright law to the requirements of the Digital Single Market (Gesetz zur Anpassung des Urheberrechts an die Erfordernisse des digitalen Binnenmarktes), which entered into force on 7 June 2021, and further background information, including comments and observations by third-parties, can be found on the website of the Federal Ministry of Justice and Consumer Protection (partially in English). 

Copyright notice:

AKAI MPC60 photo(s) above by Vintage Synth Explorer via Wikimedia Commons, licensed under the Creative Commons Attribution 3.0 Unported  (CC BY 3.0) license.