C'est le ton qui fait la musique – The end of employer copyrights?

On 6 March 2025, the Court of Justice of the European Union (CJEU) delivered its ruling in Case C‑575/23, a dispute known as the NOB case. This case arose from a statutory arrangement under Belgian law in which a Royal Decree of 1 June 2021 required performers employed by the National Orchestra of Belgium (NOB) to transfer their related rights to the orchestra in exchange for a fixed annual compensation of €600,-. The decree, imposed unilaterally by the Belgian authorities without obtaining individual consent from the musicians, led to legal challenges on the grounds that such a compulsory transfer of exclusive rights violated EU law. Consequently, the Belgian Council of State referred a series of questions to the CJEU for a preliminary ruling, setting the stage for a decision with broader implications for copyright regimes across the European Union.

Exposition – Facts and proceedings

The factual background of the dispute centres on longstanding tensions between collective bargaining practices and statutory measures that affect the rights of performers. In Belgium, negotiations between the musicians and the orchestra concerning fair remuneration eventually collapsed, prompting the government to intervene by issuing the Royal Decree. The compulsory nature of the decree, which bypassed individual consent and established a fixed, one-size-fits-all compensation mechanism, raised serious concerns regarding the protection of exclusive rights granted to performers under EU directives. The core legal issue was whether such a statutory measure is compatible with the EU’s established framework on copyright and related rights, particularly given that these rights grant performers a pre-emptive authority to control the exploitation of their performances.

At the heart of the decision is the interpretation of several EU directives. The CJEU had to decide if the unilateral transfer of related rights – imposed without the explicit consent of the performers – was in line with the provisions of the Directive on Copyright in the Digital Single Market (DSM Directive)¹, the Rental and Lending Directive², and the Copyright Directive³ which together guarantee performers exclusive rights over the reproduction, fixation, and public communication of their works. Additionally, the Court was tasked with determining whether the approach taken by the Belgian decree was reconcilable with the DSM Directive, which mandates appropriate and proportionate remuneration. A particularly significant aspect of the procedure involved clarifying the temporal scope of the directive by examining the meaning of “acts concluded” and “rights acquired” under Article 26(2) DSM Directive, and whether these concepts extended to a compulsory statutory transfer imposed before the deadline for transposition of the DSM Directive. In short – the question was whether the effective date of the (interpretation of the) DSM Directive of 7 June 2021 affects arrangements made prior to its introduction.

Advocate-General Szpunar provided a comprehensive opinion on these issues, arguing that the statutory imposition of a compulsory transfer was incompatible with EU law. He stressed that the exclusive rights afforded to performers under the European directives mentioned above are inherently protective and preventive in nature; any exploitation of their work must be predicated on their own explicit authorization. According to Szpunar, reducing these exclusive rights to a mere claim for fixed remuneration – without obtaining prior consent – undermines the very purpose of these rights. He further noted that the employment status of the performers is irrelevant in this context, as EU law does not diminish the exclusive rights of individuals simply because they are employed under a statutory framework. The fixed annual fee provided under the decree, he argued, failed to meet the standards of fair and proportionate remuneration required by the DSM Directive.

In its judgment, the Court sided with the performers by holding that the Belgian Royal Decree of 1 June 2021 infringed upon the exclusive rights of the musicians as guaranteed by EU law. The CJEU found that the Belgian decree violated the protections established under Articles 2 and 3(2) of the Copyright Directive as well as Articles 7 to 9 of the Rental and Lending Directive. Moreover, the Court confirmed that the principle of appropriate and proportionate remuneration enshrined in the DSM Directive precludes any national measure that unilaterally transfers exclusive rights without securing the explicit consent of the rightsholder and ensuring adequate compensation. 

The Court clarified that the temporal provisions regarding “acts concluded” and “rights acquired” did not extend to cover such statutory transfers, thereby rendering the Belgian decree incompatible with the EU legal framework. The provisions of the DSM Directive apply to all acts of exploitation (for example, public performances or recordings) that occur and have occurred on or after 7 June 2021, even if the underlying contracts or regulatory acts (like the Royal Decree in this case) were concluded before that date. This means that any future exploitation of performances is subject to the enhanced protections and requirements (such as the need for prior consent and fair remuneration) introduced by the DSM Directive. At the same time, the Court emphasized the principle of non-retroactivity; “acts concluded” and “rights required” that were concluded or required before 7 June 2021 remain governed by the old legal regime. In other words, the new rules do not retroactively alter rights or contractual arrangements that were finalized prior to the Directive’s effective date.

Développement I – Implications for Dutch copyright law

The implications of the decision in the NOB case for Dutch copyright law are profound. Under the current framework of Dutch law, particularly Section 7 of the Dutch Copyright Act, a doctrine known as employer’s copyright (werkgeversauteursrecht) presumes that works created by employees during the course of their employment automatically vest the copyright in the employer, unless the parties agree otherwise. This default position, often referred to as the “fiction of authorship,” does not require an explicit transfer of rights in the employment agreement since copyrights are deemed to have vested with the employer upon creation by the employee. And even though the assignment of rights under unilateral royal decree in Belgium differs from the fiction of authorship under art. 7 of the Dutch Copyright Act, the CJEU’s decision in the NOB-case challenges this automatic mechanisms of transfers of exclusive rights. The ruling underscores that any transfer of exclusive rights must be undertaken with explicit consent and accompanied by fair and proportionate remuneration, rather than being imposed unilaterally by statutory default.

In practical terms, Dutch national copyright law may require legislative reform to ensure compatibility with EU law. One possible direction is to transition from a model of automatic transfer to one based on a rebuttable presumption of transfer, wherein the default assumption of employer ownership of copyrights can be challenged unless it is supported by clear, explicit contractual provisions. This reform would necessitate that employment agreements explicitly set out the terms of any transfer of copyright, thereby safeguarding the individual rights of employees, as is already the case for all non-employment agreements (e.g. in case of consultants, contractors, etc). In the absence of such explicit provisions, questions may arise regarding the validity of the notion of employer copyright under EU law. If an employment agreement does not contain clear language indicating that the employee consents to the transfer of his or her exclusive rights, the presumption of employer ownership could be deemed insufficient to meet the requirements imposed by the EU directives. The decision implies that Dutch courts and lawmakers must scrutinize the contractual arrangements and statutory rules governing employer’s copyright to ensure that they do not inadvertently contravene the fundamental right of authors and performers to control the exploitation of their work.

Développement II – Impact on employment contracts in the Netherlands

The NOB decision will likely have a significant impact on employment contracts in the Netherlands, particularly in sectors where intellectual property and related rights play a crucial role (for example for everyone working in R&D). From a practical standpoint, employers will need to re-evaluate how they structure IP-related clauses in employment agreements, ensuring compliance with the ECJ’s emphasis on explicit consent and fair remuneration in cases of IP or related rights transfers.

The automatic attribution of copyright to the employer under Article 7 of the Dutch Copyright Act may face increased scrutiny, especially in creative and technical professions. While Article 7 remains valid as a presumption of employer authorship for copyrightable works, employers may now feel compelled to include explicit and individualized agreements to avoid any risk of later disputes about ownership, particularly where moral rights or related rights are concerned. This means employment contracts will likely need to include clearer language on IP ownership and the scope of the employer’s rights over employee-created works.

Furthermore, related rights (naburige rechten), such as performers’ rights, will require explicit assignment clauses, as the ECJ has now made it clear that forced transfers (such as through a royal decree) must be based on informed consent and fair compensation. Employers in industries such as media, entertainment, and software development may need to introduce separate remuneration structures for employees whose work generates related rights. This could result in more detailed negotiation of IP clauses, particularly for employees whose work has commercial value beyond the standard employer-employee relationship.

In high-value sectors like technology, pharmaceuticals, and R&D, the ruling may prompt employers to rethink their compensation models. If an employee’s contribution to an invention or creative work is particularly significant, there could be a greater push for additional compensation agreements to reinforce the legitimacy of the transfer of rights. This could be similar to the reasonable compensation standard seen in patent law under the Dutch Patent Act.

From a contract enforcement perspective, Dutch courts may now be more inclined to scrutinize employment agreements that contain broad, sweeping IP assignment clauses, particularly if they do not offer explicit consent mechanisms or additional remuneration. This could lead to greater litigation risks for employers who rely on standard boilerplate IP clauses without properly documenting consent.

Finally, from a transactional and due diligence perspective, companies involved in M&A deals, joint ventures, and funding rounds will likely need to ensure that all employment contracts include clear, enforceable, and well-compensated IP assignment provisions. Investors and acquirers will expect greater assurances that IP developed within a company is validly owned, without the risk of employees later challenging the transfer of rights.

Récapitulation 

While the NOB decision does not directly invalidate Article 7 of the Dutch Copyright Act, it introduces a heightened requirement for explicit consent and fairness in IP assignments, particularly for related rights. Practically speaking, this means that employers will need to tighten their contractual language, reconsider remuneration models, and ensure compliance with evolving EU standards to avoid disputes and secure their IP portfolios. 

The NOB decision reinforces the principle that exclusive rights over creative performances cannot be unilaterally transferred through statutory mechanisms without explicit consent and fair compensation. For the Dutch legal system, this means that existing provisions – particularly the automatic attribution of copyright to employers – may need to be revisited and reformed. Dutch employers and legal practitioners should consider incorporating explicit transfer clauses in employment agreements and revising statutory rules to shift from an automatic transfer model to one that respects the rights of the creator while balancing the legitimate interests of employers. Employment agreements will therefore likely (need to) become more granular, individualized, and transparent in defining how employee-created IP is handled.