Intellectual and industrial property, although it may seem like an abstract or technical concept, is a fundamental force that drives innovation and development in numerous sectors.

This set of rights includes various forms of protection, such as patents, which ensure that inventors can obtain exclusive rights to their technical inventions; copyrights, which allow authors to protect their works from unauthorized use by third parties; and trademarks, which identify and distinguish products or services, providing their owners with a unique identity in the marketplace.

It is also important to understand what trade secretsor business secrets are—they protect technical or scientific knowledge, business data, and key commercial and market strategies that are essential for maintaining a competitive advantage.

Industrial and Intellectual Property in Film: The Struggle for Ideas and Commercial Success

Through certain films, we see how cinema has depicted the complex struggles to secure these protections, ranging from legal disputes over copyrights and patents to efforts to establish and expand a brand in competitive markets.

These stories illustrate the risks, ingenuity, and perseverance required to protect an idea, and they also demonstrate how these rights become an essential tool for the success and growth of companies in the competitive global market.

Artificial Justice (2024)

This Spanish film explores a future in which artificial intelligence redefines our country's judicial system, raising questions about how emerging technologies should be regulated and what role intellectual property will play in the protection and use of these algorithms. It is a story that raises ethical and legal challenges regarding the control of AI in society.

Air (2023)

"Air" shows us the iconic deal between a young Michael Jordan—represented commercially by his mother—and Nike, which gave rise to the famous Air Jordan brand. This film captures the moment when the sports and fashion industries came together to create a brand that would change the perception of sporting goods, highlighting the power of a well-positioned brand in the global market.

Tetris (2023)

A thriller that explores the intricate story of how the video gameTetris, created in the Soviet Union, obtained the license to be marketed in the West. The film illustrates the political and legal barriers the creators had to overcome, highlighting the importance of licensing in bringing an innovative idea to the international market.

The War of the Currents (The Current War – 2017)

This historical drama depicts the fierce competition between Thomas Edison and George Westinghouse for control of the U.S. electrical grid. In addition to chronicling technological advancements, the film explores the business strategies and intellectual property rights that shaped the electrical grid as we know it today.

The Founder (2016)

This is the story of Ray Kroc, the founder of McDonald’s, which recounts how a small hamburger shop became one of the world’s largest franchise chains. The film illustrates the power of expansion under an established brand, addressing topics such as the use of intellectual property in franchise management and the global expansion of a brand.

Joy (2015)

Inspired by the life of Joy Mangano, this film tells the story of how innovation can emerge from everyday products. Through her cleaning inventions, Joy builds an empire, highlighting the importance of protecting ideas in all sectors—even less traditional ones—through patents and design rights.

Big Eyes (2014)

"Big Eyes" tells the story of Margaret Keane's struggle to claim authorship of her famous paintings, which for years were attributed to her husband. The film explores the human side and the legal implications of copyright, highlighting the importance of intellectual property in protecting artists' creative legacies.

Flash of Genius (2008)

Based on a true story, this film tells the story of an engineering professor who invents and patents a windshield wiper system and subsequently faces a legal battle with the automotive industry, which uses the system without his consent. The story highlights the importance of patents as a means of protection for inventors, illustrating the difficulties of defending intellectual property rights against large corporations.

The Man in the White Suit (1951)

In this classic satire, a scientist invents a fabric that is virtually indestructible and never gets dirty. However, the textile industry conspires to prevent its production, as it could put an end to their businesses. The film explores the challenges inventors face when their ideas threaten established commercial interests, highlighting the influence of intellectual property on the market.

The Third Man (1949)

This film noir classic explores the dangerous trade in counterfeit penicillin in postwar Vienna, revealing the risks associated with the counterfeiting and trade of unauthorized pharmaceutical products. The plot highlights the need for trademark protection and regulations to safeguard public health and intellectual property.

In short, these films offer us a unique perspective on how intellectual and industrial property not only protects the interests of creators, but also fosters fair competition, drives the economy, and promotes technological and cultural progress.

Claudia Fernández, Attorney in the IP, Media & Entertainment Practice Group at ELZABURU 

On January 25, 2023, the Supreme Court put an end to the controversy surrounding the long-running show “Cifras y Letras.”

The dispute began in 2016 with the lawsuit filed by the “expert” professor from the “Cifras y Letras” program against ARTISTAS INTÉRPRETES, SOCIEDAD DE GESTIÓN (AISGE)—the collecting society of which he was a member—demanding payment of the remuneration granted to performing artists under Article 108.5 of Royal Legislative Decree 1/1996, dated April 12, which approves the consolidated text of the Intellectual Property Law, regularizing, clarifying, and harmonizing the legal provisions in force on the matter (LPI).

The defendant, for his part, argued that under no circumstances was the professor portraying a character; rather, he identified himself as an expert in literature, and therefore was not merely playing the role of an expert, but was, in fact, one.

Commercial Court No. 9 of Madrid, in its ruling of September 26, 2018, ruled in favor of the plaintiff, finding that his appearance on the program “Cifras y Letras” constituted an artistic performance, thereby entitling him to the remuneration established in Article 108.5 of the Intellectual Property Law (LPI) pursuant to the provisions of Article 20. 2(f) of the LPI, and AISGE must therefore pay the amounts outstanding from the program’s first broadcast to the present date.

In light of the previous ruling, AISGE filed an appeal with the Provincial Court of Madrid. For its part, the Court, contrary to the rulings of the Commercial Court, held that the presenter’s performance should be “externalized” in such a way that the audience would perceive it as an artistic creation and not as a personal and spontaneous expression—that is, as a natural performance by the teacher.

As a result, the expert filed an extraordinary appeal with the Supreme Court alleging procedural violations and seeking cassation, in which he claimed a violation of Article 108.5 of the Intellectual Property Law (LPI) in conjunction with Articles 105, 120.1, 122.2, and 122.3 of the LPI.

Finally, the Supreme Court (Civil Chamber, 1st Section), in its ruling of January 25, 2023, held that “the appellant has not demonstrated a valid basis for cassation” and ruled to dismiss the extraordinary appeals for procedural violation and the cassation appeal filed by the plaintiff.

This ruling by the Supreme Court affirms and upholds the judgment handed down by the Provincial Court of Madrid, without addressing the merits of the case. It would have been interesting to hear the Supreme Court’s interpretation of this matter, since no similar case had ever been brought before the high court.

Given everything discussed so far, could it not be argued that a person whose behavior follows a script is not acting in a natural and spontaneous manner, and is therefore performing a role that is eligible for protection? If the answer to the previous question is yes, that person would be considered a performing artist within the meaning of Article 105 of the Intellectual Property Law (LPI) and would be entitled to the remuneration established in Article 108.5 of the LPI.

Claudia Fernández Rañón, Attorney at ELZABURU

The tax incentives available for audiovisual production and the production of performing arts and musical performances are currently a central component of the funding process for these projects. However, until now, it was unclear whether“reality shows” could take advantage of these incentives.

The General Directorate of Taxes has clarified this issue in its binding ruling V2673-22, which we briefly discuss below.

The inquiry was submitted by a Canarian production company, registered in the Administrative Registry of Film and Audiovisual Companies of the Ministry of Education, Culture, and Sports, which provides production services for foreign feature films and is therefore entitled to the tax deduction provided for in Article 36, paragraph 2, of the Corporate Income Tax Law (hereinafter LIS).

The resolution establishes that, in the absence of a legal basis for classifying the various types of audiovisual projects on the market, one must, in accordance with Article 3 of the Civil Code, interpret the provision based on the plain meaning of the words.

Thus, based on the definition of “documentary” provided in the regulations, the DGT considers that the“reality show”program referred to in the inquiry may be classified as a documentary and, therefore, may be eligible for the deduction discussed here, provided that it has an informative, educational, or experimental nature.

This represents a significant step forward in clarifying and interpreting the limits of tax deductions for this type of project, providing guarantees and legal certainty for similar projects that wish to use these deductions as a financing mechanism.

Jaime Hormeño, attorney at ELZABURU

We analyze the recently published Royal Decree 31/2023, dated January 24, which amends the Personal Income Tax Regulations to comply with the measures contained in the Artists’ Statute regarding withholding taxes.

On September 6, 2018, the Plenary Session of the Congress of Deputies unanimously approved the report of the Subcommittee on the Drafting of the Artists’ Statute, which called on the government to adopt emergency measures regarding artistic creation, with the aim of improving the working conditions of Spanish artists. Among these recommendations were several of a tax-related nature.

At the start of 2023, Royal Decree-Law 1/2023, dated January 10, was published, introducing some of the key improvements called for in the Artists’ Statute; all of them relate to the social protection of artists in the labor market and are intended to improve the professional standing of creators, artists, and other cultural workers.

Now, with the entry into force on January 25 of Royal Decree 31/2023, the Personal Income Tax Regulations have been amended with regard to withholding taxes and payments on account applicable to various artistic activities, in order to incorporate the recommendations contained in the Artist’s Statute into tax law.

Two provisions of the personal income tax regulations are being amended to improve protection for the various stakeholders in the sector.

1. Specifically, paragraph 2 of Article 86 is amended to reduce the minimum withholding tax rate applicable to earned income derived from a special employment relationship from 15 to 2 percent for artists working in the performing arts, audiovisual arts, and music, as well as for individuals who perform technical or auxiliary activities necessary for the conduct of such activities.

2. Furthermore, paragraph 2 amends paragraph 1 of Article 95, reducing the withholding tax rate from 15 to 7 percent with respect to economic activities carried out by artists. Specifically, for the new withholding rate to apply, the artist must have earned total income from such activities of less than 15,000 euros in the previous tax year, and this income must represent the artist’s primary source of income—defined as more than 75 percent of the sum of the total income from economic activities and employment earned by the taxpayer in that tax year.

Jaime Hormeño, tax attorney at ELZABURU

The Secretariat of State for Telecommunications and Digital Infrastructure, as part of the Plan to Promote the Audiovisual Sector (Spain Audiovisual Hub), has announced a call for grant applications for experimental development and process innovation projects using technologies related to the Metaverse and Web 3, for a total amount of 3.8 million euros.

The call for applications, along with the regulations governing the grants (hereinafter“BBRR”), has been published in the Order ETD/653/2022, dated July 6, which establishes the regulatory guidelines for the granting of grants by the Secretariat of State for Telecommunications and Digital Infrastructure and announces the call for proposals for grants for experimental development and process innovation projects using technologies associated with the Metaverse and Web 3.

This aid is financed by the Ministry itself, out of the General State Budget, and not with European funds, and is subject to the regulatory provisions contained, regarding aid for research and development projects, in Regulation (EU) No.651/2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty ( better known as the General Block Exemption Regulation—GBER).

This call for proposals falls within the scope of R&D&I, which is essential for contextualizing the grants, in the sense that they are intended to foster innovation and technological advancement, rather than merely improving the competitiveness of individual companies. That is why the creation of prototypes—and not the commercial launch of a product or service—is the objective of this funding, without prejudice to the possibility that, in the future and in conjunction with other resources, the products or services resulting from the subsidized projects may have commercial potential. As established in the BBRR, “prototypes resulting from the projects receiving the grants may not be used commercially, unless they necessarily constitute the final commercial product and their manufacture is too costly for their exclusive use for demonstration and validation purposes.”

 Furthermore, projects must include activities aimed at development and functional improvement; projects that merely integrate third-party technologies will not be considered.

In this document, ELZABURU outlines the conditions, requirements, and most relevant considerations to help you decide whether to apply for the grants described herein.

I. PURPOSE

 The grants aim to (i) promote the digitalization and competitiveness of Spanish companies in the sector and (ii) integrate women into the audiovisual industry by encouraging the use of technologies related to audiovisual media, video games, and digital and interactive content, and by supporting the digitalization of small and medium-sized enterprises (SMEs). Projects that incorporate, within these fields, Augmented Reality (AR), Virtual Reality (VR), and hybrid technologies, as well as applications of Artificial Intelligence (AI) and blockchain in the immersive environment of the metaverse and Web3.

Specifically, the BBRR define the following projects for which the grants are intended:

1. Experimental prototype development projects that focus on the use of tools, technologies, and platforms associated with Metaverse technologies (VR, AR, XR, WebGL, Web3D, WebXR, video game engines, tools for the digital representation of humans—such as avatars or digital humans—among others—to improve the production of digital content, immersive and interactive environments, and audiovisual production, with an emphasis on narrowing the gender gap and with the potential for transformative impact on society and the industry.
2. Process innovation projects involving the innovative creation and implementation of technologies related to the Metaverse and Web 3 in cultural, healthcare, or educational settings that promote the inclusion of women in these industries.

In both cases, projects must serve at least one of the following purposes:

• Prototyping or innovative processes for newaudiovisual production and digital content tools.
• Prototypes or innovative processes that utilize technologies associated with the Metaverse and Web 3 to drivesocial transformation and the integration of disadvantaged groups, particularly with regard to the gender gap.
• Creating New Workspaces and Opportunities for Collaboration
• Prototypes or innovative processes that implement technologies related to the Metaverse incultural, healthcare, or educational settings.

In this context, “digitalcontent”it means“the mass-scale provision of data or digital assets in reusable formats created using VR/AR/XR technologies, WebGL/Web3D/WebXR, video game engines, and other technologies associated with the concept of the Metaverse, such as tools for the digital representation of humans (avatar generation, digital humans, etc.) and technologies for the design and management of spaces.”

In light of the foregoing, projects whose sole or primary purpose is the mere management, issuance, trading, and/or speculation in cryptoassets and/or tokens are excluded, as they are not consistent with the described objectives . This does not preclude the funding of projects that, while complying with the objectives, engage in such transactions, provided that such transactions are not the purpose of the funded activity.

DEADLINES AND AMOUNTS

• Application period: August 4 through August 31, 2022, at 1:00 p.m. All documentation must be submitted through the Ministryof Economic Affairs and DigitalTransformation’sonline portal, in Spanish and signed by the representative of the applicant company or professional.
• Decision Deadline: The maximum period for reaching a decision and notifying the final decision may not exceed six months from the publication of the summary of the call for applications, that is, from July 14, 2022. The recipient will have 5 business days from the date of the final award decision to accept the grant.
• Project completion date: June 30 , 2024.
• Deadline for providing proof of use of the grant: 3 months following the completion of the project; cash payments, promissory notes, and checks made out to a specific person or to the bearer will not be accepted as proof.
• Total Amount of Funding: The total amount available for this call for proposals is 3.8 million euros.
• Budget of the eligible project:
  • Minimum: 150,000 euros.
  • Maximum: 1,000,000 euros.
• Maximum amount per beneficiary: The aid shall not exceed 25 % of eligible costs. This limit may be adjusted in the following cases:
  • For medium-sized enterprises, the aid may amount to 35 percent of eligible costs.
  • For small businesses, microenterprises, or professionals registered under the Special Regime for Self-Employed Workers, the grant may cover up to 45% of the eligible budget.
• Beneficiaries:
  1. Professionals registered under the Special Social Security System for Self-Employed Workers;
  2. Small and medium-sized businesses;
  3. Microenterprises

All of them must (1) be citizens of Spain or of any member state of the European Union or the European Economic Area Agreement, and (2) have tax residency or a permanent establishment in Spain, as defined by tax regulations.

In addition, the operational centers of companies receiving such aid must be located in Spain.

The following entities are not eligible to receive funding:

• Public-sector companies or entities governed by public law, nor companies in which such entities hold a majority stake.
• Companies of any type whose business involves the management of a public service.
• Simply groups of individuals or legal entities, associations, or foundations.
• General partnerships, communities of property, or any other type of economic unit or separate estate that lacks legal personality

• Limit on the Number of Projects per Beneficiary: No limit has been set on the number of projects that may be submitted per applicant/beneficiary; however, it should be noted that, due to budgetary constraints, the submission of numerous projects by a single company could adversely affect the evaluation of projects that are more mature or better positioned to receive funding. Therefore, it is important to prioritize those projects that are truly ready for implementation.
• Payment of the Grant: The grant will be paid in a single lump sum in advance for the full amount of the grant, and will be considered an advance payment until the State Secretariat for Telecommunications and Digital Infrastructure verifies that the beneficiary has met all the required criteria.
• Provision of collateral: Collateral covering 100% of the amount of the grant awarded must be provided within 15 days of the publication of the final award decision.

The guarantee will be released once the final certification has been issued following the project’s completion, in proportion to its results and, if applicable, after the beneficiary has remitted any required refunds.

OTHER REQUIREMENTS

• The project must includeat least 25% women in order to qualify as a beneficiary and must maintain this percentage throughout the entire project. This requirement applies to the project, not to the applicant company; therefore, if the project is carried out by the applicant company with the participation and hiring of other professionals and companies, this percentage will be considered for the project as a whole.

In any case, this is an eligibility requirement—failure to meet it results in exclusion—but it must be met throughout the entire duration of the project.

• Verify the economic and financial solvency. To do so, one of the following four criteria must be met:
  • The applicant organization’s annual revenue for the most recent fiscal year must be equal to or greater than 50 percent of the total budget for the project or group of projects.
  • The applicant organization’s equity as of the most recent fiscal year must be equal to or greater than 50 percent of the total budget for the project or group of projects.
  • The average annual revenue for the last three completed fiscal years must be greater than or equal to 50% of the total budget for the project or group of projects.
  • Submit proof of a guarantee deposited with the General Deposit Fund for 50% of the total aid requested. This guarantee will secure the acceptance of the aid if it is granted, and is separate from the guarantee established to secure the advance payment. It will be released automatically if the aid is not granted or, if it is granted, once the guarantee for the advance payment has been established.

If an applicant submits more than one project in response to the call for proposals, this criterion will be evaluated in conjunction with all submitted proposals, and projects will be eliminated based on the scores received for the remaining evaluation criteria, starting with those with the lowest scores, until it is determined whether or not any of the criteria listed above have been met.

• Demonstrate technical or professional competence—that is, the applicant entities’ prior experience in the project’s scope of application. Although newly established companies are not excluded from eligibility, it is true that the assessment of this competence may be affected by the limited track record they can demonstrate. This should be taken into account by companies that have created a new entity dedicated to developing these technologies; in such cases, they will have a better chance of receiving the grant if they apply through the more established company. In such cases, the provisions regarding subcontracting outlined below must be taken into account.

• Subcontracting: Beneficiaries may subcontract part of the project’s implementation, up to a limit of 50% of the project’s total cost. Furthermore, subcontractors must meet the same technical eligibility criteria required of beneficiaries.

When subcontracted work exceeds 20 percent of the grant amount and that amount exceeds 60,000 euros, subcontracting is subject to certain requirements. For these purposes, it is expressly prohibited to split a contract in order to reduce its value.

The scope of the activity to be subcontracted must be defined, including the tasks to be performed, the scope of the work, and the cost estimate, as well as the justification for the need for such subcontracting.

Contracts with individuals or legal entities affiliated with the applicant under the terms of Order ETD/653/2022is not permitted unless (i) prior express authorization is obtained from the granting authority and (ii) the eligible amount does not exceed the cost incurred by the related entity. Such authorization would be requested, if applicable, following the publication of the decision granting the aid.

It is important to note that contractors will be liable only to the beneficiary, who will assume full responsibility for the implementation of the subsidized activity vis-à-vis the government.

• Incentive Effect of the Grant. The recipient must demonstrate this by submitting a report that shows the incentive effect of the grant on the activities for which it is requested; this will be evaluated based on the following criteria:

• A substantial increase in the scope of the project or activity as a result of the assistance.
• A substantial increase in the total amount invested by the beneficiary in the project or activity as a result of the grant.
• A substantial increase in the pace of implementation of the project or activity in question.

ELIGIBLE COSTS

Those that are consistent with the nature of the subsidized activity, are strictly necessary, and are performed, paid for, and documented in a timely and proper manner:

1.  Personnel costs for researchers, technicians, and other support staff, to the extent that they are assigned to the project.
2. Costs of instruments and materials, to the extent and for the period during which they are used for the project;
3. Costs of buildings and land, to the extent and for the period that they are used for the project;
4. Contract research costs, knowledge, and patents acquired or licensed from external sources under conditions of full competition, as well as costs for consulting and equivalent services. This category includes legal advisory costs, as well as the costs of external audits required to justify the grant, estimated at 1% of the eligible budget.

Indirect costs include supplementary overhead costs and other additional operating expenses that, while not directly attributable to a specific subsidized activity, are necessary for that activity to be carried out.

Activities carried out after the grant application is submitted will be eligible for funding.

At ELZABURU, we have professionals who are ready to assist you and guide you through the application process for these grants and help make your most innovative projects a reality.

Author: Sara Isabel Tortosa

The year 2021, which was particularly intense in every respect, culminated in one of the most widely publicized reforms: the labor reform approved by the Council of Ministers through Royal Decree-Law 32/2021, dated December 28, on urgent measures for labor reform, the guarantee of job stability, and the transformation of the labor market ( “RD-Law 32/2021”), which took effect on December 31, with a three-month grace period for certain provisions to allow companies to adapt to the new regulations; this grace period ended on March 31, 2022.

The impact of the new labor framework is not uniform across all sectors, due to their differing characteristics. In particular, the cultural sector had to wait until one week before the expiration of the aforementioned adaptation period for the government to approve the specific regulations that would allow for a consistent and proper implementation of the labor reform.

For that reason, on March 22, the following was approved: the Royal Decree-Law 5/2022, dated March 22, which adapts the special employment regime for individuals engaged in artistic activities, as well as the technical and auxiliary activities necessary for their performance, and improves working conditions in the sector (“RD-Law 5/2022”), which has been in effect since March 31.

Although in a tentative, fragmented, and incomplete manner—yet absolutely necessary—some of the recommendations set forth in the Report of the Subcommittee on the Drafting of the Artists’ Statute, which was presented to the Congress of Deputies in 2018, have been incorporated.

OBJECTIVES AND NEW PROVISIONS OF THE LABOR REFORM

The promotion of permanent employment and the limitation of temporary and precarious work stand as hallmarks of this reform. However, an indiscriminate crackdown on temporary work could weaken certain sectors in which intermittent and seasonal work are inherent to the nature of the activity itself, as is the case in the cultural industry.

Let's consider an audiovisual production, a concert or theater tour, or even a theater's own seasonal program—all of which are seasonal in nature, with temporality as their common denominator.

With that said, it will be easier to understand the full scope of the impact that Royal Decree-Law 32/2021 has on the hiring of personnel in the arts and culture sector and why it has been necessary to supplement it with Royal Decree-Law 5/2022:

1. Regarding Royal Decree-Law 32/2021:

• The type of contract for a specific project or service is eliminated.
• Employment contracts are presumed to be indefinite, and the grounds for fixed-term employment are limited to the following:

1. Due to production circumstances: occasional and unforeseeable increases; fluctuations that create a temporary mismatch between available permanent employment and the demand for it; or occasional, foreseeable situations of short duration.
2. Due to the replacement of an employee.

• The training contract and the permanent intermittent contract remain in effect, with certain modifications and temporary limitations compared to the previous regulations.

1. Regarding Royal Decree 5/2022:

It implements some of the recommendations contained in the aforementioned Report of the Subcommittee on the Drafting of the Artists' Statute through the following amendments:

1. The special nature of the employment relationships of artists in public performances, as established in Article 2.1.e) of the Workers’ Statute, extends to technical and support staff who are part of the company’s permanent workforce, and they are also included in the current social security contribution groups for artistic personnel.

This specialty is subject to specific regulations, which, in this case, are set forth inRoyal Decree 1435/1985, dated August 1, which regulates the special employment relationship of artists in public performances (“RD 1435/1985”) and which, by virtue of the legal principle of specialty, takes precedence over the general provision contained in the Workers’ Statute, the application of which is considered supplementary.

Without prejudice to the limitations set forth in the Workers’ Statute, Royal Decree 5/2022 thus establishes an ad hoc fixed-term contract for the cultural sector. However, it is worth noting that Royal Decree 1435/1985 has always provided for—and continues to do so under the new wording that Royal Decree 5/2022 has given to its Article 5—the possibility of entering into fixed-term employment contracts“to meet the company’s temporary needs; such contracts may be for one or more performances, for a specific period, for a season, or for the duration that a production remains on the bill,” with the recent amendment adding“or for the duration of the various phases of production.”

This regulatory framework, supplemented by collective bargaining, has established fixed-term employment in this sector through legislation, collective agreements, and case law.

However, it is important to highlight a few issues of particular practical relevance:

• The contracts governed herein are, in any case, subject to the general rules on the chaining of contracts set forth in Article 15 of the Workers’ Statute.
• The provisions of Royal Decree 1435/1985 regarding compensation, working hours, breaks, and vacation time, the employment of minors, and other matters are expressly excluded from application to technical and support staff.

2. The definition of “performance” is expanded to include related professional activities that are not limited to performances or presentations on stage, in order to include technical and support staff.

3. It adapts to new technologies for the distribution and dissemination of content, expanding the forms of exploitation covered by its scope of application: theater, film, radio broadcasting, television, the Internet (including“streaming”), sports facilities, public squares, circuses, festivals, tablaos, nightclubs, and, in general, any venue intended for public performances or artistic or exhibition-type events.

4. The severance pay provided for upon termination of a fixed-term contract with artistic, technical, and support staff is increased, bringing it in line with that provided for workers under the general labor regime. It is increased from seven days to twelve days per year worked, without prejudice to the establishment of a higher amount under a collective bargaining agreement.

5. With regard to Social Security, employment contracts with artists, technicians, and support staff are exempt from the additional contribution required under the General Social Security Law. Furthermore, for artists enrolled in the Special Social Security System for Self-Employed Workers (RETA), the contribution is to be reduced when their annual income is less than €3,000.

III. General Note on Temporary Contracts Under Royal Decree-Law 32/2021 and Royal Decree-Law 5/2022:

Fixed-term employment contracts must clearly and precisely state the grounds justifying the temporary nature of the work to be performed. Under no circumstances may such contracts be entered into for the purpose of replacing a permanent-intermittent contract or for the performance of the company’s structural functions or activities.

Failure to comply with this requirement would result in the contract being considered an indefinite-term contract from the moment it is entered into.

TEMPORARY IMPLEMENTATION OF THE NEW LABOR REGIME

Regarding Royal Decree-Law 32/2021:

Given the three-month moratorium that ended on March 31, 2021, the new legal framework applies to contracts signed on or after that date.

However, the reform includes, among others, the following transitional rules:

1. With regard to employment contracts for specific projects or services entered into before December 31, 2021, they may remain in the same form in which they were originally entered into, but only for the maximum term originally specified;
2. During the vacatio legis—that is, between December 31, 2021, and March 31, 2022—fixed-term contracts may be entered into in accordance with the legislation in effect prior to the current reform, although their maximum duration is six months.
3. With regard to labor law violations committed prior to the effective date, penalties will be imposed in accordance with the liability regime in effect prior to the effective date.

Regarding Royal Decree-Law 5/2022:

1. It took full effect on March 31, 2022.
2. It establishes a transitional provision applicable to contracts in effect as of the effective date of this Royal Decree-Law 5/2022, which will be governed by the regulations in effect at the time the contracts were entered into.
3. Within twelve months, the government must approve a new regulation on special employment relationships to replace the current Royal Decree 1435 of 1985.
4. Will the long-awaited Artists' Statute be here to stay?

By Sara Isabel Tortosa

The unique nature of the services provided by artists has meant that—for as long as anyone can remember—their employment has been subject to special rules. Specifically, the classification of this activity as a special type of employment relationship is included in Article 2 of the Workers’ Statute, along with, among others, senior management and domestic workers.

The Origin of the Regulation

This activity, which referred exclusively to “artists in public performances,” was regulated by Royal Decree 1435/1985, dated August 1, which for decades governed the circumstances of this group. First, it included the only (admittedly very brief) legal reference in Spanish law that permitted minors to engage in artistic activities. Second, it expanded its scope to include all artistic activities in general—in a much broader sense than mere live performances—since Article 2.2 of the Royal Decree covered“…all relationships established for the performance of artistic activities, …, carried out directly before an audience or intended for recording of any kind for dissemination to the public, in venues such as theaters, movie theaters, radio stations, television stations, bullrings, sports facilities, circuses, nightclubs, discos, and, in general, any venue habitually or occasionally used for public performances or artistic or exhibition-type acts.”

The Reforms

The regulation underwent changes over time—notably two—that substantially altered its content and had long made a significant regulatory reform necessary:

On the one hand, the incorporation into Spanish law of Royal Decree 2064/1995, dated December 22—the General Regulation on Contributions and Settlement of Other Social Security Obligations—consolidated what had until then been the building blocks of a special social security system; however, its adoption laid the groundwork for the scandal: the new system did, indeed, incorporate specific contribution guidelines for “artists in public performances” subject to a special employment relationship, but it also added two sections listing specific professional categories—not all of which were as closely linked to the artist community as one might think. Among them: directors, assistant directors, or production secretaries; directors of photography; set designers; editors; technical supervisors; technical assistants; production assistants; sound supervisors; production secretaries; etc. Although the issue was noticed almost immediately and resolved in the following year’s reform with an additional clause specifying that it applied to“artists in public performances, as well as to the technical and support staff listed in section 3. II of this same article,” not all technicians and support staff were included in Section 3.II, nor did that clause resolve the issue, which the industry had to live with for many years. And, of course, it was an endless source of debate within the sector’s collective bargaining agreements, in fruitless (because legally impossible) attempts to resolve the fact that, arbitrarily, some technicians were included in the special regime and others were not, with no justification other than their inclusion on this list.

On the other hand, the successive labor reforms and their impact on the original legal text at hand. Specifically, the consequences of the 2015 labor reform with regard to Article 5 of the Royal Decree, concerning the duration of the employment contract. The aforementioned Article 5 of Royal Decree 1435/1985 referred, with regard to permanent intermittent contracts, to the provisions of the Workers’ Statute; and the 2015 labor reform incorporated general regulations to govern this type of employment, which, therefore, undeniably applied to this group as well from that point forward. Consequently, an obvious contradiction arose in the legal text, which was based on the premise that the employment relationship was of a temporary nature, and the rules arising from this latest regulatory change.

It fell to the courts to clarify this situation as much as possible. Thus, the Supreme Court, in its ruling of May 17, 2005 (appeal No. 2700/2004), established that this“…dual provision of the collective bargaining agreement—which accepts temporary employment as the general rule and allows for the possibility of permanent intermittent artists by referring to statutory regulations—requires a coordinated interpretation based on the purpose and nature of each of these provisions. This leads to the conclusion that the general rule of temporary employment set forth in Article 5.1 is justified by the unique characteristics of artists’ work, both with regard to the artist as an individual—who must possess special skills and qualifications that are constantly evolving—and with regard to the activity itself and the context in which it takes place —which are subject to constant changes and innovations—and which would render the rule of permanent employment dysfunctional. Meanwhile, the acceptance of “discontinuous permanence” is justified by the existence of seasonal work that recurs intermittently or cyclically in its nature (see, among others, the rulings of July 7, 2003 (Case No. 4185/00) and March 22, 2004 (Case No. 349/02)). It might seem that the two contractual modalities provided for in Article 5 are mutually exclusive, since if artists’ work is recognized as temporary due to its changing nature, and discontinuous permanence is achieved through the repetition of the same or a homogeneous activity, the logical conclusion would be that there can be no permanence in the employment relationship of artists. However, what the legislature has not wished to rule out is that (Art. 5.2) there are artists who are hired for a repeated and unchanging artistic activity; yet this is a scenario that, as an exception to the general rule of 5.1, must be interpreted restrictively.”

Despite the reforms, the text remained largely intact and continued to fulfill its original purpose—something absolutely essential to the group’s survival. However, it emerges quite clearly from the analysis that, from the very beginning, it was neither a legal text nor one that was correctly drafted or perfectly interpreted.

 The Artist's Statute

Sometimes, it’s the silliest issue that ends up bringing down the house of cards. Just like what happened to Al Capone, the bomb went off because of taxes. In this case, a writer publicly denounced the tax authorities for penalizing him because, as a retiree, he continued his literary work. Added to this was the issue of the cultural VAT, and from there, one after another, the shortcomings of the previously analyzed regulations and the need for comprehensive reform became apparent.

There was talk of passing a so-called “artists’ statute,” akin to a Roman codex. A parliamentary subcommittee was created with participation from all political groups represented in the Congress of Deputies—a truly unique and commendable initiative—which drafted a thorough report containing a long list of recommendations for reforming Royal Decree 1435/1985 back in June 2018[1]. The goal: to provide the artistic community with a stable legal framework tailored to its specific needs.

It is in this context—following several regulations with limited scope[2], numerous court rulings[3], and the ongoing pandemic—that Royal Decree-Law 5/2022, dated March 22, has finally been enacted, adapting the special employment regime for individuals engaged in artistic activities, as well as the technical and auxiliary activities necessary for their performance, and improving working conditions in the sector (Official State Gazette [BOE] of March 23, 2022).

To begin with, and as with everything, the regulatory reform has its strengths and areas for improvement, but it is by no means a “Roman Codex.” Among other reasons, this is because the grand ambition of consolidating all sector-specific regulations into a single regulatory text would be a task bordering on the impossible, given the immense scope of regulations of varying significance that this would entail.

The reform is, therefore, modest, in that it does not involve the creation of any new legislation, but rather a specific—and, it must be said, thorough—amendment to existing laws.

On the contrary, the legal reform was absolutely essential. Essential for survival, we might even say, considering that it is a response to Royal Decree-Law 32/2021, dated December 28, on urgent measures for labor reform, the guarantee of job stability, and the transformation of the labor market, which was set to take effect in its entirety just a few days later.

The New Regulations

The first change concerns the very basis of these new regulations. Article 2(e) of the Workers’ Statute has been reworded and, at long last, expands its scope of application beyond performers in public shows. Specifically, the special regime now applies to “…artists who work in the performing, audiovisual, and musical arts, as well as individuals who perform technical or auxiliary activities necessary for the carrying out of such work.”

As for Royal Decree 1435/1985, it is not entirely clear why a comprehensive revision of the legal text was not undertaken. Since it is being revised anyway, the new regulations even change its name, although they retain its numbering.

However, the new regulations leave many tasks and practical matters to be addressed in subsequent implementing regulations, which we sincerely hope will be adopted shortly.

Expanding the scope of application is, of course, essential, but the text does not define what constitutes the “…technical or auxiliary activities necessary for the performance of said activity.” Does this mean that, despite all efforts, there will continue to be technicians and auxiliary staff who will randomly fall within or outside the system? A definition of what is considered necessary for the performance of the activity, at this point, would be greatly appreciated. Especially since the second paragraph of Section 3 of Article 1 of the Royal Decree no longer refers to them as“necessary”but rather considers them“essential for its execution”—which, of course, is not the same thing.

Article 1, paragraph 2, of the new regulation provides a definition of what the regulation means by “special relationship,” identifying not only the worker—as Article 2(e) of the Workers’ Statute does—but also defining the conditions of the employer, apparently equating it with the status of a production or development company. In my humble opinion, this regulation violates the principle of the hierarchy of laws, in that the Royal Decree imposes a requirement that the underlying law (the aforementioned Article 2(e)) does not require. Furthermore, does this mean that all companies in technical industries that provide special services to producers and developers are automatically excluded from the regulation?

Article 5, Section 2, second paragraph of the new text also includes a new provision. It eliminates, in one fell swoop, the very premise on which the special regime operates: its temporary nature. Temporariness as a premise—and without justification—disappears from the regulation; a justifiable cause is now required for its application, which must be specified “…precisely in the contract, ” including “…the grounds for the temporary contract, the specific circumstances justifying it, and its connection to the anticipated duration.”

The economic model of companies in this sector is intrinsically linked to a production budget, with productions varying in content, quality, and duration based on factors entirely external to the organizing company itself—factors typically tied to the project’s success (public reception). Although there are a few privileged companies that do manage to string together productions with enough regularity to remain active year-round, this is by no means the general rule. Even in the case of the most active employers, the type of production significantly determines the type of professional needed in each case; hence, the foundation of the system is—and must be—the intermittent nature of the activity. Was a change that would turn the tables really necessary, when the system has been functioning smoothly—specifically in this regard—for the past 17 years?

In short, we trust that the heads of the Ministry of Labor and Social Economy and the Ministry of Inclusion, Social Security, and Migration will wisely exercise the regulatory authority granted to them by the fifth final provision of the approved law, in order to issue implementing regulations that will fully pave the way and establish “the stable legal framework tailored to their specific circumstances” that the parliamentary subcommittee deemed this group deserved when it raised the need for the Artists’ Statute. May it be so.

• [1]https://www.congreso.es/backoffice_doc/prensa/notas_prensa/61825_1536230939806.pdf
• [2] https://elpais.com/cultura/2019/04/26/actualidad/1556277965_430302.html
• [3] https://www.elindependiente.com/tendencias/cultura/2019/02/26/javier-reverte-gana-juicio-seguridad-social-cobrara-derechos-autor-pension/

By: Mabel Klimt

On September 29, the Kingdom of Spain and the Dominican Republic signed an international administrative agreement to regulate and promote film and audiovisual co-productions between the two countries.

Under the agreement, co-productions of audiovisual works between these two countries must be approved by the competent authorities of both countries: the Institute of Cinematography and Audiovisual Arts on the Spanish side, and the General Directorate of Cinema on the Dominican Republic side, in accordance with the regulations in force in each country. Such approval shall be irrevocable, except in cases where the commitments initially undertaken by the co-producers are not honored. Works that receive approval from both institutions shall be considered national productions in both countries.

Works produced as co-productions under this agreement shall be eligible for the advantages and benefits granted by each country, and only the co-producer from the country granting such benefits may be the beneficiary. In all cases, such works must be exhibited and marketed under the designation “Dominican-Spanish Co-production” or “Hispanic-Dominican Co-production.”

The proportion of each co-producer’s respective contribution to the work may range from 20% to 80%. Financial co-productions are permitted; however, works produced under this arrangement must have a budget of at least one million euros, and the percentage of the production company whose participation is exclusively financial must be no less than 10% and no more than 20%. An annual limit of six works under the financial co-production regime is established.

The distribution of the profits generated must be proportional to each producer’s contribution, unless otherwise approved by the competent authority.

The actual participation of creative, technical, and artistic personnel who meet the requirements for the granting of citizenship must be proportional to each co-producer’s financial contribution. In addition, the contribution of the minority co-producer must include, at a minimum, the participation of one writer, two actors or actresses, and one technical creative professional.

Both production and post-production work must be carried out either in Spain or in the Dominican Republic, unless the competent authorities authorize otherwise due to script requirements or technical impossibility.

In addition, the agreement includes measures designed to facilitate the entry of film crews and equipment, as well as monetary transactions and the export of film and audiovisual works.

The agreement, which has been in effect since last September, will remain in force for a period of five years and will be automatically renewed for successive periods unless either country terminates it.

Author: Clara Collado Carbonell

We live in a society that is constantly changing and evolving, and as such, on December 29, 2021, the Council of Ministers approved the preliminary draft bill amending Law 23/2011, of June 29, on legal deposit, to enable more effective preservation of national publications and optimize the management of preservation centers.

Before we begin, it is important to note that the Legal Deposit system is the regulation that requires copies of all types of published works—whether in physical or online format—to be submitted to the preservation centers of the Autonomous Communities and to the National Library of Spain. Both of these institutions are responsible for preserving Spain’s bibliographic and documentary heritage, as well as its digital heritage, including online publications, websites, and electronic books and journals.

The draft bill includes the following new provisions: First, publishers will be able to submit digital files prior to digitization, in addition to or in lieu of printed files, provided that the materials in question are books, newspapers, and/or magazines. This is intended to facilitate the preservation of and access to these documents, thereby avoiding the need to digitize these copies in the future.

In addition, the possibility of requesting prints on demand—a service that was previously unavailable—has been added, and both the Spanish Film Archive and the film archives of the autonomous communities are now recognized as centers for the preservation of Spain’s film heritage, with the objectives of recovering, researching, and preserving Spain’s film heritage, as well as promoting it.

Similarly, new types of documents are included, such as video games, commercial catalogs from bookstores, publishers, and auction houses, as well as bookmarks, among others. With regard to video games, it is worth noting that this represents a major change, since under the previous legislation they were classified as audiovisual documents, whereas now they will have their own section to ensure the deposit of the complete edition of this type of document.

Finally, among the amendments is the elimination of microforms—which are no longer published—as well as all types of advertising publications, which, as noted in the preliminary draft, lack heritage value. Additionally, the responsibility for high-level inspection—which, in accordance with the doctrine of the Constitutional Court, had previously fallen to the National Library of Spain— is also eliminated.

This text also incorporates the changes resulting from Royal Decree 635/2015, dated July 10, which regulates the legal deposit of online publications and facilitates the preservation of digital heritage.

Finally, it should be noted that this project was developed in collaboration with the autonomous communities, the Federation of Spanish Publishers’ Associations, the Spanish Video Game Association (AEVI), and the Spanish Reproduction Rights Center (CEDRO), with the aim of adapting to changes in the publishing sector, as well as enabling more effective compliance with the preservation of the national publishing heritage and the optimization of the management of preservation centers.

Authors: Mabel Klimt and Paula Bellés

On August 25, 2021, the Court of Justice of the Andean Community (hereinafter “TJCA”) ruled on the authority of the director of a motion picture to edit, cut , or delete previously filmed scenes and analyzed how that authority interferes with the related rights of performers.

The Court first refers to the grounds on which a cinematographic work is protected by copyright, citing Articles 3 and 4 of Decision 351 ofthe Common Regime on Copyright and Related Rights (hereinafter “Decision 351”), which provide that an audiovisual work is protected by copyright provided that it is original, meaning that the work includes“the personal imprint, uniqueness, or distinctiveness of the author or authors.”

To understand the above, it is important to distinguish between the author of a cinematographic work and the artist who participates in it. The former is the individual who creates the intellectual work, while the latter is the person who acts, sings, reads, recites, performs, or otherwise brings a work to life. In this sense, the creator of the work—who, in the case of audiovisual works, is the director—holds the moral and copyright in the work, while the artist is the one who brings a character to life in a unique and singular way, following the requirements of a script. It is because of this uniqueness in the artist’s performance that Chapter X of Decision 351 grants related rights to artists, including the right to“object to any distortion, mutilation, or any other infringement upon their performance or rendition that may harm their reputation.”

This latter right granted to artists should not be confused with the economic right of adaptation held by the author over the work. What is granted to artists is the right, in certain cases, to“seek protection of their moral right of integrity when distortion, mutilation, or any other infringement upon their interpretation or performance could harm their prestige or reputation.”

For their part, directors, insofar as they are the authors of a cinematographic work, have the right to edit the work, including the option to cut or remove previously filmed scenes, as well as to authorize its adaptation. This is why the rights held by directors may, on certain occasions, conflict with the related rights of performers.

In light of the foregoing, the question is to what extent the director may edit the work he or she has created without infringing on the artists’ related rights. The Court notes that the author of the audiovisual work—that is, the director—may edit or even remove an artist’s performance, for example by cutting a scene, subject to no limitation other than that such removal must not be intended to intentionally harm the performer’s prestige or reputation.

Furthermore, when analyzing the infringement of artists’ rights resulting from the removal of scenes in which their performances appear, the Court distinguishes between different types of actors (leading actors, supporting actors, etc.) in terms of protecting their performances. Thus, the level of protection afforded to an actor will vary depending on their role in the audiovisual work; consequently, a lead actor will enjoy greater protection than a supporting actor, and extras or background actors—since they are not considered artists or performers—will not be entitled to any protection in cases where scenes in which they appear are removed.

Based on all of the foregoing , we can conclude that the director of an audiovisual work will not infringe upon an artist’s related rights, and therefore the artist may not object to the removal of scenes in which he or she appears, provided that such removal is not done with the intent to damage the artist’s prestige or reputation. In order to file an objection, the artist, performer, or actor must be able to duly prove that the director’s removal was carried out with the aforementioned harmful intent.

Author: Claudia Pérez Moneu