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August 2017

Update: Additional Scheme within the German Film Fund DFFF, "DFFF II", Launched

Earlier this year, German Federal Government Commissioner for Culture and the Media Monika Grütters announced an increase of the German federal film fund DFFF (press release in German only) and indicated that there would be further increases for 2018. The draft budget for 2018 passed by the German government then provided for a 75 million Euro increase of the DFFF from its current 50 million Euro to a total of 125 million Euro per year from 2018 on, to establish a new scheme within the DFFF (so-called "DFFF II"; please also see our April Newsletter for details).

As of Aug. 1, the new scheme, which is aimed specifically at major international and VFX-heavy theatrical productions, is live with an initial budget of 25 million Euro for the second half of 2017 (to be increased to 75 million Euro annually from 2018). Under the updated DFFF Guidelines, production service providers, such as production studios or VFX service providers responsible for commissioned films or film sequences, may now also submit applications under DFFF II. Theatrical films are eligible for funding under DFFF II if they have a minimum spend of eight million Euro on German production costs, with overall production costs of at least 20 million Euro. The subsidy amounts to 25 percent of recognized German production costs, the total of the subsidy is capped at 25 million Euro per project. As with the existing DFFF I, funding will be granted on a first come, first served basis. Please see here for more information.

DFFF I will continue to operate as a funding scheme with an annual budget of 50 million Euro, however, to better support producers of larger productions, funding was increased from 20 percent to 25 percent of recognized German production costs for projects with a German spend exceeding eight million Euro. Serial projects will remain excluded from DFFF. Please also see our brochure on the DFFF and other German subsidy schemes for film and series productions (as of February 2017) here.

German Federal Film Fund Statistics Indicate Strong Year for Theaters in Germany (but less so for German Films); Medienboard announces Record-Breaking Production Activity in Berlin-Brandenburg Region and an Increase of Funds

On Aug.16, the German Federal Film Fund FFA published the 2017 half-yearly figures for the German theatrical market. Total box office revenues for January through June amount to approximately 519 million Euro, a plus of 7.7 percent compared to the first half of 2016. The number of moviegoers also increased to 60.2 million (a plus of 4.9 percent). German films, however, were only able to draw 10.5 million moviegoers, a decrease of five million compared to the first half of 2016, which resulted in a mere 18 percent market share (compared to 26.7 percent previously).

Regional film fund medienboard Berlin-Brandenburg (MBB), which released their 2016 report (in German only) Aug. 22, announced record numbers both for production activity in the region (approximately 5,000 days of photography) and the so-called "regional effect." "Regional effect" describes the ratio of how much was spent on production in the region to the amount of funding disbursed, which in 2016 amounted to 473 percent, meaning almost five times the amount of funding disbursed was spent. MBB also announced a budget increase of 1.2 million Euro for 2018 (compared to approximately 32 million Euro for the current year).

German Parliament Provides Legal Certainty for the Operation of Unencrypted Wireless Networks 

On June 30, the German Bundestag passed an amendment to the Telemedia Act to strengthen the position of operators of unencrypted local wireless networks. The key issue of the amendment is the limitation of "liability for interference" (Störerhaftung). The so called "WLAN-Gesetz" (in German only) is expected to take effect by the end of 2017 at the latest and aims to expand public and unencrypted wireless networks in Germany.

After the amendments become effective, the operators of unencrypted wireless networks are put on the same level as service providers under the Telemedia Act. As a result, they will no longer be liable for claims for damages, injunction and abatement, and judicial and extra-judicial costs resulting from infringements of third-party rights by their network-users. Exceptions shall only apply if and insofar as the operator himself is involved in the infringement of third-party rights. Password protection and user registrations may be provided by the operator on a voluntary basis, but are no longer required to be discharged from liability.

With the exclusion of liability for injunctive relief, the legislature removed the basis for "liability of interference" from the Telemedia Act. Nevertheless, operators of unencrypted wireless local networks should continue to monitor and limit the use of their networks, as the new change allows and promotes the imposition of network-barring (Netzsperren) by the courts. Operators will be obligated by law to block the use of illegal information, if there is no other way to prevent current and future violations of third-party rights by network-users. Operators must now consider implementing technical data protection measures such as DNS-, IP-, and URL-blocking, or data limitation, which can help prevent the information from being retrieved by network-users.

It remains to be seen how the German courts will put network-barring into practice. Critics already raise concerns that the obligation to block specific web content may entail the risk of so-called "overblocking," meaning that the legal use of content maybe affected by the technical limitations as well. On the European level, the legislature’s decision to incorporate a broad release from liability coupled with the exclusion of a reimbursement for judicial and extra-judicial costs could result in a conflict between the national laws and the principle of effective enforcement for the rights-holders, as laid down in the Enforcement Directive.

New German Federal Data Protection Act Officially Published

On July 5, the new German Data Protection Act (BDSG-Revised) (in German only) was officially published in the Federal Gazette. BDSG-Revised will fully replace the current German Federal Data Protection Act (BDSG) and is intended to adjust the German legal framework to the new European General Data Protection Regulation (GDPR). Both BDSG-Revised and the GDPR will become effective May 25, 2018.

Some of the most important provisions of BDSG-Revised relate to sensitive data, employee data protection, the obligation to appoint a data processing officer and the use of scoring data. Please see our GT Alert of July 2017 for details on the new law.