Clifford Chance

Introduction

In contrast to the fair use systems, the Spanish Copyright Act ("SCA")¹ contains an exhaustive closed list of exceptions and limitations to the exploitation rights over an original work. One of these exceptions is the quotation exception set forth in Section 32(1) of the SCA, which allows the inclusion, without the author's authorization, of an "extract" of his/her previously existing work in one's own, provided that such inclusion is for teaching or research purposes; is made by way of quotation or for analysis, commentary, or review; and provided that the author and source of the original work are indicated.²

As it happens with other limits and exceptions provided in the SCA, practical challenges may emerge when attempting to put the quotation exception into practice. The term "extract" is not as straightforward as it may appear. What is an "extract" in the context of Section 32(1) SCA? Can the reproduction of an entire short story made up of eight pages that was originally published within a book of 141 pages along with other independent stories be considered an "extract"? Is that eight-page short story an "extract" of the whole book? This is the question that the Spanish Supreme Court faced in its judgment No. 724/2023, of 16 May 2023³ (the "Judgment").

Background of the case

Back in 2000, philologist Ms Elena Gallardo translated a selection of Japanese Ogai Mori's short stories into Spanish, which Ms Gallardo published under the title El Barco del Río Takase. Among them, the book contained a translation of the story "La Historia de Iori y Run", a short work of just eight pages.

In 2007, the publishing group Anaya edited and published a book entitled Claves y Textos de la Literatura Japonesa (Keys aspects and texts of Japanese Literature) written by Mr Carlos Rubio and dedicated to the analysis and study of Japanese literature. The book, encompassing 715 pages, was organised into two different sections: a comprehensive examination of Japanese literature and an anthology of diverse works. Chapter 11 of Mr Rubio's book included Ms Gallardo's published translation of La Historia de Iori y Run in the anthology section. Although Ms Gallardo was expressly cited as the author of the translation (as well as her book), she never gave permission to Anaya to include her translated story in the book Claves y Textos de la Literatura Japonesa.

Against this background, the translator -Ms Gallardo- brought an action before Madrid Commercial Court No. 7, seeking, inter alia, recognition of the infringement of her copyright. Anaya contended that the inclusion of the translated work was covered by the quotation exception.

Madrid Commercial Court No. 7⁴ dismissed Ms Gallardo's claim and found that the inclusion of La Historia de Iori y Run, in a 715-page book devoted to the analysis and study of Japanese literature, would fall within the scope of the quotation exception. Ms Gallardo appealed the decision of the Commercial Court and Section 28 of the Madrid Provincial Court⁵ partially upheld Elena Gallardo's appeal and concluded that the inclusion of her translation was not covered by said copyright exception.

Finally, the Anaya group appealed to the Spanish Supreme Court, which, in a final judgment, confirmed the Madrid Provincial Court's judgment, declaring Ms Gallardo's copyright infringed.

Key findings of the Spanish Supreme Court

In its Judgment, the Spanish Supreme Court starts its reasoning by noting that (i) the translation into Spanish of "La Historia de Iori y Run" is a derivative work, whose copyright belongs to Ms Gallardo, and that (ii) the inclusion of the short story in Mr Rubio's book constitutes a reproduction that could not be carried out without Ms Gallardo's prior consent, unless the reproduction were to fall under one of the limitations or exceptions provided in the SCA.

Therefore, set in these terms, the core of the dispute centred on whether the requirements of the above-mentioned quotation exception were met and, more particularly, on whether the reproduction of "La Historia de Iori y Run" in Mr Rubio's book could qualify as an "extract" under the terms of Section 32(1) of the SCA.

In considering this issue, the Supreme Court understands that the term "extract" used in Section 32(1) of the SCA is pitted against the concept of a complete work. Thus, for the Supreme Court, it is evident that:

1. the inclusion of an entire creation goes beyond the scope of the quotation exception ("extract" vs. whole work); and that,
2. a short story, that constitutes a separate and independent unit that has been published in its entirety and on a standalone basis together with other autonomous texts, as is the case of "La Historia de Iori y Run", cannot be considered an "extract" of the whole (i.e., Ms Gallardo's book El Barco del Río Takase).

Moreover, according to the Supreme Court, the consideration of an "extract" as capable of being included in another work is also determined by its purpose. In this regard, Section 32(1) of the SCA establishes that the inclusion in one's own work of extracts of others "is lawful, provided that works have already been disclosed and their inclusion is made by way of quotation or for analysis, comment or review". Therefore, the Judgment goes on and the Supreme Court analyses whether the inclusion of the "La Historia de Lori y Run" translation serves the purposes of analysis, commentary, or review.

According to the Supreme Court, in order to determine whether a quotation fulfils such purposes, it is essential to make a proportionality assessment on a qualitative basis (i.e., specific purpose of the reproduction) rather than quantitative basis (i.e., amount of text reproduced). Applying these parameters, the Supreme Court concludes that "La Historia de Lori y Run" included in Mr Rubio's book does not fulfil the purposes of analysis, commentary, or review since Ms Gallardo's translation has been included just as a part of a compilation of a certain number of stories (i.e., it has a compilation purpose rather than as an analysis, commentary, or review).

All in all, the Court sentences that the inclusion of Ms Gallardo's translation in Mr Rubio's book does not conform to the legal requirements of the quotation exception. In particular, "La Historia de Iori y Run" (i) is not an "extract", as it is an independent complete story that has been previously published in a book alongside other independent works; and (ii) is not included for the purposes of analysis, commentary, or review.

Finally, for the sake of completeness, the Supreme Court ruled that the quotation exception, like any other copyright limit or exception provided in the SCA, must be interpreted in the light of Section 40 bis SCA, which prohibits any interpretation of a limit/exception "in such a way as to permit its application "in a manner that would unreasonably prejudice the legitimate interests of the author or otherwise conflict with a normal exploitation of the works" to which they refer.

Although Ms Gallardo's translation is incorporated into a book dedicated to Japanese literature, the fact that "La Historia de Iori y Run" is an independent unit and that Ms Gallardo's inclusion is just for compilation purposes constitutes, in the opinion, of the Supreme Court, a form of unauthorized exploitation, which is detrimental to the legitimate interests of the original author and, therefore, contrary to Section 40 bis of the SCA.

Conclusion

The Judgment of the Spanish Supreme Court No. 724/2023, of 16 May 2023 adds another building block to the hitherto limited case-law on the quotation exception and constitutes an illustrative contribution to the interpretation of the scope of such exception, particularly of the concept of "extract" under Section 32(1) SCA. It is praiseworthy that in its interpretative work, the Supreme Court has not only paid attention to the quantitative element (number of pages reproduced) but has given priority to the qualitative element (ultimate purpose of the reproduction) in order to avoid conduct which would clearly be far from the legislator's intention when establishing the quotation exception and which would go beyond the limits of Section 40 bis SCA. It is a decision that, without doubt, must be taken into consideration by those who will navigate the quotation exception in Spain.

[1] Royal Legislative Decree 1/1996, of 12 April 1996, approving the revised text of the SCA, regularizing, clarifying and harmonizing the legal provisions in force on the subject.

[2] Section 32(1) SCA reads as follows "[t]he inclusion in one's own work of extracts of others of a written, sound or audiovisual nature, as well as of isolated works of a figurative plastic or photographic nature, is lawful, provided that works have already been disclosed and their inclusion is made by way of quotation or for analysis, comment or review. Such use may be made only for teaching or research purposes, to the extent justified by the purpose of such incorporation and by indicating the source and name of the author of the work used."

[3] Supreme Court Judgment No. 724/2023 (Civil Chamber, 1^st Section), of 16 May 2023, Judge rapporteur: H.E. Ignacio Sancho Gargallo (ECLI:ES:TS:2023:2286).

[4] Judgment of Madrid Commercial Court No. 7, of 19 July 2019 (court case 664/2015).

[5] Judgment No. 392/2019 of the Provincial Court of Madrid (Section 28), 25 July 2019; Judge rapporteur: Mr. José Manuel de Vicente Bobadilla (ECLI:ES:APM:2019:8211).