Internal war between Russian accredited CMOs

In Russia there are three accredited CMO – Russian Authors’ Society (RAO) managing copyright in musical works, All-Russian organisation of Intellectual Property (VOIS) managing copyright in sound recordings and Russian Union of Right holders (RSP) collecting private copying levy. Few days ago all three CMOs announced their merger. All three CMOs are supposed to form one collective management organisation “Trade Union of creators, Russian authors’ society (PDK RAO)”. This merger should be for benefit of right holders whose rights are managed by these three accredited CMOs. But not all right holders, managers and founders of CMOs happy with it.

According to Izvestia, decision to form new CMO was adopted at special conference organised by three CMOs. But not all members, managers and even founders of all three CMO have attended this conference. VOIS’ chairman of the board was not notified about conference and decision to form new CMO, he also was not invited and considers this decision as illegal. As he believes, meeting should be approved by more than half of members of each accredited CMO (what actually is hard to make because people reside in different parts of the country), or this meeting can be organised by board of CMO (he claims it wasn’t in a case of VOIS) or special meeting can be organised by CMO’s council (he claims it wasn’t, but he is not sure whether meeting of council was in absentia). If the three CMO will form new CMO, he will contest it as a chairman of the VOIS board.

Former minister of culture, Aleksandr Sokolov, who also is founder of VOIS, did not participate in conference. Organiser did not let him in to the premises where the conference was, because he was not in lists. Sokolov waited about one and a half hour and did not receive even explanation what is going on. In interview, he gave to Izvestia, he claims it was made intentionally. He also assured that he will contest decision to form new CMO because it is illegal. He believes, idea itself to form new CMO on a base of three CMOs is wrong. Not all accredited CMOs work well in the interests of their members. VOIS works much better and now someone destroys this intentionally. According to kommersant, three representatives of VOIS have asked Russian ministry of justice to inspect validity of decision to form new CMO. Russian minister of culture, who upheld the idea of merger, also will receive letter from former minister of culture.

But CEO of RAO and RSP, Sergey Fedotov, also has something to say. The last VOIS gathering was on 30th April 2015. Not all members of VOIS council were invited. Some members were excluded from council. So he believes the last gathering was illegal, but the meeting, where decision to form new CMO was made, is legal and in accordance with rules. And actually RAO works very well. He also admitted some kind of race for power and gave little explanation about merger. If RAO protects interests of authors and VOIS protects interests of performers and producers and some RAO members are also producers or performers and therefore some kind of “one stop shop” principle would be in interests of CMO members. Not all agree with it. And the former minister of culture (with his crew) is not in team of new CMO. That is reason of conflict. Fedotov also told about VOIS. When Sokolov was minister of culture, he took RAO in the field of his vision. Turnover of RAO was huge. Sokolov requested to pay certain share of turnover to some organisations he controlled. That were non-profitable funds. (Fedotov has documentary evidence) RAO’ members refused to pay. Fedotov informed Sokolov about and RAO got problems. Taking into account that ministry of culture at that moment curated RAO, it was decided to make an offer. Sokolov’s crew will be included in team of new collective management organisation – VOIS. After VOIS creation the financing of different funds and other inappropriate things have been commenced. Fedotov did not like it. And when it was decided to form new CMO, Sokolov’s crew was excluded from team of new CMO. Fedotov and his wife receive threats. Fedotov believes someone, he don’t know exactly who, wants him to quit.

But how new CMO will operate. According to RBC, internal lawyer of RSP stated that all three accreditation (private copying levy, public performance right in musical works and sound recordings) will be operated by new CMO as assignee. He is also sure that meeting, where decision to form new CMO was made, is absolutely legal.

But there is one thing. Under article 1244 of Russian civil code “state accreditation can be obtained only by one collective management organisation”.  If all three CMO will cease to exist it means that all three accreditation are over. If all three CMO will continue to exist, it means that nothing will change. New CMO under Russian law will not have authority to licence public performance right under accreditation of its founders.