Russian government proposed three-year term for property rights of copyright owners

Under Russian copyright law, and not only under Russian law, the owner of copyright, the author, publisher has a property right to receive remuneration for exploitation of its rights in work. Economical rights of creators must be protected under national laws of different countries, including Russia, and under international law. But Russian government decided to simplify the law concerning mandatory licensing of public performance right and provided three-year term for economical rights of copyright owners.

In Russia there is a system of state accreditation for public performance right. In order to “streamline” the public performance licensing in Russia, for the best interests of right holders and users, it has been introduced non-contractual collective management of public performance rights in Russia. What it means? The public performance right in any musical work and of any author (composer, songwriter) and in any sound recording and of any performer or producer in the world is managed by Russian collective management organisation received state accreditation to manage public performance right regardless of authorization to do it.

Currently in Russia there are two CMOs who manage public performance right in musical works and in sound recording. But there is one little thing in regard to implementation of this accreditation, i.e. non-contractual collective copyright management. If Russian CMO has collected any royalties sum for public performance of certain musical work or sound recording and the beneficiary, whose public performance right has been managed and for whom the royalties have been collected, is not a member of CMO, such beneficiary is not able to receive royalties collected under state accreditation. Such beneficiary can receive collected royalties only after signing an agreement, authorising the accredited CMO to manage public performance right, which de facto has retroactive power.

If the author, performer or producer does not want to be member of accredited CMO or does not want to sign agreement, if such right holder want simple to receive their royalties? Russian accredited CMOs don’t pay such persons their royalties, because they can’t do it under Russian law. There must be a ground in writing. In absence of such ground the accredited CMO can’t distribute such royalties. Person, who does not have agreement with accredited CMO can wait his royalties very long. Therefore Russian government decided to fix imperfection of non-collective copyright management – it has proposed new draft law.

What it is all about? First of all the proposed law states that collective management organisation, regardless whether it is accredited, “has no right to refuse user or other persons, who is obliged to pay royalties, to conclude agreement without reasonable grounds”. But the users are not provided with mechanisms to adjust the rates, proposed by CMO. The second thing is covering of administrative expenditures of accredited CMO. Only government has authority to set up a maximum sum to cover administrative costs.

The third this is “know-how” intended to make the author, performer or producer fully informed of his royalties collected by CMO. It is “personal account” in CMO’s informational system. That is all. What it should be, how it should be maintained, organized – there are no details. It is also provided a mandatory audit of accredited CMO. But the subjects of audit are annually financial report of accredited CMO, annually financial report of CMO’s affiliated entities. The results of audit as well as financial reports are to be published on a web-site of accredited CMO.

And the main thing of draft law is three-year period to claim royalties, collected under state accreditation. If royalties, collected under state accreditation, have been not claimed within three years, they must be included in distribution regardless of who is beneficiary of such royalties. Taking into account the “rating system”, adopted by the Russian government, the right holders, who did not sign agreement with accredited CMO, would be deprived of their right to receive remuneration for exploitation of their public performance right.

In accredited CMO must be also formed a supervisory board. It should be collegial managing body of accredited CMO. Supervising board will consist of right holders, creative unions, users, representatives of federal supervising authority, cultural organisations. The CEO of accredited CMO does not have a right to be a member of supervisory board. The quantity of members can be not less than 11. The members of supervisory board work gratuitous.