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Dekuzu Posts

Reform of collective rights management in Russia

Russian ministry of communication (MinCom) has proposed to reform collective management in Russia as reported by vedomosti. MinCom prepares amendments to Russian Civil Code in order to abolish non-contractual collective management. Such amendments caused by imperfection of existing collective management system in Russia. The lack of transparency in a system of royalty collection, allocation and distribution and the lack of control over CMO for right holders are among the reasons why reform is necessary. MinCom wants CMO to work directly with right holders, i.e. under MinCom’ intention CMO, in order to manage someone’ rights, must conclude direct agreement with right holder. MinCom considers two possible ways of reform. The first is to abolish non-contractual right management. The second is more global: reduce commission rate (now it is about 40%) and appoint state organisation to collect private copying levy. According to deputy of minister of communication Alexey Volin, right holders are unhappy with current system of collective management. He thinks that it would be much better if author will have opportunity directly and at his own negotiate with CMO. It is not good, if the right holder is like serf and his rights are managed without his authorisation.

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Reasons for Vitorino’s recommendations on private copying and reprography levies: non-application of private copying levies to professional users

While, in principle, all products capable of making copies of copyright protected content can be levied, the private copying levies must not be imposed on goods that are acquired for purposes clearly unrelated to private copying. This approach requires a distinction between transactions where a good is sold to a private user and transactions where a good is sold to a non-private user. The latter transactions must, in principle, not be subject to a private copying levy.

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Reforming of copyright in EU and considered policy options

Summary of Impacts of Option 3b

Territoriality and absolute territorial restrictions in licensing agreements

Under the “country of origin” principle, a service provider can use the licence in its country of origin (possibly obtained from a person holding the rights in that country only) in order to actively market content outside its country of origin as well. When rights are territorially fragmented, e.g. when different persons or entities hold the rights for different Member States, a service provider established in one Member States may therefore undermine the economic position of right holders in other Member States.

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Private copying levy under Russian law

How private copying levy must be collected in Russia? IV part of Civil code of Russian Federation (CC RF) grants authors, performers and producers of phonograms and audio-visual works exclusive reproduction right in order to control a certain use of relevant subject of intellectual property. Article 1245 of CC RF provides certain exception for copies of phonograms or audio-visual works made only for private purposes – “Authors, performers, producers of phonograms and audio-visual works have the right to receive remuneration for free reproduction of phonograms and audio-visual works only for private purposes”. For example, there is no remuneration for free reproduction of musical works for private purposes. But existing mechanism of collection, allocation and distribution of levy can take in account the interests of songwriters and musical publishers along with interests of producers and performers. If one composer creates musical work, other writer creates a text and producer, using musical work and text, makes sound recording, why producer and performer have the right to receive remuneration for free reproduction of phonogram when composer and writer don’t have the right to receive remuneration for free reproduction of musical work and text? Why Russian law discriminates creators, owners of intellectual property rights? Even if you have a great talent, in most cases in order to create a phonogram you need at least text and musical accompaniment.

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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.

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A Digital Single Market Strategy for Europe

Better access to digital content – A modern copyright framework

Copyright underpins creativity in Europe and digital content is one of the main drivers of the growth of the digital economy. Images, films or music and games are the most popular online activities and digital spending on entertainment and media is predicted to have double digit growth rates (around 12%) for the next five years. Behaviour is changing as consumers switch to mobile devices. Smartphone users in Europe consume more than four hours of video content on a weekly basis, almost half of which they view on-the-go. Limitations on access pose a clear problem for the creation of a seamless Internal Market and cultural diversity. Finding balanced solutions which respond to consumer demand could generate new revenue for rights holders and ensure consumers pay for content.

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Padawan case – Legal assessment

Indiscriminate application of the levy to undertakings and professional persons (de)

Indiscriminately charging a levy, without duly taking into account the fact that, owing to factors specific to a certain line of business, the devices in question could be acquired for purposes other than private copying, may not be based on Article 5(2)(b) of Directive 2001/29. It is not ‘fair compensation’ within the meaning of that provision, especially since, as shown by recital 35, the Member States are expressly urged, (78) when determining the form, detailed arrangements and possible level of such fair compensation, to take account of the particular circumstances of each case. In addition, in the prevailing circumstances, such legislation would particularly disregard the link which, according to Article 5(2)(b) of Directive 2001/29, must exist between the act of interference and the corresponding financial compensation. The main requirement for compensation is a reproduction made ‘by a natural person for private use and for ends that are neither directly nor indirectly commercial’.

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EU copyright reform: Option 3

Summary of impacts of Option 3a

Territoriality and absolute territorial restrictions in licencing agreements

A legally binding instrument that prevents the use of absolute territorial restrictions in copyright licence contracts could be an important step, achievable in the medium-term, towards the completion of the Digital Single Market, in particular in sectors where territorial exclusivity agreements are common (i.e. in the audiovisual sector). While such an instrument would constitute a limitation to the freedom to conduct a business and the property rights of the licence provider, this would be justified provided the provision is carefully calibrated to ensure its adequacy and proportionality, in view of the Treaty fundamental freedom to provide and receive services across borders. This option would allow cross-border competition between distributors, who would be able to enter new markets through passive sales. Allowing for increased cross-border access could favour larger companies with a cross-border network, over national network operators. Increased competition could lead distributors to review their offer and prices and, in the long term, may have a significant impact on the structure of the market.

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