Transcript Copyright conference organized by SAZAS Ljubljana, March 9

19TH ANNUAL INTELLECTUAL PROPERTY LAW & POLICY
CONFERENCE
Fordham University, New York
April 28 and 29, 2011
THE ROLE OF COLLECTING SOCIETIES: PROMISES AND PROBLEMS COLLECTIVE MANAGEMENT AT IMPORTANT CROSSROADS IN THE
EU
Dr. Mihály Ficsor, President, Hungarian Copyright Council,
former Assitant Director General of the World Intellectual Property
Organization (WIPO)
I. INTRODUCTION
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Promise and raison d’être
 Collective negotiation with users („one for all, all for one” vis-à-vis
users )
 Beaumarchais; 1777, SACD
 Professional forum; representation of authors’ interests (ALI,
ALAI, Berne Convention)
 Balzac, Dumas, Victor Hugo, 1837, SGDL
 Fully-fledged collective management of rights
 Henrion, Parizot, Bourget at Les Ambassadeurs, 1847-1850,
SACEM
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Basic functions of collective management –
additional objectives in certain countries
 Negotiations with users on remuneration and other licensing
conditions
 Setting and publishing tariffs
 Licensing uses
 Monitoring uses
 Enforcement of rights
 Collection of remuneration
 Distribution of remuneration
______________________________
 + Promotion of (national) creativity
 + Role in national cultural (and financial) policy
 + Social assistance for members
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Some problems – freedom of association
and government regulation
Freedom of association – Government regulation
Freedom of association –
Freedom of association –
Freedom of association –
Freedom of association –
Freedom of regulation -
Government regulation
Government regulation
Government regulation
Government regulation
Government regulation
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Some problems – collection and
distribution of remuneration
Collection
Distribution
Collection
Distribution
Collection
Distribution
Collection
Distribution
Collection
Distribution
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Some problems – cost effectiveness and
ineffectiveness
Costs deducted
Remuneration distributed
Costs deducted
Costs deducted
Remuneration distributed
Remuneration distributed
Costs deducted
Remuneration distributed
Cost deducted
Remuneration distributed
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Some problems – (democratic) governance and
transparency
Democratic governance
Democratic governance
Democratic governance
Democratic governance
Democratic governance
governance
Transparency
Tranparency
Tranparency
Transparency
Democratic
Transparency
Transparency
Governance
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Some problems – questions of proportional
distribution and national treatement
Distribution in proportion with actual use for both national and
foreign rightholders.
Distribution for both national and foreign rightholders.
Distribution for national rightholders.
Distribution for national organizations which may perform
further distribution for national rightholders.
Distribution for national organizations which use the money for
the promotion of national creativity and culture and/or for
social purposes.
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II. MANDATORY COLLECTIVE
MANAGEMENT
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Mandatory collective management – rights to
remuneration and exclusive rights
 In the case of mere rights to remuneration, mandatory
collective management may be a normal way of exercising
rights (there is no need for authorization, just the
remuneration is to be collected and distributed).
 In the case of an exclusive right – where the owners of rights
have the right to authorize or prohibit the acts covered by
such rights and to determine the conditions of authorization –
mandatory collective management is a limitation of such a
right.
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Mandatory collective management –
international treaties
 (i) Is it determining/imposing a condition if somebody is in
the position of doing something but it is provided in the
law that he can only do so in a certain way?
 (ii) Is it determining/imposing a condition if somebody
owns something but it is provided in the law that he can
only use it in a certain manner?
 (iii) Is it determining/imposing a condition if somebody is
granted a right but it is provided in the law that he can
only exercise it through a certain system?
 The answers are obviously affirmative to these questions.
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Mandatory collective management –
international treaties
 Article 11bis(2) of the Berne Convention: “It shall be a matter for
legislation in the countries of the Union to determine the conditions
under which the rights mentioned in the preceding paragraph may be
exercised, but these conditions shall apply only in the countries where
they have been prescribed. They shall not in any circumstances be
prejudicial to the moral rights of the author, nor to his right to obtain
equitable remuneration which, in the absence of agreement, shall be fixed
by competent authority.” (Emphasis added.)
 Under the “preceding paragraph – paragraph (1) of the same Article –
“[a]thors of literary and artistic works shall enjoy the exclusive right of
authorizing: (i) the broadcasting of their works or the communication thereof
to the public by any other means of wireless diffusion of signs, sounds or
images; (ii) any communication to the public by wire or by rebroadcasting of
the broadcast of the work, when this communication is made by an
organization other than the original one; (iii) the public communication by
loudspeaker or any other analogous instrument transmitting, by signs, sounds
or images, the broadcast of the work.”
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Mandatory collective management –
international treaties
Article 13(1) of the Berne Convention:
“Each country of the Union may impose for itself reservations and
conditions on the exclusive right granted to the author of a
musical work and to the author of any words, the recording of
which together with the musical work has already been authorized
by the latter, to authorize the sound recording of that musical work,
together with such words, if any; but all such reservations and
conditions shall apply only in the countries which have imposed
them and shall not, in any circumstances, be prejudicial to the
rights of these authors to obtain equitable remuneration which, in
the absence of agreement, shall be fixed by competent authority.”
(Emphasis added.)
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Mandatory collective management –
international treaties
 The a contrario principle of interpretation of treaties:
If a treaty has the same provisions on a, b, c, d, e, f, g and h, and
only provides for an exception concerning a and b, the exception
obviously is not applicable concerning c, d, e, f, g and h.
 Consequently, where an international treaty (Berne and Rome
Conventions, TRIPS Agreement, WIPO „Internet Treaties” (WCT,
WPPT)) provides for exclusive rights and allows
determining/imposing conditions (compulsory licenses,
mandatory collective management) for the exercise of such rights
only in two cases , in the other cases it is not allowed to
determine/impose conditions.
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Mandatory collective management –
EU Directives (1)
Mandatory collective management under the acquis communautaire:
 The Rental, Lending and Related Rights Directive on the „unwaivable right to
remuneration” for rental in favor of authors and performers when they
transfer their exclusive right of rental to producers:
 Article 4(3): „The administration of this right to obtain an equitable
remuneration may be entrusted to collecting societies representing
authors or performers.”
 Article 4(4): “Member States may regulate whether and to what extent
administration by collecting societies of the right to obtain an equitable
remuneration may be imposed…” (emphasis added)
 „May regulate”: a permission (a contrario !)
 It does not concern the exercise of exclusive rights themselves directly.
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Mandatory collective management –
EU Directives (2)
Mandatory collective management under the acquis
communautaire:
 Satellite and Cable Directive:
 Article 9(1): “Member States shall ensure that the right of
copyright owners and holders of related rights to grant or
refuse authorization to a cable operator for a cable
retransmission may be exercised only through a collecting
society.” (Emphasis added.)
 This is in accordance with the international norms, due to
Article 11bis(2) of the Berne Convention.
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Mandatory collective management –
EU Directive (3)
Mandatory collective management under the acquis
communautaire:
 Resale Right Directive:
 Article 6(2): “Member States may provide for compulsory
or optional collective management of the royalty
provided for under Article 1.”
 „May provide…”: a permission (a contrario!)
 This is in accordance with the international norms, since
both the Directive and the underlining provision of the Berne
Convention (Article 14ter) only provides for a right to
remuneration.
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III. „EXTENDED” COLLECTIVE
MANAGEMENT
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„Extended” collective management – concept
and conditions
 Extended collective management is based the existence on voluntary
collective management. The effect of licenses granted by the collective
management organization on behalf of the owners of rights represented
by it is extended by law also to those who are not represented.
 In the case of exclusive rights, „extended” collective management may be
in accordance with the international norms
 if collective management is the normal way of exercising the right
concerned;
 if the repertoire of the organization is sufficiently representative;
only marginal problems of coverage are to be settled;
 if the owners of right can „opt out” (leave the collective system)
under reasonable conditions.
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„Extended” collective management –
EU rules
An example for „extended” collective management under the acquis
communautaire:
Satellite and Cable Directive:
 Article 3(2): “A Member State may provide that a collective agreement
between a collecting society and a broadcasting organization concerning a
given category of works may be extended to rightholders of the same
category who are not represented by the collecting society, provided that:
– the communication to the public by satellite simulcasts a terrestrial
broadcast by the same broadcaster, and
– the unrepresented rightholder shall, at any time, have the possibility of
excluding the extension of the collective agreement to his works and of
exercising his rights either individually or collectively.” (Emphasis added.)
 Article 3(3): “Paragraph 2 shall not apply to cinematographic works,
including works created by a process analogous to cinematography.” (In this
case, collective management is a normal way of exercising rights.)
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IV. OTHER PROVISIONS OF
EU DIRECTIVES CONCERNING
COLLECTIVE MANAGEMENT
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Right of representation concerning
enforcement of rights
Enforcement Directive of 2004
 Recital (18): „The persons entitled to request application of those measures
[enforcement measures provided in the Directive], procedures and remedies
should be not only the rightholders but also persons who have a direct interest
and legal standing in so far as permitted by and in accordance with the applicable
law, which may include professional organisations in charge of the management
of those rights or for the defence of the collective and individual interests for
which they are responsible.”
 Article 4.1(c): „Member States shall recognise as persons entitled to seek
application of the measures, procedures and remedies referred to in this
Chapter:
(c) intellectual property collective rights management bodies which are regularly
recognised as having a right to represent holders of intellectual property rights,
in so far as permitted by and in accordance with the provisions of the applicable
law,…
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Negotiations and settlement of disputes with
users (1)
Satellite and Cable Directive of 1993:
Recital (30): „Whereas contractual arrangements regarding the authorization of cable
retransmission should be promoted by additional measures; whereas a party seeking
the conclusion of a general contract should, for its part, be obliged to submit
collective proposals for an agreement; whereas, furthermore, any party shall be
entitled, at any moment, to call upon the assistance of impartial mediators whose
task is to assist negotiations and who may submit proposals; whereas any such
proposals and any opposition thereto should be served on the parties concerned in
accordance with the applicable rules concerning the service of legal documents, in
particular as set out in existing international conventions; whereas, finally, it is
necessary to ensure that the negotiations are not blocked without valid justification
or that individual holders are not prevented without valid justification from taking part
in the negotiations; whereas none of these measures for the promotion of the
acquisition of rights calls into question the contractual nature of the acquisition of
cable retransmission rights;”
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Negotiations and settlement of disputes with
users (2)
Satellite and Cable Directive
 Article 11.1: „Where no agreement is concluded regarding authorization
of the cable retransmission of a broadcast, Member States shall ensure
that either party may call upon the assistance of one or more
mediators.”
 Article 11.2 to 4.: detailed rules concerning mediation procedures.
 Article 12.1: „Member States shall ensure by means of civil or
administrative law, as appropriate, that the parties enter and conduct
negotiations regarding authorization for cable retransmission in good
faith and do not prevent or hinder negotiation without valid
justification.”
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Governmental regulation and
freedom of negotiations; competion
Satellite and Cable Directive
 Article 13: „This Directive shall be without prejudice to the regulation of
the activities of collecting societies by the Member States.”
 Recital (34): „Whereas this Directive should not prejudice further
harmonization in the field of copyright and rights related to copyright and
the collective administration of such rights; whereas the possibility for
Member States to regulate the activities of collecting societies should
not prejudice the freedom of contractual negotiation of the rights
provided for in this Directive, on the understanding that such negotiation
takes place within the framework of general or specific national rules
with regard to competition law or the prevention of abuse of
monopolies;”
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Requirements of transparency,
efficiency and equal treatment
Resale Right Directive of 2001
Recital (28): „The Member States are responsible for regulating the exercise
of the resale right, particularly with regard to the way this is managed. In this
respect management by a collecting society is one possibility. Member States
should ensure that collecting societies operate in a transparent and efficient
manner. Member States must also ensure that amounts intended for
authors who are nationals of other Member States are in fact collected and
distributed. This Directive is without prejudice to arrangements in Member
States for collection and distribution.”
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V. „INTERNAL MARKET” AND
COMPETITION RULES
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Article 81 and 82 of the EC Treaty
The EC Treaty contains two antitrust prohibition rules.
 First, agreements between two or more firms which restrict
competition
are prohibited by Article 81 of the Treaty, subject to some limited
exceptions.
 The most typical example of illegal conduct infringing Article 81 is a
cartel between competitors (which may involve price-fixing or
market sharing).
 Second, under Article 82 of the Treaty, firms, organizations in a
dominant position may not abuse that position.
 This is for example the case for predatory pricing aiming at
eliminating competitors from the market.
 The Commission is empowered by the Treaty to apply these prohibition
rules and enjoys a number of investigative powers to that end. It may
also impose fines on undertakings who violate EU antitrust rules.
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Articles 28 to 30 of the EC Treaty
 The free movement of goods is a key element in creating and developing the
internal market. This principle is laid down, in particular, by Articles 28 to 30
of the EC Treaty which prevent Member States from adopting and maintaining
unjustified restrictions on intra-community trade. Quantitative restrictions
and measures which have an effect equivalent to quantitative restrictions in
intra-community trade are prohibited.
 However, these EC Treaty provisions do not preclude prohibitions justified on
grounds of public morality, public policy or public security, the protection of
health and life of humans, or the protection of industrial and commercial
property (an imprecise expression, covering intellectual property , in general,
including copyright). Nevertheless, such prohibitions must remain
proportionate and must not amount to arbitrary discrimination or a
disguised restriction on trade between Member States.
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Deutsche Grammophon v. Metro (1)
Decision of the European Court of Justice (ECJ) of June 8, 1971 in the Deutsche
Grammophon v. Metro case (No 78-70)



The exercise of an „industrial property” right falls under the prohibition set out in
Article 85 – now Article 81 – of the EC Treaty each time it manifests itself as the
subject, the means or the result of an agreement which, by preventing imports from
other member states of products lawfully distributed there, has as its effect the
partitioning of the market.
The provisions of Article 36 – now Article 30 – of the Treaty may be relevant to a
right related to copyright, in the same way as to an industrial or commercial
property right.
It is clear from Article 36 – now Article 30 – that, although the Treaty does not
affect the existence of rights recognized by the legislation of a Member State with
regard to industrial and commercial property, the exercise of such rights may
nevertheless fall within the prohibitions laid down by the Treaty.
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Deutsche Grammophon v. Metro (2)
 It is in conflict with the rules providing for the free movement of products
within the common market for the owner of a legally recognized exclusive
right of distribution to prohibit the sale on the national territory of products
placed by him or with his consent on the market of another Member State on
the ground that such distribution did not occur within the national territory.
 The owner of a legally recognized exclusive right of distribution does not
occupy a dominant position within the meaning of Article 86 – now Article 82
– of the Treaty merely by exercising that right . It is necessary that the owner,
alone or jointly with other undertakings in the same group, should have the
power to impede the maintenance of effective competition over a
considerable part of the relevant market, having regard in particular to the
existence of any producers marketing similar products and to their position on
the market.
 The difference between the controlled price and the price of the product reimported from another member state does not necessarily suffice to disclose
an abuse of a dominant position; it may, however, if unjustified by any
objective criteria and if it is particularly marked, be a determining factor in
such abuse.
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GEMA decision of the EC, 1971
Decision 71/224/EWG of the European Commission of July 2, 1971, on the
application of Article 86 – now Article 82 – of the European Treaty
 The obligation prescribed by a CMO requiring its members to assign unduly
broad categories of rights could constitute an abuse of dominant position
(confirmed by the ECJ in 1974 in the BRT v. SABAM case).
 CMOs must not discriminate among their members as regards the distribution of
remuneration (GEMA had been paying supplementary fees only to those
members who had been ordinary members for three years).
 In the EU, CMOs are not allowed to refuse nationals of other Member States as
members, nor are they allowed to impose discriminatory terms concerning the
rights as members. (The ECJ confirmed in the Phil Collins v. Imtrat case in 1993
that national provisions containing reciprocity clauses cannot be applied in order
to deny nationals of other Member States those rights which are granted to
national owners of rights. )
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Ministère public v. Tournier
Decision of the ECJ of July 13, 1989 in Ministère public v. Tournier (case
395/87)
 In the EU, a national CMO may refuse to grant direct access to its own
national repertoire to users established in another Member State only
for efficiency reasons (e.g. for the reason that it would be too difficult to
organize the management of rights in another Member State).
 The refusal by a CMO to grant domestic users -- instead of blanket
licenses – licenses limited solely to a certain foreign repertoire (managed
on the basis of a bilateral contract with the corresponding CMO) is not
prohibited under Article 81 of the EC Treaty, unless the interests of
owners of rights could be safeguarded , also in case of such licenses,
without increasing the costs of management.
 A CMO may be regarded to impose unfair trading conditions (Article 82
of the Treaty) if its tariffs are appreciably higher than those charged in
other Member States – unless the differences are justified by relevant
objective reasons.
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VI. FROM THE SANTIAGO
AGREEMENTS TO THE CISAC
DECISION
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Elimination of the Santiago
(and Barcelona) Agreements (1)
 On April 17, 2001, European CMOs BUMA, GEMA and SACEM
notified the EC a number of so-called Santiago Agreements . Later, all
other EU and EEA (European Economic Area) joined the notification
with the exception of the Portuguese SPA.
 The Santiago Agreements (bearing that name since they were worked
out at the CISAC Congress in Santiago de Chile ) had been used since
2000. They made it possible (through certain amendments to the
CISAC model bilateral agreement on „performing rights”) to grant nonexclusive licenses for worldwide on-line use of musical works – to put
it in simple way – by the CMO of the country to which the content
provider had the closest relationship.
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Elimination of the Santiago
(and Barcelona) Agreements (2)
 On the basis of the comments received from third parties, on April
29, 2004 the EC issued „Statement of Objections” (SO) addressed to
the 16 notifying CMOs on an (unjustified) antitrust basis, referring to
the problem of what was regarded to be a so-called „customers
allocation clause.”
 When the original term of the agreements expired on December 31,
2004, the interested EU (and EEA) CMOs, in we of the SO, did not
renew them.
 The intervention of the EC, in parallel also eliminated the
applicability of the Barcelona Agreements (similar BIEM agreements
on mechanical rights).
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The „Online Recommendation”
and its implementation (1)
 After a not sufficiently well balanced, not sufficiently transparent and not
sufficiently professional preparation, on October 18, 2005, the Commission
issued the controversial and – from the viewpoint of copyright expertise and
legal drafting – of quite a low quality Recommendation No. 2005/737/EC
„on collective cross-border management of copyright and related rights for
legitimate online music services.”
The provisions of the Recommendation, in respect of on-line licensing of
music, were intended to eliminate the existing system of national CMOs
granting licenses for domestic users for the use of – practically – the world
repertoire and to replace them with a few strong societies only
representing their members to grant multi-territorial, cross-border (allEuropean) licenses.
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The „Online Recommendation”
and its implementation (2)
 Certain „all-European” licensing platforms have been established:
such as the CELAS (MCPS/PRS, GEMA, EMI), DEAL (SACEMUniversal), PEDL (Warner-Chappel Music – MCPS/PRS, SACEM,
STIM, SABAM, BUMA-STEMRA ) „Harmonia” (SGAE-SIAE-SACEM)
alliances.
 But national CMOs continue existing.
 Different models.
 Uncertainty.
 Too many sources.
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Licensors (not quite a „one-stop shop”)
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Licensing guide
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Licensee
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Licensing system, voilá: fully online
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Warning by the European Parliament (1)
On March 13, 2007, the European Parliament adopted a Resolution on
the EC Recommendation
Statements in the Resolution (emphasis added):
 „the Commission failed to undertake a broad and thorough
consultation process with interested parties and with Parliament before
adopting the Recommendation; … all categories of right-holders must
be consulted on any future regulatory activities in this area so as to
ensure a fair and balanced representation of interests,”
 „it is unacceptable that a ‘soft law’ approach was chosen without prior
consultation and without the formal involvement of Parliament and
the Council, thereby circumventing the democratic process, especially
as the initiative taken has already influenced decisions in the market to
the potential detriment of competition and cultural diversity,”
(continues)
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Warning by the European Parliament (2)
Statements in the Resolution (continued; emphasis added):
 the Recommendation seeks merely to regulate the online sale of music
recordings, but could – owing to its imprecise wording – also be applied
to other online services (e.g. broadcasting services) containing music
recordings; whereas the resulting lack of clarity as to the applicability
of differing licensing systems leads to legal uncertainty,”
 „music is not a commodity and collective rights managers are mainly
non-profit-making organisations, and… introducing a system based on
controlled competition serves the interests of all right-holders and of
promoting cultural diversity and creativity,” (continues)
Mihály Ficsor, Fordham IP Conference, April
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Warning by the European Parliament (3)
Statements in the Resolution (continued; emphasis added):
 national CRMs should continue to play an important role in providing
support for the promotion of new and minority right-holders, cultural
diversity, creativity and local repertoires, which presupposes that
national CRMs should retain the right to charge cultural deductions,”
 „there is concern about the potentially negative effects of some
provisions of the Recommendation on local repertoires and on cultural
diversity given the potential risk of favouring a concentration of rights in
the bigger CRMs, and whereas the impact of any initiative for the
introduction of competition between rights managers in attracting the
most profitable right-holders must be examined and weighed against the
adverse effects of such an approach on smaller right-holders, small and
medium-sized CRMs and cultural diversity.”
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The „CISAC decision”
The Commission continued interfering into the existing system of national
CMOs.
 Complaint by the RTL Group against GEMA because it had refused multiterritorial broadcasting license, and by „Music Choice Europe” against CISAC
alleging that it prevented its member societies to grant such licenses for the use
of music (i) on the Internet, (ii) for satellite broadcasting; and (iii) by cable
retransmission.
 The Commission adopted a decision on July 16, 2008, founding in favor of the
complaining users alleging that the practices of the CMOs infringed Article 81 of
the European Treaty.
 CISAC and 22 of the attacked societies appealed to the ECJ on October 3, 2008.
 The decision is still pending.
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The way out: a directive
 The Commission has announced the intention of the preparation of
a „framework directive” on collective management (as proposed by
the European Parliament).
 One of the objective of the „framework directive” is, of course, to
settle in more appropriate way the issues of online music licensing
in the European Union.
 In close connection with this, it is also an intention to adopt
harmonized rules to guarantee efficiency and transparency of
collective management systems.
 Advanced preparatory work is in progress.
 A first draft to come out in June, in July?
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VII. „FRAMEWORK DIRECTIVE:”
SETTLING THE PROBLEMS OF ONLINE
MUSIC LICENCING
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Online music licencing; options
Option 1: do nothing
 usually not an option to choose by the Commission (after all, one
should not exaggerate the application of the principle of subsidiarity
);
 in the situation having emerged as a result of the Online
Recommendation, not a desirable and realistic option.
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Online music licensing; options
Option 2: voluntary application of G&T criteria with „parallel direct
licensing” (G&T = governance and transparency, see below)
 CMOs to establish their own G&T charter taking into out certain general
criteria (see below); independent accreditation or certification, possible
actionable rights by rightholders and users;
 members’ free choice between exclusive mandate and non-exclusive
mandate with „carve out” blanket licenses (the latter possibly only where
G&T requirements are not fulfilled);
 slower for internal market; competition but danger of re-fragmentation,
possibly more pan-EU licenses but danger of „two-tier” system with smaller
repertoires and smaller societies disadvantaged and the application of „divide
and rule” tactics; more uncertainty; possible trend towards lower
remuneration; additional administrative and financial burdens.
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Online music licensing; options
Option 3: „European Licensing Passport”
 CMOs to receive such passports should fulfill certain G&T requirements
exhaustively harmonized; supervision by „home” states of the CMOs; possible
„must carry”-type „must manage” obligation;
 it would correspond to the intention of the Commission to copy the US model
(centralizing licensing in a small number of CMOs); it uses the same arguments
as underlining the Online Recommendation;
 it would lead to a „two tier” system with disadvantages and marginalization of
small repertoires and small societies (which might possibly „cushioned”
somewhat in case of „must manage” obligations); more flexibility for licensing
methods, competition (but with possible downward trend of tariffs); growing
administrative burdens in particular for rightowners and users in smaller
countries from where repertoires and management would emigrate.
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Online music licensing; options
Option 4: Country of origin licensing
 multi-territory – pan-European – licenses to be granted by CMOs to services
originating in their territory in the form of „extended collective
management” with the possibility of „opting out” (and then choosing direct
licensing); obligation to fulfill G&T requirements;
 due impetus for the internal market; possibility of granting blanket licenses
(which would not cover the „carved out” repertoire of those who „opt out”),
greater security for users, lower administration costs; presumed
disadvantages for „inventive licensing models” due to the „traditionalism” of
CMOs following such a model and a trend towards limited risk-taking (?);
 it would maintain the principle of solidarity and would give more adequate
level playing fields for smaller repertoires and smaller CMOs.
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Online music licensing; options
Option 5 A: Centralized licensing („one-stop shop”)
 there would be a single central licensing organization established on a
voluntary and non-exclusive basis covering its aggregate repertoire to
grant all-EU licenses, with full harmonization of G&T requirements and
EU-level supervision (OHIM?) – but with separate direct licensing by the
major publishers.
Option 5 B: Centralized licensing („one-stop shop”) with „all rights included”
packages
 a variant according to which CMOs would be obligated to grant overall
making available to the public rights (both mechanical and
communication rights) to phonogram producers, and the producers
would then grant online content providers „all rights included” packages.
These options seem unrealistic.
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Online music licensing; options
Rumor: the Commission seems to prefer Option 3: the „European Licensing
Passport.” However, if a directive is to be adopted, the institutional setup will be
different from the one in the framework of which the Online Recommendation
was adopted.
The question is what will be the position of the European Parliament; whether
or not it will abandon its preference for solutions fulfilling not only direct costbenefit-based objectives, but also those which relate to such interests as offering
level playing field also for small repertoires of smaller countries managed by
smaller societies and protecting cultural diversity in the EU.
And, of course, it is a question of how the Council will react (where, similarly to
the Parliament, the special interests of the 27 Member States may have more
direct impact on decision making).
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VIII. „FRAMEWORK DIRECTIVE:” G&T
REQUIREMENTS AND
OTHER ISSUES
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General G&T requirements
In the course of the preparatory works of a possible „Framework Directive,” it was
discussed that there would be a need for the prescription of both general G&T
requirements and separate ones applicable for all-EU online licensing.
General G&T criteria foreseen:
 mandates and licences corresponding to actual economic uses
(dowloading, on-demand streaming, etc.);
 independent dispute resolution system for both users and members;
 transparent, accessible and non-discriminatory distribution rules;
 accurate reporting on revenues collected;
 non-discriminatory attribution of administrative costs.
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Specific G&T requirements
Special G&T criteria foreseen for all-EU online music licensing, in addition to
the general ones:




identification of the repertoire with continually updated ownership
databases;
ability to perform fully electronic data exchange concerning uses of
works and objects of related rights;
accurate and timely (within a narrow time frame, such as within
three months) invoicing of online music content providers;
guaranteeing payments to rightholders not more than three months
after receipt of payments from online music providers.
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Ideas for possible provisions to be included in
the directive (2)
 Making it even clearer that voluntary collective management is the basic
rule and that mandatory and „extended” collective management of
exclusive rights may be prescribed only in exceptional cases in
accordance with the international norms.
 Regulating the criteria of „extended collective magament” to ensure that
it is not misused as de facto mandatory collective management.
 Provisions to guarantee equal treatment – also requiring the fulfillment of
the obligations to grant national treatment in all aspects of collective
management.
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Ideas for other possible provisions to be
included in the directive (2)
 Applying the „no collection without distribution” principle.
 Regulating the questions of „social and cultural deductions” by supporting
them to a reasonable extent but also insisting on the application of the
need for the agreement by the rightowners or their representive bodies
on the basis of the „nemo plus iuris tranfere potest quam ipse haberet”
principle.
 Providing rules to guarantee that the remuneration collected is
distributed – after the deduction of the actual costs of management – as
much in proportion of the value and use of the works and objects of
related rights as possible.
 In particular in the case of mandatory and „extended” collective
management , prescribing the obligation of „diligent search” in respect of
the „non-distributable sums” (such as in the case of „orphan works”) of
the collected remuneration.
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THANK YOU
FOR YOUR ATTENTION
[email protected]
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