national workshop on enforcement of intellectual property rights for judges national workshop on...

NATIONAL WORKSHOP ON ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS FOR JUDGES

organized bythe World Intellectual Property Organization (WIPO)

in cooperation withthe Albanian Copyright Office (ACO)

Tirana, June 14 and 15, 2012

Collective Management – Establishment of Tariffs

Dr. Mihály FicsorChairman, Central and Eastern European

Copyright Alliance (CEECA)

I. GENERAL PRINCIPLES

2M. Ficsor, Tirana, June 14-15, 2012

The impact of the nature of rights on the way tariffs may be determined

Copyright is basically a bunch of exclusive rights. Exclusive rights are also provided for beneficiaries of related rights at least in respect of key primary exploitations of objects of related rights Definition of „exclusive right” in the WIPO Glossary of Copyright and Related

Rights (WIPO publication, 2003, No. 891 (E)): „A right that is enjoyed by the owner of copyright or related rights, excluding the acquisition and enjoyment of the same right in respect of the same work or object of related rights by anyone else, on the basis of which the owner of rights –– and nobody else –may perform a certain act and may authorize or prohibit the performance of that act by others.”

The Berne Convention only exceptionally provides for a mere right to remuneration rather than to an exclusive right see Article 14ter on resale right (droit de suite)

Treaties on related rights do so for a broader scope of rights see, e.g. Article 12 of the Rome Convention and Article 15 of the WPPT on the

right of performers and producers of phonograms to a „single equitable remuneration” for broadcasting and communication to the public of phonograms published for commercial purposes.


The impact of the nature of rights on the way tariffs may be determined – exclusive rights (1)

Exclusive rights may be exercised in different ways – normally depending on the free choice of owners of rights individually (through directly negotiated and concluded

contracts); such as, e.g., in the case of book publishing through agents or other representatives; such as, e.g., in the

case of theatrical presentations through collective management of rights; such as, e.g., in the

case of musical performing rights. It should be kept in mind that an exclusive right is

supposed to prevail as an exclusive right also when a collective management organization exercise it on behalf of owners of rights.



Article 17 of the Berne Convention: „The provisions of this Convention cannot in any way affect the right of the Government of each country of the Union to permit, to control, or to prohibit, by legislation or regulation, the circulation, presentation, or exhibition of any work or production in regard to which the competent authority may find it necessary to exercise that right.

Agreed statement adopted by the 1967 Stockholm revision conference which – anachronistically – has been added to Article 17, to the article on the possibility of applying censorship, with which it had nothing to do:“Each country of the Union is free to enact such legislation as is necessary to prevent or deal with any abuse, by persons or organizations exercising one or more of the rights in a substantial number of different copyright works, of the monopoly position they enjoy.”



Principles (18) and (19) of the Conclusions of the WIPO book on collective maangement :

„(18)Government supervision of, and interference in, the establishment and operation of tariffs and other licensing conditions applied by joint management organizations which are in a de facto or de jure monopoly positions vis-à-vis users, is only justified if, and to the extent that, such supervision or interference is indispensable for preventing abuse of such a monopoly position.

”(19) A certain level of tariffs (for example, a higher level than in other countries) should not be regarded in itself as a sufficient basis for presumption of abuse. In that respect, it should be taken into account that the tariffs should correspond to the exclusive nature of rights and should represent an appropriate remuneration to owners of rights which, in certain countries, may be ensured in a much fuller way than in others, and the actual value of the repertoire and service offered by a joint management organization, as well as the economic and social conditions of the country concerned should also be taken into account.”


The impact of the nature of rights on the way tariffs may be determined – rights to remuneration (1)

In addition to those cases where the international copyright and related rights treaties provide for mere rights to remuneration, they also allow exceptions to and limitations of exclusive rights in certain cases, under certain conditions.

Exception: „a thing that does not follow the rule” (Oxford Advanced Learner’s Dictionary, 2000); that is, regarding a right, exception means that the right is not applicable (see, e.g. Articles 10 and 10bis of the Berne Convention, as well as Article 9(2) of the Berne Convention, Article 13 of the TRIPS Agreement, Article 10 of the WCT and Article 16 of the WPPT where the three-step test – provided in those provisions – also allow exceptions).

Limitations: „a rule that limits something [including the application of another rule]” (Oxford Advanced Learner’s Dictionary, 2000); that is, although a right – originally provided as an exclusive right – is still applicable , it is limited in some way.

Forms of limitations of exclusive rights: (i) mandatory collective management (see above); (ii) compulsory licenses (from another viewpoint: limitation of an exclusive right to a mere right to remuneration ; (iii) statutory licenses.



Compulsory licenses resulting in de facto rights to remuneration:

Article 11bis(2) of the Berne Convention: (2) It shall be a matter for legislation… to determine the conditions under which the rights mentioned in the paragraph 1 [the rights of broadcasting, rebroadcasting and cable retransmission] may be exercised… 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.

Article 13(1): 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… has already been authorized by the latter, to authorize the sound recording of that musical work, together with such words, if any; but… such reservations and conditions… 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.

Appendix to the Berne Convention: compulsory translation and reprint licenses only applicable in developing countries.



Statutory license means the limitation of a right – originally provided as an exclusive right – to a mere right to remuneration directly by the statutory law.

Along with compulsory licenses, statutory licenses belong to the broader category of „non-voluntary licenses.” WIPO Glossary: „the term ‘non-voluntary licenses’ covers both statutory licenses

and compulsory licenses –’statutory license’ meaning a direct permission granted by the law, and ‘compulsory license’ meaning an obligation of the rights owners, under the law, to grant licenses, both against payment.”

The most typical example of a statutory license combined with equitable remuneration is the application of the right of reproduction in case of copying for private purposes (usually based on „levy” systems).



The difference between compulsory licenses and statutory licenses from the viewpoint of the way tariffs may be established:

In case of a compulsory license, normally, first, the interested parties – owners of rights and users – are supposed to negotiate between each other, and a competent authority is only supposed to interfere where, and to the extent that, they are unable to reach agreement (see the close in Articles 11bis(2) and 13(1) of the Berne Convention: the remuneration „in the absence of agreement [only in the absence of agreement] , shall be fixed by competent authority”).

In the case of a statutory license, a competent authority – although it may (and preferably should) consult with the interested parties – may directly fix a tariff without the conditions (i) that, first, the parties have to negotiate, and (ii) that it may only intervene in the absence of agreement.


Impact of the nature of rights on the way tariffs are established – different levels of intervention (1)

Thesis (based on the principles and provisions of the international treaties): the intervention by governmental bodies or by special tribunals/arbitration/mediation bodies should be narrower and less intensive along the sequence of (i) mere rights to remuneration provided as such or as a

results of limitations of exclusive rights in the form of statutory licenses;

(ii) limitations of exclusive rights in the form of compulsory licenses;

(iii) exclusive rights left intact.


Impact of the nature of rights on the way tariffs are established - different levels of intervention (2)

Principle (8) in Chapter 7 of the WIPO Conclusions: „Collective management of a right to remuneration -- either an originally

exclusive right limited to a right to remuneration (such as in the case of ‘private copying’) or a right which is provided directly as a mere right to remuneration (such as in the case of the resale right) -- is necessarily a partial form of management (since the authorization for uses is not given by the joint management organization). Even in the case of a right to remuneration, it seems more appropriate, at least in certain cases where this is feasible, not to regulate by law all the aspects of the exercise of the right; a more flexible system may be provided if, instead of such regulation, collective management organizations are also given a role, in addition to the collection and distribution of the remuneration, in the negotiations about the remuneration to be paid for, and other conditions of, uses, as well as about the distribution of the collected remuneration among the various groups entitled to have a share therein.”


M. Ficsor, Tirana, June 14-15, 2012 13

II. EUROPEAN MODELS

European models with different intensity of state intervention – „liberal” systems

„Liberal” systems, such as in France or Spain: closest control of tariffs, or special mediation-arbitration

systems only in respect of rights to remuneration and cable retransmission rights where the Satellite and Cable Directive (93/83/EEC) prescribes mandatory collective management combined, at least, with a mediation system;

only some general guiding principles in the IP Code for the establishment of tariffs;

normal court jurisdiction; (however, impact of the decisions of the European Court of

Justice and the competition directorate of the European Commission).


European models with differing intensity of state intervention – Copyright Tribunals

Copyright Tribunals, such as in particular in the United Kingdom.

Jurisdiction: defined in Sections 149, 205B and Schedule 6 of the Copyright, Designs and Patents Act 1988 (as amended). Anyone who has unreasonably been refused a licence by a collecting society or considers the terms of an offered licence to be unreasonable may refer the matter to the Tribunal.

Function: The main function of the Tribunal is to decide, where the parties cannot agree between themselves, the terms and conditions of licences offered by, or licensing schemes operated by, collective licensing bodies. Its decisions are appealable to the High Court only on points of law.

Members: The Tribunal consists of a Chairman and two deputy Chairmen who are appointed by the Lord Chancellor, and not less than two, but no more than eight, ordinary members appointed by the Secretary of State for Trade and Industry.

Administrative support: The Tribunal is administered by a Secretary, who is a civil servant working in the Intellectual Property Office.


European models with differing intensity of state intervention – voluntary arbitration

Voluntary arbitration system, as in Germany. It is voluntary in the sense that, in

principle (like in the case of Copyright Tribunals), the arbitration body only acts in case of disputes brought in front of it.

Jurisdiction: based on Articles 14 to 17 of the Law on the Management of Copyright and Neighboring Rights of September 9, 1965 (amended). In disputes to which a collecting society is a party, any party may apply to the Arbitration Board where the dispute concerns: (i) the use of works or performances protected by the Copyright Law, or (ii) the conclusion or amendment of an inclusive contract.

Functions: The Board proposes a settlement to the parties. It becomes enforceable if neither of the parties opposes it within one month. The parties may turn to the court, but only after a proceeding before the Arbitration Board.

Members: the Chairman or his deputy and two assessors (appointed by the Ministry of Justice) .

Supervisory authority and administrative support: the Patent Office.


European models with differing intensity of state intervention – approval through obligatory arbitration

Tariffs are only applicable if they are approved by an arbitration board, like the Federal Arbitration Commission in Switzerland.

Jurisdiction: based on Articles 55 to 60 of the Federal Law on Copyright and Related Rights of October 9, 1992 (amended). The tariffs are only valid if the Commission approves them.

Functions: The Commission either approves the tariffs or changes them after consultation with the parties. The law prescribes that a tariff cannot be higher for authors than 10% and for owners of related rights than 3%, of the income or the expenses linked to the usage.

Members: a President, the members and two standby members appointed by the Government, and other members delegated by collective management organizations and associations of users. The Commission takes decisions in five-member panels, in which two members are the representatives of the two interested sides.

Supervisory authority: Ministry of Justice. Administrative support: Federal Institute of Intellectual Property.



III. ESTABLISHMENT OF TARIFFS UNDER

THE NEW COPYRIGHT LAW

Principles of establishment of tariffs (1)

Article 75. Establishment of tariffs (amounts of remuneration to be collected by collective management organizations and related licensing conditions)

(1) Six months, and in the case of tariffs for cable retransmission, nine months before the beginning of every calendar year, the collective management organization shall submit to the Albanian Copyright Office draft tariffs of remuneration to be paid by users of the works or other productions in respect of which it carries out collective management of rights or by those who are otherwise obligated to pay remuneration for rights collectively managed by the organization.

(2) When establishing the tariffs, in particular the following criteria shall be taken into account: (a) the income that may be obtained as a result of the use of a work or object of related rights; (b) the capacity of the place where works or objects of related rights are used (such as the number of seats or in the case of hotels, the number of hotel rooms); (c) the size of the public to which the works or objects of related rights are made available; (d) the geographical location of the use of works or objects of related rights (for example, whether in the capital, in major towns, at tourist resorts, or in smaller villages) that may have impact on the intensity of uses and/or the financial resources of users; (e) where the income does not reflect the nature of the use of the works or objects of related rights, the costs emerging with their use or the impact on their normal exploitation by the owners of rights; (f) importance of the use of works or objects of related rights for the relevant activities of the users; (g) the proportion between protected and non-protected works or objects of related rights used; (h) comparability of the proposed tariffs with the tariffs of similar collective organizations in other countries, in particular those which are more or less similar to the Republic of Albania from the viewpoint of their economic situation and standards of living.


Principles of establishment of tariffs (2)

Article 75. Establishment of tariffs (Contd. (3) The tariffs applied for the use of works or objects of related rights by broadcasting organizations

and online content providers should be differentiated in accordance with the nature of the incomes of such organizations and content providers, in the sense that they should be lower in case of incomes derived from subsidies to cover operational costs, higher in case of incomes from subscription services and particularly higher in case of incomes received from advertisers and commercial sponsors. Where no source of income of online service providers may be identified, the tariff is to be established as a lump sum taking into account the size of the public to which the works or objects of related rights are made available and the impact of such a use on the normal exploitation of works or objects of related rights by the owners of rights.

(4) The tariffs applied for cable retransmission shall also reflect the number of households connected to the cable systems and the number and nature of programs retransmitted.

(5) In the case of the rights to remuneration to be paid under Articles 39 and 40 for private reproduction and reprographic reproduction, the tariffs shall identify the scope of recording equipment and carriers in respect of which equitable remuneration is to be paid, and the tariffs shall take into account their technological characteristics (speed and quality of reproduction, storage capacity, etc.).


Procedure (1)

Article 75. Establishment of tariffs (Contd) (6) Within the period mentioned in paragraph (1), the collective management organization

shall also either publish the draft directives on its electronically accessible information system (hereinafter: website) or shall requests that, at the costs of the organization, the Albanian Copyright Office publish them on its website. When the tariffs are published on the website of the collective management organization, the Albanian Copyright Office shall publish on its website a notice on the electronic availability of the tariffs.

(7) If within 30 days from the publication of the tariffs, no representative organization or other jointly empowered representative of the interested users or other physical persons or legal entities obligated to pay remuneration (hereinafter: the users’ representative) informs the collective management organization and the Albanian Copyright Office that it does not accept the tariffs, it shall be regarded that the tariffs are adopted for the following calendar year.


Procedure (2)

Article 75. Establishment of tariffs (Contd) (8) Where the users’ representative, within the deadline mentioned in paragraph (7), informs

the collective management organization and the Albanian Copyright Office that it or he does not accept the tariffs, the adoption of the tariffs shall be suspended for maximum 60, and in the case of tariffs for cable retransmission, for maximum 120 days counted from the end of the deadline mentioned in paragraph (7). During the 60 or 120 days, respectively, the collective management organization and the users’ representative shall undertake good faith negotiations in order to reach agreement on the tariffs, for which they may request mediation service by the Mediation-Arbitration Body as provided in Article 83. In case of an agreement reached between the collective management organization and the users’ representative within the 60-day or 120-day deadline, respectively, they inform about this the Albanian Copyright Office, and it shall be regarded that the tariffs are adopted for the following calendar year.


Procedure (3)

Article 75. Establishment of tariffs (Contd) (9) Where the collective management organization and the users’ representative are not able

to reach agreement within the deadline mentioned in paragraph (8), and no mediation has taken place or, although mediation has taken place, no settlement proposal has been submitted by the mediators, the users’ representative may initiate, within ten days, an arbitration procedure by the Mediation-Arbitration Body as provided in Article 84. If the ten-day deadline expires without initiation of an arbitration procedure, the tariffs shall be regarded as adopted for the following year.

(10) Where mediation takes place in accordance with paragraph (8) with a settlement proposal submitted by the mediators and no party initiates an arbitration procedure by the Mediation-Arbitration Body, in the case of cable retransmission tariffs within three months, and in the case of other tariffs within one month, the tariffs shall be regarded as adopted for the following year. Where the said three-month period expires later than the 120-day suspension period mentioned in paragraph (8), the suspension period shall be extended accordingly.

(11) During any time within the suspension period mentioned in paragraph (8), any party may decide to abandon negotiations and rather initiate an arbitration procedure by the Mediation-Arbitration Body.


Procedure (4)

Article 75. Establishment of tariffs (Contd) (12) Where the tariffs are adopted either on the basis of the preceding paragraphs or as a

result of the arbitration procedure or possible court procedure under Article 84, the tariffs shall be published in the official gazette at the costs of the collective management organization.

(13) Where the tariffs are not adopted before the beginning of the following calendar year, as long as they are not adopted, the previously adopted tariffs shall apply. Where there is no previously adopted tariffs, the users or other physical persons or legal entities who or which are obligated to pay remuneration, as long as the new tariffs are not adopted, shall pay 60% of the amount of the draft tariffs to the collective management organization.

(14) Where, under the finally adopted arbitration award or court decision, the amount of the tariffs is established at a level lower than the 60% of the amount of the draft tariffs, the collective management organization shall pay back the difference to those from whom it has collected the remuneration under paragraph (13).


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