Changes to phonogram costs and protection introduced

On August 1 2015 an amendment to the Act on Copyright and Neighbouring Rights 1995 came into force. The amendment introduced some significant changes to the remuneration rules for performers and the duration of copyright in musical compositions with words and phonographic artistic performances.

New rules on phonogram remuneration
The amendment to the act improves performers' position in relation to producers in regard to remuneration.

Under the amendment, performers are entitled to annual additional remuneration payable by the phonogram producer for each year following 50 years after the phonogram's publication or dissemination, provided that the rights in the artistic performance were transferred to the producer or the producer was granted an exclusive licence to use the artistic performance in return for one-off remuneration. This additional remuneration is equal to 20% of the producer's revenue in the previous year from reproducing, introducing to trade and making available to the public the perfomance in a way that allows any party to access the performance at a time and place of its choosing. The additional remuneration will be paid through an organisation for the collective administration of neighbouring rights to artistic performances, appointed for a period of no more than five years by the minister for culture and protection of the national heritage.

The new law gives more control to the organisation for the collective administration of neighbouring rights and to performers. The producer must provide them with all the information and documents necessary to determine the value of the additional remuneration. Further, the right to additional remuneration cannot be waived or transferred.

The amendment also changed the rules on deductions from the remuneration payable on a periodic basis. According to the amendment, if the rights in an artistic performance were transferred or an exclusive licence to use an artistic performance was granted to a producer in return for remuneration payable to a performer by the producer on a periodic basis, these payments will be free of deductions due to advance payments or any other deductions provided in the agreement for 50 years after the publication or dissemniationof the phonogram.

The new rules apply to phonograms and performances protected as of November 1 2013 by the existing regulations, as well as phonograms and performances created after that date.

Extension of duration of protection
As of August 1 2015 phonographic artistic performances are protected for a longer period. The amendment extends the protection of performances fixed on a phonogram from 50 to 70 years. If, within 50 years following the year when the performance occurred, a performance fixed on a phonogram is published or otherwise disseminated, the right to use the performance and transfer the rights therein and the right to remuneration for use of the performance will expire 70 years after the performance. If the performance was both published and disseminated, the 70-year period runs from the event which occurred earlier.

The amendment also clarifies some crucial aspects of the duration of protection of musical compositions with words. Previously, separate terms of protection applied to music and lyrics. This was problematic since the copyright in the text often expired at a different time from the copyright in the music. Following the amendment, if the text and music were created specifically for a given text and musical work, the author's economic rights will apply 70 years after the later of the death of the author of the text or the death of the composer of the musical work.

The extended protection applies to phonographic artistic performances and musical compositions with words that were protected as of November 1 2013 by the existing regulations, as well as phonograms and performances created after that date.