Examining the rights of phonogram producers

A phonogram producer is defined as a party having a private, individual, exclusive and time-limited right. The legal definitions of “phonogram” and “phonogram producer” are set out in Article 132 of the Copyright and Related Rights Act 2003, harmonised with the World Intellectual Property Organisation (WIPO) Performances and Phonograms Treaty.

The legislation defines a “phonogram” as a fixation of performance or other sounds or of the representation of souncs, except in the form of a fixation incorporated in an audiovisual work. The rights in a phonogram are not limited by its incorporation in a videograme.

A “phonogram producer” is defined as the natural or legal person which take the initiative and has responsibility for the first fixation of the performance or other sounds of a performance or the respresentation of sounds. The act provides that unless proven otherwise, the producer is the person whose name or title is regularly noted as the holder of the phonogram producer’s rights in the phonogram.

Legislation
Phonogram producers’ rights were introduced into the Croatian legal system by the Act on Amendments and Supplements to the Copyright Act 1999. Previously, only one of the neighbouring rights was recognised - the rights of performers - (under the Copyright Act 1990). The 1999 act prescribed that phonogram producers have the exclusive right to grant a licence for the direct or indirect reproduction of the whole or a part of the phonogram, and to the distribution of the original or copies of the phonograms, including export and rental. In addition, they were given the right to remuneration in such cases, even where the phonogram is broadcast on the radio or television or for other public communication.

However, in order to harmonise Croatian copyright legislation with the global copyright system, the Act on Copyright and Related Rights was adopted in 2003. This act widened the scope of phonogram producers’ rights as follows: 

• Phonogram producers were given the exclusive right to make their phonograms available to the public (Article 133); 
• The compensation for the broadcasting and public communication of phonograms was set as a share in a single equitable remuneration for broadcasting and any other communication to the public of its phonograms published for commercial purposes (Article 135); and
• The act introduced two further remunerations: (i) a blank tape levy for renting his phonograms (ie, copies made available through public libraries (Article 134); and (ii) the right to remuneration for the reproduction of phonograms for private or other personal use (Article 136).

This act harmonised the provisions relating to the rights of phonogram producers with the provisions of international legal regulations such as the Rome Convention and the WIPO Performances and Phonograms Treaty. The Croatian copyright system is also harmonised with the acquis communautaire of the European Union

Collective management of rights
The collective management of phonogram producers’ rights in Croatia is handled by ZAPRAF. ZAPRAF was originally founded in 1995 as the Croatian Phonographic Association (HDU), as a non-profit association for individuals who dealt in discography and associated activities. Following changes to the Associations Act in 1998, it became an association for legal entities.

On 30th November 1999 HDU received authorisation from the State Intellectual Property Office to perform the collective management of phonogram producers’ rights within the scope prescribed by the law at that time. Upon a recommendation by the International Federation of the Phonographic Industry to split the activities carried out by HDU, in 2004 HDU became ZAPRAF and narrowed its activities to the collection and distribution of fees. A new organisation, also called HDU, took on all other activities, including anti-piracy activities, even though these are of interest to both HDU and ZAPRAF.

As of 16th February 2009, ZAPRAF held 80 powers of attorney from phonogram producers. This covers around 98% of the market; the remaining market share comprises largely imported music without exclusive representation in Croatia. In addition to domestic music labels, ZAPRAF represents all the relevant global phonographic labels active in Croatia.

Mutual representation agreements with other collecting societies are not common in global practice of phonogram producers; rather, the rights of foreign phonogram producers are managed by way of exclusive representation agreements for a particular territory. For example, through exclusive licence agreements Aquarius Records, Dallas Records, Dancing Bear and Menart have authorised ZAPRAF to represent the global phonographic production of the major labels (ie, Warner Music, Universal, Sony Music, BMG and EMI), thereby aligning ZAPRAF with the universal practice of managing phonogram producers’ rights through the authorised representation of phonographic labels, rather than through bilateral agreements with other collecting societies as is usual for authors and performers.

All the contracts held by domestic discographers regarding the representation of foreign discographers are exclusive in nature for Croatia and, among other things, involve all the rights managed by ZAPRAF on behalf of its members. In this way discographers, based on the contracts and the certified powers of attorney, participate in the distribution of remuneration in addition to the remuneration for their own programmes.

Rights managed individually and collectively
Phonogram producers’ rights are managed both individually and collectively. The 2003 act also recognised the possibility of managing copyright and related rights through a special legal entity; however, this model has not been used to manage phonogram producers’ rights until now (Article 155, 2003 act).

The 2003 act enumerates which phonogram producers’ rights can be managed collectively - that is, which can be managed exclusively through a collecting society (Articles 156(1)(3) and (2)). The Association for the Protection, Collection and Distribution of Phonogram Producers’ Rights (ZAPRAF) is empowered by the State Intellectual Property Office to manage collectively on behalf of phonogram producers: 

• the right to make a phonogram available to the public; 
• the right to remuneration for broadcasting and public communication of a phonogram; 
• the right of rental of a phonogram; 
• the right to remuneration for public lending of a phonogram; and 
• right to remuneration for reproduction of a phonogram for private or other personal use.

Among these rights, only one other right can be managed both individually and collectively - the right of making available to the public a phonogram. However, in practice phonogram producers manage this right individually.

All other rights are managed individually by phonogram producers, with one exception: phonogram producers have given special power of attorney to ZAPRAF so that, in certain cases, it can manage rights which are regularly managed individually on behalf of all phonogram producers. For example, phonogram producers have authorised ZAPRAF to grant on their behalf the right of reproduction of phonograms on hard drives as part of music machines (eg, jukeboxes) and to collect the remuneration for that use.

Comment
ZAPRAF justifies the presumption of the right to universal representation by the right holders (Article 159(2), 2003 act). The 2003 act prescribes a presumed power of attorney, according to which it is presumed that the collecting societies have authorisation to carry out activities to manage the rights of all domestic and foreign right holders, apart from any rights holders who have explicitly and in writing informed the collecting society not to manage their rights.

Hrvoje MARKULJ
Ivana GUSTIN