Life gets harder for collective rights management organisations

Collective rights management is a well-known concept. Among other organisations, the Russian Authors’ Society protects the rights of performers and the owners of neighbouring rights. In addition to its routine activities, the society has found another application for its efforts.

According to the law, collective rights management organisations are empowered to make claims either on behalf of rights holders or on their own behalf. They wield considerable power: their representatives frequent restaurants, clubs and other public places where music is played and make claims against the owners of those venues for the unauthorised performance of music. They then collect remuneration for the public performance and pay – or at least should pay – that remuneration to the relevant performer. If the venue owner does not pay, they go to court and usually win, meaning that the venue owner must pay both the remuneration and the court expenses.

This business model worked smoothly until recently, when the High Commercial Court issued a ruling that complicate this process. The court stated that a collective rights management organisation enjoys the rights and has the procedural obligations of a plaintiff, as provided in the Commercial Procedural Code. Therefore, when such organisation initiates suit against an infringer in the interests of a particular performer, it should provide information about that performer (eg, name, address and company name). This information should enable the court to send proper notification to the rights holder, inviting him or her to participate in the action. On receipt of such notification, the rights holder shall decide whether he or she wishes to participate. If he or she does not want to participate, the court may examine the case in his or her absence. This will make it harder for collective rights management organisations to prepare a case, as they will have to search for such information about the performer. In some cases the performer may no longer be living and the collective rights management organisation will thus have to look for his or her heirs.

Understandably, the court's decision was not welcomed by collective rights management organisations. They will find it much harder to make their money now. Further, if a performer has been notified that money is due to him or her, the organisation will  have to pay up or face further reminders or even legal action.

This is an Insight article, written by a selected partner as part of IAM's co-published content. Read more on Insight

Unlock unlimited access to all IAM content