The Sejm (lower chamber of Polish parliament) received Government bill on collective management of copyrights and related rights on 2 February 2018. This is good news because the proposed new law is designed to implement Directive 2014/26/EU of the European Parliament and of the Council of 26 February 2014 on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online use in the internal market (CRM Directive), which was supposed to have been implemented by 10 April 2016 (more than two years ago) and Poland is now facing a risk of severe fines.

However, given that the implementation time was generously long and the fines for late adopters are hefty, why is it that the new law is still in the legislative pipeline and has not become effective yet? Well, CRM Directive (and, by extension, the CRM Law) addresses important and difficult matters that have been stirring plenty of controversy for a long time now. The CRM Law aims mainly at providing for an orderly regulatory framework for the operation of collective rights management organisations (such as ZAiKS). The Union legislature emphasised the need for a greater transparency of their operations in the interests of not only the users but also the rightholders who have engaged CRM organisations for the management of their rights. In consequence, although the proposed CRM Law is still a work in progress, it is certainly an important and needed step on the way to a proper regulation of the complicated relationships among organisations, artists and users. Below are the most interesting solutions proposed in the CRM Law.

First of all, the CRM Law provides for what is called “extended collective licensing”. Under this scheme, even authors who have not engaged (contracted) any CRM organisation for the management of their rights will be represented (on a sort of “involuntary” basis) by some CRM organisation so that it will be authorised to manage their works, including by licensing them to users. However, this applies only to those situations where the Copyrights Act imposes mandatory agency of CRM organisations in relations between a rightholder and users. Thanks to extended collective licensing, users are sure that their licenses from such CRM organisations were granted by organisations really entitled to do so (and that such CRM organisations are sure to have the management of rights of even those artists who have never actually entrusted their rights to them).

While apparently needed and proper (as a way of increasing order and certainty in copyright transactions in relations between CRM organisations and users), extended collective licensing continues to cause concerns as regards the position of the rightholder. As the scheme clearly restricts rightholder’s discretion (about whether or whom to entrust the management of his rights), it should additionally: (i) impose a duty on CRM organisations to inform an artist whenever they wish to license his or her works; and (ii) expressly give the artist a right to effectively object against such a license. The proposed CRM Law does none of those things.

In addition, the CRM Law limits the extended collective licensing mandate to only those organisations which are “representative”, meaning those authorised to exercise the collective management of rights in a certain category of works with respect to certain forms of exploitation. Where there are more than one such authorised organisations, the representative organisation is the one which has the most members. While this seems clear at first sight, there is plenty of uncertainty about how it relates to Copyrights Act regulations on out of commerce works. With no such relationship expressly defined in the CRM Law, a user wishing to use an out of commerce work might well be forced to obtain (and pay for) the related license twice: once via the “representative organisation” as defined in the CRM Law, and the other time via the CRM organisation which manages rights in that out of commerce work under the Copyrights Act.

Secondly, the CRM Law offers interesting solutions designed to make some orderly regulation of the relationships between CRM organisations and users. For example, an organisation may not refuse to license a user without a valid reason. Also, CRM organisations must immediately inform users once they are no longer authorised to manage the rights of a specific rightholder (e.g. if the artist has terminated the CRM engagement). However, there is some controversy about the repertoire to be managed by a CRM organisation. According to the proposed CRM Law, an artist may authorise a CRM organisation to manage not only rights in his or her specific (existing) works but also rights in all the future works (yet unspecified) to be developed after the date of the CRM contract. A question arises if a user who is licensed by a CRM organisation with respect to the entire repertoire of an artist could really have lawful use of all of the artist’s works, including those created after the artist’s CRM contract. This is clearly contrary to the Copyrights Act, which says (Article 41(3)) that a contract (which in this case would be the CRM contract of the artist) will be invalid to the extent it concerns “all the works” of the artist “to be created in future”. In this sense, the legislative proposal causes serious legal uncertainty.

Finally, the CRM Law proposes rules on which CRM organisations could provide multi-territorial licensing of rights in musical works for on-line use. This solution is intended to limit the number of licenses an interested music provider would have to obtain from various CRM organisations to offer music files in various Member States. For example, if the owner of an “XYZ ” on-line service now wants to provide a music file to users in Poland and Germany, he must obtain a license for the file as a musical work. Naturally, the Polish license, extended by ZAiKS, would not be sufficient because it would only work in Poland so that the owner would have to obtain the other license from the relevant CRM organisation in Germany. Such multiple licensing tends to be complicated and costly. Multi-territorial licensing is designed to substantially streamline the whole process, allowing the owner to obtain just one license (at his choice, from the Polish or the German organisation) to be able to legally offer the file in both countries.

In summary, the proposed legislation introduces a number of interesting solutions which, although not perfect, are certainly necessary in the quickly changing environment which is particularly affected by the development of the internet and new technologies (multi-territorial licensing). Hopefully, the discussed weaknesses of the draft will be removed in course of further legislative work without substantially increasing the (already considerable) delay with which Poland has been implementing CRM Directive into its national law.

 

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Check what we refer to:

  • Bill on on collective management of copyrights and related rights (“CRM Law”);
  • Directive 2014/26/EU of the European Parliament and of the Council of 26 February 2014 on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online use in the internal market;
  • The Copyrights and Related Rights Act of 4 February 1994 (“Copyrights Act”).