Obstacles in copyright protection

Copyright Protection: Authorized does not mean transparent?

Entrepreneurs are willing to pay royalties and they want transparency in the activity of copyright organizations. About the situation in this area and the problems in the regulation of organizations for the protection of copyright, we took the interview, the partner of Synergy Partners Law Firm Mr. Nurzhan Stamkulov for the business information center Kapital.kz

-Nurzhan, can you describe the situation with copyright protection?
-Certainly, copyright is a part of our lives. However, our experience shows that the activities of copyright managing organizations require more detailed and transparent regulation.

- What is not transparent?
- Today, the laws allow such organizations to collect royalties for the benefit of authors. Even if those organizations do not have a contract with the author or authors’ heirs, they may just have sufficient accreditation to represent authors.

- Could you please provide an example?
- Of course, suppose there is one restaurant. New song of an American singer is playing in the restaurant. The copyright managing organization on a collective basis, which has the accreditation, sues in court and requires paying compensation. So called “accredited organizations”.

- And it considered as legal?
- Yes, it does. Lawsuit of copyright managing organizations exempts from paying the state fee. Accredited organizations on the basis of Law on Copyright and Related Rights may collect fees for the benefit of the American singer, despite the fact that such an organization does not have a contract with the singer.

- So what is the explanation of such actions?
- An explanation is simple. Accredited copyright managing organizations have to distribute royalties to foreign organizations not less than 1 time per year.

- Do they do it?
- Difficult to answer, since such copyright managing organizations are required to publish their reports. Difficulties arise, there is no transparency. For example, we do not know regarding salary in these organizations and costs they bear. Law allows such organizations to hold 30% of the collected fees to cover administrative costs.

- But some record and control are needed to be?
- Absolutely true. Such copyright managing organizations pass their reports annually, including the audit to the authorized body. However, the public do not have such data and it is necessary to use public control.

- Do you believe that it is confidential information and the state should not interfere in the private sector?
- No, since all organizations are non-profit and they are subject to the requirement of non-profit organizations. According to the Law on Non-Profit Organizations, revenues, costs, sources of funding should be public and cannot be a commercial secret. Therefore, it is not a confidential information.

- How can we change the situation, in your opinion?
- Existing shortcomings are creating problems for small and medium businesses in Kazakhstan. All businessmen and entrepreneurs are willing to pay and pay royalties, but there is another question. Do costs are spent correctly, are organizations themselves transparent, as far as these royalties reach foreign authors. Therefore, to solve this problem, we need all copyright managing organizations to be transparent, publish their reports to very detailed and register right holders and authors, including the introduction of administrative accountability mechanisms, penalties for non-fulfillment of legal requirements. Today, any fines in the legislation are not available, but the exception is only a review of accreditation. I believe that transparency will benefit the authors themselves, who do not have appropriate information and how their rewards are formed.

- Thank you for your interview and comments!