Recently, the copyright law exposure draft’s publishing has stirred the opinions among the copyrighters, among which the extension of management related to the copyright collective management organization has being boycotted by most musicians. The case judged by Ningbo Intermediate People’s Court recently over the no right to the authorization is very representative. This post will analyze the case and the regulations of “extension of management” in the exposure draft:
I. Brief introduction to the case
During 2009 to 2012, Ningbo Jialedi Company (Jialedi) was authorized by China Audio-video Copyright Association (CAVCA) under a copyright licensing and service contract, and for the authorization from January 1, 2009 to December 31, 2012., Jialedi shall pay royalties totaling 860, 000 yuan to CAVCA. These musical works include “Damn Gentle”, “Siqingaoli’s Sad”, “Making Mistake” and other 38 music works owned by Shanghai Shuitian Company.
In fact, CAVCA made such authorization and collected the license fee while with no authorization from Shuitian Company. Therefore, Shuitian Company sued CAVCA in Ningbo, and was supported by the court for the claim of compensation.
II. China’s current music copyright collective management system
The case itself is not complicated, but it reveals the huge difference between present copyright law and the exposure draft.
CAVCA mentioned before represents the recorder’s right, generally the recording company, and in the field of music, there is another copyright collective management organization which is Music Copyright Society of China (MCSC) representing the music copyright owner, generally the author of the lyrics and tunes.
But either CAVCA or MCSC must abide by the copyright law that “The copyright owners and copyright-related right holders may authorize an organization for collective administration of copyright to exercise the copyright or any copyright-related right. After authorization, the organization for collective administration of copyright may, in its own name, claim the right for the copyright owners and copyright-related right holders, and participate, as an interested party, in litigation or arbitration relating to the copyright or copyright-related right.” In other words, the premise of exercising right by copyright collective management organization is the authorization from the right owner. While in the case above, CAVCA shall have no right to disposal of the authorization, and therefore no doubt it will be judged of the liability of compensation.
III. “Extension of management” in the exposure draft
However, according to the latest exposure draft, the case will get the opposite result. According to the sixtieth clause of the draft “Where collective copyright management organizations obtain authorization from rights holders and can represent the interests of rights holders at a nationwide level, they may apply with the State Council administrative copyright management department to represent all rights holders in exercising copyright or related rights, except where rights holders indicate disallowance of collective management in writing.” Although it implies that the collective management organization has the right, it could be excluded with the statement by the right owner.
It is the seventieth provision in the exposure draft making the organization for collective administration of copyright expansion of rights, “Where users pay remuneration to collective copyright management organizations according to the contract concluded with collective copyright management organizations or statutory provisions, and a lawsuit is raised by the rights holder concerning the same right and the same use method, they do not bear responsibility for compensation, but shall cease the use, and pay remuneration according to the corresponding collective management use fee standards.” If the previous case applies the provisions, CAVCA didn’t need to bear the liability for compensation but only to pay remuneration.
The two new rules constitute the so-called “extension of management” of copyright collective management organization, resisted by most right owners. If passed, it will lead to the following consequences:
1, Even if the copyright collective management organization authorized others but not get authorization from right owners, the owners could not get satisfied compensation but only “remuneration according to the corresponding collective management use fee standards.” It restricted the autonomy of right owners.
2, The collective management organization has the pricing power of all relevant works. According to the current operation situation, the “price” may not be the most satisfied with the right people. We can imagine the right people boycott the new law.
For the above regulations, the author opposed,too. Although based on Collective Management of Copyright Regulations”, an organization is established by right people own. But in our practice, it is “official”. In the past practice, most of the collective organizations’ work did not make the copyright owner satisfaction (such as management fees are too high, authorization charges are not disclosed ). In this situation, the new law is not suitable for such substantially expand collective rights and restrict right people. The authors hope the law can remove the above provisions at the end.
Other related posts on our websites:
1. Better or Worse? Comments on the Exposure Draft of Copyright Law
2. Will Copyright Law Modification Break Down Recording Industry?
3. Music Industry’s Revision Suggestion to Drafted Copyright Law, I
4. Music Industry’s Revision Suggestion to Drafted Copyright Law, II
5. China Copyright Law’s Revision May Help Open Source Software Right Protection
6. Comparison on the Existing and Exposure Draft of China Copyright Law
Author: Mr. Luo Yanjie
Attorney-at-law of DeBund Law Offices
Co-author: Mr. You Yunting
Founder & Editor-in-Chief of Bridge IP Law Commentary
Partner & Attorney-at-law of Shanghai DeBund Law Offices
Email: Bridge@chinaiplawyer.com, Tel: 8621-5213-4900,
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Bridge IP Law Commentary is a website focus on the introduction of commercial laws in China, especially the intellectual property laws. All the posts here are our original works. And all news or cases referred here are from public reports, and our comments or analysis are of due diligence, neutrality and impartiality, representing our own opinions only and are our original works. You may contact us shall you have any opinions or suggestions.
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