Is the Second-paid Right of Audio-visual works in Draft Copyright Law Feasible?

On the 6th of July, the State Copyright Bureau published the second copyright law revision draft (hereinafter referred to as “the second draft”), which removed the “phonograms compulsory license” clause and the collective management organization’s “extended management” clause those are controversial in the first draft. The removal is welcomed by right people. In spite of this a new rule in the second draft caused controversy by the Movie Company and investors which is so-called “second paid right” of right people and related individuals. Industry insiders point out, the rule of “second paid right” will lead to the circulation payment which will increase the cost indefinitely. It will cause a negative effect to movie industry’s development. Today, we would like to introduce the rule of “second paid right” and share ideas as follows:

I. The regulations and the basic concepts of “second paid right”

There are only two regulations about second paid right in the second draft, which are “The original creator, Playwrights, directors, lyricists, composers and other creators have the right to obtain reasonable remuneration from other’s using those audiovisual products” and “The main performers have the right to obtain reasonable remuneration from other’s using those audiovisual products”.

As the copyright of audiovisual products belongs to producers, the producers are only required to pay the staff a reward one time according the current law. The following use of audiovisual works brought nothing to the staff (otherwise provided for in the contract). While the second draft will give the staff the right to get remuneration when the audiovisual works are used by others; in comparison to the current system. There is now “one time” payment, we called it the “second paid right “. However in fact, if the second draft goes into effect, when the audiovisual works are being used for many times, though the staff is not the right people, they also can get paid for many times.

II. The rule of “Second paid right” needs to be detailed

1. Scope of right people is not clear

According to the regulations described, owners of “second paid right” subject to “The original creator, Playwrights, directors, lyricists, composers and other creators ” and “main performers”, but the author thinks the regulations are unclear. An example of this is, the so-called “directors”, “Playwrights” are not legal terms, there is no clear definition. As in a movie, besides the “director” we all know, there are several “assistant directors” and “executive director”. Do they have “second paid right”? In addition, the definition of “main performers” is more ambiguous. How many “main performers” can be in a movie for a legal sense? Is “co-stars” included? Do ten stars in the American movie “Ocean’s Eleven” all have “second paid right”? Unfortunately, for the above-mentioned questions, the second draft did not give us the answers.

2. What’s the meaning of “others?”

According to the law, the premise of “second paid right” is “others’ using”, but the second draft does not explain what “others” is. In the context of the law, it is unable to distinguish “others” whether this includes “the producers” ( namely the movie copyright holder ). If included, it seems unreasonable for producers to pay another time when using works which they have a copyright for; if not included, it will give producers a chance to evade “second paying”. For example, if a movie is made into DVD after being shown, as authorizing others to make, producer will need to pay the “second remuneration “; but as make by producers themselves, they needn’t pay because it is not “others’ using”. It is obviously not fair for the staff to have the difference due to the different users. Therefore, if needed to build “second paid right” system, the author hopes the government can make more detailed provisions, or change the legislative method, make “the method of using” instead of “entity” as the triggering condition of “second paid right”.

3. Lack of definition of “using”

The second draft does not stipulate the definition of “using”. Currently copyright law, only the individual “reasonable using” appeared the word “using”, namely ” for personal study, research or appreciation, using of a published work of others”, but it still does not explain what “using” is. Literally, “using” shall mean all the behavior of exercising rights, including reproduction, distribution, information network dissemination, adaptation and so on. In fact, these rights have been transferred when the staff is paid for the first time. It seems unfair to get a second pay because the transferred right. Therefore, the legislation should clear the definition of “using” and limit “second paid right” in several “behaviors” in order to avoid the rights abuse.

4. Who should pay and the expense standard are not clear

The second draft does not stipulate who should pay. In my opinion, the producer should pay but not the following users. In addition to this, the standard of cost is also a large problem. If it is too high, it will undoubtedly lead to an increased movie cost and the movie industry will be thwarted; If too low, “Second paid right” system will be superficial, unable to truly benefit the staff.

III. The possibility of exceptions

“Second paid right” being added into the second draft caused a big shock in the film and television industry, in which the opposition was in the majority. According to the present situation of our country, the author also does not support the introduction of this provision. Indeed, in reality, it exists that the producer only pay a small amount of compensation to the cast and writing staff though the movie sells well which led to their interests are damaged. Although, at the same time, there are also many investors who have lost much money but consequently pay the staff well. The risk is the natural existence, the investor and the cast and creative staff should share the risk; Although “second paid right” completely transfers the risk to the investors which is unfair and unreasonable. The author thinks if the staff should be paid another time, this should be referred to the market itself to adjust. Both parties have the right to make their contract and not need to be imposed by law. Therefore, the author suggests the law to add the clause like “both sides agreed without paying except”.

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