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Private Use on Musical Works, Rights of Public

Performance, and Collecting Society Systems.

By' Judge Visit Sripibool

withdraw their administration if the so wish. Under the GEMA decisions, rightholders are free to assign their repertoire to the society offering the best conditions. In SABAM,(206) the European Court of Justice stated that a copyright society purely manages private, individual property interests. Collective administration has to leave maximum freedom to rightholders to manage their rights. To retain rights for five years after a member withdrew was ruled to be "unfair".

Mechanics of Administration

When an author joins a collecting society, he will normally give the society either an assignment of the rights to be administered or a mandate or license to administer these rights. The society, so armed and also representing repertoires of societies in other countries, is then in a position to issue licenses to those who intend to use the protected material. Such licenses may be in "blanket" form, covering the whole of the society's repertoire, or there may be ad hoc licenses for particular uses. Tariffs are established for the various licenses and in general there is a complex system of arrangements to allow flexibility for the various needs of the users. Such users may range from organizations of national importance, such as the national broadcasting organization, to modest establishments which require a license for the entertainment of their clientele, in cafes, restaurants, etc.
An important feature of administration of rights is the presence in many countries, as abovementioned, of tribunals set up by law to determine the tariffs which are to apply in particular cases.
There are complex scheme which apply in the distribution of the monies collected, and these will often involve arrangements between societies of different countries in order to cover the reciprocal use of repertoires. Societies may also have to deal with the problem of undistributed revenue, that is revenue which has been collected which cannot be attributed to a particular right owner.
Sometimes the royalties are distributed in accordance with the returns of user, made by the licensee: in order cases sampling techniques are used. Sometimes, some of per cent of collected license fees will be paid for the social cultural fund.(207)
With the development of new technological means of presenting works to the public, and disseminating copies, the techniques for collection and distribution of royalties have become more and more sophisticated and are likely to involve digital identification and use tracking methods as new techniques emerge.

Within the European Union, most collective organizations are allowed to retain a monopoly status or have conferred them a monopoly position in relation to their specific fields of activity. The reason is economically persuasive. For users, it is simply more expedient to be directed to one collective body which manages one specific type of right or rights in relation to one specific type of work. If more than one society exists in relation to this specific right or type of work, a user will be in the position of having to

incur extra transaction costs, in terms of time and expenditure, by obtaining licenses from two or more societies, since it would be practically impossible in many cases to limit one's use to the repertoire held by one society. Where copyright holders are concerned, the aggregation of rights within a particular collecting society brings a measure of power over their markets which is capable of being exercised in beneficial ways.
The rationale results in a strong society that is able to wield stronger bargaining power as against equally strong user organizations. The collective power of these organizations within the European Union and global market should not be underestimated. First, the monopolistic position of a collective organization in a specific area of copyright is strengthened by reciprocal organization in a specific area of copyright is strengthened by reciprocal relationships with other collecting societies in other Member States. Ostensibly, this allows such organizations to monitor and license each other's repertoires; practically, this also results in a co-ordinated effort to influence market and governmental policies. Secondly, a further result of this reciprocity is large memberships and international ties which allow societies to collect substantial license fees. Thus, in the area of music copyright, the approximate licensing revenues in 1997 were as follows for the following organizations: GEMA(Germany)-US$824.8 million; MCPS-PRS Alliance(United Kingdom)-US$661 million and SACEM(France)-US$564.6 million.(208)

Compulsory Representation, Compulsory Assignments and Compulsory Licenses

The main feature of copyright is the right to forbid the use of a work. The copyright owner has the exclusive right not to authorize the use of his works, but only if the manages his rights individually, either by himself or by a commercial agent. Only then he can decide freely whether and on which financial or other conditions he will authorize the use of his work. If he requires outrageous royalties or refuses his authorization altogether he does not have to give any reason.(209) However, the above concept is limited by the idea of the compulsory license. Sometimes, the compulsory license is so-called 'Non-voluntary licensing'.(210)

The compulsory license lies in the middle ground between the copyright owner's absolute control over the exploitation of his work on the one hand and a statutory or judicial exemption granting anyone the freedom to use a work on the other. The compulsory license mechanism takes to use a work on the other. The compulsory license mechanism takes away from authors their right of authorization, but leaves them with a right of remuneration.(211) Obviously, there are varying conceptual definitions for compulsory licenses. The "free use" proposal for copyrighted works was categorically compulsory licenses. The "free use" proposal for copyrighted works was categorically refused due to the absence of compensation for copyright owners. In contrast, compulsory license systems contain significant differences. The obvious difference between compulsory license systems and the "free use" concept is the latter's lack of compensation for copyright owners. In addition, "free use" is not applied through governmental authority. However, neither system requires the user to request authorization from the copyright owner. Due to the inherent nature of compulsory license systems, it is obvious that copyright owners do not have the choice to either accept or refuse a license. Instead, it is their obligation to grant the license. Furthermore, a compulsory license still necessitates that the publisher, and through him, the author, be informed of the application, a feature absent in the informing the author that his copyrighted work is going to be copied and requesting permission for the authorization to translate and copy.(212) In the other word, Compulsory licensing forces an intellectual property owner to allow others to use that property at a fee set by the government. The owner is not allowed to refuse to license or to negotiate voluntary license fees is a free market, but is compelled to license at a rate thought to be 'reasonable' be the government.(213)

Compulsory License in the United Kingdom

In the United Kingdom, compulsory licenses may be granted by order of the Secretary of the State in respect of the rental to the public copies of sound recordings, film or computer programs. Moreover, in the private sector, the Copyright Tribunal has the power to settle the royalty payable if the parties cannot agree on a royalty.(214)

Moreover, the collecting societies typically will represent any rightholder above a minimum threshold. For a composer to become a member of the PRS, for example, she or he must have three works either commercially recorded, broadcast within the past two years, or performed in public on at least twelve occasions within the past two years (and be commercially published). In Germany, the law regulating collective administration even prescribes a so-called 'compulsory representation'. In providing a service to all rightholders, the larger players in effect subsidize the system, since it is more costly to set up accounts, collect and distribute small amount of royalties.(215)

In the Copyright, Designs and Patents Act 1988 the Copyright Tribunal has jurisdiction on an application by a person who wishes to make a copy of a recording of a performance to give consent in place of a performer in either two cases(216) :
(a) where the identity or whereabouts of the performer could not be ascertained by reasonable inquiry; or
(b) where the performer has unreasonably withheld his consent.

Compulsory License in the United States

In the United States, the most important limitation on the reproduction right for musical works is the compulsory mechanical license. A mechanical license gives the licensee (a record company or artist) permission to reproduce and distribute a copyrighted musical work in recordings. In most situations, licenses are negotiated and of a copyright owner does not want to issue a license, it is free to decline to do so. However, the compulsory mechanical license provision says that under certain circumstances, a mechanical license can be obtained regardless of whether the copyright owner gives permission or not. The compulsory license was introduced in the 1909 Copyright Act in order to prevent a monopoly from arising in the manufacture of piano rolls. Although piano rolls are no longer used for the mechanical reproduction of music, the compulsory license still serves its purpose by insuring that no company (not even the major recording and publishing companies) can have a monopoly on the recording of musical compositions. The compulsory license provision was contained in Section 115 of the 1976 Copyright Act and provides that once a musical composition has been distributed in phonorecords in the United States with the copyright owner's permission, anyone may reproduce the composition. This means that the copyright owner has absolute control over the first recording of its song. However, once that first recording has been distributed, the copyright owner cannot prevent anyone else from recording their own version of the song. Distribution of audio recordings of any type (cassette, compact disc, etc.), but does not include audiovisual works since audiovisual works are embodied in copies rather than phonorecords. In the United States, there are four key words that are well-known in the area of licensing. That is, Mechanical license: allows the licensee (record company or recording artist) to reproduce and distribute a copyrighted musical work in recordings such as compact discs and cassettes in return for a royalty (a percentage of the sale price) on recordings sold. Performance license: allows the licensee (radio or television station, concert venue, business establishment, etc.) to publicly perform a copyrighted musical work in return for a royalty. Synchronization license: allows the licensee (movie or television producer, etc.) to reproduce and distribute a copyrighted musical work in audiovisual recordings such as movies, television and videocassettes in return for a flat fee and/or a royalty. Print license: allows the licensee to reproduce and distribute a copyrighted musical work in printed form such as sheet music in return for a royalty.(217)

In the United States, there are five compulsory licenses. They are(218):
1 The cable license, which establishes a compulsory license for secondary transmissions by cable television systems;
2 The mechanical license, which established a compulsory license for production and distribution of phonorecords of non-dramatic musical works;
3 The public broadcasting license, which establishes a compulsory license for the sue of certain copyrighted works by non-commercial broadcasting entities;
4 The satellite Retransmission license, which establishes a compulsory license for satellite retransmissions to the public for private viewing.
5 The digital audio tape device license, which establishes immunity from liability for copyright infringement for manufacturers and importers of digital recording devices, but imposes a levy on these devices, the proceeds from which are to be distributed to copyright owners.


An important role of the collecting society is the enforcement of the rights which it administers. Here the society has facilities, in terms of finance, expertise and personnel, which are far beyond those which a single rightowner may have. Where proceedings are taken against a user who has failed or refused to take out a license, an injunction may be obtained which obliges the user to respect in future all the rights represented in the particular repertoire, so that a benefit results to all members of the society, not only those whose rights the defaulting user has infringed in the past. In EEC and USA, the collecting societies have strongly worked on behalf of the copyright owners. Their works can be seen in all areas both dealing with cases in court and functioning on international forums. And sometimes, they act as a political lobbyist to make a law for themselves.(219)

Monopolies of Collecting Societies and Antitrust Law or Competition Law Concerns

Sometimes, the collecting societies may abuse their powers. In the meaning of the competition, the concept of abuse of power would be an objective concept relating to the behavior of an undertaking in a dominant position which is such to influence the structure of market where the degree of competition is weakened and through recourse to methods which has the effect of hindering the maintenance of the degree of competition still existing in the market or the growth of that competition.(220)

A very sensitive subject has always been the relationship between collecting societies and competition law. Collecting societies have certain needs which are difficult to satisfy according to established competition law rules(221) The concept of the competition law encourages price competition.(222) The competition laws want to foster the competition of price of goods according to the theory of price(223) and to protect the system of free market, and society.(224) Moreover, the law wants to maximize consumer welfare through maximizing allocative efficiency.(225) The competition policy is a cornerstone of economic policy in a free market. On the other hand, the


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(206) Belgische Radio en Television v. SABAM, [1974] E.C.R. 313. Case No.127/73.
(207) Martin Kretschmer, Copyright societies do not administer individual property rights: the incoherence of institutional traditions in Germany and the UK, Copyright in the Cultural Industries, Edited by Ruth Towse, Edward Elgar Publishing, United Kingdom 2002 at 145.
(208) See Suthersanen, supra note 181, at 18-19.
(209) See Jehoram, supra note 186, at 3.
(210) Tarja Koskinen-Olsson, Collective Management for Reprographic Copying:Experience in the Scandinavian Countries, a sheet distributed in the Seminar on "Fair Use and Collective Management for Reprographic Copying", organized by the Department of Intellectual Property. 31 July 2002 at the Arnoma Hotel Bangkok, Thailand.

(211) Makeen Fousd Makeen, Copyright in a Clobal Information Society, Kluw Law International, 2000 at 116.

(212) See Basalamah, supra note 12, at 519.
(213) J.T. McCarthy, McCarthy's Desk Encyclopedia of Intellectual Property, 1991 at 52.
(214) See Bainbridge, supra note 27, at 84.

(215) See Kretschmer, supra note 207, at 153-154.
(216) See Arnold, supra note 124, at 73.
(217) David J. Moser, Music Copyright for the New Millennium, ProMusic Press, 2002 at 54-55.
(218) See Leaffer, supra note 108, at 223.
(219) See Id, supra note 6.
(220) Inge Govaere, The Use and Abuse of Intellectual Property Rights in E.C. Law, Sweet & Maxwell, 1996 at 249.
(221) See Jehoram, supra note 186, at 6 (Westlaw)
(222) Kevin Kennedy, Competition Law and the World Trade Organisation: The Limited of Multilateralism, Sweet & Maxwell, 2001 at 11.
(223) Jack High, Competition, Edward Elgar Publishing , 2001 at 87.
(224) Id. at 374-385.
(225) Tim Frazer, Monopoly Competition & Law: the Regulation of Business Activity in Britain, Europe and America, Wheatsheaf Books, 1988 at 1.