|Albanian Collection Management Agencies: Licence to Use or Right to Abuse?|
Hoxha Memi & Hoxha
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The Constitution of 1998 guarantees everyone the freedom of artistic creation and scientific research, as well as the right to use and profit from such works. Under the Constitution, copyright is part of the fundamental economic, social and cultural rights that are protected by law.
Although the Albanian provisions on copyright protection are not unusual, the national legislation has only recently formally conformed to major copyright international treaties and conventions.
In order to protect copyright effectively, the Law on Copyright and Neighbouring Rights (9380/2005) envisages that royalties for copyright and neighbouring rights may be collected by licensed collection management agencies.
Status and licensing
Under the law, 'collection management agencies' are defined as legal entities which may be authorised to collect royalties for copyright and neighbouring rights on behalf of the rights holders, which grant such right to the agency.
As for other societies and associations in other jurisdictions, the law declares the system to be voluntary for non-profit organisations (i.e., associations), where the free will of the authors is essential to enable the agency to manage and collect royalties for the authors' protected works.
Under the law, agencies should be established based on the type of art (eg, music, audiovisual works, literary works or software), but no more than one agency may be licensed for each type of art. The law does not provide a list of available licensing areas, and experience has shown that licensed agencies have tended to extend their scope of activity and overlap into other areas. Agencies are licensed by the Ministry of Culture, Youth and Sports for a renewable three-year term.
Management rights and royalties
Under Article 106 of the law, copyright and neighbouring rights holders are free to exercise the rights granted to them by law individually, either personally or by appointing representatives, or collectively through collection management agencies, chosen by the rights holders of their own free will.
An agency can claim, on behalf of its members, payment of the relevant royalties from users of protected works. Under the law, agencies may enter into negotiations with such users to set the value of royalties to be paid, which should not be lower than:
·10% of the income realised by the user from use of the copyright; and
· 3% of the income realised by the user from the use of other neighbouring rights of literary, artistic and scientific works.
Any party which exploits literary, artistic or scientific works in the course of its activities is obliged to enter into a written agreement with the respective authors, rights holders and/or collection management agencies in regard to the obligations of the respective parties and the applicable royalties for any future use.
An agency that is entitled to collect royalties for an artwork based on such agreement must disclose to the Albanian Copyright Office all collections made each year by January 31 of the following year, and submit the relevant financial statements.
Moreover, agencies should distribute the collected royalties to the authors or their heirs, based on the mutual agreement.
The current legal framework lays down the basics of the collection management of copyright and neighbouring rights. However, practice has shown that this system does not work properly and cases of misuse of collected royalties have been reported.
The main issues with the legal framework relate to the lack of provisions regulating the methods for formally setting standard or reference royalties for each type of artwork used and type of business of the user, and monitoring the interaction between agencies and users. The lack of such processes has resulted in some agencies claiming up to 10% of the total turnover of a business instead of the 10% of the income realised by the user from the use of the copyright, as set out in the law.
Moreover, the list of authors and artworks for which agencies claim royalties is a well-kept secret. The publication of and free access to such list, together with the establishment of systems through which users can declare the works they have used, may be useful in establishing a more transparent and effective process.
Practice has shown that agencies have also initiated criminal proceedings against users for breach of copyright without properly evidencing the exact artwork used without licence and whether the agency had direct authorisation to initiate such criminal proceedings, which are strictly related to the personality of the author.
Due to the need to protect copyright effectively in Albania, the authorities have often shown leniency towards collection management agencies. However, while court rulings on the issue are awaited, some secondary legislation may produce a positive impact and help to enforce and protect copyright effectively, without facilitating abusive behaviour.
The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.
Published on our website on Nov.11, 2010