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Piracy’s End?: Breakthrough in Copyright A key to the orderly development of the new Russian broadcasting industry—with worldwide access to programming—is a system of defined protection for authors, and one that has integrity in enforcement. The lack of adequate copyright protections in the former Soviet Union has long been a ground for hand-wringing and an obstacle to important patterns of trade and assistance from entities in the West. Just two years ago, for example, the owner of rights to “Gone with the Wind” filed a lawsuit in Moscow, seeking 200,000 rubles in damages for unauthorized screening of the film. The district court dismissed the suit on the grounds that the licensed film distributor’s rights were not protected under Soviet law. Now, in December 1993, the legal setting has changed. Russia has a new copyright law, the Statute “On Copyright and Neighboring Rights” enacted in July 1993, which has important implications for the pluralistic mass media system developing in Russia. For some participants in the video marketplace, it creates new opportunities, while for many others, it poses severe restrictions. Meanwhile, from the perspective of advocates for strong copyright protection, the focus has shifted from concern about substantive rights to doubts about whether effective enforcement of those rights is possible. The statute seeks to clarify the complex web of relationships between film producers, broadcasters, cable television operators, and satellite programmers and distributors. The law extends its coverage to infamous and informal “viewing salons” where customers pay admission to unauthorized showings of films and television programming on VCR’s. In a postscript to the Statute’s enactment, President Yeltsin decreed on October 7 that the government must, by January 1994, submit proposals for Russia’s accession to several international agreements, including the Berne Convention for the Protection of Literary and Artistic Works and the Rome Convention for the Protection of Performers, Producers of Phonograms, and Broadcasting Organizations. Prior to the legal dissolution of the state broadcasting monopoly in 1990, Soviet copyright law permitted broadcasters to air films without obtaining authorization from their producers. In effect, transmission of such programming was a “fair use.” At the same time, programming produced by these state broadcasters received copyright protection. Therefore, when VCR’s, cable, and other new technologies began their assault on the state’s monopoly on use of the television medium, programming producers lacked the right to restrain unauthorized use. The proliferation of cable networks and “viewing salons” led to widespread unauthorized commercial reproduction and showing of audiovisual works, despite legislative efforts in the late 1980s to maintain the state monopoly by prohibiting cooperatives from engaging in such activity. Speaking in 1991, the director of the Sovexportfilm Association, Oleg Rudnev, decried the “spreading cancer tumor of piracy,” particularly by cable systems where “boundless impudence reigns.” When prohibition proved to be ineffective, state agencies entered into “partnerships” with video co-ops, requiring the conclusion of contracts granting royalties to the agencies as a condition of staying in business. The passage of the Soviet and Russian mass media laws in 1990 and 1991 gave free rein to the growth of distribution outlets without placing constraints on their showing of unauthorized programming. The situation led to pressure both from within and outside Russia for effective copyright protection. In June 1991, the Motion Picture Association of America (MPAA) banned distribution of U.S. films to the Soviet Union—a boycott which was lifted with respect to Russia only several months ago—and withdrew from the Moscow international film festival. Meanwhile, the 1991 U.S.-Russian bilateral investment treaty required the Russian government to introduce copyright legislation by the end of 1992. That task was undertaken, and completed on schedule, by officials of the Russian Intellectual Property Association (RAIS), the state agency which in July, 1992 was created to replace the decades-old Agency for Intellectual Property Protection (VAAP), long considered an organ of state censorship. That draft became the 1993 Copyright Statute. The Statute in General The new Statute identifies a number of “works,” such as “audiovisual works,” “literary works,” and “photographic works,” as objects of copyright protection (Article 7(1)). “Audiovisual works” are defined as cinematography, including films shown on television (Article 4). In addition, certain other enumerated activities—broadcasting, performances of artistic works, and production of sound recordings—are granted separate entitlements called “neighboring rights,” a concept used in civil law systems. Despite the distinction in the Statute between “copyright” and “neighboring rights,” the protection granted to both categories is substantially similar. Under Article 9(1) of the Statute, a copyright arises as a result of the fact of the work’s creation. Unlike the United States, there is no system of voluntary copyright registration. In order to provide notice of its right, the copyright owner may place on each copy of the work a sign of protection consisting of three elements: (1) the Latin letter “C” inside a circle; (2) the name of the copyright holder; and (3) the year in which the work was first made public. The Statute and the Video Marketplace 1. Rights of Film Producers The rights of film producers are absolute—in other words, with the exception of certain “free uses” set forth in the Statute, no one may reproduce or disseminate a film without the producer’s permission (Article 16(2)). One permitted free use is the reproduction of a work “strictly for personal purposes” (Article 18(1), something like the exception recognized by the Betamax case in the United States for home taping. All films are afforded equal treatment regardless of the citizenship of the producer (Article 5(1)). It is anticipated that foreign film producers will receive additional insurance upon Russia’s accession to the Berne Convention. A goal of the Statute is clearly to promote the use of licensing agreements whereby film producers will transfer their rights to distributors. Article 30 authorizes the use of such licensing agreements, and Article 31 sets forth certain conditions which agreements must include, such as delineation of the specific rights transferred, the time period and territory for which the rights are transferred, and the amount of payment. Regarding payment, Article 31(3) directs the Russian Council of Ministers to establish minimum rates of remuneration to producers and other copyright owners. It is anticipated that this system will drive out unfair competition by forcing distributors of films to enter into licensing agreements or face sanctions for unauthorized use. 2. Television programming The Statute extends copyright protection to programming produced by broadcasters (including satellite) and cable television systems. Regarding DBS, the Statute includes within the definition of “over-the-air broadcasting” the reception of signals from an earth sending station to a satellite and the transmission of signals from the satellite—thus, the reception of satellite signals is not limited to reception by earth receiving stations for further over-the-air or cable transmission. Unlike film producers, however, these rights do not extend to foreign entities: Article 35(3) grants neighboring rights to a broadcaster or cable operator only if it has an “official location” on the territory of the Russian Federation and broadcasts by means of transmitters located in Russia. Like the rights granted to film producers, the rights of broadcasters and cable operators with respect to their own programming are absolute, although similar free use exceptions exist. Thus, any user must obtain permission to reproduce or distribute such programming. 3. Impact of the Statute on users of protected films and television programming The Statute is intended to regulate severely the use that broadcasters, cable television operators, satellite programmers, and viewing “salons” make of protected films and programming. All of these entities, in order to reproduce or distribute protected films and programming, do so illegally if they do not obtain permission from the copyright owners. By granting copyright owners absolute rights, the Statute rejects the concept of “compulsory copyright”—those schemes, such as used in the United States for cable retransmission of protected programming, whereby royalties must be paid but permission is not required. Thus, cable television operators may not distribute films or retransmit live or recorded television programming without consent. It is particularly clear that the Statute is targeted at the activities of viewing “salons.” Article 16 prohibits unauthorized presentation of films in “public showings” (defined in Article 4 as showings in places open for visits and attended by “a considerable number of people” not belonging to the “usual family circle”—an ambiguous definition that may prove to be fertile ground for litigation). Also, Articles 40(2)(5) and 41(2)(5) grant broadcasters and cable operators absolute rights with respect to release of their programs to the general public in “places with paid access.” The Statute does not explicitly address the reception for personal use, as opposed to reproduction, of programming transmitted via direct broadcast satellite. Perhaps, since reproduction for personal purposes is a permitted fair use under Article 18, the reception would be also. The drafters might have assumed that DBS companies would scramble or encrypt their signals, though this may provide a loophole for pirating. Enforcement While proponents of copyright protection have lauded the substantive provisions of the Statute, they unanimously have voiced concern about their implementation. These expressions of concern have centered on doubts as to the Russian government’s capacity or willingness to enforce the rights of copyright owners. In mid-1992, for example, it was reported that RAIS had only 135 officials in the entire Russian Federation to enforce all forms of copyright protection. These concerns appear to reflect not only a lack of confidence in government action, but also in the efficacy of private enforcement measures—concerns which may be unwarranted given the remedies available for private actions under the Copyright Statute. Section V of the Copyright Statute (Articles 48-50) is devoted to enforcement remedies and procedures. It provides for criminal and civil actions against violators. The remedies in civil court actions by copyright owners include injunctive relief (Article 50(1)), confiscation of reproduced copies and associated equipment (Article 50(2)), and choice of actual or statutory damages (Article 49). Thus, Article 49 allows the owner either to recover its losses (including lost profits) and the income earned by the violator as a result of its illegal activity, or to receive statutory damages to be determined by the court or to receive statutory damages to be determined by the court in an amount ranging from 10 to 50,000 times the minimum wage established by legislation. Early this month, that minimum wage figure was raised to the equivalent in rubles of $11.90. In addition, Article 49(2) authorizes the courts to impose a fine amounting to ten percent of the plaintiff’s recovery. Private plaintiffs are also assisted in one other way. In those cases where sufficient information exists as to suggest criminal liability, the investigatory organs and courts are required to support filed or potential civil suits by locating and seizing reproductions which are assumed to be pirated and associated equipment (Article 50(2)). However, it must be noted that such action by the authorities is not a prerequisite to the prosecution of a private civil action. One possible mechanism for enforcement made available by the Statute is collective management of copyright and neighboring rights. Article 44(1) authorizes the creation of collective organizations in order to insure protection where enforcement of rights is difficult on an individual basis. Such entities shall be private organizations to whom antimonopoly rules do not apply, but which are prohibited from engaging in commercial activity (Article 45(1)). One collective entity already in existence is the Russian Authors’ Society (RAO), which functions as a collective manager for authors of literary works. Under President Yeltsin’s October 7th decree, the RAO succeeded to the assets and legal duties of the RAIS. It is noteworthy that Mikhail Fedotov, who after being dismissed as Minister of Press and Information in August 1993 became Chairman of RAIS, is now the president of RAO. Fedotov was also one of the authors of the 1990 and 1991 Soviet and Russian mass media statutes, and currently serves as Russia’s Ambassador to the United Nations Educational, Scientific, and Cultural Organization (UNESCO). The Vice-Presidents of RAO are composer Vladimir Matetsky and poet Andrei Voznesensky. It seems that no collective entity similar to RAO has been established for film or television programming producers. However, at least one organization—the Moscow-based International Radio and Television Association (MART)—has expressed interest in assuming such a role. MART, which represents some 100 independent video producers and cable television operators, strongly support energetic enforcement under Copyright Statute. Because of the uncertainties about enforcement, doubts remain as to the significance of the Copyright Law, at least for the short term. However, it is safe to conclude that the Law will begin to have an important impact. It should provide a tremendous boost to domestic and foreign film producers, an assessment reflected in the decision by the MPAA to end its two-year-old boycott. The statute will provide a stimulus to programming production by those domestic broadcasters and cable operators who can afford the costs of such activities. On the other hand, the existence of a stronger copyright law has important consequences in terms of the evolution of a pluralistic media system. Piracy has been the instrument by which chaos produces a cacophony of new production and transmission voices in the former Soviet Union. The new statute may cause a shake-out among broadcaster, cable operators, and the operators of viewing salons—forced to choose between entry into costly licensing agreements or to risk the sanctions associated with unauthorized showings. State broadcasters and the more financially secure independents now have a powerful weapon against upstart entrants in the marketplace of ideas. Peter Krug |
Last Updated: 11/20/99 |
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© 1999 Post-Soviet Media Law &
Policy Newsletter |
