Russian Business refuses licensed music

Entrepreneurs in Russia have begun to refuse to purchase licensed music. This is due to the military operation, the change in the protection of the rights of copyright holders, the deterioration of their rights at the suggestion of the president and, accordingly, the termination of the work of publishers Universal Music Group, Sony Music and Warner Music Group in Russia. Recall that the current President of Russia imposed a ban on receiving license fees by foreign copyright holders without the consent of a special state commission

It will become more difficult to protect intellectual property in Russia, the owners of retail outlets in Russia refuse to buy licensed music from well-known publishing brands from foreign countries. Since, in connection with the declaration of a new intellectual property protection policy, I do not consider it reasonable to pay for licensed content. At the same time, the legislation on liability for illegal use of music and content has not changed, and fines can reach millions of rubles.

In fact, Russian business, in conditions of increasing isolation, refuses to deduct royalties to both the World Intellectual Property Organization and the Russian Copyright Society. As you know, copyright and payment to authors for any works is an important element of the rule of law and civil society, but due to recent military events and the possible use of nuclear weapons, the need for legal elements of intellectual property protection ceases to exist.

Earlier, the largest copyright holder Sony Music and Universal Music Group suspended operations in Russia and closed offices to ensure security and compliance with international legislation. In addition to publishers, the Pink Floyd music group stopped its activities in Russia by removing and restricting the use of its works from sites operating in Russia. According to the International Federation of Phonogram Producers (IFPI), Russia is among the 20 largest markets. In 2020, the volume of licensed music sales increased by 30% and amounted to $ 199 million.

Recall that on May 27, 2022, the current President of Russia, Vladimir Putin, issued the Morgenstern law, according to which foreign copyright holders will be able to receive payments from Russia only in rubles, subject to approval of receiving funds by a special state commission. At the same time, the copyright holders will be divided into friendly and unfriendly, as well as by the criterion of political views. In fact, such a measure was introduced in Russia so that Russian businesses could illegally use intellectual property objects of foreign copyright holders.

License payments in Russia

In 2022, you need to pay for the music of foreign copyright holders, which is used in commerce, even if they are copyright holders – foreign agents and from unfriendly countries (USA, Gibraltar. Austria, Belgium, Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Republic of Cyprus, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.)

Despite the fact that Foreign copyright holders have suspended their activities in Russia, the Civil Code of the Russian Federation regulating the turnover of intellectual Property is still in force and protects the rights of authors and copyright holders.
In accordance with paragraph 1 of Article 1229 of the Civil Code of the Russian Federation, the use of the result of intellectual activity, if such use is carried out without the consent of the copyright holder, is illegal and entails liability, up to criminal. The amount of the fine for illegal use of intellectual property is up to 5 million rubles, in accordance with Articles 1301 and 1311 of the Civil Code.

According to Article 1242 of the Civil Code, copyright holders, namely authors, performers, producers of phonograms and other holders of copyright and related rights in cases where the exercise of their rights individually is difficult or in cases where, in accordance with the law, the use of the results of intellectual activity is allowed without the consent of the copyright holders, but with the payment of remuneration, can use the help non-profit organizations (CCPs), for which, in accordance with the powers granted to them by the copyright holders, the management of the relevant rights on a collective basis is entrusted to the organization for the management of rights on a collective basis. Examples of such organizations are the Russian Copyright Society (RAO) and the All—Russian Intellectual Property Organization (WIPO).

The scheme of payment of remuneration to copyright holders through the OKUP is fixed in paragraph 1 of Article 1243 of the Civil Code and looks like this: a rights management organization on a collective basis concludes license agreements with users on granting them the rights transferred to it by the copyright holders, and collects remuneration from users for the use of these objects.

RAO and WIPO are authorized to manage the rights and collect remuneration in favor of authors with whom the relevant contracts have been concluded, as well as — in accordance with Article 1244 of the Civil Code — those authors with whom such contracts have not been concluded.

According to the presidential decree of May 27, 2022, RAO and WIPO will transfer payments to a specially created ruble account. The measure operates within the framework of the temporary procedure for fulfilling obligations under license contracts to copyright holders who have suspended their activities in Russia. Foreign copyright holders will be able to withdraw money with the permission of a special government commission.

Payments will be made even for the music whose authors have banned its use on the territory of the Russian Federation. Thus, the obligations of the payback to partners from abroad will be considered fulfilled. The copyrights of foreign performers will also be considered respected.