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RESEARCH COLLECTIVE MANAGEMENT ORGANIZATION SYSTEM

08 Nov

COLLECTIVE MANAGEMENT ORGANIZATION SYSTEM

(A CASE STUDY SOUTH KOREA AND INDONESIA)

1.1.     BACKGROUND

According to WIPO’s publication “Collective Management of Copyright and Related Rights”, Collective Management is the exercise of copyright and related rights by organizations acting in the interest and on behalf of the owners of rights.”

Copyright law gives the creator of a work the right to allow or to prohibit the use of his works; a playwright can consent to his work being performed on stage under certain agreed conditions; a writer can negotiate a contract with a publisher for the publication and distribution of a book; and a composer or a musician can agree to have his music or performance recorded on compact disc. These examples illustrate how the owners of the rights can exercise their rights in person.

In other cases, the individual management of rights is virtually impossible due to practical reasons. An author is not materially capable of monitoring all uses of his work; he cannot for instance contact every single radio or television station to negotiate licenses and remuneration for the use of his works. Conversely, it is not practical for a broadcasting organization to seek specific permission from every author for the use of each copyrighted work. An average of 60,000 musical works are broadcast on television every year. This means thousands of copyright owners would have to be approached for authorization. The impracticability of managing these activities individually, both for the owner and user, creates a need for collective management organizations, whose role is to bridge the gap between them in these key areas, among others.

A collection management organization (CMO) usually has the duty to maintain the following rights: the right of public performance, the right of broadcasting, the performing rights for dramatic works, the mechanical reproduction rights in musical works, etc.

For an example: the following organisations are involved in protecting copyrights in Indonesia.

  • KCI : Karya Cipta Indonesia
  • PAPPRI : Persatuan Artis Penata Musik Rekaman Indonesia (United Artists Records Playground Music Indonesia)
  • WAMI : Wahana Musik Indonesia
  • AHCDI : Asosiasi Hak Cipta Dangdut Indonesia
  • KCLBI : Karya Cipta Lagu Batak indonesia

 

The International Confederation of Societies of Authors & Composers (CISAC), is the principal organization granting performing rights. KCI also a member of The International Bureau of Mechanical Reproduction Rights (BIEM). Among collecting societies, it is the principal organization in the field of mechanical reproduction rights. Both of the principal organizations above are part of the World Intellectual Property Organization (WIPO).

The Republic of Indonesia has authorized the Directorate General of Intellectual Property Rights (DGIPR) under the Ministry of Law and Human Rights to manage intellectual property rights.The Directorate General of Intellectual Property is the government agency with the authority to manage and develop the IPR system in Indonesia, where copyright laws currently still need to be developed and improved

For example, in Indonesia Copyright Law No. 19 Year 2002, there are no provisions regarding copyright collection management institutes and other related rights. The concept of copyright collection management institutes and related rights are not well known. Until this year, there was no legal definition of CMO. Commonly, a CMO can be defined as an organization that has been given the power from the creator or right holder to manage the licensed material and to collect royalty payments from the owner of commerce. Having noCMO that is recognized and approved by the statewill lead to difficultiesin licensing and remuneration in any use of copyrighted works.

CMO constraints in Indonesia provide no strong legal basis to collect royalties, because there is no clear legal framework allowing CMOs to collect royalties from users of copyrighted material. Copyright users did not feel obliged to have a license and pay the royalties.

1.2.      OBJECTIVES OF RESEARCH

The focus of this research therefore is to do a comparative study of collective management organizations (CMO) in developed and developing countries. It compares the CMO systems of South Korea and Indonesia and attempts see if any lessons can be learned from South Korea’s model.

1.3.      DEFINITION OF COPYRIGHT AND RELATED RIGHTS

Before defining the concept of collective management and introducing its main features, let us look briefly at what copyright and related rights themselves amount to.

Copyright is the legal protection extended to the owner of the rights in an original work that he has created. It comprises two main sets of rights: economic rights and moral rights.

Economic rights are the rights of reproduction, broadcasting, public performance, adaptation, translation, public recitation, public display, distribution, and so on.

Moral rights include the author’s right to object to any distortion, mutilation or other modification of his work that might be prejudicial to his honor or reputation.

When a person creates a literary, musical, scientific or artistic work, he or she is the owner of that work and is free to decide on its use. That person (called the “creator” or the “author” or “owner of rights”) can control the destiny of the work. Since, by law, the work is protected by copyright from the moment it comes into being, there is no formally acknowledged system requireing registration or deposit, as a condition of that protection. Mere ideas in themselves are not protected; the expression of those ideas is protected.

Related rights are the rights that belong to the performers, the producers of phonograms and broadcasting organizations in relation to their performances, phonograms and broadcasts respectively.

Related rights differ from copyright in that they belong to owners regarded as intermediaries in the production, recording or diffusion of works. The link with copyright is due to the fact that the three categories of related rights owners are auxiliaries in the intellectual creation process since they lend their assistance to authors in the communication of the latter’s works to the public.

The Korea Copyright Act No. 9625, April 22, 2009 does not clarify the definition of copyright in general, but states the purpose of the law in Chapter 1 Article 1,

The purpose of this Act is to protect the rights of authors and the neighboring rights and to promote fair use of works in order to contribute to the improvement and development of the culture and related industries. The related rights are the rights that belong to the performers, the producers of phonograms and broadcasting organizations in relation to their performances, phonograms and broadcasts respectively.

This article explains coverage of author’s rights, neighboring rights, and related rights.

Indonesia Copyright Law No. 19 Year 2002 (Article 1 point 1).

Copyright shall mean an exclusive right for an author or the recipient of the right to publish or reproduce his work or to grant permission for said purposes, without decreasing the limits according to the prevailing laws and regulations and in article 1 point 9 : Related right shall mean the rights which are related to copyright, that is, the exclusive right for a performer to reproduce or to broadcast his/her performances; for a producer of phonograms to reproduce or to rent phonograpic works; and for broadcasting organization to produce, reproduce, or to broadcast its broadcasting works.

The laws of both countries mentioned above already have a description of Copyright and Related rights. The two main features are used to define the concept of collective management.

1.4.      COLLECTIVE MANAGEMENT ORGANIZATION HISTORY

By the 18th century, many European countries, such as France and England already had copyright laws that provide protection to the moral and economic rights of creators. However, in the beginning of copyright law was limited to the protection of books or works of literature. Later it emerged as the protection of works of art songs and music.

In France, CMOs for the copyright and related rights have existed for the theater since 1777. Sociele des Auteurs et Compositeurs Dramatiques by Beuamarchais Still, which is still in existence, was the first collective management group to represent creators and collect royalties. A CMO in the field of music began to manage the composer and song writer. This realization led to the foundation of a collecting agency, which was soon replaced by the still functioning Société des auteurs, compositteurs et éditeur de musique” (SACEM) in France in 1850. And then Società Italiana degli Editori Autori ed (SIAE) was founded in Italy in 1882, fur Gesseschaft Musikalische Auffuhrungs und Mechanische Vervielfaltigungsrechte (GEMA) was founded in Germany in 1903, and the Performing Right Society (PRS) in the UK and the American Society of Composers, Authors and Publishers (ASCAP) in the United States was founded in 1914.

The second stage is the development of reciprocal agreements between national organizations so royalties in one country with functions with regard to copyright that are similar organizations in other countries represent copyright works over each other in their respective countries. The process of forming the reciprocal agreements between organizations was initiated by the Confederation des Auters et Internationale Societes des Compositeurs (CISAC) which was founded in 1926 in Paris.

Cooperation developed rapidly among those organisations and they felt a need for an international body to coordinate their activities and contribute to a more efficient protection of authors‘ rights throughout the world. In June 1926 that the delegates from 18 societies set up the International Confederation of Societies of Authors and Composers (CISAC). The membership of CISAC has been growing since then and now also includes, in addition to the more traditional ones, societies dealing with other types of works (such as works of fine art and audiovisual works. CISAC still to represents the creators, composers, and publishers in the world.

1.5.      OBJECTIVES / FUNCTIONS OF CMO

The basic principles of copyright are that a creator or holder of a copyright on a creation or related rights holders upon products related rights has a right to gain the rewards results use creation or product related rights for the benefit of a commercial nature. Management of this right may be conducted by institution management or directly by the creator or copyright holders. Usually this is done via a collecting society or collecting management organisation (CMO).

A CMO is an organization that manages copyrights and related rights on behalf of the holder of the rights. As already explained, the creator has the right to announce and reproduce a copyright, however the CMOis responsible for managing the copyrights to assure that royalties are paid . Therefore the presence of these organizations that manage/regulate the taking power from the creator and giving it to royalty/copyright holders who take royalties from communities that do the commercialization of a copyright. The existence of these organizations helps the creator or copyright holder obtain an advantage over the commercialization of the dramatic works.

1.6.      LEGAL STATUS OF CMO

WIPO’s publication “Collective Management of Copyright and Related Rights”, states that, “Collective Management is the exercise of copyright and related rights by organizations acting in the interest and on behalf of the owners of rights.”

Indonesia has a legal framework for the protection of intellectual property rights including copyright and related rights contained in the Copyright Act number 19 of 2002. Article 1 point 1 concerning Copyright, states that “Copyright shall mean an exclusive right for an Author or the recipient of the right to publish or reproduce his work or to grant permission for said purposes, without decreasing the limits according to the prevailing laws and regulations”.

Article 1 Point 9 states, “Related rights shall mean the rights which are related to Copyright, that is, the exclusive right for a performer to reproduce or to publish his/her performances; for a Producer of Phonograms to reproduce or to rent phonographic works; and for a Broadcasting Organization to produce, reproduce, or to broadcast its broadcasting works.”

If another party intends to use the copyright or related right work, he or she has to get the permission from the creator or Copyright holder,. This permission is commonly known as a “license”. According to the article 1 point 14, that license shall mean a permission granted by the copyright holder or the holder of related right to another party to announce and/or to reproduce his/her works or products of his/her related rights under certain requirements.

The relationship between the license and the royalty is clearly stated in article 45 point 3. In accordance with the term of this article the implementation of the license shall be accompanied by the obligation to pay royalty to the copyright holder by the licensee based on the agreement between the two parties using the agreement of professional organization as a guide, unless otherwise agreed.

Creators of the law have created a mechanism that for giving permission for use or prohibiting others from exploiting copyrighted work. This includes any CMO appointed by the creator who must obtain permission from the creator. A CMO can act and perform their duties to help creators control the use of his creation by others. The objective of the CMO is bridge the communication between the creator or right holder to arrange, collect, and to distribute royalties. A CMO can work by through power of attorney and through a license agreement.

There are constraints on CMOs in Indonesia. CMOs have no strong legal basis to collect royalties because there is no clear legal basis authorizing the CMO to collect royalties from copyright users. It was making the copyright users feel not obliged to have a license and pay the royalties.

Korea has a legal framework for the protection of intellectual property rights including copyright protecting the rights of authors and neighboring rights contained in the Copyright Act number 9625 of 2009. As mentioned in Chapter 1Article 1 the purpose of this act is to protect the rights of author and the neighboring rights and promote fair use of works in order to contribute to the improvement and development of culture and related industries.

Chapter 3 Sections 1 through 6 explains the rights of neighbors. It details the general rules of neighboring rights, rights of performers, rights of producers of phonograms, rights of broadcasting organizations, duration of neighboring rights, and limitation, transfer by assignment, exercise, etc.

Chapter 2 Section 5 Articles 50 through 52 explain about exploitation of works under statutory license. Exploitation of works in which the owner of author’s property right is not known; Brodacasting of works made public; and Production of commercial Phonograms.

Regulation of CMO is set in Chapter 7 Article 105 to Article 111 of Korea Copyright Act No. 9625, April 22, 2009. It is as follows:

Article 105 (permit, etc. For Copyright Management Service)

(1) Any person who intends to engage in copyright trust services shall obtain a permit from the Minister of Culture, Sport and Tourism as prescribed by the Presidential Decree, and any person who intends to engage in copyright agency or brokerage services shall report to the Minister of Culture, Sport and Tourism as prescribed by the Presidential Decree. <Amended on Feb. 29, 2008>

(2) Any person who intends to engage in copyright trust services pursuant to Paragraph (1) shall satisfy the following conditions, draw up the rules of copyright trust services as determined by the Presidential Decree, and submit them with an application for permit for copyright trust services to the Minister of Culture, Sport and Tourism <Amended on Feb. 29, 2008>

(3) Any person falling under any of the following categories shall not be eligible for copyright trust services or copyright agency or brokerage services (hereinafter referred to as copyright management services)

(4) Any person who has obtained a permit for copyright management services, or who has reported to the Minister of Culture, Sport and Tourism in accordance with Paragraph (1) (hereinafter referred to as “copyright management service provider”) may collect fees for his services from the owner of authors property rights or other interested persons.

(5) The rate and amount of fees as prescribed under Paragraph (4) and the rate and amount of royalties that copyright management service providers may collect from users shall be determined by the copyright management service provider subject to the approval of the Minister of Culture, Sport and Tourism; provided that this shall not apply to a person who has reported to the Minister of Culture, Sport and Tourism as a copyright agent or broker.

(6) In the case of the approval as provided under paragraph (5), the the Minister of Culture, Sport and Tourism shall ask for deliberation by the Korea Copyright Commission as prescribed under Article 112, and the Minister may set the effect period of approval or may approve the application after correcting the contents thereof, if necessary.

(7) In the case where an application for approval with regard to the rate and amount of royalties is submitted or where the approval for such application is made in accordance with Paragraph (5), the Minister of Culture, Sport and Tourism shall notify the contents thereof pursuant to Presidential Decree.

(8) The Minister of Culture, Sport and Tourism may amend the contents approved pursuant to Paragraph (5) in order to protect the rights and interests of the owner of author’s property rights and other interested persons or to promote convenient use of works, etc.

Article 106 is the “Obligation of Copyright Trust Service Providers.” Article 107 is the “Claim for Perusal of Documents.” Article 108 is “Supervision.” Article 109 “Revocation, Etc. Of a Permit” Article 110 is titles “Hearing” while Article 111 is “Surcharge.”

Korea’s copyright laws above, it is clear how the recruitment rules accommodate CMOs, how to give permission to CMOs, how anyone can set up a CMO, and what are the constraints are placed on CMOs. The question of how to determine a royalty arrangement, and the regulation of CMOs is very important. CMOs in Korea in must carrying out their duty to manage copyright and are expected to contribute significantly to improving the welfare of creators and copyright holders. This is expected to have an impact on increasing the growth of the national economy.

1.7       THE PROVISIONS APPOINTMENT AND RECRUITMENT AS CMO

Appointment and recruitment as a CMO assists the creator in enforcing their rights and enables users to ask for copyright permission for use of copyrighted material. Appointment conditions and recruitment as the CMO should be regulated by law, which means there should be a clear legal basis authorizing the CMO to collect royalties from users of songs or music. In addition, the government should facilitate and support the CMO in performing these duties.

A copyright collective management system, base on the copyright act of Korea, has been operating. Korea has many kind of collective management organizations. They were authorized by the Minister of Culture and Public Information in 1988, to provide collective management services. Thereafter, other collective management organization have obtained permission for collective management from the Minister. Twelve collective management organizations, each covering different categories of work, are in operation with authorization from the Minister of Culture, Sport and Tourism. Every collective management organization oversees specific economic rights, publication rights, neighboring rights, or licensing of rights on behalf of the holders. This system is working.

In Indonesia today, almost no concrete government policies support CMOs. This is because there is no mention of CMOs in Indonesia’s copyright laws. Hence the reason why we need regulation of CMOs in the law is so the government can mandate and actively enforce the economic rights of creators through CMOs.In other words if the roles of CMOs are set in law, the government must support the work of CMOs as required by law.

1.8       STRUCTURE

The structures of collective management organisations vary slightly depending on the choice of its regulation, legal regime involved and the form and the extent of governmental supervision, and whether they are private, public or semi-public societies. A general structure of a CMO consist of a general assembly constituted by members and principals of the CMO which elect a board, president or chairpersons. Committees are appointed by the board; the general administration/commission is headed by a chief executive officer which runs the day-to-day affairs of the CMO. It also determines the procedures through which authors become members and principals of the CMO and how works are assigned to a CMO.

12 collective management organisations in Korea

Category Organization Major Copyrights Managed
Music KOMCA (Korea Music Copyright Association) Right of public performance, right of broadcasting, right of reproduction and right of interactive transmission of music works.
KAPP (Korea Association of Phonogram Producers) Neighboring rights of phonogram content
FKMP (Federation of Korea Music Performers) Neighboring rights of music performers
Literature KTRWA (Korean TV & Radio Writers Association) Right of broadcasting, right of reproduction, right of distribution, right of interactive transmission, and right of production of derivative works for broadcast scripts
KOSA (Korean Society of Authors) Right of reproduction, right of distribution, right of interactive transmission, and right of broadcasting of literary works
KSWA (Korean Scenario Writers Association) Copyrights of scenarios used in movies, etc
KRTRA (Korea Reprographic & Transmission Rights Association) Right of reproduction and right of interactive transmission of literary works
Cinema-tographic Work KFPA (Korean Film Producers Association) Right of reproduction and right of interactive transmission of movie films
KMVIA (Korea Movie & Video Industry Association) Right of public performance of movie film (applies to performances through video and DVDs, etc)
Broadcast KBPA (Korea Broadcasting Performers Association) Neighboring rights of performers such as tv, actors, voice actors, etc.
Public and Media KOCCA (Korea Creative Content Agency) Copyrights of public cultural content in digital form
KPF (Korea Press Foundation) Copyrights of news

Table 1: Copyright collective management refers to on-going management of economic rights, publication rights, neighboring rights, or rights of licensing these rights on behalf of the holders of such rights.

Korea Music Copyright Association (KOMCA) for example, launched in 1964, recieved permission to serve as a collective management organization in 1988 and has approximately 12.000 members as of 2010. It is the largest in terms of the collection of copyright royalties among such organizations. KOMCA manages the right of public performance, right of broadcasting, right of reproduction and right of interactive transmission of music works. KOMCA has a purpose: to protect and represent right of music creators; to issue licenses music users; and to contribute to development of music culture. KOMCA has business activities: to manage copyright of musical works; to research, study and promote musical works; to make an agreement of reciprocal represtation with foreign societes to protect copyright mutually and to exchange information on copyright works; to contribute to promotion of music culture; and to do its business necessary to achieve its purpose.

Komca

Picture : KOMCA Organization Chart

KOMCA membersip is composed of: Composers; Authors; Arrangers; Music Publishers; Successor; etc. Those who perform, broadcast or transmit their own works to the public by wire / wireless means, or make their works available to the public, or publish their own works are also eligible for membership under Article 4 of the Articles of Association as are those who make a copyright trust contract with KOMCA.

KOMCA has major clients including record companies; karaoke manufactures; broadcasters (TV, Radio, Cable TV Operators, etc); mobile operators; online service providers; background music providers; concert promoters; karaoke bars; department stores, and hotels..

 

1.9       RECOMMENDATION

There needs to be improvements to the Law no. 19 Year 2002 on Copyright. The implementation of the Act is still not effective in reaching its desired goals. Rules regarding the strengthening of the position and role of the CMO as the sole Collective Management Agency should be made. It should be tasked with managing the rights of composer and musicians in Indonesia so the CMO can gain recognition the public eye.

CMOs should be regulated by law to function effectively in managing copyrights. They are expected to contribute significantly to improving the welfare of creators and copyright holders and will have an impact on increasing the growth of the national economy. Thus, users will no longer argue with reason CMOs in Indonesia are not binding, and in the end user is obliged to uphold the license agreement and pay royalties.

A CMO is a non-profit, non-governmental legal entity authorized by the creator, copyright holder, or holders of related rights to manage some economic rights and collect and distribute royalties. To prevent the overlapping scopes of work, CMOs should be divided based on their field of work and the authority to manage the field categories of copyright works or works related rights. In Korea there are 12 CMOs, each in charge of one category of copyrighted works or related rights. For example Korea Music Copyright Association (KOMCA) manages the right of public performance, right of broadcasting, right of reproduction and right of interactive transmission of musical works.

CMOs should get support from authors and copyright holders and must have a system of administrative management and financial capabilities for collecting and distributing royalties based on a system of financial administration and accounting, and establish asset management systems in accordance with applicable law

A CMO must obtain an operating permit from the government. In this case the Ministry of Law and Human Rights of the Republic of Indonesia as prescribed by the Presidential Decree. The Directorate General of Intellectual Property Rights under the auspices of the Ministry of Law and Human Rights has the authority to open the registration CMOs and collect accurate data on the CMOs used to provide input to the Ministry of Law and Human Rights.

With a strong legal basis, CMO users have the right to license a song or music and entitled to charge and collect royalties from users of songs or music. Determination of royalty rates can be determined and jointly agreed upon jointly with the approval from the ministry of law and human rights. The Directorate General of Intellectual Property Rights is involved in providing input to the Ministry of Law and Human Rights against royalty rates that have been determined and agreed jointly between the user CMO song or music. CMOs should make a final financial report each year and it should be available to the media and the report should be forwarded to the Ministry of Law and Human Rights in this Directorate General of Intellectual Property Rights.

Royalty rates can be determined and agreed upon jointly by the user and CMO. With the royalty rate as a guide, we can refer to KOMCA Key Royalty Rates to help define the value of royalties.

CMOs must have a good relationship with clients. For example, they should work with record companies, karaoke manufactures, broadcasters (TV, radio, cable TV operators, etc); mobile operators, online service providers; background music providers, concert promoters; karaoke bars; department stores, and hotels In practice all the parties are expected to get together legitimize copyright. The CMOs should be recognized as institutions whose role is to manage the copyrights of composers and collect royalties transparently by providing a clear understanding of the importance of copyright protection. In this way royalty collection in Indonesia will be as strong as in other countries. Indonesian composers will be more prosperous, feel respected, and their rights protected by law.

The Ministry of Law and Human Rights will oversee the CMO supervisor in coordination with Directorate General of Intellectual Property Rights. If CMOs break rules or perform poorly, the Ministry of Law and Human Rights are entitled to periodic reprimands, penalties can even revoke the operating license of a CMO.

 

By. Krissantyo 08/11/2012

 
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Posted by on November 8, 2012 in Office

 

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