Use and protection of music copyright and related rights

Copyright

Paragraph 1 of Article 1229 of the Civil Code of the Russian Federation provides that a citizen or legal entity who has an exclusive right to a result of intellectual activity or a means of individualization (right holder) has the right to use such a result or such a means at his own discretion in any way that does not contradict the law.

The copyright holder may, at his own discretion, permit or prohibit other persons from using the result of intellectual activity or means of individualization. The absence of a prohibition is not considered consent (permission).

Other persons may not use the corresponding result of intellectual activity or means of individualization without the consent of the copyright holder, except in cases provided for by the said Code. The use of a result of intellectual activity or a means of individualization (including their use in the ways provided for by the same Code), if such use is carried out without the consent of the copyright holder, is illegal and entails liability established by this Code and other laws, except for cases where the use of the result of intellectual property activities or means of individualization by persons other than the copyright holder, without his consent, is permitted by the said Code.

Article 1259 of the Civil Code provides that the objects of copyright are works of science, literature and art, regardless of the merits and purpose of the work, as well as the method of its expression, in particular these include literary works and musical works with or without text.

In accordance with paragraph 1 of Article 1270 of the Civil Code, the author of a work or other copyright holder has the exclusive right to use the work in accordance with Article 1229 of this Code in any form and in any manner that does not contradict the law (exclusive right to a work), including in the ways specified in paragraph 2 of the said article.

Article 1301 of the Civil Code provides that in cases of violation of the exclusive right to a work, the author or other copyright holder, along with the use of other applicable methods of protection and liability measures established by this Code (Articles 1250, 1252 and 1253), has the right in accordance with paragraph 3 of the article 1252 of the said Code, demand, at your choice, from the violator, instead of compensation for losses, payment of compensation:

1. in an amount from ten thousand rubles to five million rubles, determined at the discretion of the court based on the nature of the violation;
2. twice the cost of counterfeit copies of the work;
3. twice the cost of the right to use the work, determined on the basis of the price that, under comparable circumstances, is usually charged for the lawful use of the work in the manner used by the infringer.

Related rights

According to subparagraphs 1 and 2 of paragraph 1 of Article 1304 of the Civil Code, objects of related rights are recognized as performances by performing artists and conductors, productions by stage directors (performances), if these performances are expressed in a form that allows their reproduction and distribution using technical means; and phonograms, that is, any exclusively sound recordings of performances or other sounds or their representations, with the exception of a sound recording included in an audiovisual work.

In accordance with Article 1317 of the Civil Code, the performer has the exclusive right to use the performance in accordance with Article 1229 of this Code in any way that does not contradict the law (exclusive right to perform), including the methods specified in paragraph 2 of this article.

The producer of the phonogram has the exclusive right to use the phonogram in accordance with Article 1229 of this Code in any way that does not contradict the law (exclusive right to the phonogram), including the methods specified in paragraph 2 of this article.

Article 1311 of the Civil Code provides that in cases of violation of the exclusive right to an object of related rights, the owner of the exclusive right, along with the use of other applicable methods of protection and liability measures established by this Code (Articles 1250, 1252 and 1253), has the right in accordance with paragraph 3 Article 1252 of this Code, at your choice, require the violator to pay compensation instead of compensation for losses:

1. in an amount from ten thousand rubles to five million rubles, determined at the discretion of the court based on the nature of the violation;
2. twice the cost of counterfeit copies of the phonogram;
3. twice the value of the right to use the object of related rights, determined on the basis of the price that, under comparable circumstances, is usually charged for the lawful use of such an object in the manner used by the violator.

Thus, the concept of “music” in the current legislation may include such objects as “a musical work with or without text”, “phonogram”, “performance”, and even “literary work” - both together as part of a phonogram, and separately.

Thus, in paragraph 111 of the Resolution of the Plenum of the Supreme Court dated April 23, 2019 No. 10 “On the application of part four of the Civil Code of the Russian Federation” it is explained that a musical work with or without text (object of copyright), its performance by the performing artist and the phonogram of the performance represent are independent results of intellectual activity, the exclusive rights to which may belong to different persons. The order is carried out in relation to each right separately. Violation of rights for each such result is of an independent nature.

The rights of the phonogram producer are recognized and valid regardless of the existence and validity of copyrights and the rights of performers. At the same time, paragraph 2 of Article 1323 of the Civil Code establishes the need for phonogram producers to exercise their rights while respecting the rights of authors of works and the rights of performers.

Court practice

Russian courts also point out that the rights of the phonogram producer are derived from the rights of authors and performers. Thus, the Fourth Arbitration Court of Appeal, when considering case No. A10-6900/2017, noted (page 10 of the resolution dated June 21, 2018) that “intellectual rights to a derivative object are recognized regardless of the validity of intellectual rights to the original object, but in order to exercise the rights it is necessary to comply with intellectual rights rights to the original object (clause 3, 4 of article 1260, clause 3 of article 1303, clause 2, 3 of article 1315, clause 2 of article 1323 of the Civil Code of the Russian Federation).”

This conclusion was confirmed by the Seventeenth Arbitration Court of Appeal when considering case No. A60-28720/2009 (page 9 of the decision dated 02/25/2010): “ And in the case under consideration, the consent of the author of the work to its use is a necessary condition for the implementation of the related right of the phonogram producer.”.

The Supreme Arbitration Court came to a similar conclusion in Ruling No. VAS-4308/09 dated April 22, 2019: “Refusing to satisfy the claims, the courts referred to the fact that the production center used musical works in the exercise of related rights to phonograms...

This conclusion of the courts indicates the incorrect application of the rules on copyright for musical works, and related rights to phonograms...

It is unlawful for the courts to refer to the fact that the production center used only a phonogram, and not the musical works themselves...

Phonogram is any purely sound recording of a performance or other sounds...

The producer of a phonogram exercises his rights within the limits of the rights obtained under an agreement with the performer and author of the work recorded on the phonogram….

Under such circumstances, the actions of the production center are a violation of the plaintiff’s exclusive right to musical works, and judicial acts are subject to cancellation .”

Thus, in order to use a phonogram, it is necessary to obtain permission (conclude an agreement) with the owner of the exclusive rights to a musical work, performance, and in some cases, to a literary work. In case of failure to obtain such permission, the use of each of these objects as part of one phonogram will be recognized as a separate violation.

The Ninth Arbitration Court of Appeal came to a similar conclusion in its ruling dated March 17, 2021 in case No. A40-326511/2019.

According to Article 1254 of the Civil Code of the Russian Federation, if a violation by third parties of the exclusive right to a result of intellectual activity or to a means of individualization, for the use of which an exclusive license has been issued, affects the rights of the licensee received by him on the basis of a license agreement, the licensee may, along with other methods of protection, protect his rights in the ways provided for in Articles 1250 and 1252 of this Code.

The burden of proof in such cases is distributed as follows: the defendant is obliged to prove compliance with the requirements of the law when using objects of copyright and related rights. The plaintiff must confirm the fact that he has exclusive rights to protect them, as well as the fact that these rights are used by the defendant.

By virtue of Part 1 of Article 64, Articles 71 and 168 of the Arbitration Procedural Code of the Russian Federation, the arbitration court establishes the presence or absence of circumstances justifying the demands and objections of the persons participating in the case, as well as other circumstances important for the correct consideration of the case, based on the evidence presented.

Violation of the exclusive right and justification of compensation

According to the explanation contained in paragraph 56 of Resolution No. 10, the use of the result of intellectual activity or a means of individualization in several ways represents, as a general rule, a corresponding number of cases of violation of the exclusive right.

At the same time, the use of the result of intellectual activity or a means of individualization by one person in different ways aimed at achieving the same economic goal constitutes one violation of an exclusive right. For example, storage or transportation of counterfeit goods, provided that they are completed by the actual introduction of this product into civil circulation by the same person, are an element of the introduction of the goods into civil circulation and do not form separate violations in this case. The sale of goods with their subsequent delivery to the buyer constitutes one violation of an exclusive right.

The above provision is often applied by courts when considering cases related to the protection of exclusive rights to musical works/phonograms in the event of their unauthorized use on streaming platforms - it should be borne in mind that in this case, use in several ways has a single economic goal, namely the organization of access to users of the music service, posted on the above site, the opportunity to listen to musical works by various authors and performers (ruling of the Intellectual Rights Court dated November 7, 2019 in case No. A40-308292/2018). This circumstance can be used as a basis for reducing the amount of compensation if the plaintiff claims multiple violations, justifying this by using the same object in several ways.

It should be borne in mind that there are other grounds for reducing the amount of compensation.

Thus, according to paragraph three of paragraph 3 of Article 1252 of the Civil Code, if the rights to several results of intellectual activity or means of individualization are violated by one action, the amount of compensation is determined by the court for each unlawfully used result of intellectual activity or means of individualization. Moreover, if the rights to the corresponding results or means of individualization belong to one copyright holder, the total amount of compensation for violation of the rights to them, taking into account the nature and consequences of the violation, may be reduced by the court below the limits established by this Code, but cannot be less than fifty percent of the amount minimum amounts of all compensation for violations committed.

In accordance with the explanation of the highest court set out in paragraph 64 of Resolution No. 10, the provisions of paragraph three of paragraph 3 of Article 1252 of the Civil Code on reducing the amount of compensation are subject to application in cases where one action violates the rights to several results of intellectual activity or means of individualization (hereinafter - in case of multiple violations), in particular, when one action violates the rights to:

• several results of intellectual activity or means of individualization, interconnected: a piece of music and its phonogram; the work and the trademark in which this work is used; trademark and name of place of origin of the goods; trademark and industrial design;
• several results of intellectual activity or means of individualization that are not related to each other (for example, in the case of the sale by one person of a product with different trademarks illegally applied to it or the distribution of a material medium in which several different copies of works are expressed).

The above provision of the Civil Code on reducing the amount of compensation can also be applied in cases where there are several offenses committed by one person in relation to one result of intellectual activity or means of individualization and constituting a single process of using the object (for example, reproduction of a work and its subsequent spreading).

The provisions of paragraph three of paragraph 3 of Article 1252 of the Civil Code apply only if there are multiple violations and only if the defendant declares the need to apply an appropriate procedure for reducing compensation.

Thus, the features specified in this article related to the protection of copyright and related rights to music may allow the copyright holder/exclusive license holder to more effectively protect their rights, and the defendant in such cases to use these features to reduce the size of the stated claims.