[A2k] Brazil Passes Law Regulating Copyright Collecting Societies Passes in Brazil - It Revamps the Whole System

Ronaldo Lemos ronaldolemos01 at gmail.com
Sun Jul 21 17:57:38 PDT 2013


Dear list members,

A few months ago I asked for your support to send me materials and cases
regarding how copyright collecting societies had been supervised and
regulated worldwide. I received a lot of contributions, with some extremely
useful ones.

Accordingly, as promised, it is time to give back. Please find blow a short
report about the major changes in Brazilian law regarding the supervision
and organization of collecting societies.

The list's contributions were invaluable to the final steps of the debate.

Best regards,

Ronaldo



*Congress Passes New Law Regulating Copyright Collecting Societies in Brazil
*

The Brazilian Congress  has approved landmark legislation regulating and
changing the structure of the Copyright Collecting Societies (CCSs) in
Brazil. The new law, which was drafted as a result of the Parliamentary
Inquiry Commission (PIC) that investigated collecting societies,
establishes a supervision role to the Ministry of Culture in regard to
CCSs. The law, as well as portions of the PIC’s report, were originally
drafted by a team led by professor Ronaldo Lemos, at the Center for
Technology & Society at Fundacao Getulio Vargas in Brazil (see Ars
Technica’s coverage of the report here:
http://arstechnica.com/tech-policy/2012/05/copyright-cops-behaving-badly/).

It was then improved throughout the intensive contributions given by a
number of major artists in Brazil, such as Gilberto Gil, Caetano Veloso,
Roberto Carlos, Carlinhos Brown, Milton Nascimento and many others, who
supported the new bill.

The approval of the bill is a successful conclusion to more than 10 years
of debate in Brazil regarding the problems and role of collecting
societies. This debate involved the academia (such as the Center for
Technology and Society’s Open Business III, and A2K Brazil projects,
supported by IDRC and OSI respectively), as well as artists, civil society,
and a number of individuals concerned with the lack of transparency in the
whole system.

The rapporteur of the project was Senator Humberto Costa, and other
prominent supporters of the bill include congress member Jandira Feghali,
as well as Senators Lindberg Farias, Randolfe Rodrigues and Pedro Taques.
The law was finally passed by Congress on July 10th, and now awaits
presidential sanction. Political analysts believe the president will
approve the law as it is, with no vetoes, especially after she had a
30-minute audience with singer Roberto Carlos, one of the most famous in
musicians in Brazil and supporter of the, of whom the president declares
herself as a fan.

For more information, please see below the translation of the article
published by Professor Ronaldo Lemos at Folha de Sao Paulo’s website (a
major newspaper in Brazil), describing the whole approval process, and some
of the changes to be implemented (translation follows below and the link to
the original article is here:
http://translate.google.com.br/translate?hl=en&sl=pt&u=http://musica.uol.com.br/noticias/redacao/2013/07/04/opiniao---nova-lei-que-fiscaliza-o-ecad-e-vitoria-dos-artistas.htm
):


New law that oversees Copyright Collecting Societies in Brazil is a victory
for artists

Ronaldo Lemos *
Special to UOL/Folha

Brazil is very close to create a body with the authority to supervise its
copyright collecting societies, centralized at the organization called
“ECAD”, through Bill 129, originating in the Senate. With that the country
should end more than 20 years of a tragic exceptionalism: Brazil is one the
only countries in which the entity that collects and distributes copyright
does not have any form of oversight or regulation. This happened since when
president Collor abolished in 1990 the organ that was competent to such
supervision, which was never recreated.

Even the United States, a country where there is competition between
collecting societies, have a complex system of supervision to its "Ecads",
including defense mechanisms of artists and competent courts to oversee
abusive prices.

In Brazil the situation was worrying: there is an entity that has a
monopoly on its activities, but no supervision whatsoever. This violates
the basic principle that there should never be an unregulated monopoly.

Distortions generated by this situation penalized many Brazilian artists
and creators. In their majority, even those at the top of the hall of fame,
such as Roberto Carlos, Gilberto Gil, Ivan Lins, Caetano Veloso, among many
others, felt uncomfortable and dissatisfied with an entity that collected
more money each year, but operated without transparency, and with a poor
standard of service that could not be compared to that offered by similar
organizations in other countries.

*"The internet has propelled a huge number of new artists, DJs in
electronic music artists, indie bands, projects homemade experimental
music. None
of them felt represented by ECAD. " *

In addition, the directors of ECAD and its 9 associations had been in their
same functions for almost a lifetime. Many are in the same job for 20 or 30
years without renewal or change.

Finally, the entity suffered from problems of representativity. The
internet has propelled a huge number of new artists, DJs in electronic
music artists, indie bands, home ased experimental musicians etc. None of
them felt represented by ECAD. And that perception was real: the system of
internal representation was obscure and obsolete. Instead of a democratic
criterion (one person one vote), plutocratic criterion was adopted
(societies that collected more money had more votes). This meant that only
two associations (among the existing 9) concentrated all the
decision-making at ECAD, shielding it not only from external oversight, but
also regarding internal audits, which could be have been done by the
artists themselves.

Thus, complaints that ECAD was a black box multiplied. They culminated in
the creation of the Parliamentary Inquiry Commission (PIC) of the Senate
(which is worth mentioning, I participated by invitation of the Senate as a
lawyer expert on the subject, helping to draft the law and the final
report). The bill which now is approved originates in the work of the PIC,
which presented a detailed report pointing all problems at ECAD. Another
important element is that the work of the PIC helped inform Cade, the body
responsible for economic defense in Brazil, which ended up condemning ECAD
of forming a illegal cartel and of abuse of dominant economic position.

*"With the passage of the bill by the Senate, Brazil now has the chance to
have one of the most advanced laws from the comparative perspective on the
global collection and distribution of copyright." *

That was the spark that was lacking for the artists to articulate around
this important cause. With this, the artists became immediately
protagonists in the debate on the Senate bill. Well organized, they
presented several suggestions for modification and improvement of the
original draft, which were accepted and incorporated into the bill,
improving the draft.

With the passage of the bill by the Senate, Brazil now has the chance to
have one of the most advanced laws from the comparative perspective on the
global collection and distribution of copyright.

The project brings many achievements and solutions, many sophisticated and
well-designed. For example, states that the associations that make up the
ECAD now have all the same number of votes (one vote per membership). This
ingenious solution makes the artists decide to join each of them not by
political reasons, but for reasons of efficiency. Before the artists
basically become affiliated to only two associations, precisely those who
controlled the whole system (the others were associations that had
practically no decision-making power).
*5 POINTS OF THE NEW LAW***

*1) The associations of composers and performers that make up the ECAD must
be qualified by the Ministry of Culture, proving that they meet the
conditions to administer effectively and transparently.**

2) The management fee charged by ECAD cannot exceed 15% of the amount
collected by way of royalty payments.

3) Radio and TV will be required to make public the complete list of works
that were broad cast, and the price to be paid must reflect the reality of
the proportional usage of the songs. Today, this distribution is effected
by sampling.

4) Creation of a unified register of works that avoid distortion of data
and duplicate titles. Authors can monitor the management of their right
over the internet.

5) The associations that make up the ECAD can only be addressed by the
copyright holders, ie, composers and performers. They have fixed term of
three years with the right to reelection. *

As of now, the association to offer the best services and the lowest price
(and the smaller administration fee) will attract more artists and
creators. The
signal to decision-making is no longer a political signal (how many votes
one association has), erroneous in principle, but becomes a signal of
efficiency.

In addition, the Ministry of Culture will have the prerogative to oversee
ECAD and even revoke its license to operate in the event of severe abuse
(considered the principle of due process). The new law requires audits to
ensure transparency, efficiency, modernization and that artists and
creators must be the center and most important element in the collection
and distribution of royalties.

It makes sense. In other countries artists have access to the statement of
their due rights to receive royalties electronically, like a bank account. In
Brazil, something like that was still far from being implemented.

The law also states that the collection of copyright must be in proportion
to their use. It makes sense. A restaurant that plays music only at
lunchtime, for three hours per day, must pay in proportion to such use. A
restaurant which, in turn, is open 24 hours and play music throughout this
period should pay more.

Before this change everyone paid the same price. If the restaurant played
one song during the month, it would have to pay the “full” price on the
whole repertoire of songs from ECAD. It was an all or nothing system. One
could either pay for the full repertoire, or could not publicly perform
music legally at all.

The list of achievements of the law that oversees ECAD is huge. It is
practically a new dawn for artists and creators Brazilians. Many of them
involved in the struggle for the improvement of the system for over 15
years. It was a fight that seemed inglorious. But now, thanks to the
leadership and coordination occurred among the artists themselves, it is
about to become victorious with the forthcoming presidential sanction. The
creator wins, as well as the new generation of artists who had not being
feeling represented by ECAD. And wins society as a whole, which watches in
first row the possibility of ECAD finally start getting in tune with the
values of the 21st century.


** Ronaldo Lemos is a lawyer and professor of intellectual property in
Brazil.*



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