Foreign agents may be deprived of payments for copyright and related rights

The State Duma is discussing the introduction of a ban on payments to foreign agents for copyright and related rights. The authorities have already passed a law completely banning advertising on foreign agents’ resources. Media market participants fear that the new measure threatens the business of monetizing intellectual rights as a whole. Lawyers explain that the measure contradicts international copyright conventions, in which the Russian Federation has not ceased to participate, and not only foreign agents may suffer.

State Duma Speaker Vyacheslav Volodin on March 5 in his Telegram channel reported that deputies are receiving proposals to prohibit the payment of remuneration for copyright and related rights to foreign agents (musicians, artists, writers) who are engaged in discrediting the armed forces of the Russian Federation. Head of the State Duma Committee on Security and Anti-Corruption Vasily Piskarev (quoted by TASS) clarified that the initiative will be discussed next week.

This is not the first step by the Russian authorities to limit the income of foreign agents. State Duma February 28 accepted a law on a complete ban on advertising on all resources of foreign agents on any platforms, as well as their promotion. The advertiser and distributor are responsible for violation.

Market participants interviewed by Kommersant believe that the new initiative threatens any business of monetizing copyright and related rights in Russia.

To implement the measure, changes may be made to the Federal Law “On control over the activities of persons under foreign influence”, where they will add a clause prohibiting the receipt of remuneration for the copyright and related rights of a foreign agent, says lawyer, founder of the Music Industry Lawyers community Ilya Chamukha. The Ministry of Justice, which monitors compliance with the law on foreign agents, has the right to issue a warning if it becomes known about the payment, “in case of failure to comply with the order, the person can be brought to administrative responsibility under clause 42 of Art. 19.5 of the Code of Administrative Offenses of the Russian Federation,” the lawyer clarified. The administrative fine will range from 30 thousand to 50 thousand rubles, for officials – from 70 thousand to 100 thousand rubles, for legal entities – from 200 thousand to 300 thousand rubles.

Technical director of the publishing house Freedom Letters, Vladimir Kharitonov, believes that the changes will also affect the fourth part of the Civil Code of the Russian Federation, which regulates additional liability for gross violations of exclusive rights in the field of intellectual property.

If the announced measures are taken, notes Ilya Chamukha, foreign agent musicians will be forced to take back their catalogs from Russian companies and publish in the Russian Federation through intermediaries.

International companies working with the delivery of content to the country can also transfer settlements with foreign agents and streaming services to foreign jurisdictions, Kommersant’s interlocutor in the music market believes. With a complete ban on the monetization of content of foreign agents, it will be prohibited to pay even foreign intermediaries, Mr. Chamukha objects. Thus, Yandex Music will not be able to pay remuneration to the distributor whose catalog contains Morgenstern’s track (recognized by the Ministry of Justice of the Russian Federation as a foreign agent), “right holders who own the artist’s catalog but do not pay him anything will also suffer,” the lawyer believes.

The distributor’s agreement with the sites implies that streamers conduct moderation at their own discretion, “they have the right to remove any content without giving reasons, this is common practice,” says Multiza CEO Andrey Volyanik.

The National Federation of the Music Industry (labels “Black Star”, “Lotus Music”, “Media Land”, “SP Digital”) clarifies that one work can have several co-authors and co-right holders, including those without the status of a foreign agent. “We hope that the initiative will clarify how funds should be distributed in this case,” they say. The question is whether Internet platforms, publishers and labels will receive income for consuming content created with the participation of a foreign agent, the organization adds. VK Music and Yandex Music declined to comment; Zvuk and MTS Music did not respond to Kommersant.

Eksmo-AST emphasized that the priority remains compliance with the laws of the Russian Federation, as well as providing Russians with access to content that “meets current requirements.” Agreements with the authors “are undergoing legal review,” the company emphasized.

“Each of these publications (foreign agents – Kommersant) is labeled accordingly, is not included in promotion programs and campaigns, and is not included in priority displays,” they noted.

Typically, the licensing agreement has a clause stating that it can be terminated if the author’s actions cause damage to the publishing house, “but in the event of litigation, the publishing house will have to prove the damage,” says Vladimir Kharitonov. In addition, according to all international copyright conventions, from which the Russian Federation has not yet withdrawn, it is impossible to use a work without paying remuneration if the author does not allow it, the expert added, with the exception of cases of fees collected by societies for collective management of rights, but writers, for example, are does not apply. “It will be a little painful for everyone,” Mr. Kharitonov admits. “But foreign agents will obviously feel more pain than the publishers who not only publish them.”

Eksmo-AST clarified that the group’s assortment includes more than 30 thousand titles of literary works and only 50 of them (less than 1%) were written by foreign agents. Kommersant’s interlocutor on the media market says that “every day 80 thousand tracks are added to Russian music platforms, the share of foreign agents in the catalog does not exceed 1%.”

Yulia Yurasova