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Collective Rights Management in Israel

Collective Rights Management in Israel by Tony Greenman

 

Six Copyright and Related Rights Collective Management Organizations (CMOs) currently operate in Israel: two manage traditional copyrights, two manage rights in sound recordings and two manage performers’ rights. Until the late 1990s, these CMO’s operated free of any form of regulation, leading to complaints of monopolistic and anti-competitive practices. A bill introduced by the Ministry of Justice in 2006, intending to establish a copyright (royalty) tribunal, ran aground in the Knesset.

 

It was thus left to the Antitrust Authority to attempt to step up and regulate the field, and indeed, pursuant to the Authority’s vigorous actions in the early years of the millennium, the Antitrust Tribunal ruled that the collective management of rights of the owners of musical works by ACUM the Society of Composers, Authors and Music Publishers in Israel, and the collective management of the public performance rights in sound recordings by the two CMOs representing the owners of those rights are restrictive trade practices and thus require a permit under the Antitrust Act. ACUM and the Israel Federation of Phonograms and Tapes, Ltd. (“IFPI”) were also declared to hold monopolies in several areas of music rights administration, and administration of rights in sound recordings, respectively, subjecting them to further regulation under the antitrust laws. Still, other organizations, such as TALI, the CMO representing screenwriters and film and TV directors, and “Eshkolot” and “Eilam”, the CMOs representing performers continue to operate outside of any regulation (except in connection with the collection and distribution of the so-called “blank tape” levy).

 

The Antitrust Tribunal continued to hold that the collective administration of copyright by ACUM is in the public interest. So, too, according to the Tribunal, was the collective administration of rights in sound recordings by the two CMO’s representing the owners of rights in this field. The tribunal thus granted them permits to continue their operations. These permits regulate in part the relationship between these organizations and their members. They must be open to all rights holders of the particular class of works managed by the Organization. However, as demanded by the Antitrust Authority, members are allowed to withdraw works, or categories of works, from the management of the CMO. In addition, the permits set a framework for the relationship between the CMO’s and users. The CMO’s may not unreasonably refuse to grant a license to a user, or discriminate between users. In addition, a CMO must provide unlicensed users (other than “pirates”) the opportunity to pay a regular license fee, or to dispute the reasonableness of a fee, before suing for an injunction or statutory damages.

 

Nonetheless, the state of the law on CMO’s and the operations of the CMO’s themselves are still far from satisfactory. The lack of any prior approval mechanism for tariffs allows CMO’s to set arbitrary and unreasonable rates and to put the onus on small users to challenge those. Furthermore, in the absence of a copyright tribunal specializing in royalty rates, the few royalty rate disputes that have made it to litigation have been adjudicated in different courts, or before different arbitrators, thus severely limiting the development of clear guidelines in this area. Furthermore, at a time when the development of new media and channels of exploitation of works seem to be calling us to consider the adoption of extended collective licensing in certain areas, the widespread withdrawal of works from management by CMO’s, particularly in new media, has severely limited the current effectiveness of collective management and the functioning of the market in this area.

 

Copyright licensing is a specialized area requiring expertise and specialized handling. The Antitrust Authority and Tribunal are not the most suitable forums in which to regulate or adjudicate this area of activity. Furthermore, a comprehensive set of rules is required so as to provide a stable environment for copyright owners and users alike. Therefore Israel is in need of a new chapter to the Copyright Act dealing with collective management of copyright. In this framework, the legislature should set up a copyright tribunal, or copyright council, similar to the Canadian model, and examine whether there is a need to adopt extended collective licensing in certain areas.

 

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