'Business as usual' for British CMOs as they prepare for life outside of the European Union

 

By Emmanuel Legrand

As the European Union and the UK are attempting to clinch a last minute agreement, businesses are preparing for life after Brexit. In the field of collective rights management, the British government has issued at the start of the year a series of guidelines that set a new framework for collective management organisations  (CMOs).

  As per UK government guidance, from January 1, 2021, CMOs in the EEA  "will not be required by the Collective Rights Management Directive to represent UK right holders or to represent the catalogues of UK CMOs for online licensing of musical rights." However, UK right holders and CMOs "will still be able to request representation, but EEA CMOs may be free to refuse those requests depending on the law in individual member states."

  The guidelines also stipulate that in the UK, existing obligations on UK CMOs "will be maintained following 1 January 2021. These include those specific to multi-territorial licensing of musical works for online services." More specifically, UK CMOs that offer multi-territorial licensing of online rights in musical works "will continue to be required to represent on request the catalogue of other CMOs (UK or EEA) for multi-territorial licensing purposes."

Little change expected

  In principle, it could turn the business of British CMOs upside down, but professionals forecast minimal changes in the way CMOs operate, in particular because, while no longer adhering to EU Directives, the UK is still signatory to many international treaties such as World Intellectual Property Organisation's Berne Convention for the Protection of Literary and Artistic Works, the Copyright Treaty (WCT) and the Convention for the Protection of Producers of Phonograms Against Unauthorised Duplication of Their Phonograms, among others.

  "In this as in most copyright areas, there will be little change," explained Dominic McGonigal, Chair of London-based consultancy company C8 Associates. "As you know, copyright is territorial and international rules are mostly based on international treaties from WIPO."  

  McGonigal added that the government advice is "technically correct" and CMOs "will not be bound by the CRM Directive" in relation to multi-territorial licensing, but he added that the network of bilateral agreements was well established before 2012, before the Directive was adopted. "So it’s unlikely to change the exchange of rights for licensing much," he said.

  The view is shared by PRS for Music, the British music performance rights organisation. In a statement, PRS for Music said: "We do not believe the changes in application of the CRM Directive, as it relates to Title III – multi-territory licensing of online rights, will impact PRS for Music once the transition phase ends on January 1, 2021. PRS’ provider of multi-territory licensing and processing is ICE, the joint-venture between PRS, STIMand GEMA. As such, PRS does not expect to request an EEA CMO to represent its multi-territory rights."

  The society added: "ICE operates in a competitive market and competes for multi-territory online rights within the EEA and beyond. As the provider of services to PRS, any assignment by another CMO, whether on a voluntary basis or via the compulsory mechanism, would ultimately flow into ICE. Therefore, we do not see any new negative impact to the ongoing ‘must carry’ obligation to PRS in the UK."

  PRS for Music also noted that the UK Intellectual Property Office "is currently conducting its statutory review of the Regulations which implemented the CRM Directive. This will include consideration of the application of the Title III where its obligations are not reciprocated by CMOs in the EEA."

International agreements in place

  At PPL, the London-based neighbouring rights society, it is expected to be business as usual after January 1, 2021. The society said that the government provisions "relate to PRS only in the context of musical works." PPL added: "With regard to PPL’s international agreements, as these are based on individual contracts with each CMO, we do not anticipate our international arrangements being affected. Of course, we are keeping a close eye on all of this."

  For McGonigal, where new guidelines might have an impact is "in the emergence of licensing hubs," for example France's SACEM powering online licensing on behalf of IMPEL, the agency representing music publishers.

  "The UK CMOs are at a disadvantage in developing this business," said McGonigal. "It’s difficult to set up a multi-territory hub. In the publishing side there are numerous failures and a few partial successes. Post Brexit, the barriers to a UK CMO setting up a hub are greater. Whereas a CMO in the EU, on the publishing side, at least has the push legislation of the CRM Directive which is an incentive for other CMOs in the EU to join. And if they do join, they have the protections and the compliance certainty of the CRM Directive."

No practical impact of Brexit

  On the matter of IP protection and litigation, Matt Hervey, of law firm Gowling WLG, wrote in Lexology that from 1 January 2021, "our national interpretation of harmonised aspects of copyright can begin to drift from findings of the Court of Justice of the European Union" but for traditional forms of copyright protection, such as for literary, dramatic, musical and artistic works, sound recordings, films, broadcasts and typographical arrangements of published editions, "Brexit has no practical impact for the existing regime."

  For Hervey, disputes related to copyright in the UK "are, and will remain, matters for the courts of the UK, and there will be no change to the availability of remedies protecting copyright." In addition, as the UK is a signatory to the Hague Convention on Choice of Court Agreements, the UK courts "will continue to recognise and give effect to exclusive jurisdiction clauses, including those conferring jurisdiction on the courts in the UK in respect of licenses of copyright beyond the UK."

More guidelines

> The UK government issued the following guidelines regarding copyright works: "Most UK copyright works (such as books, films and music) will still be protected in the EU and the UK. This is because of the UK’s continued participation in the international treaties on copyright.  For the same reason, EU copyright works will continue to be protected in the UK. This applies to works made before and after 1 January 2021."
  It added: "Current cross-border copyright arrangements unique to EU member states will stop at end of the transition period.  These include cross-border portability of online content services, copyright clearance for satellite broadcasts, reciprocal protection for database rights and the orphan works exception."

> On the subject of copyright duration, the UK government guidelines are the following: "Copyright duration in the UK for works from the UK, EEA, or other countries will not change from 1 January 2021. Currently, EEA works are given the same copyright duration in the UK as UK works. For works from outside the EEA, copyright lasts for the term granted in the country-of-origin or the term granted to UK works, whichever is less. References to the EEA will be removed from UK law in this area so that duration for EEA works is calculated in the same way as for non-EEA works. Because copyright duration is equal across the UK and the EEA, there will be no immediate impact on copyright duration in the UK."