Copyright and Related Rights: Next level

With Directive on Copyright in the Digital Single Market still causing mixed feelings throughout Europe, Serbia takes the best out of earlier EU Directives in the area of protection of copyright and related works and implements it into its national legislation.

The amendments to the Law on Protection of Copyright and Related Rights as of 17 September 2019 seem to show that Serbia did its homework given by the European Commission and European Integration Office in getting national legislation closer to European standards.

Increased level of protection favours the following categories the most:

• authors of software;
• performers; and
• database producers,

but improves overall mechanisms for the protection of copyright and related rights on multiple levels – from the exercise of rights to cases of infringement.

1. Authors of Software

• Starting from scratch, the sole definition of work of authorship is extended so that besides the software itself, its accompanying technical and user documents fall under the scope of protection as well.
• The amendments also address two issues that have caused a lot of dispute in practice. First, if the software is created by more than one person, they shall all be deemed as co-authors. Secondly, it is now clarified that if the software is made by an employee, the employee is entitled to stipulate the additional remuneration for exploitation of such program by their employer in the employment agreement. If the agreement lacks provisions on such remuneration, the employee shall not be entitled to demand it from the employer. These provisions also apply in case of copyright on databases.
• Notwithstanding the stringent protection of authors, the amendments strike a fair balance between the authorizations of authors and the users’ right to fair use of copyrighted software in line with its designated purpose. That being said, the latest amendments regulate in detail exceptions to authorizations of authors necessary for users to achieve interoperability of subject software, and to make it “user-friendly” to the extent possible. Therefore, the law alters the authorizations of the author so that each rightful owner of the copy of the software is entitled to the following:
  • permanent or temporary reproduction of a software by any means and in any form, in part or in whole;
  • correction of errors within the software in line with its purpose;
  • loading, displaying, running, transmission or storage of the software if necessary for its reproduction; and
  • translation, adaptation, arrangement and any other alteration of a software and its reproduced results thereof.

It should be noted that the aforementioned exemptions may be regulated differently within the agreement with the author or the rightsholder, save for the right of making of a permanent back-up copy, which can under no circumstances be prohibited if it is necessary for the use of the software.

In addition, the person granted a right to use a copy of a software shall be entitled, without the authorisation of the rightsholder, to observe, study or test the functioning of the program in order to determine the ideas and principles which underline any of its elements if they do so while performing any of the acts of loading, displaying, running, transmitting or storing the program.

The amendments separate decompilation of software within a new article, emphasizing its use as the last resort in order to achieve interoperability with the other, independently created software if all the aforementioned means gave no result.

Specifically, the licensee, person entitled to use a copy of software or another person on their behalf, are allowed to reproduce and translate the source-code of software, if the following criteria are met:

• the information necessary to achieve interoperability has not previously been readily available to such persons; and
• those acts are confined to the parts of the original program which are necessary in order to achieve interoperability.

However, the information obtained in the aforementioned manned cannot be:

• used for goals other than to achieve the interoperability of the independently created software;
• given to others, except when necessary for the interoperability of the independently created software; or
• used for the development, production or marketing of software substantially similar in its expression, or for any other act which infringes copyright.

In regard to decompilation, the provisions of the law may not be contractually amended or altered and shall be deemed as null and void.

2. Rights of Performers

• Performers’ right to fair remuneration in case of lease of recordings of phonograms or videograms to which their performance was recorded, is now extended to cases of (i) distribution of such recordings, and (ii) their making available to the public as well, also with the restriction of wavier by the performer.
• With movie nights, open-air cinemas in public, as well as streaming services such as Netflix and HBO GO rapidly gaining popularity, performers’ right to remuneration in case of broadcasting, and making available to the public of their broadcast/recorded performances can now be enjoyed by actors as well, i.e. the rights are extended to cases when the performances are fixed to audio-visual media, or made available by wire or wireless means so that that members of the public may access these works from a place and at a time of their choosing.
• Performers are also protected in their interactions with audio producers. Firstly, if the performance is recorded on the phonogram within 50 years upon its creation, the duration of performers’ rights to exploitation is extended from 50 to 70 years as of the first publication of such phonogram.

Furthermore, upon the expiry of 50-year term as of the phonogram with the recorded performance being published, the performers have at disposal certain additional means of protection which cannot be waived:

1. right to terminate the agreement – if the phonogram producer does not offer copies of the phonogram for sale in sufficient quantity or does not make it available to the public; The sufficient quantity is deemed as the one that satisfies the needs of the general public, which is prone to different interpretations and seems likely to be the question for future court practice.
2. right to obtain annual supplementary remuneration for each full year – if under the agreement the performer had a right to claim a non-recurring remuneration. The supplementary remuneration would amount to 20 % of the revenue which the audio producer has derived in the preceding year, from reproduction, distribution and making available of the phonogram;
3. right to receive the remaining part of remuneration in sum – if the remuneration is agreed to be paid in tranches. Such remuneration cannot be deducted for any amount paid to the performer in advance, or even stipulated to be deducted within the agreement.
   • Audio producers’ rights are also shielded, with a term of such rights being extended from 50 to 70 years if the phonogram was lawfully published in 50-year term.

3. Databases

• The amendments now clearly distinguish the protection of database as copyright, and as a related right. In the first case, mere originality of selection and layout of the content of database is deemed as copyrighted work, without affecting the protection of the investment made by its database producer.

4. Enforcement of Rights

• The procedure before the court in case of infringement of copyright and/or related rights is set out in a more comprehensive manner, emphasizing the necessity of preserving of evidence and rendering precautionary measures urgently, even before the submission of the official claim or the response by the alleged defaulting party. In addition, it is now made completely clear that a revision may be filed in cases of infringement of copyright and/or related rights, regardless of the value of the claim.
• The list of precautionary measures is materially enriched, now including the ability to recall not only infringing goods, but materials and implements principally used in the creation or manufacture of such goods as well, and even seizure of movable and immovable property or blocking of bank accounts of the alleged infringer if the apparent infringement is made on a commercial scale, i.e. the infringement is used for profit gain. In line with relevant (dare we say notorious) European legislation, injunctions may also be applicable against intermediaries whose services are used by third party to infringe copyright and/or related right. Also, the court is entitled to order the intermediary to restrain from repeating the infringing acts and acts similar to them. This seems to be a tip of the iceberg of the burning question regarding intermediary liability in the digital ecosystem. It remains uncertain how would such injunction be interpreted, especially what would constitute similar acts, and would it even be enforceable against non-resident intermediaries.
• Court authorities are also now entitled to request information about each alleged infringement not only from the infringer but from any person
  • found in possession of the infringing goods on a commercial scale;
  • found to be using the infringing services on a commercial scale; or
  • found to be providing on a commercial scale services used in infringing activities; or
  • was indicated by any of such persons as being involved in the production, manufacture or distribution of the goods or the provision of the services.

In other words, any retailer or user of illegally downloaded mp3 files, software, or TV show episodes, may now be summoned before a court as a witness. This possibility was implicit before the amendments, but it appears that the courts would now rely on it even more.

5. Exercise of Rights

• Latest amendments seem to ensure more transparency in regard to the activities of collective management organizations, through more detailed and stringent procedures of fee determination, and transfer of management authorizations from the organizations’ founders to their members in line with their natural position of stakeholders in this area. The collection mechanisms for copyright holders, performers and audio producers are now separated by default, with an open possibility for those subjects to exercise their rights jointly. In addition, REM[1] is now designated to extend their record-keeping obligations from copyrighted works being broadcast to works of related rights (performances, phonograms, videograms, etc.) as well.
• What seems to draw a clear line between digital and physical works once and for all is the explicit exception from the general exhaustion of rights rule. In case of tangible works of authorship or related rights, sale of such copies leaves the rightholders empty-handed without the ability to further follow the distribution of sold copies of their works. Contrary to this, each making available to the public by wire or wireless means that members of the public may access these works from a place and at a time of their choosing does not produce the same effect. In other words, each “owner” of a digital copy of a video game, TV show episode, or software is not entitled to further share and distribute such “copies”.

As for the tangible works, the exhaustion of rights is extended to the first sale of copies in the territory of EU or EEA, with its applicability being postponed once Serbia officially becomes a part of the European Union.

• It remains to be seen how these amendments would fit into the current institutional frame, as Serbia still has a long way to go in the education of all stakeholders from judges to consumers on the importance of adequate protection of intellectual property. Hopefully, the current amendments would serve as a good start which would long-term further diminish piracy and maximize incentive for creative works online, making Serbian market fertile ground for key players in the entertainment and gaming In the end, it is worth mentioning that additional changes in this field should be also expected in terms harmonising with the Directive (EU) 2019/790 on copyright and related rights in the Digital Single Market.

[1] http://www.rem.rs/en

The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.