ECONOMIC RIGHTS OF PERFORMERS IN THEIR PERFORMANCES FIXED IN PHONOGRAMS AND OF PRODUCERS OF PHONOGRAMS IN THEIR PHONOGRAMS
42. As noted in the introduction, there was broad support in the Committee for the idea that the rights of performers in their performances fixed in phonograms should be stated separately from the rights of producers of phonograms in their phonograms. Accordingly, following the discussion below, the proposals in respect of the rights are set out separately for those two categories of owners of rights.
Protection of the rights of performers under the Rome Convention
and the TRIPS Agreement 43. In the memorandum prepared for the first session of the Committee, the International Bureau summarized the protection, under the Rome Convention, of the rights of performers in their performances fixed in phonograms. In respect of the right of reproduction, performers have the right "to prevent" the reproduction, without their consent, of a fixation of their performances that has been made without their consent (Article 7(1)(c)). However, if performers have consented to broadcasting, it is a matter for national legislation of the Contracting States to regulate the protection against the reproduction of a fixation for broadcasting purposes (Article 7(2)(1)). Likewise, Article 7(2)(2) provides that the terms and conditions governing the use of fixations made for broadcasting purposes are to be determined in accordance with the national legislation of the Contracting States.
44. The Convention does not provide rights of adaptation, distribution (including rights of rental and/or public lending which survive the first sale of copies of fixations) or importation; nor are performers provided the right to prevent the broadcasting or communication to the public of their performances without their consent, where the performance used in the broadcasting or for the communication to the public is made from a fixation (Article 7(1)(a)). If. however, a phonogram published for commercial purposes, or a reproduction of such phonogram, is used directly for broadcasting or for other communication to the public, Article 12 of the Convention provides that a single remuneration is to be paid by the user to the performers, or to the producers of the phonograms, or to both. Under Article 16(1)(a) of the Convention, various reservations are possible in respect of the right to remuneration under Article 12, which may go so far as to completely deny such a right.
45. Limitations on the rights of performers are permitted under Article 15 of the Convention, as regards (i) private use; (ii) use of short excerpts in connection with the reporting of current. events; (iii) ephemeral fixation by a broadcasting organization by means of its own facilities and for its own broadcasts; and (iv) use solely for the purposes of teaching or scientific research. Furthermore, Contracting States may provide for the same kind of limitations with regard to the protection of performers as the domestic laws and regulations provide in connection with the protection of copyright in literary and artistic works, including the possibility of non- voluntary licenses.
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46. The TRIPS Agreement contains provisions in respect of the rights of performers in their fixed performances included in phonograms. Specifically, Article 14(1) provides as follows: "In respect of a fixation of their performance on a phonogram, performers shall have the possibility of preventing the following acts when undertaken without their authorization: the fixation of their unfixed performance and the reproduction of such fixation." Under sub-paragraph (4) of the same article, an exclusive right to authorize or prohibit the commercial rental to the public of originals or copies of phonograms is provided to producers of phonograms "and any other right holders in phonograms as determined in domestic law." However, States; party to the Agreement which presently have in force systems of equitable remuneration may maintain such systems "provided that the commercial rental of phonograms is not giving rise to the material impairment of the exclusive rights of reproduction of right holders." Finally, Article 14(6) provides that "[a]ny Member may, in relation to the rights conferred ... above, provide for conditions, limitations, exceptions and reservations to the extent permitted by the Rome Convention."
Protection of the rights of producers of phonograms under the Rome
Convention, the Phonograms Convention and the TRIPS Agreement 47. In the memorandum for the first session of the Committee, the International Bureau summarized the protection, under the Rome Convention and phonograms. the Phonograms Convention of the rights of producers of phonograms in their
48. The basic provision, in respect of the rights of producers of phonograms, is contained in Article 10 of the Rome Convention. It reads as follows: "Producers of phonograms shall enjoy the right to authorize or prohibit the direct or indirect reproduction of their phonograms." As noted above, Article 12 provides that, if a phonogram published for commercial purposes, Dr a reproduction of such phonogram, is used directly for broadcasting or for other communication to the public, a single equitable remuneration shall be paid by the user to the performers, or to the producers of phonograms, or to both. Article 15 of the Rome Convention allows the same exceptions to the protection of producers of phonograms as it does with regard to the protection of performers, including the possibility of non-voluntary licenses.
49. The Phonograms Convention is, for all practical purposes, an anti-piracy convention. Under its Article 2, each Contracting State is obliged to protect producers of phonograms who are nationals of other Contracting States against the making of duplicates (copies) without the consent of the producers and against the importation of such duplicates, provided any such making or importation is for the purpose of distribution to the public, and against the distribution of such duplicates to the public. Article 3 leaves the implementation to the Contracting States, they may choose one or more of the following: copyright or other specific ("neighboring") rights, the law relating to unfair competition, or protection by penal sanctions.
50. No complete list of the possible exceptions to the protection of producers of phonograms is given in the Phonograms Convention. Article 6 simply provides that, any Contracting State which affords protection by means of copyright, by other specific rights or by penal sanctions may in its domestic law provide, with regard the protection of producers of
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phonograms, the same kinds of limitations as are permitted with respect to the protection of authors of literary 'and artistic works. The Convention provides, however, for the possibility of applying non- voluntary licenses under certain conditions.
51. The TRIPS Agreement contains provisions in respect of the rights of producers of phonograms. Article 14(2) provides that "[p]roducers of phonograms shall enjoy the right to authorize or prohibit the direct or indirect reproduction of their phonograms." Further, under sub-paragraph (4) of the same article a right to authorize or prohibit the, commercial rental to the public of originals or copies of phonograms is provided to producers of phonograms; however, as mentioned above, States party to the agreement which presently maintain systems of equitable remuneration may maintain them "provided that the commercial rental of phonograms is not giving rise to the material impairment of the exclusive rights of reproduction of right holders." Finally, Article 14(6) provides that "[a]ny Member may, in relation to the rights conferred ... above, provide for conditions, limitations, exceptions and reservations to the extent permitted by the Rome Convention"
Discussion of both kinds of rights at the first two sessions of the
Committee 52. In the memorandum prepared for the first session of the Committee, the International Bureau cited a number of developments which indicated that the rights of performers and producers of phonograms need to be modernized, and made proposals for the contents of, and exceptions to, the economic rights of performers and producers of phonograms in their fixed performances and phonograms, respectively. These developments related principally to the effect of digital technology on the creation, exploitation, and use of phonograms and fixed performances, and are summarized in the following paragraphs. The comments and suggestions made by the Committee during its first session, as well as the summaries of the Chairman, have been taken into account in the discussion and proposals.
53. The capacity to make perfect copies of phonograms and fixed performances from either existing copies or from digital broadcasts or interactive systems, and the capacity of persons who subscribe to "pay-per-listen" services for on-demand access to phonograms and fixed performances, have blurred the distinction among the traditional rights of reproduction and distribution, broadcasting and communication to the public, and public performance. At the same time, the potentially broad scope of an existing right--communication to the public--may offer the possibility of embracing many of the new forms of access to and use of phonograms and fixed performances, without erring on the side of "over-legislating" at a time when new commercial arrangements, particularly at the international level, are still developing.
54. This does not mean that the traditional rights of reproduction and distribution have lost importance. As in the case of the protection of literary and artistic works in the context of the possible protocol to the Berne Convention, the Committee recognized that the new developments might require explicit inclusion in the possible instrument of the rights of reproduction, first distribution and importation, as well as a right of rental surviving the first sale of copies. (During its first session, the Committee discussed the possible anti-competitive effects of the proposed right of importation; for a detailed discussion of the various questions, concerning the said right, see the memorandum prepared for the fourth session of the Committee of Experts on the possible protocol, which will meet immediately before the present session of the Committee.) Moreover, while there was
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insufficient support in the Committee for recognition of a public lending right surviving the first sale of copies, there was no objection to maintaining the right as a possible means of exercise of the right of first distribution, subject to exhaustion upon first sale. As far as the proposed exception to an exclusive right of rental is concerned for countries where only a right to remuneration is granted, it seems appropriate to bring the text of the proposed provision into harmony with Article 14(4) of the TRIPS Agreement. The date mentioned in the text--April 15, 1994--is the date of the Ministerial Meeting concluding the Uruguay Round of Multilateral Trade Negotiations referred to in the said provisions of the TRIPS Agreement.
55. There were divisions of opinion in the Committee concerning the proposal for a right of adaptation for both performers and producers of phonograms, but there was, as the Chairman noted, sufficient support for it to remain on the agenda for discussion. In light of the widespread practice of digital, manipulation of fixations of performances and of other sounds for new commercial uses, it seems justified for performers and producers of phonograms to have the right to control such uses by authorizing adaptation of their fixed performances and phonograms, respectively. The right of reproduction does not seem adequate to provide such control, because adaptation implies transformation and change, while reproduction refers to direct copying of protected elements which can be perceived in a substantially similar form in their new embodiment. In the case of performers, neither the moral right of integrity nor the so-called right of "personality" seem to correspond to the nature of the restricted acts covered by a right of adaptation. The right of integrity applies only to derogatory uses which are prejudicial to the honor or reputation of the performer, but not to uses which may have a salutary effect on the original fixed performance; likewise, the right of "personality" relates more to imitation of the style of a performer than to use of a fixed performance which he has created. There was some disagreement. in the Committee over the use of the term "adaptation" to apply to a right of' performers (since some participants were of the view that the term was only appropriate in respect of modifications to literary and artistic works). The., term has nonetheless been retained because it has a widely-understood meaning in the context of intellectual property rights, and it seems unlikely that it will have a negative effect on the right of authors or other owners of copyright to authorize adaptations of their works, or more generally, on the balance between the rights of authors and neighboring rights beneficiaries referred to in Article 1 of the Rome Convention.
56. In respect of the rights of (broadcasting,] communication to the public and public performance, the International Bureau proposed that the instrument include those rights, for performers and producers of phonograms, on an exclusive basis. It was also proposed that those rights, with the exception of the right of [digital broadcasting and] digital communication to the public of phonograms, could be limited to the payment of equitable remuneration. (The reference to broadcasting appears here in square brackets before the term "communication to the public" due to the fact that, in the memorandum prepared for the first two sessions of the Committee, the term "communication to the public" was used with a broader meaning also covering broadcasting.)
57. The Committee discussed the questions of the proposed rights of (broadcasting,] communication to the public and public performance in great detail. The emergence of new means of making fixed performances and phonograms available to the public lied to some degree of hesitation in respect of the proposed definitions of rights (see, for example, the discussion of the
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definition of "communication to the public" in chapter I, above), and, likewise, in respect of whether exclusive rights or mere rights to remuneration should be provided to performers, to producers of phonograms, or to both. There was consensus, however, that, even if exclusive rights might not be appropriate for all means, of digital broadcasting, communication to the public and public performance, an exclusive right should apply at least in the case of on-demand, interactive digital delivery of phonograms and performances included therein, for example, where a member of the public tan request the delivery of recorded music or other sounds, for reception at a time and place chosen by the member of the public making the request. The role of collective administration in administering any exclusive rights was also stressed, in order to ensure that users had easy access to phonograms for, for example, broadcasting purposes.
58. It seems to be the case that the concept of "secondary use" of phonograms and performances, reflected in the provision for a single equitable remuneration for broadcasting and communication to the public of phonograms in Article 12 of the Rome Convention, is no longer applicable in the case of digital uses an a result of which the commercial making available of phonograms and fixed performances is tending away from providing copies, and toward direct. delivery by electronic means from centrally-stored sources of digital information. As the Committee's discussion revealed, however, established practices in the licensing and administration of rights in respect of "secondary uses" of phonograms will have to be adjusted to the new reality in stages, and it teems that the time is not yet ripe for the recognition, at the international level, of full exclusive rights in all the cases involved. It does seem justified that the possible instrument provide exclusive rights of broadcasting, communication to the public, and public performance to both performers and producers of phonograms as a first step, followed by the possibility that the said rights may be limited to rights of equitable remuneration, except that an exclusive right should be maintained for both performers and producers of phonograms in the case of communication to the public of phonograms by digital means in the form of on-demand delivery.
59. In the memorandum prepared for the first session of the Committee, the International Bureau proposed, in general terms, that the possible limitations on the rights of performers and producer-;,; of phonograms be assimilated to the possible limitations on the rights of authors in literary and artistic works under the Berne Convention and the possible protocol (see chapter V, below, for the general discussion of exceptions to rights). Noting that Article 15(1)(a) of the Rome Convention allows free private reproduction of phonograms and performances included therein, it was suggested that the criteria for exceptions to the right of reproduction in Article 9(2) of the Berne Convention should be applied to determine the appropriate scope of private reproduction of phonograms for personal purposes in the form of "home copying."
60. Even before digital technology, there was fairly general agreement that home copying unreasonably prejudiced the legitimate interests of authors. performers and phonogram producers (even if it could not necessarily be said to conflict with a normal exploitation of the works, performances, and phonograms concerned within the terms of Article 9(2) of the Berne Convention). With the advent of digital technology, the situation became more serious because each copy, whether made from an original or a copy. is of exactly the same quality as the original recording. it was noted that, in order to mitigate the prejudice suffered by performers and producers of phonograms as a result of widespread home taping, and to minimize any conflict
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with a normal exploitation of the phonograms and performances concerned, a growing number of countries have enacted legislation providing for a payment, on recording equipment and/or blank recording material, to paid by the manufacturers and importers of such equipment and material, collected by collective administration organizations, and distributed among the owners of rights concerned after the deduction of administrative costs. The International Bureau noted the existence of other systems, including copy-protection or copy- management systems such as the Serial Copy Management System (SCMS), which prevents serial digital copying, but took the view that a system of payment on recording equipment and/or material was the most appropriate means of minimizing harm to the rights of performers and producers of phonograms caused by widespread home copying.