An article that was recently published in the “Balkan Insight” presented a criticism by members of the SOKOJ society concerning the work of this organization. The duty of SOKOJ is to manage the rights of its members – composers, songwriters, producers and other rights holders with respect to musical works of all genres – by monitoring the public use of their music, collecting royalties from the users, and distributing the royalties to the rights holders.
It would appear from the article that certain authors are dissatisfied with the manner in which SOKOJ manages their rights. SOKOJ allegedly fails to verify the reports provided by the copyright users, which serve as the basis for calculation of the royalties. Those interviewed claim that the figures reported by the end users about the use of copyright works are lower than what they are in reality, but SOKOJ fails to check the veracity of these numbers, even when the distortions are obvious. In addition, the royalties are alleged to be distributed improperly: some of the rights holders earn more than what they deserve, while others earn less. Consequently, some authors have resorted to managing their rights individually.
Complaints about the operations of SOKOJ have been voiced in the past. Critics say that SOKOJ pays them small amounts although their music is often used in public. The late Šaban Bajramović, a legend of Roma music, claimed during the past decade that in the course of the preceding 15 years he had received from SOKOJ only 49,000 dinars – a few hundred of euros – in total. Folk music singers Šabam Šaulić and Hasan Dudić have been among the loudest critics of SOKOJ on this ground in the last few years. There are also those who claim that SOKOJ awards exorbitant amounts to certain authors, especially when the beneficiaries – for instance Mlađan Dinkić – happen to be politicians (Dinkić served as a minister in a number of Serbian governments and he is likely to be a member of the new cabinet now in the making).
The representatives of SOKOJ rejoin that there are always dissatisfied parties and that SOKOJ does what it can to adequately protect the rights of its members, further claiming that their hands are tied due to the lack of commitment by the courts and other institutions in implementing the Law on Copyright and Related Rights. Among the authors there are those who opine that the works of SOKOJ’s critics are used far less than what they may believe ( this was the message of pop musician Vlado Georgijev to Hasan Dudić, referred to above). Other critics of the critics say that SOKOJ awards substantial monies to Dinkić the politician not because SOKOJ inflates the data, but because the broadcasters really do air Dinkić’s music frequently, eager to please the person in power (opinion of the rock musician, Rambo Amadeus).
Those vested with that requisite authority are better placed to determine the extent to which the complaints and the responses are rooted in facts. The subject of this post is the legal framework, which has been devised to enable the copyright holders to adequately exercise their rights, through SOKOJ or in other ways.
The ambit of transferred rights
Upon the conclusion of an agreement with the “collecting society”, the member (author, copyright owner, or an association) transfers all economic rights to the society. According to the standard SOKOJ agreement, the members transfer all economic rights save the right to adapt, arrange, or alter the work in other ways. Hence, a partial transfer of economic rights is not permitted. What this means in practice is that the author is left with a choice between the following two options: to transfer all rights to SOKOJ, or to manage his or her rights individually. (Individual management of rights is allowed by virtue of Art. 180 of the Law).
Elsewhere, the “either-or” stance gives way to a more nuanced approach. By means of an illustration: when SACEM, the French equivalent of SOKOJ, refused the request of the members of the duet Daft-Punk to exercise certain economic rights related to their songs,the European Commission found in 2002 that SACEM’s decision amounted to imposition of restrictions not strictly necessary for achievement of legitimate goals to be pursued by a collecting society. In particular, the technical progress has enabled authors to individually control some forms of use of their works by third persons, e.g. the use via multimedia or on CD-Rom. In the United Kingdom, the then-Monopolies & Mergers Commission found in a comprehensive report in 1995 that the Performing Right Society (PRS) unjustifiably prevented music authors from managing their rights concerning live performance of their songs. The French and the U.K. laws and regulations have since been changed, to reflect the views expressed by the European Commission, i.e. the U.K. competition commission.
Criteria for distribution of royalties
SOKOJ’s Distribution Rules set out the criteria for distribution of royalties which the society collects from users. The Rules, adopted by the assembly of the organization, is available on SOKOJ’s website. It is a complicated document, like the similar documents of virtually all copyright collectives managing rights in musical works. The Rules follow the logic of similar schemes in other countries, inasmuch as the remuneration reflects in the main – although not literally – the frequency of the work’s use and the value of (or, better, the society’s preference for) the musical genre to which the work belongs.
Where it is considered to be feasible, the Rules envisage an obligation for the users to list all instances of broadcasting, i.e. public performance, of a musical work in the given period, in the music cue sheets submitted to SOKOJ. In relation to these uses, the chief among them being the use in radio and TV broadcasts, SOKOJ applies the so-called points system. Among the factors determining the number of points to be awarded to a musical work is whether the work belongs to the “artistic music” (the term used in the Distribution Rules), jazz, or another musical form Privileged treatment of the classical music is routine in the comparative practice (see e.g. the Distribution Ordinance of the Italian Society of Artists and Publishers (SIAE),pp. 41-42) – and the privileged treatment of jazz is not unusual either. The other determining factors include: the number of persons performing the work; complexity of the work; passage of time between the creation and the performance of the work; duration of work; etc. Where detailed reporting is not feasible, for example with respect to live performances in taverns, SOKOJ applies other methods, i.e. the so-called program system and the system of proportional increment.
Members’ access to information and the opportunity to obtain independent audit
Applicable laws and regulations do not vest in a member of SOKOJ the power to access information which served as the basis for calculation of monies distributed to him or her. On the other opposite ,is the normative framework in France, where members of the organizations for collective management of rights have access to all information pertaining to them, including the information on the basis of which the organization calculated the proceeds for the use of member’s works. The members may also access varied documents on the operation of the organization. The limit to the nearly unrestrained right of access is set by the rules on confidentiality of data concerning the other members.
Provisions on SOKOJ also fail to empower a given number of members – for example 10 percent, or more – to compel the collecting society to carry out an independent audit into, and report about, specific aspect of SOKOJ’s operations. Such right is stipulated in Article L. 321-6 of the French Intellectual Property Code, as a measure strengthening the position of the members and ensuring that governing bodies of the collecting society perform their tasks effectively.
Internal dispute resolution mechanisms
In Serbia, like in most European jurisdictions, there are no provisions in the laws explicitly addressing resolution of disputes among the members of a collecting society and the society itself. However, the Statute of SOKOJ partly addresses the issue by stipulating, in Article 39, that the Authors Council shall decide on the appeals concerning the implementation of the Distribution Rules. The Council is a nine-member body elected by the assembly of the organization; one-third of the Council members are authors of art-music or jazz, and the remaining members are authors of other musical forms. The presence of a dispute resolution body within the organization is in line with similar practices in other national organizations for collective management of copyright and related rights. That said, the quality and authority of the decisions adopted by the Council would likely improve if the body were headed by a non-member with expertise in legal matters, as stipulated in the Rules and Regulations of the U.K. Performing Right Society Limited (Rule 6A) and the Rules of the Disputes Committee for Buma and Stemra, two collecting societies managing music-related rights in the Netherlands (Art. 3).
Control of the genuineness of data on the use of authors’ works
The Law on Copyright and Related Rights sets forth a right, but not a duty, for the collecting societies to control the use of works protected by music copyright (Art. 153). However, the standard agreements which SOKOJ enters into with the copyright holders provide implicitly for the duty to control, by establishing SOKOJ’s obligation to “control the implementation of the contractual and statutory obligations of the users“. Therefore, if SOKOJ fails to control the genuineness of the data provided by the users, the rights holders may seek protection through court proceedings based on a breach of SOKOJ’s duty as stipulated by the agreement.
External supervision and control of the operation of SOKOJ
In addition to the limited control exerted by its members, SOKOJ is subject to statutorily prescribed forms of external supervision and control, all of which purport to ensure a normal work of the organization and, in consequence, protection of members’ legitimate interests. These forms include the supervision by the Serbian Intellectual Property Bureau, financial audits, and the control by the Commission for Protection of Competition.
According to the Law on Copyright and Related Rights, the Intellectual Property Bureau controls whether the collecting societies perform their tasks in compliance with the Law. The Bureau has access to the records of the given society, including its business records, annual report, annual account, and annual audited report. Representatives of the Bureau may participate at the meetings of the governing bodies of the society and make statements about any issue concerning the collective management of copyright and related rights, as well as its compliance with the provisions of the Law. Upon identifying irregularities, if any, in the work of the society, the Bureau is duty bound to order the society to cease with such practices. If the society commits continuous and serious breaches of the Law, the Intellectual Property Bureau may withdraw its authorization to operate.
Both SOKOJ and the general public would ultimately benefit if results of the Bureau’s supervisory activities were available to all, which currently , they are not. For example, the Report on the Work of the Group (within the Intellectual Property Bureau) for Copyright and Related Rights in 2010 briefly mentions irregularities identified in the work of SOKOJ in relation to the Rules of Distribution of royalties, but specific data on the irregularities cannot be found on the website of the Bureau. The report also refers to an analysis made by the Bureau over the royalties collected by SOKOJ in 2007, 2008, and 2009 – but that analysis is also not publicly available.
The Law on Copyright and Related Rights mandates annual audit of financial statements and records of the collecting societies, as well as of the royalties account. The annual account of SOKOJ can be found at the website of the Agency for Commercial Registers.
In Serbia, the collecting societies have legal monopoly, since only one organization can be licensed for collective management of the same type of copyright or neighboring rights on a particular type of work (article 157 of the Copyright Act). The activities of such societies are therefore subject to the control by the Commission for Protection of Competition. The Commission is a relatively young agency, established in 2006, and it has so far not enquired into the activities of SOKOJ or any other similar organization.
