Fabio Pereira*

“At once the most ingenious and the worst invention of mankind”¹

Introduction

Collecting societies can be defined as institutions, generally founded by a certain category of copyright holders (authors or simply right owners), which administers the rights of its members to grant copyright authorisation for certain uses of their works, without individual consultation, and which collects and allocates the corresponding royalties, distributing a percentage of collected sums amongst its members. According to Karnell, "a model for turning rights into money."² Collective management of copyright works, through collecting societies, has been known since the middle of the nineteenth century, for performances of musical works, for recording of music, for audiovisual works, arts, photography, drama, literature, neighbouring rights and so on, for home recording, reprography, public lending, rental, etc, even though the first societies had already been constituted in the eighteenth century³. Usually, the societies are limited to one category of work and often to one type of use. Moreover, societies normally act within one national territory only. The international coverage is guaranteed by reciprocal agreements between national societies of different countries, under the guidance of international organisations⁴ and international treaties⁵.

One may argue that collecting societies represent convenient ways to agree licences and collect fees, to enhance political, social and cultural actions aiming to safeguard the interests of authors, thus representing them before national and international bodies, the government and the community (representation aspect) and also that societies may consist on a powerful entity capable of better defending copyright owners against infringements (enforcement aspect)⁶. In the view of users, on one hand, negotiating a single licence which can comprise a range of works would represent saving time and money. On the other, although powerful institutions allow the best use of copyright, assuring the correct remuneration to authors and facilitating user's lives, their strength and, sometimes their monopoly, can also ease abuses, over control the copyright market and allow over-charging for the licensing of works⁷.

Collective systems differ amongst countries⁸. While in the U.S., for instance, the Courts would not allow monopolies of collecting societies, in Europe, the European Court of Justice, the highest guardian of European Competition Law, has recognised the need for strong societies, as the more powerful broadcasting and recording industries become⁹.

Another role performed by collecting societies is to act on behalf of copyright owners and holders of related rights in what regards to cable retransmission. The rights related to the granting or refusal of authorisation to cable operators shall be vested in collecting societies as required by the EC Satellite Broadcasting and Cable Retransmission Directive¹⁰.

Nowadays, collecting societies have spread their activities throughout the world, and, in Sterling's view "the development of new technological means of disseminating works will probably lead to the increased activities of these societies and the formation of new entities to deal with new aspects of these developments"¹¹.

Collective Administration in Brazil

For the administration of authors' rights in Brazil a very complex mechanism was constituted, integrating state-owned organisations and private entities willing to assure that rights owners would be able to peacefully exercise their rights, and also aiming to facilitate the collection of the correspondent monies deriving from the exploitation of protected works.

The following section will briefly analyse the historical aspects of collective management in Brazil, the remuneration system developed for the benefit of authors and right holders, and will finally explain, in more detail, the role of the Central Office for Collection and Distribution ("Escritório Central de Arrecadação e Distribuição" – ECAD), which detains the monopoly for the collective management of rights arising from the public performance of music in the Brazilian territory.

Historical Aspects

Private associations have always performed an important role in the collection and distribution of rights, what is identifiable with the own history of authors' rights. Initially, constituted by classes of rights holders (i.e. dramatic authors, music composers), they have managed to achieve results on protecting the interests of their associates. As more powerful companies have become, in a second stage, hybrid associations have been created following the need for unifying forces to safeguarding rights holders' interests.

According to the Brazilian system, the constitution of private associations depends on Government’s authorisation and all the music collective rights are administered by ECAD. In spite of the fact that there was a previous Law on authors’ rights in the ninetieth century, the first statute to emphasize such rights was the Brazilian Civil Code 1916. After the enactment of the main compilation of civil laws, based on the French "Napoleon" Code, Brazilian society became aware of the importance of authors’ rights and has started to develop the first private associations for the administration of such rights.

In 1917, the Brazilian Society of Authors for the Theatre (SBAT) was created having, amongst its members, theatre authors and music composers. The latter decided to leave SBAT due to internal incompatibilities and formed the Brazilian Association of Composers and Authors (ABCA) in 1938, while SBAT decided to maintain an independent musical department. The scenario lasted until 1942, when SBAT’s musical department members left the association and, by joining ABCA’s associates, formed a new entity: the Brazilian Unit of Composers (UBC). Just few years later, in 1946, by virtue of divergences between editors and authors at UBC, the Brazilian Society of Music Writers, Composers and Authors (SBACEM) was created. After a decade, considering the increasingly production of intellectual works, the Managing Society of Music Copyright in Brazil (SADEMBRA) was developed, followed by the Independent Society of Music Authors and Composers (SICAM), constituted in 1960.

At that stage, five different societies were responsible for collecting rights arising from the exploitation of protected works, what, in Bittar’s view, brought prejudices to the whole system¹². For the first time, a central office for administering authors’ rights was thought. The Service for Defence of Authors’ Rights (SDDA) was a jointly office formed by SBAT, UBC, SADEMBRA and SBACEM. However, despite all the efforts, SDDA has not managed to solve the existing problems in the collective system, namely constantly claims of faults, resistance by users to comply with rules, difficulties in the collection and distribution of fees.

While the Brazilian Society for the Administration and Protection of Intellectual Rights (SOCINPRO) was created 1967, with the view of protecting related rights, other segments of the society were claiming for an entire Code for the protection of authors’ rights and related rights, in which all the legislation should be unified, by inserting mechanisms for State-control over private societies, as well as by introducing an unified system for collection of fees arising from exploitation of protected works.

After research in the area and debates amongst representatives of different segments, the first specific law on authors’ rights was enacted in 1973. Federal Law 5.988/73 established, for the administration of the sector, the National Council on Authors’ Rights (CNDA), and for the centralisation of collecting management, the Central Office for Collection and Distribution (ECAD). With the advent of the new authors’ rights law, the private associations became fully regulated. In the first instance, the Council has tried to determine ECAD’s membership requirements, imposing that it should be composed by Government members, but the existent associations, through a judicial decision, obtained the right to run the new Office. Thus, ECAD was finally composed by representatives of the musical sector, while SBAT continued to collect the rights arising from theatre shows.

The Monopoly of Central Office for Collection and Distribution (ECAD)

ECAD started its activities in 1977, being the exclusive institution responsible for administering the rights and collecting and distributing the fees arising from public exhibition of national and foreign songs. As a privately owned civil society, created by Federal Law 5.988/73, ECAD is supported by the current Brazilian Copyright Law (Law 9610/98)¹³. The Office is managed by ten music associations¹⁴ and keeps record of over 214,000 different owners of music works. Accordingly to ECAD’s numbers, there are 795,000 works catalogued, in addition to 412,000 phonograms, with registers of all the recorded versions of each song¹⁵.

Remuneration System

In accordance with its Fees Collection Policy, ECAD calculates the values to be paid by music users¹⁶ following a criteria established in regulations developed by the authors’ rights owners, through their music associations. The regulation for fees collection ranks the level of importance of the music considering the activity of the music user or its establishment, as: indispensable, necessary or secondary. It also takes into account whether the use is permanent or casual, and whether the performance is recorded or live, with or without dancing. Further, the value to be paid is also calculated according to the user profile (prepared with the information provided by the music user), and the type of collection, which is established considering the physical parameter, or a percentage applied to the gross income.

All the fees are collected previously to use, through bank invoices¹⁷, considering the proportion of works in public domain and protected works. There are deductions for shows and events performed by non-profit institutions and for live performances, since there are no related rights to be distributed, as there is no phonogram display.

ECAD distributes the fees arising from music exploitation on a monthly and quarterly basis, in accordance with the criteria established by the music associations that are part of it.

From the total amount collected, 18% is addressed to ECAD¹⁸, and 7% to the associations, for the administration of their operational expenses. The remaining 75% goes to the affiliated owners. The distribution of collected sums is made according to the several segments in which the songs have been displayed. If the owner’s song has been played, they will receive a payment statement from their association, with the list of values distributed to each segment.

It is worth mentioning that values are distributed in accordance with the type of use. In case of recorded music (DJ, for instance), both the authors’ rights owner and the related party will receive their payment, whereas for live music only the authors’ rights holder will receive it, as there is no sound recording being used as mentioned hereinabove. Once the collected amounts are shared between the author and the related party, the distribution of the authors’ part will take into account the percentage agreed between the composers and their relevant editors, in the event there is any editing or contract for the assignment of rights. Usually, such percentage reaches 75% for composers/authors, and 25% for editors, which portions may be freely altered by agreement between the parties. The percentage applied to related parties is fixed, and is established by ECAD’s General Meeting, as 41,70% to interpreters, 16,6% to musicians and 41,70% to sound recording producers.

Differing from the direct distribution, in which the sums collected from shows, circus performances, events, movies and some television networks and paid by users of each show, for example, are only distributed to the authors of the songs performed therein based on the musical screenplays provided by the promoter, programming spread sheets provided by televisions¹⁹, or resulting from the recording made by ECAD, the indirect distribution is mostly based on sampling recordings of songs played on radios (ambient and live music). The sampling criteria then takes into account the relation between the values paid by users in each State of Brazilian Federation and the number of samples established for collection²⁰.

International Collecting Societies represented in Brazil

Accordingly to section 97, §3º of Federal Law 9.610/98, foreign entities shall be represented in Brazil by national associations, through representation contracts²¹. Therefore, the national associations integrating ECAD have entered into representation contracts for their repertoires with Copyright foreign associations. Thus, ECAD is in charge of collecting in Brazil fees arising from public exhibition of both national and foreign songs²².

In the next part of this article, the main criticisms to Collective Management in Brazil will be addressed and some proposals of solution will be appointed.

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