During the last years there have been numerous initiatives to conduct large-scale reform in Estonian copyright law. For the time being, those initiatives have abated, leaving extensive reform still waiting for its time.
Nonetheless, copyright law is constantly changing, most recently in April 2016 when a new revised text of the Copyright Act (the “Revised Act”) entered into force in Estonia. The object of this Revised Act was to implement Directive 2014/26/EU on collective rights management and multi-territorial licensing of rights in musical works for online uses (the “Directive”) into Estonian law.
The implementation of the Directive required extensive changes in Estonia’s Copyright Act, which did not provide enough detail in its regulation of collective management organizations. Furthermore, the concept of multi-territorial licensing was previously unknown, and there was no mechanism for the exercise of supervision over collective management organizations. Therefore, the Revised Act is expected to have a relatively large impact on the industry.
Impacts of Transparency Obligations
The first group of amendments to the Copyright Act address the specific and uniform standards for the management of collective representation, including increasing transparency in the actions of collective management organizations. For example, a collective management organization is now defined in the Copyright Act as a non-profit association that collectively exercises copyrights or related rights. The exercise of rights shall be the sole or main purpose of the organization, and that organization shall be controlled by the right-holders. In Estonia, there are four collective management organizations which qualify under this definition.
One of the economic impacts of the changes on the collective management organizations is that under the Revised Act, they now have more extensive obligations to report – which entails more costs. However, these additional costs will decrease in the years to come.
Transparency obligations are a positive change for right-holders, which will now have more information available to help them make an informed decision in choosing a collective management organization.
Impacts of Multi-Territorial Licensing
The introduction of multi-territorial licensing theoretically helps copyright holders by reducing the number of licenses required to offer multi-territorial services, as it introduces European multi-territorial license agreements which can be issued by any country in the EU. However, specific requirements must be met by the collective management organization in order for it to be allowed to issue such licenses. As it is doubtful that the collective management organizations in Estonia have sufficient funds to comply with these requirements, the impact of this on Estonian authors who might wish to obtain multi-territorial licenses might be low.
For Estonians, a positive result derives from the requirement that large collective management organizations who offer multi-territorial licensing have to offer the repertory of smaller collective management organizations under the same conditions as their own repertories. Therefore, the availability of Estonian authors’ works in the EU is likely to increase.
Multi-territorial licensing also brings forth a beneficial social impact for Estonian consumers, as a much wider array of musical works will become available.
Impacts of State Supervision
Until the adoption of the Revised Act, Estonia was one of the few EU member states which did not provide for supervision over collective management organizations. With the Revised Act, the Ministry of Justice will exercise state supervision over compliance with the requirements for collective management organizations in a two-level supervision mechanism. First, the activities of the collective management organizations who issue multi-territorial licenses will be deemed economic activities, meaning that they will have a notification obligation and be subject to follow-up inspections. Second, the activities of collective management organizations which do not issue multi-territorial licenses will also be treated as economic activities, but they will not be subject to notification obligations. Therefore, Estonian collective management organizations will need to implement systems in order to comply with the notification obligations; however, the change will not be substantial for them.
In conclusion, the amendments to the law are likely to impact the execution of copyrights through the collective management organizations. However, the ultimate impact is yet to be seen, as the Revised Act has only been in force for a few months.
By Peeter Viirsalu, Head of IP, and Kart Raud, Associate, Law Firm Varul (member of the Tark Grunte Sutkiene group)
