On June 1, 2021, CEE Legal Matters reported that Vasil Kisil and Partners has successfully represented commercial audio content provider PressCom and its clients in a lawsuit brought against them by the Ukrainian League of Copyright and Related Rights for lost profits allegedly arising from their use of PressCom sourced music in their restaurants. CEE In-House Matters spoke with Denys Kukharenko Co-Founder and CEO of PressCom to learn more about the matter.
CEEIHM: Tell our readers a bit about PressCom?
Kukharenko: PressCom has been operating in Ukraine since 2001. Currently, our team specializes in two frontline service directions. Firstly, we supply and install sound equipment, video monitors for restaurants, shops, shopping centers. Secondly, we render background-sounding services for retail and HoReCa. This scope concentrates on licensed music sampling to meet the customer needs, including playlist compilation, preparation of hard players with software for content playback, as well as daily technical support for clients. We also ensure content management and legal reproduction (rights-on) at more than 3,000 sites throughout Ukraine.
CEEIHM: Vasil Kisil recently represented your company in the dispute with the Ukrainian League of Copyright and Related Rights. What led to the dispute?
Kukharenko: We believe that lawsuits against our clients are a technique of struggle for clients. This is also a consequence of efforts made by the Ukrainian Agency of Copyright and Related Rights to monopolize the royalty market, to gain unlimited access to the collection and distribution of remuneration according to the established rules. It should be noted that today the public (users and copyright holders) has doubts about whether the collected remuneration is fairly distributed by this organization, as well as other private clones of this organization. UACRR declares itself a defender of offended copyright holders and all the users – violators of laws on copyright and associated rights.
UACRR mistakenly believes that any user, regardless of circumstances (such as a direct agreement on remuneration payment with the copyright holder), must pay specifically to the collective management organization, no matter what phonograms such user uses. UACRR formally records the fact of use and offsets a claim without expecting to receive an answer. Thus, UACRR has turned to the court even though the defendant, a PressCom customer, had legally used phonograms, and properly paid for their use to the copyright holder.
CEEIHM: What arguments were presented to the court in support of your case?
Kukharenko: The main elements of the PressCom customer defense were: (1) the fact that the client was entitled by the copyright holder to use phonograms and regularly paid the agreed remuneration; (2) the fact that the copyright holder completed the procedure for the withdrawal of the rights under the applicable law of Ukraine; and (3) that UACRR, as a collective management organization, has no right to sue in its interests without a power of attorney from the copyright holder, whose music the client uses.
CEEIHM: What was the final outcome and what is next for PressCom?
Kukharenko: The court decision is founded on the argument that the collective management organization should act in the rightsholders’ interests, on their behalf, and under their commission. UACRR did not prove that the plaintiff inflicted harm on UACRR by using phonograms. We welcome this decision since it meets the idea of modern simplified B2B relationships, economic freedom, transparency, and ease. Such an approach has its advantages for both copyright holders and users. All copyright holders, both international monster labels and small music libraries, should have an equal opportunity to land accounts using their resources or through CMOs. In their turn, users should be able to independently choose business partners without breaking the law.
CEEIHM: Why did you choose Vasil Kisil as your legal representative?
Kukharenko: We decided on Vasil Kisil & Partners as our legal partner on the recommendation of our client. Another aspect was their successful experience in litigation with collective management organizations. We are pleased with our choice and are grateful to our colleagues from this firm. We recommend this law firm as a high-quality legal partner. Besides, we value that Vasil Kisil & Partners shares PressCom beliefs and values. We are expanding our music catalog, and our cooperation with Vasil Kisil & Partners allows us to ensure high-quality legal support and full assistance to our clients when UACRR raises claims.
Originally reported by CEE In-House Matters.