After months of deliberations, discussions, and industry protests, the national legislator has adopted an amendment to the Copyright and Related Rights Act ("Copyright Act"), granting creators and performers the long-awaited right to remuneration for the public online distribution of their works. The new provisions will take effect on September 20, 2024.
The DSM Directive and Polish implementation
The amendment implements two EU directives: Directive 2019/789 "SATCAB II"1 and Directive 2019/790 "Digital Single Market" ("DSM Directive")2. The right for creators and performers to receive remuneration for making works available online stems from Article 18 of the DSM Directive. This provision requires member states of the EU to ensure appropriate and proportionate remuneration when creators and performers license or transfer their exclusive rights to exploit their works or other protected subject matter.
The legislative process for implementing the Directive took significantly longer than the prescribed timeframe. Concurrently, there was a public debate on the desired form of the Polish implementation of the DSM Directive, particularly concerning royalties owed to members of the artistic community for the exploitation of works by streaming services. The absence of regulation in this area has been particularly detrimental to film co-creators and performing artists involved in such productions. For example, creators and actors participating in national productions like "High Water" or "Johnny" received no royalties for the exploitation of their works on platforms in Poland. It is estimated that if 22.8 million Netflix viewers had watched the film "Johnny" in theaters, the creators and performers could have expected to receive PLN 2.5 million net in royalties3. Interestingly, at the end of 2023, Netflix offered Polish creators and performers of productions available on its platform a proprietary remuneration system to supplement the fees received under production participation agreements between the digital giant and the co-creators. However, this system, which included viewership requirements, was met with a lukewarm response from the film industry.
Royalties for audiovisual creators and performers
The right to royalties for film co-creators and performing artists is governed by Article 70(2)1 of the Copyright Act, which outlines a closed list of instances in which such remuneration is provided. Previously, this provision did not include the right to remuneration for the online exploitation of works, which not only violated the Directive but also deprived artists of income from the currently most popular method of exploiting film works. The amendment fills this gap by adding two new points to the provision:
21. The co-creators of an audiovisual work and performers are entitled to:
[...]
5) appropriate remuneration for the public distribution of a work in such a way that anyone can access it at a place and time of their choosing;
6) appropriate remuneration for the retransmission of a work.
With the amendment, co-creators and performing artists of audiovisual works will be entitled to receive royalties for the exploitation of their works on streaming platforms and VOD services, as well as for retransmission, i.e., the distribution of the work in its entirety and without changes by an entity other than the original broadcaster.
Royalties will be paid in the same manner as before—through the relevant collective management organization for copyright or related rights, as specified in Article 70(3) of the Copyright Act. In practice, this means that these organizations will continue to handle both the collection of additional remuneration and its distribution to individual co-creators and performing artists of audiovisual works. Importantly, the collective management organization cannot waive this intermediary role, nor can the entitled parties authorize another entity, such as a producer, to pursue additional remuneration. Only the collective management organization has standing to act on behalf of the rights holders, as confirmed by jurisprudence4.
Payment of remuneration occurs through the participation of creators in the distribution system. A creator or performing artist submits a request for payment to the collective management organization. However, this regulation does not preclude the possibility of direct payment from the user to the creator or performing artist. Such a payment would not be considered undue, as the payment is made to the party materially entitled to the fee. The collective management organization holds only formal standing to pursue fees, while the material rights holders are the co-creators and performing artists of audiovisual works5.
Royalties for creators of other works
In parallel with the changes to Article 70(2)1, the amendment introduces Article 214 into the Copyright Act, granting authors of literary, journalistic, scientific, musical, or literary-musical works, as well as authors of adaptations of these works, the right to appropriate remuneration for the public distribution of their works in such a way that anyone can access them at a place and time of their choosing (i.e., on the Internet). The previous lack of such regulation in the Copyright Act—similar to that of Article 70(2)1—violated the DSM Directive.
For these rights holders, a key difference will be the flexibility in how remuneration is paid. The creator will decide whether the payment is made to:
- A collective management organization;
- An independent management entity;
- Directly to the creator.
Royalties for performers of other works
Performing artists of works other than audiovisual ones will have to wait a little longer for streaming and VOD royalties. While their remuneration will be paid under the same principles introduced by Article 214, the similarly constructed Article 861 of the Copyright Act will not come into effect until February 20, 2025.
Summary
The amendment to the Copyright and Related Rights Act concludes a multi-month discussion on the rights of creators and performers in the age of widespread streaming. It will be important to closely monitor how the new provisions work in practice and what direction jurisprudence will take in case of disputes.
Footnotes
1 Directive (EU) 2019/789 of the European Parliament and of the Council of 17 April 2019 laying down rules on the exercise of copyright and related rights applicable to certain online transmissions of broadcasting organisations and retransmissions of television and radio programmes, and amending Council Directive 93/83/EEC
2 Directive (EU) 2019/790 of the European Parliament and of the Council of 17 April 2019 on copyright and related rights in the Digital Single Market and amending Directives 96/9/EC and 2001/29/EC
3 Estimates of the Polish Filmmakers Association – the Union of Audiovisual Authors and Producers
4 A. Niewęgłowski. Copyright Law. Commentary. Article 70(3). WKP 2021
5 Ibidem
Originally published 13 September 2024
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