The Supreme Court of the Russian Federation may revoke the ruling of illegality of the Russian Rightholders Union registration, experts say

The experts expressed to RAPSI/rapsinews.ru the opinion that the ruling by Dagestan District Court on illegality of registration of the Russian Rightholders Union (RRU), founded by Nikita Mikhalkov, among others, was not final and could be revoked by the Supreme Court of the Russian Federation.

Akushinsky District Court of the Republic of Dagestan on March 2, upon request by the singer Kurbanmagomedov, ruled illegal the registration of RRU with the Ministry of Justice. The claim says that, according to the Civil Code of the Russian Federation, only the authors, performers, producers of soundtracks are entitled to receive remuneration for use of copyright, but there are practically no rightholders among the founders of RRU.

Kurbanmagomedov pointed out that, as of the moment of registration, the All-Russian Intellectual Property Organization, Russian Authors’ Society, Cinematographers’ Union of Russia and three individuals were the founders of the RRU.

Ruling may be revoked

Denis Shumskiy, Advocate at the Firm, does not doubt that this ruling will be contested, and that “the higher instance courts will have the opportunity to speak on the issue of legality of RRU registration”. He reminded that last year courts of arbitration considered the issue of legality of RRU accreditation and ruled it legal.

The expert says that the court saw a violation of the claimant’s rights, in particular, in that the claimant was not able to receive information, whether RRU had enough departments to collect all authorship fees payable to the singer in all regions of the Russian Federation. D.Shumskiy stated: “This creates the risk of not collecting and not paying the full amount of the fees”. The expert believes that the court agreed with the claimant that the actions of the Russian Ministry of Justice and its ruling on the official registration of RRU affected the claimant’s rights by permitting that organization to conduct its activity with violations of the claimant’s rights to receive fees and to be a member of the accredited organization.

Vladimir Bublikov, Director of Arbitration Practice Department of “RKT” LLC, is of the opinion that “the court ruling by the District Court of Dagestan is the next stage of the struggle to receive and distribute the so-called “blank CD tax” fixed at 1% of the value of equipment/information media”.

The expert reminded that, until today, N.Mikhalkov’s RRU had successfully defended the right to collect authorship fees (the amount of which, according to the experts’ evaluations, may reach 150 million USD annually), which it had obtained as the result of a tender. However, the RRU’s competitor, the Russian Allied Rights Society of Ahmed Tagibov, contests the accreditation and, respectively, the right to receive “bank CD tax”.

V.Bublikov believes that the District Court’s ruling is not final and will doubtlessly be appealed against to higher instances by RUU.

“However, - says the expert, - the Russian Allied Rights Society (RARS) is currently exercising an efficient pressure on RUU on all fronts”.

Arbitration dispute

RARS has already filed a claim with the Moscow Arbitration requesting to rule illegal the decision of the accreditation committee and the instruction of the Federal Service of Supervision over the Compliance with the Law in the Sphere of Mass Communications and Cultural Heritage Protection (Rosohrankultura) approving the composition of the accreditation committee.

Anzhelika Korotaeva, Executive Director of RARS, told RAPSI that the claimant’s position in court was that Rosohrankultura was not entitled to conduct accreditation before the Government resolution was issued defining the fee amount (1% in this case) and the list of taxed equipment.

Vladimir Putin signed the respective resolution on October 14, 2010, and it was published on October 18, 2010, while the session of the tender committee on selecting the accredited organization was held on September 20, 2010. N.Mikhalkov’s RRU was selected and accredited.

A.Korotaeva stated that RRU had never conducted such activity and was created two or three months prior to the accreditation. While RARS, according to her, was authorized back in 1993, was fully prepared for the tender and was only expecting the issuance of the Government resolution. RAPSI was not able to get commentaries from RRU and Rosohrankultura.

The Supreme Court of Arbitration of Russia in December 2011 decided not to reconsider the rulings of the lower instance courts, which had ruled legal the decision by Rosohrankultura to accredit RRU for the collection of 1% fee from the value of sound recording equipment and blank media.

Full version of the publication is available here.