A new copyright amendment is under consideration in Israel, but response from the country's music industry is lukewarm.

TEL AVIV, Israel -- A new copyright amendment is under consideration in Israel, but response from the country's music industry is lukewarm.

A key proposal of the Copyright Act (Private Copying) 2004 -- published on October 19 -- permits private copying of legally purchased music onto media that is mainly intended for copying music. The bill proposes that manufacturers and importers of media such as CD-Rs pay a royalty of up to 5% of the retail price of the media into a fund.

Under the proposal, the fee would be divided among three collecting societies: ACUM (composers and publishers' performance and mechanical rights), EMMI (artists) and Eshkolot (performers' rights).

In the United States, a similar royalty is due under the Audio Home Recording Act of 1992 from those companies that manufacture or distribute digital audio recording devices and media.

Itshak Sheffer, GM of the Israeli affiliate of the International Federation of the Phonographic Industry (IFPI), says labels have serious reservations about the bill. "The main problem is [that] the bill doesn't settle points in law, leaving the Minister, not Parliament, to decide," he says.

Points left undecided include the types of software that will be subject to the royalty and how the royalty percentage will be specifically defined.

ACUM welcomed the initiative. "We are in favor of the proposals," says Assaf Nahoum, ACUM marketing and business development manager. "We think that as long as the technology allows it, people will home copy. So we have to find a way to compensate creators. This type of law already exists in Europe -- and in Israel for cassettes. But the current law says we are entitled to [app. U.S. $300,000] from the Ministry of Education, which is hard to collect. The new law talks about a tax of 5% enforced on the manufacturers of CDs. This is better for us."

Roni Braun, CEO of leading independent record company Helicon Ltd., claims the Ministry of Justice caved in to the performing societies. "This kind of legislation exists elsewhere," he argues, "but was introduced only after measures to deal with all aspects of the Internet were implemented, among which ISPs' limited liability and anti-circumvention [measures]. Such a law is opening the gate to burning from non-legitimate sources on the Web."

In addition, a Subcommittee for Copyright Royalties of Israel's Parliament also recommended to the Knesset's Economics Committee the creation of a copyright tribunal to set the rates of the royalties paid to rights owners. The tribunal would be headed by a judge emeritus appointed by the minister of justice. It would act as a court of first appeal for compensation claims. It would also settle disputes between rights societies and rights owners.

After a government consideration period of 21 days, the bill must go to the Legislation Committee, then on to Parliament. Insiders speculate the Minister of Finance will voice some objections. It is unclear as to when the legislation may be enacted.