Czech Amendment Threatens Performance Royalties From Hotels

A proposed amendment to the Czech Republic's Copyright Act concerning music performances in hotels has angered collecting societies, which fear substantial revenue losses.

PRAGUE -- A proposed amendment to the Czech Republic's Copyright Act concerning music performances in hotels has angered collecting societies, which fear substantial revenue losses.

The amendment to the Copyright Act of 2000 would require hotels to pay fees for performances of recorded music on radio and TV in public spaces, but not in each individual guestroom, as is currently the case.

The legislation was passed by the Czech Parliament's lower chamber in late November. Before it becomes law, the amendment must be approved by the Senate, which is due to discuss it Jan. 5.

"The amendment is completely the opposite of what is common in the western world," says Karel Kucera, managing director of the Czech arm of the International Federation of the Phonographic Industry. "The vast majority of [western] countries agree that playing music in a hotel room is a public performance and should be paid for."

Currently, Czech hotels pay fees for playing music on radio and TV to the country's three largest collecting societies: OSA and Dilia, representing authors, and Intergram, which collects on behalf of Czech labels and performers.

The societies claim total monthly fees of 300 Koruna ($13) for each hotel room equipped with a radio and a television set. Intergram's license fees form the largest part of those payments.

The new law would also take away the societies' right to set the levels of fees; instead, the bodies would have to negotiate the amounts with individual hoteliers.

The law would allow hotels to have radios and TVs playing music in public places as long as they have begun negotiations with the collecting agencies. They will not need to have closed a licensing deal first, and the amendment does not set a time limit for that. Nor does it set out sanctions that collecting societies could enforce for failure to close a deal.

Critics of the amendment fear that hotels could in theory play music in public spaces indefinitely, without ever signing a contract.

Kucera complains that Czech lawmakers are ignoring the international intellectual property treaties the country signed as part of its preparations for joining the European Union on May 1, 2004. Those include the World Intellectual Property Organization Performances and Phonograms Treaty and the World Trade Organization's TRIPS agreement (covering intellectual property rights).

The music industry could seek to enforce those treaties in the Czech Republic through international courts, he warns.

Milan Rambosek, general secretary of Czech hotel and restaurant association HOREKA, points out that the amendment affects only guestrooms and that royalties will still have to be paid for publicly accessible areas.

He says hotel rooms are considered under Czech law to be an extension of a private living space.

OSA chairmwoman Alexandra Wünschova-Pujmanova complains that the amendment fails to clearly define a "public place." She fears that it could be misinterpreted to cover all hotel spaces accessible only to guests, not just their rooms.

Authors represented by OSA would lose at least 30 million Koruna ($1.3 million) in annual royalties because of the amendment, she claims.

OSA says that if the amendment passes into law, it will appeal to the Czech Constitutional Court and, ultimately, the European Court.


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