In April 2017, an amendment to the Copyright Act introduced a new procedure for negotiating royalty fees tariffs under which a collective rights manager shall publish a proposal of the tariffs and their justification on its website by the 31 August each year (the “Amendment”). The consolidated version of the Copyright Act does not specify when this new procedure becomes compulsory for collective rights managers, however interim measures of Act no. 102/2017 Coll. which amended the Copyright Act specify the new requirements need to be met only as of 31 August 2018.
Tariffs indicate the licensing fees paid by users of copyright protected works (such as television operators that broadcast copyright protected works or restaurants that have pop music playing in the background) to collective rights managers. Collective rights managers then distribute the fees to individual rights owners.
Under the Amendment, the proposal of the tariff must now justify the tariff rates and demonstrate that they are based on objective and non-discriminatory criteria. Additionally, collective rights managers will only be able to raise tariffs by an amount exceeding the rate of inflation in the preceding calendar year with the prior consent of the Ministry of Culture.
In the month following publication of the tariff proposals, users who have entered into a licensing agreement with collective rights managers or intend on doing so, as well associations representing users, will be entitled to raise objections to the tariff proposal. These will be followed by negotiations between the collective rights manager and the user and if no agreement can be reached within two months, a mediator shall be engaged. Should negotiations fail with a mediator, either of the parties may petition a court to determine a fair tariff rate.
Users who do not raise objections and are not represented by an association which raised objections, are presumed to have consented to the new tariff and the new tariff will be effective towards users on the date specified in the proposal (generally 1 January of the following calendar year), even if negotiations or court proceedings with objecting users and user associations are not concluded.
The Amendment transposes Directive 2014/26/EU of 26 February 2014 and was welcomed by critics of collective rights managers, who disapprove of the arbitrary determination of reimbursement rates.
On the other hand, collective rights managers have been vocal in their criticism of the Amendment. They have argued it creates an unnecessary administrative burden and will result in significant challenges during the negotiation of tariffs with users of copyright protected works.