Ukrainian ShowBiz: Growing Business on Legal Basis
By Dmytro Guziy
Trident
Despite the fact that the
ShowBiz and Publicity
terms are rapidly
penetrating the social enviromnent
in Ukraine, a “freshman”
to the Ukrainian show business
industry may be surprised by
absence of specific clear legal articulations regarding the
showbiz environment in Ukraine.
Of course, one could object to statements like the
above by recalling the On Tours and Performances in
Ukraine Act of Ukraine of 10 July 2003, No.1115-IV and
by-law of Resolution of the Cabinet of Ministers of Ukraine
On Rules of Organizing and Managing the Performances of
15 January 2004, No.35. In fact, the above regulations
should be obeyed in terms of performance of duty taxation
and procedures (permits) with local authorities. At
the same time, provisions thereof cover only a minor part
of the entertainment field.
The legal basis for this “virtual” business industry is
still retained by traditional institutions of civil law — first
and foremost in the Civil Code of Ukraine and Commercial
Code of Ukraine. Also, laws like the On Copyright and Related
Rights Act of Ukraine of 23 December 1993 No 3792-
XII with a new version of it in 2001 and On Advertising
Act No 270/96 in its 2003 edition (each with consequent
amendments) are of utmost importance for managing
activities in music, video and entertainment business in
Ukraine. Besides, a number of licensing, specific regulations
should be always considered as well and taxation
rules hereto.
The variety of issues most often negotiated by the market
players can be structured as follows:
• emergence and transfer of rights from the actual
composer, poet, artist and musician enabling the commercial
use of their artistic work and, therefore, making it
a “commercial product”;
• relations between secondary rights owners within
commercialization of products including producer (publishers),
record labels, content providers and distribution
channels;
• organizing performances, broadcasting and clearing
rights thereto;
• combined use of different rights for special projects
(promo and advertising campaigns, celebrity engagements,
branding, etc.).
The challenges of the 1990s were concentrated on creating
a legal basis and securing commercial interests for
discs (cassettes) produced without licenses and proving
the authorship and respective commercial rights of creators
and artists. The result is inter alia that licensing of CD
and MC production and distribution is still an important
and efficient part of recording activities.
The new tasks of the early XXI century on the emerging
Ukrainian market are aimed at securing the commercial
interests of record producers and copyright holders in
electronic distribution and content production and multiple
use of creative and professional works.
The main legal instrument for balanced and clear commercialization
of IP rights are various types of contracts
systemized by Chapter 75 of the Civil Code of Ukraine,
entitled “Operating Commercial Intellectual Property
Rights”. The basic types of agreement that should be
highlighted include alienation, license and services provision
contracts. Any such agreements are to be executed in
writing.
Each kind of the listed agreements has strong and weak
points. Thus, the services provision contract does not ensure
in its essence time lasting, result achieving and procedural
efficiency of creation and transfer of artistic work.
Strict sanctions are rarely acceptable thereto, by the way.
It is also worth remembering the specific rule of Article
1109, which provides that no license may be executed
in respect of IP rights, which are not valid at the time of
execution. Alienation of rights is also a very tough issue
for rights holders and is often opted in favor of licensing
contracts.
At the same time, very important and efficient contractual
means for negotiating IP transactions are ensured by
the possibility of splitting territories, types of use, periods
of time within the use of the same IP object. In addition
to these basic (essential) provisions secondary terms on financing
promo activities, special commitments or limitations
of use etc. are highly advisable.
As to the publishing aspect of show business, unfortunately,
at the present time no efficient system of “collective
rights management organizations” is available in Ukraine.
That makes the initial contractual structuring even more
important. However, the issue of providing an efficient
legal and commercial procedure for public broadcasting
is very urgent, requires professional and institutional approaches
and is expected to be developed in a while.
As to eventual court remedies it can be noted that
courts are currently better aware of IP legal institutions
and respective cases may be found. But almost any complicated
case in copyright requires outsourced qualified
experts. This means longer litigation periods and requires
attorneys conducting the case be very precise in emphasis
and questioning thereon.
Talented amateurs, personal cooperation and homemade
products featured in the romantic period of the
1990s. However, this is no longer the mainstream of this
business. Long-term players and projects want to keep
stabilized non-tangible guarantees that make legal structuring
and securing the cornerstone of the entertainment
business. Actually, as regards electronic technologies and
e-marketing, more and more show business is coming to
trading IP rights on a legal basis in its essence and pattern.
Deeper specialization goes hand-by-hand with business
cooperation based on the legal and contractual background.
Finally, show business and the entertainment industry
are growing in terms of structure, remuneration rates,
number and quality of projects, as well as business turnover.
Therefore, legal support is already an instrument for
securing and harmonizing business interests. As everywhere
in business, timely and professional legal advice is
also a good remedy against losses and litigation risks.
The above points represent the actual role and importance
of legal professionals in the show business and entertainment
environment. Even though they are not the
frontmen of the show business machine, lawyers are vital
key team members and “behind-the-scene” managers of
copyrights and related rights transactions therein.
|
