Bucharest Court of Appeal

BUCHAREST COURT OF APPEAL

Docket no. 2013/2/2016

Dateof issuance: 11/11/2016

TO,

ROMANIAN COPYRIGHT OFFICE

Address: Bucharest, 118, Calea Victoriei, 4th and 5th floors, 1st District

Given the request filed by UPFR, according to the court resolution from 11/11/2016,in accordance with art.131 para. 9of Law no.8/1996,this is to inform you thatCivil Decision no.784A/26.10.2016, pronounced in docket no.2013/2/2016 by the Bucharest Court of Appeal – Division IV of the Civil Court, settled the appeals filedbythe appellants-plaintiffsThe Union of Phonogram Producers in Romania - U.P.F.R. and The Romanian Centre for Performers’ Rights Management - C.R.E.D.I.D.A.M. and by the appellants-defendants The Confederation of Authorized Operators and Transporters in Romania - C.O.T.A.R. andThe Employers’ Federation of Romanian Tourism - F.P.T.R.against Arbitration Award no.l of15/02/2016, in contradictory with the appellee-defendants The Employers’ Federation of Trade Networks - F.P.R.C., The Federation of Hotel Industry in Romania - F.I.H.R., S.C. Altex România S.R.L., S.C. OMV Petrom Marketing S.R.L., S.C. DEDEMAN S.R.L., ruling as follows:

“To sustain the appeals filed against Arbitration Award no.l of 15/02/2016

To partially change the appealed Arbitration Award, as follows:

“METHODOLOGY regarding the remuneration owed to performers and to phonogram producers for the public communication of phonograms or of the reproductions thereof, as well as / or of the artistic performances from the audiovisual field, for ambient and profitable purposes, and the tables containing the property rights of performers over phonograms and over the audiovisual, and of phonogram producers, by means of mandatory collective management

1. Within the meaning of this methodology, user means a self-employed person (PFA, ÎI etc.) or a legal entity which, in relation to its commercial activity, holds or uses under any title (ownership right, administration, rental, sub-rental, free loan, concession, lease etc.) indoor or outdoor spaces, wherein it performs public communication acts,as defined by Law no. 8/1996, when public communication concerns phonograms or artistic performances from the audiovisual field.

The users which perform the public communication of phonograms or of the reproductions thereof, as well as / and of artistic performances from the audiovisual field are bound, prior to any such use, to obtain the non-exclusive licensing authorization from the habilitated collective management bodies, in exchange for the remunerations set forth in the tables included in this methodology.

The user is bound to obtain from the management bodies which collect the rights of performers, i.e. from The Romanian Centre for Performers’ Rights Management - CREDIDAM, respectively of phonogram producers, i.e. The Union of Phonogram Producers in Romania - UPFR, according to the legal regulations in force, non-exclusive licensing authorizations for the public communication of phonograms or of the reproductions thereof and/or of the artistic performances from the audiovisual field, before the start of the public communication activity of phonograms or of the reproductions thereof, as well as / and of artistic performances from the audiovisual field, in exchange for the payment of a remuneration, irrespectively of the actual duration of such public communication.

The use of supports or devices for technical testing will be considered as a use of phonograms or of the reproductions thereof and/or of the artistic performances from the audiovisual field in the presence of a client requesting such testing, by means of an audio and/or audio-video device placed for sale and subject to testing. The maintenance in working condition of one or several devices inside the premises of a shopping unit or outside it will not be considered as a technical testing, but as a use for ambient purposes of phonograms or of the reproductions thereof and/or of the artistic performances from the audiovisual field. No remuneration will be owed for technical testing activities.

The issuance of the non-exclusive licensing authorization for the public communication of phonograms or of the reproductions thereof and/or of the artistic performances from the audiovisual field will be requested by the user with at least 3 calendar days before the start of its activity.

For the issuance of the non-exclusive licensing authorizations or for the purpose of establishing the amount of the owed remunerations, the collective management bodies collecting such remunerations, appointed in accordance with the legislation in force, in relation to the rights of performers and of phonogram producers, will request from the user, and the user will be bound to make available for them, within 10 days from such request, certified copies of the following documents:

a)the certificate of registration with the Trade Register Office (for legal entities), respectively the document of authorization for self-employed persons (PFA, ÎI, any form of organisation of natural persons etc.);

b)any supporting document indicating the area wherein phonograms / artistic performances from the audiovisual field are broadcast;

c)the certificate of classification issued by the National Authority for Tourism or by the competent authority, or the proof of submission of the classification file (in the case of accommodation structures with tourist accommodation function) and the annexes thereto;

d)the certificates of classification of passenger transportation means held under any title, the transportation licenses issued for each transportation means owned, the award contracts for indirect management of taxi services or of rental services (in the case of authorised transporters).

2.4.The non-exclusive licensing authorization will be issued for a period of 3 / 6 / 12 calendar months or for a seasonal period, as specified by the user, which can be extended with successive periods, on condition of the payment of the owed remuneration.

The non-exclusive licensing authorization will be issued on the basis of an affidavit given by the user (legal representative or proxy), or of a contract concluded between the user and the collective management body of the related rights of performers, respectively between the user and the collective management body of the rights of phonogram producers, for the purpose of obtaining the non-exclusive licensing authorization.

The non-exclusive licensing authorization for the use of phonograms or of the reproductions thereof and/or of the artistic performances from the audiovisual field for profitable purposes, in relation to the activities listed at point I1 of the table available below, containing the value of the remunerations owed for the use of music for ambient purposes, will be issued for each event / manifestation / show / tour / campaign or for other activity assimilated thereto.

2.5. The non-exclusive licensing authorization is valid only for the spaces or activities declared by the user or for which a contract/convention was concluded for the purpose of obtaining the non-exclusive licensing authorizationfor the period established in the non-exclusive licensing authorization, and the proof of the extension of the authorization will be made only based on the payment documents of the fair remuneration owed under this methodology for all the periods ulterior to the expiration of the deadline stipulated in such authorization.

2.6. The non-exclusive licensing authorization is nominal and it cannot be transmitted to a third party by means of sub-licensing.

2.7. The expiration of the non-exclusive licensing authorization subsequently to the termination of the activity, to the temporary suspension of the activity performed by the user or to the termination of the public communication of phonograms or of the reproductions thereof and/or of the artistic performances from the audiovisual field will occur if, with at least 15 calendar days before the termination or the temporary suspension of the activity or of the termination of the public communication, the user submits to the collective management body of the related rights of performers, respectively of the phonogram producers which issued the non-exclusive licensing authorization, an affidavit signed and stamped by the legal representative of the user, which attests the date of termination or of the temporary suspension of the performed activity or of the termination of the public communication. When the termination of the activity, the temporary suspension of the activity or the termination of the public communication of phonograms or of the reproductions thereof and/or of the artistic performances from the audiovisual field occurs as a result of a force majeure event, the user is bound to communicate the above mentioned affidavit within 48 hours from the occurrence of the force majeure event.

In case the user fails to submit the affidavit regarding the termination, the temporary suspension of the activity or the termination of the public communication of phonograms or of the reproductions thereof and/or of the artistic performances from the audiovisual field, the user will still owe the remunerations established in this methodology, according to the non-exclusive licensing authorization, without the ability to invoke a potential termination of the public communication.

In case the user paid the remuneration in advance for spaces wherein it ceased to carry out public communication activities at a later moment, and this fact was communicated to the collective management body under the conditions of para. 1, the remuneration corresponding to such period will be returned to the user.

2.8. In case the information supplied by the user in the affidavit or supplied by it at the time of conclusion of the contract, under the conditions of art. 2.4 para. 2, is ascertained not to be accurate and the actual information is likely to increase the value of the remuneration – as established based on its affidavit, the user will owe three times the amount with which the remunerations were increased, based on art. 139 para. (2) letter b) of Law no. 8/1996.

3.1. For the use of phonograms or of the reproductions thereof and/or of the artistic performances from the audiovisual field, users are bound to pay the remuneration in line with the values set forth in the tables forming an integral part of this methodology, plus VAT.

3.2. The remuneration owed for the public communication of phonograms or of the reproductions thereof and/or of the artistic performances from the audiovisual field for ambient purposes will be paid quarterly / biannually / annually, the latest until the last day preceding the period for which it is paid. By way of exception, users can pay the owed remuneration on a monthly basis, if the amount thereof exceeds the amount of Lei 1,000/month, the latest until the last day of the month preceding the month for which it is paid.

3.3. For the public communication of phonograms or of the reproductions thereof and/or of the artistic performances from the audiovisual field for lucrative purposes, users will pay in advance, the latest until the last day of the month preceding the deployment of their activity, the minimum remuneration established in accordance with tables I1, I2, I3 and I4 below.

The payment of the minimum remunerations will be performed under the conditions of point 3.2.

Afterwards, the users which perform the public communication of phonograms or of the reproductions thereof and/or of artistic performances from the audiovisual field will pay the owed percentage remuneration as follows:

- a user which carries out occasional events will pay the owed percentage remuneration in accordance with table I1 below: within at most 5 working days from the end date of the event / manifestation / show / tour / campaign or of other activities assimilated thereto;

- a user which performs the public communication of phonograms or of the reproductions thereof and/or of artistic performances from the audiovisual field in indoor or outdoor spaces, according to tables I2, I3 and I4 below: monthly, the latest until the last day of the month for the previous month, for which it is owed.

3.4. For delays in the payment of remunerations, users will owe penalties representing 0.1% per day of delay of the outstanding amounts, being served a notice of default, without the necessity for the notification thereof.

3.5. A user which performs the public communication of phonograms or of the reproductions thereof and/or of artistic performances from the audiovisual field for profitable purposes, according to tables I1, I2, I3 and I4, is bound to submit monthly to the collective management body of the related rights of performers, respectively of phonogram producers, the latest until the 10th day of the month following the month for which it owes the remuneration or at the end of the event / manifestation / show / tour / campaign or of other activities assimilated thereto (in the case of occasional events), the documents indicated below:

- supporting financial – accounting documents for each payment month (analytical balances, accounting balance sheets), supporting the declared amounts and verifying the monthly calculated remuneration;

- an affidavit, signed and stamped by the user’s legal representative, regarding the calculation basis of the remuneration owed for the public communication of phonograms or of the reproductions thereof and/or of artistic performances from the audiovisual field for profitable purposes, differentiated for each specific activity carried out for the purpose of the public communication thereof for profitable purposes;

- the list of phonograms or of the reproductions thereof and/or of the artistic performances from the audiovisual field, communicated to the public, for the correct distribution of the remunerations collected by the management bodies, according to the playlist template indicated below:

3.6. The calculation base of the remunerations owed for the public communication of phonograms or of the reproductions thereof and/or of the artistic performances from the audiovisual field, from public communication for profitable purposes is represented, as the case may be, by:

1. the revenues, without VAT, obtained from consumption and from the sale of tickets, subscriptions, programs, the value of advertising materials, sponsorships etc., but not less than:

2. the expense budget of the event / manifestation / show / tour / campaign, without VAT;

3. the expense budget for advertising, promotional or electoral campaigns, without VAT.

The remuneration is not owed, and if it was already paid, it will be returned, in case of cancellation of the event / manifestation / show / tour / campaign.

3.7. For users which hold a valid license on the effective date of this methodology, the provisions of art. 3.2 and respectively of art. 3.3 will be applied.

For the remuneration paid in advance, and related to the licensing authorization with a minimum validity period of 12 months, a discount representing 5% of the amount owed for such period will be granted, and a discount amounting to 3% will be granted for the remuneration associated with the licensing authorization with a validity period of minimum 6 months.

3.8. In case the user has several outstanding payments, the performed payment will settle the debts in the order of their age.

3.9. In case phonograms or the reproductions thereof and/or artistic performances from the audiovisual field are publicly communicated within the same space both for ambient and for profitable purposes, remunerations will be paid for both uses.

3.10. In the case of users which organise tours or events, they can pay the due percentage remunerations at the end of the tour or of the last event, under the conditions set forth in the last paragraph of art. 3.3, after the advance payment of the remuneration stipulated in the first paragraph of art. 3.3.

3.11. In case a user holds or uses several spaces or performs several activities, the remuneration will be owed distinctly for each individual space or for each individual activity performed by it.

In the event of a single source of sound or of sound and image in unconfined spaces inside shopping units or inside supermarket or hypermarket units, for the area of public alimentation which forms an integral part of the commercial activities performed by them, wherein phonograms or the reproductions thereof and/or artistic performances from the audiovisual field are publicly communicated, the user will pay a single remuneration corresponding to the entire area, taking into consideration the remuneration for the activity with the highest weight.

3.12. For undeclared spaces and/or periods, for which the user performed the public communication of phonograms or of the reproductions thereof and/or of artistic performances from the audiovisual field for ambient or profitable purpose, without the prior procurement of the non-exclusive licensing authorization, it will be bound to pay to the collective management body of the related rights of performers and of phonogram producers, an amount representing three times the value of the amounts which the user would have owed in case it would have had a non-exclusive licensing authorization. In case the amount of the remuneration which the user would have owed cannot be determined, it will owe three times the value of the remuneration usually paid by the users from the same category.

3.13. In the case of the rental, sub-rental or of other manner of conveyance of the partial use of a space wherein phonograms or the reproductions thereof and/or artistic performances from the audiovisual field are publicly communicated, the legal holders of the respective space under any title (tenants, occupants etc.) are bound to obtain the non-exclusive licensing authorization and to pay the distinct remuneration, on the supposition that they will perform public communication acts distinct from the public communication which takes place inside the area which also contains the used space.

4.1. The collective management bodies of the rights of performers, respectively of phonogram producers, in accordance with the legal regulations in force, can appoint proxies who will monitor the public communication of phonograms or the reproductions thereof and/or artistic performances from the audiovisual field, for ambient or profitable purpose, who will have free access to the indoor or outdoor spaces wherein the public communication takes place, based on the credentials issued by the above mentioned collective management bodies or on other supporting documents (delegations), being allowed to carry portable audio and/or video recording equipment. Such right does not exonerate users from their obligation to declare the use of phonograms or the reproductions thereof and/or of artistic performances from the audiovisual field prior to the start of such activity, or to pay the related remunerations under the conditions and in the amount established in this methodology.

4.2. The aspects ascertained by the proxies of the collective management bodies on occasion of the performed verifications will be recorded in the verification minutes which will be concluded on site, which can be accompanied by audio/audio-video recordings substantiating the public communication, until proven otherwise.