GENERAL BUSINESS TERMS
for theprovision of sub-licenses for the public showing of the copies ofcinematographic works in cinemas and similar establishments as amended by the Amendment No. 2 of 1 July 2013
I. Initial provisions
1)Pursuant to the Section 273-274 of the Commercial Code and in conformity with the Act No. 121/2000 Coll. (Copyright Act), the Act No. 273/1993 Coll., as amended, (the Acton certain conditionsfor the production and the Act No. 496/2012 Coll. on audiovisual works and cinema promotion, amending certain acts (Audiovisual Law), distribution andarchiving of audiovisualworks), these General Business Terms(hereinafter referred to as the GBT) govern the basic rightsand obligations of distributorsandoperatorsof cinemasand similar establishments(hereinafterreferred to as "cinemas") for the provision ofsub-licensesfor the public showingofthe copies ofcinematographic worksin cinemas andsimilar establishments.
2) Pursuant to the Section 273 of the Commercial Code and under the conditionsset out in theseGBT,distributorsof films(cinematographicworks)andcinema operatorsshallconcludethe relevant contractsto grantsub-licenses, while the differingprovisions in the contractshall take precedence overthese Business Terms.
II. Definition of expressions
Distributor
Distributoris aperson who, initsbusinessand in the extentof authorizationfromthe holders of therightsto use theaudiovisual work anditscopies,gives the permission to thirdparties tousethe audio-visual workin the CzechRepublic,for cinematicpresentationsand for this purposeprovides the licensee(operator)with the copy ofthe audiovisual work.
Operator
Operator is anorganizer ofcinematicperformances, i.e. alegal ornatural person whoorganizescinematographicperformancesathis expense and responsibility.
Distribution
All activitiesrelated to ensuring thecontractual, technical, marketing and othertermsfor the implementation ofcinematographic performances by theoperator.
Cinematographic work
Cinematographic work(hereinafter referred to as thefilm) is an audiovisualwork intendedfor the viewing by the publicthrough thecinematographicperformances; cinematographic workis notan audiovisual workthat has the nature ofadvertising.Within themeaning ofthe Section62in the Copyright Act, audiovisualwork isa work created bythe arrangement ofaudio-visual works, whether processedorunprocessed, which consist of the series ofrecorded, interlinkedimages evoking theimpression of movement, whether accompanied by the soundor not, perceivable by the sight andif accompanied by the sound, perceivable by the hearing as well.
Cinematographic performance
Cinematographic performance allows the public to see the film in thecinema orin a similarmanner.(Forthe purposesof these GBT italso means thescreening of the filmin the cinema or thefilm screenings).
Cinema
A place, wherethe operator organizescinematographicperformances, or where thefilm screeningstake place. Permanentcinemameans abuilding with thepermanently installedtechnical equipment, regularly conductingcinematographicperformances.A cinemawithlimited hoursmeansan object with thepermanently installedtechnical equipment,engagingin the cinematographicperformancesintermittently.Occasionalcinemais a room withtechnical equipment,temporarilyinstalledto conductcinematographicperformances.
Digital D-Cinema
D-Cinema refers to thecinemaspecifiedin the precedingparagraph, whichis an adequatesubstitute forthe 35 mmprojection, equipped with the technology (DCI Server and DCI Projector) which must meet the requirements ofthe DCISystemSpecifications,published on thewebsite ( operated by the DCIAssociation(Digital CinemaInitiatives). Everycinema equipped with theDCItechnology issubject to the distributor’s registration orthe registration of his designated subjects.For the purposes of registration, the operator mustprovideall the necessary informationon the technicalequipment inthe cinemabefore thefilm is shown.If the technical equipment (DCIServer orDCIProjector) is changed, eachcinema must undergo the registration again.
Digital E-Cinema
E-Cinema refers tothe cinema,whichisequipped with a digitalprojectoror otherdevice thatdoes not comply withthe requirements of the DCISystemSpecifications, but is able topublicly presentmoviesand alternativecontent from theAVZmedia,such as DVD, Blu-ray Disc, etc.,orobtainedby the recordingof a copy fromthe network orwirelessly.The operator mustprovidethe distributor withall the required informationon the technicalequipment inthe cinema.
Viewer
The viewer is any person,who attends thecinematographicperformance(the filmscreening)in the cinema,orsimilar establishments.
Copies of films
-Optical film copies
Filmrecordingmediumenablingthe screeningof a film.Opticalfilmcopy isusually35 mm widefilm stripmarked bythe registration number.Opticalfilmcopyis secured bya solidportableboxpreventing itsdamage.Thisboxmustbe always identified by thenumber ofthe opticalfilm copy, the filmtitle, distributor’s nameand a numberindicating the numberofboxesin a completeset.
-Digital copies of films forthe D-Cinemas
A set ofdigital datain the form ofDCP(DigitalCinemaPackage)is equivalent to theopticalfilm copiesthat canbedelivered to thecinema on the externalmemoryunit, USB, or wirelessly over the network.DCPis usuallyencodedand itsscreeningrequiresthe KDM(the KeyDelivery Message), which is unique toeach serverand projectorandcontains the validity period which corresponds with the contractconcluded between thedistributor andoperator. The distributorusually delivers the KDM24 hours before theagreedstart of the firstscreening and does that usually by e-mail.
-The film copies for the E-Cinema
Theaudiovisual recordin other thanthe DCIformat.The copy canbedelivered tothe cinemawirelesslyvia networkor on a carrier. Audiovisual recordingcarrierfor the E-Film Cinemacan beDVD,Blu-ray Disc and other mediumdesigned primarily forthe home useor for the DCP, Betacam, DigiBeta and so on.
Program scheduling (also referred to as deployment)
Contractual arrangement between the distributor andoperator regarding the screeningof the specificfilm, the number of performances, date, time, the cinema location and its technical facilities, thescreening technology,copies of the film, setting the calculation ofproceeds to thedistributor, accessibility and other conditions for the film screening on which bothpartieshave jointlyagreedin advance. The program schedulingmaybe in awritten or electronicformat.Very often,the agreement on the program schedulingusesthe distributor’swebsiteportal.Theprogram scheduling concludesthe relevantsub-licensecontracttousethe particularfilm.
Sub-license
Sub-licenseisa non-exclusive and bindingauthorizationprovided by the distributor to theoperatortousea particularfilm, itsaudiovisual recordingand allcopyrighted works,performances andother rightsrelated to copyright containedin the film,with the exception ofcopyrightedmusic, the screening of its copyinthe cinema,making it accessibleto the publicbyan audiovisual recordingdeviceas definedbythe Section 20 of the Copyright Actinthe manner andextent specifiedin the programschedule.
In accordancewith the relevantprovisions ofthe Copyright Act, the operator is required to obtain at his responsibility and costapermission tothe use the music containedin the film andmust do that from thecollectiveadministrator, which is the PUA (The ProtectiveUnion of Authors) and to obtain the rights to the music by concludinga collectivelicensing contract,or on the basis of a collectivelicensing contract,whichunder the Section 100, Item h) in the Copyright Actshall be concluded by theAssociation ofCinema Operators, being the organizationauthorized to protecttheinterestsof its associatedusers.
With the expiry of the duration for theuse of films(i.e.the "deployment" time),the authorizationtousea particularfilm shall be terminated.
Distribution list
A document issued by thedistributorwith each individualfilm, whichin addition toidentifyingthe producerand distributorusually containsthe distribution name of thefilm, the basic synopsis, the names of authors, actors and other creators, the film’s original nameand country of origin, the production year, length, videoformat, the type ofaudiorecording,language version, duration of the rightsand accessibility.The distributionlistcontainsmandatoryinformation as definedby the §§ 4 and 5 of the Sections2 and3 in the Act No.496/2012Coll.
The use of transport
Distributor’s binding writteninstructionsfor themovementof the film copy,i.e.the date of shipment andthe shipper’s and receiver’s(distributor or operator)exact address. Inthe cases requiringthe operational andurgentdecisions, thetransportinstructionscan beagreedverbally.In the event thata change inthe use of transport occurslessthan 24hours beforethe specified date of shipment, thedistributor shall notify the operator about this changeby a special e-mail message or by thephone.
Performance profile– the weekly performances
A standardschedule of thefilm screeningsin the cinema.It usually involvesthe weekly performances,beginning withthe firstperformanceon Thursday andending withthe lastperformancethe followingWednesday.The basic performanceprofilespecifies the number ofcinematographicperformancesusually showninthe individual days of theweek, or anumber of performancesper month.
Record on the copy condition
A documentused torecordthe exacttechnical condition of theopticalfilmand the number cinematographicperformances conducted with the specific film.The records are prepared by theprojectionistor otheremployee authorizedby the operatorduring the preparation beforetheopticalfilm copy is shipped. Thisrecordis certified byhis signature and the operator’s stamp.The record isattached to theopticalfilm copy and it is enclosed in theportablebox.
Technical certification
A document, which is provingthe ability ofthe equipment in the cinema to screen the copy of the film. Technicalcertificatesare issuedby the authorizedtechnicians;their list is maintained by the UFDandACO. With this certificate theoperatordemonstrates to the distributor that the equipment operates properly. Technicalcondition of equipment used in the D-Cinemasisvalidated by thesupplier (integrator), thetechnical condition ofthe equipmentused in the E-Cinemasis the full responsibility of the operator.
Admission fee
The Admission Feeshall be understood the pricepaid bytheviewer in orderto be admitted toindividualcinematographicperformances.The Admission Fee, in accordance with § 26 of the Act No. 496/2012 Coll. shall be understood a monetary amount to be paid by theviewerfor attending a cinematographic performance. The Admission Fee shall not be linked up or combined with another service.
Gross revenue
Gross revenueshall be understood the total amountactuallycollectedforthe admission to the cinema, including the VAT.
Net revenue
Net revenue is gross revenue reduced by:
- VAT (in the event that the cinema operator is subject to VAT)
- Fee for cinematographic productions (according to the Act 496/2012 Coll.)
- OSA Royalties in the amount as agreed by the Czech Film Chamber and published by the UFD.
The resulting net revenue is divided in an agreed ratio between the cinema operator and the distributor.
Feesfor cinematographic performances
Cinema operators pay feesforcinematographic performances to the Cinematographic Fund in accordance with § 26 of the Audiovisual Law. The time period for the payment of fees is a calendar quarter. The procedure for paying feescorresponds to the valid fee schedule, which ispublished on the website of the State Cinematographic Fund.
The licensing fee (the so called rental)
The licensing fee is a feepaidto the distributorfor the provision ofa sub-licensetousethefilm copy by showing it to the public from the record,which used to be customarilyknown as the"rental". The percentagelicensing feeshall be understood a contractuallyspecifiedshare of thenet sales, which belongs to the distributor. Thus calculatedlicensefeedoes not include theVAT, whichis addedin the event that the distributor is a VAT tax payer.
The fixedlicensing feeshall be understood a fixedamount, which shall be paid by the operatorto the distributorfor the provision ofa sub-licensefor a fixed time period(regardless of thenumber of viewers andrevenues).
The form oflicensingfees,their amountsand the due dates for their paymentsshall be agreed incontractsbetween the operator anddistributor.
Admission ticket
The admission ticket is a printedor electronicauthorizationto enter thecinematographicperformance.
The cinema inspections
Cinema inspections include the checking ofthe compliance withthe GBT, checking ofthe accuracy ofthe revenue reporting, visitors´trafficand relatedpayments of fees,checking of therecords of fees paid for cinematographic performances in accordance with the§§ 26 and 29 of the Act No.496/2012Coll.,as amended, the inspection of technicalcertificate andtechnical qualityof the screening,checking of the useof advertisingand promotional materialsand advertisingfilms,checking of the course ofperformances in the cinema, checkingof handling of the film copies and the inspection of the compliance with the copyright protection.
III. The binding terms
1)The bindingcontractualbusinessrelationship starts by the confirmation of the programschedule by thedistributorandoperator.The method of confirmationis given bymeans ofa separatecontractual relationshipbetween the distributor andoperator.
Prior to the film screening the distributormustdeliverorotherwisemakeavailable the film distributionlist to the operator.
2)The operator mustcomply with theagreedterms,with the screening of the film in the agreedcinema, with the established calculation of remittances to the distributor, with the specifiedaccessibilityrequirements and other detailsapprovedin the program scheduleand specifiedin the distribution list.
3)The GBT shall not be breachedprovidingeither ofthe contractual partiesinforms the other party aboutthechangeof program prior to the confirmation ofthe program scheduleor if the parties agree onthechange.
4)Prior to the screening of thefilm, thedistributorshall be obliged to providetransportand other logistics ifthese are necessaryforthe film screeningand the operatorshall be obliged touse and comply with these. The distributorshall be responsible for theaccuracy of the transportand otherinstructionsandfor the delivery of the film to theoperator.
IV. Cinematographic performances
1)The distributorand operatormust comply withthe principles ofcopyright protection.The operator mustplace a signin a prominent placein the cinema,warning theviewers aboutthe prohibitionof illegalpreparation of film copies, in the textapproved by theACOandUFD.
2)The operatorshall be obliged to screen the copy ofthe film inits entirety, as it was provided by the distributorora third party.
3)Unless the operator and distributorexpresslyagree otherwise, the distributorshall have the rightto screen the advertisingimages (trailers) which were providedorotherwisemade available totheoperator.
4)The placement of commercial advertising before thecinematographic presentation ofa particularfilmispossibleat the prices thatareusual in the market. However, each casemust bedealt with in the specific contract between the distributorand operator, so that the operator could fulfill the terms of his contracts with advertising agencies.
5)The operator shall notlendanycopy of the film to a third partywithout the distributor’s consent,orallow the creation ofadditional copies.
6)The distributorshall supply thecopy of the filmfor distributionin a condition fitfor the useand the agreedpurpose.In the event there is a need fora specialprocedure whilehandling thecopies of the film(such us the pre-set order when recording theCzechsubtitles, etc.), thedistributorshall provide thesecopies of the filmwith the relevantinstructions, or shallinformthe operatorby other means.
7)The operatoris committedto conduct thecinematographicperformanceswhile complying withthe specified technical parameters of the film copy, in the highest qualityand with the dueprofessional care.
8)The operator shall ensure that the copy of the film is handled and stored safely.
9)Technical equipmentused for the screening of 35 mmcopies canbe operated only bythe personwith a validqualification.The list of entitiesauthorizedto recognize such qualification is maintained jointly by theUFDandACO.
10)The operator mustimmediately anddemonstrably inform the distributorabout anydamage to thecopy of thefilm. In the case ofthe opticalfilm copy,ifthe damage isnot indicated in therecordabout the condition of the copy, or if thatrecord is missing, thenimmediatelyafter the discovery of the damage.In such case the operatormustproceedaccording to the distributor’s instructions.
V. Advertising and promotion in the cinema
1)Unless expressly agreed otherwise,the distributoragrees toprovide the operatorwith theavailableadvertising andpromotionalmaterial for the first screening of the film. Itsextent andquantity,or the time ofdelivery shall be agreed betweenthe operator and distributorwitheach titleduring the confirmation of theprogramschedule.
2)As agreed, the operatoris committed to use thesuppliedadvertising andpromotionalmaterialsaccordingly, i.e. forthe promotionof a particularfilm and in conformity with thedistributor’sand operator’s interests.
3)The distributorand operator shall be using other procedures foradvertising andpublicity of films,in orderto increasethe awareness andinterest of potentialaudiencesin thecinematographicperformances at thecinema.
VI. Records and statements
1)The operatorshall maintain trustworthy and verifiablerecords of thesoldandunsoldadmission tickets, especially the dailystatements ofrevenues andattendance.
2)Admission ticketmustcontain the name ofspecificperformance forwhichit can be used (the place, date and time)and the total price to bepaidby the participant to theperformance. The use ofpre-printedtickets,ticketprintingandissuance of electronicticketsmust beclearlyrecordedas to allow the secureidentifying ofthe numberof tickets soldto individualperformances, pricing, the use ofdiscountsand freetickets. The so-calledblanktickets (i.e. theticketswithoutthe aboveidentification)shall not beallowed.
3)When using thecomputerizedticketingsystemsin the cinema(see the contents ofthe previous Paragraph2),the operator shall beobliged touse only thesoftwareauditedby the UFD, or equipped withotherinternationallyvalid certificate.The UFDshall publish the listof the auditedsoftware onits website.
4)The operator maygivea discountto the holdersof thePSHor PSHRG ID cards (ParticularlySevere Handicap or
Particularly SevereHandicapRequiring the Guide). Unlessthe contract with the distributorspecifies otherwise, the operator mayprovidediscounts onthe basicadmissionifthe recordsmeet therequirements oftrustworthiness and verifiability.
5)Unlessthe contract with the distributorspecifies otherwise, the operator shall have the right todistributefree ticketsupto the 2% oftotaltickets soldfor one scheduledprogramof the film. Thispercentageamountmay be increasedonly after an agreementwith the distributor,such asin the case ofthe agreedmarketing supportof the film.
6)The operator must keep trustworthy and verifiable records of the issued free tickets.
7)The operator shallensure the implementation ofthe statement at the end of the ticket salesevery daywithin 1hour after thebeginning of the lastscreeningof each film.When usingthe audited computerized system, this can be done oncea dayafter the end oftheentire performance schedule.
8)Unlessagreedotherwise and subject to the distributor’s instructions, thefollowing businessdayafter the end ofthe weekthe operator must enter the resultsof the film performances on the webinterface, or on the suppliedform and send them electronicallyor by other means.The license feeshall be sentunder the separateagreementsbetween the distributorsand operators.
9)The operator ofD-Cinema isobliged to ensure thatthe facility retains thefootprintof thecinematographicperformanceson the server and upon request mustallow thedistributorto inspect the number of performancesrecorded onthe D-Cinema servers. Ifthis operationrequires the assistance froma service companyorfrom the cinemaintegrator, the costs shall beborne by the partythat requested the inspection,providing the check-updoes not detect aviolation of agreementsassociatedwith the damage tothe distributor.
VII. Inspections
1)The operator mustto allowthe employeesof the UFDorthird partiesresponsible for checking thecinemas to inspect the cinema without any undue delay. The operatorshall be obliged to allow theinspectionof the related documentsbytheperson authorized bythedistributor whosefilm iscurrentlyscheduled in the program.
2)The operator must order the responsiblecinema employees (the cinema manager, assistant manager or cashier) to assistduring the inspections in the cinema.
3)The personconducting theinspectionsmust identify himself with the relevant document (ID card) or a power of attorney, whichhe shall obtain from the UFD(ordistributor).Specimens of these ID cardsare availableat the offices ofthe UFDandACO.
4)The personconducting theinspectionshall be obliged to prepare a protocol about the results of the inspection, of which a copy shall be received by thecinema operator,or his authorizedrepresentative.The operatorshall have the righttoexpress his opinion about the protocol.
5)Destruction of the dataon theD-Cinemaserver, orthe failureto allow the distributoror aperson authorized by the distributorto verify the number ofD-Cinema performancesisconsideredto be the rejection ofinspections in the cinema andit represents a seriousviolationof theGBT, based on which thedistributor mayimmediately terminate themutualcontracts,regardless of the program schedules which wereprepared earlier.