The Cold War in Intellectual Property Law Policy: Russian Music Site Allofmp3.com to reopen

  Popular Russian online music store Allofmp3.com announced its plans to
reopen following a ruling by a Moscow district court acquitting its former
head of copyright violation. After persistent pressure and attempts by an
angry U.S. recording industry to smother the site, the plug was finally
pulled on the site earlier this year by the Russian government in light of
the sour point that became of it in its negotiations with the United
States government over Russia’s accession to the WTO.
  The site has been on the firing line as it offered more than 500,000
songs-some of which, such as those of the Beatles who have till date not
consented to the release of their works in any digital media format, are
not available on “authorised” retailers like iTunes- literally “for a
song”, without the standard anti-piracy protections such as Digital Rights
Management encryption, and without permission from the artists or
copyright owners. The bigger problem for the record companies is that the
site claims that its operations are legal under Russian law under which it
operates.
  The bases for Allofmp3’s claim are provisions in Russian copyright law
which provide for compulsory licensing of copyrighted material, whether
Russian or foreign, as long as royalties are paid to organizations
collectively managing copyright-holders’ rights. So in effect, these
societies don’t need the copyright owner’s consent when they license out
their works. Allofmp3 has agreements with two such collecting societies to
which it pays 15 percent of every sale, which is then supposed to be
distributed to copyright owners. According to some statements reported in
the press, the site is also considering paying original performing artists
5 percent of their sales revenue, regardless of whether they still hold
the copyright to their music.
  Given this position in domestic law, one then wonders whether the foreign
record labels may have any recourse to any of Russia’s international
treaty obligations. The answer, I think, is unfortunately in the negative.
The multilateral intellectual property treaties to which Russia is a party
lay down only minimum standards, which seem to me insufficient in meeting
the ends of the U.S. and other major record labels. For example, under the
Berne Convention, protection extends only to music composers and not to
recorders and performers, and which interestingly also makes way for
compulsory licensing in consideration of an equitable compensation to the
right holder. Similarly, the Rome Convention may also not afford relief as
Allofmp3’s mechanism of royalty payment to management organisations may
qualify under the Convention’s allowance for broadcast of music without 
the rightholders’ consent in return of sufficient remuneration. Nor is
Russia a signatory to the 1996 WIPO Performances and Phonograms Treaty
which was introduced specifically in light of technological advances, and
which gives the producers of the work the exclusive right of distribution
of their work in all media.
  While the true legal position of Allofmp3 may be hazy at the moment, two
things emerge clearly from the hoopla surrounding it. One is the
inadequacy of national laws, coupled with the territoriality of
intellectual property regimes, to deal with infringement in today’s
digital age. The other- related but larger- issue which I feel strongly
about is of the difference in values and priorities between the IP policy
of modern capitalist societies and that of communist/post-communist
societies such as Russia, and how a hegemonising discourse has been built
around the former.  
  The whole controversy around Allofmp3.com can be related to a
rightholder-centric, capitalist IP policy which, laden with its values of
individual rights and profit-maximisation, has come to be the dominant
discourse in intellectual property law policy, and hence, almost
emotively, to be synonymous with what is “right” and “fair” in this domain
of the law.  In this bargain, the user-centric, communitarian policies of
nations like Russia and China having a communist background, which place
emphasis on the dissemination of information and ideas to the public, have
come to be undermined and criticised. 
  Intellectual property rights are not hegemony; they are just certain
incentive-based, and sometimes dessert-based, entitlements against which
the public interest in access and dissemination- has to be counterweighed.
The function of copyright law is to attain and maintain the balance
between the interests of the creators, owners and users. A regime of
compulsory licensing coupled with royalties and protection of moral rights
of creators is perhaps one way of achieving this balance. This means that,
in the case of Allofmp3, the focus should turn from shutting down the
website to ensuring that the remuneration to the creators and
copyright-holders is adequate, and more importantly, that it reaches them.