Valuation of copyrights for law purposes - collecting societies

This article describes the methodology of valuation for copyright royalties paid by cable operators to copyright collecting societes. Currently in different European countries are hundred law cases between the collecting societies and cable operators. The original methodology described here is grounded in international comparison methods and court experience of the author.

Recent years show an increase of enforcement rights related to possesing copyrights. People in different countries protested against signing of ACTA - Anti-Counterfeiting Trade Agreement. This process causes an increase in court cases related to compensation for different copyright owners. There is a lack of common methodology for calculating compensation for copyright owners.

In Polish courts, there are currently is more than 100 cases between the copyright collecting societies and cable operators. The biggest Polish cable operators usually have 2 cases: against the collecting society representing authors of music and literary works and audiovisual works producers and authors. Court cases are related to lack of proper law procedures and Poland has one of highest levels of copyright fees in comparison to the other European Union countries. Similar cases occur in other European countries like Spain or Estonia.

Due to the lack of proper market comparisons for assesment level of copyright royalties offered by collecting societies, authors created a method based on three steps:

1) assesment of global charges for all collecting societies;

2) choice of proper multiplier;

3) calculation of proper royalty rate for collecting society based on economic use of repertoire and economic profits for the cable operator.

This method was used to assess the proper royalty rate in several court cases of different operators in Poland. Calculations of corrective coefficients based on audience research were made.