For a country that regularly claims to be at war with the United States, Russian lawmakers appear to have plenty of time to discuss how its citizens will continue to be entertained by mostly U.S. content.
Over the last 18 months, various ideas and proposals have leaned toward limiting or even nullifying Western entertainment companies’ intellectual property rights in response to their withdrawal from the Russian market. Until more recently, these obviously damaging proposals were met with relatively mild cautionary language, even from traditionally vocal anti-piracy groups.
Whether the response to a bill submitted to the State Duma earlier this year represents changing times is unclear, but Russian rightsholders now insist that allowing everyone to pirate Western content will end up damaging business in Russia.
Federal Law No. 46-FZ
The bill submitted in April seeks amendments to the provisions of Federal Law No. 46-FZ of March 8, 2022.
In respect of intellectual property, the law currently references the application of the “international principle” of exhaustion of rights. Using content that has been legally put into circulation in any other country of the world is not an infringement of exclusive rights, the law continues, adding that parallel importation of goods can be carried out without authorization from the rightsholder.
“This tool is used by most states in the world to prevent anti-competitive practices and abuses of market position by right holders,” the text concludes (pdf).
Bill Demands More Than Parallel Imports
When Western companies decided to stop doing business with Russia in response to its invasion of Ukraine, that amounted to an abuse of their position, Russia argues. As a result, Russia no longer feels bound by licensing restrictions and will source the same content from elsewhere, whenever that’s required.
The bill submitted in April seeks significant amendments to Law No. 46-FZ that would allow Western content with exclusive foreign rights to be translated, reproduced/copied and publicly distributed with zero permission needed from the rightsholders.
The only remotely positive aspect is that any use of those works would need to be reported to a Russian collection society with the authority to calculate how much is owed, collect the funds, and then distribute an unknown percentage of those funds to rightsholders. By allowing the ‘buyer’ of content to set the terms and conditions of sale and eliminating negotiations on price, the proposal turns business norms upside down.
TV Giants and Legal Streaming Platforms Unite
Opposition to the bill inside Russia now has the support of TV companies and legal streaming platforms. A letter sent by the powerful industry group Media Communications Union, which represents the rights of companies including Gazprom Media, Channel One, and Rostelecom, informed the head of the State Duma Committee on Economic Policy of their concerns.
As reported by Kommersant, the letter warns that the widespread use of copyrighted works without proper authorization “violates the interests of specialized market participants” and may lead to the “termination of their activities.”
“It also creates the risk of using this mechanism to legalize and popularize pirated resources, which will negatively affect domestic producers and owners of exclusive rights to content,” the letter adds.
Other Options, All Bad
Other proposals reported recently include Russia unblocking previously blocked pirate sites, providing they don’t offer content shown legally by local online streaming platforms or available to view in cinemas.
Amendments to the Civil Code adopted in the first reading by the State Duma last month would allow multiple violations of multiple rightsholders’ rights to be considered as one violation, if they were committed all at once or over a short period of time, using one or multiple methods. Local rightsholders are reportedly unhappy with the plan, according to a Kommersant source.
“The concept of a single infringement will greatly simplify the lives of pirates,” the source said. “For example, a pirate has made a website and posted a thousand films, books and music from different rights holders. There is a single economic goal here – to make money from advertising on the site.”
There are also fears that the amendments could lead to minimal damages awards of just 100,000 rubles ($1,100)
Media Communications Union Makes Suggestions
The members of the Media Communications Union have some proposals relating to Western content. It appears that while everyone pirating is a bad idea, more limited use centered around a limited number of companies may be acceptable.
In broad terms, the industry group believes that Russian companies that previously concluded licensing agreements with foreign copyright holders should be given the right to decide whether that content is made available or not.
“That is, as long as the film is on at least one platform, it is forbidden to ‘pirate’ it,” the insider clarified.
The media companies also propose that access to Western content should not be universal; companies that had licensing agreements in force on February 24, 2022, should receive priority consideration.
