COPYRIGHT AND AGREEMENT ON ROYALTY RIGHTS 

By: Dr. Iman Sjahputra SH, SpN, LL.M

Actually the Law No. 19 Year 2002 on the Copyright has brought fresh wind on the copyright protection in Indonesia. But, is it the law equipped with proper tools? So that this country shall no longer called as the pirate’s heaven? The fact is not! The spreading of the copyright infringements in this country may be it is not entirely caused by the lack of commitment in the legal enforcement. There is another reason why the copying behaviors grows fertile in this country, it might be caused by the lack of community legal awareness and knowledge in the Intellectual Property Rights (IPR) field, including caused by the low of public consumers buying strength because of the economic crisis that struck Indonesia.

This situation has made the IPR infringement case as a common case in Indonesia. This can be proven easily whereas we can easily find the pirated copyright products in the luxury malls until low segment traditional markets. The pirated products offered are also very varied from the computers, books, cassettes, DVDs, software up until the household products, such as dresses and bags are easily be found with very low prices compared to the original products. You do not need to worry in case buying the pirated products since, aside from its cheap price, its quality sometimes can be compared with the original products. It means that the buyer might not be harmed in purchasing the pirated products, but on the contrary we must not forget that there is a party being harmed from such activities. Indeed the party being harmed is the holder of the intellectual property’s right.

The owner of IPR, let’s say for example is the song composer, legally has two essential rights which are protected by the Copyright Law i.e. the economical and moral rights. The economic right is the right to enjoy his/her work created in the form of money. Therefore if a composer successfully in composing a song then legally the composer is entitled to collect the royalty from the party who use or record the song. A royalty is the money given by somebody to the composer for using the composer’s work. The agreement form between the composer and the user/producer of a record is the common private agreement i.e. in the form of a licensing agreement. Therefore the agreement articles in the Civil Code, such as Article 1320 on the validity of agreement, Article 1338 on the good faith agreement and Article 1313 on the agreement shall become the guidance in the making of licensing agreement.

How far the rights and liabilities are allowed to be managed in the licensing/royalty agreement is the right of both parties, as long as it is not against the law. A licensing agreement between the composer and recording producer, for example, is giving the exclusive rights to the recording to produce or broadcast a phonogram and visual picture of a performance (Article 49 Copyright Law). On the opposite, in return the composer shall get the royalty from such recording. The song recorded by the recording producer might be marketed, sold or rented to the third party. The money collected from selling, renting and marketing of such work shall become the right of the recording producer, and not the composer’s right.

What if the third party is exploiting such song for commercial purposes, for example, the song is being played in the karaoke, cinema, mall or restaurant? Does the recording producer have any right to claim royalty right from the buyers who are playing such song for commercial purposes? It is clearly not, because the manufacturer (recording producer) is only given the right to produce, multiply and sell the recording. While the interest from playing the song by the third party/restaurant shall become the right of the composer. Therefore, in case the composer wishes to collect the royalty from any party whom conducting the commercial activities, it shall be the right of the composer. However, in practice, it is very rare for the composer to be able to go directly to the end user.

Therefore usually the composer gives the authority to the third party/organization to make an agreement regarding the using of the song and such agreement is legal and common as long as such agreement related to the interest of both parties and does not harm the other party. However, if such agreement is one sided agreement only which means the composer through his/her attorney decide a specific amount or royalty for the end user  then such agreement is illegal since there is a forcing element in such agreement and legally that kind of agreement can be cancelled through the court. So, even though the composer has the right to claim for royalty, but the claim cannot be done abusively.

It is different to the composer’s economic right, the composer’s moral right gives the right to the composer to ask the third party to affix his name on the work they are created. Furthermore, to prevent the act to change a creation so it is not the same as the original. If such act is done by the third party then the composer shall have the right to prohibit such action. For example, a fiction film about a prominent figure which being altered by the film director to meet the commercial interest. This action can be forbidden by the creator or his/her heir. This matter is in accordance to the philosophy of law as regulated in the Law No. 19 Year 2002 that the creator has the moral and economic rights to enjoy his/her creation/work. Therefore, the copyright give the exclusive owner right or the creator works.

Therefore, each person who wants to publish and/or reproduce a copyright work shall get the prior permission from the copyright owner or holder.

*) Writer is an advocate domiciled in Jakarta who handles many Trademark, Patent and Copyright cases.


Back