In addition to the first support measures for the cultural industry announced by the Ministry of Culture on March 18th 2020, the Government introduced by Ordinance No. 2020-353 of 27 March 2020 (the "Copyrights and Neighbouring Rights Ordinance") a system of exceptional aid for holders of copyrights and neighbouring rights.
The measures provided by this Ordinance are designed to support the individual cultural and creation actors, who are directly affected by the Covid-19 epidemic and by the measures taken to limit its spread, particularly in view of the reduction in the exploitation of works resulting in particular from bans on gatherings, and closures of cultural venues and schools.
SYSTEM OF EXCEPTIONAL AID TO COPYRIGHTS AND NEIGHBORING RIGHTS HOLDERS
The system provided by the Copyrights and Neighbouring Rights Ordinance is based on the - temporary and derogatory - ability entrusted to the collective management organisations of copyrights and neighbouring rights ("CMO"), to use a portion of the funds collected in the course of their missions to offer direct financial aids to copyrights and neighbouring rights holders affected by the Covid-19 epidemic and/or measures taken to limit its spread.
Resources of the CMO concerned by the system result from the funds mentioned by Article L.324-17 of the French Intellectual Property Code, which are in theory allocated to the funding of actions for helping the creation, dissemination of the performing arts, the development of artistic and cultural education, and the training of artists. It includes (i) 25% share of the funds collected under the private copying remuneration; and (ii) all of the funds considered "impossible to reallocate", i.e. funds collected by CMO which could not be reallocated to right holders, either for lack of international convention to which France is a party for foreign works, or because the beneficiaries of the works in question could not be identified or located.
According to the last annual reports of the Permanent Commission for Control of Royalties Collecting and Distributing Societies (Commission permanente des Sociétés de Perception et de Répartition des Droits or CPC SPRD) which is attached to the French Court of Auditors (Cour des Comptes), the abovementioned sums currently represent, for all of the concerned CMO:
(i) 73 million euros in respect of the 25% share of the sums deriving from private copying remuneration; and
(ii) 80 million euros in respect to funds designated as "impossible to reallocate", noting that these funds are - under normal circumstances - blocked for a period of 3 to 5 years before they can be released by the CMO to financially support actions for helping the cultural industry.
Until 31 December 2020, the various CMO (SACEM, SACD, SCAM, ADAGP, ADAMI, SPEDIDAM, SAIF, etc.) will therefore have the ability to immediately release significant resources to proceed to the payment of direct financial aid to the authors and artists affected by the current situation.
ELIGIBILITY AND PROCEDURES FOR ALLOCATING EXCEPTIONAL FINANCIAL AID
The Copyrights and Neighbouring Rights Ordinance remains silent as to the specific conditions for the payment of the financial aids it provides for.
Regarding the eligibility criteria, the Copyrights and Neighbouring Rights Ordinance only states that the aid will be intended for copyrights and neighbouring rights holders "whose income from the exploitation in France of protected works is seriously affected as a result of the health crisis caused on national territory by the covid-19 virus or the implementation of measures taken to limit the spread of the virus".
With regard to the allocation conditions of the financial aids, and insofar as no subsequent implementing Decree appears to be expected (neither according to the Ordinance on Copyrights and Neighbouring Rights nor according to the information available to us at the moment), it should be understood that the allocation procedures and rules will have to be determined by each CMO according to the requests made by their respective members, under the supervision of the Minister of Culture and the Prime Minister.
The CMO are also subject to a permanent control by the French Court of Auditors.
Considering the differences in resources between the different CMO, it remains to be seen whether they will spontaneously organise themselves to pool the system and the processing of applications for financial aid, or whether they will ask the Ministry of Culture to organise such pooling.
This legal update is not intended to be and should not be construed as providing legal advice. The addressee is solely liable for any use of the information contained herein and the Law Firm shall not be held responsible for any damages, direct, indirect or otherwise, arising from the use of the information by the addressee.
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