2. Abner Pérez, MA. Young Scholar’s Workshop, September 2015 University of Music and Performing Arts, Vienna Compulsory licensing in the recording industry: A brief study of the implications of Ecuador’s latest attempt at regulating piracy http://tinyurl.com/nplz2xg

3. To explore the legal, economical and cultural implications of the upcoming intellectual property code of Ecuador with regards to applying compulsory licensing in the recording industry. OBJECTIVE

4. 1.- Historical perspective 2.- COESC+i 3.- Compulsory licensing - Legal framework 4.- Potential impact 5.- Final ideas CONTENT

5. 1.- HISTORICAL PERSPECTIVE Ecuador Area: 283,560 Km2 (3x Austria) Population: 16,1444.000 (est.) (2x Austria) 13 indigenous nationalities 14 official languages 70% mestizo Currency: USD

6. ECUADOR AND MUSIC PIRACY Dollarized economy since 2000 due to crisis Informal trade became extremely popular, as did confrontations with the police Massive consumption of audio-visual pirate products ($1) Street > Markets > Shops > Licensed shops © eluniverso.com

7. ORGANIZED PIRATES ASECOPAC (2011) – Omaira Moscoso Licensed national films – big success IEPI changes attitude prosecution/negotiation COESC+i (Organic Code of Social Economy, Knowledge and Innovation) © ASECOPAC archive

8. 2.- COESC+i – COMPULSORY LICENSING Article 202. (Book III, Title II, Section VIII): In granting compulsory licenses.- The competent authority on intellectual property rights may grant compulsory licenses over the exclusive rights of a holder, consisting of a literary or artistic, musical or audio-visual works in the following cases: … abuse of dominant position in the market by the right holder; … the right is already granted and there is no possibility of getting another authorization; …. it has not been translated, or the translation is not available in the domestic market; … it is not available in the domestic market after five years of publication; … it has not been sold in Ecuador or the amount available to the public has been unable to satisfy the domestic market.

9. COESC+i Protection Access Previous situation:

10. COESC+i Access Protection Current situation:

11. COESC+i Access Compulsory Licenses:

12. 3.- COMPULSORY LICENSING – LEGAL FRAMEWORK TRIPS (Trade related aspects of intellectual property rights) : Compulsory licensing is when a government allows someone else to produce the patented product or process without the consent of the patent owner. It is one of the flexibilities on patent protection included in the WTO’s agreement on intellectual property.

13. COMPULSORY LICENSING – LEGAL FRAMEWORK Berne Convention - Article 13(1): First condition: A compulsory license must not be “...prejudicial to the rights of the authors to obtain equitable remuneration”. Second condition: A “competent authority” can fix that remuneration. Berne Convention - Article 11bis(2): As long as it is not "prejudicial to the moral rights of the author, nor to his right to obtain equitable remuneration".

14. COMPULSORY LICENSING – LEGAL FRAMEWORK Rome Convention - Article 15(2): Condition: Applies to performers, producers of phonograms and broadcasting organizations, in its domestic laws, in connection with the protection of copyright in literary and artistic works. Rome Convention - Article 12: “…Domestic law may, in the absence of agreement between these parties, lay down the conditions as to the sharing of this remuneration."

15. COMPULSORY LICENSING – LEGAL FRAMEWORK WIPO Copyright Treaty - Article 1 (4): "Contracting Parties shall comply with Articles 1 to 21 and the Appendix of the Berne Convention." WIPO Copyright Treaty - Article 10 (2): “…certain special cases that do not conflict with a normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the author."

16. COMPULSORY LICENSING – LEGAL FRAMEWORK WIPO Performances and Phonograms Treaty - Article 16: " (1) Contracting Parties may, in their national legislation, provide for the same kinds of limitations or exceptions with regard to the protection of performers and producers of phonograms as they provide for, in their national legislation, in connection with the protection of copyright in literary and artistic works. (2) Contracting Parties shall confine any limitations of or exceptions to rights provided for in this Treaty to certain special cases which do not conflict with a normal exploitation of the performance or phonogram and do not unreasonably prejudice the legitimate interests of the performer or of the producer of the phonogram."

17. 4.- POTENTIAL IMPACT – ECUADOR’S RECORD INDUSTRY $1.28m (yearly) - 10 th regional market / 50 th worldwide IFPI data (2014):

18. POTENTIAL IMPACT – ECUADOR’S RECORD INDUSTRY MoCH (Ministry of Culture and Heritance data (2013): $43.7m Willingness to pay: $8 album / $1 song If piracy gets regulated: $221.55m If the money collected by compulsory licensing is never claimed then it gets reinvested. Great news for everybody??

19. POTENTIAL IMPACT – ECUADOR’S RECORD INDUSTRY Uso Justo (Fair Use) Imposed measure Right owners – natural person vs. institution Setting an example… possibly a bad one.

20. 5.- FINAL IDEAS It is possible to apply compulsory licenses in the recording industry Pragamatically, it would balance protection – access Ambiguous definitions: equitable remuneration, fair use, nature of the work… Price control? Voluntary licensing over compulsory one But just maybe…

21. Abner Pérez, MA. E-mail: abnerp.abner@gmail.com + 593 983748325 Muchas Gracias Main References: Berne Convention for the Protection of Literary and Artistic Works. (1979). Bond, E & Saggi, K. (2014). Compulsory licensing, price controls, and access to patented foreign products. Journal of Development Economics. 109, 217-228 doi:10.1016/j.jdeveco.2014.04.001. COESC+i. (2015). Código Orgánico de Economía Social del Conocimiento e Innovación. López, J. (2013). La No Industria Musical en Ecuador: Hacia la recuperación de un paciente terminal. Cartón Piedra. 65: 13-17. Rome Convention for Protection of Performers, Producers of Phonograms and Broadcasting Organizations. (1961), World Intellectual Property Organization Copyright Treaty (WCT). (1996). World Intellectual Property Organization Performance and Phonograms Treaty (WPPT). (1996). World Trade Organization's Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS). (1994).