Doing Karaoke Business, Be Careful With The Copyright!

Doing Karaoke Business, Be Careful With The Copyright!

Created in Japan since the 70s of the Twentieth Century, karaoke – a form of entertainment where users sing lyrics on the recorded soundtrack – has become a popular entertainment activity around the world in general and in Vietnam in particular. Just looking at the increasing density of karaoke bars built everywhere in Vietnam year by year, both in density and scale, we can see how popular and highly profitable this entertainment activity is.

Despite its popularity, the people do karaoke business usually pay attention to meeting the operating conditions prescribed by law before doing karaoke business in Vietnam, such as:

(i) establish a company or household business;

(ii) ensuring conditions relating to fire and explosion prevention;

(iii) the minimum area of the room.

and other conditions specified in Decree 54/2019. However, this Decree does not mention the payment of royalties and remuneration when using audio/video recordings of musical works (“Recordings”) as a compulsory condition to satisfy when engaging the business, while Audio/ video recording is the main business object of Karaoke service.

As mentioned above, karaoke is a form of entertainment that users resing the lyric based on the recorded soundtrack, the lyric will be shown on a screen (if available). In nature, the subjects of the karaoke service are audio/ video recordings of performances of musical works (usually having lyrics) – all of which are subject to the protection of intellectual property rights. However, in fact, in the karaoke business, the businessman does not pay attention to the payment of royalties, remuneration for the owners of intellectual property rights, until … being requested for compensation or being administratively sanctioned but not understanding why.

According to Article 3 and Paragraph 1, Article 14 of the Vietnam Intellectual Property Law, musical work is one of 12 types of literary, artistic and scientific works protected copyright. In particular, a musical work is a work expressed in the form of a musical note or other musical characters or formed on a sound or video recording with or without lyrics, regardless of whether being performed or not (Article 10 of Decree 22/2018/ND-CP).

The audio/video recordings are fixations of sounds, images of performances or other sounds and images or the shaping of re-enacting sounds and images which are not in the form of fixation associated with cinematographic works or works created in the same manner. Sound and video records are also subject to the protection of related rights according to the provisions of Article 3 of the Intellectual Property Law.

The use of recordings in karaoke business belongs to the case of using published works, sound/video recordings do not require permission in advance, but must pay royalties and remunerations in accordance with Articles 26 and 33 of the Law Intellectual Property.

Paragraph 2, Article 43 of Decree 22/2018 / ND-CP stipulates: “Organizations and individuals exploit and use works, sound/ video recordings and broadcasts according to the provisions of Paragraph 1, Article 26, Paragraphs 1 and 2, Article 33 of the Intellectual Property Law are obligated to contact directly with the copyright owner, the related right owner or the collective representative organization of copyright and related rights. In the case where it is not possible to contact the owner of the copyright or related rights directly, the organization or individual exploits and uses the work, the recordings, the broadcast must notify via mass media. “

In addition, Paragraph 1, Article 45 of Decree 22/2018/ND-CP also stipulates more specific on cases of exploitation and use of audio and video records: “Organizations and individuals using directly or indirectly sound and video recordings according to the provisions of Paragraphs 1 and 2, Article 33 of the Intellectual Property Law, must pay royalties, remunerations and material benefits to copyright owners and related right owners. “

In addition to traditional karaoke, means copy recordings onto CDs or a fixed storage system, karaoke provider also develop karaoke businesses on the base of online source such as YouTube, Nhaccuatui…

However, regardless of whether the online or offline records are exploited, violations of payment of royalties and remuneration to copyright or related rights owners may be handled if required by the right holders. The violating party will then be subjected to civil compensation for damages and administrative fines for violations. The amount of civil compensation usually is determined based on the actual damage incurred, which is proved by the copyright, the related rights owner, and will depend on each specific infringement case. The fine for administrative violations against the use of published audio/video recordings for commercial purposes in karaoke service may be up to VND 25,000,000.

When the value of intellectual property is recognized and highly appreciated, copyright/related rights owners also have a better understanding of their statutory rights, the individual/ organizations engaging in karaoke business should pay more attention to the payment of royalties and remuneration to copyright / related rights holders before using the sound/video recording of music works into exploitation, to avoid damage.

Payment of royalties and remuneration to copyright or related rights owners may be made directly by agreement with the copyright or related rights owner, but this method is risk in many aspects like: time-consuming (because you have to contact many people/organizations for different recordings/works); The cost is high and unstable because each author/singer has a specific price and is often subjective; At the same time, there is a high risk of ambiguity in identifying copyright / related rights (because in many cases, the owner is not the same person to the author/singer).

 Therefore, karaoke business organizations/individuals can choose another option to pay for the copyright and related rights collective organizations that are recognized under the law, such as VCPMC – representing the authors, SkyMusic – representing for performers/ singer … with a fixed, public fee schedule, to quickly fulfill the obligations to pay royalties and remuneration for the use of records in their business activities./.

If you have any questions or require any additional information, please contact Apolat Legal – An International Law Firm in Viet Nam.

This article is for general information only and is not a substitute for legal advice.

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