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  • The Winner of the Competition of Collective Management Organizations of Economic Rights is IPOA

    The Commission for Accreditation has revealed the winner of the competition announced for granting accreditation to a collective management organization of economic rights and granted accreditation to the Intellectual Property Owners Association (IPOA) both in the field of copyright and related rights.

    Within the reform being implemented in the field of collective management of copyright and related rights, Sakpatenti announced a competition for granting accreditation to a collective management organization of economic rights on September 26 of the current year. 

    In addition to IPOA, the Georgian Copyright Association (GCA) and the Georgian Neighboring Rights Association (GNRA) also participated in the competition. 

    GCA, which applied for accreditation for the part of copyright, requested that the Commission for Accreditation, in the process of reviewing the application and considering its compliance with the requirements of the Law, be guided by the Charter of the organization, which was not registered duly either at the stage of submitting the application or at the moment of making the final decision by the Commission for Accreditation. 

    According to the Law of Georgia “On Entrepreneurs”, the charter of a legal entity shall be registered in the Register of Entrepreneurs and Non-entrepreneur (Non-commercial) Legal Entities. 

    It should be noted that the competition for accreditation was announced on September 26, and the applicants had a two-month period for submitting documents.

    In order to determine whether an applicant met the accreditation requirements stipulated by Article 64 of the Law of Georgia “On Copyright and Related Rights” for granting accreditation to a collective management organization managing of economic rights, the Commission was guided by the current redaction of the Charter of the organization , registered in the Register of Entrepreneurs and Non-entrepreneur (Non-commercial) Legal Entities of the association, and determined that the applicant does not comply with several important requirements defined by Article 64(1) of the Law of Georgia “On Copyright and Related Rights”, including:

    • the guarantees of equal and non-discriminatory treatment for the members; 

    • the mechanism of exclusion of a relevant right from the collective management system;

    • the rule of communication with non-member rightsholders;

    • the rule of fair election of the chairman of the organization, which implies that the current Charter of the Association does not provide for a restriction on the election of one and the same person consecutively twice;

    • members of the Association are accepted by the Board of the Association, while such a decision shall be made by the General Assembly;

    • the Charter does not provide for the possibility of creating a Supervisory Board;

    • despite the requirement of the Law, the current Charter of the organization does not envisage the possibility of holding a meeting remotely.

    Accordingly, by the decision of the Commission for Accreditation, due to non-compliance with a number of requirements of the Law, GCA was excluded from the competition. As regards the other two organizations, GNRA and IPOA, the Commission at the stage of identification of compliance of the submitted materials with the requirements of the Law determined that both satisfy the main requirements established by the legislation of Georgia. 

    Taking into account that both GNRA and IPOA requested accreditation in the field of related rights (IPOA requested accreditation both in the field of related rights and copyright), the Commission, in accordance with the procedure established by the legislation of Georgia, additionally held a discussion in order to determine which organization satisfied better the established requirements.

    The Law stipulates that in order to receive accreditation, the organization shall prove that it can manage collectively economic rights, including, it shall have appropriate staff, shall own the material and technical based necessary for collection of royalties and shall have effective mechanisms for collection, distribution and payment of royalties (including appropriate software). 

    To confirm compliance with the above-mentioned criteria, GNRA presented various documents, including information that the organization has 1 office located in Tbilisi, contracts concluded with two staff members, service contracts concluded with two natural persons, and one agreement on delivering accounting and tax services.

    It becomes clear from the documents presented by IPOA to confirm the compliance with the same requirements that the organization has 5 offices. Unlike its competitor, IPOA offices are located both in Tbilisi and in different regions of Georgia, it has presented information confirming the existence of contracts with 22 staff members. 

    In this part, it became obvious to the Commission that IPOA’s coverage of the regions of Georgia simplifies relationship of the organization and delivery of service both to holders as well as users of copyright and related rights. The mentioned representation is confirmed by the relevant qualified staff of the organization. 

    The Commission found that IPOA submitted documents which confirmed that it has effective mechanisms for collection, distribution and payment of royalties (including appropriate software). 

    GNRA indicated in the application that in the HORECA sector (Hotel, Restaurant, café) for the part of the related rights collectively managed by GNRA, namely, for the public performance of phonograms of musical works, it had transferred the right to collect royalties to GCA, on the basis of a relevant agreement. To confirm this, the organization presented an agreement on the transfer of the right to collect royalties for public performances of phonograms of musical works.

    It should be borne in mind that the Commission for Accreditation made a unanimous decision to refuse to grant accreditation to N(N)LE “Georgian Copyright Association – Collective Management Organization of Economic Rights” (GCA), including for the reason that at the organization the legal guarantees stipulated by the legislation of Georgia are not introduced, which, taking into account the above, ensure the collection of royalties according to fair, transparent principles. Thus, the Commission considers that in case of granting accreditation to GNRA regarding the respective rights, the process of collection and distribution of rightsholders’ royalties in accordance with the fair and transparent principle might have been endangered. 

    In addition, it should be noted that part of the founders and members of GNRA (50 out of 192 members), on December 18, 2023, informed the Commission in writing that at their request, an extraordinary meeting of GNRA is scheduled, where the issue of cancellation/reorganization of the organization will be discussed, and at the same time, they asked the Commission members to grant accreditation to IPOA.

    As a result of the study of the above-mentioned as well as other circumstances provided by the applicants and stipulated by the Law, the Commission has determined that the accreditation for management of copyright and related rights is granted to the Intellectual Property Owners Association – IPOA.

    Contacts

    Marker 17, Tarkhnishvili str., Tbilisi 0179, Georgia
    Phone (+995 32) 222 08 78