Copyright group wins control over royalties recouped by new tax

A court has ended the battle over who will get to control more than $250 million garnered from a controversial new tax.

The right to distribute the money was handed over to the Russian Union of Copyright Holders, an organization headed by renowned film director Nikita Mikhalkov.

The tax applies to storage and recording equipment and is intended to recoup losses to copyright piracy.

Thus one per cent of the eventual retail cost of each electronic item which could be used in the pirating process is to be redistributed to production houses, record companies and other organizations and persons involved in the creative process.

Among the companies ready to pay the tax are Sony, Canon, Fujifilm, and Casio. The Russian Union of Copyright Holders is now negotiating with Nokia and Samsung.

For copyright organizations, $100 million is a huge sum. Back in 2009, the whole year’s income of the Russian Authors’ Community – from public demonstration of copyrighted materials on TV channels, radio stations, restaurants, and cinemas – was around $90 million.

The Russian Union of Copyright Holders, however, was planning to distribute among the copyright owners only 15 per cent of the tax, with 25 per cent allocated to the organization’s apparatus, whereas 60 per cent was to go to the union’s special fund.

Many copyright holders were extremely unhappy with such a decision. Some even argued that the new tax was “a big present for Nikita Mikhalkov’s birthday,” as, coincidentally, it was adopted on October 21, when the director celebrated his 65th birthday.

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