Facing the music on dirty copyright deeds

Facing the music on dirty copyright deeds

Restaurant owners are being targeted for playing songs without a licence, exposing a murky world of lies, police extortion and legal ambiguity

Calvin* was unaware that he needed a licence to play music until plainclothes policemen entered his restaurant in Thong Lor on the evening of April 7, went behind the bar and seized his MP3 player.

The restaurant’s manager, Pum*, was taken to Thong Lor police station, where two staff members from nearby restaurants were also present. A rotund officer identified as “Daeng”, wearing a gold and diamond bracelet and a ring with a ruby, asked for the foreign boss to present himself at the station.

The restaurant was accused of playing music without a licence from a local copyright agency, which is supposed to protect the interests of international artists and record companies.

“He [Daeng] kept demanding that we pay 80,000 baht on the spot, or else they would issue a warrant to arrest all the restaurant’s shareholders,” Pum said.

After Calvin arrived, they eventually settled on a fee of 60,000 baht. The restaurant was issued an invoice for 20,000 baht, and a certificate carrying the name Inter Music Copyright Co (IMC) allowing it to play music in its venue, for one year.

The police officer claimed IMC owns the rights to “almost 100% of all international music” that is played in Thailand.

At no point did a company representative approach either Calvin or Pum.

In the music industry, the partnership between the enforcers and copyright collectors — both real and impostors — is notoriously known as “nak bin” (pilots).

IN THE DA RK: Inquiry official Pol Col Viradol Thubthimdee at Thong Lor police station.

‘THEY THREATEN YOU’

On April 5, a man who Pum assumed was a police officer, equipped with a walkie-talkie, walked into Calvin’s restaurant. He told the staff he was there to see a friend, but simply surveyed the venue for a few minutes and walked out.

Two days later, a group of plainclothes police arrived at half past six. Pum estimated there were almost 10 policemen present.

They showed a police badge, along with a report they claimed was filed by IMC. The statement contained neither the name of the restaurant nor the name of the offending song and its composer, both of which are required as a standard procedure.

At this point, police are required to clarify whether or not they represent the copyright owners, said Pol Col Viradol Thubthimdee, an inquiry official at Thong Lor police station. The officers who visited Calvin’s restaurant failed to provide any documents proving such representation.

“If you take pictures, they threaten you, so it’s not easy to figure out what’s right and wrong to do,” Calvin said.

“Whenever something like this happens to me, I think, ‘Why I am living in Thailand?’ I have no protection. It’s crazy, not right and upsetting to me.”

At Thong Lor police station, Calvin withdrew money at the TMB Bank ATM that is conveniently located near the picnic benches on the left of the building’s entrance.

The 60,000 baht that was finally negotiated upon was handed over inside the station. A pink invoice carrying IMC’s name was issued for the 20,000-baht licence, which allows the restaurant to play music for which IMC is authorised to collect copyright usage fees, for one year.

The licence was laminated at the police station. Both the invoice and licence were shown to Spectrum.

When Pum asked for an invoice for the remaining 40,000 baht, a Thong Lor officer provided her with a copy of the police logbook report instead. The report did not mention any fees.

“I asked why they did not run a check of the songs we played, but they were certain that ours were on their list, claiming the authority to collect royalty fees for almost all international songs played in Thailand,” Pum said.

Pol Col Viradol denied any knowledge of the April 7 incident, and that the police were collecting money on behalf of licensing companies. However, another police officer at the station confirmed that the practice was going on, but said the extortionists were officers from another police station.

Take a seat: Coffee shops, karaoke bars, restaurants, nightclubs and other entertainment venues dot the Thong Lor landscape, and face a confusing set of rules regarding intellectual property.

STOP THE MUSIC

IMC does not have a website, but it is among the 21 music licensing companies listed on the Department of Intellectual Property’s (DIP) website.

The DIP does not set regulations for music licensing companies. However, music licences for public communication are controlled goods and services under the price control law, and companies are required to provide information — such as the structure of licensing fees, lists of songs and business operating costs — to the Commerce Ministry.

Only two companies on the list provide music licences for international songs: IMC and MPC Music Co. While the former has a list of 12,535 songs for which it is authorised to collect copyright licence fees, the latter has more than 5.6 million.

“If a restaurant plays 100 songs a day, at least one would be on my company’s list,” said Nattawat Thianchao, IMC’s founder and managing director.

IMC was registered as Copyrightsiam Co in 2005, but in 2012 the name was changed to IMC with registered capital of one million baht, according to documents Spectrum requested from the Department of Business Development.

Despite numerous reports of coercive acts by copyright protection agencies, Mr Nattawat denied any wrongdoing by IMC. He said those accused of abusing the system in the past had falsely claimed to have represented his company.

When asked specifically about the April 7 incident, Mr Nattawat said he could not confirm whether those involved were real or fake representatives of his company. But he added that it was company practice not to impose a settlement fee in excess of 10,000 baht for breaches of copyright. He said the fine had to be recorded in the police logbook, otherwise it was considered extortion.

An IMC employee was fired in February for imposing a settlement fee above 10,000 baht, Mr Nattawat said. While no longer employed by his company, Mr Nattawat said he had received complaints that the ex-employee was still demanding money while falsely claiming to work for IMC and using expired company documents and ID. He said the fraudster had reportedly demanded 70,000-80,000 baht from unwitting restaurants and pubs. Mr Nattawat said that filing a complaint with police was a last resort, which only occurred if negotiations with a company representative failed. He said the company filed more than 10 complaints to police each month.

“We do not focus on the fine. We focus on the licence fee. So we try to avoid involving the police,” he said. “If officers were to be involved, we would never seize the MP3 player.”

When accompanying a police officer, IMC representatives must have with them their company ID card and genuine documents that show IMC is authorised to collect fees on behalf of songwriters and record labels.

According to a list on the DIP website, IMC’s annual licence fees range from 600 baht per karaoke booth to 30,000 baht for a department store.

Mr Nattawat said IMC has about 20 staff targeting tourist destinations — where he said the playing of international music is more prevalent — across the country. In Bangkok, there are only two teams employed by IMC.

Strate gically placed: Thong Lor police station features an ATM close to the front entrance, which is handy for those paying fines.

MAKING SENSE OF THE LAW

Although foreigners are easy prey for the “nak bins”, Thailand’s convoluted music licensing regulations make it hard even for Thais to understand.

According to the 1994 Copyright Act, the owner of a copyright has the exclusive rights of communication to the public.

Therefore, any communication to the public of a copyrighted work without permission is deemed an infringement.

In response to such an infringement, copyright owners can choose either to file a civil or criminal complaint, with penalties ranging from a fine of 20,000-800,000 baht and/or imprisonment for up to four years.

Piset Chiyasak, general manager of the Thai Entertainment Content Trade Association (Teca), said the industry is looking for ways to remove the possibility of a criminal com-plaint, as it was causing problems for business owners.

While a civil complaint is filed by a lawyer to the court, a criminal case is reported to the police.

“What we actually want is money, not to push business operators into jail,” he said.

He said the tough financial penalties also provide a means for some unscrupulous operators to stand over restaurant and pub owners to demand a quick cash payment to avoid prosecution.

The issue has been put before the Commerce Ministry’s copyrights committee. DIP deputy director-general Thosapone Dansuputra said while the committee is considering how to amend the Copyright Act to solve the problem, it is unlikely to remove all criminal penalties. This is because Thailand is a member of the 1994 Trips Agreement under the World Trade Organisation, which requires its members to provide criminal procedures and penalties at least in cases of copyright piracy on a commercial scale.

Section 32 of the Copyright Act also contains what is in essence a fair use clause, interpreted by some legal experts to cover restaurants which do not profit directly from the playing of copyrighted music.

Winyat Chatmontree, a human rights and intellectual property rights lawyer, said the Copyright Act should be amended because the current law provides too much financial benefit for copyright owners and their representatives. It also allows for corrupt practices in the collection of money.

He said restaurants that do not directly collect revenue from playing music are not guilty of copyright infringement, because they make money from the sale of food and beverages.

He also suggested that the “fair use” principle suggests that playing a song from YouTube at a restaurant is legal, because the copyright owner has already given permission to communicate to the public by placing it on the site.

In one case in 2010 involving a restaurant owner, the Supreme Court ruled that because the restaurant did not seek direct profit from playing a CD, it could not be considered guilty of copyright infringement.

Khitsada Daungchaaum, an IT lawyer, said music licensing companies need to prove that the business operators were seeking direct profit from playing the music.

DIVIDING THE SPOILS

Of the 21 music licensing companies listed on the DIP website, only two have obtained the rights to international music — IMC and MPC.

MPC was set up in 1994 and represents more than 400 Thai songwriters and about 18 record labels including Universal Music, Warner Music, Sony Music and Butterfly Records. After deducting costs, half of the fees collected by the licensing companies are allocated to composers, while the other half is allocated to record labels. Amounts are based on a complex formula which essentially calculates the popularity of each track.

Wirat U-Tawaughn, honorary chairman of Music Copyright (Thailand), a subsidiary of MPC, maintained that MPC uses a business approach when conducting negotiations with its clients and does not have a policy of using police intervention. If the business refuses to purchase a licence to play music to the public, MPC will send them notice letters. Legal complaints are the last resort.

‘HIGHEST RATES IN THE WORLD’

Thailand has the largest number of music licensing companies in the world, making it confusing for business operators to figure out who to go to if they want to obtain a licence. As a result, some businesses are required to pay hundreds of thousands of baht per year for licences to play music.

“If businesses were to pay for all 21 licences, Thailand would have the highest rates in the world,” said Khanuengha Kaewpia, MPC’s deputy licensing manager. “As a result, they choose to play only a handful of songs to avoid high costs.”

Most other countries have less than five music licensing companies, often consisting of only one company representing composers and another representing record labels.

To add to the complication, the list of songs are updated once a year by each company and submitted to the Bureau of Licensing. Each year, thousands of songs are duplicated on the lists of the copyright protectors.

IMC and MPC both list the song A Better Love Next Time composed by Rodney Jerkins, for instance. However, the lyrics listed for the song by IMC are incorrect. IMC lists the lyrics as “She wants to lick me like a lollipop”, which actually come from another song, She’s Got Skillz, by All 4 One. Both IMC and MPC list the same lyrics, composer and melody of the song A Day in the Life by Paul McCartney.

Mr Thosapone of the DIP said in this case, the department would invite both sides to negotiate, which rarely happens. “But we do not have the authority to decide who actually owns the rights to the song,” he said. n

PLAY BY THE RULES

The Department of Intellectual Property (DIP) has provided the following guidelines for business owners who would like to play music to customers.

For choosing a music licensing company:

1. MAKE a list of the songs that you would like to play. Check the name of each song at the DIP website to find out which company has the authority over its copyright.

2. ASK for details concerning the use of the song directly from the company. When paying the fee, make it clear that you won’t be charged by another company for duplicate songs.

3. USE only necessary songs. Not only will that lower your costs, but it will also prevent you from being charged with copyright infringement.

4. CHECK the song list from the DIP website at least once or twice a month, in case the company changes the list.

5. CHOOSE a company with good after-sales service.

6. PLAY only songs that you have the right to play so that you won’t be charged with copyright infringement.

For responding to a visit by representatives of a music licensing company:

1. DO check whether or not the representative has an authorisation letter from the copyright owner, as well as the list of songs.

2. DO inform the police if you suspect any wrongdoing. 

3. DON’T pay money to the police. They do not have the authority to impose a “fine” under the Copyright Act. Fines resulting in a civil or criminal charge can only be settled in court.

4. DON’T pay a settlement fee to the company if you suspect something fishy.

5. DO make sure that a settlement fee, if necessary, is paid to the company in the presence of police. The fee needs to be recorded in the police logbook, as well as the company name, representative name and the name of the song. If the person refuses to include the information in the logbook, you shouldn’t pay the fee.

6. DON’T bribe the police. You might end up paying a higher price than going to court.

7. DO record the events on camera as evidence if you suspect any wrongdoing.

8. DO file a complaint against the extortionist. The DIP is happy to provide legal advice and suggestions. Call their hotline at 1368.

SOURCE: Department of Intellectual Property.

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