Sources. Regulation in EU law.

In 2014, the EU adopted Directive 2014/26/EU of the European Parliament and of the Council of 26 February 2014 on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online use in the internal market Text with EEA relevance. In this regard, the corresponding part of the Bulgarian Copyright and Neighbouring Rights Act has undergone major changes76.

National Law (CNRA)

New rules have been adopted since 29 March 2018, that guide the collective management of copyrights and neighbouring rights. Collective management of copyright and/or neighboring rights is the simultaneous management on behalf of and at the expense of more than one rightholder for their common benefit. Collective management of copyright and neighbouring rights includes:

  1. granting of licences for protected subject matter to users;

  2. collection of rights revenue derived from the exploitation of rights, as well as rights to receive due remunerations, including compensatory;

  3. distribution and payment to rightholders of the amounts derived from the exploitation;

  4. protection of managed rights, including judicial protection;

  5. monitoring of the exercise of rights.

According to Article 94, paragraph 3 of the Act: “The activity of producers of films and other

audio-visual works, producers of phonograms, of radio and television organisations and publishers, including book publishers of books, musical works and periodicals, as well the activity of agents and mediators representing authors or performers before an organisation for collective management of rights, shall not be considered to be collective management of rights”.

II. Subjects of collective management of rights

The collective management for rights may be conducted by two types of subjects: organisations for collective management of rights and an independent management entity for collective management of rights.

1. Organisations for collective management of rights. Registration.

Collective management organisations are established, managed and controlled by their members who are rightholders. The organisations conclude Mutual Representative Contracts with rightholders or other organisations with similar activity, and by virtue of these contracts, the organisations are authorized to collectively manage rights. This activity should be the organisation’s sole or core activity. It may not be professionally involved in activities involving use of the works or other protected subject matter within the meaning of CNRA.

Collective management organisations are non-profit associations, registered under the Non-Profit Legal Entities Act (Законзаюридическителица с нестопанскацел) and registered in the register of non-profit legal entities with the Registry Agency in accordance with the Commercial Register and the Register of Non-Profit Legal Entities Act (ЗТРРЮЛНЦ). This means that NPLEA shall apply to the cases not covered by CNRA. The exercise of

collective management of rights also requires registration with the Ministry of Culture, which keeps a public register of the registered entities for collective management of rights. The register is published on the Ministry of Culture’s website77. An application for registration shall be submitted by non-profit associations or companies registered under the Bulgarian legislation or the legislation of another Member State of the European Union, or that of another country that is party to the Agreement on the European Economic Area or that of the Swiss Confederation, or an entity entitled to collective management of copyright and neighbouring rights under the legislation of another Member State of the European Unionor another country that is party to the Agreement on the European Economic Area or that of the Swiss Confederation, or a third country.

The application shall be filed in Bulgarian or with a Bulgarian translation and in an approved form. It shall contain the legal status of the applicant, the categories of rights, types of rights, works and other protected subject matter the registration of which is applied for, as well as whether the conditions for registration are fulfilled. Article 94b1 offers an exhaustive list of the documents which must be attached thereto.

Registration shall be completed by the Minister of Culture in the following cases:

  1. if the applicant is authorized by two or more written contracts with rightholders, or by another collective management organisation by virtue of a Mutual Representation Contract to carry out collective management of rights on behalf of this organisation as indicated in the application;

  2. the applicant meets the requirements of Article 94u1 if the application is for multiterritorial  licensing for the online exploitation of music works under Chapter Eleven “i”;

  3. the applicant’s statute, accordingly memorandum and articles of association, stipulates that the collective management of the categories of rights, types of rights, types of works or other types of protected subject matter the registration of which

    is applied for is the sole or core activity of the applicant.

    1. the applicant is not under insolvency proceedings or in liquidation;

    2. the application of registration is submitted 12 months after entry into force of the order for cancellation of the registration.

    The submitted documents shall be reviewed within two months. Refusal of registration may be contested pursuant to the Code of Administrative Procedure. If the organisation is registered by the Minister of Culture, it is issued a certificate of registration. The certificate is unlimited. In case of changes to the registered circumstances, the entity shall notify the Minister of Culture and present certified copies of the relevant documents within 14 days from the date of the changes.

    When the application concerns the registration of collective management organisations of multiterritorial  licensing for the online exploitation of music works by the copyright holders and another non-profit association submits an application during the registration procedure, the registered entity shall be the one that is already registered for collective management of such rights in the territory of Bulgaria, and if there is no such entity, the entity that has wider representation shall be registered.

    In case an organisation for collective management of rights has already been registered, the applicant has to present a representation agreement with the registered organisation.

    When the application concerns the collective management of rights of wireless broadcasting, transmission or retransmission by cable, public performance, or wireless or cable transmission and an organisation for collective management of right has been registered in this regard, the applicant shall be registered after submission of a representation agreement with the already registered organisation. The registered organisation may not refuse unreasonably to conclude such an agreement. The refusal is unreasonable when its grounds are not related to the content of the representation agreement and/or the registration of the organisation for collective management of rights.

    A representation agreement is not required when the application for registration is submitted by an independent entity for management of rights and it concerns the collective management of rights of public performance through playing music in publicly available premises and vehicles. The applicant shall publish and maintain information on his website regarding the right for collective management of rights assigned by rightholders: rightholder, categories of rights, types of rights, works and other protected subject matter, term and territory.

    The representation agreement must contain clauses regarding:

    1. the registered organisation’s authorization to permit the use of works and other protected subject matter assigned to the applicant for collective management of rights;

    1. 2. the registered organisation’s authorization to collect the remunerations due to it in accordance with its fees;

    2. 3. the categories of rights, types of rights, works and other protected subject matter, as well as rightholders referred to in the agreement;

    3. 4. the types of works and other protected subject matter assigned to the applicant for collective management of rights;

    4. 5. the term and territory of representation;

    5. 6. proof by the applicant of the rightholders and works and other protected subject matter represented by him, as well as the frequency of their updates;

    1. 7. the method of calculation of the proportion of collected remuneration owed to the applicant pursuant to the use of works and other protected subject matter, entrusted for collective management of rights, and the terms of their payment to the applicant; the registered organisation is not responsible for subsequent allocation of remunerations paid to the applicant;

    8. the method of information exchange regarding the identification of works or other protected subject matter and rightholders;

    9. the method and term of the settlement of relations between contractual parties and users at termination or cancellation of the representation agreement;

    10. the method and term of notifying the Minister of Culture about the termination or cancellation of the representation agreement, which may not exceed 14 days of the termination or cancellation.

    Establishing an organisation for collective management of rights.

    Collective management organisations are established, managed and controlled by their members who are rightholders. Members of collective management organisations may be natural persons or legal entities that are rightholders, other organisationsfor collective management of rights, rightholders’ associations and other organisations that satisfy the membership requirements pursuant to organisation’s statute. The membership requirements shall be published on the collective management organisation’swebsite. The principle is that the organisation may not refuse membership to an entity that wishes to authorize the organisation to manage its copyright. Exceptions are permissible in two cases:

    • when the entity requires management of rights outside the scope of the organisation’s activity;
    • when the entity is represented by another organisation that is already a member of the organisation for collective management of rights.

    Membership refusals shall be reasoned and in written form. Members are entitled to information regarding the organisation’s activity, as well as to participate in the making of decisions relating to this activity. There must be easy access to information, to which aim the Law requires organisations to accommodate communication by electronic means among themselves.

    As non-profit entities, collective management organisations may not generate profit and must distribute all amounts derived from collective management of rights among rightholders, after deduction of the amount due for management of their activity. The organisation shall perform its activity in the best interests of the rightholders whose rights it represents and it shall not impose on rightholders obligations which are not objectively

    necessary for the protection of their rights and interests or for the effective management of their rights.

    The general assembly of members is the organisation’s supreme body. Every member is entitled to participate in the general assembly of members and vote on the issues raised in the agenda, unless otherwise stipulated in the statute. Restrictions may only be imposed in accordance with two criteria: membership duration and/or amounts received or due to a member. These restrictions must be implemented in a “fair and proportionate manner”.

    If the organisation holds different categories of members, depending on the categories of rights or types of works and other protected subject matter, including in terms of genre, they must be represented in the general assembly of members in a fair and balanced manner. When a member of the general assembly of members has appointed another person in the general assembly of members as a proxy holder, explicitly and in written form, to vote on his behalf, it is necessary that the appointing member and the proxy holder belong to the membership category or the same group of rights. Otherwise, there will be a conflict of interest.

    The general assembly of members shall be convened at least once a year. The general assembly of members shall decide on:

    1. the adoption and amendment of the statute;

    1. 2. the appointment and dismissal of members of the general assembly of members and the supervisory board;

    2. 3. approve the remuneration and other benefits granted to the members of the management and the supervisory boards by the organisation;

    3. 4. shall decide on terminating the organisation; 5.shall adopt and amend the policy on distribution of the income from collective management of rights;

    4. shall decide on: a) the general policy on the use of non-distributable amounts; b) the general investment policy with regard to rights revenue and to any income arising from the investment of rights revenue; c) the general policy on deductions from rights revenue and from any income arising from the investment

      of rights revenue; d) the use of non-distributable amounts;

      The powers listed above may not be seized by other bodies of the organisation, but they may be delegated, by a resolution of the general assembly of members, to the body exercising the supervisory function.

      The management board is the main executive body of collective management organisations. The powers of the management board are set out in the organisation’s statute.

      The supervisory board is the body that monitors the activity and performance of the duties of the persons managing the organisation, including the implementation of the decisions of the general assembly of members. Other powers may also be provided in the organisation’s statute. The management and the supervisory boards shall report to the general assembly of members at least once a year.

      1. Independent management entities for collective managmentof rights

      Independent management entities are commercial entities which are not controlled or owned by rightholders, whether directly or indirectly, entirely or partially, and are authorized to manage and administer copyrights entrusted to them through management agreements. Despite being commercial entities, they may not perform other commercial activities unless such activities accompany the entity’s main objective of managing authors’ rights. These entities shall be registered in the Commercial Register with the Registry Agency in accordance with the Commerce Act and the Non-Profit Legal Entities Act (NPLEA). An additional registration by the Minister of Culture, under CNRA, is needed in order to perform collective management of rights, which registration corresponds with that of organisations for collective management of rights.

      The agreements with rightholders enter into force on the date of issue of the independent management entity’s certificate of registration.

      The authorization for collective management of rights shall be done explicitly and in written form for each category of rights, type of rights, type of works or other protected subject matter.

      Rightholders may entrust the management of different types of rights or different types of works to different organisations. Rightholders may grant individual permission for non-profit use of protected subject matter, provided they notify the collective management organisation. In all

      other cases, the individual transfer of rights of exploitation of a work must be permitted by the organisation’s statute and the rightholder is again obligated to notify the organisation.

      Rightholders have the right to terminate an authorisation granted to a collective management organisation or to withdraw from a collective management organisation the collective management of separate rights or types of rights for the territories of their choice, on serving written notice not exceeding six months.  The collective management organisation may decide that such termination or withdrawal is to take effect only at the beginning of the next calendar year. When collective management of rights is mandatory, the rightholder may only authorize another organisation for collection management of rights. Rightholders are owed all amounts received prior to the entry into force of the termination, as well as all amounts received after the termination, under preliminary permission. Organisations for collective management of rights may not restrict the exercise of the right to terminate the agreement or to payment of remunerations by imposing further conditions.

      1. Management of rights revenue.

      Investment rules

      Rights revenue shall be invested in the best interests of the rightholders, in accordance with the general investment policy and the risk management policy.

      Investments must also comply with the following requirements, set out in Article 94, paragraph 3, namely:

      1. where there is any potential conflict of interest, the collective management organisation shall ensure that the investment is made in the sole interest of those rightholders;

      1. 2. the assets shall be invested in order to ensure the security, quality, liquidity and profitability of the portfolio as a whole;

      2. 3. the assets shall be properly diversified in order to avoid excessive reliance on any particular asset and accumulations of risks in the portfolio as a whole.

      Deductions rules.

      Deductions shall be established on the basis of objective criteria and must be reasonable in relation to the services provided to the

      rightholders. Where a collective management organisation provides social, cultural or educational services funded by rights revenue of the organisation, the criteria for their distribution, the access to and the extent of those services shall be fair and transparent. Deductions shall not exceed the documented costs incurred by the collective management organisation in managing copyright. Being a non-profit legal entity, its ultimate objective may not be generating profit.

      Distribution of amounts due to rightholders

      The organisation shall distribute the amounts due to rightholder no later than 30 September of the year following the year in which the rights revenue was collected. The organisation may not comply with this term only on account of objective reasons relating to reporting by users.

      A collective management organisation or members of the collective management organisation who represent rightholders shall regularly, diligently and accurately distribute amounts due to rightholders in accordance with the general policy on distribution of rights revenue. The organisation shall take all necessary measures to identify and locate the rightholders as part of its obligation of regular, diligent and accurate distribution and payment of the amounts due.

      Before the end of the calendar year, the collective management organisation shall make available information on works and other subject-matter for which one or more rightholders have not been identified or located. Access to this information is granted to both rightholders represented by the organisation and collective management organisations with which it has concluded representation agreements.

      When rightholders cannot be identified or located, within one year after the end of the calendar year in which the collection of rights revenue occurred, collecting management organisations shall publicly disclose, on their website, information regarding the work’s title, the rightholder’s name (respectively publisher or producer), as well as all other information which could help to identify the rightholder. If despite all taken measures, the rightholders have not been identified and, consequently,

      the amounts due to rightholders cannot be distributed before the end of the period of three years after the end of the financial year in which the collection of the rights revenue occurred, such amounts shall be treated as non-distributable. The general assembly of members shall decide on the use of those amounts. Apart from funding social, cultural and educational activities, they may be used for the benefit of rightholders.

      1. Relations with users. Licensing of exploitation rights.

      Collective management organisations and independent management entities may only license to a user rights for which they are explicitly authorized or which they represent under a mutual representation agreement. They may only license rights within the framework of the categories and types of rights and to protected subject-matter registered in the certificate of registration. When the Law provides that the right to use may only be licensed via a collective management organisation, every registered collective management organisation shall act on behalf of the rightholders that are not its members. The organisation undertakes to manage its relations with them on the same terms as the relations with its members.

      Licensing of rights shall be conducted by concluding an agreement, object of which are the collectively managed rights to use works or other protected subject-matter. Parties to the agreement are the collective management organisation or independent management entity, on one side, and, on the other, the user to whom the rights to use works or other protected subject-matter are licensed. Each of the parties is obligated to provide the other party with information necessary for the conclusion of the contract. On receipt of a user’s request for conclusion of a contract for the licensing of collectively managed rights, the organisation shall send a draft contract, together with information on the tariffs for the the service in question, or provide a reasoned statement explaining why it refuses to conclude the contract. It provides the user with a list of the rightholders who have explicitly refused representation by the organisation or receipt of any remuneration from it, the subject-matter relevant to the refusal, as well as categories and types of right to which the refusal applies.

      A user who has entered into contract with a collective management organisation shall provide information at the user’s disposal in

      the form of a report on the use of the rights licensed to him. A user shall provide all information at his disposal as is necessary to enable the collective management organisation to determine, collect and pay amounts due to rightholders.

      1. Relations with other collective management organisations

      Collective management organisations conclude mutual representation agreements which regulate all matters related to the collection, distribution and payment of rights revenue or any income arising from the investment of that rights revenue. The terms of payment, especially with respect to the amounts of remuneration, may not differ from the tariffs used by the other rightholders represented by the organisations. Deductions may not be made for any purpose otherwise than in respect of management fees unless they are expressly agreed upon in the representation agreement. The amounts due to rightholders shall be distributed and paid in accordance with the terms and conditions which apply to all members or the organisation.

      Information provided to other collective management organisations 

      A collective management organisation shall disclose information, not less than once a year and by electronic means, to the other organisations that are party to representation agreements. Such information refers to a specific period and its minimum contents are set out in Article 94 of the Act. If rightholders and organisations require further information, they shall give a reasoned statement explaining the reasons for their request.

      Aside from the obligation to inform their counterparties, organisations are obligated to publicly disclose information concerning the public interest. This information shall be kept up to date on the organisation’s public website78. At least the following information

      shall be made public.