Film exhibitors triumph as remuneration scheme goes to Supreme Court

BY LUIS C. SCHMIDT
PARTNER
WORLD COPYRIGHT LAW REPORT, MARCH 2005
In Cinemas La Huasteca Federal Congress (RA 296/2004 Amparo 1340/2003), the Ninth Circuit Court in Mexico City has overruled an earlier district court resolution and found that group of film exhibitors and broadcasters do have the right to bring a constitutional action against a copyright remuneration scheme. The case has now been referred to the Supreme Court.
In July 2003 Congress passed amendments to the Copyright Law granting remuneration rights for authors and performing artists. The reforms were designed to ensure that authors and artists benefit from the exploitation of their works, in particular the public communication of these works. Under the amendments, authors and artists are entitled to remuneration each time that a work they have written or performed is made the subject of public communication by any form or means. However, the amended law fails to take account of whether the authors and performing artists own the patrimonial right of public communication or have assigned it to a third party.
A group of users, including film exhibitors and broadcasters, filed an action seeking protection from the amendments and, in particular, the provisions on remuneration. The users argued that the amendments are inconsistent with the Copyright Law and are unconstitutional as would oblige them to pay twice for the same act of public communication. In addition, the remuneration would inflict harm not only to the users but to the general public as well. The users also pointed out that by passing the amendments Congress unfairly altered the practices of a whole industry and heavily shifted the line of interest between authors and users in favour of the former.
The court of first instance dismissed the users’ actions, basing its decision on the fact that amended provisions are not self-executive (ie, they require the application of a competent authority in order to produce harm and thus the right to seek constitutional relief). Under the reasoning the right to bring a constitutional action would only be triggered if a civil judge ordered a user to remunerate an author or artist whose work or performance was the subject of public communication.
The group of users subsequently appealed to the Ninth Circuit Court, which has now overturned this resolution and referred the case to the Supreme Court for constitutional analysis. The Supreme Court’s decision is being eagerty awaited as it will set a valuable precedent on important questions related to royalties and other remunerative issues for the use of works and artistic performances.