This week in Italy n. 5 – The Court of Rome on the Distribution of Royalties of Related Rights

The Article 39, paragraph 2 of the Law No. 29 of 2012 has liberalized the market for the collective management of related rights, allowing the creation of new operators, competitors of the previous monopolist (New Imaie). The liberalization process was then completed by the Ministerial Decree of 19 December 2012, which set out the requirements that must meet by the new collecting societies.

However the liberalization is still incomplete, since it has not yet been passed a regulation concerning the distribution of royalties by users to the different collecting societies.

The issue was recently dealt with by the Court of Rome. New Imaie has taken legal action demanding the nullity of the agreement entered into by the association of record producers (SCF) and one of the new collecting societies (Itsright). In its decision, dated December 21 and published on January 13, the Court of Rome – while acknowledging the confusion in the sector of related rights – considered valid the agreement, enabling the distribution of amounts collected by Itsright among its artists.

The judicial demand of New Imaie was rejected mainly on procedural grounds, since there would be no prerequisites for an injunction. Thus, it is very likely that the first instance decision will be appealed.