In a recent decision¹, the Court of Appeals of the State of Rio de Janeiro considered abusive the claim raised by ECAD (the main performance rights organization in Brazil) to increase from 10% to 15% the percentage of royalties due as a result of public performance of musical works during FIFA Fun Fest (an event held during the 2010 World Cup), and to apply such percentage to the gross revenues arising out of this event.
In this case, ECAD filed a lawsuit arguing that “the parties promoted by RioTur have become outdoors”, attracting several sponsors at the expense of the exploitation of third parties’ works, and, therefore, the economic balance between copyright holders and the defendant was changed. In its view, that change would justify the increase of the copyright royalties due as a result of the public performance of musical works during the events.
Upon deciding the appeal, the Court of Appeals affirmed the lower Court’s dismissal of the lawsuit, holding that, although ECAD was entitled to collect and unilaterally fix the royalties due, Brazilian Courts must verify abusive collections when the principles of good faith and reasonability are not observed. The Court held that such change, which was unilateral and not previously discussed, was based on royalties distinct from those usually collected by ECAD and, if accepted, would make ECAD a true partner sharing the profits of the event.
¹Lawsuit No. 0018094-37.2013.8.19.0001