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Decision on the Protection of Neighboring Rights in Cinematographic Works

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Decision on the Protection of Neighboring Rights in Cinematographic Works

Posted | Updated by Insights team:

Publication | Update:

Jun 2024
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The copyright law dispute, also known by the public as the case of famous actor Kemal Sunal, was conclude...

The copyright law dispute, also known by the public as the case of famous actor Kemal Sunal, was concluded with the decision of the Court of Cassation General Assembly of Civil Chambers (“General Assembly”) after going through various stages for many years.[1]

In the lawsuit filed by the heirs of Kemal Sunal, the dispute centers on (i) whether it is possible to accept that Kemal Sunal’s economic rights as a performing artist within the scope of Article 80 of the Law No. 5846 on Intellectual and Artistic Works (“LIAW”) were transferred to the producer of the cinematographic works in question produced before 12.06.1995 through the contracts concluded between Kemal Sunal, as the leading actor of the subject works, and the producer of the works, and (ii) whether the plaintiffs can claim damages based on Kemal Sunal’s neighboring rights within the scope of Article 80 of LIAW because of the screening and distribution of the cinematographic works on platforms and venues other than movie theaters.  

The General Assembly evaluated the dispute by analyzing the amendments made to LIAW by Laws No. 4110 and 4630 which introduced significant changes to LIAW and in some aspects created distinctions between works created before and after the date 12.06.1995. In summary, the General Assembly dictated that (i) performing artists will benefit from all neighboring rights granted under Art. 80/I-1-A of LIAW for their performances in works created before 12.06.1995 and that the relevant protection period will be seventy years from the first fixation of the performance, (ii) performing artist’s neighboring rights, which are protected under Additional Article 2/III of the LIAW, can only be exercised with the authorization of the right holder performing artist or his/her heirs, (iii) in the context of obtaining the performing artist’s authorization for the exercise of his/her neighboring rights, the provisions of Article 48 to 65 LIAW shall apply by analogy to the extent appropriate to their nature, (iv) pursuant to Article 52 of LIAW, contracts on economic rights or any other kind of exploitation must be made in writing and economic rights subject to such contract or exploitation must be indicated separately and individually, (iv) if a contract, involving the transfer of economic rights that have not yet been granted to the performing artist by law at the time of execution of the contract, was concluded before the amendments made by Laws No. 4110 and 4630, the transfer of economic rights that have not yet been granted to the performing artists as of the date of the contract will be invalid and the contracts containing the prior waiver or prior transfer of these rights will be null and void.

The General Assembly applying these findings to the concrete case decided that (i) the contracts concluded between Kemal Sunal and the producer do not constitute a contract that results in the transfer of the economic rights listed in Article 80/I-1-A of LIAW that Kemal Sunal holds as a performing artist because there is no written agreement in which the transfer of neighboring rights, which did not exist at the time of the execution of the contracts, is shown separately pursuant to Art. 52 of LIAW, and even if the existence of such an agreement is accepted, this agreement will be any way invalid pursuant to Art. 51 of LIAW, (ii) it cannot be argued that Kemal Sunal properly transferred to the producer his neighboring rights, which did not exist at the time of execution of the contract, (iii) it would be inequitable to accept that Kemal Sunal’s neighboring rights on the cinematographic works, which did not exist at the time, were transferred to the producer in return for the compensation paid to Kemal Sunal.

Consequently, the General Assembly found the decision of the Regional Court of Appeal to be in accordance with the procedure and the law, and concluded that the plaintiffs were entitled to claim compensation under Art. 80 of the LIAW for the uses subject to the lawsuit. 

The General Assembly’s aforementioned decision contains explanatory findings regarding the duration and scope of the protection of the performing artists’ neighboring rights in the works created prior to 12.06.1995 and their relationship with the rights of the author.  Moreover, the decision clarifies the meaning and scope of Article 51 of LIAW.  In addition, the decision is significant in terms of resolving the uncertainties regarding the ownership and duration of protection of cinematographic works created before 12.06.1995, as we have previously covered in our article titled Protection of Cinematographic Works in Turkey. In this respect, it is considered that the decision will shed light on many points regarding the legality of right transfers as well as the issues regarding copyright and neighboring rights ownership on cinematographic works created before 12.06.1995.

[1] Court of Cassation General Assembly of Civil Chambers decision numbered E. 2020/350 K. 2022/1638 and dated 01.12.2022

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The future outlook “forecast” is based on a set of statistical methods such as regression analysis, industry specific drivers as well as analyst evaluations, as well as analysis of the trends that influence economic outcomes and business decision making.
The Global Economic Model is covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure. We aim update our market forecast to include the latest market developments and trends.

Forecasts, Data modelling and indicator normalisation

Review of independent forecasts for the main macroeconomic variables by the following organizations provide a holistic overview of the range of alternative opinions:

  • Cambridge Econometrics (CE)

  • The Centre for Economic and Business Research (CEBR)

  • Experian Economics (EE)

  • Oxford Economics (OE)

As a result, the reported forecasts derive from different forecasters and may not represent the view of any one forecaster over the whole of the forecast period. These projections provide an indication of what is, in our view most likely to happen, not what it will definitely happen.

Short- and medium-term forecasts are based on a “demand-side” forecasting framework, under the assumption that supply adjusts to meet demand either directly through changes in output or through the depletion of inventories.
Long-term projections rely on a supply-side framework, in which output is determined by the availability of labour and capital equipment and the growth in productivity.
Long-term growth prospects, are impacted by factors including the workforce capabilities, the openness of the economy to trade, the legal framework, fiscal policy, the degree of government regulation.

Direct contribution to GDP
The method for calculating the direct contribution of an industry to GDP, is to measure its ‘gross value added’ (GVA); that is, to calculate the difference between the industry’s total pre­tax revenue and its total bought­in costs (costs excluding wages and salaries).

Forecasts of GDP growth: GDP = CN+IN+GS+NEX

GDP growth estimates take into account:

  • Consumption, expressed as a function of income, wealth, prices and interest rates;

  • Investment as a function of the return on capital and changes in capacity utilization; Government spending as a function of intervention initiatives and state of the economy;

  • Net exports as a function of global economic conditions.

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Market Quantification
All relevant markets are quantified utilizing revenue figures for the forecast period. The Compound Annual Growth Rate (CAGR) within each segment is used to measure growth and to extrapolate data when figures are not publicly available.

Revenues

Our market segments reflect major categories and subcategories of the global market, followed by an analysis of statistical data covering national spending and international trade relations and patterns. Market values reflect revenues paid by the final customer / end user to vendors and service providers either directly or through distribution channels, excluding VAT. Local currencies are converted to USD using the yearly average exchange rates of local currencies to the USD for the respective year as provided by the IMF World Economic Outlook Database.

Industry Life Cycle Market Phase

Market phase is determined using factors in the Industry Life Cycle model. The adapted market phase definitions are as follows:

  • Nascent: New market need not yet determined; growth begins increasing toward end of cycle

  • Growth: Growth trajectory picks up; high growth rates

  • Mature: Typically fewer firms than growth phase, as dominant solutions continue to capture the majority of market share and market consolidation occurs, displaying lower growth rates that are typically on par with the general economy

  • Decline: Further market consolidation, rapidly declining growth rates

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The Global Economic Model
The Global Economic Model brings together macroeconomic and sectoral forecasts for quantifying the key relationships.

The model is a hybrid statistical model that uses macroeconomic variables and inter-industry linkages to forecast sectoral output. The model is used to forecast not just output, but prices, wages, employment and investment. The principal variables driving the industry model are the components of final demand, which directly or indirectly determine the demand facing each industry. However, other macroeconomic assumptions — in particular exchange rates, as well as world commodity prices — also enter into the equation, as well as other industry specific factors that have been or are expected to impact.

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Wherever possible, publicly available data from official sources are used for the latest available year. Qualitative indicators are normalised (on the basis of: Normalised x = (x - Min(x)) / (Max(x) - Min(x)) where Min(x) and Max(x) are, the lowest and highest values for any given indicator respectively) and then aggregated across categories to enable an overall comparison. The normalised value is then transformed into a positive number on a scale of 0 to 100. The weighting assigned to each indicator can be changed to reflect different assumptions about their relative importance.

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The principal explanatory variable in each industry’s output equation is the Total Demand variable, encompassing exogenous macroeconomic assumptions, consumer spending and investment, and intermediate demand for goods and services by sectors of the economy for use as inputs in the production of their own goods and services.

Elasticities
Elasticity measures the response of one economic variable to a change in another economic variable, whether the good or service is demanded as an input into a final product or whether it is the final product, and provides insight into the proportional impact of different economic actions and policy decisions.
Demand elasticities measure the change in the quantity demanded of a particular good or service as a result of changes to other economic variables, such as its own price, the price of competing or complementary goods and services, income levels, taxes.
Demand elasticities can be influenced by several factors. Each of these factors, along with the specific characteristics of the product, will interact to determine its overall responsiveness of demand to changes in prices and incomes.
The individual characteristics of a good or service will have an impact, but there are also a number of general factors that will typically affect the sensitivity of demand, such as the availability of substitutes, whereby the elasticity is typically higher the greater the number of available substitutes, as consumers can easily switch between different products.
The degree of necessity. Luxury products and habit forming ones, typically have a higher elasticity.
Proportion of the budget consumed by the item. Products that consume a large portion of the consumer’s budget tend to have greater elasticity.
Elasticities tend to be greater over the long run because consumers have more time to adjust their behaviour.
Finally, if the product or service is an input into a final product then the price elasticity will depend on the price elasticity of the final product, its cost share in the production costs, and the availability of substitutes for that good or service.

Prices
Prices are also forecast using an input-output framework. Input costs have two components; labour costs are driven by wages, while intermediate costs are computed as an input-output weighted aggregate of input sectors’ prices. Employment is a function of output and real sectoral wages, that are forecast as a function of whole economy growth in wages. Investment is forecast as a function of output and aggregate level business investment.

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