Taking aim at Orbis
By Maria Kowalewska
Industry professionals expect the nation's largest hotel operator, Orbis, to win a court case filed against it by the Filmmakers' Association (SFP), which is suing Orbis for copyright infringement. The ruling is to be handed down later this month.
Insiders also said that the case is unlikely to damage the leisure giant's stock exchange credibility and market reputation.
In what has been an unprecedented intellectual property case, the SFP has claimed that when Orbis installs TV sets in its hotel rooms, it publicly broadcasts copyright protected works. If the court were to come to the conclusion that the installation of TVs in hotel rooms is equivalent to the public broadcasting of protected works, Orbis, as well as other hotel owners in the country, could be liable for royalty fees to the SFP or similar organizations. The SFP is seeking monthly payments of zł. 2 from Orbis for each television set installed in the hotel operator's rooms.
Market watchers say that the fee of approximately zł. 300,000 that the SFP is demanding in outstanding payments since the copyright law came into effect in 1994 could prove a lucrative bounty for the association if it wins its case.
Orbis has responded officially by saying that the SFP has not proven that it is entitled to represent approximately 1,300 Polish filmmakers, and in particular it has not presented any contracts with filmmakers. Therefore, Orbis argues, the SFP is not entitled to claim any fees on behalf of filmmakers.
"From Orbis' point of view, the SFP is unable to provide (proof of) the authorization it received from various filmmakers allowing it to represent their interests in courts," said Bogdan Duda, an attorney at CMS Cameron McKenna, adding that the filmmakers' association would have a hard time proving its case. "If the court rules in favor of the association, it will provide them with grounds to claim royalties from all hotels throughout the country. It could affect the entire industry."
"The temptation to fight with someone as well-established as Orbis is irresistible," continued Duda, who believes that the SFP's motivation is purely financial. "SFP believes that it is its right to receive royalties for public broadcasting. If this becomes a binding ruling, the association will have steady income guaranteed for many years to come."
Experts point out that the sum of zł. 300,000 represents only a fraction of the giant's annual income. Anna Hess, an analyst at CDM Pekao, believes that a possible court ruling in favor of the filmmakers will not damage Orbis' credibility, image or financial performance.
"First of all, on the scale of what Orbis earns, the sum of zł. 300,000 is not a lot," she said. "Also, there is no lobby or interest group that could benefit from exposing the matter further, and thus through such actions taint Orbis' image."
Krzysztof Łopaciński, director of the Institute of Tourism, believes that in this case it will not be the hotels that will end up paying the fees, but rather customers who will suffer as hotel operators increase their prices to cover the fees.
Łopaciński says that the payment SFP is demanding is unheard of anywhere else in Europe, where only public broadcasting payments are made to the relevant authorities. He also defends Orbis, saying the association has targeted a firm it sees as a lucrative source of income.
Orbis is the largest hotel operator in the country, with 56 hotels under its management, giving the operator nearly 10,000 beds in key tourist locations. The company's share in the domestic hotel market is currently estimated at 40%. The second largest player on the market, Gromada, has less than 20 hotels, while foreign players, such as Marriott, Sheraton and Radisson SAS, have at most a few hotels in the entire country.
Ryszard Kirejczyk, director of the Authors and Audiovisual Producers Association (ZAPA), an organization that represents the rights of filmmakers and producers and cooperates with SFP, fends off accusations of opportunism as well as critics who claim his association should seek remuneration from state television, which holds the copyrights on everything it broadcasts. His position is that Orbis uses a particular field of utilization, which, according to a ministry of culture permit, places all copyrights for audiovisual works under the SFP's management.
"Copyright protection is a novelty in the country," Kirejczyk said. "A company that is rooted in the previous system as strongly as Orbis needs a court ruling in order to start doing what is legally its obligation. It is already paying royalties to the Authors and Scenic Composers Association (ZAIKS)."
Kirejczyk said that the association will eventually move to collect fees from all hotels in the country, but added the charge will vary depending on its size and income.
"The fees have been calculated in such a way as not to cause too much of a problem to the operator," he said.
Hanna Węglewska, Orbis' spokeswoman, said that currently the company and its individual hotels are paying public and private TV channel subscription fees as well as payments to ZAIKS and the Association of Performing Artists (STOART).
Over the past few years Orbis has implemented an ambitious modernization plan for its E270-million hotel chain. Since mid-2000, Orbis' strategic investor has been France-based Accor, which, together with Deutsche Bank and real estate developer GTC, acquired 35% of Orbis shares from the state treasury.
