Vasil Kisil & Partners and McDonald's Win the Case over Public Performance of Phonograms in Chain’s Restaurants


Vasil Kisil & Partners’ team has successfully represented McDonald's Ukraine in the case against Ukrainian League of Copyright and Related Rights (ULCRR).

ULCRR filed a lawsuit against McDonald's, seeking remuneration for public performance of phonograms in the chain’s restaurants. ULCRR is the only accredited collective management organization (CMO) authorized to collect remuneration for this type of use of phonograms in Ukraine. The plaintiff contended that McDonald's was obliged to enter into an agreement with the plaintiff, regardless of the actual circumstances of use. However, McDonald's entered into remuneration agreements directly with the holders of related rights to phonograms and performances. The rights holders withdrew their rights from management of ULCRR, which is why the latter had no right to collect remuneration for their phonograms.

The courts of two instances dismissed the ULCRR’s lawsuit, and the Supreme Court refused to commence cassation proceeding. The courts found that ULCRR had no right to file such lawsuit. The law stipulates that in order to apply to a court for the protection of property rights ULCRR must obtain a power of attorney from the rights holders. The assessment of the right to file a lawsuit is essential for this category of disputes, and there are currently several dozens of them. 

The project was handled by the Intellectual Property team composed of Ilarion Tomarov, Counsel, and Daria Romashchenko, Associate.

“The uniqueness of this dispute lies in that it can set a precedent for dozens of others. The holders of rights to phonograms and performances have two alternatives in addition to the CMO: to manage their rights either independently or through a representative. The courts of two instances have confirmed that the holders of rights to phonograms and performances may withdraw their rights from management of ULCRR. They may enter into an agreement directly with the users and receive a remuneration. By applying the new provision of the Commercial Procedural Code of Ukraine regarding the probability of evidence, the court has found that the fact of withdrawal of rights is proved as more probable than not,” said Ilarion Tomarov.