Finnish broadcasting company MTV Oy victorious in copyrights royalty dispute with collecting society Teosto

Compass Lexecon was retained by MTV Oy to provide an economic expert report and testimony to the Market Court in Finland. A Compass Lexecon team analysed the royalties payable by MTV to Teosto for music broadcasted on MTV’s pay-TV and video-on-demand services. The Market Court dismissed all claims from Teosto, ruling in favour of MTV.

Situation

Teosto, a performance rights organisation that collects royalties on behalf of songwriters and composers in Finland, laid down a complaint at the Market Court in Finland against broadcasting company MTV. The dispute was about what would a reasonable royalty level be for music used on MTV’s pay-TV and video-on-demand services. Teosto’s complaint was accompanied with analyses by an economic consultant, allegedly showing that the royalty rate levels demanded were on par with rates charged in other countries. MTV contacted Compass Lexecon to provide an independent assessment of Teosto’s submitted economic evidence related to the royalty rates to be paid, and to act as expert witness in front of the Market Court.

Our Role

The Compass Lexecon team first reviewed the analyses put forward by Teosto’s appointed economic advisors. Teosto’s advisors had done a country comparison to argue that the demanded royalty rates were on par with rates charged in other countries. We showed the flaws in the analyses using our comparable contracts approach: a transparent and objective methodology for the implementation of a comparables based IP valuation that we have applied in multiple IP matters previously. In particular, we showed that Teosto’s advisors had cherry-picked countries for their comparables analysis and did not follow any systematic analysis framework. Second, we drew insights from our comparables valuation approach on the royalties to be paid to Teosto. Senior Vice President, Pekka Sääskilahti, acted as expert witness in court appointed by MTV to testify on the accuracy of Teosto’s advisor’s analyses.

Our Impact

In a decision given on 31 October 2023, the Market Court dismissed all claims by Teosto. It noted that the collecting society had not provided evidence or proved that the market situation would have changed from a previous judgement justifying the demanded higher royalty rates. These were also arguments that the Compass Lexecon team had put forward.

The Team

The Compass Lexecon team was headed by Pekka Sääskilahti, who acted as expert witness at the Market Court, and included Lotta Väänänen, Robin Rander, Timo Autio, Eeva Hietamäki, Juho Anttila, Kristian Teromaa, Alex Wiik, Janne Sirniö, Olli Putkiranta, Joonas Roos, and Aaro Suhonen. They closely cooperated with a team from law firm Bird & Bird, including Katia Duncker, Jori Taipale, Jarno Sulasalmi, and Anton Hartzell.

“The MTV vs Teosto case was a Finnish copyright matter in which we put in practice our IP valuation expertise. The IP valuation approach we used allowed us to analyse rigorously, systematically, and transparently the arguments put forward by Teosto’s appointed economic expert. The Market Court dismissed all claims by Teosto leading to a victory for our client MTV.” - Pekka Sääskilahti, Senior Vice President