New Class Licensing Scheme for the Regulation of Collective Management Organisations
31 October 2023 Posted in Press releases
1. The Ministry of Law (MinLaw) and the Intellectual Property Office of Singapore (IPOS) today published the subsidiary legislation for a new collective management organisation (CMO) class licensing scheme in the Gazette, which will come into operation on 1 May 2024. This subsidiary legislation, the Copyright (Collective Management Organisations) Regulations 2023 (“Regulations”), is made pursuant to the Copyright Act 2021.
2. CMOs perform a critical role in the creative sector and the economy by facilitating efficient rights clearance through systematic and cost-effective licensing solutions. In Singapore, CMOs represent thousands of rights owners, including songwriters, composers, lyricists, record labels, authors, publishers, and filmmakers.
3. The class licensing scheme seeks to achieve a well-functioning collective management ecosystem by raising standards of transparency, accountability, efficiency, and good governance among CMOs. The scheme applies a light-touch model of regulation targeted at critical areas only, while leaving CMOs the flexibility to operate within those boundaries. The scheme does not interfere in the fees that CMOs charge for the use of the material they manage; CMOs remain free to determine such fees.
4. Under this scheme, every CMO is automatically subject to a mandatory class licence and must comply with all applicable licence conditions. Since the scheme operates automatically, there is no need to register or pay any fee to be a CMO.
5. IPOS, as the regulator of the scheme, is empowered to take regulatory actions against CMOs and their officers for breach of licence conditions, including issuing regulatory directions, imposing financial penalties or ordering CMOs to cease their collective management business. CMOs and their officers have a right to be heard at every stage of the regulatory action process, including a final appeal to the Minister for Law.
6. The Regulations set out the licence conditions that CMOs must comply with as well as procedural matters relating to the regulation of CMOs. The Regulations incorporate feedback received by MinLaw and IPOS during the public consultation exercise conducted from 7 November 2022 to 4 January 20231.
7. A summary of the key licence conditions is outlined in the Annex.
Implementation of the Class Licensing Scheme
8. CMOs are given a six-month notice period from 31 October 2023 to adjust their operations so that they will be in compliance with the class licensing scheme when it takes effect on 1 May 2024.
9. Once in force, the scheme will strengthen Singapore’s copyright regime and benefit all key stakeholders in our collective management ecosystem:
a. for the CMO’s members, which include individual creators, the scheme will empower members with a set of key rights, including a right to vary or terminate their mandates to their CMOs and a right to participate in the operations of their CMOs. It will also ensure that members receive regular income distributions from their CMOs and that these distributions are properly accounted for.
b. for the CMO’s users, which include individual consumers, businesses and institutions, the scheme will allow them to make informed decisions and give them greater certainty and efficiency when licensing from CMOs. Should disputes arise, the scheme will require CMOs to act in good faith and reasonably when dealing with the disputes.
c. for CMOs, the scheme provides a clear set of rules without unnecessarily increasing compliance efforts and costs. In the future, IPOS will also develop, in collaboration with the industry, best practice notes such as recommendations, illustrations, and templates, which will further encourage and help CMOs to meet industry and international standards.
Annex: Summary of Key Licence Conditions
MINISTRY OF LAW
INTELLECTUAL PROPERTY OFFICE OF SINGAPORE
31 OCTOBER 2023
Annex: Summary of Key Licence Conditions
A. Members’ Rights
1. The licence conditions establish a minimum standard for CMOs in their dealings with members:
a) CMOs must give each of their members a copy of their membership agreement and any change to the membership agreement must be made in writing.
b) CMOs must offer potential members the option of entering into non-exclusive membership agreements. For existing members, CMOs must offer an unconditional right to vary or terminate the rights granted to the CMO, including varying the grant of rights from an exclusive to a non-exclusive basis (or vice versa), subject only to a notice requirement.
c) CMOs must give their members a right to participate in the operation of the CMO, including giving them a say in the appointment and removal of directors.
d) CMOs must establish, maintain and comply with the following policies, which can be amended only with approval of their members:
i. A membership policy that sets out how a CMO manages its relationship with its members;
ii. A distribution policy that governs critical aspects of the distribution of tariffs; and
iii. A dispute resolution policy that deals with disputes with their members or users.
B. Distribution of Tariffs
2. The distribution policy which must set out matters such as the method to calculate tariffs, the frequency of tariff distributions, and the way in which a CMO deals with collected tariffs that it is unable to distribute. A CMO must generally distribute a tariff within 6 months after the financial year in which it collected that tariff (unless the distribution policy provides for a longer period). When distributing tariffs, the CMO must also provide usage information for members to understand the distributions they receive, and members must be given the opportunity to dispute and/or query distributions.
C. Dispute Resolution
3. The dispute resolution policy must provide a dispute resolution process in which members and users (including intending users) can raise disputes to the CMO, which must then respond within a specified period. The dispute resolution policy does not preclude any party from referring their dispute to a Copyright Tribunal.
D. Ensuring Good Governance
4. Several safeguards are included to ensure that CMOs operate in a transparent and accountable manner. CMOs are required to:
a) Keep proper financial records.
b) Allow members to inspect financial records.
c) Make annual transparency reports.
E. Information to Provide to Members of the Public
5. CMOs must set up and maintain a website with key information and up-to-date documents to enable the public, including potential users and members, to make informed decisions before transacting with the CMO. For users, this includes obtaining confirmation and proof on whether certain materials that are sought to be licensed are within a CMO’s repertoire.
Last updated on 31 October 2023