TIPO Proposes Common Royalty Standards and A General Contact Window for Licensing of Copyrighted Music Work.

In light of the perplexing royalty rates adopted for music work licensing, TIPO proposes to amend the Copyright Intermediary Organization Act to require that existing copyright intermediary organizations consolidate and provide a general contact window for prospective licensees.  TIPO also propose to adopt a pro rata fee standard.  According to TIPO’s proposed amendment, prospective licensees (broadcasting, television operators) seeking copyright licensing may request TIPO for grant of compulsory licensing if their licensing negotiation with the copyright holder fails.  Delis, discount warehouses who wish to broadcast copyrighted music in their business premises will only need to approach the intermediary organization instead of the artists of the works respectively.

Local music licensing is never a simple matter because different intermediary organizations adopt different fee rates.  As a result, the copyright holders are dissatisfied with insufficient commercial exploitation of their copyright and the users are unhappy with the fees they have to pay while the copyright holders retaining the right to file criminal complaint against them.

TIPO has proposed to control the total number of the local copyright intermediary organizations by allowing merger by and among themselves.  TIPO also proposed to regulate the consideration payable to the copyright intermediary organization which, as TIPO proposes, should remain unchanged for a term of four years.  Also, under the amendment proposed, in consideration of protecting the copyright holder’s rights and interests, the user must pay a reasonable amount of fees to the copyright holder before the applicable fee rate is agreed-upon.

Further, under the proposed amendment, public broadcasting is divided into two types:  first-tier broadcasting and second-tier broadcasting.  First-tier broadcasting means the broadcasting of a copyrighted work on the radio, on the television; second-tier broadcasting means the broadcasting of the radio or telephone program which the business operator has received to the customers by means of loud speakers at its business premises such as a bulk sale store or restaurant.

The amendment as proposed and pending legislative deliberation may resolve certain practical issues such as excess copyright intermediary groups, confusingly varied rates of fees payable to such groups, copyright holders’ criminal actions against licensees arising from payments of fees.  According to TIPO, the amendment proposed focuses on the right to second-tier broadcasting which will be exercised by and only by the collective management group.  As to the first-tier broadcasting, the user may seek compulsory licensing from TIPO if the copyright right holder is not a member of any collective management group and the user’s licensing negotiation with the copyright holder ends unsuccessful.  Further, TIPO has proposed to establish a common royalty standards according to the manner and form of the use being sought for to simplify the licensing process to encourage the public to seek authorized use of copyright works.

	Definition	Place(s) where the copyrighted work is broadcasted	Proposed amendment
First-tier broadcasting	First-hand broadcasting of copyrighted work	On television, radio	Article 71bis Where the broadcast operator who intends to publicly broadcast a publicly released copyrighted work on the radio or television or who intends to publicly communicate to the public a copyrighted work it has broadcasted on the radio or television via the web or other telecommunication means has sought for copyright license from the copyright holder without success, the broadcast operator may apply with the Copyright Authority for compulsory license and pay the consideration to use the work except in cases where the copyrighted work is managed by a copyright collective management group. The application for compulsory license provided in the preceding paragraph must be preceded by an unsuccessful mediation.The Copyright Authority shall publish the grant of the application provided in the first paragraph on its official website.The amount of the consideration provided in the first paragraph shall be comparable to such reasonable consideration as may be freely negotiated and agreed-upon by the parties to the licensing of general copyrighted work. The regulations governing the grant of the application provided in the first paragraph and the amount or calculation of the consideration and other matters for compliance shall be prescribed by the Copyright Authority.
Second-tier broadcasting	Broadcasting of copyrighted television programs or radio programs through loud speakers	Hotels, hospitals, supermarkets, buses, stores, department stores, etc.	Article 37bis The licensing of the right to use the copyrighted work shall be conducted by the copyright collective management group where 1. the sound and image originally broadcasted is to be publicly communicated to the public through cable, radio or other broadcasting or transmission system or equipment; 2. the sound and image originally broadcasted is to be publicly communicated to the public through loud speakers or other equipment.
Source:  TIPO

(2009.03)
/EMA