Proposed Amendments to the Statute of Collective Management Organization of Copyright -- Including Establishment of Common Royalty Standards, General Contact Window and Adding Uniform Calculation Rate per Song.

The Executive Yuan has recently passed the review of the proposed draft amendments to the Statute of Collective Management Organization of Copyright.  The present draft of the proposed amendments will be scheduled for reviewing during the next committee meeting and pending approval of the Executive Yuan.

In the future, TIPO will make announcement informing users regarding the common royalty standards establish by the copyright collective management organizations on using the copyrighted work.  There will be three billing models of collecting copyright fees, including individual license, general license and the new billing model of charging per single song.  These billing models aim to make the royalty rate mechanisms to be more reasonable.

Public broadcasting of copyrighted works by means of radio and television and then rebroadcast in public places including hotels, hair and beauty salons, hospitals, and tour buses; broadcasting by means of KTV, Karaoke, vocal accompaniment or using internet and TV for mass-publication could all be subject to paying royalty for using the copyrighted works.

In the past, Taiwan musical copyright intermediary organizations adopted different fee rates, which cause the user to have to negotiate with various intermediary organizations for seeking copyright licensing by paying different royalty rates, which is the reason that often lead concerned parties to disputes.  Despite TIPO’s relentless efforts to find common grounds among various parties, no resolution was reached among the concerned parties.  Referring to the practices of Switzerland, collective management groups are required to establish common royalty standards and provide a general contact window for prospective licensees. 

Once the proposed amendment is enacted, a buffer time of two years will be given for putting the agreed upon common royalty rates and negotiations into practice.  In addition, as considerable amount of time and money have been put into the review process of royalty rate for using copyrighted works, it is advisable for such agreed upon rate to be applicable from the present 2 years to an extended 3 years.  In event of any occurrence of significant change in circumstances, the user can file application for examination or the collective management organization can at its discretion establish new royalty rate.

Payment standard for temporary payment mechanism is also on the agenda for making amendment.  In practice, intermediary organizations often charge users for royalty rates which are lower than the ones established by the competent government authorities.  However, disputes often arise when intermediary organizations intend to increase royalty rates charge for users.  Therefore, if negotiation broke down between the concerned parties, the user can either pay according to the original rate or make a temporary payment approved by the TIPO.

In addition, currently users are required to provide the utilization list upon requests by the collective management organizations.  The collective management group may terminate the agreement if the users failed to provide the requested utilization list.  Under the proposed amendment, if the agreement includes disclaimer in respect of the utilization list, the users are exempted from providing the said list.

Highlights on the draft amendment to the Statute of Collective Management Organization
Amended Item	Amendment
Inclusion of common royalty standards	A central body responsible for collecting all fees for all groups will be established, along with a uniform calculation rate and distribution method for all user royalty fees.
Inclusion of a uniform calculation rate	Individual song will be charged with a uniform calculation rate (i.e. per-song royalty payment rate).
Extension of the reviewed royalty rate	The reviewed royalty rate will be applicable for 3 years, extending from the current term of 2 years.

(2009.08)
/DC