In late 2008, a proposed class action was initiated in Ontario, Canada, by the estate of the late Chet Baker as the representative of a proposed class consisting of songwriters and music publishers whose musical works have been embodied in sound recordings released or distributed in physical formats in Canada by the four major record companies, Sony BMG Music (Canada) Inc., now Sony Music Entertainment Canada Inc., EMI Group Canada Inc., Universal Music Canada Inc., Warner Music Canada Co., in circumstances where the record companies had allegedly failed to secure the necessary mechanical licenses and for which royalties had been accrued on the record companies’ so-called “pending lists”.
Settlement agreements were reached between the original plaintiffs and the defendant record companies in July, August and December 2010, which involve the payment of defined amounts of unpaid pending list royalties into a settlement trust to be administered by CMRRA/SODRAC Inc. (“CSI”), with the proceeds of the settlement to be paid to or for the benefit of rightsholders of musical works.
Subsequently, CMRRA and SODRAC entered into an agreement with the plaintiffs to pay certain royalties held by them into the settlement trust, to be administered on the same basis.
In May 2011, the Baker Estate plaintiffs were replaced by Craig Northey with the consent of all parties, and the settlement was approved by the Ontario Superior Court of Justice, and certified as a class action.
The class is defined as follows:
“Any rights holder who holds, or who has held at any time, rights in a musical work embodied in an audio product or a video product first released or distributed in Canada by any of the Record Label Defendants at any time up to and including December 31, 2012, for which rights the applicable Record Label Defendant was required to obtain a reproduction licence (including, in relation to video products, any necessary synchronization licence) but for which either no such licence has been obtained for the reproduction of the musical work or for which the required royalties have not been paid for the reproduction of the musical work despite the issuance of such a licence.”
Post-2012 Canadian Releases: A key component of the settlement, beyond addressing historical pending amounts, provided for a strategy that will prevent the accumulation of pending royalties in the future. Accordingly, CSI and the major record companies have now implemented the Future Licensing System (link to FL page) to manage the licensing and payment of royalties associated with products released in Canada from January 1, 2013 onward. This relies on the exchange of electronic data for licensing in a more timely and efficient manner, while at the same time providing for payment of outstanding royalties into a separate trust account, the “Licensing Trust”, after a prescribed period of time. The data related to items paid into the Licensing Trust will be published by CSI via a public Claims Website (link) that will allow Rightsholders to review and claim their unpaid royalties.
For the complete set of official documents and notices related to this action, please visit the settlement website at www.pendinglistsettlement.com.
For information regarding the distribution of the settlement, please refer to the appropriate sections of this website.