The settlement of the class action called for the implementation of a new mechanical licensing system to avoid the accumulation of pending royalties in the future, and to promote the timely payment of royalties to all rightsholders.
Settlement details regarding this system can be found under Section 6 of the Key Terms of Settlement.
The new system was launched in early 2013, such that all newly released physical audio recordings by the major record companies as of January 1, 2013 have been licensed through this new system.
The system was built by CSI in accordance with specifications agreed upon by CMRRA, SODRAC, the major record companies and the plaintiff. To optimize the system’s functionality, the exchange of data between CSI, CMRRA and SODRAC on one hand, and the major record companies on the other, is performed using standard electronic Digital Digital Data Exchange (DDex) formatted messages.
LICENSING TRUST AND PUBLIC LICENSING PERIOD:
Where the ownership of a musical work remains unidentified after a period of 150 days after the release date of the recording in Canada, the royalties accrued for unidentified ownership shares are paid by the record companies into a trust account established and administered by CSI for the benefit of those rightsholders. This trust account is referred to as the Licensing Trust.
CSI will review the details of each quarterly royalty file where the associated royalties are being paid into the Licensing Trust to identify rightsholders based on newly registered copyright ownership shares or licences which may have already been issued, in order to make an initial distribution on these items.
For all shares that remain unidentified, information about the associated musical works and recordings will be published on CSI’s Claims Website in an attempt to identify and locate the copyright owners.
The rightsholder(s) for any musical work, or part thereof, that remains unidentified 90 days after the work has first been published on CSI’s website, will be deemed “unlocatable” for the purpose of this system.
CSI will then apply, on behalf of the label, for a licence from the Copyright Board of Canada under Section 77 of the Copyright Act. Once a licence has been granted by the Copyright Board, all accrued and future royalties will be paid into a trust account established by CSI expressely for this purpose. CSI will also maintain a separate section of its website on which the details of such licences will be made public in a further effort to locate the rightsholder(s).
This aspect of the settlement remains under development, and more information regarding the availability of Section 77 licence details will be posted as it becomes available.