FAQ – Pending List Settlement

Please find below a list of frequently asked questions. CSI will revise this list as new questions are asked through the Got Questions? section of our website.

What is the CSI Licensing Trust?

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.

What are the reasons that certain royalties related to Post-2012 Products are paid into the Licensing Trust?

The record companies are required to pay any accrued royalties into the Licensing Trust for ownership shares that remain unidentified or unlicensed 150 days after the release of the product in question.  Based on CSI’s review of the Licensing Trust royalty files, we have found that royalties are being paid into the trust for the following reasons:

  • Unknown Ownership – where the copyright owner remains unidentified, or an identified copyright owner has not yet registered his/her ownership share with CMRRA or SODRAC, or with the record company through a direct licence;
  • Ownership Disputes – where a conflicting claim results in a dispute situation involving CMRRA and/or SODRAC and/or a direct licensor, the record companies will pay all related royalties into the Licensing Trust from the time they are notified of the dispute.  As agreed between CSI, SODRAC and the record companies, the 150 day period does not apply in these cases.
  • Rejected Licences – the record companies may reject the licences issued to them by CMRRA or SODRAC based on a disagreement over the royalty rate or applicability of the licence; CSI has also identified that there are some technical issues that can result in licences being rejected, and we have taken steps to address these issues to prevent the unnecessary accumulation of rejected licences.

Am I a member of the Class in this action?

The Class is defined as:

“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.”

If you are a rights holder and you have not opted out of the class by the August 2, 2011 deadline, then you are a class member.

Am I being legally represented by CMRRA-SODRAC Inc. (CSI) or its counsel in this action?

No.  Class members are represented in this action by the law firms Harrison Pensa and Bates Barristers.

How much was paid into the Settlement Trust ?

The record companies, together with CMRRA and SODRAC, paid a total amount of approximately $46.5 million in the settlement trust for Group I and II Products. This amount reflects the total paid prior to any adjustments related to rights holders who have opted-out of the class. This amount is inclusive of all legal and administrative fees.

How will the settlement funds be distributed?

Please refer to the Distribution of the Settlement Funds section of our website. In short, the settlement funds will be distributed to class members using two separate methodologies.

Who is entitled to receive a market share portion of the class action settlement?

Three conditions must be met for a rights holder to receive a market share portion of the settlement fund.

1) First, a rights holder must be a member of the class, which is defined as:

“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.”

2) Second, a rights holder must have received royalties from one of the four Canadian major record companies as follows:

• For Group I Products, a rights holder must have received royalties from one of the four Canadian major record companies between January 1, 2003 and December 31, 2009.

• For Group II Products, a rights holder must have received royalties from one of the four Canadian major record companies between January 1, 2005 and December 31, 2010.

• For Group III Products, a rights holder must have received royalties from one of the four Canadian major record companies between January 1, 2008 and December 31, 2013.

3) Third, the market share allocation to the rights holder for each individual distribution must be greater than, or equal to, $100. Market share allocations below $100 are redistributed on a pro-rata basis to rights holders with a market share allocation of $100 or more.

Am I entitled to receive a portion of the settlement fund for catalogues or musical works I no longer hold rights to?

In the case of the market share distributions:

For rightsholders who are not members of CMRRA or SODRAC, CSI will pay the current rightsholders of the publishing catalogues in question.

For rightsholders who are members of either CMRRA or SODRAC, CSI will pay each collective the total share of the funds allocated to the rightsholders they represent. In turn, CMRRA and SODRAC will each distribute those funds to their respective members and principals as follows:

  • CMRRA will pay the current rightsholders of the publishing catalogues in question;
  • SODRAC will distribute the funds on a "work by work" basis, according to the documentation on file that originally served to effect the distribution of the major record companies' royalty reports dating from January 1, 2003 through December 31, 2010.

In the case of claims made to Medium and High Value Items:

CSI, along with CMRRA and SODRAC, will pay the current rightsholders of the musical works in question.

When will I be able to claim on Medium and High Value Items?

The claims period for Group I and II Products is now closed.  There will be a further claims period against Group III Products, which has not yet been scheduled. This information will be posted here as soon as it is known.  Please refer to the Claims Period page for further details.

I received a market share payment. Does this payment cover both writer and publisher portions of the settlement for the catalogue(s) in question?

If you received a payment from CSI or CMRRA, this payment represents both writer and publisher portions of the settlement, as would a regular payment of mechanical royalties (by CMRRA). As such, it is incumbent upon the music publishers who are recipients of a market share payment to distribute, in accordance with the provision of their relevant publishing agreements, a portion of the payment to the writers associated with the publishing catalogue(s) for which such payment was received. This also applies to any other rightsholder(s) associated with the publishing catalogue(s) in question.

If you received a payment from SODRAC, this payment covers the writer and/or publisher portions originally collected by SODRAC.  These rights are generally paid directly to each rightsholder. Music publishers who received a payment from SODRAC on behalf of one or more writers, or on behalf of any other rightsholders, are responsible for the distribution of the applicable shares to those parties based on the contractual agreements entered into with those parties for the musical works in question.

When is the distribution of payments to rightsholders expected?

Please refer to the table below for the anticipated distribution dates for Group I and II Products. CSI will publish more details as they become available.

Group I and II Categories: Anticipated Distribution Date:
Low-Value Items - 1st Distribution December 15, 2011
Low-Value Items - 2nd Distribution June 15, 2012
Medium-Value Items September 15, 2012
High-Value Items March 15, 2013

When will there be a payment in the Settlement Trust for Group III Products?

An agreement on the payment of royalties for Group III Products has not yet been finalized between the parties. More information will be provided as soon as it is made available to CSI.

What is being done to prevent the accumulation of royalties in the record companies’ pending list in the future?

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.  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.  For more information on this topic, please refer to the Post-2012 Products section of our website.

What are “Group I Products”?

Products released in Canada prior to July 1, 2007.

What are “Group II Products”?

Products released in Canada between July 1, 2007 and December 31, 2009, inclusive.

What are “Group III Products”?

Products released in Canada between January 1, 2010 and December 31, 2012, inclusive.

Which products are licensed via the new licensing system?

Products released in Canada on or after January 1, 2013.

What are “Low-Value Items”?

Pending list items that have a quantifiable aggregate value of $1,000.00 or less on each pending list.

What are “Medium-Value Items”?

Pending list items that have a quantifiable aggregate value greater than $1,000.00 and less than $2,500.00 on each pending list.

What are “High-Value Items”?

Pending list items that have a quantifiable aggregate value equal to or greater than $2,500.00 on each pending list.