The 2010 settlement of the class action called for the implementation of a new mechanical licensing system and related processes 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 and related processes can be found under Section 6 of the Key Terms of Settlement.
All physical audio recordings released by the major record companies in Canada as of January 1, 2013 have been licensed through this new system.
LICENSING TRUST AND CLAIMS WEBSITE:
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.
The payment of royalties into the Licensing Trust occurs on a quarterly basis. The subsequent release of the royalties from the Licensing Trust is a three-step process.
STEP 1 – CSI Review: Each quarter, CSI reviews the details of the royalties paid into the Licensing Trust to identify rightsholders based on newly registered copyright ownership shares or licences which may have since been issued by CMRRA or SODRAC, in order to make an initial distribution on these items;
STEP 2 – Public Licensing Period: For all shares that remain unidentified, information about the associated musical works and recordings is published on the Claims Website in an attempt to identify and locate the copyright owners. Rightsholders are invited to register for access to the Claims Website, review the lists of available royalties and make claims where applicable;
STEP 3 – Unlocatable Rightsholders: 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. At such time, CSI will then apply, on behalf of the label, for a licence from the Copyright Board of Canada under Section 77 of the Canadian Copyright Act. Once a licence has been granted by the Copyright Board, all accrued and future royalties will be paid into a separate trust account established by CSI expressly 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.