Knowledge Highlights 15 November 2022

From 7 November 2022 to 4 December 2022, the Ministry of Law (“MinLaw”) and the Intellectual Property Office of Singapore (“IPOS”) are conducting a joint public consultation to seek feedback on the draft Copyright (Collective Management Organisations) Regulations (“draft Regulations”). The proposed Regulations will be made pursuant to Part 9 of the Copyright Act 2021 (“Act”).

By way of background, the Act was passed in Parliament on 13 September 2021 and has mostly taken effect on 21 November 2021, except for Part 9 which establishes a statutory framework for the regulation of collective management organisations (“CMOs”) in the form of a mandatory class licensing scheme. For more about the Act, please read our previous article titled “New Copyright Act partially commences on 21 November 2021 to strengthen and update Singapore’s copyright regime”. Under the mandatory class licensing scheme, CMOs will be automatically licensed and must comply with all applicable licence conditions. IPOS will be the regulator of the scheme and will be empowered to take regulatory actions against CMOs and their officers for any breach of licence conditions.

The public consultation exercise is part of an ongoing review of Singapore’s copyright regime and follows earlier consultation efforts on Singapore’s copyright regime. The aim of the current consultation is to seek views on the language of the specific provisions of the draft Regulations and the specific additional issues raised in the consultation paper, including whether there is any ambiguity, or any practical or operational difficulty arising from the language.

For more about previous public consultations relating to CMOs, please read our previous articles titled “MinLaw and IPOS release second part of public consultation on draft Copyright Bill on collective management organisations and Copyright Tribunal” and “MinLaw and IPOS consult on proposed licensing scheme for collective management organisations in Singapore”.

Licence conditions under the draft Regulations

Under the single general class licence to be introduced under the draft Regulations, CMOs must comply with all the licence conditions in the draft Regulations. Set out below is a summary of the five key licence conditions proposed:

  • Members’ rights: The draft Regulations require a CMO to provide for each member’s rights in a written membership agreement (no specific form specified) between the CMO and the member, and any change to the membership agreement must be made in writing. Further, CMOs must establish, maintain and comply with the following policies: (i) membership policy, (ii) distribution policy, and (iii) dispute resolution policy (collectively, “CMO Policies”). The membership agreement must incorporate the CMO Policies by express reference and cannot be inconsistent with them. The CMO Policies prevail over any inconsistent term of the membership agreement.
  • Collection and distribution of royalties (defined as “tariffs” in the Act): The draft Regulations require CMOs to establish and comply with a distribution policy which must govern at least the following critical aspects relating to collection and distribution of tariffs: (i) calculation of distributions, including an account of the CMOs’ methodology and deductions, (ii) frequency and manner of distributions, (iii) obligations concerning tariffs that CMOs are unable to distribute despite their best efforts, (iv) collection of information on use of CMOs’ portfolios, whether from users or otherwise, (v) sufficiency of information given to members on usage of CMOs’ portfolios and distributions, and (vi) members’ rights to query and dispute their distributions.
  • Dispute resolution: The draft Regulations require CMOs to establish and comply with a dispute resolution policy to deal with complaints by members and users (including intending users). The dispute resolution policy must provide a dispute resolution process in which members and users can file a complaint to a CMO, which must then respond within a specified period.
  • Good governance: The draft Regulations require CMOs to put in place safeguards to ensure they operate in a manner that is transparent and accountable, including safeguards relating to board appointments and removals, disqualification of key officers, and baseline financial record-keeping and reporting obligations.
  • Provision of information to the public: To promote accountability and transparency, the draft Regulations require each CMO to maintain an Internet website on which it must publish key documents and information such as its CMO Policies and details about its portfolio.

The above licence conditions for CMOs would increase the transparency and accountability of CMOs’ activities for both their members and the general public, and enable copyright users and potential members to make informed decisions in their dealings with CMOs.

Procedures relating to regulatory action

Apart from licence conditions, the draft Regulations set out the procedures and time for the following processes: (i) making representations before IPOS takes regulatory action, (ii) applying for reconsideration of IPOS’ regulatory action, and (iii) appealing against the reconsidered decision of IPOS. These are supported by general provisions governing the submission of documents and the waiver, refund or remission of fees associated with these processes.

The draft procedures operationalise IPOS’ power to regulate the activities of CMOs provided in Part 9 of the Act. Should a CMO not comply with its licence conditions, IPOS has the power to investigate any contravention, conduct an audit of the CMO’s business, or even order the CMO to cease its business for a specified period, or indefinitely.

Implementation timeframe

Part 9 of the Act and the Regulations will come into force at the same time. There will be a six-month notice period before the class licensing scheme takes effect to give CMOs the opportunity to develop and implement all necessary policies and procedures, and make all necessary changes to their organisational structures and operations to be in full compliance with the scheme by the time it takes effect.

New Copyright Unit

With effect from 1 September 2022, IPOS has established a new Copyright Unit to support the administration of the new CMO class licensing scheme. The Unit will also manage other copyright-related matters, including developing and reviewing Singapore’s copyright policy and laws, advising the Government on copyright issues, representing Singapore at international and regional fora on copyright matters, and providing administrative support services related to Singapore’s copyright regime.

Reference materials

The following materials are available on the Ministry of Law website www.mlaw.gov.sg and the IPOS website www.ipos.gov.sg:

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