The new Collective Rights Management Directive, regarding collective management of copyright related rights and multi-territorial licensing of rights in music works for online use, has been adopted by the Council of the European Union, which is the final stage of approval required before it comes into effect. The Directive will come into force on the twentieth day following publication in the Official Journal of the European Union. Member States will have a period of 24 months from the Directive’s entry into force to incorporate its provisions of into national law.

BACKGROUND

Collective rights management has been on the European agenda for some time, particularly as, traditionally, a rightholder, such as a performing artist, was unable to join a collective rights organisation, also known as a collecting society, outside his or her territory of nationality. Collecting societies operated on the principle of reciprocity, which led to issues about the reporting the rightholder’s work being used outside his or her collecting society’s jurisdiction and exploited digitally across multiple territories.

The European Commission began to look at the issue of collective rights management in detail a number of years ago, in the context of the online use of musical works, which cumulated in a 2005 Recommendation (2005/737/EC) aimed at allowing rightsholders to choose a collective rights organisation irrespective of nationality. The Recommendation and further work by the Commission has led to the new Collective Rights Management Directive on collective management of copyrightand related rights and multi-territorial licensing of rights in musical works for online use in the internal market.

THE DIRECTIVE

The Directive introduces a number of reforms to the current system of collecting societies. It impacts not only on the activities of collecting societies vis-à-vis rightsholders, but also on their governance and supervision.

Article 5(2) of the Directive grants a rightholder the right to select a collecting society for a particular category of right or work outside his or her territory of nationality or residence. A key principle of the Directive is transparency and, accordingly, the Directive contains a number of provisions concerning the information provided to the rightholder by the collecting society and establishes a maximum period for paying royalties to a rightholder of nine months following the end of the financial year in which the royalties were collected (Article 13(1)).

As regards multi-territorial licensing, the Directive first requires acollecting society to meet certain criteria to be entitled to grant such licences, including the ability to accurately identify the use of works. It then sets out a number of obligations with respect to reporting and transparency requirements. Article 30 also requires a collecting society that offers multi-territorial licensing in respect of its own repertoire to accept a request from another collecting society to offer that society’s repertoire for multi-territorial licensing on the same conditions.

The Directive also requires adequate procedures for dispute resolution amongst collecting societies and between users of their services.

COMMENT

The key objectives of the Directive are to increase transparency and to facilitate cross-border licensing. The Commission has stated that implementation of the regime set out in the Directive is essential to the completion of the “digital single market”. The requirement that a collecting society makes the repertoire of another society available on the same terms supports this aim, and emphasises the Commission’s desire to create a level playing field across Europe for the online exploitation of rights.