Collective Rights Management — Request For Comments

Colecting societies will have to live up to certain minimum rules on transparency and accounting, according to a proposal from the Commission

The Commission has presented a proposal for an EU-wide directive on Collective Rights Management.

“Directive on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online uses in the internal market COM(2012) 372/2“ is the full name of it, but it appears that everybody will be calling it the CRM Directive (for Collective Rights Management. (cashed)

In this directive, the Commission wants to do two things. First, to establish minimum rules on transparency, accounting standards, and supervisory functions within all collecting societies operating in Europe. Second, to set up rules to promote multi-territorial licensing of musical works, so that it becomes easier for companies like Spotify to establish themselves on a pan-European basis.

Both objectives are sensible and urgent, so this is a “positive” dossier, where there is a chance to make improvements over the status quo.

I have read through the Commission’s proposal, and on the whole, I think it is very good.

The rules on transparency, accounting standards, and supervisory functions for the collecting societies are quite detailed, but this is a good thing. By spelling out in some detail what it is that they want, the Commission increases the chance that they will have a real harmonizing effect. A certain level of harmonization is needed if the proposed rules on multi-territorial are to work in practice, so the two parts have a natural connection.

The rules that the Commission proposes are very basic and sensible, so although they are detailed, it would be very hard to argue that any of the provisions would be too hard to meet for a reasonably well run society. We will have to watch the process in the European Parliament and the following steps to make sure that these rules are not watered down by lobbyists from collecting societies that would themselves have problems in living up to these very basic standards.

There are a few things that I have noticed in the directive that I think can be improved.

For example, in Article 12.2 of the proposal it says that if a collecting society collects money on behalf of a rightholder, but is unable to locate that rightholder within 5 years, the collecting society can keep the money and use it for their own purposes. This I think is a bad idea, since it in effect creates an incentive for the collecting societies not to work too hard at locating the rightholders that should rightly have the money.

A better idea, in my opinion, would be to say that each Member State should set up a fund to be used for cultural purposes, and that the collecting societies should pay any money that was unclaimed after 5 years to that fund. The exact purposes that the money in the fund would be used for could be decided by the individual Member States, but one such purpose could be to pay for the digitization of orphan works in the collections in public libraries, museums, and archives, including the payment of compensation to reappearing  rightholders, in accordance with the Orphan Works Directive that the European Parliament adopted in September 2012.

I also question why, in Article 12.1, the collecting societies need 12 months after the end of a financial year to pay out money they owe to artists and authors. In this age of computers they ought to be able to distribute the money a lot faster than that.

I would like comments from interested parties who have looked at the directive and/or have first hand experience of dealing with collecting societies. Please use the comment field to either post your observations, or give a link to comments published elsewhere.

I am the Green shadow rapporteur for this directive in the Legal Affairs Committee JURI, which is the lead committee, so I will be following this report very closely.

As I said, I think looks like a good proposal that we should be able to support without having to make too many amendments. But as always, the devil is in the detail. I may have missed some really serious problem hidden somewhere in the text, or there may be a lot of other minor problems that need to amended if the directive is going to be a good one.

What do you think? The comment field is open.

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Others who comment on the directive: IPKat, Kluwer Copyright Blog, IPtegrity.com, Digital Europe,