Introduction
In Malaysia, the licensing of songs and other musical works are not really uniformized. This compares unfavourably with the United States, where licensing bodies like the Harry Fox Agency can easily calculate your licensing fee if you want to license a song, based on the number of downloads, use case, and medium. Their licensing rates are often published openly as well.
In 2012, the Malaysian parliament passed the Copyright (Licensing Body) Regulations 2012 (P.U.(A) 159/2012). It has since been repealed and replaced by Copyright (Collective Management Organization) Regulations 2022 (P.U. (A) 61/2022).
Under section 27AA of the Copyrights Act, the authority of a licensing body covers the licensing of songs for “cover songs”. A licensing body has authority to approve “making adaptation of the work”, as stated under section 27AA(1)(f) of the Copyrights Act.
However, a more important consideration for copyright owners, is the collection of royalties, and distribution of royalties among the copyright owners.
Moving on, we come back to the 2012 and 2022 Regulations.
Fees went up
A major change has been the fee to be declared as a licensing body.
In the 2012 Regulations, companies or other entities wanting to be registered as a “licensing body” would have to pay a fee. The fee for an applicant to be declared as a licensing body was only RM1,000, without any need for renewal (at least, there is no mention of renewal in the 2012 Regulations).
However, in the 2022 Regulations there were some changes regarding the fees: First, the application to be declared as a licensing body now became RM20,000, a 20x increase on the previous fees for declaration. Second, the declaration would be valid for 2 years only, so, an applicant would have to apply to renew at least 60 days before the expiry date. The fee would be RM2,500 for renewals, but if the applicant was late, it would be RM3,800 instead.
Aside from fees, we make some other comparisons between the 2012 and the 2022 Regulations.
Organization format became restricted?
In the 2012 Regulations, there was no mention of what type of organization could be allowed to register, but there was mention that the signatory of the form would have to be “a director, manager, secretary, partner, or other similar officer or person of the society, organization, body corporate or firm.” It stands to reason that even societies and partnerships or firms, even cooperative societies, could be applicants under the 2012 Regulations.
But in the 2022 Regulations, there is mention that the application must be accompanied by a “certificate of incorporation of a company limited by guarantee”, meaning to say, an applicant should be a company limited by guarantee (CLBG). A check with any company secretary will soon reveal that you need an approval from the Prime Minister’s Office to set up a company limited by guarantee. Not that difficult, but you need to show a need for setting up.
However, in section 27A(1) it is stated, “A society or an organization which intends to operate as a licensing body for copyright owners or for a specified class of copyright owners shall apply to the Controller to be declared as a licensing body.” Does this now mean that a society or other format of organization can now apply to become a licensing body? Does it mean that the requirement of the 2022 Regulation for a certificate of incorporation as a company limited by guarantee, is now rendered academic, or simply optional?
This is uncertain and it needs to be clarified in Parliament, or a court. A daring society or other format of organization (other than a CLBG) can test the law to help the courts find the right approach.
Licensing Scheme Must Be Available to Public
Both the 2012 Regulations and 2022 Regulations require that the licensing scheme be made available to the public, but in slightly different ways. In the 2012 Regulations, “information relating to the licensing scheme” must be made available to the public. “Information” does not always mean “availability”, and it is possible to obtain reams and reams of information without getting a chance to apply for licensing. So in the 2022 Regulations, the requirement changed to “proof of licensing scheme is made available to public”. This means that the government will ensure that the licensing body really makes good on their declared mission that they will make licensing available to members of the public – anyone can apply to be represented, or to be licensed.
Rules Related to Collection and Distribution of Licensing Scheme
In the 2012 Regulations, how much was collected, and how much was licensed, was not a standard requirement of the registration process. There is mention of “the applicant’s rules”, which need to comply with the Copyright Act, but the required scope of those rules are not explicitly stated.
In the 2022 Regulations, a “constituent document relating to the collection and distribution of licensing scheme” is now a requirement of the registration process. Thus, copyright owners could choose whether or not to be represented by the licensing body.
So much for the comparison between the 2012 and 2022 Regulations. We now move on to…
The Tribunal’s Authority in Licensing Schemes
Under section 27AA of the Copyrights Act, licensing bodies are bound by certain provisions of the Copyright Act (sections 27B to 27G), regarding licenses for the following:
- reproducing the work;
- performing, showing or playing the work in public;
- communicating the work to the public;
- rebroadcasting the work;
- the commercial rental of the work to the public; or
- making adaptation of the work.
Under section 27B(1), any organization may approach the Tribunal, regarding a proposed licensing scheme, if they claim to represent a group of people who need to be licensed. The Tribunal can entertain the request, or reject it if the request is premature. (Section 27B(2))
Likewise, the Tribunal handles disputes between the licensing body (i.e. the “operator of the licensing scheme”) and (a) a person who claims to require a license, or (b) a body representing such a person, or (c) a person who has a license which is affected by the licensing scheme. (See Section 27C, Copyright Act)
If a person has applied for a license, but was refused, or simply not given a license for any reason, he can refer it to the Tribunal. (Section 27E). If the Tribunal grants the license, and the licensing body is unhappy about the decision, the licensing body can apply for a review of the order. (Section 27F)
Section 27I to 27L apply to licenses of the following categories:
(A) licences relating to the copyright in literary or musical works which cover works of more than one author, so far as they authorize—
- reproducing the work;
- performing, showing or playing the work in public;
- communicating the work to the public; or
- distributing the work to the public; and
and
(B) licences relating to the copyright in any other works, so far as they authorize—
- making copies of the work;
- performing, showing or playing the work in public;
- communicating the work to the public; or
- causing the work to be publicly performed, shown or played,
What is clear is that these related to works of artists, authors, composers, musicians and other creators which are represented by the licensing bodies.
Uncertainty of Scope!
A big question arises here. What if the artists, authors, composers, musicians and other creators are not represented by the licensing bodies? What if the work was created by a foreign creator? Or, what if the work was created by a machine algorithm?
Does the licensing body, set up under the 2012 Regulations or the 2022 Regulations, have the authority to claim that they represent these foreign creators? Or, that they have the right to license even machine created works?
It is submitted that they do not.
Section 27A(1) states clearly that “A society or an organization which intends to operate as a licensing body for copyright owners or for a specified class of copyright owners shall apply to the Controller to be declared as a licensing body.”
That means the licensing body can only grant a license for what copyright owners they represent.
It is also clear that regulation 2(2)(c) of the 2022 Regulations requires that a licensing body disclose, “the list of copyright owners, authors or performers or their agents”, when applying to be declared as a licensing body.
It is possible that a licensing body would eventually represent more copyright owners than initially disclosed, but how can members of the public find out who are actually represented by a certain licensing body?
A possible solution can come in two parts, in which, firstly, the licensing body must disclose the copyright owners it represents, every time it applies for renewal (which is every two years, not that long); and secondly, the list of copyright owners represented must be (and this is important) listed on the MyIPO website.
The Need To See Who Represents Who
Why is it important that members of the public can see which copyright owner is represented by which licensing agency? Well, for a few good reasons.
Firstly, it prevents fraud, where a member of the public cannot be certain whether or not a copyright owner is licensed by a certain licensing body. A person interested to license a certain song, must be sure that the composer of the song is represented by a certain licensing body, otherwise, the licensing body may grant a license for a song that it does not represent at all.
Secondly, to give certainty to the licensee that the licensing body grants a valid license. There may be licensing bodies collecting licensing fees here and there, simply based on their status that they are a licensing body, and not because they represent a certain copyright owner. “Here, pay me money, I’m a licensing body. But I don’t represent those guys.” In other words, it could be a case of collecting “protection money” if there is no justification to pay, but payment is insisted upon.
Thirdly, to prevent postdated licensing. A licensing body could potentially enforce copyright for a copyright owner that it does not represent, and subsequently take up a role to represent the copyright owner – after enforcement has begun. Which means that, enforcement at the time of its commencement, could be illegal. And this can be easily avoided if the list of copyright owners represented are stated on the MyIPO website.
All in all, a good case for MyIPO to promote greater transparency by disclosing on its website, and requiring disclosure from licensing bodies, of the copyright owners actually represented!
Thanks for reading.
Disclaimer
This article was prepared for general information only. Please do not regard its contents as legal advice. Please consult with a licensed legal practitioner before making any decision or taking any action based on the contents of this article.
Also, no living artists were referenced by the author when creating the images featured in this article.