After the Music Modernization Act is passed, attention is turned to converting it into practical realities associated with it. The United State Copyright Office has started the process to form the act’s mechanical Licensing Collective. The department is putting efforts to designate the members of the Digital License Coordinator and Mechanical Licensing Collective (MLC).
The interested parties can submit their proposals until March 21, 2019. The public can comment on the submissions until April 22.
What is the copyright office requesting for?
In order to form the MLC, the Copyright Office has to select the group of applicants until July 08. The office is requesting for information, asking the interested groups to submit their proposals along with business plans and other information such as the number of employees. When hiring the employees, it’s important to include the names and resumes of the key employees. However, a collective’s officer may not be an employee or agent of any board of directors.
The request for information also includes suggestions on how the unexpected costs are to be met—holding reserve funds or taking on debt (in this case what collateral should be used).
The Copyright Office also requested for information about establishing a database that is to be used for matching compositions to recordings; different factors (such as usage, genre, royalty amounts, etc.) that will be considered for prioritizing matching efforts. However, it provides the groups involved in copyright infringement cases to specify target goals, which should be expressed according to the market share.
From the information the Copyright Office has asked for, it’s showing that the interpretation of some of the law’s factors differs from that of the entities that contributed to its formation.
What does the Copyright Office say?
Whatever group is designed for collective, it’s important to note that Dec. 21 of the Federal Register that the MMA law doesn’t address whether board members are allowed to serve as any of the Unclaimed Royalties Oversight Committee, Dispute Resolution Committee, or Operations Advisory Committee of the collective. In addition, the law doesn’t preclude vendors, members, and other affiliates in the submissions from multiple competing entities.
Another issue—specific wording in the MMA causing disagreements over the interpretation of the key section. The law states that the collective must be endorsed by the support from copyright owners in the music industry, that represent the greatest percentage of the market.
Now, the question arises that what does the greatest percentage of the licensor market mean? Is it market share based on the total revenue from the royalties? Or, the total number of licensed copyright holders and the number of music licenses they issued?
Coming back to the point—the Copyright Office has asked the group members that are going to submit applications to include the identities and other details of the board members, provided these details aren’t the roles of their past positions in the industry. But, it’s important to note that the executives should know how to fulfill the responsibilities in order to govern the collective’s operations.