Principles for Binding Resolutions and Best Practices

Transcription

1 BTC Business Technical Committee Lisbon, 13/04/ /04/2016 Source Language: English Published on: 22/04/2016 Principles for Binding Resolutions and Best Practices BTC Binding Resolutions Working Group BTC

2 Version Control This document was approved on the following dates: Version Date/Time Body Note /02/2016 BTC BR WG Submitted to the BTC for review /04/2016 BTC BR WG Updated based on feedback received from BTC members: 1. Removed references to archived document CT R1 2. Section 4.3. Unidentified Uses corrected rule number to Adjustment reason codes renumbered from 1.1.1, to 5.1.1, etc /04/2016 BTC Approved by the BTC on 13 th April 2016, subject to change to title of Section 2.4 [Consultation of Member s Database...]. Section 2.4 title updated. BTC Page 2 of 47

3 Table of Contents 1 Introduction CISAC s Binding Resolutions Purpose of This Document Document Overview Documentation Affiliates (IPI) Musical Works (ISWC) Contribution to CIS-NET, Musical Works Information Consultation of Databases and other relevant sources of Documentation Counterclaims Distribution Adaptations and Arrangements Sub Publication Distribution Keys Unidentified Scenarios Product Level Work and IP Level Unidentified Products Insufficient Documentation Unidentified Uses Undistributed Shares Post Distribution Adjustments Debit/Credit payment adjustments Previously Unpaid Usage Incorrect/Revised Documentation Resolved dispute/conflict Revised calculation of royalty rate/point value Misidentified work Incorrect reporting by a record company or other licensee Fees in Error BTC Page 3 of 47

4 Table of Figures Figure 1: Creating an IPI Entry... 8 Figure 2: Original Work Registration Process Figure 3: Counterclaims Best Practice Figure 4: Distribution of Adaptations and Arrangements of Works Figure 5: Distribution of Shares in Sub-Published Works Figure 6: Unidentified Scenarios Figure 7: Typical Product Level Matching Process, e.g. AV Matching Figure 8: Typical Work and IP Level Matching Process Figure 9: Insufficient Documentation A (Warsaw/Rome) Figure 10: Insufficient Documentation B (Part Pay) Figure 11: Unidentified Use Figure 12: Undistributed Shares A (Zero IPs Identified) Figure 13: Undistributed Shares B (Some IPs Identified) Figure 14: Debit/Credit Adjustment Payments Figure 15: Fees in Error BTC Page 4 of 47

5 1 Introduction 1.1 CISAC s Binding Resolutions Endorsed Binding Resolutions should be applied by societies according to the Compliance Calendar, amended from time to time by CISAC and validated by the CISAC Board of Directors. Best Practices are not yet binding on CISAC members but societies are strongly encouraged to apply Best Practices where possible. Resolutions or Best Practices (BP) that are still to be defined (TBD) are resolutions that are being discussed within the Business Technical Committee and that are expected to be validated within the coming years. 1.2 Purpose of This Document The purpose of the Principles for Binding Resolutions and Best Practices document is to detail the reason(s) for the binding resolutions. This document should be used by CISAC Members to help them understand how to implement CISAC Binding Resolutions & Best Practices. The current version of CISAC s Binding Resolutions for Musical Societies is: SG R Document Overview The binding resolutions and best practices are categorised in this document under four sections: Section Resolution(s) Documentation Affiliates (IPI) 7 Musical Works (ISWC) 8 Contribution to CIS-NET, Musical Works Information 9 Consultation of Member s Database, 10, 11,12 Documentation supplied by Affiliates and Third Parties & CIS-Net for Musical Works and Musical Works within an Audio-Visual Production Counterclaims BP Distribution Adaptations and Arrangements 13, 14, 15 Sub Publication Distribution Keys 16 Unidentified Scenarios Unidentified Products BP Insufficient Documentation 22 Unidentified Uses 21 Undistributed Shares BP Post-Distribution Adjustments Debit/Credit Payment Adjustments 20 Fees in Error BR (no. TBC) BTC Page 5 of 47

6 2 Documentation Principles for Binding Resolutions and Best Practices Documentation is defined as any essential data required for the identification of a musical work and for the administration of the rights in that musical work. Societies need documentation in order to clearly identify works, IPs and products. The binding resolutions and best practises under this category attempt to ensure that societies create, update and exchange all relevant information which is required for the allocation of royalties. The section covers areas related to the following: Registration of Interested Parties Registration of Musical Works Registration of AV Cue Sheets Handling of Counter Claims Use of CIS Tools to support the above activities BTC Page 6 of 47

7 2.1 Affiliates (IPI) Rule No. BR 7 Rule Type Binding Resolution Reference SG R1, article 7 Repertoire Music Type of rights All rights Synopsis Use of interested party identifiers (IPI) Purpose To uniquely & persistently identify interested parties Statement of Principle Category Keywords Prior reference(s) Origin Other References A Society will register its affiliates and relevant names in the IPI System Mandatory Interested party (IP), name, IPI, patronym, pseudonym, IP Name Number, IP Base Number None None ISIP-0021R6: General Description and Business Rules, as amended from time to time by CISAC None Related rule(s) Date formulated 11 th CIS Sessions, February 2008 Date approved TBC Terminology Interested Party IPI Number IPI System Rights holders (natural persons and legal entities) of copyright protected works and public domain works The IP base number plus any associated IP name numbers which are used to identify an Interested Party and which are allocated and maintained by the IPI System The Database of Interested Party and Affiliate Information through which an IPI Number is allocated and maintained on behalf of CISAC in accordance with rules defined by CISAC Business Rules 1. The following applies to any IP that is an affiliate of a society that is a member of CISAC. 2. A society must provide information on their affiliates to the IPI System administered by SUISA so that IPI Numbers can be assigned to the affiliate s patronyms and any pseudonyms. 3. A society must record the IPI Numbers and use these in documentation and information exchange purposes between societies. 4. A society must inform the IPI System on any relevant change to their IPs. 5. In case of a transfer or termination, the existing IPI Numbers must continue to be used to identify that IP. 6. If an IP is an affiliate of more than one society, the same IPI Numbers must be used by all societies to identify that IP. 7. See IPI General Description and Business Rules (document ISIP-0021R6 as amended from time to time by CISAC). BTC Page 7 of 47

8 Figure 1: Creating an IPI Entry BTC Page 8 of 47

9 2.2 Musical Works (ISWC) Rule No. BR 8 Rule Type Binding Resolution Reference SG R1, article 8 Repertoire Music Type of rights All rights Synopsis Use of musical work identifiers Purpose To uniquely identify musical works using a standard code (ISWC) Statement of Principle Category Keywords Prior reference(s) Origin Other References When a Society makes the documentation related to a Musical Work from its own Repertoire available to other organisations, the Society will ensure that an ISWC is assigned to this Musical Work. Mandatory ISWC, Musical Work None None ISWC-MC : ISWC International Agency Manual, as amended from time to time by CISAC. ISWCMC R4: ISWC Business Rules, as amended from time to time by CISAC. CISNET R22: Consolidated CIS-Net Business Rules, as amended from time to time by CISAC. Related rule(s) None Date formulated 11 th CIS Sessions, February 2008 Date approved 06 June 2013 Terminology ISWC The unique International Standard Musical Work Code which is allocated to a Musical Work in accordance with ISO Standard Business Rules 1. A society must ensure that an ISWC is assigned to a work when the work is part of its domestic repertoire (as defined in CISNET R22) and i. The society administers the work performing rights; or ii. The society administers the work mechanical rights and no society administering the performing rights of the same work has already assigned an ISWC. 2. Each CISAC Society and ISWC Agency will abide by the ISWC Business Rules (document ISWCMC R4), as defined and amended from time to time by CISAC. ISWC assignment ISWC assignment is done through the use of the CSI (Common Search Engine) that guarantees the uniqueness of ISWCs. Work information is submitted to the CSI when documentation is made available on CIS-Net, either using a local or regional node, or the WID. Please refer to ISWC-IA for more details on interface options. BTC Page 9 of 47

10 Figure 2: Original Work Registration Process BTC Page 10 of 47

11 2.3 Contribution to CIS-NET, Musical Works Information Rule No. BR 9 Rule Type Binding Resolution Reference SG R1, article 9 Repertoire Music Type of rights All rights Synopsis Post repertoire to CIS-Net Purpose Statement of Principle To make musical works documentation available via CIS-Net When a society has minimum mandatory information on a musical work that either falls within its Repertoire, or has been used within its territory, the Society will make this information available via CIS-Net. Category Mandatory Keywords Documentation, Distribution, Shares, Title, Musical Works. Prior reference(s) None Origin None NIG : Data Standards, Business Rules and Service Level Agreement Other References for musical works nodes within CIS-Net. CISNET R22: Consolidated CIS-Net Business Rules, as amended from time to time by CISAC. Related rule(s) None Date formulated 11 th CIS Sessions, February 2008 (domestic repertoire) Date approved 06 June 2013 Terminology Repertoire Each and every Musical Work in which the performing right and/or mechanical right has been, or may be, assigned to a Society. Business Rules See consolidated CIS-Net Business Rules (document CISNET R22, as amended from time to time by CISAC) Contribution to CIS-Net Depending on their willingness and capabilities, societies can either contribute to CIS-Net using a local node, a regional node or the WID for domestic repertoire and the IRN for the international repertoire. Regardless of their choice, CIS-Net contributing societies have to be compliant with the consolidated business rules, especially regarding the data quality and the update frequency requirements. BTC Page 11 of 47

12 2.4 Consultation of Databases and other relevant sources of Documentation Rule No. BRs 10, 11 & 12 Rule Type Binding Resolution Reference SG R1, articles 10, 11 & 12 Repertoire Music Type of rights All rights Synopsis Consultation of Member s Database and documentation supplied by affiliates and third parties Purpose Identification of interested parties in musical works and in musical works within an audio-visual production When a society is processing usage data from a User or third party sources, Statement these Binding Resolutions set out how a society should research so as to of Principle identify the musical works and ultimately the Interested Parties. Category Mandatory Keywords Documentation, Distribution, Shares, Title. Prior reference(s) None Origin None Other References Related rule(s) Date formulated Date approved Business Rules Binding Resolution 9 Contribution to CIS-Net Binding Resolution 22 Insufficient Documentation Binding Resolution 21 Unidentified Uses CISNET R22: Consolidated CIS-Net Business Rules, as amended from time to time by CISAC. TBC Binding Resolutions 10, 11 & 12 should be read in conjunction with each other. The resolutions apply to any work that has been used (performed, broadcast, recorded, downloaded, etc.) in the User Society territory (ies). Musical Works The society must use its reasonable endeavours to identify the Interested Parties in such Musical Work by consulting one or several of the following: 1.1. Its Database; 1.2. Any documentation supplied by an affiliate or a sister society 1.3. Documentation made available on CIS-Net CISNET R22 by its Sister Societies, in accordance with the Consolidated CIS-Net Business Rules (please refer to BR12 - Use of CIS-Net MWI) When the User Society cannot find the work documentation on CIS-Net, the User Society will either make a distribution based on the Insufficient Documentation Binding Resolution and/or act according to the Unidentified Uses Binding Resolution. BTC Page 12 of 47

13 Musical Works within an Audio Visual Production The society must use its reasonable endeavours to identify the Interested Parties in such Musical Works within an AV Production by consulting one or several of the following: 1.4. Its Database; 1.5. Any documentation supplied by an affiliate or a sister society 1.6. A broadcasting organisation or a production company or third party source (where applicable); 1.7. Documentation made available on CIS-Net AVI by its Sister Societies, in accordance with the Consolidated CIS-Net Business Rules CISNET R22 (please refer to BR12 Use of AV Index) In the event that the cue sheet is not available from the CIS Net AVI, the User Society will proceed based on their existing internal policies and procedures. Business Usage Guidelines 1. The User Society will use the CIS Net AVI to identify and request any production that: 1.1. has been used (broadcasted, aired etc.) in the User Society territory(ies) 1.2. has not been identified in the legacy database of the User Society 1.3. has not been identified in the data provided by the sister societies, publishers, broadcasters and/or production company to the User Society 2. The User Society will retrieve the documentation on the Audio-Visual production cue-sheet in accordance with the rules defined by the AVX as documented in the Rules for Suppliers and Users ISAVI The User Society will first query the CIS Net AVI using the information made available, e.g. Title of Production or Year of Production to identify the Supplier Society that is the authoritative source for the cue-sheet documentation Then the User Society will request the details of the cue sheet documentation from the supplier society as identified in the CIS Net AVI. Note only those Audio-Visual production cue sheets for which a Supplier Society has received authoritative documentation will be available in the CIS Net AVI. In the event that the cue sheet is not available from the CIS Net AVI Supplier Societies, the User Society will proceed based on their existing internal policies and procedures. 3. The User Societies will use cue sheets received from the CIS Net AVI Supplier Societies as an authoritative source of information relative to the content of the AV production in addition to production companies or their respective sub-publisher AV production registrations and in accordance with their society s internal policies. Terminology Cue Sheet Feuille de timbre Programa musical The list of all the musical works (cues and songs) contained in an audio-visual work. The cue sheet includes the following information about each work: duration, usage (for example, background instrumental, featured vocal, opening theme, etc.), entitled parties (name, society of affiliation and to IPI name number) and shares. BTC Page 13 of 47

14 2.5 Counterclaims Rule No. Rule Type Reference Repertoire Type of rights Synopsis Purpose Statement of Principle Category Keywords Prior reference(s) Origin Other References Related rule(s) Date formulated Date approved TBD Best Practice CT-R R2 Music All rights Best practice procedure for the handling of counterclaims To harmonise the handling of counterclaims and disputes When a society receives a counterclaim it should seek to abide by the recommended timeframe as well as the actions for reviewing the claim and administering the royalties concerned. Recommended Documentation, Duplicate claims, Counterclaims None None TBC Business Rules: If a new publisher claim conflicts with an existing publisher s claim then the new claimant must be able to support this with documentation before that claim is accepted by the society. The new claimant has 60 days to produce documentation for its claim. In the meantime the society keeps paying the first, original claimant. If the new claimant can document its claim, then the original claimant has 60 days to produce documentation for its claim. In the meantime all moneys are being held in suspense. If the original claimant has not answered within 60 days they will be notified that their claim will be deleted if the society does not hear from them within 15 days. Royalties will continue to be held throughout that period. The society shall, where possible and if known, suspend only the share/s within a work which is/are in dispute. The society shall not make value judgment of the supporting documentation. This means only that the society will check that the following pre-requisite information is included: (i) Term dates, (ii) Territory, (iii) Specific works/limitation of repertoire and, (iv) That documents are signed and dated by all interested parties. The society shall not have the responsibility to determine which of the claimants documentation is more correct, or valid. However, 1. Society specific restrictions or limitations may apply on a case by case basis. 2. Local exceptions regarding processing times described above can appear. 3. Policies on how long a work can be in dispute and monies kept in suspense may differ from society to society. BTC Page 14 of 47

15 Figure 3: Counterclaims Best Practice BTC Page 15 of 47

16 3 Distribution Distribution is defined as the act of a society allocating royalties at regular and set intervals and paying these royalties to the relevant interested parties or sister societies. The binding resolutions under this category ensure that there are practices in place to enable accurate distributions; particularly where IPs other than the original rights-holders may be entitled to a payment. BTC Page 16 of 47

17 3.1 Adaptations and Arrangements Principles for Binding Resolutions and Best Practices Rule No. BRs 13, 14 & 15 Rule Type Binding Resolution Reference SG R1, articles 13, 14 & 15 Repertoire Musical works Type of rights Performing rights Synopsis Distribution of royalties arising from the use of an authorised adaptation and/or arrangement To ensure that the appropriate interested parties of a work, where the usage of an authorized adaptation and/or arrangement is unknown, Purpose participate in the distribution of royalties produced by the use of that work. Statement of Principle Societies will endeavour to distribute royalties for authorized adaptations and/or arrangements as accurately as possible in the context of the available usage reporting. Category Mandatory Local version, foreign version, instrumental version, arranger, sub-lyricist, Keywords sub-publisher, sub-rights holder, original work, adaptation, arrangement, translated version, lyricist, publisher, rights holder, interested party(ties) Prior reference(s) Las Palmas-, Amalfi-Resolution, Barcelona-Resolution CA : distribution of foreign versions used outside the territory of Origin sub-publication, Las Palmas, 1970 CT , Remuneration of adapters, Copenhagen, 1977 CA , distribution of royalties arising from performances of a work in its original version on the sub-publication territory (Interpretation of Las Palmas Resolution), Tel Aviv, 1980 CA , distribution of royalties arising from performances of a vocal work in the territory of sub-publication ('Amalfi' resolution), Amalfi, 1991 CTR Appendix 1, Distribution of royalties arising from Other References performances of a local sub-arrangement, Barcelona, 1997 (see also CTR and AG ) BOD R1 Local / foreign version BTC , Arrangement and adaptation: Binding Resolutions CTR R1, Adaptations and arrangements AG R1, Governance Model revision: new Professional Rule and Binding Resolutions Related rule(s) None Date originally Distribution Technical Committee, May 2008 formulated Date amended BTC, April 2014 Date approved 06 June 2014 Status Approved BTC Page 17 of 47

18 Terminology Interested Parties Authorized Arrangement Authorized Adaptation Musical Work Authorized Sub-right holders Rights holders (natural persons and legal entities) of copyright protected works and public domain works a derivative of an original written musical composition a modification / change of an original written musical text A work composed of a combination of sounds with or without lyrics to be performed by instruments and/or the human voice, not intended for a dramatic context Written consent provided by the interested party (ties) of an original work Are considered sub-arrangers, sub-lyricist; not original right holders Business Rules 1. The rule applies when the terms of the contract between the creator and publisher entitles the subright holder to a share of the royalties in the authorized adaptation and/or arrangement. 2. Regardless of territory, where there is doubt or where it is impossible to establish which version has been used, all royalties accrued shall be distributed to the interested party (ties) of the original work. 3. The sub-lyricist, arranger or sub-arranger is entitled to receive a share of royalties only if the authorized adaptation and/or arrangement are known to be used. BTC Page 18 of 47

19 Figure 4: Distribution of Adaptations and Arrangements of Works BTC Page 19 of 47

20 3.2 Sub Publication Distribution Keys Rule No. BR16 Rule Type Binding Resolution Reference SG R1, article 16 Repertoire Musical works Type of rights Performing rights Synopsis Distribution of shares in sub-published works Purpose To determine the allocation of royalties among interested parties in a subpublished work To ensure the equitable allocation of royalties among all interested parties Statement in a sub-published work, such that the total allocated to the creators of Principle should in no case be less than one half of the total royalties distributed. Category Mandatory Keywords Stockholm Key, London Key, sub-published work(s), sub-publisher s share(s). Prior reference(s) CISAC Congresses (Madrid, London, Stockholm, London, Amsterdam, Hamburg, Paris, 1957) Origin FDE : organization of societies, publisher's share, statutes of subpublication (London Key) AG : statute of sub-publication of works [Stockholm Key] CTR : Distribution of royalties raising from performances of a local/sub-arrangement Other References DOC : Sub-publication and the Federal Statute of Sub-Publication SG R1: Model contract of reciprocal representation between public performance rights societies (article 7- II -d) ASI R1: Exchange of general agreement information between societies: data standards, business rules, forms Related rule(s) None Date formulated Distribution Technical Committee, May 2008 Date approved TBC Terminology 50% Rule this is the principle that the combined sub-publisher s and/or original publisher s shares may not exceed 50% of the performing right royalties for a sub-published musical work. Sub-publishing agreement General agreement an agreement between an assignor (original publisher) and an assignee (local sub-publisher) covering one or more countries outside the country/ies where the assignor is based. The agreement can cover all or only certain works in the assignor s catalogues. an agreement between publishers that does not cover individual works but entire publishing catalogues. BTC Page 20 of 47

21 Circular/Agreement Schedule information exchange, by means of which societies are informed on the conclusion / termination of, or changes in sub-publishing agreements by a society which represents one of the parties to the agreement. In case of general agreement, information has to be specified as exactly as possible so that the parties, which are assigning and/or taking over rights, can be clearly identified, and the royalties for the works covered by agreement can thus be distributed correctly Business Rules: This Binding Resolution ensures that royalties are allocated fairly among all interested parties in a subpublished work. When allocating royalties, the distributing society should apply the 50% Rule so that the total amount of royalties allocated to the creators in a sub-published work is never less than one half of the total royalties distributed i.e. the creator share should never be less than 50%. Within the bounds of the binding resolution, where practicable and on a bilateral basis, distributing societies should respect the rules regarding sub-publication of the society of the original publisher. BTC Page 21 of 47

22 Figure 5: Distribution of Shares in Sub-Published Works BTC Page 22 of 47

23 4 Unidentified Scenarios Within reason societies endeavour to identify and match usages and interested parties of musical works. However, within the distribution process there will always be a number of unidentified usages as well as undistributable shares. To improve transparency societies make available information regarding unidentified usages and undistributable shares. The binding resolutions and best practices under this category attempt to ensure that there are processes in place to try to identify the correct rightholders. Product Level A product is defined as a source of music performance data which contains one or more works. It is usually a collection of musical works such as an audio-visual cue sheet, a set list or a sound recording. The unidentified product scenarios are covered by the following best practices: (BP TBD in progress) Use of the CIS-Net AVI (BP - TBD in progress) Use of NLP Work and IP Level A musical work is defined as a work composed of a combination of sounds with or without lyrics to be performed by instruments and/or the human voice, not intended for a dramatic context. An IP (Interested Party) is defined as a rightholder (natural person and legal entity) of a copyright protected works and public domain works. The unidentified work scenario is covered by the following binding resolution: (BR 21) Unidentified Uses The unidentified IP scenarios are covered by the following binding resolutions and best practices: (BR 22) Insufficient Documentation (BP TBD in progress) Undistributed Shares BTC Page 23 of 47

24 Figure 6: Unidentified Scenarios BTC Page 24 of 47

25 Figure 7: Typical Product Level Matching Process, e.g. AV Matching BTC Page 25 of 47

26 Figure 8: Typical Work and IP Level Matching Process BTC Page 26 of 47

27 4.1 Unidentified Products Rule No. Rule Type Reference Repertoire Type of rights Synopsis Purpose Statement of Principle Category Keywords Prior reference(s) Origin Other References Related rule(s) Date formulated Date approved Status TBD (In progress) Best Practice Musical works Performing rights Mechanical rights To obtain the documentation of used products (e.g. unidentified AV or unidentified set lists) required to ensure comprehensive distributions To provide transparency and facilitate the provision of the documentation on rightholders with the ultimate goal of carrying out a proper distribution Recommended TBC BTC Page 27 of 47

28 4.2 Insufficient Documentation Principles for Binding Resolutions and Best Practices Rule No. BR 22 Rule Type Binding Resolution Reference SG R1, article 22 Repertoire Musical works Type of rights Performing and / or mechanical rights Synopsis Distribution of royalties to identified works with insufficient documentation for distribution Purpose To facilitate payment / distribution of such royalties Statement of Principle How societies should distribute royalties for performances of works with insufficient documentation. Category Mandatory Keywords Royalty, Royalties, right holder, rights holder, Warsaw, Rome, documentation, distribution, unidentified, undocumented (etc.) Prior reference(s) Warsaw Rule, Warsaw payments "Rome Rule" Origin FDE R2: General Assembly, Warsaw, 1934 Rome Rule of BIEM (1976 updated in 1993) CT : CISAB-BIEM Technical Committee, Paris, 1992, clarification of Other References the original right holder. AG : Governance model revision Binding Resolution 7 Debits/Credits Payment Adjustments Binding Resolution 9 Use of CIS-Net MWI Binding Resolution 11 Unidentified Uses Related rule(s) Binding Resolution (Insert number) Fees in Error Binding resolutions 10, 11, 12 Consultation of Members Database, Documentation Supplied by Affiliates and Third Parties & CIS-Net for Musical Works and Musical Works within an Audiovisual Production Binding resolutions 13, 14, 15 Adaptations and Arrangements Date formulated Distribution Technical Committee, May 2012 Date approved 06 June 2013 Terminology Original right holders Original Society Receiving Society Intended society original composers and authors; and may also include publishers. The society in the territory where the usage occurred and is making the distribution payment The society that receives payment from the Original Society due to insufficient documentation Society that is presumed to be an entitled recipient of related royalties due to insufficient documentation BTC Page 28 of 47

29 Business Rules For the sake of clarity, there are 2 categories of works that can be designated, as works for which there is no documentation, and as works that have been partially documented. 1. If, at the time of a distribution and after consulting both its proprietary database and CIS-Net, there is a use of a work with insufficient documentation, the Original society must distribute: i. All the royalties accruing to the work to the Receiving society, if one of the original right holders can be identified as a member or copyright owner belonging to the Receiving society OR; ii. Alternatively, if one or more original right holder(s) and their respective corresponding share(s) can be identified as belonging to one or more sister society(ties), then the royalties accrued for said work can be distributed to the respective sister society(ties) in accordance iii. with their respective shares. For the sake of clarity, only Societies that distribute works with insufficient documentation under Section 1 (i) above, must apply the Warsaw Rule indicator for performing rights or the Rome Rule indicator for mechanical rights in their distribution files. Societies that distribute works with insufficient documentation under Section 1 (ii) should neither use the Warsaw Rule nor the Rome Rule indicator. 2. Once the Receiving society receives a distribution from the Original society for the use of a work with insufficient documentation and if the corresponding complete documentation is registered in its own proprietary database: i. Will carry out the distribution to its own members according to the portion of documentation available to it AND ii. Where necessary the receiving society will follow the business rules for the Fees In Error principle 3. Once the Receiving society receives a distribution from the Original society for the use of a work with insufficient documentation and if the corresponding complete documentation is not registered in its own proprietary database: i. Will carry out the distribution to its own members according to the portion of documentation available to it AND ii. Where necessary the receiving society will follow the business rules for the Fees In Error principle BTC Page 29 of 47

30 Figure 9: Insufficient Documentation A (Warsaw/Rome) BTC Page 30 of 47

31 Figure 10: Insufficient Documentation B (Part Pay) BTC Page 31 of 47

32 4.3 Unidentified Uses Rule No. 21 Rule Type Binding Resolution Reference SG R1, article 21 Repertoire Musical works Type of rights Performing rights Mechanical rights Synopsis To obtain the documentation of used works required to ensure comprehensive distribution of royalties To provide transparency and facilitate the provision of the documentation Purpose on rights holders and works for which royalties were unable to be distributed due to a lack of identification. Statement of Principle Societies will use the CISAC standard formats to report unidentified uses Category Mandatory Keywords Unidentified, undocumented, undistributed, rights holder, Warsaw, UP-1, inquiry lists Prior reference(s) CTR : Resolution on the implementation of the UPA/UPW and WIA Origin formats CTR Unidentified Uses Other References ISMWI-0040R7: Guidelines for the circulation of unidentified performances usage data, as amended from time to time by CISAC. Binding Resolution 4 Insufficient Documentation Binding Resolution 9 Use of CIS-Net MWI Related rule(s) Binding resolutions 10, 11, 12 Consultation of Members Database, Documentation Supplied by Affiliates and Third Parties & CIS-Net for Musical Works and Musical Works within an Audiovisual Production Date formulated Distribution Technical Committee, May 2008 Date approved 06 June 2013 Terminology The UP file facilitates the circulation of data regarding unidentified / non matched uses of musical works. Unidentified use Original Society Receiving Society An unidentified use is one which cannot be matched to any work by the original society and which cannot be distributed by use of the partially documented work rules in the Insufficient Documentation binding resolution. The society in the territory where the usage occurred and is making the distribution payment. The society that receives a UP file from the Original Society. Minimum Mandatory Such information as set out in the CIS-Net Consolidated Business Rules Information (CISNET R22). BTC Page 32 of 47

33 Business Rules This procedure shall apply when no right holder is identified for a use in the Original society s territory. If, at the time of a distribution and after consulting both its proprietary database and CIS-Net, the Original society has no corresponding documentation on a work or cannot match a work that has been used in its territory, it will generate and circulate an Unidentified Use (UP) file. 1. Societies will use the CISAC standard UP format to facilitate the circulation of data regarding unidentified uses of musical works. 2. If the Original society administers more than one right (i.e. administers both performing and mechanical), it must generate, label and circulate separate UP files per right type (i.e. one for performing rights only and a separate one for mechanical rights only). 3. Upon obtaining a UP file from the Original society, a Receiving Society will have 3 years from the date of the original distribution to claim unidentified uses on each UP file generated by the Original Society. 4. After receiving relevant works documentation based on the Receiving Society claim from analysing the UP file, the Original Society will confirm the matches, and: 1. If they are appropriate, will register the works and link them to their related unidentified uses, and include the credited royalties in its next / subsequent distribution to the Receiving Society. 2. If the match failed confirmation, the Original Society will notify the Receiving Society indicating the Reference Number of the Non-Confirmed match. The Receiving Society will be tasked with posting the works documentation onto CIS- Net for those previously unidentified uses that they have matched and subsequently claimed, provided that said work documentation meets minimum mandatory information. BTC Page 33 of 47

34 Figure 11: Unidentified Use BTC Page 34 of 47

35 4.4 Undistributed Shares Rule No. TBD (In progress) Rule Type Best Practice Reference Repertoire Musical works Type of rights Performing rights Mechanical rights Synopsis To obtain the documentation of used works required to ensure comprehensive distribution of royalties To provide transparency and facilitate the provision of the documentation Purpose on rights holders with the ultimate goal of carrying out a proper distribution Statement Societies will use the CISAC standard formats to report of Principle undistributed/unidentified shares Category Recommended Keywords Unidentified, undocumented, undistributed, rights holder, Warsaw, UP-1, inquiry lists Prior reference(s) Lack of Documentation CTR : Resolution on the implementation of the UPA/UPW and WIA Origin formats CT-R Unidentified Uses Other References ISMWI-0040R7: Guidelines for the circulation of unidentified performances usage data, as amended from time to time by CISAC. Binding Resolution 4 Insufficient Documentation Related rule(s) Binding Resolution 9 Use of CIS-Net Binding Resolutions 11 Unidentified Uses Binding Resolutions 20 Debit/Credit Payment Adjustments Date formulated January 2016 Date approved TBC Status To be discussed at the BTC in 2016 Terminology Unidentified use An unidentified use is one which cannot be matched to any documented work by the distributing society and which cannot be distributed by use of the partially documented work rules in the "Insufficient Documentation" binding resolution. The UP file facilitates the circulation of data regarding unidentified uses of musical works. Undistributed share(s) The portions of a work for which the Original Society did not have sufficient documentation in order to identify and distribute all share(s). UDS file Original Society Receiving Society A file containing works for which a portion of the shares were not distributed or identified. The society in the territory where the usage occurred and is making the distribution payment The society that receives a UP or UDS file from the Original Society BTC Page 35 of 47

36 Business Rules Note: the following business rules have been presented to the DTC in 2012 but no consensus have been reached. This procedure shall apply in accordance with Business Rule 1 (ii) of the Insufficient Documentation Binding Resolution. The Original society will generate and circulate an Undistributed Share (UDS) file for the portion of a work for which royalties are being withheld because the Original Society did not have sufficient documentation in order to distribute all shares. 1. Societies will use the agreed CISAC format to create UDS files within 3 months of the original distribution. UDS files will be labelled separately to distinguish from UP files and will be used to facilitate the circulation of data regarding undistributed shares of musical works. 2. If the Original society administers more than one right (i.e. administers both performing and mechanical), it must generate, label and circulate separate UDS files per right type (i.e. one for performing rights only and a separate one for mechanical rights only). 3. Upon obtaining a UDS file from the Original society sister societies will have 3 years from the date of the original distribution to claim undistributed shares on each UDS file generated by the Original society. The claiming society should send their complete works documentation. 4. After receiving relevant works documentation based on a sister society claim from analysing the UDS file, the Original society will correct its documentation and distribute royalties in the next available distribution. As per the Debit/Credit binding resolution, a society may apply a reasonable financial threshold below which it judges that the expense of making debit or credit payment adjustments outweighs the cost of making them. Such threshold must be published. 5. The claiming sister society will be tasked with posting the works documentation onto CIS-Net for those previously Undistributed shares that they have matched and subsequently claimed. BTC Page 36 of 47

37 Figure 12: Undistributed Shares A (Zero IPs Identified) BTC Page 37 of 47

38 Figure 13: Undistributed Shares B (Some IPs Identified) BTC Page 38 of 47

39 5 Post Distribution Adjustments While societies attempt to distribute accurately, within a distribution there may be incorrect payments which need to be adjusted post-distribution. The binding resolutions under this category attempt to ensure that there are practices in place to adjust for incorrect distribution payments. 5.1 Debit/Credit payment adjustments Rule No. BR 20 Rule Type Binding Resolution Reference SG R1, article 20 Repertoire Musical works Type of rights Performing rights, mechanical rights Procedure for dealing with inter-society payment adjustments. For clarity, Synopsis Debits/Credits arise from distribution payment errors or missed distribution payments discovered by the original remitting society To ensure agreed controls and regulations are installed to govern debit and Purpose credit payment adjustments following an earlier incorrect payment from one society to another. Statement of Principle How societies will consistently treat debit and credit adjustments. Category Mandatory Keywords Payment, adjustment, debit, credit Prior reference(s) Fees-in-error Debits and Credits CTR R1: the treatment of royalties received in error, and of debits Origin and credits (document still to be completed) CTR R2: Debits Credits Adjustments CTR : Study of the Dublin resolution the treatment of royalties received in error and of debits and credits, with annexes, CTR a, Other References CTR b, CTR c. CTR R1: Minutes of the Distribution Technical Committee, Buenos Aires, May Related rule(s) Binding Resolution Fees in Error under discussion Date formulated Distribution Technical Committee, May 2008 Date approved 06 June 2013 Terminology Claim Credit Debit A request for royalties based on a perceived omitted or incorrect payment A credit adjustment deriving from an under or omitted payment A debit adjustment deriving from an over or incorrect payment BTC Page 39 of 47

40 Adjustment Reason Codes Previously Unpaid Usage A performance, sale or other usage of a work that was previously unpaid. NB: Payments for late registrations may use this code for unpaid performances. Previously unpaid uses resulting from the UP matching process are not considered adjustments; Examples of unpaid usages include the following: E.g. 1, (US) Society A receives a claim from (affiliated) Society C for performances of a work that Society A perceived was represented by (US) Society B. Society A establishes that it does represent the claimed work and duly credits Society C. E.g. 2, Society B receives a claim for a work that was not previously paid or which previously resulted in few royalties. After conducting research, Society B determines there were missed performances and a credit adjustment is processed Incorrect/Revised Documentation Adjustments resulting from incorrect or revised documentation of an IP, work, agreement and/or cue sheet. The documentation can originate from an IP, publisher, sub-publisher, society or CIS tool (CISNET, IPI.) Resolved dispute/conflict Adjustments arising from the resolution of a dispute or counterclaim process Revised calculation of royalty rate/point value A payment for a particular royalty source that was paid at an incorrect rate/point value by a society. Some examples may include the following: Performing Right: o o o E.g. 1, Society A distributes royalties for a live performance. Society A receives a new set list with additional works. Therefore, Society A must recalculate the royalties available for distribution and adjust all works based on the new set list, which has more works than originally calculated. E.g. 2, Society B must provide a rebate to a user. Society B must then send debits for the original payments based on the adjusted license. E.g. 3, Society C uses a certain point value as the basis of their distribution for commercial television. The point value for public television is accidentally applied rather than the rate for commercial television. A credit adjustment is made for the recalculated point value. Mechanical Right: o E.g. 1, Society A distributes royalties video carrier. Society A receives new label copy with additional works. Therefore, Society A must recalculate the royalties available for distribution and adjust all works based on the new label copy, which has more works than originally calculated. BTC Page 40 of 47

41 o o o E.g. 2, Society B must provide a rebate to a user. Society B must then send debits for the original payments based on the adjusted license. E.g. 3, Society B has not previously applied a deduction of the sale price of the producer (for instance because it was not declared that the sound-carrier was sold together with a magazine). Society B must then send debits for the original payments based on the adjusted license. E.g. 4, Society B calculated the rate on a PPD lower that the one applied by the producer. A credit adjustment is made for the recalculated payment Misidentified work A credit/debit when a society identifies and makes payment for a work when it should have made payment for a different work of the same or similar title. E.g. Society identifies and makes payment for work A instead of work B, which has the same title Incorrect reporting by a record company or other licensee The work originally reported by a record company or other licensee differs from the actual work used. Business Rules For clarity, Debits/Credits arise from distribution payment errors or missed distribution payments discovered by the original remitting society; Fees in Error arise from distribution payment errors discovered by the receiving society. Following are the business reasons for this Binding Resolution: 1. Previously Unpaid Usage 2. Incorrect/Revised Documentation 3. Resolved dispute/conflict 4. Revised calculation of royalty rate/point value 5. Misidentified work 6. Incorrect reporting by a record company or other licensee A society may apply a reasonable financial threshold below which it judges that the expense of making debit or credit payment adjustments outweighs the cost of making them. Such threshold must be published. All payment adjustments must be accompanied by all of the information as defined by the current standard CISAC distribution format. Adjustment reason codes are detailed in the document CTR R2. Debits: 1. Debits must only be made by the society that originally reported and accounted for the usage/payment. a. Debits may not be made against distributions statements sent more than 3 years earlier. 2. Debits of less than US$500 (or equivalent) per work may be made without prior notification or approval by the debited society. For each component, the debiting society must document: - Original Reference Identifier - Original Distribution Identifier - Adjustment Reason Code BTC Page 41 of 47

42 3. For debits over US$500 (or equivalent) per work, the debiting society must notify the society to be debited prior to applying the debit. The debiting society must allow enough time, when proposing the debit, for the society to be debited to respond and when appropriate, prevent the application of the debit. a. The debiting society must explain the reason for the proposed debit; and for each component must document: - Original Reference Identifier - Original Distribution Identifier - Adjustment Reason Code b. The society to be debited must, within 30 calendar days of receiving the notification, indicate to the debiting society any objection to the proposed debit as well as the steps being taken to resolve it. i. If the society to be debited does not respond within 30 calendar days, the debiting society may proceed with the debit in its next distribution. c. The society to be debited has 6 months to research and provide a detailed explanation of their objection i. If any objection raised is not resolved within 6 months of the date of first written notification, the debiting society may proceed with the debit unless a counterclaim and dispute procedure has been invoked for the work(s) in question Credits: For the avoidance of doubt, credit adjustments arising from validated royalty claims must be honoured regardless of the reason for incorrect or missing payment at the time of the original distribution. Credit adjustments must be processed for distributions sent up to 3 years from the date the claim was received. The 3 years period begins when all relevant distribution related components (royalty payment, statement, distribution summary) have been received - If time lapses between the date of the claim notification and the payment of the adjustment, the credit must include the royalties as indicated above plus the royalties generated during the elapsed time. BTC Page 42 of 47

43 Figure 14: Debit/Credit Adjustment Payments BTC Page 43 of 47

44 5.2 Fees in Error Rule No. TBD (Under Progress) Rule Type Binding Resolution Repertoire Musical works Type of rights Performing rights, mechanical rights Synopsis Procedure for dealing with royalties incorrectly received To ensure royalties incorrectly received by one society are reported to the Purpose Original Society and the Intended Society, where known, with relevant information to facilitate the correct distribution Statement of Principle Royalties incorrectly received are returned to the Original Society. Category Mandatory Keywords returned royalties, fees in error Prior reference(s) Fees in error Origin CTR R1: the treatment of royalties received in error, and of debits and credits CTR : Study of the Dublin resolution the treatment of royalties received in error and of debits and credits, with annexes, CTR a, CTR b, CTR c. Other References CTR R1: Minutes of the Distribution Technical Committee, Buenos Aires, May CT-R : Fees in Error Proposal CT-R : Fees in Error Reporting Format Related rule(s) Binding Resolution 4 Insufficient Documentation Binding Resolution 7 Debits/Credits Payment Adjustment Date formulated Distribution Technical Committee, May 2008 Date approved BTC 2015, BOD June 2015 Status Under discussion Terminology: Original society Receiving society Intended society Original Distribution Society that makes the original payment Society that receives the payment in error from the original society Society that is presumed to be the entitled recipient of the royalties The original distribution made by the Original Society to the Receiving Society BTC Page 44 of 47

45 Fees in Error Reasons The reasons for Fees in Error are as follows: Reason Rights expired - Royalties sent for an IP whose contract has expired or who has lost rights in the work Incorrect IP - Royalties sent for an incorrect IP Incorrect Title - Royalties sent for a work with a similar title Incorrect Share - The share reported exceeds the actual share of the IP Non Member - Royalties sent for an IP who is a non-member Incorrect society - Royalties sent for the correct IP but incorrect society. Used when an IP transfers societies Work not licensed by the Original society Business Rules It is understood that payments made by the Original Society were made by that Society in good faith and are based on information believed to be correct at the time of distribution. This Business Rule addresses incorrect payments resulting from documentation errors unbeknown to the Original Society. For clarity, Fees In Error arise from perceived payments errors discovered by the Receiving Society, which is believed to belong to a member of another society; Debits/Credits arise from payments errors or missed payments discovered by the original remitting society. Following are the business rules for Fees in Error: 1. When the Receiving Society discovers that a payment was sent by the Original Society in error, the Receiving Society returns the payment and takes the following steps: 1.1 The receiving society will promptly review the distribution data and return the fees received in error to the Original Society in the distribution immediately after detecting the erroneous payment. It is recommended that the Receiving Society return the erroneous payments within a year of receiving the original payment. For the avoidance of doubt, the Receiving Society will not forward royalties to the Intended Society The Receiving Society, at the time royalties are returned, sends a report (BEX document ref ) to both the Original Society and the Intended Society where known The report should not be summarized payments. That is to say that the report should contain the itemized payments as reported by the Original Society The report to the Original Society can be in either CRD format or a delimited file, e.g..csv The report to the Intended Society will be in a delimited file format The report to the Original Society will be in a separate file and not included with the Receiving Society s national/domestic distribution The Receiving Society will return payments it has identified as erroneous for a period of 3 years from the date of the Original Distribution from the Original Society The Receiving Society may apply a reasonable financial threshold below which it judges that the expense of processing the fee in error outweighs the cost. Such a threshold must be published. 2. Upon receipt of the returned fees in error, the Original society will immediately take the necessary steps to correct its documentation and initiate a distribution to the Intended Society, where applicable. BTC Page 45 of 47

46 2.1. Payment to the Intended Society will be made in the same amount as the original payment in the Original Society s local currency. The parties acknowledge that in the event of significant fluctuations of currency exchange, the parties will work in good faith to address potential loss of income Once the Original Society confirms the correct distribution key, it will make the necessary adjustments to the Intended Society in the next available distribution Adjustments to the Intended Society resulting from a returned Fee in Error will be made for a period of 3 years from the date of the Original Distribution The Original Society will refrain from issuing debit and credit adjustments until it analyses the returned royalty reports and has confirmed that royalties for the work in question have not been returned If the Original Society discovers additional erroneous payments as a result of its investigation which have not been reported by the Receiving Society, it will follow the debit process as outlined in the Debit and Credit Adjustment Resolution The Original Society may apply a reasonable financial threshold below which it judges that the expense of making debit or credit payment adjustments outweighs the cost of making them. Such a threshold must be published The burden of responsibility, fiscal or other, lies with the Original Society. e.g. if the Original Society sends 100 to the Receiving Society upon returning the royalties to the Original Society, the Original Society, because of exchange rate fluctuations, only receives 95, the loss of income should not be passed along to the Receiving Society or the Intended Society. 3. Where the Intended Society is known: 3.1. The Intended Society can only send a claim to the Original Society. The Intended Society will not debit or send a claim to the Receiving Society The Intended Society has a period of 3 years from the date of the original distribution to make such claims The Intended Society is required to send corrective documentation to the Original Society and CIS-Net The Original Society will correct its records to prevent further erroneous payments. 4. Where the Intended Society is not known, it is the responsibility of the Original Society to: 4.1. Initiate further steps to identify the appropriate interested parties Amend its records, where possible, and prevent further erroneous payments to the Receiving Society. 5. It is in the best interest of all societies to research payments promptly. Alternative arrangements may be agreed on a bilateral basis. BTC Page 46 of 47

47 Figure 15: Fees in Error BTC Page 47 of 47