APAA COPYRIGHT COMMITTEE 2014
SPECIAL TOPIC REPORT
MALAYSIA GROUP
"Collective Management Organizations Collective management organizations (CMOs) act on behalf of their members
to negotiate rates and terms of use, issue licenses, collect and distribute
royalties. CMOs are becoming more relevant as copyrighted works are
increasingly delivered in digital form. CMOs generally result in a monopoly
vis-a-vis both rights owners and users. Unrestrained, a monopoly is prone to
abuse. Therefore, to ensure the proper operation of CMOs, should
government maintain a position of cooperation or be justified in introducing
legal provisions resulting in greater supervision and control over CMOs?"
Position under Malaysian Copyright Law
In Malaysia, a collective management organization which negotiates and grants
copyright licences on behalf of copyright owners is known as a "licensing body"
under the Copyright Act 1987.
The coming into force of the Copyright (Amendment) Act 2012 observes the exercise
of a greater supervision and control over a licensing body in which the amended
Section 27A makes it mandatory for a licensing body to apply to the Controller of
Copyright to be declared as a licensing body. In this regard, the grant of a declaration
is subject to the applicant providing sufficient and satisfactory information to show
that it is fit and proper to be a licensing body. The Controller of Copyright is
empowered to revoke a declaration given to a licensing body if the circumstances
justify a revocation.
In addition, the Copyright Act 1987 provides a platform for reference to the Copyright
Tribunal in respect of proposed licensing scheme, existing licensing scheme,
entitlement to licence as well as licences granted other than in pursuance of a
licensing scheme by a licensing body. The said platform indirectly allows the
government to control the licensing activities of the licensing bodies when a
reference is made by an interested party to the Tribunal.
At present, there are four organizations which have been declared as licensing
bodies under the Copyright Act 1987. They are the Music Authors’ Copyright
Protection Bhd (MACP), Public Performance Malaysia Sdn Bhd (PPM), Recording
Performers Malaysia (M) Bhd (RPM) and Performers Rights & Interest Society
Berhad (PRISM Berhad). Each of these licensing bodies represent their own
members in collecting licensing fees on behalf of the members.
Recent Issues Involving Collection of Licensing Fees By the Licensing Bodies
On 1st September 2014, the Minister in the Prime Minister’s Department, Datuk Dr
Wee Ka Siong highlighted complaints by small and medium businesses such as
coffee shops, hairdressing outlets, car workshops, electrical appliances shops and
small retail shops over the allegedly exceedingly high royalty fees of up to RM800 a
year. This was later followed by an announcement by the Minister that the Cabinet
had decided that coffee shops, hawker centres, peddlers, cafes and other small food
businesses with only one television set in their premises need not pay the royalty
fees and that businesses whose profits are not music-oriented were also exempted.
In a remark made by the said Minister, it was said that the royalty licensing bodies
should not abuse their power to collect payment from trading premises which were
not for commercial purposes.
On this issue, the Minister of the Domestic Trade, Cooperative and Consumerism
Datuk Seri Hasan Malek expressed his views that the government has no power to
give any royalty fee waiver because it is the exclusive rights of artists, creators,
record companies, singers and musicians. In other words, any exemption on the use
or exploitation of copyrighted works must obtain the consent of the relevant copyright
owners. In his view, the Copyright Act 1987 had provided a platform via the Copyright
Tribunal to enable any affected quarters to submit a case for a review of the tariff or
licensing scheme offered by any licensing bodies.
In this connection, the Malaysian Chinese Performers & Artistes Association said that
the three major artistes associations in the country will seek for a meeting with the
Prime Minister to propose a merger of all copyright collection companies in the
country as the existence of four different licensing bodies not only cause confusion to
the users but at the same give them an excuse to refuse payment of royalty fees.
Should the Government Maintain a Position of Cooperation or Be Justified in
Introducing Legal Provisions Resulting in Greater Supervision and Control
Over CMOs?
In the committee's view, the existing form of control exercised by the government
over the licensing bodies through the Copyright Act 1987 ("Act") are sufficient and as
such no greater control is necessary. In this connection, the Act is regulated by the
Intellectual Property Corporation of Malaysia which is an agency under the Ministry of
Domestic Trade, Co-operatives and Consumerism.
By reason of the relevant provisions in the Act, the local licensing bodies enjoy no
real "monopoly" in granting copyright licenses on behalf of their members. This is
because the licensing schemes and licences may be referred to and reviewed by the
Copyright Tribunal which is empowered to confirm or vary the referred licensing
schemes or licences. Furthermore, the Tribunal may also determine the issue of a
person's entitlement to a grant of licence against the will of the licensing bodies.
Other examples of indirect control exercised by the government under the Act are as
follows:
1.
the mandatory declaration of a licensing body as discussed above.
2.
the power of the Controller to revoke a declaration granted to a licensing body
which is found to be, amongst others, 'not functioning adequately as a
licensing body' or 'not acting in accordance with its rules or in the best interest
of its members, or their agents'.
3.
the statutory requirement to submit profit and loss account, balance sheet and
auditor's report to the Controller of Copyright on an annual basis.
Despite the recent calls by the users for greater interference by the government in
supervising collection of fees by licensing bodies, the rights of the licensing bodies to
fix licensing rates and collect licensing fees on behalf of the copyright owners must
be respected to ensure that the owners are adequately rewarded for their works and
will continue to author new works for the enjoyment of the users. It is a question of
striking a balance between protecting the rights of the copyright owners and the
rights of the users to enjoy copyrighted works at a reasonable price.
In fact, one may be of the view that the government's recent announcement in
exempting small businesses and non-music oriented businesses from paying
licensing fees may have gone beyond the supposed role of a "supervisor" if the
relevant licensing bodies have not consented to giving such exemptions. It is
important that the government should maintain a position of co-operation with the
licensing bodies through discussions in solving licensing fees related issues instead
of stepping into the shoes of the copyright owners without their consent.
In the words of the Minister of the Domestic Trade, Cooperative and Consumerism
Datuk Seri Hasan Malek:
"if the government wants to interfere in deciding on the royalty collection tariff, it
should be made through the enforcement of the law and standard practices...the
ministry has no power in fixing the tariff or charge. The government respects private
rights of the owners of copyrights to discuss with the users of the music works."
Conclusion (Malaysia country group view);
There is always a need to balance the interests of the copyright owners and users.
Some copyright works are more than just leisure or optional commodities. They may
be essential to the economic activities of SMEs and low end users or even every day
consumer life.
CMOs have of course a role to play – they make it convenient for copyright owners to
pool resources together and provide convenient access to users to obtain licensing of
works. However the “collectiveness” and grouping of the owners may also lead to
abuse as there is now an ability to “collectively control” the market for the use of the
works and there is in fact through licensing schemes implemented by CMOs, no
competition amongst the owners. In the extreme case “cartelish” behaviour may
arise thereby abusing the end consumer.
In the light of the above our view is there is need for governmental control over
selected activities of the CMOs to ensure protection for end users from unfair
practices of the CMOs. The Malaysian model seems to have arrived at a kind of
balance on this issue.
In view of the above, there is no need for greater supervision and control over the
licensing bodies in Malaysia as the existing legislations provide sufficient form of
control over the licensing bodies. In fact, more respect over the exclusive rights of the
copyright owners to control the use and exploitation of their own works ought to be
given.
End of paper
Chew Phye Keat/Leong Ooi Ling
on behalf of Raja, Darryl & Loh
2nd October 2014