Vol. 142, No. 17 — April 26, 2008

COPYRIGHT BOARD

FILE: Reproduction of Musical Works

Statement of Proposed Royalties to Be Collected for the Reproduction of Musical Works, in Canada, in Cinematographic Works for Theatrical Exhibition or Private Use

In accordance with section 70.14 of the Copyright Act, the Copyright Board hereby publishes the statement of proposed royalties filed by the Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) on March 28, 2008, with respect to royalties it proposes to collect, effective on January 1, 2009, for the reproduction of musical works, in Canada, in cinematographic works for theatrical exhibition or private use (Tariff No. 5) for the years 2009 to 2012.

In accordance with the provisions of the same section, the Board hereby gives notice that prospective users or their representatives who wish to object to the statement may file written objections with the Board, at the address indicated below, within 60 days of the publication hereof, that is no later than June 25, 2008.

Ottawa, April 26, 2008

CLAUDE MAJEAU
Secretary General
56 Sparks Street, Suite 800
Ottawa, Ontario
K1A 0C9
613-952-8621 (telephone)
613-952-8630 (fax)
majeau.claude@cb-cda.gc.ca (email)

PROPOSED STATEMENT OF ROYALTIES TO BE COLLECTED BY SODRAC FOR THE REPRODUCTION OF MUSICAL WORKS EMBEDDED INTO CINEMATOGRAPHIC WORKS FOR THE PURPOSE OF DISTRIBUTION OF COPIES OF THE CINEMATOGRAPHIC WORKS FOR PRIVATE USE OR THEATRICAL EXHIBITION FOR THE YEARS 2009 TO 2012

Tariff No. 5

Short Title

1. This tariff may be cited as the SODRAC Tariff (Reproduction of Musical Works in Cinematographic Works for Theatrical Exhibition or Private Use), 2009-2012.

Definitions

2. In this tariff,

“cinematographic work” means a cinematographic work initially intended for any use or exploitation whatsoever but not a work where the main content is music such as a concert, musical, variety show, video-clip, workout show or any other work of the same nature. This definition includes trailer and all audiovisual content embedded into the copy of the cinematographic work, e.g. a menu, bonus feature or trailer; (« œuvrecinématographique »)

“commercial theatre” means premises such as a commercial cinema where the principal purpose is the exhibition of cinematographic works in public and where an admission fee is charged; (« sallecommerciale »)

“copy” means a copy of a cinematographic work on any video recording medium including, for exhibition in a theatre, a copy of the cinematographic work on a server; (« copie »)

“distribution revenues” means any amount a distributor may receive from any person in respect of a copy containing at least one work from the repertoire for the purpose of sale or rental to a consumer for private use or for the purpose of exhibition in a theatre; (« revenus de distribution »)

“distributor” means a person authorized to reproduce a cinematographic work for the purpose of sale or rental to a consumer for private use or for the purpose of exhibition in a theatre; (« distributeur »)

“multiple-purpose hall” means premises where a cinematographic work is exhibited in public but where the principal purpose is not the exhibition in public of cinematographic works, such as schools, airplanes, army bases or institutions; (« lieupolyvalent »)

“non-commercial theatre” means premises, such as a cinema or a multiple purpose hall, where either no admission fee is charged or the admission fee covers only expenses incurred for the exhibition of a cinematographic work; (« salle non commerciale »)

“outdoor theatre” means outdoor premises where the principal purpose is the exhibition of cinematographic works to the public; (« ciné-parc »)

“repertoire” means SODRAC’s repertoire of musical works; (« répertoire »)

“semester” means from January 1st to June 30th and from July 1st to December 31st; (« semestre »)

“SODRAC” means the Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) Inc. and SODRAC 2003 Inc., acting jointly and severally; (« SODRAC »)

“theatre” means a commercial or non-commercial theatre, an outdoor theatre or a multiple-purpose hall; (« salle »)

“trailer” means a short film to promote another cinematographic work that incorporates musical works embedded into that cinematographic work and/or other musical works. (« film-annonce »)

Application

Private Use

3. A distributor who complies with this tariff shall be entitled to reproduce onto a copy a work of the repertoire already embedded into that cinematographic work, or to authorize such reproduction, for the purpose of selling or renting the copy to consumers for private use.

4. For greater clarity, this tariff does not apply to permanent or limited downloads, to online sales or rentals of cinematographic works to the public or to on-demand video.

However, this Tariff does apply to online sales of copies, or to direct sales to consumers by any means, where a physical audiovisual recording of the cinematographic work is delivered to the consumer.

Exhibition in a Theatre

5. A distributor who complies with this tariff shall be entitled to reproduce onto a copy a work of the repertoire already embedded into that cinematographic work, or to authorize such reproduction, for the purpose of delivering it by any means for the public exhibition of the cinematographic work.

6. A distributor may authorize a third party to make the necessary copies for public exhibition in a theatre, including on a server.

Restrictions

7. This tariff does not authorize the fixation or reproduction into a cinematographic work of a musical work that has not already been embedded into it.

This tariff does not authorize the fixation or reproduction into a trailer of a musical work that is not embedded in the cinematographic work that such trailer promotes.

Authorization

8. This Tariff does apply to all copies that a distributor authorizes the making of, in Canada or abroad, intended for distribution for private use in Canada or for the purpose of exhibition in a theatre in Canada.

Royalties

Private Use

9. For copies intended for private use, a distributor shall pay to SODRAC:

(a) 1.2% of its distribution revenues or an amount of 8¢ per copy, whichever amount is higher, for each copy delivered for sale that contains a work from the repertoire in the feature presentation; and

(b) 1.2% of its distribution revenues or an amount of 36¢, per copy, whichever amount is higher, for each copy delivered for rental that contains a work from the repertoire in the feature presentation.

Exhibition in a Theatre

10. For copies intended for exhibition in a theatre, a distributor shall pay to SODRAC 1.2% of its distribution revenues.

11. All royalties payable under this tariff are exclusive of any federal, provincial or other governmental taxes or levies of any kind.

Reporting and Payment Requirements for Private Use

12. (1) No later than 31 days after the end of a semester, a distributor shall provide the following items to SODRAC, with respect to each cinematographic work for which the information has not already been provided and a copy of which was delivered for private use during the semester:

(a) a physical or electronic sample of the cover of the copy of each version of the cinematographic work;

(b) a distribution report in an electronic format for each cinematographic work containing the following information:

(i) the name, address, telephone number, fax number and email address of the distributor,

(ii) the original title in the original language, any alternate titles in the original language and any titles in other languages used on the copy, per episode if a series,

(iii) the identification numbers [Universal Product Code, product number, International Standard Audiovisual Number (ISAN), International Standard Book Number (ISBN)],

(iv) the name of the production company,

(v) the country, the year and the type of production,

(vi) the release dates of the cinematographic work and of the copy, and

(vii) the names of the director and of the starring performers; and

(c) a complete list of the musical works embedded into the copy of the cinematographic work differentiating between the feature presentation, menu, bonus features, trailers and other parts, and including the titles of the musical works, their duration and the names of the authors and composers of the musical works.

(2) As soon as possible after receiving the information set out in subsection (1), SODRAC shall notify the distributor in writing of those cinematographic works that include a work from the repertoire.

(3) No later than 15 days after the end of a semester, a distributor shall provide to SODRAC, with respect to each cinematographic work mentioned in a notice referred to in section (2) that was received before the end of the semester, a copy of which was delivered during the semester for the purpose of sale or rental to a consumer, the following information relating to that semester:

(i) the number of copies in inventory at the beginning of the semester,

(ii) the reserve for returns in the previous report,

(iii) the number of copies made during the semester,

(iv) the number of copies delivered,

(v) the number of promotional copies delivered,

(vi) the amount received by the distributor for each copy,

(vii) the type of use (sale, rental),

(viii) the number of copies returned,

(ix) the number of copies in inventory at the end of the semester,

(x) the current reserve,

(xi) the total distribution revenues, and

(xii) the royalties payable to SODRAC.

(4) A distributor who withdraws from a catalogue a cinematographic work mentioned in a notice referred to in subsection (2) shall notify SODRAC of the withdrawal at the same time as it provides the information set out in subsection (3) for the semester during which the withdrawal occurs.

(5) A distributor who destroys a copy of a cinematographic work mentioned in a notice referred to in subsection (2) shall notify SODRAC of the destruction at the same time as it provides the information set out in subsection (3) for the semester during which the destruction occurs. The distributor shall provide a written sworn statement with the notice.

Reporting and Payment Requirements for Exhibition in a Theatre

13. (1) No later than 31 days after the end of a semester, a distributor shall provide the following information to SODRAC, with respect to each cinematographic work for which the information has not already been provided and a copy of which was delivered for exhibition in a theatre during the semester:

(a) a distribution report in an electronic format for each cinematographic work delivered to be exhibited as a feature presentation containing the following information:

(i) the name, address, telephone number, fax number and email address of the distributor,

(ii) the original title in the original language, any alternate titles in the original language and any titles in other languages used on the copy, per episode if a series,

(iii) the identification numbers [Universal Product Code, product number, International Standard Audiovisual Number (ISAN), International Standard Book Number (ISBN)],

(iv) the name of the production company,

(v) the country, the year and the type of production,

(vi) the theatrical release date of the cinematographic work,

(vii) the names of the Director and of the starring performers, and

(viii) a complete report of the musical content including the titles of the musical works, their duration and the names of the authors and composers of the musical works; and

(b) a distribution report in an electronic format for each trailer containing the following information:

(i) the name, address, telephone number, fax number and email address of the distributor,

(ii) the original title in the original language, any alternate titles in the original language and any titles in other languages of the cinematographic work promoted by the trailer,

(iii) the identification number and International Standard Audiovisual Number (ISAN) of the trailer,

(iv) the release date of the trailer, and

(v) a complete report of the musical content of the trailer including the titles of the musical works, their duration and the names of the authors and composers of the musical works.

(2) As soon as possible after receiving the information set out in subsection (1), SODRAC shall notify the distributor in writing of those cinematographic works that include a work from the repertoire.

(3) No later than 15 days after the end of a semester, a distributor shall provide to SODRAC, with respect to each cinematographic work mentioned in a notice referred to in subsection (2) that was received before the end of the semester, a copy of which was delivered during the semester for exhibition in a theatre, the following information relating to that semester:

A. For cinematographic works exhibited as feature presentations

(i) the number of copies delivered,

(ii) the provinces where the copy was distributed,

(iii) the distribution revenues, and

(iv) the royalties payable to SODRAC.

B. For trailers

(i) the number of copies delivered,

(ii) the provinces where the copy was distributed,

(iii) the distribution revenues, and

(iv) the royalties payable to SODRAC.

Payments, Reserves and Promotional Copies

14. (1) A distributor shall forward to SODRAC the royalties payable in respect of a copy at the same time as it sends the information set out in subsections 12(3) and 13(3) in respect of that copy.

(2) A distributor who fulfils for the first time the obligations set out in sections 12 and 13 in respect of a cinematographic work also fulfils these obligations in respect of all previous semesters.

(3) A distributor may deduct in its calculation of the royalties otherwise payable in respect of a cinematographic work a reserve for eventual returns up to a maximum of 20% of the number of copies delivered for private use in each of the three first semesters. In each subsequent semester, the maximum will be reduced to 5% per semester until such cinematographic work is withdrawn from the distributor’s catalogue.

For greater clarity, the reserves for each cinematographic work are independent from one another and deductions cannot be applied to copies of another cinematographic work.

(4) No reserve for returns is allowed to the distributor in the determination of the royalties in respect of copies intended for exhibition in a theatre.

(5) A distributor that complies with the requirements for reports and payments of section 12 may deduct in its calculation of the royalties otherwise payable a maximum of 10% of the number of promotional copies intended for private use, up to a maximum of 300 copies, in any format, of a given cinematographic work. This deduction in respect of promotional copies of a cinematographic work applies only for the first semester of a copy’s release and only for that specific cinematographic work.

(6) A distributor may not take any deduction in its calculations of royalties in respect of promotional copies intended for exhibition in a theatre.

Accounts and Records

15. (1) A distributor shall keep and preserve, for a period of four years after the end of the semester to which they relate, records from which its distribution revenues and the information set out in sections 12 and 13 can be readily ascertained.

(2) SODRAC may audit these records at any time during the period set out in subsection (1) on notice of ten business days and during normal business hours.

(3) SODRAC shall, upon receipt, supply to the distributor a copy of the audit report.

(4) If an audit discloses that royalties have been understated in any semester by more than 10%, the distributor shall pay the reasonable costs of the audit within 30 days of the demand for such payment.

(5) When a distributor enters into an agreement with a third party pursuant to the authorizations granted in this Tariff, the distributor shall incorporate in such agreements the same rights to audit the third parties as are provided to SODRAC in this tariff.

Confidentiality

16. (1) Subject to subsections (2) and (3), SODRAC shall treat in confidence information received from a distributor pursuant to this tariff, unless the distributor who supplied the information consents in writing to the information being treated otherwise.

(2) SODRAC may share information referred to in subsection (1):

(a) with the Copyright Board;

(b) in connection with proceedings before the Copyright Board, if SODRAC has first provided a reasonable opportunity for the distributor providing the information to request a confidentiality order;

(c) to the extent required to effect the distribution of royalties, with a collective society or with a royalty claimant; or

(d) if ordered by law or by a court of law.

(3) Subsection (1) does not apply to information that is publicly available, or to information obtained from someone other than a distributor and who is not under an apparent duty of confidentiality to that distributor.

Adjustments

17. Adjustments in the amount of royalties owed (including excess payments), as a result of the discovery of an error or otherwise, shall be made on the date the next royalty payment is due.

Interests on Late Payments

18. Any amount not received by the due date shall bear interest from that date until the date the amount is received. Interest shall be calculated daily, at a rate equal to one per cent above the Bank Rate effective on the last day of the previous month (as published by the Bank of Canada). Interest shall not compound.

The late provision of the reports described in subsections 12(1) and 13(1) is comparable to a late payment and shall require the payment of interest specified in this section.

Delivery of Notices and Payments

19. (1) Anything that a distributor sends to SODRAC shall be sent to 759 Carré Victoria, Suite 420, Montréal, Quebec H2Y 2J7, fax number 514-845-3401, email sodrac@sodrac.com, or to any other address of which the distributor has been notified in writing.

(2) Anything that SODRAC sends to a distributor shall be sent to the last address of which SODRAC has been notified in writing.

20. (1) A notice may be delivered by hand, by postage paid mail, by fax or by email.

(2) A notice or payment mailed in Canada shall be presumed to have been received three business days after the day it was mailed.

(3) A notice sent by fax or email shall be presumed to have been received the day it is transmitted.

Termination

21. (1) SODRAC may, upon 30-day notice in writing, terminate the licence of a distributor who does not comply with this tariff.

(2) Upon termination of the licence, a distributor shall immediately withdraw from the market all copies it owns that contain a work of the repertoire.

Term

22. This Tariff comes into force on January 1, 2009, and ends on December 31, 2012.

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