Centre for Internet and Society

Comparative Transparency Review of Collective Management Organisations in India, United Kingdom and the United States

maggie — 2015-08-21T17:12:10Z

This Transparency Review seeks to compare the publicly available information on the websites of music collective management organizations (“CMOs”) operating within India, the United States, and the United Kingdom. A total of 10 CMOs were selected, which included a range of non-profit, government registered organizations to for-profit, private organizations, managing works on behalf of record labels, publishers, composers, lyricists, and music performers. This exercise intends to contribute to the growing body of research on the relationship between transparency and effectiveness of CMOs. It concludes with recommendations and learnings which may lead to more transparent and effective functioning of copyright societies in India, and management of music copyright overall.

The research paper was co-authored by Maggie Huang, Arpita Sengupta, Paavni Anand.

Taking into account the needs of users and members of CMOs, the following pieces of information was determined to be useful to report on the websites: : membership lists, governing directors, user types, tariff rates, royalty distribution schemes, and annual revenue reports. Collectively, the presence of these became rough parameters for transparency. The authors then reviewed each website to determine whether this information was made publicly available, and whether such disclosure was voluntary or mandated by law. As a proxy for effectiveness, percentage of revenue distributed as royalties was calculated for those who made their annual revenue report available.

Broadly, the review found that India's 2012 Copyright Amendment Act and 2013 Copyright Rules were by far the most stringent regarding registration, operations, rate setting, and reporting. Despite India's strict laws, it appears there is little compliance, particularly by PPL which failed to report the mandated tariff rates, royalty distribution policy, and its annual revenue report. ISRA had all the information sought on their website except for the crucial annual revenue report. IPRS however clearly made an effort to comply, with all information sought, provided.

Relative to India, CMOs in the United Kingdom were regulated less strictly, with U.K.'s 2014 Copyright Regulations allowing self regulation provided CMOs follow guidelines to comply with the operating code of conduct. All six indicators were available on websites of both UK PPL and PRS for Music, although the latter required user authorization to access membership/repertoire data.

In comparison, the U.S. seems to have the most lax reporting standards of the three, really only mandating basic reporting for CMOs administering statutory licenses. However, similar to India, rate-setting in the U.S. for certain digital broadcasts are subject to significant government control, in addition to anticompetetive measures which prevent partial withdrawal of rights from certain CMOs’ blanket licenses. Availability of information varied, with BMI and Sound Exchange complying with the more demanding parts of US legislation and disclosing all information sought, while ASCAP and HFA were missing tariff rates and user types respectively. SESAC was the least informative, with governing directors absent, and more crucially, their annual revenue report.

To determine relative efficiency, the authors calculated the percentage of royalties distributed per total revenue for those CMOs which published their revenue reports. All distributed royalties ranged between 80%-90%. Though not necessarily the most accurate measure, there appeared no significant correlation between the percentage of distributed royalties, and amount of information found; therefore a correlation between effectiveness and information transparency remain unknown.

However, throughout the exercise, the limitations of the research design became clear, leading to its own learnings for future research. Methodologically, the more attention should have been paid to spanning a wider spectrum of legal control, drawing clear lines of which types of CMOs to include in the study, being careful not to equate presence of information with usability or effectiveness, deeper assessment of the legal provisions, and the inclusion of membership exclusive data as part of the exercise.

Nevertheless, the comparative review process did produce several learnings that Indian CMOs could adopt for enhanced transparency and potentially improved effectiveness as well. These recommendations are as follows:

Publish the full repertoire of works the CMO is authorized to license, and its corresponding rights holder information in a searchable format;
Provide a platform for collectively identifying the rights-holder of orphan works (works which are registered whose royalties are collected, but ownership information is unknown);
Guide new users and potential members through a more user-friendly designed page with simplified, accessible introduction to music licensing;
Increase clarity surrounding royalty distribution policies;
Publish updated annual revenue reports; and
Clarify the dispute resolution processes.

This review concludes by suggesting future research through stronger methodological design, further exploring membership exclusive data, assessing effectiveness outcomes between multiple, competing licensing bodies versus a single, state-granted monopoly society, and the possibility of alternative compensation schemes for music financing and production.

MOTIVATIONS FOR RESEARCH: MUSIC COPYRIGHT MANAGEMENT IN THE MOBILE MUSIC AGE for the PERVASIVE TECHNOLOGIES PROJECT

Managing copyright in the digital age is one of the most contentious issues today amongst music industries globally. Innovation in digital technologies has opened up formerly restricted production and distribution channels, resulting in a proliferation of music like never before.

The mobile phone is one of these innovations, particularly since becoming the most preferred music listening device in India. [1] The overarching utility of the mobile phone has made it the object of study for the Centre for Internet and Society's Pervasive Technologies project[2], which seeks to identify intellectual property levers which can enhance access to affordable mobile devices' hardware, software, and content within India and China.

Access to music content[3] via the mobile phone is one of the chapter's primary focus, with a research objective of balancing access to music for internet and mobile consumers, while ensuring the protection of rights and remuneration for artists and creators.

The initial phases of this research found that new stakeholders such as device manufacturers, telecom operators, and streaming services were developing business models based on a free, ad-supported service with a paid premium tier, ultimately resulting in high royalty payouts and low profit margins. However, artists in India and worldwide are raising grievances due to decreasing royalty revenue, putting to question whether these business models are sustainable in the long term.

We had hoped to answer these questions within the Indian context, but the findings were ultimately inconclusive. This was primarily due to two reasons: 1) lack of data transparency at multiple levels of the music distribution chain, and 2) a copyright management system heavily in flux due to poor enforcement of the ambiguous 2012 Copyright Amendment Act. The copyright societies in India embodied both these issues in India, resulting in a need to study these institutions further as one of the main objects of research.

INTRODUCTION to COLLECTIVE MANAGEMENT ORGANIZATIONS and the NEED FOR TRANSPARENCY

Music copyright societies, commonly referred to as collecting agencies or collective management organizations ("CMOs") provides music rights holders (authors, owners, and performers of lyrics, compositions, and sound recordings) the ability to authorize the licensing of their copyrighted works to another body (the CMO) who can collect royalties from the numerous sources of usage on behalf of its members. If the law allows, these CMOs are also able to collectively negotiate for rates as well. Royalties derived from these licenses are often collected and distributed by CMOs as a source of income for the creators of musical works, after administrative costs are deducted.

CMOs and their rights-holder members represent a principle-agent relationship as agent-CMOs collects royalties from users on behalf of its principle rightsholder-members. However, if a conflict of interest arises, the inherent information asymmetry may give rise to abuse. In the case of CMOs, this standard principle-agent problem has manifested in forms ranging from inefficient administration overhead, to more dubious acts of corruption and collusion.

Economic theory tells us that the key to a free and fair market is "perfect information", or when stakeholders are equipped with the relevant information needed to make market decisions. Information enforces accountability, an idea that sparked the Right to Information movement in India. This is why transparency is especially critical in the music industry, characterized by complex revenue and consumption patterns, an intricate copyright law framework and stakeholders with varying levels of bargaining power.

Given many CMOs operate as state-granted monopolies which exclusively administer specific class of works, it is important that the collection and distribution of royalties occur in a transparent manner so members and regulators can scrutinize its functioning to ensure greatest effectiveness. For countries which allow competition between CMOs, transparency in operations and revenue data can provide users and members the ability to make an informed choice, and the opportunity for other competing players to enter the market.

Within India, transparency has been a recurring issue due to allegations of mismanagement and corruption[4] of the copyright societies. This was one of the motivations for the 2012 Copyright Amendment and subsequent2013 Copyright Rules which attempted to address, amongst other issues, regulations around transparency for registered copyright societies in India.

Thus, in light of new transparency and operations regulations for India, and inconclusive research findings due to sparse data, the authors sought to review the transparency of various CMO websites and their corresponding regulatory measures in the hopes of answering the following questions:

1. How does India's level of CMO transparency compare to other countries?

2. Is disclosure of information a result of regulatory pressures or voluntary?

3. What kind of learnings and recommendations can be made from the voluntary information disclosure and/or legal regulatory environments of other countries?

METHODOLOGY

Selecting countries for comparison

Since one of the broader goals of this review was to identify legal and/or industry led proposals for increased CMO effectiveness in India, the authors wanted to select case study country samples which were relevant and useful for the Indian context, while also considering differing legal and regulatory regimes.

The United States was chosen due to its competitive CMO structure where multiple CMOs administering the same class of musical works, and representing similar kinds of rights-holders can co-exist as private entities. Aside from statutory rate-setting of sound recording broadcasts, and anticompetitive consent decrees for ASCAP and BMI, the United States seem to have little to no regulation overall surrounding CMO operations and management.

The United Kingdom was selected due to its recent growing interests in the Indian music industry. This was demonstrated by the high volume of British attendants at recent Indian music industry conferences , several of which were directly sponsored by UK Trade & Investment as a music trade export mission.[5] In addition, U.K.'s CMO structure seemed to be more streamlined, with class of works separately managed under two main music CMOs.

Indian research participants of ongoing research also expressed interest in registering their musical works with CMOs in the U.S. and U.K. given increasing market demand, higher currency exchange, and increased reliability of royalty receipts. This was further indication of relevant country case studies for a comparison with India.

Identifying the Relevant CMOs

Due to challenges enforcing India's 2012 Copyright Amendment Act, and subsequent ambiguity of copyright societies' registration statuses, the selection criteria for CMOs consisted of those organizations which generally issued music licenses and collected royalty revenue on behalf of other rights-holder members.

In India, the following three CMOs were identified for this review: the Indian Performing Right Society ("IPRS") which collects on behalf of composers, lyricists, and publisher-members[6]; the Phonographic Performance Limited ("PPL") which exclusively controls public performance and broadcasting rights for its music label members[7]; and the Indian Singers Rights Association ("ISRA") which is currently the sole officially registered copyright society collecting on behalf of singers for their Performer's Rights. [8]

The status of IPRS and PPL as registered societies are ambiguous due to recent reports of registration withdrawal [9]; therefore compliance to Section 33 of the Copyright Act is uncertain. However, the authors chose to uphold the same standards in this review due to similarity in purpose and functioning.

In the U.S., the identified CMOs included the American Society of Composers, Authors, and Publishers ("ASCAP"), Broadcast Music, Inc, ("BMI") and SESAC (originally the Society of European Stage Authors and Composers) which are all competing Performing Rights Organizations collecting on behalf of songwriters and music publishers for public performance rights. SoundExchange is responsible for managing digital sound recordings for copyright owners (mostly music labels) and performing artists; while Harry Fox Agency ("HFA") collects mechanical royalties on behalf of publishers and songwriters when their compositions are reproduced.

In the U.K., two CMOs were identified: PRS for Music which manages public performance rights on behalf of songwriters, composers, and music publishers; and Phonographic Performance Limited ("PPL-UK"), which manages the rights of performers and record producers. Unlike the United States and India, each society exclusively manages separate categories of works. Although technically a compulsory collective licensing scheme is mandated under Indian copyright law for musical works incorporated in cinematograph films or sound recordings, ambiguity in India remains due to the unregistered/deregistered yet still functioning licensing bodies.

Identifying the comparative parameters

To compare CMOs transparency, the authors sought to develop a feasible proxy to determine their website's degree of disclosure. This was done considering two main stakeholders who most often access CMO websites: rights-holders, and users. The rights holders are owners and/or authors of a copyright or related right (i.e. performer's right) who is a member, has sought membership, or is a potential member of the CMO. The user is any person or organization who seeks to use the copyrighted work and is hence made to pay a fee for such use. This fee is generally based on the licensing agreement, struck between the CMO and the user on behalf of their collective rights holders.

Thus, the following information was identified to be useful for comparative assessment: list of members, governing directors, usage types, tariff rates, royalty distribution policy, annual revenue report, and percentage of distributed royalties. The justifications, and comparative findings are outlined below.

FINDINGS

List of members

Publishing members lists is useful for potential users since it can collectively reduce search costs for ownership information, making the process of licensing and royalty collection more efficient overall. In addition, users approached for licensing payment can also verify that the CMO is indeed authorized to administer those works. This has been a recurring issue in recent history for CMOs in both the United States [10] and India[11], which have reported extortion-like licensing demands for songs which may not have been even owned by their member rights-holders. Some have been alleged to demand licenses for broad, undefined catalogs like entire genres of music.[12] Having members lists published can prevent these discrepancies.

In India, all identified CMOs published their membership lists in accordance with Rule 66, section 1(c) of the Copyright Rules, which mandates the disclosure of members lists explicitly on the website.

In the U.S., all CMOs have published their membership data either as full lists or in the form of a searchable repertoire database corresponding with the specific work. This presentation format was similar in the U.K. although PRS for Music restricted access to authorized users. Nevertheless, this disclosure went beyond U.K.'s Copyright Regulations which only require the number of rights holders represented, whether as members or non-member rights holders to be published in the annual report. To the authors' knowledge, the U.S. does not seem to have an equivalent law as such.

Several CMO websites in the U.S. and U.K. also feature a search for owners of orphan works - copyrighted songs within their catalog in which the due rights-holders are unable to be contacted, or simply unknown due to a multitude of reasons, including lack of data collection, transfer of rights, unknown inheritance from deceased rights holders, amongst others. Many of these CMOs hold undistributed royalties for these works, bringing to question whether rights-holder members truly give genuine authorization for their continued licensing.

India's CMOs could enhance their transparency by adopting the repertoire format of membership disclosure which corresponds with each copyrighted work. It could also provide a platform to collectively identify orphan works' due rights-holders.

Country	CMO	List of Members Available on Website?	Regulation?
India	IPRS	Yes	Copyright Rules, 2013, Rule 66 Code of Conduct for Copyright Societies. Section (1): Every society shall make available on its website... c) List of all members in the general body
	PPL	Yes
	ISRA	Yes
United States	ASCAP	Yes, members can be searched through a database[13]	N/A
	BMI	Yes, members can be searched through a database.[14]
	SESAC	Yes, member list available through repertoire search and as downloadable full list.[15]
	SoundExchange	Yes
	HFA	Yes, artists can be individually searched via HFA's 'Songfile' database[16] but not available as a whole
United Kingdom	PPL UK	Yes, repertoire search database including member/label search exists.[17]	The Copyright (Regulation of Relevant Licensing Bodies )Regulations , 2014 Reporting Requirements 6. The code of practice shall require the relevant licensing body to publish an annual report which includes: a) the number of right holders represented, whether as members or through representative arrangements including, where possible and if applicable, an estimate of the number of non-member right holders represented by any Extended Collective Licensing Scheme
	PRS for Music	A database exists but restricted to authorized users

Governing directors

For rights holder members, knowledge of the governing members directing the functioning of the CMO can help ensure decision making occurs in a representative, accountable manner. In 2011, it was found that IPRS and PPL of India were governed by the same Board of Directors [18], despite theoretically managing distinct sets of rights and representing different rights-holder members. Stopps (2013) in WIPO's 'How to Make a Living from Music' states that democratic governance is highly desirable if not essential, since the board structure should ideally reflect the rights they administer.[19]

In India, all CMOs comply with the 2013 Copyright Rules which mandates the publishing of Governing Council members on its website. All CMOs in the United States, with the exception of SESAC have published information on their governing or executive board. SESAC does highlight the appointment of the CEO within its 'news' section, but not in an easily accessible location.

In the UK, the governing directors are disclosed, though not explicitly mandated for disclosure on the website. Copyright Regulations does require the appointment procedure of the Directors and their remuneration be included in the Annual Report. India's 2014 Copyright Rules appears relatively stringent in comparison given the process is specified in detail rather than a self-regulated process.

Country	CMO	Governing Directors Available on Website?	Regulation?
India	IPRS	Yes	Copyright Rules, 2013, Rule 66 Code of Conduct for Copyright Societies. Section (1): Every society shall make available on its website… d) Names and address of chairman, other members of the Governing Council and other officers in the society Copyright Rules 59 Management of Copyright Society (1) Every copyright society shall have… a) General body…b) Governing Council with Chairman… c) a CEO… (3) The Chairman shall be elected by two third of the majority….
	PPL	Yes
	ISRA	Yes
United States	ASCAP	Yes	N/A
	BMI	Yes, management
	SESAC	Appointment of CEO announced under 'News' section.[20] No other members found
	SoundExchange	Yes
	HFA	Yes
United Kingdom	PPL UK	Yes	Copyright (Regulation of Relevant Licensing Bodies) Regulations, 2014 requires the procedure for appointment of Directors, and the list of remuneration of the Directors to be included in the Annual Report.
	PRS for Music	Yes

User Categories

The categorization of users simply allow potential licensees to understand when they would be legally required to purchase a music license given the scope and scale of their business/usage. User categories can range from restaurants, internet streaming, radio broadcasting, and live performance; to the physical reproduction of a musical composition or sound recording (for example through photocopying of sheet music or burning of CDs).

All CMOs identified had user categories displayed on the websites, with some presenting the distinctions through search options while others outlined usage types as a general list. Only India's Copyright Rules mandated the publishing of different categories of users as part of their tariff scheme.
U.S.'s HFA did not not distinguish licensing requirements by user type, but did communicate when a license would be needed through simple questions regarding usage.

Country	CMO	User categories Available on Website?	Regulation?
India	IPRS	Yes	According to Rule 56 of the Copyright Rules, 2013, it is mandatory for Indian CMOs to publish on their website the different categories of users in their Tariff Scheme
	PPL	Yes
	ISRA	Yes
United States	ASCAP	Yes	N/A
	BMI	Yes, Search bar for user types available
	SESAC	Yes
	SoundExchange	Yes
	HFA	Not specifically, but section on 'What kind of license do I need' delineates user types
United Kingdom	PPL UK	Yes	N/A
	PRS for Music	Yes

Tariff Rates

Tariff rates are the costs of licenses issued by the CMOs. The calculation of these rates are done in a myriad of ways, ranging from being fixed by statutory provisions, set collectively by CMOs, or negotiated privately in a willing buyer-willing seller market. Some rate-setting considerations have included anticipated number of listeners, physical size of establishment, time of music use, number of loudspeakers, etc. Due to similarities in mode and scale of usage, most fixed tariff rates such as blanket licenses offered by CMOs are distinguished by different categories of users, most fixed tariff rates are divided accordingly.

In a market like the U.S. where CMOs compete to sublicense similar kinds of rights, publishing tariff rates can enable comparison of licensing fees for the most cost effective choice.[21] It can also allow users to forecast licensing expenses and adjust their business models or anticipated usage accordingly. Lastly, transparent cost calculations as opposed to hidden negotiated rates can prevent price and user discrimination, since licensees can verify the accuracy of their license charge.

In India, IPRS and ISRA complies to Rule 56 (2) of the Copyright Rules 2014 which mandates the publication of rates distinguished by categories of users, mode of exploitation, user group, durations of use, and territory. In U.K., both CMOs comply with Section 5(c) of their Copyright Regulations 2014 which mandates the publication of 'tariff rates in a uniform format' on the website as part of the monitoring and reporting requirements. In the U.S., all CMOs with the exception of ASCAP publish their tariff rates.

Although the U.S. does not seem to mandate the explicit disclosure of rates, both U.S. and India set statutory rates for certain uses of sound recordings. In the U.S. for example, the rates for ephemeral sound recordings akin to non-interactive, radio-like services are set by the Copyright Royalty Board under S17 USC 112 and 114. Similarly, in India, a statutory rate is also fixed by the Copyright Board for radio broadcasting.

As an anticompetitive measure, music consent decrees in the U.S. also mandate that ASCAP and BMI provide licenses on equivalent, non exclusive terms. This means that while its members can still individually refrain from joining a CMO in its entirety, partial withdrawing of their works from blanket licenses are not allowed.[22]

Despite fairly affordable statutory rates for use in non-interactive services, interactive streaming which seeks to host popular content often still requires direct licensing agreements from major record label conglomerates. Due to the importance of acquiring that content, these labels are often able to negotiate exclusive deals with hidden terms. Evolving music consumption patterns and an inconsistent rate-setting landscape have raised grievances, particularly amongst songwriters. In the U.S., this has led to the Copyright Office's review and reconsideration of the music licensing landscape in recent months, while in India, the cost of content acquisition remain a source of debate by the services.

Country	CMO	Tariff Rates Available on Website?	Regulation?
India	IPRS	Yes, listed as per usage types	Section 33A of the Copyright Act, 1957 and Rule 56 of the Copyright Rules, 2013: ...must indicate separate for categories of users, media of exploitation, user group, durations of use and territory, etc.
	PPL	No
	ISRA	Yes
United States	ASCAP	No, must request	No regulation mandating the disclosure of tariff rates. Consent decrees for BMI/ASCAP as an anticompetitive measure mandates offering of licenses to services on equivalent, non exclusive terms. Statutory rates set by the Copyright Royalty Board under 17 U.S.C. 112 and 114.
	BMI	Yes
	SESAC	Yes
	SoundExchange	Yes
	HFA	Yes, rate charts published[23]
United Kingdom	PPL UK	Yes	The Copyright (Regulation of Relevant Licensing Bodies) Regulations 2014 Section 5 of its Specified Criteria mandates 'provide details of tariffs in a uniform format on its website.
	PRS for Music	Yes

Royalty distribution policy

The royalty distribution policy typically outlines the process and manner of royalty distribution, specifying how royalty is split between member-rights holders and the CMO. It usually notes the frequency of payments as well. Since one of the main reasons a rights-holder seeks membership within a CMO is to ensure their royalties are received on a consistent basis without themselves having to track down all users of their work, a transparent distribution policy is of utmost importance.

In India, IPRS and ISRA published the distribution policy on their website in compliance with Rule 58 of the Copyright Rules. Upon review of both, it was interesting to note the lack of detail in India's policies. Although it is specified in the Act, ISRA does not convey on its website clearly the distribution of percentages, nor the administrative cut it seeks to take. IPRS was very unclear about their frequency of payments, noting that "The distribution of Royalties shall be carried out promptly from time to time", despite the Copyright rules stipulating that the frequency be set at every quarter.

In the U.S., S . 370.5 (c )of the Code of Federal Regulations for statutorily set sound recordings do state that online-published Annual Reports must have information on how royalties are collected, distributed, and spent as administrative expenses. All CMOs seem to comply.

In the UK, Section 6 of the 2014 Copyright Regulations Specified Criteria mandates reporting of the distribution policy in its annual report. Both identified CMOs comply.

Country	CMO	Royalty Distribution Policy Available on Website?	Regulation?
India	IPRS	Yes, although quite vague, unclear frequency of payments[24]	Rule 58 of the Copyright Rules 2013 outline the terms of the Royalty Distribution Policy
	PPL	No
	ISRA	Yes, but vague, unclear re: distribution of percentages and administrative deduction.
United States	ASCAP	Yes, it outlines exactly how it is calculated	For designated collection and distribution companies for use of sound recordings under statutory licenses: S . 370.5 ( c ) of the Code of Federal Regulations , as part of the annual Report, Collectives must indicate how royalties are collected and distributed.
	BMI	Yes, in the Royalty Policy Manual
	SESAC	Yes
	SoundExchange	Yes
	HFA	Yes, rate charts[25] and commission rates revealed.
United Kingdom	PPL UK	Yes	The Copyright (Regulation of Relevant Licensing Bodies) Regulations 2014 Section 6 Reporting Requirements of its Specified Criteria mandates the publishing of the distribution policy in its annual report.
	PRS for Music	Yes

Annual revenue report

The annual revenue report provides an overview of total income, which is particularly important for a CMO acting as a non-profit organization. Rightsholders can assess what the rest of the revenue is being used for, and cross-verify whether the self-reported data is true. For market and policy researchers, the annual revenue report can also provide the breakdown of which licensing services or catalogs are being used. An externally audited revenue report also enhances trust in the organization and ensures reliable financial transparency. Thus, the publication of the annual revenue report forms one of the most important benchmarks of transparency.

In India, only IPRS has published their 2013-14 annual revenue report in compliance with Rule 66 of the Copyright Rules which mandates the publishing of an annual report and audited accounts on their website. None of the other CMOs seem to have done this.

In the United States,S . 370.5 (c ) of the Code of Federal Regulations mandates that CMOs collecting and distributing for statutorily licensed sound recordings must publish their annual revenue report. CMO SoundExchange complies, while HFA does so voluntarily. ASCAP and BMI also post their reports on occasion with a few years missing, but SESAC's report seems to be absent, possibly due to private incorporated company status.

In the UK, both CMOs comply with the 2014 Copyright Regulations under Rule 6 mandating the publication of an annual report.

Country	CMO	Annual Revenue Report Available on Website?	Regulation?
India	IPRS	Yes, for year '13-'14	Rule 66 of the Copyright Rules, 2013, CMOs mandate the publishing of an annual report and audited accounts on their website.
	PPL	No
	ISRA	No
United States	ASCAP	Yes, until 2013	For designated collection and distribution companies for use of sound recordings under statutory licenses: S . 370.5 ( c ) of the Code of Federal Regulations .
	BMI	Sporadically posted
	SESAC	No (possibly because privately held company?)
	SoundExchange	Yes
	HFA	Yes
United Kingdom	PPL UK	Yes, until 2013	In UK, the Copyright (Regulation of Relevant Licensing Bodies) Regulations, 2014 under Rule 6 requires that every CMO publish an annual report containing the annual financial statements, collections from the different licenses and the distribution of royalties.
	PRS for Music	Yes, until 2014

Percentage of Revenue as Distributed Royalties

Given the main function of CMOs are to secure royalties for rights-holders, the percentage of revenue as distributed royalties was calculated using numbers from the latest published annual revenue reports. Although there are differences in CMO mandates and subsequently their investment on litigation and advocacy for example, the proportion of revenue as distributed royalties was used as a simplified proxy of effectiveness for this review. [26]

For those CMOs who published their annual revenue reports, it was found that the percentage of revenue as distributed royalties seemed to range between 80-90%. Given the controversies surrounding collecting societies in India, it was admittedly surprising that IPRS' distributed royalty percentage averaged almost 1% higher than comparable societies in the UK. It is also interesting that the United States seem to have the most efficient CMOs, with two rounding to 90%.

Country	CMO	Data reported on Website	Percentage of Revenue as Distributed Royalties
India	IPRS	From 2013/14 annual revenue report: Net royalties payable: Rs 396743413 / License fees total revenue Rs 470934348:	0.84246013204 = 84.25%
	PPL	N/A	N/A
	ISRA	N/A	N/A
United States	ASCAP	Self reported 88cents/dollar goes back to artists. 2014 Revenue Report: Total receipts: 945 385 Total distribution to members: 850 984	850 984/945 385 = 0.90014544339 90.01%
	BMI	Self reported numbers from press release: "For the fiscal year ending June 30, 2012, BMI reported revenues of $898.7 million and royalty distributions to our affiliates totaling $749.8 million."	749.8 / 898.7 = 0.83431623456 83.43%
	SESAC	N/A
	SoundExchange	Self reported from pre-audit 2013 fiscal report[27]: Total Royalties Collected $656 Total gross distributions $590	590 / 656 = 0.8993902439 89.94%
	HFA	N/A but self reported 11.5% commission[28]	N/A
United Kingdom	PPL UK	Self reported from 2013 financial statement:[29] Total license fee income: £176.9 m Net distributable revenue: £148.4m	0.83889202939 83.89%
	PRS for Music	Self-reported from 2014 annual revenue report[30]: Our royalty revenues for the year were £664.3m, of which we distributed £565.6m to members.	565.6/664.3 = 0.85142255005 85.14%

LIMITATIONS & LEARNINGS

The major limitation of this review is rooted in its various methodological weaknesses, ranging from the sampling of countries, inclusion of ambiguous CMOs, possible bias towards Indian copyright law during the parameter design, limitations of distributed royalties percentage as an effectiveness proxy, lack of measurable factors when attempting to evaluate 'ease of website use', and somewhat shallow legal research. Nevertheless, these were part and parcel of the learnings which stemmed from this review.

Limitations in Country Selection Process

The selection of countries to be assessed was not very methodologically sound. After further literature review, it seems a more representative sample could have been selected. Dr. Fabrice Rochelandet in his 1996 conference paper ' Are Collecting Societies Efficient? An evaluation of collective administration of copyright in Europe' categorized legal supervision systems in the following spectrum: lack of control, control at request, setting up control, permanent control, and extreme control. [31]

Rochelandet (1996) identifies UK as having 'control at request' since decisions surrounding operations are generally left up to the CMO themselves, exemplified by the freedom to develop their own functioning and code of practices, which then must be approved. Control at request is also demonstrated by rights-holder members ability to procure certain documentation upon request, and call upon the tribunals for dispute resolution if desired.

Using this taxonomy, India would likely span across 'setting up control', 'control at request', and possibly 'permanent control'. Setting up control is fitting since the 2012 Copyright Amendment mandates the registration of any organization in the business of issuing and granting licenses for underlying musical works (composition and lyrics) as a 'copyright society'. Typically this requires extensive documentation on procedural and governance matters, most of which is predetermined in detail in the 2012 Copyright Act and 2014 Rules. Permanent control may also apply since the Central Government has powers to cancel the registration of any copyright society and legally cease its functioning. Additionally, quite substantial regulations determine rate setting process and even calculation, as well as distribution of royalties. Lastly, control at request may also be fitting since similar to the UK system, an internal dispute resolution is legally mandated. However, any dispute can also be brought to the quasi-judicial Copyright Board if unable to settle matters internally.

The United States appears as if it would deviate from former examples of more involved legal supervision since it would likely be characterized by 'lack of control'. Few requirements exist regarding specific operations of licensing bodies, with the exception of rate setting for ephemereal sound recordings and anticompetitive consent decrees, the U.S. does provide a contrasting comparative system.

Although these examples do span across part of the spectrum of legal control, a future case study country could include one which mandates complete control such as in the case of Italy with a single state granted monopolist or New Zealand in which a single clearance license is offered to reduce complexity and transaction costs for music users.[32]

Limitations of CMO Identification

Throughout the methodology design, one of the main challenges was deciding which CMOs to include in the review. Due to lack of in-depth knowledge of U.S. and U.K.'s music licensing space, the initial survey and selection included bodies irrelevant to music licensing specifically. Due to the ambiguity in India, all organizations who were involved in some form collective licensing were initially included, including private entities like Novex Communications, and the South Indian Music Companies Association, due to their seeming similarities in functioning. However, they were eventually excluded in the final review to include only those which have received registered society status, or are currently registered as such.

There was also a lack of distinction made between licensing bodies specifically managing underlying works like music composition and lyrics, sound recording (phonographic rights), and performance rights. Although interesting insights may have been able to be drawn between similarly managed members and rights, the disaggregated rights management in the U.S. made these categorizations and comparisons challenging.

Part of the confusion stemmed from the vast variety of CMO systems and characteristics. Ficsor (2003) distinguishes these differences from four varying viewpoints: the level of collectivization, rights' owners freedom of choice, scope of rights and rights-owners covered, and the freedom of CMOs to set rates and other licensing terms.[33] The level of collectivization range in terms of representation, authorization, and even distribution of royalties/returns. The freedom of rights owners' have range in the ability to choose joint management of rights, or even which CMO to manage their rights -- assuming the option is not restricted by their respective copyright laws. The scope of rights and rights owners covered by a CMO varies from exclusively managing its own members rights, occasionally managing other members rights, and occasionally managing all similar members rights with no ability to opt out. Lastly, the freedom of CMOs to set rates and licensing terms range from free negotiations with the possibility of an arbitration body, to legally fixed predetermined rates and conditions.

The tremendous variety of CMO characteristics and the lack of bright lines in defining control factors for this review's selection meant that major music publishers, music services who directly issue payment, and even content aggregators who collate and distribute works for a certain fee could have been included. However, the decision to include only those officially recognized and legally registered as CMOs enhanced the feasibility of this review.

Limitations of Parameter Selection

While reviewing the parameters for transparency, it soon became clear that there were several limitations to the information identified. These include heavy influence in its development from India's context and legal provisions, an assumed value in transparency for transparency's sake, lack of specificity when surveying 'ease of website use', overly simplified proxy for efficiency measurement, a relatively shallow review of the law, and lack of assessment of membership data.

While selecting the comparative parameters, the process of developing a feasible transparency proxy may have been tilted towards the context and legal developments of India. This appeared to be the case when the first round of data collection was inconsistent with further reviews due to what appeared to be differences in the terms being sought - terms used in the Indian Copyright Act - rather than the substance of the content. This is indicative of how India's laws heavily influenced the development of the parameters.

Exposure to mistrust and lack of data in the Indian context may have also led authors to a somewhat presumed ideal of transparency for transparency's sake, implying in a weak correlation between publicly available information, the more effective the website and possibly the CMO . However, Schroff (2014) noted that information overload could occur if a potential licensee is uncertain what they are looking for.[34] From an efficiency point of view, search costs may actually decrease if less information is provided upfront, but better presented in more accessible language and format to guide the user to the relevant information.

Following review of the websites for a list of members, it appears that a more fruitful parameter may have been the publication of actual works and affiliated creators, rather than only the rights-holder members themselves. A grievance occasionally raised is the lack of recognition of composers and producers within a song, since it is typically the singer (or in the case of Indian film music, the actor and the film) who the audience associates with the work. Thus, a full repertoire list could be a useful addition for Indian websites to consider.

The selection of governing directors as a marker of transparency may have also been influenced by India's recent concerns surrounding copyright societies' leadership. Although it is a useful indicator, private, for-profit CMOs which have exclusive membership does not necessarily have the same burdens of a compulsory collective licensing scheme in which representation is necessary. What may be more useful for members is ensuring a dispute resolution process is easily accessible so that any grievances can be taken up through proper channels.

Identifying a relatively simple proxy for effectiveness and efficiency was also challenging. Many CMOs in their annual reports highlighted figures such as 'administrative costs', 'operation costs', 'cost to income ratios', and other similar indicators to report expenses outside of royalty licensing, collection, and distribution. However, due to differences in calculations, a simplified proxy was developed to assess the effectiveness of their core purpose of royalty distribution. However, this calculation does not account for absolute sums, year on year growth, taxation, and other non-monetary benefits. In addition, the differing years, geographies, and class of works makes comparison not very methodologically sound.

The authors had initially included 'ease of website use' as part of the review. However, this parameter was not very clearly developed and defined, and thus reviewed subjectively by different research assistants with varying assessments. Nevertheless, closer attention was paid to web design and user interface to enable greater efficiency in searching for relevant information. Future assessments could measure the number of clicks or amount of time it takes to find a certain piece of oft-sought information.

The assessment of each country's relevant laws was based on whether reporting the information online was mandated by law. However, throughout the exercise it soon became clear that beyond reporting standards, more interesting distinctions such as the level of control and specificity to which the law sought to determine functioning and operations of the CMOs. Although this was briefly touched upon throughout the review, further research should be explored in this area.

Lastly, data the authors did not seek due to logistical limitations were membership-exclusive information. Recent complaints about royalties of streaming services have resulted in the publishing of
numerous HFA and SoundExchange royalty reports by their rights-owners. These reports outline the services and songs from which they have received their royalties, allowing for more informed debate and discussion of royalty payouts and business models of the various digital services. Ongoing research surrounding copyright management in India have found that detailed reports on how royalty was calculated, or from which works/services they were generated are often absent upon receipt of their royalty cheques.

CONCLUSIONS

Despite India's strict legal provisions and control regarding registration, operations, rate setting, and reporting, it appears there is little enforcement and even less compliance, particularly by Phonographic Performance Limited which failed to report tariff rates, royalty distribution policy, and its annual revenue report. The Indian Singers Rights Association published all parameters sought with the exception of their annual revenue report, leaving authors without data needed to calculate the percentage of distributed royalty. The Indian Performing Rights Association provided all information sought in this review, with an 84.25% of revenue as distributed royalties as calculated from its 2013/14 annual revenue report.

Relative to India, CMOs in United Kingdom were regulated less strictly, allowing self-developed codes of conduct providing adherence to certain broad guidelines on operations and reporting. It appears the government only imposes rules in the absence of adequate self-regulation. U.K.'s Phonographic Performance Limited displayed all six indicators sought, with 83.9% as distributed revenues from its 2013 financial statement. PRS for Music did not make its members list and repertoire open to the general public, but did publish all other parameters with 85.1% of distributed revenues as calculated from its 2014 annual revenue report.

To the authors' knowledge, the U.S. has the least operations regulation for CMOs with the exception of reporting laws for those issuing statutory licenses. Anticompetitive consent decrees also prevent partial withdrawal from blanket licenses to ensure non-discrimination towards select services. Despite relaxed regulation, BMI and SoundExchange reported all identified parameters, while ASCAP and HFA reported five, with SESAC only having four. ASCAP, Sound Exchange, and BMI were the only ones to have published their annual revenue report, with percentage of revenue royalty calculated to 90.0%, 89.9%, and 83.4% respectively.

It is important to reiterate however that information transparency demonstrated by CMOs website does not necessarily indicate effectiveness. Though not necessarily the most accurate indicator, there appeared no significant correlation between the percentage of distributed royalties, and amount of information found. All three countries have recently, or are currently undergoing regulatory reviews and reform to enhance copyright management. India's Copyright Amendment Act and Copyright Rules was a response to allegations of corruption and collusion of copyright societies. The legal status of certain CMOs and other private authorized agents not included here are ambiguous. Though they seem to function similarly to private CMOs in the US, whether they will be obliged to comply with copyright societies regulation is uncertain. The United States' Copyright Office has recently undergone a major study of the music licensing landscape. One of the major grievances highlighted was the disparity between negotiated sound recording rates and statutory rates of licenses for works of composers and publishers for the rapidly growing use of internet radio streaming. This disparity is furthered by the aforementioned Consent Decrees. In early 2014, the European Commission had also adopted the Collective Rights Management Directive with the main objectives of increasing transparency and efficiency of CMOs, and to facilitate cross-border licensing for music online. Thus, transparency and increased effectiveness of CMOs particularly in light of the digital age are being made a priority within legislation; and hopefully, in execution as well.

Recommendations

Through reviewing other CMO websites, a few learnings were found which could be adopted by Indian CMOs for enhanced transparency and effectiveness:

Publish a full repertoire of works the CMO is authorized to license with corresponding rights holder information. This recommendation stems from other CMO websites which present their administrable works in a searchable database, allowing users the ability to efficiently identify whether the work they seek to use are covered by the license.
Provide a platform for collectively identifying the due rights-holder of orphan works. This recommendation was a feature found in several other websites which lost contact with the rights holder through failure to update ownership information in the case of rights transfer, changes in contact details ,passing of the original author, unknown inheritance, and more.
Guide new users and potential members through a more user-friendly designed page with simplified, accessible introduction to music licensing. As exemplified by the layout of other websites, the webpage could be subdivided between information useful for prospective or current licensees, and prospective or current member rights-holders. Basic questions framed in accessible language can guide the website user to the correct information.
Increase clarity surrounding royalty distribution policies. During the review, IPRS and ISRA's royalty distribution scheme were noticeably vague. Although ISRA noted the most crucial elements, certain details like how "reliable statistical data" were to be procured and calculated in the case of missing log sheets was absent. IPRS was even more obscure, noting their frequency of royalty distribution would occur "promptly, from time to time."
Publish updated annual revenue reports. This document is probably one of the key indicators of how a CMO is doing financially, and it is important that these are made available so CMOs remain transparent and accountable to its rights-holder members and users.
Clarify dispute resolution processes. This is important particularly for those jurisdictions which do not allow much choice, if at all, between various institutions and rate-setting processes. Membership and representation would ideally provide and promote proper channels for raising and addressing grievances prior to seeking legal remedies.

Further Questions

Although a few insights were found through this review, the numerous limitations indicate a better designed exercise asking different, more nuanced questions may uncover some more fruitful conclusions. Future research could explore membership-exclusive data, and how reporting is presented across CMOs. From a legal standpoint, a more detailed analysis of regulations across different jurisdictions may shed light on different international standards of transparency and reporting. Additionally, given that the highest percentage of distributed royalties were from CMOs based in the U.S., the correlation leads to the question of whether more relaxed reporting requirements, or perhaps a competitive CMO structure can actually contribute to increased effectiveness? Lastly, given the increasingly complex licensing environment and continued creation of rights due to technological innovations, the feasibility of this system to monitor and finance music should be questioned as well. Further research on alternative compensation schemes considering tax-based, or patron-based financing will increasingly become more feasible and important systems to explore.

WORKS CITED

Agarwal, Devika. "After IPRS, PPL next to Claim It Is Not a 'Copyright Society.'" SpicyIP, n.d. http://spicyip.com/2015/03/after-iprs-ppl-next-to-claim-that-it-is-not-a-copyright-society.html.
Andrew. "Transparency and the Collective Management Organisations." CREATe, October 1, 2014. http://www.create.ac.uk/blog/2014/10/01/transparency-and-the-collective-management-organisations.
ASCAP. "Ascap Clearance Express (ACE) Search." ASCAP We Create Music, n.d. https://www.ascap.com/Home/ace-title-search/index.aspx.
Basheer, Shamnad. "Indian Copyright Collecting Societies and Foreign Royalties: Whither Transparency?," November 18, 2008. http://spicyip.com/2008/11/indian-copyright-collecting-societies.html.
BMI. "BMI Search." BMI, n.d. http://www.bmi.com/search.
Centre for Internet and Society. "Research Proposal: Pervasive Technologies: Access to Knowledge in the Marketplace.," n.d. http://www.google.com/url?q=http%3A%2F%2Fcis-india.org%2Fa2k%2Fpervasive-technologies-research-proposal.pdf&sa=D&sntz=1&usg=AFQjCNF4hnAUXGIRMcUozZfs5QOFwvO55A.
FICCI & KPMG. "The Stage Is Set: FICCI-KPMG Indian Media and Entertainment Industry Report 2014." Industry Report. FICCI-KPMG, 2014. https://www.kpmg.com/IN/en/Topics/FICCI-Frames/Documents/FICCI-Frames-2014-The-stage-is-set-Report-2014.pdf.
Ficsor, Mihali. Collective Management of Copyright and Related Rights. Geneva: WIPO, 2002. http://www.wipo.int/edocs/pubdocs/en/copyright/855/wipo_pub_855.pdf.
Future of Music Coalition. "ASCAP - BMI Consent Decrees." Future of Music Coalition, October 3, 2014. https://futureofmusic.org/article/fact-sheet/ascap-bmi-consent-decrees.
Harry Fox. "Songfile Search." Songfile, n.d. https://secure.harryfox.com/songfile/termsofuse/publictermsofuse.do.
HFA. "HFA Commission Rates." HFA, n.d. https://www.harryfox.com/publishers/commission_rate.html.
---. "Rate Charts," 2014. https://www.harryfox.com/find_out/rate_charts.html.
Huang, Maggie. "Copyright Management in the Age of Mobile Music," December 26, 2014. http://cis-india.org/a2k/blogs/copyright-management-in-age-of-mobile-music.
IPRS. "Distribution Scheme As Per 17-5-2013." Indian Performing Right Association, 2012. http://www.iprs.org/cms/IPRS/DistributionScheme.aspx.
---. "The Indian Performing Right Society Limited.," n.d. http://www.iprs.org/cms/.
ISRA. "About ISRA." ISRA Copyright, n.d. http://isracopyright.com/about_isra.php.
Philipes, Richard Hayes. "How One Independent Musician Defeated BMI." Woodpecker.com, 2003. http://www.woodpecker.com/writing/essays/phillips.html.
PPL. "About Us." Phonographic Performance LImited, n.d. http://www.pplindia.org/aboutus.aspx.
---. "PPL Member/Label Search," n.d. http://repsearch.ppluk.com/ars/faces/pages/licenseSearch.jspx?_afrWindowMode=0&_afrLoop=6609527708771000&_adf.ctrl-state=17ajb42h7o_4.
PPL UK. "Annual Review 2014." Annual Revenue Report, 2014. http://www.ppluk.com/Documents/Annual%20reviews/PPL_Annual_Report_2014.pdf.
PRS for Music. "PRS for Music 2014 Review." Annual Review, 2014. https://www.prsformusic.com/SiteCollectionDocuments/About%20MCPS-PRS/financial-results/prs-for-music-financial-review-2014.pdf.
Reddy, Prashant. "Did the Big Music Companies on IPRS & PPL Collude to Deny Lyricists and Composers Crores of Rupees in 'Ringtone Royalties? - An Investigation." Http://spicyipindia.blogspot.in/2011/02/did-big-music-companies-on-iprs-ppl.html. Spicy IP, February 14, 2011. http://spicyipindia.blogspot.in/2011/02/did-big-music-companies-on-iprs-ppl.html.
Reid, Harvey. "ASCAP & BMI - Protectors of Artists or Shadowy Thieves?" Wooedpecker.com, 1993. http://www.woodpecker.com/writing/essays/royalty-politics.html.
SESAC. "Repertory Seearch." SESAC, n.d. https://www.sesac.com/repertory/RepertorySearch.aspx?x=100&y=22.
---. "SESAC Announces the Appointment of John Josephson as Chairman and CEO of SESAC," July 31, 2014. http://www.sesac.com/News/News_Details.aspx?id=2109.
Smirke, Richard. "U.K. Music Industry Sets Trade Mission to India." Billboard, September 4, 2014. http://www.billboard.com/articles/business/6243633/ukti-aim-bpi-trade-mission-india-mumbai.
Sound Exchange. "Sound Exchange Draft Annual Report 2013." Annual Report. Sound Exchange, 2013. http://www.soundexchange.com/wp-content/uploads/2014/03/2013-Fiscal-Report-PRE-AUDIT.pdf.
Stopps, David. "How to Make a Living from Music." Creative Industries. WIPO, 2013. http://www.wipo.int/edocs/pubdocs/en/copyright/939/wipo_pub_939.pdf.

[1] FICCI & KPMG. "The Stage Is Set: FICCI-KPMG Indian Media and Entertainment Industry Report 2014." https://www.kpmg.com/IN/en/Topics/FICCI-Frames/Documents/FICCI-Frames-2014-The-stage-is-set-Report-2014.pdf

[2] Centre for Internet and Society. "Research Proposal: Pervasive Technologies: Access to Knowledge in the Marketplace.," http://www.google.com/url?q=http%3A%2F%2Fcis-india.org%2Fa2k%2Fpervasive-technologies-research-proposal.pdf&sa=D&sntz=1&usg=AFQjCNF4hnAUXGIRMcUozZfs5QOFwvO55A.

[3] Huang, Maggie. "Copyright Management in the Age of Mobile Music," December 26, 2014. http://cis-india.org/a2k/blogs/copyright-management-in-age-of-mobile-music.

[4] Reddy, Prashant. "The Background Score to the Copyright (Amendment) Act." NUJS Review 5, no. 4 (2012). http://nujslawreview.org/wp-content/uploads/2015/02/01_prashant.pdf.

[5] Smirke, Richard. "U.K. Music Industry Sets Trade Mission to India." Billboard, Sept 4, 2014. http://www.billboard.com/articles/business/6243633/ukti-aim-bpi-trade-mission-india-mumbai.

[6] IPRS. "The Indian Performing Right Society Limited.," http://www.iprs.org/cms/.

[7] PPL. "About Us." Phonographic Performance LImited, n.d. http://www.pplindia.org/aboutus.aspx.

[8] ISRA. "About ISRA." ISRA Copyright, n.d. http://isracopyright.com/about_isra.php.

[9] Agarwal, Devika. "After IPRS, PPL next to Claim It Is Not a 'Copyright Society.'" SpicyIP, Mar 30 2015. http://spicyip.com/2015/03/after-iprs-ppl-next-to-claim-that-it-is-not-a-copyright-society.html.

[10] Reid, Harvey. "ASCAP & BMI - Protectors of Artists or Shadowy Thieves?" Wooedpecker.com, 1993. http://www.woodpecker.com/writing/essays/royalty-politics.html.

[11] Basheer, Shamnad. "Indian Copyright Collecting Societies and Foreign Royalties: Whither Transparency?," November 18, 2008. http://spicyip.com/2008/11/indian-copyright-collecting-societies.html.

[12] Philipes, Richard Hayes. "How One Independent Musician Defeated BMI." Woodpecker.com, 2003. http://www.woodpecker.com/writing/essays/phillips.html.

[13] ASCAP. "Ascap Clearance Express (ACE) Search." ASCAP We Create Music, https://www.ascap.com/Home/ace-title-search/index.aspx.

[14] BMI. "BMI Search." BMI http://www.bmi.com/search.

[15] SESAC. "Repertory Seearch." SESAC, https://www.sesac.com/repertory/RepertorySearch.aspx?x=100&y=22.

[16] Harry Fox. "Songfile Search." Songfile,

https://secure.harryfox.com/songfile/termsofuse/publictermsofuse.do.

[17] PPL. "PPL Member/Label Search," http://repsearch.ppluk.com/ars/faces/pages/licenseSearch.jspx?_afrWindowMode=0&_afrLoop=6609527708771000&_adf.ctrl-state=17ajb42h7o_4.

[18] Reddy, Prashant. "Did the Big Music Companies on IPRS & PPL Collude to Deny Lyricists and Composers Crores of Rupees in 'Ringtone Royalties? - An Investigation." http://spicyipindia.blogspot.in/2011/02/did-big-music-companies-on-iprs-ppl.html. Spicy IP, Feb 14 2011.

[19] Stopps, David. "How to Make a Living from Music." Creative Industries. WIPO, 2013. http://www.wipo.int/edocs/pubdocs/en/copyright/939/wipo_pub_939.pdf.

[20] SESAC. "SESAC Announces the Appointment of John Josephson as Chairman and CEO of SESAC," July 31, 2014. http://www.sesac.com/News/News_Details.aspx?id=2109.

[21] Although it is important to note that each work can only be registered exclusively to one society, so the catalogs won't be identical.

[22] Future of Music Coalition. "ASCAP - BMI Consent Decrees." Future of Music Coalition, October 3, 2014. https://futureofmusic.org/article/fact-sheet/ascap-bmi-consent-decrees.

[23] HFA. "Rate Charts," 2014. https://www.harryfox.com/find_out/rate_charts.html.

[24] IPRS. "Distribution Scheme As Per 17-5-2013." Indian Performing Right Association, 2012. http://www.iprs.org/cms/IPRS/DistributionScheme.aspx.

[25] HFA. "Rate Charts," 2014. https://www.harryfox.com/find_out/rate_charts.html.

[26] However, it is important to note the major limitations of these numbers in making any sort of conclusions due to data acquired from different years, varying geographies, without accounting for differing mandates and non-royalty collection activities. More reflections on this in the Limitations and Learnings Section

[27] "Sound Exchange Draft Annual Report 2013." Annual Report. Sound Exchange, 2013. http://www.soundexchange.com/wp-content/uploads/2014/03/2013-Fiscal-Report-PRE-AUDIT.pdf.

[28] "HFA Commission Rates." HFA, https://www.harryfox.com/publishers/commission_rate.html.

[29] PPL UK. "Annual Review 2014." Annual Revenue Report, 2014. http://www.ppluk.com/Documents/Annual%20reviews/PPL_Annual_Report_2014.pdf.

[30] PRS for Music. "PRS for Music 2014 Review." Annual Review, 2014. https://www.prsformusic.com/SiteCollectionDocuments/About%20MCPS-PRS/financial-results/prs-for-music-financial-review-2014.pdf.

[31] Rochelandet, Fabrice. "Are Copyright Collecting Societies Efficient? An Evaluation of Collective Administration of Copyright in Europe." Universidad Autónoma de Madrid, 2002.

[32] Resnikoff, Paul. "New Zealand Invents the 'Single Music License' for ALL Performances…." Digital Music News, September 30, 2013. http://www.digitalmusicnews.com/permalink/2013/09/30/newzealand.

[33] Ficsor, Mihali. Collective Management of Copyright and Related Rights. Geneva: WIPO, 2002. http://www.wipo.int/edocs/pubdocs/en/copyright/855/wipo_pub_855.pdf.

[34] Andrew. "Transparency and the Collective Management Organisations." CREATe, October 1, 2014. http://www.create.ac.uk/blog/2014/10/01/transparency-and-the-collective-management-organisations.

For more details visit http://editors.cis-india.org/a2k/blogs/comparative-transparency-review-of-collective-management-organisations-in-india-uk-usa

Beyond Alcohol and Angel Investors: Building Business Models in an Age of Mobile Music Streaming (Conference Learnings)

maggie — 2015-02-23T12:39:36Z

This blog post is the first of a series of blogs to document, synthesize, and analyze learnings from attending various music industry trade conferences. This first post introduces the research question, and highlights learnings about the various business models which can be accessible via the mobile, and broadly how the music industry is attempting to respond to monetization challenges.

Introduction

The Pervasive Technologies: Access to Knowledge in the Marketplace project is conducting research on access to the mobile phone hardware, software, and content in the context of the intellectual property regimes in India and China. This chapter focuses on access to music content via the mobile phone in India with a particular focus on copyright law.

Following preliminary research, it was identified that the copyright organizing institutions in India lacked legitimacy amongst stakeholders within the music industry. For the purposes of this research, these institutions include the Copyright Act, the Copyright Board, and the copyright societies. Collectively, these institutions have received constitutionality petitions, corruption allegations, and critiques of overall ineffectiveness in regulating and balancing music copyright for the maximal benefit to society. This is of particular importance in light of new modes of digital music distribution technologies (such as mobile phones, and music streaming platforms) which have resulted in a tremendous increase in music consumption but simultaneous decrease in revenue. This is in part due to new business models for music streaming services, and the increasing complexity of music copyright and licensing management in the digital content industries.

1) How have evolving music distribution technologies accessible via the mobile phone impacted business models and licensing practices amongst stakeholders in the digital music industry?

2) What are the specific copyright challenges for each stakeholder in the digital music distribution chain? How can the copyright institutions provide for a more effective regulation and regulation of music in India?

The research methodology1 includes a series of expert interviews whose participants were identified by attending the following key music industry trade conferences in India, and remotely attending in the relevant conferences abroad:

1) 6th MixRadio Music Connects Conference in Mumbai ("MRMC")2

2) The Exchange UK Conference ("Exchange")

3) Indiearth Independent Music, Film, and Media Xchange Conference ("Indiearth XChange")

4) Future of Music Coalition Policy Summit (remote attendance) ("FMC")3

5) San Francisco Music Tech Summit (remote attendance) ("SFMT")4

This first post will highlight learnings from the above conferences5, primarily to respond to the question: What business models for digital music distribution exist in the market today? How is music production financed today? The question of how each industry stakeholder is responding to monetization challenges will also be explored. The main findings documented are mainly sourced from the MRMC and IndiEarth Xchange conferences due to their focus on India and its unique, context-specific challenges.

"India should stop chasing and build business models. We are already ahead... being a mobile-first market... now must lead by learning from our rich cousins - the film and television industry. " - Sridhar Subramaniam, CEO, Sony Music India⁶

Business models and monetization seemed to be the key buzz words at the 6th annual MixRadio Music Conference held in Mumbai, with industry veteran Sridhar Subramaniam, CEO Of Sony Music India giving the opening keynote speech 'How the Industry Stands Today?'. Despite Vijay Lazarus, Secretary of the Indian Music Industry preceding the keynote with a welcome speech warning of piracy as the biggest barrier to monetization. Subramaniam seemed much more optimistic, declaring 2016 as the 'year of music' despite a 10% decline in the former year due to decreased subscription in c first aller ring-back tunes 7. This was in part due to his belief that India was ahead of the game -- being a mobile-market amidst a global trend of mobile music convergence through streaming-based music consumption. Given India's increasing preference for music access in this form, Subramaniam suggested India "stop chasing and build business models" via learning from the music industry's two rich cousins -- the television and film industry.

Subramaniam outlined a strategic plan for growing the 200 million dollar music industry up to a billion in 5 years. He explained how the music industry is positioned where the TV industry was 5 years ago - giving content away for free via ad-supported revenues. This is due to the popular "freemium" business model for music streaming, which allows users to listen to music for "free" (data-consuming, supported by advertisements), with an option to upgrade to a paid tier.

Given recently overlapping ecosystems - standalone music services, device-embedded music services, and operator-supported music services - the question was whether there was enough advertising based revenue to sustain this cluttered industry. In three years, Subramaniam predicted moving from predominantly pirate-consumed music, to ad-supported to a consumer-paid revenue model.

This transition would be done via learning from the film industry through a technique called windowing. This is when the same content is released through multiple windows - for film, this is done first in a theatre, then via home video, then television, then broadcast TV. For the music industry, monetization could occur via exclusives, recommendations, personalization, quality, or regional restrictions; holding some kind of premium content behind a paid wall. This strategy according to Subramaniam's estimates could reach the billion dollar mark in 3 years with the goal of transitioning the 200 million pirated market, to 75 million ad supported, to 25 million subscribers.

" For the first time we have access [to music] from not just one, two, but three ecosystems - standalone music services, device embedded music services, and operator-supported music services." - Sridhar Subramaniam

Following the forward thinking strategy for future business models, the rest of MRMC's panels brought the conversation back to current services and ecosystems of standalone, device-embedded, and operator-supported music services. This increasingly crowded space, along with new international entrants makes the mapping of upcoming services extremely difficult. Nevertheless, the diversity of these services were attempted to be represented at MRMC, with "standalones" like streaming services Gaana, Hungama Australian-based Guvera, and RDIO (which acquired former Indian service Dhingana), along with download stores like Indian-based independent platforms OKListen, Songdew, and Insync. "Device-embedded" services were represented by Samsung with its MilkMusic service, and formerly Microsoft/Nokia owned MixRadio (which has been recently acquired by LINE messaging app8). Lastly, "operator supported" platforms was represented by Bharti Airtel who introduced their new Wynk app, only fully accessible for Airtel telecom subscribers. Multinational content aggregator Believe Digital also was present, providing insight on how the back-end aggregation of content works. A question from the audience inquiring about how to get ones' music onto the various platforms revealed content aggregators' main value -- providing smaller labels and independent artists the ability to ensure their content is distributed widely across multiple platforms.

Although the MRMC panel Streaming: Gathering Momentum hosted a variety of different streaming services, it seemed that there is increasingly less differentiation. Services like user-tracking playlist curation and recommendation, social media-inspired tagging, mood-based suggestions, friend-based recommendations, temporary offline downloads, and more were all being adopted in various forms. Business models of initial free-to-use/access with premium pricing for ad removal and full-on downloads were also becoming a standard across platforms. Some services prioritized specific stakeholders, like Guvera who described their advertiser/brand focused approach through brand play-list curation to target to certain music users.

The Global Music and Mobile panel at the San Francisco Music Tech Summit ("SFMT") highlighted challenges for music applications, with Kathleen McMahon, Vice-President at SoundHound noting the challenge of merely staying relevant in the app store, in part due to the decreasing differentiation with other services. In the streaming ecosystem, a variety of music consumption options are increasingly available through a singular platform (i.e. Hungama enabling on line streaming, download of songs, and purchase of ring-tunes). Given the principle product - the music itself - is the same, the differentiator is marked in part by the user interface, and perhaps more significantly, by price differentiation.

Panelists also spoke of interesting licensing challenges, one being the complexity of differing rates between web-streaming verses mobile streaming, wifi-data transfer, verses 3G access. This copyright challenge was also exemplified when a panelist lamented on the challenges of licensing in various geographic territories, asking "Should I be able to listen to my Spotify subscription wherever I go? Is this not possible purely because of rights and not technology? Do borders even make sense anymore?" These specific challenges will be discussed in an upcoming post highlighting copyright and licensing challenges, but it is worth mentioning here as a barrier to potential technological innovation and ultimately success and survival of these platforms.

" [MCNs are] the new age record label...except far more equitable and less exploitative." - Samir Bhanghra, Managing Director and Co-Founder, Qyuki ⁹

Despite the increasing competition and services, one particular streaming platform which need not be concerned is the audio-video streaming service YouTube, which has a reach of 1 billion consumers, averaging to a viewership of 450billion mins per month 10. Framed as the new broadcast company for user-uploaded content, this viewership directly translates into advertising revenue for the platform, with brands sponsoring specific content creators ("YouTubers") themselves. An interesting new stakeholder which is in part facilitating this phenomena are multi-channel networks ("MCNs"), who was represented in the MRMC Indian MCNs panel by MCNs Qyuki, Digital Quotient, Ping Network and YouTubers All India Bakchod. The MCNs described their business model as a relationship-service, which acts as an aggregator and optimizer of various YouTube channels. With back-end analytics and advertising strategies, MCNs aim to optimize monetization opportunities by focusing on maximizing CPM (clicks per impression) and identifying brand sponsors. Despite the seemingly disruptive service, Tammay Bhat of All India Bakchod was skeptical about the need for such service, asking "How will an MCN actually help me get more money and sustain? As a creator, brands are coming directly. They are so accessible and it's not that difficult. Perhaps it could help smaller creators but..."

Smaller creators and independent artists was definitely one of the target clientele for Qyuki. Samir Bhangra, co-founder of MCN Qyuki's held workshop They Say You Can Monetize Content Digitally - Really? at the IndiEarth Xchange ("the Xchange") independent music film, and media trade conference. He appealed to the independent artists by illustrating the potential reach of the one billion YouTube viewers, and explained some useful back-end analytics which can allow for more strategic and effective monetization. According to Bhangra, the CPM in India is about 1Rs per view, with the possibility of doubling or tripling this if viewed in the United States. Qyuki in particular sought to optimize monetization through ad-funded support (via CPM and brand sponsorship), payment via the MCN themselves for content creation, and 'forward integration' through increasing demand for live and digital gigs through increasing regular viewers. Bhangra even went as far as hailing Qyuki and MCNs as the "new age record label" which would allow content creators full creative control.

"Well, I support piracy so..." - Sohail Arora, Founder, KRUNK¹¹

For independent artists, social media tools like YouTube, Facebook, and other direct-to-fan digital services are of even greater importance considering the relative lack of accessibility to mass-media marketing power. In the XChange workshop Driving Your Career with Social Media, Sohail Arora, founder of booking agency and general artist management company KRUNK focused on search-engine optimization strategies for various social media platforms This included tips such as tagging influencers via social media, strategic timings of content posting, unique release and distribution of music, diversity in content posts, suggestions for increased fan engagement, and more.

The rise of new technologies seem to have brought an increased role and importance to not just social media tools, but also artists managers as well to utilize these services effectively as one of their duties. This new role and its various responsibilities was highlighted by the The Exchange Music Trade Conference ("the Exchange") in the panel The Role of Artist Management Agencies. Considering the diversity of distribution options available, and the difficulty of controlling content usage once released, I asked artist manager Arora for his thoughts on some musicians' strategies of giving away free music downloads. He responded by stressing that freely giving away music was an essential marketing tool for his artists. The ability to download and share would in turn translate to an increased number of fans, quantifiable, measurable social media support (via "likes" and "follows"), and subsequently increased ticket sales, attendance for live shows, and brand sponsorship. This perspective resulted in an interesting conversation/debate with the audience, one member of whom was Marti Bharath, producer/composer of electronic act Sapta who believed that giving away music for free led to piracy, and a devaluation of music. In response, Arora unashamedly stated that he supported piracy, which temporarily halted that conversation during the time-crunched presentation.

" Independent Music is... anything that is not Bollywood" - Nikhil Udupa - MTV Indies. "If you liked it, good. If you didn't, not my problem" - Verhnon Ibrahim, Consultant¹²

Despite the numerous social media tools and online opportunities available for self-promotion, the reach of mass media and its role as a marketing tool was not forgotten amongst the independent music scene.

In the Making Space for Culture panel, an interesting conversation arose on what it meant to be an "independent" artist. It seems that it boiled down to those who were mostly unconnected to the larger institutional support of the music industry like major labels and traditional media -- radio, newspapers, magazines, and television. On the one hand, there was a sense of ambivalence as to whether or not their work would ever appeal to the tastes of the masses. One panelist had asked - would popularization of a certain artist or music remove the label of being "independent"? Nikhil Udupa of MTV Music defined independent music in India as anything that was not Bollywood, due to its dominance in the Indian music market and overall appeal to the masses. Music industry veteran Verhnon Ibrahim conveyed the notion of an independent artist by expressing the somewhat indifference to likeability when reflecting on his days while in a heavy metal band: "If you liked it, good. If you didn't, not my problem". He seemed to imply that appeal to the masses was essentially irrelevant, and almost more revered due to a sense of being able to maintain artistic integrity and authenticity.

The title of the panel itself - Making Space for Culture - was interesting, seemingly alluding to the opinion that mass-consumed, popular music was perhaps not as "cultured" . The main grievance and topic of conversation was that independent music, film, and media did not receive adequate airtime space on traditional media - television, radio, and even print. This premise was probably the only agreement during the panel, as conversation soon evolved to heated debates on whether media created trends or merely picked up on them; and whether there was lack of quality independent content for full-time curation of independent channels, a sentiment expressed by Nikhil Udupa from MTV Indies. This panel's conversation also touched upon a sense of entitlement which independent artists held, in which audience member Guru Somayji of Bangalore-venue CounterCulture expressed his agreement. This echoed the comment from an audience member earlier in the day who stated "musicians do not deserve to be paid... venue spaces do not deserve to make money. There is no entitlement. You only make money when people are breaking down the door to listen to you."

Amidst a crowd of independent musicians and artists hoping to devote their lives to creating their art in a financially feasible way, there was an understandably ill response from the audience. The main criticism was the lack of broadcasters' efforts in finding quality content, and allowing independents a chance to perform in large venues and mass media channels. Verhnon Ibrahim, consultant and industry expert on the Making Space for Culture Panel attempted to explain that radio, television, and other traditional forms of media and communication was a mass-market game, whose purpose was to ultimately to sell ads. He cited radio's high cost of royalty payments to explain the need to curate for the majority so advertisers will get the most reach. Ibrahim stressed the need to demonstrate quantifiable forms of "deserving" - number of Facebook likes, YouTube views etc. to demonstrate virality and fan following, so the media would have to pick up on ones' popularity.

"It's public knowledge that vast sums of money in royalties have not been collected... [due to a] situation of buying out rights, but even labels and rights holders say hundreds of thousands of pounds are not making their way back." - Terry Mardi, Managing Director, Asian Music Publishing¹³

Although several independent musicians raised grievances about the lack of avenues to perform in, and the reoccurring problem of being paid on time, there seemed to be a hesitancy when discussing business strategies and the challenges of copyright due to technological innovation. In the independent space, this was anecdotally demonstrated by one panelists' response when asked about the impact of technology on the distribution strategies for their art, and on financial returns for their livelihood. He responded: "Those are two separate things... one is about making money and making a living. The other is about making an art form. These are two separate things." Within the larger industry conference MRMC, there seemed to be a lack of representation by musicians and content creators. Yet, one particularly vocal audience member, and later panel member of the UK Exchange was Terry Mardi, Managing Director of Asian Music Publishing. Numerous times throughout both conferences, he raised the controversial issue of missing royalty payments in India, and the absence of royalty collection and distribution by unregistered copyright societies IPRS and PPL. In MRMC, this issue was ever so briefly touched upon in a panel when Bollywood playback singer Natalie Di Luccio who's worked closely with A.R. Rahman mentioned that she had never received a contract outlining her rights and her royalty dues. Although there was very little curated conversation about this issue, coffee breaks demonstrated a clear gravitation towards those vocal and concerned about the issue, while many stakeholders, particularly the few musicians in the room seemed to find this a significant gap in voices not heard and expressed in MRMC. At IndiEarth, Vivek Ragpolan, representative of the Music Composers Association of India briefly commented as an audience member about the need to take collective action regarding composers and overall musicians' rights, stressing the importance of independent artists also being included within the new provisions of the Copyright Amendment Act. Though this issue of royalty licensing will be reviewed in a future post, this brief mention demonstrates the challenge of monetization and livelihood at multiple levels -- significantly for content creators, but also for the music platforms themselves.

"It seems like the pricing model is wrong... it's the only way to explain the drop in revenue" - Tarun Malik, Apps & Content Strategy, Samsung ¹⁴

Across different platforms, panels, conferences, and countries, one particular question seemingly common to all was that of price points band business model viability. Tarun Malik, Apps & Content Strategy of Samsung in Biggies Give Their View commented on the growth of the industry. Despite an increase in overall consumption, he noted - "It seems like the pricing model is wrong...it is the only way to explain the drop in revenue". Atul Charumani, formerly Head of Content with OnMobile and currently Managing Director of Turnkey Music stated that "in no other industry where the content is produced at such a high cost, is the product given away for free." In the Global Mobile and Music Panel at the San Francisco Music Tech Summit, the moderator asked a panel of music distribution service providers - "What is the value of music? Does music have intrinsic value at this point? Or is it just how it is presented?" In response, Dean Bolte, Managing Director of Omniphone expressed that the value of music was different for every person, and that some people were willing to pay more for access than others. The priority is to ensure that those who value music more have the opportunity to express through payment, since anything was better than zero. Beyond competition between music service apps, Bolte noted that the competition for funds also occurred across app categories, noting a generation of youth conditioned to acquire music for free through Napster, yet pay for additional levels in games. He closed the panel with the insight that "the product needs to be better than the sword".

The targeting of youth and young adults was also conveyed by the somewhat surprising pervasiveness of brands, who had a larger than anticipated presence for a music industry conference. The UK Exchange demonstrated the potential of partnerships in its Brands & Music - When They Combine Forces panel. MRMC panel The Brand Sponsor also invited the Taj hotel (who seem like an unlikely sponsor) an opportunity to express its interest in supporting the discovery of new talent. Aditya Swami from MTV & MTV Indies said that brands can communicate through music, and create conversations with their consumers. Subramaniam, CEO of Sony Music mentioned the importance of funding through brands and advertising in the MRMC keynote How the Industry Stands Today, while IndiEarth's Taking it Live panel opened the day with a conversation about live venues seeking sponsorship from alcohol, clothing and other 'lifestyle' companies. Even the MCNs in the MRMC Indian MCNs panel discussed one of its main services as the securing of brand sponsorship.

"Independent music in India would not exist if it weren't for alcohol sponsorships" - Tej Brar, Artist Manager, Only Much Louder ¹⁵

Music platform MixRadio, the title sponsor of MRMC was an understandably suitable partner, since it closely correlated to the main music product. Yet, particularly in India, it soon became apparent that alcohol brands have a very significant role in financing the music industry. This was highlighted when liquor-brand Bacardi received an award during MRMC for 'excellent brand association'. It was later learned in an interview that liquor and cigarette brands are not legally able to advertise in India, hence the popularity of alcohol sponsorships for live music festivals, venues, and club nights. Tej Brar, EDM Artist Manager for Only Much Louder believed that independent music would not exist in India if it weren't for alcohol brands. This is an interesting phenomenon considering just a decade ago, the idea of synchronizing ones' music with a corporate brand would be akin to "selling out". However, in today's increasingly digital world, especially in India where non-film musicians don't have much of a presence, brand sponsorship is one of the main 'monetization strategies' for music production. The last important significant financier to mention are investors, showcased in the MRMC panel Of All Things Finance. These "angel investors" play an instrumental role in backing many of the technology start-ups and other streaming services while experimenting with various business models. Yet whether these investment decisions are one that would reap sustainable returns is still a question to be answered.

Conclusion

It seems in this mobile first market, India has the opportunity to lead the way in developing business models that grow the industry through multi-tiered windowing of music streaming. Strategically, in an ecosystem still rampant with piracy, moving consumers towards legal access to music can facilitate new sources of revenue. This opportunity has also given rise to new intermediaries like YouTube and multi-channel networks. time will tell whether their contribution will legitimately grow the industry or simply take away more pieces of what seems to be a shrinking profit pie. Independent artists are able to use new direct-to-fan distribution platforms such as YouTube, amongst others to share their works. Yet, it is clear that the sustenance of a livelihood off of digital sales and distribution is extremely difficult. It is interesting to note that the bulk of financing for music seems to be trending towards live shows and brand sponsorship. However, despite increase in digital music consumption, the distribution of the revenue needs to be further studied and understood. Given the ease of replication, this will require a further in-depth understanding of licensing and copyright management in India today.

1 See the research methodology here: http://cis-india.org/a2k/blogs/copyright-management-in-age-of-mobile-music last accessed Jan 22, 2015

2 All of the panels from this conference can be found online here: http://musicconnects.indiantelevision.com/y2k14/videos.php last accessed Jan 20^th 2015

3 See here for the IndiEarth website: http://www.xchange14.indiearth.com/ last accessed Jan 20 ^th 2015

4 Watch and/or listen to the Future of Music Coalition panels here:https://futureofmusic.org/events/future-music-summit-2014 last acccesed Jan 19 ^th 2014

5 All data in this solely from public conference panels; including quotes, etc. Does not include any individual interview data.

6 As quoted from the MixRadio Music Connects Keynote panel:

7 Though it was not mentioned in the speech, it is useful to understand the initail demand for CRBTs was not necessarily genuine, for the fall in revenue was due to the crackdown by the Telecom Regulatory Authority of India to prevent false billing by telecom and value-added-service providers.

8 See http://blogs.wsj.com/digits/2014/12/19/messaging-app-lines-first-acquisition-music-streaming-service-mixradio/

9 As heard in the MixMusic Radio Connects panel Indian MCNs on Nov 5^th 2014

10 According to Samir Bhangra in MixRadio Music Connects' Indian MCNs panel on Nov 5^th 2014

11 As heard at the IndiEarth Xchange conference in the Driving Your Career with Social Media panel on Dec 5^th 2014

12 Stated at IndiEarth Xchange Conference in the Making Space for Culture panel on Dec 4^th 2014

13 As heard at UK The Exchange Submerge conference on Nov 7^th 2014

14 As stated on the MixRadio Music Connects panel Crystal Ball Gazing: Bigges Give Their View on Nov 5^th 2014

15 In a conversation at the IndiEarth Music Xchange Conference on Dec 5^th, 2014

For more details visit http://editors.cis-india.org/a2k/blogs/beyond-alcohol-and-angel-investors

“Copyright Management in the Age of Mobile Music” - Living Methodology Document

maggie — 2014-12-26T13:44:25Z

This blog post outlines the research methodology for a chapter in the Pervasive Technologies: Access to the Marketplace project, in which access to the mobile phone hardware, software, and content is assessed within the intellectual property framework in India and China. This chapter focuses on copyright and access to music content in India.

Research Problem:

In light of new music distribution business models accessible via the mobile phone, there has been increasing complexity in music copyright licensing, revenue, and royalty distribution. Despite the intent of the 2012 Copyright Amendment to resolve stakeholder grievances, the copyright institutions in India continue to lack legitimacy amongst relevant stakeholders for the management of music copyright.

Research Objective:

Provide evidence-based policy proposals which may aid industry leaders and policy makers to more effectively manage music copyright in India

Research Questions

How have evolving music distribution technologies accessible via the mobile in India impacted business models and licensing practices amongst stakeholders in the digital music industry?
What are the specific copyright challenges for each relevant stakeholder, and how can the copyright institutions provide for more effective management in the industry?

Research Objects

Modes of mobile music access

Value-added-services
Device- bundled music
Online download stores
Online streaming (primary focus due to increasing popularity)

Methodology

How have evolving music distribution platforms impacted business models and licensing practices amongst stakeholders in the digital music industry?
- Map out digital platforms' business models
- Identify stakeholders within these ecosystems, and their copyright licensing negotiation process, terms, and revenue distribution
What are the specific challenges pertaining to copyright and licensing for each relevant stakeholder? How can the copyright institutions provide for more effective management?
- Identify and evaluate grievances pre- and post-2012 Copyright Amendment
- Identify proposals for improvement of copyright institutions: Copyright Act, Copyright Board, copyright societies.
- Compare music copyright institutional structure and process in other jurisdictions
- Gather list of policy proposals and evaluate
Methods:
- Literature review – industry reports, media reports, industry blog posts, academic research,
- Expert interviews of stakeholders – handset manufacturers, copyright societies, government, lobby groups, content aggregators, music labels, music publishers, online streaming platforms, online music retailers, venture capital investors, telecom operators, musicians, multi-channel networks, legal practitioners
- Stakeholder analysis of policy proposals

For more details visit http://editors.cis-india.org/a2k/blogs/copyright-management-in-age-of-mobile-music

Government Intervention in the Marketplace: Policies for Access or Politics? (Interviews with Semiconductor Industry – Part 4)

maggie — 2014-12-26T14:34:26Z

This is the last of a four-part blog series highlighting findings from a small sample of interviews with fabless semiconductor industry professionals in Taiwan. These industry insiders was approached for the intent of understanding expert knowledge on the process of integrated circuit design. However, the conversations resulted in leanings far beyond that scope. This post explores the tension between market forces and governmental intervention in providing access to mobile technology.

Following conversations regarding the trends and changes in computing usage models, process of chip manufacturing, and challenges with the current patent system, CIS wanted to understand these chip manufacturers' thoughts on the smart phone patent wars' implications on access to mobile technology, and how government regulation and intervention could perhaps resolve some the legal battles.

Although it seems there is an overabundance of litigation and patent wars amongst smartphone manufacturers, most recently culminating in India between manufacturers Xiaomi and Ericcsson,[1] it was of one interviewees' perception that these legal battles was simply a natural result of market forces in the technology industry. Although companies do indeed want to protect their intellectual property, the lawsuits are more often motivated by business interests to slow down ones' competitors. Litigation requires a massive investment in time and resources, and ultimately, the courts are just another avenue where market forces are at play. Naturally, with or without patent wars, prices will go down with competition.

The interviewee provided the example of Microsoft and Intel who had drove the computer industry who were making 75-80% of the products with profits only going to them. But as the market grew, prices slowly went down as more companies came out with new products. This was a "natural, organic development", and "perhaps if the industry had dropped prices earlier it would have been slightly better for consumers", but one interviewee "doubt it would have made much of a difference."

In the past there have been instances where governments have regulated markets to prevent anti-competitive behavior and predatory pricing, as exemplified by the antitrust claim filed against Microsoft in the United States, [2] or Intel being sued by the European Union for monopoly control.[3]

In China, Qualcomm has been under investigation, and is risk of being fined up to 10% of their most recent annual revenues because the government believes they are monopolizing the market. More recently, there have been talks of a possible investigation by the European Union for the same.[4] However, the interviewee expressed his disagreement that these really resolved the problem of high costs.

" Everyone always complained about software costs...that Microsoft was too expensive, that PCs were too high. But then with mobile, for years Microsoft was trying to do Windows... but then Google came along and offered Android for next to nothing. Suddenly the market's changed."

What really resolved the problem of high costs of personal computers according to this interviewee was mobile phones, which merely came with a bit of patience with the market. There seemed to be a general lack of faith in government intervention, and a sentiment that government imposed an overly top-down management of the industry.

Another example given of poor government intervention was the Aakash tablet in India, which one interviewee noted was a "disaster" because the government initially announced a retail price of USD $60 without accurately taking into actual costs of production. Having been considered as one of the potential suppliers for the tablet, this interviewee noted a later announcement of a retail price of USD $28, which taking into account the physical cost of hardware would have been impossible to manufacture. The interviewees' company was requested to reduce their prices given an anticipated high stock order, but ultimately the partnership never went through as it would have resulted in a significant loss.

Initially the Aakash tablet was conceived to be 'made-in-India', but our interviewee cited a bit of "naivety" on behalf of the government. At a meeting with the Aakash planners, he explained how the manufacturing of each part - the screen, motherboard, small connectors, supply busts - required billions of dollars in infrastructural investment.

"Suddenly you're not talking about one factory, you're talking about 30 factories. It's just not going to work. It's too complex. And this is why Shenzhen is going to do very well in the next 10 years. Because they have done this."

Given the Pervasive Technologies project covers the territories of China and India, and attempts to evaluate potential policy levers to enhance access for both geographies, this was a useful insight which led to further questioning about the experiences of working within various jurisdictions. In particular, we were interested in the experiences of these companies operating in different geographic markets, and asked specifically about comparative experiences between the United States and Europe which generally has more stringent enforcement, with our countries of focus - India and China.

One of the interviewed companies which provided turnkey chip set solutions explained how their reputation in China had evolved since the ease of use facilitated the manufacturing of counterfeit products, particularly at a time when the Chinese government did not seem to care too much about infringement. Although there has been increased enforcement measures, these company's products are still often found in gray markets and in shanzhai technology through unauthorized resellers despite not knowingly selling chip sets to illegal companies.

Another interviewee perceived that the Chinese and Taiwanese market required much more effort in general for foreign companies to operate in due to lack of transparency and multilingual access, compared with the North American and European market. The indigenous standards China is pushing, like the TD-SDCMA standard within the telecom industry, one interviewee noted that it puts more of a burden on companies to have multiple standards, and felt it was more so a political demonstration of Chinese power.Other analyses cite this as a strategic method to set these standards for enhancing development of local research and development, and use indigenous standards as a bargaining tool to reduce royalty rates. ⁹

Regardless of the motives, another interviewee noted that the Chinese market was big enough with opportunities worth pursuing that developing products according to China's standards made sense as a business.Following the market means pursuing demand, and according to this interviewee, although China requires a bit more investment, it is justified if it is what customers are asking for.

Despite increased foreign investment in the Chinese manufacturing sector, local smartphone manufacturers from China like Lenovo, Huawei, ZTE, and Xiaomi provide smartphones at an extremely affordable cost - for USD $50-60, or about RMB 300-400. Other marketplaces like Taobao also sell cheap smartphones in the mass market. There are difficulties of operating in India due to lack of reliable infrastructural support, which results in a need for increased investment and risk. However, a development of indigenous Indian tech industry can be done, perhaps developing the hardware first in China, setting up some local manufacturing while focusing on software development in the meantime.

This small sample of interviewees seemed to express a general perception that less governmental regulation and intervention in the technology industry was better for access. However, it can be reasonably well-argued that the reason China's mobile market is so successful is due to government-imposed standards which prevented reliance on expensive foreign patents. After explaining in brief the proposal of a compulsory licensed patent pool for standard essential patents, the interviewees responded that it may be something the government is trying to do with good intentions, but could have unintended side effects.

When asked for suggestions on how policy makers could help facilitate access to technology and an overall more innovative market space, answers included increased hardware education through encouraging openness for more sharing and learning within the industry, and outside to hackers and makers which could encourage 'outsourced research and development'. Although other interviewees seemed to disagree that openness would encourage access, the overriding consensus was the need for policy makers to prevent the possibility of behaviour like patent trolling and the unnecessary protection and locking up of innovative technologies from arising in the first place - done via a global standardized restructuring of the patent system.

[1]. http://indianexpress.com/article/technology/mobile-tabs/xiaomi-vs-ericsson-vs-oneplus-vs-micromax-the-winter-of-smartphone-court-battles/

[2].https://www.princeton.edu/~achaney/tmve/wiki100k/docs/United_States_Microsoft_antitrust_case.html

[3]. http://curia.europa.eu/jcms/upload/docs/application/pdf/2014-06/cp140082en.pdf

[4]. http://www.forbes.com/sites/greatspeculations/2014/08/29/possible-eu-investigation-add-to-qualcomms-regulatory-problems/

For more details visit http://editors.cis-india.org/a2k/blogs/interviews-with-semiconductor-industry-part-4

[Open] Innovation and Expertise > Patent Protection & Trolls in a Broken Patent Regime (Interviews with Semiconductor Industry - Part 3)

maggie — 2014-12-26T13:19:46Z

This is the third of a four-part blog series1 highlighting findings from a small sample of interviews with fabless semiconductor industry professionals in Taiwan. These industry insiders was approached for the intent of understanding expert knowledge on the process of integrated circuit design. However, the conversations resulted in leanings far beyond that scope. This post explores some of their views on the current intellectual property system.

The intellectual property framework is meant to provide a temporary monopoly so those taking the risk to invest time, money, and resources into research and development can reap the returns for that investment without having to worry about others undercutting their price and competing for market share. Registration of patents supposedly encourages the dissemination of ideas and overall greater knowledge contribution for public access and eventual public domain. The interviewees were asked about their thoughts on this system of protection, incentivization, and knowledge-share, resulting in five broad themes:

1) Expertise trumps patent ownership

Particularly today in a digital world where innovative ideas and concepts can be easily shared, the first thing many people think about when discussing innovation, is the need to protect via patents. A vast amount of literature attempts to review the implications of patents' on technological innovation and economic development.

However, one interviewee noted that this emphasis on patent protection often overshadows what is much vital to the success of a technology business or industry - the people: the expertise and experience of the companies, their engineers, and their management. A lot of knowledge and 'intellectual property' lies in the procedures and processes which have resulted in effective application of standards and high level of performance for ones' products. The value of these skills and intelligence of human resources far outweigh the importance of protecting and owning patents.

2) Broken patent system

There was a clear consensus that the number one intellectual property concern is the need to revamp the current patent regime, with all interviewees agreeing that "useless patents" were being filed. Some suggestions for improvement included international standardization regarding the definition of a patent, the process of patent applications, and the scope of what a patent should cover. One interviewee believed that currently, the patent system actually prevents technological innovation, because one single patent can cover many ways of achieving something. The Apple patent entitled ' Method for providing human input into computer' which patents nearly every single possible human-computer interaction is an example of this.

"Patents today are trivial, and don't contain information regarding HOW to make something; there are too many process and design patents, and not enough functional patents...merely competitive differentiations rather than fundamental technological changes" .

This quote expressed the perception that only inventions that affect functionality in a fundamental way should be patented. A patent should not be claimed for something you cannot do, or does not show any kind of knowledge for how to solve a problem. One interviewee suggested that if a patent is granted without use for 3 years either by the owner or through licensing, the patent should be considered invalid.

Another industry expert explained that numerous patent applications are entered into the system without enough resources and competencies in the government to review them well. Albeit suggested in a joking manner, there may be truth to his claim that a knowledgeable intellectual property tech expert would opt to work for the more lucrative law firm over the government. He observed over the years a cycle where patents are easily approved, in which if a lawsuit arose, the patents are assessed more carefully again, resulting in massive inefficiencies for the system.

3. Patent Trolls

The poor execution of the patent system has resulted in the phenomenon of 'patent trolls', or what is more neutrally termed as non-practicing entities ("NPEs")[1] or patent assertion entities ("PAEs").[2] As explained by one interviewee, the business models of these entities often begin by conceiving of future technologies which may be necessary or foreseeable in the near future. Then, they seek to patent those ideas with no intention of actually producing producing or manufacturing the product. The main purpose is to profit through litigation and licensing. An example given of a patent trolling company was "Intellectual Ventures", which describes themselves as an "invention capital company" that "owns some of the world's largest and fastest growing intellectual property portfolios"[3]

The difficulty is that patent trolls are virtually indistinguishable from aspiring inventors and engineers, who may seek to manufacture and scale up their products through outsourcing and licensing. In addition, the lack of actual production makes valuation, legislation, and enforcement around this practice extremely difficult.

"The problem is, the guys who have patents think it's worth this much money… and the company that wants to license think it's worth another amount. From a regulatory or legal point of view, it's very difficult to legislate these things… you can't legislate a value right? In the end, it's how much the customer is willing to pay for it. It doesn't matter how many years someone's been working on it, if no one wants to buy it, it's not worth anything."

Robert L Stoll, former USPTO Commissioner of Patents says the most effective way to reduce predatory behavior is to ensure bad patents don't get issued in the first place, highlighting a legislation in the America Invests Act of 2011 which allows third parties to challenge granted patents on basis of former prior art, and non-technical financial or product patent.[4] Increased collaboration shown through standards and cross-licensing

The development of standards is very "fashionable" at the moment, according to one interviewee, who expressed his desire for his own company to be more involved in the process. However, another interviewee stated that more could be done to enhance collaboration within industry so that technologies could be provided free of licensing and ultimately benefit society at large through greater interoperability. Although there are signs of partnerships through cross-licensing agreements, particularly amongst larger firms, there are limitations because not everyone, including small firms, can afford it.

Most interviewees also expressed the need for greater emphasis on knowledge and research, rather than relying on proprietary technologies, which may actually hinder technological innovation. Examples given for companies doing this were Google and IBM, who both have more of a research background, and potentially have more research and development resources to engage in this kind of work.

5) Need for more openness

One interviewee who had extensive experience in the hackerspace community was an advocate for openness within the industry, and believed many companies had the option to become more open and effectively 'outsource' their research and development to the larger community.

Some successful projects he suggested was an open-sourced graphics processing unit ("GPU"), which does not exist even for the largely open Rasberry Pi. Even the development of a lower quality open sourced GPU in the market would result in tremendous demand, in his opinion. The ARM technology, the most popular CPU in the market is also currently semi-closed, and could in his opinion have benefited from more openness.

One interviewee expressed disappointment that all of the chips in his company was proprietary, even those that were no longer in production due to fear that competitors would be able to anticipate future developments from past projects. He suspected that many things were protected simply because the legal department assumed confidential and proprietary, without necessarily a coordinated long-term vision from head management. It is this normalized culture in industry that is, in his opinion a great hindrance to innovation, development, and accessibility of technology.

https://www.patentfreedom.com/about-npes/background/

http://www.ftc.gov/policy/studies/patent-assertion-entities-pae-study

http://www.intellectualventures.com/about

http://www.wipo.int/wipo_magazine/en/2014/02/article_0007.html

For more details visit http://editors.cis-india.org/a2k/blogs/interviews-with-semi-conductor-industry-part-3

Methodology: Access to Music through the Mobile

maggie — 2014-12-08T16:22:41Z

Like its predecessors the vinyl, the cassette tape, the CD, and the MP3 player, the mobile phone as the most recent musical carrier have been well documented to be a disruptive technology, one which has made earlier carrier technologies virtually obsolete. The mobile phone has transformed the music industry and its supporting infrastructure — dramatically altering the roles of various intermediaries and stakeholders who enable the creation, distribution, and consumption of musical content.

Context

For the first time in 13 years, the music business is growing again, with consumption of musical content at an all time high due to innovations which have provided more affordable and convenient platforms for accessing music than ever before. These include web-based and mobile-based applications which have arisen to compete with piracy through "free", "feels-like-free" and "fermium" business models.[1]

Given the pervasiveness of the mobile phone, especially in India where it is the only mode of access for over 50% of the population [2], these innovations along with expanding broadband and data services seems to be a mark of success in bringing access to music and other media content to those formerly priced out, and geographically excluded from the legal market.

However, Indian web and mobile-based applications such as Gaana and Saavn, and its U.S. counterparts like Spotify and Pandora have continuously operated at a loss, often sustained by venture capitalist funding or a larger corporate backing.[3] Although many online platforms, such as the recently shut down Flyte (funded by Flipkart) cite piracy as the official reason for its closure, industry insiders have allegedly noted exorbitant licensing fees demanded by rights holders as the case.[4]

Research Problems

1. It is uncertain whether legal access to affordable music through the mobile will remain.

As an access issue, this is problematic due to the potential disappearances of these platforms, which have with varying success provided an alternative to unauthorized file sharing while increasing the ease of consumers' access to a larger volume and variety of legal content. Some of these applications provide a "direct-to-fan" platform for musicians to upload their own music online without having to 'break in' to a relatively closed entertainment industry, particularly in the Indian market where the mass majority of music is dominated by the film industry. Access to increased volume and variety is also not a guarantee, particularly in light of some musicians' indignation over the intermediaries' profits from their content, and the little revenue received in return.

2. Numerous stakeholders are entering the technologically advancing, digital music industry resulting in uncertainty of optimal business models and increased complexity of revenue and royalty distribution.
Thus, given evolving business models due to the transitioning physical to digital music industry, no consensus has yet been found on which platforms or revenue models offer an optimal solution for access to, and production of music. The potential for monetization in all levels of the value chain - from production, to content aggregation, to content distribution, and consumption -- has resulted in an increase in the number of intermediaries, further complicating the ecosystem.

All stakeholders fulfill different roles in the industry while expressing the common challenge of 'monetization'.

Web and mobile based content distributors are attempting to find the right price points at which Indian consumers are willing to pay, particularly in a market whose billing model is largely based on mobile credits and cash-on-delivery since only 1% of the population have access to credit. [5] Globally, criticisms for streaming distributors like Spotify are highly publicized, not paying enough royalty to artists despite claims that 70% of their revenue is spent on content licensing.[6]

Content aggregators are attempting to monetize services such as music fingerprinting, meta-data tagging, and other analytics tracking to identify and capitalize on consumer behavior and consumption trends. Meanwhile, telecom companies and mobile phone manufacturers are attempting to provide integrated services and music bundle packages to increase the interoperability of these platforms for a more frictionless experience for consumers.

Content owners - vast majority being music labels -- are attempting to maintain their relevance in the industry through its powerful artist and repertoire marketing role, amidst criticisms that stakeholders like multi-channel networks and self-publishing content distributors (i.e. SoundCloud, Youtube, etc.) will deem it irrelevant. Many distributors globally note the vast ownership of content leading to the potential abuse of bargaining power, as exemplified by the Competition Commission of India's recent ruling that Super Cassette Industries' (or T-Series, who own 70% of Hindi film music) practiced unfair and discriminatory charging practices for a radio broadcasters due to their demand for minimum guarantees.[7]

The content producers -- lyricists, composers, performers, and more are struggling to monetize and finance the production of their music. Down the valuation stream, the contractual agreements between content owners and distributors affect the livelihoods of these artists. India's music industry is particularly unique in that the vast majority of content are film music, which means the common financier of music production are the film industry, rather than music labels or publishing houses. Additionally, given a one-time, work-for-hire agreement was commonplace in the Indian film industry during music production, a contractual agreement stipulating royalty division was slow to materialize.

3. Continued violation of law due to lack of legitimacy of Copyright Board, Copyright societies, and 2012 Copyright Amendment.

The entire music ecosystem is governed by the framework of copyright, which necessitates legal mechanisms to ensure proper regulation and balance between the protection of rights holders and access to content for consumers.

The 2012 Copyright Amendment attempted to address the imbalance of bargaining power through preventing the first author's transfer of right to royalty, amongst others. This amendment was also passed in response to alleged corruption and collusion between the content owners (music labels), various judiciaries, and the former copyright societies (Indian Performing Rights Societies ("IPRS") and the Indian Phonographic Publishing Limited ("PPL")), resulting in an absence of royalty payments to lyricists and composers for many years.[8]

Despite this, the Copyright Amendment have not been as effective in correcting the issues on the ground, and are still allegedly being circumvented via advanced royalties, backdated agreements, and waiver of performance royalty rights.[9] Other inefficiencies cited have been poor transparency of royalty payments, lack of publicly available analytics on web and mobile-based platforms, and untimely responses by the Copyright Board to conduct investigations into the allegations.

Amidst these allegations, some industry analysts also claim the Copyright framework itself needs to catch up with the technological potential that the internet, and these new services provide. This may be an alternative perspective to be explored.

*(Tentative) Research Questions and Methodology

Thus, given uncertainty of the sustainability of affordable, legal access; the increasing complexity of business models and royalty distribution, and the continued violation of Copyright law due to lack of legitimacy, the policy question is:
How can legal and institutional mechanisms ensure an enabling environment for access to, and production of music for all mobile phone users in India?

"Legal mechanisms" - Copyright Act, Copyright Board, licensing mechanisms
"Institutional mechanisms" - Copyright societies, music industry norms, corporate policies
"Access" - equitable, fair, easy access to quality and quantity of music
- Potential barriers to access (to music, through mobile):
- Political: Legal constraints (Goonda Act?), intermediaries prevent copying, licensing bodies
- Economic: Lack of availability of older repertoire, access to mobile device
- Social: Use or access of materials involving loss of privacy, lack of quality production
- Technological: TPMs, compatibility, broadband/data access, payment gateways, geographic barriers, lack of net neutrality

Access necessitates "production" - ability to create content with little entry barriers; balance right of artists to earn, and consumer access

Barriers to production and distribution:
Uncertainty of business models in age of digital music
Ineffectiveness of Copyright regulation: Copyright societies, Copyright board
Controversy surrounding Copyright Act
Lack of finance/income -- intermediaries taking share of pie ?? Inefficiencies in music industry?

"Mobile phone users in India" - smartphone users able to access web and mobile based platforms

How do the stakeholders in the Indian music industry work together to facilitate access to music via the mobile phone?

Who are the stakeholders of the music industry in India?
What are their roles and their objectives?
How have their roles changed given the digital transition of the music industry?

Method: Conduct a stakeholder analysis mapping the physical to digital transition. Secure information via literature review (academic and grey) and expert interviews secured via snowball sampling.

Content Creation

Lyricists/composers (film, non-film)
Performers (film, nom-film)
Film Producer
Sound Producer
Publisher
Self-production (Remix artists, DJs, independents)

Content Aggregation and Distribution
- Content Aggregation:

Music labels (International/film/indie)
Mobile aggregators (VAS companies)
Tech aggregators (back-end for digital platforms: meta-data tagging, analytics, etc.)

Content distribution (digital)

Online stores (e.g. iTunes)

Mobile/Web-based

Webcast/Radio (e.g. MumbaiOne Radio)
Digital Stores (e.g. Amazon, iTunes, eMusic, Google Play, Flyte, OKListen, etc.)
Interactive streaming (e.g. 8tracks, Gaana, Hungama, Raaga, Rdio, Spotify, etc.)
Bundled telco-music stores (formerly Nokia MixMusic)

Copyright Board
Copyright societies (e.g. IPRS (Indian Performing Rights Society), PPL (Phonographics Performance Limited, ISRA (Indian Singers Rights Association))
Associations (e.g. MCAI (Music Composers Association of India), SIMCA (South Indian Music Companies Association), IMI (Indian Music Industry - ass. of producers), etc.)

Financiers:
- Venture capitalists
- Brands/advertisers
- Corporate backing
- Multi-channel networks
  - Technical intermediaries
    - Telecom operators
    - Internet service providers
    - Data providers
    - Payment gateway providers

Mobile phone manufacturers

Consumers

Types of music listeners (Ovum research taxonomy)
- Active fans (lean forward/niche)
- Core enthusiasts (lean forward/mainstream)
- Indie followers (lean back/niche)
- Lean-back listeners (lean back/mainstream)
Class distinction / price sensitivity?

What are the current business models for web and mobile-based content distributors? How does this impact each stakeholder in the music industry?

What are the new business models of the digital music industry in India?
- How are the new intermediaries/stakeholders in the web/mobile targeted music industry impacting business models?
- Literature review (media, industry reports) and expert interviews

What is the revenue distribution in the music production value chain for the web/mobile-based platforms in India?
- Method: International comparison of new digital music business models worldwide:
- Online MOOC Course & lectures (Coursera - West Virginia University ; YouTube - Future of Music Coalition[11] )
- Literature review (academic, white, grey, media, industry repots, etc.)
- Method: Replicate FMC's study for Indian context: Music and How Money Flows[12]

Who are the consumers that access music via mobile/web-based platforms in India?

Is there a socio-cultural-economic dimension distinguishing those willing and able to pay? Who actually pays and how much?
- Method: Literature review, expert interviews, surveys??
- Are there different levels of musical engagement which translate to consumer behavior (active fans, core enthusiasts, indie follower, lean back listeners) and subsequent willingness to pay? What percentage of listeners fall in each category in India?
  - Method: Questionnaire to current users of web/mobile-based music distributors supplemented by expert interviews
  - What kind of economic good is digital music in India? Inferior, luxury, normal? Complementary, substitute? Public, merit, private, free?
    - Method: Literature review, theoretical economic analysis supplemented by user survey and expert interviews

Considering the stakeholders in the digital music industry, consumer behavior in India, how should music copyrights be regulated to provide optimal access of music through the mobile to consumers and fair renumeration to first authors?

What role do legal mechanisms currently play in the distribution of royalty revenue in the music industry (on the ground)?
- Method: Mapping of copyright processes and agreements (oral, contractual, or otherwise) between stakeholders in the music industry, noting specifically role of Copyright Board, and (former) Copyright societies; expert interviews
What role do codified laws (2012 Copyright Amendment, case law) stipulate should be the legal mechanisms to distribute royalty in the music industry?
- Method: Legal literature review, expert interviews
- How have the 2012 Copyright Amendment impacted the stakeholders in the music industry? Are the laws effectively enforced? Has the Copyright Amendment been designed/defined/articulated in an optimal way for all stakeholders? Why or why not?
- Method: Literature review
- How should copyright be organized? Who should distribute royalty revenues? What process?
  - Method: Consider stakeholder analysis, context of India music/film industry, consumer demand and price-sensitivity, and conduct cross-jurisdictional comparison
  - What industry norms should be set for a more transparent, efficient supply chain to ensure rights holders receive fair compensation?
    - Method: International comparison of industry norms for copyright organization and distribution

[1].Amba Kak, Fighting Free with Free - The Legal Music Market in India as a Response to the Digital Age (Centre for Internet and Society, to be published.)

[2].Avendus Capital, India’s Mobile Internet: The Revolution Has Begun: An Overview of How Mobile Internet Is Touching the Lives of Millions, Industry (Avendus Capital Private Limited, September 2013), http://www.avendus.com/Files/Fund%20Performance%20PDF/Avendus_Report-India’s_Mobile_Internet-2013.pdf.

[3].Amba Kak, Fighting Free with Free - The Legal Music Market in India as a Response to the Digital Age (Centre for Internet and Society, to be published.)

[4].Nikhil Pahwa, “Why Flipkart Shut Down Flyte Music,” News and Analysis of Digital Media in India, MediaNama, (May 29, 2013), http://www.medianama.com/2013/05/223-why-flipkart-shut-flyte-music/.

[5].Reserve Bank of India, as cited in IFPI, India: Nearing an all-time high http://www.ifpi.org/india.php

[6].James Duffett-Smith, Music Licensing Study: Notice and Request for Public Comment (United States Copyright Office 2014).

[7].Ashok Chawla, M.L. Tayal, and S.L. Bunker, HT Media Limited v. Super Cassettes Industries Limited (Competition Commission of India 2014).

[8].Prashant Reddy, “Did the Big Music Companies on IPRS & PPL Collude to Deny Lyricists and Composers Crores of Rupees in ‘ringtone Royalties’ – An Investigation,” http://spicyip.com/2011/02/did-big-music-companies-on-iprs-ppl.html, SpicyIP, (February 14, 2011)

[9].Anonymous, “Ghost Post: The myriad ways in which the Copyright Amendment Act, 2012 is being circumvented” http://spicyip.com/2014/01/ghost-post-the-myriad-ways-in-which-the-copyright-amendment-act-2012-is-being-circumvented.html, SpicyIP, (January 18, 2014)

[10].https://www.coursera.org/course/gpsmusic

[11]. https://www.youtube.com/playlist?list=PL471E012D03E9BA03

[12]. https://futureofmusic.org/blog/2013/06/18/music-and-how-money-flows

Click to download the PDF

For more details visit http://editors.cis-india.org/a2k/blogs/methodology-access-to-music-through-mobile

Fab to Fabless: Understanding the Process of Chip Manufacturing (Interviews with Semiconductor Industry - Part 2)

maggie — 2014-12-26T12:06:48Z

This is the second of a four-part blog series highlighting findings from a small sample of interviews with fabless semiconductor industry professionals in Taiwan. These industry insiders was approached for the intent of understanding expert knowledge on the process of integrated circuit design. This post explores the process of chip manufacturing and the foundry business model.

See the first blog post here.

Studies have shown that Taiwan's integrated circuit manufacturing sector have shown spatial and industrial knowledge spillover, resulting in "increased information diffusion, interaction and communication, innovation, and intellectual capital.". Market research company IC Insights found that Taiwanese and Chinese companies represented five of the eight fastest-growing fabless integrated circuit ("IC") suppliers in 2013.

The Pervasive Technologies: Access to Knowledge in the Marketplace project is looking at the accessibility of networked communication technologies in the mass market within the sub-100 dollar range. This has resulted in a narrowing of the research scope to the mobile phone due to the pervasiveness of the mobile for accessing Internet, as understood by exploring the trends in technology usage models as explored in Part I of this blog post series: Trends and Changes in Technology (Part I of IV).

The need to understand the full story of the mobile phone production led CIS to Taiwan to understand the beginnings of the manufacturing process - the development of an integrated chip. The interviewed professionals all represented fabless IC semiconductor design companies which operated via a foundry business model where the actual fabrication is outsourced.

According to one expert whose company earned 50% of its revenue from mobile chipsets alone, the process of the mobile phone manufacturing begins at the fabless design stage, where fabless IC design companies design a chip following consultation with the fabricators to specify the mechanical constraints of the process (the size of the die, the minimum size of the wiring line, etc.) to ensure design requirements are met, and to negotiate the costs of production. Another interviewee highlighted that during this design phase, there are three clear goals: 1) Upgrade performance, 2) Reduce cost by integrating features, and 3) Reduce power consumption.

These particular companies provided insight to some of the commonly licensed technology that went into a smartphone chipset. This included the central processing unit (CPU) from ARM Holdings, who in 2010 held 95% of the CPU marketshare in smartphone technology, and have only increased since then. One of the interviewed companies also uses the graphics processing unit (GPU) intellectual property from Imagination Technologies, which after Qualcomm had the 2nd largest market share of IP for personal devices in 2013. Qualcomm who owns the most patents to the 3G standard with over 250 licenses in its CDMA portfolio has made considerable revenue gains thus far, but some analysts predict due to a transition into 4G technology without the same dominant 3G portfolio, they will lose their dominant market position.

Having taken into account these IP into the design process, the design is then sent to fabricators such as the Taiwan Semiconductor Manufacturing Industry (TSMC) who in 2013 owned at least 50% of the world's global maker share in fabrication, and others like the United Microelectronics Corporation (UMC) and Global Foundries). According to the interviewee, the fabrication process requires about 2-3 months.

This foundry business model is a result of increased efficiency and division of labour. Fabrication plants require large amounts of investments into manufacturing facilities. According to interviewees, one would have to spend an average of 5-10 billion USD to built a fabrication plant now. Since plants like TSMC exists, semiconductor industries can now focus on their area of expertise, which is design and customer relationship, and optimize their synergistic relationship for gains for all.

One of the recent revolutionary developments which have contributed to low-cost smartphone manufacturing has been the turnkey solution chipset, which includes the hardware reference design, the printed circuit board, the software, and instructions for how to create a mobile phone. This turnkey solution, amongst other electronic parts, are sent for white box packaging, then shipped to a distributor like WPG Holdings who are the largest electronics distributor in Asia. WPG and others will then distribute these chips and other related products to their customers, the smartphone manufacturers. This entire production cue takes about 3-4 months.

The turnkey solution as mentioned before vastly contrasts the traditional manufacturing process of a mobile phone, where a chip could be designed, given to the original equipment manufacturer (OEM) who would then design all the remaining parts. There used to be a very clear division of labour. Now, one interviewee explained, manufacturers will "buy a turnkey solution, open a factory, take a chassis (case), screw it all together, and sell it. This is what's driven the demand, and that's what created this low cost-market."

According to our interviewees, the low-cost production of this turnkey chip solution is the reason how so many of the phones in the sub-$100 dollar market exist today.

P.127 of Tsai, Diana H. A. “Knowledge Spillovers and High-Technology Clustering: Evidence from Taiwan’s Hsinchu Science-Based Industrial Park.” Contemporary Economic Policy 23.1 (2005): 116–128. Print.

IC Insights. “Taiwanese and Chinese Companies Represented Five of Eight Fastest Growing Top-25 Fabless IC Suppliers in 2013.” IC Insights. N.p., 7 May 2014. Web. 3 Sept. 2014.

Morgan, Timothy Prickett. “ARM Holdings Eager for PC and Server Expansion.” The Register, Feb. 2011. Web.

Trefis Team. “Why Qualcomm’s Royalty Rate Will Continue To Decline.” Forbes, 10 June 2014. Web.

Wang, Lisa. “TSMC Eyes 50% Global Market Share.” 26 Mar. 2014: 13. Print.

For more details visit http://editors.cis-india.org/a2k/blogs/interviews-with-semi-conductor-industry-professionals-in-taiwan-2

Changing Usage Models: Desktops to Ubiquitous Cloud-Based Mobile Computing (Interviews with Semiconductor Industry - Part 1)

maggie — 2014-12-26T12:08:34Z

This is the first of a four-part blog series highlighting findings from a small sample of interviews with fabless semiconductor industry professionals in Taiwan. These industry insiders was approached for the intent of understanding expert knowledge on the process of integrated circuit design. However, the conversations resulted in leanings far beyond that scope. This post explores the trends of personal computing technology, which provides the pretext for the narrowing of the Pervasive Technologies project scope to a focus on the mobile phone.

Since the mid-1990s, the dissemination of information communications technologies (ICTs) has been hailed as the solution to bridging the digital divide. This rationale led to a multitude of programs, including One Laptop per Child, the Aakash tablet, and most recently, Modi's 'Digital India' campaign, to ensure all Indians have a mobile phone by the year 2019.

The Pervasive Technologies project looking at Access to Knowledge has come to understand that mobile phone technology have become ubiquitous, with 79% of internet users accessing the internet through mobiles in 2014. Particularly for low-income consumers, those who do not have access to computing rely on their mobile phones for accessing tools ranging from the common email, text messaging, calling; and the more advanced and revolutionary - mobile banking (e.g. m-PESA), crowd-sourced environmental protection (e.g. SpillMap), and more.

The evolution to the ubiquity of mobile technology was a valuable learning gained from recent interviews in Taiwan with professionals from the fabless semiconductor chip design industry. A senior executive with over 20 years experience in the field provided some insight to trends/changes in personal computing technology upon inquiring about the recent trends and changes within the industry.

One significant change that has been occurring is the usage model of consumers. Desktops and even laptops are not fully mobile since they cannot be used in one's hands. As broadband have become more pervasive, smartphones and tablets have resulted in new usage models where computing can be done virtually anywhere. People now tend to vale this more than the desktop experience.

The 'cloud' has also changed computing because the performance requirements for PC processors and other technologies no longer have to be as advanced. In addition, there has been a big shift from desktop content creation to mobile computing. This has mostly been catered towards content consumption (e.g. accessing email, viewing photos, using social media, etc.).

As a result of changing usage models and cloud competing, there has been a general industry shift away from computers. The PC market has slowed down, and the smartphone and tablet markets have exploded. They are generally cheeper, don't have as many bugs, and are much more convenient. Previously, the big names were desktop providers HP, and Dell; but now "there's less sex appeal around it… we're not excited by it.. it's the smartphone that's very exciting". The tech revolution has brought to light exciting smartphone brands like HTC, Samsung, Google and Apple.

In addition to big name smartphone brands, smaller, low-cost manufacturers like Xiaomi are developing a new business model through service, or application shopping. Prices of smartphones are continuing to decrease, so manufacturers using this model are looking to sell their hardware with smaller margins, and profit mainly through software. According to Digi-Capital, an investment bank for mobile apps and games, by 2017, mobile apps could reach $70 billion in annual revenue. Thus, greater affordability for the physical devices are naturally occurring within the market due to changing business models.

Accessibility of mobile phones through decreased costs are also supplemented by the trend of technology becoming much more open in the past 10-20 years. "One of the biggest challenges in the last 10 years is that you've got open source, you've got open hardware…things like the maker movement….", including Arduino, Linux, and others. There is a general market trend of consumers wanting to know more about their products.

However, one interviewee believed it was still much too closed, likening today's lack of openness to selling a vacuum cleaner without the user guide explaining how it works. "It's basically the same as buying a Hoover for home, and you don't get the user manual. How am I supposed to change the bag inside? They're not going to tell you."

When asked if this demand for more openness will change the industry, he responded: "There is a demand, there is a lot of demand, but very little supply. There is demand from the outside, and those within the company. We have to convince our departments to be more open. We have to convince the engineers. It's a lot like convincing politicians, there is no immediate reward."

Given these trends, it was of one interviewees' belief that increased accessibility of technology through both decreased cost and increased availability may not necessarily lie in the legal environment or the policy sphere, but rather requires patience for the industry to adapt to a changing marketplace.

Understanding the modes and mediums which information, culture, and ultimately knowledge is accessed is fundamental to the Pervasive Technologies research as an Access to Knowledge issue. Thus, getting a grasp on technological trends, and being able to predict upcoming business models was a very valuable learning.

Guha, Romit, and Anandita Mankotia Mankotia. “PM Modi’s Digital India Project: Government to Ensure That Every Indian Has Smartphone by 2019.” The Economic Times 25 Aug. 2014. Web. 2 Sept. 2014.

See the research proposal for the Pervasive Technologies project here: http://cis-india.org/a2k/pervasive-technologies-research-proposal.pdf

“Smartphone Users Worldwide Will Total 1.75 Billion in 2014.” eMarketer. N.p., 16 Jan. 2014. Web. 3 Sept. 2014.

Takahashi, Dean. “Mobile Apps Could Hit $70B in Revenues by 2017.” VentureBeat. N.p., 29 Apr. 2014. Web. 7 Sept. 2014.

This will be further explored in the last blog post of this series.

For more details visit http://editors.cis-india.org/a2k/blogs/interviews-with-semi-conductor-industry-professionals-in-taiwan-1

Grounds for Compulsory Patent Licensing in United States, Canada, China, and India

maggie — 2014-07-29T08:45:25Z

The research paper seeks to answer questions about the grounds of compulsory licensing in international treaties with specific examples from America and Asia. The grounds for granting compulsory licenses, jurisdictional comparison of compulsory licensing, etc., are examined.

Holding ownership to a patented invention means one has certain exclusive rights: a) the right to decide who may use the invention during the time of protection; b) the right to give licenses to other parties to use the invention on mutually agreed terms; and, c) the right to sell and transfer ownership of the patent to someone else[1]. Once this patent expires, the invention would enter the public domain to be shared freely[2].

However, given certain conditions, a compulsory license can be granted, in which “authorization [is] given by national authority to a person without or against the consent of the titleholder, for the exploitation of a subject matter protected by a patent or other intellectual property rights” [3].

Compulsory licensing has been most contentiously applied for patented pharmaceutical companies who are often looking to recoup research and development costs. Proponents of this instrument are now also growing amongst advocates for climate change mitigation technologies [4]. The Pervasive Technologies: Access to Knowledge in the Marketplace project is broadly assessing access to knowledge through sub-100 dollar devices. The accessibility of these critical technologies, and subsequent access to knowledge, information, and culture through these devices may be implicated by this policy lever[5]

Thus, this paper seeks to answer the following questions:

What are the grounds for compulsory licensing set in international treaties?
How does Canada, United States (i.e. North America), India, and China (i.e. Asia) provide for compulsory licensing within its national laws?

This will be done through first providing an overview of the relevant international treaties to understand the compulsory licensing framework which signatory nations must follow. Then, utilizing Correa (1999)'s study as a foundation, an analysis of the text within the four aforementioned's codified laws will be assessed to understand all the possible grounds compulsory licensing can be provided. This paper will conclude by summarizing any significant distinctions across the four jurisdictions.

Compulsory Patent Licensing in International Law and Regional Trade Agreements
Paris Convention for the Protection of Industrial Property (1883) [6]
Article 5(2) of the Paris Convention provides each country with the right to "grant compulsory licenses to prevent abuses which might result form the exercise of exclusive rights conferred by the patent… " United States, Canada, China, and India are four of the 175 contracting parties to this convention [7]. This can only be done after 4 years of applying for the patent, or 3 years from the date in which the patent was granted. This means, a sufficient amount of time must have elapsed to allow the rights holder to exploit the invention.

North American Free Trade Agreement (1994)[8]
Article 1704 in NAFTA provides that "appropriate measures" can be taken to control abusive or anticompetitive practices. The United States and Canada have utilized this ground of anti-competition to grant numerous compulsory licenses.

Article 1709 notes that there must not be a discrimination of technology – patents may only be revoked when the grant has not remedied lack of exploitation, and that the use of the patent adheres to certain criteria.

In 1993, Canada repealed the compulsory licensing regulations from its Patent Law to comply with the international TRIPS and NAFTA treaties.

Trade Related Aspects of Intellectual Property Rights (1994) [9]
All members of the World Trade Organization is provided the right to use compulsory licenses via Article 31 Other Use Without Authorization of the Right Holder within the Trade Related Aspects of Intellectual Property Rights (TRIPs) agreement. This Article stipulates 12 procedural provisions: compulsory licensing should be granted on 'individual merits'[10], must have shown prior effort to obtain authorization under reasonable commercial terms [11], must be non-exclusive[12], adequate renumeration must be provided[13], and the license must be terminated as soon as the circumstances for which it was granted cease to exist[14].

Suggested, but not obligatory grounds for which compulsory licensing could be granted under the TRIPs agreement are a) emergency and extreme urgency, b) anticompetitive practices, c) public non-commercial use, and the d) use of dependent patents[15].

Doha Declaration on the TRIPS Agreement and Public Health (2001)
The Doha Declaration is a clarification of the earlier TRIPS agreement in response to some countries' public health concerns due to obstacles to accessing patented medicines.[16]

Paragraph 4 of the Doha Declaration expressly allows Members to take measures to protect public health, while paragraph 5b states that "each Member has the right to grant compulsory licenses and the freedom to determine the grounds upon which such licenses are granted". Freedom of each country to define the terms of their intellectual property rights is also further reiterated.

Grounds for granting compulsory licenses
Correa (1999) in his paper Intellectual Property Rights and the Use of Compulsory License: Options for Developing Countries outlines eight common grounds which provided the framework for this comparative analysis between the jurisdictions of the United States, Canada, India, and China. Through analyzing the codified law on compulsory licensing, a few other grounds were added to the list.

Refusal to deal
In principle, the patent owner has an exclusive right to determine whether or not to issue a license to a third party. However, if under reasonable terms, one still refuses to issue a license, national courts may interpret this as an abuse of patent rights, resulting in lack of availability of the product and commercial development. In the United States, this is often raised as an anticompetitive issue.

Non-working and inadequate supply
The "working obligation" was initially understood as the industrial use of an invention, which according to Article 31 of the TRIPs Agreement required working 'predominantly' for local markets. However, many countries have defined 'working' to include commercial use of the invention, in which importation of a product would suffice[17].

Public interest
The public interest needs to be balanced with individuals' rights, and it is the responsibility of the courts or administration in each respective country to determine this. Thus, what actually constitutes as "public interest" varies depending on time and jurisdiction. For example, countries with limited industrial development could consider a compulsory patent to develop its national industries as for public interest [18]. Accessibility of a product at the lowest price have been argued to be in public interest, but some courts have ruled this to be invalid[19]

Anticompetitive practices
A patent is essentially a temporary monopoly meant to provide an economic reward for the inventor's work, as well as additional incentive to continue producing[20]. However, excessive monopolization through unlawful or unfair practices, such as when a patent is overly broad, acquiring and accumulating patent portfolios, and subsequent patent trolling are some acts that be considered anticompetitive patent practices[21]. Compulsory licenses have also been granted through this ground under anti-monopoly, antitrust, and competition laws.

Governmental use
Each country's government decides what is to be considered as governmental use. Occasionally synonymous to government use has also been public, non-commercial use, or as suggested by the TRIPs agreement, for the purposes of national emergency or urgency. This is assuming the government is acting on behalf of public interest; given its lack of an international standardized definition, this ground can be utilized and interpreted in other ways.

Facilitate use of dependent patents
When a new invention (dependent invention) cannot be developed without infringing on the license of an existing patented invention, (principle invention) a compulsory licensing can be granted to facilitate innovation. This ensures the patents of principle inventions would not block technical progress. The TRIPs agreement expressly allows this, provided reasonable compensation is articulated. In some jurisdictions, cross-licensing, (which involves a licensing agreement between two parties to exploit each other's intellectual property[22]) can be negotiated to resolve this issue.

Compulsory licenses for medicines
Numerous countries have issued licenses for increased accessibility to food and medicine. Prior to the Doha Round, TRIPs prohibited this, as Article 27 states "national laws cannot discriminate in exercise of patent rights on the basis of field of technology". However, the Doha Declaration addressed this, allowing pharmaceuticals to have increased accessibility (via pricing, production, and importation) for the sake of public health.

Exclusive Grant Back or Coercive Package Licensing
A grant back can be agreed upon when there is an expectation of an improvement on the licensed technology through increased superiority or method [23]. This allows the licensee to commercialize an improved product without having to file for another patent[24]. Exclusive grant back provides the licensor the exclusive right to use or sublicense improvements, while licensee retains non-exclusive right to practice the improvements.[25] Grant-backs, particularly exclusive ones are sometimes deemed as anticompetitive.

A package license, otherwise known as patent pools is used when the licensing of more than one patent is necessary to commercialize an invention [26] Coercive package licensing can occur when the licensing of other patents within the package is forceful and unnecessary. The defining and interpretation of 'coercion' ultimately depends on each country's respective authorities.

Hindrance from Importation of Abroad[27]
This ground may fall under non-working, but is unique in that it notes a state's ability to grant compulsory license on behalf of a foreign-owned patent. Yang (2012) cites that this as one of the most controversial aspects of compulsory patent licensing, as countries may feel undermined when another state can grant compulsory licenses that are against their own interests[28].

Jurisdictional comparison of Compulsory Licensing
The following table was developed as an exercise to review compulsory licensing within the jurisdictions of the United States, Canada, India, and China. Utilizing Correa (1999)'s findings as a skeletal framework, the four aforementioned countries' codified patent laws were used to determine the grounds for compulsory licensing. The main compairson was done through analyzing the specific text within the laws of the four jurisdiction – one approach to treaty and law interpretation[29] However, for those countries that were lacking general provisions on compulsory licensing (i.e. United States, and eventually Canada in 1993[30]), there was a need to expand to a more comprehensive approach and look through other codified laws beyond patents and intellectual property, as well as through case law to see if the mentioned grounds have been used to provide for compulsory licenses[31].

Grounds		Countries	Law
Refusal to deal and/or abuses of patentees' exclusive rights		U.S	n/a in codified law…refusal to deal is an essential element of intellectual property rights…but can lead to anti-competition in which Antitrust laws can be used
		Canada	Patent Law - Abuse of Rights 65.2(d): "if by reason of refusal of patentee to grant* a license or licenses on reasonable terms…*
		India	Patent Act 1970 S.4(d) *"Refusal to deal"* includes any agreement which restricts, or is likely to restrict, by any method the persons or classes of persons to whom goods are sold or from whom goods are bought Patent Act, 1970 S. 84.7(a) " If by reason of refusal…ii) demand for the patented article has not been met to an adequate extent or on reasonable terms; or iii) a market for the patented article manufactured in India is not being supplied or developed; or iv) the establishment or development of commercial activities in India is not prejudiced Patent Act 1970 S.84 (6) " …Controller shall take into account, - i) nature of invention, the time which has elapsed since the sealing of the patent and the measures already taken by the patentee or any licensee to make full use of the invention; iv) ..whether applicant has made efforts to obtain a license from the patentee on reasonable terms conditions, and such efforts have not been successful within a reasonable period *period not ordinarily exceeding a period of six months* as the Controller may deem fit
		China	Patent Law of the People's Republic of China - Article 48 (1): " When it has been 3 years since the date the patent right is granted, and four years since the date the patent application is submitted, the patentee, without legitimate reasons, fails to have the patent exploited or fully exploited"
Non-working and inadequate supply		U.S.	n/a
		Canada	Patent Act 1935: s.65 a): "… is capable of being worked within Canada but is not being worked within Canada on a commercial scale, and no satisfactory reason can be given for that non-working…" REPEALED in 1993 due to NAFTA and TRIPS
		India	Patents Act, 1970 S. 84 (1): " At any time after expiration of 3 years from the date of the grant of a patent, any person interested may make an application… b)…not available to the public at a reasonably affordable price, or c) that the patented invention is not available to the public at a reasonably affordable price Patent Act 1970 S.84(2): "…reasonable requirements of the public.. not satisfied or that the patented invention is not worked in the territory of India, Patent Act, 1970 S. 84.7(a) "If by reason of refusal…ii) demand for the patented article has not been met to an adequate extent or on reasonable terms; or iii) a market for the patented article manufactured in India is not being supplied or developed; or iv) the establishment or development of commercial activities in India is not prejudiced Patent Act, 1970 S. 84.7(d): " If the patented invention is not being worked in the territory of India on a commercial scale to an adequate extent, or is not being so worked to the fullest extent that is reasonably practicable
		China	Measures for Compulsory licensing of Patent Implementation (2012) - Ch 2 Art. 5: "If without good reason not implemented or fully implemented, their licensing patent within 3 years from the date of grant of patent right..and 4 years from the date of filing patent"
Public interest:		U.S.	"...no general provision allowing authorities to override patents in the larger public interest” [32] Bayh-Dole Act of 1980 - allow government to exercise "march in" rights with regard to government funded research results that universities might otherwise patent But US has granted compulsory licenses when felt public interest was at stake (Atomic Energy Act and Clean Air Act 1970, Federal Non-Nuclear Energy Research and Development Act 1973)
Canada	Patent Law - Abuse of Rights 65.2(d): "if by reason of refusal of patentee to grant a license or licenses on reasonable terms… in public interest that license/licenses should be granted" Patent Act S. 39. (3) License under patent relating to food: " In the case of any patent…of food…shall grant to any person applying…Commissioner shall have regard to the desirability of making the food available to the public at the lowest possible price consistent with giving to the inventor due reward for the research leading to the invention" REPEALED in 1993 due to NAFTA and TRIPS
India	Patent Act 1970, S. 84 (2)…not available to the public at a reasonably affordable price Patent Act 1970 S. 84 (6) " …Controller shall take into account, ii) the ability of the applicant to work the invention to the public advantage Patent Act, 1970 - S. 92 Special provision for compulsory licenses on notifications by Central Government-(1): " If Central Government is satisfied… circumstances of national emergency or in circumstances of extreme urgency, or in case of public non commercial use...
China	Patent Law - Article 49: " Where a national emergency or any extraordinary state of affairs occurs, or public interests so require…" Measures for Compulsory Licensing of Patent Implementation - Article 6: If emergency or irregular event of the state…or for purposes of public interest
Anti-competitive practices		U.S.	Antitrust & Trade Law: Sherman Act 15 U.S. C.S. 2 - Monopolizing trade a felony; penalty: " Every person who shall monopolize, or attempt to monopolize…any part of trade or commerce among several States, or with foreign nations…deemed guilty of a felony, and conviction.."
		Canada	Competition Act (S. 32 RSC 1985): " …where use has been made of exclusive rights and privileges conferred by one or more patents for invention…(a) limit unduly the facilities for transporting, producing, manufacturing, supplying…may be a subject of trade or commerce, (b) restrain or injure, unduly, trade or commerce…(c) prevent, limit, or lessen, unduly, the manufacture or production…or unreasonably enhance the price thereof, or (d) prevent or lessen, unduly, competition in…
India	India Patent Law Chapter 90 (1.ix) Terms and Conditions of compulsory licenses… granted to remedy a practice determined after judicial or administrative process to be anticompetitive…
China	Measures for Compulsory Licensing of Patent Implementation, 2012 - Article 11: " …that actions of patent holder in exercising patent right…deemed to be monopolistic actions" Patent Law of the People's Republic of China - Article 48 (2): " …patentee's exercise of the patent right is in accordance with law, confirmed as monopoly and its negative impact on competition needs to be eliminated or reduced"
Governmental use		United States	28 United States Code 1498: " …when used or manufactured by or for the United States without license of the owner…remedy shall be..Claims for recovery of his reasonable and entire compensation for such use and manufacture…" ie. Government does not have to seek license or negotiate for use, and the only appeal for patent owner is compensation
		Canada	Under the 1993 and 1994 amendments to the Patent Act of 1985, section 19.1: "the Commissioner may, on application by the Government of Canada or the government of a province, authorize the use of a patented invention by that government ."
		India	Patent Act, 1970 - S. 100 Power of Central Government to use inventions for purposes of Government (1): "…at any time…the Central Government and any person authorized in writing… may use the invention for the purposes of Government in accordance with provisions of this chapter" Patent Act, 1970 S. 100 Power of Central Government to use inventions for purposes of Government (2): " Where an invention has, before priority date of relevant claim, been duly recorded in a document, or tested or tried, by or on behalf of the Government or Government undertaking… any use of the invention by the Central Government or any person authorized in writing by it for the purposes of Government may be made free of any royalty or other renumeration to the patentee " Patent Act, 1970 S. 100 Power of Central Government to use inventions for purposes of Government (6): " The right to make, use, exercise, and vend an invention for the purposes of Government under sub-section (1) shall include the right to sell on noncommercial basis, and person c laiming through..as if Central Government or authorized were the patentee of the invention
China	Patent Law of PRC Art. 14: "If an invention patent of a State-owned enterprise or institution is of great significance to national or public interests, upon approval by State Council.. Patent Law PRC Article 49: " Where a national emergency or any extraordinary state of affairs occurs…patent administration department under the State council may grant a compulsory license for exploitation of an inanition patent or utility model patent" Patent Law PRC Article 14: “ If an invention patent of a State-owned enterprise or institution is o f great significance to national or public interests, upon approval by the State Council, the relevant competent department under the State Council ...may decide to have the patent widely applied within an approved scope and allow the designated units to exploit the patent, and the said units shall pay royalties to the patentee in accordance with the regulations of the State.
Facilitate use of dependent patents		United States	N/A - U.S. Does has not formally codified a general provision for Compulsory licensing of Dependent Patents [33]
		Canada	N/A
		India	Patent Act 1970 - Section 88 Power of Controller in Granting Compulsory licenses (3): …if Controller satisfied that the applicant cannot efficiently or satisfactorily work the license granted to him under those patents without infringing the other patents held by the patentee, and if those patents involve important technical advancement of considerable economic significance …may direct grant of a license…
		China	Patent Law - Ch 6 Art 51: " If an invention/utility model…represents major technological advancement of remarkable economic significance, compared with an earlier invention or utility model for which the patent right has already been obtained, and exploitation of former relies on exploitation of latter…may grant it a compulsory license to exploit..."
Compulsory licenses for medicines		United States	N/A but has threatened Bayer for compulsory licensing of Ciproflaxin medicine who subsequently dropped their prices drastically [34]
		Canada	Bill C-9 Amendment to Food and Drugs Act, 2004: "…pharmaceutical products intended for export in accordance with that WTO General Council decision…to comply with…sold on domestic market" Patent Act (4) License under patent relating to medicine - " ..intended or capable of being used for the preparation of production of medicine…Commissioner shall grant.. REPEALED in 1993 due to NAFTA and TRIPS
India	Patent Act 1970 Section 92.A Compulsory license for export of patent pharmaceutical products in certain exceptional circumstances: " …shall be available for manufacture and export of patented pharmaceutical products [35] to any country having insufficient or no manufacturing capacity in the pharmaceutical sector for the concerned product to address public health problems…" Patent Act, 1970 Section 83.(d): "General principles applicable to working of patented inventions… do not impede protection of public health and nutrition…
China	Patent Law of PRC: Article 50: " For the benefit of public health…grant compulsory license for manufacture of the drug, for which a patent right has been obtained, and for its export to the countries or regions that conform to the provisions…" Measures for Compulsory Licensing of Patent Implementation, 2012 - Ch 2 Art 7: " For purposes of public health…able to implement petition for compulsory licensing…for manufacture of patented medicines..and export of, to following countries/regions: 1) The most underdeveloped countries/regions; 2) Developed/developing members of the WTO
Exclusive grant-back and Coercive package licensing		U.S.	Legal in the past – granted in Transparent Wrap Machine Corp v Stokes & Smith Co. but discouraged... interpreted by Rule of Reason doctrine which is an interpretation of Sherman Antitrust (Anti-competition) Act[36] Now Department Of Justice from 2007 has said must be non-exclusive under its Antitrust laws [37]
		Canada	N/A
		India	Patent Act, 1970 Section 84 (7.c): …Reasonable requirements of the public shall be deemed not to have been satisfied [38] - c) if the patentee imposes a condition upon the grant of license under the patent to provide exclusive grant back, prevention to challenges to validity of patent, or coercive package licensing
		China	N/A
Hindered by importation from abroad		U.S.	N/A
		Canada	N/A
		India	Patent Act, 1970 Section 84 (7.e): " if the working of the patented invention in the territory of India on a commercial scale is being prevented or hindered by the importation from abroad of the patented article by…i) patentee..ii) persons purchasing…iii) other persons not taking proceedings for infringement
China	N/A

Summary of Cross-Jurisdictional Comparison
As mentioned previously, this comparison necessitated an expansion into codified law outside of compulsory licensing and patent law into case law, since the United States had never written a general provision for compulsory licensing, and Canada had repealed theirs in 1993 upon the signing of the NAFTA and TRIPS agreement. For Canada, compulsory licenses (CLs) continued to be granted following the repeal through the Foods and Drugs Act, as well as the Competition Act. Despite United States' lack of general provisions, Knowledge Ecology International claims it is the world's leader in the use of CLs, yet hypocritical to developing countries' requests for affordable patented pharmaceuticals.[39]

In general, India and China both have very extensive compulsory licensing laws. China's State Intellectual Property Office even developed additional Measures to account for the execution of compulsory licensing. Despite comprehensive CL provisions, India has had only one compulsory license ever granted in the case of Natco Pharma Ltd v. Bayer Corporation, for the domestic production of cancer-drug Nexavar. [40] China has yet to grant any compulsory license, but the new Measures may signify an increasing willingness to do so, or even to be used as a bargaining tool. However, given its goal of developing domestic intellectual property (i.e. China's 5-year plan), it is unlikely that China will grant compulsory licenses in the masses.[41]

In regards to the specific grounds themselves, some grounds noted particular differences per country.

Under U.S. Intellectual Property Law, refusal to deal is actually is considered a right, thus does not provide for compulsory licensing; depending on the degree however, it could lead to anti-competition[42]. According to the Paris Convention, one can only request consideration for a CLs 3 years from the granting of a patent, or 4 years from application, allowing said time for provision of dealing. However, India seems to have a more stringent period of not exceeding a period of six months, while China noted specifically not 'without legitimate reasons'.

The non-working and inadequate supply was again not present in U.S. Law, yet Canada did include it in its former compulsory licensing provision prior to repeal. Canada had defined 'working' specifically referring to a commercial scale when compulsory licensing was in effect. India's 'working' means being available at a reasonably affordable price, and supplied or developed, through the establishment of commercial activities, worked to the fullest extent that is fully practicable, while China mentioned non-working 'if without good reason, it is not implemented or fully implemented'.

The United States does not have any provision providing explicitly for public interest. However, under the Bayh-Dole Act, government-funding for research during the economic crisis in the 1970s was granted as long as the inventors agreed to allow petition for 'march-in rights', in which the government or a third party “shall have the right...to require the contractor...to grant a nonexclusive, partially exclusive, or exclusive license” (35 U.S. Code S203(a)) if it meets one of four requirements - one being to “...alleviate health and safety needs which are not reasonably satisfied...” (35 U.S. Code Section 203). Canada's public interest clause had existed, but was repealed. India now states that CLs can be granted to make available to the public “at a reasonably affordable price, to public advantage, and for public non-commercial use”. In China, public interest is provided in conditions of 'national emergency or extraordinary state of affairs, for the purpose of public interest'.

The United States does however strongly uphold and value competition, and have granted CLs to remedy anticompetitive practices under its Antitrust laws, prohibiting any 'attempt to monopolize any part of trade or commerce'. China also uses the language of 'monopolistic actions' and allows compulsory licensing if its “negative impact on competition needs to be eliminated or reduced.” Canada's Competition Act allows for compulsory licensing if one 'limits unduly, the facilities for transporting, producing, manufacturing... restrain or injure unduly, trade or commercial etc..' .preventing fair competition. India also notes the remedying of anticompetitive acts in its patent laws.

Governmental use in the United States have been granted for use by the Department of Defense and as mentioned previously for the Bayh-Dole Act. However, unlike the other countries of focus, there is no way to appeal a CL for the purposes of government-use. The only way to remedy this as a patent owner is compensation. In Canada, the Commissioner may on application by the Government of Canada or province authorize a CL. Indian patent law also allows CLs for the purposes of the Government, with the explicit possibility of being made free of any royalty or renumeration. It also expressly notes within S103 that one can petition to the Government if this occurs. The Chinese Patent Law notes governmental use through the language of 'great significance to national or public interests', and 'national emergency or extraordinary state of affairs. The possibility of appeal is also expressly noted in Article 58.

Neither United States or Canada have formally codified any mention of compulsory licensing for the use of dependent patents, though it does exist in the TRIPs agreement they both comply to. In India patent law, CLs is granted through this ground “only if it involves important technical advancement of considerable economic significance, and... only if it cannot be accomplished without infringing other patents.” In China, the law states that if an “invention/utility model represents major technological advancement...compared with earlier invention or utility model...and the exploitation of former relies on exploitation of the latter...”, a compulsory license may be granted.

Compulsory licensing for medicine in the United States again have never been codified, but have been used to encourage Bayer to reduce their prices under the possibility of being issued compulsory liceninsg. Home to many of the pharmaceutical industries who own patents to medicines, the United States has been called hypocritical due to its common lack of providing affordable pharmaceuticals. Canada allows for CLs under the Food and Drugs Act which points to the World Trade Organization guidelines. Prior to the repeal of its compulsory licensing act, Canada also had specific provisions relating to medicines, and was actually the first country to authorize the compulsory licensing of an AIDS drug for Rwanda for export.[43] In India, the only compulsory license that has ever been granted was for cancer drug Nexavar. In its compulsory licensing provision, it states that CLs are “available for manufacture and export of patented pharmaceutical products...to any country having insufficient or no manufacturing” abilities. Similar to the TRIPs agreement, it also states that none of the principles should impede the protection of public health and nutrition. China's patent laws state that CLs can be used for the benefit of public health. The Measures for Implementation specifies more specifically which countries and regions are allowed, which includes WTO members, or the 'underdeveloped' nations.

Only in the Indian Patent Law does it explicitly allow for CL in the event of exclusive grant backs due to anti-competition and/or not being reasonable to the public. On the contrary, the United States actually had allowed exclusive grant back in the Transparent Wrap Machine Corp v Stokes & Smith Co. case[44]. However, the FTC now strongly recommends against it as it is considered anticompetitive when a grant-back is exclusive[45]. Canada and China does not seem to have this condition in their laws.

Similarly, only in the Indian patent law does coercive package licensing provide for compulsory licensing. This clause may have implications on standard-essential patent pools when attempting to determine which patents are indeed 'essential', and if they comply with fair, reasonable, and non discriminatory regulations[46].

Indian Patent Law also expressly allows for compulsory licensing on the ground that a product is hindered by importation from abroad. It must be proven the lack of accessibility is soley due to the process of it being imported, perhaps affected by natural disasters, socioeconomic reasons, political instability, sanctions, or more – ultimately affecting the cost and availability of this product. [47]

Conclusion and Further Reflections on Compulsory Licensing
Ultimately, there seems to be no correlation between the detail and scope of compulsory licensing (and other codified) law, and the number of compulsory licenses granted. However, it must be noted that the Eastern countries of focus in this review have had much less time developing its intellectual property landscape. In addition, the comprehensiveness of India and China's patent laws also reflect the incorporation of valuable lessons learned from poor implementation of other countries.

The prevalence of broadly defined patents, patent trolling, and the increasing need to navigate patent thickets all act as barriers to innovation and production to a commercial scale in which these technologies can actually be disseminated. The Pervasive Technologies project looks ultimately at bridging the digital divide through providing access to low-cost technology, and subsequently access to information, culture, and knowledge.

Compulsory licenses can be used to decrease the cost burden of production, and reduce barriers to innovation, ultimately providing greater accessibility to these tools for all of society. The Centre for Internet and Society has proposed and continues to advocate the establishment of patent pools for low-access devices through the use of compulsory licenses to achieve this goal[48].

[1] WIPO. What Is Intellectual Property. World Intellectual Property Organization, 2012. Print. 5

[2] WIPO, 6

[3] Correa, Carlos M. “Intellectual Property Rights and the.” Trade Related Agenda Development and Equity (1999): 3

[4] Contreras, Jorge L., and Charles R. McManis. “Compulsory Licensing of Intellectual Property: A Viable Policy Lever for Promoting Access to Critical Technologies?” TRIPS and Developing Countries – Towards a New World Order? (Gustavo Ghidini, Rudolph J.R. Peritz & Marco Ricolfi, eds., 2014 (Edward Elgar)) (2014): 112 Print.

[5] Abraham, Sunil. Letter for Establishment of Patent Pool for Low-Cost Access Devices through Compulsory Licenses. 27 June 2013. Accessed: http://cis-india.org/a2k/blog/letter-for-establishment-of-patent-pool-for-low-cost-access-devices

[6] The Paris Convention is an intellectual property treaty covering industrial property: patents, trademarks, industrial designs, utility models, service marks, trade names, and geographical indicators.

WIPO. “Summary of the Paris Convention for the Protection of Industrial Property (1883).” World Intellectual Property Organization. Website. http://www.wipo.int/treaties/en/ip/paris/summary_paris.html

[7] WIPO. “WIPO-Administered Treaties: Contracting Parties.” World Intellectual Property Organization. Website. http://www.wipo.int/treaties/en/ShowResults.jsp?treaty_id=2

[8] The North American Free Trade Agreement (NAFTA) is the largest free trade agreement in the world, with members Canada, United States, and Mexico.
USTR. “North American Free Trade Agreement (NAFTA).” Office of the United States Representative. Website. http://www.ustr.gov/trade-agreements/free-trade-agreements/north-american-free-trade-agreement-nafta

[9] The Trade Related Aspects of Intellectual Property RIghts (TRIPS) agreement is a treaty which provides basic intellectual property provisions for international law, and stipulates that members shall be free to determine methods of implementing the provisions, in addition to enact more specific measures provided it coincides with the rest of the agreement.
World Trade Organization. “Agreement on Trade Related Aspects of Intellectual Property Rights, Including Trade in Counterfeit Goods.”WTO Legal Texts - A Summary of the Final Act of the Uruguay Round. Website. http://www.wto.org/english/docs_e/legal_e/ursum_e.htm#nAgreement

[10] TRIPS - Article 31.a)

[11] TRIPS - Article 31.b)

[12] TRIPS - Article 31.b)

[13] TRIPS – Article 31.h)

[14] TRIPS – Article 31.c)

[15] TRIPS – Article 31

[16] fWHO. “The Doha Declaration on the TRIPs Agreement and Public Health.” World Health Organization. http://www.who.int/medicines/areas/policy/doha_declaration/en/

[17] Correa, 11-12.

[18] Fauver, Cole M. “Compulsory Patent Licensing in the United States: An Idea Whose Time Has Come.” Northwestern Journal of International Law and Business 8.3 (1988): 666–685. Print. p671

[19] Correa, 13

[20] Ferrell, John. Patent Pro Se: The Entrepreneur’s Guide to Provisional Patent Applications. BayWater Publishing, 2010. Print.

[21] Milchenko, Oleg. “Contemporary Anti-Competetive Practices of Patents Usage.” Journal of International Commercial Law and Technology 8.3 (2013): 1-13. Print.

[22] Shapiro, Carl. “Navigating the Patent Thicket: Cross Licneses, Patent Pools, and Standard Setting.” Innovation Policy and the Economy 1 (2001): 119–150. Print.

[23] McGurk, Thomas B. “The Grant-Back Clause in Your Technology License.” Biodiesel Magazine 17 Jan. 2013.

[24] Origin IP Academy. “Exclusive Grant Back License.” Origiin IP Academy 15 Nov. 2009. Blog. Accessed: http://origiinipae.blogspot.in/2009/11/exclusive-grant-back-license.html

[25] Dykeman, David J. “When Licensing out Patents, Make Sure Improvements Are Granted Back.” Boston Business Journal 8 Mar. 2006. Blog retrieved from: http://www.bizjournals.com/boston/blog/mass-high-tech/2006/03/when-licensing-out-patents-make-sure.html?page=all

[26] Origiin IP Academy. “Coercive Package Licensing.” Origiin IP Academy 11 Nov. 2009. Accessed: http://origiinipae.blogspot.in/2009/11/coercive-package-licensing.html

[27] Reddy, Prashant. “‘Working’ a Patent under the Indian Patent Act, 970 - Does Importation of a Patented Invention Count?” Spicy IP - Decoding Indian Intellectual Property Law. 22 Apr. 2010. Retrieved: http://spicyip.com/2010/04/working-patent-under-indian-patent-act.html

[28] Yang, Deli. “Compulsory Licesning: For Better or for Worse, the Done Deal Lies in the Balance.” Journal of Intellectual Property Rights 17 (2012): 76–81; p80 Print. Global IP Debates

[29] Shaw, Malcom N. International Law 7th Edition. 5th ed. Cambridge University Press, 2003. Print.

[30] Canada had repealed its section on Compulsory Licensing in order to comply with the TRIPS and NAFTA agreements

[31] A more comprehensive approach could be to assess broadly ALL the compulsory licensing cases rather than just a select few ….particularly for United States and Canada...

[32] http://www.aals.org/documents/2006intprop/JeromeReichmanOutline.pdf

[33] Reichman, Jerome. “Compulsory Licensing of Patented Inventions: Comparing United States Law and Practice with Options under the TRIPS Agreement.” Vancouver, Canada: Duke University School of Law, 2006.

[34] Reichman, Jerome H. “Comment: Compulsory Licensing of Patented Pharmaceutical Inventions: Evaluating the Options.” The Journal of Law, Medicine, and Ethics 37.2 (2009): 247–263. Print.

[35] Pharmaceutical products' means any patented product, or product manufactured through a patented process, of the pharmaceutical sector needed to address public health problems and shall be inclusive of ingredients necessary for their manufacture and diagnostic kits required for their use"

[36] Dratler, Jay. Licensing of Intellectual Property. New York: Law Journal Press, 2005: 7.89 Print.

[37] Miller, Mark E., and David S. Almeling. “DOJ, FTC Redefine Antitrust Rules on Patent Pools.” National Law Journal. 29 Oct. 2007.

[38] Therefore compulsory licensing can be granted given Controller agrees

[39] Raja, Kanaga. “US Leads the World in Use of Compulsory Licenses, Says KEI.” Third World Network. N.p., 18 Mar. 2014.

[40] Bakhru, Rachna. “India Grants First Compulsory Licence under Patents Act.” Intellectual Property Magazine June 2012: 46–47. Print.

[41] Miller Canfield. “China Allows Compulsory Licensing.” Law FIrm of Miller Canfield. Dec. 2012. Retreived: http://www.millercanfield.com/resources-321.html

[42] Genevaz, Simon. “Against Immunity for Unilateral Refusal to Deal in Intellectual Property: Why Antitrust Law Should Not Distingusih between IP and Other Property Rights.” Berkeley Technology Law Journal 19.2 (2014): 742–784. Print.

[43] World Trade Organization. “Canada Is First to Notify Compulsory License to Export Generic Drug.” WTO | 2007 News Items. N.p., 4 Oct. 2007.

[44] sSchmalbeck, Richard L. “The Validity of Grant-Back Clauses in Patent Licensing Agreements.” University of Chicago Law Review 42 (1975): 733–748.

[45] Miller & Ameling, 2007: 3

[46] Lerner, Josh, and Jean Tirole. “Standard-Essential Patents.” Working Paper 43.

[47] Reddy, 2010

[48] See Executive Director of CIS' letter to the government here: http://cis-india.org/a2k/blog/letter-for-establishment-of-patent-pool-for-low-cost-access-devices

For more details visit http://editors.cis-india.org/a2k/blogs/grounds-for-compulsory-patent-licensing-in-us-canada-china-and-india