Page 166 - A Study on the Role of UGC Platforms in Copyright Law：An Intermediary-oriented Approach

A Study on the Role of UGC Platforms in Copyright Law: Chapter 5 Formulating a Non-commercial UGC Creation Levy Scheme
An Intermediary-oriented Approach

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suggested in their joint report. Considering how frequently foreign copyrighted works are
used by boundless networks, this thesis argues that establishing transnational CMOs through
bilateral, regional or international treaties to distribute revenues to foreign copyright owners
would be efficient.
Some countries, especially civil law countries, only allow one CMO to represent
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copyright owners in one specific category. Other countries, especially common-law
countries, allow competition between CMOs in the same field, such as ASCAP, BMI
and SESAC, which all manage musical works in the US. Although the latter approach
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encourages competition between CMOs and gives more protection to individual members,
these CMOs have fewer advantages in distributing levies. If there is only one CMO
governing a particular category of copyright, a leviable device or service only needs to
submit levies to the CMO in the specific field of the copyrighted works that the UGCs are
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based on. The CMO can then distribute levies to the copyright owners in this category.
However, if there is more than one CMO in the same field, the leviable device or service
must separate the total amount of levies and then allocate them to various competitive
CMOs. This would be difficult, if not impossible, considering the large number of copyright
owners to be allocated. That might be one of the reasons why the US introduced a new
CMO, the Mechanical Licensing Collective, in the Music Modernization Act passed in
2018. The Mechanical Licensing Collective maintains a comprehensive database of musical
work. It grants blanket mechanical licenses for streaming or downloading musical works
and remunerates composers and music publishers. By the same token, the proposal in
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Section 5.5.2, which utilizes the intermediate role of UGC platforms to develop content

234 IFRRO and WIPO (n 206) 22.
235 Adolf Dietz, ‘Legal Regulation of Collective Management of Copyright (Collecting Societies Law) in Western and Eastern
Europe’ (2002) 49 Journal of Copyright Society of the U.S.A 897, 905; Ariel Katz, ‘The Potential Demise of Another
Natural Monopoly: Rethinking the Collective Administration of Performing Rights’ (2015) 1 Journal of Competition Law
and Economics 541, 544; For example, PRS in the UK represents songwriters, composers and music publishers. AWG in
Australia represents writers for stage, screen, radio and online. CWWCS in China represents written material publishers.
HKCLA in Hong Kong represents newspapers and magazines.
236 Katz (n 236) n 13.
237 If the UGC facilitated by the leviable device or service mainly uses one category of copyrighted works, the device or service
only needs to submit levies to the corresponding CMO which will distribute levies to copyright owners of the particular
category. For example, Flickr only needs to submit levies to the image-based CMO. SoundCloud only needs to submit levies
to the music-based CMO. Some UGC might be based on more than one category of copyrighted works. For example, video-
based UGC platforms such as YouTube host UGC that contains films, music works and even photos and literary works.
A possible solution is to use content identification technology along with sample survey to UGC creators mentioned in
Section 4.4.2 to make a rough estimation of how different types of copyrighted works contribute to UGC, and then allocate
levies to the corresponding CMOs in proportion. For example, if it turns out that films make 70% contribution to UGC on
YouTube, music works make 20% of contribution, photos make 5% contribution and literary works contribute 5%, YouTube
will distribute 70% of levies to film-based CMO, 20% of levies to music-based CMO, 5% to image-based CMO and 5% to
literary work-based CMO. Then each CMO will allocate the levies to each right holder in proportion to the popularity of the
copyrighted work.
238 Dave Davis, ‘Music Modernization Act of 2018 Becomes Law’ (Copyright Clearance Center, 11 October 2018) <https://
www.copyright.com/blog/music-modernization-act-introduced-house-senate/> accessed 10 July 2019.

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