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CHAPTER I GENERAL PRINCIPLES
Article 1
This Act is enacted in accordance with Article 81, paragraph 3 of the Copyright Act.
Article 2
The competent authority referred to in this Act is the Ministry of Economic Affairs (MOEA).
Issuance of establishment permits for copyright collective management organizations (CMOs), as
well as guidance and supervision of their operations, will be carried out by the specialized agency
designated by the MOEA.
Article 3
The terms used in this Act shall be defined as follows:
1.Copyright collective management services ("collective management services"): Services for the
management of economic rights on behalf of multiple economic rights holders, in which uniform
royalty rates and methods for distribution of royalties are adopted as the basis for collection and
distribution of royalties, and in which license agreements with users are established in the name of
those providing the management.
2.Copyright collective management organization ("CMO"): An incorporated association engaging in
collective management services, organized by economic rights holders, approved and established
pursuant to this Act, and exercising rights and performing obligations in the name of the CMO.
3.Individual license agreement: An agreement between a CMO and a user under which the
exploitation of specific economic rights under the management of the CMO is licensed to the user
for its exploitation and royalties are paid by the user.
4.Blanket license agreement: An agreement between a CMO and a user under which all economic
rights under the management of the CMO are licensed to the user for a specific period, with no
restriction on the number of uses, and royalties are paid by the user.
5.Management agreement: An agreement between an economic rights holder and a CMO for
management of such rights and distribution of the royalties collected to said economic rights holder
by the CMO.
6.Management fees: The fees a CMO charges an economic rights holder for performing collective
management services.
7.Royalty rates: The criteria for calculation, the ratios, or the amounts of royalties that the CMO
collects for providing the economic rights it manages for exploitation by users.
8.Joint royalty rate: A single royalty rate jointly adopted by two or more CMOs with respect to the
same type of exploitation.
CHAPTER II ESTABLISHMENT
Article 4
To establish a CMO, the promoters shall prepare an application form, with the following
documentation attached, and apply to the specialized agency in charge of copyright matters for a
permit:
1.A register of promoters.
2.The articles of organization.
3.The royalty collection and distribution rules.
4.Templates for individual license agreements, blanket license agreements, and management
agreements.
5.Other documents designated by the specialized agency in charge of copyright matters.
The register of promoters under subparagraph 1 of the preceding paragraph shall include the
following items:
1.The names of the promoters, and their nationalities, dates of birth, and domiciles or residences.
For a juristic person promoter, the information shall include its name, the date of its establishment,
the locations of its offices or places of business, and the name, date of birth, and domicile or
residence of its representative.
2.The titles, authors, and categories of the works for which a promoter is the economic rights holder;
furthermore, provide an electronic format file.
3. The minutes and sign-in lists of all promoter meetings held within 6 months before the
application date.
The minimum number of the promoters referred to in paragraph 1 shall be determined by the
specialized agency in charge of copyright matters for different respective categories of works.
One-half or more of the promoters shall have domestic domiciles or offices.
The application form mentioned in paragraph 1 shall state the purposes of applying for an
establishment permit and shall bear the signature or personal seal of each promoter.
When a CMO adds a new category of works to those it manages, it shall submit a permit application
to the specialized agency in charge of copyright matters, attaching a list of the economic rights
holders for the new category along with the documents named in paragraph 1, subparagraphs 2
through 5.
The provisions of paragraph 2 and paragraph 3 regarding promoters shall apply mutatis mutandis to
the list of economic rights holders and their numbers.
Article 4-1
When the specialized agency in charge of copyright matters processes an application case for a
permit to establish a CMO under paragraph 1 of the preceding article, after the application
documents are complete, it shall post an announcement of the application case on the website of the
specialized agency in charge of copyright matters for 30 days, for public comments.
Public comments under the preceding paragraph may be taken into consideration in the review by
the specialized agency in charge of copyright matters.
Article 5
When multiple CMOs wish to merge and become a single CMO, they shall apply to the specialized
agency in charge of copyright matters for a permit approval, attaching a list of economic rights
holders and the documents named in paragraph 1, subparagraphs 2 through 5 of the preceding
article.
The specialized agency in charge of copyright matters shall revoke the permits of the CMOs that are
extinguished as a result of the merger; their rights and obligations shall be succeeded to by the
post-merger surviving CMO or newly established CMO.
Article 6
No person to whom any of the following circumstances applies may be a promoter of a CMO:
1.Having no legal capacity or having limited legal capacity, or receiving an order for
commencement of assistance, where the order has not been voided.
2.Having been declared bankrupt or had a court issue a ruling for the commencement of liquidation
proceedings, where the person's rights have not yet been reinstated.
3.Having committed a crime of fraud, breach of fiduciary duty, embezzlement, or violation of the
Copyright Act, and after receiving a final and irrevocable guilty judgment, having received a
sentence of no less than six months imprisonment where the sentence has not yet been served, or
has not been fully served, or two years have not yet passed after serving of the sentence, expiration
of the probation period, or pardon. In the case of a juristic person, having committed a criminal
violation of the Copyright Act and having received a final and irrevocable guilty judgment where
the judgment has not been executed, has not been fully executed, or two years have not yet passed
after execution of the judgment.
4. Having been sentenced by a final and irrevocable ruling to a rehabilitative disposition, where the
sentence has not yet been served, or has not been fully served, or two years has not yet passed after
serving of the sentence.
Article 6-1
No person to whom any of the following circumstances applies may be a promoter who applies for a
permit to establish a CMO:
1. Currently being a member of a CMO that conducts the same collective management services.
2. Simultaneously being a promoter who applies or has applied for permits to establish two or more
CMOs that conduct the same collective management services.
Article 7
The articles of organization of a CMO shall include the following information:
1.The CMO's name.
2.The CMO's purpose.
3.The address of its principal office, and address of any branch offices.
4.The category of works whose economic rights are under its management, and the scope of the
rights.
5.The manner in which membership qualification is obtained and forfeited.
6.The rights and obligations of members.
7.Rates or amounts of management fees.
8.The numbers, functions, terms of office, and methods of election and discharge of directors,
supervisors and members of the complaint committee set out in Article 20, paragraph 1.
9.The kinds of meetings it will hold, procedures for convening the meetings, and methods of
resolution.
10.Sources of funds, and their accounting treatment.
11.The method of public announcement.
12.Types of disputes between any member and a CMO that are subject to handling by the complaint
committee, and the procedures and methods of dispute resolution.
13.Procedures for amending the articles of organization.
14.Procedures for changing royalty rates.
15.Procedures for changing the method of royalty collection and distribution.
16.Procedures for amending templates for individual license agreements, blanket license agreements,
or management agreements.
17.The dates on which the articles of organization were adopted and amended.
18.Other matters required by laws and regulations.
Article 8
Under any of the following circumstances, the specialized agency in charge of copyright matters
shall deny an application for establishment of a CMO:
1.The name of the organization is the same as that of a CMO already granted an establishment
permit.
2.The information supporting the application for establishment permit reveals that the applicant is
unable to effectively administer collective management services.
3.Application particulars are found to be in violation of a law or regulation or to contain
misrepresentations.
4.Statutory procedures are not observed and no correction is made within a period given by the
specialized agency in charge of copyright matters.
Where the scope of management being applied for overlaps in whole or in part with the categories
of works and the scope of rights under the management of a CMO that has already been granted an
establishment permit, the specialized agency in charge of copyright matters may deny approval for
the overlapping portion if the other CMO is already capable of functioning as a management
collective.
The specialized agency in charge of copyright matters shall notify the applicant in writing whether
the application for establishment permit has been granted or denied, and publish the approved
application on its website.
Article 9
A CMO shall incorporate as a juristic person within six months after the specialized agency in
charge of copyright matters issues an establishment permit.
The CMO of the preceding paragraph shall submit a photocopy of its incorporation certificate to the
specialized agency in charge of copyright matters for recordation within thirty days after its
incorporation. It shall also make public announcement of its incorporation certificate, articles of
organization, the royalty collection and distribution rules, and templates for individual license
agreements, blanket license agreements, and management agreements; the same shall apply to
amendments of the above items.
The public announcement of the preceding paragraph shall be published in an appropriate manner,
such as publication in a newspaper at the place where the principal office of the CMO is located, or
on the CMO's website.
Article 10
A person not organized and approved for establishment as a CMO in accordance with this Act shall
not conduct collective management services or perform any other juristic act in the name of a CMO.
Where any party violates the preceding paragraph, any individual or blanket license agreement
executed by it shall become null and void and the offender shall be liable for compensation of
damages for any resultant loss to another person. Where there are two or more offenders, they shall
bear joint and several liability.
CHAPTER III ORGANIZATION
Article 11
A member of a CMO shall be an economic rights holder.
An economic rights holder may not be at the same time a member of two or more CMOs providing
the same collective management services.
If an economic rights holder violates the provision of the preceding paragraph and joins two or more
CMOs at different times, the rights holder will be deemed to have not joined the CMO or CMOs it
entered at later times; a rights holder who joins two or more CMOs at the same time shall choose
membership in only one among them within 30 days after the time it joins; a rights holder that fails
to make a choice within 30 days will be deemed to have joined none of the CMOs.
Article 12
A CMO may not reject any applicant for membership who meets the membership qualifications set
out in its articles of organization.
A CMO shall adopt mechanisms for reviewing the economic rights and other relevant information
of its members, and the members shall provide supporting documents for the relevant rights.
A member may withdraw from the organization at any time, unless the articles of organization
provide that withdrawal can only take place at the end of a business year or after a period of
pre-announcement.
Article 13
Under any of the following circumstances, a member shall be deemed to have withdrawn from the
organization:
1.Death, bankruptcy, or dissolution of the member.
2.Loss of membership qualifications.
3. Dissolution of the CMO is ordered.
Article 14
A member shall execute a management agreement with its CMO to entrust the CMO with
management of its economic rights.
A member shall have the right, in accordance with the royalty collection and distribution rules, to
request distribution of royalties, and also has the obligation to pay management fees and
membership fees.
Article 15
The highest authority of a CMO shall be the general meeting of its members.
The board of directors of a CMO shall have at least three directors, to be elected from among the
members by the general meeting of its members.
The supervisors of a CMO shall be elected from among the members by the general meeting of its
members. At least one of the supervisors shall have a domestic domicile.
The terms of a CMO’s directors and supervisors may not exceed four years. Directors and
supervisors may be re-elected to consecutive terms. However, the number of persons serving
consecutive terms may not exceed two-thirds of the number of directors or supervisors respectively;
if the chairman of the board is re-elected, his or her term of office shall not exceed eight years in
total.
When a CMO director or supervisor seat becomes vacant, the by-elected successor or replacement
shall serve until the term of the original incumbent expires. If the chairman of the board is elected in
a by-election, the term of office shall be counted toward the number of years specified in the proviso
of the preceding paragraph.
Article 15-1
No person to whom any of the following circumstances applies may serve as a director or
supervisor of a CMO; if already serving as such; the person shall ipso facto be dismissed:
1. Having any of the circumstances set out in the subparagraphs of Article 6 apply.
2. Having committed a criminal offence under the Organized Crime Prevention Act and found guilty
by a final and irrevocable judgment, where the sentence has not yet been served, or has not been
fully served, or five years have not yet passed after serving of the sentence, expiration of the
probation period, or pardon.
3. Having committed a criminal offence under the Anti-Corruption Act and found guilty by a final
and irrevocable judgment, where the sentence has not yet been served, or has not been fully served,
or two years have not yet passed after serving of the sentence, expiration of the probation period, or
pardon.
4. Having had a negotiable instrument dishonored and still being within the blacklist period.
5. Having been found guilty by a final and irrevocable judgment of a criminal offense under the
Securities and Exchange Act or the Money Laundering Control Act, where the sentence has not yet
been served, or has not been fully served, or five years have not yet passed after serving of the
sentence, expiration of the probation period, or pardon.
Article 16
Except for the first general meeting of CMO members, which shall be convened by promoters,
general meetings of members shall be convened at least once a year by the board of directors.
Unless specially provided in this Act or the articles of organization, a resolution of the general
meeting of members shall require a majority of votes cast at a meeting attended by members
representing a majority of the total voting rights.
An amendment to the articles of organization shall require at least two thirds of votes cast at a
meeting attended by members representing a majority of the total voting rights.
Members shall have equal voting rights, except where the articles of organization provide otherwise.
In respect of the number of members attending a meeting and the number of favorable votes
required as provided for in paragraphs 2 and 3 above, if a higher requirement is provided for in the
articles of organization, such provision shall apply.
The provisions in Article 57 of the Civil Code shall apply to the dissolution of a CMO.
Article 17
The board of directors shall carry out its functions in accordance with laws, regulations, its articles
of organization, and resolutions of the general meeting of members.
In the event that a resolution of the board of directors violates the provision of the preceding
paragraph and causes injury to the CMO, directors participating in the resolution shall be jointly and
severally liable for damages, provided that any director who has expressed opposition, as confirmed
by records or a written statement, shall be exempt from liability.
Article 18
A supervisor shall carry out the following duties:
1.Investigating the operational and financial status of the CMO and auditing its books and
documents, either personally or by retaining an attorney or a certified public accountant.
2.Auditing the statements prepared under paragraph 1 of Article 21, either personally or by retaining
a certified public accountant, and reporting the inspection results at a general meeting of members.
A supervisor who through neglect of his/her duties causes damage to the CMO shall bear liability
for damages.
A supervisor shall not act concurrently as a director, complaint committee member, or staff member
of the CMO.
Article 19
If a director of a CMO bargains with the CMO on his/her own behalf or on behalf of another party, a
supervisor shall act as the representative of the CMO.
Article 19-1
A CMO shall establish an internal control system with respect to personnel matters, finances, and
business, and shall file that system, and any change thereto, with the specialized agency in charge of
copyright matters for recordation.
The CMO shall perform the collective management services in a reasonable, prudent, and
appropriate manner in accordance with the internal control system under the preceding paragraph. It
furthermore shall file an internal control statement with the specialized agency in charge of
copyright matters within three months after the close of each fiscal year.
The competent authority will adopt regulations governing the content, applicable scope, operating
procedures, and recordation of the internal control system under paragraph 1, the filing of the
internal control statement under the preceding paragraph, and other matters for compliance.
Article 20
A CMO shall have a complaint committee to handle disputes between members and the CMO in
accordance with its articles of organization. The committee shall have at least five members, who
shall be elected by the general meeting of members from among CMO members, impartial members
of society, or scholars or experts.
A CMO may stipulate in its articles of organization that any dispute between a member and the
CMO shall not be brought up at a general meeting of members until it has been handled by the
complaint committee.
A director, supervisor, or staff member of a CMO shall not be a member of its complaint committee.
A complaint committee member shall withdraw voluntarily if he/she has personal interest in a
complaint case.
A CMO shall notify the complaining member of the decision made by the complaint committee and
the decision shall be carried out by the board of directors. However, the case may be brought up for
resolution at a general meeting of members if the complaining member or the board of directors is
opposed to the decision rendered by the complaint committee.
Article 21
At the end of each business year, the board of directors shall prepare the following statements and
refer them to supervisors for auditing at least thirty days before a general meeting of members is
held:
1.A business report.
2. A property list.
3. Financial statements, which shall include the balance sheet, final statement of revenues and
expenditures, and cash flow statement.
The financial statements in subparagraph 3 of the preceding paragraph shall be audited and attested
by a certified public accountant.
The statements listed in paragraph 1, together with the supervisor's audit report, shall be made
available at the principal office of the CMO at least ten days before a general meeting of members is
held, and members may at any time inspect and review the same, either by themselves or in the
company of any attorneys or certified public accountants retained by them.
Article 22
The board of directors shall submit the statements listed in the preceding Article, together with the
supervisor's audit report, for ratification at a general meeting of members. Upon ratification through
a resolution of the general meeting of members, directors and supervisors shall be released from
liability; this provision does not apply, however, given the commission of any unlawful act by a
director or supervisor.
After the business report in subparagraph 1 and the financial statements in subparagraph 3 of
paragraph 1 of the preceding article have been ratified by the general meeting of members, the
CMO shall publish the status of collection and distribution of the royalties on its website for public
inspection.
CHAPTER IV RIGHTS AND OBLIGATIONS OF A CMO
Article 23
A CMO shall provide collective management services for members in accordance with laws,
regulations, its articles of organization, and resolutions of the general meeting of its members.
A CMO, when providing collective management services under the preceding paragraph, shall
collect management fees at the stipulated rate or in the stipulated amount.
The rate or amount of management fees in the preceding paragraph shall be stipulated based on the
funding required to maintain normal operation of the CMO.
Article 24
A CMO shall adopt royalty rates and dates for implementation of the rates for each type of
exploitation of the economic rights under its management. A CMO shall take the following factors
into account when setting royalty rates:
1.The result of consultations with the users, and the users' suggestions.
2.The economic benefit to be obtained by users through exploitation of the works.
3.The numbers of economic rights under its management.
4.The type and quantity of the exploitation.
5.Other factors that the specialized agency in charge of copyright matters designates for
consideration.
In adopting the royalty rates of the preceding paragraph, when a blanket license agreement is
employed, users shall be provided with a choice of the following fee calculation models:
1.A specific monetary amount or ratio.
2.Another fee calculation model negotiated and agreed upon between the user and the CMO.
A CMO shall lower at its discretion the royalty rates of paragraph 1 when the user exploits a work
for cultural, educational, or other purposes in the public interest; when the exploitation is non-profit
in nature, the CMO shall further lower at its discretion the royalty rates.
The specialized agency in charge of copyright matters may conduct investigations into the actual
circumstances of use of the works under the management of any CMO.
The specialized agency in charge of copyright matters shall guide the CMO to use innovative
technology methods to improve its management efficiency and reduce the cost of exploitation, and
to refine the fee calculation model, so as to enhance the rights and interests of copyright owners and
the convenience of users.
The royalty rates of paragraph 1 shall be publicly announced for the purpose of review by the
general public, and shall be reported to the specialized agency in charge of copyright matters for
recordation. The royalty rates may not be implemented at any time prior to 30 full days after the
date of announcement. The same provisions shall apply in the case of any change to the royalty
rates.
A CMO shall state the reasons for adoption of the royalty rates at the time of their public
announcement pursuant to the preceding paragraph.
When a CMO has not adopted a royalty rate for a specific type of exploitation in accordance with
the provisions of paragraph 1, a user may request the CMO in writing or in an electronic format file
to adopt a royalty rate; prior to the adoption of such a royalty rate, the provisions of Chapter 7 of the
Copyright Act shall not apply to any instance of exploitation for which adoption of a royalty rate has
been requested.
Article 25
A copyright user who objects to a royalty rate set by a CMO may apply to the specialized agency in
charge of copyright matters for a review; at the time of application it shall also submit written
reasons and other related materials.
When the specialized agency in charge of copyright matters receives an application pursuant to the
preceding paragraph, it shall publish the application on its website. Other users with the same
circumstances of exploitation may also submit written reasons and related materials and make a
request of the specialized agency in charge of copyright matters for participation in the application
for review.
After receiving an application for review pursuant to paragraph 1, the specialized agency in charge
of copyright matters may order the CMO to provide the factors under each subparagraph of the
preceding article that it used in consideration of the royalty rates, its conditions for licensing, and
other relevant documents. The CMO may not refuse such an order.
When the specialized agency in charge of copyright matters performs its review, it may change the
criteria, ratios, or amounts for calculation of royalties originally adopted by the CMO, and shall
seek the opinion of the Copyright Review and Mediation Committee.
When there are matters requiring supplementation or correction with respect to an application under
paragraph 1 that are not performed within the period designated by the specialized agency in charge
of copyright matters, or in the absence of reasons for application, the specialized agency in charge
of copyright matters may reject the application.
When there is sufficient reason for an application for review under paragraph 1, the specialized
agency in charge of copyright matters shall make a determination of the given royalty rate, which
shall be effective from the date of application for review, provided that in the case of applications
made prior to the date of implementation of a given royalty rate, the newly determined rate shall
take effect from the date of implementation.
A royalty rate that has been determined pursuant to the preceding paragraph may not be changed by
the CMO within three years from its date of implementation, and during the same period, users also
may not make any further application for review of matters on which such a determination has been
made, provided that these provisions will not apply in the case of a material change in
circumstances.
The specialized agency in charge of copyright matters may prohibit the implementation of a royalty
rate which is under application for review pursuant to paragraph 1 when the rate is in violation of
the law, or when there is no legal basis for collection of that royalty rate.
The review determinations under paragraph 6 and the preceding paragraph shall be published on the
website of the specialized agency in charge of copyright matters.
If a royalty rate is determined through a review by the specialized agency in charge of copyright
matters, then for any license agreement that was signed between a user and a CMO prior to the
determination, the user may, during the effective term of the agreement, request a change by the
CMO in the amount of the royalty.
When implementation of a CMO's royalty rate has been prohibited by the specialized agency in
charge of copyright matters, the CMO shall return the royalties already collected.
The review decision of an application under paragraph 1 shall be made by the specialized agency in
charge of copyright matters within four months from the date the documents are fully submitted.
The members of the Copyright Review and Mediation Committee under paragraph 4 shall include
government authorities, scholars, experts, rights holders and users.
Article 26
For royalty rates between the time of application for review and the review determination, the user
may make a provisional payment, based on the type of exploitation, at the royalty rate originally set
prior to the change in rate or at the originally stipulated royalty amount; if there is no originally set
royalty rate or originally stipulated royalty amount, the user may apply to the specialized agency in
charge of copyright matters to approve an amount for provisional payment.
Prior to its approval of the provisional payment of the preceding paragraph, the specialized agency
in charge of copyright matters may seek the opinion of the Copyright Review and Mediation
Committee.
The amount of provisional payment approved pursuant to paragraph 1 shall be published on the
website of the specialized agency in charge of copyright matters, and during the period of review of
the royalty rate, the provisional payment shall apply to all users engaging in exploitation under the
same circumstances.
When a user makes a provisional payment to a CMO pursuant to paragraph 1, and where the
payment is clearly indicated as a provisional payment, the user's exploitation will not be subject to
the provisions of Chapter 6 and Chapter 7 of the Copyright Act.
When a user has made provisional payments pursuant to paragraph 1, then except where otherwise
stipulated between the two parties, the payments shall be adjusted based on the royalty rate
determined through the review process; when an application for royalty rate review is rejected, the
payments shall be adjusted based on the CMO's publicly announced royalty rate.
When the implementation of a royalty rate for which a review application has been made by a user
is prohibited pursuant to paragraph 8 of the preceding article, the CMO shall return the provisional
payments already collected.
Article 27
A CMO shall publish information related to the works under its scope of management on the
Internet for public access, including a list of the economic rights holders under its management, and
the names of the works managed, the authors, the percentages of the economic rights held, the
numbers of works, or other information sufficient to allow the works under its management to be
identified, and shall also provide information within a reasonable scope in response to applications
by members of the public.
When a CMO negotiates a blanket license agreement with a user, it shall inform the user of the
information under the preceding paragraph.
Article 28
The following items shall be expressly set out in a individual license agreement:
1.The name of the economic rights holder, and title of the work.
2.The economic rights to be licensed for exploitation.
3.The territory, term, and method of licensed exploitation.
4.The method of calculation and the amount of royalties.
5.Method of royalty payment.
6.Liability for breach.
7.The date of agreement.
Article 29
In addition to setting out the matters required in subparagraphs 2 through 7 of the preceding article,
a blanket license agreement shall also state that the licensee is licensed, within a specified period, to
use all the economic rights managed by the CMO an unlimited number of times..
Article 30
The specialized agency in charge of copyright matters may designate relevant CMOs to adopt a
joint royalty rate with respect to a specified type of exploitation.
The designated CMOs under the preceding paragraph shall engage in consultation in order to adopt
the joint royalty rate and methods of distribution of royalties, to be collected from users by one of
the CMOs.
If agreement cannot be reached by consultation pursuant to the preceding paragraph, any of the
CMOs may apply to the specialized agency in charge of copyright matters for a determination.
The provisions of Article 24 through Article 26 shall apply to the joint royalty rate of paragraph 2.
In determining the joint royalty rate under paragraph 3, the opinions of users and of the Copyright
Review and Mediation Committee shall be sought, and the disposition containing the determination
shall be published on the website of the specialized agency in charge of copyright matters.
A joint royalty rate that has been determined pursuant to the preceding paragraph may not be
changed by the CMOs within three years from its date of implementation, and during the same
period, users also may not make any application for review of the rate, provided that these
provisions will not apply in the case of a material change in circumstances.
The provisions of paragraph 2 through the preceding paragraph shall be implemented two years
after promulgation of the 12 January 2010 amendments to this Act.
When, prior to the date of implementation under the preceding paragraph, CMOs that have been
designated pursuant to paragraph 1 have already undertaken consultation and adopted a joint royalty
rate with respect to a specific type of exploitation, they may apply the provisions of Article 24
through Article 26.
Article 31
When a member withdraws from a CMO, the CMO shall terminate the management agreement and
cease to manage that member's economic rights.
A copyright user who has already entered into a license agreement with the CMO prior to a
member's withdrawal may continue to exploit the works of the member who has withdrawn until the
agreement expires and need not pay further royalties to that member, provided that where the
license agreement contains stipulations prohibiting continued exploitation, those stipulations shall
apply.
In the absence of the circumstances under the proviso of the preceding paragraph, the member who
has withdrawn may apply to the CMO to request distribution of royalties, provided that the member
who has withdrawn may not so request distribution of royalties when it has joined another CMO
and may receive distribution of royalties in the new CMO for the exploitation by users set out in the
preceding paragraph.
When stipulations exist between the CMO and the user as in the proviso of paragraph 2, the CMO
shall immediately notify the user when the member withdraws from the CMO.
Article 32
A CMO shall not refuse a request from a non-member economic rights holder for management of
the rights holder's economic rights that falls within the scope of categories of works and rights
managed by the CMO.
Article 33
The provisions of Article 11, Article 14, Article 20, paragraphs 1, 2, and 5, Article 23, paragraphs 1
and 2, and Article 31 shall apply mutatis mutandis to matters between non-member economic rights
holders and a CMO.
Article 34
Within the scope of rights managed by it, a CMO shall provide licenses with the same terms and
conditions to users engaging in exploitation under the same circumstances.
If a user is refused a license by the CMO, or no licensing agreement can be reached, the user shall
be deemed to have obtained a license if, prior to exploitation, the user has made payment of or
lodged with a court the royalty rate or the amount demanded by the CMO.
When a user has made payment to the CMO or lodged payment with a court pursuant to the
preceding paragraph, it may at the same time lodge a declaration with the CMO, reserving the right
of later opposition.
Article 35
A CMO shall warrant its authorization to manage the rights whose exploitation it is licensing under
its individual license agreements or blanket license agreements. When a user is clearly aware at the
time of execution of an agreement that the CMO has no such authorization to perform management,
the CMO is not liable to make such a warranty unless otherwise stipulated in the agreement.
Article 36
A CMO shall exercise the due care of a good administrator when providing collective management
services.
Article 37
A copyright user shall periodically provide the CMO concerned with a record of use as the basis for
calculating royalties to be distributed. When the license agreement stipulates otherwise, however, its
provisions shall govern.
A CMO may, at its own cost, request a user at any time to provide a record of use.
If a user fails to provide a record of use or provides one that is materially incorrect or untrue, the
CMO may terminate the license agreements executed with the user.
Article 38
The CMO shall maintain a segregated account with a financial institution for deposit of the royalties
it collects. Except for the deduction of management fees under paragraph 2 or as otherwise provided
by other laws, royalties may not be used in any way other than distributing them.
Based on its royalty collection and distribution rules, a CMO shall make periodic distribution of the
balance of the royalties collected, after the deduction of management fees, to economic rights
holders.
The "periodic distribution" referred to in the preceding paragraph shall take place at least once each
year.
When a CMO distributes royalties, its board of directors shall, in accordance with its royalty
collection and distribution rules, compile a table of royalty distributions that contains the following
information, and submit it to the supervisors for auditing and confirmation after auditing and
attestation by a certified public accountant:
1.The names of the economic rights holders and the economic rights held thereby.
2.The amount of each royalty payment and the total amount of royalties received.
3.The amount of management fees deductible from each royalty or the total amount thereof.
4.The distributable balance after deduction of the total management fees under subparagraph 2
above from the total amount of royalty received under subparagraph 2.
5.The method of calculating the amount to be distributed to each individual.
6.The amount to be distributed to each individual.
A CMO shall distribute royalties in accordance with the table of royalty distributions audited and
confirmed by its supervisors, and keep said table of royalty distributions at its principal office. It
also shall provide the economic rights holders with the table of royalty distributions for their works
or make it available for them to review.
The competent authority will adopt regulations governing certified public accountant auditing and
attestation procedures, working papers, reports, and other compliance matters under paragraph 4 and
Article 21, paragraph 2.
Article 39
When providing collective management services, a CMO may initiate litigious or non-litigious
actions in its own name on behalf of economic rights holders. The CMO, however, may initiate
criminal proceedings only when it has an exclusive license or has received [the economic rights] by
way of trust transfer.
The "litigious actions" mentioned in the preceding paragraph shall mean the institution of civil and
administrative suits and complaints or private prosecutions in criminal cases. "Non-litigious actions"
shall mean administrative appeal and other actions.
CHAPTER V REWARD, GUIDANCE, AND SUPERVISION OF COLLECTIVE
MANAGEMENT ORGANIZATIONS
Article 40
The specialized agency in charge of copyright matters may reward a CMO for excellence in
providing collective management services.
Article 41
The specialized agency in charge of copyright matters may at any time audit or order the CMO to
submit within a specific deadline the statements that CMOs are required to prepare or compile in
accordance with applicable laws and regulations or their articles of organization. The specialized
agency in charge of copyright matters may also at any time inspect the operational and financial
status of a CMO or order it to report on its handling of operations and finances within a specific
deadline.
When performing the audits and inspections of the preceding paragraph, the specialized agency in
charge of copyright matters may order a CMO to submit supporting documents, vouchers,
statements, and relevant information, and shall return the same, after reviewing them, within one
month from the date of receipt.
A CMO shall not evade, hinder, or refuse an audit or inspection made or order given by the
specialized agency in charge of copyright matters pursuant to the preceding two paragraphs.
The specialized agency in charge of copyright matters, as it deems necessary in accordance with the
state of a CMO's business and property, may order the CMO to change its method of operation, or
order the CMO to submit a financial improvement by a specific deadline, or issue other necessary
dispositions.
Article 42
If a CMO commits any act in violation of laws, regulations, or its articles of organization, the
specialized agency in charge of copyright matters may order it to make corrections within a
prescribed deadline.
If the CMO does not make the correction within the prescribed deadline of the preceding paragraph,
the specialized agency in charge of copyright matters may suspend or dismiss from office, or order
the CMO to replace from office, the director, supervisor, or complaint committee member who
committed the unlawful act.
Article 43
When any of the following circumstances applies to a CMO, the specialized agency in charge of
copyright matters shall revoke its establishment permit:
1.The CMO fails to carry out incorporation registration within the period of time prescribed in
Article 9, paragraph 1.
2.The CMO fails to commence collective management services within one year after its
incorporation registration.
3.The CMO is incapable of effectively performing collective management services.
CHAPTER VI PENAL PROVISIONS
Article 44
For a violation of Article 10, paragraph 1, the offender shall be punished with an administrative fine
of not less than NT$500,000 and not more than NT$2.5 million.
When any of the following circumstances applies to a CMO, it shall be punished with an
administrative fine of not less than NT$100,000 and not more than NT$500,000:
1. Evading, hindering, or refusing an audit, inspection, or order by the specialized agency in charge
of copyright matters, in violation of Article 41, paragraph 3.
2.Violation of an order given or other required measures imposed by the specialized agency in
charge of copyright matters pursuant to Article 41, paragraph 4.
3.Failure to make correction within the prescribed deadline in accordance with an order given
pursuant to Article 42, paragraph 1.
The administrative fines under the preceding two paragraphs may be imposed for each successive
infraction until correction is effected.
Article 45
When any of the following circumstances applies to a CMO and is of a material nature, and the
CMO has still failed to make corrections after receiving a penalty under paragraph 2 of the
preceding article, the specialized agency in charge of copyright matters shall revoke its
establishment permit:
1. Unauthorized use of member royalty allocations, in violation of Article 38, paragraph 1.
2. Failure to distribute royalties, in violation of Article 38, paragraph 2.
3. Other violation of law or regulation or its articles of organization.
If a CMO, in violation of an order under Article 42, paragraph 2, fails to replace from office the
director, supervisor, or complaint committee member who committed the unlawful act, and the
circumstances are serious, the specialized agency in charge of copyright matters furthermore shall
revoke its permit.
CHAPTER VII Supplementary Provisions
Article 46
For an organization for the management of economic rights on behalf of economic rights holders
that was duly established prior to the 7 November 1997 date on which this Act was promulgated and
took effect, it shall continue to handle any matters that were under its management and which had
not terminated prior to the promulgation and taking effect of the Act.
If the organization of the preceding paragraph did not apply for an establishment permit for
collective management services within one year after this Act was promulgated and enforced, or if
approval was denied for the application, then any agreement executed with a user in the name of the
organization for licensed exploitation of economic rights before the date on which this Act was
promulgated and enforced, and which had not yet expired by 31 December 1998, shall be
terminated on that date.
Article 47
The provisions of Articles 24 through 26 will apply to royalty rates which were already
implemented, or which were under application for review but where the review was not completed,
prior to the enforcement of the articles of this Act amended on 12 January 2010, provided that this
shall not apply to royalty rates which were determined through a review by the specialized agency
in charge of copyright matters prior to the enforcement of the articles of this Act amended on 12
January 2010, and which at that time had been implemented for less than two full years.
Article 47-1
A person already serving as a director, supervisor, or chairman of the board of a CMO prior to the
enforcement of the articles of this Act amended on 29 April 2022 and remaining incumbent at the
time of enforcement of the amendment may continue to serve until the end of the person's term, free
from the restrictions set out in Article 15, paragraph 4.
Article 48
When, after approval for establishment of a CMO, the CMO's establishment permit is voided or
revoked, then except under the circumstances of article 43, subparagraph 1, the specialized agency
in charge of copyright matters shall order the CMO's dissolution, shall provide written notification
of the reasons to the district court of the relevant jurisdiction and the CMO, and shall publish the
same on its website.
Article 48-1
When the dissolution of a CMO has been ordered, the court, upon a motion by the specialized
agency in charge of copyright matters or an interested party, may, when it deems necessary, dismiss
the liquidator.
Article 49
Except where dates of enforcement have been otherwise provided, this Act shall be enforced from
the date of promulgation. |