PART 2Collective Management Organisations

Licensing15

1

A collective management organisation and a user and an independent management entity and a user must—

a

conduct negotiations for the licensing of rights in good faith; and

b

provide each other with all necessary information.

2

A collective management organisation must ensure that licensing terms are based on objective and non-discriminatory criteria (but see paragraph (3)).

3

Paragraph (2) does not require a collective management organisation to use as a precedent for other online services licensing terms agreed with a user where the user is providing a new type of online service which has been available to the public in F1the United Kingdom for less than 3 years.

4

A collective management organisation must ensure that—

a

right holders receive appropriate remuneration for the use of their rights;

b

tariffs it determines for exclusive rights and rights to remuneration are reasonable in relation to matters such as—

i

the economic value of the use of the rights in trade taking into account the nature and scope of the use of the work and other subject matter; and

ii

the economic value of the service provided by the collective management organisation;

and;

c

it informs the user concerned of the criteria used for the setting of those tariffs.

5

A collective management organisation must—

a

reply without undue delay to requests from users indicating, amongst other things, the information needed in order for the collective management organisation to offer a licence;

b

upon receipt of all relevant information without undue delay either—

i

offer a licence; or

ii

provide the user with a reasoned statement explaining why it does not intend to license a particular service;

c

allow users to communicate with it by electronic means, including, where appropriate, for the purpose of reporting on the use of the licence; and

d

after giving a user a licence, treat that user in good faith (but see paragraph (6)).

6

Paragraph 5(d) does not apply where the collective management organisation is a F2company that qualifies as a micro-entity under section 384A of the Companies Act 2006.