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1 IPOPHL MEMORANDUM CIRCULAR NO. ______

2 Series of 2019
3
4
5 SUBJECT: REVISED RULES AND REGULATIONS ON THE ACCREDITATION OF
6 COLLECTIVE MANAGEMENT ORGANIZATIONS AND OTHER SIMILAR ENTITIES

7 WHEREAS, the Intellectual Property Office of the Philippines (IPOPHL) is mandated to

8 administer and implement the State policies declared in Republic Act No. 8293, the Intellectual
9 Property Code of the Philippines (IP Code) as amended;

10 WHEREAS, Sec. 183 of the IP Code as amended, allows the owners of copyright and
11 related rights or their heirs to designate a society of artists, writers, composers and other rights-
12 holders, commonly referred to as collective management organizations (CMOs), to collectively
13 exercise their economic rights on their behalf, provided that they first secure the necessary
14 accreditation from IPOPHL in order that they can enforce the rights of their members:

15 Whereas, meetings with various copyright stakeholders have resulted in a call for IPOPHL
16 to establish and enforce accreditation mechanisms for CMOs and other similar entities with the
17 view of protecting both the rights-holders and the users of protected works, taking into
18 consideration the public interest:

19 Whereas, there is now a need to revise and update the existing Rules on Accreditation of
20 CMOs as contained in IPOPHL Office Order No. 13-173 (2013) in order to better realize the
21 objectives thereof as well as to properly address the concerns of all interested parties:

22 Now, therefore, IPOPHL hereby issues the following revised rules and regulations on the
23 accreditation of CMOs and other similar entities:

24 RULE I
25 GENERAL PROVISIONS
26
27 Section 1. Title. These Rules shall be known as the "Rules on Accreditation of Collective
28 Management Organizations and Other Similar Entities".

29 Section 2. Coverage. These rules and regulations shall apply to:

30 a. Any CMO, which refers to a non-stock, non-profit organization, local or foreign, which
31 has for its sole and principal purpose the exercise of copyright or related rights on behalf
32 of more than one right holder, for the collective benefit of the said right-holders1, including
33 any or all of the following activities:

34 (i) negotiation with and grant of licenses to users in respect of the rights and uses
35 that the CMO is mandated by its members to manage, which includes the usage
36 or exploitation of copyrighted works in Philippine territory by digital music services,
37 concert producers, cable companies and other similar users2;

1
New definition under Sec. 171.4 of the proposed amendments to R.A. 8293
2
Sec. 183.3 (a) of the proposed amendments to R.A. 8293
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38 (ii) collection of royalties and other forms of remuneration for the license of rights
39 which the CMO manages for its members3;

40 (iii) collection of proceeds In subsequent transfers, lease or resale of the originals

41 of paintings, sculptures and manuscripts;

42 (iv) collection of additional remuneration for subsequent communication or

43 broadcast of a performance;

44 (v) collection of single equitable remuneration for the broadcast, other

45 communication to the public or public performance of a sound recording or of an
46 audiovisual fixation in relation to Sec. 2094; and

47 (vi) distribution of the abovementioned collections to the rights holders.

48 b. Any CMO established before the effectivity of these Rules and is engaged in any or all
49 of the above cited activities. Such CMO shall, within three (3) months from effectivity
50 hereof, apply for accreditation.

51 c. Other entities or individuals who engage in any of the functions enumerated in item (a)
52 of this Section.

53 Section 3. Exemption. Parents in relation to their minor children or other persons exercising
54 guardianship over their wards are not required to apply for accreditation.5

55 RULE II
56 PROCEDURE FOR ACCREDITATION
57
58 Section 1. Pre-Qualification Requirements. Only CMOs, entities, or individuals meeting all the
59 following pre-qualification requirements during initial screening may apply for accreditation with
60 IPOPHL:

61 a. Registration as a non-stock, non-profit corporation or, for individuals, as a non-stock,

62 non-profit One Person Corporation (OPC);

63 b. Membership is composed of right-holders belonging to the sector whose rights shall be

64 managed;

65 c. The General Manager or Executive Director, or the sole Director or President in case of
66 OPC, and the heads of Documentation, Licensing, Distribution and Finance have at least
67 sixteen (16) hours of training on copyright or any related topics relevant to the particular
68 sector obtained from IPOPHL or other institutions offering IP courses or seminars, both
69 local and abroad; Provided further, that the Members of the Board shall have at least eight
70 hours (8) of training on good governance, taken not earlier than three (3) years from date
71 of application.

3
Sec. 183.3 (b) of the proposed amendments to R.A. 8293
4
Sec. 183.3 (e) of the proposed amendments to R.A. 8293
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Pursuant to Sec. 183.2 of the proposed amendments to R.A. 8293
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72 d. Managerial and administrative capability of enforcing the rights of its members.

73 e. Existence or establishment of an internal dispute resolution or any similar system

74 providing for an effective and workable process of settling disputes and grievances
75 between or among members of the CMO.

76 f. Compliance with any other reasonable requirement/s the IPOPHL may impose from time
77 to time pursuant to its rule-making power and in accordance with due process.

78 Section 2. Documentary Requirements. In case the CMO, entity, or individual is considered

79 pre-qualified by IPOPHL after compliance with the immediately preceding Section, a duly
80 accomplished application form shall be submitted in duplicate to the Bureau of Copyright and
81 Other Related Rights, along with the following documents:

82 a. Articles of Incorporation and By-Laws, provided that OPC is not required to submit By-
83 Laws pursuant to Sec. 119 of R.A. 11232 (The Revised Corporation Code of the
84 Philippines);

85 b. SEC Registration/BIR Registration/business permits and/or relevant government

86 licenses/registrations

87 c. Organizational structure

88 d. List of Board members and officers, with respective biodata

89 e. List of members

90 f. List of current licensees (if applicable)

91 g. List of authorized collecting agents, with respective contracts of agency

92 h. Business/Operations Manual (including published tariffs/rates per category

93 and distribution rules)

94 i. Documents used in business:

95 (i) Membership Agreement/Deed of Assignment

96 (ii) Reciprocal agreements, if any

97 (iii) Licensing Agreement

98 j. Audited Financial Statements, if already in operation

99 Section 3. Application Fee. Upon submission of the duly-accomplished application form and
100 documentary requirements, a non-refundable application fee in such amount as approved by the
101 Secretary of Trade and Industry shall be paid by the applicant to cover expenses of the
102 proceedings and administrative costs.

103 Section 4. Third Party Observation. Within one (1) week from filing, the application shall be
104 published in the IPOPHL Website. Any interested party may submit written observations thereon
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105 to the Bureau of Copyright and Other Related Rights within thirty (30) days from the date of such
106 publication. The observations shall forthwith be communicated within three (3) days from receipt
107 thereof to the applicant, who may comment on them within ten (10) days from receipt of said
108 communication. The Bureau shall acknowledge and consider the observations and comment in
109 making its decision, and include the same in the file of the application to which it relates.

110 Section 5. Clarificatory hearing and assistance of experts. If necessary, the Bureau Director
111 may, within ten (10) days from receipt of the last observation, call the parties to a clarificatory
112 hearing. Furthermore, the Director may obtain the assistance of persons in the government and/or
113 private sector who are acknowledged experts in their relevant field, of proven integrity and probity,
114 when necessary to resolve the matter.

115 Section 6. Decision of the Director of the Bureau of Copyright and Other Related Rights.
116 The Bureau Director shall examine the merits of the application within thirty (30) days from filing
117 thereof or from the receipt of the last observation or comment of the parties. Thereafter, the
118 Director shall render a decision granting or denying accreditation. The corresponding certificate
119 of accreditation shall be issued within one (1) week after the decision granting the same.

120 Section 7. Denial of Accreditation. Accreditation may be denied if:

121 a. The applicant does not comply with the provisions of Sections 1 and 2 of Rule II above;

122 b. The information supporting the application reveals that the CMO is unable to effectively
123 manage and administer intermediary affairs as well as the rights of their members; or

124 c. The applicant committed fraud or willful misrepresentation in the compliance with the
125 documentary requirements under Section 2 of Rule II above. In such a case, the applicant
126 shall likewise be banned from re-applying for accreditation for the remaining term of its
127 current accreditation.

128 Section 8. Remedies. The decision of the Director denying accreditation may be the subject of
129 a motion for reconsideration filed by the applicant before the Director or, alternatively, shall be
130 appealable to the Director General within thirty (30) days from receipt by the applicant of the said
131 decision: Provided, that only one motion for reconsideration of the decision of the Director can be
132 filed: Provided further, that in case said motion is denied, the applicant shall have the balance of
133 the period provided above within which to file an appeal to the Director General. In case no motion
134 for reconsideration or appeal is filed, said decision shall become final and executory after the
135 lapse of the said thirty (30) day-period.

136 Upon proper motion citing meritorious reasons and the payment of the full amount of appeal fee
137 and other applicable fees before the expiration of the reglementary period to perfect an appeal,
138 the Office of the Director General may grant an additional period of fifteen (15) days within which
139 to file the appeal. No further extension shall be allowed.

140 Section 9. Effectivity of Accreditation. The accreditation shall be effective for a period of five
141 (5) years starting from the date of issuance of the order granting the accreditation.

142 Section 10. Publication upon Approval of Accreditation. IPOPHL shall publish, in the IPOPHL
143 Website, the accreditation certificates, statutes, organizational structure, rates for collecting
144 licensing fees, and distribution rates and mechanism of the accredited CMO.
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145 RULE III
146 EFFECTS OF ACCREDITATION
147
148 Section 1. Rights of an Accredited CMO. An accredited CMO has the right to:
149
150 a. Administer any or all of the following rights, depending on the nature of the work and
151 the agreement with their members:

152 (i) reproduction

153 (ii) transformation

154 (iii) first public distribution

155 (iv) rental

156 (v) public display

157 (vi) public performance

158 (vii) communication to the public

159 (viii) moral rights of its deceased members6

160 b. Negotiate with and grant licenses to users of protected literary, scholarly, scientific and
161 artistic works, derivative works, performances, sound recordings, audiovisual works and
162 broadcasts;

163 c. Collect royalties and other forms of remuneration for the use of the abovementioned
164 works, including proceeds in subsequent transfers;

165 d. Distribute the said collection to their members;

166 e. Sue and enforce administered rights.

167 Section 2. Duties of an Accredited CMO. The accredited CMO shall:

168
169 a. Ensure the faithful discharge of their obligations as well as compliance with applicable
170 laws and regulations;

171 b. Submit annual audited financial statements on or before April 30 of each year and allow
172 the same to be posted in the IPOPHL website;

173 c. Notify IPOPHL of meetings, which are, at least, open to its general membership, and
174 welcome a representative to such meetings;

175 d. Submit to IPOPHL whatever requests for information involving the CMO and its
176 stakeholders;

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Pursuant to Sec. 183.4 of the proposed amendments to R.A. 8293
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177 e. Comply with these rules and the orders of IPOPHL issued from time to time.

178 Section 3. Reporting of Changes. An accredited CMO, which has amended its statutes or has
179 undergone any change relative to its business (including changes in authorized collecting agents,
180 if any), shall notify the IPOPHL thereof by submitting the amendatory statutes or a summary of
181 the changes within thirty (30) days from effectivity thereof or the occurrence of the change, as the
182 case may be. If such change shall necessitate the amendment of the accreditation certificate, an
183 amendment fee of One Thousand Pesos (PhP 1,000.00) shall be paid.
184
185 RULE IV
186 POST-ACCREDITATION
187
188 Section 1. Re-application for Accreditation. After the expiration of the period for accreditation,
189 a CMO may re-apply for accreditation by submitting the documents enumerated in Section 2 of
190 Rule II and paying the application fee as required in Section 3 Rule II. The Director shall consider
191 the performance of the CMO in its previous accreditation and shall issue a resolution within fifteen
192 (15) days from filing of the application.
193
194 Section 2. Suspension of Accreditation. The Director may suspend, either totally or partially,
195 the accreditation of a CMO, after giving the latter an opportunity to be heard, if any one of the
196 following circumstances are found after accreditation:
197
198 a. The CMO tolerated or abetted any of its Board members or officers in violating any
199 related law, rules and regulations issued by IPOPHL.

200 b. Any of the documents or material information/data therein submitted by the CMO has
201 been found to be false or untrue.

202 c. Failure to maintain its compliance with the provisions of Section 1 of Rule II above.

203 d. Failure to engage in any of the activities under Section 2(a) of Rule 1 within one year
204 after accreditation.

205 e. Failure to observe the parameters for collection and distribution of royalties and other
206 forms of remuneration.

207 f. Malicious breach of contract or fiduciary duty against any of its members, regarding the
208 primary activities and the duties of an accredited CMO as set out in these Rules and/or
209 the principles of transparency, efficiency and good governance, including the fair and
210 proportionate representation of members in the CMO's governing bodies.

211 g. Failure to give proper accounting to IPOPHL or to its members.

212 h. Failure to comply with the mandatory submissions under Sec. 2(b) and (d) of Rule III
213 hereof.

214 The CMO may file a Motion To Lift Suspension with the Director within thirty (30) days
215 from receipt of the order of suspension, provided, that the ground/s for denial or has/have ceased
216 to exist and it has complied with the pre-qualification and documentary requirements under
217 Sections 1 and 2 of Rule II above.
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219 Section 3. Automatic Cancellation of Accreditation. If the CMO whose accreditation is
220 suspended fails to comply with the condition/s for the lifting thereof within six (6) months from the
221 date of suspension as provided in the immediately preceding Section, then its accreditation shall
222 be automatically cancelled. Furthermore, said CMO shall be banned from re-applying for
223 accreditation for the remaining balance of the term of its original accreditation.

224 Section 4. Effect of Non-accreditation, Denial, Total or Partial Suspension and Cancellation
225 of Accreditation. A CMO who has not applied for accreditation after the effectivity of these Rules,
226 or whose application has been denied, or its accreditation totally suspended or cancelled, cannot,
227 under any circumstance, engage in any of the activities enumerated in Section 2(a) of Rule I. In
228 case of partial suspension, the CMO may still engage in the activities enumerated in Section 2(a)
229 of Rule I with respect to the rights they are allowed to manage.
230
231 Section 5. Notice to the Public. Any change in the status of accreditation of a CMO resulting
232 from the above actions shall be notified to the public through the IPOPHL Website.
233
234 RULE V
235 FINAL PROVISIONS
236
237 Section 1. Retroactive Application. Upon effectivity, these Rules shall also apply to cases
238 pending before the Bureau and the Office of the Director-General.
239
240 Section 2. Separability Clause. If any section or provision of these Rules shall be held to be
241 invalid, the remaining provisions shall remain in full force and effect as completely as if the part
242 held invalid had not been included therein.

243 Section 3. Furnishing of Certified Copies. The IPOPHL Financial Management And
244 Administrative Bureau7 (FMAB) is hereby directed to immediately file three (3) certified copies of
245 these Rules with the University of the Philippines Law Center, and one (1) certified copy each to
246 the Office of the President, the Senate of the Philippines, the House of Representatives, the
247 Supreme Court of the Philippines and the National Library of the Philippines.

248 Section 4. Effectivity. These Rules shall take effect after fifteen (15) days from publication in a
249 newspaper of general circulation.

250

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As renamed under Sec. 6.2 (g) of the proposed amendments to R.A. 8293