Canada's four major record labels have agreed to pay $47.5 million (U.S. $48 million) in damages to songwriters for copyright infringement and overdue royalties, the Toronto Sun reports. As part of their settlements the labels also agree to work together to create improved licensing systems.
The 2008 class action lawsuit, led by the estate of jazz musician Chet Baker, alleged that the four major labels had reproduced and sold over 300,000 song titles without securing the proper licenses or paying royalties. The lawsuit relates only to physical product, not digital downloads or other digital products.
A hearing for the court's approval of the settlement will take place on February 15.
For audio royalties, according to settlement term sheets, Universal Music Canada will pay $17.5million, Sony Music Canada will pay no less than $17.3 million, EMI Music Canada will pay $7.3 million and Warner Music Canada will pay $5.5 million.
Class members will be paid in relation to the amount of royalties accrued by the labels on their pending lists, which kept track of musical works that had been reproduced without previously acquiring the proper licenses or paying the copyright owners.
Two performing rights organizations, Canadian Musical Reproduction Rights Agency (CMRRA) and Société du droit de reproduction des auteurs, compositeurs et éditeurs au Canada (SODRAC), were named in the lawsuit but have cooperated in return for being cleared of liability. CMRRA and SODRAC will act as settlement administrator and will be paid a commission of 10% of all payments made into the settlement trust, according to settlement term sheets.
A licensing agreement is also part of the settlement but has yet to be drafted. Mechanical licensing of audio products released after December 31, 2011 will be governed by a licensing agreement between the labels, CMRRA and SODRAC. The parties agree to "take immediate steps" and work "collaboratively" to "develop the necessary systems and capacity to implement the licensing standards" laid out by the settlement.