Contrasting mandatory and voluntary collective licensing in copyright works.

Different approaches to collective management are utilized globally, including statutory or mandatory collective management, as well as contractual or voluntary collective management. The distinction lies in the nature of the rights being managed. When an exclusive right is in place, licensing is based on voluntary agreements, and the use of protected works may be prohibited. Collective management is an important aspect of licensing in such cases. However, for a mere right to remuneration, which constitutes a non-voluntary license, exploitation occurs without the consent of right holders, but they are entitled to receive equitable remuneration. Collective management is necessary to collect and distribute such remuneration to right holders.

Different operational systems for collective management have been shown to function well, depending on the legal, political, economic, social realities, and international obligations of the country involved. CMO systems also influence the tariffs or licensing schemes. When negotiating tariffs, CMOs should ensure that their criteria are objective, clear, and reasonable. The cost of licenses should be fair and equitable. A CMO can support its tariff proposals by using independent economic research to demonstrate the economic value of the rights in question in relevant markets. All aspects of the transaction should be considered when determining the fair value of a CMO’s license, including the value of the rights and the benefit that collective licensing offers to users by reducing the number of licensing transactions they need to carry out.