[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 227 Enrolled Bill (ENR)]
S.227
One Hundred Fourth Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Wednesday,
the fourth day of January, one thousand nine hundred and ninety-five
An Act
To amend title 17, United States Code, to provide an exclusive right to
perform sound recordings publicly by means of digital transmissions, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Digital Performance Right in Sound
Recordings Act of 1995''.
SEC. 2. EXCLUSIVE RIGHTS IN COPYRIGHTED WORKS.
Section 106 of title 17, United States Code, is amended--
(1) in paragraph (4) by striking ``and'' after the semicolon;
(2) in paragraph (5) by striking the period and inserting ``;
and''; and
(3) by adding at the end the following:
``(6) in the case of sound recordings, to perform the
copyrighted work publicly by means of a digital audio
transmission.''.
SEC. 3. SCOPE OF EXCLUSIVE RIGHTS IN SOUND RECORDINGS.
Section 114 of title 17, United States Code, is amended--
(1) in subsection (a) by striking ``and (3)'' and inserting
``(3) and (6)'';
(2) in subsection (b) in the first sentence by striking
``phonorecords, or of copies of motion pictures and other
audiovisual works,'' and inserting ``phonorecords or copies'';
(3) by striking subsection (d) and inserting:
``(d) Limitations on Exclusive Right.--Notwithstanding the
provisions of section 106(6)--
``(1) Exempt transmissions and retransmissions.--The
performance of a sound recording publicly by means of a digital
audio transmission, other than as a part of an interactive service,
is not an infringement of section 106(6) if the performance is part
of--
``(A)(i) a nonsubscription transmission other than a
retransmission;
``(ii) an initial nonsubscription retransmission made for
direct reception by members of the public of a prior or
simultaneous incidental transmission that is not made for
direct reception by members of the public; or
``(iii) a nonsubscription broadcast transmission;
``(B) a retransmission of a nonsubscription broadcast
transmission: Provided, That, in the case of a retransmission
of a radio station's broadcast transmission--
``(i) the radio station's broadcast transmission is not
willfully or repeatedly retransmitted more than a radius of
150 miles from the site of the radio broadcast transmitter,
however--
``(I) the 150 mile limitation under this clause
shall not apply when a nonsubscription broadcast
transmission by a radio station licensed by the Federal
Communications Commission is retransmitted on a
nonsubscription basis by a terrestrial broadcast
station, terrestrial translator, or terrestrial
repeater licensed by the Federal Communications
Commission; and
``(II) in the case of a subscription retransmission
of a nonsubscription broadcast retransmission covered
by subclause (I), the 150 mile radius shall be measured
from the transmitter site of such broadcast
retransmitter;
``(ii) the retransmission is of radio station broadcast
transmissions that are--
``(I) obtained by the retransmitter over the air;
``(II) not electronically processed by the
retransmitter to deliver separate and discrete signals;
and
``(III) retransmitted only within the local
communities served by the retransmitter;
``(iii) the radio station's broadcast transmission was
being retransmitted to cable systems (as defined in section
111(f)) by a satellite carrier on January 1, 1995, and that
retransmission was being retransmitted by cable systems as
a separate and discrete signal, and the satellite carrier
obtains the radio station's broadcast transmission in an
analog format: Provided, That the broadcast transmission
being retransmitted may embody the programming of no more
than one radio station; or
``(iv) the radio station's broadcast transmission is
made by a noncommercial educational broadcast station
funded on or after January 1, 1995, under section 396(k) of
the Communications Act of 1934 (47 U.S.C. 396(k)), consists
solely of noncommercial educational and cultural radio
programs, and the retransmission, whether or not
simultaneous, is a nonsubscription terrestrial broadcast
retransmission; or
``(C) a transmission that comes within any of the following
categories--
``(i) a prior or simultaneous transmission incidental
to an exempt transmission, such as a feed received by and
then retransmitted by an exempt transmitter: Provided, That
such incidental transmissions do not include any
subscription transmission directly for reception by members
of the public;
``(ii) a transmission within a business establishment,
confined to its premises or the immediately surrounding
vicinity;
``(iii) a retransmission by any retransmitter,
including a multichannel video programming distributor as
defined in section 602(12) of the Communications Act of
1934 (47 U.S.C. 522(12)), of a transmission by a
transmitter licensed to publicly perform the sound
recording as a part of that transmission, if the
retransmission is simultaneous with the licensed
transmission and authorized by the transmitter; or
``(iv) a transmission to a business establishment for
use in the ordinary course of its business: Provided, That
the business recipient does not retransmit the transmission
outside of its premises or the immediately surrounding
vicinity, and that the transmission does not exceed the
sound recording performance complement. Nothing in this
clause shall limit the scope of the exemption in clause
(ii).
``(2) Subscription transmissions.--In the case of a
subscription transmission not exempt under subsection (d)(1), the
performance of a sound recording publicly by means of a digital
audio transmission shall be subject to statutory licensing, in
accordance with subsection (f) of this section, if--
``(A) the transmission is not part of an interactive
service;
``(B) the transmission does not exceed the sound recording
performance complement;
``(C) the transmitting entity does not cause to be
published by means of an advance program schedule or prior
announcement the titles of the specific sound recordings or
phonorecords embodying such sound recordings to be transmitted;
``(D) except in the case of transmission to a business
establishment, the transmitting entity does not automatically
and intentionally cause any device receiving the transmission
to switch from one program channel to another; and
``(E) except as provided in section 1002(e) of this title,
the transmission of the sound recording is accompanied by the
information encoded in that sound recording, if any, by or
under the authority of the copyright owner of that sound
recording, that identifies the title of the sound recording,
the featured recording artist who performs on the sound
recording, and related information, including information
concerning the underlying musical work and its writer.
``(3) Licenses for transmissions by interactive services.--
``(A) No interactive service shall be granted an exclusive
license under section 106(6) for the performance of a sound
recording publicly by means of digital audio transmission for a
period in excess of 12 months, except that with respect to an
exclusive license granted to an interactive service by a
licensor that holds the copyright to 1,000 or fewer sound
recordings, the period of such license shall not exceed 24
months: Provided, however, That the grantee of such exclusive
license shall be ineligible to receive another exclusive
license for the performance of that sound recording for a
period of 13 months from the expiration of the prior exclusive
license.
``(B) The limitation set forth in subparagraph (A) of this
paragraph shall not apply if--
``(i) the licensor has granted and there remain in
effect licenses under section 106(6) for the public
performance of sound recordings by means of digital audio
transmission by at least 5 different interactive services:
Provided, however, That each such license must be for a
minimum of 10 percent of the copyrighted sound recordings
owned by the licensor that have been licensed to
interactive services, but in no event less than 50 sound
recordings; or
``(ii) the exclusive license is granted to perform
publicly up to 45 seconds of a sound recording and the sole
purpose of the performance is to promote the distribution
or performance of that sound recording.
``(C) Notwithstanding the grant of an exclusive or
nonexclusive license of the right of public performance under
section 106(6), an interactive service may not publicly perform
a sound recording unless a license has been granted for the
public performance of any copyrighted musical work contained in
the sound recording: Provided, That such license to publicly
perform the copyrighted musical work may be granted either by a
performing rights society representing the copyright owner or
by the copyright owner.
``(D) The performance of a sound recording by means of a
retransmission of a digital audio transmission is not an
infringement of section 106(6) if--
``(i) the retransmission is of a transmission by an
interactive service licensed to publicly perform the sound
recording to a particular member of the public as part of
that transmission; and
``(ii) the retransmission is simultaneous with the
licensed transmission, authorized by the transmitter, and
limited to that particular member of the public intended by
the interactive service to be the recipient of the
transmission.
``(E) For the purposes of this paragraph--
``(i) a `licensor' shall include the licensing entity
and any other entity under any material degree of common
ownership, management, or control that owns copyrights in
sound recordings; and
``(ii) a `performing rights society' is an association
or corporation that licenses the public performance of
nondramatic musical works on behalf of the copyright owner,
such as the American Society of Composers, Authors and
Publishers, Broadcast Music, Inc., and SESAC, Inc.
``(4) Rights not otherwise limited.--
``(A) Except as expressly provided in this section, this
section does not limit or impair the exclusive right to perform
a sound recording publicly by means of a digital audio
transmission under section 106(6).
``(B) Nothing in this section annuls or limits in any way--
``(i) the exclusive right to publicly perform a musical
work, including by means of a digital audio transmission,
under section 106(4);
``(ii) the exclusive rights in a sound recording or the
musical work embodied therein under sections 106(1), 106(2)
and 106(3); or
``(iii) any other rights under any other clause of
section 106, or remedies available under this title, as
such rights or remedies exist either before or after the
date of enactment of the Digital Performance Right in Sound
Recordings Act of 1995.
``(C) Any limitations in this section on the exclusive
right under section 106(6) apply only to the exclusive right
under section 106(6) and not to any other exclusive rights
under section 106. Nothing in this section shall be construed
to annul, limit, impair or otherwise affect in any way the
ability of the owner of a copyright in a sound recording to
exercise the rights under sections 106(1), 106(2) and 106(3),
or to obtain the remedies available under this title pursuant
to such rights, as such rights and remedies exist either before
or after the date of enactment of the Digital Performance Right
in Sound Recordings Act of 1995.''; and
(4) by adding after subsection (d) the following:
``(e) Authority for Negotiations.--
``(1) Notwithstanding any provision of the antitrust laws, in
negotiating statutory licenses in accordance with subsection (f),
any copyright owners of sound recordings and any entities
performing sound recordings affected by this section may negotiate
and agree upon the royalty rates and license terms and conditions
for the performance of such sound recordings and the proportionate
division of fees paid among copyright owners, and may designate
common agents on a nonexclusive basis to negotiate, agree to, pay,
or receive payments.
``(2) For licenses granted under section 106(6), other than
statutory licenses, such as for performances by interactive
services or performances that exceed the sound recording
performance complement--
``(A) copyright owners of sound recordings affected by this
section may designate common agents to act on their behalf to
grant licenses and receive and remit royalty payments:
Provided, That each copyright owner shall establish the royalty
rates and material license terms and conditions unilaterally,
that is, not in agreement, combination, or concert with other
copyright owners of sound recordings; and
``(B) entities performing sound recordings affected by this
section may designate common agents to act on their behalf to
obtain licenses and collect and pay royalty fees: Provided,
That each entity performing sound recordings shall determine
the royalty rates and material license terms and conditions
unilaterally, that is, not in agreement, combination, or
concert with other entities performing sound recordings.
``(f) Licenses for Nonexempt Subscription Transmissions.--
``(1) No later than 30 days after the enactment of the Digital
Performance Right in Sound Recordings Act of 1995, the Librarian of
Congress shall cause notice to be published in the Federal Register
of the initiation of voluntary negotiation proceedings for the
purpose of determining reasonable terms and rates of royalty
payments for the activities specified by subsection (d)(2) of this
section during the period beginning on the effective date of such
Act and ending on December 31, 2000. Such terms and rates shall
distinguish among the different types of digital audio transmission
services then in operation. Any copyright owners of sound
recordings or any entities performing sound recordings affected by
this section may submit to the Librarian of Congress licenses
covering such activities with respect to such sound recordings. The
parties to each negotiation proceeding shall bear their own costs.
``(2) In the absence of license agreements negotiated under
paragraph (1), during the 60-day period commencing 6 months after
publication of the notice specified in paragraph (1), and upon the
filing of a petition in accordance with section 803(a)(1), the
Librarian of Congress shall, pursuant to chapter 8, convene a
copyright arbitration royalty panel to determine and publish in the
Federal Register a schedule of rates and terms which, subject to
paragraph (3), shall be binding on all copyright owners of sound
recordings and entities performing sound recordings. In addition to
the objectives set forth in section 801(b)(1), in establishing such
rates and terms, the copyright arbitration royalty panel may
consider the rates and terms for comparable types of digital audio
transmission services and comparable circumstances under voluntary
license agreements negotiated as provided in paragraph (1). The
Librarian of Congress shall also establish requirements by which
copyright owners may receive reasonable notice of the use of their
sound recordings under this section, and under which records of
such use shall be kept and made available by entities performing
sound recordings.
``(3) License agreements voluntarily negotiated at any time
between one or more copyright owners of sound recordings and one or
more entities performing sound recordings shall be given effect in
lieu of any determination by a copyright arbitration royalty panel
or decision by the Librarian of Congress.
``(4)(A) Publication of a notice of the initiation of voluntary
negotiation proceedings as specified in paragraph (1) shall be
repeated, in accordance with regulations that the Librarian of
Congress shall prescribe--
``(i) no later than 30 days after a petition is filed by
any copyright owners of sound recordings or any entities
performing sound recordings affected by this section indicating
that a new type of digital audio transmission service on which
sound recordings are performed is or is about to become
operational; and
``(ii) in the first week of January, 2000 and at 5-year
intervals thereafter.
``(B)(i) The procedures specified in paragraph (2) shall be
repeated, in accordance with regulations that the Librarian of
Congress shall prescribe, upon the filing of a petition in
accordance with section 803(a)(1) during a 60-day period
commencing--
``(I) six months after publication of a notice of the
initiation of voluntary negotiation proceedings under paragraph
(1) pursuant to a petition under paragraph (4)(A)(i); or
``(II) on July 1, 2000 and at 5-year intervals thereafter.
``(ii) The procedures specified in paragraph (2) shall be
concluded in accordance with section 802.
``(5)(A) Any person who wishes to perform a sound recording
publicly by means of a nonexempt subscription transmission under
this subsection may do so without infringing the exclusive right of
the copyright owner of the sound recording--
``(i) by complying with such notice requirements as the
Librarian of Congress shall prescribe by regulation and by
paying royalty fees in accordance with this subsection; or
``(ii) if such royalty fees have not been set, by agreeing
to pay such royalty fees as shall be determined in accordance
with this subsection.
``(B) Any royalty payments in arrears shall be made on or
before the twentieth day of the month next succeeding the month in
which the royalty fees are set.
``(g) Proceeds From Licensing of Subscription Transmissions.--
``(1) Except in the case of a subscription transmission
licensed in accordance with subsection (f) of this section--
``(A) a featured recording artist who performs on a sound
recording that has been licensed for a subscription
transmission shall be entitled to receive payments from the
copyright owner of the sound recording in accordance with the
terms of the artist's contract; and
``(B) a nonfeatured recording artist who performs on a
sound recording that has been licensed for a subscription
transmission shall be entitled to receive payments from the
copyright owner of the sound recording in accordance with the
terms of the nonfeatured recording artist's applicable contract
or other applicable agreement.
``(2) The copyright owner of the exclusive right under section
106(6) of this title to publicly perform a sound recording by means
of a digital audio transmission shall allocate to recording artists
in the following manner its receipts from the statutory licensing
of subscription transmission performances of the sound recording in
accordance with subsection (f) of this section:
``(A) 2\1/2\ percent of the receipts shall be deposited in
an escrow account managed by an independent administrator
jointly appointed by copyright owners of sound recordings and
the American Federation of Musicians (or any successor entity)
to be distributed to nonfeatured musicians (whether or not
members of the American Federation of Musicians) who have
performed on sound recordings.
``(B) 2\1/2\ percent of the receipts shall be deposited in
an escrow account managed by an independent administrator
jointly appointed by copyright owners of sound recordings and
the American Federation of Television and Radio Artists (or any
successor entity) to be distributed to nonfeatured vocalists
(whether or not members of the American Federation of
Television and Radio Artists) who have performed on sound
recordings.
``(C) 45 percent of the receipts shall be allocated, on a
per sound recording basis, to the recording artist or artists
featured on such sound recording (or the persons conveying
rights in the artists' performance in the sound recordings).
``(h) Licensing to Affiliates.--
``(1) If the copyright owner of a sound recording licenses an
affiliated entity the right to publicly perform a sound recording
by means of a digital audio transmission under section 106(6), the
copyright owner shall make the licensed sound recording available
under section 106(6) on no less favorable terms and conditions to
all bona fide entities that offer similar services, except that, if
there are material differences in the scope of the requested
license with respect to the type of service, the particular sound
recordings licensed, the frequency of use, the number of
subscribers served, or the duration, then the copyright owner may
establish different terms and conditions for such other services.
``(2) The limitation set forth in paragraph (1) of this
subsection shall not apply in the case where the copyright owner of
a sound recording licenses--
``(A) an interactive service; or
``(B) an entity to perform publicly up to 45 seconds of the
sound recording and the sole purpose of the performance is to
promote the distribution or performance of that sound
recording.
``(i) No Effect on Royalties for Underlying Works.--License fees
payable for the public performance of sound recordings under section
106(6) shall not be taken into account in any administrative, judicial,
or other governmental proceeding to set or adjust the royalties payable
to copyright owners of musical works for the public performance of
their works. It is the intent of Congress that royalties payable to
copyright owners of musical works for the public performance of their
works shall not be diminished in any respect as a result of the rights
granted by section 106(6).
``(j) Definitions.--As used in this section, the following terms
have the following meanings:
``(1) An `affiliated entity' is an entity engaging in digital
audio transmissions covered by section 106(6), other than an
interactive service, in which the licensor has any direct or
indirect partnership or any ownership interest amounting to 5
percent or more of the outstanding voting or non-voting stock.
``(2) A `broadcast' transmission is a transmission made by a
terrestrial broadcast station licensed as such by the Federal
Communications Commission.
``(3) A `digital audio transmission' is a digital transmission
as defined in section 101, that embodies the transmission of a
sound recording. This term does not include the transmission of any
audiovisual work.
``(4) An `interactive service' is one that enables a member of
the public to receive, on request, a transmission of a particular
sound recording chosen by or on behalf of the recipient. The
ability of individuals to request that particular sound recordings
be performed for reception by the public at large does not make a
service interactive. If an entity offers both interactive and non-
interactive services (either concurrently or at different times),
the non-interactive component shall not be treated as part of an
interactive service.
``(5) A `nonsubscription' transmission is any transmission that
is not a subscription transmission.
``(6) A `retransmission' is a further transmission of an
initial transmission, and includes any further retransmission of
the same transmission. Except as provided in this section, a
transmission qualifies as a `retransmission' only if it is
simultaneous with the initial transmission. Nothing in this
definition shall be construed to exempt a transmission that fails
to satisfy a separate element required to qualify for an exemption
under section 114(d)(1).
``(7) The `sound recording performance complement' is the
transmission during any 3-hour period, on a particular channel used
by a transmitting entity, of no more than--
``(A) 3 different selections of sound recordings from any
one phonorecord lawfully distributed for public performance or
sale in the United States, if no more than 2 such selections
are transmitted consecutively; or
``(B) 4 different selections of sound recordings--
``(i) by the same featured recording artist; or
``(ii) from any set or compilation of phonorecords
lawfully distributed together as a unit for public
performance or sale in the United States,
if no more than three such selections are transmitted
consecutively:
Provided, That the transmission of selections in excess of the
numerical limits provided for in clauses (A) and (B) from multiple
phonorecords shall nonetheless qualify as a sound recording
performance complement if the programming of the multiple
phonorecords was not willfully intended to avoid the numerical
limitations prescribed in such clauses.
``(8) A `subscription' transmission is a transmission that is
controlled and limited to particular recipients, and for which
consideration is required to be paid or otherwise given by or on
behalf of the recipient to receive the transmission or a package of
transmissions including the transmission.
``(9) A `transmission' includes both an initial transmission
and a retransmission.''.
SEC. 4. MECHANICAL ROYALTIES IN DIGITAL PHONORECORD DELIVERIES.
Section 115 of title 17, United States Code, is amended--
(1) in subsection (a)(1)--
(A) in the first sentence by striking out ``any other
person'' and inserting in lieu thereof ``any other person,
including those who make phonorecords or digital phonorecord
deliveries,''; and
(B) in the second sentence by inserting before the period
``, including by means of a digital phonorecord delivery'';
(2) in subsection (c)(2) in the second sentence by inserting
``and other than as provided in paragraph (3),'' after ``For this
purpose,'';
(3) by redesignating paragraphs (3), (4), and (5) of subsection
(c) as paragraphs (4), (5), and (6), respectively, and by inserting
after paragraph (2) the following new paragraph:
``(3)(A) A compulsory license under this section includes the
right of the compulsory licensee to distribute or authorize the
distribution of a phonorecord of a nondramatic musical work by
means of a digital transmission which constitutes a digital
phonorecord delivery, regardless of whether the digital
transmission is also a public performance of the sound recording
under section 106(6) of this title or of any nondramatic musical
work embodied therein under section 106(4) of this title. For every
digital phonorecord delivery by or under the authority of the
compulsory licensee--
``(i) on or before December 31, 1997, the royalty payable
by the compulsory licensee shall be the royalty prescribed
under paragraph (2) and chapter 8 of this title; and
``(ii) on or after January 1, 1998, the royalty payable by
the compulsory licensee shall be the royalty prescribed under
subparagraphs (B) through (F) and chapter 8 of this title.
``(B) Notwithstanding any provision of the antitrust laws, any
copyright owners of nondramatic musical works and any persons
entitled to obtain a compulsory license under subsection (a)(1) may
negotiate and agree upon the terms and rates of royalty payments
under this paragraph and the proportionate division of fees paid
among copyright owners, and may designate common agents to
negotiate, agree to, pay or receive such royalty payments. Such
authority to negotiate the terms and rates of royalty payments
includes, but is not limited to, the authority to negotiate the
year during which the royalty rates prescribed under subparagraphs
(B) through (F) and chapter 8 of this title shall next be
determined.
``(C) During the period of June 30, 1996, through December 31,
1996, the Librarian of Congress shall cause notice to be published
in the Federal Register of the initiation of voluntary negotiation
proceedings for the purpose of determining reasonable terms and
rates of royalty payments for the activities specified by
subparagraph (A) during the period beginning January 1, 1998, and
ending on the effective date of any new terms and rates established
pursuant to subparagraph (C), (D) or (F), or such other date
(regarding digital phonorecord deliveries) as the parties may
agree. Such terms and rates shall distinguish between (i) digital
phonorecord deliveries where the reproduction or distribution of a
phonorecord is incidental to the transmission which constitutes the
digital phonorecord delivery, and (ii) digital phonorecord
deliveries in general. Any copyright owners of nondramatic musical
works and any persons entitled to obtain a compulsory license under
subsection (a)(1) may submit to the Librarian of Congress licenses
covering such activities. The parties to each negotiation
proceeding shall bear their own costs.
``(D) In the absence of license agreements negotiated under
subparagraphs (B) and (C), upon the filing of a petition in
accordance with section 803(a)(1), the Librarian of Congress shall,
pursuant to chapter 8, convene a copyright arbitration royalty
panel to determine and publish in the Federal Register a schedule
of rates and terms which, subject to subparagraph (E), shall be
binding on all copyright owners of nondramatic musical works and
persons entitled to obtain a compulsory license under subsection
(a)(1) during the period beginning January 1, 1998, and ending on
the effective date of any new terms and rates established pursuant
to subparagraph (C), (D) or (F), or such other date (regarding
digital phonorecord deliveries) as may be determined pursuant to
subparagraphs (B) and (C). Such terms and rates shall distinguish
between (i) digital phonorecord deliveries where the reproduction
or distribution of a phonorecord is incidental to the transmission
which constitutes the digital phonorecord delivery, and (ii)
digital phonorecord deliveries in general. In addition to the
objectives set forth in section 801(b)(1), in establishing such
rates and terms, the copyright arbitration royalty panel may
consider rates and terms under voluntary license agreements
negotiated as provided in subparagraphs (B) and (C). The royalty
rates payable for a compulsory license for a digital phonorecord
delivery under this section shall be established de novo and no
precedential effect shall be given to the amount of the royalty
payable by a compulsory licensee for digital phonorecord deliveries
on or before December 31, 1997. The Librarian of Congress shall
also establish requirements by which copyright owners may receive
reasonable notice of the use of their works under this section, and
under which records of such use shall be kept and made available by
persons making digital phonorecord deliveries.
``(E)(i) License agreements voluntarily negotiated at any time
between one or more copyright owners of nondramatic musical works
and one or more persons entitled to obtain a compulsory license
under subsection (a)(1) shall be given effect in lieu of any
determination by the Librarian of Congress. Subject to clause (ii),
the royalty rates determined pursuant to subparagraph (C), (D) or
(F) shall be given effect in lieu of any contrary royalty rates
specified in a contract pursuant to which a recording artist who is
the author of a nondramatic musical work grants a license under
that person's exclusive rights in the musical work under sections
106 (1) and (3) or commits another person to grant a license in
that musical work under sections 106 (1) and (3), to a person
desiring to fix in a tangible medium of expression a sound
recording embodying the musical work.
``(ii) The second sentence of clause (i) shall not apply to--
``(I) a contract entered into on or before June 22, 1995,
and not modified thereafter for the purpose of reducing the
royalty rates determined pursuant to subparagraph (C), (D) or
(F) or of increasing the number of musical works within the
scope of the contract covered by the reduced rates, except if a
contract entered into on or before June 22, 1995, is modified
thereafter for the purpose of increasing the number of musical
works within the scope of the contract, any contrary royalty
rates specified in the contract shall be given effect in lieu
of royalty rates determined pursuant to subparagraph (C), (D)
or (F) for the number of musical works within the scope of the
contract as of June 22, 1995; and
``(II) a contract entered into after the date that the
sound recording is fixed in a tangible medium of expression
substantially in a form intended for commercial release, if at
the time the contract is entered into, the recording artist
retains the right to grant licenses as to the musical work
under sections 106(1) and 106(3).
``(F) The procedures specified in subparagraphs (C) and (D)
shall be repeated and concluded, in accordance with regulations
that the Librarian of Congress shall prescribe, in each fifth
calendar year after 1997, except to the extent that different years
for the repeating and concluding of such proceedings may be
determined in accordance with subparagraphs (B) and (C).
``(G) Except as provided in section 1002(e) of this title, a
digital phonorecord delivery licensed under this paragraph shall be
accompanied by the information encoded in the sound recording, if
any, by or under the authority of the copyright owner of that sound
recording, that identifies the title of the sound recording, the
featured recording artist who performs on the sound recording, and
related information, including information concerning the
underlying musical work and its writer.
``(H)(i) A digital phonorecord delivery of a sound recording is
actionable as an act of infringement under section 501, and is
fully subject to the remedies provided by sections 502 through 506
and section 509, unless--
``(I) the digital phonorecord delivery has been authorized
by the copyright owner of the sound recording; and
``(II) the owner of the copyright in the sound recording or
the entity making the digital phonorecord delivery has obtained
a compulsory license under this section or has otherwise been
authorized by the copyright owner of the musical work to
distribute or authorize the distribution, by means of a digital
phonorecord delivery, of each musical work embodied in the
sound recording.
``(ii) Any cause of action under this subparagraph shall be in
addition to those available to the owner of the copyright in the
nondramatic musical work under subsection (c)(6) and section 106(4)
and the owner of the copyright in the sound recording under section
106(6).
``(I) The liability of the copyright owner of a sound recording
for infringement of the copyright in a nondramatic musical work
embodied in the sound recording shall be determined in accordance
with applicable law, except that the owner of a copyright in a
sound recording shall not be liable for a digital phonorecord
delivery by a third party if the owner of the copyright in the
sound recording does not license the distribution of a phonorecord
of the nondramatic musical work.
``(J) Nothing in section 1008 shall be construed to prevent the
exercise of the rights and remedies allowed by this paragraph,
paragraph (6), and chapter 5 in the event of a digital phonorecord
delivery, except that no action alleging infringement of copyright
may be brought under this title against a manufacturer, importer or
distributor of a digital audio recording device, a digital audio
recording medium, an analog recording device, or an analog
recording medium, or against a consumer, based on the actions
described in such section.
``(K) Nothing in this section annuls or limits (i) the
exclusive right to publicly perform a sound recording or the
musical work embodied therein, including by means of a digital
transmission, under sections 106(4) and 106(6), (ii) except for
compulsory licensing under the conditions specified by this
section, the exclusive rights to reproduce and distribute the sound
recording and the musical work embodied therein under sections
106(1) and 106(3), including by means of a digital phonorecord
delivery, or (iii) any other rights under any other provision of
section 106, or remedies available under this title, as such rights
or remedies exist either before or after the date of enactment of
the Digital Performance Right in Sound Recordings Act of 1995.
``(L) The provisions of this section concerning digital
phonorecord deliveries shall not apply to any exempt transmissions
or retransmissions under section 114(d)(1). The exemptions created
in section 114(d)(1) do not expand or reduce the rights of
copyright owners under section 106 (1) through (5) with respect to
such transmissions and retransmissions.''; and
(5) by adding after subsection (c) the following:
``(d) Definition.--As used in this section, the following term has
the following meaning: A `digital phonorecord delivery' is each
individual delivery of a phonorecord by digital transmission of a sound
recording which results in a specifically identifiable reproduction by
or for any transmission recipient of a phonorecord of that sound
recording, regardless of whether the digital transmission is also a
public performance of the sound recording or any nondramatic musical
work embodied therein. A digital phonorecord delivery does not result
from a real-time, non-interactive subscription transmission of a sound
recording where no reproduction of the sound recording or the musical
work embodied therein is made from the inception of the transmission
through to its receipt by the transmission recipient in order to make
the sound recording audible.''.
SEC. 5. CONFORMING AMENDMENTS.
(a) Definitions.--Section 101 of title 17, United States Code, is
amended by inserting after the definition of ``device'', ``machine'',
or ``process'' the following:
``A `digital transmission' is a transmission in whole or in
part in a digital or other non-analog format.''.
(b) Limitations on Exclusive Rights: Secondary Transmissions.--
Section 111(c)(1) of title 17, United States Code, is amended in the
first sentence by inserting ``and section 114(d)'' after ``of this
subsection''.
(c) Limitations on Exclusive Rights: Secondary Transmissions of
Superstations and Network Stations for Private Home Viewing.--
(1) Section 119(a)(1) of title 17, United States Code, is
amended in the first sentence by inserting ``and section 114(d)''
after ``of this subsection''.
(2) Section 119(a)(2)(A) of title 17, United States Code, is
amended in the first sentence by inserting ``and section 114(d)''
after ``of this subsection''.
(d) Copyright Arbitration Royalty Panels.--
(1) Section 801(b)(1) of title 17, United States Code, is
amended in the first and second sentences by striking ``115'' each
place it appears and inserting ``114, 115,''.
(2) Section 802(c) of title 17, United States Code, is amended
in the third sentence by striking ``section 111, 116, or 119,'' and
inserting ``section 111, 114, 116, or 119, any person entitled to a
compulsory license under section 114(d), any person entitled to a
compulsory license under section 115,''.
(3) Section 802(g) of title 17, United States Code, is amended
in the third sentence by inserting ``114,'' after ``111,''.
(4) Section 802(h)(2) of title 17, United States Code, is
amended by inserting ``114,'' after ``111,''.
(5) Section 803(a)(1) of title 17, United States Code, is
amended in the first sentence by striking ``115'' and inserting
``114, 115'' and by striking ``and (4)'' and inserting ``(4) and
(5)''.
(6) Section 803(a)(3) of title 17, United States Code, is
amended by inserting before the period ``or as prescribed in
section 115(c)(3)(D)''.
(7) Section 803(a) of title 17, United States Code, is amended
by inserting after paragraph (4) the following new paragraph:
``(5) With respect to proceedings under section 801(b)(1)
concerning the determination of reasonable terms and rates of
royalty payments as provided in section 114, the Librarian of
Congress shall proceed when and as provided by that section.''.
SEC. 6. EFFECTIVE DATE.
This Act and the amendments made by this Act shall take effect 3
months after the date of enactment of this Act, except that the
provisions of sections 114(e) and 114(f) of title 17, United States
Code (as added by section 3 of this Act) shall take effect immediately
upon the date of enactment of this Act.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.