[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 28 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                 S. 28

    To amend title 17, United States Code, with respect to certain 
           exemptions from copyright, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 21, 1997

Mr. Thurmond (for himself and Mr. Helms) introduced the following bill; 
  which was read twice and referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
    To amend title 17, United States Code, with respect to certain 
           exemptions from copyright, 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 ``Fairness in Musical Licensing Act of 
1997''.

SEC. 2. EXEMPTION OF CERTAIN MUSIC USES FROM COPYRIGHT PROTECTION.

    (a) Business Exemption.--Section 110(5) of title 17, United States 
Code, is amended to read as follows:
            ``(5) communication by electronic device of a transmission 
        embodying a performance or display of a nondramatic musical 
        work by the reception of a broadcast, cable, satellite, or 
        other transmission, unless--
                    ``(A) an admission fee is charged specifically to 
                see or hear the transmission, or
                    ``(B) the transmission is not properly licensed;''.
    (b) Agricultural Events.--Section 110(6) of title 17, United States 
Code, is amended to read as follows:
            ``(6) performance of a nondramatic musical work by a 
        governmental body or a nonprofit agricultural or horticultural 
        organization, in the course of an agricultural or horticultural 
        fair, convention, meeting, event, or exhibition conducted by 
        such body or organization; the exception provided by this 
        paragraph shall extend to any liability for copyright 
        infringement that would otherwise be imposed on such body or 
        organization, including under the doctrines of vicarious 
        liability, contributory infringement, or related infringement, 
        for a performance by a concessionaire, business establishment, 
        or other person at such fair, convention, meeting, event, or 
        exhibition, but shall not excuse any such person from liability 
        for the performance;''.
    (c) Exemption Relating to Promotion.--Section 110(7) of title 17, 
United States Code, is amended--
            (1) by striking ``vending'';
            (2) by striking ``sole'';
            (3) by inserting ``or of the audio, video or other devices 
        utilized in the performance,'' after ``phonorecords of the 
        work,''; and
            (4) by striking ``and is within the immediate area where 
        the sale is occurring''.
    (d) Performances at Children's Camps.--Section 110 of title 17, 
United States Code, is amended--
            (1) by striking the periods at the end of paragraphs (8) 
        and (9) and inserting semicolons;
            (2) in paragraph (10) by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end thereof the following:
            ``(11) performance of a nondramatic musical work at an 
        organized children's camp, if children in attendance sing all 
        or a portion of the work, children in attendance engage in 
        games or dance to the accompaniment of all or a portion of the 
        work, or the performance is of an instructional nature.''.

SEC. 3. BINDING ARBITRATION OF RATE DISPUTES INVOLVING PERFORMING 
              RIGHTS SOCIETIES.

    (a) In General.--Section 504 of title 17, United States Code, is 
amended by adding at the end the following new subsection:
    ``(d) Performing Rights Societies; Binding Arbitration.--
            ``(1) Arbitration of disputes prior to court action.--
                    ``(A) Arbitration.--(i) If a general music user and 
                a performing rights society are unable to agree on the 
                appropriate fee to be paid for the user's past or 
                future performance of musical works in the repertoire 
                of the performing rights society, the general music 
                user shall, in lieu of any other dispute-resolution 
                mechanism established by any judgment or decree 
                governing the operation of the performing rights 
                society, be entitled to binding arbitration of such 
                disagreement pursuant to the rules of the American 
                Arbitration Association. The music user may initiate 
                such arbitration.
                    ``(ii) The arbitrator in such binding arbitration 
                shall determine a fair and reasonable fee for the 
                general music user's past and future performance of 
                musical works in such society's repertoire and shall 
                determine whether the user's past performances of such 
                musical works, if any, infringed the copyrights of 
                works in the society's repertoire. If the arbitrator 
                determines that the general music user's past 
                performances of such musical works infringed the 
                copyrights of works in the society's repertoire, the 
                arbitrator shall impose a penalty for such 
                infringement. Such penalty shall not exceed the 
                arbitrator's determination of the fair and reasonable 
                license fee for the performances at issue.
                    ``(B) Definitions.--(i) For purposes of this 
                paragraph, a `general music user' is any person who 
                performs musical works publicly but is not engaged in 
                the transmission of musical works to the general public 
                or to subscribers through broadcast, cable, satellite, 
                or other transmission.
                    ``(ii) For purposes of this paragraph, 
                transmissions within a single commercial establishment 
                or within establishments under common ownership or 
                control are not transmissions to the general public.
                    ``(iii) For purposes of clause (ii), an 
                `establishment' is a retail business, restaurant, bar, 
                inn, tavern, or any other place of business in which 
                the public may assemble.
                    ``(C) Enforcement of arbitrator's determinations.--
                An arbitrator's determination under this paragraph is 
                binding on the parties and may be enforced pursuant to 
                sections 9 through 13 of title 9.
            ``(2) Court-annexed arbitration.--In any civil action for 
        infringement of the right granted in section 106(4) involving a 
        musical work that is in the repertoire of a performing rights 
        society, if the defendant admits the prior public performance 
        of one or more works in the repertoire of the performing rights 
        society but contests the amount of the license fee demanded by 
        such society for such performance, the dispute shall, if 
        requested by the defendant, be submitted to arbitration under 
        section 652(e) of title 28. In such arbitration proceeding, the 
        arbitrator shall determine the amount owed by the defendant to 
        the performing rights society for all past public performances 
        of musical works in the society's repertoire. Such amount shall 
        not exceed two times the amount of the blanket license fee that 
        would be applied by the society to the defendant for the year 
        or years in which the performances occurred. In addition, the 
        arbitrator shall, if requested by the defendant, determine a 
        fair and reasonable license fee for the defendant's future 
        public performances of the musical works in such society's 
        repertoire.
            ``(3) Term of license fee determination.--In any 
        arbitration proceeding initiated under this subsection, the 
        arbitrator's determination of a fair and reasonable license fee 
        for the performance of the music in the repertoire of the 
        performing rights society concerned shall apply for a period of 
        not less than 3 years nor more than 5 years after the date of 
        the arbitrator's determination.''.
    (b) Actions That Shall Be Referred to Arbitration.--Section 652 of 
title 28, United States Code, is amended by adding at the end the 
following:
    ``(e) Actions That Shall Be Referred to Arbitration.--In any civil 
action for infringement of the right granted in section 106(4) of title 
17 involving a musical work that is in the repertoire of a performing 
rights society, if the defendant admits the public performance of any 
musical work in the repertoire of the performing rights society but 
contests the amount of the license fee demanded for such performance by 
the society, the district court shall, if requested by the defendant, 
refer the dispute to arbitration, which shall be conducted in 
accordance with section 504(d)(2) of title 17. Each district court 
shall establish procedures by local rule authorizing the use of 
arbitration under this subsection. The definitions set forth in title 
17 apply to the terms used in this subsection.''.

SEC. 4. RADIO PER PROGRAMMING PERIOD LICENSE.

    Section 504 of title 17, United States Code, as amended by section 
3 of this Act, is further amended by adding at the end thereof the 
following new subsection:
    ``(e) Radio Per Programming Period Licenses.--
            ``(1) In general.--Each performing rights society shall 
        offer, to any radio broadcaster that so requests, a per 
        programming period license to perform nondramatic musical works 
        in the repertoire of the performing rights society. Such 
        license shall be offered on reasonable terms and conditions 
        that provide an economically and administratively viable 
        alternative to the society's blanket license for all such 
        broadcasters.
            ``(2) Price of per programming period licenses.--(A) The 
        total price of a per programming period license described in 
        paragraph (1)--
                    ``(i) shall include separate components for 
                incidental and feature performances, with the 
                incidental performance component to be independent of 
                the quantity of such performances by the broadcaster 
                and not to exceed the relative value that the 
                performing rights society assigns to such performances 
                in its distribution of royalties; and
                    ``(ii) shall not exceed the fee that would be 
                payable by the broadcaster under the lowest price 
                blanket license offered to radio broadcasters, and 
                shall vary between the incidental performance 
                component, for a broadcaster that makes only incidental 
                performances of music in the society's repertoire, and 
                such blanket license fee, in direct proportion to the 
                percentage of the broadcaster's revenue attributable to 
                programming periods containing feature performances of 
                musical works in the society's repertoire compared to 
                the industry average percentage of revenue attributable 
                to programming periods containing feature performances 
                of such musical works.
            ``(B) Nondramatic musical works that have been licensed 
        directly or at the source, or whose performance constitutes 
        fair use or is otherwise exempt from liability under this 
        title, shall not be considered in calculating any per 
        programming period license fee under this subsection.
            ``(3) Implementation.--Any radio broadcaster entitled to a 
        per programming period license under this subsection may bring 
        an action to require compliance with this subsection in an 
        appropriate United States district court, including any 
        district court established by court order or statute as a court 
        that resolves disputes, with respect to license rates, that may 
        arise between performing rights societies and persons who 
        perform musical works in the society's repertoire.
            ``(4) Definitions.--As used in this subsection--
                    ``(A) the term `blanket license' means a license 
                provided by a performing rights society that authorizes 
                the unlimited performance of musical works in the 
                society's repertoire, for a fee that does not vary with 
                the quantity or type of performances of musical works 
                in the society's repertoire;
                    ``(B) the term `incidental' means commercial 
                jingles not exceeding 60 seconds in duration, bridges, 
                themes or signatures, arrangements of works in the 
                public domain, and background music, including music 
                used in conjunction with sporting events; and
                    ``(C) the term `programming period' means any 15-
                minute period of radio broadcasting commencing on the 
                hour, or at 15, 30, or 45 minutes past the hour.''.

SEC. 5. ACCESS TO REPERTOIRE AND LICENSING INFORMATION.

    Section 504 of title 17, United States Code, as amended by sections 
3 and 4 of this Act, is further amended by adding at the end the 
following:
    ``(f) Access to Musical Repertoire.--
            ``(1) Online computer access.--Each performing rights 
        society shall make available, free of charge, to all interested 
        persons, online computer access to copyright and licensing 
        information for each work in its repertoire. Such access shall, 
        for each such musical work, identify the work by title of the 
        work, the name of the author and the copyright owner, and the 
        names of any artists known to have performed the work. Such 
        online computer access shall permit the efficient review of 
        multiple musical works consistent with reasonably available 
        technology.
            ``(2) Directory of titles.--Each performing rights society 
        shall make available at cost, not less frequently than 
        semiannually, a printed directory of each title in its 
        repertoire, as of the date which is not more than 30 days 
        before the date on which the directory is published, containing 
        the information set forth in paragraph (1).
            ``(3) Documentation of right to license.--A performing 
        rights society shall, upon the request of any person who 
        performs or may perform musical works in the society's 
        repertoire, provide to that person copies of the documentation 
        establishing the society's right to license the public 
        performance of such musical works.
            ``(4) Restrictions on infringement actions.--
                    ``(A) Restrictions.--A performing rights society 
                may not institute or be a party to, or pay the costs of 
                another party in, any action alleging the infringement 
                of the copyright in, or charge a fee under any per 
                programming period license for, any work in that 
                society's repertoire that is not identified and 
                documented as required by paragraphs (1), (2), and (3).
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                on the basis of a failure to comply with paragraph (2) 
                with respect to a musical work first entering the 
                society's repertoire within the 6-month period 
                beginning 30 days before the date on which the 
                society's last directory was published under paragraph 
                (2), if the society establishes that such musical work 
                was included in the online database required by 
                paragraph (1) not less than 10 days before the 
                performance giving rise to the alleged infringement or 
                charge.
    ``(g) Access to Licensing Information.--
            ``(1) Terms of licenses.--Each performing rights society 
        shall provide, within 5 business days after it receives a 
        written request from a licensee of any musical work in the 
        society's repertoire, or from any person that is negotiating to 
        become such a licensee--
                    ``(A) the schedule of the society's license rates 
                and terms of the license fees to be paid under the 
                license agreement, including any sliding scale or 
                schedule for any increase or decrease in rates for the 
                duration of the license agreement;
                    ``(B) the formulas by which the rates are derived; 
                and
                    ``(C) license terms under agreements executed by 
                the performing rights society and licensees described 
                in subparagraph (A).
            ``(2) Copies of licenses.--Any performing rights society 
        that receives a written request from an entity that has been 
        requested to enter into a license agreement with the performing 
        rights society on behalf of persons who perform or may perform 
        musical works within that society's repertoire, shall provide 
        to that entity, within 5 business days after receiving that 
        request, a schedule of fees for such performances by similar 
        persons.''.

SEC. 6. ANNUAL REPORTS.

    Not later than March 1 of each year, the Attorney General of the 
United States shall submit a written report to the Congress on the 
activities of the Department of Justice during the preceding calendar 
year relating to the continuing supervision and enforcement by the 
Department of the consent decree of the American Society of Composers, 
Authors, and Publishers of March 14, 1950, and the consent decree of 
Broadcast Music, Inc. of December 29, 1966. Such report shall include a 
description of all issues raised or complaints filed with the 
Department of Justice relating to the operations of those performing 
rights societies, and a summary of the Department's actions or 
investigations undertaken by the Department in response to such issues 
and complaints.

SEC. 7. VICARIOUS LIABILITY PROHIBITED.

    A landlord, an organizer or sponsor of a convention, exposition, or 
meeting, a facility owner, or any other person making space available 
to another party by contract, shall not be liable under any theory of 
vicarious or contributory infringement with respect to an infringing 
public performance of a copyrighted work by a tenant, lessee, 
subtenant, sublessee, licensee, exhibitor, or other user of such space 
on the ground that--
            (1) a contract for such space provides the landlord, 
        organizer or sponsor, facility owner, or other person a right 
        or ability to control such space and compensation for the use 
        of such space; or
            (2) the landlord, organizer or sponsor, facility owner, or 
        other person has or had at the time of the infringing 
        performance actual control over some aspects of the use of such 
        space,
if the contract for the use of such space prohibits infringing public 
performances and the landlord, organizer or sponsor, facility owner, or 
other person does not exercise control over the selection of works 
performed.

SEC. 8. CONFORMING AMENDMENTS.

    Section 101 of title 17, United States Code, is amended by 
inserting after the undesignated paragraph relating to the definition 
of ``perform'' the following:
            ``A `performing rights society' is an association, 
        corporation, or other entity that licenses the public 
        performance of nondramatic musical works on behalf of copyright 
        owners of such works, such as the American Society of 
        Composers, Authors, and Publishers, Broadcast Music, Inc., and 
        SESAC, Inc. The `repertoire' of a performing rights society 
        consists of those works for which the society provides licenses 
        on behalf of the owners of copyright in the works.''.

SEC. 9. CONSTRUCTION OF ACT.

    Except as provided in section 504(d)(1) of title 17, United States 
Code, as added by section 3(a) of this Act, nothing in this Act shall 
be construed to relieve any performing rights society (as defined in 
section 101 of title 17, United States Code) of any obligation under 
any consent decree, State statute, or other court order governing its 
operation, as such decree or order is in effect on the date of the 
enactment of this Act, as it may be amended after such date, or as it 
may be issued or agreed to after such date.
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