[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1417 Reported in Senate (RS)]
Calendar No. 744
108th CONGRESS
2d Session
H.R. 1417
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 4, 2004
Received; read twice and referred to the Committee on the Judiciary
September 29, 2004
Reported by Mr. Hatch, with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]
_______________________________________________________________________
A BILL
To amend title 17, United States Code, to replace copyright arbitration
royalty panels with Copyright Royalty Judges, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
<DELETED>SECTION 1. SHORT TITLE.</DELETED>
<DELETED> This Act may be cited as the ``Copyright Royalty and
Distribution Reform Act of 2004''.</DELETED>
<DELETED>SEC. 2. REFERENCE.</DELETED>
<DELETED> Except as otherwise expressly provided, whenever in this
Act an amendment or repeal is expressed in terms of an amendment to, or
repeal of, a section or other provision, the reference shall be
considered to be made to a section or other provision of title 17,
United States Code.</DELETED>
<DELETED>SEC. 3. COPYRIGHT ROYALTY JUDGE AND STAFF.</DELETED>
<DELETED> (a) In General.--Chapter 8 is amended to read as
follows:</DELETED>
<DELETED>``CHAPTER 8--PROCEEDINGS BY COPYRIGHT ROYALTY JUDGES</DELETED>
<DELETED>``Sec.
<DELETED>``801. Copyright Royalty Judges; appointment and functions.
<DELETED>``802. Copyright Royalty Judgeships; staff.
<DELETED>``803. Proceedings of Copyright Royalty Judges.
<DELETED>``804. Institution of proceedings.
<DELETED>``805. General rule for voluntarily negotiated agreements.
<DELETED>``Sec. 801. Copyright Royalty Judges; appointment and
functions</DELETED>
<DELETED> ``(a) Appointment.--The Librarian of Congress shall
appoint 3 full-time Copyright Royalty Judges, and shall appoint one of
the three as the Chief Copyright Royalty Judge. In making such
appointments, the Librarian shall consult with the Register of
Copyrights.</DELETED>
<DELETED> ``(b) Functions.--Subject to the provisions of this
chapter, the functions of the Copyright Royalty Judges shall be as
follows:</DELETED>
<DELETED> ``(1) To make determinations and adjustments of
reasonable terms and rates of royalty payments as provided in
sections 112(e), 114, 115, 116, 118, 119 and 1004. The rates
applicable under sections 114(f)(1)(B), 115, and 116 shall be
calculated to achieve the following objectives:</DELETED>
<DELETED> ``(A) To maximize the availability of
creative works to the public.</DELETED>
<DELETED> ``(B) To afford the copyright owner a fair
return for his or her creative work and the copyright
user a fair income under existing economic
conditions.</DELETED>
<DELETED> ``(C) To reflect the relative roles of the
copyright owner and the copyright user in the product
made available to the public with respect to relative
creative contribution, technological contribution,
capital investment, cost, risk, and contribution to the
opening of new markets for creative expression and
media for their communication.</DELETED>
<DELETED> ``(D) To minimize any disruptive impact on
the structure of the industries involved and on
generally prevailing industry practices.</DELETED>
<DELETED> ``(2) To make determinations concerning the
adjustment of the copyright royalty rates under section 111
solely in accordance with the following provisions:</DELETED>
<DELETED> ``(A) The rates established by section
111(d)(1)(B) may be adjusted to reflect--</DELETED>
<DELETED> ``(i) national monetary inflation
or deflation; or</DELETED>
<DELETED> ``(ii) changes in the average
rates charged cable subscribers for the basic
service of providing secondary transmissions to
maintain the real constant dollar level of the
royalty fee per subscriber which existed as of
the date of October 19, 1976,</DELETED>
<DELETED>except that--</DELETED>
<DELETED> ``(I) if the average rates charged
cable system subscribers for the basic service
of providing secondary transmissions are
changed so that the average rates exceed
national monetary inflation, no change in the
rates established by section 111(d)(1)(B) shall
be permitted; and</DELETED>
<DELETED> ``(II) no increase in the royalty
fee shall be permitted based on any reduction
in the average number of distant signal
equivalents per subscriber.</DELETED>
<DELETED>The Copyright Royalty Judges may consider all
factors relating to the maintenance of such level of
payments, including, as an extenuating factor, whether
the industry has been restrained by subscriber rate
regulating authorities from increasing the rates for
the basic service of providing secondary
transmissions.</DELETED>
<DELETED> ``(B) In the event that the rules and
regulations of the Federal Communications Commission
are amended at any time after April 8, 1976, to permit
the carriage by cable systems of additional television
broadcast signals beyond the local service area of the
primary transmitters of such signals, the royalty rates
established by section 111(d)(1)(B) may be adjusted to
insure that the rates for the additional distant signal
equivalents resulting from such carriage are reasonable
in the light of the changes effected by the amendment
to such rules and regulations. In determining the
reasonableness of rates proposed following an amendment
of Federal Communications Commission rules and
regulations, the Copyright Royalty Judges shall
consider, among other factors, the economic impact on
copyright owners and users; except that no adjustment
in royalty rates shall be made under this subparagraph
with respect to any distant signal equivalent or
fraction thereof represented by--</DELETED>
<DELETED> ``(i) carriage of any signal
permitted under the rules and regulations of
the Federal Communications Commission in effect
on April 15, 1976, or the carriage of a signal
of the same type (that is, independent,
network, or noncommercial educational)
substituted for such permitted signal;
or</DELETED>
<DELETED> ``(ii) a television broadcast
signal first carried after April 15, 1976,
pursuant to an individual waiver of the rules
and regulations of the Federal Communications
Commission, as such rules and regulations were
in effect on April 15, 1976.</DELETED>
<DELETED> ``(C) In the event of any change in the
rules and regulations of the Federal Communications
Commission with respect to syndicated and sports
program exclusivity after April 15, 1976, the rates
established by section 111(d)(1)(B) may be adjusted to
assure that such rates are reasonable in light of the
changes to such rules and regulations, but any such
adjustment shall apply only to the affected television
broadcast signals carried on those systems affected by
the change.</DELETED>
<DELETED> ``(D) The gross receipts limitations
established by section 111(d)(1)(C) and (D) shall be
adjusted to reflect national monetary inflation or
deflation or changes in the average rates charged cable
system subscribers for the basic service of providing
secondary transmissions to maintain the real constant
dollar value of the exemption provided by such section,
and the royalty rate specified therein shall not be
subject to adjustment.</DELETED>
<DELETED> ``(3)(A) To authorize the distribution, under
sections 111, 119, and 1007, of those royalty fees collected
under sections 111, 119, and 1005, as the case may be, to the
extent that the Copyright Royalty Judges have found that the
distribution of such fees is not subject to
controversy.</DELETED>
<DELETED> ``(B) In cases where the Copyright Royalty Judges
determine that controversy exists, the Copyright Royalty Judges
shall determine the distribution of such fees, including
partial distributions, in accordance with section 111, 119, or
1007, as the case may be.</DELETED>
<DELETED> ``(C) the Copyright Royalty Judges shall make a
partial distribution of such fees during the pendency of the
proceeding under subparagraph (B) if all participants under
section 803(b)(2) in the proceeding that are entitled to
receive those fees that are to be partially distributed--
</DELETED>
<DELETED> ``(i) agree to such partial
distribution;</DELETED>
<DELETED> ``(ii) sign an agreement obligating them
to return any excess amounts to the extent necessary to
comply with the final determination on the distribution
of the fees made under subparagraph (B); and</DELETED>
<DELETED> ``(iii) file the agreement with the
Copyright Royalty Judges.</DELETED>
<DELETED> ``(D) The Copyright Royalty Judges and any other
officer or employee acting in good faith in distributing funds
under subparagraph (C) shall not be held liable for the payment
of any excess fees under subparagraph (C). The Copyright
Royalty Judges shall, at the time the final determination is
made, calculate any such excess amounts.</DELETED>
<DELETED> ``(4) To accept or reject royalty claims filed
under section 111, 119, and 1007, on the basis of timeliness or
the failure to establish the basis for a claim.</DELETED>
<DELETED> ``(5) To accept or reject rate adjustment
petitions as provided in section 804 and petitions to
participate as provided in section 803(b)(1) and (2).</DELETED>
<DELETED> ``(6) To determine the status of a digital audio
recording device or a digital audio interface device under
sections 1002 and 1003, as provided in section 1010.</DELETED>
<DELETED> ``(7)(A) To adopt as the basis for statutory terms
and rates or as a basis for the distribution of statutory
royalty payments, an agreement concerning such matters reached
among some or all of the participants in a proceeding at any
time during the proceeding, except that--</DELETED>
<DELETED> ``(i) the Copyright Royalty Judges shall
provide to the other participants in the proceeding
under section 803(b)(2) that would be bound by the
terms, rates, distribution, or other determination set
by the agreement an opportunity to comment on the
agreement and object to its adoption as the basis for
statutory terms and rates or as a basis for the
distribution of statutory royalty payments, as the case
may be; and</DELETED>
<DELETED> ``(ii) the Copyright Royalty Judges may
decline to adopt the agreement as the basis for
statutory terms and rates or as the basis for the
distribution of statutory royalty payments, as the case
may be, if any other participant described in
subparagraph (A) objects to the agreement and the
Copyright Royalty Judges find, based on the record
before them, that the agreement is not likely to meet
the statutory standard for setting the terms and rates,
or for distributing the royalty payments, as the case
may be.</DELETED>
<DELETED> ``(B) License agreements voluntarily negotiated
pursuant to section 112(e)(5), 114(f)(3), 115(c)(3)(E)(i),
116(c), or 118(b)(2) that do not result in statutory terms and
rates shall not be subject to clauses (i) and (ii) of
subparagraph (A).</DELETED>
<DELETED> ``(c) Rulings.--The Copyright Royalty Judges may make any
necessary procedural or evidentiary rulings in any proceeding under
this chapter and may, before commencing a proceeding under this
chapter, make any such rulings that would apply to the proceedings
conducted by the Copyright Royalty Judges. The Copyright Royalty Judges
may consult with the Register of Copyrights in making any rulings under
section 802(f)(1).</DELETED>
<DELETED> ``(d) Administrative Support.--The Librarian of Congress
shall provide the Copyright Royalty Judges with the necessary
administrative services related to proceedings under this
chapter.</DELETED>
<DELETED> ``(e) Location in Library of Congress.--The offices of the
Copyright Royalty Judges and staff shall be in the Library of
Congress.</DELETED>
<DELETED>``Sec. 802. Copyright Royalty Judgeships; staff</DELETED>
<DELETED> ``(a) Qualifications of Copyright Royalty Judges.--Each
Copyright Royalty Judge shall be an attorney who has at least 7 years
of legal experience. The Chief Copyright Royalty Judge shall have at
least 5 years of experience in adjudications, arbitrations, or court
trials. Of the other two Copyright Royalty Judges, one shall have
significant knowledge of copyright law, and the other shall have
significant knowledge of economics. An individual may serve as a
Copyright Royalty Judge only if the individual is free of any financial
conflict of interest under subsection (h). In this subsection,
`adjudication' has the meaning given that term in section 551 of title
5, but does not include mediation.</DELETED>
<DELETED> ``(b) Staff.--The Chief Copyright Royalty Judge shall hire
3 full-time staff members to assist the Copyright Royalty Judges in
performing their functions.</DELETED>
<DELETED> ``(c) Terms.--The terms of the Copyright Royalty Judges
shall each be 6 years, except of the individuals first appointed, the
Chief Copyright Royalty Judge shall be appointed to a term of 6 years,
and of the remaining Copyright Royalty Judges, one shall be appointed
to a term of 2 years, and the other shall be appointed to a term of 4
years. An individual serving as a Copyright Royalty Judge may be
reappointed to subsequent terms. The term of a Copyright Royalty Judge
shall begin when the term of the predecessor of that Copyright Royalty
Judge ends. When the term of office of a Copyright Royalty Judge ends,
the individual serving that term may continue to serve until a
successor is selected.</DELETED>
<DELETED> ``(d) Vacancies or Incapacity.--</DELETED>
<DELETED> ``(1) Vacancies.--If a vacancy should occur in the
position of Copyright Royalty Judge, the Librarian of Congress
shall act expeditiously to fill the vacancy, and may appoint an
interim Copyright Royalty Judge to serve until another
Copyright Royalty Judge is appointed under this section. An
individual appointed to fill the vacancy occurring before the
expiration of the term for which the predecessor of that
individual was appointed shall be appointed for the remainder
of that term.</DELETED>
<DELETED> ``(2) Incapacity.--In the case in which a
Copyright Royalty Judge is temporarily unable to perform his or
her duties, the Librarian of Congress may appoint an interim
Copyright Royalty Judge to perform such duties during the
period of such incapacity.</DELETED>
<DELETED> ``(e) Compensation.--</DELETED>
<DELETED> ``(1) Judges.--The Chief Copyright Royalty Judge
shall receive compensation at the rate of basic pay payable for
level AL-1 for administrative law judges pursuant to section
5372(b) of title 5, and each of the other two Copyright Royalty
Judges shall receive compensation at the rate of basic pay
payable for level AL-2 for administrative law judges pursuant
to such section. The compensation of the Copyright Royalty
Judges shall not be subject to any regulations adopted by the
Office of Personnel Management pursuant to its authority under
section 5376(b)(1) of title 5.</DELETED>
<DELETED> ``(2) Staff members.--Of the staff members
appointed under subsection (b)--</DELETED>
<DELETED> ``(A) the rate of pay of one staff member
shall be not more than the basic rate of pay payable
for GS-15 of the General Schedule;</DELETED>
<DELETED> ``(B) the rate of pay of one staff member
shall be not less than the basic rate of pay payable
for GS-13 of the General Schedule and not more than the
basic rate of pay payable for GS-14 of such Schedule;
and</DELETED>
<DELETED> ``(C) the rate of pay for the third staff
member shall be not less than the basic rate of pay
payable for GS-8 of the General Schedule and not more
than the basic rate of pay payable for GS-11 of such
Schedule.</DELETED>
<DELETED> ``(f) Independence of Copyright Royalty Judge.--</DELETED>
<DELETED> ``(1) In making determinations.--</DELETED>
<DELETED> ``(A) In general.--Subject to subparagraph
(B), the Copyright Royalty Judges shall have full
independence in making determinations concerning
adjustments and determinations of copyright royalty
rates and terms, the distribution of copyright
royalties, the acceptance or rejection of royalty
claims, rate adjustment petitions, and petitions to
participate, and in issuing other rulings under this
title, except that the Copyright Royalty Judges may
consult with the Register of Copyrights on any matter
other than a question of fact. Any such consultations
between the Copyright Royalty Judges and the Register
of Copyright on any question of law shall be in writing
or on the record.</DELETED>
<DELETED> ``(B) Novel questions.--(i)
Notwithstanding the provisions of subparagraph (A), in
any case in which the Copyright Royalty Judges in a
proceeding under this title are presented with a novel
question of law concerning an interpretation of those
provisions of this title that are the subject of the
proceeding, the Copyright Royalty Judges shall request
the Register of Copyrights, in writing, to submit a
written opinion on the resolution of such novel
question. The Register shall submit and make public
that opinion within such time period as the Copyright
Royalty Judges may prescribe. Any consultations under
this subparagraph between the Copyright Royalty Judges
and the Register of Copyrights shall be in writing or
on the record. The opinion of the Register shall not be
binding on the Copyright Royalty Judges, but the
Copyright Royalty Judges shall take the opinion of the
Register into account in making the judges'
determination on the question concerned.</DELETED>
<DELETED> ``(ii) In clause (i), a `novel question of
law' is a question of law that has not been determined
in prior decisions, determinations, and rulings
described in section 803(a).</DELETED>
<DELETED> ``(2) Performance appraisals.--</DELETED>
<DELETED> ``(A) In general.--Notwithstanding any
other provision of law or any regulation of the Library
of Congress, and subject to subparagraph (B), the
Copyright Royalty Judges shall not receive performance
appraisals.</DELETED>
<DELETED> ``(B) Relating to sanction or removal.--To
the extent that the Librarian of Congress adopts
regulations under subsection (h) relating to the
sanction or removal of a Copyright Royalty Judge and
such regulations require documentation to establish the
cause of such sanction or removal, the Copyright
Royalty Judge may receive an appraisal related
specifically to the cause of the sanction or
removal.</DELETED>
<DELETED> ``(g) Inconsistent Duties Barred.--No Copyright Royalty
Judge may undertake duties inconsistent with his or her duties and
responsibilities as Copyright Royalty Judge.</DELETED>
<DELETED> ``(h) Standards of Conduct.--The Librarian of Congress
shall adopt regulations regarding the standards of conduct, including
financial conflict of interest and restrictions against ex parte
communications, which shall govern the Copyright Royalty Judges and the
proceedings under this chapter.</DELETED>
<DELETED> ``(i) Removal or Sanction.--The Librarian of Congress may
sanction or remove a Copyright Royalty Judge for violation of the
standards of conduct adopted under subsection (h), misconduct, neglect
of duty, or any disqualifying physical or mental disability. Any such
sanction or removal may be made only after notice and opportunity for a
hearing, but the Librarian of Congress may suspend the Copyright
Royalty Judge during the pendency of such hearing. The Librarian shall
appoint an interim Copyright Royalty Judge during the period of any
such suspension.</DELETED>
<DELETED>``Sec. 803. Proceedings of Copyright Royalty Judges</DELETED>
<DELETED> ``(a) Proceedings.--</DELETED>
<DELETED> ``(1) In general.--The Copyright Royalty Judges
shall act in accordance with this title, and to the extent not
inconsistent with this title, in accordance with subchapter II
of chapter 5 of title 5, in carrying out the purposes set forth
in section 801. The Copyright Royalty Judges shall act in
accordance with regulations issued by the Copyright Royalty
Judges and on the basis of a fully documented written record,
prior decisions of the Copyright Royalty Tribunal, prior
copyright arbitration royalty panel determinations, rulings by
the Librarian of Congress before the effective date of the
Copyright Royalty and Distribution Reform Act of 2004, prior
determinations of Copyright Royalty Judges under this chapter,
and decisions of the court in appeals under this chapter
before, on, or after such effective date. Any participant in a
proceeding under subsection (b)(2) may submit relevant
information and proposals to the Copyright Royalty
Judges.</DELETED>
<DELETED> ``(2) Judges acting as panel and individually.--
The Copyright Royalty Judges shall preside over hearings in
proceedings under this chapter en banc. The Chief Copyright
Royalty Judge may designate a Copyright Royalty Judge to
preside individually over such collateral and administrative
proceedings, and over such proceedings under paragraphs (1)
through (5) of subsection (b), as the Chief Judge considers
appropriate.</DELETED>
<DELETED> ``(3) Determinations.--Final determinations of the
Copyright Royalty Judges in proceedings under this chapter
shall be made by majority vote. A Copyright Royalty Judge
dissenting from the majority on any determination under this
chapter may issue his or her dissenting opinion, which shall be
included with the determination.</DELETED>
<DELETED> ``(b) Procedures.--</DELETED>
<DELETED> ``(1) Initiation.--</DELETED>
<DELETED> ``(A) Call for petitions to participate.--
(i) Promptly upon the filing of a petition for a rate
adjustment or determination under section 804(a) or
804(b)(8), or by no later than January 5 of a year
specified in section 804 for the commencement of a
proceeding if a petition has not been filed by that
date, the Copyright Royalty Judges shall cause to be
published in the Federal Register notice of
commencement of proceedings under this chapter calling
for the filing of petitions to participate in a
proceeding under this chapter for the purpose of making
the relevant determination under section 111, 112, 114,
115, 116, 118, 119, 1004 or 1007, as the case may
be.</DELETED>
<DELETED> ``(ii) Petitions to participate shall be
filed by no later than 30 days after publication of
notice of commencement of a proceeding, under clause
(i), except that the Copyright Royalty Judges may, for
substantial good cause shown and if there is no
prejudice to the participants that have already filed
petitions, accept late petitions to participate at any
time up to the date that is 90 days before the date on
which participants in the proceeding are to file their
written direct statements.</DELETED>
<DELETED> ``(B) Petitions to participate.--Each
petition to participate in a proceeding shall describe
the petitioner's interest in the subject matter of the
proceeding. Parties with similar interests may file a
single petition to participate.</DELETED>
<DELETED> ``(2) Participation in general.--Subject to
paragraph (4), a person may participate in a proceeding under
this chapter, including through the submission of briefs or
other information, only if--</DELETED>
<DELETED> ``(A) that person has filed a petition to
participate in accordance with paragraph (1) (either
individually or as a group under paragraph (1)(B)),
together with a filing fee of $150;</DELETED>
<DELETED> ``(B) the Copyright Royalty Judges have
not determined that the petition to participate is
facially invalid; and</DELETED>
<DELETED> ``(C) the Copyright Royalty Judges have
not determined, sua sponte or on the motion of another
participant in the proceeding, that the person lacks a
significant interest in the proceeding.</DELETED>
<DELETED> ``(3) Voluntary negotiation period.--</DELETED>
<DELETED> ``(A) In general.--Promptly after the date
for filing of petitions to participate in a proceeding,
the Copyright Royalty Judges shall make available to
all participants in the proceeding a list of such
participants and shall initiate a voluntary negotiation
period among the participants.</DELETED>
<DELETED> ``(B) Length of proceedings.--The
voluntary negotiation period initiated under
subparagraph (A) shall be 3 months.</DELETED>
<DELETED> ``(C) Determination of subsequent
proceedings.--At the close of the voluntary negotiation
proceedings, the Copyright Royalty Judges shall, if
further proceedings under this chapter are necessary,
determine whether and to what extent paragraphs (4) and
(5) will apply to the parties.</DELETED>
<DELETED> ``(4) Small claims procedure in distribution
proceedings.--</DELETED>
<DELETED> ``(A) In general.--If, in a proceeding
under this chapter to determine the distribution of
royalties, a participant in the proceeding asserts that
the contested amount of the claim is $10,000 or less,
the Copyright Royalty Judges shall decide the
controversy on the basis of the filing in writing of
the initial claim, the initial response by any opposing
participant, and one additional response by each such
party. The participant asserting the claim shall not be
required to pay the filing fee under paragraph
(2).</DELETED>
<DELETED> ``(B) Bad faith inflation of claim.--If
the Copyright Royalty Judges determine that a
participant asserts in bad faith an amount in
controversy in excess of $10,000 for the purpose of
avoiding a determination under the procedure set forth
in subparagraph (A), the Copyright Royalty Judges shall
impose a fine on that participant in an amount not to
exceed the difference between the actual amount
distributed and the amount asserted by the
participant.</DELETED>
<DELETED> ``(5) Paper proceedings in ratemaking
proceedings.--The Copyright Royalty Judges in proceedings under
this chapter to determine royalty rates may decide, sua sponte
or upon motion of a participant, to determine issues on the
basis of initial filings in writing, initial responses by any
opposing participant, and one additional response by each such
participant. Prior to making such decision to proceed on such a
paper record only, the Copyright Royalty Judges shall offer to
all parties to the proceeding the opportunity to comment on the
decision. The procedure under this paragraph--</DELETED>
<DELETED> ``(A) shall be applied in cases in which
there is no genuine issue of material fact, there is no
need for evidentiary hearings, and all participants in
the proceeding agree in writing to the procedure;
and</DELETED>
<DELETED> ``(B) may be applied under such other
circumstances as the Copyright Royalty Judges consider
appropriate.</DELETED>
<DELETED> ``(6) Regulations.--</DELETED>
<DELETED> ``(A) In general.--The Copyright Royalty
Judges may issue regulations to carry out their
functions under this title. Not later than 120 days
after Copyright Royalty Judges or interim Copyright
Royalty Judges, as the case may be, are first appointed
after the enactment of the Copyright Royalty and
Distribution Reform Act of 2004, such judges shall
issue regulations to govern proceedings under this
chapter.</DELETED>
<DELETED> ``(B) Interim regulations.--Until
regulations are adopted under subparagraph (A), the
Copyright Royalty Judges shall apply the regulations in
effect under this chapter on the day before the
effective date of the Copyright Royalty and
Distribution Reform Act of 2004, to the extent such
regulations are not inconsistent with this chapter,
except that functions carried out under such
regulations by the Librarian of Congress, the Register
of Copyrights, or copyright arbitration royalty panels
that, as of such date of enactment, are to be carried
out by the Copyright Royalty Judges under this chapter,
shall be carried out by the Copyright Royalty Judges
under such regulations.</DELETED>
<DELETED> ``(C) Requirements.--Regulations issued
under subparagraph (A) shall include the
following:</DELETED>
<DELETED> ``(i) The written direct
statements of all participants in a proceeding
under paragraph (2) shall be filed by a date
specified by the Copyright Royalty Judges,
which may be no earlier than four months, and
no later than five months, after the end of the
voluntary negotiation period under paragraph
(3). Notwithstanding the preceding sentence, a
participant in a proceeding may, within 15 days
after the end of the discovery period specified
in clause (iii), file an amended written direct
statement based on new information received
during the discovery process.</DELETED>
<DELETED> ``(ii)(I) Following the submission
to the Copyright Royalty Judges of written
direct statements by the participants in a
proceeding under paragraph (2), the judges
shall meet with the participants for the
purpose of setting a schedule for conducting
and completing discovery. Such schedule shall
be determined by the Copyright Royalty
Judges.</DELETED>
<DELETED> ``(II) In this chapter, the term
`written direct statements' means witness
statements, testimony, and exhibits to be
presented in the proceedings, and such other
information that is necessary to establish
terms and rates, or the distribution of royalty
payments, as the case may be, as set forth in
regulations issued by the Copyright Royalty
Judges.</DELETED>
<DELETED> ``(iii) Hearsay may be admitted in
proceedings under this chapter to the extent
deemed appropriate by the Copyright Royalty
Judges.</DELETED>
<DELETED> ``(iv) Discovery in such
proceedings shall be permitted for a period of
60 days, except for discovery ordered by the
Copyright Royalty Judges in connection with the
resolution of motions, orders and disputes
pending at the end of such period.</DELETED>
<DELETED> ``(v) Any participant under
paragraph (2) in a proceeding under this
chapter to determine royalty rates may, upon
written notice, seek discovery of information
and materials relevant and material to the
proceeding. Any objection to any such discovery
request shall be resolved by a motion or
request to compel discovery made to the
Copyright Royalty Judges. Each motion or
request to compel discovery shall be determined
by the Copyright Royalty Judges, or by a
Copyright Royalty Judge when permitted under
subsection (a)(2), who may approve the request
only if the evidence that would be produced is
relevant and material. A Copyright Royalty
Judge may refuse a request to compel discovery
of evidence that has been found to be relevant
and material, only upon good cause shown. For
purposes of the preceding sentence, the basis
for `good cause' may only be that--</DELETED>
<DELETED> ``(I) the discovery sought
is unreasonably cumulative or
duplicative, or is obtainable from
another source that is more convenient,
less burdensome, or less
expensive;</DELETED>
<DELETED> ``(II) the participant
seeking discovery has had ample
opportunity by discovery in the action
to obtain the information sought;
or</DELETED>
<DELETED> ``(III) the burden or
expense of the proposed discovery
outweighs its likely benefit, taking
into account the needs and resources of
the participants, the importance of the
issues at stake, and the importance of
the proposed discovery in resolving the
issues.</DELETED>
<DELETED> ``(vi) The rules in effect on the
day before the effective date of the Copyright
Royalty and Distribution Reform Act of 2004,
relating to discovery in proceedings under this
title to determine the distribution of royalty
fees, shall continue to apply to such
proceedings on and after such effective
date.</DELETED>
<DELETED> ``(vii) The Copyright Royalty
Judges may issue subpoenas requiring the
production of evidence or witnesses, but only
if the evidence requested to be produced or
that would be proffered by the witness is
relevant and material.</DELETED>
<DELETED> ``(viii) The Copyright Royalty
Judges shall order a settlement conference
among the participants in the proceeding to
facilitate the presentation of offers of
settlement among the participants. The
settlement conference shall be held during a
21-day period following the end of the
discovery period.</DELETED>
<DELETED> ``(c) Determination of Copyright Royalty Judges.--
</DELETED>
<DELETED> ``(1) Timing.--The Copyright Royalty Judges shall
issue their determination in a proceeding not later than 11
months after the conclusion of the 21-day settlement conference
period under subsection (b)(3)(C)(vi), but, in the case of a
proceeding to determine successors to rates or terms that
expire on a specified date, in no event later than 15 days
before the expiration of the then current statutory rates and
terms.</DELETED>
<DELETED> ``(2) Rehearings.--</DELETED>
<DELETED> ``(A) In general.--The Copyright Royalty
Judges may, in exceptional cases, upon motion of a
participant under subsection (b)(2), order a rehearing,
after the determination in a proceeding is issued under
paragraph (1), on such matters as the Copyright Royalty
Judges determine to be appropriate.</DELETED>
<DELETED> ``(B) Timing for filing motion.--Any
motion for a rehearing under subparagraph (A) may only
be filed within 15 days after the date on which the
Copyright Royalty Judges deliver their initial
determination concerning rates and terms to the
participants in the proceeding.</DELETED>
<DELETED> ``(C) Participation by opposing party not
required.--In any case in which a rehearing is ordered,
any opposing party shall not be required to participate
in the rehearing.</DELETED>
<DELETED> ``(D) No negative inference.--No negative
inference shall be drawn from lack of participation in
a rehearing.</DELETED>
<DELETED> ``(E) Continuity of rates and terms.--(i)
If the decision of the Copyright Royalty Judges on any
motion for a rehearing is not rendered before the
expiration of the statutory rates and terms that were
previously in effect, in the case of a proceeding to
determine successors to rates and terms that expire on
a specified date, then--</DELETED>
<DELETED> ``(I) the initial determination of
the Copyright Royalty Judges that is the
subject of the rehearing motion shall be
effective as of the day following the date on
which the rates and terms that were previously
in effect expire; and</DELETED>
<DELETED> ``(II) in the case of a proceeding
under section 114(f)(1)(C) or 114(f)(2)(C),
royalty rates and terms shall, for purposes of
section 114(f)(4)(B), be deemed to have been
set at those rates and terms contained in the
initial determination of the Copyright Royalty
Judges that is the subject of the rehearing
motion, as of the date of that
determination.</DELETED>
<DELETED> ``(ii) The pendency of a motion for a
rehearing under this paragraph shall not relieve
persons obligated to make royalty payments who would be
affected by the determination on that motion from
providing the statements of account and any reports of
use, to the extent required, and paying the royalties
required under the relevant determination or
regulations.</DELETED>
<DELETED> ``(iii) Notwithstanding clause (ii),
whenever royalties described in clause (ii) are paid to
a person other than the Copyright Office, the entity
designated by the Copyright Royalty Judges to which
such royalties are paid by the copyright user (and any
successor thereto) shall, within 60 days after the
motion for rehearing is resolved or, if the motion is
granted, within 60 days after the rehearing is
concluded, return any excess amounts previously paid to
the extent necessary to comply with the final
determination of royalty rates by the Copyright Royalty
Judges.</DELETED>
<DELETED> ``(3) Contents of determination.--A determination
of the Copyright Royalty Judges shall be accompanied by the
written record, and shall set forth the facts that the
Copyright Royalty Judges found relevant to their determination.
Among other terms adopted in a determination, the Copyright
Royalty Judges may specify notice and recordkeeping
requirements of users of the copyrights at issue that apply in
lieu of those that would otherwise apply under
regulations.</DELETED>
<DELETED> ``(4) Continuing jurisdiction.--The Copyright
Royalty Judges may amend the determination or the regulations
issued pursuant to the determination in order to correct any
technical errors in the determination or to respond to
unforeseen circumstances that preclude the proper effectuation
of the determination.</DELETED>
<DELETED> ``(5) Protective order.--The Copyright Royalty
Judges may issue such orders as may be appropriate to protect
confidential information, including orders excluding
confidential information from the record of the determination
that is published or made available to the public, except that
any terms or rates of royalty payments or distributions may not
be excluded.</DELETED>
<DELETED> ``(6) Publication of determination.--The Librarian
of Congress shall cause the determination, and any corrections
thereto, to be published in the Federal Register. The Librarian
of Congress shall also publicize the determination and
corrections in such other manner as the Librarian considers
appropriate, including, but not limited to, publication on the
Internet. The Librarian of Congress shall also make the
determination, corrections, and the accompanying record
available for public inspection and copying.</DELETED>
<DELETED> ``(d) Judicial Review.--</DELETED>
<DELETED> ``(1) Appeal.--Any determination of the Copyright
Royalty Judges under subsection (c) may, within 30 days after
the publication of the determination in the Federal Register,
be appealed, to the United States Court of Appeals for the
District of Columbia Circuit, by any aggrieved participant in
the proceeding under subsection (b)(2) who fully participated
in the proceeding and who would be bound by the determination.
If no appeal is brought within that 30-day period, the
determination of the Copyright Royalty Judges shall be final,
and the royalty fee or determination with respect to the
distribution of fees, as the case may be, shall take effect as
set forth in paragraph (2).</DELETED>
<DELETED> ``(2) Effect of rates.--</DELETED>
<DELETED> ``(A) Expiration on specified date.--When
this title provides that the royalty rates and terms
that were previously in effect are to expire on a
specified date, any adjustment or determination by the
Copyright Royalty Judges of successor rates and terms
for an ensuing statutory license period shall be
effective as of the day following the date of
expiration of the rates and terms that were previously
in effect, even if the determination of the Copyright
Royalty Judges is rendered on a later date.</DELETED>
<DELETED> ``(B) Other cases.--In cases where rates
and terms do not expire on a specified date or have not
yet been established, successor or new rates or terms
shall take effect on the first day of the second month
that begins after the publication of the determination
of the Copyright Royalty Judges in the Federal
Register, except as otherwise provided in this title,
and the rates and terms previously in effect, to the
extent applicable, shall remain in effect until such
successor rates and terms become effective.</DELETED>
<DELETED> ``(C) Obligation to make payments.--(i)
The pendency of an appeal under this subsection shall
not relieve persons obligated to make royalty payments
under section 111, 112, 114, 115, 116, 118, 119, or
1003, who would be affected by the determination on
appeal, from providing the statements of account (and
any report of use, to the extent required) and paying
the royalties required under the relevant determination
or regulations.</DELETED>
<DELETED> ``(ii) Notwithstanding clause (i),
whenever royalties described in clause (i) are paid to
a person other than the Copyright Office, the entity
designated by the Copyright Royalty Judges to which
such royalties are paid by the copyright user (and any
successor thereto) shall, within 60 days after the
final resolution of the appeal, return any excess
amounts previously paid (and interest thereon, if
ordered pursuant to paragraph (3)) to the extent
necessary to comply with the final determination of
royalty rates on appeal.</DELETED>
<DELETED> ``(3) Jurisdiction of court.--If the court,
pursuant to section 706 of title 5, modifies or vacates a
determination of the Copyright Royalty Judges, the court may
enter its own determination with respect to the amount or
distribution of royalty fees and costs, and order the repayment
of any excess fees, the payment of any underpaid fees, and the
payment of interest pertaining respectively thereto, in
accordance with its final judgment. The court may also vacate
the determination of the Copyright Royalty Judges and remand
the case to the Copyright Royalty Judges for further
proceedings in accordance with subsection (a).</DELETED>
<DELETED> ``(e) Administrative Matters.--</DELETED>
<DELETED> ``(1) Deduction of costs of library of congress
and copyright office from filing fees.--</DELETED>
<DELETED> ``(A) Deduction from filing fees.--The
Librarian of Congress may, to the extent not otherwise
provided under this title, deduct from the filing fees
collected under subsection (b) for a particular
proceeding under this chapter the reasonable costs
incurred by the Librarian of Congress, the Copyright
Office, and the Copyright Royalty Judges in conducting
that proceeding, other than the salaries of the
Copyright Royalty Judges and the 3 staff members
appointed under section 802(b).</DELETED>
<DELETED> ``(B) Authorization of appropriations.--
There are authorized to be appropriated such sums as
may be necessary to pay the costs of proceedings under
this chapter not covered by the filing fees collected
under subsection (b). All funds made available pursuant
to this subparagraph shall remain available until
expended.</DELETED>
<DELETED> ``(2) Positions required for administration of
compulsory licensing.--Section 307 of the Legislative Branch
Appropriations Act, 1994, shall not apply to employee positions
in the Library of Congress that are required to be filled in
order to carry out section 111, 112, 114, 115, 116, 118, or 119
or chapter 10.</DELETED>
<DELETED>``Sec. 804. Institution of proceedings</DELETED>
<DELETED> ``(a) Filing of Petition.--With respect to proceedings
referred to in paragraphs (1) and (2) of section 801(b) concerning the
determination or adjustment of royalty rates as provided in sections
111, 112, 114, 115, 116, 118, and 1004, during the calendar years
specified in the schedule set forth in subsection (b), any owner or
user of a copyrighted work whose royalty rates are specified by this
title, or are established under this chapter before or after the
enactment of the Copyright Royalty and Distribution Reform Act of 2004,
may file a petition with the Copyright Royalty Judges declaring that
the petitioner requests a determination or adjustment of the rate. The
Copyright Royalty Judges shall make a determination as to whether the
petitioner has such a significant interest in the royalty rate in which
a determination or adjustment is requested. If the Copyright Royalty
Judges determine that the petitioner has such a significant interest,
the Copyright Royalty Judges shall cause notice of this determination,
with the reasons therefor, to be published in the Federal Register,
together with the notice of commencement of proceedings under this
chapter. With respect to proceedings under paragraph (1) of section
801(b) concerning the determination or adjustment of royalty rates as
provided in sections 112 and 114, during the calendar years specified
in the schedule set forth in subsection (b), the Copyright Royalty
Judges shall cause notice of commencement of proceedings under this
chapter to be published in the Federal Register as provided in section
803(b)(1)(A).</DELETED>
<DELETED> ``(b) Timing of Proceedings.--</DELETED>
<DELETED> ``(1) Section 111 proceedings.--(A) A petition
described in subsection (a) to initiate proceedings under
section 801(b)(2) concerning the adjustment of royalty rates
under section 111 to which subparagraph (A) or (D) of section
801(b)(2) applies may be filed during the year 2005 and in each
subsequent fifth calendar year.</DELETED>
<DELETED> ``(B) In order to initiate proceedings under
section 801(b)(2) concerning the adjustment of royalty rates
under section 111 to which subparagraph (B) or (C) of section
801(b)(2) applies, within 12 months after an event described in
either of those subsections, any owner or user of a copyrighted
work whose royalty rates are specified by section 111, or by a
rate established under this chapter before or after the
enactment of the Copyright Royalty and Distribution Reform Act
of 2004, may file a petition with the Copyright Royalty Judges
declaring that the petitioner requests an adjustment of the
rate. The Copyright Royalty Judges shall then proceed as set
forth in subsection (a) of this section. Any change in royalty
rates made under this chapter pursuant to this subparagraph may
be reconsidered in the year 2005, and each fifth calendar year
thereafter, in accordance with the provisions in section
801(b)(3)(B) or (C), as the case may be. A petition for
adjustment of rates under section 11(d)(1)(B) as a result of a
change is the rules and regulations of the Federal
Communications Commission shall set forth the change on which
the petition is based.</DELETED>
<DELETED> ``(C) Any adjustment of royalty rates under
section 111 shall take effect as of the first accounting period
commencing after the publication of the determination of the
Copyright Royalty Judges in the Federal Register, or on such
other date as is specified in that determination.</DELETED>
<DELETED> ``(2) Certain section 112 proceedings.--
Proceedings under this chapter shall be commenced in the year
2007 to determine reasonable terms and rates of royalty
payments for the activities described in section 112(e)(1)
relating to the limitation on exclusive rights specified by
section 114(d)(1)(C)(iv), to become effective on January 1,
2009. Such proceedings shall be repeated in each subsequent
fifth calendar year.</DELETED>
<DELETED> ``(3) Section 114 and corresponding 112
proceedings.--</DELETED>
<DELETED> ``(A) For eligible nonsubscription
services and new subscription services.--Proceedings
under this chapter shall be commenced as soon as
practicable after the effective date of the Copyright
Royalty and Distribution Reform Act of 2004 to
determine reasonable terms and rates of royalty
payments under sections 114 and 112 for the activities
of eligible nonsubscription transmission services and
new subscription services, to be effective for the
period beginning on January 1, 2006, and ending on
December 31, 2010. Such proceedings shall next be
commenced in January 2009 to determine reasonable terms
and rates of royalty payments, to become effective on
January 1, 2011. Thereafter, such proceedings shall be
repeated in each subsequent fifth calendar
year.</DELETED>
<DELETED> ``(B) For preexisting subscription and
satellite digital audio radio services.--Proceedings
under this chapter shall be commenced in January 2006
to determine reasonable terms and rates of royalty
payments under sections 114 and 112 for the activities
of preexisting subscription services, to be effective
during the period beginning on January 1, 2008, and
ending on December 31, 2012, and preexisting satellite
digital audio radio services, to be effective during
the period beginning on January 1, 2007, and ending on
December 31, 2012. Such proceedings shall next be
commenced in 2011 to determine reasonable terms and
rates of royalty payments, to become effective on
January 1, 2013. Thereafter, such proceedings shall be
repeated in each subsequent fifth calendar
year.</DELETED>
<DELETED> ``(C)(i) Notwithstanding any other
provision of this chapter, this subparagraph shall
govern proceedings commenced pursuant to sections
114(f)(1)(C) and 114(f)(2)(C) concerning new types of
services.</DELETED>
<DELETED> ``(ii) Not later than 30 days after a
petition to determine rates and terms for a new type of
service that is filed by any copyright owner of sound
recordings, or such new type of service, indicating
that such new type of service is or is about to become
operational, the Copyright Royalty Judges shall issue a
notice for a proceeding to determine rates and terms
for such service.</DELETED>
<DELETED> ``(iii) The proceeding shall follow the
schedule set forth in such subsections (b), (c), and
(d) of section 803, except that--</DELETED>
<DELETED> ``(I) the determination shall be
issued by not later than 24 months after the
publication of the notice under clause (ii);
and</DELETED>
<DELETED> ``(II) the decision shall take
effect as provided in subsections (c)(2) and
(d)(2) of section 803 and section
114(f)(4)(B)(ii) and (C).</DELETED>
<DELETED> ``(iv) The rates and terms shall remain in
effect for the period set forth in section 114(f)(1)(C)
or 114(f)(2)(C), as the case may be.</DELETED>
<DELETED> ``(4) Section 115 proceedings.--A petition
described in subsection (a) to initiate proceedings under
section 801(b)(1) concerning the adjustment or determination of
royalty rates as provided in section 115 may be filed in the
year 2006 and in each subsequent fifth calendar year, or at
such other times as the parties have agreed under section
115(c)(3)(B) and (C).</DELETED>
<DELETED> ``(5) Section 116 proceedings.--(A) A petition
described in subsection (a) to initiate proceedings under
section 801(b) concerning the determination of royalty rates
and terms as provided in section 116 may be filed at any time
within 1 year after negotiated licenses authorized by section
116 are terminated or expire and are not replaced by subsequent
agreements.</DELETED>
<DELETED> ``(B) If a negotiated license authorized by
section 116 is terminated or expires and is not replaced by
another such license agreement which provides permission to use
a quantity of musical works not substantially smaller than the
quantity of such works performed on coin-operated phonorecord
players during the 1-year period ending March 1, 1989, the
Copyright Royalty Judges shall, upon petition filed under
paragraph (1) within 1 year after such termination or
expiration, commence a proceeding to promptly establish an
interim royalty rate or rates for the public performance by
means of a coin-operated phonorecord player of nondramatic
musical works embodied in phonorecords which had been subject
to the terminated or expired negotiated license agreement. Such
rate or rates shall be the same as the last such rate or rates
and shall remain in force until the conclusion of proceedings
by the Copyright Royalty Judges, in accordance with section
803, to adjust the royalty rates applicable to such works, or
until superseded by a new negotiated license agreement, as
provided in section 116(b).</DELETED>
<DELETED> ``(6) Section 118 proceedings.--A petition
described in subsection (a) to initiate proceedings under
section 801(b)(1) concerning the determination of reasonable
terms and rates of royalty payments as provided in section 118
may be filed in the year 2006 and in each subsequent fifth
calendar year.</DELETED>
<DELETED> ``(7) Section 1004 proceedings.--A petition
described in subsection (a) to initiate proceedings under
section 801(b)(1) concerning the adjustment of reasonable
royalty rates under section 1004 may be filed as provided in
section 1004(a)(3).</DELETED>
<DELETED> ``(8) Proceedings concerning distribution of
royalty fees.--With respect to proceedings under section
801(b)(3) concerning the distribution of royalty fees in
certain circumstances under section 111, 116, 119, or 1007, the
Copyright Royalty Judges shall, upon a determination that a
controversy exists concerning such distribution, cause to be
published in the Federal Register notice of commencement of
proceedings under this chapter.</DELETED>
<DELETED>``Sec. 805. General rule for voluntarily negotiated
agreements</DELETED>
<DELETED> ``Any rates or terms under this title that--</DELETED>
<DELETED> ``(1) are agreed to by participants to a
proceeding under section 803(b)(2),</DELETED>
<DELETED> ``(2) are adopted by the Copyright Royalty Judges
as part of a determination under this chapter, and</DELETED>
<DELETED> ``(3) are in effect for a period shorter than
would otherwise apply under a determination pursuant to this
chapter,</DELETED>
<DELETED>shall remain in effect for such period of time as would
otherwise apply under such determination, except that the Copyright
Royalty Judges shall adjust the rates pursuant to the voluntary
negotiations to reflect national monetary inflation during the
additional period the rates remain in effect.''.</DELETED>
<DELETED> (b) Conforming Amendment.--The table of chapters for title
17, United States Code, is amended by striking the item relating to
chapter 8 and inserting the following:</DELETED>
<DELETED>``8. Proceedings by Copyright Royalty Judges....... 801''.
<DELETED>SEC. 4. DEFINITION.</DELETED>
<DELETED> Section 101 is amended by inserting after the definition
of ``copies'' the following:</DELETED>
<DELETED> ``A `Copyright Royalty Judge' is a Copyright
Royalty Judge appointed under section 802 of this title, and
includes any individual serving as an interim Copyright Royalty
Judge under such section.''.</DELETED>
<DELETED>SEC. 5. TECHNICAL AMENDMENTS.</DELETED>
<DELETED> (a) Cable Rates.--Section 111(d) is amended--</DELETED>
<DELETED> (1) in paragraph (2), in the second sentence, by
striking ``a copyright arbitration royalty panel'' and
inserting ``the Copyright Royalty Judges.''; and</DELETED>
<DELETED> (2) in paragraph (4)--</DELETED>
<DELETED> (A) in subparagraph (A), by striking
``Librarian of Congress'' each place it appears and
inserting ``Copyright Royalty Judges'';</DELETED>
<DELETED> (B) in subparagraph (B)--</DELETED>
<DELETED> (i) in the first sentence, by
striking ``Librarian of Congress shall, upon
the recommendation of the Register of
Copyrights,'' and inserting ``Copyright Royalty
Judges shall'';</DELETED>
<DELETED> (ii) in the second sentence, by
striking ``Librarian determines'' and inserting
``Copyright Royalty Judges determine'';
and</DELETED>
<DELETED> (iii) in the third sentence--
</DELETED>
<DELETED> (I) by striking
``Librarian'' each place it appears and
inserting ``Copyright Royalty Judges'';
and</DELETED>
<DELETED> (II) by striking ``convene
a copyright arbitration royalty panel''
and inserting ``conduct a proceeding'';
and</DELETED>
<DELETED> (C) in subparagraph (C), by striking
``Librarian of Congress'' and inserting ``Copyright
Royalty Judges''.</DELETED>
<DELETED> (b) Ephemeral Recordings.--Section 112(e) is amended--
</DELETED>
<DELETED> (1) in paragraph (3)--</DELETED>
<DELETED> (A) by amending the first sentence to read
as follows: ``Voluntary negotiation proceedings
initiated pursuant to section 804(a) for the purpose of
determining reasonable terms and rates of royalty
payments for the activities specified by paragraph (1)
shall cover the 5-year period beginning on January 1 of
the second year following the year in which the
proceedings are commenced, or such other period as the
parties may agree.''; and</DELETED>
<DELETED> (B) in the third sentence, by striking
``Librarian of Congress'' and inserting ``Copyright
Royalty Judges'';</DELETED>
<DELETED> (2) in paragraph (4)--</DELETED>
<DELETED> (A) by amending the first sentence to read
as follows: ``In the absence of license agreements
negotiated under paragraphs (2) and (3), the Copyright
Royalty Judges shall commence a proceeding pursuant to
chapter 8 to determine and publish in the Federal
Register a schedule of reasonable rates and terms
which, subject to paragraph (5), shall be binding on
all copyright owners of sound recordings and
transmitting organizations entitled to a statutory
license under this subsection during the 5-year period
specified in paragraph (3), or such other period as the
parties may agree.'';</DELETED>
<DELETED> (B) by striking ``copyright arbitration
royalty panel'' each subsequent place it appears and
inserting ``Copyright Royalty Judges'';</DELETED>
<DELETED> (C) in the fourth sentence, by striking
``its decision'' and inserting ``their decision'';
and</DELETED>
<DELETED> (D) in the last sentence, by striking
``Librarian of Congress'' and inserting ``Copyright
Royalty Judges'';</DELETED>
<DELETED> (3) in paragraph (5), by striking ``or decision by
the Librarian of Congress'' and inserting ``, decision by the
Librarian of Congress, or determination by the Copyright
Royalty Judges'';</DELETED>
<DELETED> (4) by striking paragraph (6) and redesignating
paragraphs (7), (8), and (9), as paragraphs (6), (7), and (8),
respectively; and</DELETED>
<DELETED> (5) in paragraph (6)(A), as so redesignated, by
striking ``Librarian of Congress'' and inserting ``Copyright
Royalty Judges''.</DELETED>
<DELETED> (c) Scope of Exclusive Rights in Sound Recordings.--
Section 114(f) is amended--</DELETED>
<DELETED> (1) in paragraph (1)--</DELETED>
<DELETED> (A) in subparagraph (A)--</DELETED>
<DELETED> (i) by amending the first sentence
to read as follows: ``Voluntary negotiation
proceedings initiated pursuant to section
804(a) for the purpose of determining
reasonable terms and rates of royalty payments
for subscription transmissions by preexisting
subscription services and transmissions by
preexisting satellite digital audio radio
services shall cover the 5-year period
beginning on January 1 of the year following
the second year in which the proceedings are
commenced, except where differential
transitional periods are provided in section
804(b)(3), or such other period as the parties
may agree.''; and</DELETED>
<DELETED> (ii) in the third sentence, by
striking ``Librarian of Congress'' and
inserting ``Copyright Royalty
Judges'';</DELETED>
<DELETED> (B) in subparagraph (B)--</DELETED>
<DELETED> (i) by amending the first sentence
to read as follows: ``In the absence of license
agreements negotiated under subparagraph (A),
the Copyright Royalty Judges shall commence a
proceeding pursuant to chapter 8 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 affected by this paragraph
during the 5-year period specified in
subparagraph (A), or such other date as the
parties may agree.''; and</DELETED>
<DELETED> (ii) in the second sentence, by
striking ``copyright arbitration royalty
panel'' and inserting ``Copyright Royalty
Judges''; and</DELETED>
<DELETED> (C) by amending subparagraph (C) to read
as follows:</DELETED>
<DELETED> ``(C) The procedures under subparagraphs (A) and
(B) also shall be initiated pursuant to a petition filed by any
copyright owners of sound recordings, any preexisting
subscription services, or any preexisting satellite digital
audio radio services indicating that a new type of subscription
digital audio transmission service on which sound recordings
are performed is or is about to become operational, for the
purpose of determining reasonable terms and rates of royalty
payments with respect to such new type of transmission service
for the period beginning with the inception of such new type of
service and ending on the date on which the royalty rates and
terms for subscription digital audio transmission services most
recently determined under subparagraph (A) or (B) and chapter 8
expire, or such other period as the parties may
agree.'';</DELETED>
<DELETED> (2) in paragraph (2)--</DELETED>
<DELETED> (A) in subparagraph (A)--</DELETED>
<DELETED> (i) by amending the first sentence
to read as follows: ``Voluntary negotiation
proceedings initiated pursuant to section
804(a) for the purpose of determining
reasonable terms and rates of royalty payments
for public performances of sound recordings by
means of eligible nonsubscription transmissions
and transmissions by new subscription services
specified by subsection (d)(2) shall cover the
5-year period beginning on January 1 of the
second year following the year in which the
proceedings are commenced, except where
different transitional periods are provided in
section 804(b)(3)(A), or such other period as
the parties may agree.''; and</DELETED>
<DELETED> (ii) in the third sentence, by
striking ``Librarian of Congress'' and
inserting ``Copyright Royalty
Judges'';</DELETED>
<DELETED> (B) in subparagraph (B)--</DELETED>
<DELETED> (i) by amending the first sentence
to read as follows: ``In the absence of license
agreements negotiated under subparagraph (A),
the Copyright Royalty Judges shall commence a
proceeding pursuant to chapter 8 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 affected by this paragraph
during the period specified in subparagraph
(A), or such other period as the parties may
agree.''; and</DELETED>
<DELETED> (ii) by striking ``copyright
arbitration royalty panel'' each subsequent
place it appears and inserting ``Copyright
Royalty Judges''; and</DELETED>
<DELETED> (C) by amending subparagraph (C) to read
as follows:</DELETED>
<DELETED> ``(C) The procedures under subparagraphs (A) and
(B) shall also be initiated pursuant to a petition filed by any
copyright owners of sound recordings or any eligible
nonsubscription service or new subscription service indicating
that a new type of eligible nonsubscription service or new
subscription service on which sound recordings are performed is
or is about to become operational, for the purpose of
determining reasonable terms and rates of royalty payments with
respect to such new type of service for the period beginning
with the inception of such new type of service and ending on
the date on which the royalty rates and terms for preexisting
subscription digital audio transmission services or preexisting
satellite digital radio audio services, as the case may be,
most recently determined under subparagraph (A) or (B) and
chapter 8 expire, or such other period as the parties may
agree.'';</DELETED>
<DELETED> (3) in paragraph (3), by striking ``or decision by
the Librarian of Congress'' and inserting ``, decision by the
Librarian of Congress, or determination by the Copyright
Royalty Judges''; and</DELETED>
<DELETED> (4) in paragraph (4), by striking ``Librarian of
Congress'' each place it appears and inserting ``Copyright
Royalty Judges''.</DELETED>
<DELETED> (d) Phonorecords of Nondramatic Musical Works.--Section
115(c)(3) is amended--</DELETED>
<DELETED> (1) in subparagraph (A)(ii), by striking ``(F)''
and inserting ``(E)'';</DELETED>
<DELETED> (2) in subparagraph (B)--</DELETED>
<DELETED> (A) by striking ``under this paragraph''
and inserting ``under this section''; and</DELETED>
<DELETED> (B) by striking ``subparagraphs (B)
through (F)'' and inserting ``this subparagraph and
subparagraphs (B) through (E)'';</DELETED>
<DELETED> (3) in subparagraph (C)--</DELETED>
<DELETED> (A) by amending the first sentence to read
as follows: ``Voluntary negotiation proceedings
initiated pursuant to a petition filed under section
804(a) for the purpose of determining reasonable terms
and rates of royalty payments for the activities
specified by this section shall cover the period
beginning with the effective date of such terms and
rates, but not earlier than January 1 of the second
year following the year in which the petition is filed,
and ending on the effective date of successor terms and
rates, or such other period as the parties may
agree.''; and</DELETED>
<DELETED> (B) in the third sentence, by striking
``Librarian of Congress'' and inserting ``Copyright
Royalty Judges'';</DELETED>
<DELETED> (4) in subparagraph (D)--</DELETED>
<DELETED> (A) by amending the first sentence to read
as follows: ``In the absence of license agreements
negotiated under subparagraphs (B) and (C), the
Copyright Royalty Judges shall commence proceedings
pursuant to chapter 8 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 specified in
subparagraph (C) or such other period as may be
determined pursuant to subparagraphs (B) and (C), or
such other period as the parties may
agree.'';</DELETED>
<DELETED> (B) in the third sentence, by striking
``copyright arbitration royalty panel'' and inserting
``Copyright Royalty Judges''; and</DELETED>
<DELETED> (C) in the last sentence, by striking
``Librarian of Congress'' and inserting ``Copyright
Royalty Judges'';</DELETED>
<DELETED> (5) in subparagraph (E)--</DELETED>
<DELETED> (A) in clause (i)--</DELETED>
<DELETED> (i) in the first sentence, by
striking ``the Librarian of Congress'' and
inserting ``a copyright arbitration royalty
panel, the Librarian of Congress, or the
Copyright Royalty Judges''; and</DELETED>
<DELETED> (ii) in the second sentence, by
striking ``(C), (D) or (F) shall be given
effect'' and inserting ``(C) or (D) shall be
given effect as to digital phonorecord
deliveries''; and</DELETED>
<DELETED> (B) in clause (ii)(I), by striking ``(C),
(D) or (F)'' each place it appears and inserting ``(C)
or (D)''; and</DELETED>
<DELETED> (6) by striking subparagraph (F) and redesignating
subparagraphs (G) through (L) as subparagraphs (F) through (K),
respectively.</DELETED>
<DELETED> (e) Coin-Operated Phonorecord Players.--Section 116 is
amended--</DELETED>
<DELETED> (1) in subsection (b), by amending paragraph (2)
to read as follows:</DELETED>
<DELETED> ``(2) Chapter 8 proceeding.--Parties not subject
to such a negotiation may have the terms and rates and the
division of fees described in paragraph (1) determined in a
proceeding in accordance with the provisions of chapter 8.'';
and</DELETED>
<DELETED> (2) in subsection (c)--</DELETED>
<DELETED> (A) in the subsection heading, by striking
``Copyright Arbitration Royalty Panel Determinations''
and inserting ``Determinations by Copyright Royalty
Judges''; and</DELETED>
<DELETED> (B) by striking ``a copyright arbitration
royalty panel'' and inserting ``the Copyright Royalty
Judges''.</DELETED>
<DELETED> (f) Use of Certain Works in Connection With Noncommercial
Broadcasting.--Section 118 is amended--</DELETED>
<DELETED> (1) in subsection (b)--</DELETED>
<DELETED> (A) in paragraph (1)--</DELETED>
<DELETED> (i) in the first sentence, by
striking ``Librarian of Congress'' and
inserting ``Copyright Royalty Judges'';
and</DELETED>
<DELETED> (ii) by striking the second and
third sentences;</DELETED>
<DELETED> (B) in paragraph (2), by striking ``the
Librarian of Congress:'' and all that follows through
the end of the sentence and inserting ``a copyright
arbitration royalty panel, the Librarian of Congress,
or the Copyright Royalty Judge, if copies of such
agreements are filed with the Copyright Royalty Judges
within 30 days of execution in accordance with
regulations that the Copyright Royalty Judges shall
issue.''; and</DELETED>
<DELETED> (C) in paragraph (3)--</DELETED>
<DELETED> (i) in the second sentence--
</DELETED>
<DELETED> (I) by striking
``copyright arbitration royalty panel''
and inserting ``Copyright Royalty
Judges''; and</DELETED>
<DELETED> (II) by striking
``paragraph (2).'' and inserting
``paragraph (2) or (3).'';</DELETED>
<DELETED> (ii) in the last sentence, by
striking ```Librarian of Congress'' and
inserting ``Copyright Royalty Judges'';
and</DELETED>
<DELETED> (iii) by striking ``(3) In'' and
all that follows through the end of the first
sentence and inserting the following:</DELETED>
<DELETED> ``(3) Voluntary negotiation proceedings initiated
pursuant to a petition filed under section 804(a) for the
purpose of determining a schedule of terms and rates of royalty
payments by public broadcasting entities to copyright owners in
works specified by this subsection and the proportionate
division of fees paid among various copyright owners shall
cover the 5-year period beginning on January 1 of the second
year following the year in which the petition is filed. The
parties to each negotiation proceeding shall bear their own
costs.</DELETED>
<DELETED> ``(4) In the absence of license agreements
negotiated under paragraph (2) or (3), the Copyright Royalty
Judges shall, pursuant to chapter 8, conduct a proceeding to
determine and publish in the Federal Register a schedule of
rates and terms which, subject to paragraph (2), shall be
binding on all owners of copyright in works specified by this
subsection and public broadcasting entities, regardless of
whether such copyright owners have submitted proposals to the
Copyright Royalty Judges.'';</DELETED>
<DELETED> (2) by striking subsection (c) and redesignating
subsections (d) through (g) as subsections (c) through (f),
respectively;</DELETED>
<DELETED> (3) in subsection (c), as so redesignated, in the
matter preceding paragraph (1)--</DELETED>
<DELETED> (A) by striking ``(b)(2)'' and inserting
``(b)(2) or (3)'';</DELETED>
<DELETED> (B) by striking ``(b)(3)'' and inserting
``(b)(4)''; and</DELETED>
<DELETED> (C) by striking ``a copyright arbitration
royalty panel'' and inserting ``the Copyright Royalty
Judges'';</DELETED>
<DELETED> (4) in subsection (d), as so redesignated--
</DELETED>
<DELETED> (A) by striking ``in the Copyright
Office'' and inserting ``with the Copyright Royalty
Judges''; and</DELETED>
<DELETED> (B) by striking ``Register of Copyrights''
and inserting ``Copyright Royalty Judges'';
and</DELETED>
<DELETED> (5) in subsection (f), as so redesignated, by
striking ``(d)'' and inserting ``(c)''.</DELETED>
<DELETED> (g) Secondary Transmissions by Satellite Carriers.--
Section 119(b) is amended--</DELETED>
<DELETED> (1) in paragraph (3), by striking ``Librarian of
Congress'' and inserting ``Copyright Royalty Judges'';
and</DELETED>
<DELETED> (2) in paragraph (4)--</DELETED>
<DELETED> (A) in subparagraph (A), by striking
``Librarian of Congress'' each place it appears and
inserting ``Copyright Royalty Judges''; and</DELETED>
<DELETED> (B) by amending subparagraphs (B) and (C)
to read as follows:</DELETED>
<DELETED> ``(B) Determination of controversy;
distributions.--After the first day of August of each
year, the Copyright Royalty Judges shall determine
whether there exists a controversy concerning the
distribution of royalty fees. If the Copyright Royalty
Judges determine that no such controversy exists, the
Librarian of Congress shall, after deducting reasonable
administrative costs under this paragraph, distribute
such fees to the copyright owners entitled to receive
them, or to their designated agents. If the Copyright
Royalty Judges find the existence of a controversy, the
Copyright Royalty Judges shall, pursuant to chapter 8
of this title, conduct a proceeding to determine the
distribution of royalty fees.</DELETED>
<DELETED> ``(C) Withholding of fees during
controversy.--During the pendency of any proceeding
under this subsection, the Copyright Royalty Judges
shall withhold from distribution an amount sufficient
to satisfy all claims with respect to which a
controversy exists, subject to any distributions made
under section 801(b)(3).''.</DELETED>
<DELETED> (h) Digital Audio Recording Devices.--</DELETED>
<DELETED> (1) Royalty payments.--Section 1004(a)(3) is
amended by striking ``Librarian of Congress'' each place it
appears and inserting ``Copyright Royalty Judges''.</DELETED>
<DELETED> (2) Entitlement to royalty payments.--Section
1006(c) is amended by striking ``Librarian of Congress shall
convene a copyright arbitration royalty panel which'' and
inserting ``Copyright Royalty Judges''.</DELETED>
<DELETED> (3) Procedures for distributing royalty
payments.--Section 1007 is amended--</DELETED>
<DELETED> (A) in subsection (a), by amending
paragraph (1) to read as follows:</DELETED>
<DELETED> ``(1) Filing of claims.--During the first 2 months
of each calendar year, every interested copyright party seeking
to receive royalty payments to which such party is entitled
under section 1006 shall file with the Copyright Royalty Judges
a claim for payments collected during the preceding year in
such form and manner as the Copyright Royalty Judges shall
prescribe by regulation.''; and</DELETED>
<DELETED> (B) by amending subsections (b) and (c) to
read as follows:</DELETED>
<DELETED> ``(b) Distribution of Payments in the Absence of a
Dispute.--After the period established for the filing of claims under
subsection (a), in each year, the Copyright Royalty Judges shall
determine whether there exists a controversy concerning the
distribution of royalty payments under section 1006(c). If the
Copyright Royalty Judges determine that no such controversy exists, the
Librarian of Congress shall, within 30 days after such determination,
authorize the distribution of the royalty payments as set forth in the
agreements regarding the distribution of royalty payments entered into
pursuant to subsection (a). The Librarian of Congress shall, before
such royalty payments are distributed, deduct the reasonable
administrative costs incurred by the Librarian under this
section.</DELETED>
<DELETED> ``(c) Resolution of Disputes.--If the Copyright Royalty
Judges find the existence of a controversy, the Copyright Royalty
Judges shall, pursuant to chapter 8 of this title, conduct a proceeding
to determine the distribution of royalty payments. During the pendency
of such a proceeding, the Copyright Royalty Judges shall withhold from
distribution an amount sufficient to satisfy all claims with respect to
which a controversy exists, but shall, to the extent feasible,
authorize the distribution of any amounts that are not in controversy.
The Librarian of Congress shall, before such royalty payments are
distributed, deduct the reasonable administrative costs incurred by the
Librarian under this section.''.</DELETED>
<DELETED> (4) Determination of certain disputes.--(A)
Section 1010 is amended to read as follows:</DELETED>
<DELETED>``Sec. 1010. Determination of certain disputes</DELETED>
<DELETED> ``(a) Scope of Determination.--Before the date of first
distribution in the United States of a digital audio recording device
or a digital audio interface device, any party manufacturing,
importing, or distributing such device, and any interested copyright
party may mutually agree to petition the Copyright Royalty Judges to
determine whether such device is subject to section 1002, or the basis
on which royalty payments for such device are to be made under section
1003.</DELETED>
<DELETED> ``(b) Initiation of Proceedings.--The parties under
subsection (a) shall file the petition with the Copyright Royalty
Judges requesting the commencement of a proceeding. Within 2 weeks
after receiving such a petition, the Chief Copyright Royalty Judge
shall cause notice to be published in the Federal Register of the
initiation of the proceeding.</DELETED>
<DELETED> ``(c) Stay of Judicial Proceedings.--Any civil action
brought under section 1009 against a party to a proceeding under this
section shall, on application of one of the parties to the proceeding,
be stayed until completion of the proceeding.</DELETED>
<DELETED> ``(d) Proceeding.--The Copyright Royalty Judges shall
conduct a proceeding with respect to the matter concerned, in
accordance with such procedures as the Copyright Royalty Judges may
adopt. The Copyright Royalty Judges shall act on the basis of a fully
documented written record. Any party to the proceeding may submit
relevant information and proposals to the Copyright Royalty Judges. The
parties to the proceeding shall each bear their respective costs of
participation.</DELETED>
<DELETED> ``(e) Judicial Review.--Any determination of the Copyright
Royalty Judges under subsection (d) may be appealed, by a party to the
proceeding, in accordance with section 803(d) of this title. The
pendency of an appeal under this subsection shall not stay the
determination of the Copyright Royalty Judges. If the court modifies
the determination of the Copyright Royalty Judges, the court shall have
jurisdiction to enter its own decision in accordance with its final
judgment. The court may further vacate the determination of the
Copyright Royalty Judges and remand the case for proceedings as
provided in this section.''.</DELETED>
<DELETED> (B) The item relating to section 1010 in the table
of sections for chapter 10 is amended to read as
follows:</DELETED>
<DELETED>``1010. Determination of certain disputes.''.
<DELETED>SEC. 6. EFFECTIVE DATE AND TRANSITION PROVISIONS.</DELETED>
<DELETED> (a) Effective Date.--This Act and the amendments made by
this Act shall take effect 6 months after the date of the enactment of
this Act, except that the Librarian of Congress shall appoint interim
Copyright Royalty Judges under section 802(d) of title 17, United
States Code, as amended by this Act, within 90 days after such date of
enactment to carry out the functions of the Copyright Royalty Judges
under title 17, United States Code, to the extent that Copyright
Royalty Judges provided for in section 801(a) of title 17, United
States Code, as amended by this Act, have not been appointed before the
end of that 90-day period.</DELETED>
<DELETED> (b) Transition Provisions.--</DELETED>
<DELETED> (1) In general.--Subject to paragraph (2), the
amendments made by this Act shall not affect any proceedings
commenced, petitions filed, or voluntary agreements entered
into before the enactment of this Act under the provisions of
title 17, United States Code, amended by this Act, and pending
on such date of enactment. Such proceedings shall continue,
determinations made in such proceedings, and appeals taken
therefrom, as if this Act had not been enacted, and shall
continue in effect until modified under title 17, United States
Code, as amended by this Act. Such petitions filed and
voluntary agreements entered into shall remain in effect as if
this Act had not been enacted.</DELETED>
<DELETED> (2) Effective periods for certain ratemaking
proceedings.--Notwithstanding paragraph (1), terms and rates in
effect under section 114(f)(2) or 112(e) of title 17, United
States Code, for new subscription services, eligible
nonsubscription services, and services exempt under section
114(d)(1)(C)(iv) of such title for the period 2003 through
2004, and any rates published in the Federal Register under the
authority of the Small Webcaster Settlement Act of 2002 for the
years 2003 through 2004, shall be effective until the first
applicable effective date for successor terms and rates
specified in section 804(b)(2) or (3)(A) of title 17, United
States Code, or until such later date as the parties may agree.
Any proceeding commenced before the enactment of this Act
pursuant to section 114(f)(2) and chapter 8 of title 17, United
States Code, to adjust or determine such rates and terms for
periods following 2004 shall be terminated upon the enactment
of this Act and shall be null and void.</DELETED>
<DELETED> (c) Existing Appropriations.--Any funds made available in
an appropriations Act before the date of the enactment of this Act to
carry out chapter 8 of title 17, United States Code, shall be available
to the extent necessary to carry out this section.</DELETED>
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Copyright Royalty and Distribution
Reform Act of 2004''.
SEC. 2. REFERENCE.
Except as otherwise expressly provided, whenever in this Act an
amendment or repeal is expressed in terms of an amendment to, or repeal
of, a section or other provision, the reference shall be considered to
be made to a section or other provision of title 17, United States
Code.
SEC. 3. COPYRIGHT ROYALTY JUDGE AND STAFF.
(a) In General.--Chapter 8 is amended to read as follows:
``CHAPTER 8--PROCEEDINGS BY COPYRIGHT ROYALTY JUDGES
``Sec.
``801. Copyright Royalty Judges; appointment and functions.
``802. Copyright Royalty Judgeships; staff.
``803. Proceedings of Copyright Royalty Judges.
``804. Institution of proceedings.
``805. General rule for voluntarily negotiated agreements.
``Sec. 801. Copyright Royalty Judges; appointment and functions
``(a) Appointment.--Upon the recommendation of the Register of
Copyrights, the Librarian of Congress shall appoint 3 full-time
Copyright Royalty Judges, and shall appoint 1 of the 3 as the Chief
Copyright Royalty Judge.
``(b) Functions.--Subject to the provisions of this chapter, the
functions of the Copyright Royalty Judges shall be as follows:
``(1) To make determinations and adjustments of reasonable
terms and rates of royalty payments as provided in sections
112(e), 114, 115, 116, 118, 119 and 1004. The rates applicable
under sections 114(f)(1)(B), 115, and 116 shall be calculated
to achieve the following objectives:
``(A) To maximize the availability of creative
works to the public.
``(B) To afford the copyright owner a fair return
for his or her creative work and the copyright user a
fair income under existing economic conditions.
``(C) To reflect the relative roles of the
copyright owner and the copyright user in the product
made available to the public with respect to relative
creative contribution, technological contribution,
capital investment, cost, risk, and contribution to the
opening of new markets for creative expression and
media for their communication.
``(D) To minimize any disruptive impact on the
structure of the industries involved and on generally
prevailing industry practices.
``(2) To make determinations concerning the adjustment of
the copyright royalty rates under section 111 solely in
accordance with the following provisions:
``(A) The rates established by section 111(d)(1)(B)
may be adjusted to reflect--
``(i) national monetary inflation or
deflation; or
``(ii) changes in the average rates charged
cable subscribers for the basic service of
providing secondary transmissions to maintain
the real constant dollar level of the royalty
fee per subscriber which existed as of the date
of October 19, 1976,
except that--
``(I) if the average rates charged cable
system subscribers for the basic service of
providing secondary transmissions are changed
so that the average rates exceed national
monetary inflation, no change in the rates
established by section 111(d)(1)(B) shall be
permitted; and
``(II) no increase in the royalty fee shall
be permitted based on any reduction in the
average number of distant signal equivalents
per subscriber.
The Copyright Royalty Judges may consider all factors
relating to the maintenance of such level of payments,
including, as an extenuating factor, whether the
industry has been restrained by subscriber rate
regulating authorities from increasing the rates for
the basic service of providing secondary transmissions.
``(B) In the event that the rules and regulations
of the Federal Communications Commission are amended at
any time after April 8, 1976, to permit the carriage by
cable systems of additional television broadcast
signals beyond the local service area of the primary
transmitters of such signals, the royalty rates
established by section 111(d)(1)(B) may be adjusted to
insure that the rates for the additional distant signal
equivalents resulting from such carriage are reasonable
in the light of the changes effected by the amendment
to such rules and regulations. In determining the
reasonableness of rates proposed following an amendment
of Federal Communications Commission rules and
regulations, the Copyright Royalty Judges shall
consider, among other factors, the economic impact on
copyright owners and users; except that no adjustment
in royalty rates shall be made under this subparagraph
with respect to any distant signal equivalent or
fraction thereof represented by--
``(i) carriage of any signal permitted
under the rules and regulations of the Federal
Communications Commission in effect on April
15, 1976, or the carriage of a signal of the
same type (that is, independent, network, or
noncommercial educational) substituted for such
permitted signal; or
``(ii) a television broadcast signal first
carried after April 15, 1976, pursuant to an
individual waiver of the rules and regulations
of the Federal Communications Commission, as
such rules and regulations were in effect on
April 15, 1976.
``(C) In the event of any change in the rules and
regulations of the Federal Communications Commission
with respect to syndicated and sports program
exclusivity after April 15, 1976, the rates established
by section 111(d)(1)(B) may be adjusted to assure that
such rates are reasonable in light of the changes to
such rules and regulations, but any such adjustment
shall apply only to the affected television broadcast
signals carried on those systems affected by the
change.
``(D) The gross receipts limitations established by
section 111(d)(1)(C) and (D) shall be adjusted to
reflect national monetary inflation or deflation or
changes in the average rates charged cable system
subscribers for the basic service of providing
secondary transmissions to maintain the real constant
dollar value of the exemption provided by such section,
and the royalty rate specified therein shall not be
subject to adjustment.
``(3)(A) To authorize the distribution, under sections 111,
119, and 1007, of those royalty fees collected under sections
111, 119, and 1005, as the case may be, to the extent that the
Copyright Royalty Judges have found that the distribution of
such fees is not subject to controversy.
``(B) In cases where the Copyright Royalty Judges determine
that controversy exists, the Copyright Royalty Judges shall
determine the distribution of such fees, including partial
distributions, in accordance with section 111, 119, or 1007, as
the case may be.
``(C) The Copyright Royalty Judges may make a partial
distribution of such fees during the pendency of the proceeding
under subparagraph (B) if all participants under section
803(b)(2) in the proceeding that are entitled to receive those
fees that are to be partially distributed--
``(i) agree to such partial distribution;
``(ii) sign an agreement obligating them to return
any excess amounts to the extent necessary to comply
with the final determination on the distribution of the
fees made under subparagraph (B);
``(iii) file the agreement with the Copyright
Royalty Judges; and
``(iv) agree that such funds are available for
distribution.
``(D) The Copyright Royalty Judges and any other officer or
employee acting in good faith in distributing funds under
subparagraph (C) shall not be held liable for the payment of
any excess fees under subparagraph (C). The Copyright Royalty
Judges shall, at the time the final determination is made,
calculate any such excess amounts.
``(4) To accept or reject royalty claims filed under
sections 111, 119, and 1007, on the basis of timeliness or the
failure to establish the basis for a claim.
``(5) To accept or reject rate adjustment petitions as
provided in section 804 and petitions to participate as
provided in section 803(b) (1) and (2).
``(6) To determine the status of a digital audio recording
device or a digital audio interface device under sections 1002
and 1003, as provided in section 1010.
``(7)(A) To adopt as a basis for statutory terms and rates
or as a basis for the distribution of statutory royalty
payments, an agreement concerning such matters reached among
some or all of the participants in a proceeding at any time
during the proceeding, except that--
``(i) the Copyright Royalty Judges shall provide to
those that would be bound by the terms, rates,
distribution, or other determination set by the
agreement an opportunity to comment on the agreement
and shall provide to the other participants in the
proceeding under section 803(b)(2) that would be bound
by the terms, rates, distribution, or other
determination set by the agreement an opportunity to
comment on the agreement and object to its adoption as
a basis for statutory terms and rates or as a basis for
the distribution of statutory royalty payments, as the
case may be; and
``(ii) the Copyright Royalty Judges may decline to
adopt the agreement as a basis for statutory terms and
rates or as a basis for the distribution of statutory
royalty payments, as the case may be, if any other
participant described in subparagraph (A) objects to
the agreement and the Copyright Royalty Judges
conclude, based on the record before them if one
exists, that the agreement does not provide a
reasonable basis for setting statutory terms or rates,
or for distributing the royalty payments, as the case
may be.
``(B) License agreements voluntarily negotiated pursuant to
section 112(e)(5), 114(f)(3), 115(c)(3)(E)(i), 116(c), or
118(b) (2) or (3) that do not result in statutory terms and
rates shall not be subject to clauses (i) and (ii) of
subparagraph (A).
``(C) Interested parties may negotiate and agree to, and
the Copyright Royalty Judges may adopt, an agreement that
specifies as terms notice and recordkeeping requirements that
apply in lieu of those that would otherwise apply under
regulations.
``(8) To perform other duties, as assigned by the Register
of Copyrights within the Library of Congress, except as
provided in section 802(g) at times when Copyright Royalty
Judges are not engaged in performing the other duties set forth
in this section.
``(c) Rulings.--As provided in section 802(f)(1), the Copyright
Royalty Judges may make any necessary procedural or evidentiary rulings
in any proceeding under this chapter and may, before commencing a
proceeding under this chapter, make any such rulings that would apply
to the proceedings conducted by the Copyright Royalty Judges.
``(d) Administrative Support.--The Librarian of Congress shall
provide the Copyright Royalty Judges with the necessary administrative
services related to proceedings under this chapter.
``(e) Location in Library of Congress.--The offices of the
Copyright Royalty Judges and staff shall be in the Library of Congress.
``Sec. 802. Copyright Royalty Judgeships; staff
``(a) Qualifications of Copyright Royalty Judges.--
``(1) In general.--Each Copyright Royalty Judge shall be an
attorney who has at least 7 years of legal experience. The
Chief Copyright Royalty Judge shall have at least 5 years of
experience in adjudications, arbitrations, or court trials. Of
the other two Copyright Royalty Judges, one shall have
significant knowledge of copyright law, and the other shall
have significant knowledge of economics. An individual may
serve as a Copyright Royalty Judge only if the individual is
free of any financial conflict of interest under subsection
(h).
``(2) Definition.--In this subsection, the term
`adjudication' has the meaning given that term in section 551
of title 5, but does not include mediation.
``(b) Staff.--The Chief Copyright Royalty Judge shall hire 3 full-
time staff members to assist the Copyright Royalty Judges in performing
their functions.
``(c) Terms.--The terms of the Copyright Royalty Judges shall each
be 6 years, except of the individuals first appointed, the Chief
Copyright Royalty Judge shall be appointed to a term of 6 years, and of
the remaining Copyright Royalty Judges, one shall be appointed to a
term of 2 years, and the other shall be appointed to a term of 4 years.
An individual serving as a Copyright Royalty Judge may be reappointed
to subsequent terms. The term of a Copyright Royalty Judge shall begin
when the term of the predecessor of that Copyright Royalty Judge ends.
When the term of office of a Copyright Royalty Judge ends, the
individual serving that term may continue to serve until a successor is
selected.
``(d) Vacancies or Incapacity.--
``(1) Vacancies.--If a vacancy should occur in the position
of Copyright Royalty Judge, the Librarian of Congress shall act
expeditiously to fill the vacancy, and may appoint an interim
Copyright Royalty Judge to serve until another Copyright
Royalty Judge is appointed under this section. An individual
appointed to fill the vacancy occurring before the expiration
of the term for which the predecessor of that individual was
appointed shall be appointed for the remainder of that term.
``(2) Incapacity.--In the case in which a Copyright Royalty
Judge is temporarily unable to perform his or her duties, the
Librarian of Congress may appoint an interim Copyright Royalty
Judge to perform such duties during the period of such
incapacity.
``(e) Compensation.--
``(1) Judges.--The Chief Copyright Royalty Judge shall
receive compensation at the rate of basic pay payable for level
AL-1 for administrative law judges pursuant to section 5372(b)
of title 5, and each of the other two Copyright Royalty Judges
shall receive compensation at the rate of basic pay payable for
level AL-2 for administrative law judges pursuant to such
section. The compensation of the Copyright Royalty Judges shall
not be subject to any regulations adopted by the Office of
Personnel Management pursuant to its authority under section
5376(b)(1) of title 5.
``(2) Staff members.--Of the staff members appointed under
subsection (b)--
``(A) the rate of pay of one staff member shall be
not more than the basic rate of pay payable for level
10 of GS-15 of the General Schedule;
``(B) the rate of pay of one staff member shall be
not less than the basic rate of pay payable for GS-13
of the General Schedule and not more than the basic
rate of pay payable for level 10 of GS-14 of such
Schedule; and
``(C) the rate of pay for the third staff member
shall be not less than the basic rate of pay payable
for GS-8 of the General Schedule and not more than the
basic rate of pay payable for level 10 of GS-11 of such
Schedule.
``(3) Locality pay.--All rates of pay referred to under
this subsection shall include locality pay.
``(f) Independence of Copyright Royalty Judge.--
``(1) In making determinations.--
``(A) In general.--Subject to subparagraph (B), the
Copyright Royalty Judges shall have full independence
in making determinations concerning adjustments and
determinations of copyright royalty rates and terms,
the distribution of copyright royalties, the acceptance
or rejection of royalty claims, rate adjustment
petitions, and petitions to participate, and in issuing
other rulings under this title, except that the
Copyright Royalty Judges may consult with the Register
of Copyrights on any matter other than a question of
fact. A Copyright Royalty Judge or Judges, or by motion
to the Copyright Royalty Judge or Judges, any
participant in a proceeding may request a determination
of the resolution by the Register of Copyrights on any
material question of substantive law (not including
questions of procedure before the Copyright Royalty
Judges, the ultimate adjustments and determinations of
copyright royalty rates and terms, the ultimate
distribution of copyright royalties, or the acceptance
or rejection of royalty claims, rate adjustment
petitions, or petitions to participate) concerning an
interpretation or construction of those provisions of
this title that are the subject of the proceeding. Any
such motion requesting a written decision by the
Register of Copyrights shall be in writing or on the
record, and reasonable provision shall be made for
comment by the participants in the proceeding in such a
way as to minimize duplication and delay. Except as
provided in subparagraph (B), the Register of
Copyrights shall deliver to the Copyright Royalty
Judges his or her decision within 14 days of receipt by
the Register of Copyrights of all of the briefs or
comments of the participants. Such decision shall be in
writing and shall be included by the Copyright Royalty
Judges in the record that accompanies their final
determination. If such a decision is timely delivered
to the Register of Copyrights, the Copyright Royalty
Judges shall apply the legal determinations embodied in
the decision of the Register of Copyrights in resolving
material questions of substantive law.
``(B) Novel questions.--(i) In any case in which a
novel question of law concerning an interpretation of
those provisions of this title that are the subject of
the proceeding is presented, the Copyright Royalty
Judges shall request a decision of the Register of
Copyrights, in writing, to resolve such novel question.
To the extent practicable, provision shall be made for
comment on such request by the participants in the
proceeding, in such a way as to minimize duplication
and delay. The Register shall transmit his or her
decision to the Copyright Royalty Judges within 30 days
of receipt by the Register of Copyrights of all of the
briefs or comments of the participants. Such decision
shall be in writing and included by the Copyright
Royalty Judges in the record that accompanies their
final determination. If such a decision is timely
transmitted, the Copyright Royalty Judges shall apply
the legal determinations embodied in the decision of
the Register of Copyrights in resolving material
questions of substantive law.
``(ii) In clause (i), a `novel question of law' is
a question of law that has not been determined in prior
decisions, determinations, and rulings described in
section 803(a).
``(C) Consultation.--Notwithstanding the provisions
of subparagraph (A), the Copyright Royalty Judges shall
consult with the Register of Copyrights with respect to
any determination or ruling that would require that any
act be performed by the Copyright Office, and any such
determination or ruling shall not be binding upon the
Register of Copyrights.
``(D) Sua sponte review of legal conclusions by the
register of copyrights.--The Register of Copyrights may
review for legal error the resolution by the Copyright
Royalty Judges of a material question of substantive
law under this title that underlies or is contained in
a final determination of the Copyright Royalty Judges.
If the Register of Copyrights concludes, after taking
into consideration the views of the participants in the
proceeding, that any resolution reached by the
Copyright Royalty Judges was in material error, the
Register of Copyrights shall issue a written decision
correcting such legal error, which shall be made part
of the record of the proceeding. Additionally, the
Register of Copyrights shall cause to be published in
the Federal Register such written decision together
with a specific identification of the legal conclusion
of the Copyright Royalty Judges that is determined to
be erroneous. As to conclusions of substantive law
involving an interpretation of the statutory provisions
of this title, the decision of the Register of
Copyrights shall be binding upon the Copyright Royalty
Judges in subsequent proceedings under this chapter.
When a decision has been rendered pursuant to
subsection 802(f)(1)(D), the Register of Copyrights
may, on the basis of and in accordance with such
decision, intervene as of right in any appeal of a
final determination of the Copyright Royalty Judges
pursuant to section 803(d) in the United States Court
of Appeals for the District of Columbia Circuit. If,
prior to intervening in such an appeal, the Register of
Copyrights gives notification and undertakes to consult
with the Attorney General with respect to such
intervention, and the Attorney General fails within
reasonable period after receipt of such notification to
intervene in such appeal, the Register of Copyrights
may intervene in such appeal in his or her own name by
any attorney designated by the Register of Copyrights
for such purpose. Intervention by the Register of
Copyrights in his or her own name shall not preclude
the Attorney General from intervening on behalf of the
United States in such an appeal as may be otherwise
provided or required by law.
``(E) Effect on judicial review.--Nothing in this
section shall be interpreted to alter the standard
applied by a court in reviewing legal determinations
involving an interpretation or construction of the
provisions of this title or to affect the extent to
which any construction or interpretation of the
provisions of this title shall be accorded deference by
a reviewing court.
``(2) Performance appraisals.--
``(A) In general.--Notwithstanding any other
provision of law or any regulation of the Library of
Congress, and subject to subparagraph (B), the
Copyright Royalty Judges shall not receive performance
appraisals.
``(B) Relating to sanction or removal.--To the
extent that the Librarian of Congress adopts
regulations under subsection (h) relating to the
sanction or removal of a Copyright Royalty Judge and
such regulations require documentation to establish the
cause of such sanction or removal, the Copyright
Royalty Judge may receive an appraisal related
specifically to the cause of the sanction or removal.
``(g) Inconsistent Duties Barred.--No Copyright Royalty Judge may
undertake duties that conflict with his or her duties and
responsibilities as a Copyright Royalty Judge.
``(h) Standards of Conduct.--The Librarian of Congress shall adopt
regulations regarding the standards of conduct, including financial
conflict of interest and restrictions against ex parte communications,
which shall govern the Copyright Royalty Judges and the proceedings
under this chapter.
``(i) Removal or Sanction.--The Librarian of Congress may sanction
or remove a Copyright Royalty Judge for violation of the standards of
conduct adopted under subsection (h), misconduct, neglect of duty, or
any disqualifying physical or mental disability. Any such sanction or
removal may be made only after notice and opportunity for a hearing,
but the Librarian of Congress may suspend the Copyright Royalty Judge
during the pendency of such hearing. The Librarian shall appoint an
interim Copyright Royalty Judge during the period of any such
suspension.
``Sec. 803. Proceedings of Copyright Royalty Judges
``(a) Proceedings.--
``(1) In general.--The Copyright Royalty Judges shall act
in accordance with regulations issued by the Copyright Royalty
Judges and the Librarian of Congress, and on the basis of a
written record, prior determinations of the Copyright Royalty
Tribunal, Librarian of Congress, copyright arbitration royalty
panels, the Register of Copyrights, and the Copyright Royalty
Judges (to the extent those determinations are not inconsistent
with a decision of the Register of Copyrights that was timely
delivered pursuant to subsection 802(f)(1)(D)), under this
chapter, and decisions of the court of appeals under this
chapter before, on, or after the effective date of the
Copyright Royalty and Distribution Reform Act of 2004.
``(2) Judges acting as panel and individually.--The
Copyright Royalty Judges shall preside over hearings in
proceedings under this chapter en banc. The Chief Copyright
Royalty Judge may designate a Copyright Royalty Judge to
preside individually over such collateral and administrative
proceedings, and over such proceedings under paragraphs (1)
through (5) of subsection (b), as the Chief Judge considers
appropriate.
``(3) Determinations.--Final determinations of the
Copyright Royalty Judges in proceedings under this chapter
shall be made by majority vote. A Copyright Royalty Judge
dissenting from the majority on any determination under this
chapter may issue his or her dissenting opinion, which shall be
included with the determination.
``(b) Procedures.--
``(1) Initiation.--
``(A) Call for petitions to participate.--(i)
Promptly upon the filing of a petition for a rate
adjustment or upon a determination made under section
804(a) or as provided under section 804(b)(8), or by no
later than January 5 of a year specified in section 804
for the commencement of a proceeding if a petition has
not been filed by that date, the Copyright Royalty
Judges shall cause to be published in the Federal
Register notice of commencement of proceedings under
this chapter calling for the filing of petitions to
participate in a proceeding under this chapter for the
purpose of making the relevant determination under
section 111, 112, 114, 115, 116, 118, 119, 1004, or
1007, as the case may be.
``(ii) Petitions to participate shall be filed by
no later than 30 days after publication of notice of
commencement of a proceeding, under clause (i), except
that the Copyright Royalty Judges may, for substantial
good cause shown and if there is no prejudice to the
participants that have already filed petitions, accept
late petitions to participate at any time up to the
date that is 90 days before the date on which
participants in the proceeding are to file their
written direct statements. Notwithstanding the
preceding sentence, petitioners whose petitions are
filed more than 30 days after publication of notice of
commencement of a proceeding are not eligible to object
to a settlement reached during the voluntary
negotiation period under section 803(b)(3), and any
objection filed by such a petitioner shall not be taken
into account by the Copyright Royalty Judges.
``(B) Petitions to participate.--Each petition to
participate in a proceeding shall describe the
petitioner's interest in the subject matter of the
proceeding. Parties with similar interests may file a
single petition to participate.
``(2) Participation in general.--Subject to paragraph (4),
a person may participate in a proceeding under this chapter,
including through the submission of briefs or other
information, only if--
``(A) that person has filed a petition to
participate in accordance with paragraph (1) (either
individually or as a group under paragraph (1)(B)),
together with a filing fee of $150;
``(B) the Copyright Royalty Judges have not
determined that the petition to participate is facially
invalid; and
``(C) the Copyright Royalty Judges have not
determined, sua sponte or on the motion of another
participant in the proceeding, that the person lacks a
significant interest in the proceeding.
``(3) Voluntary negotiation period.--
``(A) In general.--Promptly after the date for
filing of petitions to participate in a proceeding, the
Copyright Royalty Judges shall make available to all
participants in the proceeding a list of such
participants and shall initiate a voluntary negotiation
period among the participants.
``(B) Length of proceedings.--The voluntary
negotiation period initiated under subparagraph (A)
shall be 3 months.
``(C) Determination of subsequent proceedings.--At
the close of the voluntary negotiation proceedings, the
Copyright Royalty Judges shall, if further proceedings
under this chapter are necessary, determine whether and
to what extent paragraphs (4) and (5) will apply to the
parties.
``(4) Small claims procedure in distribution proceedings.--
``(A) In general.--If, in a proceeding under this
chapter to determine the distribution of royalties, a
participant in the proceeding asserts a claim in the
amount of $10,000 or less, the Copyright Royalty Judges
shall decide the controversy on the basis of the filing
of the written direct statement by the participant, the
response by any opposing participant, and 1 additional
response by each such party. The participant asserting
the claim shall not be required to pay the filing fee
under paragraph (2).
``(B) Bad faith inflation of claim.--If the
Copyright Royalty Judges determine that a participant
asserts in bad faith an amount in controversy in excess
of $10,000 for the purpose of avoiding a determination
under the procedure set forth in subparagraph (A), the
Copyright Royalty Judges shall impose a fine on that
participant in an amount not to exceed the difference
between the actual amount distributed and the amount
asserted by the participant.
``(5) Paper proceedings.--The Copyright Royalty Judges in
proceedings under this chapter may decide, sua sponte or upon
motion of a participant, to determine issues on the basis of
the filing of the written direct statement by the participant,
the response by any opposing participant, and one additional
response by each such participant. Prior to making such
decision to proceed on such a paper record only, the Copyright
Royalty Judges shall offer to all parties to the proceeding the
opportunity to comment on the decision. The procedure under
this paragraph--
``(A) shall be applied in cases in which there is
no genuine issue of material fact, there is no need for
evidentiary hearings, and all participants in the
proceeding agree in writing to the procedure; and
``(B) may be applied under such other circumstances
as the Copyright Royalty Judges consider appropriate.
``(6) Regulations.--
``(A) In general.--The Copyright Royalty Judges may
issue regulations to carry out their functions under
this title. All regulations issued by the Copyright
Royalty Judges are subject to the approval of the
Librarian of Congress. Not later than 120 days after
Copyright Royalty Judges or interim Copyright Royalty
Judges, as the case may be, are first appointed after
the enactment of the Copyright Royalty and Distribution
Reform Act of 2004, such judges shall issue regulations
to govern proceedings under this chapter.
``(B) Interim regulations.--Until regulations are
adopted under subparagraph (A), the Copyright Royalty
Judges shall apply the regulations in effect under this
chapter on the day before the effective date of the
Copyright Royalty and Distribution Reform Act of 2004,
to the extent such regulations are not inconsistent
with this chapter, except that functions carried out
under such regulations by the Librarian of Congress,
the Register of Copyrights, or copyright arbitration
royalty panels that, as of such date of enactment, are
to be carried out by the Copyright Royalty Judges under
this chapter, shall be carried out by the Copyright
Royalty Judges under such regulations.
``(C) Requirements.--Regulations issued under
subparagraph (A) shall include the following:
``(i) The written direct statements of all
participants in a proceeding under paragraph
(2) shall be filed by a date specified by the
Copyright Royalty Judges, which may be no
earlier than four months, and no later than
five months, after the end of the voluntary
negotiation period under paragraph (3).
Notwithstanding the preceding sentence, the
Copyright Royalty Judges may allow a
participant in a proceeding to file an amended
written direct statement based on new
information received during the discovery
process, within 15 days after the end of the
discovery period specified in clause (iii).
``(ii)(I) Following the submission to the
Copyright Royalty Judges of written direct
statements by the participants in a proceeding
under paragraph (2), the judges shall meet with
the participants for the purpose of setting a
schedule for conducting and completing
discovery. Such schedule shall be determined by
the Copyright Royalty Judges.
``(II) In this chapter, the term `written
direct statements' means witness statements,
testimony, and exhibits to be presented in the
proceedings, and such other information that is
necessary to establish terms and rates, or the
distribution of royalty payments, as the case
may be, as set forth in regulations issued by
the Copyright Royalty Judges.
``(iii) Hearsay may be admitted in
proceedings under this chapter to the extent
deemed appropriate by the Copyright Royalty
Judges.
``(iv) Discovery in such proceedings shall
be permitted for a period of 60 days, except
for discovery ordered by the Copyright Royalty
Judges in connection with the resolution of
motions, orders and disputes pending at the end
of such period.
``(v) Any participant under paragraph (2)
in a proceeding under this chapter to determine
royalty rates may request of an opposing
participant nonprivileged documents directly
related to the written direct statement of that
participant. Any objection to such a request
shall be resolved by a motion or request to
compel production made to the Copyright Royalty
Judges according to regulations adopted by the
Copyright Royalty Judges. Each motion or
request to compel discovery shall be determined
by the Copyright Royalty Judges, or by a
Copyright Royalty Judge when permitted under
subsection (a)(2). Upon such motion, the
Copyright Royalty Judges may order discovery
pursuant to regulations established under this
paragraph.
``(vi) Any participant under paragraph (2)
in a proceeding under this chapter to determine
royalty rates may, upon a written motion to the
Copyright Royalty Judges, request of an
opposing participant or witness other relevant
information and materials if absent the
discovery sought the moving party would be
prejudiced or the Copyright Royalty Judges'
resolution of the proceeding would be
substantially impaired. Absent a showing of
substantial good cause or demonstration of a
likelihood of substantial prejudice, no
participant in a proceeding may take more than
3 depositions and propound more than 10
interrogatories in that proceeding. Absent such
a showing, the total number of depositions
ordered in such a proceeding shall not exceed
10, and the total number of interrogatories
shall not exceed 25 in each proceeding. In
determining whether discovery will be granted
under this clause, the Copyright Royalty Judges
may consider--
``(I) whether the information
sought would serve to protect the
integrity of the proceeding, to prevent
substantial prejudice to any
participant, or to correct a material
misrepresentation or omission by any
participant;
``(II) whether the burden or
expense of producing the requested
information or materials outweighs the
likely benefit, taking into account the
needs and resources of the
participants, the importance of the
issues at stake, and the probative
value of the requested information or
materials in resolving such issues;
``(III) whether the requested
information or materials would be
unreasonably cumulative or duplicative,
or are obtainable from another source
that is more convenient, less
burdensome, or less expensive; and
``(IV) whether the participant
seeking discovery has had ample
opportunity by discovery in the
proceeding or by other means to obtain
the information sought.
``(vii) The rules and practices in effect
on the day before the effective date of the
Copyright Royalty and Distribution Reform Act
of 2004, relating to discovery in proceedings
under this chapter to determine the
distribution of royalty fees, shall continue to
apply to such proceedings on and after such
effective date.
``(viii) In proceedings to determine
royalty rates, the Copyright Royalty Judges may
issue a subpoena commanding a participant or
witness in a proceeding to determine royalty
rates to appear and give testimony or to
produce and permit inspection of documents or
tangible things if the Copyright Royalty
Judges' resolution of the proceeding would be
substantially impaired by the absence of such
testimony or production of documents or
tangible things. Such subpoena shall specify
with reasonable particularity the materials to
be produced or the scope and nature of the
required testimony. Nothing in this
subparagraph shall preclude the Copyright
Royalty Judges from requesting the production
by a nonparticipant of information or materials
relevant to the resolution by the Copyright
Royalty Judges of a material issue of fact. A
Copyright Royalty Judge may not issue a
subpoena under this clause to any person who
was a participant in a proceeding to determine
royalty rates and has negotiated a settlement
with respect to those rates.
``(ix) The Copyright Royalty Judges shall
order a settlement conference among the
participants in the proceeding to facilitate
the presentation of offers of settlement among
the participants. The settlement conference
shall be held during a 21-day period following
the end of the discovery period and shall take
place outside the presence of the Copyright
Royalty Judges.
``(x) No evidence, including exhibits, may
be submitted in the written direct statement of
a participant without a sponsoring witness,
except where the Copyright Royalty Judges have
taken official notice, or in the case of
incorporation by reference of past records, or
for good cause shown.
``(c) Determination of Copyright Royalty Judges.--
``(1) Timing.--The Copyright Royalty Judges shall issue
their determination in a proceeding not later than 11 months
after the conclusion of the 21-day settlement conference period
under subsection (b)(3)(C)(vi), but, in the case of a
proceeding to determine successors to rates or terms that
expire on a specified date, in no event later than 15 days
before the expiration of the then current statutory rates and
terms.
``(2) Rehearings.--
``(A) In general.--The Copyright Royalty Judges
may, in exceptional cases, upon motion of a participant
under subsection (b)(2), order a rehearing, after the
determination in a proceeding is issued under paragraph
(1), on such matters as the Copyright Royalty Judges
determine to be appropriate.
``(B) Timing for filing motion.--Any motion for a
rehearing under subparagraph (A) may only be filed
within 15 days after the date on which the Copyright
Royalty Judges deliver their initial determination
concerning rates and terms to the participants in the
proceeding.
``(C) Participation by opposing party not
required.--In any case in which a rehearing is ordered,
any opposing party shall not be required to participate
in the rehearing, except as provided under subsection
(d)(1).
``(D) No negative inference.--No negative inference
shall be drawn from lack of participation in a
rehearing.
``(E) Continuity of rates and terms.--(i) If the
decision of the Copyright Royalty Judges on any motion
for a rehearing is not rendered before the expiration
of the statutory rates and terms that were previously
in effect, in the case of a proceeding to determine
successors to rates and terms that expire on a
specified date, then--
``(I) the initial determination of the
Copyright Royalty Judges that is the subject of
the rehearing motion shall be effective as of
the day following the date on which the rates
and terms that were previously in effect
expire; and
``(II) in the case of a proceeding under
section 114(f)(1)(C) or 114(f)(2)(C), royalty
rates and terms shall, for purposes of section
114(f)(4)(B), be deemed to have been set at
those rates and terms contained in the initial
determination of the Copyright Royalty Judges
that is the subject of the rehearing motion, as
of the date of that determination.
``(ii) The pendency of a motion for a rehearing
under this paragraph shall not relieve persons
obligated to make royalty payments who would be
affected by the determination on that motion from
providing the statements of account and any reports of
use, to the extent required, and paying the royalties
required under the relevant determination or
regulations.
``(iii) Notwithstanding clause (ii), whenever
royalties described in clause (ii) are paid to a person
other than the Copyright Office, the entity designated
by the Copyright Royalty Judges to which such royalties
are paid by the copyright user (and any successor
thereto) shall, within 60 days after the motion for
rehearing is resolved or, if the motion is granted,
within 60 days after the rehearing is concluded, return
any excess amounts previously paid to the extent
necessary to comply with the final determination of
royalty rates by the Copyright Royalty Judges.
``(3) Contents of determination.--A determination of the
Copyright Royalty Judges shall be supported by the written
record and shall set forth the findings of fact relied on by
the Copyright Royalty Judges. Among other terms adopted in a
determination, the Copyright Royalty Judges may specify notice
and recordkeeping requirements of users of the copyrights at
issue that apply in lieu of those that would otherwise apply
under regulations.
``(4) Continuing jurisdiction.--The Copyright Royalty
Judges may, with the approval of the Register of Copyrights,
issue an amendment to a written determination to correct any
technical or clerical errors in the determination or to modify
the terms, but not the rates, of royalty payments in response
to unforeseen circumstances that would frustrate the proper
implementation of such determination. Such amendment shall be
set forth in a written addendum to the determination that shall
be distributed to the participants of the proceeding and shall
be published in the Federal Register.
``(5) Protective order.--The Copyright Royalty Judges may
issue such orders as may be appropriate to protect confidential
information, including orders excluding confidential
information from the record of the determination that is
published or made available to the public, except that any
terms or rates of royalty payments or distributions may not be
excluded.
``(6) Publication of determination.--The Librarian of
Congress shall cause the determination, and any corrections
thereto, to be published in the Federal Register. The Librarian
of Congress shall also publicize the determination and
corrections in such other manner as the Librarian considers
appropriate, including, but not limited to, publication on the
Internet. The Librarian of Congress shall also make the
determination, corrections, and the accompanying record
available for public inspection and copying.
``(7) Late payment.--A determination of Copyright Royalty
Judges may include terms with respect to late payment, but in
no way shall such terms prevent the copyright holder from
asserting other rights or remedies provided under this title.
``(d) Judicial Review.--
``(1) Appeal.--Any determination of the Copyright Royalty
Judges under subsection (c) may, within 30 days after the
publication of the determination in the Federal Register, be
appealed, to the United States Court of Appeals for the
District of Columbia Circuit, by any aggrieved participant in
the proceeding under subsection (b)(2) who fully participated
in the proceeding and who would be bound by the determination.
Any party that did not participate in a rehearing may not raise
any issue that was the subject of that rehearing at any stage
of judicial review of the hearing determination. If no appeal
is brought within that 30-day period, the determination of the
Copyright Royalty Judges shall be final, and the royalty fee or
determination with respect to the distribution of fees, as the
case may be, shall take effect as set forth in paragraph (2).
``(2) Effect of rates.--
``(A) Expiration on specified date.--When this
title provides that the royalty rates and terms that
were previously in effect are to expire on a specified
date, any adjustment or determination by the Copyright
Royalty Judges of successor rates and terms for an
ensuing statutory license period shall be effective as
of the day following the date of expiration of the
rates and terms that were previously in effect, even if
the determination of the Copyright Royalty Judges is
rendered on a later date.
``(B) Other cases.--In cases where rates and terms
do not expire on a specified date or have not yet been
established, the Copyright Royalty Judges shall
determine the dates that successor or new rates or
terms shall take effect. Except as otherwise provided
in this title, the rates and terms previously in
effect, to the extent applicable, shall remain in
effect until such successor rates and terms become
effective.
``(C) Obligation to make payments.--
``(i) The pendency of an appeal under this
subsection shall not relieve persons obligated
to make royalty payments under section 111,
112, 114, 115, 116, 118, 119, or 1003, who
would be affected by the determination on
appeal, from--
``(I) providing the statements of
account and any report of use; and
``(II) paying the royalties
required under the relevant
determination or regulations.
``(ii) Notwithstanding clause (i), whenever
royalties described in clause (i) are paid to a person
other than the Copyright Office, the entity designated
by the Copyright Royalty Judges to which such royalties
are paid by the copyright user (and any successor
thereto) shall, within 60 days after the final
resolution of the appeal, return any excess amounts
previously paid (and interest thereon, if ordered
pursuant to paragraph (3)) to the extent necessary to
comply with the final determination of royalty rates on
appeal.
``(3) Jurisdiction of court.--If the court, pursuant to
section 706 of title 5, modifies or vacates a determination of
the Copyright Royalty Judges, the court may enter its own
determination with respect to the amount or distribution of
royalty fees and costs, and order the repayment of any excess
fees, the payment of any underpaid fees, and the payment of
interest pertaining respectively thereto, in accordance with
its final judgment. The court may also vacate the determination
of the Copyright Royalty Judges and remand the case to the
Copyright Royalty Judges for further proceedings in accordance
with subsection (a).
``(e) Administrative Matters.--
``(1) Deduction of costs of library of congress and
copyright office from filing fees.--
``(A) Deduction from filing fees.--The Librarian of
Congress may, to the extent not otherwise provided
under this title, deduct from the filing fees collected
under subsection (b) for a particular proceeding under
this chapter the reasonable costs incurred by the
Librarian of Congress, the Copyright Office, and the
Copyright Royalty Judges in conducting that proceeding,
other than the salaries of the Copyright Royalty Judges
and the 3 staff members appointed under section 802(b).
``(B) Authorization of appropriations.--There are
authorized to be appropriated such sums as may be
necessary to pay the costs incurred under this chapter
not covered by the filing fees collected under
subsection (b). All funds made available pursuant to
this subparagraph shall remain available until
expended.
``(2) Positions required for administration of compulsory
licensing.--Section 307 of the Legislative Branch
Appropriations Act, 1994, shall not apply to employee positions
in the Library of Congress that are required to be filled in
order to carry out section 111, 112, 114, 115, 116, 118, or 119
or chapter 10.
``Sec. 804. Institution of proceedings
``(a) Filing of Petition.--With respect to proceedings referred to
in paragraphs (1) and (2) of section 801(b) concerning the
determination or adjustment of royalty rates as provided in sections
111, 112, 114, 115, 116, 118, 119, and 1004, during the calendar years
specified in the schedule set forth in subsection (b), any owner or
user of a copyrighted work whose royalty rates are specified by this
title, or are established under this chapter before or after the
enactment of the Copyright Royalty and Distribution Reform Act of 2004,
may file a petition with the Copyright Royalty Judges declaring that
the petitioner requests a determination or adjustment of the rate. The
Copyright Royalty Judges shall make a determination as to whether the
petitioner has such a significant interest in the royalty rate in which
a determination or adjustment is requested. If the Copyright Royalty
Judges determine that the petitioner has such a significant interest,
the Copyright Royalty Judges shall cause notice of this determination,
with the reasons for such determination, to be published in the Federal
Register, together with the notice of commencement of proceedings under
this chapter. With respect to proceedings under paragraph (1) of
section 801(b) concerning the determination or adjustment of royalty
rates as provided in sections 112 and 114, during the calendar years
specified in the schedule set forth in subsection (b), the Copyright
Royalty Judges shall cause notice of commencement of proceedings under
this chapter to be published in the Federal Register as provided in
section 803(b)(1)(A).
``(b) Timing of Proceedings.--
``(1) Section 111 proceedings.--(A) A petition described in
subsection (a) to initiate proceedings under section 801(b)(2)
concerning the adjustment of royalty rates under section 111 to
which subparagraph (A) or (D) of section 801(b)(2) applies may
be filed during the year 2005 and in each subsequent fifth
calendar year.
``(B) In order to initiate proceedings under section
801(b)(2) concerning the adjustment of royalty rates under
section 111 to which subparagraph (B) or (C) of section
801(b)(2) applies, within 12 months after an event described in
either of those subsections, any owner or user of a copyrighted
work whose royalty rates are specified by section 111, or by a
rate established under this chapter before or after the
enactment of the Copyright Royalty and Distribution Reform Act
of 2004, may file a petition with the Copyright Royalty Judges
declaring that the petitioner requests an adjustment of the
rate. The Copyright Royalty Judges shall then proceed as set
forth in subsection (a) of this section. Any change in royalty
rates made under this chapter pursuant to this subparagraph may
be reconsidered in the year 2005, and each fifth calendar year
thereafter, in accordance with the provisions in section
801(b)(3) (B) or (C), as the case may be. A petition for
adjustment of rates under section 11(d)(1)(B) as a result of a
change is the rules and regulations of the Federal
Communications Commission shall set forth the change on which
the petition is based.
``(2) Certain section 112 proceedings.--Proceedings under
this chapter shall be commenced in the year 2007 to determine
reasonable terms and rates of royalty payments for the
activities described in section 112(e)(1) relating to the
limitation on exclusive rights specified by section
114(d)(1)(C)(iv), to become effective on January 1, 2009. Such
proceedings shall be repeated in each subsequent fifth calendar
year.
``(3) Section 114 and corresponding 112 proceedings.--
``(A) For eligible nonsubscription services and new
subscription services.--Proceedings under this chapter
shall be commenced as soon as practicable after the
effective date of the Copyright Royalty and
Distribution Reform Act of 2004 to determine reasonable
terms and rates of royalty payments under sections 114
and 112 for the activities of eligible nonsubscription
transmission services and new subscription services, to
be effective for the period beginning on January 1,
2006, and ending on December 31, 2010. Such proceedings
shall next be commenced in January 2009 to determine
reasonable terms and rates of royalty payments, to
become effective on January 1, 2011. Thereafter, such
proceedings shall be repeated in each subsequent fifth
calendar year.
``(B) For preexisting subscription and satellite
digital audio radio services.--Proceedings under this
chapter shall be commenced in January 2006 to determine
reasonable terms and rates of royalty payments under
sections 114 and 112 for the activities of preexisting
subscription services, to be effective during the
period beginning on January 1, 2008, and ending on
December 31, 2012, and preexisting satellite digital
audio radio services, to be effective during the period
beginning on January 1, 2007, and ending on December
31, 2012. Such proceedings shall next be commenced in
2011 to determine reasonable terms and rates of royalty
payments, to become effective on January 1, 2013.
Thereafter, such proceedings shall be repeated in each
subsequent fifth calendar year.
``(C)(i) Notwithstanding any other provision of
this chapter, this subparagraph shall govern
proceedings commenced pursuant to section 114(f)(1)(C)
and 114(f)(2)(C) concerning new types of services.
``(ii) Not later than 30 days after a petition to
determine rates and terms for a new type of service
that is filed by any copyright owner of sound
recordings, or such new type of service, indicating
that such new type of service is or is about to become
operational, the Copyright Royalty Judges shall issue a
notice for a proceeding to determine rates and terms
for such service.
``(iii) The proceeding shall follow the schedule
set forth in such subsections (b), (c), and (d) of
section 803, except that--
``(I) the determination shall be issued by
not later than 24 months after the publication
of the notice under clause (ii); and
``(II) the decision shall take effect as
provided in subsections (c)(2) and (d)(2) of
section 803 and section 114(f)(4)(B)(ii) and
(C).
``(iv) The rates and terms shall remain in effect
for the period set forth in section 114(f)(1)(C) or
114(f)(2)(C), as the case may be.
``(4) Section 115 proceedings.--A petition described in
subsection (a) to initiate proceedings under section 801(b)(1)
concerning the adjustment or determination of royalty rates as
provided in section 115 may be filed in the year 2006 and in
each subsequent fifth calendar year, or at such other times as
the parties have agreed under section 115(c)(3) (B) and (C).
``(5) Section 116 proceedings.--(A) A petition described in
subsection (a) to initiate proceedings under section 801(b)
concerning the determination of royalty rates and terms as
provided in section 116 may be filed at any time within 1 year
after negotiated licenses authorized by section 116 are
terminated or expire and are not replaced by subsequent
agreements.
``(B) If a negotiated license authorized by section 116 is
terminated or expires and is not replaced by another such
license agreement which provides permission to use a quantity
of musical works not substantially smaller than the quantity of
such works performed on coin-operated phonorecord players
during the 1-year period ending March 1, 1989, the Copyright
Royalty Judges shall, upon petition filed under paragraph (1)
within 1 year after such termination or expiration, commence a
proceeding to promptly establish an interim royalty rate or
rates for the public performance by means of a coin-operated
phonorecord player of nondramatic musical works embodied in
phonorecords which had been subject to the terminated or
expired negotiated license agreement. Such rate or rates shall
be the same as the last such rate or rates and shall remain in
force until the conclusion of proceedings by the Copyright
Royalty Judges, in accordance with section 803, to adjust the
royalty rates applicable to such works, or until superseded by
a new negotiated license agreement, as provided in section
116(b).
``(6) Section 118 proceedings.--A petition described in
subsection (a) to initiate proceedings under section 801(b)(1)
concerning the determination of reasonable terms and rates of
royalty payments as provided in section 118 may be filed in the
year 2006 and in each subsequent fifth calendar year.
``(7) Section 1004 proceedings.--A petition described in
subsection (a) to initiate proceedings under section 801(b)(1)
concerning the adjustment of reasonable royalty rates under
section 1004 may be filed as provided in section 1004(a)(3).
``(8) Proceedings concerning distribution of royalty
fees.--With respect to proceedings under section 801(b)(3)
concerning the distribution of royalty fees in certain
circumstances under section 111, 119, or 1007, the Copyright
Royalty Judges shall, upon a determination that a controversy
exists concerning such distribution, cause to be published in
the Federal Register notice of commencement of proceedings
under this chapter.
``Sec. 805. General rule for voluntarily negotiated agreements
``Any rates or terms under this title that--
``(1) are agreed to by participants to a proceeding under
section 803(b)(3),
``(2) are adopted by the Copyright Royalty Judges as part
of a determination under this chapter, and
``(3) are in effect for a period shorter than would
otherwise apply under a determination pursuant to this chapter,
shall remain in effect for such period of time as would otherwise apply
under such determination, except that the Copyright Royalty Judges
shall adjust the rates pursuant to the voluntary negotiations to
reflect national monetary inflation during the additional period the
rates remain in effect.''.
(b) Conforming Amendment.--The table of chapters for title 17,
United States Code, is amended by striking the item relating to chapter
8 and inserting the following:
``8. Proceedings by Copyright Royalty Judges................ 801''.
SEC. 4. DEFINITION.
Section 101 is amended by inserting after the definition of
``copies'' the following:
``A `Copyright Royalty Judge' is a Copyright Royalty Judge
appointed under section 802 of this title, and includes any
individual serving as an interim Copyright Royalty Judge under
such section.''.
SEC. 5. TECHNICAL AMENDMENTS.
(a) Cable Rates.--Section 111(d) is amended--
(1) in paragraph (2), in the second sentence, by striking
``a copyright arbitration royalty panel'' and inserting ``the
Copyright Royalty Judges.''; and
(2) in paragraph (4)--
(A) in subparagraph (A), by striking ``Librarian of
Congress'' each place it appears and inserting
``Copyright Royalty Judges'';
(B) in subparagraph (B)--
(i) in the first sentence, by striking
``Librarian of Congress shall, upon the
recommendation of the Register of Copyrights,''
and inserting ``Copyright Royalty Judges
shall'';
(ii) in the second sentence, by striking
``Librarian determines'' and inserting
``Copyright Royalty Judges determine''; and
(iii) in the third sentence--
(I) by striking ``Librarian'' each
place it appears and inserting
``Copyright Royalty Judges''; and
(II) by striking ``convene a
copyright arbitration royalty panel''
and inserting ``conduct a proceeding'';
and
(C) in subparagraph (C), by striking ``Librarian of
Congress'' and inserting ``Copyright Royalty Judges''.
(b) Ephemeral Recordings.--Section 112(e) is amended--
(1) in paragraph (3)--
(A) by amending the first sentence to read as
follows: ``Proceedings under chapter 8 shall determine
reasonable rates and terms of royalty payments for the
activities specified by paragraph (1) during the 5-year
periods beginning on January 1 of the second year
following the year in which the proceedings are to be
commenced, or such other periods as the parties may
agree.''; and
(B) by striking the second sentence;
(C) in the third sentence, by striking ``Librarian
of Congress'' and inserting ``Copyright Royalty
Judges''; and
(D) in the fourth sentence, by striking
``negotiation'';
(2) in paragraph (4)--
(A) by amending the first sentence to read as
follows: ``The schedule of reasonable rates and terms
determined by the Copyright Royalty Judges shall,
subject to paragraph (5), be binding on all copyright
owners of sound recordings and transmitting
organizations entitled to a statutory license under
this subsection during the 5-year period specified in
paragraph (3), or such other period as the parties may
agree.'';
(B) by striking ``copyright arbitration royalty
panel'' each subsequent place it appears and inserting
``Copyright Royalty Judges'';
(C) in the fourth sentence, by striking ``its
decision'' and inserting ``their decision'';
(D) in the fifth sentence, by striking ``negotiated
as provided'' and inserting ``described''; and
(E) in the last sentence, by striking ``Librarian
of Congress'' and inserting ``Copyright Royalty
Judges'';
(3) in paragraph (5), by striking ``or decision by the
Librarian of Congress'' and inserting ``, decision by the
Librarian of Congress, or determination by the Copyright
Royalty Judges'';
(4) by striking paragraph (6) and redesignating paragraphs
(7), (8), and (9), as paragraphs (6), (7), and (8),
respectively; and
(5) in paragraph (6)(A), as so redesignated, by striking
``Librarian of Congress'' and inserting ``Copyright Royalty
Judges''.
(c) Scope of Exclusive Rights in Sound Recordings.--Section 114(f)
is amended--
(1) in paragraph (1)--
(A) in subparagraph (A)--
(i) by amending the first sentence to read
as follows: ``Proceedings under chapter 8 shall
determine reasonable rates and terms of royalty
payments for subscription transmissions by
preexisting subscription services and
transmissions by preexisting satellite digital
audio radio services specified by subsection
(d)(2) during 5-year periods beginning on
January 1 of the second year following the year
in which the proceedings are to be commenced,
except where different transitional periods are
provided in section 804(b), or such periods as
the parties may agree.'';
(ii) in the third sentence, by striking
``Librarian of Congress'' and inserting
``Copyright Royalty Judges''; and
(iii) in the fourth sentence, by striking
``negotiation'';
(B) in subparagraph (B)--
(i) by amending the first sentence to read
as follows: ``The schedule of reasonable rates
and terms determined by the Copyright Royalty
Judges shall, subject to paragraph (3), be
binding on all copyright owners of sound
recordings and entities performing sound
recordings affected by this paragraph during
the 5-year period specified in subparagraph
(A), a transitional period provided in section
804(b), or such other period as the parties may
agree.'';
(ii) in the second sentence, by striking
``copyright arbitration royalty panel'' and
inserting ``Copyright Royalty Judges''; and
(iii) in the second sentence, by striking
``negotiated as provided'' and inserting
``described''; and
(C) by amending subparagraph (C) to read as
follows:
``(C) The procedures under subparagraphs (A) and (B) also
shall be initiated pursuant to a petition filed by any
copyright owners of sound recordings, any preexisting
subscription services, or any preexisting satellite digital
audio radio services indicating that a new type of subscription
digital audio transmission service on which sound recordings
are performed is or is about to become operational, for the
purpose of determining reasonable terms and rates of royalty
payments with respect to such new type of transmission service
for the period beginning with the inception of such new type of
service and ending on the date on which the royalty rates and
terms for subscription digital audio transmission services most
recently determined under subparagraph (A) or (B) and chapter 8
expire, or such other period as the parties may agree.'';
(2) in paragraph (2)--
(A) in subparagraph (A)--
(i) by amending the first paragraph to read
as follows: ``Proceedings under chapter 8 shall
determine reasonable rates and terms of royalty
payments for subscription transmissions by
preexisting subscription services and
transmissions by preexisting satellite digital
audio radio services specified by subsection
(d)(2) during 5-year periods beginning on
January 1 of the second year following the year
in which the proceedings are to be commenced,
except where different transitional periods are
provided in section 804(b), or such periods as
the parties may agree.'';
(ii) in the third sentence, by striking
``Librarian of Congress'' and inserting
``Copyright Royalty Judges''; and
(iii) in the fourth sentence, by striking
``negotiation'';
(B) in subparagraph (B)--
(i) by amending the first sentence to read
as follows: ``The schedule of reasonable rates
and terms determined by the Copyright Royalty
Judges shall, subject to paragraph (3), be
binding on all copyright owners of sound
recordings and entities performing sound
recordings affected by this paragraph during
the 5-year period specified in subparagraph
(A), a transitional period provided in section
804(b), or such other period as the parties may
agree.'';
(ii) by striking ``copyright arbitration
royalty panel'' each subsequent place it
appears and inserting ``Copyright Royalty
Judges''; and
(iii) in the last sentence by striking
``negotiated as provided'' and inserting
``described in''; and
(C) by amending subparagraph (C) to read as
follows:
``(C) The procedures under subparagraphs (A) and (B) shall
also be initiated pursuant to a petition filed by any copyright
owners of sound recordings or any eligible nonsubscription
service or new subscription service indicating that a new type
of eligible nonsubscription service or new subscription service
on which sound recordings are performed is or is about to
become operational, for the purpose of determining reasonable
terms and rates of royalty payments with respect to such new
type of service for the period beginning with the inception of
such new type of service and ending on the date on which the
royalty rates and terms for preexisting subscription digital
audio transmission services or preexisting satellite digital
radio audio services, as the case may be, most recently
determined under subparagraph (A) or (B) and chapter 8 expire,
or such other period as the parties may agree.'';
(3) in paragraph (3), by striking ``or decision by the
Librarian of Congress'' and inserting ``, decision by the
Librarian of Congress, or determination by the Copyright
Royalty Judges''; and
(4) in paragraph (4)--
(A) by striking ``Librarian of Congress'' each
place it appears and inserting ``Copyright Royalty
Judges''; and
(B) by adding after the first sentence ``The notice
and recordkeeping rules in effect on the day before the
effective date of the Copyright Royalty and
Distribution Reform Act of 2004 shall remain in effect
until new regulations are promulgated by the Copyright
Royalty Judges. If new regulations are promulgated
under this subparagraph, the Copyright Royalty Judges
shall take into account the substance and effect of the
rules in effect on the day before the effective date of
the Copyright Royalty and Distribution Reform Act of
2004 and shall, to the extent practicable, avoid
significant disruption of the function of the
designated agents that are authorized to collect and
distribute royalty fees as such functions exist on the
day prior to the effective date of this Act.''.
(d) Phonorecords of Nondramatic Musical Works.--Section 115(c)(3)
is amended--
(1) in subparagraph (A)(ii), by striking ``(F)'' and
inserting ``(E)'';
(2) in subparagraph (B)--
(A) by striking ``under this paragraph'' and
inserting ``under this section''; and
(B) by striking ``subparagraphs (B) through (F)''
and inserting ``this subparagraph and subparagraphs (B)
through (E)'';
(3) in subparagraph (C)--
(A) by amending the first sentence to read as
follows: ``Proceedings under chapter 8 shall determine
reasonable rates and terms of royalty payments for the
activities specified by this section during periods
beginning with the effective date of such rates and
terms, but not earlier than January 1 of the second
year following the year in which the petition
requesting the proceeding is filed, and ending on the
effective date of successor rates and terms, or such
other period as the parties may agree.'';
(B) in the third sentence, by striking ``Librarian
of Congress'' and inserting ``Copyright Royalty
Judges''; and
(C) in the fourth sentence, by striking
``negotiation'';
(4) in subparagraph (D)--
(A) by amending the first sentence to read as
follows: ``The schedule of reasonable rates and terms
determined by the Copyright Royalty Judges shall,
subject to subparagraph (E), 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 specified in
subparagraph (C), such other period as may be
determined pursuant to subparagraphs (B) and (C), or
such other period as the parties may agree.'';
(B) in the third sentence, by striking ``copyright
arbitration royalty panel'' and inserting ``Copyright
Royalty Judges''; and
(C) in the third sentence, by striking ``negotiated
as provided in subparagraphs (B) and (C)'' and
inserting ``described'';
(5) in subparagraph (E)--
(A) in clause (i)--
(i) in the first sentence, by striking
``Librarian of Congress'' and inserting
``Librarian of Congress, Copyright Royalty
Judges, or a copyright arbitration royalty
panel to the extent those determinations were
accepted by the Librarian of Congress''; and
(ii) in the second sentence, by striking
``(C), (D) or (F) shall be given effect'' and
inserting ``(C) or (D) shall be given effect as
to digital phonorecord deliveries''; and
(B) in clause (ii)(I), by striking ``(C), (D) or
(F)'' each place it appears and inserting ``(C) or
(D)''; and
(6) by striking subparagraph (F) and redesignating
subparagraphs (G) through (L) as subparagraphs (F) through (K),
respectively.
(e) Coin-Operated Phonorecord Players.--Section 116 is amended--
(1) in subsection (b), by amending paragraph (2) to read as
follows:
``(2) Chapter 8 proceeding.--Parties not subject to such a
negotiation may have the terms and rates and the division of
fees described in paragraph (1) determined in a proceeding in
accordance with the provisions of chapter 8.''; and
(2) in subsection (c)--
(A) in the subsection heading, by striking
``Copyright Arbitration Royalty Panel Determinations''
and inserting ``Determinations by Copyright Royalty
Judges''; and
(B) by striking ``a copyright arbitration royalty
panel'' and inserting ``the Copyright Royalty Judges''.
(f) Use of Certain Works in Connection With Noncommercial
Broadcasting.--Section 118 is amended--
(1) in subsection (b)--
(A) in paragraph (1)--
(i) in the first sentence, by striking
``Librarian of Congress'' and inserting
``Copyright Royalty Judges''; and
(ii) by striking the second and third
sentences;
(B) in paragraph (2), by striking ``Librarian of
Congress:'' and all that follows through the end of the
sentence and inserting ``Librarian of Congress, a
copyright arbitration royalty panel, or the Copyright
Royalty Judges, to the extent that they were accepted
by the Librarian of Congress, if copies of such
agreements are filed with the Copyright Royalty Judges
within 30 days of execution in accordance with
regulations that the Copyright Royalty Judges shall
issue.''; and
(C) in paragraph (3)--
(i) in the second sentence--
(I) by striking ``copyright
arbitration royalty panel'' and
inserting ``Copyright Royalty Judges'';
and
(II) by striking ``paragraph (2).''
and inserting ``paragraph (2) or
(3).'';
(ii) in the last sentence, by striking
```Librarian of Congress'' and inserting
``Copyright Royalty Judges''; and
(iii) by striking ``(3) In'' and all that
follows through the end of the first sentence
and inserting the following:
``(3) Voluntary negotiation proceedings initiated pursuant
to a petition filed under section 804(a) for the purpose of
determining a schedule of terms and rates of royalty payments
by public broadcasting entities to copyright owners in works
specified by this subsection and the proportionate division of
fees paid among various copyright owners shall cover the 5-year
period beginning on January 1 of the second year following the
year in which the petition is filed. The parties to each
negotiation proceeding shall bear their own costs.
``(4) In the absence of license agreements negotiated under
paragraph (2) or (3), the Copyright Royalty Judges shall,
pursuant to chapter 8, conduct a proceeding to determine and
publish in the Federal Register a schedule of rates and terms
which, subject to paragraph (2), shall be binding on all owners
of copyright in works specified by this subsection and public
broadcasting entities, regardless of whether such copyright
owners have submitted proposals to the Copyright Royalty
Judges.'';
(2) by striking subsection (c) and redesignating
subsections (d) through (g) as subsections (c) through (f),
respectively;
(3) in subsection (c), as so redesignated, in the matter
preceding paragraph (1)--
(A) by striking ``(b)(2)'' and inserting ``(b)(2)
or (3)'';
(B) by striking ``(b)(3)'' and inserting
``(b)(4)''; and
(C) by striking ``a copyright arbitration royalty
panel under subsection (b)(3)'' and inserting ``the
Copyright Royalty Judges under subsection (b)(3), to
the extent that they were accepted by the Librarian of
Congress'';
(4) in subsection (d), as so redesignated--
(A) by striking ``in the Copyright Office'' and
inserting ``with the Copyright Royalty Judges''; and
(B) by striking ``Register of Copyrights shall
prescribe'' and inserting ``Copyright Royalty Judges
shall prescribe as provided in section 803(b)(6)''; and
(5) in subsection (f), as so redesignated, by striking
``(d)'' and inserting ``(c)''.
(g) Secondary Transmissions by Satellite Carriers.--Section 119(b)
is amended--
(1) in paragraph (3), by striking ``Librarian of Congress''
and inserting ``Copyright Royalty Judges''; and
(2) in paragraph (4)--
(A) in subparagraph (A), by striking ``Librarian of
Congress'' each place it appears and inserting
``Copyright Royalty Judges''; and
(B) by amending subparagraphs (B) and (C) to read
as follows:
``(B) Determination of controversy;
distributions.--After the first day of August of each
year, the Copyright Royalty Judges shall determine
whether there exists a controversy concerning the
distribution of royalty fees. If the Copyright Royalty
Judges determine that no such controversy exists, the
Librarian of Congress shall, after deducting reasonable
administrative costs under this paragraph, distribute
such fees to the copyright owners entitled to receive
them, or to their designated agents. If the Copyright
Royalty Judges find the existence of a controversy, the
Copyright Royalty Judges shall, pursuant to chapter 8
of this title, conduct a proceeding to determine the
distribution of royalty fees.
``(C) Withholding of fees during controversy.--
During the pendency of any proceeding under this
subsection, the Copyright Royalty Judges shall withhold
from distribution an amount sufficient to satisfy all
claims with respect to which a controversy exists, but
shall have the discretion to proceed to distribute any
amounts that are not in controversy.''.
(h) Digital Audio Recording Devices.--
(1) Royalty payments.--Section 1004(a)(3) is amended by
striking ``Librarian of Congress'' each place it appears and
inserting ``Copyright Royalty Judges''.
(2) Entitlement to royalty payments.--Section 1006(c) is
amended by striking ``Librarian of Congress shall convene a
copyright arbitration royalty panel which'' and inserting
``Copyright Royalty Judges''.
(3) Procedures for distributing royalty payments.--Section
1007 is amended--
(A) in subsection (a), by amending paragraph (1) to
read as follows:
``(1) Filing of claims.--During the first 2 months of each
calendar year, every interested copyright party seeking to
receive royalty payments to which such party is entitled under
section 1006 shall file with the Copyright Royalty Judges a
claim for payments collected during the preceding year in such
form and manner as the Copyright Royalty Judges shall prescribe
by regulation.''; and
(B) by amending subsections (b) and (c) to read as
follows:
``(b) Distribution of Payments in the Absence of a Dispute.--After
the period established for the filing of claims under subsection (a),
in each year, the Copyright Royalty Judges shall determine whether
there exists a controversy concerning the distribution of royalty
payments under section 1006(c). If the Copyright Royalty Judges
determine that no such controversy exists, the Librarian of Congress
shall, within 30 days after such determination, authorize the
distribution of the royalty payments as set forth in the agreements
regarding the distribution of royalty payments entered into pursuant to
subsection (a). The Librarian of Congress shall, before such royalty
payments are distributed, deduct the reasonable administrative costs
incurred by the Librarian under this section.
``(c) Resolution of Disputes.--If the Copyright Royalty Judges find
the existence of a controversy, the Copyright Royalty Judges shall,
pursuant to chapter 8 of this title, conduct a proceeding to determine
the distribution of royalty payments. During the pendency of such a
proceeding, the Copyright Royalty Judges shall withhold from
distribution an amount sufficient to satisfy all claims with respect to
which a controversy exists, but shall, to the extent feasible,
authorize the distribution of any amounts that are not in controversy.
The Librarian of Congress shall, before such royalty payments are
distributed, deduct the reasonable administrative costs incurred by the
Librarian under this section.''.
(4) Determination of certain disputes.--(A) Section 1010 is
amended to read as follows:
``Sec. 1010. Determination of certain disputes
``(a) Scope of Determination.--Before the date of first
distribution in the United States of a digital audio recording device
or a digital audio interface device, any party manufacturing,
importing, or distributing such device, and any interested copyright
party may mutually agree to petition the Copyright Royalty Judges to
determine whether such device is subject to section 1002, or the basis
on which royalty payments for such device are to be made under section
1003.
``(b) Initiation of Proceedings.--The parties under subsection (a)
shall file the petition with the Copyright Royalty Judges requesting
the commencement of a proceeding. Within 2 weeks after receiving such a
petition, the Chief Copyright Royalty Judge shall cause notice to be
published in the Federal Register of the initiation of the proceeding.
``(c) Stay of Judicial Proceedings.--Any civil action brought under
section 1009 against a party to a proceeding under this section shall,
on application of one of the parties to the proceeding, be stayed until
completion of the proceeding.
``(d) Proceeding.--The Copyright Royalty Judges shall conduct a
proceeding with respect to the matter concerned, in accordance with
such procedures as the Copyright Royalty Judges may adopt. The
Copyright Royalty Judges shall act on the basis of a fully documented
written record. Any party to the proceeding may submit relevant
information and proposals to the Copyright Royalty Judges. The parties
to the proceeding shall each bear their respective costs of
participation.
``(e) Judicial Review.--Any determination of the Copyright Royalty
Judges under subsection (d) may be appealed, by a party to the
proceeding, in accordance with section 803(d) of this title. The
pendency of an appeal under this subsection shall not stay the
determination of the Copyright Royalty Judges. If the court modifies
the determination of the Copyright Royalty Judges, the court shall have
jurisdiction to enter its own decision in accordance with its final
judgment. The court may further vacate the determination of the
Copyright Royalty Judges and remand the case for proceedings as
provided in this section.''.
(B) The item relating to section 1010 in the table of
sections for chapter 10 is amended to read as follows:
``1010. Determination of certain disputes.''.
SEC. 6. EFFECTIVE DATE AND TRANSITION PROVISIONS.
(a) Effective Date.--This Act and the amendments made by this Act
shall take effect 6 months after the date of the enactment of this Act,
except that the Librarian of Congress shall appoint 1 or more interim
Copyright Royalty Judges under section 802(d) of title 17, United
States Code, as amended by this Act, within 90 days after such date of
enactment to carry out the functions of the Copyright Royalty Judges
under title 17, United States Code, to the extent that Copyright
Royalty Judges provided for in section 801(a) of title 17, United
States Code, as amended by this Act, have not been appointed before the
end of that 90-day period.
(b) Transition Provisions.--
(1) In general.--Subject to paragraphs (2) and (3), the
amendments made by this Act shall not affect any proceedings
commenced, petitions filed, or voluntary agreements entered
into before the enactment of this Act under the provisions of
title 17, United States Code, amended by this Act, and pending
on such date of enactment. Such proceedings shall continue,
determinations made in such proceedings, and appeals taken
therefrom, as if this Act had not been enacted, and shall
continue in effect until modified under title 17, United States
Code, as amended by this Act. Such petitions filed and
voluntary agreements entered into shall remain in effect as if
this Act had not been enacted. For the purposes of this
paragraph, the Librarian of Congress may determine whether a
proceeding has commenced.
(2) Pending proceedings.--Notwithstanding paragraph (1),
any proceeding commenced before the enactment of this Act may
be terminated by the Librarian of Congress, with the approval
of the Copyright Royalty Judges. In such cases, the Copyright
Royalty Judges shall initiate a new proceeding in accordance
with regulations adopted pursuant to section 803(b)(6) of title
17, United States Code.
(3) Effective periods for certain ratemaking proceedings.--
Notwithstanding paragraph (1), terms and rates in effect under
section 114(f)(2) or 112(e) of title 17, United States Code,
for new subscription services, eligible nonsubscription
services, and services exempt under section 114(d)(1)(C)(iv) of
such title for the period 2003 through 2004, and any rates
published in the Federal Register under the authority of the
Small Webcaster Settlement Act of 2002 for the years 2003
through 2004, shall be effective until the later of the first
applicable effective date for successor terms and rates
specified in section 804(b)(2) or (3)(A) of title 17, United
States Code, or until such later date as the parties may agree
or the Copyright Royalty Judges may establish. If successor
terms and rates have not yet been established by such date,
licensees shall continue to make royalty payments at the rates
and on the terms previously in effect, subject to retroactive
adjustment when successor rates and terms for such services are
established.
(c) Existing Appropriations.--Any funds made available in an
appropriations Act before the effective date of this Act to carry out
chapter 8 of title 17, United States Code, shall be available to the
extent necessary to carry out this section.
Calendar No. 744
108th CONGRESS
2d Session
H. R. 1417
_______________________________________________________________________
AN ACT
To amend title 17, United States Code, to replace copyright arbitration
royalty panels with Copyright Royalty Judges, and for other purposes.
_______________________________________________________________________
September 29, 2004
Reported with an amendment