Rate setting standards

(a)

Section 112 licenses

Section 112(e)(4) of title 17, United States Code, is amended in the third sentence by striking fees that would have been negotiated in the marketplace between a willing buyer and a willing seller and inserting the fair market value of the rights licensed under this subsection. (b)

Section 114 licenses

Section 114(f) of title 17, United States Code, is amended— (1)by striking paragraph (1); (2)by redesignating paragraphs (2), (3), (4), and (5) as paragraphs (1), (2), (3), and (4), respectively; and (3)in paragraph (1) (as redesignated under this subsection)— (A)in subparagraph (A), by striking all after Proceedings and inserting under chapter 8 shall determine reasonable rates and terms of royalty payments for eligible transmissions during the 5-year period beginning on January 1 of the second year following the year in which the proceedings are to be commenced, and on January 1 of every 5-year period thereafter, except when a different transitional period is provided under section 6(b)(3) of the Copyright Royalty and Distribution Reform Act of 2004, or such other period as the parties may agree.; (B)in subparagraph (B)— (i)in the first sentence, by striking affected by this paragraph and inserting under this section; (ii)in the second sentence, by striking nonsubscription; and (iii)in the third sentence— (I)by striking transmissions by eligible nonsubscription services and new subscription and inserting eligible transmission; and (II)by striking rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller and inserting the fair market value of the rights licensed under this section; (iv)in the fourth sentence, by striking base its and inserting base their; (v)in clause (i), by striking and after the semicolon; (vi)in clause (ii), by striking the period and inserting ; and; (vii)by inserting after clause (ii) the following:

(iii)the degree to which reasonable recording affects the potential market for sound recordings, and the additional fees that are required to be paid by services for compensation.

; and

(viii)in the matter following clause (ii), by striking described in subparagraph (A); and (C)by striking subparagraph (C) and inserting the following:

(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 transmitting entity indicating that a new type of 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 that 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 services, eligible nonsubscription services, or new subscription 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. (D)In this paragraph, the term eligible transmission means— (i)subscription transmissions by preexisting subscription services; (ii)subscription transmissions by preexisting satellite digital audio radio services; (iii)eligible nonsubscription transmissions; and (iv)transmissions by new subscription services.

(c)

Content protection

Section 114(d)(2) of title 17, United States Code, is amended— (1)in subparagraph (A)— (A)in clause (ii), by striking and after the semicolon; (B)in clause (iii), by adding and after the semicolon; and (C)by adding after clause (iii) the following:

(iv)the transmitting entity takes no affirmative steps to authorize, enable, cause, or induce the making of a copy or phonorecord by or for the transmission recipient and uses technology that is reasonably available, technologically feasible, and economically reasonable to prevent the making of copies or phonorecords embodying the transmission, in whole or in part, except for reasonable recording as defined in subsection (j)(10);

;

(2)in subparagraph (C)— (A)by striking clause (vi); and (B)by redesignating clauses (vii) through (ix) as clauses (vi) through (viii), respectively; and (3)by adding at the end the following:

For purposes of subparagraph (A)(iv), the mere offering of a transmission and accompanying metadata does not in itself enable the making of a copy or phonorecord. Nothing in subparagraph (A)(iv) shall preclude or prevent a performing rights society or a mechanical rights organization, or any entity owned in whole or in part by, or acting on behalf of, such organizations, from monitoring public performances or other uses of copyrighted works contained in such transmissions. Any such organization or entity shall be granted a license on either a gratuitous basis or for a de minimus fee to cover only the reasonable costs to the licensor of providing the license, and on reasonable, nondiscriminatory terms, to access and retransmit as necessary any content contained in such transmissions protected by content protection or similar technologies, if such licenses are for purposes of carrying out the activities of such organizations or entities in monitoring the public performance or other uses of copyrighted works, and such organizations or entities employ reasonable methods to protect any such content accessed from further distribution.

(d)

Definition

Section 114(j) of title 17, United States Code, is amended— (1)by redesignating paragraphs (10) through (15) as paragraphs (11) through (16), respectively; and (2)by inserting after paragraph (9) the following:

(10) (A)A reasonable recording means the making of a copy or phonorecord of a performance licensed under this section for private, noncommercial use if technological measures used by the transmitting entity and incorporated into a recording device— (i)permit automated recording or playback based on specific programs, time periods, or channels as selected by or for the user; (ii)do not permit automated recording or playback based on specific sound recordings, albums, or artists; (iii)do not permit the separation of component segments of the copyrighted material contained in the transmission program which results in the playback of a manipulated sequence; and (iv)do not permit the redistribution, retransmission, or other exporting of a phonorecord embodying all or part of a performance licensed under this section from the device by digital outputs or removable media, unless the destination device is part of a secure in-home network that also complies with this paragraph. (B)Nothing in this paragraph prevents a consumer from engaging in non-automated manual recording and playback in a manner that is not an infringement of copyright.

(e)

Technical and conforming amendments

(1)

Section 114

Section 114(f) of title 17, United States Code (as amended by subsection (b) of this section), is further amended— (A)in paragraph (1)(B), in the first sentence, by striking paragraph (3) and inserting paragraph (2); and (B)in paragraph (4)(C), by striking under paragraph (4) and inserting under paragraph (3). (2)

Chapter 8

(A)Section 801(b) of title 17, United States Code, is amended— (i)in paragraph (1), by striking 114(1)(B), 115, and inserting 115; and (ii)in paragraph (7)(B), by striking 114(f)(3) and inserting 114(f)(2). (B)Section 803(c)(2)(E)(i)(II) of title 17, United States Code, is amended— (i)by striking or 114(f)(2)(C); and (ii)by striking 114(f)(4)(B) and inserting 114(f)(3)(B). (C)Section 804(b)(3)(C) of title 17, United States Code, is amended— (i)in clause (i), by striking and 114(f)(2)(C); and (ii)in clause (iv), by striking or 114(f)(2)(C), as the case may be.