[House Report 104-554]
[From the U.S. Government Publishing Office]
104th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 104-554
_______________________________________________________________________
COPYRIGHT CLARIFICATIONS ACT OF 1996
_______________________________________________________________________
May 6, 1996.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Moorhead, from the Committee on the Judiciary, submitted the
following
R E P O R T
[To accompany H.R. 1861]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the bill
(H.R. 1861) to make technical corrections in the Satellite Home
Viewer Act of 1994 and other provisions of title 17, United
States Code, having considered the same, report favorably
thereon with an amendment and recommend that the bill as
amended do pass.
CONTENTS
Page
The Amendment in the Nature of a Substitute...................... 1
Purpose and Summary.............................................. 6
Background and Need for Legislation.............................. 6
Hearings......................................................... 6
Committee Consideration.......................................... 6
Committee Oversight Findings..................................... 7
Committee on Government Reform and Oversight..................... 7
New Budget Authority and Tax Expenditures........................ 7
Congressional Budget Office Estimate............................. 7
Inflationary Impact Statement.................................... 10
Section-by-Section Analysis and Discussion....................... 10
Agency Views..................................................... 20
Changes in Existing Law.......................................... 22
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Copyright Clarifications Act of
1996''.
SEC. 2. SATELLITE HOME VIEWER ACT.
The Satellite Home Viewer Act of 1994 (Public Law 103-369) is amended
as follows:
(1) Section 2(3)(A) is amended to read as follows:
``(A) in clause (i) by striking `12 cents' and
inserting `17.5 cents per subscriber in the case of
superstations that as retransmitted by the satellite
carrier include any program which, if delivered by any
cable system in the United States, would be subject to
the syndicated exclusivity rules of the Federal
Communications Commission, and 14 cents per subscriber
in the case of superstations that are syndex-proof as
defined in section 258.2 of title 37, Code of Federal
Regulations; and' ''.
(2) Section 2(4) is amended to read as follows:
``(4) Subsection (c) is amended--
``(A) in paragraph (1)--
``(i) by striking `until December 31, 1992,';
``(ii) by striking `(2), (3) or (4)' and
inserting `(2) or (3)'; and
``(iii) by striking the second sentence;
``(B) in paragraph (2)--
``(i) in subparagraph (A) by striking `July
1, 1991' and inserting `July 1, 1996'; and
``(ii) in subparagraph (D) by striking
`December 31, 1994' and inserting `December 31,
1999, or in accordance with the terms of the
agreement, whichever is later'; and
``(C) in paragraph (3)--
``(i) in subparagraph (A) by striking
`December 31, 1991' and inserting `January 1,
1997';
``(ii) by amending subparagraph (B) to read
as follows:
`(B) Establishment of royalty fees.--In determining
royalty fees under this paragraph, the copyright
arbitration royalty panel appointed under chapter 8
shall establish fees for the retransmission of network
stations and superstations that most clearly represent
the fair market value of secondary transmissions. In
determining the fair market value, the panel shall base
its decision on economic, competitive, and programming
information presented by the parties, including--
`(i) the competitive environment in which
such programming is distributed, the cost of
similar signals in similar private and
compulsory license marketplaces, and any
special features and conditions of the
retransmission marketplace;
`(ii) the economic impact of such fees on
copyright owners and satellite carriers; and
`(iii) the impact on the continued
availability of secondary transmissions to the
public.'; and
``(iii) in subparagraph (C), by inserting `or
July 1, 1997, whichever is later' after
`section 802(g)'.''.
(3) Section 2(5)(A) is amended to read as follows:
``(A) in paragraph (5)(C) by striking `the date of
the enactment of the Satellite Home Viewer Act of 1988'
and inserting `November 16, 1988'; and''.
SEC. 3. COPYRIGHT IN RESTORED WORKS.
Section 104A of title 17, United States Code, is amended as follows:
(1) Subsection (d)(3)(A) is amended to read as follows:
``(3) Existing derivative works.--(A) In the case of a
derivative work that is based upon a restored work and is
created--
``(i) before the date of the enactment of the Uruguay
Round Agreements Act, if the source country of the
restored work is an eligible country on such date, or
``(ii) before the date of adherence or proclamation,
if the source country of the restored work is not an
eligible country on such date of enactment, a reliance
party may continue to exploit that derivative work for
the duration of the restored copyright if the reliance
party pays to the owner of the restored copyright
reasonable compensation for conduct which would be
subject to a remedy for infringement but for the
provisions of this paragraph.''.
(2) Subsection (e)(1)(B)(ii) is amended by striking the last
sentence.
(3) Subsection (h)(2) is amended to read as follows:
``(2) The `date of restoration' of a restored copyright is
the later of--
``(A) January 1, 1996, the date on which the
Agreement on Trade-Related Aspects of Intellectual
Property referred to in section 101(d)(15) of the
Uruguay Round Agreements Act enters into force with
respect to the United States, if the source country of
the restored work is a nation adhering to the Berne
Convention or a WTO member country on such date, or
``(B) the date of adherence or proclamation, in the
case of any other source country of the restored
work.''.
(4) Subsection (h)(3) is amended to read as follows:
``(3) The term `eligible country' means a nation, other than
the United States, that, after the date of the enactment of the
Uruguay Round Agreements Act--
``(A) becomes a WTO member,
``(B) is or becomes a member of the Berne Convention,
or
``(C) becomes subject to a proclamation under
subsection (g).''.
SEC. 4. LICENSES FOR NONEXEMPT SUBSCRIPTION TRANSMISSIONS.
Section 114(f) of title 17, United States Code, is amended--
(1) in paragraph (1), by inserting ``, or ending 30 days
after the Librarian issues and publishes in the Federal
Register an order adopting or rejecting the report of the
copyright arbitration royalty panel, if such panel is
convened'' after ``December 31, 2000''; and
(2) in paragraph (2), by striking ``and publish in the
Federal Register''.
SEC. 5. ROYALTY PAYABLE UNDER COMPULSORY LICENSE.
Section 115(c)(3)(D) of title 17, United States Code, is amended by
striking ``and publish in the Federal Register''.
SEC. 6. NEGOTIATED LICENSE FOR JUKEBOXES.
Section 116 of title 17, United States Code, is amended--
(1) by amending subsection (b)(2) to read as follows:
``(2) Arbitration.--Parties not subject to such a negotiation
may determine the result of the negotiation by arbitration in
accordance with the provisions of chapter 8.''; and
(2) by adding at the end the following new subsection:
``(d) Definitions.--As used in this section, the following terms mean
the following:
``(1) A `coin-operated phonorecord player' is a machine or
device that--
``(A) is employed solely for the performance of
nondramatic musical works by means of phonorecords upon
being activated by the insertion of coins, currency,
tokens, or other monetary units or their equivalent;
``(B) is located in an establishment making no direct
or indirect charge for admission;
``(C) is accompanied by a list which is comprised of
the titles of all the musical works available for
performance on it, and is affixed to the phonorecord
player or posted in the establishment in a prominent
position where it can be readily examined by the
public; and
``(D) affords a choice of works available for
performance and permits the choice to be made by the
patrons of the establishment in which it is located.
``(2) An `operator' is any person who, alone or jointly with
others--
``(A) owns a coin-operated phonorecord player;
``(B) has the power to make a coin-operated
phonorecord player available for placement in an
establishment for purposes of public performance; or
``(C) has the power to exercise primary control over
the selection of the musical works made available for
public performance on a coin-operated phonorecord
player.''.
SEC. 7. LIMITATIONS ON EXCLUSIVE RIGHTS; COMPUTER PROGRAMS.
Section 117 of title 17, United States Code, is amended as follows:
(1) Strike ``Notwithstanding'' and insert the following:
``(a) Making of Additional Copy or Adaptation by Owner of Copy.--
Notwithstanding''.
(2) Strike ``Any exact'' and insert the following:
``(b) Lease, Sale, or Other Transfer of Additional Copy or
Adaptation.--Any exact''.
(3) Add at the end the following:
``(c) Machine Maintenance or Repair.--Notwithstanding the provisions
of section 106, it is not an infringement for the owner or lessee of a
machine to make or authorize the making of a copy of a computer program
if such copy is made solely by virtue of the activation of a machine
that lawfully contains an authorized copy of the computer program, for
purposes only of maintenance or repair of that machine, provided that--
``(1) such new copy is used in no other manner and is
destroyed immediately after the maintenance or repair is
completed, and
``(2) with respect to any computer program or part thereof
that is not necessary for that machine to be activated, such
program or part thereof is not accessed or used other than to
make such new copy by virtue of the activation of the machine.
``(d) Definitions.--For purposes of this section--
``(1) the term `maintenance' of a machine means servicing the
machine in order to make it work in accordance with its
original specifications and any changes to those specifications
authorized for that machine; and
``(2) the term `repair' of a machine means restoring it to
the state of working in accordance with its original
specifications and any changes to those specifications
authorized for that machine.''.
SEC. 8. PUBLIC BROADCASTING COMPULSORY LICENSE.
Section 118 of title 17, United States Code, is amended as follows:
(1) Subsection (b) is amended by striking paragraph (1) and
redesignating paragraphs (2) and (3) as paragraphs (1) and (2),
respectively.
(2) Subsection (b)(2) (as redesignated by paragraph (1) of
this section) is amended by striking ``(2)'' each place it
appears and inserting ``(1)''.
(3) Subsection (e) is amended to read as follows:
``(e)(1) Except as expressly provided in this subsection, this
section shall not apply to works other than those specified in
subsection (b).
``(2) Owners of copyright in nondramatic literary works and public
broadcasting entities may, during the course of voluntary negotiations,
agree among themselves, respectively, as to the terms and rates of
royalty payments without liability under the antitrust laws. Any such
terms and rates of royalty payments shall be effective upon being filed
in the Copyright Office, in accordance with regulations that the
Register of Copyrights shall prescribe.''.
SEC. 9. REGISTRATION AND INFRINGEMENT ACTIONS.
Section 411(b)(1) of title 17, United States Code, is amended to read
as follows:
``(1) serves notice upon the infringer, not less than 48
hours before such fixation, identifying the work and the
specific time and source of its first transmission, and
declaring an intention to secure copyright in the work; and''.
SEC. 10. COPYRIGHT OFFICE FEES.
(a) Fee Increases.--Section 708(b) of title 17, United States Code,
is amended to read as follows:
``(b) In calendar year 1996 and in any subsequent calendar year, the
Register of Copyrights, by regulation, may increase the fees specified
in subsection (a) in the following manner:
``(1) The Register shall conduct a study of the costs
incurred by the Copyright Office for the registration of
claims, the recordation of documents, and the provision of
services. The study shall also consider the timing of any
increase in fees and the authority to use such fees consistent
with the budget.
``(2) The Register shall have discretion to increase fees up
to the reasonable costs incurred by the Copyright Office for
the services described in paragraph (1) plus a reasonable
inflation adjustment to account for any estimated increase in
costs.
``(3) Any newly established fee based on paragraph (2) shall
be rounded off to the nearest dollar, or for a fee less than
$12, rounded off to the nearest 50 cents.
``(4) The fees shall be fair and equitable and give due
consideration to the objectives of the copyright system.
``(5) If upon completion of the study, the Register
determines that the fees should be increased, the Register
shall prepare a proposed fee schedule and submit the schedule
with the accompanying economic analysis to the Congress. The
fees proposed by the Register may be instituted after the end
of 120 days after the schedule is submitted to the Congress
unless, within that 120-day period, a law is enacted stating in
substance that the Congress does not approve the schedule.''.
(b) Deposit of Fees.--Section 708(d) of such title is amended to read
as follows:
``(d)(1) Except as provided in paragraph (2), all fees received under
this section shall be deposited by the Register of Copyrights in the
Treasury of the United States and shall be credited to the
appropriations for necessary expenses of the Copyright Office. Such
fees that are collected shall remain available until expended. The
Register may, in accordance with regulations that he or she shall
prescribe, refund any sum paid by mistake or in excess of the fee
required by this section.
``(2) In the case of fees deposited against future services, the
Register of Copyrights shall request the Secretary of the Treasury to
invest in interest-bearing securities in the United States Treasury any
portion of the fees that, as determined by the Register, is not
required to meet current deposit account demands. Funds shall be
invested in securities that permit funds to be available to the
Copyright Office at all times if they are determined to be necessary to
meet current deposit account demands. Such investments shall be in
public debt securities with maturities suitable to the needs of the
fund, as determined by the Register of Copyrights, and bearing interest
at rates determined by the Secretary of the Treasury, taking into
consideration current market yields on outstanding marketable
obligations of the United States of comparable maturities.
``(3) The income on such investments shall be deposited in the
Treasury of the United States and shall be credited to the
appropriations for necessary expenses of the Copyright Office.''.
SEC. 11. COPYRIGHT ARBITRATION ROYALTY PANELS.
(a) Establishment and Purpose.--Section 801 of title 17, United
States Code, is amended--
(1) in subsection (b)(1) by striking ``and 116'' in the first
sentence and inserting ``116, and 119'';
(2) in subsection (c) by inserting after ``panel'' at the end
of the sentence the following:
``, including--
``(1) authorizing the distribution of those royalty fees
collected under sections 111, 119, and 1005 that the Librarian
has found are not subject to controversy; and
``(2) accepting or rejecting royalty claims filed under
sections 111, 119, and 1007 on the basis of timeliness or the
failure to establish the basis for a claim''; and
(3) by amending subsection (d) to read as follows:
``(d) Support and Reimbursement of Arbitration Panels.--The Librarian
of Congress, upon the recommendation of the Register of Copyrights,
shall provide the copyright arbitration royalty panels with the
necessary administrative services related to proceedings under this
chapter, and shall reimburse the arbitrators at such intervals and in
such manner as the Librarian shall provide by regulation. Each such
arbitrator is an independent contractor acting on behalf of the United
States, and shall be paid pursuant to a signed agreement between the
Library of Congress and the arbitrator. Payments to the arbitrators
shall be considered costs incurred by the Library of Congress and the
Copyright Office for purposes of section 802(h)(1).''.
(b) Proceedings.--Section 802(h)(1) of title 17, United States Code,
is amended--
(1) by amending the heading to read ``Deduction of costs of
library of congress and copyright office from royalty fees.--
'';
(2) in the first sentence by inserting ``to support
distribution proceedings'' after ``Copyright Office''; and
(3) by amending the third sentence to read as follows: ``In
ratemaking proceedings, the Librarian of Congress and the
Copyright Office may assess their reasonable costs directly to
the parties to the most recent relevant arbitration proceeding,
50 percent of the costs to the parties who would receive
royalties from the royalty rate adopted in the proceeding and
50 percent of the costs to the parties who would pay the
royalty rate so adopted, subject to the discretion of the
arbitrators to assess costs under subsection (c).''.
SEC. 12. DIGITAL AUDIO RECORDING DEVICES AND MEDIA.
Section 1007(b) of title 17, United States Code, is amended by
striking ``Within 30 days after'' in the first sentence and inserting
``After''.
SEC. 13. TREATMENT OF PRE-1978 PUBLICATION OF SOUND RECORDINGS.
Section 303 of title 17, United States Code, is amended--
(1) by striking ``Copyright'' and inserting ``(a)
Copyright''; and
(2) by adding at the end the following:
``(b) The distribution before January 1, 1978, of a phonorecord shall
not for any purpose constitute a publication of the musical work
embodied therein.''.
SEC. 14. CONFORMING AMENDMENT.
Paragraph (5) of section 4 of the Digital Performance Right in Sound
Recordings Act of 1995 is redesignated as paragraph (4).
SEC. 15. EFFECTIVE DATES.
(a) In General.--Except as provided in subsection (b), the amendments
made by this Act shall take effect on the date of the enactment of this
Act.
(b) Satellite Home Viewer Act.--The amendments made by section 1
shall be effective as if enacted as part of the Satellite Home Viewer
Act of 1994 (Public Law 103-369).
Purpose and Summary
H.R. 1861 accomplishes many purposes. Some of its
provisions will assist the U.S. Copyright Office in carrying
out its duties, including giving the Office the ability to set
reasonable fees for basic services, subject to congressional
approval. Others correct or clarify the language in several
recent amendments to the law so that Congress' original intent
can be better achieved. Two provisions resolve problems created
by recent judicial interpretations of provisions of the
copyright law. One of these amendments makes clear that the
distribution of musical disks or tapes before 1978 did not
publish the musical compositions embodied in the disks or
tapes. The other amendment ensures that independent service
organizations have the ability to activate a computer to
maintain and repair its hardware components without being held
liable by a court for copyright infringement due to that
activation alone.
Background and Need for the Legislation
The Copyright Act was last generally revised in 1976, in
response to the many technological changes that had occurred
since the enactment of the 1909 Act. Since 1976, Congress
regularly has had to address new issues, especially those
raised by new technologies or new methods of exploitation. Each
session of Congress has produced at least one major amendment
to the Copyright Act.
The U.S. Copyright Office is the agency charged with
primary responsibility for implementing the provisions of the
Copyright Act. In early 1995, the Copyright Office submitted to
the Subcommittee on Courts and Intellectual Property a number
of recommendations to clarify or correct the following: the
Copyright Fees and Technical Amendments Act of 1989, the Audio
Home Recording Act of 1992, the Copyright Royalty Tribunal
Reform Act of 1993, the Satellite Home Viewer Act of 1994, and
the Digital Performance Right in Sound Recordings Act of 1995.
On June 15, 1995, H.R. 1861 was introduced.
Hearings
The Committee's Subcommittee on Courts and Intellectual
Property held a hearing on H.R. 1861 on November 9, 1995 in
Room 2237 Rayburn House Office Building. Testimony was received
from Ms. Marybeth Peters, Register of Copyrights, United States
Copyright Office, The Library of Congress (Serial #32).
Committee Consideration
On December 13, 1995, the Subcommittee held a markup on
H.R. 1861. The Subcommittee adopted, by voice vote, an
amendment in the nature of a substitute to H.R. 1861 offered by
Chairman Moorhead, and favorably reported, by voice vote, a
quorum being present, the amendment in the nature of a
substitute to the full Committee. On March 12, 1996, the
Committee adopted, by voice vote, an amendment offered by Mr.
Moorhead to the amendment in the nature of a substitute, and
favorably reported, by voice vote, a quorum being present, the
amendment in the nature of a substitute, as amended, to the
Committee of the Whole House on the State of the Union.
Committee Oversight Findings
In compliance with clause 2(l)(3)(A) of rule XI of the
Rules of the House of Representatives, the Committee reports
that the findings and recommendations of the Committee, based
on oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
Committee on Government Reform and Oversight Findings
No findings or recommendations of the Committee on
Government Reform and Oversight were received as referred to in
clause 2(l)(3)(D) of rule XI of the Rules of the House of
Representatives.
New Budget Authority and Tax Expenditures
Clause 2(l)(3)(B) of House rule XI is inapplicable because
this legislation does not provide new budgetary authority or
increased tax expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 2(l)(C)(3) of rule XI of the
Rules of the House of Representatives, the Committee sets
forth, with respect to the bill, H.R. 1861, the following
estimate and comparison prepared by the Director of the
Congressional Budget Office under section 403 of the
Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 17, 1996.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary, House of Representatives,
Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1861, the
Copyright Clarifications Act of 1996.
Enactment of H.R. 1861 would affect direct spending and
receipts; therefore, pay-as-you-go procedures would apply to
the bill.
If you wish further details on this estimate, we will be
pleased to provide them.
Sincerely,
James L. Blum
(For June E. O'Neill, Director).
Enclosure.
congressional budget office cost estimate
1. Bill number: H.R. 1861.
2. Bill title: Copyright Clarification Act of 1996.
3. Bill status: As ordered reported by the House Committee
on the Judiciary on March 12, 1996.
4. Bill purpose: H.R. 1861 would amend the United States
Copyright Act to make numerous technical corrections and
clarifications. Specifically, the bill would:
eliminate certain reporting requirements;
enable the Librarian of Congress to distribute
uncontested royalties without convening a Copyright
Arbitration Royalty Panel (CARP);
authorize the Librarian of Congress to deduct
expenses for the CARP from the royalties collected and
distributed by the government;
clarify the arbitration proceedings with regard to
jukebox copyright licenses;
shorten the amount of time in which transmitters of
live broadcasts must serve notice that they wish to
copyright a broadcast from 10 days to 48 hours; and
enable the owner or lessee of a computer to duplicate
a copyrighted computer program in order to protect the
program if the computer needs to be repaired or
maintained.
In addition, the bill would authorize the Register of
Copyrights to adjust the current Copyright Office fees in order
to reflect the fair cost of registering claims and providing
services. The bill specifies that the fees would be credited as
offsetting collections to the appropriations account.
5. Estimated Cost to the Federal Government: Under current
law, the Copyright Office has the authority to collect and
spend user fees; H.R. 1861 would enable the office to increase
the amount of such fees to cover its expenses, thus eliminating
the need for an annual appropriation starting in 1998. (The
1996 appropriation--net of offsetting collections--is $11
million.) Because H.R. 1861 would enable the Copyright Office
to collect and spend the fees without further authorization,
the net impact of the fees on direct spending would be roughly
zero.
H.R. 1861 also would also authorize the Librarian of
Congress to collect and distribute fees for rate making. These
fees would increase federal receipts and outlays by about $1
million each fiscal year 1997-2000.
----------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000
----------------------------------------------------------------------------------------------------------------
Changes to direct spending and revenues:
Estimated budget authority................................ ........ 1 1 1 1
Estimated outlays......................................... ........ 1 0 1 1
Estimated revenues........................................ ........ 1 1 1 1
----------------------------------------------------------------------------------------------------------------
The costs of this bill fall within budget function 370.
6. Basis of estimate.
mandatory spending
Copyright Office Fees.--Under current law, the Copyright
office is authorized to collect and spend about $20 million in
fees each year. In fiscal year 1996 the Copyright Office
received an additional $11 million in appropriations for total
net budget authority of $31 million. H.R. 1861 would authorize
the Copyright Office to set fees according to the fair cost of
registering copyright claims and providing services. CBO
estimates that the Copyright Office would conduct a study on
fees in 1997 and would become fully fee-funded in fiscal year
1998, eliminating the need for appropriations.
Under current law, the Copyright Office assesses most of
its fees on copyright registration claims. CBO expects that as
the office begins to raise fees the number of copyright
registrations will begin to fall. As a result of the decrease
in demand and the expiration of a certain fee in 1998, CBO
expects the Copyright Office to collect slightly less in fiscal
years 1998-2000 than the $31 million in budget authority
appropriated in 1996. CBO estimates that the office would raise
an additional $8 million in fees for total budget authority of
$28 million. Although the Copyright Office could collect and
spend the fees without further authorization, we would expect
the appropriations acts to specify in advance the amount of
fees that could be spent in any fiscal year.
Changes to Royalty Fees.--H.R. 1861 would change certain
statutory royalty payments for carriage of network signals by
satellite carriers. These royalty payments are collected by the
federal government as governmental receipts and are distributed
without appropriation as direct spending. Because H.R. 1861
would raise the statutory rates to the amounts currently in
effect as the result of a 1992 arbitration ruling, CBO
estimates that the bill would cause no change in direct
spending or receipts.
Under current law, the Copyright Office convenes a
Copyright Arbitration Royalty Panel to arbitrate disputes
between copyright owners and users. The members of the CARP,
who are not government employees, bill the parties to the
arbitration directly for their expenses. H.R. 1861 would allow
the Librarian of Congress to deduct the expenses of the CARP
for distribution proceedings from the royalties held in escrow
by the government. CBO estimates that this provision would have
no budgetary impact because it would not affect the amount of
royalties collected or the amount of money disbursed by the
government.
The Copyright Office also convenes a CARP to set royalty
rates. H.R. 1861 would authorize the Librarian of Congress to
collect fees from parties to a ratemaking proceeding and
distribute those fees to members of the CARP to cover their
expenses. Based on information from the Copyright Office, CBO
estimates that the Librarian would collect and distribute fees
of about $1 million each year. These fees would increase
federal receipts and outlays by about $1 million each year. The
net budgetary impact of such fees would be roughly zero over
time.
H.R. 1861 would require the Librarian of Congress to
convene a CARP to establish royalty rates if copyright owners
and jukebox operators fail to negotiate an agreement on rates.
If a CARP were to be convened when the current licensing
agreement expires in 1999, the office would likely collect and
distribute disputed royalties of about $7 million a year. Based
on information from the Copyright Office, CBO expects that the
jukebox owners will successfully negotiate another agreement
with copyright owners in 1999 and that the royalty payments
will not be collected and distributed by the office. Therefore,
we do not expect that this provision would affect direct
spending and receipts.
Spending Subject to Appropriations
CBO estimates that eliminating certain reporting
requirements would save the Copyright Office about $150,000 in
each of fiscal years 1997-1998. Because additional fee income
would be available to cover the office's expenses, net outlays
from appropriations would decline from $11 million in 1996 to
close to zero in 1998 and subsequent years.
CBO estimates that the other provisions of the bill would
have no budgetary impact.
7. Pay-as-you-go considerations: Section 252 of the
Balanced Budget and Emergency Deficit Control Act of 1985 sets
up pay-as-you-go procedures for legislation affecting direct
spending or receipts through 1998. CBO estimates that enactment
of H.R. 1861 would affect direct spending and receipts, as
shown in the following table.
------------------------------------------------------------------------
1996 1997 1998
------------------------------------------------------------------------
Change in outlays......................... 0 1 0
Change in receipts........................ 0 1 1
------------------------------------------------------------------------
8. Estimated impact on State, local, and tribal
governments: H.R. 1861 contains no intergovernmental mandates
as defined in Public Law 104-4 and would impose no direct costs
on state, local, or tribal governments.
9. Estimated impact on the private sector: This bill would
impose no new private sector mandates that would exceed the
$100 million threshold specified in Public Law 104-4. The
increases in copyright fees authorized by the bill would total
less than $10 million a year
10. Previous CBO estimate: None.
11. Estimate prepared by: Federal Cost Estimate: Rachel
Forward State and Local Government Impact: Karen McVey; Private
Sector Impact: Matt Eyles.
12. Estimate approved by: Robert A. Sunshine, (for Paul N.
Van de Water, Assistant Director for Budget Analysis).
Inflationary Impact Statement
Pursuant to clause 2(l)(4) of rule XI of the Rules of the
House of Representatives, the Committee estimates that H.R.
1861 will have no significant inflationary impact on prices and
costs in the national economy.
Section-by-Section Analysis
Section 1--Short title
This section sets forth the title of the Act as the
``Copyright Clarifications Act of 1996.''
Section 2--Satellite Home Viewer Act
The Satellite Home Viewer Act of 1994 contained certain
drafting errors which were the result of amending the Copyright
Act without taking into account changes made by the Copyright
Royalty Tribunal Reform Act of 1993.
Subsection (1) clarifies the royalty rates that are paid by
satellite carriers for retransmission of network and
superstation broadcast signals to satellite dish owners for
private home viewing. Congress intended that the rates adopted
in the law should be the same as the rates that were set by
arbitration in 1992. However, the Satellite Home Viewer Act of
1994 reversed the rates; the current law states that 17.5 cents
should be paid for signals not subject to the FCC's syndicated
exclusivity blackout rules, and 14 cents per subscriber for
signals subject to such rules. Subsection (1) corrects that
reversal.
Subsection (2) corrects the section numbers, and
accompanying references, to take into account the changes made
to title 17 by the Copyright Royalty Tribunal Reform Act of
1993.
Subsection (3) deletes reference to the effective date of
the Satellite Home Viewer Act of 1988 to avoid any confusion
that might result from two Acts of the same name, and inserts
the effective date of the Satellite Home Viewer Act of 1988,
which was November 16, 1988.
Section 3--Copyright in restored works
In 1994, a new Section 104A was created to restore
copyright protection to certain preexisting works from other
World Trade Organization (``WTO'') and Berne Convention member
countries that had fallen into the public domain in the United
States. During the drafting process, some inadvertent errors
were made. These errors alter the intended meaning of the
statute or create accidental ambiguities. In order to avoid
constitutional challenges and unnecessary litigation, the
amendments to Section 104A in H.R. 1861 correct the errors.
1. Provision for already-created derivative works
The first part of the amendment to section 104A deals with
establishing special treatment for already-created derivative
works. The problem with this subsection was created by a word
change in the bill during technical and conforming revisions.
This change inadvertently altered the effect of the subsection
and in large part nullified its purpose. The amendment in H.R.
1861 substitutes the word ``restored'' for the word
``derivative'' in two places in subsection (3), entitled
``Existing Derivative Works,'' in order to reverse that
mistaken change, and inserts the word ``derivative'' in one
other place in that subsection in order to ensure clarity.
In enacting section 104A, Congress considered the fact that
restoring copyright in works that are currently in the public
domain creates a potential problem: people may have used these
works as the basis for new derivative works, such as motion
pictures made from novels. At the time the new derivative work
was created, the use of the underlying work was completely
lawful, since it was in the public domain. Once copyright in
the underlying work is restored, however, the continued use of
the derivative work without the consent of the owner of the
copyright in the underlying work would constitute copyright
infringement. See Stewart v. Abend, 495 U.S. 207 (1990).
Witnesses at the hearings on the bill testified that
preventing the creators of derivative works from making use of
those works might raise Constitutional problems under both the
Copyright Clause and the Takings Clause of the Fifth Amendment.
Accordingly, Congress included a special provision for
derivative works based on restored works where the derivative
work was created before the date of restoration, allowing the
owner of the derivative work to continue to use it even after
the one-year sell-off period provided to all reliance parties,
upon payment of reasonable compensation to the copyright owner
of the restored work. See SAA at paragraph B.1.c.(3), 1994
U.S.C.C.A.N. 4040, 4292.
In a drafting error, the phrase ``if the source country of
the restored work is an eligible country'' was changed to ``if
the source country of the derivative work is an eligible
country.'' Since ``eligible country'' is defined in the statute
to exclude the United States, the effect of this word change
was to exclude all U.S. derivative works from the benefit of
this provision--the major constituency of works that the
provision was meant to protect. In other words, U.S. derivative
works based on now-restored foreign works that were in the
public domain at the time the derivative works were created can
no longer legally be exploited in this country without the
consent of the owner of the foreign work. The amendment
corrects that unintended inequity.
2. Publication of list of notices of intent
The second part of the amendment deletes the requirement
for the Copyright Office to publish in the Federal Register a
cumulative annual list of notices of intent to enforce restored
copyrights filed with the Office. The Office is already
required to publish a list of such notices every four months,
and publication of a cumulative annual list would be expensive
and duplicative.
3. Date of copyright restoration
The third part of the amendment adds the phrase ``January
1, 1996'' to the statute's definition of ``date of
restoration'' to make explicit the date on which these foreign
copyrights were restored.
Despite Congressional intent that the restoration date be
January 1, 1996, the statutory language is potentially
ambiguous on this point. The ``date of restoration'' is defined
as the date on which the Trade Related Aspects of Intellectual
Property Agreement (``TRIPs'') entered into force with respect
to the United States for works from countries that are members
of the Berne Convention or the WTO on that date. The question
of when the TRIPs agreement entered into force is subject to
interpretation. TRIPs is part of the overall WTO agreement,
which generally entered into force on January 1, 1995. However,
the WTO agreement allowed a one-year grace period before
compliance with TRIPs itself was required. The TRIPs portion of
the agreement can therefore be considered to have its own
effective date of January 1, 1996.
In enacting new section 104A, Congress intended a 1996 date
for the restoration of foreign copyrights. The statute itself
requires the Copyright Office to issue regulations governing
restored copyrights no later than 90 days before the TRIPs
agreement entered into force with respect to the United States.
Sec. 104A(e)(1)(D)(i). If the TRIPs effective date (and
therefore the restoration date) were January 1, 1995, the
statute did not become law until 3 weeks prior to that date,
making it impossible for the Copyright Office to comply with a
deadline of 90 days in advance.
The Statement of Administrative Action (``SAA''), approved
by Congress and the statute's legislative history both confirm
this interpretation. The SAA unambiguously states that the
foreign copyrights will be restored on the date ``when the
TRIPs Agreement's obligations take effect for the United
States.'' The Joint Report on the Senate version makes this
explicit, stating that the ``bill would automatically restore
copyright protection for qualifying works * * * one year after
the WTO comes into being.'' Joint Report of the Committee on
Finance, Committee on Agriculture, Nutrition and Forestry, and
Committee on Governmental Affairs of the United States Senate
to accompany the Uruguay Round Agreements Act, S. 2467, S. Rep.
No. 412, 103d Cong., 2d Sess. 225 (1994).
Since enactment of the TRIPs Agreement, the Copyright
Office and the White House have attempted to resolve any
ambiguity. The Copyright Office published a notice of policy
decision concluding that January 1, 1996 is the date of
restoration. 60 Fed. Reg. 7793 (February 9, 1995). The
President issued a proclamation declaring January 1, 1996 to be
the date on which the TRIPs obligations take effect for the
United States. Proclamation 6780 of March 23, 1995, 60 Fed.
Reg. 15845 (1995).
Nevertheless, some commentators have concluded that the
language of the statute requires a restoration date of January
1, 1995. See, e.g., William F. Patry, Copyright and the GATT:
An Interpretation and Legislative History of the Uruguay Round
Agreements Act 31-36 (1995). Apart from the inconsistency with
legislative intent, this reading causes problems. First, since
the Copyright Office did not (and could not administratively)
start to accept notices of intent to enforce restored
copyrights until January 1,1996, it would effectively reduce
the window of opportunity to file such notices from two years
to one. Second, it would affect which foreign works would be
restored, and therefore made unavailable for free use by the
American public.
4. Definition of ``eligible country'' for purposes of
determining who qualifies as ``reliance party''
Finally, the definition of ``eligible country'' creates a
potential unintended problem when read in the context of the
definition of who qualifies as a ``reliance party.'' The
amendment revises the definition of ``eligible country'' to
resolve this problem.
A ``reliance party'' is given certain limited rights to
continue exploiting restored works. In order to qualify as a
reliance party, the time period of when one engaged in acts
with respect to the restored work is critical. Ordinarily,
these acts must have begun prior to the date of the statute's
enactment (December 8, 1994). If the source country of the work
has become an ``eligible country'' after that date, however,
the acts must have begun prior to the date it became an
eligible country. The problem is that ``eligible country'' is
defined as ``a nation, other than the United States, that is a
WTO member country, adheres to the Berne Convention, or is
subject to a presidential proclamation.'' In the context of
determining whether someone is a reliance party, this could be
read to mean that the party's acts must have begun prior to the
date that the source country became an eligible country by
joining the Berne Convention. Some countries joined the Berne
Convention when it was established in 1886; others joined at
subsequent points between that date and December 8, 1994.
Obviously, no one will be able to qualify as a reliance party
if his or her use of a work had to begin before 1886.
The amendment therefore expands the definition of
``eligible country'' to clarify the relevant dates of the
events leading to eligibility. The reference to a country that
``is a WTO member'' is changed to refer to a country that
``after the date of enactment of this Act, becomes a WTO
member''; the reference to a country that ``adheres to the
Berne Convention'' is changed to refer to a country that ``on
such date [of enactment] is, or after such date becomes, a
member of the Berne Convention''; and the relevant presidential
proclamation is defined as one that takes place ``after such
date.''
Section 4.--Licenses for nonexempt subscription transmissions
Subsection (1) is intended to avoid the possibility of a
gap in the effective dates of the royalty rates established in
1996 and 2000-2001 for the public performance of sound
recordings by nonexempt subscription digital transmission
services. The Digital Performance Right in Sound Recordings Act
of 1995 directed that the rates established in 1996 are to
expire on December 31, 2000. New rates are to be established
during 2000. However, it is possible that the work of the
copyright arbitration royalty panel (``CARP'') and of the
Librarian of Congress in reviewing the CARP's report will not
be concluded by December 31, 2000, thereby creating a period in
which no rates apply. Subsection (1) avoids this result by
stating that the effective date of the rates set in 1996 last
until December 31, 2000, or until 30 days after the Librarian
has published in the Federal Register his or her decision to
adopt or reject the CARP's rate adjustment decision. Resorting
to this second option will be unnecessary if a CARP is not
convened, or if the CARP and the Librarian conclude their
functions before December 31, 2000.
Subsection (2) deletes the phrase from Section 114(f) which
authorizes a copyright arbitration royalty panel to publish its
decision in the Federal Register. This was an inadvertent
mistake, since only government agencies may publish in the
Federal Register. Any decision of a CARP will be published by
the Librarian of Congress pursuant to the provisions of chapter
8 of the Copyright Act.
Section 5.--Royalty payable under compulsory license
This section deletes the phrase from Section 115(c) which
authorizes a copyright arbitration royalty panel to publish its
decision in the Federal Register. Since only agencies may
publish in the Federal Register, the decision of the CARP will
be published by the Librarian of Congress pursuant to the
provisions of chapter 8 of the Copyright Act.
Section 6.--Negotiated license for jukeboxes
The Copyright Royalty Tribunal Reform Act of 1993
eliminated the old Sec. 116 jukebox compulsory license and
replaced it with the Sec. 116A negotiated jukebox license
adopted in the Berne Convention implementing legislation in
1988. This produced two unintended results. It eliminated the
definitions of a ``jukebox'' and a ``jukebox operator,'' and it
sanctioned the possibility of an arbitration proceeding which
is not a copyright arbitration royalty panel (CARP)
arbitration. This section restores the original definitions as
they appeared in the Copyright Act in 1978, and it clarifies
that any jukebox negotiated license which requires arbitration
is to be a CARP proceeding.
Section 7. Limitations on exclusive rights; computer programs
This legislation amends Section 117 to ensure that
independent service organizations do not inadvertently become
liable for copyright infringement merely because they have
turned on a machine in order to service its hardware
components.
When a computer is activated, that is when it is turned on,
certain software or parts thereof (generally the machine's
operating system software) is automatically copied into the
machine's random access memory, or ``RAM''. During the course
of activating the computer, different parts of the operating
system may reside in the RAM at different times because the
operating system is sometimes larger than the capacity of the
RAM. Because such copying has been held to constitute a
``reproduction'' under Sec. 106 of the Copyright Act,1 a
person who activated the machine without the authorization of
the copyright owner of that software could be liable for
copyright infringement. This legislation has the narrow and
specific intent of relieving independent service providers,
persons unaffiliated with either the owner or lessee of the
machine, from liability under the Copyright Act when, solely by
virtue of activating the machine in which a computer program
resides, they inadvertently cause an unauthorized copy of that
program to be made.
---------------------------------------------------------------------------
\1\ See MAI Sys. Corp. v. Peak Computer, 991 F.2d 511 (9th Cir.
1993), cert. dismissed, 114 S.Ct. 671 (1994).
---------------------------------------------------------------------------
The legislation is narrowly crafted to achieve the
foregoing objective without prejudicing the rights of copyright
owners of computer software. Thus, for example, the amendment
does not relieve from liability persons who make unauthorized
adaptations, modifications or other changes to the software.
The amendment also does not relieve from liability persons who
make any unauthorized copies of software other than those
caused solely by activation of the machine.
The operative provisions, and limitations, are in two new
subsections to Section 117: subsections (c) and (d).
Subsection (c) delineates the specific circumstances under
which a reproduction of a computer program would not constitute
infringement of copyright. The goal is to maintain undiminished
copyright protection afforded under the Copyright Act to
authors of computer programs, while making it possible for
third parties to perform servicing of the hardware. It states
that it is not an infringement of copyright for the owner or
lessee of a machine to make or authorize the making of a copy
of a computer program provided that the following conditions
are met:
First, subsection (c) itself makes clear that the copy of
the computer program must have been made solely and
automatically by virtue of turning on the machine in order to
perform repairs or maintenance on the hardware components of
the machine. Moreover, the copy of the computer program which
is reproduced as a direct and sole consequence of activation
must be an authorized copy that has lawfully been installed in
the machine. Authorized copies of computer programs are only
those copies that have been made available with the consent of
the copyright owner. Also, the acts performed by the service
provider must be authorized by the owner or lessee of the
machine.
Second, in accordance with paragraph (c)(1), the resulting
copy may not be used by the person performing repairs or
maintenance of the hardware components of the machine in any
manner other than to effectuate the repair or maintenance of
the machine. Once these tasks are completed, the copy of the
program must be destroyed, which generally will happen
automatically once the machine is turned off.
Third, as is made clear in paragraph (c)(2), the amendment
is not intended to diminish the rights of copyright owners of
those computer programs, or parts thereof, that also may be
loaded into RAM when the computer is turned on, but which did
not need to be so loaded in order for the machine to be turned
on. A hardware manufacturer or software developer might, for
example, provide diagnostic and utility programs that load into
RAM along with or as part of the operating system, even though
they market those programs as separate products--either as
freestanding programs, or pursuant to separate licensing
agreements. Indeed, a password or other technical access device
is sometimes required for the owner of the machine to be able
to gain access to such programs. In other cases, it is not the
hardware or software developer that has arranged for certain
programs automatically to be reproduced when the machine is
turned on; rather, the owner of the machine may have configured
its computer to load certain applications programs into RAM as
part of the boot-up process (such as a word processing program
on a personal computer). This amendment is not intended to
derogate from the rights of the copyright owners of such
programs. In order to avoid inadvertent copyright infringement,
these programs need to be covered by subsection (c), but only
to the extent that they are automatically reproduced when the
machine is turned on. This legislation is not intended to
legitimize unauthorized access to and use of such programs just
because they happen to be resident in the machine itself and
are reproduced with or as part of the operating system when the
machine is turned on. According to paragraph (c)(2), if such a
program is accessed or used without the authorization of the
copyright owner, the initial reproduction of the program shall
not be deemed exempt from infringement under subsection (c).
Subsection (d) defines two terms not previously defined by
the Copyright Act. Paragraph (1) defines the term
``maintenance.'' These acts can include, but are not limited
to, cleaning the machine, tightening connections, installing
new components such as memory chips, circuit boards and hard
disks, checking the proper functioning of these components, and
other similar acts.
Paragraph (2) of subsection (d) defines the term
``repair.'' Acts of repairing the hardware include, but are not
limited to, replacing worn or defective components such as
memory chips, circuit boards and hard disks, correcting the
improper installation of new components, and other similar
acts.
Both paragraphs (1) and (2) of subsection (d) are subject
to the same limitations, which are intended to clarify that
activating a machine in order to perform maintenance or repair
does not constitute infringement under subsection (c) if the
maintenance or repair is undertaken to make the machine work in
accordance with the parameters specified for such a machine and
its component parts. Because technological improvements may
lead customers to upgrade their machines, the language of both
definitions authorizes service providers to maintain those
components of the hardware that have been installed since the
time the machine was originally acquired, or to install new
components. But their acts shall be deemed non-infringing under
subsection (c) only if the components being serviced have been
lawfully acquired and installed. Finally, the terms
``maintenance'' and ``repair'' do not include unauthorized
adaptations, modifications, error corrections or any other
changes to any software which may be in the machine being
serviced.
Section 8.--Public broadcasting compulsory license
This section eliminates an inconsistency created by the
Copyright Royalty Tribunal Reform Act of 1993. This Act directs
the Librarian of Congress to collect royalty rate proposals
from public broadcasters and copyright owners and then to
``proceed on the basis of the proposals.'' Formerly, the
Copyright Royalty Tribunal received such proposals and then
conducted a proceeding. The Tribunal Reform Act replaced the
Tribunal's name with that of the Librarian's each place it
appeared in Sec. 118. Ratemaking authority to decide
conflicting rate proposals, however, is within the jurisdiction
of the copyright arbitration royalty panels, and therefore the
Librarian cannot ``proceed'' with the rate proposals. This
section therefore eliminates the provision.
However, the Committee notes 37 C.F.R. 251.63(b) of the
Copyright Office's rules which permits the Librarian to adopt
uncontested, settled rate proposals. No action taken under this
Act is intended to adversely affect the operation of that rule.
This section also eliminates as obsolete subsection (e)(2)
of Sec. 118, which required the Register of Copyrights to
submit a report to Congress in 1980 as to the extent of
voluntarily negotiated public broadcasting licenses.
Section 9.--Registration and infringement actions
This section amends section 411(b) of the Copyright Act,
which covers works that are being transmitted ``live'' at the
same time that they are being fixed in tangible form for the
first time. Currently, copyright owners must give the would-be
infringer at least a 10-day advance notice that a copyright is
being claimed in the work. When notice is given, an injunction
can be obtained to prevent the unauthorized use of the work.
This provision has proven problematic when applied to a
number of sporting events, especially elimination play-offs. In
many instances the teams and the times of the games are not
known 10 days in advance. Therefore, this notice provision is
amended to provide for notice of not less than 48 hours.
Section 10.--Copyright Office fees
The Copyright Fees and Technical Amendments Act of 1989
established a fee schedule for Copyright Office services which
could be adjusted in 1995 and every fifth year thereafter
according to changes in the Consumer Price Index.
Actual experience with the fee adjustment mechanism,
however, has highlighted certain problems that underscore the
need for reform. Because of the relatively low inflation of the
early 1990s, the change in the Consumer Price Index was not
great enough to justify incurring the costs associated with
publicizing and administering a new fee schedule. Therefore,
the Copyright Office did not publish a new fee schedule in
1995, and is required by the current statute to wait until 2000
to modify its fees.
However, it is not clear from the current wording of the
law whether, if the Copyright Office were to adopt a new fee
schedule in 2000, it could take into account the inflation of
the entire ten-year period since the last fee schedule was
adopted, 1990-2000, or whether it could only take into account
the inflation of the period 1995-2000. The fee schedule adopted
in 1989 is not based on a cost recovery model. Consequently,
merely adjusting fees based on rises in the Consumer Price
Index will not solve all of the problems. Therefore, subsection
(a) gives the Register the authority to set the basic fees.
Subsection (a) allows fees to be raised beginning in 1996
and in any subsequent year. Based on a study to determine the
costs incurred by the Copyright Office, the Register may
increase fees up to the reasonable costs incurred by the
Copyright Office plus a reasonable inflation adjustment to
account for future increases in costs. The fees shall be
rounded off to the nearest dollar, or, if the fee is less than
$12, to the nearest half-dollar. The fees must be fair and
equitable and give due consideration to the objectives of the
copyright system. This allows the Register to decide that fees
may be less than the costs of the services provided, if that
furthers the objectives of the copyright system.
If the Register wants to increase fees, he or she shall
submit the proposed fee schedule with the study and its
economic analysis to Congress. The fees proposed by the
Register may be instituted after the end of 120 days after the
schedule is submitted to the Congress unless, within that 120-
day period, a law is enacted stating in substance that the
Congress does not approve the schedule.
Subsection (b) of this section gives the Register of
Copyrights the discretion to invest funds from the Copyright
Office's prepaid fees (``Deposit Accounts'') that are not
needed to meet current demands for services in interest-bearing
securities in the United States Treasury, and to use the income
from such investments for necessary expenses of the Copyright
Office. The Copyright Office is currently engaged in developing
its new electronic registration, recordation and deposit
system, CORDS (Copyright Office Registration, Recordation and
Deposit System), and the Committee expects that the Copyright
Office will, where feasible, use the interest on deposit
account funds for the development and operation of CORDS.
Section 11.--Copyright arbitration royalty panels
Subsection (1) makes clear that the 1997 satellite carrier
rate adjustment is a CARP proceeding. That proceeding was left
out of section 801 when the Copyright Royalty Tribunal Reform
Act of 1993 was passed, because, at that time, the satellite
carrier compulsory license was set to expire in 1994 without
any further rate adjustment. With the passage of the Satellite
Home Viewer Act of 1994, the satellite carrier compulsory
license is extended to December 31, 1999, and the rate
adjustment proceeding which has been scheduled for 1997 needs
to be reflected in section 801.
Subsection (2) gives two concrete examples of the
procedural and evidentiary rulings the Librarian of Congress
may render related to CARP proceedings. They include the
authority to determine the amount and distribute the royalty
fees that are not in controversy, and the authority to reject
royalty claims that are untimely or do not establish the basis
for a claim as required by the Copyright Office's regulations.
By setting out these examples, the Committee does not intend to
abridge the authority of the Librarian to make other procedural
and evidentiary rulings that would apply to a CARP proceeding,
such as precontroversy discovery rulings.
Subsection (3) gives the Librarian of Congress the
authority to pay the CARP arbitrators directly according to a
signed agreement and any regulations that the Librarian may
adopt. Currently, the parties to an arbitration proceeding pay
the arbitrators.
Subsection (3) further provides that in distribution
proceedings, the payments made to the arbitrators by the
Librarian, as well as the costs of the Library and the
Copyright Office, come from the relevant royalty pool. In
ratemaking proceedings, the costs are paid by assessing the
parties to the proceeding, 50 percent from the copyright owners
and 50 percent from the copyright users. However, this
assessment of the arbitrators' costs may be modified by the
arbitrators if they find in their discretion that a different
assessment should apply.
Subsection (3) also clarifies the status of the
arbitrators. They are independent contractors acting on behalf
of the United States. The phrase ``acting on behalf of the
United States'' is intended to make clear that the laws
governing the conduct and standards of behavior of government
employees and those who deal with them in a professional
capacity apply to the CARP arbitrators.
Section 12--Digital audio recording devices and media
The Audio Home Recording Act of 1992 requires the Librarian
to determine by March 30th of each year whether there are any
controversies among the claimants in the distribution of
digital audio recording technology (DART) royalties. However,
DART royalty claimants file their claims, in person or by mail,
in January and February of each year. Because claims mailed in
February may not reach the Copyright Office until early March,
there is very little time for the Office to compile its
official claimant list and for the claimants to negotiate with
each other to determine whether they can settle their
differences before the March 30th deadline. The March 30th
deadline has proved to be impracticable. This section removes
the deadline, and gives the Librarian the flexibility to
reasonably set the length of the negotiation period in order to
promote settlements.
Section 13--Effect of pre-1978 distribution of recordings containing
musical compositions.
This section affirms that the distribution of phonorecords
to the public before January 1, 1978 did not constitute
publication of the musical composition embodied in that
phonorecord under the 1909 Copyright Act. It is intended to
restore the law to what it was before the decision of the Ninth
Circuit Court of Appeals in La Cienega Music Co. v. Z. Z. Top.
\2\
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\2\ 44 F.3d 813 (9th Cir.), cert. denied, 64 U.S.L.W. 3262 (Oct.
10, 1995).
---------------------------------------------------------------------------
Until that decision, it was the long-standing view of the
Copyright Office and the understanding of the music industry,
as reflected in their business practices, that the sale or
distribution of recordings to the public before January 1,
1978, did not constitute publication of the musical composition
embodied on the recording. This view was confirmed by the
Second Circuit Court of Appeals in Rosette v. Rainbo Record
Mfg. Corp. \3\
---------------------------------------------------------------------------
\3\ 354 F. Supp. 1183 (S.D.N.Y.), aff'd per curiam, 546 F.2d 461
(2d Cir. 1976).
---------------------------------------------------------------------------
The La Cienega decision has, therefore, placed a cloud over
the legal status of a large number of musical works recorded
and sold before January 1, 1978. Moreover, it has called into
question the long established practices of the Copyright
Office. It is the intent of this section to remove the cloud
and bring the law into conformity with the Second Circuit
opinion and Copyright Office practices.
Section 14--Conforming amendment
This section corrects a numbering mistake in the Digital
Performance Right in Sound Recordings Act of 1995.
Section 15--Effective dates.
All amendments to the Copyright Act included in this bill
take effect on the date of enactment of the legislation, with
the exception of Section 2, the satellite carrier provisions,
which are effective on the date of enactment of the Satellite
Home Viewer Act of 1994, October 18, 1994.
Agency Views
Library of Congress,
The Register of Copyrights,
Washington, DC, November 17, 1995.
Mr. Howard Coble,
Subcommittee on Courts and Intellectual Property, Committee on the
Judiciary, House of Representatives, Washington, DC.
Dear Mr. Coble: As you know, from my answer to your
question in the hearing on November 9th, I am extremely
concerned about the cloud hanging over the copyrights of
thousands of pre-1978 musical compositions. I am writing to you
now to solicit your support to clarify, through legislation,
the status of these songs. As I mentioned, last month the
Supreme Court denied a petition for certiorari in La Cienega
Music Co. v. Z.Z. Top, 44 F.3d 813 (1995) cert. denied, 64
U.S.L.W. 3262 (Oct. 10, 1995). The U.S. Court of Appeals for
the Ninth Circuit held on January 10, 1995, that selling
records constituted ``publication'' of the recorded musical
composition under the Copyright Act of 1909. The Ninth Circuit
also implicitly held that recordings were copies of the musical
compositions and that unless they bore the required copyright
notice, the musical compositions entered the public domain in
the United States--the exact wording of the court was ``his
compositions entered the public domain immediately upon the
sale of the recordings to the public.''
This position conflicts with the decision of the Second
Circuit in Rosette v. Rainbo Record Mfg. Corp., 354 F. Supp.
1183 (S.D.NY.), aff'd per curiam, 546 F.2d 461 (2d Cir. 1976)
that the sale of recordings did not constitute publication of
the musical compositions embodied on the recordings under the
1909 Act. The position of the Second Circuit agrees with the
established music practice. It also agrees with the long
standing practices of the Copyright Office.
For many years, the Copyright Office has espoused the view
that recordings sold before January 1, 1978, i.e., those that
were released under the 1909 Act, were not copies of the
musical compositions embodied on them, and therefore the
distribution of recordings did not constitute publication under
the federal copyright statute. Moreover, if by chance a
recording bore an appropriate copyright notice for the musical
composition embodied on it and registration for the music was
sought on this basis, registration was refused. The Office
would state that copies had to be visually perceptible, e.g.
sheet music copies, and that unless such copies had been sold,
placed on sale or offered to the public, registration for the
music as a published work was not possible. The Office would
suggest registration for the work as an unpublished work and
ask for the deposit of a lead sheet. See, for example, the
enclosed samples of our practices and our publications
(Compendium of Copyright Office Practices I (1975) and II
(1984); Copyright Office Circular 50, ``Copyright for Musical
Compositions'' and Circular 56, ``Copyright for Sound
Recordings'' (1974); and a form letter, FL 50C.)
In 1972 when sound recordings were added to the statute,
the law made it clear that phonorecords constituted copies of
only the sound recording--they were not copies of the musical
compositions embodied on them. Under the 1909 act all
copyrightable works were embodied in copies. The 1976 Act,
however, includes two separate forms of fixation--copies and
phonorecords. Moreover, in the 1976 Act a copyright notice was
only required on visually perceptible copies of works and on
phonorecords of sound recordings. Thus, there was no
requirement that a recording of a musical composition needed to
include a separate copyright notice for the music.
The November 6th Billboard article, ``Trade Scrambles to
Protect Copyrights: Court's Inaction Could Jeopardize Pre-78
Songs'' tells the story. The decision of the Ninth Circuit has
effectively cast a cloud over a number of musical compositions.
What is at stake here is whether or not to pay mechanical and
performance royalties, the validity of contracts and licenses
as well as the value of entire song catalogs.
Musical compositions, including classical music, were
generally recorded. Under the Ninth Circuit decision they would
be considered published and since most recordings would not
have contained a copyright notice for the musical compositions
contained in the recording, they would be considered in the
public domain. Copyright notices on recordings were usually for
liner notes, song lyrics, or album artwork and most likely
would not have contained the name of the copyright owner of the
music.
In any case, the Office refused registration for these
works as published works. Many of these works were instead
registered as unpublished works; as mentioned above, this was
what the Copyright Office suggested. Renewal registrations
based on these unpublished registrations may have been made.
Later published sheet music editions may have been registered,
and renewals based on these registration may also have been
made. Despite all of this, copyright for these works could now
be considered to be lost by publication of recordings at any
time before January 1, 1978.
It seems incongruous that at the time when Congress is
considering lengthening the copyright term for musical
compositions that we are faced with the possibility that many
of these works will be found to be in the public domain under
the logic of the Ninth Circuit.
I believe that the drafters of the 1909 law and also of the
1976 law did not intend that distribution of recordings would
place the musical compositions embodied in them in the public
domain. It is unfortunate that after years in which the law was
believed to be settled, this issue has once again been raised.
I was hoping the issue would be resolved by the Supreme Court.
Since that will not be the case and because these issues
present themselves daily to the Copyright Office as well as to
those in the music business, it would be very helpful if this
Congress could settle the question once and for all.
Enclosed is proposed language for a bill, which hopefully
could be added to the Satellite Home Viewer Act Correction bill
(H.R. 1861) or could be enacted with the extension of term bill
(H.R. 989); the proposal is a simple declaration that under the
1909 Act distribution of phonorecords did not publish the
musical compositions embodied in them.
Sincerely,
Marybeth Peters,
Register of Copyrights.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3 of rule XIII of the Rules of the
House of Representatives, changes in existing law made by the
bill, as reported, are shown as follows (existing law proposed
to be omitted is enclosed in black brackets, new matter is
printed in italic, existing law in which no change is proposed
is shown in roman):
SECTION 2 OF THE SATELLITE HOME VIEWER ACT OF 1994
SEC. 2. STATUTORY LICENSE FOR SATELLITE CARRIERS.
Section 119 of title 17, United States Code, is amended as
follows:
(1) * * *
* * * * * * *
(3) Subsection (b)(1)(B) is amended--
[(A) in clause (i) by striking ``12 cents''
and inserting ``17.5 cents per subscriber in
the case of superstations not subject to
syndicated exclusivity under the regulations of
the Federal Communications Commission, and 14
cents per subscriber in the case of
superstations subject to such syndicated
exclusivity''; and]
(A) in clause (i) by striking ``12 cents''
and inserting ``17.5 cents per subscriber in
the case of superstations that as retransmitted
by the satellite carrier include any program
which, if delivered by any cable system in the
United States, would be subject to the
syndicated exclusivity rules of the Federal
Communications Commission, and 14 cents per
subscriber in the case of superstations that
are syndex-proof as defined in section 258.2 of
title 37, Code of Federal Regulations; and''
* * * * * * *
[(4) Subsection (c) is amended--
[(A) in paragraph (1) by striking ``December
31, 1992,'';
[(B) in paragraph (2)--
[(i) in subparagraph (A) by striking
``July 1, 1991'' and inserting ``July
1, 1996''; and
[(ii) in subparagraph (D) by striking
``December 31, 1994'' and inserting
``December 31, 1999, or in accordance
with the terms of the agreement,
whichever is later''; and
[(C) in paragraph (3)--
[(i) in subparagraph (A) by striking
``December 31, 1991'' and inserting
``January 1, 1997'';
[(ii) by amending subparagraph (D) to
read as follows:
[``(D) Establishment of royalty fees.--In
determining royalty fees under this paragraph,
the Copyright Arbitration Panel shall establish
fees for the retransmission of network stations
and superstations that most clearly represent
the fair market value of secondary
transmissions. In determining the fair market
value, the Panel shall base its decision on
economic, competitive, and programming
information presented by the parties,
including--
[``(i) the competitive environment in
which such programming is distributed,
the cost for similar signals in similar
private and compulsory license
marketplaces, and any special features
and conditions of the retransmission
marketplace;
[``(ii) the economic impact of such
fees on copyright owners and satellite
carriers; and
[``(iii) the impact on the continued
availability of secondary transmissions
to the public.'';
[(iii) in subparagraph (E) by
striking ``60'' and inserting ``180'';
and
[(iv) in subparagraph (C)--
[(I) by striking ``, or until
December 31, 1994''; and
[(II) by inserting ``or July
1, 1997, whichever is later''
after ``section 802(g)''.]
(4) Subsection (c) is amended--
(A) in paragraph (1)--
(i) by striking ``until December 31,
1992,'';
(ii) by striking ``(2), (3) or (4)''
and inserting ``(2) or (3)''; and
(iii) by striking the second
sentence;
(B) in paragraph (2)--
(i) in subparagraph (A) by striking
``July 1, 1991'' and inserting ``July
1, 1996''; and
(ii) in subparagraph (D) by striking
``December 31, 1994'' and inserting
``December 31, 1999, or in accordance
with the terms of the agreement,
whichever is later''; and
(C) in paragraph (3)--
(i) in subparagraph (A) by striking
``December 31, 1991'' and inserting
``January 1, 1997'';
(ii) by amending subparagraph (B) to
read as follows:
``(B) Establishment of royalty fees.--In
determining royalty fees under this paragraph,
the copyright arbitration royalty panel
appointed under chapter 8 shall establish fees
for the retransmission of network stations and
superstations that most clearly represent the
fair market value of secondary transmissions.
In determining the fair market value, the panel
shall base its decision on economic,
competitive, and programming information
presented by the parties, including--
``(i) the competitive environment in
which such programming is distributed,
the cost of similar signals in similar
private and compulsory license
marketplaces, and any special features
and conditions of the retransmission
marketplace;
``(ii) the economic impact of such
fees on copyright owners and satellite
carriers; and
``(iii) the impact on the continued
availability of secondary transmissions
to the public.''; and
(iii) in subparagraph (C), by
inserting ``or July 1, 1997, whichever
is later'' after ``section 802(g)''.
(5) Subsection (a) is amended--
[(A) in paragraph (5)(C) by striking ``the
Satellite Home Viewer Act of 1988'' and
inserting ``this section''; and]
(A) in paragraph (5)(C) by striking ``the
date of the enactment of the Satellite Home
Viewer Act of 1988'' and inserting ``November
16, 1988''; and
* * * * * * *
----------
TITLE 17, UNITED STATES CODE
CHAPTER 1--SUBJECT MATTER AND SCOPE OF COPYRIGHT
* * * * * * *
Sec. 104A. Copyright in restored works
(a) * * *
* * * * * * *
(d) Remedies for Infringement of Restored Copyrights.--
(1) * * *
* * * * * * *
[(3) Existing derivative works.--(A) In the case of a
derivative work that is based upon a restored work and
is created--
[(i) before the date of the enactment of the
Uruguay Round Agreements Act, if the source
country of the derivative work is an eligible
country on such date, or
[(ii) before the date of adherence or
proclamation, if the source country of the
derivative work is not an eligible country on
such date of enactment, a reliance party may
continue to exploit that work for the duration
of the restored copyright if the reliance party
pays to the owner of the restored copyright
reasonable compensation for conduct which would
be subject to a remedy for infringement but for
the provisions of this paragraph.]
(3) Existing derivative works.--(A) In the case of a
derivative work that is based upon a restored work and
is created--
(i) before the date of the enactment of the
Uruguay Round Agreements Act, if the source
country of the restored work is an eligible
country on such date, or
(ii) before the date of adherence or
proclamation, if the source country of the
restored work is not an eligible country on
such date of enactment,a reliance party may
continue to exploit that derivative work for
the duration of the restored copyright if the
reliance party pays to the owner of the
restored copyright reasonable compensation for
conduct which would be subject to a remedy for
infringement but for the provisions of this
paragraph.
* * * * * * *
(e) Notices of Intent To Enforce a Restored Copyright.--
(1) Notices of intent filed with the copyright
office--
(A) * * *
(B)(i) * * *
(ii) Not less than 1 list containing all
notices of intent to enforce shall be
maintained in the Public Information Office of
the Copyright Office and shall be available for
public inspection and copying during regular
business hours pursuant to sections 705 and
708. [Such list shall also be published in the
Federal Register on an annual basis for the
first 2 years after the applicable date of
restoration.]
* * * * * * *
(h) Definitions.--For purposes of this section and section
109(a):
(1) * * *
[(2) The ``date of restoration'' of a restored
copyright is the later of--
[(A) the date on which the Agreement on
Trade-Related Aspects of Intellectual Property
referred to in section 101(d)(15) of the
Uruguay Round Agreements Act enters into force
with respect to the United States, if the
source country of the restored work is a nation
adhering to the Berne Convention or a WTO
member country on such date; or
[(B) the date of adherence or proclamation,
in the case of any other source country of the
restored work.
[(3) The term ``eligible country'' means a nation,
other than the United States, that is a WTO member
country, adheres to the Berne Convention, or is subject
to a proclamation under section 104A(g).]
(2) The ``date of restoration'' of a restored
copyright is the later of--
(A) January 1, 1996, the date on which the
Agreement on Trade-Related Aspects of
Intellectual Property referred to in section
101(d)(15) of the Uruguay Round Agreements Act
enters into force with respect to the United
States, if the source country of the restored
work is a nation adhering to the Berne
Convention or a WTO member country on such
date, or
(B) the date of adherence or proclamation, in
the case of any other source country of the
restored work.
(3) The term ``eligible country'' means a nation,
other than the United States, that, after the date of
the enactment of the Uruguay Round Agreements Act--
(A) becomes a WTO member,
(B) is or becomes a member of the Berne
Convention, or
(C) becomes subject to a proclamation under
subsection (g).
* * * * * * *
Sec. 114. Scope of exclusive rights in sound recordings
(a) * * *
* * * * * * *
(f) Licenses for Nonexempt Subscription Transmissions.--
(1) No later than 30 days after the enactment of the
Digital Performance Right in Sound Recordings Act of
1995, the Librarian of Congress shall cause notice to
be published in the Federal Register of the initiation
of voluntary negotiation proceedings for the purpose of
determining reasonable terms and rates of royalty
payments for the activities specified by subsection
(d)(2) of this section during the period beginning on
the effective date of such Act and ending on December
31, 2000, or ending 30 days after the Librarian issues
and publishes in the Federal Register an order adopting
or rejecting the report of the copyright arbitration
royalty panel, if such panel is convened. Such terms
and rates shall distinguish among the different types
of digital audio transmission services then in
operation. Any copyright owners of sound recordings or
any entities performing sound recordings affected by
this section may submit to the Librarian of Congress
licenses covering such activities with respect to such
sound recordings. The parties to each negotiation
proceeding shall bear their own costs.
(2) In the absence of license agreements negotiated
under paragraph (1), during the 60-day period
commencing 6 months after publication of the notice
specified in paragraph (1), and upon the filing of a
petition in accordance with section 803(a)(1), the
Librarian of Congress shall, pursuant to chapter 8,
convene a copyright arbitration royalty panel to
determine [and publish in the Federal Register] a
schedule of rates and terms which, subject to paragraph
(3), shall be binding on all copyright owners of sound
recordings and entities performing sound recordings. In
addition to the objectives set forth in section
801(b)(1), in establishing such rates and terms, the
copyright arbitration royalty panel may consider the
rates and terms for comparable types of digital audio
transmission services and comparable circumstances
under voluntary license agreements negotiated as
provided in paragraph (1). The Librarian of Congress
shall also establish requirements by which copyright
owners may receive reasonable notice of the use of
their sound recordings under this section, and under
which records of such use shall be kept and made
available by entities performing sound recordings.
* * * * * * *
Sec. 115. Scope of exclusive rights in nondramatic musical works:
Compulsory license for making and distributing
phonorecords
In the case of nondramatic musical works, the exclusive
rights provided by clauses (1) and (3) of section 106, to make
and to distribute phonorecords of such works, are subject to
compulsory licensing under the conditions specified by this
section.
(a) * * *
* * * * * * *
(c) Royalty Payable Under Compulsory License.--
(1) * * *
* * * * * * *
(3)(A) * * *
* * * * * * *
(D) In the absence of license agreements negotiated
under subparagraphs (B) and (C), upon the filing of a
petition in accordance with section 803(a)(1), the
Librarian of Congress shall, pursuant to chapter 8,
convene a copyright arbitration royalty panel to
determine [and publish in the Federal Register] a
schedule of rates and terms which, subject to
subparagraph (E), shall be binding on all copyright
owners of nondramatic musical works and persons
entitled to obtain a compulsory license under
subsection (a)(1) during the period beginning January
1, 1998, and ending on the effective date of any new
terms and rates established pursuant to subparagraph
(C), (D) or (F), or such other date (regarding digital
phonorecord deliveries) as may be determined pursuant
to subparagraphs (B) and (C). Such terms and rates
shall distinguish between (i) digital phonorecord
deliveries where the reproduction or distribution of a
phonorecord is incidental to the transmission which
constitutes the digital phonorecord delivery, and (ii)
digital phonorecord deliveries in general. In addition
to the objectives set forth in section 801(b)(1), in
establishing such rates and terms, the copyright
arbitration royalty panel may consider rates and terms
under voluntary license agreements negotiated as
provided in subparagraphs (B) and (C). The royalty
rates payable for a compulsory license for a digital
phonorecord delivery under this section shall be
established de novo and no precedential effect shall be
given to the amount of the royalty payable by a
compulsory licensee for digital phonorecord deliveries
on or before December 31, 1997. The Librarian of
Congress shall also establish requirements by which
copyright owners may receive reasonable notice of the
use of their works under this section, and under which
records of such use shall be kept and made available by
persons making digital phonorecord deliveries.
* * * * * * *
Sec. 116. Negotiated licenses for public performances by means of coin-
operated phonorecord players
(a) * * *
(b) Negotiated Licenses.--
(1) * * *
[(2) Arbitration.--Parties to such a negotiation,
within such time as may be specified by the Librarian
of Congress by regulation, may determine the result of
the negotiation by arbitration. Such arbitration shall
be governed by the provisions of title 9, to the extent
such title is not inconsistent with this section. The
parties shall give notice to the Librarian of Congress
of any determination reached by arbitration and any
such determination shall, as between the parties to the
arbitration, be dispositive of the issues to which it
relates.]
(2) Arbitration.--Parties not subject to such a
negotiation may determine the result of the negotiation
by arbitration in accordance with the provisions of
chapter 8.
* * * * * * *
(d) Definitions.--As used in this section, the following
terms mean the following:
(1) A ``coin-operated phonorecord player'' is a
machine or device that--
(A) is employed solely for the performance of
nondramatic musical works by means of
phonorecords upon being activated by the
insertion of coins, currency, tokens, or other
monetary units or their equivalent;
(B) is located in an establishment making no
direct or indirect charge for admission;
(C) is accompanied by a list which is
comprised of the titles of all the musical
works available for performance on it, and is
affixed to the phonorecord player or posted in
the establishment in a prominent position where
it can be readily examined by the public; and
(D) affords a choice of works available for
performance and permits the choice to be made
by the patrons of the establishment in which it
is located.
(2) An ``operator'' is any person who, alone or
jointly with others--
(A) owns a coin-operated phonorecord player;
(B) has the power to make a coin-operated
phonorecord player available for placement in
an establishment for purposes of public
performance; or
(C) has the power to exercise primary control
over the selection of the musical works made
available for public performance on a coin-
operated phonorecord player.
Sec. 117. Limitations on exclusive rights: Computer programs
[Notwithstanding] (a) Making of Additional Copy or Adaptation
by Owner of Copy.--Notwithstanding the provisions of section
106, it is not an infringement for the owner of a copy of a
computer program to make or authorize the making of another
copy or adaptation of that computer program provided:
(1) that such a new copy or adaptation is created as
an essential step in the utilization of the computer
program in conjunction with a machine and that it is
used in no other manner, or
(2) that such new copy or adaptation is for archival
purposes only and that all archival copies are
destroyed in the event that continued possession of the
computer program should cease to be rightful.
[Any exact] (b) Lease, Sale, or Other Transfer of Additional
Copy or Adaptation.--Any exact copies prepared in accordance
with the provisions of this section may be leased, sold, or
otherwise transferred, along with the copy from which such
copies were prepared, only as part of the lease, sale, or other
transfer of all rights in the program. Adaptations so prepared
may be transferred only with the authorization of the copyright
owner.
(c) Machine Maintenance or Repair.--Notwithstanding the
provisions of section 106, it is not an infringement for the
owner or lessee of a machine to make or authorize the making of
a copy of a computer program if such copy is made solely by
virtue of the activation of a machine that lawfully contains an
authorized copy of the computer program, for purposes only of
maintenance or repair of that machine, provided that--
(1) such new copy is used in no other manner and is
destroyed immediately after the maintenance or repair
is completed, and
(2) with respect to any computer program or part
thereof that is not necessary for that machine to be
activated, such program or part thereof is not accessed
or used other than to make such new copy by virtue of
the activation of the machine.
(d) Definitions.--For purposes of this section--
(1) the term ``maintenance'' of a machine means
servicing the machine in order to make it work in
accordance with its original specifications and any
changes to those specifications authorized for that
machine; and
(2) the term ``repair'' of a machine means restoring
it to the state of working in accordance with its
original specifications and any changes to those
specifications authorized for that machine.
Sec. 118. Scope of exclusive rights: Use of certain works in connection
with noncommercial broadcasting
(a) * * *
(b) Notwithstanding any provision of the antitrust laws, any
owners of copyright in published nondramatic musical works and
published pictorial, graphic, and sculptural works and any
public broadcasting entities, respectively, may negotiate and
agree upon the terms and rates of royalty payments and the
proportionate division of fees paid among various copyright
owners, and may designate common agents to negotiate, agree to,
pay, or receive payments.
[(1) Any owner of copyright in a work specified in
this subsection or any public broadcasting entity may
submit to the Librarian of Congress proposed licenses
covering such activities with respect to such works.
The Librarian of Congress shall proceed on the basis of
the proposals submitted to it as well as any other
relevant information. The Librarian of Congress shall
permit any interested party to submit information
relevant to such proceedings.]
[(2)] (1) License agreements, voluntarily negotiated
at any time between one or more copyright owners and
one or more public broadcasting entities shall be given
effect in lieu of any determination by the Librarian of
Congress: Provided, That copies of such agreements are
filed in the Copyright Office within thirty days of
execution in accordance with regulations that the
Register of Copyrights shall prescribe.
[(3)] (2) In the absence of license agreements
negotiated under paragraph [(2)] (1), the Librarian of
Congress shall, pursuant to chapter 8, convene a
copyright arbitration royalty panel to determine and
publish in the Federal Register a schedule of rates and
terms which, subject to paragraph [(2)] (1), 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 Librarian of Congress. In
establishing such rates and terms the copyright
arbitration royalty panel may consider the rates for
comparable circumstances under voluntary license
agreements negotiated as provided in paragraph [(2)]
(1). The Librarian of Congress shall also establish
requirements by which copyright owners may receive
reasonable notice of the use of their works under this
section, and under which records of such use shall be
kept by public broadcasting entities.
* * * * * * *
[(e) Except as expressly provided in this subsection, this
section shall have no applicability to works other than those
specified in subsection (b).
[(1) Owners of copyright in nondramatic literary
works and public broadcasting entities may, during the
course of voluntary negotiations, agree among
themselves, respectively, as to the terms and rates of
royalty payments without liability under the antitrust
laws. Any such terms and rates of royalty payments
shall be effective upon filing in the Copyright Office,
in accordance with regulations that the Register of
Copyrights shall prescribe.
[(2) On January 3, 1980, the Register of Copyrights,
after consulting with authors and other owners of
copyright in nondramatic literary works and their
representatives, and with public broadcasting entities
and their representatives, shall submit to the Congress
a report setting forth the extent to which voluntary
licensing arrangements have been reached with respect
to the use of nondramatic literary works by such
broadcast stations. The report should also describe any
problems that may have arisen, and present legislative
or other recommendations, if warranted.]
(e)(1) Except as expressly provided in this subsection, this
section shall not apply to works other than those specified in
subsection (b).
(2) Owners of copyright in nondramatic literary works and
public broadcasting entities may, during the course of
voluntary negotiations, agree among themselves, respectively,
as to the terms and rates of royalty payments without liability
under the antitrust laws. Any such terms and rates of royalty
payments shall be effective upon being filed in the Copyright
Office, in accordance with regulations that the Register of
Copyrights shall prescribe.
* * * * * * *
CHAPTER 3--DURATION OF COPYRIGHT
* * * * * * *
Sec. 303. Duration of copyright: Works created but not published or
copyrighted before January 1, 1978
(a) Copyright in a work created before January 1, 1978, but
not theretofore in the public domain or copyrighted, subsists
from January 1, 1978, and endures for the term provided by
section 302. In no case, however, shall the term of copyright
in such a work expire before December 31, 2002; and, if the
work is published on or before December 31, 2002, the term of
copyright shall not expire before December 31, 2027.
(b) The distribution before January 1, 1978, of a phonorecord
shall not for any purpose constitute a publication of the
musical work embodied therein.
* * * * * * *
CHAPTER 4--COPYRIGHT NOTICE, DEPOSIT, AND REGISTRATION
* * * * * * *
Sec. 411. Registration and infringement actions
(a) * * *
(b) In the case of a work consisting of sounds, images, or
both, the first fixation of which is made simultaneously with
its transmission, the copyright owner may, either before or
after such fixation takes place, institute an action for
infringement under section 501, fully subject to the remedies
provided by sections 502 through 506 and sections 509 and 510,
if, in accordance with requirements that the Register of
Copyrights shall prescribe by regulation, the copyright owner--
[(1) serves notice upon the infringer, not less than
ten or more than thirty days before such fixation,
identifying the work and the specific time and source
of its first transmission, and declaring an intention
to secure copyright in the work; and]
(1) serves notice upon the infringer, not less than
48 hours before such fixation, identifying the work and
the specific time and source of its first transmission,
and declaring an intention to secure copyright in the
work; and
* * * * * * *
CHAPTER 7--COPYRIGHT OFFICE
* * * * * * *
Sec. 708. Copyright Office fees
(a) * * *
[(b) In calendar year 1995 and in each subsequent fifth
calendar year, the Register of Copyrights, by regulation, may
increase the fees specified in subsection (a) by the percent
change in the annual average, for the preceding calendar year,
of the Consumer Price Index published by the Bureau of Labor
Statistics, over the annual average of the Consumer Price Index
for the fifth calendar year preceding the calendar year in
which such increase is authorized.]
(b) In calendar year 1996 and in any subsequent calendar
year, the Register of Copyrights, by regulation, may increase
the fees specified in subsection (a) in the following manner:
(1) The Register shall conduct a study of the costs
incurred by the Copyright Office for the registration
of claims, the recordation of documents, and the
provision of services. The study shall also consider
the timing of any increase in fees and the authority to
use such fees consistent with the budget.
(2) The Register shall have discretion to increase
fees up to the reasonable costs incurred by the
Copyright Office for the services described in
paragraph (1) plus a reasonable inflation adjustment to
account for any estimated increase in costs.
(3) Any newly established fee based on paragraph (2)
shall be rounded off to the nearest dollar, or for a
fee less than $12, rounded off to the nearest 50 cents.
(4) The fees shall be fair and equitable and give due
consideration to the objectives of the copyright
system.
(5) If upon completion of the study, the Register
determines that the fees should be increased, the
Register shall prepare a proposed fee schedule and
submit the schedule with the accompanying economic
analysis to the Congress. The fees proposed by the
Register may be instituted after the end of 120 days
after the schedule is submitted to the Congress unless,
within that 120-day period, a law is enacted stating in
substance that the Congress does not approve the
schedule.
* * * * * * *
[(d) All fees received under this section shall be deposited
by the Register of Copyrights in the Treasury of the United
States and shall be credited to the appropriation for necessary
expenses of the Copyright Office. The Register may, in
accordance with regulations that he or she shall prescribe,
refund any sum paid by mistake or in excess of the fee required
by this section.]
(d)(1) Except as provided in paragraph (2), all fees received
under this section shall be deposited by the Register of
Copyrights in the Treasury of the United States and shall be
credited to the appropriations for necessary expenses of the
Copyright Office. Such fees that are collected shall remain
available until expended. The Register may, in accordance with
regulations that he or she shall prescribe, refund any sum paid
by mistake or in excess of the fee required by this section.
(2) In the case of fees deposited against future services,
the Register of Copyrights shall request the Secretary of the
Treasury to invest in interest-bearing securities in the United
States Treasury any portion of the fees that, as determined by
the Register, is not required to meet current deposit account
demands. Funds shall be invested in securities that permit
funds to be available to the Copyright Office at all times if
they are determined to be necessary to meet current deposit
account demands. Such investments shall be in public debt
securities with maturities suitable to the needs of the fund,
as determined by the Register of Copyrights, and bearing
interest at rates determined by the Secretary of the Treasury,
taking into consideration current market yields on outstanding
marketable obligations of the United States of comparable
maturities.
(3) The income on such investments shall be deposited in the
Treasury of the United States and shall be credited to the
appropriations for necessary expenses of the Copyright Office.
* * * * * * *
CHAPTER 8--COPYRIGHT ARBITRATION ROYALTY PANELS
Sec. 801. Copyright arbitration royalty panels: Establishment and
purpose
(a) * * *
(b) Purposes.--Subject to the provisions of this chapter, the
purposes of the copyright arbitration royalty panels shall be--
(1) to make determinations concerning the adjustment
of reasonable copyright royalty rates as provided in
sections 114, 115, [and 116] 116, and 119, and to make
determinations as to reasonable terms and rates of
royalty payments as provided in section 118. The rates
applicable under sections 114, 115, and 116 shall be
calculated to achieve the following objectives:
(A) * * *
* * * * * * *
(c) Rulings.--The Librarian of Congress, upon the
recommendation of the Register of Copyrights, may, before a
copyright arbitration royalty panel is convened, make any
necessary procedural or evidentiary rulings that would apply to
the proceedings conducted by such panel, including--
(1) authorizing the distribution of those royalty
fees collected under sections 111, 119, and 1005 that
the Librarian has found are not subject to controversy;
and
(2) accepting or rejecting royalty claims filed under
sections 111, 119, and 1007 on the basis of timeliness
or the failure to establish the basis for a claim.
[(d) Administrative Support of Copyright Arbitration Royalty
Panels.--The Library of Congress, upon the recommendation of
the Register of Copyrights, shall provide the copyright
arbitration royalty panels with the necessary administrative
services related to proceedings under this chapter.]
(d) Support and Reimbursement of Arbitration Panels.--The
Librarian of Congress, upon the recommendation of the Register
of Copyrights, shall provide the copyright arbitration royalty
panels with the necessary administrative services related to
proceedings under this chapter, and shall reimburse the
arbitrators at such intervals and in such manner as the
Librarian shall provide by regulation. Each such arbitrator is
an independent contractor acting on behalf of the United
States, and shall be paid pursuant to a signed agreement
between the Library of Congress and the arbitrator. Payments to
the arbitrators shall be considered costs incurred by the
Library of Congress and the Copyright Office for purposes of
section 802(h)(1).
Sec. 802. Membership and proceedings of copyright arbitration royalty
panels
(a) * * *
* * * * * * *
(h) Administrative Matters.--
(1) [Deduction of costs from royalty fees.--]
Deduction of costs of library of congress and copyright
office from royalty fees.--The Librarian of Congress
and the Register of Copyrights may, to the extent not
otherwise provided under this title, deduct from
royalty fees deposited or collected under this title
the reasonable costs incurred by the Library of
Congress and the Copyright Office to support
distribution proceedings under this chapter. Such
deduction may be made before the fees are distributed
to any copyright claimants. [If no royalty pool exists
from which their costs can be deducted, the Librarian
of Congress and the Copyright Office may assess their
reasonable costs directly to the parties to the most
recent relevant arbitration proceeding.] In ratemaking
proceedings, the Librarian of Congress and the
Copyright Office may assess their reasonable costs
directly to the parties to the most recent relevant
arbitration proceeding, 50 percent of the costs to the
parties who would receive royalties from the royalty
rate adopted in the proceeding and 50 percent of the
costs to the parties who would pay the royalty rate so
adopted, subject to the discretion of the arbitrators
to assess costs under subsection (c).
* * * * * * *
CHAPTER 10--DIGITAL AUDIO RECORDING DEVICES AND MEDIA
* * * * * * *
SUBCHAPTER C--ROYALTY PAYMENTS
* * * * * * *
Sec. 1007. Procedures for distributing royalty payments
(a) * * *
(b) Distribution of Payments in the Absence of a Dispute.--
[Within 30 days after] After the period established for the
filing of claims under subsection (a), in each year after the
year in which this section takes effect, the Librarian of
Congress shall determine whether there exists a controversy
concerning the distribution of royalty payments under section
1006(c). If the Librarian of Congress determines 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
such section (a), after deducting its reasonable administrative
costs under this section.
* * * * * * *
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SECTION 4 OF THE DIGITAL PERFORMANCE RIGHT IN SOUND RECORDINGS ACT OF
1995
SEC. 4. MECHANICAL ROYALTIES IN DIGITAL PHONORECORD DELIVERIES.
Section 115 of title 17, United States Code, is amended--
(1) * * *
* * * * * * *
[(5)] (4) by adding after subsection (c) the
following:
``(d) Definition.--As used in this section, the following
term has the following meaning: A `digital phonorecord
delivery' is each individual delivery of a phonorecord by
digital transmission of a sound recording which results in a
specifically identifiable reproduction by or for any
transmission recipient of a phonorecord of that sound
recording, regardless of whether the digital transmission is
also a public performance of the sound recording or any
nondramatic musical work embodied therein. A digital
phonorecord delivery does not result from a real-time, non-
interactive subscription transmission of a sound recording
where no reproduction of the sound recording or the musical
work embodied therein is made from the inception of the
transmission through to its receipt by the transmission
recipient in order to make the sound recording audible.''.