[House Report 105-325]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    105-325
_______________________________________________________________________


 
         TREATMENT OF PRE-1978 PUBLICATION OF SOUND RECORDINGS

_______________________________________________________________________


October 21, 1997.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Coble, from the Committee on the Judiciary, submitted the following

                              R E P O R T

                        [To accompany H.R. 1967]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 1967) to amend title 17, United States Code, to 
provide that the distribution before January 1, 1978, of a 
phonorecord shall not for any purpose constitute a publication 
of the musical work embodied therein, having considered the 
same, reports favorably thereon without amendment and 
recommends that the bill do pass.


                           TABLE OF CONTENTS

                                                                 Page
Purpose and Summary........................................           2
Background and Need for Legislation........................           2
Hearings...................................................           3
Committee Consideration....................................           3
Committee Oversight Findings...............................           3
Committee on Government Reform and Oversight Findings......           3
New Budget Authority and Tax Expenditures..................           3
Congressional Budget Office Estimate.......................           3
Inflationary Impact Statement..............................           4
Section-by-Section Analysis and Discussion.................           5
Agency Views...............................................           5
Changes in Existing Law Made by the Bill, as Reported......           6

                          Purpose and Summary

    H.R. 1967 resolves problems created by recent judicial 
interpretations of provisions of the 1909 Copyright Act. It 
makes clear that the distribution of a musical record, disc or 
tape before 1978 did not constitute a publication of the 
musical composition(s) embodied in that disc or tape.

                Background and Need for the Legislation

    Under the 1909 Copyright Act, a copyright owner had to 
secure her rights to her work once it was ``published'' by 
providing statutory notice to the public that the work was 
copyrighted. In Rosette v. Rainbo Mfg. Corp., 546 F. 2d 461 (2d 
Cir. 1976), the United States Court of Appeals for the Second 
Circuit held that the sale of a phonorecord did not a 
``publication'' of the work(s) contained within the phonorecord 
for purposes of the 1909 Copyright Act, because a record is not 
a ``copy'' of the works contained within it (citing the Supreme 
Court's ruling in White-Smith Music Pub. Co. v. Apollo Co., 209 
U.S. 1 (1908), which held that a piano roll is not a ``copy'' 
of the underlying composition.) Based upon the Court's holding 
that the distribution of a phonorecord did not constitute a 
copy of any work contained therein, and on the Copyright 
Office's advice, songwriters and music publishers did not 
attempt to assure that the cover of a phonorecord which 
contained one of their works had printed upon it a statutory 
notice of ownership of the copyrighted work(s) contained within 
the phonorecord.
    As a practical matter, industry practice would make it very 
difficult for songwriters and music publishers to ensure that a 
phonorecord cover contain a copyright notice regarding works 
contained within the recording, since these owners do not own 
the copyright in the phonorecord itself, and therefore do not 
control the production and publishing of the cover. Usually, a 
recording label company owns the copyright in the distribution 
(and digital performance) of the phonorecord itself, while a 
songwriter or music publisher owns the copyright to a work or 
works contained within any one recording.
    The Copyright Office interpreted the 1909 Act, based upon 
the above practical considerations and legal interpretations, 
to mean that the release of a phonorecord was not a ``copy'' 
for purposes of the Act, and thus advised songwriters and music 
publishers that there was no need to comply with the 1909 
notification requirements for phonorecord releases. This 
interpretation was affirmed in 1976 by Rosette.
    The United States Court of Appeals for the Ninth Circuit, 
in La Cienega Music Co. v. ZZ Top, 44 F. 3d 813 (9th Cir. 
1995), rejected the Rosette interpretation of the 1909 Act and 
held that the selling of a phonorecord does constitute a 
``publication'' of any of the underlying works, requiring 
compliance with the notice requirements. This decision 
effectively places all pre-1978 works (the 1909 Act applies to 
pre-1978 works) under a cloud since, in reliance on the 1976 
decision and Copyright Office advice, most recordings of 
musical works at that time were released without a copyright 
notice for works contained within.
    H.R. 1967 reverses the La Cienega decision and affirms in 
the Copyright Act that a phonorecord released before 1978 did 
not constitute a ``publication'' under the 1909 Copyright Act.

                                Hearings

    The Committee's Subcommittee on Courts and Intellectual 
Property held a field hearing on H.R. 1967 in Nashville, 
Tennessee, on June 27, 1997. Testimony on this issue was 
received from Paul Williams, songwriter, on behalf of the 
American Society of Composers, Authors and Publishers; Ed 
Murphy, President, National Music Publishers Association; 
George David Weiss, Songwriter, Songwriters Guild of America; 
and Frances Preston, President and Chief Executive Officer, 
Broadcast Music Incorporated.

                        Committee Consideration

    On September 30, 1997, the Subcommittee held a markup on 
H.R. 1967. No amendments were offered and the bill was 
favorably reported, by voice vote, a quorum being present, to 
the full Committee. On October 7, 1997, the Committee held a 
markup on H.R. 1967. No amendments were offered and the bill 
was favorably reported, by voice vote, a quorum being present, 
to the House.

                      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. 1967, 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, May 16, 1997.
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. 1967, a bill to 
amend title 17, United States Code, to provide that the 
distribution before January 1, 1978, of a phonorecord shall not 
for any purpose constitute a publication of the musical work 
embodied therein.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Rachel 
Forward, who can be reached at 226-2860.
            Sincerely,

                                           June E. O'Neill, Director.  
    Enclosure.

H.R. 1967--Title 17, United States Code, to provide that the 
        distribution before January 1, 1978, of a phonorecord shall not 
        for any purpose constitute a publication of the musical work 
        embodied therein
    CBO estimates that enacting H.R. 1967 would have no 
significant impact on the federal budget. Because H.R. 1967 
would not affect direct spending or receipts, pay-as-you-go 
procedures would not apply. In addition H.R. 1967 contains no 
private-sector or intergovernmental mandates as defined in the 
Unfunded Mandates Reform Act of 1995 and would not affect the 
budgets of state, local, or tribal governments.
    H.R. 1967 would affirm the Copyright Office's current 
policy that the distribution of a phonorecord before 1978 does 
not constitute a publication of the underlying musical 
composition. That policy is consistent with a 1976 ruling from 
the Second U.S. Circuit Court of Appeals (Rosette v. Rainbo 
Manufacturing Corporation). In 1995 the Ninth U.S. Circuit 
Court of Appeals issued a contrary decision (La Cienega Music 
Co. v. ZZ Top), which held that pre-1978 musical compositions 
distributed on phonorecords constitute published works and must 
bear the required copyright notice to avoid becoming part of 
the public domain. Because the bill would confirm the Copyright 
Office's treatment of pre-1978 musical compositions, enacting 
H.R. 1967 would not significantly affect the workload or costs 
of the office.
    The CBO staff contact for this estimate is Rachel Forward, 
who can be reach at 226-2860. The estimate was approved by 
Robert A. Sunshine, Deputy 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. 
1967 will have no significant inflationary impact on prices and 
costs in the national economy.

                      Section-by-Section Analysis

   Section 1.--Treatment of Pre-1978 Publication of Sound Recordings

    This section affirms that the distribution of a phonorecord 
to the public before January 1, 1978 did not constitute 
publication of a 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.\1\
---------------------------------------------------------------------------
    \1\ 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 a recording to the public before January 1, 
1978, did not constitute publication of the musical 
composition(s) embodied in the recording. This view was 
confirmed by the Second Circuit Court of Appeals in Rosette v. 
Rainbo Record Mfg. Corp.\2\
---------------------------------------------------------------------------
    \2\ 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 interpretation 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 2.--Effective Dates

    All amendments to the Copyright Act included in this bill 
take effect on the date of enactment of the legislation.

                              Agency Views

                        U.S.Department of Commerce,
                             Office of the General Counsel,
                                                    Washington, DC.
Hon. Henry J. Hyde, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: I am writing to express the 
Administration's support for H.R. 1967, copyright legislation 
scheduled for consideration by your Committee.
    We strongly support legislation to remove a cloud over the 
copyright status of thousands of musical works embodied in 
phonorecords distributed before 1978. In the case of La Cienega 
Music Co. v. ZZ Top, 53 F.3d 950 (9th Cir. 1995), cert. denied, 
116 S.Ct. 331 (1995), the Ninth Circuit held that the 
publication of a phonorecord published the underlying musical 
work, thereby upsetting years of business practices based on 
what was believed to be settled law. Under pre-1978 copyright 
law, it was widely accepted that the publication of a 
phonorecord did not publish the music embodied in that 
phonorecord. By holding that this was a publication of a 
musical work, the La Cienega decision casts doubt over the 
copyright status of these works because the phonorecords in 
which they were embodied did not include the notice of 
copyright required under the 1909 Copyright Act to secure 
Federal copyright protection. Enactment of H.R. 1967 would 
reverse the Ninth Circuit's La Cienega decision, thereby 
ensuring the continued copyright protection of these valuable 
musical works, estimated by industry to generate $1.2 billion 
in annual revenues.
    We urge the Committee to move promptly to report this bill.
    The Office of Management and Budget advises that from the 
standpoint of the Administration's program, there is no 
objection to the presentation of this report for the 
consideration of the Committee.
            Sincerely,
                                         Kathryn R. Lunney,
                                           Deputy General Counsel  

H.L.C.

         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 (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

              SECTION 303 OF TITLE 17, UNITED STATES CODE

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.

                                
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