[Federal Register Volume 61, Number 232 (Monday, December 2, 1996)]
[Rules and Regulations]
[Pages 63715-63718]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30458]


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LIBRARY OF CONGRESS

Copyright Office

37 CFR Parts 251, 252, 257, and 259

[Docket No. RM 94-1A]


Copyright Arbitration Royalty Panels; Rules and Regulations

AGENCY: Copyright Office, Library of Congress.

ACTION: Technical amendments.

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SUMMARY: On December 7, 1994, the Copyright Office of the Library of 
Congress published final regulations governing the administration of 
royalty fee distribution proceedings and royalty rate adjustment 
proceedings for the statutory licenses. Over the past eighteen months, 
the Office tested these rules and identified areas which required minor 
adjustments or clarification. This notice makes non-substantive 
technical amendments to correct the identified problems.

EFFECTIVE DATE: January 2, 1997.

FOR FURTHER INFORMATION CONTACT: Marilyn J. Kretsinger, Acting General 
Counsel, or Tanya M. Sandros, CARP Specialist, Copyright Arbitration 
Royalty Panel, P.O. Box 70977, Southwest Station, Washington, D.C. 
20024. Telephone: (202) 707-8380. Telefax: (202) 707-8366.

SUPPLEMENTARY INFORMATION: The Copyright Office (``Office'') of the 
Library of Congress issued the current regulations, see 37 CFR chapter 
II, subchapter B, governing the Copyright Arbitration Royalty Panels 
(``CARP'') after an extensive rulemaking which began with a notice of 
proposed rulemaking, 59 FR 2550 (January 18, 1994), and concluded with 
the publication of the final regulations on December 7, 1994. 59 FR 
63025 (December 7, 1994). During 1995 and 1996, these rules were used 
to conduct a CARP proceeding to determine the distribution of the 1990, 
1991, and 1992 cable royalties; to initiate a second CARP proceeding to 
determine the distribution of the 1992, 1993, and 1994 digital audio 
recording technology (DART) royalties in the Musical Works Funds; and 
to set the schedule for four rate setting proceedings.
    In using the CARP rules to administer these proceedings, the Office 
identified some minor problems with the application of the current 
rules, which these non-substantive technical amendments correct. The 
amendments clarify ambiguous sections, harmonize discordant rules, and 
streamline the process, when possible, based on the experience gleaned 
over the past eighteen months.

Official Address

    During the course of a CARP proceeding, interested parties file 
pleadings with the Copyright Office and the CARP. Although many of 
these pleadings are filed with the Copyright Office prior to the 
initiation of the CARP, the regulations do not instruct the parties 
where to file the pleading at the Copyright Office, if hand delivered. 
Therefore, Sec. 251.1 is amended to address this omission by adding the 
official address of the Office of the Copyright General Counsel.

List of Arbitrators

    The Librarian of Congress selects arbitrators for a CARP from a 
list of names generated from the nominations submitted to him by at 
least three professional arbitration associations. Section 251.3(a) 
allows the arbitration associations to submit new names each year and 
Sec. 251.3(b) requires the Librarian to publish a list of qualified 
nominees after January 1 of each year.
    The annual solicitation of new names from at least three 
arbitration associations and the review of the financial disclosure 
forms from the nominees, however, requires substantial time and effort 
on the part of the Librarian of Congress, the Copyright Office, and the 
nominating organizations. Likewise, the parties to a proceeding expend 
considerable time and expense in examining the background material for 
each potential arbitrator in preparing their objections under 
Sec. 251.4 to listed arbitrators. But in spite of all the preliminary 
work, very few individuals on the list actually will have an 
opportunity to serve on a panel. In 1995, three individuals from a list 
of 77 names were chosen to serve on a single panel; and this year, no 
more than six individuals from a list of 36 nominees will be chosen to 
serve as a CARP arbitrator.
    In consideration of the relatively small probability of using more 
than a handful of names from the list in any given year, the Office 
cannot justify the disproportionate amount of time and expense expended 
by the nominating

[[Page 63716]]

associations, the parties, or itself in generating and reviewing an 
annual list. Therefore, the rule is amended to reflect a two year cycle 
for generating a new list.

Qualifications of the Arbitrators

    Section 251.5(c), which quotes the statutory requirements for an 
arbitrator under consideration for service on a CARP, mistakenly uses 
an ``or'' in place of ``and.'' This amendment corrects the 
typographical error.

Financial Disclosure Forms

    Section 251.32(a), which allows a nominated arbitrator to file a 
financial disclosure form with the Librarian of Congress up to one 
month after the publication of the list of nominees in the Federal 
Register, is amended and now requires a nominated arbitrator to file 
the financial disclosure form no later than 45 days after the 
arbitration association submits the candidate's name to the Librarian 
of Congress. This amendment will allow the Librarian of Congress to 
compile a list for publication in the Federal Register that includes 
only those names of nominees who show a clear interest in serving on 
the panels through their submission of a completed financial disclosure 
form.
    Currently, Sec. 251.32(b)(2)(ii) requires the Librarian to publish 
in the order establishing the precontroversy discovery schedule a list 
of potential financial conflicts which the listed arbitrators have 
agreed to disclose. This list of conflicts, however, need not be 
published in the Federal Register or even simultaneously with the order 
setting the precontroversy discovery schedule. Therefore, 
Sec. 251.32(b)(2)(ii) is amended by removing the specific reference to 
publication in the order establishing the period for precontroversy 
motions.
    A typographical error exists in Sec. 251.32(d). In the third clause 
of the first sentence, the word ``any'' is a mistake; the clause should 
read ``if there are no changes in the arbitrator's financial 
interests,''.

Written Cases

    Section 251.43(a) requires participants to file direct cases with 
the Copyright Arbitration Royalty Panel when, in fact, a panel may not 
have been selected at the moment in the proceeding when direct cases 
are due. Therefore, the amended rule requires the participants to file 
their direct cases with the Copyright Office.

Filing and Service of Written Cases and Pleadings

    The bifurcation of the responsibilities for a CARP proceeding 
between the Library and the arbitration panel generated considerable 
confusion concerning the number of copies to be filed with the panel 
and with the Copyright Office. Therefore, the current filing 
requirements articulated in Secs. 251.44(a) and 251.44(b) are combined 
into a single regulation which addresses all the filing requirements 
related to a CARP proceeding. The new regulation instructs participants 
to deliver an original and five copies to the Copyright Office for 
further distribution to the CARP, unless otherwise instructed by the 
Librarian of Congress or the CARP. This change eliminates the confusion 
engendered by the two filing requirements described in the current 
Secs. 251.44(a) and 251.44(b).
    Additionally, a new Sec. 251.44(b) contains the information 
pertaining to the filing of exhibits which had been in Sec. 251.44(a). 
The information concerning the filing of exhibits remains the same and 
is moved to a separate section merely for clarification purposes.
    Currently, Sec. 251.44(e)(2) requires a party not represented by 
counsel to sign and verify all documents filed in a proceeding. Since 
the party's signature constitutes certification by the signing party 
that to the best of his or her knowledge and belief there are good 
grounds to support the filing, the rule is amended to require only the 
party's signature.
    Section 251.44(f) is amended by removing redundant references to 
the Library of Congress, the Copyright Office, and the CARP, since 
parties will file all pleadings with the Copyright Office, as required 
under the new Sec. 251.44(a).
    Section 251.44(g) is also amended to harmonize the time for filing 
oppositions and replies with the filing requirements specified in 
Sec. 251.45(b), and now requires all oppositions be filed within seven 
business days of the filing of the motion. Additionally, the language 
referring to the date of service has been removed, because the filing 
date of the motion or opposition is the relevant date for determining 
the appropriate response date. Each party, however, must make service 
of all motions, petitions, objections, oppositions, and replies on the 
other parties or their counsel by means no slower than overnight 
express mail on the same day the pleading is filed.

Discovery and Prehearing Motions

    Sections 251.45(b)(1)(i) and (b)(2)(i) are amended and will allow 
parties to file replies to a response within five business days of the 
filing of the response. Additionally, the amendment clarifies that the 
seven-day period specified for filing responses to a pleading refers to 
business days. This correction creates a consistent time frame for 
filing CARP documents, and removes the distinction between a pleading 
cycle within a 45-day precontroversy period and a pleading cycle at any 
other time.
    Sections 251.45(b)(1)(i) and (b)(2)(i) is amended further to state 
that each party must effect actual delivery of a complete copy of its 
written direct case on each party, no later than the first day of the 
45-day precontroversy discovery period.

Consideration of Petition; Settlement

    Historically, parties in a rate setting proceeding have engaged in 
a period of negotiation before the initiation of formal hearings. 
Section 251.63(a) continues this tradition, but refers to the 30-day 
negotiation period as a ``period for consideration for their 
settlement.'' To avoid any confusion arising from this language, the 
amended section now reads ``a 30-day period for negotiation of a 
settlement.''

Filing of Claims

    Each year, the Copyright Office receives claims for cable 
compulsory license fees, for compulsory license fees for secondary 
transmissions by satellite carriers, and for statutory license fees for 
digital audio recording technology and media distributed in the United 
States. The Copyright Act defines the filing period for each license, 
see 17 U.S.C. 111(d)(4)(A), 119(b)(4)(A) and 1007(a)(1), but the 
regulations define the parameters for compliance with the statutory 
dates. See 37 CFR 252.4(e), 257.4(e), and 259.5(e).
    Specifically, the rules allow a party to provide a receipt from the 
U.S. Postal Service which shows that the claim was properly mailed, and 
therefore, properly filed. Properly mailed, however, means both that a 
claim has a correct address and that it is mailed during the 
appropriate time period. The only acceptable proof of a timely filing, 
however, is the certified mail return receipt bearing a U.S. Postal 
Service mark demonstrating that the mailing occurred during the 
relevant time period to the appropriate address. Therefore, the word 
``mailed'' in the phrase, ``a claimant may nonetheless prove that the 
claim was properly mailed,'' is being replaced with the word ``filed'' 
as a means of clarifying the language in all the regulatory sections 
which discuss proof of a timely filing. Additionally, the amended rule 
states

[[Page 63717]]

specifically that the receipt must bear a July date stamp of the U. S. 
Postal Service, except where paragraph (b) of the section applies, when 
the claim is filed under Secs. 252.4(e) or 257.4(e), or a January or 
February date stamp of the U.S. Postal Service, except where paragraph 
(b) of the section applies, when the claim is filed under 
Sec. 259.5(e), before the Office will accept the receipt as proof of a 
timely filed claim.

Authorizations for DART Claimants

    On December 1, 1995, the Office published a final rule which 
specified the nature of the authorization which an organization acting 
as a common agent must obtain before making a claim for DART fees on 
behalf of its members and affiliates. 60 FR 61657 (December 1, 1995). 
The rule also included two limited exceptions to the rule requiring 
separate, specific, and written authorization. These exceptions were 
available to all organizations acting as a common agent on behalf of 
its members.
    On December 19, 1995, and again on February 1, 1996, in letters to 
the Copyright Office, the Alliance of Artists and Recording Companies 
(``AARC'') voiced its concern that the new rule could create confusion, 
rather than reduce it, where a claimant, whose interests were 
represented by different organizations, asserted a claim in both the 
Sound Recordings Fund and the Musical Works Fund. Initially, the 
performance rights organizations strongly opposed AARC's proposal to 
change the rule. Joint Letter from ASCAP, BMI, Inc. and SESAC, Inc. 
dated January 24, 1995. These parties, however, pursued further 
discussions concerning the potential problems associated with the 
exceptions in Sec. 259.2(c); and on June 4, 1996, ARCC and the 
performance rights organizations announced that they had reached 
agreement upon a proposed change that would address AARC's concerns. As 
all known parties affected by the proposed limitation on the exceptions 
agree to the proposed change, Sec. 259.2(c) is amended accordingly. 
Under the amended rule, an organization acting as a common agent can 
take advantage of the exceptions to the rule requiring written, 
separate, and specific authorization only when it files a claim to the 
Musical Works Fund.

List of Subjects

37 CFR Part 251

    Administrative practice and procedure, Hearing and appeal 
procedures.

37 CFR Part 252

    Cable television, Claims, Copyright.

37 CFR Part 257

    Claims, Copyright, Satellites.

27 CFR Part 259

    Claims, Copyright, Digital audio recordings devices and media.

    Accordingly, 37 CFR chapter II is corrected by making the following 
corrections and amendments.

PART 251--COPYRIGHT ARBITRATION ROYALTY PANEL RULES AND PROCEDURES

    1. The authority citation for part 251 continues to read as 
follows:

    Authority: 17 U.S.C. 801-803.

    2. Section 251.1 is revised to read as follows:


Sec. 251.1  Official addresses.

    Claims, pleadings, and general correspondence should be addressed 
to:

Copyright Arbitration Royalty Panel (CARP), P.O. Box 70977, Southwest 
Station, Washington, DC 20024

or, hand-delivered to:

Office of the Copyright General Counsel, Room 403, James Madison 
Building, 101 Independence Avenue, S.E., Washington, DC 20540


Sec. 251.3  Arbitration lists. [Amended]

    3. In Sec. 251.3(a) introductory text, the phrase ``of each year'' 
is removed and the phrase ``, 1998, and every two years thereafter'' is 
added after the phrase ``before January 1''.
    4. In Sec. 251.3(b), the phrase ``of each year,'' is removed and 
the phrase ``, 1998, and every two years thereafter'' is added after 
the phrase ``after January 1''.


Sec. 251.5  Qualifications of the arbitrators. [Corrected]

    5. In Sec. 251.5(c), the word ``or'' is removed and the word 
``and'' is added before the word ``facilitating''.
    6. In Sec. 251.32, paragraphs (a) and (b)(2)(ii) are revised to 
read as follows:


Sec. 251.32  Financial disclosure statement.

    (a) Within 45 days of their nomination, each nominated arbitrator 
shall file with the Librarian of Congress a confidential financial 
disclosure statement as provided by the Library of Congress, which 
statement shall be reviewed by the Librarian and designated Library 
staff to determine what conflicts of interest, if any, exist according 
to Sec. 251.31.
    (b) * * *
    (2) * * *
    (ii) Such list shall be included in an order issued no later than 
the commencement of the 45-day precontroversy discovery period;
* * * * *
    7. Section 251.32(d) is corrected by removing the word ``any'' in 
the phrase ``if there are any changes in the arbitrator's financial 
interests,'' and adding the word ``no'' before the word ``changes'' in 
the same phrase.


Sec. 251.43  Written cases. [Amended]

    8. Section 251.43(a) is amended by removing the phrase ``Copyright 
Arbitration Royalty Panel'' and adding ``Copyright Office'' in its 
place.
    9. In Sec. 251.44, paragraphs (a), (b), (e)(2), (f) and (g) are 
revised to read as follows:


Sec. 251.44  Filing and service of written cases and pleadings.

    (a) Filing of pleadings. In a royalty fee distribution proceeding 
or in a rate adjustment proceeding, the submitting party shall deliver 
an original and five copies of all filings to the Copyright Office at 
the address listed in Sec. 251.1, unless otherwise instructed by the 
Librarian of Congress or the CARP. The Copyright Office will make 
further distribution to the CARP, as necessary. In no case shall a 
party tender any written case or pleading by facsimile transmission.
    (b) Exhibits. All exhibits must be included with a party's case; 
however, in the case of exhibits whose bulk or whose cost of 
reproduction would unnecessarily encumber the record or burden the 
party, the Librarian of Congress or the CARP may reduce the number of 
required copies. Nevertheless, a complete copy must still be submitted 
to the Copyright Office.
* * * * *
    (2) The original of all documents filed by a party not represented 
by counsel shall be signed by that party and list that party's address 
and telephone number.
* * * * *
    (f) The Librarian of Congress shall compile and distribute to those 
parties who have filed a notice of intent to participate, the official 
service list of the proceeding, which shall be composed of the names 
and addresses of the representatives of all the parties to the 
proceeding. In all filings, a copy shall be served upon counsel of all 
other parties identified in the service list, or, if the party is 
unrepresented by counsel, upon the party itself. Proof of service shall 
accompany the filing. Parties shall notify the Librarian of any change 
in the name or address to which service shall be made, and shall serve 
a copy of such notification on all parties and the CARP.

[[Page 63718]]

    (g) Oppositions and replies. Except as otherwise provided in this 
part or by the Librarian of Congress or a CARP, oppositions to motions 
shall be filed within seven business days of the filing of the motion, 
and replies to oppositions shall be filed within five business days of 
the filing of the opposition. Each party must serve all motions, 
petitions, objections, oppositions, and replies on the other parties or 
their counsel by means no slower than overnight express mail on the 
same day the pleading is filed.
    10. In Sec. 251.45, paragraphs (b)(1)(i) and (b)(2)(i) are revised 
to read as follows:


Sec. 251.45  Discovery and prehearing motions.

* * * * *
    (b) *  *  *
    (1)(i) In the case of a royalty fee distribution proceeding, the 
Librarian of Congress shall, after the filing of comments and notices 
described in paragraph (a) of this section, designate a 45-day period 
for precontroversy discovery and exchange of documents. The period will 
begin with the exchange of written direct cases among the parties to 
the proceeding. Each party to the proceeding must effect actual 
delivery of a complete copy of its written direct case on each of the 
other parties to the proceeding no later than the first day of the 45-
day period. At any time during the 45-day period, any party to the 
proceeding may file with the Librarian prehearing motions and 
objections, including petitions to dispense with formal hearings under 
Sec. 251.41(b) and objections to arbitrators appearing on the 
arbitrator list under Sec. 251.4. Responses to motions, petitions, and 
objections must be filed with the Librarian within seven business days 
from the filing of such motions, petitions, and objections. Replies to 
the responses shall be filed within five business days from the filing 
of such responses with the Librarian. Each party must serve all 
motions, petitions, objections, oppositions, and replies on the other 
parties or their counsel by means no slower than overnight express mail 
on the same day the pleading is filed.
* * * * *
    (2)(i) In the case of a rate adjustment proceeding, the Librarian 
of Congress shall, after the filing of comments and notices described 
in paragraph (a) of this section, designate a 45-day period for 
precontroversy discovery and exchange of documents. The period will 
begin with the exchange of written direct cases among the parties to 
the proceeding. Each party to the proceeding must effect actual 
delivery of a complete copy of its written direct case on each of the 
other parties to the proceeding no later than the first day of the 45-
day period. At any time during the 45-day period, any party to the 
proceeding may file with the Librarian prehearing motions and 
objections, including petitions to dispense with formal hearings under 
Sec. 251.41(b) and objections to arbitrators appearing on the 
arbitrator list under Sec. 251.4. Responses to motions, petitions, and 
objections must be filed with the Librarian within seven business days 
from the filing of such motions, petitions, and objections. Replies to 
the responses shall be filed within five business days from the filing 
of such responses with the Librarian. Each party must serve all 
motions, petitions, objections, oppositions, and replies on the other 
parties or their counsel by means no slower than overnight express mail 
on the same day the pleading is filed.
* * * * *


Sec. 251.63  Consideration of petition; settlements. [Amended]

    11. Section 251.63(a) is amended by removing the phrase 
``consideration of their settlement.'' and adding the phrase 
``negotiation of a settlement.'' after the phrase ``designate a 30-day 
period for''.

PART 252--FILING OF CLAIMS TO CABLE ROYALTY FEES

    12. The authority citation for part 252 continues to read as 
follows:

    Authority: 17 U.S.C. 111(d)(4), 801, 803.

    13. In Sec. 252.4, paragraph (e) is revised to read as follows:


Sec. 252.4  Compliance with statutory dates.

* * * * *
    (e) In the event that a properly addressed and mailed claim is not 
timely received by the Copyright Office, a claimant may nonetheless 
prove that the claim was properly filed if it was sent by certified 
mail return receipt requested, and the claimant can provide a receipt 
bearing a July date stamp of the U.S. Postal Service, except where 
paragraph (b) of this section applies. No affidavit of an officer or 
employee of the claimant, or of a U.S. postal worker will be accepted 
in lieu of the receipt.

PART 257--FILING OF CLAIMS TO SATELLITE CARRIER ROYALTY FEES

    14. The authority citation for part 257 continues to read as 
follows:

    Authority: 17 U.S.C. 119(b)(4).

    15. In Sec. 257.4, paragraph (e) is revised to read as follows:


Sec. 257.4  Compliance with statutory dates.

* * * * *
    (e) In the event that a properly addressed and mailed claim is not 
timely received by the Copyright Office, a claimant may nonetheless 
prove that the claim was properly filed if it was sent by certified 
mail return receipt requested, and the claimant can provide a receipt 
bearing a July date stamp of the U.S. Postal Service, except where 
paragraph (b) of this section applies. No affidavit of an officer or 
employee of the claimant, or of a U.S. postal worker will be accepted 
in lieu of the receipt.

PART 259--FILING OF CLAIMS TO DIGITAL AUDIO RECORDING DEVICES AND 
MEDIA ROYALTY PAYMENTS

    16. The authority citation for part 259 continues to read as 
follows:
    Authority: 17 U.S.C. 1007(a)(1).


Sec. 259.2  Time of filing. [Amended]

    17. In Sec. 259.2, the last sentence in paragraph (c) introductory 
text is amended by removing the phrase ``in cases'' and adding the 
phrase ``for claimants to the Musical Works Fund'' after the word 
``required''.
    18. In Sec. 259.5, paragraph (e) is revised to read as follows:


Sec. 259.5  Compliance with statutory dates.

* * * * *
    (e) In the event that a properly addressed and mailed claim is not 
timely received by the Copyright Office, a claimant may nonetheless 
prove that the claim was properly filed if it was sent by certified 
mail return receipt requested, and the claimant can provide a receipt 
bearing a January or February date stamp of the U.S. Postal Service, 
except where paragraph (b) of this section applies. No affidavit of an 
officer or employee of the claimant, or of a U.S. postal worker will be 
accepted in lieu of the receipt.

    Dated: November 12, 1996.
Marybeth Peters,
Register of Copyrights.

    So Adopted:
James H. Billington,
The Librarian of Congress.
[FR Doc. 96-30458 Filed 11-29-96; 8:45 am]
BILLING CODE 1410-33-P