[Federal Register Volume 69, Number 119 (Tuesday, June 22, 2004)]
[Rules and Regulations]
[Pages 34578-34585]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-14084]


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LIBRARY OF CONGRESS

Copyright Office

37 CFR Part 201

[Docket No. RM 2001-6B]


Compulsory License for Making and Distributing Phonorecords, 
Including Digital Phonorecord Deliveries

AGENCY: Copyright Office, Library of Congress.

ACTION: Final rule.

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SUMMARY: The Copyright Office of the Library of Congress is amending 
its regulations governing the content and service of certain notices on 
the copyright owner of a musical work. The notice is served or filed by 
a person who intends to use a musical work to make and distribute 
phonorecords, including by means of digital phonorecord deliveries, 
under a compulsory license.

EFFECTIVE DATE: July 22, 2004.

FOR FURTHER INFORMATION CONTACT: David O. Carson, General Counsel, or 
Tanya M. Sandros, Senior Attorney, Copyright Arbitration Royalty Panel, 
P.O. Box 70977, Southwest Station, Washington, DC 20024-0977. 
Telephone: (202) 707-8380; telefax: (202) 252-3423.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 115 of the Copyright Act, 17 U.S.C., provides that ``[w]hen 
phonorecords of a nondramatic musical work have been distributed to the 
public in the United States under the authority of the copyright owner, 
any other person * * * may, by complying with the provisions of this 
section, obtain a compulsory license to make and distribute 
phonorecords of the work.'' 17 U.S.C. 115(a)(1). The compulsory license 
set forth in section 115 permits the use of a nondramatic musical work 
in a phonorecord without the consent of the copyright owner if certain 
conditions are met and royalties are paid.
    Section 115 was subsequently amended on November 1, 1995, with the 
enactment of the Digital Performance Right in Sound Recordings Act of 
1995 (``DPRA''), Public Law 104-39 (1995). Among other things, this law 
expanded the section 115 compulsory license for making and distributing 
phonorecords to include not only the traditional use of the musical 
work to make an original sound recording, but also the distribution of 
a phonorecord of a nondramatic musical work by means of a digital 
phonorecord delivery

[[Page 34579]]

(``DPD'').\1\ See 17 U.S.C. 115(c)(3)(A). As defined in the law, a 
digital phonorecord delivery (DPD) is:
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    \1\ The right to make and distribute a DPD, however, does not 
include the exclusive rights to make and distribute the sound 
recording itself. These rights are held by the copyright owner of 
the sound recording and must be cleared through a separate 
transaction. See 17 U.S.C. 115(c)(3)(H).

    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 
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recording or any nondramatic musical work embodied therein.

17 U.S.C. 115(d).

    The DMCA did not change or alter the longstanding notice 
requirement set forth in section 115(b) which requires a person who 
wishes to obtain a compulsory license under section 115 to notify the 
copyright owner of his or her intention to use the copyright owner's 
musical work to make and distribute phonorecords under the section 115 
license. However, the amendments did require the Copyright Office to 
amend its regulations governing the content and service of the required 
Notices of Intention to use the license to include the making of a 
digital phonorecord delivery, and the Office did so in 1999. See 64 FR 
41286 (July 30, 1999). It is now evident that these changes did not go 
far enough to address the needs of certain digital music services which 
anticipate using most, if not all, of the musical works embodied in the 
sound recordings readily available in today's marketplace under the 
section 115 license.
    Consequently, on August 28, 2001, the Copyright Office published a 
second notice of proposed rulemaking (``NPRM'') in which it suggested 
further amendments to those rules associated with service of a notice 
to use the section 115 license and filing of such notice with the 
office. 66 FR 45241 (August 28, 2001). After considering the comments 
from the record industry, music publishers and potential new users of 
the license who seek to make digital phonorecord deliveries under the 
section 115 license, the Office published a set of proposed regulations 
that would allow, among other things, service on an agent, the listing 
of multiple works on a single notice, and use of an address other than 
the one listed in the Copyright Office records. In proposing these 
rules, however, the Office identified three issues pertinent to the 
rulemaking that either had not been presented to the public for comment 
or that required further comment from the parties before the Office 
could issue a final rule. For this reason, the Office published yet 
another NPRM for the purpose of offering interested parties an 
opportunity to comment on these three issues: (1) Whether licensees 
should be required to send statements of account and royalty payments 
to the agent to whom the notice of intention was sent until the agent 
or the copyright owner advises the licensee that the statements and 
payments should be sent elsewhere; (2) whether it is advisable to 
simplify the requirement that a licensee provide information concerning 
its ownership, officers and directors; and (3) the sufficiency of a 
Notice to cover all possible configurations, including those not listed 
specifically on the notice. 69 FR 11566 (March 11, 2004).

II. Comments and Discussion

    The Copyright Office received six comments in response to the March 
11 notice from the National Music Publishers' Association, Inc. 
(``NMPA'') and The Harry Fox Agency, Inc. (``HFA''), jointly; the 
Digital Media Association (``DiMA''); Yemi Adegbonmire; the Recording 
Industry Association of America, Inc. (``RIAA''); NMPA/HFA/RIAA, 
jointly; and Music Reports, Inc. (``MRI'').\2\
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    \2\ The MRI comment was received on May 4, 2004, nearly a month 
after the date specified in the March 11 Federal Register notice for 
filing comments. Nevertheless, the Office has considered its 
comments since review of its comment has not impeded the process nor 
caused any undue prejudice to the other interested parties.
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    All commenters who expressed an opinion supported proposed rule 
Sec.  201.18(b), which would require the authorized agent of a 
copyright owner, within two weeks of receiving a notice, to provide the 
licensee the name and address of the person to whom the licensee shall 
submit Statements of Account and royalty payments. They agreed that the 
rule balanced the equities fairly between the licensee, who bears the 
responsibility for serving the notice on the proper party in the first 
instance, and the copyright owner. RIAA/NMPA/HFA went on to note that 
the alternative proposal--to allow a licensee to make payments and file 
statements on the agent authorized to accept the notice--would open the 
door to disputes concerning misdirected payments which could be 
difficult and time consuming to resolve after the fact. We find this 
reasoning compelling.
    The second proposal--to eliminate the requirement that a licensee 
provide certain information concerning its ownership, officers and 
directors, and substitute greatly simplified requirements--also 
generated no controversy. RIAA/NMPA/HFA had maintained that the current 
rules require more information than needed to meet the copyright 
owner's legitimate right to know with whom it is dealing and may well 
impose a needless burden on licensees. In light of these assertions by 
both copyright owners and users, the Office proposed to amend the rule 
and adopt the RIAA/NMPA/HFA proposal which requires that a licensee 
provide only the name and title of the licensee's CEO, managing partner 
or the like, and identifying information for the primary entity (such 
as a record company or digital music service) expected to be actively 
engaged in business under the license, if that entity is other than the 
licensee itself. Because the proposed amendment to the rules provide 
sufficient information to identify the licensee and no party opposes 
the proposed changes, the Copyright Office is adopting the proposed 
amendments as announced in the March 11 notice.
    The only issue over which the commenters disagreed was whether a 
single Notice of Intention to use a particular work is sufficient 
notice to cover all possible format configurations, including both 
those specifically identified on the notice and those which could be 
used although not listed on the notice. The question arose because of a 
comment DiMA made in its initial comment suggesting that the Office 
promulgate ``a minimal set of regulations for the common situation in 
which online entities will be distributing digital phonorecord 
deliveries of sound recordings already covered by a mechanical 
license.'' Because DiMA's suggestion was unclear, the Office opined 
that DiMA's suggestion may have been intended to permit a licensee to 
rely upon an earlier-filed notice, e.g., one filed in order to use the 
license to make physical phonorecords, to cover the making of DPDs even 
though the digital phonorecord format configuration was not listed on 
that notice. We had stated in the March 11 notice that while it was 
highly unlikely the final rule promulgated in this proceeding would 
include any further amendments to address DiMA's suggestion, we would 
consider DiMA's proposal and comments received on this issue for 
possible future action.
    DiMA, however, did not elaborate on its earlier comment, obviating 
the need to consider its suggestion further. On the other hand, HFA/
NMPA and RIAA did file comments on the Office's proposed interpretation 
of DiMA's suggestion. Interestingly, the record company representatives 
and the publishing interests representatives take

[[Page 34580]]

diametrically opposed positions on whether a single notice covers all 
configuration formats or whether additional Notices need to be filed 
each time the licensee expects to use the musical work in a format not 
previously identified.
    RIAA maintains that the current regulations already ``permit a 
licensee under section 115 to rely upon a Notice of Intention that had 
been previously served or filed to make DPDs.'' It notes that the 
Copyright Act recognizes a single compulsory license within section 115 
and covers the making and distribution of a nondramatic musical work by 
means of a digital audio transmission that results in a digital 
phonorecord delivery (``DPD'') and that the regulations treat DPDs as 
merely another phonorecord configuration. RIAA then turns to the 
regulatory text, focusing on the provision that requires the licensee 
to identify those phonorecord configurations already made and those 
expected to be made under the license. See 37 CFR 201.18(c)(1)(iv). It 
maintains that the phrase ``expected to be made'' does not require 
absolute precision and that the licensee need only provide the 
information ``in good faith and on the basis of the best knowledge, 
information, and belief of the person signing the Notice. If so given, 
later developments affecting the accuracy of such information shall not 
affect the validity of the Notice.'' 37 CFR 201.18(d)(3), as amended. 
According to RIAA, these provisions when taken together do not require 
the filing of subsequent notices merely because a new type of 
phonorecord configuration is being made and distributed under the 
section 115 license.
    RIAA then cites to an HFA comment offered during the initial 
rulemaking proceeding,\3\ the purpose of which was to establish notice 
and recordkeeping requirements for use of the section 115 license, 
where HFA stated that it could accept the filing of a single notice 
which listed all phonorecord configurations contemplated at the time of 
the notice, provided that ``the regulations insure adequate notice of 
use of additional forms to be filed for each type of phonorecord 
configuration of a particular sound recording of a particular song 
(which we feel is necessary for purposes of clarity and sensible 
accounting in any event).'' Supplemental Statement Concerning 
Regulations to be Promulgated by the Copyright Office Relative to the 
Compulsory License Provisions of the Copyright Act (section 115), 
submitted by the Harry Fox Agency, Inc., May 26, 1977. RIAA opines that 
the Office adopted HFA's position and promulgated Sec. Sec.  
201.19(e)(3)(ii)(D) and (f)(4), at least in part, to serve this 
purpose. These two provisions of the rules require that specific 
accounting information be reported separately for each phonorecord 
configuration, thus giving the publishers accurate and timely 
information about the number and types of phonorecords being made and 
distributed under the compulsory license.
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    \3\ This proceeding began on March 30, 1977, when the Copyright 
Office published a notice in the Federal Register, announcing public 
hearings to receive testimony on substantive issues related to 
formulating regulations concerning the form, content and manner of 
service of notices of intention and accounting statements. These 
hearings took place on April 26 and 27, 1977. 42 FR 16837 (March 30, 
1977). It concluded nearly 2\1/2\ years later with the publication 
of final rules. 45 FR 79038 (November 28, 1980).
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    NMPA and HFA take a radically different view of the current notice 
requirements. They now argue that any provision or interpretation which 
would allow the filing of a single Notice of Intention to cover format 
configurations beyond those identified on the notice, ``would disrupt 
longstanding industry practice and conflict directly with established 
jurisprudence.'' They maintain that it is standard industry practice to 
require each licensee to specify the configuration for which the 
licensee seeks the license. They argue that the reason for imposing 
configuration limitations is to provide the publishers with a means to 
track the licensee's use of the musical work and to insure that the 
appropriate royalty rate attaches to the different configurations. In 
support of their position, NMPA and HFA cite two court cases which held 
that the scope of a mechanical license was limited to the express terms 
of the license. See Rodgers & Hammerstein Org. v. UMG Recordings, Inc., 
00 Civ. 9322 (JSM), 2001 U.S. Dist. LEXIS 16111 (S.D.N.Y. Sept. 26, 
2001), and Fred Ahlert Music Corp. v. Warner/Chappell Music, Inc., 958 
F. Supp. 170 (S.D.N.Y. 1997). Neither court, however, discusses the 
terms of use applicable to a section 115 statutory license.
    The Office acknowledges that HFA and NMPA offer a well-articulated 
presentation of the current state of affairs with respect to mechanical 
licenses negotiated in the marketplace but finds that their discussion 
misses the mark. As a primary matter, HFA and NMPA overlook the fact 
that a voluntary license negotiated in the marketplace between a 
willing buyer and a willing seller are not the same as the license 
Congress granted to licensees who make and distribute phonorecords 
under the terms set forth in section 115 of the Copyright Act. The 
terms of the statutory license are set by Congress and are not subject 
to modification at will by the parties. Parties may use the statutory 
license as a starting point, adopting those provisions that meet their 
needs and modifying or eliminating those that do not. But, the result 
is a negotiated license which varies from the section 115 statutory 
license in significant ways.
    NMPA and HFA, however, treat the statutory and negotiated licenses 
as one and the same. Thus, they rely on the courts' interpretation of 
voluntary license terms to inform the interpretation of similar 
statutory and regulatory provisions that govern the statutory license, 
but they fail to explain how the courts' interpretation of private 
commercial licenses relates to the regulatory framework and the policy 
considerations which underlie the notice and accounting requirements 
adopted by the Register of Copyrights in 1980.
    The relevant question is whether the current regulations adopted in 
1980 require a compulsory licensee to file a new notice in the case 
where the licensee seeks to expand its use of the section 115 license 
to cover phonorecord configurations not listed on the Notice of 
Intention to Use. A review of the comments and testimony from the 
rulemaking proceeding by which the current regulations were promulgated 
show that the question engendered some debate. During the early phase 
of that proceeding, publishers sought a rule that would require a 
licensee to file a separate notice for each separate type of 
phonorecord configuration, but they backed away from that position in 
their later comments. In Supplemental Comments filed on May 26, 1977, 
the Harry Fox Agency stated its willingness to permit use of a single 
notice listing those configurations the licensee is contemplating using 
at the time of service, provided that the licensee subsequently 
identified the use of new configurations on the accounting forms.
    They may have changed their position in light of statements made by 
the Register of Copyrights during public hearings held by the Copyright 
Office in April 1977. In her comments, the Register spoke directly to 
the question and made the observation that the notice was to contain 
information that ``would be given as of the date that the Notice was 
filed, and there [was] no obligation that it be kept up-to-date.'' In 
taking this position, she contrasted the lack of a legal requirement to 
update a notice served under section 115 with

[[Page 34581]]

the notice requirements for use of the cable compulsory license ``where 
there is a requirement that it be kept up-to-date.'' Transcript of 
Second Hearing on Implementation of the Copyright Law Revision, Docket 
No. 77-3, at 46. (April 26, 1977).
    Beyond the early exchanges, the parties did not address the 
question further and the Copyright Office issued interim regulations on 
December 29, 1977. 42 FR 64889 (December 29, 1977). These regulations 
did not include any provision that would require a licensee to submit a 
further formal notice to the copyright owner of actual use beyond the 
initial notice that listed format configurations the licensee was using 
at the time or expected to use in the future. The rules, however, did 
include, and still do, a requirement that the licensee provide the 
accounting information specified in Sec. Sec.  201.19(e)(3)(ii)(D) and 
(f)(4)(i) for each phonorecord configuration actually made, thus 
seeming to adopt the HFA suggestion for using statements of account to 
provide further information on actual use.
    In light of the fact that the purpose of the Notice of Intention is 
merely to give notice to the copyright owner of a licensee's intention 
to use the copyright owner's musical work to make and distribute 
phonorecords subject to the terms of the section 115 compulsory 
license, additional notices to update information that was correct at 
the time of service are not part of the statutory scheme. Once a notice 
is served, the copyright owner is on notice that the licensee will be 
using the identified musical work to make phonorecords. The licensee is 
then obligated to provide specific information about the types and 
numbers of phonorecords made and distributed as part of the monthly and 
annual statements of account, making it unnecessary to file follow-up 
notices for this purpose.

III. Additional Issues

    1. Further revisions to Sec.  201.19. DiMA offered no specific 
comment on the three questions posed in the March 11 notice, but it has 
requested that the Office modify Sec.  201.19 as follows: (1) To permit 
statements of account to be signed and delivered by the compulsory 
licensee or a duly authorized agent preparing the statement; (2) to 
eliminate the requirement for a handwritten signature, given the 
ability to work through an agent; and (3) to permit service of the 
statements of account by regular mail or electronic delivery. MRI 
requests the same three modifications.
    In the current rulemaking, the Office sought to amend its rules to 
expedite the filing of notices pursuant to section 115(b)(1) of the 
Copyright Act and offered proposed amendments to Sec.  201.18 to 
achieve this goal, while at the same time proposing limited changes to 
Sec.  201.19 in order to harmonize the service requirements between the 
two sections. See 66 FR 45241 (August 28, 2001). This notice expressly 
stated that the Office was not considering further changes to Sec.  
201.19 in this proceeding. Id. at 45242. While we understand DiMA's 
interest in pursuing additional amendments in the interest of 
streamlining the reporting process and will consider initiating a new 
rulemaking proceeding to address these issues, we will not place the 
current rulemaking on hold to consider new questions. The process with 
respect to amending the rules to streamline the process for serving 
notices under Sec.  201.18 has come to an end, and it is in the 
interest of all parties that these final rules be adopted without 
delay.
    As part of this proceeding, however, amendments have already been 
made to allow service of statements of account by regular mail. See 37 
CFR 201.19(e)(7)(i), (ii) and (f)(7)(i) and (iii). Formerly, these 
provisions required service by certified mail or registered mail, but 
they have been amended to allow for service ``by mail or by reputable 
courier service.'' However, the proposed rules did not include a 
provision to permit service of statements of account by electronic 
delivery because this proceeding had not considered amendments to Sec.  
201.19 beyond those needed to provide the licensee with options for 
sending the Statements as currently prepared. The rules governing the 
Statements of Account differ significantly from those governing a 
Notice of Intention in that they require the person signing the 
document to certify the accuracy of the information in the Statements 
of Account. Consequently, it would appear that the signature of the 
certifying official constitutes a legal representation on behalf of the 
licensee that should not be dismissed lightly without comment from the 
affected parties and, thus, should be considered along with the other 
issues identified by DiMA and MRI in a separate rulemaking.
    2. Date of filing. Adegbonmire noted that the amended rules did not 
clarify that a receipt from a reputable courier indicating the date of 
attempted delivery would be acceptable as evidence of the date of 
service, even though the March 11 notice stated that such proof would 
be sufficient to establish the date of service. He proposes amending 
proposed Sec.  201.18(f)(5) to include language expressly stating that 
such receipt is acceptable proof for establishing the date of service. 
We agree and have made the necessary changes to proposed Sec.  
201.18(f)(5) and to Sec. Sec.  201.19(e)(7)(iv) and (f)(7)(iv).
    He also suggested that the rules expressly recognize use of a 
Delivery Confirmation receipt as proof of the date of service. We are 
unfamiliar with this service and decline to adopt the suggestion to 
specifically list a Delivery Confirmation receipt as evidence of the 
date of service. Sections 201.18(f)(5) and 201.19(e)(7)(iv), however, 
should not be interpreted as listing the only acceptable forms of 
proof. In fact, the last sentence in these provisions leaves open the 
possibility that the licensee may adduce other evidence to establish 
the date of service. For that reason, we see no reason to list every 
possible means of proof for establishing the date of service and have 
only acknowledged the two specific means the parties have already 
considered by virtue of the earlier notices.
    3. Demand for electronic submission. Adegbonmire has also offered 
comment on the proposed regulation that would permit a copyright owner 
or its agent to demand that a notice containing more than 50 titles of 
works be resubmitted in an electronic format. He proposes setting the 
threshold at 25 titles rather than 50 to facilitate the process, though 
he does not state how it would do so. Consequently, we see no reason to 
reconsider the decision to set the threshold at more than 50 titles.
    He also suggests that the rule itself violates the statute because 
the rule would allow a licensee to resubmit its notice in an electronic 
format within 30 days after receipt of the demand. We disagree. 
Provided that the initial notice adheres to the rules and is served on 
the copyright owner or its agent before or within 30 days of making, 
and before distributing any phonorecords of the listed works, then the 
licensee has fulfilled the statutory requirement to serve notice. The 
request for an electronic submission is a subsequent requirement that 
must be met in accordance with the rules. The requirement itself does 
not raise questions of whether the filing is timely; rather, it 
addresses compliance with format and submission requirements. Thus, 
failure to comply with the copyright owner's demand for an electronic 
submission would constitute a violation of the rules governing use of 
the license and could provide the basis for a copyright infringement 
suit.
    There being no other matters for consideration, the Office is 
announcing final rules--incorporating the amendments discussed--
governing the

[[Page 34582]]

filing of Notices of Intention to Use a section 115 license for the 
making and distribution of phonorecords.

IV. Regulatory Flexibility Act

    Although the Copyright Office, as a department of the Library of 
Congress and part of the legislative branch, is not an ``agency subject 
to the Regulatory Flexibility Act,'' 5 U.S.C. 601-612, the Register of 
Copyrights has considered the effect of the amendments to Sec. Sec.  
201.18 and 201.19 on individual authors and small entities. The 
Register has determined that the final regulations will not have a 
significant economic impact on a substantial number of individual 
compulsory licensees or small entities that would require provision of 
special relief for small entities in the regulations, and that the 
final regulations are, to the extent consistent with the stated 
objectives of applicable statutes, designed to minimize any significant 
economic impact on small entities.

List of Subjects in 37 CFR Part 201

    Copyright.

Final Regulation

0
In consideration of the foregoing, the Copyright Office is amending 
part 201 of 37 CFR as follows:

PART 201--GENERAL PROVISIONS

0
1. The authority citation for part 201 continues to read as follows:

    Authority: 17 U.S.C. 702.

0
2. Section 201.18 is revised to read follows:


Sec.  201.18  Notice of intention to obtain a compulsory license for 
making and distributing phonorecords of nondramatic musical works.

    (a) General. (1) A ``Notice of Intention'' is a Notice identified 
in section 115(b) of title 17 of the United States Code, and required 
by that section to be served on a copyright owner or, in certain cases, 
to be filed in the Copyright Office, before or within thirty days after 
making, and before distributing any phonorecords of the work, in order 
to obtain a compulsory license to make and distribute phonorecords of 
nondramatic musical works.
    (2) A Notice of Intention shall be served or filed for nondramatic 
musical works embodied, or intended to be embodied, in phonorecords 
made under the compulsory license. A Notice of Intention may designate 
any number of nondramatic musical works, provided that the copyright 
owner of each designated work or, in the case of any work having more 
than one copyright owner, any one of the copyright owners is the same 
and that the information required under paragraphs (d)(1)(i) through 
(iv) of this section does not vary. For purposes of this section, a 
Notice which lists multiple works shall be considered a composite 
filing of multiple Notices and fees shall be paid accordingly if filed 
in the Copyright Office under paragraph (f) of this section (i.e., a 
separate fee, in the amount set forth in Sec.  201.3(e)(1), shall be 
paid for each work listed in the Notice).
    (3) For the purposes of this section, the term copyright owner, in 
the case of any work having more than one copyright owner, means any 
one of the co-owners.
    (4) For the purposes of this section, service of a Notice of 
Intention on a copyright owner may be accomplished by means of service 
of the Notice on either the copyright owner or an agent of the 
copyright owner with authority to receive the Notice. In the case where 
the work has more than one copyright owner, the service of the Notice 
on any one of the co-owners of the nondramatic musical work or upon an 
authorized agent of one of the co-owners identified in the Notice of 
Intention shall be sufficient with respect to all co-owners. 
Notwithstanding paragraph (a)(2) of this section, a single Notice may 
designate works not owned by the same copyright owner in the case where 
the Notice is served on a common agent of multiple copyright owners, 
and where each of the works designated in the Notice is owned by any of 
the copyright owners who have authorized that agent to receive Notices.
    (5) For purposes of this section, a copyright owner or an agent of 
a copyright owner with authority to receive Notices of Intention may 
make public a written policy that it will accept Notices of Intention 
to make and distribute phonorecords pursuant to 17 U.S.C. 115 which 
include less than all of the information required by this section, in a 
form different than required by this section, or delivered by means 
(including electronic transmission) other than those required by this 
section. Any Notice provided in accordance with such policy shall not 
be rendered invalid for failing to comply with the specific 
requirements of this section.
    (6) For the purposes of this section, a digital phonorecord 
delivery shall be treated as a type of phonorecord configuration, and a 
digital phonorecord delivery shall be treated as a phonorecord 
manufactured, made, and distributed on the date the phonorecord is 
digitally transmitted.
    (b) Agent. An agent who has been authorized to accept Notices of 
Intention in accordance with paragraph (a)(4) of this section and who 
has received a Notice of Intention on behalf of a copyright owner shall 
provide within two weeks of the receipt of that Notice of Intention the 
name and address of the copyright owner or its agent upon whom the 
person or entity intending to obtain the compulsory license shall serve 
Statements of Account and the monthly royalty in accordance with Sec.  
201.19(a)(4).
    (c) Form. The Copyright Office does not provide printed forms for 
the use of persons serving or filing Notices of Intention.
    (d) Content. (1) A Notice of Intention shall be clearly and 
prominently designated, at the head of the notice, as a ``Notice of 
Intention to Obtain a Compulsory License for Making and Distributing 
Phonorecords,'' and shall include a clear statement of the following 
information:
    (i) The full legal name of the person or entity intending to obtain 
the compulsory license, together with all fictitious or assumed names 
used by such person or entity for the purpose of conducting the 
business of making and distributing phonorecords;
    (ii) The telephone number, the full address, including a specific 
number and street name or rural route of the place of business, and an 
e-mail address, if available, of the person or entity intending to 
obtain the compulsory license, and if a business organization intends 
to obtain the compulsory license, the name and title of the chief 
executive officer, managing partner, sole proprietor or other person 
similarly responsible for the management of such entity. A post office 
box or similar designation will not be sufficient for this purpose 
except where it is the only address that can be used in that geographic 
location.
    (iii) The information specified in paragraphs (d)(1)(i) and (ii) of 
this section for the primary entity expected to be engaged in the 
business of making and distributing phonorecords under the license or 
of authorizing such making and distribution (for example: a record 
company or digital music service), if an entity intending to obtain the 
compulsory license is a holding company, trust or other entity that is 
not expected to be actively engaged in the business of making and 
distributing phonorecords under the license or of authorizing such 
making and distribution;
    (iv) The fiscal year of the person or entity intending to obtain 
the compulsory license. If that fiscal year is

[[Page 34583]]

a calendar year, the Notice shall state that this is the case;
    (v) For each nondramatic musical work embodied or intended to be 
embodied in phonorecords made under the compulsory license:
    (A) The title of the nondramatic musical work;
    (B) The name of the author or authors, if known;
    (C) A copyright owner of the work, if known;
    (D) The types of all phonorecord configurations already made (if 
any) and expected to be made under the compulsory license (for example: 
single disk, long-playing disk, cassette, cartridge, reel-to-reel, a 
digital phonorecord delivery, or a combination of them);
    (E) The expected date of initial distribution of phonorecords 
already made (if any) or expected to be made under the compulsory 
license;
    (F) The name of the principal recording artist or group actually 
engaged or expected to be engaged in rendering the performances fixed 
on phonorecords already made (if any) or expected to be made under the 
compulsory license;
    (G) The catalog number or numbers, and label name or names, used or 
expected to be used on phonorecords already made (if any) or expected 
to be made under the compulsory license; and
    (H) In the case of phonorecords already made (if any) under the 
compulsory license, the date or dates of such manufacture.
    (vi) In the case where the Notice will be filed with the Copyright 
Office pursuant to paragraph (f)(3) of this section, the Notice shall 
include an affirmative statement that with respect to the nondramatic 
musical work named in the Notice of Intention, the registration records 
or other public records of the Copyright Office have been searched and 
found not to identify the name and address of the copyright owner of 
such work.
    (2) A ``clear statement'' of the information listed in paragraph 
(d)(1) of this section requires a clearly intelligible, legible, and 
unambiguous statement in the Notice itself and without incorporation by 
reference of facts or information contained in other documents or 
records.
    (3) Where information is required to be given by paragraph (d)(1) 
of this section ``if known'' or as ``expected,'' such information shall 
be given in good faith and on the basis of the best knowledge, 
information, and belief of the person signing the Notice. If so given, 
later developments affecting the accuracy of such information shall not 
affect the validity of the Notice.
    (e) Signature. The Notice shall be signed by the person or entity 
intending to obtain the compulsory license or by a duly authorized 
agent of such person or entity.
    (1) If the person or entity intending to obtain the compulsory 
license is a corporation, the signature shall be that of a duly 
authorized officer or agent of the corporation.
    (2) If the person or entity intending to obtain the compulsory 
license is a partnership, the signature shall be that of a partner or 
of a duly authorized agent of the partnership.
    (3) If the Notice is signed by a duly authorized agent for the 
person or entity intending to obtain the compulsory license, the Notice 
shall include an affirmative statement that the agent is authorized to 
execute the Notice of Intention on behalf of the person or entity 
intending to obtain the compulsory license.
    (4) If the Notice is served electronically, the person or entity 
intending to obtain the compulsory license and the copyright owner 
shall establish a procedure to verify that the Notice is being 
submitted upon the authority of the person or entity intending to 
obtain the compulsory license.
    (f) Filing and service. (1) If the registration records or other 
public records of the Copyright Office identify the copyright owner of 
the nondramatic musical works named in the Notice of Intention and 
include an address for such owner, the Notice may be served on such 
owner by mail sent to, or by reputable courier service at, the last 
address for such owner shown by the records of the Office. It shall not 
be necessary to file a copy of the Notice in the Copyright Office in 
this case.
    (2) If the Notice is sent by mail or delivered by reputable courier 
service to the last address for the copyright owner shown by the 
records of the Copyright Office and the Notice is returned to the 
sender because the copyright owner is no longer located at the address 
or has refused to accept delivery, the original Notice as sent shall be 
filed in the Copyright Office. Notices of Intention submitted for 
filing under this paragraph (f)(2) shall be submitted to the Licensing 
Division of the Copyright Office, shall be accompanied by a brief 
statement that the Notice was sent to the last address for the 
copyright owner shown by the records of the Copyright Office but was 
returned, and may be accompanied by appropriate evidence that it was 
mailed to, or that delivery by reputable courier service was attempted 
at, that address. In these cases, the Copyright Office will specially 
mark its records to consider the date the original Notice was mailed, 
or the date delivery by courier service was attempted, if shown by the 
evidence mentioned above, as the date of filing. An acknowledgment of 
receipt and filing will be provided to the sender.
    (3) If, with respect to the nondramatic musical works named in the 
Notice of Intention, the registration records or other public records 
of the Copyright Office do not identify the copyright owner of such 
work and include an address for such owner, the Notice may be filed in 
the Copyright Office. Notices of Intention submitted for filing shall 
be accompanied by the fee specified in Sec.  201.3(e). A separate fee 
shall be assessed for each title listed in the Notice. Notices of 
Intention will be filed by being placed in the appropriate public 
records of the Licensing Division of the Copyright Office. The date of 
filing will be the date when the Notice and fee are both received in 
the Copyright Office. An acknowledgment of receipt and filing will be 
provided to the sender.
    (4) Alternatively, if the person or entity intending to obtain the 
compulsory license knows the name and address of the copyright owner of 
the nondramatic musical work, or the agent of the copyright owner as 
described in paragraph (a)(4) of this section, the Notice of Intention 
may be served on the copyright owner or the agent of the copyright 
owner by sending the Notice by mail or delivering it by reputable 
courier service to the address of the copyright owner or agent of the 
copyright owner. For purposes of section 115(b)(1) of title 17 of the 
United States Code, the Notice will not be considered properly served 
if the Notice is not sent to the copyright owner or the agent of the 
copyright owner as described in paragraph (a)(4) of this section, or if 
the Notice is sent to an incorrect address.
    (5) If a Notice of Intention is sent by certified mail or 
registered mail, a mailing receipt shall be sufficient to prove that 
service was timely. If a Notice of Intention is delivered by a 
reputable courier, documentation from the courier showing the first 
date of attempted delivery shall also be sufficient to prove that 
service was timely. In the absence of a receipt from the United States 
Postal Service showing the date of delivery or documentation showing 
the first date of attempted delivery by a reputable courier, the 
compulsory licensee shall bear the burden of proving that the

[[Page 34584]]

Notice of Intention was served in a timely manner.
    (6) If a Notice served upon a copyright owner or an authorized 
agent of a copyright owner identifies more than 50 works that are 
embodied or intended to be embodied in phonorecords made under the 
compulsory license, the copyright owner or the authorized agent may 
send the person who served the Notice a demand that a list of each of 
the works so identified be resubmitted in an electronic format, along 
with a copy of the original Notice. The person who served the Notice 
must submit such a list, which shall include all of the information 
required in paragraph (d)(1)(v) of this section, within 30 days after 
receipt of the demand from the copyright owner or authorized agent. The 
list shall be submitted on magnetic disk or another medium widely used 
at the time for electronic storage of data, in the form of a flat file, 
word processing document or spreadsheet readable with computer software 
in wide use at such time, with the required information identified and/
or delimited so as to be readily discernible. The list may be submitted 
by means of electronic transmission (such as e-mail) if the demand from 
the copyright owner or authorized agent states that such submission 
will be accepted.
    (g) Harmless errors. Harmless errors in a Notice that do not 
materially affect the adequacy of the information required to serve the 
purposes of section 115(b)(1) of title 17 of the United States Code, 
shall not render the Notice invalid.

0
3. Section 201.19 is amended as follows:
0
a. by revising paragraph (a)(3);
0
b. by redesignating paragraphs (a)(4) through (a)(11) as paragraph 
(a)(5) through (a)(12), respectively;
0
c. by adding a new paragraph (a)(4);
0
d. by removing the phrase ``subparagraph (B) of this Sec.  
201.19(a)(5)(iii)'' and adding ``paragraph (a)(7)(iii)(B) of this 
section'' in its place each place it appears;
0
e. by removing the phrase ``paragraph (B) of this Sec.  
201.19(a)(5)(iii)'' and adding ``paragraph (a)(7)(iii)(B) of this 
section'' in its place each place it appears;
0
f. in newly designated paragraph (a)(7), by removing the phrase 
``paragraph (a)(5)'' and adding ``paragraph (a)(6) of this section'' in 
its place;
0
g. in paragraph (c)(2)(iii), by removing the phrase ``paragraph 
(a)(7)'' and adding ``paragraph (a)(10)'' in its place;
0
h. in paragraph (d) introductory text, by removing the phrase ``Sec.  
201.19(a)(4)'' and adding ``paragraph (a)(5) of this section'' in its 
place;
0
i. by revising paragraph (e)(7)(i);
0
j. by revising paragraph (e)(7)(ii)(A);
0
k. in paragraph (e)(7)(ii)(B), by removing the phrase ``Sec.  
202.19(e)(7)(ii)'' and adding ``this paragraph (e)(7)(ii)'' in its 
place;
0
l. in paragraph (e)(7)(ii)(D), by removing the phrase ``this Sec.  
201.19(e)(7)(ii)'' and adding ``this paragraph (e)(7)(ii)'' in its 
place;
0
m. by adding a new paragraph (e)(7)(iv);
0
n. by revising paragraph (f)(3)(iii);
0
o. in paragraph (f)(4)(ii), by removing the phrase ``paragraphs (A) 
through (F) of this Sec.  201.19(f)(4)(i)'' and adding ``paragraphs 
(f)(4)(i)(A) through (F) of this section'' in its place;
0
p. in paragraph (f)(5), by removing the phrase ``[subject to paragraph 
(f)(3)(iii)(A)]'';
0
q. by revising paragraph (f)(7)(i);
0
r. by revising paragraph (f)(7)(iii)(A);
0
s. in paragraph (f)(7)(iii)(B), by removing the phrase ``Sec.  
202.19(f)(7)(iii)'' and adding ``this paragraph (f)(7)(iii)'' in its 
place; and
0
t. by adding a new paragraph (f)(7)(iv).
0
The revisions and additions to Sec.  201.19 read as follows:


Sec.  201.19  Royalties and statements of account under compulsory 
license for making and distributing phonorecords of nondramatic musical 
works.

    (a) * * *
    (3) For the purposes of this section, the term copyright owner, in 
the case of any work having more than one copyright owner, means any 
one of the co-owners.
    (4) For the purposes of this section, the service of a Statement of 
Account on a copyright owner under paragraph (e)(7) or (f)(7) of this 
section may be accomplished by means of service on either the copyright 
owner or an agent of the copyright owner with authority to receive 
Statements of Account on behalf of the copyright owner. In the case 
where the work has more than one copyright owner, the service of the 
Statement of Account on one co-owner or upon an agent of one of the co-
owners shall be sufficient with respect to all co-owners.
* * * * *
    (e) * * *
    (7) Service. (i) Each Monthly Statement of Account shall be served 
on the copyright owner or the agent with authority to receive Monthly 
Statements of Account on behalf of the copyright owner to whom or which 
it is directed, together with the total royalty for the month covered 
by the Monthly Statement, by mail or by reputable courier service on or 
before the 20th day of the immediately succeeding month. However, in 
the case where the licensee has served its Notice of Intention upon an 
agent of the copyright owner pursuant to Sec.  201.18, the licensee is 
not required to serve Monthly Statements of Account or make any royalty 
payments until the licensee receives from the agent with authority to 
receive the Notice of Intention notice of the name and address of the 
copyright owner or its agent upon whom the licensee shall serve Monthly 
Statements of Account and the monthly royalty fees. Upon receipt of 
this information, the licensee shall serve Monthly Statements of 
Account and all royalty fees covering the intervening period upon the 
person or entity identified by the agent with authority to receive the 
Notice of Intention by or before the 20th day of the month following 
receipt of the notification. It shall not be necessary to file a copy 
of the Monthly Statement in the Copyright Office.
    (ii)(A) In any case where a Monthly Statement of Account is sent by 
mail or reputable courier service and the Monthly Statement of Account 
is returned to the sender because the copyright owner or agent is no 
longer located at that address or has refused to accept delivery, or in 
any case where an address for the copyright owner is not known, the 
Monthly Statement of Account, together with any evidence of mailing or 
attempted delivery by courier service, may be filed in the Licensing 
Division of the Copyright Office. Any Monthly Statement of Account 
submitted for filing in the Copyright Office shall be accompanied by a 
brief statement of the reason why it was not served on the copyright 
owner. A written acknowledgment of receipt and filing will be provided 
to the sender.
* * * * *
    (iv) If a Monthly Statement of Account is sent by certified mail or 
registered mail, a mailing receipt shall be sufficient to prove that 
service was timely. If a Monthly Statement of Account is delivered by a 
reputable courier, documentation from the courier showing the first 
date of attempted delivery shall also be sufficient to prove that 
service was timely. In the absence of a receipt from the United States 
Postal Service showing the date of delivery or documentation showing 
the first date of attempted delivery by a reputable courier, the 
compulsory licensee shall bear the burden of proving that the Monthly 
Statement of Account was served in a timely manner.
    (f) * * *
    (3) * * *
    (iii) If the compulsory licensee is a business organization, the 
name and

[[Page 34585]]

title of the chief executive officer, managing partner, sole proprietor 
or other person similarly responsible for the management of such 
entity.
* * * * *
    (7) Service. (i) Each Annual Statement of Account shall be served 
on the copyright owner or the agent with authority to receive Annual 
Statements of Account on behalf of the copyright owner to whom or which 
it is directed by mail or by reputable courier service on or before the 
20th day of the third month following the end of the fiscal year 
covered by the Annual Statement. It shall not be necessary to file a 
copy of the Annual Statement in the Copyright Office. An Annual 
Statement of Account shall be served for each fiscal year during which 
at least one Monthly Statement of Account shall be served for each 
fiscal year during which at least one Monthly Statement of Account was 
required to have been served under paragraph (e)(7) of this section.
* * * * *
    (iii)(A) In any case where an Annual Statement of Account is sent 
by mail or by reputable courier service and is returned to the sender 
because the copyright owner or agent is not located at that address or 
has refused to accept delivery, or in any case where an address for the 
copyright owner is not known, the Annual Statement of Account, together 
with any evidence of mailing or attempted delivery by courier service, 
may be filed in the Licensing Division of the Copyright Office. Any 
Annual Statement of Account submitted for filing shall be accompanied 
by a brief statement of the reason why it was not served on the 
copyright owner. A written acknowledgment of receipt and filing will be 
provided to the sender.
* * * * *
    (iv) If an Annual Statement of Account is sent by certified mail or 
registered mail, a mailing receipt shall be sufficient to prove that 
service was timely. If an Annual Statement of Account is delivered by a 
reputable courier, documentation from the courier showing the first 
date of attempted delivery shall also be sufficient to prove that 
service was timely. In the absence of a receipt from the United States 
Postal Service showing the date of delivery or documentation showing 
the first date of attempted delivery by a reputable courier, the 
compulsory licensee shall bear the burden of proving that the Annual 
Statement of Account was served in a timely manner.
* * * * *

    Dated: June 7, 2004.
Marybeth Peters,
Register of Copyrights.

    So Approved.
James H. Billington,
The Librarian of Congress.
[FR Doc. 04-14084 Filed 6-21-04; 8:45 am]
BILLING CODE 1410-33-P