[Federal Register Volume 72, Number 103 (Wednesday, May 30, 2007)]
[Notices]
[Pages 30039-30042]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-10363]


=======================================================================
-----------------------------------------------------------------------

LIBRARY OF CONGRESS

Copyright Office


Notice of Roundtable Regarding the Section 115 Compulsory License 
for Making and Distributing Phonorecords, Including Digital Phonorecord 
Deliveries

AGENCY: Copyright Office, Library of Congress.

ACTION: Notice announcing public roundtable.

-----------------------------------------------------------------------

SUMMARY: The Copyright Office announces a public roundtable discussion 
concerning the use of the statutory license to make and distribute 
digital phonorecords, including for a limited period, and to make 
phonorecords that facilitate streaming. This discussion is an adjunct 
to the comments filed in the current rulemaking exploring these issues. 
The roundtable will also address the statutory requirement to provide 
notice of intention to obtain the compulsory license.

DATES: The public roundtable will be held in Washington, DC on June 15, 
2007, in the Copyright Office Hearing Room at the Library of Congress, 
Room LM-408, 4th Floor, James Madison Building, 101 Independence 
Avenue, SE, Washington, DC from 9:30 a.m. to 4:30 p.m. Requests to 
participate or observe the roundtable shall be submitted in writing no 
later than close of business on June 6, 2007.

ADDRESSES: Requests to observe or participate in the roundtable should 
be addressed to Joe Keeley, Attorney Advisor, and may be sent by mail 
or preferably by e-mail to [email protected]. See SUPPLEMENTARY 
INFORMATION for alternative means of submission and filing 
requirements.

FOR FURTHER INFORMATION CONTACT: Joe Keeley, Attorney Advisor, or 
Stephen Ruwe, Attorney Advisor, Office of the General Counsel, P.O. Box 
70977, Southwest Station, Washington, DC 20024-0977. Telephone: (202) 
707-8350. Telefax: (202) 707-8366.

SUPPLEMENTARY INFORMATION:

Background

    Section 115 of the Copyright Act, title 17 of the United States 
Code provides a statutory license for the making and distribution of 
phonorecords of nondramatic musical works. Historically, the statutory 
rates have established the ceiling for the mechanical licenses issued 
in the marketplace. In 1995, Congress passed the Digital Performance 
Right in Sound Recordings Act, Pub. L. No. 104-39, 109 Stat. 336, which 
amended section 115 to include the right to distribute a phonorecord by 
means of a ``digital phonorecord delivery'' (``DPD''). The statute 
includes a definition of a DPD and explains the process for 
establishing rates for these phonorecords. In addition, it acknowledges 
the existence of additional DPDs ``where the reproduction or 
distribution of the phonorecord is incidental to the transmission which 
constitutes the [DPD]'' 17 U.S.C. 115(c)(3)(D), and requires that a 
separate rate be set for these phonorecords. However, the law does not 
identify which DPDs can be classified as incidental or provide any 
guidelines for making this decision.
    For this reason, the Copyright Office published a Notice of Inquiry 
in the Federal Register, 66 FR 14099 (March 9, 2001), requesting 
comment on the interpretation and application of the mechanical and 
digital phonorecord compulsory license, 17 U.S.C. 115, to certain 
digital music services. The Recording Industry Association of America 
(``RIAA'') had suggested in its petition for this rulemaking that 
section 115 be interpreted in such a way as to cover all reproductions 
made to operate services offering On-Demand Streams and Limited 
Downloads, as defined in the March 9, 2001, notice. At about the same 
time, RIAA entered into separate negotiations with the National Music 
Publishers Association and the Harry Fox Agency, Inc. and reached an 
agreement concerning several of the issues involved in the original 
Notice of Inquiry. Because this side agreement addressed the key issues 
raised in the earlier Notice of Inquiry, the Copyright Office sought 
additional comments on

[[Page 30040]]

the original questions. 66 FR 64783 (December 14, 2001).
    The incidental DPD debate has been hotly contested and, along with 
the reform of section 115, the subject of numerous hearings before the 
Subcommittee on Courts, the Internet and Intellectual Property of the 
House Committee on the Judiciary (March 23, 2007; May 16, 2006; June 
21, 2005; and March 11, 2004) and the Senate Judiciary Committee, 
Subcommittee on Intellectual Property (July 12, 2005). Yet, in spite of 
all the attention, the legal issues remain unresolved. Consequently, 
the Office is again focusing on the rulemaking process and is hosting 
the roundtable discussion as a way to refresh the existing record in 
order to ascertain the scope of the 115 license in relation to certain 
digital music services.
    In addition to the issues raised in the March 9, 2001, Notice of 
Inquiry, on August 28, 2001, the Copyright Office issued a Notice of 
Proposed Rulemaking to amend the rules associated with service of a 
Notice of Intention to Obtain Compulsory License (``Notice'') under 
section 115. 66 FR 45241 (August 28, 2001). The purpose of the 
amendments was to streamline the notification process and make it 
easier for the licensee to serve the copyright owner with Notice for 
multiple musical works. After considering the comments received in that 
rulemaking proceeding, the Office adopted regulations that allow, among 
other things: service on an agent; the listing of multiple works on a 
single Notice; the filing of a single Notice to cover all possible 
configurations, including those not listed specifically on the Notice; 
and use of an address other than the one listed in Copyright Office 
records. 69 FR 34578 (June 22, 2004).
    In issuing its Final Rule, the Office recognized that the purpose 
of the Notice requirements in section 115 of the Copyright Act, 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.'' 69 FR 34581 (June 22, 2004). The Office now seeks 
to address whether there are compelling reasons to further streamline 
the Notice process.

Roundtable Topics

    The Office is identifying a number of key issues for discussion and 
encourages the participation of persons who can address these issues 
from the perspectives of law, policy and the practical needs of the 
affected industries. The Office also encourages input from persons who 
can speak to the technological aspects involved in the making of a 
digital transmission, especially with respect to the making of specific 
reproductions during the course of a transmission. In addition, the 
Office invites participants to identify any other actions they believe 
the Office should undertake, pursuant to its regulatory authority, to 
make the section 115 license more workable and/or efficient.

     Topic 1: How do ``Limited Downloads'' Fit Within the Scope of 
the Section 115 License?

    The March 9, 2001, Notice of Inquiry addressed a petition for 
clarification of the status of Limited Downloads within the section 115 
license. The petitioning party, the RIAA, characterized a Limited 
Download as an on-demand transmission of a time-limited or other use-
limited download to a storage device (such as a computer's hard drive), 
using technology that causes the downloaded file to be available for 
listening only either during a limited time or for a certain number of 
times. The Notice of Inquiry, as well as the resulting comments, 
focused largely on whether Limited Downloads fit within the scope of 
section 115 as either incidental digital phonorecord deliveries 
(``incidental DPDs''), as provided for in 17 U.S.C. 115(c)(3)(D), or 
distributions of phonorecords by rental lease or lending, as provided 
for in 115 U.S.C. 115(c)(4). Since a DPD is defined as an ``individual 
delivery of a phonorecord which results in a specifically identifiable 
reproduction,'' and since a Limited Download would appear to be the 
specifically identifiable reproduction that is the end result of the 
DPD, could that same Limited Download also be considered ``incidental 
to the transmission which constitutes the digital phonorecord 
delivery?'' Can a DPD in fact result in a reproduction which is 
incidental to itself or should a Limited Download be characterized as a 
general DPD,\1\ albeit potentially valued at a different rate. The 
Office welcomes further discussion on each of these approaches.
---------------------------------------------------------------------------

    \1\Section 115(d) defines a ``digital phonorecord delivery'' as 
``each individual delivery of a phonorecord by digital transmission 
of a sound recording which results in a specifically identifiable 
reproduction by or for any transmission recipient of a phonorecord 
of that sound recording, regardless of whether the digital 
transmission is also a public performance of the sound recording or 
any nondramatic musical work embodied therein. A digital phonorecord 
delivery does not result from a real-time, non-interactive 
subscription transmission of a sound recording where no reproduction 
of the sound recording or the musical work embodied therein is made 
from the inception of the transmission through to its receipt by the 
transmission recipient in order to make the sound recording 
audible.''
---------------------------------------------------------------------------

    In considering whether a Limited Download can be viewed as an 
incidental DPD, the Office takes note of the fact that the language of 
17 U.S.C. 115(c)(3)(D) identifies an incidental DPD as a reproduction 
or distribution of a phonorecord that is incidental to the transmission 
which constitutes the digital phonorecord delivery. This would seem to 
indicate that an incidental DPD cannot exist without an underlying DPD. 
Given this condition, could a Limited Download ever be considered an 
incidental DPD? If the Limited Download is considered a general DPD, 
are there also incidental DPDs made in the course of delivering the 
Limited Download?
    Alternatively, reliance on the section 115 provision for rental, 
lease or lending of a phonorecord as a way to clear the rights to the 
use of the musical work in Limited Downloads is not self-evident. A 
plain reading of the statutory language\2\ seems to envision that any 
coverage provided by the section 115 license for phonorecord rental, 
lease or lending is predicated on a further distribution of a 
phonorecord already in existence. Furthermore, use of the provision 
appears to require a licensee to make two payments, once under 17 
U.S.C. 115(c)(2) for the making and distribution of the phonorecord and 
again for subsequent acts of rental, lease or lending of that 
phonorecord. It is also worth noting that royalty determinations for 
every such act of rental, lease or lending are dependent upon the 
revenue received by the licensee for the underlying reproduction and 
distribution.\3\ As a matter of practicality, it seems the rental, 
lease or lending provision is uniquely suited to traditional, non-
digital, uses of the

[[Page 30041]]

section 115 license, in which a phonorecord is not parted with 
permanently, but instead returned to the licensee who may rent it 
multiple times. The Office welcomes alternative views on application of 
the section 115 provision for rental, lease or lending of a phonorecord 
to Limited Downloads.
---------------------------------------------------------------------------

    \2\``A compulsory license under this section includes the right 
of the maker of a phonorecord of a nondramatic musical work under 
subsection (a)(1) to distribute or authorize distribution of such 
phonorecord by rental, lease, or lending (or by acts or practices in 
the nature of rental, lease, or lending). In addition to any royalty 
payable under clause (2) and chapter 8 of this title, a royalty 
shall be payable by the compulsory licensee for every act of 
distribution of a phonorecord by or in the nature of rental, lease, 
or lending, by or under the authority of the compulsory licensee. 
With respect to each nondramatic musical work embodied in the 
phonorecord, the royalty shall be a proportion of the revenue 
received by the compulsory licensee from every such act of 
distribution of the phonorecord under this clause equal to the 
proportion of the revenue received by the compulsory licensee from 
distribution of the phonorecord under clause (2) that is payable by 
a compulsory licensee under that clause and under chapter 8. The 
Register of Copyrights shall issue regulations to carry out the 
purpose of this clause.'' 115 U.S.C. 115(c)(4)
    \3\Id.

     Topic 2: Does ``Streaming'' Fit Within the Scope of the Section 
---------------------------------------------------------------------------
115 License?

    The March 9, 2001, Notice of Inquiry sought clarification of the 
status of streaming,\4\ specifically with respect to ``on-demand 
streams'' within the section 115 license. In the previous Notice of 
Inquiry, the Office recognized that streaming necessarily involves a 
making of a number of copies of the musical work--or portions of the 
work--along the transmission path to accomplish the delivery of the 
work. Copies are made by the computer servers that deliver the musical 
work (variously referred to as ``server,'' ``root,'' ``encoded,'' or 
``cache'' copies), and additional copies are made by the receiving 
computer to better facilitate the actual performance of the work (often 
referred to as ``buffer'' copies). Some of these copies are temporary; 
some may not necessarily be so. 66 FR 14101 (March 9, 2001).
---------------------------------------------------------------------------

    \4\While the March 9, 2001, Notice of Inquiry set out to address 
``On-Demand Streams'' only, the Office will consider all types of 
streaming, regardless of their interactive nature, in determining 
their place within the scope of the section 115 license, which 
unlike the section 114 license makes no distinction between 
interactive and noninteractive uses of copyrighted works.
---------------------------------------------------------------------------

    Similar to its consideration with regard to Limited Downloads, the 
Office welcomes further information regarding whether the reproductions 
made in the course of streaming enjoy coverage under the section 115 
provisions as incidental DPDs. Again, the Office takes note of the fact 
that the language of 17 U.S.C. 115(c)(3)(D) identifies an incidental 
DPD as a reproduction or distribution of a phonorecord that is 
incidental to the transmission which constitutes the digital 
phonorecord delivery.
    The Office, therefore, seeks further information as to whether the 
reproductions made to facilitate a stream result in a DPD as defined in 
section 115(d),\5\ focusing on the requirement that the DPD must result 
in ``a specifically identifiable reproduction by or for any 
transmission recipient.'' Does streaming result in such specifically 
identifiable reproductions? And if a DPD is made in the course of 
streaming, does the streaming process also produce incidental DPDs for 
purposes of section 115? The Office welcomes the participation of 
individuals who can provide technical expertise in considering these 
questions.
---------------------------------------------------------------------------

    \5\ See supra n.1.

     Topic 3: Do Server Copies Necessary to Transmit Limited 
Downloads or Streams Fit Within the Scope of the Section 115 
---------------------------------------------------------------------------
License?

    The Office welcomes further information as to whether server 
copies, or other copies not actually delivered to the public for 
private use, fit within the scope of the section 115 license, perhaps 
as incidental DPDs. The language of 17 U.S.C. 115(c)(3)(D), which 
identifies an incidental DPD as a reproduction or distribution of a 
phonorecord that is incidental to the transmission which constitutes 
the digital phonorecord delivery could indicate that server copies may 
be considered incidental DPDs. On the other hand, the section 115(a)(1) 
requirement that ``a person may obtain a compulsory license only if his 
or her primary purpose in making phonorecords is to distribute them to 
the public for private use'' may cut against consideration of a server 
copy as an incidental DPD, at least in cases where the server copy is 
used for purposes of streaming. Does the fact that the law indicates 
that an incidental DPD can be either a reproduction or a distribution 
minimize the importance of the 115(a)(1) requirement or nullify it in 
the case of an incidental DPD?

     Topic 4: Notice Requirements

    The Office amended its regulations governing Notice several years 
ago to allow service on agents of copyright owners as a way to make the 
license more functional. 69 FR 34578 (June 22, 2004). However, the 
section 115 license remains largely unused by most parties to previous 
rulemaking proceedings who expressed an interest in employing it. The 
Office, therefore, seeks information as to whether there are compelling 
reasons to further streamline the Notice process.
    Specifically, the Office seeks further information on the benefits 
and burdens of the existing Notice requirements; the potential to 
eliminate information (data fields) currently required in a Notice; and 
services and technology that may be employed by either the Office or 
third parties to assist in the Notice process. The Office also seeks 
further information on the following previously suggested, yet 
heretofore unimplemented, methods for streamlining the Notice process:
    a.Filing of ``Universal'' or ``Database'' Notices.
    Current regulations allow that a Notice may address the works of 
multiple copyright owners only so long as such Notice is served on an 
agent of a copyright owner, and all of the works addressed by such 
Notice are owned or co-owned by copyright owners who have authorized 
their agent to accept Notice on their behalf. The Office seeks further 
information concerning additional changes to allow the filing of a 
single, universal ``Database'' Notice upon agents of copyright owners. 
Such a ``Database'' Notice would be effective only to the extent it 
addresses works owned or co-owned by the copyright owners represented 
by the agent on whom the Notice is served. Similar proposals regarding 
``Database'' Notices have been suggested in previous proceedings. One 
such proposal put forward by DiMA, would have allowed the licensee, in 
the case of electronic submissions, to serve directly on copyright 
owners a single ``Database'' Notice listing multiple works by multiple 
owners. 69 FR 11571 (March 11, 2004).
    The Office undertakes further inquiry regarding service of a single 
``Database'' Notice to consider another proposal similar to DiMA's that 
would allow service of ``Database'' Notices on agents of copyright 
owners, as opposed to service of ``Database'' Notices directly on 
copyright owners. In its earlier consideration for allowing 
``Database'' Notices, the Office found that section 115 ``does not 
anticipate that the copyright owner should have to search a licensee's 
universal database Notice to determine which of the copyright owner's 
works a licensee intends to use.'' 69 FR 11571 (March 11, 2004). In 
seeking further information regarding service of a ``Database'' Notice 
on agents of copyright owners, the Office recognizes the continually 
advancing search and sort capabilities of word processing, spreadsheet, 
and other electronic data management applications that are in 
increasingly wide use. Given such capabilities, would it be reasonable 
to require agents of copyright owners served with Notice to provide not 
only the name and address of the person to whom Statements of Account 
and monthly royalties are to be made, but also information regarding 
the works owned by the copyright owners the agent represents? And, 
assuming for purposes of this discussion copyright owners can provide 
this information, can and should the Office issue regulations under 
section 115 to allow service of a blanket ``Database'' Notice on a 
copyright owner (or an agent of one or more copyright owners) that does 
not specify any particular musical work, but simply states that the 
user intends to

[[Page 30042]]

use the section 115 license to make and distribute DPDs for all musical 
works owned by that particular copyright owner (or all copyright owners 
represented by that particular agent)?
    The Office takes note of the actions among interested parties to 
develop data exchange standards for information relating to media 
content, exemplified by the establishment of ``Digital Data Exchange.'' 
(See www.ddex.net. Are there additional emerging business solutions 
that may efficiently aid the administration of ``Database'' Notices? 
Would the adoption of a uniform standard for the exchange of digital 
data allow for the use of a universal ``Database'' Notice? Are there 
legal impediments to allowing service of a universal ``Database'' 
Notice on agents of copyright owners?
    b.Authority of Agents
    Current regulations allow a potential licensee to choose to serve 
Notice on either the copyright owner or an agent of the copyright owner 
with authority to receive the Notice. Previous rulemaking proceedings 
have considered that the regulations may set a higher standard for 
establishing an agency relationship than that applied as a matter of 
agency law. 69 FR 11568 (March 11, 2004). Currently, the regulations 
provide for service of the Notice on either the copyright owner or an 
agent of the copyright owner with authority to receive the Notice. The 
Office seeks further input as to whether an agent with authority to 
accept Notices includes general registered agents of copyright owners 
of the sort that may be required as a condition of enjoying corporate 
or other similar legal status by copyright owners in their respective 
jurisdictions. And if not, whether the regulations should be so 
amended.

Participation and Filing Requirements

    Parties wishing to observe or participate in the roundtable 
discussion must submit a written request no later than close of 
business on June 6, 2007. Requests to observe the roundtable or to 
participate as a member of the roundtable must indicate the following 
information:

     1. The name of the person, including whether it is his or her 
intention to observe the roundtable or to participate as a member of 
the roundtable;

     2. The organization or organizations represented by that 
person, if any;

     3. Contact information (address, telephone, and e-mail); and


     4. Information on the specific focus or interest of the 
observers or participants (or his or her organization) and any 
questions or issues they would like to raise.

    The capacity of the room in which the roundtable will be held is 
limited. If the Office receives so many requests that the room's 
capacity is reached, attendance will be granted in the order the 
requests are received.
    The preferred method for submission of the requests to observe or 
participate is via email. If sent by e-mail, please send to 
[email protected]. Alternatively, requests may be delivered by hand 
or submitted by mail.
    If hand delivered by a private party, an original and five copies 
of the request to observe or participate should be brought to Room 401 
of the James Madison Building between 8:30 a.m. and 5 p.m. The envelope 
should be addressed as follows: Office of the General Counsel, Library 
of Congress, James Madison Building, LM-401, Washington, DC, 20559-
6000.
    If delivered by a commercial courier, an original and five copies 
of a request to observe or participate in the roundtable must be 
delivered to the Congressional Courier Acceptance Site (``CCAS'') 
located at 2nd and D Streets, NE, Washington, DC between 8:30 a.m. and 
4 p.m. The envelope should be addressed as follows: Office of the 
General Counsel, U.S. Copyright Office, LM 401, James Madison Building, 
101 Independence Avenue, SE, Washington, DC. Please note that CCAS will 
not accept delivery by means of overnight delivery services such as 
Federal Express, United Parcel Service or DHL.
    If sent by mail (including overnight delivery using U.S. Postal 
Service Express Mail), an original and five copies of a request to 
observe or participate should be addressed to U.S. Copyright Office, 
Copyright GC/I&R, P.O. Box 70400, Southwest Station, Washington, DC 
20024. Please be aware that delivery of mail via the U.S. Postal 
Service or private courier is subject to delay. Therefore, it is 
strongly suggested that any request to observe or participate be made 
via email.

    Dated: May 24, 2007
Marybeth Peters,
Register of Copyrights.
[FR Doc. E7-10363 Filed 5-29-07; 8:45 am]
BILLING CODE 1410-30-S