[Federal Register Volume 73, Number 164 (Friday, August 22, 2008)]
[Pages 49708-49709]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-19570]



Copyright Royalty Board

[Docket No. 2006-5 CRB DD 2002-2004]

Distribution of the 2002, 2003, and 2004 Digital Audio Recording 
Technology Royalty Funds

AGENCY: Copyright Royalty Board, Library of Congress.

ACTION: Notice announcing commencement of proceeding with request for 
Petitions to Participate.


SUMMARY: The Copyright Royalty Judges are announcing the commencement 
of the proceeding to determine the distribution of the digital audio 
recording technology royalty fees in the 2002, 2003, and 2004 Musical 
Works Funds. The Judges are also announcing the date by which a party 
who wishes to participate in this proceeding must file its Petition to 
Participate and the accompanying $150 filing fee.

DATES: Petitions to Participate and the filing fee are due no later 
than September 22, 2008.

ADDRESSES: An original, five copies, and an electronic copy in Portable 
Document Format (PDF) on a CD of the Petition to Participate, along 
with the $150 filing fee, may be delivered to the Copyright Royalty 
Board by either mail or hand delivery. Petitions to Participate and the 
$150 filing fee may not be delivered by an overnight delivery service 
other than the U.S. Postal Service Express Mail. If by mail (including 
overnight delivery), Petitions to Participate, along with the $150 
filing fee, must be addressed to: Copyright Royalty Board, P.O. 70977, 
Washington, DC 20024-0977. If hand delivered by a private party, 
Petitions to Participate, along with the $150 filing fee, must be 
brought to the Library of Congress, James Madison Memorial Building, 
LM-401, 101 Independence Avenue, SE., Washington, DC 20559-6000. If 
delivered by a commercial courier, Petitions to Participate, along with 
the $150 filing fee, must be delivered to the Congressional Courier 
Acceptance Site, located at 2nd and D Street, NE., Washington, DC. The 
envelope must be addressed to: Copyright Royalty Board, Library of 
Congress, James Madison Memorial Building, LM-403, 101 Independence 
Avenue, SE., Washington, DC 20559-6000.

Specialist. Telephone: (202) 707-7658. Telefax: (202) 252-3423 or e-
mail at [email protected].



    The Audio Home Recording Act of 1992 (the ``AHRA''), Public Law 
102-563, requires manufacturers and importers to pay royalties on 
digital audio recording devices and media that are distributed in the 
United States. 17 U.S.C. 1003. These royalties are deposited with the 
Copyright Office for further distribution among interested copyright 
parties by the Copyright Royalty Judges (``Judges''), provided that the 
interested copyright parties file a claim with the Copyright Royalty 

[[Page 49709]]

each year during the months of January and February. 17 U.S.C. 1005, 
    The AHRA provides that the royalties are divided between two funds: 
the Sound Recordings Fund and the Musical Works Fund. The Sound 
Recordings Fund receives 66\2/3\% of the royalties and the Musical 
Works Fund receives the remaining 33\1/3%\. These fees are allocated 
further to specific subfunds.
    The Sound Recordings Fund consists of four subfunds: the Featured 
Artists Subfund, the Copyright Owners Subfund, the Nonfeatured 
Musicians Subfund, and the Nonfeatured Vocalists Subfund. The royalty 
fees allocated to the Sound Recordings Funds are divided among these 
four subfunds according to the percentages set out in section 1006 of 
the Copyright Act. 17 U.S.C. 1006(b)(1). Similarly, the statute 
prescribes that the royalty fees allocated to the Musical Works Fund be 
divided equally between two subfunds, the Publishers Subfund and the 
Writers Subfund. 17 U.S.C. 1006(b)(2).
    Distribution of these fees may occur in one of two ways. The 
interested copyright parties within each subfund may either negotiate 
the terms of a settlement as to the division of royalty funds,\1\ or 
the Copyright Royalty Judges may conduct a proceeding to determine the 
distribution of the royalties that remain in controversy in each 
subfund. See 17 U.S.C. 1006(c).

    \1\ For each of the claim years 2002, 2003, and 2004, the 
interested copyright parties to the royalty fees in the Sound 
Recordings Funds have negotiated a universal settlement agreement 
among themselves as to the proportionate share that each party 
receives from the subfunds; consequently, these funds have been 

    On May 19, 2006, the Judges received a motion filed jointly by 
Broadcast Music, Inc., the American Society of Composers, Authors and 
Publishers, SESAC, Inc., and the Harry Fox Agency (hereinafter ``the 
Settling Parties'') asking the Judges to authorize a partial 
distribution of 95% of the 2002, 2003, and 2004 digital audio recording 
technology (``DART'') Musical Works Funds. The Settling Parties sought 
the distribution under 17 U.S.C. 801(b)(3)(A), which provides that 
royalty fees not subject to controversy may be distributed by the 
Judges. Subsequently, on September 27, 2006, the Judges held a hearing 
on the motion; and after considering the views of the claimants 
participating in the hearing, including an objection to the motion by 
one claimant, the Judges granted the motion, finding that retention of 
5% of the 2002, 2003, and 2004 DART Musical Works Funds would be 
sufficient to resolve any potential controversies as to the 
distribution of royalties. See Order in Docket No. 2006-5 CRB DD 2002-
2004 (October 2, 2006). The Judges also determined that it would begin 
a proceeding to resolve any existing controversies as to the remaining 
5% of the 2002, 2003, and 2004 DART Musical Works Funds.\2\ Id. Today's 
notice commences that proceeding.

    \2\ On July 1, 2008, the Settling Parties filed a motion 
requesting commencement of the proceeding mentioned in the October 
2, 2006, order.

Commencement of Proceeding

    Consistent with 17 U.S.C. 804(b)(8), the Judges determine that a 
controversy exists as to the distribution of the 2002, 2003, and 2004 
DART Musical Works Fund. We reach this determination, in this instance, 
for two reasons. First, an objection to the motion for partial 
distribution was raised by a claimant who participated in the September 
27, 2006, hearing. Second, to date we have not received notification 
that any settlements have been reached for any of these years, nor have 
we received motions for final distribution.
    The Judges are consolidating the consideration of the distribution 
of the 2002, 2003, and 2004 DART Musical Works Funds into a single 
proceeding because the issues regarding the distribution of the royalty 
fees are similar, if not the same, for each year. Moreover, due to the 
relatively low amount of funds for each year, consolidation provides a 
cost savings to the parties and promotes administrative efficiencies.

Petitions To Participate

    Petitions to Participate must provide all of the information 
required by 37 CFR 351.1(b)(2). Participants also must identify by year 
each subfund in the Musical Works Fund to which they are asserting a 
claim to royalties. Petitions to Participate submitted by interested 
parties whose claims do not exceed $1,000 \3\ must contain a statement 
that the party will not seek a distribution of more than $1,000. No 
filing fee is required for these parties. Interested parties with 
claims exceeding one thousand dollars ($1,000), however, must submit a 
filing fee of one hundred and fifty dollars ($150) with their Petition 
to Participate or it will be rejected. Cash will not be accepted; 
therefore, parties must pay the filing fee with a check or money order 
made payable to the ``Copyright Royalty Board.'' If a check is returned 
for lack of sufficient funds, the corresponding Petition to Participate 
will be dismissed.

    \3\ The Copyright Royalty Judge Program Technical Corrections 
Act, Public Law 109-303, changed the amount from $10,000 to $1,000.

    Further procedural matters, including scheduling, will be addressed 
after Petitions to Participate have been received.
    In accordance with 37 CFR 350.2 (Representation), only attorneys 
who are members of the bar in one or more states and in good standing 
will be allowed to represent parties before the Copyright Royalty 
Judges, unless the party is an individual who represents herself or 

    Dated: August 18, 2008.
James Scott Sledge,
Chief United States Copyright Royalty Judge.
 [FR Doc. E8-19570 Filed 8-21-08; 8:45 am]