[Federal Register Volume 80, Number 241 (Wednesday, December 16, 2015)]
[Notices]
[Pages 78252-78253]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-31629]


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LIBRARY OF CONGRESS

Copyright Royalty Board

[Docket Nos. 2012-6 CRB CD 2004-2009 (Phase II) and 2012-7 CRB SD 1999-
2009 (Phase II)]


Distribution of Cable and Satellite Royalty Funds

AGENCY: Copyright Royalty Board, Library of Congress.

ACTION: Notice requesting comments.

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SUMMARY: The Copyright Royalty Judges are soliciting comments on a 
motion by Independent Producers Group for a partial distribution of 
royalty funds.

DATES: Comments are due on or before January 15, 2016.

ADDRESSES: Interested claimants must submit comments to only one of the 
following addresses. Unless responding by email or online, claimants 
must submit an original, five paper copies, and an electronic version 
on a CD.
    Email: [email protected]; or
    Online: Use the Federal eRulemaking Portal ``Regulations.gov'' at: 
http://www.regulations.gov.
    U.S. mail: Copyright Royalty Board, P.O. Box 70977, Washington, DC 
20024-0977; or
    Overnight service (only USPS Express Mail is acceptable): Copyright 
Royalty Board, P.O. Box 70977, Washington, DC 20024-0977; or
    Commercial courier: Address package to: Copyright Royalty Board, 
Library of Congress, James Madison Memorial Building, LM-403, 101 
Independence Avenue SE., Washington, DC 20559-6000. Deliver to: 
Congressional Courier Acceptance Site, 2nd Street NE. and D Street NE., 
Washington, DC; or
    Hand delivery: Library of Congress, James Madison Memorial 
Building, LM-401, 101 Independence Avenue SE., Washington, DC 20559-
6000.

FOR FURTHER INFORMATION CONTACT: Lakeshia Keys, Program Specialist, by 
telephone at (202) 707-7658 or email at [email protected].

SUPPLEMENTARY INFORMATION: On September 18, 2015, Worldwide Subsidy 
Group LLC dba Independent Producers Group (``IPG'') filed with the 
Copyright Royalty Board Judges (``Judges'') a Motion for Partial 
Distribution of 2004-2009 Cable Royalties and 2000-2009 Satellite 
Royalties (``IPG Motion'') pursuant to Section 801(b)(3)(C) of the 
Copyright Act. Motion for Partial Distribution of 2004-2009 Cable 
Royalties and 2000-2009 Satellite Royalties, Docket Nos. 2012-6 CRB CD 
2004-2009 (Phase II) and 2012-7 CRB SD 1999-2009 (Phase II) 
(consolidated); see 17 U.S.C. 801(b)(3)(C).
    IPG seeks a 0.20% share of royalties from the Phase I Program 
Suppliers Category for the years 2004-2009 for cable and 2000-2009 for 
satellite.\1\ The Motion Picture Association of America, Inc. 
(``MPAA'') opposes, in part, IPG's requested partial distribution. MPAA 
Opposition, in Part, to Independent Producer Group's Motion for Partial 
Distribution of 2004-2009 Cable Royalties and 2000-2009 Satellite 
Royalties (Sept. 25, 2015) (``MPAA Opposition'').
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    \1\ MPAA and IPG settled all remaining Phase II controversies 
regarding 1999 satellite royalties in the Program Suppliers 
Category, and the Judges ordered a final distribution of those 
royalties. Order Directing Final Distribution of 1999 Satellite 
Royalty Funds Except Devotional Share, Docket No. 2008-5 CRB SD 
1999-2000 (Jun. 19, 2013) and Order Granting In Part Motion for 
Final Distribution of the 1998 and 1999 Cable Royalty Funds and the 
1999 Satellite Royalty Funds, Docket Nos. 2008-1 CRB CD 98-99 and 
2008-5 CRB SD 1999-2000 (Jan. 31, 2013).
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    MPAA does not object to IPG's request with respect to cable 
royalties, subject to IPG signing a pay-back agreement as contemplated 
by Section 801(b)(3)(C) of the Copyright Act.\2\ MPAA does, however, 
oppose IPG's request regarding satellite royalties because, according 
to MPAA (1) IPG has not yet established its entitlement to receive a 
share of satellite royalties, and (2) the 0.20% percentage share of the 
Program Suppliers Category royalties that IPG seeks is either 
equivalent to or greater than the total royalty award that MPAA 
proposed for IPG for some of the 2000-2009 satellite funds. MPAA 
Opposition at 1-2. MPAA also states that it has concerns, which it 
contends the Judges share, ``not only about IPG's ability, but also its 
willingness, to disgorge funds, should the need arise.'' Id. at 4, 
quoting Order Denying IPG Motion For Partial Distribution, Docket Nos. 
2008-2 CRB CD 2000-03 (Phase II), 2008-1 CRB CD 1998-99 (Phase II), 
2012-6 CRB CD 2004-09 (Phase II) and 2012-7 CRB SD 1999-2009 (Phase II) 
at 6 (Feb. 11, 2014).
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    \2\ In its opposition, MPAA provides what it calls a ``good 
faith estimate of the dollar amounts of the shares requested'' by 
IPG for cable royalties. MPAA Opposition at 2-3. MPAA does not 
explain the methodology it used to derive the estimates. In its 
reply, IPG questions the accuracy of MPAA's estimates, which IPG 
states are ``substantially lower than what was previously reported 
by the MPAA to IPG to be the Program Supplier share of such royalty 
pools.'' Independent Producer Group's Reply in Support of Motion for 
Partial Distribution of 2004-2009 Cable Royalties and 2000-2009 
Satellite Royalties (``IPG Reply'') at 1-2 (Oct. 1, 2015). MPAA, in 
turn, filed a motion to strike IPG's reply which motion the Judges 
denied because it was not ripe. MPAA Motion to Strike IPG's Reply . 
. . (Oct. 6, 2015); Order Denying MPAA Motion to Strike IG's Reply 
(December 10, 2015).
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    IPG counters that the ``touchstone as to whether a party may seek 
and be advance distributed [sic] royalties has been determined to be 
whether such party has established itself as a `legitimate' claimant, 
and whether adverse parties can set forth a `reasonable' objection to 
such advance distribution.'' IPG Reply at 5. IPG contends that for each 
year from 2000-2009 it maintains cable and satellite claims that 
survived all claims-hearing challenges and to which even MPAA has 
assigned a value. IPG contends that those facts establish IPG as a 
``legitimate'' claimant entitled to a partial distribution of satellite 
royalties. Id.
    IPG also disputes MPAA's contention that the partial distribution 
percentage that IPG seeks is equivalent to or greater than the total 
royalty award that MPAA proposed for IPG for some of the 2000-

[[Page 78253]]

2009 satellite funds, arguing that MPAA's ``unfounded assertion . . . 
is simply inaccurate . . .'' Id. at 6.\3\
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    \3\ The Judges note that MPAA proposed a Program Suppliers 
satellite share allocation to IPG of 0.20% in 2002 and 0.13% in 
2004. For the eight remaining years in controversy, MPAA proposed 
shares higher than 0.20%. MPAA-Represented Program Suppliers' 
Proposed Findings of Fact and Conclusions of Law at 7 (Aug. 17, 
2015).
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    Lastly, IPG discounts the above-quoted passage from the Judges' 
February 11, 2014 Order Denying IPG Motion for Partial Distribution 
regarding the Judges' concerns about IPG's ability and willingness to 
disgorge funds should the need arise. IPG contends that the Judges' 
concern expressed in that order (which IPG contends was 
``unwarranted'') ``was inspired by nothing more than inflammatory 
rhetoric of the [Settling Devotional Claimants].'' IPG Reply at 7.
    Before authorizing a partial distribution of royalty funds 
requested under Section 801(b)(3)(C) of the Copyright Act, the Judges 
must first publish a notice in the Federal Register seeking responses 
to the request to ascertain whether any claimant entitled to receive 
such royalty fees has a reasonable objection to the proposed 
distribution. This Notice seeks comments on whether any interested 
claimant asserts a reasonable objection to IPG's request. The Judges 
must receive written objections detailing the existence and extent of 
any entity's objection(s) by the end of the comment period. The Judges 
will not consider any objections with respect to the partial 
distribution motion that come to their attention after the close of 
that period.
    In particular, the Judges seek comment on whether IPG should be 
considered an ``established claimant'' for purposes of receiving a 
partial distribution of royalties, and, if so, for what years and for 
which Phase I categories, and for which funds. For example, assuming 
for the sake of argument that IPG is deemed an ``established claimant'' 
with respect to the Phase I Program Suppliers Category for cable for a 
particular year, does that status carry over to other Phase I 
categories (e.g., Devotionals, Joint Sports, etc.)? Does it carry over 
to all years? If not, to which years does the ``established claimant'' 
status apply? Moreover, does the status of an established cable 
claimant (or claimant representative) carry over to satellite 
royalties, as IPG contends, or only to cable royalties? Does the 
reverse also apply (i.e., is an ``established claimant'' for purposes 
of satellite also an ``established claimant'' for cable)?
    If the Judges determine that IPG is an ``established claimant'' for 
the first time for any fund, are there safeguards (in addition to the 
pay-back agreement) the Judges can and should employ to ensure that IPG 
is able and willing to disgorge in the event of overpaid funds? Which 
safeguards would be appropriate or necessary? How long should they last 
and how would they be enforced?
    If the Judges determine that IPG is entitled to the partial 
distribution it requests, what methodology should the Judges use to 
determine the dollar amount to which IPG is entitled? Would it be 
necessary for the Judges (or the Licensing Division of the Copyright 
Office, or both) to have access to all applicable Phase I confidential 
agreements to make the necessary calculations or is another means 
available? Commenters should consider what special calculations would 
have to be made to determine IPG's share of the various subfunds 
(Basic, Syndex and 3.75%) in addition to calculating interest on (and 
deductions of applicable expenses against) funds deposited with the 
Licensing Division.
    The issues and questions set forth above are not necessarily 
exhaustive. Commenters may address any other issues or questions that 
they believe are relevant to the pending Motion.
    The Copyright Royalty Board has posted IPG's Motion at http://www.loc.gov/crb.

    Dated: December 10, 2015.
Jesse M. Feder,
U.S. Copyright Royalty Judge.
[FR Doc. 2015-31629 Filed 12-15-15; 8:45 am]
BILLING CODE 1410-72-P