[Federal Register Volume 83, Number 200 (Tuesday, October 16, 2018)]
[Proposed Rules]
[Pages 52176-52178]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-22516]


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LIBRARY OF CONGRESS

 Copyright Office

37 CFR Part 201

[Docket No. 2018-8]


Noncommercial Use of Pre-1972 Sound Recordings That Are Not Being 
Commercially Exploited

AGENCY: U.S. Copyright Office, Library of Congress.

ACTION: Notice of inquiry.

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SUMMARY: The U.S. Copyright Office is issuing a notice of inquiry 
regarding the Classics Protection and Access Act, title II of the 
recently enacted Orrin G. Hatch-Bob Goodlatte Music Modernization Act. 
In connection with the establishment of federal remedies for 
unauthorized uses of sound recordings fixed before February 15, 1972 
(``Pre-1972 Sound Recordings''), Congress also established an exception 
for certain noncommercial uses of Pre-1972 Sound Recordings that are 
not being commercially exploited. To qualify for this exemption, a user 
must file a notice of noncommercial use after conducting a good faith, 
reasonable search to determine whether the Pre-1972 Sound Recording is 
being commercially exploited, and the rights owner of the sound 
recording must not object to the use within 90 days. To promulgate the 
regulations required by the new statute, the Office is soliciting 
comments regarding specific steps that a user should take to 
demonstrate she has made a good faith, reasonable search. The Office 
also solicits comments regarding the filing requirements for the user 
to submit a notice of noncommercial use and for a rights owner to 
submit a notice objecting to such use.

DATES: Initial written comments must be received no later than 11:59 
p.m. Eastern Time on November 15, 2018. Written reply comments must be 
received no later than 11:59 p.m. Eastern Time on November 30, 2018. 
Rather than reserving time for potential extensions of time to file 
comments, commenting parties should be aware that the Office has 
already established what it believes to be the most reasonable 
deadlines consistent with the statutory deadlines by which it must 
promulgate the regulations described in this notice of inquiry.

ADDRESSES: For reasons of government efficiency, the Copyright Office 
is using the regulations.gov system for the submission and posting of 
public comments in this proceeding. All comments are therefore to be 
submitted electronically through regulations.gov. Specific instructions 
for submitting comments are available on the Copyright Office's website 
at https://www.copyright.gov/rulemaking/pre1972-soundrecordings-noncommercial/. If electronic submission of comments is not feasible 
due to lack of access to a computer and/or the internet, please contact 
the Office using the contact information below for special 
instructions.

FOR FURTHER INFORMATION CONTACT: Regan A. Smith, General Counsel and 
Associate Register of Copyrights, by email at [email protected], 
Anna Chauvet, Assistant General Counsel, by email at 
[email protected], or Jason E. Sloan, Assistant General Counsel, by 
email at [email protected]. Each can be contacted by telephone by 
calling (202) 707-8350.

SUPPLEMENTARY INFORMATION: 

I. Background

    On October 11, 2018, the president signed into law the Orrin G. 
Hatch-Bob Goodlatte Music Modernization Act, H.R. 1551 (``MMA''). Title 
II of the MMA, the Classics Protection and Access Act, created chapter 
14 of the copyright law, title 17, United States Code, which, among 
other things, extends remedies for copyright infringement to owners of 
sound recordings fixed before February 15, 1972 (``Pre-1972 Sound 
Recordings''). Under the provision, rights owners may be eligible to 
recover statutory damages

[[Page 52177]]

and/or attorneys' fees for the unauthorized use of their Pre-1972 Sound 
Recordings if certain requirements are met. To be eligible for these 
remedies, rights owners must typically file schedules listing their 
Pre-1972 Sound Recordings (``Pre-1972 Schedules'') with the U.S. 
Copyright Office (the ``Office''), which are indexed into the Office's 
public records.\1\ The filing requirement is ``designed to operate in 
place of a formal registration requirement that normally applies to 
claims involving statutory damages.'' \2\
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    \1\ 17 U.S.C. 1401(f)(5)(A)(i)(I)-(II).
    \2\ H.R. Rep. No. 115-651, at 16 (2018); see S. Rep. No. 115-
339, at 18 (2018).
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    The MMA also creates a new mechanism for the public to obtain 
authorization to make noncommercial uses of Pre-1972 Sound Recordings 
that are not being commercially exploited. Under section 1401, a person 
may file a notice with the Copyright Office and propose a specific 
noncommercial use after taking steps to determine whether the recording 
is, at that time, being commercially exploited by or under the 
authority of the rights owner.\3\ Specifically, before determining that 
the recording is not being commercially exploited, she must first 
undertake a ``good faith, reasonable search'' of both the Pre-1972 
Schedules indexed by the Copyright Office and music services ``offering 
a comprehensive set of sound recordings for sale or streaming.'' \4\ At 
that point, she may file a notice identifying the Pre-1972 Sound 
Recording and nature of the intended noncommercial use with the Office 
(``Notice of Pre-1972 Noncommercial Use'').\5\ The Office will index 
this notice into its public records.\6\
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    \3\ 17 U.S.C. 1401(c)(1)(A)-(B).
    \4\ 17 U.S.C. 1401(c)(1)(A).
    \5\ Id. 1401(c)(1)(B).
    \6\ Id. 1401(c)(1)(C).
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    In response, the rights owner of the Pre-1972 Sound Recording may 
file a notice with the Copyright Office ``opting out'' of (i.e., 
objecting to) the noncommercial use (``Pre-1972 Opt-Out Notice''), and 
if the user nonetheless engages in the noncommercial use, such use may 
subject the user to liability under section 1401(a) if no other 
limitation on liability applies.\7\ The rights owner of the Pre-1972 
Sound Recording has 90 days from when the Notice of Pre-1972 
Noncommercial Use is indexed into the Office's public records to file a 
Pre-1972 Opt-Out Notice.\8\ If, however, the rights owner does not opt-
out within 90 days, the user may engage in the noncommercial use of the 
Pre-1972 Sound Recording without violating section 1401(a).\9\ The 
filing of a Notice of Pre-1972 Noncommercial Use does not affect any 
limitation on the exclusive rights of a copyright owner described in 
sections 107, 108, 109, 110, or 112(f) of the Copyright Act, as applied 
to a claim of unauthorized use of a Pre-1972 Sound Recording.\10\
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    \7\ Id. 1401(c)(1).
    \8\ Id. 1401(c)(1)(C).
    \9\ Id. 1401(c)(1).
    \10\ Id. 1401(c)(2)(C).
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    Under the Classics Protection and Access Act, the Copyright Office 
has 180 days to issue regulations identifying the ``specific, 
reasonable steps that, if taken by a [noncommercial user of a Pre-1972 
Sound Recording], are sufficient to constitute a good faith, reasonable 
search'' of the Office's records and commercial services to support a 
conclusion that a relevant Pre-1972 Sound Recording is not being 
commercially exploited.\11\ Once this regulation is promulgated, a user 
following the ``specific, reasonable steps'' identified by the Office 
will be shielded from liability, even if the sound recording is later 
discovered to be commercially exploited.\12\ Other searches may also 
satisfy the statutory requirement of conducting a good faith search, 
but the user would need to independently demonstrate how she met the 
statutory requirement if challenged.\13\
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    \11\ Id. 1401(c)(3)(A).
    \12\ Id. 1401(c)(4)(B).
    \13\ Id. 1401(c)(4)(A)-(B).
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    The Office must also issue regulations ``establish[ing] the form, 
content, and procedures'' for users to file Notices of Pre-1972 
Noncommercial Use and rights owners to file Pre-1972 Opt-Out 
Notices.\14\
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    \14\ Id. 1401(c)(3)(B), (5)(A).
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II. Subjects of Inquiry

A. Good Faith, Reasonable Search

    The Copyright Office seeks public input regarding the ``specific, 
reasonable steps'' that should be sufficient for a user to undertake to 
satisfy the requirement to conduct a ``good faith, reasonable search'' 
and qualify for the noncommercial use safe harbor.\15\
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    \15\ Id. 1401(c)(3)(A), (4)(B).
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    Requiring a ``good faith, reasonable search'' to determine whether 
a work is being commercially exploited is not foreign to copyright law. 
Under the section 108 exception for libraries and archives, once a 
published work is in its last twenty years of copyright protection, a 
library or archives may reproduce, distribute, display, or perform that 
work, for purposes of preservation, scholarship, or research, provided 
the institution has determined after ``reasonable investigation'' that 
the work is not currently subject to normal commercial 
exploitation.\16\ In addition, the Office has examined ``good faith'' 
searches of works in the context of orphan works (i.e., works for which 
a good faith prospective user cannot readily identify and/or locate the 
copyright owner(s) in a situation where permission from the copyright 
owner(s) is necessary as a matter of law).\17\ In its 2015 policy study 
on orphan works, the Office recommended that any limitation on 
liability for using an orphan work must require, among other things, 
that users have performed a ``good faith, qualifying search to locate 
and identify the owner of the infringed copyright before the use of the 
work began.'' \18\ Similarly, for example, in 2008, the U.S. Senate 
passed a bill that would have limited liability for the use of orphan 
works where a user, before making a use, ``performed and documented a 
qualifying search, in good faith, to locate and identify the owner of 
the infringed copyright.'' \19\ The bill stated that a qualifying 
search was one where the user ``undertakes a diligent effort that is 
reasonable under the circumstances to locate the owner of the infringed 
copy,'' which required, at a minimum: ``a search of the records of the 
Copyright Office that are available to the public through the internet 
. . .''; ``use of appropriate technology tools, printed publications, 
and where reasonable, internal or external expert assistance''; ``use 
of appropriate databases, including databases that are available to the 
public through the internet''; and ``any actions that are reasonable 
and appropriate under the facts relevant to the search, including 
actions based on facts known at the start of the search and facts 
uncovered during the search, and including a review, as appropriate, of 
Copyright Office records not available to the public through the 
internet that are reasonably likely to be useful in identifying and 
locating the copyright owner.'' \20\
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    \16\ 17 U.S.C. 108(h)(1), (2)(A).
    \17\ U.S. Copyright Office, Orphan Works and Mass Digitization 
56 (2015), https://www.copyright.gov/orphan/reports/orphan-works2015.pdf.
    \18\ Id.
    \19\ Shawn Bentley Orphan Works Act, S. 2913, 110th Cong. sec. 
514(b)(1) (as passed by Senate, Sept. 26, 2008).
    \20\ Id. sec. 514(2)(A).
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    In this notice of inquiry, the Office seeks practical sources and 
other information that would allow it to enumerate a list of reasonable 
steps that a user should undertake as part of a good faith, reasonable 
search, including services that should be searched. The

[[Page 52178]]

Office also seeks input on any model methods of search. Specifically:
    1. What would constitute a reasonable search of the Office's 
database of Pre-1972 Schedules, which will index information including 
the name of the rights owner, title, and featured artist for each sound 
recording filed on a schedule?
    2. Please suggest specific ``services offering a comprehensive set 
of sound recordings for sale or streaming'' that users should be asked 
to reasonably search before qualifying for the safe harbor.
    3. Which criteria should be used to identify music streaming 
services that should be searched, now and in the future? For example, 
one publication recently analyzed search requests for music providers, 
and determined that the most frequently searched services were YouTube 
Music, Amazon Music, Apple Music, Pandora, and Spotify.\21\ Is this a 
reasonable list, or should the Office consider different and/or 
additional analytics, such as catalog size, number of listeners, or 
inclusion into indexes such as Nielsen Music? To that end, Billboard 
recently added the iHeartRadio subscription stream to various 
streaming-inclusive charts,\22\ and other services, such as SiriusXM, 
Deezer, Bandcamp, SoundCloud, and Tidal provide music to millions of 
users.
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    \21\ Daniel Sanchez, We Asked a Search Analytics Company to Tell 
Us the Most Popular Music Services, Digital Music News (June 11, 
2018), https://www.digitalmusicnews.com/2018/06/11/most-popular-music-services/.
    \22\ Billboard Staff, Pandora & iHeartRadio Subscription Streams 
to Be Added to Billboard Charts, Billboard (June 25, 2018), https://www.billboard.com/articles/news/8462711/pandora-iheartradio-subscription-streams-added-billboard-charts.
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    4. Is it reasonable to expect a user's search to encompass music 
distribution services, such as CD Baby, TuneCore, or The Orchard?
    5. Are there other sources to which the Office should look that may 
demonstrate commercialization of physical copies of recordings, e.g., 
vinyl records or compact discs?
    6. Are there other specialized services or salesfronts regarding 
particular genres or eras within the category of Pre-1972 Sound 
Recordings that should be considered by the Office?
    7. How many sources should a user be required to search before 
qualifying for the safe harbor? In responding, please consider that the 
Office must promulgate a ``reasonable'' list of steps, but in a way 
that does not overlook commercialization of Pre-1972 sound recordings.
    8. Please describe specific steps that should constitute a 
reasonable search for a recording on an identified service. Should the 
steps be service-specific or would a single list of steps be adequate 
for any identified source? Is the description of a qualifying search 
described by the 2008 bill referenced above useful in defining whether 
a user has conducted a reasonable search to determine whether a work is 
being commercially exploited?

B. Filing of Notices of Pre-1972 Noncommercial Use and Pre-1972 Opt-Out 
Notices

    The Office also seeks written comments on how it should ``establish 
the form, content, and procedures'' for users to file Notices of Pre-
1972 Noncommercial Use and rights owners to file Pre-1972 Opt-Out 
Notices. Specifically:
    1. Should the Office provide guidelines as to what constitutes a 
``noncommercial'' use, and if so, what? In answering, consider that 
``merely recovering costs of production and distribution of a sound 
recording resulting from a use otherwise permitted under this 
subsection does not itself necessarily constitute a commercial use of 
the sound recording,'' and ``the fact that a person engaging in the use 
of a sound recording also engages in commercial activities does not 
itself necessarily render the use commercial.'' \23\ For example, 
should the online use of a work where the user receives website 
advertising revenue be considered ``commercial''? Should a prospective 
user be asked to disclose whether they are an individual, or whether 
they will operate as a commercial or noncommercial entity?
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    \23\ 17 U.S.C. 1401(C)(2).
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    2. To what extent should a user be required to specify the nature 
of the use, such as the expected audience, duration of the use, and 
whether it will be online or limited to a particular geographic area?
    3. How should the user be required to certify or describe the steps 
taken for a search to constitute a ``good faith, reasonable search''? 
How detailed should any description be? In responding, the Office 
encourages commenters to consider other forms and procedures offered by 
the Office, which reflect operational considerations by the Office, as 
well as the resources described above.\24\
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    \24\ See, e.g., Document Recordation: Completing and Submitting 
Declarations of Ownership in Musical Works, U.S. Copyright Office, 
https://www.copyright.gov/recordation/domw/#requirements 
(instructions on filing Declarations of Ownership in Musical Works); 
Requirements and Instructions for Completing and Submitting 
Schedules of Pre-1972 Sound Recordings, U.S. Copyright Office, 
https://copyright.gov/music-modernization/pre1972-soundrecordings/schedulefiling-instructions.html (instructions on filing Pre-1972 
Schedules); Requirements and Instructions for Completing and 
Submitting Notices of Contact Information For Transmitting Entities 
Publicly Performing Pre-1972 Sound Recordings, U.S. Copyright 
Office, https://copyright.gov/music-modernization/pre1972-soundrecordings/contactinformation-instructions.html (instructions 
on filing notices of contact information for transmitting entities 
publicly performing Pre-1972 Sound Recordings); Modernizing 
Copyright Recordation, 82 FR 52213 (Nov. 13, 2017) (issuing interim 
rule amending regulations governing recordation of transfers of 
copyright ownership, other documents pertaining to a copyright, and 
notices of termination).
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    Depending on the feedback received, the Office will either issue an 
interim rule, or a notice of proposed rulemaking with further request 
for comment.

    Dated: October 11, 2018.
Regan A. Smith,
General Counsel and Associate Register of Copyrights.
[FR Doc. 2018-22516 Filed 10-15-18; 8:45 am]
 BILLING CODE 1410-30-P