[Federal Register Volume 78, Number 214 (Tuesday, November 5, 2013)]
[Rules and Regulations]
[Pages 66276-66279]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-26382]
=======================================================================
-----------------------------------------------------------------------
LIBRARY OF CONGRESS
Copyright Royalty Board
37 CFR Part 384
[Docket No. 2012-1 CRB Business Establishments II]
Determination of Rates and Terms for Business Establishment
Services
AGENCY: Copyright Royalty Board, Library of Congress.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Copyright Royalty Judges are publishing final regulations
setting the rates and terms for the making of an ephemeral recording of
a sound recording by a business establishment service for the period
January 1, 2014, through December 31, 2018.
DATES: Effective date: January 1, 2014.
[[Page 66277]]
FOR FURTHER INFORMATION CONTACT: Richard Strasser, Senior Attorney, or
Gina Giuffreda, Attorney Advisor. Telephone: (202) 707-8658. Email:
[email protected].
SUPPLEMENTARY INFORMATION: In 1995, Congress enacted the Digital
Performance in Sound Recordings Act, Public Law 104-39, which created
an exclusive right for copyright owners of sound recordings, subject to
certain limitations, to perform publicly sound recordings by means of
certain digital audio transmissions. Among the limitations on the
performance right was the creation of a statutory license for
nonexempt, noninteractive digital subscription transmissions. 17 U.S.C.
114(d).
Congress expanded the scope of the section 114 statutory license in
the Digital Millennium Copyright Act of 1998 (DMCA), Public Law 105-34.
The DMCA authorizes the public performance of a sound recording when
the sound recording is made by a preexisting satellite digital audio
radio service or as part of an eligible nonsubscription transmission in
accordance with the terms and rates of the statutory license. See 17
U.S.C. 114(d). The DMCA also created a statutory license for the making
of an ``ephemeral recording'' of a sound recording by certain
transmitting organizations. 17 U.S.C. 112(e). This license allows
entities that transmit performances of sound recordings to business
establishments, pursuant to the limitations set forth in section
114(d)(1)(C)(iv), to make an ephemeral recording to facilitate
transmission of a public performance of a sound recording. Id. The
license also provides a means by which a transmitting entity with a
statutory license under section 114(f) can make more than one
phonorecord permitted under the exemption set forth in section 112(a).
Id.
The Copyright Act requires the Copyright Royalty Judges (Judges) to
conduct proceedings every five years to determine the rates and terms
for ``the activities described in section 112(e)(1) relating to the
limitation on exclusive rights specified by section 114(d)(1)(C)(iv).''
17 U.S.C. 801(b)(1), 804(b)(2).\1\ Thus, the Judges, in accordance with
17 U.S.C. 804(b)(2), published a notice in the Federal Register
commencing the current proceeding to set rates and terms for the
section 112(e) license and requesting interested parties to submit
their petitions to participate. 77 FR 133 (Jan. 3, 2012). In response
to the notice, the Judges received petitions to participate from:
Pandora Media, Inc.; Music Choice; DMX, Inc.; Muzak, LLC; Music
Reports, Inc.; Clear Channel Broadcasting, Inc.; SoundExchange, Inc.;
and Sirius XM Radio, Inc. The Judges set the timetable for the three-
month negotiation period, see 17 U.S.C. 803(b)(3), as well as a
deadline of November 16, 2012, for the participants' submission of
written direct statements. Subsequently, the Judges granted the
participants' request to extend the deadline to November 29, 2012, in
order to allow the participants to finalize a settlement agreement. See
Order Granting Joint Motion for Extension of Time for Filing Written
Direct Statements, Docket No. 2012-1 CRB Business Establishments II
(Nov. 14, 2012). On November 29, 2012, the Judges received a Motion to
Adopt Settlement stating that all participants had reached a settlement
obviating the need for a hearing.
---------------------------------------------------------------------------
\1\ The Judges commenced a proceeding in 2007, as directed by
section 804(b)(2) of the Copyright Act, and published final
regulations in the Federal Register on March 27, 2008. 73 FR 16199.
Therefore, commencement of the next proceeding--the current
proceeding--was to occur in January 2012. 17 U.S.C. 804(b)(2).
---------------------------------------------------------------------------
Section 801(b)(7)(A) of the Copyright Act authorizes the Judges to
adopt rates and terms negotiated by ``some or all of the participants
in a proceeding at any time during the proceeding'' provided they are
submitted to the Judges for approval. This section provides in part
that the Judges must provide to both non-participants and participants
to the rate proceeding who ``would be bound by the terms, rates, or
other determination set by any agreement * * * an opportunity to
comment on the agreement.'' 17 U.S.C. 801(b)(7)(A)(i). Participants to
the proceeding may also ``object to [the agreement's] adoption as a
basis for statutory terms and rates.'' Id.
The Judges ``may decline to adopt the agreement as a basis for
statutory terms and rates for participants that are not parties to the
agreement,'' only ``if any participant [to the proceeding] objects to
the agreement and the [Judges] conclude, based on the record before
them if one exists, that the agreement does not provide a reasonable
basis for setting statutory terms or rates.'' 17 U.S.C.
801(b)(7)(A)(ii). Accordingly, on July 19, 2013, the Judges published a
notice requesting comment on the proposed rates and terms. 78 FR 43094.
The Judges received no comments or objections in response to the July
19 notice.
Having received no comments or objections to the proposal, the
Judges, by this notice, are adopting as final regulations the rates and
terms for the making of an ephemeral recording by a business
establishment service for the period January 1, 2014, through December
31, 2018.
List of Subjects in 37 CFR Part 384
Copyright, Digital audio transmissions, Ephemeral recordings,
Performance right, Sound recordings.
Final Regulations
For the reasons set forth in the preamble, the Copyright Royalty
Judges amend Part 384 of Chapter III of title 37 of the Code of Federal
Regulations as follows:
PART 384--RATES AND TERMS FOR THE MAKING OF EPHEMERAL RECORDINGS BY
BUSINESS ESTABLISHMENT SERVICES
0
1. The authority citation for part 384 continues to read as follows:
Authority: 17 U.S.C. 112(e), 801(b)(1).
Sec. 384.1 [Amended]
0
2. Section 384.1 is amended as follows:
0
a. In paragraph (a), by removing ``Sec. 384.2(a)'' and adding ``Sec.
384.2'' in its place, and by removing ``2009-2013'' and adding
``January 1, 2014, through December 31, 2018'' in its place;
0
b. In paragraph (b), by removing ``licenses set forth in 17 U.S.C.
112'' and adding ``license set forth in 17 U.S.C. 112(e)'' in its
place; and
0
c. In paragraph (c), by removing ``services'' and adding ``Licensees''
in its place.
0
3. Section 384.2 is amended by revising the definition for ``Copyright
Owner'' to read as follows:
Sec. 384.2 Definitions.
* * * * *
Copyright Owners are sound recording copyright owners who are
entitled to royalty payments made under this part pursuant to the
statutory license under 17 U.S.C. 112(e).
* * * * *
Sec. 384.3 [Amended]
0
4. Section 384.3 is amended as follows:
0
a. In paragraph (a), by removing ``service pursuant to the limitation
on exclusive rights specified by 17 U.S.C. 114(d)(1)(C)(iv)'' and
adding ``Business Establishment Service'' in its place and removing
``10%'' and adding ``12.5%'' in its place; and
0
b. In paragraph (b), by removing ``$10,000 for each calendar year'' and
adding ``$10,000 for each calendar year of the License Period'' in its
place.
0
5. Section 384.4 is amended as follows:
[[Page 66278]]
0
a. By revising the paragraph heading for paragraph (a);
0
b. In paragraph (b)(2)(i), by removing ``condition precedent in
paragraph (b)(2) of this section'' and adding ``condition precedent in
this paragraph (b)(2)'' in its place, and by removing ``authorized such
Collective'' and adding ``authorized the Collective'' in its place;
0
c. By revising paragraphs (c) through (e);
0
d. By revising introductory text of paragraph (f);
0
e. In paragraph (f)(2), by removing ``facsimile number'' and adding
``facsimile number (if any)'' in its place, and by removing
``individual or individuals'' and adding ``person'' in its place;
0
f. In paragraph (f)(3), by removing ``handwritten'';
0
g. In paragraph (f)(3)(i), by removing ``a corporation'' and adding
``corporation'' in its place;
0
h. In paragraph (f)(6), by removing ``a corporation'' and adding
``corporation'' in its place;
0
i. In paragraph (f)(8), by removing ``if the Licensee is a corporation
or partnership,'';
0
j. By revising paragraphs (g) and (h); and
0
k. By removing paragraph (i).
The revisions read as follows:
Sec. 384.4 Terms for making payment of royalty fees and statements of
account.
(a) Payment to the Collective. * * *
* * * * *
(c) Monthly payments. A Licensee shall make any payments due under
Sec. 384.3(a) on a monthly basis on or before the 45th day after the
end of each month for that month. All monthly payments shall be rounded
to the nearest cent.
(d) Minimum payments. A Licensee shall make any minimum payment due
under Sec. 384.3(b) by January 31 of the applicable calendar year,
except that payment by a Licensee that has not previously made
Ephemeral Recordings pursuant to the license under 17 U.S.C. 112(e)
shall be due by the 45th day after the end of the month in which the
Licensee commences to do so.
(e) Late payments. A Licensee shall pay a late fee of 1.0% per
month, or the highest lawful rate, whichever is lower, if either or
both a required payment or statement of account for a required payment
is received by the Collective after the due date. Late fees shall
accrue from the due date until both the payment and statement of
account are received by the Collective.
(f) Statements of account. For any part of the License Period
during which a Licensee operates a Business Establishment Service, at
the time when a minimum payment is due under paragraph (d) of this
section, and by 45 days after the end of each month during the period,
the Licensee shall deliver to the Collective a statement of account
containing the information set forth set forth in this paragraph (f) on
a form prepared, and made available to Licensees, by the Collective. In
the case of a minimum payment, or if a payment is owed for such month,
the statement of account shall accompany the payment. A statement of
account shall contain only the following information:
* * * * *
(g) Distribution of royalties. (1) The Collective shall promptly
distribute royalties received from Licensees directly to Copyright
Owners, or their designated agents, that are entitled to such
royalties. The Collective shall only be responsible for making
distributions to those Copyright Owners or their designated agents who
provide the Collective with such information as is necessary to
identify the correct recipient. The Collective shall distribute
royalties on a basis that values all Ephemeral Recordings by a Licensee
equally based upon the information provided under the reports of use
requirements for Licensees contained in Sec. 370.4 of this chapter.
(2) If the Collective is unable to locate a Copyright Owner
entitled to a distribution of royalties under paragraph (g)(1) of this
section within 3 years from the date of payment by a Licensee, such
royalties shall be handled in accordance with Sec. 384.8.
(h) Retention of records. Books and records of a Licensee and of
the Collective relating to payments of and distributions of royalties
shall be kept for a period of not less than the prior 3 calendar years.
Sec. 384.5 [Amended]
0
6. Section 384.5 is amended as follows:
0
a. In paragraph (a), by removing ``part'' and adding ``section'' in its
place, and by removing ``account, any information'' and adding
``account and any information'' in its place;
0
b. In paragraph (b), by removing ``The Collective shall have'' and
adding ``The party claiming the benefit of this provision shall have''
in its place;
0
c. In paragraph (c), by removing ``activities directly related
thereto'' and adding ``activities related directly thereto'' in its
place;
0
d. In paragraph (d)(1), by removing ``work, require access to the
records'' and adding ``work require access to Confidential
Information'' in its place;
0
e. In paragraph (d)(2), by removing ``Collective committees'' and
adding ``the Collective committees'' in its place, and by removing
``confidential information'' and adding ``Confidential Information'' in
its place each place it appears;
0
f. In paragraph (d)(3), by removing ``respect to the verification of a
Licensee's royalty payments'' and adding ``respect to verification of a
Licensee's statement of account'' in its place;
0
g. In paragraph (d)(4), by removing ``Copyright owners whose works''
and adding ``Copyright Owners, including their designated agents, whose
works'' in its place, by removing ``, or agents thereof'', and by
removing ``confidential information'' and adding ``Confidential
Information'' in its place; and
0
h. In paragraph (e), by removing ``to safeguard all Confidential
Information'' and adding ``to safeguard against unauthorized access to
or dissemination of any Confidential Information'' in its place, and by
removing ``belonging to such Collective'' and adding ``belonging to the
Collective'' in its place.
0
7. Section 384.6 is amended by revising paragraph (d) to read as
follows:
Sec. 384.6 Verification of royalty payments.
* * * * *
(d) Acquisition and retention of report. The Licensee shall use
commercially reasonable efforts to obtain or to provide access to any
relevant books and records maintained by third parties for the purpose
of the audit. The Collective shall retain the report of the
verification for a period of not less than 3 years.
* * * * *
0
8. Section 384.7 is amended as follows:
0
a. In paragraph (a), by removing ``Provided'' and adding ``provided''
in its place; and
0
b. By revising paragraph (d).
The revision reads as follows:
Sec. 384.7 Verification of royalty distributions.
* * * * *
(d) Acquisition and retention of record. The Collective shall use
commercially reasonable efforts to obtain or to provide access to any
relevant books and records maintained by third parties for the purpose
of the audit. The Copyright Owner requesting the verification procedure
shall retain the report of the verification for a period of not less
than 3 years.
* * * * *
0
9. Section 384.8 is revised to read as follows:
[[Page 66279]]
Sec. 384.8 Unclaimed funds.
If the Collective is unable to identify or locate a Copyright Owner
who is entitled to receive a royalty distribution under this part, the
Collective shall retain the required payment in a segregated trust
account for a period of 3 years from the date of distribution. No claim
to such distribution shall be valid after the expiration of the 3-year
period. After expiration of this period, the Collective may apply the
unclaimed funds to offset any costs deductible under 17 U.S.C.
114(g)(3). The foregoing shall apply notwithstanding the common law or
statutes of any State.
Dated: September 18, 2013.
Suzanne M. Barnett,
Chief Copyright Royalty Judge.
Approved by:
James H. Billington,
Librarian of Congress.
[FR Doc. 2013-26382 Filed 11-4-13; 8:45 am]
BILLING CODE 1410-72-P