[Federal Register Volume 82, Number 217 (Monday, November 13, 2017)]
[Rules and Regulations]
[Pages 52221-52224]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-24526]



Copyright Office

37 CFR Part 201

[Docket No. 2017-17]

Fees for Electronic Recordation and Notices of Intention To 
Obtain a Compulsory License

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

ACTION: Final rule.


SUMMARY: The U.S. Copyright Office is publishing a final rule 
establishing a separate, lower filing fee for recording documents when 
they are submitted with an electronic title list. Separately, the 
Office is noting a policy change, effective on the same date as the 
final rule, to require the payment of fees for the filing of all 
notices of intention to obtain a compulsory license to make and 
distribute phonorecords, including those that are filed in the Office 
after failed delivery to the copyright owner.

DATES: Effective December 18, 2017.

FOR FURTHER INFORMATION CONTACT: Sarang V. Damle, General Counsel and 
Associate Register of Copyrights, by email at [email protected], or Jason E. 
Sloan, Attorney-Advisor, by email at [email protected]. Each can be 
contacted by telephone by calling (202) 707-8350.


I. New Recordation Fee for Electronic Title Lists

A. Background

    This final rule adjusts U.S. Copyright Office fees in accordance 
with 17 U.S.C. 708. Section 708(a) specifies that ``[f]ees shall be 
paid to the Register of Copyrights'' for services, including a set of 
specified services enumerated in paragraphs (1) through (11) of that 
subsection.\1\ This includes, as relevant here, fees for ``the 
recordation, as provided by section 205, of a transfer of copyright 
ownership or other document.'' \2\ Fees for this service and the other 
services specifically enumerated in section 708(a)(1)-(9) are to be set 
forth in a proposed schedule that is sent to Congress 120 days before 
the adjusted fees can take effect.\3\ The fee may go into effect after 
the end of that period unless ``a law is enacted stating in substance 
that the Congress does not approve the schedule.'' \4\

    \1\ 17 U.S.C. 708(a).
    \2\ Id. at 708(a)(4).
    \3\ Id. at 708(b)(5).
    \4\ Id. Section 708(a) also authorizes the Register to fix fees 
for other services not enumerated in section 708(a)(1)-(9), such as 
the cost of preparing copies of Office records. Id. at 708(a). The 
fees for these additional Office services, as well as fees for the 
filing of cable and satellite statements of account under paragraphs 
(10) and (11) of section 708(a), need not be submitted to Congress, 
but are instead established by the Register of Copyrights by 
regulation based on the Office's costs. Id.

    Before proposing new fees for the services enumerated in (1) 
through (9), the Register must conduct a study of the Office's costs 
and must consider the timing of any fee adjustments and the Office's 
authority to use the fees consistent with the Office's budget.\5\ 
Section 708(b) further provides that the Register may adjust these fees 
to ``not more than that necessary to cover the reasonable costs 
incurred by the Copyright Office for . . . [such services], plus a 
reasonable inflation adjustment to account for any estimated increase 
in costs.'' \6\ Finally, section 708(b) also mandates that the ``[f]ees 
[so] established . . . shall be fair and equitable and give due 
consideration to

[[Page 52222]]

the objectives of the copyright system.'' \7\

    \5\ Id. at 708(b)(1).
    \6\ Id. at 708(b)(2).
    \7\ Id. at 708(b)(4).

B. Cost Study

    Pursuant to section 708, the Office submitted a proposed fee 
schedule and analysis to Congress on August 18, 2017.\8\ That study and 
this final rule implementing the fee it proposed concern a single 
Copyright Office service: The recording of documents accompanied by 
electronic title lists, i.e., lists of certain indexing information 
about the works to which such documents pertain.\9\

    \8\ The study is available on the Office's Web site at https://www.copyright.gov/policy/feestudy2017/fee-study-2017.pdf.
    \9\ Examples of such indexing information can include the types 
of works, the titles of the works (including alternate titles), 
their respective registration numbers, and authorship information.

    Since 1870, the Copyright Office has recorded documents pertaining 
to works under copyright, such as assignments, licenses, and grants of 
security interests. Under the Copyright Act, recordation of such 
documents is voluntary, but provides certain legal entitlements, such 
as constructive notice of the facts stated in the recorded document 
when certain conditions are met.\10\ Thus, the Office has an important 
interest in ensuring that the public record of copyright transactions 
is as timely, complete, and accurate as possible.

    \10\ 17 U.S.C. 205(c) (``Recordation of a document in the 
Copyright Office gives all persons constructive notice of the facts 
stated in the recorded document, but only if--(1) the document, or 
material attached to it, specifically identifies the work to which 
it pertains so that, after the document is indexed by the Register 
of Copyrights, it would be revealed by a reasonable search under the 
title or registration number of the work; and (2) registration has 
been made for the work.'').

    In general, the recordation process is still paper based, and 
Office staff manually transcribe information from documents into an 
electronic format to permit indexing in the Office's public catalog. 
Among the information that must be indexed are the titles of and 
related information for copyrighted works associated with the document 
submitted for recordation, which are typically presented in a list 
appended to the document, referred to informally as a ``title 
appendix.'' A title appendix associated with a document can include 
hundreds, or even thousands, of titles.
    The manual entry of information from title appendices is a 
significant contributor to long processing times in the Office's 
Recordation Section. In 2014, to gain efficiencies, the Office 
promulgated a new rule permitting documents submitted for recordation 
to be accompanied by an electronic title list in the form of an Excel 
spreadsheet.\11\ Document recordation fees, however, were last adjusted 
before the introduction of electronic title lists. Thus, the Office has 
never set a separate fee for recording documents with such lists, and 
currently charges the same recordation fee regardless of whether the 
document has an electronic title list.

    \11\ See 79 FR 55633 (Sept. 17, 2014) (codified at 37 CFR 

    As a result, the Office's cost study proposed implementing a 
separate, reduced filing fee for groups of additional titles provided 
in an electronic title list that accompanies a document submitted for 
recordation. The fee adjustment implemented by this final rule only 
pertains to that fee. The Office is not adjusting the baseline document 
recordation fee of $105 at this time; that fee will remain the same for 
recordations made both with and without electronic title lists. Nor is 
the Office adjusting the fee for groups of additional titles when an 
electronic title list is not used. Proposals for those fees will be 
included in a comprehensive study of all Copyright Office costs and 
fees expected to be submitted to Congress next year.
    The fee-setting methodology employed by the study used activity-
based costing principles which comply with standards set for federal 
managerial accounting \12\ and with guidance for fee setting as 
published by the Office of Management and Budget Circular A-25 Revised: 
User Charges,\13\ and the Government Accountability Office.\14\ Under 
the approach, total costs for the entire recordation function were used 
to develop a time-based multiplier, which was then used to calculate 
the cost of the individual activities for recording the information 
contained in electronic title lists. The total cost of completing an 
electronic title list transaction was determined by aggregating the 
cost of each individual activity.

    \12\ This includes the Federal Accounting Standards Advisory 
Board's Managerial Cost Accounting Concepts and Standards for the 
Federal Government, which promotes activity-based costing for 
calculating the cost of providing services. See Fed. Accounting 
Standards Advisory Bd., Statement of Federal Financial Accounting 
Standards No. 4: Managerial Cost Accounting Concepts and Standards 
for the Federal Government (1995).
    \13\ See Office of Mgmt. and Budget, Circular No. A-25 Revised: 
User Charges, Whitehouse.gov, http://www.whitehouse.gov/omb/circulars_a025 (last visited Aug. 13, 2017).
    \14\ See U.S. Gov't Accountability Office, Federal User Fees: A 
Design Guide (GAO-08-386SP) (2008).

    Cost studies of this type are typically retrospective, using actual 
data from a fiscal year that has concluded. This study used actual data 
from fiscal year 2016, but the methodology was applied prospectively 
against a planned new service. This prospective approach was used 
because, concurrent with the effective date of this rule, the Office is 
implementing a new, more efficient process for providing this service 
than the one currently employed. This methodology was reviewed and 
validated by an independent consulting firm.
    The new fee for documents submitted with electronic title lists to 
be implemented by this final rule is as follows:

1 to 50 additional titles: $60
51 to 500 additional titles: $225
501 to 1,000 additional titles: $390
1,001 to 10,000 additional titles: $555
10,001 or more additional titles: $5,550

In the analysis submitted to Congress, the Office determined that while 
use of electronic title lists can significantly increase the Office's 
processing efficiency, remitters had little incentive to use them. 
Thus, the Office proposed, and is now instituting, a fee for using 
electronic title lists that is generally lower than the current fee for 
recordations made without them. The lower fee is being adopted 
primarily to incentivize use of electronic title lists for documents 
with more than ten additional titles \15\ in an effort to increase 
administrative efficiency and to offer a less expensive avenue to 
obtaining the benefits of recording a document with the Copyright 

    \15\ Though documents with ten or fewer additional titles may be 
submitted with an electronic title list, the final rule will deliver 
fee savings to remitters where documents have more than ten 
additional titles.

    In considering the fairness, equity, and objectives of the 
copyright system, the Office believes that offering recordation 
services for a lower fee, where remitters have done the work to create 
an electronic title list, should result in a wider range of remitters 
submitting documents and may also result in existing remitters 
submitting additional or updated documents with more frequency than 
they might otherwise. Receipt of additional recorded documents should 
result in greater copyright ownership data being incorporated into the 
Office's records, which furthers the Office's mission and benefits the 
public at large.
    In its analysis, the Office also determined that as compared to 
manually indexing documents, where more titles generally means more 
processing time and higher costs, when an electronic title list is 
used, processing time is typically more constant. However, in further 
evaluating the fairness, equity, and objectives of the copyright 
system, the Office has

[[Page 52223]]

decided to adopt a tiered pricing structure based on the number of 
titles to which the document pertains. Under this scheme, larger filers 
submitting documents with a larger number of titles pay a higher fee 
for the added benefit they receive (when the fee is viewed on a per-
title basis) to offset the lower total fee for smaller filers with 
fewer titles. The first four tiers of the proposed schedule increase 
incrementally based on the total number of additional titles submitted. 
The reason for the larger jump between the fourth and fifth tiers is 
because of the significant added costs to the Office to process 
documents with 10,000 or more titles, caused by current system 
    The Office notes that the proposed fee schedule will be revisited 
as part of a comprehensive study of all Office costs and fees to be 
completed next year. As discussed above, the goal of the proposed fee 
schedule is primarily to incentivize use of electronic title lists. To 
do that, the proposed fee offers a discount from the ordinary 
recordation fee of $35 per group of ten additional titles. When the 
full fee study examines all Office costs and evaluates an appropriate 
fee to record a document without an electronic title list in light of 
current costs, it is possible that fee will increase, in which case it 
is also possible that the fee being adopted for using an electronic 
title list may be adjusted upward as well to ensure adequate cost 

C. Effective Date

    Congress's 120-day review period under 17 U.S.C. 708(b)(5) began 
after the Office submitted the proposed fee schedule and analysis on 
August 18, 2017. If no law is enacted stating in substance that 
Congress does not approve of the proposed recordation fee during such 
time, the fee will be instituted pursuant to this final rule, effective 
December 18, 2017.

II. Notices of Intention

    Though not related to the above-discussed cost study or final rule, 
the Office is taking this opportunity to provide public notice that it 
will implement a policy change regarding fees for notices of intention 
to obtain a compulsory license to make and distribute phonorecords 
    Under the Copyright Act, section 115 establishes a compulsory 
license, whereby anyone may make and distribute phonorecords of 
nondramatic musical works, subject to certain terms and conditions, and 
upon paying royalties when applicable. To obtain a compulsory license, 
a licensee must serve an NOI on the relevant copyright owner in the 
form and manner specified by Copyright Office regulations.\16\

    \16\ See generally 37 CFR 201.18.

    In two circumstances, however, an NOI can be filed with the 
Copyright Office rather than the copyright owner. First, if the public 
records of the Copyright Office do not identify the copyright owner and 
include an address at which notice can be served, the NOI can instead 
be filed with the Office.\17\ These ``unidentified NOIs'' can be filed 
electronically or in paper hard copy, though a discounted fee is 
offered for electronic submissions.\18\

    \17\ 17 U.S.C. 115(b)(1).
    \18\ 37 CFR 201.3(e)(1).

    Second, if the NOI is sent to the last address for the copyright 
owner shown by the Office's records, but is returned to the sender 
because the copyright owner was no longer located at that address or 
refused to accept delivery, the Office's regulations permit the 
``original Notice as sent'' to be filed with the Office, along with a 
``brief statement that the Notice was sent to the last address for the 
copyright owner shown by the records of the Copyright Office but was 
returned,'' and may also ``be accompanied by appropriate evidence that 
it was mailed to, or that delivery by reputable courier service was 
attempted at, that address.'' \19\ Typically, for these ``returned-to-
sender NOIs,'' the Office receives the NOI in the original mailing 
envelope marked with a return to sender label. The Office does not 
currently have any mechanism for accepting these NOIs 

    \19\ Id. Sec.  201.18(f)(2).
    \20\ See id.

    The Office's regulations used to explicitly state that no filing 
fee would be charged for returned-to-sender NOIs, while such a fee 
would be charged for the unidentified NOIs.\21\ But in 2001, the Office 
issued a notice of proposed rulemaking seeking to remove this 
limitation, as ``[t]he cost to the Office of processing the filing of a 
Notice of Intention is the same whether the copyright owner is not 
identified in the records of the Office or the copyright owner is no 
longer located at the address shown in the records of the Office or has 
refused to accept delivery.''\22\ The Office believed that the same 
filing fee ``should be charged in both cases.''\23\ The final rule, 
effective in 2004, adopted that proposal, repealing the regulatory 
language that had expressly prohibited charging a fee.\24\ Consistent 
with this rulemaking, the Copyright Office's fee schedule does not 
distinguish between different types of NOIs.\25\

    \21\ Compare 37 CFR 201.18(e)(1) (2003) (``Notices of Intention 
submitted for filing shall be accompanied by the fee specified in 
Sec.  201.3(e).'') with id. Sec.  201.18(e)(3) (``No filing fee will 
be required in the case of Notices filed under this paragraph.'').
    \22\ 66 FR 45241, 45243 (Aug. 28, 2001); see also 69 FR 11566, 
11572 (Mar. 11, 2004) (additional, related notice of proposed 
rulemaking reiterating that ``the Office intends to amend its rules 
to require a filing fee in each instance where the Notice is filed 
with the Copyright Office without regard to the licensee's reason 
for filing the Notice with the Office'').
    \23\ 66 FR at 45243; see also 69 FR at 11572.
    \24\ 69 FR 34578, 34583 (June 22, 2004).
    \25\ See 37 CFR 201.3(e)(1) (establishing a fee for 
``[r]ecordation of a notice of intention to make and distribute 
phonorecords'' without differentiation).

    In practice, however, and in part due to the extremely low volume 
of returned-to-sender NOIs the Office received in the years following 
adoption of the 2004 rule, the Office abstained from imposing the 
established fee. In recent years, however, the volume of returned-to-
sender NOIs has increased sharply. Last year the Office received over 
800 such NOIs, and this year the Office has received over 2,000 to 
date. Each of these NOIs must be individually and manually processed. 
Because of this increased burden, the Office can no longer afford to 
forbear from the collection of fees. Accordingly, this document 
announces a policy change that will be implemented on December 18, 
2017: Any returned-to-sender NOIs received in the Office on or after 
that date must be accompanied by the same filing fee applicable to 
other paper-filed NOIs, which is currently $75 plus $20 per group of 
one to ten additional titles.\26\ The Office is publicly announcing 
this policy change in advance to give remitters of returned-to-sender 
NOIs time to adjust their practices.

    \26\ See id.

List of Subjects in 37 CFR Part 201

    Copyright, General provisions.

Final Regulations

    For the reasons set forth in the preamble, the Copyright Office 
amends 37 CFR part 201 as follows:


1. The authority citation for part 201 continues to read as follows:

    Authority: 17 U.S.C. 702.

2. Amend Sec.  201.3 by revising paragraph (c)(16) to read as follows:

Sec.  201.3  Fees for registration, recordation, and related services, 
special services, and services performed by the Licensing Division.

* * * * *
    (c) * * *

[[Page 52224]]

     Registration, recordation and related services          Fees ($)
                              * * * * * * *
(16) Recordation of a document, including a notice of     ..............
 intention to enforce
    Single title........................................             105
    Additional titles (per group of 1 to 10 titles).....              35
    Additional titles provided in an electronic title
        1 to 50 additional titles.......................              60
        51 to 500 additional titles.....................             225
        501 to 1,000 additional titles..................             390
        1,001 to 10,000 additional titles...............             555
        10,001 or more additional titles................           5,550
    Correction of online Public Catalog data due to                    7
     erroneous electronic title submission (per title)..
                              * * * * * * *

* * * * *

    Dated: October 24, 2017.
Karyn Temple Claggett,
Acting Register of Copyrights and Director of the U.S. Copyright 

    Approved by:

Carla D. Hayden,
Librarian of Congress.
[FR Doc. 2017-24526 Filed 11-9-17; 8:45 am]