Fairness in Musical Licensing Act of 1995

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fairness in Musical Licensing Act of 
1995''.

SEC. 2. BUSINESS EXEMPTION.

    Section 110(5) of title 17, United States Code, is amended to read 
as follows:
            ``(5) communication by electronic device of a transmission 
        embodying a performance or display of a work by the reception 
        of a broadcast, cable, satellite, or other transmission, 
        unless--
                    ``(A) an admission fee is charged specifically to 
                see or hear the transmission, or
                    ``(B) the transmission is not properly licensed,
        except that this paragraph shall apply in the case of a 
        performance or display in a commercial establishment only if 
        the performance or display is incidental to the main purpose of 
        the establishment;''.

SEC. 3. BINDING ARBITRATION OF RATE DISPUTES INVOLVING PERFORMING 
              RIGHTS SOCIETIES.

    (a) In General.--Section 504 of title 17, United States Code, is 
amended by adding at the end the following new subsection:
    ``(d) Performing Rights Societies; Binding Arbitration.--
            ``(1) Arbitration of disputes prior to court action.--
                    ``(A) Arbitration.--(i) If a general music user and 
                a performing rights society are unable to agree on the 
                appropriate fee to be paid for the user's past or 
                future performance of musical works in the repertoire 
                of the performing rights society, the general music 
                user shall, in lieu of any other dispute-resolution 
                mechanism established by any judgment or decree 
                governing the operation of the performing rights 
                society, be entitled to binding arbitration of such 
                disagreement pursuant to the rules of the American 
                Arbitration Association. The music user may initiate 
                such arbitration.
                    ``(ii) The arbitrator in such binding arbitration 
                shall determine a fair and reasonable fee for the 
                general music user's past and future performance of 
                musical works in such society's repertoire and shall 
                determine whether the user's past performances of such 
                musical works, if any, infringed the copyrights of 
                works in the society's repertoire. If the arbitrator 
                determines that the general music user's past 
                performances of such musical works infringed the 
                copyrights of works in the society's repertoire, the 
                arbitrator shall impose a penalty for such 
                infringement. Such penalty shall not exceed the 
                arbitrator's determination of the fair and reasonable 
                license fee for the performances at issue.
                    ``(B) Definition.--For purposes of this paragraph, 
                a `general music user' is any person who performs 
                musical works publicly but is not engaged in the 
                transmission of musical works to the general public or 
                to subscribers through broadcast, cable, satellite, or 
                other transmission. For purposes of this paragraph, 
                transmissions within a single commercial establishment 
                or within establishments under common ownership or 
                control are not transmissions to the general public.
                    ``(C) Enforcement of arbitrator's determinations.--
                An arbitrator's determination under this paragraph is 
                binding on the parties and may be enforced pursuant to 
                sections 9 through 13 of title 9.
            ``(2) Court-annexed arbitration.--In any civil action for 
        infringement of the right granted in section 106(4) involving a 
        musical work that is in the repertoire of a performing rights 
        society, if the defendant admits the prior public performance 
        of one or more works in the repertoire of the performing rights 
        society but contests the amount of the license fee demanded by 
        such society for such performance, the dispute shall, if 
        requested by the defendant, be submitted to arbitration under 
section 652(e) of title 28. In such arbitration proceeding, the 
arbitrator shall determine the amount owed by the defendant to the 
performing rights society for all past public performances of musical 
works in the society's repertoire. Such amount shall not exceed two 
times the amount of the blanket license fee that would be applied by 
the society to the defendant for the year or years in which the 
performances occurred. In addition, the arbitrator shall, if requested 
by the defendant, determine a fair and reasonable license fee for the 
defendant's future public performances of the musical works in such 
society's repertoire.
            ``(3) Term of license fee determination.--In any 
        arbitration proceeding initiated under this subsection, the 
        arbitrator's determination of a fair and reasonable license fee 
        for the performance of the music in the repertoire of the 
        performing rights society concerned shall apply for a period of 
        not less than 3 years nor more than 5 years after the date of 
        the arbitrator's determination.''.
    (b) Actions That Shall Be Referred to Arbitration.--Section 652 of 
title 28, United States Code, is amended by adding at the end the 
following:
    ``(e) Actions That Shall Be Referred to Arbitration.--In any civil 
action for infringement of the right granted in section 106(4) of title 
17 involving a musical work that is in the repertoire of a performing 
rights society, if the defendant admits the public performance of any 
musical work in the repertoire of the performing rights society but 
contests the amount of the license fee demanded for such performance by 
the society, the district court shall, if requested by the defendant, 
refer the dispute to arbitration, which shall be conducted in 
accordance with section 504(d)(2) of title 17. Each district court 
shall establish procedures by local rule authorizing the use of 
arbitration under this subsection. The definitions set forth in title 
17 apply to the terms used in this subsection.''.

SEC. 4. RADIO PER PROGRAMMING PERIOD LICENSE.

    Section 504 of title 17, United States Code, as amended by section 
3 of this Act, is further amended by adding at the end thereof the 
following new subsection:
    ``(e) Radio Per Programming Period Licenses.--
            ``(1) In general.--Each performing rights society shall 
        offer, to any radio broadcaster that so requests, a per 
        programming period license to perform nondramatic musical works 
        in the repertoire of the performing rights society. Such 
        license shall be offered on reasonable terms and conditions 
        that provide an economically and administratively viable 
        alternative to the society's blanket license for all such 
        broadcasters.
            ``(2) Price of per programming period licenses.--(A) The 
        total price of a per programming period license described in 
        paragraph (1)--
                    ``(i) shall include separate components for 
                incidental and feature performances, which are 
                independent of the quantity of such performances by the 
                broadcaster and do not exceed the relative value the 
                performing rights society assigns to such performances 
                in its distribution of royalties; and
                    ``(ii) shall not exceed the fee that would be 
                payable by the broadcaster under the lowest price 
                blanket license offered to radio broadcasters, and 
                shall be in direct proportion to the percentage of the 
                broadcaster's revenue attributable to programming 
                periods containing feature performances of musical 
                works in the society's repertoire compared to the 
                industry average percentage of revenue attributable to 
                programming periods containing feature performances of 
                musical works in the society's repertoire.
            ``(B) Nondramatic musical works that have been licensed 
        directly or at the source, or whose performance constitutes 
        fair use or is otherwise exempt from liability under this 
        title, shall not be considered in calculating any per 
        programming period license fee under this subsection.
            ``(3) Administration of license.--Beginning January 1, 
        1998, the performance of nondramatic musical works by a 
        broadcaster under any per programming period license shall be 
        determined on the basis of statistically reliable sampling or 
        monitoring by the performing rights society, and the society 
        may not require the broadcaster to report such performance to 
        the society. The society shall provide the broadcaster with a 
        report detailing the results of such sampling or monitoring, 
        identifying each programming period containing the performance 
        of nondramatic musical works in the society's repertoire and 
        the nondramatic musical works performed.
            ``(4) Implementation.--Any radio broadcaster entitled to a 
        per programming period license under this subsection may bring 
        an action to require compliance with this subsection in an 
appropriate United States district court, including any district court 
established by court order or statute as a court that resolves 
disputes, with respect to license rates, that may arise between 
performing rights societies and persons who perform musical works in 
the society's repertoire.
            ``(5) Definitions.--As used in this subsection--
                    ``(A) the term `blanket license' means a license 
                provided by a performing rights society that authorizes 
                the unlimited performance of musical works in the 
                society's repertoire, for a fee that does not vary with 
                the quantity or type of performances of musical works 
                in the society's repertoire;
                    ``(B) the term `incidental' means commercial 
                jingles not exceeding 60 seconds in duration, bridges, 
                themes or signatures, arrangements of works in the 
                public domain, and background music, including music 
                used in conjunction with sporting events; and
                    ``(C) the term `programming period' means any 15-
                minute period of radio broadcasting commencing on the 
                hour, or at 15, 30, or 45 minutes past the hour.''.

SEC. 5. ACCESS TO REPERTOIRE AND LICENSING INFORMATION.

    Section 504 of title 17, United States Code, as amended by sections 
3 and 4 of this Act, is further amended by adding at the end the 
following:
    ``(f) Access to Musical Repertoire.--
            ``(1) Online computer access.--Each performing rights 
        society shall make available, free of charge, to all interested 
        persons, online computer access to copyright and licensing 
        information for each work in its repertoire. Such access shall, 
        for each such musical work, identify the work by title of the 
        work, the name, address, and telephone number of both the 
        author and the copyright owner, when the work will enter the 
        public domain, and the names of any artists known to have 
        performed the work. Such online computer access shall permit 
        the efficient review of multiple musical works consistent with 
        reasonably available technology.
            ``(2) Directory of titles.--Each performing rights society 
        shall make available at no charge, not less frequently than 
        semiannually, a printed directory of each title in its 
        repertoire, as of the date which is not more than 30 days 
        before the date on which the directory is published, containing 
        the information set forth in paragraph (1).
            ``(3) Documentation of right to license.--A performing 
        rights society shall, upon the request of any person who 
        performs or may perform musical works in the society's 
        repertoire, provide to that person copies of the documentation 
        establishing the society's right to license the public 
        performance of such musical works.
            ``(4) Restrictions on infringement actions.--
                    ``(A) Restrictions.--A performing rights society 
                may not institute or be a party to, or pay the costs of 
                another party in, any action alleging the infringement 
                of the copyright in, or charge a fee under any per 
                programming period license for, any work in that 
                society's repertoire that is not identified and 
                documented as required by paragraphs (1), (2), and (3).
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                on the basis of a failure to comply with paragraph (2) 
                with respect to a musical work first entering the 
                society's repertoire within the 6-month period 
                beginning 30 days before the date on which the 
                society's last directory was published under paragraph 
                (2), if the society establishes that such musical work 
                was included in the online database required by 
                paragraph (1) not less than 10 days before the 
                performance giving rise to the alleged infringement or 
                charge.
    ``(g) Access to Licensing Information.--
            ``(1) Terms of licenses.--Each performing rights society 
        shall provide, within 5 business days after it receives a 
        written request from a licensee of any musical work in the 
        society's repertoire, or from any person that is negotiating to 
        become such a licensee--
                    ``(A) a schedule of the society's license rates for 
                those licensees in the same locality as the licensee or 
                person making the request, that have characteristics 
                similar to such licensee or person, except that the 
                society shall provide information with respect to at 
                least 5 but not more than 10 such licensees;
                    ``(B) the formulas by which the rates are derived; 
                and
                    ``(C) license terms under agreements executed by 
                the performing rights society and licensees described 
                in subparagraph (A).
            ``(2) Copies of licenses.--Each performing rights society 
        shall provide, within 5 business days after receiving a written 
        request from an entity authorized to negotiate license fees and 
        terms on behalf of any group of persons who perform or may 
        perform musical works within that society's repertoire, copies 
        of all forms of licenses negotiated between that society and 
        other entities authorized to negotiate license fees and terms 
        on behalf of any group of persons who perform musical works in 
        that society's repertoire, except that the society shall not 
        disclose individual licensee's names, addresses, or business 
        confidential information.''.

SEC. 6. ANNUAL REPORTS.

    Not later than March 1 of each year, the Attorney General of the 
United States shall submit a written report to the Congress on the 
activities of the Department of Justice during the preceding calendar 
year relating to the continuing supervision and enforcement by the 
Department of the consent decree of the American Society of Composers, 
Authors, and Publishers of March 14, 1950, and the consent decree of 
Broadcast Music, Inc. of December 29, 1966. Such report shall include a 
description of all issues raised or complaints filed with the 
Department of Justice relating to the operations of those performing 
rights societies, and a summary of the Department's actions or 
investigations undertaken by the Department in response to such issues 
and complaints.

SEC. 7. VICARIOUS LIABILITY PROHIBITED.

    A landlord, an organizer or sponsor of a convention, exposition, or 
meeting, a facility owner, or any other person making space available 
to another party by contract, shall not be liable under any theory of 
vicarious or contributory infringement with respect to an infringing 
public performance of a copyrighted work by a tenant, lessee, 
subtenant, sublessee, licensee, exhibitor, or other user of such space 
on the ground that--
            (1) a contract for such space provides the landlord, 
        organizer or sponsor, facility owner, or other person a right 
        or ability to control such space and compensation for the use 
        of such space; or
            (2) the landlord, organizer or sponsor, facility owner, or 
        other person has or had at the time of the infringing 
        performance actual control over some aspects of the use of such 
        space,
if the contract for the use of such space prohibits infringing public 
performances and the landlord, organizer or sponsor, facility owner, or 
other person does not exercise control over the selection of works 
performed.

SEC. 8. RELIGIOUS SERVICE EXEMPTION.

    Section 110(3) of title 17, United States Code, is amended by 
inserting after ``religious assembly'' the following: ``, the 
transmission of such services, whether live or recorded, or the 
recording of copies or phonorecords of a transmission program embodying 
such services in their entirety''.

SEC. 9. CONFORMING AMENDMENTS.

    (a) Definitions.--Section 101 of title 17, United States Code, is 
amended by inserting after the undesignated paragraph relating to the 
definition of ``perform'' the following:
            ``A `performing rights society' is an association, 
        corporation, or other entity that licenses the public 
        performance of nondramatical musical works on behalf of 
        copyright owners of such works, such as the American Society of 
        Composers, Authors, and Publishers, Broadcast Music, Inc., and 
        SESAC, Inc. The `repertoire' of a performing rights society 
        consists of those works for which the society provides licenses 
        on behalf of the owners of copyright in the works.''.

SEC. 10. CONSTRUCTION OF ACT.

    Except as provided in section 504(d)(1) of title 17, United States 
Code, as added by section 3(a) of this Act, nothing in this Act shall 
be construed to relieve any performing rights society (as defined in 
section 101 of title 17, United States Code) of any obligation under 
any consent decree or other court order governing its operation, as 
such decree or order is in effect on the date of the enactment of this 
Act, as it may be amended after such date, or as it may be issued or 
agreed to after such date.

Summary: Fairness in Musical Licensing Act of 1995 - Revises Federal copyright law to provide that communication by electronic device of a transmission embodying a performance or display of a work by the reception of a broadcast, cable, satellite, or other transmission shall not be a copyright infringement unless an admission fee is charged to see or hear the transmission or the transmission is not properly licensed. Provides that a performance or display in a commercial establishment shall not be considered infringement if incidental to the main purpose of the establishment. Specifies that, if a general music user and a performing rights society are unable to agree on the appropriate fee to be paid for the user's past or future performance of musical works in the society's repertoire, the user shall be entitled to binding arbitration of such disagreement pursuant to the rules of the American Arbitration Association in lieu of any other dispute-resolution mechanism established by any judgment or decree governing the operation of such society. Requires the arbitrator to determine a fair and reasonable fee for the user's past and future performance of works in such society's repertoire and to impose a penalty for infringement if the user's past performance infringed the copyright of such works. Makes an arbitrator's determination binding on both parties. Sets forth provisions regarding civil actions for infringement that may be submitted to arbitration if the license fee for a performance is contested. Requires a performing rights society, at the request of any radio broadcaster, to offer the broadcaster a per programming license to perform nondramatic musical works in its repertoire. Directs that such license be offered on terms and conditions that provide an economically and administratively viable alternative to blanket licenses. Sets forth provisions regarding prices of such licenses. Requires, beginning January 1, 1998, the performance of nondramatic musical works by broadcasters under any per programming period license to be determined on the basis of statistically reliable sampling or monitoring by the society and prohibits the society from requiring the broadcaster to report such performance to the society. Authorizes such broadcasters to bring actions to require compliance with such requirements. Directs each performing rights society to make available free online computer access to copyright and licensing information for each work in its repertoire as well as a semiannual printed directory of each title in its repertoire. Requires such society, upon request, to provide to any person who may perform musical works in its repertoire, copies of documentation establishing the society's right to license the public performance of such works. Bars a society from instituting or being a party to any action alleging infringement in, or charging a fee under any per programming period license for, any work in the repertoire that is not identified or documented as described above, with exceptions. Requires the Attorney General to report annually to the Congress on the activities of the Department of Justice relating to the continuing supervision and enforcement of specified consent decrees of the American Society of Composers, Authors, and Publishers and Broadcast Music, Inc. Sets forth conditions under which landlords, organizers of conventions, or others making space available to another party are exempt from liability under any theory of vicarious or contributory infringement with respect to an infringing public performance of a copyrighted work by a tenant, lessee, or other user of such space. Provides that the transmission of religious services or the recording of copies or phonorecords of a transmission program embodying such services shall not be a copyright infringement.