105TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 105–25

COPYRIGHT TECHNICAL AMENDMENTS ACT

MARCH 17, 1997.—Committed to the Committee of the Whole House on the State

of the Union and ordered to be printed

Mr. COBLE, from the Committee on the Judiciary,

submitted the following

REPORT

[To accompany H.R. 672]

[Including cost estimate of the Congressional Budget Office]

The Committee on the Judiciary, to whom was referred the bill

(H.R. 672) to make technical amendments to certain provisions of

title 17, United States Code, having considered the same, report favorably thereon with an amendment and recommend that the bill

as amended do pass.

CONTENTS

Page

Purpose and Summary ............................................................................................ 6

Background and Need for the Legislation ............................................................. 6

Hearings ................................................................................................................... 7

Committee Consideration ........................................................................................ 7

Vote of the Committee ............................................................................................. 7

Committee Oversight Findings ............................................................................... 7

Committee on Government Reform and Oversight ............................................... 7

New Budget Authority and Tax Expenditures ...................................................... 7

Congressional Budget Office Estimate ................................................................... 7

Constitutional Authority Statement ...................................................................... 11

Section-by-Section Analysis and Discussion .......................................................... 11

Changes in Existing Law ........................................................................................ 18

The amendment is as follows:

Strike out all after the enacting clause and insert in lieu thereof

the following:

SECTION 1. TECHNICAL CORRECTIONS TO THE SATELLITE HOME VIEWER ACT OF 1994.

The Satellite Home Viewer Act of 1994 (Public Law 103–369) is amended as follows:

(1) Section 2(3)(A) is amended to read as follows:

‘‘(A) in clause (i) by striking ‘12 cents’ and inserting ‘17.5 cents per subscriber in the case of superstations that as retransmitted by the satellite
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carrier include any program which, if delivered by any cable system in the

United States, would be subject to the syndicated exclusivity rules of the

Federal Communications Commission, and 14 cents per subscriber in the

case of superstations that are syndex-proof as defined in section 258.2 of

title 37, Code of Federal Regulations’; and ’’.

(2) Section 2(4) is amended to read as follows:

‘‘(4) Subsection (c) is amended—

‘‘(A) in paragraph (1)—

‘‘(i) by striking ‘until December 31, 1992,’;

‘‘(ii) by striking ‘(2), (3) or (4)’ and inserting ‘(2) or (3)’; and

‘‘(iii) by striking the second sentence;

‘‘(B) in paragraph (2)—

‘‘(i) in subparagraph (A) by striking ‘July 1, 1991’ and inserting ‘July

1, 1996’; and

‘‘(ii) in subparagraph (D) by striking ‘December 31, 1994’ and inserting ‘December 31, 1999, or in accordance with the terms of the agreement, whichever is later’; and

‘‘(C) in paragraph (3)—

‘‘(i) in subparagraph (A) by striking ‘December 31, 1991’ and inserting ‘January 1, 1997’;

‘‘(ii) by amending subparagraph (B) to read as follows:

‘‘‘(B) ESTABLISHMENT OF ROYALTY FEES.—In determining royalty fees

under this paragraph, the copyright arbitration royalty panel appointed

under chapter 8 shall establish fees for the retransmission of network stations and superstations that most clearly represent the fair market value

of secondary transmissions. In determining the fair market value, the panel

shall base its decision on economic, competitive, and programming information presented by the parties, including—

‘‘‘(i) the competitive environment in which such programming is distributed, the cost of similar signals in similar private and compulsory

license marketplaces, and any special features and conditions of the retransmission marketplace;

‘‘‘(ii) the economic impact of such fees on copyright owners and satellite carriers; and

‘‘‘(iii) the impact on the continued availability of secondary transmissions to the public.’; and

‘‘(iii) in subparagraph (C), by inserting ‘or July 1, 1997, whichever is

later’ after ‘section 802(g)’.’’.

(3) Section 2(5)(A) is amended to read as follows:

‘‘(A) in paragraph (5)(C) by striking ‘the date of the enactment of the Satellite Home Viewer Act of 1988’ and inserting ‘November 16, 1988’; and’’.

SEC. 2. COPYRIGHT IN RESTORED WORKS.

Section 104A of title 17, United States Code, is amended as follows:

(1) Subsection (d)(3)(A) is amended to read as follows:

‘‘(3) EXISTING DERIVATIVE WORKS.—(A) In the case of a derivative work that

is based upon a restored work and is created—

‘‘(i) before the date of the enactment of the Uruguay Round Agreements

Act, if the source country of the restored work is an eligible country on such

date, or

‘‘(ii) before the date on which the source country of the restored work becomes an eligible country, if that country is not an eligible country on such

date of enactment,

a reliance party may continue to exploit that derivative work for the duration

of the restored copyright if the reliance party pays to the owner of the restored

copyright reasonable compensation for conduct which would be subject to a remedy for infringement but for the provisions of this paragraph.’’.

(2) Subsection (e)(1)(B)(ii) is amended by striking the last sentence.

(3) Subsection (h)(2) is amended to read as follows:

‘‘(2) The ‘date of restoration’ of a restored copyright is—

‘‘(A) January 1, 1996, if the source country of the restored work is a nation adhering to the Berne Convention or a WTO member country on such

date, or

‘‘(B) the date of adherence or proclamation, in the case of any other

source country of the restored work.’’.

(4) Subsection (h)(3) is amended to read as follows:

‘‘(3) The term ‘eligible country’ means a nation, other than the United States,

that—
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‘‘(A) becomes a WTO member country after the date of the enactment of

the Uruguay Round Agreements Act;

‘‘(B) on such date of enactment is, or after such date of enactment becomes, a member of the Berne Convention; or

‘‘(C) after such date of enactment becomes subject to a proclamation

under subsection (g).

For purposes of this section, a nation that is a member of the Berne Convention

on the date of the enactment of the Uruguay Round Agreements Act shall be

construed to become an eligible country on such date of enactment.’’.

SEC. 3. LICENSES FOR NONEXEMPT SUBSCRIPTION TRANSMISSIONS.

Section 114(f) of title 17, United States Code, is amended—

(1) in paragraph (1), by inserting ‘‘, or, if a copyright arbitration royalty panel

is convened, ending 30 days after the Librarian issues and publishes in the Federal Register an order adopting the determination of the copyright arbitration

royalty panel or an order setting the terms and rates (if the Librarian rejects

the panel’s determination)’’ after ‘‘December 31, 2000’’; and

(2) in paragraph (2), by striking ‘‘and publish in the Federal Register’’.

SEC. 4. ROYALTY PAYABLE UNDER COMPULSORY LICENSE.

Section 115(c)(3)(D) of title 17, United States Code, is amended by striking ‘‘and

publish in the Federal Register’’.

SEC. 5. NEGOTIATED LICENSE FOR JUKEBOXES.

Section 116 of title 17, United States Code, is amended—

(1) by amending subsection (b)(2) to read as follows:

‘‘(2) ARBITRATION.—Parties not subject to such a negotiation may determine,

by arbitration in accordance with the provisions of chapter 8, the terms and

rates and the division of fees described in paragraph (1).’’; and

(2) by adding at the end the following new subsection:

‘‘(d) DEFINITIONS.—As used in this section, the following terms mean the following:

‘‘(1) A ‘coin-operated phonorecord player’ is a machine or device that—

‘‘(A) is employed solely for the performance of nondramatic musical works

by means of phonorecords upon being activated by the insertion of coins,

currency, tokens, or other monetary units or their equivalent;

‘‘(B) is located in an establishment making no direct or indirect charge

for admission;

‘‘(C) is accompanied by a list which is comprised of the titles of all the

musical works available for performance on it, and is affixed to the phonorecord player or posted in the establishment in a prominent position where

it can be readily examined by the public; and

‘‘(D) affords a choice of works available for performance and permits the

choice to be made by the patrons of the establishment in which it is located.

‘‘(2) An ‘operator’ is any person who, alone or jointly with others—

‘‘(A) owns a coin-operated phonorecord player;

‘‘(B) has the power to make a coin-operated phonorecord player available

for placement in an establishment for purposes of public performance; or

‘‘(C) has the power to exercise primary control over the selection of the

musical works made available for public performance on a coin-operated

phonorecord player.’’.

SEC. 6. REGISTRATION AND INFRINGEMENT ACTIONS.

Section 411(b)(1) of title 17, United States Code, is amended to read as follows:

‘‘(1) serves notice upon the infringer, not less than 48 hours before such fixation, identifying the work and the specific time and source of its first transmission, and declaring an intention to secure copyright in the work; and’’.

SEC. 7. COPYRIGHT OFFICE FEES.

(a) FEE INCREASES.—Section 708(b) of title 17, United States Code, is amended

to read as follows:

‘‘(b) In calendar year 1997 and in any subsequent calendar year, the Register of

Copyrights, by regulation, may increase the fees specified in subsection (a) in the

following manner:

‘‘(1) The Register shall conduct a study of the costs incurred by the Copyright

Office for the registration of claims, the recordation of documents, and the provision of services. The study shall also consider the timing of any increase in

fees and the authority to use such fees consistent with the budget.

‘‘(2) The Register may, on the basis of the study under paragraph (1), and

subject to paragraph (5), increase fees to not more than that necessary to cover
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the reasonable costs incurred by the Copyright Office for the services described

in paragraph (1), plus a reasonable inflation adjustment to account for any estimated increase in costs.

‘‘(3) Any fee established under paragraph (2) shall be rounded off to the near- est dollar, or for a fee less than $12, rounded off to the nearest 50 cents.

‘‘(4) Fees established under this subsection shall be fair and equitable and

give due consideration to the objectives of the copyright system.

‘‘(5) If the Register determines under paragraph (2) that fees should be increased, the Register shall prepare a proposed fee schedule and submit the

schedule with the accompanying economic analysis to the Congress. The fees

proposed by the Register may be instituted after the end of 120 days after the

schedule is submitted to the Congress unless, within that 120-day period, a law

is enacted stating in substance that the Congress does not approve the schedule.’’.

(b) DEPOSIT OF FEES.—Section 708(d) of such title is amended to read as follows:

‘‘(d)(1) Except as provided in paragraph (2), all fees received under this section

shall be deposited by the Register of Copyrights in the Treasury of the United

States and shall be credited to the appropriations for necessary expenses of the

Copyright Office. Such fees that are collected shall remain available until expended.

The Register may, in accordance with regulations that he or she shall prescribe, refund any sum paid by mistake or in excess of the fee required by this section.

‘‘(2) In the case of fees deposited against future services, the Register of Copyrights shall request the Secretary of the Treasury to invest in interest-bearing securities in the United States Treasury any portion of the fees that, as determined by

the Register, is not required to meet current deposit account demands. Funds from

such portion of fees shall be invested in securities that permit funds to be available

to the Copyright Office at all times if they are determined to be necessary to meet

current deposit account demands. Such investments shall be in public debt securities with maturities suitable to the needs of the Copyright Office, as determined by

the Register of Copyrights, and bearing interest at rates determined by the Secretary of the Treasury, taking into consideration current market yields on outstanding marketable obligations of the United States of comparable maturities.

‘‘(3) The income on such investments shall be deposited in the Treasury of the

United States and shall be credited to the appropriations for necessary expenses of

the Copyright Office.’’.

SEC. 8. COPYRIGHT ARBITRATION ROYALTY PANELS.

(a) ESTABLISHMENT AND PURPOSE.—Section 801 of title 17, United States Code,

is amended—

(1) in subsection (b)(1) by striking ‘‘and 116’’ in the first sentence and inserting ‘‘116, and 119’’;

(2) in subsection (c) by inserting after ‘‘panel’’ at the end of the sentence the

following:

‘‘, including—

‘‘(1) authorizing the distribution of those royalty fees collected under sections

111, 119, and 1005 that the Librarian has found are not subject to controversy;

and

‘‘(2) accepting or rejecting royalty claims filed under sections 111, 119, and

1007 on the basis of timeliness or the failure to establish the basis for a claim’’;

and

(3) by amending subsection (d) to read as follows:

‘‘(d) SUPPORT AND REIMBURSEMENT OF ARBITRATION PANELS.—The Librarian of

Congress, upon the recommendation of the Register of Copyrights, shall provide the

copyright arbitration royalty panels with the necessary administrative services related to proceedings under this chapter, and shall reimburse the arbitrators presiding in distribution proceedings at such intervals and in such manner as the Librarian shall provide by regulation. Each such arbitrator is an independent contractor

acting on behalf of the United States, and shall be hired pursuant to a signed agreement between the Library of Congress and the arbitrator. Payments to the arbitrators shall be considered reasonable costs incurred by the Library of Congress and

the Copyright Office for purposes of section 802(h)(1).’’.

(b) PROCEEDINGS.—Section 802 of title 17, United States Code, is amended—

(1) in subsection (c) by striking the last sentence; and

(2) in subsection (h) by amending paragraph (1) to read as follows:

‘‘(1) DEDUCTION OF COSTS OF LIBRARY OF CONGRESS AND COPYRIGHT OFFICE

FROM ROYALTY FEES.—The Librarian of Congress and the Register of Copyrights

may, to the extent not otherwise provided under this title, deduct from royalty

fees deposited or collected under this title the reasonable costs incurred by the
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Library of Congress and the Copyright Office under this chapter. Such deduction may be made before the fees are distributed to any copyright claimants.

In addition, all funds made available by an appropriations Act as offsetting collections and available for deductions under this subsection shall remain available until expended. In ratemaking proceedings, the reasonable costs of the Librarian of Congress and the Copyright Office shall be borne by the parties to

the proceedings as directed by the arbitration panels under subsection (c).’’.

SEC. 9. DIGITAL AUDIO RECORDING DEVICES AND MEDIA.

Section 1007(b) of title 17, United States Code, is amended by striking ‘‘Within

30 days after’’ in the first sentence and inserting ‘‘After’’.

SEC. 10. CONFORMING AMENDMENT.

Section 4 of the Digital Performance Right in Sound Recordings Act of 1995 (Public Law 104–39) is amended by redesignating paragraph (5) as paragraph (4).

SEC. 11. MISCELLANEOUS TECHNICAL AMENDMENTS.

(a) AMENDMENTS TO TITLE 17, UNITED STATES CODE.—Title 17, United States

Code, is amended as follows:

(1) The table of chapters at the beginning of title 17, United States Code, is

amended—

(A) in the item relating to chapter 6, by striking ‘‘Requirement’’ and inserting ‘‘Requirements’’;

(B) in the item relating to chapter 8, by striking ‘‘Royalty Tribunal’’ and

inserting ‘‘Arbitration Royalty Panels’’;

(C) in the item relating to chapter 9, by striking ‘‘semiconductor chip

products’’ and inserting ‘‘Semiconductor Chip Products’’; and

(D) by inserting after the item relating to chapter 9 the following:

‘‘10. Digital Audio Recording Devices and Media ..................................................................................... 1001’’.

(2) The item relating to section 117 in the table of sections at the beginning

of chapter 1 is amended to read as follows:

‘‘117. Limitations on exclusive rights: Computer programs.’’.

(3) Section 101 is amended in the definition of to perform or display a work

‘‘publicly’’ by striking ‘‘processs’’ and inserting ‘‘process’’.

(4) Section 108(e) is amended by striking ‘‘pair’’ and inserting ‘‘fair’’.

(5) Section 109(b)(2)(B) is amended by striking ‘‘Copyright’’ and inserting

‘‘Copyrights’’.

(6) Section 110 is amended—

(A) in paragraph (8) by striking the period at the end and inserting a

semicolon;

(B) in paragraph (9) by striking the period at the end and inserting ‘‘;

and’’; and

(C) in paragraph (10) by striking ‘‘4 above’’ and inserting ‘‘(4)’’.

(7) Section 115(c)(3)(E) is amended—

(A) in clause (i) by striking ‘‘sections 106(1) and (3)’’ each place it appears

and inserting ‘‘paragraphs (1) and (3) of section 106’’; and

(B) in clause (ii)(II) by striking ‘‘sections 106(1) and 106(3)’’ and inserting

‘‘paragraphs (1) and (3) of section 106’’.

(8) Section 119(c)(1) is amended by striking ‘‘until unless’’ and inserting ‘‘unless’’.

(9) Section 304(c) is amended in the matter preceding paragraph (1) by striking ‘‘the subsection (a)(1)(C)’’ and inserting ‘‘subsection (a)(1)(C)’’.

(10) Section 405(b) is amended by striking ‘‘condition or’’ and inserting ‘‘condition for’’.

(11) Section 407(d)(2) is amended by striking ‘‘cost of’’ and inserting ‘‘cost to’’.

(12) The item relating to section 504 in the table of sections at the beginning

of chapter 5 is amended by striking ‘‘Damage’’ and inserting ‘‘Damages’’.

(13) Section 504(c)(2) is amended by striking ‘‘court it’’ and inserting ‘‘court

in’’.

(14) Section 509(b) is amended by striking ‘‘merchandise; and baggage’’ and

inserting ‘‘merchandise, and baggage’’.

(15) Section 601(a) is amended by striking ‘‘nondramtic’’ and inserting ‘‘nondramatic’’.

(16) Section 601(b)(1) is amended by striking ‘‘subsustantial’’ and inserting

‘‘substantial’’.
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(17) The item relating to section 710 in the table of sections at the beginning

of chapter 7 is amended by striking ‘‘Reproductions’’ and inserting ‘‘Reproduction’’.

(18) The item relating to section 801 in the table of sections at the beginning

of chapter 8 is amended by striking ‘‘establishment’’ and inserting ‘‘Establishment’’.

(19) Section 801(b) is amended—

(A) by striking ‘‘shall be—’’ and inserting ‘‘shall be as follows:’’;

(B) in paragraph (1) by striking ‘‘to make’’ and inserting ‘‘To make’’;

(C) in paragraph (2)—

(i) by striking ‘‘to make’’ and inserting ‘‘To make’’; and

(ii) in subparagraph (D) by striking ‘‘adjustment; and’’ and inserting

‘‘adjustment.’’; and

(D) in paragraph (3) by striking ‘‘to distribute’’ and inserting ‘‘To distribute’’.

(20) Section 803(b) is amended in the second sentence by striking ‘‘subsection

subsection’’ and inserting ‘‘subsection’’.

(21) The item relating to section 903 in the table of sections at the beginning

of chapter 9 is amended to read as follows:

‘‘903. Ownership, transfer, licensure, and recordation.’’.

(22) Section 909(b)(1) is amended—

(A) by striking ‘‘force’’ and inserting ‘‘work’’; and

(B) by striking ‘‘sumbol’’ and inserting ‘‘symbol’’.

(23) Section 910(a) is amended in the second sentence by striking ‘‘as used’’

and inserting ‘‘As used’’.

(24) Section 1006(b)(1) is amended by striking ‘‘Federation Television’’ and inserting ‘‘Federation of Television’’.

(25) Section 1007 is amended—

(A) in subsection (a)(1) by striking ‘‘the calendar year in which this chapter takes effect’’ and inserting ‘‘calendar year 1992’’; and

(B) in subsection (b) by striking ‘‘the year in which this section takes effect’’ and inserting ‘‘1992’’.

(b) RELATED PROVISIONS.— (1) Section 1(a)(1) of the Act entitled ‘‘An Act to amend chapter 9 of title 17,

United States Code, regarding protection extended to semiconductor chip products of foreign entities’’, approved November 9, 1987 (17 U.S.C. 914 note), is

amended by striking ‘‘orginating’’ and inserting ‘‘originating’’.

(2) Section 2319(b)(1) of title 18, United States Code, is amended by striking

‘‘last 10’’ and inserting ‘‘least 10’’.

SEC. 12. EFFECTIVE DATES.

(a) IN GENERAL.—Except as provided in subsections (b) and (c), the amendments

made by this Act shall take effect on the date of the enactment of this Act.

(b) SATELLITE HOME VIEWER ACT.—The amendments made by section 1 shall be

effective as if enacted as part of the Satellite Home Viewer Act of 1994 (Public Law

103–369).

(c) TECHNICAL AMENDMENT.—The amendment made by section 11(b)(1) shall be

effective as if enacted on November 9, 1987.

PURPOSE AND SUMMARY

H.R. 672 accomplishes many purposes. Some of its provisions will

assist the U.S. Copyright Office in carrying out its duties, including

giving the Office the ability to set reasonable fees for basic services,

subject to congressional approval. Others correct or clarify the language in several recent amendments to the law so that Congress’

original intent can be better achieved. None of the amendments

contained in H.R. 672 change substantive copyright law. All of the

amendments are non-controversial and technical or clarifying in

nature.

BACKGROUND AND NEED FOR THE LEGISLATION

The Copyright Act was last generally revised in 1976, in response to the many technological changes that had occurred since
7

the enactment of the 1909 Act. Since 1976, Congress regularly has

had to address new issues, especially those raised by new technologies or new methods of exploitation. Each session of Congress

has produced at least one major amendment to the Copyright Act.

HEARINGS

The Committee’s Subcommittee on Courts and Intellectual Property held a hearing on H.R. 1861, a technical corrections bill containing almost all of the provisions contained in H.R. 672 on November 9, 1995. Testimony was received from Ms. Marybeth Peters, Register of Copyrights, United States Copyright Office, The

Library of Congress (Serial 32). No hearings were held on H.R. 672

in the 105th Congress.

COMMITTEE CONSIDERATION

On March 5, 1997, the Subcommittee held a markup on H.R.

672. The Subcommittee adopted, by voice vote, en bloc amendments

to H.R. 672 offered by Chairman Coble, and favorably reported, by

voice vote, a quorum being present, a single amendment in the nature of a substitute to H.R. 672 to the full Committee. On March

12, 1997, the Committee adopted, by voice vote, en bloc amendments offered by Mr. Coble to the amendment in the nature of a

substitute, and favorably reported, by voice vote, a quorum being

present, the amendment in the nature of a substitute, as amended,

to the House.

VOTE OF THE COMMITTEE

There were no recorded votes.

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 2(l)(3)(A) of rule XI of the Rules of the

House of Representatives, the Committee reports that the findings

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report.

COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT FINDINGS

No findings or recommendations of the Committee on Government Reform and Oversight were received as referred to in clause

2(l)(3)(D) of rule XI of the Rules of the House of Representatives.

NEW BUDGET AUTHORITY AND TAX EXPENDITURES

Clause 2(l)(3)(B) of House rule XI is inapplicable because this

legislation does not provide new budgetary authority or increased

tax expenditures.

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

In compliance with clause 2(l)(C)(3) of rule XI of the Rules of the

House of Representatives, the Committee sets forth, with respect to

the bill, H.R. 672, the following estimate and comparison prepared
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by the Director of the Congressional Budget Office under section

403 of the Congressional Budget Act of 1974:

U.S. CONGRESS,

CONGRESSIONAL BUDGET OFFICE,

Washington, DC, March 17, 1997.

Hon. HENRY J. HYDE,

Chairman, Committee on the Judiciary,

House of Representatives, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 672, a bill to make technical amendments to certain provisions of Title 17, United States

Code.

If you wish further details on this estimate, we will be pleased

to provide them. The CBO staff contact is Rachel Forward.

Sincerely,

JUNE E. O’NEILL, Director.

Enclosure.

H.R. 672—A bill to make technical amendments to certain provisions of Title 17, United States Code

SUMMARY

H.R. 672 would amend the United States Copyright Act to make

a numerous technical corrections and clarifications. Specifically,

the bill would eliminate certain reporting requirements, enable the

Librarian of Congress to distribute uncontested royalties without

convening a copyright arbitration royalty panel (CARP), and authorize the Librarian of Congress to deduct expenses for CARPs

from the royalties collected and distributed by the government. The

bill also would authorize the Register of Copyrights to adjust the

current Copyright Office fees to reflect the fair cost of registering

claims and providing services. The bill specifies that the fees would

be credited as offsetting collections to the office’s appropriations account.

By allowing for increases in fees, H.R. 672 would eliminate the

need for appropriations to fund the Copyright Office, thus reducing

discretionary spending by about $11 million a year over the 1999–

2002 period. In addition, CBO estimates that enacting this bill

would result in direct spending of $5 million over the 1998–2002

period and would increase revenues by $5 million over the same

period. Because the legislation would affect direct spending and receipts in fiscal year 1998, pay-as-you-go procedures would apply.

CBO estimates a net pay-as-you-go impact of zero for 1998.

The legislation also contains a private-sector mandate but the

amount of the mandate would not exceed the $100 million threshold specified in the Unfunded Mandates Reform Act of 1995

(UMRA). The bill contains no intragovernmental mandates as defined in UMRA and would impose no costs on state, local, or tribal

governments.

ESTIMATED COST TO THE FEDERAL GOVERNMENT

Under current law, the Copyright Office has the authority to collect and spend user fees; H.R. 672 would enable the office to in-
9

crease the amount of such fees to cover its expenses, thus eliminating the need for an annual appropriation starting in 1999. The

1997 appropriation—net of offsetting collections—is $11 million.

Because H.R. 672 would enable the Copyright Office to collect and

spend the fees without further authorization, the net impact of

these fees on direct spending would be roughly zero.

H.R. 672 would make a number of changes affecting the administration of the copyright arbitration royalty panels and the distribution of royalties. Most of the changes would not affect the federal

budget because they would either codify current practice or would

not apply within the foreseeable future. CBO estimates, however,

that authorizing the Library of Congress to collect and spend fees

to cover the cost of ratemaking proceedings conducted by the

CARPs would increase federal receipts and outlays by about $1

million in each of fiscal years 1998 through 2002.

For the purposes of this estimate, CBO has assumed that H.R.

672 would be enacted by the end of fiscal year 1997 and that outlays would follow the historical spending patterns for the Copyright

Office. The following table shows the estimated impact of this bill

on direct spending and revenues.

[In millions of dollars]

Fiscal year—

1997 1998 1999 2000 2001 2002

CHANGES TO DIRECT SPENDING AND REVENUES

Estimated Budget Authority ............................................... 0 1 1 1 1 1

Estimated Outlays .............................................................. 0 1 1 1 1 1

Estimated Revenues .......................................................... 0 1 1 1 1 1

The costs of this legislation fall within budget function 370 (commerce and housing credit).

BASIS OF ESTIMATE

Direct spending and revenues

Enacting H.R. 672 would result in increases in Copyright Office

fees (which are recorded as offsetting collections) and royalty fees

(which are recorded as governmental receipts). As a result, direct

spending would also increase—by the amounts of additional fee collections.

Copyright Office Fees.—Under current law, the Copyright Office

is authorized to collect and spend about $22 million in fees each

year. In fiscal year 1997 the Copyright Office received an additional $11 million in appropriations for total budget authority of

$33 million. H.R. 672 would authorize the Copyright Office to set

fees according to the fair cost of registering copyright claims and

providing services. CBO expects that the Copyright Office would

conduct a study on fees in 1998 and would become fully fee-funded

in fiscal year 1999, eliminating the need for appropriations.

Under current law, the Copyright Office assesses most of its fees

on copyright registration claims. In order to recover the direct cost

of the copyright registration process, fees would need to be increased from $20 per registration to an estimated $35 to $40 per

registration. Such an increase in the copyright registration fee

could cause a drop in demand, but CBO expects that the number
10

of copyright registrations would not fall sharply below the current

level. CBO estimates that the office would raise an additional $12

million to $13 million in fees per year by increasing the registration fee and other user fees over the 1999–2002 period. Although

the Copyright Office could collect and spend the fees without further authorization, we would expect the appropriations acts to

specify in advance the amount of fees that could be spent in any

fiscal year.

Changes to Royalty Fees.—H.R. 672 would change certain statutory royalty payments for carriage of network signals by satellite

carriers. These royalty payments are collected by the federal government as governmental receipts (revenues) and are distributed

without appropriation as direct spending. Because H.R. 672 would

raise the statutory rates to the amounts currently in effect as a result of a 1992 arbitration ruling, CBO estimates that this provision

would cause no change in direct spending or receipts.

Under current law, the Copyright Office convenes a copyright arbitration royalty panel to arbitrate disputes between copyright

owners and users. The members of CARPs, who are not government employees, bill the parties to the arbitration directly for their

expenses. H.R. 672 would allow the Librarian of Congress to deduct

the expenses of such CARPs from the royalties held in escrow by

the government. CBO estimates that this provision would have no

budgetary impact because it would not affect the amount of royalties collected or the amount of money disbursed by the government.

The Copyright Office also convenes a CARP to set royalty rates.

H.R. 672 would authorize the Librarian of Congress to collect fees

from parties to a ratemaking proceeding and distribute those fees

to members of CARPs to cover their expenses. Based on information from the Copyright Office, CBO estimates that the Librarian

would collect and distribute fees of about $1 million each year.

These fees would increase governmental receipts and outlays by

about $1 million each year. The net budgetary impact of such fees

would be roughly zero over time.

H.R. 672 would require the Librarian of Congress to convene a

CARP to establish royalty rates if copyright owners and jukebox

operators fail to negotiate an agreement on rates. If a CARP were

to be convened when the current licensing agreement expires in

1999, the office would likely collect and distribute disputed royalties of about $7 million a year. Based on information from the

Copyright Office, CBO expects that the jukebox owners will successfully negotiate another agreement with copyright owners in

1999 and that the royalty payments will not be collected and distributed by the office. Therefore, we do not expect that this provision would affect direct spending or receipts.

Spending subject to appropriation

CBO estimates that eliminating certain reporting requirements

would save the Copyright Office about $150,000 in fiscal year 1998.

Because additional fee income would be available to cover the office’s expenses, net outlays from appropriations would decline from

$11 million in 1997 to close to zero in 1999 and subsequent years.
11

PAY-AS-YOU-GO CONSIDERATIONS

Section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985 sets up pay-as-you-go procedures for legislation affecting direct spending or receipts through 1998. CBO estimates

that enactment of H.R. 672 would increase both direct spending

and governmental receipts (revenues) by about $1 million each in

1998 from the collection and spending of fees to cover the expenses

of the CARPs.

ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS

H.R. 672 contains no intergovernmental mandates as defined in

the Unfunded Mandates Reform Act of 1995 (UMRA) and would

impose no costs on state, local, or tribal governments.

ESTIMATED IMPACT ON THE PRIVATE SECTOR

This bill would impose a new private-sector mandate by authorizing the Register of Copyrights to increase the fees charged by the

Copyright Office. CBO has determined that increases to Copyright

Office fees are mandates as defined in UMRA. The direct costs of

the new mandate would total about $12 million a year, which is

significantly below the $100 million threshold specified in UMRA.

Estimate prepared by: Federal cost: Rachel Forward; impact on

State, local, and tribal governments: Leo Lex; and impact on the

private sector: Matthew Eyles.

Estimate approved by: Robert A. Sunshine, Deputy Assistant Director for Budget Analysis.

CONSTITUTIONAL AUTHORITY

Pursuant to rule XI, clause 2(l)(4) of the Rules of the House of

Representatives, the Committee finds the authority for this legislation in Article I, clause 8, section 8 of the Constitution.

SECTION-BY-SECTION ANALYSIS

Section 1. Technical Corrections to Section 119 of the Act.

Section 119 contains certain drafting errors which were the result of amending the Copyright Act without taking into account

changes made by the Copyright Royalty Tribunal Reform Act of

1993.

Subsection (1) clarifies the royalty rates that are paid by satellite

carriers for retransmission of network and superstation broadcast

signals to satellite dish owners for private home viewing. Congress

intended that the rates adopted in the law should be the same as

the rates that were set by arbitration in 1992. However, the Satellite Home Viewer Act of 1994 reversed the rates; the current law

states that 17.5 cents should be paid for signals not subject to the

FCC’s syndicated exclusivity blackout rules, and 14 cents per subscriber for signals subject to such rules. Subsection (1) corrects that

reversal.

Subsection (2) corrects the section numbers, and accompanying

references, to take into account the changes made to title 17 by the

Copyright Royalty Tribunal Reform Act of 1993.
12

Subsection (3) deletes reference to the effective date of the Satellite Home Viewer Act of 1988 to avoid any confusion that might

result from two Acts of the same name, and inserts the effective

date of the Satellite Home Viewer Act of 1988, which was November 16, 1988.

Section 2. Copyright in Restored Works.

In 1994, a new Section 104A was created to restore copyright

protection to certain preexisting works from other World Trade Organization (‘‘WTO’’) and Berne Convention member countries that

had fallen into the public domain in the United States. During the

drafting process, some inadvertent errors were made. These errors

alter the intended meaning of the statute or create accidental ambiguities. In order to avoid constitutional challenges and unnecessary litigation, the amendments to Section 104A in H.R. 672 correct the errors.

1. Provision for already-created derivative works

The first part of the amendment to section 104A deals with establishing special treatment for already-created derivative works.

The problem with this subsection was created by a word change in

the bill during technical and conforming revisions. This change inadvertently altered the effect of the subsection and in large part

nullified its purpose. The amendment in H.R. 672 substitutes the

word ‘‘restored’’ for the word ‘‘derivative’’ in two places in subsection (3), entitled ‘‘Existing Derivative Works,’’ in order to reverse

that mistaken change, and inserts the word ‘‘derivative’’ in one

other place in that subsection in order to ensure clarity.

In enacting section 104A, Congress considered the fact that restoring copyright in works that are currently in the public domain

creates a potential problem: people may have used these works as

the basis for new derivative works, such as motion pictures made

from novels. At the time the new derivative work was created, the

use of the underlying work was completely lawful, since it was in

the public domain. Once copyright in the underlying work is restored, however, the continued use of the derivative work without

the consent of the owner of the copyright in the underlying work

would constitute copyright infringement. See Stewart v. Abend, 495

U.S. 207 (1990).

Witnesses at the hearings on the bill testified that preventing

the creators of derivative works from making use of those works

might raise Constitutional problems under both the Copyright

Clause and the Takings Clause of the Fifth Amendment. Accordingly, Congress included a special provision for derivative works

based on restored works where the derivative work was created before the date of restoration, allowing the owner of the derivative

work to continue to use it even after the one-year sell-off period

provided to all reliance parties, upon payment of reasonable compensation to the copyright owner of the restored work. See SAA at

paragraph B.1.c.(3), 1994 U.S.C.C.A.N. 4040, 4292.

In a drafting error, the phrase ‘‘if the source country of the restored work is an eligible country’’ was changed to ‘‘if the source

country of the derivative work is an eligible country.’’ Since ‘‘eligible country’’ is defined in the statute to exclude the United States,
13

the effect of this word change was to exclude all U.S. derivative

works from the benefit of this provision—the major constituency of

works that the provision was meant to protect. In other words, U.S.

derivative works based on now-restored foreign works that were in

the public domain at the time the derivative works were created

can no longer legally be exploited in this country without the consent of the owner of the foreign work. The amendment corrects that

unintended inequity.

2. Publication of list of notices of intent

The second part of the amendment deletes the requirement for

the Copyright Office to publish in the Federal Register a cumulative annual list of notices of intent to enforce restored copyrights

filed with the Office. The Office is already required to publish a list

of such notices every four months, and publication of a cumulative

annual list would be expensive and duplicative.

3. Date of copyright restoration

The third part of the amendment specifies the date ‘‘January 1,

1996’’ in the statute’s definition of ‘‘date of restoration’’ to make explicit the date on which these foreign copyrights were restored.

Despite Congressional intent that the restoration date be January 1, 1996, the statutory language is potentially ambiguous on

this point. The ‘‘date of restoration’’ is defined as the date on which

the Agreement on Trade-Related Aspects of Intellectual Property

Rights (‘‘TRIPs’’) entered into force with respect to the United

States for works from countries that are members of the Berne

Convention or the WTO on that date. The reference to when the

TRIPs agreement entered into force is subject to interpretation.

TRIPs is part of the overall WTO agreement, which entered into

force with respect to the United States on January 1, 1995. The

TRIPS agreement granted to the United States and other developed countries one year, or until January 1, 1996, to fully implement its provisions. The TRIPs obligation to restore copyrights

therefore became effective on January 1, 1996.

In enacting new section 104A, Congress intended the restoration

of foreign copyrights to take place on January 1, 1996. The statute

itself requires the Copyright Office to issue regulations governing

restored copyrights no later than 90 days before the TRIPs agreement entered into force with respect to the United States.

§ 104A(e)(1)(D)(I). If the restoration date were January 1, 1995, the

statute did not become law until 3 weeks prior to that date, making

it impossible for the Copyright Office to comply with a deadline of

90 days in advance.

The Statement of Administrative Action (‘‘SAA’’), approved by

Congress and the statute’s legislative history both confirm this interpretation. The SAA unambiguously states that the foreign copyrights will be restored on the date ‘‘when the TRIPs Agreement’s

obligations take effect for the United States.’’ The Joint Report on

the Senate version makes this explicit, stating that the ‘‘bill would

automatically restore copyright protection for qualifying works

* * * one year after the WTO comes into being.’’ Joint Report of

the Committee on Finance, Committee on Agriculture, Nutrition

and Forestry, and Committee on Governmental Affairs of the Unit-
14

ed States Senate to accompany the Uruguay Round Agreements

Act, S. 2467, S. Rep. No. 412, 103d Cong., 2d Sess. 225 (1994).

Since enactment of the TRIPs Agreement, the Copyright Office

and the White House have attempted to resolve any ambiguity.

The Copyright Office published a notice of policy decision concluding that January 1, 1996 is the date of restoration. 60 Fed. Reg.

7793 (February 9, 1995). The President issued a proclamation clarifying that January 1, 1996 is the date on which all the TRIPs obligations take effect for the United States. Proclamation 6780 of

March 23, 1995, 60 Fed. Reg. 15845 (1995).

Nevertheless, some commentators have concluded that the language of the statute requires a restoration date of January 1, 1995.

See, e.g., William F. Patry, Copyright and the GATT: An Interpretation and Legislative History of the Uruguay Round Agreements

Act, 31–36 (1995). Apart from the inconsistency with legislative intent, this reading causes problems. First, since the Copyright Office

did not (and could not administratively) start to accept notices of

intent to enforce restored copyrights until January 1,1996, it would

effectively reduce the window of opportunity to file such notices

from two years to one. Second, it would expand the group of foreign

works for which copyright would be restored, and therefore made

unavailable for free use by the American public.

4. Definition of ‘‘eligible country’’ for purposes of determining who

qualifies as ‘‘reliance party’’

Finally, the definition of ‘‘eligible country’’ creates a potential unintended problem when read in the context of the definition of who

qualifies as a ‘‘reliance party.’’ The amendment revises the definition of ‘‘eligible country’’ to resolve this problem.

A ‘‘reliance party’’ is given certain limited rights to continue exploiting restored works. In order to qualify as a reliance party, the

time period of when one engaged in acts with respect to the restored work is critical. Ordinarily, these acts must have begun

prior to the date of the statute’s enactment (December 8, 1994). If

the source country of the work has become an ‘‘eligible country’’

after that date, however, the acts must have begun prior to the

date it became an eligible country. The problem is that ‘‘eligible

country’’ is defined as ‘‘a nation, other than the United States, that

is a WTO member country, adheres to the Berne Convention, or is

subject to a presidential proclamation.’’ In the context of determining whether someone is a reliance party, this could be read to

mean that the party’s acts must have begun prior to the date that

the source country became an eligible country by joining the Berne

Convention. Some countries joined the Berne Convention when it

was established in 1886; others joined at subsequent points between that date and December 8, 1994. Obviously, no one will be

able to qualify as a reliance party if his or her use of a work had

to begin before 1886.

The amendment therefore amends the definition of ‘‘eligible country’’ to clarify the relevant dates of the events leading to eligibility.

The reference to a country that ‘‘is a WTO member’’ is changed to

refer to a country that becomes a WTO member country after the

date of the enactment of the Uruguay Round Agreements Act’’; the

reference to a country that ‘‘adheres to the Berne Convention’’ is
15

changed to refer to a country that ‘‘on such date of enactment is,

or after such date of enactment becomes, a member of the Berne

Convention’’; and the relevant presidential proclamation is defined

as one that takes place ‘‘after such date of enactment.’’

Section 3. Licenses for Nonexempt Subscription Transmissions.

Subsection (1) is intended to avoid the possibility of a gap in the

effective dates of the royalty rates established in 1996 and 2000–

2001 for the public performance of sound recordings by nonexempt

subscription digital transmission services. The Digital Performance

Right in Sound Recordings Act of 1995 directed that the rates established in 1996 are to expire on December 31, 2000. New rates

are to be established during 2000. However, it is possible that the

work of the copyright arbitration royalty panel (‘‘CARP’’) and of the

Librarian of Congress in reviewing the CARP’s report will not be

concluded by December 31, 2000, thereby creating a period in

which no rates apply. Subsection (1) avoids this result by stating

that the effective date of the rates set in 1996 last until December

31, 2000, or until 30 days after the Librarian has published in the

Federal Register his or her decision to adopt or reject the CARP’s

rate adjustment decision. Resorting to this second option will be

unnecessary if a CARP is not convened, or if the CARP and the Librarian conclude their functions before December 31, 2000.

Subsection (2) deletes the phrase from Section 114(f) which authorizes a copyright arbitration royalty panel to publish its decision

in the Federal Register. This was an inadvertent mistake, since

only government agencies may publish in the Federal Register.

Any decision of a CARP will be published by the Librarian of Congress pursuant to the provisions of chapter 8 of the Copyright Act.

Section 4. Royalty Payable Under Compulsory License.

This section deletes the phrase from Section 115(c) which authorizes a copyright arbitration royalty panel to publish its decision in

the Federal Register. Since only agencies may publish in the Federal Register, the decision of the CARP will be published by the Librarian of Congress pursuant to the provisions of chapter 8 of the

Copyright Act.

Section 5. Negotiated License for Jukeboxes.

The Copyright Royalty Tribunal Reform Act of 1993 eliminated

the old § 116 jukebox compulsory license and replaced it with the

§ 116A negotiated jukebox license adopted in the Berne Convention

implementing legislation in 1988. This produced two unintended

results. It eliminated the definitions of a ‘‘jukebox’’ and a ‘‘jukebox

operator,’’ and it sanctioned the possibility of an arbitration proceeding which is not a copyright arbitration royalty panel (CARP)

arbitration. This section restores the original definitions as they

appeared in the Copyright Act in 1978, and it clarifies that any

jukebox negotiated license which requires arbitration is to be a

CARP proceeding.

Section 6. Registration and Infringement Actions.

This section amends section 411(b) of the Copyright Act, which

covers works that are being transmitted ‘‘live’’ at the same time

that they are being fixed in tangible form for the first time. Cur-
16

rently, copyright owners must give the would-be infringer at least

a 10-day advance notice that a copyright is being claimed in the

work. When notice is given, an injunction can be obtained to prevent the unauthorized use of the work.

This provision has proven problematic when applied to a number

of sporting events, especially elimination play-offs. In many instances the teams and the times of the games are not known 10

days in advance. Therefore, this notice provision is amended to provide for notice of not less than 48 hours.

Section 7. Studies on Copyright and Other Matters.

This section allows the Copyright Office to continue its current

practice of conducting studies and programs on copyright law and

on other matters on which it possesses expertise such as semiconductor chip protection and database protection.

Section 8. Copyright Office Fees.

The Copyright Fees and Technical Amendments Act of 1989 established a fee schedule for Copyright Office services which could

be adjusted in 1995 and every fifth year thereafter according to

changes in the Consumer Price Index.

Actual experience with the fee adjustment mechanism, however,

has highlighted certain problems that underscore the need for reform. Because of the relatively low inflation of the early 1990s, the

change in the Consumer Price Index was not great enough to justify incurring the costs associated with publicizing and administering a new fee schedule. Therefore, the Copyright Office did not

publish a new fee schedule in 1995, and is required by the current

statute to wait until 2000 to modify its fees.

However, it is not clear from the current wording of the law

whether, if the Copyright Office were to adopt a new fee schedule

in 2000, it could take into account the inflation of the entire tenyear period since the last fee schedule was adopted, 1990–2000, or

whether it could only take into account the inflation of the period

1995–2000. The fee schedule adopted in 1989 is not based on a cost

recovery model. Consequently, merely adjusting fees based on rises

in the Consumer Price Index will not solve all of the problems.

Therefore, subsection (a) gives the Register the authority to set the

basic fees.

Subsection (a) allows fees to be raised beginning in 1996 and in

any subsequent year. Based on a study to determine the costs incurred by the Copyright Office, the Register may increase fees up

to the reasonable costs incurred by the Copyright Office plus a reasonable inflation adjustment to account for future increases in

costs. The fees shall be rounded off to the nearest dollar, or, if the

fee is less than $12, to the nearest half-dollar. The fees must be

fair and equitable and give due consideration to the objectives of

the copyright system. This allows the Register to decide that fees

may be less than the costs of the services provided, if that furthers

the objectives of the copyright system.

If the Register wants to increase fees, he or she shall submit the

proposed fee schedule with the study and its economic analysis to

Congress. The fees proposed by the Register may be instituted after

the end of 120 days after the schedule is submitted to the Congress
17

unless, within that 120-day period, a law is enacted stating in substance that the Congress does not approve the schedule.

Subsection (b) of this section gives the Register of Copyrights the

discretion to invest funds from the Copyright Office’s prepaid fees

(‘‘Deposit Accounts’’) that are not needed to meet current demands

for services in interest-bearing securities in the United States

Treasury, and to use the income from such investments for necessary expenses of the Copyright Office. The Copyright Office is

currently engaged in developing its new electronic registration, recordation and deposit system, CORDS (Copyright Office Registration, Recordation and Deposit System), and the Committee expects

that the Copyright Office will, where feasible, use the interest on

deposit account funds for the development and operation of

CORDS.

Section 9. Copyright Arbitration Royalty Panels.

Subsection (1) makes clear that the 1997 satellite carrier rate adjustment is a CARP proceeding. That proceeding was left out of

section 801 when the Copyright Royalty Tribunal Reform Act of

1993 was passed, because, at that time, the satellite carrier compulsory license was set to expire in 1994 without any further rate

adjustment. With the passage of the Satellite Home Viewer Act of

1994, the satellite carrier compulsory license is extended to December 31, 1999, and the rate adjustment proceeding which has been

scheduled for 1997 needs to be reflected in section 801.

Subsection (2) gives two concrete examples of the procedural and

evidentiary rulings the Librarian of Congress may render related

to CARP proceedings. They include the authority to determine the

amount and distribute the royalty fees that are not in controversy,

and the authority to reject royalty claims that are untimely or do

not establish the basis for a claim as required by the Copyright Office’s regulations. By setting out these examples, the Committee

does not intend to abridge the authority of the Librarian to make

other procedural and evidentiary rulings that would apply to a

CARP proceeding, such as precontroversy discovery rulings.

Subsection (3) gives the Librarian of Congress the authority to

pay the CARP arbitrators directly according to a signed agreement

and any regulations that the Librarian may adopt. Currently, the

parties to an arbitration proceeding pay the arbitrators.

Subsection (3) further provides that in distribution proceedings,

the payments made to the arbitrators by the Librarian, as well as

the costs of the Library and the Copyright Office, come from the

relevant royalty pool. In ratemaking proceedings, the costs are paid

by assessing the parties to the proceeding subject to the discretion

of the arbitrators.

Subsection (3) also clarifies the status of the arbitrators. They

are independent contractors acting on behalf of the United States.

The phrase ‘‘acting on behalf of the United States’’ is intended to

make clear that the laws governing the conduct and standards of

behavior of government employees and those who deal with them

in a professional capacity apply to the CARP arbitrators.

Section 10. Digital Audio Recording Devices and Media.
18

The Audio Home Recording Act of 1992 requires the Librarian to

determine by March 30th of each year whether there are any controversies among the claimants in the distribution of digital audio

recording technology (DART) royalties. However, DART royalty

claimants file their claims, in person or by mail, in January and

February of each year. Because claims mailed in February may not

reach the Copyright Office until early March, there is very little

time for the Office to compile its official claimant list and for the

claimants to negotiate with each other to determine whether they

can settle their differences before the March 30th deadline. The

March 30th deadline has proved to be impracticable. This section

removes the deadline, and gives the Librarian the flexibility to reasonably set the length of the negotiation period in order to promote

settlements.

Section 11. Conforming Amendment.

This section corrects a numbering mistake in the Digital Performance Right in Sound Recordings Act of 1995.

Section 12. Miscellaneous Technical Amendments.

This section corrects spelling and typographical errors existing in

title 17.

Section 13. Effective Dates.

All amendments to the Copyright Act included in this bill take

effect on the date of enactment of the legislation, with the exception of Section 2, the satellite carrier provisions, which are effective

on the date of enactment of the Satellite Home Viewer Act of 1994,

October 18, 1994.

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3 of rule XIII of the Rules of the House

of Representatives, changes in existing law made by the bill, as reported, are shown as follows (existing law proposed to be omitted

is enclosed in black brackets, new matter is printed in italic, existing law in which no change is proposed is shown in roman):

SATELLITE HOME VIEWER ACT OF 1994

* * * * * * *

SEC. 2. STATUTORY LICENSE FOR SATELLITE CARRIERS.

Section 119 of title 17, United States Code, is amended as follows:

(1) * * *

* * * * * * *

(3) Subsection (b)(1)(B) is amended—

ø(A) in clause (i) by striking ‘‘12 cents’’ and inserting

‘‘17.5 cents per subscriber in the case of superstations not

subject to syndicated exclusivity under the regulations of

the Federal Communications Commission, and 14 cents

per subscriber in the case of superstations subject to such

syndicated exclusivity’’; and¿

(A) in clause (i) by striking ‘‘12 cents’’ and inserting ‘‘17.5

cents per subscriber in the case of superstations that as re-
19

transmitted by the satellite carrier include any program

which, if delivered by any cable system in the United

States, would be subject to the syndicated exclusivity rules

of the Federal Communications Commission, and 14 cents

per subscriber in the case of superstations that are syndexproof as defined in section 258.2 of title 37, Code of Federal

Regulations’’; and

* * * * * * *

ø(4) Subsection (c) is amended—

ø(A) in paragraph (1) by striking ‘‘December 31, 1992,’’;

ø(B) in paragraph (2)—

ø(i) in subparagraph (A) by striking ‘‘July 1, 1991’’

and inserting ‘‘July 1, 1996’’; and

ø(ii) in subparagraph (D) by striking ‘‘December 31,

1994’’ and inserting ‘‘December 31, 1999, or in accordance with the terms of the agreement, whichever is

later’’; and

ø(C) in paragraph (3)—

ø(i) in subparagraph (A) by striking ‘‘December 31,

1991’’ and inserting ‘‘January 1, 1997’’;

ø(ii) by amending subparagraph (D) to read as follows:

ø(D) ESTABLISHMENT OF ROYALTY FEES.—In determining

royalty fees under this paragraph, the Copyright Arbitration Panel shall establish fees for the retransmission of

network stations and superstations that most clearly represent the fair market value of secondary transmissions.

In determining the fair market value, the Panel shall base

its decision on economic, competitive, and programming information presented by the parties, including—

ø‘‘(i) the competitive environment in which such programming is distributed, the cost for similar signals in

similar private and compulsory license marketplaces,

and any special features and conditions of the retransmission marketplace;

ø‘‘(ii) the economic impact of such fees on copyright

owners and satellite carriers; and

ø‘‘(iii) the impact on the continued availability of

secondary transmissions to the public.’’;

ø(iii) in subparagraph (E) by striking ‘‘60’’ and inserting ‘‘180’’; and

ø(iv) in subparagraph (C)—

ø(I) by striking ‘‘, or until December 31, 1994’’;

and

ø(II) by inserting ‘‘or July 1, 1997, whichever is

later’’ after ‘‘section 802(g)’’.¿

(4) Subsection (c) is amended—

(A) in paragraph (1)—

(i) by striking ‘‘until December 31, 1992,’’;

(ii) by striking ‘‘(2), (3) or (4)’’ and inserting ‘‘(2) or

(3)’’; and

(iii) by striking the second sentence;

(B) in paragraph (2)—
20

(i) in subparagraph (A) by striking ‘‘July 1, 1991’’

and inserting ‘‘July 1, 1996’’; and

(ii) in subparagraph (D) by striking ‘‘December 31,

1994’’ and inserting ‘‘December 31,1999, or in accordance with the terms of the agreement, whichever is

later’’; and

(C) in paragraph (3)—

(i) in subparagraph (A) by striking ‘‘December 31,

1991’’ and inserting ‘‘January 1, 1997’’;

ø(ii) by amending subparagraph (D) to read as follows:

ø‘‘(D) ESTABLISHMENT OF ROYALTY FEES.—In determining royalty fees under this paragraph, the Copyright Arbitration Panel shall establish fees for the retransmission of

network stations and superstations that most clearly represent the fair market value of secondary transmissions.

In determining the fair market value, the Panel shall base

its decision on economic, competitive, and programming information presented by the parties, including—

ø‘‘(i) the competitive environment in which such programming is distributed, the cost for similar signals in

similar private and compulsory license marketplaces,

and any special features and conditions of the retransmission marketplace;

ø‘‘(ii) the economic impact of such fees on copyright

owners and satellite carriers; and

ø‘‘(iii) the impact on the continued availability of

secondary transmissions to the public.’’;

ø(iii) in subparagraph (E) by striking ‘‘60’’ and inserting ‘‘180’’; and

ø(iv) in subparagraph (C)—

ø(I) by striking ‘‘, or until December 31, 1994’’;

and

ø(II) by inserting ‘‘or July 1, 1997, whichever is

later’’ after ‘‘section 802(g)’’.¿

(4) Subsection (c) is amended—

(A) in paragraph (1)—

(i) by striking ‘‘until December 31, 1992,’’;

(ii) by striking ‘‘(2), (3) or (4)’’ and inserting ‘‘(2) or

(3)’’; and

(iii) by striking the second sentence;

(B) in paragraph (2)—

(i) in subparagraph (A) by striking ‘‘July 1, 1991’’

and inserting ‘‘July 1, 1996’’; and

(ii) in subparagraph (D) by striking ‘‘December 31,

1994’’ and inserting ‘‘December 31, 1999, or in accordance with the terms of the agreement, whichever is

later’’; and

(C) in paragraph (3)—

(i) in subparagraph (A) by striking ‘‘December 31,

1991’’ and inserting ‘‘January 1, 1997’’;

(ii) by amending subparagraph (B) to read as follows:
21

‘‘(B) ESTABLISHMENT OF ROYALTY FEES.—In determining

royalty fees under this paragraph, the copyright arbitration

royalty panel appointed under chapter 8 shall establish fees

for the retransmission of network stations and superstations that most clearly represent the fair market value of

secondary transmissions. In determining the fair market

value, the panel shall base its decision on economic, competitive, and programming information presented by the

parties, including—

‘‘(i) the competitive environment in which such programming is distributed, the cost of similar signals in

similar private and compulsory license marketplaces,

and any special features and conditions of the retransmission marketplace;

‘‘(ii) the economic impact of such fees on copyright

owners and satellite carriers; and

‘‘(iii) the impact on the continued availability of secondary transmissions to the public.’’; and

(iii) in subparagraph (C), by inserting ‘‘or July 1,

1997, whichever is later’’ after ‘‘section 802(g)’’.

(5) Subsection (a) is amended—

ø(A) in paragraph (5)(C) by striking ‘‘the Satellite Home

Viewer Act of 1988’’ and inserting ‘‘this section’’; and¿

(A) in paragraph (5)(C) by striking ‘‘the date of the enactment of the Satellite Home Viewer Act of 1988’’ and inserting ‘‘November 16, 1988’’; and

* * * * * * *

TITLE 17, UNITED STATES CODE

Chap. Sec.

1. Subject Matter and Scope of Copyright ............................................ 101

* * * * * * *

6. Manufacturing øRequirement¿ Requirements and Importation 601

* * * * * * *

8. Copyright øRoyalty Tribunal¿ Arbitration Royalty Panels ......... 801

9. Protection of øsemiconductor chip products¿ Semiconductor

Chip Products ....................................................................................... 901

10. Digital Audio Recording Devices and Media .................................... 1001

* * * * * * *

CHAPTER 1—SUBJECT MATTER AND SCOPE OF

COPYRIGHT

Sec.

101. Definitions.

* * * * * * *

ø117. Scope of exclusive rights: Use in conjunction with computers¿

117. Limitations on exclusive rights: Computer programs.

* * * * * * *

§ 101. Definitions

Except as otherwise provided in this title, as used in this title,

the following terms and their variant forms mean the following:
22

An ‘‘anonymous work’’ is a work on the copies or

phonorecords of which no natural person is identified as author.

An ‘‘architectural work’’ is the design of a building as embodied in any tangible medium of expression, including a building, architectural plans, or drawings. The work includes the

overall form as well as the arrangement and composition of

spaces and elements in the design, but does not include individual standard features.

* * * * * * *

To perform or display a work ‘‘publicly’’ means—

(1) to perform or display it at a place open to the public

or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or

(2) to transmit or otherwise communicate a performance

or display of the work to a place specified by clause (1) or

to the public, by means of any device or øprocesss¿ process,

whether the members of the public capable of receiving the

performance or display receive it in the same place or in

separate places and at the same time or at different times.

* * * * * * *

§ 104A. Copyright in restored works

(a) * * *

* * * * * * *

(d) REMEDIES FOR INFRINGEMENT OF RESTORED COPYRIGHTS.— (1) * * *

* * * * * * *

ø(3) EXISTING DERIVATIVE WORKS.—(A) In the case of a derivative work that is based upon a restored work and is created—

ø(i) before the date of the enactment of the Uruguay

Round Agreements Act, if the source country of the derivative work is an eligible country on such date, or

ø(ii) before the date of adherence or proclamation, if the

source country of the derivative work is not an eligible

country on such date of enactment, a reliance party may

continue to exploit that work for the duration of the restored copyright if the reliance party pays to the owner of

the restored copyright reasonable compensation for conduct which would be subject to a remedy for infringement

but for the provisions of this paragraph.¿

(3) EXISTING DERIVATIVE WORKS.—(A) In the case of a derivative work that is based upon a restored work and is created—

(i) before the date of the enactment of the Uruguay Round

Agreements Act, if the source country of the restored work

is an eligible country on such date, or

(ii) before the date on which the source country of the restored work becomes an eligible country, if that country is

not an eligible country on such date of enactment,

a reliance party may continue to exploit that derivative work for

the duration of the restored copyright if the reliance party pays
23

to the owner of the restored copyright reasonable compensation

for conduct which would be subject to a remedy for infringement but for the provisions of this paragraph.

* * * * * * *

(e) NOTICES OF INTENT TO ENFORCE A RESTORED COPYRIGHT.—

(1) NOTICES OF INTENT FILED WITH THE COPYRIGHT OFFICE.—

(A) * * *

(B)(i)***

(ii) Not less than 1 list containing all notices of intent to enforce shall be maintained in the Public Information Office of

the Copyright Office and shall be available for public inspection and copying during regular business hours pursuant to

sections 705 and 708. øSuch list shall also be published in the

Federal Register on an annual basis for the first 2 years after

the applicable date of restoration.¿

* * * * * * *

(h) DEFINITIONS.—For purposes of this section and section 109(a):

(1) * * *

ø(2) The ‘‘date of restoration’’ of a restored copyright is the

later of—

ø(A) the date on which the Agreement on Trade-Related

Aspects of Intellectual Property referred to in section

101(d)(15) of the Uruguay Round Agreements Act enters

into force with respect to the United States, if the source

country of the restored work is a nation adhering to the

Berne Convention or a WTO member country on such

date; or

ø(B) the date of adherence or proclamation, in the case

of any other source country of the restored work.

ø(3) The term ‘‘eligible country’’ means a nation, other than

the United States, that is a WTO member country, adheres to

the Berne Convention, or is subject to a proclamation under

subsection (g).¿

(2) The ‘‘date of restoration’’ of a restored copyright is—

(A) January 1, 1996, if the source country of the restored

work is a nation adhering to the Berne Convention or a

WTO member country on such date, or

(B) the date of adherence or proclamation, in the case of

any other source country of the restored work.

(3) The term ‘‘eligible country’’ means a nation, other than the

United States, that—

(A) becomes a WTO member country after the date of the

enactment of the Uruguay Round Agreements Act;

(B) on such date of enactment is, or after such date of enactment becomes, a member of the Berne Convention; or

(C) after such date of enactment becomes subject to a

proclamation under subsection (g).

For purposes of this section, a nation that is a member of the

Berne Convention on the date of the enactment of the Uruguay

Round Agreements Act shall be construed to become an eligible

country on such date of enactment.

* * * * * * *
24

§ 108. Limitations on exclusive rights: Reproduction by libraries and archives

(a) * * *

* * * * * * *

(e) The rights of reproduction and distribution under this section

apply to the entire work, or to a substantial part of it, made from

the collection of a library or archives where the user makes his or

her request or from that of another library or archives, if the library or archives has first determined, on the basis of a reasonable

investigation, that a copy or phonorecord of the copyrighted work

cannot be obtained at a øpair¿ fair price, if—

(1) * * *

* * * * * * *

§ 109. Limitations on exclusive rights: Effect of transfer of

particular copy or phonorecord

(a) * * *

(b)(1)***

(2)(A)***

(B) Not later than three years after the date of the enactment

of the Computer Software Rental Amendments Act of 1990, and at

such times thereafter as the Register of øCopyright¿ Copyrights

considers appropriate, the Register of Copyrights, after consultation with representatives of copyright owners and librarians, shall

submit to the Congress a report stating whether this paragraph

has achieved its intended purpose of maintaining the integrity of

the copyright system while providing nonprofit libraries the capability to fulfill their function. Such report shall advise the Congress

as to any information or recommendations that the Register of

Copyrights considers necessary to carry out the purposes of this

subsection.

* * * * * * *

§ 110. Limitations on exclusive rights: Exemption of certain

performances and displays

Notwithstanding the provisions of section 106, the following are

not infringements of copyright:

(1) * * *

* * * * * * *

(8) performance of a nondramatic literary work, by or in the

course of a transmission specifically designed for and primarily

directed to blind or other handicapped persons who are unable

to read normal printed material as a result of their handicap,

or deaf or other handicapped persons who are unable to hear

the aural signals accompanying a transmission of visual signals, if the performance is made without any purpose of direct

or indirect commercial advantage and its transmission is made

through the facilities of: (i) a governmental body; or (ii) a noncommercial educational broadcast station (as defined in section

397 of title 47); or (iii) a radio subcarrier authorization (as de-
25

fined in 47 CFR 73.293–73.295 and 73.593–73.595); or (iv) a

cable system (as defined in section 111(f))ø.¿;

(9) performance on a single occasion of a dramatic literary

work published at least ten years before the date of the performance, by or in the course of a transmission specifically designed for and primarily directed to blind or other handicapped

persons who are unable to read normal printed material as a

result of their handicap, if the performance is made without

any purpose of direct or indirect commercial advantage and its

transmission is made through the facilities of a radio subcarrier authorization referred to in clause (8)(iii), Provided, That

the provisions of this clause shall not be applicable to more

than one performance of the same work by the same performers or under the auspices of the same organizationø.¿; and

(10) notwithstanding paragraph ø4 above¿ (4), the following

is not an infringement of copyright: performance of a nondramatic literary or musical work in the course of a social function

which is organized and promoted by a nonprofit veterans’ organization or a nonprofit fraternal organization to which the general public is not invited, but not including the invitees of the

organizations, if the proceeds from the performance, after deducting the reasonable costs of producing the performance, are

used exclusively for charitable purposes and not for financial

gain. For purposes of this section the social functions of any

college or university fraternity or sorority shall not be included

unless the social function is held solely to raise funds for a specific charitable purpose.

* * * * * * *

§ 114. Scope of exclusive rights in sound recordings

(a) * * *

* * * * * * *

(f) LICENSES FOR NONEXEMPT SUBSCRIPTION TRANSMISSIONS.—

(1) No later than 30 days after the enactment of the Digital

Performance Right in Sound Recordings Act of 1995, the Librarian of Congress shall cause notice to be published in the

Federal Register of the initiation of voluntary negotiation proceedings for the purpose of determining reasonable terms and

rates of royalty payments for the activities specified by subsection (d)(2) of this section during the period beginning on the

effective date of such Act and ending on December 31, 2000,

or, if a copyright arbitration royalty panel is convened, ending

30 days after the Librarian issues and publishes in the Federal

Register an order adopting the determination of the copyright

arbitration royalty panel or an order setting the terms and rates

(if the Librarian rejects the panel’s determination). Such terms

and rates shall distinguish among the different types of digital

audio transmission services then in operation. Any copyright

owners of sound recordings or any entities performing sound

recordings affected by this section may submit to the Librarian

of Congress licenses covering such activities with respect to

such sound recordings. The parties to each negotiation proceeding shall bear their own costs.
26

(2) In the absence of license agreements negotiated under

paragraph (1), during the 60-day period commencing 6 months

after publication of the notice specified in paragraph (1), and

upon the filing of a petition in accordance with section

803(a)(1), the Librarian of Congress shall, pursuant to chapter

8, convene a copyright arbitration royalty panel to determine

øand publish in the Federal Register¿ a schedule of rates and

terms which, subject to paragraph (3), shall be binding on all

copyright owners of sound recordings and entities performing

sound recordings. In addition to the objectives set forth in section 801(b)(1), in establishing such rates and terms, the copyright arbitration royalty panel may consider the rates and

terms for comparable types of digital audio transmission services and comparable circumstances under voluntary license

agreements negotiated as provided in paragraph (1). The Librarian of Congress shall also establish requirements by which

copyright owners may receive reasonable notice of the use of

their sound recordings under this section, and under which

records of such use shall be kept and made available by entities performing sound recordings.

* * * * * * *

§ 115. Scope of exclusive rights in nondramatic musical

works: Compulsory license for making and distributing phonorecords

In the case of nondramatic musical works, the exclusive rights

provided by clauses (1) and (3) of section 106, to make and to distribute phonorecords of such works, are subject to compulsory licensing under the conditions specified by this section.

(a) * * *

* * * * * * *

(c) ROYALTY PAYABLE UNDER COMPULSORY LICENSE.—

(1) * * *

* * * * * * *

(3)(A)***

* * * * * * *

(D) In the absence of license agreements negotiated under

subparagraphs (B) and (C), upon the filing of a petition in accordance with section 803(a)(1), the Librarian of Congress

shall, pursuant to chapter 8, convene a copyright arbitration

royalty panel to determine øand publish in the Federal Register¿ a schedule of rates and terms which, subject to subparagraph (E), shall be binding on all copyright owners of nondramatic musical works and persons entitled to obtain a compulsory license under subsection (a)(1) during the period beginning January 1, 1998, and ending on the effective date of any

new terms and rates established pursuant to subparagraph

(C), (D) or (F), or such other date (regarding digital phonorecord deliveries) as may be determined pursuant to subparagraphs (B) and (C). Such terms and rates shall distinguish between (i) digital phonorecord deliveries where the reproduction

or distribution of a phonorecord is incidental to the trans-
27

mission which constitutes the digital phonorecord delivery, and

(ii) digital phonorecord deliveries in general. In addition to the

objectives set forth in section 801(b)(1), in establishing such

rates and terms, the copyright arbitration royalty panel may

consider rates and terms under voluntary license agreements

negotiated as provided in subparagraphs (B) and (C). The royalty rates payable for a compulsory license for a digital phonorecord delivery under this section shall be established de novo

and no precedential effect shall be given to the amount of the

royalty payable by a compulsory licensee for digital phonorecord deliveries on or before December 31, 1997. The Librarian of Congress shall also establish requirements by which

copyright owners may receive reasonable notice of the use of

their works under this section, and under which records of

such use shall be kept and made available by persons making

digital phonorecord deliveries.

(E)(i) License agreements voluntarily negotiated at any time

between one or more copyright owners of nondramatic musical

works and one or more persons entitled to obtain a compulsory

license under subsection (a)(1) shall be given effect in lieu of

any determination by the Librarian of Congress. Subject to

clause (ii), the royalty rates determined pursuant to subparagraph (C), (D) or (F) shall be given effect in lieu of any contrary royalty rates specified in a contract pursuant to which a

recording artist who is the author of a nondramatic musical

work grants a license under that person’s exclusive rights in

the musical work under øsections 106(1) and (3)¿ paragraphs

(1) and (3) of section 106 or commits another person to grant

a license in that musical work under øsections 106(1) and (3)¿

paragraphs (1) and (3) of section 106, to a person desiring to

fix in a tangible medium of expression a sound recording embodying the musical work.

(ii) The second sentence of clause (i) shall not apply to—

(I) * * *

(II) a contract entered into after the date that the sound

recording is fixed in a tangible medium of expression substantially in a form intended for commercial release, if at

the time the contract is entered into, the recording artist

retains the right to grant licenses as to the musical work

under øsections 106(1) and 106(3)¿ paragraphs (1) and (3)

of section 106.

* * * * * * *

§ 116. Negotiated licenses for public performances by means

of coin-operated phonorecord players

(a) * * *

* * * * * * *

(b) NEGOTIATED LICENSES.—

(1) * * *

ø(2) ARBITRATION.—Parties to such a negotiation, within

such time as may be specified by the Librarian of Congress by

regulation, may determine the result of the negotiation by arbitration. Such arbitration shall be governed by the provisions of
28

title 9, to the extent such title is not inconsistent with this section. The parties shall give notice to the Librarian of Congress

of any determination reached by arbitration and any such determination shall, as between the parties to the arbitration, be

dispositive of the issues to which it relates.¿

(2) ARBITRATION.—Parties not subject to such a negotiation

may determine, by arbitration in accordance with the provisions

of chapter 8, the terms and rates and the division of fees described in paragraph (1).

* * * * * * *

(d) DEFINITIONS.—As used in this section, the following terms

mean the following:

(1) A ‘‘coin-operated phonorecord player’’ is a machine or device that—

(A) is employed solely for the performance of nondramatic

musical works by means of phonorecords upon being activated by the insertion of coins, currency, tokens, or other

monetary units or their equivalent;

(B) is located in an establishment making no direct or indirect charge for admission;

(C) is accompanied by a list which is comprised of the titles of all the musical works available for performance on

it, and is affixed to the phonorecord player or posted in the

establishment in a prominent position where it can be readily examined by the public; and

(D) affords a choice of works available for performance

and permits the choice to be made by the patrons of the establishment in which it is located.

(2) An ‘‘operator’’ is any person who, alone or jointly with others—

(A) owns a coin-operated phonorecord player;

(B) has the power to make a coin-operated phonorecord

player available for placement in an establishment for purposes of public performance; or

(C) has the power to exercise primary control over the selection of the musical works made available for public performance on a coin-operated phonorecord player.

* * * * * * *

§ 119. Limitations on exclusive rights: Secondary transmissions of superstations and network stations for

private home viewing

(a) * * *

* * * * * * *

(c) ADJUSTMENT OF ROYALTY FEES.—

(1) APPLICABILITY AND DETERMINATION OF ROYALTY FEES.—

The rate of the royalty fee payable under subsection (b)(1)(B)

shall be effective øuntil¿ unless a royalty fee is established

under paragraph (2), (3), or (4) of this subsection. After that

date, the fee shall be determined either in accordance with the

voluntary negotiation procedure specified in paragraph (2) or
29

in accordance with the compulsory arbitration procedure specified in paragraphs (3) and (4).

* * * * * * *

CHAPTER 3—DURATION OF COPYRIGHT

* * * * * * *

§ 304. Duration of copyright: Subsisting copyrights

(a) * * *

* * * * * * *

(c) TERMINATION OF TRANSFERS AND LICENSES COVERING EX- TENDED RENEWAL TERM.—In the case of any copyright subsisting

in either its first or renewal term on January 1, 1978, other than

a copyright in a work made for hire, the exclusive or nonexclusive

grant of a transfer or license of the renewal copyright or any right

under it, executed before January 1, 1978, by any of the persons

designated by øthe¿ subsection (a)(1)(C) of this section, otherwise

than by will, is subject to termination under the following conditions:

(1) * * *

* * * * * * *

CHAPTER 4—COPYRIGHT NOTICE, DEPOSIT, AND

REGISTRATION

* * * * * * *

§ 405. Notice of copyright: Omission of notice on certain copies and phonorecords

(a) * * *

(b) EFFECT OF OMISSION ON INNOCENT INFRINGERS.—Any person

who innocently infringes a copyright, in reliance upon an authorized copy or phonorecord from which the copyright notice has been

omitted and which was publicly distributed by authority of the

copyright owner before the effective date of the Berne Convention

Implementation Act of 1988, incurs no liability for actual or statutory damages under section 504 for any infringing acts committed

before receiving actual notice that registration for the work has

been made under section 408, if such person proves that he or she

was misled by the omission of notice. In a suit for infringement in

such a case the court may allow or disallow recovery of any of the

infringer’s profits attributable to the infringement, and may enjoin

the continuation of the infringing undertaking or may require, as

a condition øor¿ for permitting the continuation of the infringing

undertaking, that the infringer pay the copyright owner a reasonable license fee in an amount and on terms fixed by the court.

* * * * * * *

§ 407. Deposit of copies or phonorecords for Library of Congress

(a) * * *

* * * * * * *
30

(d) At any time after publication of a work as provided by subsection (a), the Register of Copyrights may make written demand

for the required deposit on any of the persons obligated to make

the deposit under subsection (a). Unless deposit is made within

three months after the demand is received, the person or persons

on whom the demand was made are liable—

(1) to a fine of not more than $250 for each work; and

(2) to pay into a specially designated fund in the Library of

Congress the total retail price of the copies or phonorecords demanded, or, if no retail price has been fixed, the reasonable

cost øof¿ to the Library of Congress of acquiring them; and

* * * * * * *

§ 411. Registration and infringement actions

(a) * * *

(b) In the case of a work consisting of sounds, images, or both,

the first fixation of which is made simultaneously with its transmission, the copyright owner may, either before or after such fixation takes place, institute an action for infringement under section

501, fully subject to the remedies provided by sections 502 through

506 and sections 509 and 510, if, in accordance with requirements

that the Register of Copyrights shall prescribe by regulation, the

copyright owner—

ø(1) serves notice upon the infringer, not less than ten or

more than thirty days before such fixation, identifying the

work and the specific time and source of its first transmission,

and declaring an intention to secure copyright in the work;

and¿

(1) serves notice upon the infringer, not less than 48 hours before such fixation, identifying the work and the specific time

and source of its first transmission, and declaring an intention

to secure copyright in the work; and

* * * * * * *

CHAPTER 5—COPYRIGHT INFRINGEMENT AND

REMEDIES

Sec.

501. Infringement of copyright.

* * * * * * *

504. Remedies for infringement: øDamage¿ Damages and profits.

* * * * * * *

§ 504. Remedies for infringement: Damages and profits

(a) * * *

* * * * * * *

(c) STATUTORY DAMAGES.—

(1) * * *

(2) In a case where the copyright owner sustains the burden

of proving, and the court finds, that infringement was committed willfully, the court in its discretion may increase the award

of statutory damages to a sum of not more than $100,000. In

a case where the infringer sustains the burden of proving, and
31

the court finds, that such infringer was not aware and had no

reason to believe that his or her acts constituted an infringement of copyright, the court øit¿ in its discretion may reduce the award of statutory damages to a sum of not less than $200.

The court shall remit statutory damages in any case where an

infringer believed and had reasonable grounds for believing

that his or her use of the copyrighted work was a fair use

under section 107, if the infringer was: (i) an employee or

agent of a nonprofit educational institution, library, or archives

acting within the scope of his or her employment who, or such

institution, library, or archives itself, which infringed by reproducing the work in copies or phonorecords; or (ii) a public

broadcasting entity which or a person who, as a regular part

of the nonprofit activities of a public broadcasting entity (as defined in subsection (g) of section 118) infringed by performing

a published nondramatic literary work or by reproducing a

transmission program embodying a performance of such a

work.

* * * * * * *

§ 509. Seizure and forfeiture

(a) * * *

(b) The applicable procedures relating to (i) the seizure, summary

and judicial forfeiture, and condemnation of vessels, vehicles, merchandise, and baggage for violations of the customs laws contained

in title 19, (ii) the disposition of such vessels, vehicles, merchandise, and baggage or the proceeds from the sale thereof, (iii) the remission or mitigation of such forfeiture, (iv) the compromise of

claims, and (v) the award of compensation to informers in respect

of such forfeitures, shall apply to seizures and forfeitures incurred,

or alleged to have been incurred, under the provisions of this section, insofar as applicable and not inconsistent with the provisions

of this section; except that such duties as are imposed upon any officer or employee of the Treasury Department or any other person

with respect to the seizure and forfeiture of vessels, vehicles, ømerchandise; and baggage¿ merchandise, and baggage under the provisions of the customs laws contained in title 19 shall be performed

with respect to seizure and forfeiture of all articles described in

subsection (a) by such officers, agents, or other persons as may be

authorized or designated for that purpose by the Attorney General.

* * * * * * *

CHAPTER 6—MANUFACTURING REQUIREMENTS AND

IMPORTATION

* * * * * * *

§ 601. Manufacture, importation, and public distribution of

certain copies

(a) Prior to July 1, 1986, and except as provided by subsection

(b), the importation into or public distribution in the United States

of copies of a work consisting preponderantly of ønondramtic¿ nondramatic literary material that is in the English language and is

protected under this title is prohibited unless the portions consist-
32

ing of such material have been manufactured in the United States

or Canada.

(b) The provisions of subsection (a) do not apply—

(1) where, on the date when importation is sought or public

distribution in the United States is made, the author of any

substantial part of such material is neither a national nor a

domiciliary of the United States or, if such author is a national

of the United States, he or she has been domiciled outside the

United States for a continuous period of at least one year immediately preceding that date; in the case of a work made for

hire, the exemption provided by this clause does not apply unless a øsubsustantial¿ substantial part of the work was prepared for an employer or other person who is not a national

or domiciliary of the United States or a domestic corporation

or enterprise;

* * * * * * *

CHAPTER 7—COPYRIGHT OFFICE

Sec.

701. The Copyright Office: General responsibilities and organization.

* * * * * * *

710. øReproductions¿ Reproduction for use of the blind and physically handicapped:

Voluntary licensing forms and procedures.

* * * * * * *

§ 708. Copyright Office fees

(a) * * *

ø(b) In calendar year 1995 and in each subsequent fifth calendar

year, the Register of Copyrights, by regulation, may increase the

fees specified in subsection (a) by the percent change in the annual

average, for the preceding calendar year, of the Consumer Price

Index published by the Bureau of Labor Statistics, over the annual

average of the Consumer Price Index for the fifth calendar year

preceding the calendar year in which such increase is authorized.¿

(b) In calendar year 1997 and in any subsequent calendar year,

the Register of Copyrights, by regulation, may increase the fees specified in subsection (a) in the following manner:

(1) The Register shall conduct a study of the costs incurred

by the Copyright Office for the registration of claims, the recordation of documents, and the provision of services. The study

shall also consider the timing of any increase in fees and the

authority to use such fees consistent with the budget.

(2) The Register may, on the basis of the study under paragraph (1), and subject to paragraph (5), increase fees to not

more than that necessary to cover the reasonable costs incurred

by the Copyright Office for the services described in paragraph

(1), plus a reasonable inflation adjustment to account for any

estimated increase in costs.

(3) Any fee established under paragraph (2) shall be rounded

off to the nearest dollar, or for a fee less than $12, rounded off

to the nearest 50 cents.
33

(4) Fees established under this subsection shall be fair and

equitable and give due consideration to the objectives of the

copyright system.

(5) If the Register determines under paragraph (2) that fees

should be increased, the Register shall prepare a proposed fee

schedule and submit the schedule with the accompanying economic analysis to the Congress. The fees proposed by the Register may be instituted after the end of 120 days after the schedule is submitted to the Congress unless, within that 120-day period, a law is enacted stating in substance that the Congress

does not approve the schedule.

* * * * * * *

ø(d) All fees received under this section shall be deposited by the

Register of Copyrights in the Treasury of the United States and

shall be credited to the appropriation for necessary expenses of the

Copyright Office. The Register may, in accordance with regulations

that he or she shall prescribe, refund any sum paid by mistake or

in excess of the fee required by this section.¿

(d)(1) Except as provided in paragraph (2), all fees received under

this section shall be deposited by the Register of Copyrights in the

Treasury of the United States and shall be credited to the appropriations for necessary expenses of the Copyright Office. Such fees

that are collected shall remain available until expended. The Register may, in accordance with regulations that he or she shall prescribe, refund any sum paid by mistake or in excess of the fee required by this section.

(2) In the case of fees deposited against future services, the Register of Copyrights shall request the Secretary of the Treasury to invest in interest-bearing securities in the United States Treasury any

portion of the fees that, as determined by the Register, is not required to meet current deposit account demands. Funds from such

portion of fees shall be invested in securities that permit funds to

be available to the Copyright Office at all times if they are determined to be necessary to meet current deposit account demands.

Such investments shall be in public debt securities with maturities

suitable to the needs of the Copyright Office, as determined by the

Register of Copyrights, and bearing interest at rates determined by

the Secretary of the Treasury, taking into consideration current

market yields on outstanding marketable obligations of the United

States of comparable maturities.

(3) The income on such investments shall be deposited in the

Treasury of the United States and shall be credited to the appropriations for necessary expenses of the Copyright Office.

* * * * * * *

CHAPTER 8—COPYRIGHT ARBITRATION ROYALTY

PANELS

Sec.

801. Copyright arbitration royalty panels: øestablishment¿ Establishment and purpose.

* * * * * * *
34

§ 801. Copyright arbitration royalty panels: Establishment

and purpose

(a) * * *

(b) PURPOSES.—Subject to the provisions of this chapter, the purposes of the copyright arbitration royalty panels øshall be—¿ shall

be as follows:

(1) øto¿ To make determinations concerning the adjustment

of reasonable copyright royalty rates as provided in sections

114, 115, øand 116¿ 116, and 119, and to make determinations

as to reasonable terms and rates of royalty payments as provided in section 118. The rates applicable under sections 114,

115, and 116 shall be calculated to achieve the following objectives:

(A) * * *

* * * * * * *

(2) øto¿ To make determinations concerning the adjustment

of the copyright royalty rates in section 111 solely in accordance with the following provisions:

(A) * * *

* * * * * * *

(D) The gross receipts limitations established by section

111(d)(1)(C) and (D) shall be adjusted to reflect national

monetary inflation or deflation or changes in the average

rates charged cable system subscribers for the basic service of providing secondary transmissions to maintain the

real constant dollar value of the exemption provided by

such section; and the royalty rate specified therein shall

not be subject to adjustmentø; and¿. (3) øto¿ To distribute royalty fees deposited with the Register of Copyrights under sections 111, 116, 119(b), and 1003,

and to determine, in cases where controversy exists, the distribution of such fees.

(c) RULINGS.—The Librarian of Congress, upon the recommendation of the Register of Copyrights, may, before a copyright arbitration royalty panel is convened, make any necessary procedural or

evidentiary rulings that would apply to the proceedings conducted

by such panel, including—

(1) authorizing the distribution of those royalty fees collected

under sections 111, 119, and 1005 that the Librarian has found

are not subject to controversy; and

(2) accepting or rejecting royalty claims filed under sections

111, 119, and 1007 on the basis of timeliness or the failure to

establish the basis for a claim. ø(d) ADMINISTRATIVE SUPPORT OF COPYRIGHT ARBITRATION ROY- ALTY PANELS.—The Library of Congress, upon the recommendation

of the Register of Copyrights, shall provide the copyright arbitration royalty panels with the necessary administrative services related to proceedings under this chapter.¿

(d) SUPPORT AND REIMBURSEMENT OF ARBITRATION PANELS.—

The Librarian of Congress, upon the recommendation of the Register of Copyrights, shall provide the copyright arbitration royalty

panels with the necessary administrative services related to proceedings under this chapter, and shall reimburse the arbitrators presid-
35

ing in distribution proceedings at such intervals and in such manner as the Librarian shall provide by regulation. Each such arbitrator is an independent contractor acting on behalf of the United

States, and shall be hired pursuant to a signed agreement between

the Library of Congress and the arbitrator. Payments to the arbitrators shall be considered reasonable costs incurred by the Library of

Congress and the Copyright Office for purposes of section 802(h)(1).

* * * * * * *

§ 802. Membership and proceedings of copyright arbitration

royalty panels

(a) * * *

* * * * * * *

(c) ARBITRATION PROCEEDINGS.—Copyright arbitration royalty

panels shall conduct arbitration proceedings, subject to subchapter

II of chapter 5 of title 5, for the purpose of making their determinations in carrying out the purposes set forth in section 801. The arbitration panels shall act on the basis of a fully documented written record, prior decisions of the Copyright Royalty Tribunal, prior

copyright arbitration panel determinations, and rulings by the Librarian of Congress under section 801(c). Any copyright owner who

claims to be entitled to royalties under section 111, 114, 116, or

119, any person entitled to a compulsory license under section

114(d), any person entitled to a compulsory license under section

115, or any interested copyright party who claims to be entitled to

royalties under section 1006, may submit relevant information and

proposals to the arbitration panels in proceedings applicable to

such copyright owner or interested copyright party, and any other

person participating in arbitration proceedings may submit such

relevant information and proposals to the arbitration panel conducting the proceedings. In ratemaking proceedings, the parties to

the proceedings shall bear the entire cost thereof in such manner

and proportion as the arbitration panels shall direct. øIn distribution proceedings, the parties shall bear the cost in direct proportion

to their share of the distribution.¿

* * * * * * *

(h) ADMINISTRATIVE MATTERS.—

ø(1) DEDUCTION OF COSTS FROM ROYALTY FEES.—The Librarian of Congress and the Register of Copyrights may, to the extent not otherwise provided under this title, deduct from royalty fees deposited or collected under this title the reasonable

costs incurred by the Library of Congress and the Copyright

Office under this chapter. Such deduction may be made before

the fees are distributed to any copyright claimants. If no royalty pool exists from which their costs can be deducted, the Librarian of Congress and the Copyright Office may assess their

reasonable costs directly to the parties to the most recent relevant arbitration proceeding.¿

(1) DEDUCTION OF COSTS OF LIBRARY OF CONGRESS AND COPYRIGHT OFFICE FROM ROYALTY FEES.—The Librarian of Congress

and the Register of Copyrights may, to the extent not otherwise

provided under this title, deduct from royalty fees deposited or
36

collected under this title the reasonable costs incurred by the Library of Congress and the Copyright Office under this chapter.

Such deduction may be made before the fees are distributed to

any copyright claimants. In addition, all funds made available

by an appropriations Act as offsetting collections and available

for deductions under this subsection shall remain available

until expended. In ratemaking proceedings, the reasonable costs

of the Librarian of Congress and the Copyright Office shall be

borne by the parties to the proceedings as directed by the arbitration panels under subsection (c).

* * * * * * *

§ 803. Institution and conclusion of proceedings

(a) * * *

(b) With respect to proceedings under subparagraph (B) or (C) of

section 801(b)(2), following an event described in either of those

subsections, any owner or user of a copyrighted work whose royalty

rates are specified by section 111, or by a rate established by the

Copyright Royalty Tribunal or the Librarian of Congress, may,

within twelve months, file a petition with the Librarian declaring

that the petitioner requests an adjustment of the rate. In this

event the Librarian shall proceed as in øsubsection¿ subsection (a)

of this section. Any change in royalty rates made by the Copyright

Royalty Tribunal or the Librarian of Congress pursuant to this subsection may be reconsidered in 1980, 1985, and each fifth calendar

year thereafter, in accordance with the provisions in section

801(b)(2)(B) or (C), as the case may be.

* * * * * * *

CHAPTER 9—PROTECTION OF SEMICONDUCTOR CHIP

PRODUCTS

Sec.

901. Definitions.

* * * * * * *

ø903. Ownership and transfer.¿

903. Ownership, transfer, licensure, and recordation.

* * * * * * *

§ 909. Mask work notice

(a) * * *

(b) The notice referred to in subsection (a) shall consist of—

(1) the words ‘‘mask øforce¿ work’’, the øsumbol¿ symbol, or

the symbol M (the letter M in a circle); and

* * * * * * *

§ 910. Enforcement of exclusive rights

(a) Except as otherwise provided in this chapter, any person who

violates any of the exclusive rights of the owner of a mask work

under this chapter, by conduct in or affecting commerce, shall be

liable as an infringer of such rights. øas¿ As used in this subsection, the term ‘‘any person’’ includes any State, any instrumentality of a State, and any officer or employee of a State or instru-
37

mentality of a State acting in his or her official capacity. Any State,

and any such instrumentality, officer, or employee, shall be subject

to the provisions of this chapter in the same manner and to the

same extent as any nongovernmental entity.

* * * * * * *

CHAPTER 10—DIGITAL AUDIO RECORDING DEVICES

AND MEDIA

* * * * * * *

SUBCHAPTER C—ROYALTY PAYMENTS

* * * * * * *

§ 1006. Entitlement to royalty payments

(a) * * *

(b) ALLOCATION OF ROYALTY PAYMENTS TO GROUPS.—The royalty

payments shall be divided into 2 funds as follows:

(1) THE SOUND RECORDINGS FUND.—66 2⁄3 percent of the royalty payments shall be allocated to the Sound Recordings

Fund. 2 5⁄8 percent of the royalty payments allocated to the

Sound Recordings Fund shall be placed in an escrow account

managed by an independent administrator jointly appointed by

the interested copyright parties described in section 1001(7)(A)

and the American Federation of Musicians (or any successor

entity) to be distributed to nonfeatured musicians (whether or

not members of the American Federation of Musicians or any

successor entity) who have performed on sound recordings distributed in the United States. 1 3⁄8 percent of the royalty payments allocated to the Sound Recordings Fund shall be placed

in an escrow account managed by an independent administrator jointly appointed by the interested copyright parties described in section 1001(7)(A) and the American Federation of

Television and Radio Artists (or any successor entity) to be distributed to nonfeatured vocalists (whether or not members of

the American Federation of Television and Radio Artists or any

successor entity) who have performed on sound recordings distributed in the United States. 40 percent of the remaining royalty payments in the Sound Recordings Fund shall be distributed to the interested copyright parties described in section

1001(7)(C), and 60 percent of such remaining royalty payments

shall be distributed to the interested copyright parties described in section 1001(7)(A).

* * * * * * *

§ 1007. Procedures for distributing royalty payments

(a) FILING OF CLAIMS AND NEGOTIATIONS.—

(1) FILING OF CLAIMS.—During the first 2 months of each calendar year after øthe calendar year in which this chapter

takes effect¿ calendar year 1992, every interested copyright

party seeking to receive royalty payments to which such party

is entitled under section 1006 shall file with the Librarian of

Congress a claim for payments collected during the preceding
38

year in such form and manner as the Librarian of Congress

shall prescribe by regulation.

* * * * * * *

(b) DISTRIBUTION OF PAYMENTS IN THE ABSENCE OF A DISPUTE.—

øWithin 30 days after¿ After the period established for the filing

of claims under subsection (a), in each year after øthe year in

which this section takes effect¿ 1992, the Librarian of Congress

shall determine whether there exists a controversy concerning the

distribution of royalty payments under section 1006(c). If the Librarian of Congress determines that no such controversy exists, the

Librarian of Congress shall, within 30 days after such determination, authorize the distribution of the royalty payments as set forth

in the agreements regarding the distribution of royalty payments

entered into pursuant to subsection (a), after deducting its reasonable administrative costs under this section.

* * * * * * *

SECTION 4 OF THE DIGITAL PERFORMANCE RIGHT IN

SOUND RECORDINGS ACT OF 1995

SEC. 4. MECHANICAL ROYALTIES IN DIGITAL PHONORECORD DELIVERIES.

Section 115 of title 17, United States Code, is amended—

(1) * * *

* * * * * * *

ø(5)¿ (4) by adding after subsection (c) the following:

‘‘(d) DEFINITION.—As used in this section, the following term has

the following meaning: A ‘digital phonorecord delivery’ is each individual delivery of a phonorecord by digital transmission of a sound

recording which results in a specifically identifiable reproduction

by or for any transmission recipient of a phonorecord of that sound

recording, regardless of whether the digital transmission is also a

public performance of the sound recording or any nondramatic musical work embodied therein. A digital phonorecord delivery does

not result from a real-time, non-interactive subscription transmission of a sound recording where no reproduction of the sound

recording or the musical work embodied therein is made from the

inception of the transmission through to its receipt by the transmission recipient in order to make the sound recording audible.’’.

ACT OF NOVEMBER 9, 1987

AN ACT To amend chapter 9 of title 17, United States Code, regarding protection

extended to semiconductor chip products of foreign entities.

SECTION 1. FINDINGS AND PURPOSES.

(a) FINDINGS.—The Congress finds that—

(1) section 914 of title 17, United States Code, which authorizes the Secretary of Commerce to issue orders extending interim protection under chapter 9 of title 17, United States

Code, to mask works fixed in semiconductor chip products and

øorginating¿ originating in foreign countries that are making
39

good faith efforts and reasonable progress toward providing

protection, by treaty or legislation, to mask works of United

States nationals, has resulted in substantial and positive legislative developments in foreign countries regarding protection of

mask works;

* * * * * * *

SECTION 2319 OF TITLE 18, UNITED STATES CODE

§ 2319. Criminal infringement of a copyright

(a) * * *

(b) Any person who commits an offense under subsection (a) of

this section—

(1) shall be imprisoned not more than 5 years, or fined in the

amount set forth in this title, or both, if the offense consists

of the reproduction or distribution, during any 180-day period,

of at ølast¿ least 10 copies or phonorecords, of 1 or more copyrighted works, with a retail value of more than $2,500;

* * * * * * *

Æ