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[104th Congress Public Law 39]
[From the U.S. Government Printing Office]

<DOC>
[DOCID: f:publ39.104]

        DIGITAL PERFORMANCE RIGHT IN SOUND RECORDINGS ACT OF 1995

[[Page 109 STAT. 336]]

Public Law 104-39
104th Congress

                                 An Act

 
To amend title 17, United States Code, to provide an exclusive right to 
perform sound recordings publicly by means of digital transmissions, and 
         for other purposes. <<NOTE: Nov. 1, 1995 -  [S. 227]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Digital 
Performance Right in Sound Recordings Act of 
1995. Copyrights. Communications.>> 

SECTION 1. SHORT TITLE. <<NOTE: 17 USC 101 note.>> 

    This Act may be cited as the ``Digital Performance Right in Sound 
Recordings Act of 1995''.

SEC. 2. EXCLUSIVE RIGHTS IN COPYRIGHTED WORKS.

    Section 106 of title 17, United States Code, is amended--
            (1) in paragraph (4) by striking ``and'' after the 
        semicolon;
            (2) in paragraph (5) by striking the period and inserting 
        ``; and''; and
            (3) by adding at the end the following:
            ``(6) in the case of sound recordings, to perform the 
        copyrighted work publicly by means of a digital audio 
        transmission.''.

SEC. 3. SCOPE OF EXCLUSIVE RIGHTS IN SOUND RECORDINGS.

    Section 114 of title 17, United States Code, is amended--
            (1) in subsection (a) by striking ``and (3)'' and inserting 
        ``(3) and (6)'';
            (2) in subsection (b) in the first sentence by striking 
        ``phonorecords, or of copies of motion pictures and other 
        audiovisual works,'' and inserting ``phonorecords or copies'';
            (3) by striking subsection (d) and inserting:

    ``(d) Limitations on Exclusive Right.--Notwithstanding the 
provisions of section 106(6)--
            ``(1) Exempt transmissions and retransmissions.--The 
        performance of a sound recording publicly by means of a digital 
        audio transmission, other than as a part of an interactive 
        service, is not an infringement of section 106(6) if the 
        performance is part of--
                    ``(A)(i) a nonsubscription transmission other than a 
                retransmission;
                    ``(ii) an initial nonsubscription retransmission 
                made for direct reception by members of the public of a 
                prior or simultaneous incidental transmission that is 
                not made for direct reception by members of the public; 
                or
                    ``(iii) a nonsubscription broadcast transmission;
                    ``(B) a retransmission of a nonsubscription 
                broadcast transmission: Provided, That, in the case of a 
                retransmission of a radio station's broadcast 
                transmission--

[[Page 109 STAT. 337]]

                          ``(i) the radio station's broadcast 
                      transmission is not willfully or repeatedly 
                      retransmitted more than a radius of 150 miles from 
                      the site of the radio broadcast transmitter, 
                      however--
                                    ``(I) the 150 mile limitation under 
                                this clause shall not apply when a 
                                nonsubscription broadcast transmission 
                                by a radio station licensed by the 
                                Federal Communications Commission is 
                                retransmitted on a nonsubscription basis 
                                by a terrestrial broadcast station, 
                                terrestrial translator, or terrestrial 
                                repeater licensed by the Federal 
                                Communications Commission; and
                                    ``(II) in the case of a subscription 
                                retransmission of a nonsubscription 
                                broadcast retransmission covered by 
                                subclause (I), the 150 mile radius shall 
                                be measured from the transmitter site of 
                                such broadcast retransmitter;
                          ``(ii) the retransmission is of radio station 
                      broadcast transmissions that are--
                                    ``(I) obtained by the retransmitter 
                                over the air;
                                    ``(II) not electronically processed 
                                by the retransmitter to deliver separate 
                                and discrete signals; and
                                    ``(III) retransmitted only within 
                                the local communities served by the 
                                retransmitter;
                          ``(iii) the radio station's broadcast 
                      transmission was being retransmitted to cable 
                      systems (as defined in section 111(f)) by a 
                      satellite carrier on January 1, 1995, and that 
                      retransmission was being retransmitted by cable 
                      systems as a separate and discrete signal, and the 
                      satellite carrier obtains the radio station's 
                      broadcast transmission in an analog format: 
                      Provided, That the broadcast transmission being 
                      retransmitted may embody the programming of no 
                      more than one radio station; or
                          ``(iv) the radio station's broadcast 
                      transmission is made by a noncommercial 
                      educational broadcast station funded on or after 
                      January 1, 1995, under section 396(k) of the 
                      Communications Act of 1934 (47 U.S.C. 396(k)), 
                      consists solely of noncommercial educational and 
                      cultural radio programs, and the retransmission, 
                      whether or not simultaneous, is a nonsubscription 
                      terrestrial broadcast retransmission; or
                    ``(C) a transmission that comes within any of the 
                following categories--
                          ``(i) a prior or simultaneous transmission 
                      incidental to an exempt transmission, such as a 
                      feed received by and then retransmitted by an 
                      exempt transmitter: Provided, That such incidental 
                      transmissions do not include any subscription 
                      transmission directly for reception by members of 
                      the public;
                          ``(ii) a transmission within a business 
                      establishment, confined to its premises or the 
                      immediately surrounding vicinity;
                          ``(iii) a retransmission by any retransmitter, 
                      including a multichannel video programming 
                      distributor as

[[Page 109 STAT. 338]]

                      defined in section 602(12) of the Communications 
                      Act of 1934 (47 U.S.C. 522(12)), of a transmission 
                      by a transmitter licensed to publicly perform the 
                      sound recording as a part of that transmission, if 
                      the retransmission is simultaneous with the 
                      licensed transmission and authorized by the 
                      transmitter; or
                          ``(iv) a transmission to a business 
                      establishment for use in the ordinary course of 
                      its business: Provided, That the business 
                      recipient does not retransmit the transmission 
                      outside of its premises or the immediately 
                      surrounding vicinity, and that the transmission 
                      does not exceed the sound recording performance 
                      complement. Nothing in this clause shall limit the 
                      scope of the exemption in clause (ii).
            ``(2) Subscription transmissions.--In the case of a 
        subscription transmission not exempt under subsection (d)(1), 
        the performance of a sound recording publicly by means of a 
        digital audio transmission shall be subject to statutory 
        licensing, in accordance with subsection (f) of this section, 
        if--
                    ``(A) the transmission is not part of an interactive 
                service;
                    ``(B) the transmission does not exceed the sound 
                recording performance complement;
                    ``(C) the transmitting entity does not cause to be 
                published by means of an advance program schedule or 
                prior announcement the titles of the specific sound 
                recordings or phonorecords embodying such sound 
                recordings to be transmitted;
                    ``(D) except in the case of transmission to a 
                business establishment, the transmitting entity does not 
                automatically and intentionally cause any device 
                receiving the transmission to switch from one program 
                channel to another; and
                    ``(E) except as provided in section 1002(e) of this 
                title, the transmission of the sound recording is 
                accompanied by the information encoded in that sound 
                recording, if any, by or under the authority of the 
                copyright owner of that sound recording, that identifies 
                the title of the sound recording, the featured recording 
                artist who performs on the sound recording, and related 
                information, including information concerning the 
                underlying musical work and its writer.
            ``(3) Licenses for transmissions by interactive services.--
                    ``(A) No interactive service shall be granted an 
                exclusive license under section 106(6) for the 
                performance of a sound recording publicly by means of 
                digital audio transmission for a period in excess of 12 
                months, except that with respect to an exclusive license 
                granted to an interactive service by a licensor that 
                holds the copyright to 1,000 or fewer sound recordings, 
                the period of such license shall not exceed 24 months: 
                Provided, however, That the grantee of such exclusive 
                license shall be ineligible to receive another exclusive 
                license for the performance of that sound recording for 
                a period of 13 months from the expiration of the prior 
                exclusive license.

[[Page 109 STAT. 339]]

                    ``(B) The limitation set forth in subparagraph (A) 
                of this paragraph shall not apply if--
                          ``(i) the licensor has granted and there 
                      remain in effect licenses under section 106(6) for 
                      the public performance of sound recordings by 
                      means of digital audio transmission by at least 5 
                      different interactive services: Provided, however, 
                      That each such license must be for a minimum of 10 
                      percent of the copyrighted sound recordings owned 
                      by the licensor that have been licensed to 
                      interactive services, but in no event less than 50 
                      sound recordings; or
                          ``(ii) the exclusive license is granted to 
                      perform publicly up to 45 seconds of a sound 
                      recording and the sole purpose of the performance 
                      is to promote the distribution or performance of 
                      that sound recording.
                    ``(C) Notwithstanding the grant of an exclusive or 
                nonexclusive license of the right of public performance 
                under section 106(6), an interactive service may not 
                publicly perform a sound recording unless a license has 
                been granted for the public performance of any 
                copyrighted musical work contained in the sound 
                recording: Provided, That such license to publicly 
                perform the copyrighted musical work may be granted 
                either by a performing rights society representing the 
                copyright owner or by the copyright owner.
                    ``(D) The performance of a sound recording by means 
                of a retransmission of a digital audio transmission is 
                not an infringement of section 106(6) if--
                          ``(i) the retransmission is of a transmission 
                      by an interactive service licensed to publicly 
                      perform the sound recording to a particular member 
                      of the public as part of that transmission; and
                          ``(ii) the retransmission is simultaneous with 
                      the licensed transmission, authorized by the 
                      transmitter, and limited to that particular member 
                      of the public intended by the interactive service 
                      to be the recipient of the transmission.
                    ``(E) For the purposes of this paragraph--
                          ``(i) a `licensor' shall include the licensing 
                      entity and any other entity under any material 
                      degree of common ownership, management, or control 
                      that owns copyrights in sound recordings; and
                          ``(ii) a `performing rights society' is an 
                      association or corporation that licenses the 
                      public performance of nondramatic musical works on 
                      behalf of the copyright owner, such as the 
                      American Society of Composers, Authors and 
                      Publishers, Broadcast Music, Inc., and SESAC, Inc.
            ``(4) Rights not otherwise limited.--
                    ``(A) Except as expressly provided in this section, 
                this section does not limit or impair the exclusive 
                right to perform a sound recording publicly by means of 
                a digital audio transmission under section 106(6).
                    ``(B) Nothing in this section annuls or limits in 
                any way--

[[Page 109 STAT. 340]]

                          ``(i) the exclusive right to publicly perform 
                      a musical work, including by means of a digital 
                      audio transmission, under section 106(4);
                          ``(ii) the exclusive rights in a sound 
                      recording or the musical work embodied therein 
                      under sections 106(1), 106(2) and 106(3); or
                          ``(iii) any other rights under any other 
                      clause of section 106, or remedies available under 
                      this title, as such rights or remedies exist 
                      either before or after the date of enactment of 
                      the Digital Performance Right in Sound Recordings 
                      Act of 1995.
                    ``(C) Any limitations in this section on the 
                exclusive right under section 106(6) apply only to the 
                exclusive right under section 106(6) and not to any 
                other exclusive rights under section 106. Nothing in 
                this section shall be construed to annul, limit, impair 
                or otherwise affect in any way the ability of the owner 
                of a copyright in a sound recording to exercise the 
                rights under sections 106(1), 106(2) and 106(3), or to 
                obtain the remedies available under this title pursuant 
                to such rights, as such rights and remedies exist either 
                before or after the date of enactment of the Digital 
                Performance Right in Sound Recordings Act of 1995.''; 
                and
            (4) by adding after subsection (d) the following:

    ``(e) Authority for Negotiations.--
            ``(1) Notwithstanding any provision of the antitrust laws, 
        in negotiating statutory licenses in accordance with subsection 
        (f), any copyright owners of sound recordings and any entities 
        performing sound recordings affected by this section may 
        negotiate and agree upon the royalty rates and license terms and 
        conditions for the performance of such sound recordings and the 
        proportionate division of fees paid among copyright owners, and 
        may designate common agents on a nonexclusive basis to 
        negotiate, agree to, pay, or receive payments.
            ``(2) For licenses granted under section 106(6), other than 
        statutory licenses, such as for performances by interactive 
        services or performances that exceed the sound recording 
        performance complement--
                    ``(A) copyright owners of sound recordings affected 
                by this section may designate common agents to act on 
                their behalf to grant licenses and receive and remit 
                royalty payments: Provided, That each copyright owner 
                shall establish the royalty rates and material license 
                terms and conditions unilaterally, that is, not in 
                agreement, combination, or concert with other copyright 
                owners of sound recordings; and
                    ``(B) entities performing sound recordings affected 
                by this section may designate common agents to act on 
                their behalf to obtain licenses and collect and pay 
                royalty fees: Provided, That each entity performing 
                sound recordings shall determine the royalty rates and 
                material license terms and conditions unilaterally, that 
                is, not in agreement, combination, or concert with other 
                entities performing sound recordings.

    ``(f) Licenses for Nonexempt Subscription Transmissions.--
            ``(1) <<NOTE: Federal Register, publication.>> No later than 
        30 days after the enactment of the Digital Performance Right in 
        Sound Recordings Act of 1995,

[[Page 109 STAT. 341]]

        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. 
        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.
            ``(2) <<NOTE: Federal Register, publication.>> 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 and 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). <<NOTE: Records.>> 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.
            ``(3) License agreements voluntarily negotiated at any time 
        between one or more copyright owners of sound recordings and one 
        or more entities performing sound recordings shall be given 
        effect in lieu of any determination by a copyright arbitration 
        royalty panel or decision by the Librarian of Congress.
            ``(4) <<NOTE: Regulations.>> (A) Publication of a notice of 
        the initiation of voluntary negotiation proceedings as specified 
        in paragraph (1) shall be repeated, in accordance with 
        regulations that the Librarian of Congress shall prescribe--
                    ``(i) no later than 30 days after a petition is 
                filed by any copyright owners of sound recordings or any 
                entities performing sound recordings affected by this 
                section indicating that a new type of digital audio 
                transmission service on which sound recordings are 
                performed is or is about to become operational; and
                    ``(ii) in the first week of January, 2000 and at 5-
                year intervals thereafter.
            ``(B)(i) The procedures specified in paragraph (2) shall be 
        repeated, in accordance with regulations that the Librarian of 
        Congress shall prescribe, upon the filing of a petition in 
        accordance with section 803(a)(1) during a 60-day period 
        commencing--

[[Page 109 STAT. 342]]

                    ``(I) six months after publication of a notice of 
                the initiation of voluntary negotiation proceedings 
                under paragraph (1) pursuant to a petition under 
                paragraph (4)(A)(i); or
                    ``(II) on July 1, 2000 and at 5-year intervals 
                thereafter.
            ``(ii) The procedures specified in paragraph (2) shall be 
        concluded in accordance with section 802.
            ``(5)(A) Any person who wishes to perform a sound recording 
        publicly by means of a nonexempt subscription transmission under 
        this subsection may do so without infringing the exclusive right 
        of the copyright owner of the sound recording--
                    ``(i) <<NOTE: Regulations.>> by complying with such 
                notice requirements as the Librarian of Congress shall 
                prescribe by regulation and by paying royalty fees in 
                accordance with this subsection; or
                    ``(ii) if such royalty fees have not been set, by 
                agreeing to pay such royalty fees as shall be determined 
                in accordance with this subsection.
            ``(B) Any royalty payments in arrears shall be made on or 
        before the twentieth day of the month next succeeding the month 
        in which the royalty fees are set.

    ``(g) Proceeds From Licensing of Subscription Transmissions.--
            ``(1) Except in the case of a subscription transmission 
        licensed in accordance with subsection (f) of this section--
                    ``(A) a featured recording artist who performs on a 
                sound recording that has been licensed for a 
                subscription transmission shall be entitled to receive 
                payments from the copyright owner of the sound recording 
                in accordance with the terms of the artist's contract; 
                and
                    ``(B) a nonfeatured recording artist who performs on 
                a sound recording that has been licensed for a 
                subscription transmission shall be entitled to receive 
                payments from the copyright owner of the sound recording 
                in accordance with the terms of the nonfeatured 
                recording artist's applicable contract or other 
                applicable agreement.
            ``(2) The copyright owner of the exclusive right under 
        section 106(6) of this title to publicly perform a sound 
        recording by means of a digital audio transmission shall 
        allocate to recording artists in the following manner its 
        receipts from the statutory licensing of subscription 
        transmission performances of the sound recording in accordance 
        with subsection (f) of this section:
                    ``(A) 2\1/2\ percent of the receipts shall be 
                deposited in an escrow account managed by an independent 
                administrator jointly appointed by copyright owners of 
                sound recordings 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) who have performed on 
                sound recordings.
                    ``(B) 2\1/2\ percent of the receipts shall be 
                deposited in an escrow account managed by an independent 
                administrator jointly appointed by copyright owners of 
                sound recordings 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

[[Page 109 STAT. 343]]

                American Federation of Television and Radio Artists) who 
                have performed on sound recordings.
                    ``(C) 45 percent of the receipts shall be allocated, 
                on a per sound recording basis, to the recording artist 
                or artists featured on such sound recording (or the 
                persons conveying rights in the artists' performance in 
                the sound recordings).

    ``(h) Licensing to Affiliates.--
            ``(1) If the copyright owner of a sound recording licenses 
        an affiliated entity the right to publicly perform a sound 
        recording by means of a digital audio transmission under section 
        106(6), the copyright owner shall make the licensed sound 
        recording available under section 106(6) on no less favorable 
        terms and conditions to all bona fide entities that offer 
        similar services, except that, if there are material differences 
        in the scope of the requested license with respect to the type 
        of service, the particular sound recordings licensed, the 
        frequency of use, the number of subscribers served, or the 
        duration, then the copyright owner may establish different terms 
        and conditions for such other services.
            ``(2) The limitation set forth in paragraph (1) of this 
        subsection shall not apply in the case where the copyright owner 
        of a sound recording licenses--
                    ``(A) an interactive service; or
                    ``(B) an entity to perform publicly up to 45 seconds 
                of the sound recording and the sole purpose of the 
                performance is to promote the distribution or 
                performance of that sound recording.

    ``(i) No Effect on Royalties for Underlying Works.--License fees 
payable for the public performance of sound recordings under section 
106(6) shall not be taken into account in any administrative, judicial, 
or other governmental proceeding to set or adjust the royalties payable 
to copyright owners of musical works for the public performance of their 
works. It is the intent of Congress that royalties payable to copyright 
owners of musical works for the public performance of their works shall 
not be diminished in any respect as a result of the rights granted by 
section 106(6).
    ``(j) Definitions.--As used in this section, the following terms 
have the following meanings:
            ``(1) An `affiliated entity' is an entity engaging in 
        digital audio transmissions covered by section 106(6), other 
        than an interactive service, in which the licensor has any 
        direct or indirect partnership or any ownership interest 
        amounting to 5 percent or more of the outstanding voting or non-
        voting stock.
            ``(2) A `broadcast' transmission is a transmission made by a 
        terrestrial broadcast station licensed as such by the Federal 
        Communications Commission.
            ``(3) A `digital audio transmission' is a digital 
        transmission as defined in section 101, that embodies the 
        transmission of a sound recording. This term does not include 
        the transmission of any audiovisual work.
            ``(4) An `interactive service' is one that enables a member 
        of the public to receive, on request, a transmission of a 
        particular sound recording chosen by or on behalf of the 
        recipient. The ability of individuals to request that particular 
        sound recordings be performed for reception by the public at 
        large

[[Page 109 STAT. 344]]

        does not make a service interactive. If an entity offers both 
        interactive and non-interactive services (either concurrently or 
        at different times), the non-interactive component shall not be 
        treated as part of an interactive service.
            ``(5) A `nonsubscription' transmission is any transmission 
        that is not a subscription transmission.
            ``(6) A `retransmission' is a further transmission of an 
        initial transmission, and includes any further retransmission of 
        the same transmission. Except as provided in this section, a 
        transmission qualifies as a `retransmission' only if it is 
        simultaneous with the initial transmission. Nothing in this 
        definition shall be construed to exempt a transmission that 
        fails to satisfy a separate element required to qualify for an 
        exemption under section 114(d)(1).
            ``(7) The `sound recording performance complement' is the 
        transmission during any 3-hour period, on a particular channel 
        used by a transmitting entity, of no more than--
                    ``(A) 3 different selections of sound recordings 
                from any one phonorecord lawfully distributed for public 
                performance or sale in the United States, if no more 
                than 2 such selections are transmitted consecutively; or
                    ``(B) 4 different selections of sound recordings--
                          ``(i) by the same featured recording artist; 
                      or
                          ``(ii) from any set or compilation of 
                      phonorecords lawfully distributed together as a 
                      unit for public performance or sale in the United 
                      States,
                if no more than three such selections are transmitted 
                consecutively:
        Provided, That the transmission of selections in excess of the 
        numerical limits provided for in clauses (A) and (B) from 
        multiple phonorecords shall nonetheless qualify as a sound 
        recording performance complement if the programming of the 
        multiple phonorecords was not willfully intended to avoid the 
        numerical limitations prescribed in such clauses.
            ``(8) A `subscription' transmission is a transmission that 
        is controlled and limited to particular recipients, and for 
        which consideration is required to be paid or otherwise given by 
        or on behalf of the recipient to receive the transmission or a 
        package of transmissions including the transmission.
            ``(9) A `transmission' includes both an initial transmission 
        and a retransmission.''.
SEC. 4. MECHANICAL ROYALTIES IN DIGITAL PHONORECORD DELIVERIES.

    Section 115 of title 17, United States Code, is amended--
            (1) in subsection (a)(1)--
                    (A) in the first sentence by striking out ``any 
                other person'' and inserting in lieu thereof ``any other 
                person, including those who make phonorecords or digital 
                phonorecord deliveries,''; and
                    (B) in the second sentence by inserting before the 
                period ``, including by means of a digital phonorecord 
                delivery'';
            (2) in subsection (c)(2) in the second sentence by inserting 
        ``and other than as provided in paragraph (3),'' after ``For 
        this purpose,'';

[[Page 109 STAT. 345]]

            (3) by redesignating paragraphs (3), (4), and (5) of 
        subsection (c) as paragraphs (4), (5), and (6), respectively, 
        and by inserting after paragraph (2) the following new 
        paragraph:
            ``(3)(A) A compulsory license under this section includes 
        the right of the compulsory licensee to distribute or authorize 
        the distribution of a phonorecord of a nondramatic musical work 
        by means of a digital transmission which constitutes a digital 
        phonorecord delivery, regardless of whether the digital 
        transmission is also a public performance of the sound recording 
        under section 106(6) of this title or of any nondramatic musical 
        work embodied therein under section 106(4) of this title. For 
        every digital phonorecord delivery by or under the authority of 
        the compulsory licensee--
                    ``(i) on or before December 31, 1997, the royalty 
                payable by the compulsory licensee shall be the royalty 
                prescribed under paragraph (2) and chapter 8 of this 
                title; and
                    ``(ii) on or after January 1, 1998, the royalty 
                payable by the compulsory licensee shall be the royalty 
                prescribed under subparagraphs (B) through (F) and 
                chapter 8 of this title.
            ``(B) Notwithstanding any provision of the antitrust laws, 
        any copyright owners of nondramatic musical works and any 
        persons entitled to obtain a compulsory license under subsection 
        (a)(1) may negotiate and agree upon the terms and rates of 
        royalty payments under this paragraph and the proportionate 
        division of fees paid among copyright owners, and may designate 
        common agents to negotiate, agree to, pay or receive such 
        royalty payments. Such authority to negotiate the terms and 
        rates of royalty payments includes, but is not limited to, the 
        authority to negotiate the year during which the royalty rates 
        prescribed under subparagraphs (B) through (F) and chapter 8 of 
        this title shall next be determined.
            ``(C) <<NOTE: Federal Register, publication.>> During the 
        period of June 30, 1996, through December 31, 1996, 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 
        subparagraph (A) 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 the 
        parties may agree. Such terms and rates shall distinguish 
        between (i) digital phonorecord deliveries where the 
        reproduction or distribution of a phonorecord is incidental to 
        the transmission which constitutes the digital phonorecord 
        delivery, and (ii) digital phonorecord deliveries in general. 
        Any copyright owners of nondramatic musical works and any 
        persons entitled to obtain a compulsory license under subsection 
        (a)(1) may submit to the Librarian of Congress licenses covering 
        such activities. The parties to each negotiation proceeding 
        shall bear their own costs.
            ``(D) <<NOTE: Federal Register, publication.>> 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 and publish in the Federal Register a schedule of 
        rates and terms which, subject to subparagraph

[[Page 109 STAT. 346]]

        (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 transmission 
        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. <<NOTE: Records.>> 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 sections 106 (1) and (3) or 
        commits another person to grant a license in that musical work 
        under sections 106 (1) and (3), 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) a contract entered into on or before June 22, 
                1995, and not modified thereafter for the purpose of 
                reducing the royalty rates determined pursuant to 
                subparagraph (C), (D) or (F) or of increasing the number 
                of musical works within the scope of the contract 
                covered by the reduced rates, except if a contract 
                entered into on or before June 22, 1995, is modified 
                thereafter for the purpose of increasing the number of 
                musical works within the scope of the contract, any 
                contrary royalty rates specified in the contract shall 
                be given effect in lieu of royalty rates determined 
                pursuant to subparagraph (C), (D) or (F) for the number 
                of musical works within the scope of the contract as of 
                June 22, 1995; and
                    ``(II) a contract entered into after the date that 
                the sound recording is fixed in a tangible medium of 
                expression

[[Page 109 STAT. 347]]

                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 sections 106(1) and 106(3).
            ``(F) <<NOTE: Regulations.>> The procedures specified in 
        subparagraphs (C) and (D) shall be repeated and concluded, in 
        accordance with regulations that the Librarian of Congress shall 
        prescribe, in each fifth calendar year after 1997, except to the 
        extent that different years for the repeating and concluding of 
        such proceedings may be determined in accordance with 
        subparagraphs (B) and (C).
            ``(G) Except as provided in section 1002(e) of this title, a 
        digital phonorecord delivery licensed under this paragraph shall 
        be accompanied by the information encoded in the sound 
        recording, if any, by or under the authority of the copyright 
        owner of that sound recording, that identifies the title of the 
        sound recording, the featured recording artist who performs on 
        the sound recording, and related information, including 
        information concerning the underlying musical work and its 
        writer.
            ``(H)(i) A digital phonorecord delivery of a sound recording 
        is actionable as an act of infringement under section 501, and 
        is fully subject to the remedies provided by sections 502 
        through 506 and section 509, unless--
                    ``(I) the digital phonorecord delivery has been 
                authorized by the copyright owner of the sound 
                recording; and
                    ``(II) the owner of the copyright in the sound 
                recording or the entity making the digital phonorecord 
                delivery has obtained a compulsory license under this 
                section or has otherwise been authorized by the 
                copyright owner of the musical work to distribute or 
                authorize the distribution, by means of a digital 
                phonorecord delivery, of each musical work embodied in 
                the sound recording.
            ``(ii) Any cause of action under this subparagraph shall be 
        in addition to those available to the owner of the copyright in 
        the nondramatic musical work under subsection (c)(6) and section 
        106(4) and the owner of the copyright in the sound recording 
        under section 106(6).
            ``(I) The liability of the copyright owner of a sound 
        recording for infringement of the copyright in a nondramatic 
        musical work embodied in the sound recording shall be determined 
        in accordance with applicable law, except that the owner of a 
        copyright in a sound recording shall not be liable for a digital 
        phonorecord delivery by a third party if the owner of the 
        copyright in the sound recording does not license the 
        distribution of a phonorecord of the nondramatic musical work.
            ``(J) Nothing in section 1008 shall be construed to prevent 
        the exercise of the rights and remedies allowed by this 
        paragraph, paragraph (6), and chapter 5 in the event of a 
        digital phonorecord delivery, except that no action alleging 
        infringement of copyright may be brought under this title 
        against a manufacturer, importer or distributor of a digital 
        audio recording device, a digital audio recording medium, an 
        analog recording device, or an analog recording medium, or 
        against a consumer, based on the actions described in such 
        section.
            ``(K) Nothing in this section annuls or limits (i) the 
        exclusive right to publicly perform a sound recording or the 
        musical

[[Page 109 STAT. 348]]

        work embodied therein, including by means of a digital 
        transmission, under sections 106(4) and 106(6), (ii) except for 
        compulsory licensing under the conditions specified by this 
        section, the exclusive rights to reproduce and distribute the 
        sound recording and the musical work embodied therein under 
        sections 106(1) and 106(3), including by means of a digital 
        phonorecord delivery, or (iii) any other rights under any other 
        provision of section 106, or remedies available under this 
        title, as such rights or remedies exist either before or after 
        the date of enactment of the Digital Performance Right in Sound 
        Recordings Act of 1995.
            ``(L) The provisions of this section concerning digital 
        phonorecord deliveries shall not apply to any exempt 
        transmissions or retransmissions under section 114(d)(1). The 
        exemptions created in section 114(d)(1) do not expand or reduce 
        the rights of copyright owners under section 106 (1) through (5) 
        with respect to such transmissions and retransmissions.''; and
            (5) 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.''.

SEC. 5. CONFORMING AMENDMENTS.

    (a) Definitions.--Section 101 of title 17, United States Code, is 
amended by inserting after the definition of ``device'', ``machine'', or 
``process'' the following:
            ``A `digital transmission' is a transmission in whole or in 
        part in a digital or other non-analog format.''.

    (b) Limitations on Exclusive Rights: Secondary Transmissions.--
Section 111(c)(1) of title 17, United States Code, is amended in the 
first sentence by inserting ``and section 114(d)'' after ``of this 
subsection''.
    (c) Limitations on Exclusive Rights: Secondary Transmissions of 
Superstations and Network Stations for Private Home Viewing.--
            (1) Section 119(a)(1) of title 17, United States Code, is 
        amended in the first sentence by inserting ``and section 
        114(d)'' after ``of this subsection''.
            (2) Section 119(a)(2)(A) of title 17, United States Code, is 
        amended in the first sentence by inserting ``and section 
        114(d)'' after ``of this subsection''.

    (d) Copyright Arbitration Royalty Panels.--
            (1) Section 801(b)(1) of title 17, United States Code, is 
        amended in the first and second sentences by striking ``115'' 
        each place it appears and inserting ``114, 115,''.

[[Page 109 STAT. 349]]

            (2) Section 802(c) of title 17, United States Code, is 
        amended in the third sentence by striking ``section 111, 116, or 
        119,'' and inserting ``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,''.
            (3) Section 802(g) of title 17, United States Code, is 
        amended in the third sentence by inserting ``114,'' after 
        ``111,''.
            (4) Section 802(h)(2) of title 17, United States Code, is 
        amended by inserting ``114,'' after ``111,''.
            (5) Section 803(a)(1) of title 17, United States Code, is 
        amended in the first sentence by striking ``115'' and inserting 
        ``114, 115'' and by striking ``and (4)'' and inserting ``(4) and 
        (5)''.
            (6) Section 803(a)(3) of title 17, United States Code, is 
        amended by inserting before the period ``or as prescribed in 
        section 115(c)(3)(D)''.
            (7) Section 803(a) of title 17, United States Code, is 
        amended by inserting after paragraph (4) the following new 
        paragraph:
            ``(5) With respect to proceedings under section 801(b)(1) 
        concerning the determination of reasonable terms and rates of 
        royalty payments as provided in section 114, the Librarian of 
        Congress shall proceed when and as provided by that section.''.

SEC. 6. <<NOTE: 17 USC 101 note.>> EFFECTIVE DATE.

    This Act and the amendments made by this Act shall take effect 3 
months after the date of enactment of this Act, except that the 
provisions of sections 114(e) and 114(f) of title 17, United States Code 
(as added by section 3 of this Act) shall take effect immediately upon 
the date of enactment of this Act.

    Approved November 1, 1995.

LEGISLATIVE HISTORY--S. 227 (H.R. 1506):
---------------------------------------------------------------------------

HOUSE REPORTS: No. 104-274 accompanying H.R. 1506 (Comm. on the 
Judiciary).
SENATE REPORTS: No. 104-128 (Comm. on the Judiciary).
CONGRESSIONAL RECORD, Vol. 141 (1995):
            Aug. 8, considered and passed Senate.
            Oct. 17, H.R. 1506 and S. 227 considered and passed House.

                                  <all>
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