104TH CONGRESS

1ST SESSION S. 227

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.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Digital Performance

5 Right in Sound Recordings Act of 1995’’.
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1 SEC. 2. EXCLUSIVE RIGHTS IN COPYRIGHTED WORKS.

2 Section 106 of title 17, United States Code, is

3 amended—

4 (1) in paragraph (4) by striking ‘‘and’’ after

5 the semicolon;

6 (2) in paragraph (5) by striking the period and

7 inserting ‘‘; and’’; and

8 (3) by adding at the end the following:

9 ‘‘(6) in the case of sound recordings, to perform

10 the copyrighted work publicly by means of a digital

11 audio transmission.’’.

12 SEC. 3. SCOPE OF EXCLUSIVE RIGHTS IN SOUND RECORD13 INGS.

14 Section 114 of title 17, United States Code, is

15 amended—

16 (1) in subsection (a) by striking ‘‘and (3)’’ and

17 inserting ‘‘(3) and (6)’’;

18 (2) in subsection (b) in the first sentence by

19 striking ‘‘phonorecords, or of copies of motion pic20 tures and other audiovisual works,’’ and inserting

21 ‘‘phonorecords or copies’’;

22 (3) by striking subsection (d) and inserting:

23 ‘‘(d) LIMITATIONS ON EXCLUSIVE RIGHT.—Notwith24 standing the provisions of section 106(6)—

25 ‘‘(1) EXEMPT TRANSMISSIONS AND

26 RETRANSMISSIONS.—The performance of a sound
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1 recording publicly by means of a digital audio trans2 mission, other than as a part of an interactive serv3 ice, is not an infringement of section 106(6) if the

4 performance is part of—

5 ‘‘(A)(i) a nonsubscription transmission

6 other than a retransmission;

7 ‘‘(ii) an initial nonsubscription

8 retransmission made for direct reception by

9 members of the public of a prior or simulta10 neous incidental transmission that is not made

11 for direct reception by members of the public;

12 or

13 ‘‘(iii) a nonsubscription broadcast trans14 mission;

15 ‘‘(B) a retransmission of a nonsubscription

16 broadcast transmission: Provided, That, in the

17 case of a retransmission of a radio station’s

18 broadcast transmission—

19 ‘‘(i) the radio station’s broadcast

20 transmission is not willfully or repeatedly

21 retransmitted more than a radius of 150

22 miles from the site of the radio broadcast

23 transmitter, however—

24 ‘‘(I) the 150 mile limitation

25 under this clause shall not apply when
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1 a nonsubscription broadcast trans2 mission by a radio station licensed by

3 the Federal Communications Commis4 sion is retransmitted on a

5 nonsubscription basis by a terrestrial

6 broadcast station, terrestrial trans7 lator, or terrestrial repeater licensed

8 by the Federal Communications Com9 mission; and

10 ‘‘(II) in the case of a subscription

11 retransmission of a nonsubscription

12 broadcast retransmission covered by

13 subclause (I), the 150 mile radius

14 shall be measured from the transmit15 ter site of such broadcast

16 retransmitter;

17 ‘‘(ii) the retransmission is of radio

18 station broadcast transmissions that are—

19 ‘‘(I) obtained by the

20 retransmitter over the air;

21 ‘‘(II) not electronically processed

22 by the retransmitter to deliver sepa23 rate and discrete signals; and
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1 ‘‘(III) retransmitted only within

2 the local communities served by the

3 retransmitter;

4 ‘‘(iii) the radio station’s broadcast

5 transmission was being retransmitted to

6 cable systems (as defined in section 111(f))

7 by a satellite carrier on January 1, 1995,

8 and that retransmission was being

9 retransmitted by cable systems as a sepa10 rate and discrete signal, and the satellite

11 carrier obtains the radio station’s broad12 cast transmission in an analog format:

13 Provided, That the broadcast transmission

14 being retransmitted may embody the pro15 gramming of no more than one radio sta16 tion; or

17 ‘‘(iv) the radio station’s broadcast

18 transmission is made by a noncommercial

19 educational broadcast station funded on or

20 after January 1, 1995, under section

21 396(k) of the Communications Act of 1934

22 (47 U.S.C. 396(k)), consists solely of non23 commercial educational and cultural radio

24 programs, and the retransmission, whether
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1 or not simultaneous, is a nonsubscription

2 terrestrial broadcast retransmission; or

3 ‘‘(C) a transmission that comes within any

4 of the following categories:

5 ‘‘(i) a prior or simultaneous trans6 mission incidental to an exempt trans7 mission, such as a feed received by and

8 then retransmitted by an exempt transmit9 ter: Provided, That such incidental trans10 missions do not include any subscription

11 transmission directly for reception by

12 members of the public;

13 ‘‘(ii) a transmission within a business

14 establishment, confined to its premises or

15 the immediately surrounding vicinity;

16 ‘‘(iii) a retransmission by any

17 retransmitter, including a multichannel

18 video programming distributor as defined

19 in section 602(12) of the Communications

20 Act of 1934 (47 U.S.C. 522(12)), of a

21 transmission by a transmitter licensed to

22 publicly perform the sound recording as a

23 part of that transmission, if the

24 retransmission is simultaneous with the li-
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1 censed transmission and authorized by the

2 transmitter; or

3 ‘‘(iv) a transmission to a business es4 tablishment for use in the ordinary course

5 of its business: Provided, That the business

6 recipient does not retransmit the trans7 mission outside of its premises or the im8 mediately surrounding vicinity, and that

9 the transmission does not exceed the sound

10 recording performance complement. Noth11 ing in this clause shall limit the scope of

12 the exemption in clause (ii).

13 ‘‘(2) SUBSCRIPTION TRANSMISSIONS.—In the

14 case of a subscription transmission not exempt

15 under subsection (d)(1), the performance of a sound

16 recording publicly by means of a digital audio trans17 mission shall be subject to statutory licensing, in ac18 cordance with subsection (f) of this section, if—

19 ‘‘(A) the transmission is not part of an

20 interactive service;

21 ‘‘(B) the transmission does not exceed the

22 sound recording performance complement;

23 ‘‘(C) the transmitting entity does not cause

24 to be published by means of an advance pro25 gram schedule or prior announcement the titles
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1 of the specific sound recordings or phonorecords

2 embodying such sound recordings to be trans3 mitted;

4 ‘‘(D) except in the case of transmission to

5 a business establishment, the transmitting en6 tity does not automatically and intentionally

7 cause any device receiving the transmission to

8 switch from one program channel to another;

9 and

10 ‘‘(E) except as provided in section 1002(e)

11 of this title, the transmission of the sound re12 cording is accompanied by the information en13 coded in that sound recording, if any, by or

14 under the authority of the copyright owner of

15 that sound recording, that identifies the title of

16 the sound recording, the featured recording art17 ist who performs on the sound recording, and

18 related information, including information con19 cerning the underlying musical work and its

20 writer.

21 ‘‘(3) LICENSES FOR TRANSMISSIONS BY INTER22 ACTIVE SERVICES.—

23 ‘‘(A) No interactive service shall be grant24 ed an exclusive license under section 106(6) for

25 the performance of a sound recording publicly
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1 by means of digital audio transmission for a pe2 riod in excess of 12 months, except that with

3 respect to an exclusive license granted to an

4 interactive service by a licensor that holds the

5 copyright to 1,000 or fewer sound recordings,

6 the period of such license shall not exceed 24

7 months: Provided, however, That the grantee of

8 such exclusive license shall be ineligible to re9 ceive another exclusive license for the perform10 ance of that sound recording for a period of 13

11 months from the expiration of the prior exclu12 sive license.

13 ‘‘(B) The limitation set forth in subpara14 graph (A) of this paragraph shall not apply if—

15 ‘‘(i) the licensor has granted and

16 there remain in effect licenses under sec17 tion 106(6) for the public performance of

18 sound recordings by means of digital audio

19 transmission by at least 5 different inter20 active services: Provided, however, That

21 each such license must be for a minimum

22 of 10 percent of the copyrighted sound re23 cordings owned by the licensor that have

24 been licensed to interactive services, but in

25 no event less than 50 sound recordings; or
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1 ‘‘(ii) the exclusive license is granted to

2 perform publicly up to 45 seconds of a

3 sound recording and the sole purpose of

4 the performance is to promote the distribu5 tion or performance of that sound record6 ing.

7 ‘‘(C) Notwithstanding the grant of an ex8 clusive or nonexclusive license of the right of

9 public performance under section 106(6), an

10 interactive service may not publicly perform a

11 sound recording unless a license has been

12 granted for the public performance of any copy13 righted musical work contained in the sound re14 cording: Provided, That such license to publicly

15 perform the copyrighted musical work may be

16 granted either by a performing rights society

17 representing the copyright owner or by the

18 copyright owner.

19 ‘‘(D) The performance of a sound record20 ing by means of a retransmission of a digital

21 audio transmission is not an infringement of

22 section 106(6) if—

23 ‘‘(i) the retransmission is of a trans24 mission by an interactive service licensed

25 to publicly perform the sound recording to
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1 a particular member of the public as part

2 of that transmission; and

3 ‘‘(ii) the retransmission is simulta4 neous with the licensed transmission, au5 thorized by the transmitter, and limited to

6 that particular member of the public in7 tended by the interactive service to be the

8 recipient of the transmission.

9 ‘‘(E) For the purposes of this paragraph—

10 ‘‘(i) a ‘licensor’ shall include the li11 censing entity and any other entity under

12 any material degree of common ownership,

13 management, or control that owns copy14 rights in sound recordings; and

15 ‘‘(ii) a ‘performing rights society’ is

16 an association or corporation that licenses

17 the public performance of nondramatic

18 musical works on behalf of the copyright

19 owner, such as the American Society of

20 Composers, Authors and Publishers,

21 Broadcast Music, Inc., and SESAC, Inc.

22 ‘‘(4) RIGHTS NOT OTHERWISE LIMITED.—

23 ‘‘(A) Except as expressly provided in this

24 section, this section does not limit or impair the

25 exclusive right to perform a sound recording
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1 publicly by means of a digital audio trans2 mission under section 106(6).

3 ‘‘(B) Nothing in this section annuls or lim4 its in any way—

5 ‘‘(i) the exclusive right to publicly per6 form a musical work, including by means

7 of a digital audio transmission, under sec8 tion 106(4);

9 ‘‘(ii) the exclusive rights in a sound

10 recording or the musical work embodied

11 therein under sections 106(1), 106(2) and

12 106(3); or

13 ‘‘(iii) any other rights under any other

14 clause of section 106, or remedies available

15 under this title, as such rights or remedies

16 exist either before or after the date of en17 actment of the Digital Performance Right

18 in Sound Recordings Act of 1995.

19 ‘‘(C) Any limitations in this section on the

20 exclusive right under section 106(6) apply only

21 to the exclusive right under section 106(6) and

22 not to any other exclusive rights under section

23 106. Nothing in this section shall be construed

24 to annul, limit, impair or otherwise affect in

25 any way the ability of the owner of a copyright
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1 in a sound recording to exercise the rights

2 under sections 106(1), 106(2) and 106(3), or to

3 obtain the remedies available under this title

4 pursuant to such rights, as such rights and

5 remedies exist either before or after the date of

6 enactment of the Digital Performance Right in

7 Sound Recordings Act of 1995.’’; and

8 (4) by adding after subsection (d) the following:

9 ‘‘(e) AUTHORITY FOR NEGOTIATIONS.—

10 ‘‘(1) Notwithstanding any provision of the anti11 trust laws, in negotiating statutory licenses in ac12 cordance with subsection (f), any copyright owners

13 of sound recordings and any entities performing

14 sound recordings affected by this section may nego15 tiate and agree upon the royalty rates and license

16 terms and conditions for the performance of such

17 sound recordings and the proportionate division of

18 fees paid among copyright owners, and may des19 ignate common agents on a nonexclusive basis to ne20 gotiate, agree to, pay, or receive payments.

21 ‘‘(2) For licenses granted under section 106(6),

22 other than statutory licenses, such as for perform23 ances by interactive services or performances that

24 exceed the sound recording performance com25 plement—
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1 ‘‘(A) copyright owners of sound recordings

2 affected by this section may designate common

3 agents to act on their behalf to grant licenses

4 and receive and remit royalty payments: Pro5 vided, That each copyright owner shall establish

6 the royalty rates and material license terms and

7 conditions unilaterally, that is, not in agree8 ment, combination, or concert with other copy9 right owners of sound recordings; and

10 ‘‘(B) entities performing sound recordings

11 affected by this section may designate common

12 agents to act on their behalf to obtain licenses

13 and collect and pay royalty fees: Provided, That

14 each entity performing sound recordings shall

15 determine the royalty rates and material license

16 terms and conditions unilaterally, that is, not in

17 agreement, combination, or concert with other

18 entities performing sound recordings.

19 ‘‘(f) LICENSES FOR NONEXEMPT SUBSCRIPTION

20 TRANSMISSIONS.—

21 ‘‘(1) No later than 30 days after the enactment

22 of the Digital Performance Right in Sound Record23 ings Act of 1995, the Librarian of Congress shall

24 cause notice to be published in the Federal Register

25 of the initiation of voluntary negotiation proceedings
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1 for the purpose of determining reasonable terms and

2 rates of royalty payments for the activities specified

3 by subsection (d)(2) of this section during the period

4 beginning on the effective date of such Act and end5 ing on December 31, 2000. Such terms and rates

6 shall distinguish among the different types of digital

7 audio transmission services then in operation. Any

8 copyright owners of sound recordings or any entities

9 performing sound recordings affected by this section

10 may submit to the Librarian of Congress licenses

11 covering such activities with respect to such sound

12 recordings. The parties to each negotiation proceed13 ing shall bear their own costs.

14 ‘‘(2) In the absence of license agreements nego15 tiated under paragraph (1), during the 60-day pe16 riod commencing 6 months after publication of the

17 notice specified in paragraph (1), and upon the filing

18 of a petition in accordance with section 803(a)(1),

19 the Librarian of Congress shall, pursuant to chapter

20 8, convene a copyright arbitration royalty panel to

21 determine and publish in the Federal Register a

22 schedule of rates and terms which, subject to para23 graph (3), shall be binding on all copyright owners

24 of sound recordings and entities performing sound

25 recordings. In addition to the objectives set forth in
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1 section 801(b)(1), in establishing such rates and

2 terms, the copyright arbitration royalty panel may

3 consider the rates and terms for comparable types of

4 digital audio transmission services and comparable

5 circumstances under voluntary license agreements

6 negotiated as provided in paragraph (1). The Li7 brarian of Congress shall also establish requirements

8 by which copyright owners may receive reasonable

9 notice of the use of their sound recordings under

10 this section, and under which records of such use

11 shall be kept and made available by entities perform12 ing sound recordings.

13 ‘‘(3) License agreements voluntarily negotiated

14 at any time between one or more copyright owners

15 of sound recordings and one or more entities per16 forming sound recordings shall be given effect in lieu

17 of any determination by a copyright arbitration roy18 alty panel or decision by the Librarian of Congress.

19 ‘‘(4)(A) Publication of a notice of the initiation

20 of voluntary negotiation proceedings as specified in

21 paragraph (1) shall be repeated, in accordance with

22 regulations that the Librarian of Congress shall pre23 scribe—

24 ‘‘(i) no later than 30 days after a petition

25 is filed by any copyright owners of sound re-
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1 cordings or any entities performing sound re2 cordings affected by this section indicating that

3 a new type of digital audio transmission service

4 on which sound recordings are performed is or

5 is about to become operational; and

6 ‘‘(ii) in the first week of January, 2000

7 and at 5-year intervals thereafter.

8 ‘‘(B)(i) The procedures specified in paragraph

9 (2) shall be repeated, in accordance with regulations

10 that the Librarian of Congress shall prescribe, upon

11 the filing of a petition in accordance with section

12 803(a)(1) during a 60-day period commencing—

13 ‘‘(I) six months after publication of a no14 tice of the initiation of voluntary negotiation

15 proceedings under paragraph (1) pursuant to a

16 petition under paragraph (4)(A)(i); or

17 ‘‘(II) on July 1, 2000 and at 5-year inter18 vals thereafter.

19 ‘‘(ii) The procedures specified in paragraph (2)

20 shall be concluded in accordance with section 802.

21 ‘‘(5)(A) Any person who wishes to perform a

22 sound recording publicly by means of a nonexempt

23 subscription transmission under this subsection may

24 do so without infringing the exclusive right of the

25 copyright owner of the sound recording—
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1 ‘‘(i) by complying with such notice require2 ments as the Librarian of Congress shall pre3 scribe by regulation and by paying royalty fees

4 in accordance with this subsection; or

5 ‘‘(ii) if such royalty fees have not been set,

6 by agreeing to pay such royalty fees as shall be

7 determined in accordance with this subsection.

8 ‘‘(B) Any royalty payments in arrears shall be

9 made on or before the twentieth day of the month

10 next succeeding the month in which the royalty fees

11 are set.

12 ‘‘(g) PROCEEDS FROM LICENSING OF SUBSCRIPTION

13 TRANSMISSIONS.—

14 ‘‘(1) Except in the case of a subscription trans15 mission licensed in accordance with subsection (f) of

16 this section—

17 ‘‘(A) a featured recording artist who per18 forms on a sound recording that has been li19 censed for a subscription transmission shall be

20 entitled to receive payments from the copyright

21 owner of the sound recording in accordance

22 with the terms of the artist’s contract; and

23 ‘‘(B) a nonfeatured recording artist who

24 performs on a sound recording that has been li25 censed for a subscription transmission shall be
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1 entitled to receive payments from the copyright

2 owner of the sound recording in accordance

3 with the terms of the nonfeatured recording

4 artist’s applicable contract or other applicable

5 agreement.

6 ‘‘(2) The copyright owner of the exclusive right

7 under section 106(6) of this title to publicly perform

8 a sound recording by means of a digital audio trans9 mission shall allocate to recording artists in the fol10 lowing manner its receipts from the statutory licens11 ing of subscription transmission performances of the

12 sound recording in accordance with subsection (f) of

13 this section:

‘‘(A) 21 14 ⁄2 percent of the receipts shall be

15 deposited in an escrow account managed by an

16 independent administrator jointly appointed by

17 copyright owners of sound recordings and the

18 American Federation of Musicians (or any suc19 cessor entity) to be distributed to nonfeatured

20 musicians (whether or not members of the

21 American Federation of Musicians) who have

22 performed on sound recordings.

‘‘(B) 21 23 ⁄2 percent of the receipts shall be

24 deposited in an escrow account managed by an

25 independent administrator jointly appointed by
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1 copyright owners of sound recordings and the

2 American Federation of Television and Radio

3 Artists (or any successor entity) to be distrib4 uted to nonfeatured vocalists (whether or not

5 members of the American Federation of Tele6 vision and Radio Artists) who have performed

7 on sound recordings.

8 ‘‘(C) 45 percent of the receipts shall be al9 located, on a per sound recording basis, to the

10 recording artist or artists featured on such

11 sound recording (or the persons conveying

12 rights in the artists’ performance in the sound

13 recordings).

14 ‘‘(h) LICENSING TO AFFILIATES.—

15 ‘‘(1) If the copyright owner of a sound record16 ing licenses an affiliated entity the right to publicly

17 perform a sound recording by means of a digital

18 audio transmission under section 106(6), the copy19 right owner shall make the licensed sound recording

20 available under section 106(6) on no less favorable

21 terms and conditions to all bona fide entities that

22 offer similar services, except that, if there are mate23 rial differences in the scope of the requested license

24 with respect to the type of service, the particular

25 sound recordings licensed, the frequency of use, the
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1 number of subscribers served, or the duration, then

2 the copyright owner may establish different terms

3 and conditions for such other services.

4 ‘‘(2) The limitation set forth in paragraph (1)

5 of this subsection shall not apply in the case where

6 the copyright owner of a sound recording licenses—

7 ‘‘(A) an interactive service; or

8 ‘‘(B) an entity to perform publicly up to

9 45 seconds of the sound recording and the sole

10 purpose of the performance is to promote the

11 distribution or performance of that sound re12 cording.

13 ‘‘(i) NO EFFECT ON ROYALTIES FOR UNDERLYING

14 WORKS.—License fees payable for the public performance

15 of sound recordings under section 106(6) shall not be

16 taken into account in any administrative, judicial, or other

17 governmental proceeding to set or adjust the royalties pay18 able to copyright owners of musical works for the public

19 performance of their works. It is the intent of Congress

20 that royalties payable to copyright owners of musical

21 works for the public performance of their works shall not

22 be diminished in any respect as a result of the rights

23 granted by section 106(6).

24 ‘‘(j) DEFINITIONS.—As used in this section, the fol25 lowing terms have the following meanings:
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1 ‘‘(1) An ‘affiliated entity’ is an entity engaging

2 in digital audio transmissions covered by section

3 106(6), other than an interactive service, in which

4 the licensor has any direct or indirect partnership or

5 any ownership interest amounting to 5 percent or

6 more of the outstanding voting or non-voting stock.

7 ‘‘(2) A ‘broadcast’ transmission is a trans8 mission made by a terrestrial broadcast station li9 censed as such by the Federal Communications

10 Commission.

11 ‘‘(3) A ‘digital audio transmission’ is a digital

12 transmission as defined in section 101, that em13 bodies the transmission of a sound recording. This

14 term does not include the transmission of any audio15 visual work.

16 ‘‘(4) An ‘interactive service’ is one that enables

17 a member of the public to receive, on request, a

18 transmission of a particular sound recording chosen

19 by or on behalf of the recipient. The ability of indi20 viduals to request that particular sound recordings

21 be performed for reception by the public at large

22 does not make a service interactive. If an entity of23 fers both interactive and non-interactive services (ei24 ther concurrently or at different times), the non-
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1 interactive component shall not be treated as part of

2 an interactive service.

3 ‘‘(5) A ‘nonsubscription’ transmission is any

4 transmission that is not a subscription transmission.

5 ‘‘(6) A ‘retransmission’ is a further trans6 mission of an initial transmission, and includes any

7 further retransmission of the same transmission. Ex8 cept as provided in this section, a transmission

9 qualifies as a ‘retransmission’ only if it is simulta10 neous with the initial transmission. Nothing in this

11 definition shall be construed to exempt a trans12 mission that fails to satisfy a separate element re13 quired to qualify for an exemption under section

14 114(d)(1).

15 ‘‘(7) The ‘sound recording performance com16 plement’ is the transmission during any 3-hour pe17 riod, on a particular channel used by a transmitting

18 entity, of no more than—

19 ‘‘(A) 3 different selections of sound record20 ings from any one phonorecord lawfully distrib21 uted for public performance or sale in the Unit22 ed States, if no more than 2 such selections are

23 transmitted consecutively; or

24 ‘‘(B) 4 different selections of sound record25 ings
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1 ‘‘(i) by the same featured recording

2 artist; or

3 ‘‘(ii) from any set or compilation of

4 phonorecords lawfully distributed together

5 as a unit for public performance or sale in

6 the United States,

7 if no more than three such selections are trans8 mitted consecutively:

9 Provided, That the transmission of selections in ex10 cess of the numerical limits provided for in clauses

11 (A) and (B) from multiple phonorecords shall none12 theless qualify as a sound recording performance

13 complement if the programming of the multiple

14 phonorecords was not willfully intended to avoid the

15 numerical limitations prescribed in such clauses.

16 ‘‘(8) A ‘subscription’ transmission is a trans17 mission that is controlled and limited to particular

18 recipients, and for which consideration is required to

19 be paid or otherwise given by or on behalf of the re20 cipient to receive the transmission or a package of

21 transmissions including the transmission.

22 ‘‘(9) A ‘transmission’ includes both an initial

23 transmission and a retransmission.’’.
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1 SEC. 4. MECHANICAL ROYALTIES IN DIGITAL PHONO2 RECORD DELIVERIES.

3 Section 115 of title 17, United States Code, is

4 amended—

5 (1) in subsection (a)(1)—

6 (A) in the first sentence by striking out

7 ‘‘any other person’’ and inserting in lieu thereof

8 ‘‘any other person, including those who make

9 phonorecords or digital phonorecord deliv10 eries,’’; and

11 (B) in the second sentence by inserting be12 fore the period ‘‘, including by means of a digi13 tal phonorecord delivery’’;

14 (2) in subsection (c)(2) in the second sentence

15 by inserting ‘‘and other than as provided in para16 graph (3),’’ after ‘‘For this purpose,’’;

17 (3) by redesignating paragraphs (3), (4), and

18 (5) of subsection (c) as paragraphs (4), (5), and (6),

19 respectively, and by inserting after paragraph (2)

20 the following new paragraph:

21 ‘‘(3)(A) A compulsory license under this section

22 includes the right of the compulsory licensee to dis23 tribute or authorize the distribution of a phono24 record of a nondramatic musical work by means of

25 a digital transmission which constitutes a digital

26 phonorecord delivery, regardless of whether the digi-
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1 tal transmission is also a public performance of the

2 sound recording under section 106(6) of this title or

3 of any nondramatic musical work embodied therein

4 under section 106(4) of this title. For every digital

5 phonorecord delivery by or under the authority of

6 the compulsory licensee—

7 ‘‘(i) on or before December 31, 1997, the

8 royalty payable by the compulsory licensee shall

9 be the royalty prescribed under paragraph (2)

10 and chapter 8 of this title; and

11 ‘‘(ii) on or after January 1, 1998, the roy12 alty payable by the compulsory licensee shall be

13 the royalty prescribed under subparagraphs (B)

14 through (F) and chapter 8 of this title.

15 ‘‘(B) Notwithstanding any provision of the anti16 trust laws, any copyright owners of nondramatic mu17 sical works and any persons entitled to obtain a

18 compulsory license under subsection (a)(1) may ne19 gotiate and agree upon the terms and rates of roy20 alty payments under this paragraph and the propor21 tionate division of fees paid among copyright owners,

22 and may designate common agents to negotiate,

23 agree to, pay or receive such royalty payments. Such

24 authority to negotiate the terms and rates of royalty

25 payments includes, but is not limited to, the author-
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1 ity to negotiate the year during which the royalty

2 rates prescribed under subparagraphs (B) through

3 (F) and chapter 8 of this title shall next be deter4 mined.

5 ‘‘(C) During the period of June 30, 1996,

6 through December 31, 1996, the Librarian of Con7 gress shall cause notice to be published in the Fed8 eral Register of the initiation of voluntary negotia9 tion proceedings for the purpose of determining rea10 sonable terms and rates of royalty payments for the

11 activities specified by subparagraph (A) during the

12 period beginning January 1, 1998, and ending on

13 the effective date of any new terms and rates estab14 lished pursuant to subparagraph (C), (D) or (F), or

15 such other date (regarding digital phonorecord deliv16 eries) as the parties may agree. Such terms and

17 rates shall distinguish between (i) digital phono18 record deliveries where the reproduction or distribu19 tion of a phonorecord is incidental to the trans20 mission which constitutes the digital phonorecord de21 livery, and (ii) digital phonorecord deliveries in gen22 eral. Any copyright owners of nondramatic musical

23 works and any persons entitled to obtain a compul24 sory license under subsection (a)(1) may submit to

25 the Librarian of Congress licenses covering such ac-
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1 tivities. The parties to each negotiation proceeding

2 shall bear their own costs.

3 ‘‘(D) In the absence of license agreements nego4 tiated under subparagraphs (B) and (C), upon the

5 filing of a petition in accordance with section

6 803(a)(1), the Librarian of Congress shall, pursuant

7 to chapter 8, convene a copyright arbitration royalty

8 panel to determine and publish in the Federal Reg9 ister a schedule of rates and terms which, subject to

10 subparagraph (E), shall be binding on all copyright

11 owners of nondramatic musical works and persons

12 entitled to obtain a compulsory license under sub13 section (a)(1) during the period beginning January

14 1, 1998, and ending on the effective date of any new

15 terms and rates established pursuant to subpara16 graph (C), (D) or (F), or such other date (regarding

17 digital phonorecord deliveries) as may be determined

18 pursuant to subparagraphs (B) and (C). Such terms

19 and rates shall distinguish between (i) digital phono20 record deliveries where the reproduction or distribu21 tion of a phonorecord is incidental to the trans22 mission which constitutes the digital phonorecord de23 livery, and (ii) digital phonorecord deliveries in gen24 eral. In addition to the objectives set forth in section

25 801(b)(1), in establishing such rates and terms, the
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1 copyright arbitration royalty panel may consider

2 rates and terms under voluntary license agreements

3 negotiated as provided in subparagraphs (B) and

4 (C). The royalty rates payable for a compulsory li5 cense for a digital phonorecord delivery under this

6 section shall be established de novo and no

7 precedential effect shall be given to the amount of

8 the royalty payable by a compulsory licensee for dig9 ital phonorecord deliveries on or before December

10 31, 1997. The Librarian of Congress shall also es11 tablish requirements by which copyright owners may

12 receive reasonable notice of the use of their works

13 under this section, and under which records of such

14 use shall be kept and made available by persons

15 making digital phonorecord deliveries.

16 ‘‘(E)(i) License agreements voluntarily nego17 tiated at any time between one or more copyright

18 owners of nondramatic musical works and one or

19 more persons entitled to obtain a compulsory license

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

21 of any determination by the Librarian of Congress.

22 Subject to clause (ii), the royalty rates determined

23 pursuant to subparagraph (C), (D) or (F) shall be

24 given effect in lieu of any contrary royalty rates

25 specified in a contract pursuant to which a recording
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1 artist who is the author of a nondramatic musical

2 work grants a license under that person’s exclusive

3 rights in the musical work under sections 106(1)

4 and (3) or commits another person to grant a license

5 in that musical work under sections 106(1) and (3),

6 to a person desiring to fix in a tangible medium of

7 expression a sound recording embodying the musical

8 work.

9 ‘‘(ii) The second sentence of clause (i) shall not

10 apply to—

11 ‘‘(I) a contract entered into on or before

12 June 22, 1995, and not modified thereafter for

13 the purpose of reducing the royalty rates deter14 mined pursuant to subparagraph (C), (D) or

15 (F) or of increasing the number of musical

16 works within the scope of the contract covered

17 by the reduced rates, except if a contract en18 tered into on or before June 22, 1995, is modi19 fied thereafter for the purpose of increasing the

20 number of musical works within the scope of

21 the contract, any contrary royalty rates speci22 fied in the contract shall be given effect in lieu

23 of royalty rates determined pursuant to sub24 paragraph (C), (D) or (F) for the number of
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1 musical works within the scope of the contract

2 as of June 22, 1995; and

3 ‘‘(II) a contract entered into after the date

4 that the sound recording is fixed in a tangible

5 medium of expression substantially in a form

6 intended for commercial release, if at the time

7 the contract is entered into, the recording artist

8 retains the right to grant licenses as to the mu9 sical work under sections 106(1) and 106(3).

10 ‘‘(F) The procedures specified in subparagraphs

11 (C) and (D) shall be repeated and concluded, in ac12 cordance with regulations that the Librarian of Con13 gress shall prescribe, in each fifth calendar year

14 after 1997, except to the extent that different years

15 for the repeating and concluding of such proceedings

16 may be determined in accordance with subpara17 graphs (B) and (C).

18 ‘‘(G) Except as provided in section 1002(e) of

19 this title, a digital phonorecord delivery licensed

20 under this paragraph shall be accompanied by the

21 information encoded in the sound recording, if any,

22 by or under the authority of the copyright owner of

23 that sound recording, that identifies the title of the

24 sound recording, the featured recording artist who

25 performs on the sound recording, and related infor-
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1 mation, including information concerning the under2 lying musical work and its writer.

3 ‘‘(H)(i) A digital phonorecord delivery of a

4 sound recording is actionable as an act of infringe5 ment under section 501, and is fully subject to the

6 remedies provided by sections 502 through 506 and

7 section 509, unless—

8 ‘‘(I) the digital phonorecord delivery has

9 been authorized by the copyright owner of the

10 sound recording; and

11 ‘‘(II) the owner of the copyright in the

12 sound recording or the entity making the digital

13 phonorecord delivery has obtained a compulsory

14 license under this section or has otherwise been

15 authorized by the copyright owner of the musi16 cal work to distribute or authorize the distribu17 tion, by means of a digital phonorecord delivery,

18 of each musical work embodied in the sound re19 cording.

20 ‘‘(ii) Any cause of action under this subpara21 graph shall be in addition to those available to the

22 owner of the copyright in the nondramatic musical

23 work under subsection (c)(6) and section 106(4) and

24 the owner of the copyright in the sound recording

25 under section 106(6).
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1 ‘‘(I) The liability of the copyright owner of a

2 sound recording for infringement of the copyright in

3 a nondramatic musical work embodied in the sound

4 recording shall be determined in accordance with ap5 plicable law, except that the owner of a copyright in

6 a sound recording shall not be liable for a digital

7 phonorecord delivery by a third party if the owner

8 of the copyright in the sound recording does not li9 cense the distribution of a phonorecord of the

10 nondramatic musical work.

11 ‘‘(J) Nothing in section 1008 shall be construed

12 to prevent the exercise of the rights and remedies al13 lowed by this paragraph, paragraph (6), and chapter

14 5 in the event of a digital phonorecord delivery, ex15 cept that no action alleging infringement of copy16 right may be brought under this title against a man17 ufacturer, importer or distributor of a digital audio

18 recording device, a digital audio recording medium,

19 an analog recording device, or an analog recording

20 medium, or against a consumer, based on the ac21 tions described in such section.

22 ‘‘(K) Nothing in this section annuls or limits (i)

23 the exclusive right to publicly perform a sound re24 cording or the musical work embodied therein, in25 cluding by means of a digital transmission, under
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1 sections 106(4) and 106(6), (ii) except for compul2 sory licensing under the conditions specified by this

3 section, the exclusive rights to reproduce and distrib4 ute the sound recording and the musical work em5 bodied therein under sections 106(1) and 106(3), in6 cluding by means of a digital phonorecord delivery,

7 or (iii) any other rights under any other provision of

8 section 106, or remedies available under this title, as

9 such rights or remedies exist either before or after

10 the date of enactment of the Digital Performance

11 Right in Sound Recordings Act of 1995.

12 ‘‘(L) The provisions of this section concerning

13 digital phonorecord deliveries shall not apply to any

14 exempt transmissions or retransmissions under sec15 tion 114(d)(1). The exemptions created in section

16 114(d)(1) do not expand or reduce the rights of

17 copyright owners under section 106(1) through (5)

18 with respect to such transmissions and

19 retransmissions.’’; and

20 (5) by adding after subsection (c) the following:

21 ‘‘(d) DEFINITION.—As used in this section, the fol22 lowing term has the following meaning: A ‘digital phono23 record delivery’ is each individual delivery of a phono24 record by digital transmission of a sound recording which

25 results in a specifically identifiable reproduction by or for
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1 any transmission recipient of a phonorecord of that sound

2 recording, regardless of whether the digital transmission

3 is also a public performance of the sound recording or any

4 nondramatic musical work embodied therein. A digital

5 phonorecord delivery does not result from a real-time,

6 noninteractive subscription transmission of a sound re7 cording where no reproduction of the sound recording or

8 the musical work embodied therein is made from the in9 ception of the transmission through to its receipt by the

10 transmission recipient in order to make the sound record11 ing audible.’’.

12 SEC. 5. CONFORMING AMENDMENTS.

13 (a) DEFINITIONS.—Section 101 of title 17, United

14 States Code, is amended by inserting after the definition

15 of ‘‘device’’, ‘‘machine’’, or ‘‘process’’ the following:

16 ‘‘A ‘digital transmission’ is a transmission in

17 whole or in part in a digital or other non-analog for18 mat.’’.

19 (b) LIMITATIONS ON EXCLUSIVE RIGHTS: SECOND20 ARY TRANSMISSIONS.—Section 111(c)(1) of title 17, Unit21 ed States Code, is amended in the first sentence by insert22 ing ‘‘and section 114(d)’’ after ‘‘of this subsection’’.

23 (c) LIMITATIONS ON EXCLUSIVE RIGHTS: SECOND24 ARY TRANSMISSIONS OF SUPERSTATIONS AND NETWORK

25 STATIONS FOR PRIVATE HOME VIEWING.—
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1 (1) Section 119(a)(1) of title 17, United States

2 Code, is amended in the first sentence by inserting

3 ‘‘and section 114(d)’’ after ‘‘of this subsection’’.

4 (2) Section 119(a)(2)(A) of title 17, United

5 States Code, is amended in the first sentence by in6 serting ‘‘and section 114(d)’’ after ‘‘of this sub7 section’’.

8 (d) COPYRIGHT ARBITRATION ROYALTY PANELS.—

9 (1) Section 801(b)(1) of title 17, United States

10 Code, is amended in the first and second sentences

11 by striking ‘‘115’’ each place it appears and insert12 ing ‘‘114, 115,’’.

13 (2) Section 802(c) of title 17, United States

14 Code, is amended in the third sentence by striking

15 ‘‘section 111, 116, or 119,’’ and inserting ‘‘section

16 111, 114, 116, or 119, any person entitled to a com17 pulsory license under section 114(d), any person en18 titled to a compulsory license under section 115,’’.

19 (3) Section 802(g) of title 17, United States

20 Code, is amended in the third sentence by inserting

21 ‘‘114,’’ after ‘‘111,’’.

22 (4) Section 802(h)(2) of title 17, United States

23 Code, is amended by inserting ‘‘114,’’ after ‘‘111,’’.

24 (5) Section 803(a)(1) of title 17, United States

25 Code, is amended in the first sentence by striking
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1 ‘‘115’’ and inserting ‘‘114, 115’’ and by striking

2 ‘‘and (4)’’ and inserting ‘‘(4) and (5)’’.

3 (6) Section 803(a)(3) of title 17, United States

4 Code, is amended by inserting before the period ‘‘or

5 as prescribed in section 115(c)(3)(D)’’.

6 (7) Section 803(a) of title 17, United States

7 Code, is amended by inserting after paragraph (4)

8 the following new paragraph:

9 ‘‘(5) With respect to proceedings under section

10 801(b)(1) concerning the determination of reason11 able terms and rates of royalty payments as pro12 vided in section 114, the Librarian of Congress shall

13 proceed when and as provided by that section.’’.

14 SEC. 6. EFFECTIVE DATE.

15 This Act and the amendments made by this Act shall

16 take effect 3 months after the date of enactment of this

17 Act, except that the provisions of sections 114(e) and

18 114(f) of title 17, United States Code (as added by section

19 3 of this Act) shall take effect immediately upon the date

20 of enactment of this Act.

Passed the Senate August 8 (legislative day, July

10), 1995.

Attest:

Secretary.
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S 227 ES——2

S 227 ES——3
104TH CONGRESS

1ST SESSION S. 227

AN ACT

To amend title 17, United States Code, to provide

for other purposes.publicly by means of digital transmissions, andan exclusive right to perform sound recordings