Calendar No. 165

104TH CONGRESS

1ST SESSION S. 227

[Report No. 104–128]

A BILL

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

AUGUST 4 (legislative day, JULY 10), 1995

Reported with an amendment
II

Calendar No. 165

104TH CONGRESS

1ST SESSION S. 227

[Report No. 104–128]

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.

IN THE SENATE OF THE UNITED STATES

JANUARY 13 (legislative day, JANUARY 10), 1995

Mr. HATCH (for himself, Mrs. FEINSTEIN, Mr. SIMPSON, Mr. DEWINE, Mr.

LOTT, and Mr. BAUCUS) introduced the following bill; which was read

twice and referred to the Committee on the Judiciary

AUGUST 4 (legislative day, JULY 10), 1995

Reported by Mr. HATCH, with an amendment

[Strike out all after the enacting clause and insert the part printed in italic]

A BILL

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,
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1 SECTION 1. SHORT TITLE.

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

3 Right in Sound Recordings Act of 1995’’.

4 SEC. 2. EXCLUSIVE RIGHTS IN COPYRIGHTED WORKS.

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

6 amended—

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

8 the semicolon;

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

10 inserting ‘‘; and’’; and

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

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

13 the copyrighted work publicly by means of a digital

14 transmission.’’.

15 SEC. 3. SCOPE OF EXCLUSIVE RIGHTS IN SOUND RECORD16 INGS.

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

18 amended—

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

20 replacing it with ‘‘(3) and (6)’’;

21 (2) in subsection (b) by deleting from the first

22 sentence ‘‘phonorecords, or of copies of motion pic23 tures and other audiovisual works,’’ and inserting

24 ‘‘phonorecords or copies’’;

25 (3) by striking subsection (d) and replacing it

26 with the following new subsection (d):
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1 ‘‘(d) LIMITATIONS ON EXCLUSIVE RIGHT.—Notwith2 standing the provisions of section 106(6)—

3 ‘‘(1) EXEMPT TRANSMISSIONS.—The perform4 ance of a sound recording publicly by means of a

5 digital transmission, other than as part of an inter6 active service, is not an infringement of section

7 106(6) if the performance is part of—

8 ‘‘(A) a nonsubscription transmission, such

9 as a nonsubscription broadcast transmission;

10 ‘‘(B) a prior or simultaneous transmission

11 incidental to a nonsubscription transmission,

12 such as a feed received by and then

13 retransmitted by the nonsubscription transmit14 ter: Provided, That such incidental trans15 missions do not include any subscription trans16 mission directly for reception by members of

17 the public;

18 ‘‘(C) a retransmission of a nonsubscription

19 broadcast transmission: Provided, That, in the

20 case of a retransmission of a radio station’s

21 broadcast transmission, the transmission is not

22 willfully or repeatedly retransmitted more than

23 a radius of one hundred and fifty miles from

24 the site of the radio broadcast transmitter;
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1 ‘‘(D) a further transmission by a business,

2 confined to its premises or the immediately sur3 rounding vicinity, of a transmission described in

4 paragraphs (A) or (B) of this subsection (d)(1);

5 or

6 ‘‘(E) a retransmission otherwise subject to

7 liability, if such transmission is simultaneous

8 with the primary transmission and authorized

9 by the primary transmitter, and the primary

10 transmitter has been licensed to publicly per11 form the sound recording.

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

13 case of a subscription transmission, the performance

14 of a sound recording publicly by means of a digital

15 transmission shall be subject to statutory licensing,

16 in accordance with subsection (f) of this section, if—

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

18 interactive service; and

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

20 sound recording performance complement.

21 ‘‘(3) RIGHTS NOT OTHERWISE LIMITED.—

22 ‘‘(A) Except as expressly provided herein,

23 this section does not limit or impair the exclu24 sive right to perform a sound recording publicly
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1 by means of a digital transmission under sec2 tion 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 transmission, under section

8 106(4),

9 ‘‘(ii) the exclusive rights to reproduce

10 and distribute a sound recording or the

11 musical work embodied therein under sec12 tions 106(1) and 106(3), including by

13 means of a digital phonorecord delivery as

14 defined in section 115, or

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

16 clause of section 106, or remedies available

17 under this title, as such rights or remedies

18 exist either before or after the date of en19 actment of this Act.’’; and

20 ‘‘(4) by adding after subsection (d) the follow21 ing:

22 ‘‘(e) AUTHORITY FOR NEGOTIATIONS.—Any copy23 right owners of sound recordings and any entities perform24 ing sound recordings affected by this section may nego25 tiate and agree upon the terms and rates of royalty pay-
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1 ments for the performance of such sound recordings and

2 the proportionate division of fees paid among copyright

3 owners, and may designate common agents to negotiate,

4 agree to, pay, or receive such royalty payments.

5 ‘‘(f) LICENSES FOR SUBSCRIPTION TRANS6 MISSIONS.—

7 ‘‘(1) No later than thirty days after the enact8 ment of this legislation, the Librarian of Congress

9 shall cause notice to be published in the Federal

10 Register of the initiation of voluntary negotiation

11 proceedings for the purpose of determining reason12 able terms and rates of royalty payments for the ac13 tivities specified by subsection (d)(2) of this section

14 during the period beginning on the effective date of

15 this legislation and ending on December 31, 2000.

16 Such terms and rates shall distinguish among the

17 different types of digital transmission services then

18 in operation. Any copyright owners of sound record19 ings or any entities performing sound recordings af20 fected by this section may submit to the Librarian

21 of Congress licenses covering such activities with re22 spect to such sound recordings. The parties to each

23 negotiation proceeding shall bear their own costs.

24 ‘‘(2) In the absence of license agreements nego25 tiated under paragraph (1), the Librarian of Con-
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1 gress shall, pursuant to chapter 8, convene a copy2 right arbitration royalty panel to determine and pub3 lish in the Federal Register a schedule of rates and

4 terms which, subject to paragraph (3), shall be bind5 ing on all copyright owners of sound recordings and

6 entities performing sound recordings. In establishing

7 such rates and terms the copyright arbitration roy8 alty panel may consider the rates for comparable

9 types of digital transmission services and comparable

10 circumstances under voluntary license agreements

11 negotiated as provided in paragraph (1). The parties

12 to the proceeding shall bear the entire cost thereof

13 in such manner and proportion as the arbitration

14 panels shall direct. The Librarian of Congress shall

15 also establish requirements by which copyright own16 ers may receive reasonable notice of the use of their

17 sound recordings under this section, and under

18 which records of such use shall be kept by entities

19 performing sound recordings.

20 ‘‘(3) License agreements voluntarily negotiated

21 at any time between one or more copyright owners

22 of sound recordings and one or more entities per23 forming sound recordings shall be given effect in lieu

24 of any determination by the Librarian of Congress.
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1 ‘‘(4) the procedures specified in paragraphs (1)

2 and (2) shall be repeated and concluded, in accord3 ance with regulations that the Librarian of Congress

4 shall prescribe—

5 ‘‘(A) within a six-month period each time

6 that a petition is filed by any copyright owners

7 of sound recordings or any entities performing

8 sound recordings affected by this section indi9 cating that a new type of digital transmission

10 service on which sound recordings are per11 formed is or is about to become operational,

12 and

13 ‘‘(B) between June 30 and December 31,

14 2000 and at five-year intervals thereafter.

15 ‘‘(5) Any person who wishes to perform a sound

16 recording publicly by means of a subscription trans17 mission under this subsection (f) may do so without

18 infringing the exclusive right of the copyright owner

19 of the sound recording by complying with such no20 tice requirements as the Register of Copyrights shall

21 prescribe by regulation and by paying royalty fees in

22 accordance with this subsection, or, if such royalty

23 fees have not been set, by agreeing to pay such roy24 alty fees as shall be determined in accordance with

25 this subsection, and any royalty payments in arrears
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1 shall be made on or before the twentieth day of the

2 month next succeeding the month in which the roy3 alty fees are set.

4 ‘‘(g) PROCEEDS FROM LICENSING OF SUBSCRIPTION

5 TRANSMISSIONS.—In the case of a subscription trans6 mission performance of a sound recording licensed under

7 subsection (f) of this section, the copyright owner of the

8 exclusive right under section 106(6) of this title to publicly

9 perform a sound recording by means of a digital trans10 mission shall allocate to recording artists in the following

11 manner its receipts from the licensing of subscription

12 transmission performances of the sound recording in ac13 cordance with subsection (f) of this section:

‘‘(1) 21 14 ⁄2 percent of the receipts shall be depos15 ited in an escrow account managed by an independ16 ent administrator jointly appointed by copyright

17 owners of sound recordings and the American Fed18 eration of Musicians (or any successor entity) to be

19 distributed to nonfeatured musicians (whether or not

20 members of the American Federation of Musicians)

21 who have performed on sound recordings.

‘‘(2) 21 22 ⁄2 percent of the receipts shall be depos23 ited in an escrow account managed by an independ24 ent administrator jointly appointed by copyright

25 owners of sound recordings and the American Fed-
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1 eration of Television and Radio Artists (or any suc2 cessor entity) to be distributed to nonfeatured vocal3 ists (whether or not members of the American Fed4 eration of Television and Radio Artists) who have

5 performed on sound recordings.

6 ‘‘(3) 45 percent of the receipts shall be allo7 cated, on a per sound recording basis, to the record8 ing artist or artists featured on such sound record9 ing (or the persons conveying rights in the artists’

10 performance in the sound recordings).

11 ‘‘(h) LICENSING TO AFFILIATES.—Where the copy12 right owner of a sound recording owns a controlling inter13 est in, or otherwise possesses the power directly or indi14 rectly to exercise a controlling influence over the manage15 ment or policies of, an entity engaging in digital trans16 missions covered by section 106(6) and licenses to such

17 entity the right to publicly perform a sound recording by

18 means of a digital transmission, the copyright owner shall

19 make the licensed sound recording available under section

20 106(6) on similar terms and conditions to all other simi21 larly-situated entities offering similar types of digital

22 transmission services, except that such copyright owner

23 may—

24 ‘‘(1) impose reasonable requirements for credit25 worthiness; and
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1 ‘‘(2) establish different prices, terms, and con2 ditions to take into account the types of services of3 fered, the duration of the license, the geographic re4 gion, the numbers of subscribers served, and any

5 other relevant factors.

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

7 WORKS.—License fees payable for the public performance

8 of sound recordings under clause (6) of section 106 shall

9 not be taken into account in any administrative, judicial

10 or other governmental proceeding to set or adjust the roy11 alties payable to copyright owners of musical works for

12 the public performance of their works.

13 ‘‘(j) DEFINITIONS.—As used in this section, the fol14 lowing terms have the following meanings:

15 ‘‘(1) A ‘broadcast transmission’ is a trans16 mission made by a broadcast station licensed as such

17 by the Federal Communications Commission.

18 ‘‘(2) An ‘interactive service’ is one that enables

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

20 transmission of a particular sound recording chosen

21 by or on behalf of the recipient. The ability of indi22 viduals to request that particular sound recordings

23 be performed for reception by the public at large

24 does not make a service interactive. If an entity of25 fers both interactive and non-interactive services (ei-
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1 ther concurrently or at different times), the non2 interactive component shall not be treated as part of

3 an interactive service.

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

5 transmission that is not a subscription transmission.

6 ‘‘(4) The ‘sound recording performance com7 plement’ is the transmission of no more than—

8 ‘‘(A) two selections each day of sound re9 cordings embodied in any one phonorecord dis10 tributed in the United States for ultimate sale

11 to consumers; or

12 ‘‘(B) three selections each day of sound re13 cordings of performances—

14 ‘‘(i) by the same featured recording

15 artist, or

16 ‘‘(ii) embodied in any set of

17 phonorecords or compilation of sound re18 cordings marketed together as a unit for

19 ultimate sale to consumers.

20 ‘‘(5) A ‘subscription transmission’ is a trans21 mission that is controlled and limited to particular

22 recipients, and for which consideration is required to

23 be paid or otherwise given by or on behalf of the re24 cipient to receive the transmission or a package of

25 transmissions including the transmission.’’.
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1 SEC. 4. SCOPE OF EXCLUSIVE RIGHTS IN NONDRAMATIC

2 MUSICAL WORKS: COMPULSORY LICENSE

3 FOR MAKING AND DISTRIBUTING

4 PHONORECORDS.

5 Section 115 of title 17, United State Code, is amend6 ed—

7 (1) by inserting before the period at the end of

8 the second sentence in subsection (a)(1) the words

9 ‘‘including by means of a digital phonorecord deliv10 ery’’;

11 (2) by inserting in the second sentence of sub12 section (c)(2), after the words ‘‘For this purpose,’’

13 the words ‘‘and other than as provided in clause

14 (3),’’;

15 (3) by redesignating clauses (3), (4) and (5) of

16 subsection (c) as clauses (4), (5) and (6), respec17 tively, and by inserting the following new clause:

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

19 includes the right of the maker of a phonorecord of

20 a nondramatic musical work under subsection (a)(1)

21 to distribute or authorize distribution of the sound

22 recording of such phonorecord by means of a digital

23 transmission which constitutes a digital phonorecord

24 delivery, regardless of whether the digital trans25 mission is also a public performance of the sound re26 cording under section 106(6) of this title or of any
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1 nondramatic musical work embodied therein under

2 section 106(4) of this title. For every digital phono3 record delivery by or under the authority of the com4 pulsory licensee, the royalty payable by the compul5 sory licensee shall be the royalty prescribed under

6 clause (2) and chapter 8 of this title.

7 ‘‘(B) Independent of any right of public per8 formance under section 106(4), the copyright owner

9 of a nondramatic musical work embodied in a sound

10 recording has the right to receive royalty payments

11 at the rates prescribed under this subsection when

12 the digital transmission of that sound recording con13 stitutes a digital phonorecord delivery. Unless au14 thorized by said copyright owner of the nondramatic

15 musical work or by any person who has obtained a

16 compulsory license under this section, such a digital

17 transmission, by whomever made, shall be actionable

18 by the copyright owner in the nondramatic musical

19 work as an act of infringement: Provided, however,

20 That no such cause of action may be brought

21 against a copyright owner of a sound recording un22 less it authorized the digital phonorecord delivery.

23 Any such cause of action shall be in addition to

24 those available to the copyright owner of the musical

25 work under section 106(4) and the copyright owner
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1 of the sound recording with respect to digital phono2 record deliveries and under section 106(6).

3 ‘‘(C) Nothing in section 1008 shall be construed

4 to prevent the exercise of the rights and remedies al5 lowed by clauses (3) and (7) and chapter 5 in the

6 event of a digital phonorecord delivery, except that

7 no action alleging infringement of copyright may be

8 brought under this title against a manufacturer, im9 porter or distributor of a digital audio recording de10 vice, a digital audio recording medium, an analog re11 cording device, or an analog recording medium, or

12 against a consumer, based on the actions described

13 in such section.

14 ‘‘(D) Nothing in this section annuls or limits in

15 any way (i) the exclusive right to publicly perform

16 a sound recording or the musical work embodied

17 therein, including by means of a digital trans18 mission, under sections 106(4) and 106(6), (ii) ex19 cept for the compulsory licensing under the condi20 tions specified by this section, the exclusive rights to

21 reproduce and distribute the sound recording and

22 the musical work embodied therein under sections

23 106(1) and 106(3), including by means of a digital

24 phonorecord delivery, or (iii) any other rights under

25 any other clause of section 106, or remedies avail-
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1 able under this title, as such rights or remedies exist

2 either before or after the date of enactment of this

3 Act.’’; and

4 (4) by adding after subsection (c) the following:

5 ‘‘(d) DEFINITIONS.—As used in this section, the fol6 lowing term has the following meaning: A ‘digital phono7 record delivery’ is each individual digital transmission of

8 a sound recording which results in a specifically identified

9 reproduction by or for any transmission recipient of a pho10 norecord of that sound recording, regardless of whether

11 the digital transmission is also a public performance of

12 the sound recording or any nondramatic musical work em13 bodied therein.’’.

14 SEC. 5. CONFORMING AMENDMENTS.

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

16 States Code, is amended by inserting after the definition

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

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

19 whole or in part in a digital or other non-analog for20 mat.’’.

21 (b) LIMITATIONS ON EXCLUSIVE RIGHTS: SECOND22 ARY TRANSMISSIONS.—Section 111(c)(1) of title 17,

23 United States Code, is amended in the first sentence by

24 striking ‘‘The’’ and inserting ‘‘Except in the case of a per-
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1 formance of a sound recording in the course of a digital

2 transmission, the’’.

3 (c) LIMITATIONS ON EXCLUSIVE RIGHTS: SECOND4 ARY TRANSMISSIONS OF SUPERSTATIONS AND NETWORK

5 STATIONS FOR PRIVATE HOME VIEWING.—Section

6 119(a)(1) of title 17, United States Code, is amended by

7 striking ‘‘Subject to’’ and inserting ‘‘Except in the case

8 of a performance of a sound recording in the course of

9 a digital transmission, and subject to’’.

10 (d) COPYRIGHT ARBITRATION ROYALTY PANELS.—

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

12 Code, is amended in the first and second sentences

13 by inserting ‘‘114’’ before ‘‘115’’.

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

15 Code, is amended in the third sentence by deleting

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

17 111, 114, 116, or 119, any person entitled to a com18 pulsory license under section 114(d), any person en19 titled to a compulsory license under section 115,’’.

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

21 Code, is amended in the third sentence by inserting

22 after ‘‘111’’ ‘‘, 114’’.

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

24 Code, is amended by inserting after ‘‘111’’ ‘‘, 114’’.
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1 SEC. 6. EFFECTIVE DATE.

2 This Act shall become effective three months after

3 the date of enactment, except that the provisions of sec4 tions 114(e) and 114(f) shall take effect immediately upon

5 enactment.

6 SECTION 1. SHORT TITLE.

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

8 Right in Sound Recordings Act of 1995’’.

9 SEC. 2. EXCLUSIVE RIGHTS IN COPYRIGHTED WORKS.

10 Section 106 of title 17, United States Code, is amend11 ed—

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

13 semicolon;

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

15 inserting ‘‘; and’’; and

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

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

18 the copyrighted work publicly by means of a digital

19 audio transmission.’’.

20 SEC. 3. SCOPE OF EXCLUSIVE RIGHTS IN SOUND RECORD21 INGS.

22 Section 114 of title 17, United States Code, is amend23 ed—

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

25 inserting ‘‘(3) and (6)’’;
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1 (2) in subsection (b) in the first sentence by

2 striking ‘‘phonorecords, or of copies of motion pictures

3 and other audiovisual works,’’ and inserting

4 ‘‘phonorecords or copies’’;

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

6 ‘‘(d) LIMITATIONS ON EXCLUSIVE RIGHT.—Notwith7 standing the provisions of section 106(6)—

8 ‘‘(1) EXEMPT TRANSMISSIONS AND

9 RETRANSMISSIONS.—The performance of a sound re10 cording publicly by means of a digital audio trans11 mission or retransmission, other than as a part of an

12 interactive service, is not an infringement of section

13 106(6) if the performance is part of—

14 ‘‘(A) a nonsubscription transmission, such

15 as a nonsubscription broadcast transmission;

16 ‘‘(B) a retransmission of a nonsubscription

17 broadcast transmission: Provided, That, in the

18 case of a retransmission of a radio station’s

19 broadcast transmission—

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

21 transmission is not willfully or repeatedly

22 retransmitted more than a radius of 150

23 miles from the site of the radio broadcast

24 transmitter, however—
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1 ‘‘(I) the 150 mile limitation under

2 this clause shall not apply when a

3 nonsubscription broadcast trans4 mission by a radio station licensed by

5 the Federal Communications Commis6 sion is retransmitted on a

7 nonsubscription basis by a terrestrial

8 broadcast station, terrestrial trans9 lator, or terrestrial repeater licensed by

10 the Federal Communications Commis11 sion; and

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

13 retransmission of a nonsubscription

14 broadcast retransmission covered by

15 subclause (I), the 150 mile radius shall

16 be measured from the transmitter site

17 of such broadcast retransmitter;

18 ‘‘(ii) the retransmission is of radio sta19 tion broadcast transmissions that are—

20 ‘‘(I) obtained by the retransmitter

21 over the air;

22 ‘‘(II) not electronically processed

23 by the retransmitter to deliver separate

24 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 separate

10 and discrete signal, and the satellite carrier

11 obtains the radio station’s broadcast trans12 mission in an analog format: Provided,

13 That the broadcast transmission being

14 retransmitted may embody the program15 ming of no more than one radio station; or

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

17 transmission is made by a noncommercial

18 educational broadcast station funded on or

19 after January 1, 1995, under section 396(k)

20 of the Communications Act of 1934 (47

21 U.S.C. 396(k)), consists solely of non22 commercial educational and cultural radio

23 programs, and the retransmission, whether

24 or not simultaneous, is a nonsubscription

25 terrestrial broadcast retransmission; or
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1 ‘‘(C) a transmission or retransmission that

2 comes within any of the following categories:

3 ‘‘(i) a prior or simultaneous trans4 mission or retransmission incidental to an

5 exempt transmission or retransmission,

6 such as a feed received by and then

7 retransmitted by an exempt transmitter:

8 Provided, That such incidental trans9 missions or retransmissions do not include

10 any subscription transmission or

11 retransmission directly for reception by

12 members of the public;

13 ‘‘(ii) a transmission or retransmission

14 within a business establishment, confined to

15 its premises or the immediately surround16 ing vicinity;

17 ‘‘(iii) a retransmission by any

18 retransmitter, including a multichannel

19 video programming distributor as defined

20 in section 522(12) of the Communications

21 Act of 1934 (47 U.S.C. 522(12)), of a trans22 mission by a transmitter licensed to pub23 licly perform the sound recording as a part

24 of that transmission, if the retransmission

25 is simultaneous with the licensed trans-
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1 mission and authorized by the transmitter;

2 or

3 ‘‘(iv) a transmission or retransmission

4 to a business establishment for use in the

5 ordinary course of its business: Provided,

6 That the business recipient does not

7 retransmit the transmission outside of its

8 premises or the immediately surrounding

9 vicinity, and that the transmission does not

10 exceed the sound recording performance

11 complement. Nothing in this clause shall

12 limit the scope of the exemption in clause

13 (ii).

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

15 case of a subscription transmission not exempt under

16 subsection (d)(1), the performance of a sound record17 ing publicly by means of a digital audio transmission

18 shall be subject to statutory licensing, in accordance

19 with subsection (f) of this section, if—

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

21 interactive service;

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

23 sound recording performance complement;

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

25 to be published by means of an advance program
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1 schedule or prior announcement the titles of the

2 specific sound recordings or phonorecords em3 bodying such sound recordings to be transmitted;

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

5 a business establishment, the transmitting entity

6 does not automatically and intentionally cause

7 any device receiving the transmission to switch

8 from one program channel to another; and

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

10 of this title, the transmission of the sound record11 ing is accompanied by the information encoded

12 in that sound recording, if any, by or under the

13 authority of the copyright owner of that sound

14 recording, that identifies the title of the sound re15 cording, the featured recording artist who per16 forms on the sound recording, and related infor17 mation, including information concerning the

18 underlying musical work and its writer.

19 ‘‘(3) LICENSES FOR TRANSMISSIONS BY INTER20 ACTIVE SERVICES.—

21 ‘‘(A) No interactive service shall be granted

22 an exclusive license under section 106(6) for the

23 performance of a sound recording publicly by

24 means of digital audio transmission for a period

25 in excess of 12 months, except that with respect
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1 to an exclusive license granted to an interactive

2 service by a licensor that holds the copyright to

3 1,000 or fewer sound recordings, the period of

4 such license shall not exceed 24 months: Pro5 vided, however, That the grantee of such exclusive

6 license shall be ineligible to receive another exclu7 sive license for the performance of that sound re8 cording for a period of 13 months from the expi9 ration of the prior exclusive license.

10 ‘‘(B) The limitation set forth in subpara11 graph (A) of this paragraph shall not apply if—

12 ‘‘(i) the licensor has granted and there

13 remain in effect licenses under section

14 106(6) for the public performance of sound

15 recordings by means of digital audio trans16 mission by at least 5 different interactive

17 services: Provided, however, That each such

18 license must be for a minimum of 10 per19 cent of the copyrighted sound recordings

20 owned by the licensor that have been li21 censed on an exclusive basis to interactive

22 services, but in no event less than 50 sound

23 recordings; or

24 ‘‘(ii) the exclusive license is granted to

25 perform publicly up to 45 seconds of a
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1 sound recording and the sole purpose of the

2 performance is to promote the distribution

3 or performance of that sound recording.

4 ‘‘(C) Notwithstanding the grant of an exclu5 sive or nonexclusive license of the right of public

6 performance under section 106(6), an interactive

7 service may not publicly perform a sound record8 ing unless a license has been granted for the pub9 lic performance of any copyrighted musical work

10 contained in the sound recording, Provided, That

11 such license to publicly perform the copyrighted

12 musical work may be granted either by a per13 forming rights society representing the copyright

14 owner or by the copyright owner.

15 ‘‘(D) The performance of a sound recording

16 by means of a digital audio retransmission is

17 not an infringement of section 106(6) if—

18 ‘‘(i) the retransmission is of a trans19 mission by an interactive service licensed to

20 publicly perform the sound recording to a

21 particular member of the public as part of

22 that transmission; and

23 ‘‘(ii) the retransmission is simulta24 neous with the licensed transmission, au25 thorized by the transmitter, and limited to
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1 that particular member of the public in2 tended by the interactive service to be the

3 recipient of the transmission.

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

5 ‘‘(i) a ‘licensor’ shall include the licens6 ing entity and any other entity under any

7 material degree of common ownership, man8 agement, or control that owns copyrights in

9 sound recordings; and

10 ‘‘(ii) a ‘performing rights society’ is an

11 association or corporation that licenses the

12 public performance of nondramatic musical

13 works on behalf of the copyright owner, such

14 as the American Society of Composers, Au15 thors and Publishers, Broadcast Music, Inc.,

16 and SESAC, Inc.

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

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

19 section, this section does not limit or impair the

20 exclusive right to perform a sound recording

21 publicly by means of a digital audio trans22 mission under section 106(6).

23 ‘‘(B) Nothing in this section annuls or lim24 its in any way—
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1 ‘‘(i) the exclusive right to publicly per2 form a musical work, including by means of

3 a digital audio transmission, under section

4 106(4);

5 ‘‘(ii) the exclusive rights to reproduce

6 and distribute a sound recording or the mu7 sical work embodied therein under sections

8 106(1) and 106(3); or

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

10 clause of section 106, or remedies available

11 under this title, as such rights or remedies

12 exist either before or after the date of enact13 ment of the Digital Performance Right in

14 Sound Recordings Act of 1995.

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

16 exclusive right under section 106(6) apply only

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

18 not to any other exclusive rights under section

19 106. Nothing in this section shall be construed to

20 annul, limit, impair or otherwise affect in any

21 way the ability of the owner of a copyright in

22 a sound recording to exercise the rights under

23 sections 106(1), 106(2) and 106(3), or to obtain

24 the remedies available under this title pursuant

25 to such rights, as such rights and remedies exist
29

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1 either before or after the date of enactment of the

2 Digital Performance Right in Sound Recordings

3 Act of 1995.’’; and

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

5 ‘‘(e) AUTHORITY FOR NEGOTIATIONS.—

6 ‘‘(1) Notwithstanding any provision of the anti7 trust laws, in negotiating statutory licenses in accord8 ance with subsection (f), any copyright owners of

9 sound recordings and any entities performing sound

10 recordings affected by this section may negotiate and

11 agree upon the royalty rates and license terms and

12 conditions for the performance of such sound record13 ings and the proportionate division of fees paid

14 among copyright owners, and may designate common

15 agents on a nonexclusive basis to negotiate, agree to,

16 pay, or receive payments.

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

18 other than statutory licenses, such as for performances

19 by interactive services or performances that exceed the

20 sound recording performance complement—

21 ‘‘(A) copyright owners of sound recordings

22 affected by this section may designate common

23 agents to act on their behalf to grant licenses and

24 receive and remit royalty payments, Provided,

25 That each copyright owner shall establish the
30

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1 royalty rates and material license terms and

2 conditions unilaterally, that is, not in agree3 ment, combination, or concert with other copy4 right owners of sound recordings; and

5 ‘‘(B) entities performing sound recordings

6 affected by this section may designate common

7 agents to act on their behalf to obtain licenses

8 and collect and pay royalty fees, Provided, That

9 each entity performing sound recordings shall

10 determine the royalty rates and material license

11 terms and conditions unilaterally, that is, not in

12 agreement, combination, or concert with other

13 entities performing sound recordings.

14 ‘‘(f) LICENSES FOR NONEXEMPT SUBSCRIPTION

15 TRANSMISSIONS.—

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

17 of the Digital Performance Right in Sound Record18 ings Act of 1995, the Librarian of Congress shall

19 cause notice to be published in the Federal Register

20 of the initiation of voluntary negotiation proceedings

21 for the purpose of determining reasonable terms and

22 rates of royalty payments for the activities specified

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

24 beginning on the effective date of such Act and ending

25 on December 31, 2000. Such terms and rates shall
31

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1 distinguish among the different types of digital audio

2 transmission services then in operation. Any copy3 right owners of sound recordings or any entities per4 forming sound recordings affected by this section may

5 submit to the Librarian of Congress licenses covering

6 such activities with respect to such sound recordings.

7 The parties to each negotiation proceeding shall bear

8 their own costs.

9 ‘‘(2) In the absence of license agreements nego10 tiated under paragraph (1), the Librarian of Congress

11 shall, pursuant to chapter 8, convene a copyright ar12 bitration royalty panel to determine and publish in

13 the Federal Register a schedule of rates and terms

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

15 all copyright owners of sound recordings and entities

16 performing sound recordings. In establishing such

17 rates and terms the copyright arbitration royalty

18 panel may consider the rates for comparable types of

19 digital audio transmission services and comparable

20 circumstances under voluntary license agreements ne21 gotiated as provided in paragraph (1). The parties to

22 the proceeding shall bear the entire cost of the pro23 ceeding in such manner and proportion as the arbi24 tration panels shall direct. The Librarian of Congress

25 shall also establish requirements by which copyright
32

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1 owners may receive reasonable notice of the use of

2 their sound recordings under this section, and under

3 which records of such use shall be kept by entities per4 forming sound recordings.

5 ‘‘(3) License agreements voluntarily negotiated

6 at any time between one or more copyright owners of

7 sound recordings and one or more entities performing

8 sound recordings shall be given effect in lieu of any

9 determination by a copyright arbitration royalty

10 panel or decision by the Librarian of Congress.

11 ‘‘(4) The procedures specified in paragraphs (1)

12 and (2) shall be repeated and concluded, in accord13 ance with regulations that the Librarian of Congress

14 shall prescribe—

15 ‘‘(A) within a 6-month period each time

16 that a petition is filed by any copyright owners

17 of sound recordings or any entities performing

18 sound recordings affected by this section indicat19 ing that a new type of digital audio trans20 mission service on which sound recordings are

21 performed is or is about to become operational,

22 and

23 ‘‘(B) between June 30 and December 31,

24 2000 and at 5-year intervals thereafter.
33

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

2 sound recording publicly by means of a nonexempt

3 subscription transmission under this subsection may

4 do so without infringing the exclusive right of the

5 copyright owner of the sound recording—

6 ‘‘(i) by complying with such notice require7 ments as the Register of Copyrights shall pre8 scribe by regulation and by paying royalty fees

9 in accordance with this subsection; or

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

11 by agreeing to pay such royalty fees as shall be

12 determined in accordance with this subsection.

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

14 made on or before the twentieth day of the month next

15 succeeding the month in which the royalty fees are

16 set.

17 ‘‘(g) PROCEEDS FROM LICENSING OF SUBSCRIPTION

18 TRANSMISSIONS.—

19 ‘‘(1) Except in the case of a subscription trans20 mission licensed in accordance with subsection (f) of

21 this section—

22 ‘‘(A) a featured recording artist who per23 forms on a sound recording that has been li24 censed for a subscription transmission shall be

25 entitled to receive payments from the copyright
34

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1 owner of the sound recording in accordance with

2 the terms of the artist’s contract; and

3 ‘‘(B) a nonfeatured recording artist who

4 performs on a sound recording that has been li5 censed for a subscription transmission shall be

6 entitled to receive payments from the copyright

7 owner of the sound recording in accordance with

8 the terms of the nonfeatured recording artist’s

9 applicable contract or other applicable agree10 ment.

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

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

13 a sound recording by means of a digital audio trans14 mission shall allocate to recording artists in the fol15 lowing manner its receipts from the statutory licens16 ing of subscription transmission performances of the

17 sound recording in accordance with subsection (f) of

18 this section:

‘‘(A) 21 19 ⁄2 percent of the receipts shall be de20 posited in an escrow account managed by an

21 independent administrator jointly appointed by

22 copyright owners of sound recordings and the

23 American Federation of Musicians (or any suc24 cessor entity) to be distributed to nonfeatured

25 musicians (whether or not members of the Amer-
35

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1 ican Federation of Musicians) who have per2 formed on sound recordings.

‘‘(B) 21 3 ⁄2 percent of the receipts shall be de4 posited in an escrow account managed by an

5 independent administrator jointly appointed by

6 copyright owners of sound recordings and the

7 American Federation of Television and Radio

8 Artists (or any successor entity) to be distributed

9 to nonfeatured vocalists (whether or not members

10 of the American Federation of Television and

11 Radio Artists) who have performed on sound re12 cordings.

13 ‘‘(C) 45 percent of the receipts shall be allo14 cated, on a per sound recording basis, to the re15 cording artist or artists featured on such sound

16 recording (or the persons conveying rights in the

17 artists’ performance in the sound recordings).

18 ‘‘(h) LICENSING TO AFFILIATES.—

19 ‘‘(1) If the copyright owner of a sound recording

20 licenses an affiliated entity the right to publicly per21 form a sound recording by means of a digital audio

22 transmission under section 106(6), the copyright

23 owner shall make the licensed sound recording avail24 able under section 106(6) on no less favorable terms

25 and conditions to all bona fide entities that offer
36

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1 similar services, except that, if there are material dif2 ferences in the scope of the requested license with re3 spect to the type of service, the particular sound re4 cordings licensed, the frequency of use, the number of

5 subscribers served, or the duration, then the copyright

6 owner may establish different terms and conditions

7 for such other services.

8 ‘‘(2) The limitation set forth in paragraph (1) of

9 this subsection shall not apply in the case where the

10 copyright owner of a sound recording licenses—

11 ‘‘(A) an interactive service; or

12 ‘‘(B) an entity to perform publicly up to 45

13 seconds of the sound recording and the sole pur14 pose of the performance is to promote the dis15 tribution or performance of that sound recording.

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

17 WORKS.—License fees payable for the public performance

18 of sound recordings under clause (6) of section 106 shall

19 not be taken into account in any administrative, judicial,

20 or other governmental proceeding to set or adjust the royal21 ties payable to copyright owners of musical works for the

22 public performance of their works. It is the intent of Con23 gress that royalties payable to copyright owners of musical

24 works for the public performance of their works shall not
37

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1 be diminished in any respect as a result of the rights grant2 ed by section 106(6).

3 ‘‘(j) DEFINITIONS.—As used in this section, the follow4 ing terms have the following meanings:

5 ‘‘(1) An ‘affiliated entity’ is an entity engaging

6 in digital audio transmissions covered by section

7 106(6), other than an interactive service, in which the

8 licensor has any direct or indirect partnership or any

9 ownership interest amounting to 5 percent or more of

10 the outstanding voting or non-voting stock.

11 ‘‘(2) A ‘broadcast transmission’ is a trans12 mission made by a broadcast station licensed as such

13 by the Federal Communications Commission.

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

15 transmission as defined in section 101, that embodies

16 the transmission of a sound recording. This term does

17 not include the transmission of any audiovisual work.

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

19 a member of the public to receive, on request, a trans20 mission of a particular sound recording chosen by or

21 on behalf of the recipient. The ability of individuals

22 to request that particular sound recordings be per23 formed for reception by the public at large does not

24 make a service interactive. If an entity offers both

25 interactive and non-interactive services (either con-
38

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1 currently or at different times), the non-interactive

2 component shall not be treated as part of an inter3 active service.

4 ‘‘(5) A ‘nonsubscription transmission’,

5 ‘nonsubscription retransmission’, or a

6 ‘nonsubscription broadcast transmission’ is any

7 transmission or retransmission that is not a subscrip8 tion transmission or retransmission.

9 ‘‘(6) A ‘retransmission’ includes any further si10 multaneous retransmission of the same transmission.

11 Nothing in this definition shall be construed to ex12 empt a transmission that fails to satisfy a separate

13 element required to qualify for an exemption under

14 section 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 United

22 States, if no more than 2 such selections are

23 transmitted consecutively; or

24 ‘‘(B) 4 different selections of sound record25 ings
39

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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 excess

10 of the numerical limits provided for in clauses (A)

11 and (B) from multiple phonorecords shall nonetheless

12 qualify as a sound recording performance complement

13 if the programming of the multiple phonorecords was

14 not willfully intended to avoid the numerical limita15 tions 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 SEC. 4. MECHANICAL ROYALTIES IN DIGITAL PHONO23 RECORD DELIVERIES.

24 Section 115 of title 17, United States Code, is amend25 ed—
40

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1 (1) in subsection (a)(1)—

2 (A) in the first sentence by striking out

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

4 ‘‘any other person, including those who make

5 phonorecords or digital phonorecord deliveries by

6 means of a digital audio transmission,’’; and

7 (B) in the second sentence by inserting be8 fore the period ‘‘, including by means of a digi9 tal phonorecord delivery’’;

10 (2) in subsection (c)(2) in the second sentence by

11 inserting ‘‘and other than as provided in paragraph

12 (3),’’ after ‘‘For this purpose,’’;

13 (3) by redesignating paragraphs (3), (4), and (5)

14 of subsection (c) as paragraphs (4), (5), and (6), re15 spectively, and by inserting after paragraph (2) the

16 following new paragraph:

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

18 includes the right of the compulsory licensee to dis19 tribute or authorize the distribution of a phonorecord

20 of a nondramatic musical work by means of a digital

21 transmission which constitutes a digital phonorecord

22 delivery, regardless of whether the digital trans23 mission is also a public performance of the sound re24 cording under section 106(6) of this title or of any

25 nondramatic musical work embodied therein under
41

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1 section 106(4) of this title. For every digital phono2 record delivery by or under the authority of the com3 pulsory licensee—

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

5 royalty payable by the compulsory licensee shall

6 be the royalty prescribed under paragraph (2)

7 and chapter 8 of this title; and

8 ‘‘(ii) on or after January 1, 1998, the roy9 alty payable by the compulsory licensee shall be

10 the royalty prescribed under subparagraphs (B)

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

12 ‘‘(B) Notwithstanding any provision of the anti13 trust laws, for the purpose of this subparagraph, any

14 copyright owners of nondramatic musical works and

15 any persons entitled to obtain a compulsory license

16 under subsection (a)(1) may negotiate and agree upon

17 the terms and rates of royalty payments under this

18 paragraph and the proportionate division of fees paid

19 among copyright owners, and may designate common

20 agents to negotiate, agree to, pay or receive such roy21 alty payments. Such authority to negotiate the terms

22 and rates of royalty payments includes, but is not

23 limited to, the authority to negotiate the year during

24 which the royalty rates prescribed under subpara-
42

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1 graphs (B) through (F) and chapter 8 of this title

2 shall next be determined.

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

4 through December 31, 1996, Librarian of Congress

5 shall cause notice to be published in the Federal Reg6 ister of the initiation of voluntary negotiation pro7 ceedings for the purpose of determining reasonable

8 terms and rates of royalty payments for the activities

9 specified by subparagraph (A) during the period be10 ginning January 1, 1998, and ending on December

11 31, 2007, or such earlier date (regarding digital

12 transmissions) as the parties may agree. Such terms

13 and rates shall distinguish between (i) digital phono14 record deliveries where the reproduction or distribu15 tion of a phonorecord is incidental to the trans16 mission which constitutes the digital phonorecord de17 livery, and (ii) digital phonorecord deliveries in gen18 eral. Any copyright owners of nondramatic musical

19 works and any persons entitled to obtain a compul20 sory license under subsection (a)(1) may submit to

21 the Librarian of Congress licenses covering such ac22 tivities. The parties to each negotiation proceeding

23 shall bear their own costs.

24 ‘‘(D) In the absence of license agreements nego25 tiated under subparagraph (C), the Librarian of Con-
43

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1 gress shall, pursuant to chapter 8, convene a copy2 right arbitration royalty panel to determine and pub3 lish in the Federal Register a schedule of rates and

4 terms which, subject to subparagraph (E), shall be

5 binding on all copyright owners of nondramatic mu6 sical works and persons entitled to obtain a compul7 sory license under subsection (a)(1) during the period

8 beginning January 1, 1998, and ending on December

9 31, 2007, or such earlier date (regarding digital

10 transmissions) as may be determined pursuant to

11 subparagraph (C) or chapter 8. Such terms and rates

12 shall distinguish between (i) digital phonorecord de13 liveries where the reproduction or distribution of a

14 phonorecord is incidental to the transmission which

15 constitutes the digital phonorecord delivery, and (ii)

16 digital phonorecord deliveries in general. In addition

17 to the objectives set forth in section 801(b)(1), in es18 tablishing such rates and terms, the copyright arbi19 tration royalty panel may consider rates under vol20 untary license agreements negotiated as provided in

21 subparagraph (C). The royalty rates payable for a

22 compulsory license for a digital phonorecord delivery

23 under this section shall be established de novo and no

24 precedential effect shall be given to the amount of the

25 royalty payable by a compulsory licensee for digital
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1 phonorecord deliveries on or before December 31,

2 1997. The parties to the proceeding shall bear the en3 tire cost thereof in such manner and proportion as

4 the arbitration panels shall direct. The Librarian of

5 Congress shall also establish requirements by which

6 copyright owners may receive reasonable notice of the

7 use of their works under this section, and under

8 which records of such use shall be kept and made

9 available by persons making digital phonorecord de10 liveries.

11 ‘‘(E)(i) License agreements voluntarily nego12 tiated at any time between one or more copyright

13 owners of nondramatic musical works and one or

14 more persons entitled to obtain a compulsory license

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

16 any determination by the Librarian of Congress. Sub17 ject to clause (ii), the royalty rates determined pursu18 ant to subparagraph (C) or (D) shall be given effect

19 in lieu of any contrary royalty rates specified in a

20 contract pursuant to which a recording artist who is

21 the author of a nondramatic musical work grants a

22 license under that person’s exclusive rights in the mu23 sical work under section 106(1) or (3) to a person de24 siring to fix in a tangible medium of expression a

25 sound recording embodying the musical work.
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1 ‘‘(ii) Clause (i) shall not apply to—

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

3 June 22, 1995, and not modified thereafter for

4 the purpose of reducing such rates or of increas5 ing the number of musical works within the

6 scope of the contract covered by the reduced rates,

7 except if a contract entered into on or before

8 June 22, 1995, is modified thereafter for the pur9 pose of increasing the number of musical works

10 within the scope of the contract, any contrary

11 royalty rates specified in the contract shall be

12 given effect in lieu of royalty rates determined

13 pursuant to subparagraph (C) or (D) for the

14 number of musical works within the scope of the

15 contract as of June 22, 1995; and

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

17 that the sound recording is fixed in a tangible

18 medium of expression substantially in a form in19 tended for commercial release, if at the time the

20 contract is entered into, the recording artist re21 tains the right to grant licenses under sections

22 106(1) and 106(3).

23 ‘‘(F) The procedures specified in subparagraphs

24 (C) and (D) shall be repeated and concluded, in ac25 cordance with regulations that the Librarian of Con-
46

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1 gress shall prescribe, as provided in section 803(a)(3),

2 except to the extent that different times for the repeat3 ing and concluding of such proceedings may be deter4 mined in accordance with subparagraph (C) or (D).

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

6 this title, a digital phonorecord delivery licensed

7 under this paragraph shall be accompanied by the in8 formation encoded in the sound recording, if any, by

9 or under the authority of the copyright owner of that

10 sound recording, that identifies the title of the sound

11 recording, the featured recording artist who performs

12 on the sound recording, and related information, in13 cluding information concerning the underlying musi14 cal work and its writer.

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

16 sound recording is actionable as an act of infringe17 ment under section 501, and is fully subject to the

18 remedies provided by sections 502 through 506 and

19 sections 509 and 510, unless—

20 ‘‘(I) the digital phonorecord delivery has

21 been authorized by the copyright owner of the

22 sound recording; and

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

24 sound recording or the entity making the digital

25 phonorecord delivery has obtained a compulsory
47

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1 license under this section or has otherwise been

2 authorized to distribute or authorize the distribu3 tion, by means of a digital phonorecord delivery,

4 of each nondramatic musical work embodied in

5 the sound recording.

6 ‘‘(ii) Any cause of action under this subpara7 graph shall be in addition to those available to the

8 owner of the copyright in the nondramatic musical

9 work under subsection (c)(5) and section 106(4) and

10 the owner of the copyright in the sound recording

11 under section 106(6).

12 ‘‘(I) The liability of the copyright owner of a

13 sound recording for infringement of the copyright in

14 a musical work embodied in the sound recording shall

15 be determined in accordance with applicable law, ex16 cept that the owner of a copyright in a sound record17 ing shall not be liable for a digital phonorecord deliv18 ery by a third party if the owner of the copyright in

19 the sound recording does not license the distribution

20 of a phonorecord of the musical work.

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

22 to prevent the exercise of the rights and remedies al23 lowed by this paragraph, paragraph (7), and chapter

24 5 in the event of a digital phonorecord delivery, ex25 cept that no action alleging infringement of copyright
48

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1 may be brought under this title against a manufac2 turer, importer or distributor of a digital audio re3 cording device, a digital audio recording medium, an

4 analog recording device, or an analog recording me5 dium, or against a consumer, based on the actions de6 scribed in such section.

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

8 the exclusive right to publicly perform a sound record9 ing or the musical work embodied therein, including

10 by means of a digital transmission, under sections

11 106(4) and 106(6), (ii) except for compulsory licens12 ing under the conditions specified by this section, the

13 exclusive rights to reproduce and distribute the sound

14 recording and the musical work embodied therein

15 under sections 106(1) and 106(3), including by means

16 of a digital phonorecord delivery, or (iii) any other

17 rights under any other provision of section 106, or

18 remedies available under this title, as such rights or

19 remedies exist either before or after the date of enact20 ment of the Digital Performance Right in Sound Re21 cordings Act of 1995.

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

23 digital phonorecord deliveries shall not apply to any

24 exempt transmissions or retransmissions under sec25 tion 114(d)(1). The exemptions created in section
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1 114(d)(1) do not expand or reduce the rights of copy2 right owners under section 106 (1) through (5) with

3 respect to such transmissions and retransmissions.’’;

4 and

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

6 ‘‘(d) DEFINITION.—As used in this section, the follow7 ing term has the following meaning: A ‘digital phonorecord

8 delivery’ is each individual delivery of a phonorecord by

9 digital transmission of a sound recording which results in

10 a specifically identifiable reproduction by or for any trans11 mission recipient of a phonorecord of that sound recording,

12 regardless of whether the digital transmission is also a pub13 lic performance of the sound recording or any nondramatic

14 musical work embodied therein. A digital phonorecord de15 livery does not result from a real-time, noninteractive sub16 scription transmission of a sound recording where no repro17 duction of the sound recording or the musical work em18 bodied therein is made from the inception of the trans19 mission through to its receipt by the transmission recipient

20 in order to make the sound recording audible.’’.

21 SEC. 5. CONFORMING AMENDMENTS.

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

23 States Code, is amended by inserting after the definition

24 of ‘‘device’’, ‘‘machine’’, or ‘‘process’’ the following:
50

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

2 whole or in part in a digital or other non-analog for3 mat.’’.

4 (b) LIMITATIONS ON EXCLUSIVE RIGHTS: SECONDARY

5 TRANSMISSIONS.—Section 111(c)(1) of title 17, United

6 States Code, is amended in the first sentence by inserting

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

8 (c) LIMITATIONS ON EXCLUSIVE RIGHTS: SECONDARY

9 TRANSMISSIONS OF SUPERSTATIONS AND NETWORK STA10 TIONS FOR PRIVATE HOME VIEWING.—

11 (1) Section 119(a)(1) of title 17, United States

12 Code, is amended in the first sentence by inserting

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

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

15 States Code, is amended in the first sentence by in16 serting ‘‘and section 114(d)’’ after ‘‘of this sub17 section’’.

18 (d) COPYRIGHT ARBITRATION ROYALTY PANELS.—

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

20 Code, is amended in the first and second sentences by

21 striking ‘‘115’’ each place it appears and inserting

22 ‘‘114, 115,’’.

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

24 Code, is amended in the third sentence by striking

25 ‘‘section 111, 116, or 119,’’ and inserting ‘‘section
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1 111, 114, 116, or 119, any person entitled to a com2 pulsory license under section 114(d), any person enti3 tled to a compulsory license under section 115,’’.

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

5 Code, is amended in the third sentence by inserting

6 ‘‘114,’’ after ‘‘111,’’.

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

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

9 SEC. 6. EFFECTIVE DATE.

10 This Act and the amendments made by this Act shall

11 take effect 3 months after the date of enactment of this Act,

12 except that the provisions of sections 114(e) and 114(f) of

13 title 17, United States Code (as added by section 3 of this

14 Act) shall take effect immediately upon the date of enact15 ment of this Act.

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