In the Senate of the United States, 

September 18, 2018. 

Resolved, That the bill from the House of Representatives (H.R. 1551) entitled ‘‘An Act to amend the Internal 

Revenue Code of 1986 to modify the credit for production 

from advanced nuclear power facilities.’’, do pass with the following 

AMENDMENT: 

Strike all after the enacting clause and insert the 

following: 

1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Orrin G. Hatch Music Modernization Act’’. 

4 (b) TABLE OF CONTENTS.—The table of contents for 

5 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Customs user fees. 

TITLE I—MUSIC LICENSING MODERNIZATION 

Sec. 101. Short title. 

Sec. 102. Blanket license for digital uses and mechanical licensing collective. 

Sec. 103. Amendments to section 114. 

Sec. 104. Random assignment of rate court proceedings. 

Sec. 105. Performing rights society consent decrees. 
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Sec. 106. Effective date. 

TITLE II—CLASSICS PROTECTION AND ACCESS 

Sec. 201. Short title. 

Sec. 202. Unauthorized use of pre-1972 sound recordings. 

TITLE III—ALLOCATION FOR MUSIC PRODUCERS 

Sec. 301. Short title. 

Sec. 302. Payment of statutory performance royalties. 

Sec. 303. Effective date. 

TITLE IV—SEVERABILITY 

Sec. 401. Severability. 

1 SEC. 2. CUSTOMS USER FEES. 

2 Section 13031(j)(3)(A) of the Consolidated Omnibus 

3 Budget Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)(A)) 

4 is amended by striking ‘‘October 13, 2027’’ and inserting 

5 ‘‘October 20, 2027’’. 

6 TITLE I—MUSIC LICENSING 

7 MODERNIZATION 

8 SEC. 101. SHORT TITLE. 

9 This title may be cited as the ‘‘Musical Works Mod10 ernization Act’’. 

11 SEC. 102. BLANKET LICENSE FOR DIGITAL USES AND ME12 CHANICAL LICENSING COLLECTIVE. 

13 (a) AMENDMENT.—Section 115 of title 17, United 

14 States Code, is amended— 

15 (1) in subsection (a)— 

16 (A) in the subsection heading, by inserting 

17 ‘‘IN GENERAL’’ after ‘‘AVAILABILITY AND SCOPE

18 OF COMPULSORY LICENSE’’; 
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1 (B) by striking paragraph (1) and inserting 

2 the following: 

3 ‘‘(1) ELIGIBILITY FOR COMPULSORY LICENSE.— 

4 ‘‘(A) CONDITIONS FOR COMPULSORY LI5 CENSE.—A person may by complying with the 

6 provisions of this section obtain a compulsory li7 cense to make and distribute phonorecords of a 

8 nondramatic musical work, including by means 

9 of digital phonorecord delivery. A person may 

10 obtain a compulsory license only if the primary 

11 purpose in making phonorecords of the musical 

12 work is to distribute them to the public for pri13 vate use, including by means of digital phono14 record delivery, and— 

15 ‘‘(i) phonorecords of such musical work 

16 have previously been distributed to the pub17 lic in the United States under the authority 

18 of the copyright owner of the work, includ19 ing by means of digital phonorecord deliv20 ery; or 

21 ‘‘(ii) in the case of a digital music pro22 vider seeking to make and distribute digital 

23 phonorecord deliveries of a sound recording 

24 embodying a musical work under a compul-
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1 sory license for which clause (i) does not 

2 apply— 

3 ‘‘(I) the first fixation of such 

4 sound recording was made under the 

5 authority of the musical work copy6 right owner, and the sound recording 

7 copyright owner has the authority of 

8 the musical work copyright owner to 

9 make and distribute digital phono10 record deliveries embodying such work 

11 to the public in the United States; and 

12 ‘‘(II) the sound recording copy13 right owner, or the authorized dis14 tributor of the sound recording copy15 right owner, has authorized the digital 

16 music provider to make and distribute 

17 digital phonorecord deliveries of the 

18 sound recording to the public in the 

19 United States. 

20 ‘‘(B) DUPLICATION OF SOUND RECORD21 ING.—A person may not obtain a compulsory li22 cense for the use of the work in the making of 

23 phonorecords duplicating a sound recording fixed 

24 by another, including by means of digital phono25 record delivery, unless— 
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1 ‘‘(i) such sound recording was fixed 

2 lawfully; and 

3 ‘‘(ii) the making of the phonorecords 

4 was authorized by the owner of the copy5 right in the sound recording or, if the sound 

6 recording was fixed before February 15, 

7 1972, by any person who fixed the sound re8 cording pursuant to an express license from 

9 the owner of the copyright in the musical 

10 work or pursuant to a valid compulsory li11 cense for use of such work in a sound re12 cording.’’; and 

13 (C) in paragraph (2), by striking ‘‘A com14 pulsory license’’ and inserting ‘‘MUSICAL AR15 RANGEMENT.—A compulsory license’’; 

16 (2) by striking subsection (b) and inserting the 

17 following: 

18 ‘‘(b) PROCEDURES TO OBTAIN A COMPULSORY LI19 CENSE.— 

20 ‘‘(1) PHONORECORDS OTHER THAN DIGITAL

21 PHONORECORD DELIVERIES.—A person who seeks to 

22 obtain a compulsory license under subsection (a) to 

23 make and distribute phonorecords of a musical work 

24 other than by means of digital phonorecord delivery 

25 shall, before, or not later than 30 calendar days after, 
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1 making, and before distributing, any phonorecord of 

2 the work, serve notice of intention to do so on the 

3 copyright owner. If the registration or other public 

4 records of the Copyright Office do not identify the 

5 copyright owner and include an address at which no6 tice can be served, it shall be sufficient to file the no7 tice of intention with the Copyright Office. The notice 

8 shall comply, in form, content, and manner of service, 

9 with requirements that the Register of Copyrights 

10 shall prescribe by regulation. 

11 ‘‘(2) DIGITAL PHONORECORD DELIVERIES.—A 

12 person who seeks to obtain a compulsory license under 

13 subsection (a) to make and distribute phonorecords of 

14 a musical work by means of digital phonorecord de15 livery— 

16 ‘‘(A) prior to the license availability date, 

17 shall, before, or not later than 30 calendar days 

18 after, first making any such digital phonorecord 

19 delivery, serve a notice of intention to do so on 

20 the copyright owner (but may not file the notice 

21 with the Copyright Office, even if the public 

22 records of the Office do not identify the owner or 

23 the owner’s address), and such notice shall com24 ply, in form, content, and manner of service, 
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1 with requirements that the Register of Copy2 rights shall prescribe by regulation; or 

3 ‘‘(B) on or after the license availability 

4 date, shall, before making any such digital pho5 norecord delivery, follow the procedure described 

6 in subsection (d)(2), except as provided in para7 graph (3). 

8 ‘‘(3) RECORD COMPANY INDIVIDUAL DOWNLOAD

9 LICENSES.—Notwithstanding paragraph (2)(B), a 

10 record company may, on or after the license avail11 ability date, obtain an individual download license in 

12 accordance with the notice requirements described in 

13 paragraph (2)(A) (except for the requirement that no14 tice occur prior to the license availability date). A 

15 record company that obtains an individual download 

16 license as permitted under this paragraph shall pro17 vide statements of account and pay royalties as pro18 vided in subsection (c)(2)(I). 

19 ‘‘(4) FAILURE TO OBTAIN LICENSE.— 

20 ‘‘(A) PHONORECORDS OTHER THAN DIGITAL

21 PHONORECORD DELIVERIES.—In the case of 

22 phonorecords made and distributed other than by 

23 means of digital phonorecord delivery, the failure 

24 to serve or file the notice of intention required by 

25 paragraph (1) forecloses the possibility of a com-
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1 pulsory license under paragraph (1). In the ab2 sence of a voluntary license, the failure to obtain 

3 a compulsory license renders the making and 

4 distribution of phonorecords actionable as acts of 

5 infringement under section 501 and subject to 

6 the remedies provided by sections 502 through 

7 506. 

8 ‘‘(B) DIGITAL PHONORECORD DELIV9 ERIES.— 

10 ‘‘(i) IN GENERAL.—In the case of 

11 phonorecords made and distributed by 

12 means of digital phonorecord delivery: 

13 ‘‘(I) The failure to serve the notice 

14 of intention required by paragraph 

15 (2)(A) or paragraph (3), as applicable, 

16 forecloses the possibility of a compul17 sory license under such paragraph. 

18 ‘‘(II) The failure to comply with 

19 paragraph (2)(B) forecloses the possi20 bility of a blanket license for a period 

21 of 3 years after the last calendar day 

22 on which the notice of license was re23 quired to be submitted to the mechan24 ical licensing collective under such 

25 paragraph. 
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1 ‘‘(ii) EFFECT OF FAILURE.—In either 

2 case described in subclause (I) or (II) of 

3 clause (i), in the absence of a voluntary li4 cense, the failure to obtain a compulsory li5 cense renders the making and distribution 

6 of phonorecords by means of digital phono7 record delivery actionable as acts of in8 fringement under section 501 and subject to 

9 the remedies provided by sections 502 

10 through 506.’’; 

11 (3) by amending subsection (c) to read as fol12 lows: 

13 ‘‘(c) GENERAL CONDITIONS APPLICABLE TO COMPUL14 SORY LICENSE.— 

15 ‘‘(1) ROYALTY PAYABLE UNDER COMPULSORY LI16 CENSE.— 

17 ‘‘(A) IDENTIFICATION REQUIREMENT.—To 

18 be entitled to receive royalties under a compul19 sory license obtained under subsection (b)(1) the 

20 copyright owner must be identified in the reg21 istration or other public records of the Copyright 

22 Office. The owner is entitled to royalties for 

23 phonorecords made and distributed after being so 

24 identified, but is not entitled to recover for any 

25 phonorecords previously made and distributed. 
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1 ‘‘(B) ROYALTY FOR PHONORECORDS OTHER

2 THAN DIGITAL PHONORECORD DELIVERIES.—Ex3 cept as provided by subparagraph (A), for every 

4 phonorecord made and distributed under a com5 pulsory license under subsection (a) other than 

6 by means of digital phonorecord delivery, with 

7 respect to each work embodied in the phono8 record, the royalty shall be the royalty prescribed 

9 under subparagraphs (D) through (F), para10 graph (2)(A), and chapter 8. For purposes of 

11 this subparagraph, a phonorecord is considered 

12 ‘distributed’ if the person exercising the compul13 sory license has voluntarily and permanently 

14 parted with its possession. 

15 ‘‘(C) ROYALTY FOR DIGITAL PHONORECORD

16 DELIVERIES.—For every digital phonorecord de17 livery of a musical work made under a compul18 sory license under this section, the royalty pay19 able shall be the royalty prescribed under sub20 paragraphs (D) through (F), paragraph (2)(A), 

21 and chapter 8. 

22 ‘‘(D) AUTHORITY TO NEGOTIATE.—Notwith23 standing any provision of the antitrust laws, 

24 any copyright owners of nondramatic musical 

25 works and any persons entitled to obtain a com-
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1 pulsory license under subsection (a) may nego2 tiate and agree upon the terms and rates of roy3 alty payments under this section and the propor4 tionate division of fees paid among copyright 

5 owners, and may designate common agents on a 

6 nonexclusive basis to negotiate, agree to, pay or 

7 receive such royalty payments. Such authority to 

8 negotiate the terms and rates of royalty pay9 ments includes, but is not limited to, the author10 ity to negotiate the year during which the roy11 alty rates prescribed under this subparagraph, 

12 subparagraphs (E) and (F), paragraph (2)(A), 

13 and chapter 8 shall next be determined. 

14 ‘‘(E) DETERMINATION OF REASONABLE

15 RATES AND TERMS.—Proceedings under chapter 

16 8 shall determine reasonable rates and terms of 

17 royalty payments for the activities specified by 

18 this section during the period beginning with the 

19 effective date of such rates and terms, but not 

20 earlier than January 1 of the second year fol21 lowing the year in which the petition requesting 

22 the proceeding is filed, and ending on the effec23 tive date of successor rates and terms, or such 

24 other period as the parties may agree. Any copy25 right owners of nondramatic musical works and 
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1 any persons entitled to obtain a compulsory li2 cense under subsection (a) may submit to the 

3 Copyright Royalty Judges licenses covering such 

4 activities. The parties to each proceeding shall 

5 bear their own costs. 

6 ‘‘(F) SCHEDULE OF REASONABLE RATES.— 

7 The schedule of reasonable rates and terms deter8 mined by the Copyright Royalty Judges shall, 

9 subject to paragraph (2)(A), be binding on all 

10 copyright owners of nondramatic musical works 

11 and persons entitled to obtain a compulsory li12 cense under subsection (a) during the period 

13 specified in subparagraph (E), such other period 

14 as may be determined pursuant to subpara15 graphs (D) and (E), or such other period as the 

16 parties may agree. The Copyright Royalty 

17 Judges shall establish rates and terms that most 

18 clearly represent the rates and terms that would 

19 have been negotiated in the marketplace between 

20 a willing buyer and a willing seller. In deter21 mining such rates and terms for digital phono22 record deliveries, the Copyright Royalty Judges 

23 shall base their decision on economic, competi24 tive, and programming information presented by 

25 the parties, including— 
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1 ‘‘(i) whether use of the compulsory li2 censee’s service may substitute for or may 

3 promote the sales of phonorecords or other4 wise may interfere with or may enhance the 

5 musical work copyright owner’s other 

6 streams of revenue from its musical works; 

7 and 

8 ‘‘(ii) the relative roles of the copyright 

9 owner and the compulsory licensee in the 

10 copyrighted work and the service made 

11 available to the public with respect to the 

12 relative creative contribution, technological 

13 contribution, capital investment, cost, and 

14 risk. 

15 ‘‘(2) ADDITIONAL TERMS AND CONDITIONS.— 

16 ‘‘(A) VOLUNTARY LICENSES AND CONTRAC17 TUAL ROYALTY RATES.— 

18 ‘‘(i) IN GENERAL.—License agreements 

19 voluntarily negotiated at any time between 

20 one or more copyright owners of nondra21 matic musical works and one or more per22 sons entitled to obtain a compulsory license 

23 under subsection (a) shall be given effect in 

24 lieu of any determination by the Copyright 

25 Royalty Judges. Subject to clause (ii), the 
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1 royalty rates determined pursuant to sub2 paragraphs (E) and (F) of paragraph (1) 

3 shall be given effect as to digital phono4 record deliveries in lieu of any contrary 

5 royalty rates specified in a contract pursu6 ant to which a recording artist who is the 

7 author of a nondramatic musical work 

8 grants a license under that person’s exclu9 sive rights in the musical work under para10 graphs (1) and (3) of section 106 or com11 mits another person to grant a license in 

12 that musical work under paragraphs (1) 

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

14 to fix in a tangible medium of expression a 

15 sound recording embodying the musical 

16 work. 

17 ‘‘(ii) APPLICABILITY.—The second sen18 tence of clause (i) shall not apply to— 

19 ‘‘(I) a contract entered into on or 

20 before June 22, 1995, and not modified 

21 thereafter for the purpose of reducing 

22 the royalty rates determined pursuant 

23 to subparagraphs (E) and (F) of para24 graph (1) or of increasing the number 

25 of musical works within the scope of 
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1 the contract covered by the reduced 

2 rates, except if a contract entered into 

3 on or before June 22, 1995, is modified 

4 thereafter for the purpose of increasing 

5 the number of musical works within 

6 the scope of the contract, any contrary 

7 royalty rates specified in the contract 

8 shall be given effect in lieu of royalty 

9 rates determined pursuant to subpara10 graphs (E) and (F) of paragraph (1) 

11 for the number of musical works with12 in the scope of the contract as of June 

13 22, 1995; and 

14 ‘‘(II) a contract entered into after 

15 the date that the sound recording is 

16 fixed in a tangible medium of expres17 sion substantially in a form intended 

18 for commercial release, if at the time 

19 the contract is entered into, the record20 ing artist retains the right to grant li21 censes as to the musical work under 

22 paragraphs (1) and (3) of section 106. 

23 ‘‘(B) SOUND RECORDING INFORMATION.— 

24 Except as provided in section 1002(e), a digital 

25 phonorecord delivery licensed under this para-
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1 graph shall be accompanied by the information 

2 encoded in the sound recording, if any, by or 

3 under the authority of the copyright owner of 

4 that sound recording, that identifies the title of 

5 the sound recording, the featured recording artist 

6 who performs on the sound recording, and re7 lated information, including information con8 cerning the underlying musical work and its 

9 writer. 

10 ‘‘(C) INFRINGEMENT REMEDIES.— 

11 ‘‘(i) IN GENERAL.—A digital phono12 record delivery of a sound recording is ac13 tionable as an act of infringement under 

14 section 501, and is fully subject to the rem15 edies provided by sections 502 through 506, 

16 unless— 

17 ‘‘(I) the digital phonorecord deliv18 ery has been authorized by the sound 

19 recording copyright owner; and 

20 ‘‘(II) the entity making the digital 

21 phonorecord delivery has obtained a 

22 compulsory license under subsection 

23 (a) or has otherwise been authorized by 

24 the musical work copyright owner, or 

25 by a record company pursuant to an 
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1 individual download license, to make 

2 and distribute phonorecords of each 

3 musical work embodied in the sound 

4 recording by means of digital phono5 record delivery. 

6 ‘‘(ii) OTHER REMEDIES.—Any cause of 

7 action under this subparagraph shall be in 

8 addition to those available to the owner of 

9 the copyright in the nondramatic musical 

10 work under subparagraph (J) and section 

11 106(4) and the owner of the copyright in 

12 the sound recording under section 106(6). 

13 ‘‘(D) LIABILITY OF SOUND RECORDING OWN14 ERS.—The liability of the copyright owner of a 

15 sound recording for infringement of the copy16 right in a nondramatic musical work embodied 

17 in the sound recording shall be determined in ac18 cordance with applicable law, except that the 

19 owner of a copyright in a sound recording shall 

20 not be liable for a digital phonorecord delivery 

21 by a third party if the owner of the copyright in 

22 the sound recording does not license the distribu23 tion of a phonorecord of the nondramatic musi24 cal work. 
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1 ‘‘(E) RECORDING DEVICES AND MEDIA.— 

2 Nothing in section 1008 shall be construed to 

3 prevent the exercise of the rights and remedies al4 lowed by this paragraph, subparagraph (J), and 

5 chapter 5 in the event of a digital phonorecord 

6 delivery, except that no action alleging infringe7 ment of copyright may be brought under this 

8 title against a manufacturer, importer or dis9 tributor of a digital audio recording device, a 

10 digital audio recording medium, an analog re11 cording device, or an analog recording medium, 

12 or against a consumer, based on the actions de13 scribed in such section. 

14 ‘‘(F) PRESERVATION OF RIGHTS.—Nothing 

15 in this section annuls or limits— 

16 ‘‘(i) the exclusive right to publicly per17 form a sound recording or the musical work 

18 embodied therein, including by means of a 

19 digital transmission, under paragraphs (4) 

20 and (6) of section 106; 

21 ‘‘(ii) except for compulsory licensing 

22 under the conditions specified by this sec23 tion, the exclusive rights to reproduce and 

24 distribute the sound recording and the mu25 sical work embodied therein under para-
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1 graphs (1) and (3) of section 106, including 

2 by means of a digital phonorecord delivery; 

3 or 

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

5 provision of section 106, or remedies avail6 able under this title, as such rights or rem7 edies exist before, on, or after the date of en8 actment of the Digital Performance Right 

9 in Sound Recordings Act of 1995. 

10 ‘‘(G) EXEMPT TRANSMISSIONS AND RE11 TRANSMISSIONS.—The provisions of this section 

12 concerning digital phonorecord deliveries shall 

13 not apply to any exempt transmissions or re14 transmissions under section 114(d)(1). The ex15 emptions created in section 114(d)(1) do not ex16 pand or reduce the rights of copyright owners 

17 under paragraphs (1) through (5) of section 106 

18 with respect to such transmissions and retrans19 missions. 

20 ‘‘(H) DISTRIBUTION BY RENTAL, LEASE, OR

21 LENDING.—A compulsory license obtained under 

22 subsection (b)(1) to make and distribute 

23 phonorecords includes the right of the maker of 

24 such a phonorecord to distribute or authorize 

25 distribution of such phonorecord, other than by 
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1 means of a digital phonorecord delivery, by rent2 al, lease, or lending (or by acts or practices in 

3 the nature of rental, lease, or lending). With re4 spect to each nondramatic musical work em5 bodied in the phonorecord, the royalty shall be a 

6 proportion of the revenue received by the compul7 sory licensee from every such act of distribution 

8 of the phonorecord under this clause equal to the 

9 proportion of the revenue received by the compul10 sory licensee from distribution of the phonorecord 

11 under subsection (a)(1)(A)(ii)(II) that is payable 

12 by a compulsory licensee under that clause and 

13 under chapter 8. The Register of Copyrights shall 

14 issue regulations to carry out the purpose of this 

15 subparagraph. 

16 ‘‘(I) PAYMENT OF ROYALTIES AND STATE17 MENTS OF ACCOUNT.—Except as provided in 

18 paragraphs (4)(A)(i) and (10)(B) of subsection 

19 (d), royalty payments shall be made on or before 

20 the twentieth day of each month and shall in21 clude all royalties for the month next preceding. 

22 Each monthly payment shall be made under oath 

23 and shall comply with requirements that the 

24 Register of Copyrights shall prescribe by regula25 tion. The Register shall also prescribe regulations 
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1 under which detailed cumulative annual state2 ments of account, certified by a certified public 

3 accountant, shall be filed for every compulsory 

4 license under subsection (a). The regulations cov5 ering both the monthly and the annual state6 ments of account shall prescribe the form, con7 tent, and manner of certification with respect to 

8 the number of records made and the number of 

9 records distributed. 

10 ‘‘(J) NOTICE OF DEFAULT AND TERMI11 NATION OF COMPULSORY LICENSE.—In the case 

12 of a license obtained under paragraph (1), 

13 (2)(A), or (3) of subsection (b), if the copyright 

14 owner does not receive the monthly payment and 

15 the monthly and annual statements of account 

16 when due, the owner may give written notice to 

17 the licensee that, unless the default is remedied 

18 not later than 30 days after the date on which 

19 the notice is sent, the compulsory license will be 

20 automatically terminated. Such termination ren21 ders either the making or the distribution, or 

22 both, of all phonorecords for which the royalty 

23 has not been paid, actionable as acts of infringe24 ment under section 501 and fully subject to the 

25 remedies provided by sections 502 through 506. 
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1 In the case of a license obtained under subsection 

2 (b)(2)(B), license authority under the compulsory 

3 license may be terminated as provided in sub4 section (d)(4)(E).’’; 

5 (4) by amending subsection (d) to read as fol6 lows: 

7 ‘‘(d) BLANKET LICENSE FOR DIGITAL USES, MECHAN8 ICAL LICENSING COLLECTIVE, AND DIGITAL LICENSEE CO9 ORDINATOR.— 

10 ‘‘(1) BLANKET LICENSE FOR DIGITAL USES.— 

11 ‘‘(A) IN GENERAL.—A digital music pro12 vider that qualifies for a compulsory license 

13 under subsection (a) may, by complying with the 

14 terms and conditions of this subsection, obtain a 

15 blanket license from copyright owners through 

16 the mechanical licensing collective to make and 

17 distribute digital phonorecord deliveries of musi18 cal works through one or more covered activities. 

19 ‘‘(B) INCLUDED ACTIVITIES.—A blanket li20 cense— 

21 ‘‘(i) covers all musical works (or shares 

22 of such works) available for compulsory li23 censing under this section for purposes of 

24 engaging in covered activities, except as 

25 provided in subparagraph (C); 
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1 ‘‘(ii) includes the making and distribu2 tion of server, intermediate, archival, and 

3 incidental reproductions of musical works 

4 that are reasonable and necessary for the 

5 digital music provider to engage in covered 

6 activities licensed under this subsection, 

7 solely for the purpose of engaging in such 

8 covered activities; and 

9 ‘‘(iii) does not cover or include any 

10 rights or uses other than those described in 

11 clauses (i) and (ii). 

12 ‘‘(C) OTHER LICENSES.—A voluntary li13 cense for covered activities entered into by or 

14 under the authority of 1 or more copyright own15 ers and 1 or more digital music providers, or au16 thority to make and distribute permanent 

17 downloads of a musical work obtained by a dig18 ital music provider from a sound recording 

19 copyright owner pursuant to an individual 

20 download license, shall be given effect in lieu of 

21 a blanket license under this subsection with re22 spect to the musical works (or shares thereof) 

23 covered by such voluntary license or individual 

24 download authority and the following conditions 

25 apply: 
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1 ‘‘(i) Where a voluntary license or indi2 vidual download license applies, the license 

3 authority provided under the blanket license 

4 shall exclude any musical works (or shares 

5 thereof) subject to the voluntary license or 

6 individual download license. 

7 ‘‘(ii) An entity engaged in covered ac8 tivities under a voluntary license or author9 ity obtained pursuant to an individual 

10 download license that is a significant non11 blanket licensee shall comply with para12 graph (6)(A). 

13 ‘‘(iii) The rates and terms of any vol14 untary license shall be subject to the second 

15 sentence of clause (i) and clause (ii) of sub16 section (c)(2)(A) and paragraph (9)(C), as 

17 applicable. 

18 ‘‘(D) PROTECTION AGAINST INFRINGEMENT

19 ACTIONS.—A digital music provider that obtains 

20 and complies with the terms of a valid blanket 

21 license under this subsection shall not be subject 

22 to an action for infringement of the exclusive 

23 rights provided by paragraphs (1) and (3) of sec24 tion 106 under this title arising from use of a 

25 musical work (or share thereof) to engage in cov-
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1 ered activities authorized by such license, subject 

2 to paragraph (4)(E). 

3 ‘‘(E) OTHER REQUIREMENTS AND CONDI4 TIONS APPLY.—Except as expressly provided in 

5 this subsection, each requirement, limitation, 

6 condition, privilege, right, and remedy otherwise 

7 applicable to compulsory licenses under this sec8 tion shall apply to compulsory blanket licenses 

9 under this subsection. 

10 ‘‘(2) AVAILABILITY OF BLANKET LICENSE.— 

11 ‘‘(A) PROCEDURE FOR OBTAINING LI12 CENSE.—A digital music provider may obtain a 

13 blanket license by submitting a notice of license 

14 to the mechanical licensing collective that speci15 fies the particular covered activities in which the 

16 digital music provider seeks to engage, as follows: 

17 ‘‘(i) The notice of license shall comply 

18 in form and substance with requirements 

19 that the Register of Copyrights shall estab20 lish by regulation. 

21 ‘‘(ii) Unless rejected in writing by the 

22 mechanical licensing collective not later 

23 than 30 calendar days after the date on 

24 which the mechanical licensing collective re25 ceives the notice, the blanket license shall be 
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1 effective as of the date on which the notice 

2 of license was sent by the digital music pro3 vider, as shown by a physical or electronic 

4 record. 

5 ‘‘(iii) A notice of license may only be 

6 rejected by the mechanical licensing collec7 tive if— 

8 ‘‘(I) the digital music provider or 

9 notice of license does not meet the re10 quirements of this section or applicable 

11 regulations, in which case the require12 ments at issue shall be specified with 

13 reasonable particularity in the notice 

14 of rejection; or 

15 ‘‘(II) the digital music provider 

16 has had a blanket license terminated 

17 by the mechanical licensing collective 

18 during the 3-year period preceding the 

19 date on which the mechanical licensing 

20 collective receives the notice pursuant 

21 to paragraph (4)(E). 

22 ‘‘(iv) If a notice of license is rejected 

23 under clause (iii)(I), the digital music pro24 vider shall have 30 calendar days after re25 ceipt of the notice of rejection to cure any 
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1 deficiency and submit an amended notice of 

2 license to the mechanical licensing collective. 

3 If the deficiency has been cured, the me4 chanical licensing collective shall so confirm 

5 in writing, and the license shall be effective 

6 as of the date that the original notice of li7 cense was provided by the digital music 

8 provider. 

9 ‘‘(v) A digital music provider that be10 lieves a notice of license was improperly re11 jected by the mechanical licensing collective 

12 may seek review of such rejection in an ap13 propriate district court of the United 

14 States. The district court shall determine 

15 the matter de novo based on the record be16 fore the mechanical licensing collective and 

17 any additional evidence presented by the 

18 parties. 

19 ‘‘(B) BLANKET LICENSE EFFECTIVE

20 DATE.—Blanket licenses shall be made available 

21 by the mechanical licensing collective on and 

22 after the license availability date. No such license 

23 shall be effective prior to the license availability 

24 date. 

25 ‘‘(3) MECHANICAL LICENSING COLLECTIVE.— 
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1 ‘‘(A) IN GENERAL.—The mechanical licens2 ing collective shall be a single entity that— 

3 ‘‘(i) is a nonprofit entity, not owned 

4 by any other entity, that is created by copy5 right owners to carry out responsibilities 

6 under this subsection; 

7 ‘‘(ii) is endorsed by, and enjoys sub8 stantial support from, musical work copy9 right owners that together represent the 

10 greatest percentage of the licensor market 

11 for uses of such works in covered activities, 

12 as measured over the preceding 3 full cal13 endar years; 

14 ‘‘(iii) is able to demonstrate to the Reg15 ister of Copyrights that the entity has, or 

16 will have prior to the license availability 

17 date, the administrative and technological 

18 capabilities to perform the required func19 tions of the mechanical licensing collective 

20 under this subsection and that is governed 

21 by a board of directors in accordance with 

22 subparagraph (D)(i); and 

23 ‘‘(iv) has been designated by the Reg24 ister of Copyrights, with the approval of the 
29 

† HR 1551 EAS 

1 Librarian of Congress pursuant to section 

2 702, in accordance with subparagraph (B). 

3 ‘‘(B) DESIGNATION OF MECHANICAL LICENS4 ING COLLECTIVE.— 

5 ‘‘(i) INITIAL DESIGNATION.—Not later 

6 than 270 days after the enactment date, the 

7 Register of Copyrights shall initially des8 ignate the mechanical licensing collective as 

9 follows: 

10 ‘‘(I) Not later than 90 calendar 

11 days after the enactment date, the Reg12 ister shall publish notice in the Federal 

13 Register soliciting information to as14 sist in identifying the appropriate en15 tity to serve as the mechanical licens16 ing collective, including the name and 

17 affiliation of each member of the board 

18 of directors described under subpara19 graph (D)(i) and each committee estab20 lished pursuant to clauses (iii), (iv), 

21 and (v) of subparagraph (D). 

22 ‘‘(II) After reviewing the informa23 tion requested under subclause (I) and 

24 making a designation, the Register 
30 

† HR 1551 EAS 

1 shall publish notice in the Federal Reg2 ister setting forth— 

3 ‘‘(aa) the identity of and 

4 contact information for the me5 chanical licensing collective; and 

6 ‘‘(bb) the reasons for the des7 ignation. 

8 ‘‘(ii) PERIODIC REVIEW OF DESIGNA9 TION.—Following the initial designation of 

10 the mechanical licensing collective, the Reg11 ister shall, every 5 years, beginning with the 

12 fifth full calendar year to commence after 

13 the initial designation, publish notice in the 

14 Federal Register in the month of January 

15 soliciting information concerning whether 

16 the existing designation should be contin17 ued, or a different entity meeting the cri18 teria described in clauses (i) through (iii) of 

19 subparagraph (A) shall be designated. Fol20 lowing publication of such notice, the Reg21 ister shall— 

22 ‘‘(I) after reviewing the informa23 tion submitted and conducting addi24 tional proceedings as appropriate, pub25 lish notice in the Federal Register of a 
31 

† HR 1551 EAS 

1 continuing designation or new designa2 tion of the mechanical licensing collec3 tive, as the case may be, and the rea4 sons for such a designation, with any 

5 new designation to be effective as of the 

6 first day of a month that is not less 

7 than 6 months and not longer than 9 

8 months after the date on which the 

9 Register publishes the notice, as speci10 fied by the Register; and 

11 ‘‘(II) if a new entity is designated 

12 as the mechanical licensing collective, 

13 adopt regulations to govern the trans14 fer of licenses, funds, records, data, and 

15 administrative responsibilities from the 

16 existing mechanical licensing collective 

17 to the new entity. 

18 ‘‘(iii) CLOSEST ALTERNATIVE DESIGNA19 TION.—If the Register is unable to identify 

20 an entity that fulfills each of the qualifica21 tions set forth in clauses (i) through (iii) of 

22 subparagraph (A), the Register shall des23 ignate the entity that most nearly fulfills 

24 such qualifications for purposes of carrying 
32 

† HR 1551 EAS 

1 out the responsibilities of the mechanical li2 censing collective. 

3 ‘‘(C) AUTHORITIES AND FUNCTIONS.— 

4 ‘‘(i) IN GENERAL.—The mechanical li5 censing collective is authorized to perform 

6 the following functions, subject to more par7 ticular requirements as described in this 

8 subsection: 

9 ‘‘(I) Offer and administer blanket 

10 licenses, including receipt of notices of 

11 license and reports of usage from dig12 ital music providers. 

13 ‘‘(II) Collect and distribute royal14 ties from digital music providers for 

15 covered activities. 

16 ‘‘(III) Engage in efforts to iden17 tify musical works (and shares of such 

18 works) embodied in particular sound 

19 recordings, and to identify and locate 

20 the copyright owners of such musical 

21 works (and shares of such works). 

22 ‘‘(IV) Maintain the musical works 

23 database and other information rel24 evant to the administration of licens25 ing activities under this section. 
33 

† HR 1551 EAS 

1 ‘‘(V) Administer a process by 

2 which copyright owners can claim 

3 ownership of musical works (and 

4 shares of such works), and a process by 

5 which royalties for works for which the 

6 owner is not identified or located are 

7 equitably distributed to known copy8 right owners. 

9 ‘‘(VI) Administer collections of the 

10 administrative assessment from digital 

11 music providers and significant non12 blanket licensees, including receipt of 

13 notices of nonblanket activity. 

14 ‘‘(VII) Invest in relevant re15 sources, and arrange for services of 

16 outside vendors and others, to support 

17 the activities of the mechanical licens18 ing collective. 

19 ‘‘(VIII) Engage in legal and other 

20 efforts to enforce rights and obligations 

21 under this subsection, including by fil22 ing bankruptcy proofs of claims for 

23 amounts owed under licenses, and act24 ing in coordination with the digital li25 censee coordinator. 
34 

† HR 1551 EAS 

1 ‘‘(IX) Initiate and participate in 

2 proceedings before the Copyright Roy3 alty Judges to establish the adminis4 trative assessment under this sub5 section. 

6 ‘‘(X) Initiate and participate in 

7 proceedings before the Copyright Office 

8 with respect to activities under this 

9 subsection. 

10 ‘‘(XI) Gather and provide docu11 mentation for use in proceedings before 

12 the Copyright Royalty Judges to set 

13 rates and terms under this section. 

14 ‘‘(XII) Maintain records of the ac15 tivities of the mechanical licensing col16 lective and engage in and respond to 

17 audits described in this subsection. 

18 ‘‘(XIII) Engage in such other ac19 tivities as may be necessary or appro20 priate to fulfill the responsibilities of 

21 the mechanical licensing collective 

22 under this subsection. 

23 ‘‘(ii) RESTRICTIONS CONCERNING LI24 CENSING AND ADMINISTRATIVE ACTIVI25 TIES.—With respect to the administration 
35 

† HR 1551 EAS 

1 of licenses, except as provided in clauses (i) 

2 and (iii) and subparagraph (E)(v), the me3 chanical licensing collective may only— 

4 ‘‘(I) issue blanket licenses pursu5 ant to subsection (d)(1); and 

6 ‘‘(II) administer blanket licenses 

7 for reproduction or distribution rights 

8 in musical works for covered activities, 

9 including collecting and distributing 

10 royalties, pursuant to blanket licenses. 

11 ‘‘(iii) ADDITIONAL ADMINISTRATIVE

12 ACTIVITIES.—Subject to paragraph (11)(C), 

13 the mechanical licensing collective may also 

14 administer, including by collecting and dis15 tributing royalties, voluntary licenses issued 

16 by, or individual download licenses ob17 tained from, copyright owners only for re18 production or distribution rights in musical 

19 works for covered activities, for which the 

20 mechanical licensing collective shall charge 

21 reasonable fees for such services. 

22 ‘‘(iv) RESTRICTION ON LOBBYING.— 

23 The mechanical licensing collective may not 

24 engage in government lobbying activities, 

25 but may engage in the activities described 
36 

† HR 1551 EAS 

1 in subclauses (IX), (X), and (XI) of clause 

2 (i). 

3 ‘‘(D) GOVERNANCE.— 

4 ‘‘(i) BOARD OF DIRECTORS.—The me5 chanical licensing collective shall have a 

6 board of directors consisting of 14 voting 

7 members and 3 nonvoting members, as fol8 lows: 

9 ‘‘(I) Ten voting members shall be 

10 representatives of music publishers— 

11 ‘‘(aa) to which songwriters 

12 have assigned exclusive rights of 

13 reproduction and distribution of 

14 musical works with respect to cov15 ered activities; and 

16 ‘‘(bb) none of which may be 

17 owned by, or under common con18 trol with, any other board mem19 ber. 

20 ‘‘(II) Four voting members shall 

21 be professional songwriters who have 

22 retained and exercise exclusive rights of 

23 reproduction and distribution with re24 spect to covered activities with respect 

25 to musical works they have authored. 
37 

† HR 1551 EAS 

1 ‘‘(III) One nonvoting member 

2 shall be a representative of the non3 profit trade association of music pub4 lishers that represents the greatest per5 centage of the licensor market for uses 

6 of musical works in covered activities, 

7 as measured for the 3-year period pre8 ceding the date on which the member is 

9 appointed. 

10 ‘‘(IV) One nonvoting member 

11 shall be a representative of the digital 

12 licensee coordinator, provided that a 

13 digital licensee coordinator has been 

14 designated pursuant to paragraph 

15 (5)(B). Otherwise, the nonvoting mem16 ber shall be the nonprofit trade associa17 tion of digital licensees that represents 

18 the greatest percentage of the licensee 

19 market for uses of musical works in 

20 covered activities, as measured over the 

21 preceding 3 full calendar years. 

22 ‘‘(V) One nonvoting member shall 

23 be a representative of a nationally rec24 ognized nonprofit trade association 

25 whose primary mission is advocacy on 
38 

† HR 1551 EAS 

1 behalf of songwriters in the United 

2 States. 

3 ‘‘(ii) BYLAWS.— 

4 ‘‘(I) ESTABLISHMENT.—Not later 

5 than 1 year after the date on which the 

6 mechanical licensing collective is ini7 tially designated by the Register of 

8 Copyrights under subparagraph (B)(i), 

9 the collective shall establish bylaws to 

10 determine issues relating to the govern11 ance of the collective, including, but 

12 not limited to— 

13 ‘‘(aa) the length of the term 

14 for each member of the board of 

15 directors; 

16 ‘‘(bb) the staggering of the 

17 terms of the members of the board 

18 of directors; 

19 ‘‘(cc) a process for filling a 

20 seat on the board of directors that 

21 is vacated before the end of the 

22 term with respect to that seat; 

23 ‘‘(dd) a process for electing a 

24 member to the board of directors; 

25 and 
39 

† HR 1551 EAS 

1 ‘‘(ee) a management struc2 ture for daily operation of the col3 lective. 

4 ‘‘(II) PUBLIC AVAILABILITY.—The 

5 mechanical licensing collective shall 

6 make the bylaws established under sub7 clause (I) available to the public. 

8 ‘‘(iii) BOARD MEETINGS.—The board 

9 of directors shall meet not less frequently 

10 than biannually and discuss matters perti11 nent to the operations of the mechanical li12 censing collective, including the mechanical 

13 licensing collective budget. 

14 ‘‘(iv) OPERATIONS ADVISORY COM15 MITTEE.—The board of directors of the me16 chanical licensing collective shall establish 

17 an operations advisory committee consisting 

18 of not fewer than 6 members to make rec19 ommendations to the board of directors con20 cerning the operations of the mechanical li21 censing collective, including the efficient in22 vestment in and deployment of information 

23 technology and data resources. Such com24 mittee shall have an equal number of mem25 bers of the committee who are— 
40 

† HR 1551 EAS 

1 ‘‘(I) musical work copyright own2 ers who are appointed by the board of 

3 directors of the mechanical licensing 

4 collective; and 

5 ‘‘(II) representatives of digital 

6 music providers who are appointed by 

7 the digital licensee coordinator. 

8 ‘‘(v) UNCLAIMED ROYALTIES OVER9 SIGHT COMMITTEE.—The board of directors 

10 of the mechanical licensing collective shall 

11 establish and appoint an unclaimed royal12 ties oversight committee consisting of 10 

13 members, 5 of which shall be musical work 

14 copyright owners and 5 of which shall be 

15 professional songwriters whose works are 

16 used in covered activities. 

17 ‘‘(vi) DISPUTE RESOLUTION COM18 MITTEE.—The board of directors of the me19 chanical licensing collective shall establish 

20 and appoint a dispute resolution committee 

21 that shall— 

22 ‘‘(I) consist of not fewer than 6 

23 members; and 

24 ‘‘(II) include an equal number of 

25 representatives of musical work copy-
41 

† HR 1551 EAS 

1 right owners and professional song2 writers. 

3 ‘‘(vii) MECHANICAL LICENSING COL4 LECTIVE ANNUAL REPORT.— 

5 ‘‘(I) IN GENERAL.—Not later than 

6 June 30 of each year commencing after 

7 the license availability date, the me8 chanical licensing collective shall post, 

9 and make available online for a period 

10 of not less than 3 years, an annual re11 port that sets forth information regard12 ing— 

13 ‘‘(aa) the operational and li14 censing practices of the collective; 

15 ‘‘(bb) how royalties are col16 lected and distributed; 

17 ‘‘(cc) budgeting and expendi18 tures; 

19 ‘‘(dd) the collective total costs 

20 for the preceding calendar year; 

21 ‘‘(ee) the projected annual 

22 mechanical licensing collective 

23 budget; 

24 ‘‘(ff) aggregated royalty re25 ceipts and payments; 
42 

† HR 1551 EAS 

1 ‘‘(gg) expenses that are more 

2 than 10 percent of the annual me3 chanical licensing collective budg4 et; and 

5 ‘‘(hh) the efforts of the collec6 tive to locate and identify copy7 right owners of unmatched musi8 cal works (and shares of works). 

9 ‘‘(II) SUBMISSION.—On the date 

10 on which the mechanical licensing col11 lective posts each report required under 

12 subclause (I), the collective shall pro13 vide a copy of the report to the Reg14 ister of Copyrights. 

15 ‘‘(viii) INDEPENDENT OFFICERS.—An 

16 individual serving as an officer of the me17 chanical licensing collective may not, at the 

18 same time, also be an employee or agent of 

19 any member of the board of directors of the 

20 collective or any entity represented by a 

21 member of the board of directors, as de22 scribed in clause (i). 

23 ‘‘(ix) OVERSIGHT AND ACCOUNT24 ABILITY.— 
43 

† HR 1551 EAS 

1 ‘‘(I) IN GENERAL.—The mechan2 ical licensing collective shall— 

3 ‘‘(aa) ensure that the policies 

4 and practices of the collective are 

5 transparent and accountable; 

6 ‘‘(bb) identify a point of con7 tact for publisher inquiries and 

8 complaints with timely redress; 

9 and 

10 ‘‘(cc) establish an anti-co11 mingling policy for funds not col12 lected under this section and roy13 alties collected under this section. 

14 ‘‘(II) AUDITS.— 

15 ‘‘(aa) IN GENERAL.—Begin16 ning in the fourth full calendar 

17 year that begins after the initial 

18 designation of the mechanical li19 censing collective by the Register 

20 of Copyrights under subparagraph 

21 (B)(i), and in every fifth calendar 

22 year thereafter, the collective shall 

23 retain a qualified auditor that 

24 shall— 
44 

† HR 1551 EAS 

1 ‘‘(AA) examine the 

2 books, records, and oper3 ations of the collective; 

4 ‘‘(BB) prepare a report 

5 for the board of directors of 

6 the collective with respect to 

7 the matters described in item 

8 (bb); and 

9 ‘‘(CC) not later than 

10 December 31 of the year in 

11 which the qualified auditor is 

12 retained, deliver the report 

13 described in subitem (BB) to 

14 the board of directors of the 

15 collective. 

16 ‘‘(bb) MATTERS AD17 DRESSED.—Each report prepared 

18 under item (aa) shall address the 

19 implementation and efficacy of 

20 procedures of the mechanical li21 censing collective— 

22 ‘‘(AA) for the receipt, 

23 handling, and distribution of 

24 royalty funds, including any 
45 

† HR 1551 EAS 

1 amounts held as unclaimed 

2 royalties; 

3 ‘‘(BB) to guard against 

4 fraud, abuse, waste, and the 

5 unreasonable use of funds; 

6 and 

7 ‘‘(CC) to protect the 

8 confidentiality of financial, 

9 proprietary, and other sen10 sitive information. 

11 ‘‘(cc) PUBLIC AVAIL12 ABILITY.—With respect to each re13 port prepared under item (aa), 

14 the mechanical licensing collective 

15 shall— 

16 ‘‘(AA) submit the report 

17 to the Register of Copyrights; 

18 and 

19 ‘‘(BB) make the report 

20 available to the public. 

21 ‘‘(E) MUSICAL WORKS DATABASE.— 

22 ‘‘(i) ESTABLISHMENT AND MAINTE23 NANCE OF DATABASE.—The mechanical li24 censing collective shall establish and main25 tain a database containing information re-
46 

† HR 1551 EAS 

1 lating to musical works (and shares of such 

2 works) and, to the extent known, the iden3 tity and location of the copyright owners of 

4 such works (and shares thereof) and the 

5 sound recordings in which the musical 

6 works are embodied. In furtherance of 

7 maintaining such database, the mechanical 

8 licensing collective shall engage in efforts to 

9 identify the musical works embodied in par10 ticular sound recordings, as well as to iden11 tify and locate the copyright owners of such 

12 works (and shares thereof), and update such 

13 data as appropriate. 

14 ‘‘(ii) MATCHED WORKS.—With respect 

15 to musical works (and shares thereof) that 

16 have been matched to copyright owners, the 

17 musical works database shall include— 

18 ‘‘(I) the title of the musical work; 

19 ‘‘(II) the copyright owner of the 

20 work (or share thereof), and the owner21 ship percentage of that owner; 

22 ‘‘(III) contact information for 

23 such copyright owner; 
47 

† HR 1551 EAS 

1 ‘‘(IV) to the extent reasonably 

2 available to the mechanical licensing 

3 collective— 

4 ‘‘(aa) the international 

5 standard musical work code for 

6 the work; and 

7 ‘‘(bb) identifying information 

8 for sound recordings in which the 

9 musical work is embodied, includ10 ing the name of the sound record11 ing, featured artist, sound record12 ing copyright owner, producer, 

13 international standard recording 

14 code, and other information com15 monly used to assist in associ16 ating sound recordings with musi17 cal works; and 

18 ‘‘(V) such other information as the 

19 Register of Copyrights may prescribe 

20 by regulation. 

21 ‘‘(iii) UNMATCHED WORKS.—With re22 spect to unmatched musical works (and 

23 shares of works) in the database, the musi24 cal works database shall include— 
48 

† HR 1551 EAS 

1 ‘‘(I) to the extent reasonably 

2 available to the mechanical licensing 

3 collective— 

4 ‘‘(aa) the title of the musical 

5 work; 

6 ‘‘(bb) the ownership percent7 age for which an owner has not 

8 been identified; 

9 ‘‘(cc) if a copyright owner 

10 has been identified but not lo11 cated, the identity of such owner 

12 and the ownership percentage of 

13 that owner; 

14 ‘‘(dd) identifying informa15 tion for sound recordings in which 

16 the work is embodied, including 

17 sound recording name, featured 

18 artist, sound recording copyright 

19 owner, producer, international 

20 standard recording code, and 

21 other information commonly used 

22 to assist in associating sound re23 cordings with musical works; and 

24 ‘‘(ee) any additional infor25 mation reported to the mechanical 
49 

† HR 1551 EAS 

1 licensing collective that may assist 

2 in identifying the work; and 

3 ‘‘(II) such other information relat4 ing to the identity and ownership of 

5 musical works (and shares of such 

6 works) as the Register of Copyrights 

7 may prescribe by regulation. 

8 ‘‘(iv) SOUND RECORDING INFORMA9 TION.—Each musical work copyright owner 

10 with any musical work listed in the musical 

11 works database shall engage in commer12 cially reasonable efforts to deliver to the me13 chanical licensing collective, including for 

14 use in the musical works database, to the 

15 extent such information is not then avail16 able in the database, information regarding 

17 the names of the sound recordings in which 

18 that copyright owner’s musical works (or 

19 shares thereof) are embodied, to the extent 

20 practicable. 

21 ‘‘(v) ACCESSIBILITY OF DATABASE.— 

22 The musical works database shall be made 

23 available to members of the public in a 

24 searchable, online format, free of charge. 

25 The mechanical licensing collective shall 
50 

† HR 1551 EAS 

1 make such database available in a bulk, 

2 machine-readable format, through a widely 

3 available software application, to the fol4 lowing entities: 

5 ‘‘(I) Digital music providers oper6 ating under the authority of valid no7 tices of license, free of charge. 

8 ‘‘(II) Significant nonblanket li9 censees in compliance with their obli10 gations under paragraph (6), free of 

11 charge. 

12 ‘‘(III) Authorized vendors of the 

13 entities described in subclauses (I) and 

14 (II), free of charge. 

15 ‘‘(IV) The Register of Copyrights, 

16 free of charge (but the Register shall 

17 not treat such database or any infor18 mation therein as a Government 

19 record). 

20 ‘‘(V) Any other person or entity 

21 for a fee not to exceed the marginal 

22 cost to the mechanical licensing collec23 tive of providing the database to such 

24 person or entity. 
51 

† HR 1551 EAS 

1 ‘‘(vi) ADDITIONAL REQUIREMENTS.— 

2 The Register of Copyrights shall establish 

3 requirements by regulations to ensure the 

4 usability, interoperability, and usage re5 strictions of the musical works database. 

6 ‘‘(F) NOTICES OF LICENSE AND NON7 BLANKET ACTIVITY.— 

8 ‘‘(i) NOTICES OF LICENSES.—The me9 chanical licensing collective shall receive, re10 view, and confirm or reject notices of license 

11 from digital music providers, as provided 

12 in paragraph (2)(A). The collective shall 

13 maintain a current, publicly accessible list 

14 of blanket licenses that includes contact in15 formation for the licensees and the effective 

16 dates of such licenses. 

17 ‘‘(ii) NOTICES OF NONBLANKET ACTIV18 ITY.—The mechanical licensing collective 

19 shall receive notices of nonblanket activity 

20 from significant nonblanket licensees, as 

21 provided in paragraph (6)(A). The collective 

22 shall maintain a current, publicly accessible 

23 list of notices of nonblanket activity that in24 cludes contact information for significant 
52 

† HR 1551 EAS 

1 nonblanket licensees and the dates of receipt 

2 of such notices. 

3 ‘‘(G) COLLECTION AND DISTRIBUTION OF

4 ROYALTIES.— 

5 ‘‘(i) IN GENERAL.—Upon receiving re6 ports of usage and payments of royalties 

7 from digital music providers for covered ac8 tivities, the mechanical licensing collective 

9 shall— 

10 ‘‘(I) engage in efforts to— 

11 ‘‘(aa) identify the musical 

12 works embodied in sound record13 ings reflected in such reports, and 

14 the copyright owners of such mu15 sical works (and shares thereof); 

16 ‘‘(bb) confirm uses of musical 

17 works subject to voluntary licenses 

18 and individual download licenses, 

19 and the corresponding pro rata 

20 amounts to be deducted from roy21 alties that would otherwise be due 

22 under the blanket license; and 

23 ‘‘(cc) confirm proper pay24 ment of royalties due; 
53 

† HR 1551 EAS 

1 ‘‘(II) distribute royalties to copy2 right owners in accordance with the 

3 usage and other information contained 

4 in such reports, as well as the owner5 ship and other information contained 

6 in the records of the collective; and 

7 ‘‘(III) deposit into an interest8 bearing account, as provided in sub9 paragraph (H)(ii), royalties that can10 not be distributed due to— 

11 ‘‘(aa) an inability to identify 

12 or locate a copyright owner of a 

13 musical work (or share thereof); or 

14 ‘‘(bb) a pending dispute be15 fore the dispute resolution com16 mittee of the mechanical licensing 

17 collective. 

18 ‘‘(ii) OTHER COLLECTION EFFORTS.— 

19 Any royalties recovered by the mechanical 

20 licensing collective as a result of efforts to 

21 enforce rights or obligations under a blanket 

22 license, including through a bankruptcy 

23 proceeding or other legal action, shall be 

24 distributed to copyright owners based on 

25 available usage information and in accord-
54 

† HR 1551 EAS 

1 ance with the procedures described in sub2 clauses (I) and (II) of clause (i), on a pro 

3 rata basis in proportion to the overall per4 centage recovery of the total royalties owed, 

5 with any pro rata share of royalties that 

6 cannot be distributed deposited in an inter7 est-bearing account as provided in subpara8 graph (H)(ii). 

9 ‘‘(H) HOLDING OF ACCRUED ROYALTIES.— 

10 ‘‘(i) HOLDING PERIOD.—The mechan11 ical licensing collective shall hold accrued 

12 royalties associated with particular musical 

13 works (and shares of works) that remain 

14 unmatched for a period of not less than 3 

15 years after the date on which the funds were 

16 received by the mechanical licensing collec17 tive, or not less than 3 years after the date 

18 on which the funds were accrued by a dig19 ital music provider that subsequently trans20 ferred such funds to the mechanical licens21 ing collective pursuant to paragraph 

22 (10)(B), whichever period expires sooner. 

23 ‘‘(ii) INTEREST-BEARING ACCOUNT.— 

24 Accrued royalties for unmatched works (and 

25 shares thereof) shall be maintained by the 
55 

† HR 1551 EAS 

1 mechanical licensing collective in an inter2 est-bearing account that earns monthly in3 terest— 

4 ‘‘(I) at the Federal, short-term 

5 rate; and 

6 ‘‘(II) that accrues for the benefit 

7 of copyright owners entitled to pay8 ment of such accrued royalties. 

9 ‘‘(I) MUSICAL WORKS CLAIMING PROCESS.— 

10 When a copyright owner of an unmatched work 

11 (or share of a work) has been identified and lo12 cated in accordance with the procedures of the 

13 mechanical licensing collective, the collective 

14 shall— 

15 ‘‘(i) update the musical works database 

16 and the other records of the collective ac17 cordingly; and 

18 ‘‘(ii) provided that accrued royalties 

19 for the musical work (or share thereof) have 

20 not yet been included in a distribution pur21 suant to subparagraph (J)(i), pay such ac22 crued royalties and a proportionate amount 

23 of accrued interest associated with that 

24 work (or share thereof) to the copyright 

25 owner, accompanied by a cumulative state-
56 

† HR 1551 EAS 

1 ment of account reflecting usage of such 

2 work and accrued royalties based on infor3 mation provided by digital music providers 

4 to the mechanical licensing collective. 

5 ‘‘(J) DISTRIBUTION OF UNCLAIMED AC6 CRUED ROYALTIES.— 

7 ‘‘(i) DISTRIBUTION PROCEDURES.— 

8 After the expiration of the prescribed hold9 ing period for accrued royalties provided in 

10 subparagraph (H)(i), the mechanical licens11 ing collective shall distribute such accrued 

12 royalties, along with a proportionate share 

13 of accrued interest, to copyright owners 

14 identified in the records of the collective, 

15 subject to the following requirements, and in 

16 accordance with the policies and procedures 

17 established under clause (ii): 

18 ‘‘(I) The first such distribution 

19 shall occur on or after January 1 of 

20 the second full calendar year to com21 mence after the license availability 

22 date, with not less than 1 such dis23 tribution to take place during each cal24 endar year thereafter. 
57 

† HR 1551 EAS 

1 ‘‘(II) Copyright owners’ payment 

2 shares for unclaimed accrued royalties 

3 for particular reporting periods shall 

4 be determined in a transparent and eq5 uitable manner based on data indi6 cating the relative market shares of 

7 such copyright owners as reflected in 

8 reports of usage provided by digital 

9 music providers for covered activities 

10 for the periods in question, including, 

11 in addition to usage data provided to 

12 the mechanical licensing collective, 

13 usage data provided to copyright own14 ers under voluntary licenses and indi15 vidual download licenses for covered 

16 activities, to the extent such informa17 tion is available to the mechanical li18 censing collective. In furtherance of the 

19 determination of equitable market 

20 shares under this subparagraph— 

21 ‘‘(aa) the mechanical licens22 ing collective may require copy23 right owners seeking distributions 

24 of unclaimed accrued royalties to 

25 provide, or direct the provision of, 
58 

† HR 1551 EAS 

1 information concerning the usage 

2 of musical works under voluntary 

3 licenses and individual download 

4 licenses for covered activities; and 

5 ‘‘(bb) the mechanical licens6 ing collective shall take appro7 priate steps to safeguard the con8 fidentiality and security of usage, 

9 financial, and other sensitive data 

10 used to compute market shares in 

11 accordance with the confiden12 tiality provisions prescribed by 

13 the Register of Copyrights under 

14 paragraph (12)(C). 

15 ‘‘(ii) ESTABLISHMENT OF DISTRIBU16 TION POLICIES.—The unclaimed royalties 

17 oversight committee established under sub18 paragraph (D)(v) shall establish policies 

19 and procedures for the distribution of un20 claimed accrued royalties and accrued in21 terest in accordance with this subpara22 graph, including the provision of usage data 

23 to copyright owners to allocate payments 

24 and credits to songwriters pursuant to 

25 clause (iv), subject to the approval of the 
59 

† HR 1551 EAS 

1 board of directors of the mechanical licens2 ing collective. 

3 ‘‘(iii) PUBLIC NOTICE OF UNCLAIMED

4 ACCRUED ROYALTIES.—The mechanical li5 censing collective shall— 

6 ‘‘(I) maintain a publicly acces7 sible online facility with contact infor8 mation for the collective that lists un9 matched musical works (and shares of 

10 works), through which a copyright 

11 owner may assert an ownership claim 

12 with respect to such a work (and a 

13 share of such a work); 

14 ‘‘(II) engage in diligent, good15 faith efforts to publicize, throughout the 

16 music industry— 

17 ‘‘(aa) the existence of the col18 lective and the ability to claim 

19 unclaimed accrued royalties for 

20 unmatched musical works (and 

21 shares of such works) held by the 

22 collective; 

23 ‘‘(bb) the procedures by 

24 which copyright owners may iden25 tify themselves and provide con-
60 

† HR 1551 EAS 

1 tact, ownership, and other rel2 evant information to the collective 

3 in order to receive payments of 

4 accrued royalties; 

5 ‘‘(cc) any transfer of accrued 

6 royalties for musical works under 

7 paragraph (10)(B), not later than 

8 180 days after the date on which 

9 the transfer is received; and 

10 ‘‘(dd) any pending distribu11 tion of unclaimed accrued royal12 ties and accrued interest, not less 

13 than 90 days before the date on 

14 which the distribution is made; 

15 and 

16 ‘‘(III) as appropriate, participate 

17 in music industry conferences and 

18 events for the purpose of publicizing 

19 the matters described in subclause (II). 

20 ‘‘(iv) SONGWRITER PAYMENTS.—Copy21 right owners that receive a distribution of 

22 unclaimed accrued royalties and accrued 

23 interest shall pay or credit a portion to 

24 songwriters (or the authorized agents of 

25 songwriters) on whose behalf the copyright 
61 

† HR 1551 EAS 

1 owners license or administer musical works 

2 for covered activities, in accordance with 

3 applicable contractual terms, but notwith4 standing any agreement to the contrary— 

5 ‘‘(I) such payments and credits to 

6 songwriters shall be allocated in pro7 portion to reported usage of individual 

8 musical works by digital music pro9 viders during the reporting periods 

10 covered by the distribution from the 

11 mechanical licensing collective; and 

12 ‘‘(II) in no case shall the payment 

13 or credit to an individual songwriter 

14 be less than 50 percent of the payment 

15 received by the copyright owner attrib16 utable to usage of musical works (or 

17 shares of works) of that songwriter. 

18 ‘‘(K) DISPUTE RESOLUTION.—The dispute 

19 resolution committee established under subpara20 graph (D)(vi) shall establish policies and proce21 dures— 

22 ‘‘(i) for copyright owners to address in 

23 a timely and equitable manner disputes re24 lating to ownership interests in musical 

25 works licensed under this section and allo-
62 

† HR 1551 EAS 

1 cation and distribution of royalties by the 

2 mechanical licensing collective, subject to 

3 the approval of the board of directors of the 

4 mechanical licensing collective; 

5 ‘‘(ii) that shall include a mechanism to 

6 hold disputed funds in accordance with the 

7 requirements described in subparagraph 

8 (H)(ii) pending resolution of the dispute; 

9 and 

10 ‘‘(iii) except as provided in paragraph 

11 (11)(D), that shall not affect any legal or 

12 equitable rights or remedies available to any 

13 copyright owner or songwriter concerning 

14 ownership of, and entitlement to royalties 

15 for, a musical work. 

16 ‘‘(L) VERIFICATION OF PAYMENTS BY ME17 CHANICAL LICENSING COLLECTIVE.— 

18 ‘‘(i) VERIFICATION PROCESS.—A copy19 right owner entitled to receive payments of 

20 royalties for covered activities from the me21 chanical licensing collective may, individ22 ually or with other copyright owners, con23 duct an audit of the mechanical licensing 

24 collective to verify the accuracy of royalty 
63 

† HR 1551 EAS 

1 payments by the mechanical licensing col2 lective to such copyright owner, as follows: 

3 ‘‘(I) A copyright owner may audit 

4 the mechanical licensing collective only 

5 once in a year for any or all of the 3 

6 calendar years preceding the year in 

7 which the audit is commenced, and 

8 may not audit records for any cal9 endar year more than once. 

10 ‘‘(II) The audit shall be conducted 

11 by a qualified auditor, who shall per12 form the audit during the ordinary 

13 course of business by examining the 

14 books, records, and data of the mechan15 ical licensing collective, according to 

16 generally accepted auditing standards 

17 and subject to applicable confiden18 tiality requirements prescribed by the 

19 Register of Copyrights under para20 graph (12)(C). 

21 ‘‘(III) The mechanical licensing 

22 collective shall make such books, 

23 records, and data available to the 

24 qualified auditor and respond to rea25 sonable requests for relevant informa-
64 

† HR 1551 EAS 

1 tion, and shall use commercially rea2 sonable efforts to facilitate access to rel3 evant information maintained by third 

4 parties. 

5 ‘‘(IV) To commence the audit, any 

6 copyright owner shall file with the 

7 Copyright Office a notice of intent to 

8 conduct an audit of the mechanical li9 censing collective, identifying the pe10 riod of time to be audited, and shall si11 multaneously deliver a copy of such 

12 notice to the mechanical licensing col13 lective. The Register of Copyrights 

14 shall cause the notice of audit to be 

15 published in the Federal Register not 

16 later than 45 calendar days after the 

17 date on which the notice is received. 

18 ‘‘(V) The qualified auditor shall 

19 determine the accuracy of royalty pay20 ments, including whether an under21 payment or overpayment of royalties 

22 was made by the mechanical licensing 

23 collective to each auditing copyright 

24 owner, except that, before providing a 

25 final audit report to any such copy-
65 

† HR 1551 EAS 

1 right owner, the qualified auditor shall 

2 provide a tentative draft of the report 

3 to the mechanical licensing collective 

4 and allow the mechanical licensing col5 lective a reasonable opportunity to re6 spond to the findings, including by 

7 clarifying issues and correcting factual 

8 errors. 

9 ‘‘(VI) The auditing copyright 

10 owner or owners shall bear the cost of 

11 the audit. In case of an underpayment 

12 to any copyright owner, the mechan13 ical licensing collective shall pay the 

14 amounts of any such underpayment to 

15 such auditing copyright owner, as ap16 propriate. In case of an overpayment 

17 by the mechanical licensing collective, 

18 the mechanical licensing collective may 

19 debit the account of the auditing copy20 right owner or owners for such over21 paid amounts, or such owner or owners 

22 shall refund overpaid amounts to the 

23 mechanical licensing collective, as ap24 propriate. 
66 

† HR 1551 EAS 

1 ‘‘(ii) ALTERNATIVE VERIFICATION PRO2 CEDURES.—Nothing in this subparagraph 

3 shall preclude a copyright owner and the 

4 mechanical licensing collective from agree5 ing to audit procedures different from those 

6 described in this subparagraph, except that 

7 a notice of the audit shall be provided to 

8 and published by the Copyright Office as 

9 described in clause (i)(IV). 

10 ‘‘(M) RECORDS OF MECHANICAL LICENSING

11 COLLECTIVE.— 

12 ‘‘(i) RECORDS MAINTENANCE.—The 

13 mechanical licensing collective shall ensure 

14 that all material records of the operations of 

15 the mechanical licensing collective, includ16 ing those relating to notices of license, the 

17 administration of the claims process of the 

18 mechanical licensing collective, reports of 

19 usage, royalty payments, receipt and main20 tenance of accrued royalties, royalty dis21 tribution processes, and legal matters, are 

22 preserved and maintained in a secure and 

23 reliable manner, with appropriate commer24 cially reasonable safeguards against unau25 thorized access, copying, and disclosure, and 
67 

† HR 1551 EAS 

1 subject to the confidentiality requirements 

2 prescribed by the Register of Copyrights 

3 under paragraph (12)(C) for a period of not 

4 less than 7 years after the date of creation 

5 or receipt, whichever occurs later. 

6 ‘‘(ii) RECORDS ACCESS.—The mechan7 ical licensing collective shall provide 

8 prompt access to electronic and other 

9 records pertaining to the administration of 

10 a copyright owner’s musical works upon 

11 reasonable written request of the owner or 

12 the authorized representative of the owner. 

13 ‘‘(4) TERMS AND CONDITIONS OF BLANKET LI14 CENSE.—A blanket license is subject to, and condi15 tioned upon, the following requirements: 

16 ‘‘(A) ROYALTY REPORTING AND PAY17 MENTS.— 

18 ‘‘(i) MONTHLY REPORTS AND PAY19 MENT.—A digital music provider shall re20 port and pay royalties to the mechanical li21 censing collective under the blanket license 

22 on a monthly basis in accordance with 

23 clause (ii) and subsection (c)(2)(I), except 

24 that the monthly reporting shall be due on 

25 the date that is 45 calendar days, rather 
68 

† HR 1551 EAS 

1 than 20 calendar days, after the end of the 

2 monthly reporting period. 

3 ‘‘(ii) DATA TO BE REPORTED.—In re4 porting usage of musical works to the me5 chanical licensing collective, a digital music 

6 provider shall provide usage data for musi7 cal works used under the blanket license and 

8 usage data for musical works used in cov9 ered activities under voluntary licenses and 

10 individual download licenses. In the report 

11 of usage, the digital music provider shall— 

12 ‘‘(I) with respect to each sound re13 cording embodying a musical work— 

14 ‘‘(aa) provide identifying in15 formation for the sound recording, 

16 including sound recording name, 

17 featured artist, and, to the extent 

18 acquired by the digital music pro19 vider in connection with its use of 

20 sound recordings of musical works 

21 to engage in covered activities, in22 cluding pursuant to subparagraph 

23 (B), sound recording copyright 

24 owner, producer, international 

25 standard recording code, and 
69 

† HR 1551 EAS 

1 other information commonly used 

2 in the industry to identify sound 

3 recordings and match them to the 

4 musical works the sound record5 ings embody; 

6 ‘‘(bb) to the extent acquired 

7 by the digital music provider in 

8 the metadata provided by sound 

9 recording copyright owners or 

10 other licensors of sound recordings 

11 in connection with the use of 

12 sound recordings of musical works 

13 to engage in covered activities, in14 cluding pursuant to subparagraph 

15 (B), provide information con16 cerning authorship and ownership 

17 of the applicable rights in the mu18 sical work embodied in the sound 

19 recording (including each song20 writer, publisher name, and re21 spective ownership share) and the 

22 international standard musical 

23 work code; and 

24 ‘‘(cc) provide the number of 

25 digital phonorecord deliveries of 
70 

† HR 1551 EAS 

1 the sound recording, including 

2 limited downloads and interactive 

3 streams; 

4 ‘‘(II) identify and provide contact 

5 information for all musical work copy6 right owners for works embodied in 

7 sound recordings as to which a vol8 untary license, rather than the blanket 

9 license, is in effect with respect to the 

10 uses being reported; and 

11 ‘‘(III) provide such other informa12 tion as the Register of Copyrights shall 

13 require by regulation. 

14 ‘‘(iii) FORMAT AND MAINTENANCE OF

15 REPORTS.—Reports of usage provided by 

16 digital music providers to the mechanical 

17 licensing collective shall be in a machine18 readable format that is compatible with the 

19 information technology systems of the me20 chanical licensing collective and meets the 

21 requirements of regulations adopted by the 

22 Register of Copyrights. The Register shall 

23 also adopt regulations setting forth require24 ments under which records of use shall be 

25 maintained and made available to the me-
71 

† HR 1551 EAS 

1 chanical licensing collective by digital 

2 music providers engaged in covered activi3 ties under a blanket license. 

4 ‘‘(iv) ADOPTION OF REGULATIONS.— 

5 The Register of Copyrights shall adopt regu6 lations— 

7 ‘‘(I) setting forth requirements 

8 under which records of use shall be 

9 maintained and made available to the 

10 mechanical licensing collective by dig11 ital music providers engaged in cov12 ered activities under a blanket license; 

13 and 

14 ‘‘(II) regarding adjustments to re15 ports of usage by digital music pro16 viders, including mechanisms to ac17 count for overpayment and under18 payment of royalties in prior periods. 

19 ‘‘(B) COLLECTION OF SOUND RECORDING

20 INFORMATION.—A digital music provider shall 

21 engage in good-faith, commercially reasonable ef22 forts to obtain from sound recording copyright 

23 owners and other licensors of sound recordings 

24 made available through the service of such dig25 ital music provider information concerning— 
72 

† HR 1551 EAS 

1 ‘‘(i) sound recording copyright owners, 

2 producers, international standard recording 

3 codes, and other information commonly 

4 used in the industry to identify sound re5 cordings and match them to the musical 

6 works the sound recordings embody; and 

7 ‘‘(ii) the authorship and ownership of 

8 musical works, including songwriters, pub9 lisher names, ownership shares, and inter10 national standard musical work codes. 

11 ‘‘(C) PAYMENT OF ADMINISTRATIVE ASSESS12 MENT.—A digital music provider and any sig13 nificant nonblanket licensee shall pay the admin14 istrative assessment established under paragraph 

15 (7)(D) in accordance with this subsection and 

16 applicable regulations. 

17 ‘‘(D) VERIFICATION OF PAYMENTS BY DIG18 ITAL MUSIC PROVIDERS.— 

19 ‘‘(i) VERIFICATION PROCESS.—The me20 chanical licensing collective may conduct an 

21 audit of a digital music provider operating 

22 under the blanket license to verify the accu23 racy of royalty payments by the digital 

24 music provider to the mechanical licensing 

25 collective as follows: 
73 

† HR 1551 EAS 

1 ‘‘(I) The mechanical licensing col2 lective may commence an audit of a 

3 digital music provider not more fre4 quently than once in any 3-calendar5 year period to cover a verification pe6 riod of not more than the 3 full cal7 endar years preceding the date of com8 mencement of the audit, and such 

9 audit may not audit records for any 

10 such 3-year verification period more 

11 than once. 

12 ‘‘(II) The audit shall be conducted 

13 by a qualified auditor, who shall per14 form the audit during the ordinary 

15 course of business by examining the 

16 books, records, and data of the digital 

17 music provider, according to generally 

18 accepted auditing standards and sub19 ject to applicable confidentiality re20 quirements prescribed by the Register 

21 of Copyrights under paragraph 

22 (12)(C). 

23 ‘‘(III) The digital music provider 

24 shall make such books, records, and 

25 data available to the qualified auditor 
74 

† HR 1551 EAS 

1 and respond to reasonable requests for 

2 relevant information, and shall use 

3 commercially reasonable efforts to pro4 vide access to relevant information 

5 maintained with respect to a digital 

6 music provider by third parties. 

7 ‘‘(IV) To commence the audit, the 

8 mechanical licensing collective shall 

9 file with the Copyright Office a notice 

10 of intent to conduct an audit of the 

11 digital music provider, identifying the 

12 period of time to be audited, and shall 

13 simultaneously deliver a copy of such 

14 notice to the digital music provider. 

15 The Register of Copyrights shall cause 

16 the notice of audit to be published in 

17 the Federal Register not later than 45 

18 calendar days after the date on which 

19 notice is received. 

20 ‘‘(V) The qualified auditor shall 

21 determine the accuracy of royalty pay22 ments, including whether an under23 payment or overpayment of royalties 

24 was made by the digital music pro25 vider to the mechanical licensing col-
75 

† HR 1551 EAS 

1 lective, except that, before providing a 

2 final audit report to the mechanical li3 censing collective, the qualified auditor 

4 shall provide a tentative draft of the 

5 report to the digital music provider 

6 and allow the digital music provider a 

7 reasonable opportunity to respond to 

8 the findings, including by clarifying 

9 issues and correcting factual errors. 

10 ‘‘(VI) The mechanical licensing 

11 collective shall pay the cost of the 

12 audit, unless the qualified auditor de13 termines that there was an under14 payment by the digital music provider 

15 of not less than 10 percent, in which 

16 case the digital music provider shall 

17 bear the reasonable costs of the audit, 

18 in addition to paying the amount of 

19 any underpayment to the mechanical 

20 licensing collective. In case of an over21 payment by the digital music provider, 

22 the mechanical licensing collective shall 

23 provide a credit to the account of the 

24 digital music provider. 
76 

† HR 1551 EAS 

1 ‘‘(VII) A digital music provider 

2 may not assert section 507 or any 

3 other Federal or State statute of limi4 tations, doctrine of laches or estoppel, 

5 or similar provision as a defense to a 

6 legal action arising from an audit 

7 under this subparagraph if such legal 

8 action is commenced not more than 6 

9 years after the commencement of the 

10 audit that is the basis for such action. 

11 ‘‘(ii) ALTERNATIVE VERIFICATION PRO12 CEDURES.—Nothing in this subparagraph 

13 shall preclude the mechanical licensing col14 lective and a digital music provider from 

15 agreeing to audit procedures different from 

16 those described in this subparagraph, except 

17 that a notice of the audit shall be provided 

18 to and published by the Copyright Office as 

19 described in clause (i)(IV). 

20 ‘‘(E) DEFAULT UNDER BLANKET LI21 CENSE.— 

22 ‘‘(i) CONDITIONS OF DEFAULT.—A dig23 ital music provider shall be in default 

24 under a blanket license if the digital music 

25 provider— 
77 

† HR 1551 EAS 

1 ‘‘(I) fails to provide 1 or more 

2 monthly reports of usage to the me3 chanical licensing collective when due; 

4 ‘‘(II) fails to make a monthly roy5 alty or late fee payment to the mechan6 ical licensing collective when due, in 

7 all or material part; 

8 ‘‘(III) provides 1 or more monthly 

9 reports of usage to the mechanical li10 censing collective that, on the whole, is 

11 or are materially deficient as a result 

12 of inaccurate, missing, or unreadable 

13 data, where the correct data was avail14 able to the digital music provider and 

15 required to be reported under this sec16 tion and applicable regulations; 

17 ‘‘(IV) fails to pay the administra18 tive assessment as required under this 

19 subsection and applicable regulations; 

20 or 

21 ‘‘(V) after being provided written 

22 notice by the mechanical licensing col23 lective, refuses to comply with any 

24 other material term or condition of the 

25 blanket license under this section for a 
78 

† HR 1551 EAS 

1 period of not less than 60 calendar 

2 days. 

3 ‘‘(ii) NOTICE OF DEFAULT AND TERMI4 NATION.—In case of a default by a digital 

5 music provider, the mechanical licensing 

6 collective may proceed to terminate the 

7 blanket license of the digital music provider 

8 as follows: 

9 ‘‘(I) The mechanical licensing col10 lective shall provide written notice to 

11 the digital music provider describing 

12 with reasonable particularity the de13 fault and advising that unless such de14 fault is cured not later than 60 cal15 endar days after the date of the notice, 

16 the blanket license will automatically 

17 terminate at the end of that period. 

18 ‘‘(II) If the digital music provider 

19 fails to remedy the default before the 

20 end of the 60-day period described in 

21 subclause (I), the license shall termi22 nate without any further action on the 

23 part of the mechanical licensing collec24 tive. Such termination renders the 

25 making of all digital phonorecord de-
79 

† HR 1551 EAS 

1 liveries of all musical works (and 

2 shares thereof) covered by the blanket 

3 license for which the royalty or admin4 istrative assessment has not been paid 

5 actionable as acts of infringement 

6 under section 501 and subject to the 

7 remedies provided by sections 502 

8 through 506. 

9 ‘‘(iii) NOTICE TO COPYRIGHT OWN10 ERS.—The mechanical licensing collective 

11 shall provide written notice of any termi12 nation under this subparagraph to copy13 right owners of affected works. 

14 ‘‘(iv) REVIEW BY FEDERAL DISTRICT

15 COURT.—A digital music provider that be16 lieves a blanket license was improperly ter17 minated by the mechanical licensing collec18 tive may seek review of such termination in 

19 an appropriate district court of the United 

20 States. The district court shall determine 

21 the matter de novo based on the record be22 fore the mechanical licensing collective and 

23 any additional supporting evidence pre24 sented by the parties. 

25 ‘‘(5) DIGITAL LICENSEE COORDINATOR.— 
80 

† HR 1551 EAS 

1 ‘‘(A) IN GENERAL.—The digital licensee co2 ordinator shall be a single entity that— 

3 ‘‘(i) is a nonprofit, not owned by any 

4 other entity, that is created to carry out re5 sponsibilities under this subsection; 

6 ‘‘(ii) is endorsed by and enjoys sub7 stantial support from digital music pro8 viders and significant nonblanket licensees 

9 that together represent the greatest percent10 age of the licensee market for uses of musi11 cal works in covered activities, as measured 

12 over the preceding 3 calendar years; 

13 ‘‘(iii) is able to demonstrate that it 

14 has, or will have prior to the license avail15 ability date, the administrative capabilities 

16 to perform the required functions of the dig17 ital licensee coordinator under this sub18 section; and 

19 ‘‘(iv) has been designated by the Reg20 ister of Copyrights, with the approval of the 

21 Librarian of Congress pursuant to section 

22 702, in accordance with subparagraph (B). 

23 ‘‘(B) DESIGNATION OF DIGITAL LICENSEE

24 COORDINATOR.— 
81 

† HR 1551 EAS 

1 ‘‘(i) INITIAL DESIGNATION.—The Reg2 ister of Copyrights shall initially designate 

3 the digital licensee coordinator not later 

4 than 270 days after the enactment date, in 

5 accordance with the same procedure de6 scribed for designation of the mechanical li7 censing collective in paragraph (3)(B)(i). 

8 ‘‘(ii) PERIODIC REVIEW OF DESIGNA9 TION.—Following the initial designation of 

10 the digital licensee coordinator, the Register 

11 of Copyrights shall, every 5 years, begin12 ning with the fifth full calendar year to 

13 commence after the initial designation, de14 termine whether the existing designation 

15 should be continued, or a different entity 

16 meeting the criteria described in clauses (i) 

17 through (iii) of subparagraph (A) should be 

18 designated, in accordance with the same 

19 procedure described for the mechanical li20 censing collective in paragraph (3)(B)(ii). 

21 ‘‘(iii) INABILITY TO DESIGNATE.—If 

22 the Register of Copyrights is unable to iden23 tify an entity that fulfills each of the quali24 fications described in clauses (i) through 

25 (iii) of subparagraph (A) to serve as the 
82 

† HR 1551 EAS 

1 digital licensee coordinator, the Register 

2 may decline to designate a digital licensee 

3 coordinator. The determination of the Reg4 ister not to designate a digital licensee coor5 dinator shall not negate or otherwise affect 

6 any provision of this subsection except to 

7 the limited extent that a provision ref8 erences the digital licensee coordinator. In 

9 such case, the reference to the digital li10 censee coordinator shall be without effect 

11 unless and until a new digital licensee coor12 dinator is designated. 

13 ‘‘(C) AUTHORITIES AND FUNCTIONS.— 

14 ‘‘(i) IN GENERAL.—The digital licensee 

15 coordinator is authorized to perform the fol16 lowing functions, subject to more particular 

17 requirements as described in this subsection: 

18 ‘‘(I) Establish a governance struc19 ture, criteria for membership, and any 

20 dues to be paid by its members. 

21 ‘‘(II) Engage in efforts to enforce 

22 notice and payment obligations with 

23 respect to the administrative assess24 ment, including by receiving informa-
83 

† HR 1551 EAS 

1 tion from and coordinating with the 

2 mechanical licensing collective. 

3 ‘‘(III) Initiate and participate in 

4 proceedings before the Copyright Roy5 alty Judges to establish the adminis6 trative assessment under this sub7 section. 

8 ‘‘(IV) Initiate and participate in 

9 proceedings before the Copyright Office 

10 with respect to activities under this 

11 subsection. 

12 ‘‘(V) Gather and provide docu13 mentation for use in proceedings before 

14 the Copyright Royalty Judges to set 

15 rates and terms under this section. 

16 ‘‘(VI) Maintain records of its ac17 tivities. 

18 ‘‘(VII) Assist in publicizing the 

19 existence of the mechanical licensing 

20 collective and the ability of copyright 

21 owners to claim royalties for un22 matched musical works (and shares of 

23 works) through the collective. 

24 ‘‘(VIII) Engage in such other ac25 tivities as may be necessary or appro-
84 

† HR 1551 EAS 

1 priate to fulfill its responsibilities 

2 under this subsection. 

3 ‘‘(ii) RESTRICTION ON LOBBYING.—The 

4 digital licensee coordinator may not engage 

5 in government lobbying activities, but may 

6 engage in the activities described in sub7 clauses (III), (IV), and (V) of clause (i). 

8 ‘‘(iii) ASSISTANCE WITH PUBLICITY

9 FOR UNCLAIMED ROYALTIES.—The digital 

10 licensee coordinator shall make reasonable, 

11 good-faith efforts to assist the mechanical li12 censing collective in the efforts of the collec13 tive to locate and identify copyright owners 

14 of unmatched musical works (and shares of 

15 such works) by encouraging digital music 

16 providers to publicize the existence of the 

17 collective and the ability of copyright own18 ers to claim unclaimed accrued royalties, 

19 including by— 

20 ‘‘(I) posting contact information 

21 for the collective at reasonably promi22 nent locations on digital music pro23 vider websites and applications; and 

24 ‘‘(II) conducting in-person out25 reach activities with songwriters. 
85 

† HR 1551 EAS 

1 ‘‘(6) REQUIREMENTS FOR SIGNIFICANT NON2 BLANKET LICENSEES.— 

3 ‘‘(A) IN GENERAL.— 

4 ‘‘(i) NOTICE OF ACTIVITY.—Not later 

5 than 45 calendar days after the license 

6 availability date, or 45 calendar days after 

7 the end of the first full calendar month in 

8 which an entity initially qualifies as a sig9 nificant nonblanket licensee, whichever oc10 curs later, a significant nonblanket licensee 

11 shall submit a notice of nonblanket activity 

12 to the mechanical licensing collective. The 

13 notice of nonblanket activity shall comply 

14 in form and substance with requirements 

15 that the Register of Copyrights shall estab16 lish by regulation, and a copy shall be made 

17 available to the digital licensee coordinator. 

18 ‘‘(ii) REPORTING AND PAYMENT OBLI19 GATIONS.—The notice of nonblanket activity 

20 submitted to the mechanical licensing collec21 tive shall be accompanied by a report of 

22 usage that contains the information de23 scribed in paragraph (4)(A)(ii), as well as 

24 any payment of the administrative assess25 ment required under this subsection and ap-
86 

† HR 1551 EAS 

1 plicable regulations. Thereafter, subject to 

2 clause (iii), a significant nonblanket li3 censee shall continue to provide monthly re4 ports of usage, accompanied by any re5 quired payment of the administrative as6 sessment, to the mechanical licensing collec7 tive. Such reports and payments shall be 

8 submitted not later than 45 calendar days 

9 after the end of the calendar month being 

10 reported. 

11 ‘‘(iii) DISCONTINUATION OF OBLIGA12 TIONS.—An entity that has submitted a no13 tice of nonblanket activity to the mechanical 

14 licensing collective that has ceased to qual15 ify as a significant nonblanket licensee may 

16 so notify the collective in writing. In such 

17 case, as of the calendar month in which 

18 such notice is provided, such entity shall no 

19 longer be required to provide reports of 

20 usage or pay the administrative assessment, 

21 but if such entity later qualifies as a sig22 nificant nonblanket licensee, such entity 

23 shall again be required to comply with 

24 clauses (i) and (ii). 
87 

† HR 1551 EAS 

1 ‘‘(B) REPORTING BY MECHANICAL LICENS2 ING COLLECTIVE TO DIGITAL LICENSEE COORDI3 NATOR.— 

4 ‘‘(i) MONTHLY REPORTS OF NON5 COMPLIANT LICENSEES.—The mechanical 

6 licensing collective shall provide monthly re7 ports to the digital licensee coordinator set8 ting forth any significant nonblanket licens9 ees of which the collective is aware that have 

10 failed to comply with subparagraph (A). 

11 ‘‘(ii) TREATMENT OF CONFIDENTIAL

12 INFORMATION.—The mechanical licensing 

13 collective and digital licensee coordinator 

14 shall take appropriate steps to safeguard the 

15 confidentiality and security of financial 

16 and other sensitive data shared under this 

17 subparagraph, in accordance with the con18 fidentiality requirements prescribed by the 

19 Register of Copyrights under paragraph 

20 (12)(C). 

21 ‘‘(C) LEGAL ENFORCEMENT EFFORTS.— 

22 ‘‘(i) FEDERAL COURT ACTION.—Should 

23 the mechanical licensing collective or digital 

24 licensee coordinator become aware that a 

25 significant nonblanket licensee has failed to 
88 

† HR 1551 EAS 

1 comply with subparagraph (A), either may 

2 commence an action in an appropriate dis3 trict court of the United States for damages 

4 and injunctive relief. If the significant non5 blanket licensee is found liable, the court 

6 shall, absent a finding of excusable neglect, 

7 award damages in an amount equal to 

8 three times the total amount of the unpaid 

9 administrative assessment and, notwith10 standing anything to the contrary in sec11 tion 505, reasonable attorney’s fees and 

12 costs, as well as such other relief as the 

13 court determines appropriate. In all other 

14 cases, the court shall award relief as appro15 priate. Any recovery of damages shall be 

16 payable to the mechanical licensing collec17 tive as an offset to the collective total costs. 

18 ‘‘(ii) STATUTE OF LIMITATIONS FOR

19 ENFORCEMENT ACTION.—Any action de20 scribed in this subparagraph shall be com21 menced within the time period described in 

22 section 507(b). 

23 ‘‘(iii) OTHER RIGHTS AND REMEDIES

24 PRESERVED.—The ability of the mechanical 

25 licensing collective or digital licensee coordi-
89 

† HR 1551 EAS 

1 nator to bring an action under this sub2 paragraph shall in no way alter, limit or 

3 negate any other right or remedy that may 

4 be available to any party at law or in eq5 uity. 

6 ‘‘(7) FUNDING OF MECHANICAL LICENSING COL7 LECTIVE.— 

8 ‘‘(A) IN GENERAL.—The collective total 

9 costs shall be funded by— 

10 ‘‘(i) an administrative assessment, as 

11 such assessment is established by the Copy12 right Royalty Judges pursuant to subpara13 graph (D) from time to time, to be paid 

14 by— 

15 ‘‘(I) digital music providers that 

16 are engaged, in all or in part, in cov17 ered activities pursuant to a blanket li18 cense; and 

19 ‘‘(II) significant nonblanket li20 censees; and 

21 ‘‘(ii) voluntary contributions from dig22 ital music providers and significant non23 blanket licensees as may be agreed with 

24 copyright owners. 

25 ‘‘(B) VOLUNTARY CONTRIBUTIONS.— 
90 

† HR 1551 EAS 

1 ‘‘(i) AGREEMENTS CONCERNING CON2 TRIBUTIONS.—Except as provided in clause 

3 (ii), voluntary contributions by digital 

4 music providers and significant nonblanket 

5 licensees shall be determined by private ne6 gotiation and agreement, and the following 

7 conditions apply: 

8 ‘‘(I) The date and amount of each 

9 voluntary contribution to the mechan10 ical licensing collective shall be docu11 mented in a writing signed by an au12 thorized agent of the mechanical licens13 ing collective and the contributing 

14 party. 

15 ‘‘(II) Such agreement shall be 

16 made available as required in pro17 ceedings before the Copyright Royalty 

18 Judges to establish or adjust the ad19 ministrative assessment in accordance 

20 with applicable statutory and regu21 latory provisions and rulings of the 

22 Copyright Royalty Judges. 

23 ‘‘(ii) TREATMENT OF CONTRIBU24 TIONS.—Each voluntary contribution de25 scribed in clause (i) shall be treated for pur-
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1 poses of an administrative assessment pro2 ceeding as an offset to the collective total 

3 costs that would otherwise be recovered 

4 through the administrative assessment. Any 

5 allocation or reallocation of voluntary con6 tributions between or among individual dig7 ital music providers or significant non8 blanket licensees shall be a matter of private 

9 negotiation and agreement among such par10 ties and outside the scope of the administra11 tive assessment proceeding. 

12 ‘‘(C) INTERIM APPLICATION OF ACCRUED

13 ROYALTIES.—In the event that the administra14 tive assessment, together with any funding from 

15 voluntary contributions as provided in subpara16 graphs (A) and (B), is inadequate to cover cur17 rent collective total costs, the collective, with ap18 proval of its board of directors, may apply un19 claimed accrued royalties on an interim basis to 

20 defray such costs, subject to future reimburse21 ment of such royalties from future collections of 

22 the assessment. 

23 ‘‘(D) DETERMINATION OF ADMINISTRATIVE

24 ASSESSMENT.— 
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1 ‘‘(i) ADMINISTRATIVE ASSESSMENT TO

2 COVER COLLECTIVE TOTAL COSTS.—The ad3 ministrative assessment shall be used solely 

4 and exclusively to fund the collective total 

5 costs. 

6 ‘‘(ii) SEPARATE PROCEEDING BEFORE

7 COPYRIGHT ROYALTY JUDGES.—The amount 

8 and terms of the administrative assessment 

9 shall be determined and established in a 

10 separate and independent proceeding before 

11 the Copyright Royalty Judges, according to 

12 the procedures described in clauses (iii) and 

13 (iv). The administrative assessment deter14 mined in such proceeding shall— 

15 ‘‘(I) be wholly independent of roy16 alty rates and terms applicable to dig17 ital music providers, which shall not be 

18 taken into consideration in any man19 ner in establishing the administrative 

20 assessment; 

21 ‘‘(II) be established by the Copy22 right Royalty Judges in an amount 

23 that is calculated to defray the reason24 able collective total costs; 
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1 ‘‘(III) be assessed based on usage 

2 of musical works by digital music pro3 viders and significant nonblanket li4 censees in covered activities under both 

5 compulsory and nonblanket licenses; 

6 ‘‘(IV) may be in the form of a 

7 percentage of royalties payable under 

8 this section for usage of musical works 

9 in covered activities (regardless of 

10 whether a different rate applies under 

11 a voluntary license), or any other 

12 usage-based metric reasonably cal13 culated to equitably allocate the collec14 tive total costs across digital music 

15 providers and significant nonblanket 

16 licensees engaged in covered activities, 

17 and shall include as a component a 

18 minimum fee for all digital music pro19 viders and significant nonblanket li20 censees; and 

21 ‘‘(V) take into consideration an22 ticipated future collective total costs 

23 and collections of the administrative 

24 assessment, including, as applicable— 
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1 ‘‘(aa) any portion of past ac2 tual collective total costs of the 

3 mechanical licensing collective not 

4 funded by previous collections of 

5 the administrative assessment or 

6 voluntary contributions because 

7 such collections or contributions 

8 together were insufficient to fund 

9 such costs; 

10 ‘‘(bb) any past collections of 

11 the administrative assessment and 

12 voluntary contributions that ex13 ceeded past actual collective total 

14 costs, resulting in a surplus; and 

15 ‘‘(cc) the amount of any vol16 untary contributions by digital 

17 music providers or significant 

18 nonblanket licensees in relevant 

19 periods, described in subpara20 graphs (A) and (B) of paragraph 

21 (7). 

22 ‘‘(iii) INITIAL ADMINISTRATIVE AS23 SESSMENT.—The procedure for establishing 

24 the initial administrative assessment shall 

25 be as follows: 
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1 ‘‘(I) Not later than 270 days after 

2 the enactment date, the Copyright Roy3 alty Judges shall commence a pro4 ceeding to establish the initial admin5 istrative assessment by publishing a 

6 notice in the Federal Register seeking 

7 petitions to participate. 

8 ‘‘(II) The mechanical licensing 

9 collective and digital licensee coordi10 nator shall participate in the pro11 ceeding described in subclause (I), 

12 along with any interested copyright 

13 owners, digital music providers or sig14 nificant nonblanket licensees that have 

15 notified the Copyright Royalty Judges 

16 of their desire to participate. 

17 ‘‘(III) The Copyright Royalty 

18 Judges shall establish a schedule for 

19 submission by the parties of informa20 tion that may be relevant to estab21 lishing the administrative assessment, 

22 including actual and anticipated col23 lective total costs of the mechanical li24 censing collective, actual and antici25 pated collections from digital music 
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1 providers and significant nonblanket 

2 licensees, and documentation of vol3 untary contributions, as well as a 

4 schedule for further proceedings, which 

5 shall include a hearing, as the Copy6 right Royalty Judges determine appro7 priate. 

8 ‘‘(IV) The initial administrative 

9 assessment shall be determined, and 

10 such determination shall be published 

11 in the Federal Register by the Copy12 right Royalty Judges, not later than 1 

13 year after commencement of the pro14 ceeding described in this clause. The 

15 determination shall be supported by a 

16 written record. The initial administra17 tive assessment shall be effective as of 

18 the license availability date, and shall 

19 continue in effect unless and until an 

20 adjusted administrative assessment is 

21 established pursuant to an adjustment 

22 proceeding under clause (iv). 

23 ‘‘(iv) ADJUSTMENT OF ADMINISTRA24 TIVE ASSESSMENT.—The administrative as25 sessment may be adjusted by the Copyright 
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1 Royalty Judges periodically, in accordance 

2 with the following procedures: 

3 ‘‘(I) Not earlier than 1 year after 

4 the most recent publication of a deter5 mination of the administrative assess6 ment by the Copyright Royalty Judges, 

7 the mechanical licensing collective, the 

8 digital licensee coordinator, or one or 

9 more interested copyright owners, dig10 ital music providers, or significant 

11 nonblanket licensees, may file a peti12 tion with the Copyright Royalty 

13 Judges in the month of May to com14 mence a proceeding to adjust the ad15 ministrative assessment. 

16 ‘‘(II) Notice of the commencement 

17 of such proceeding shall be published in 

18 the Federal Register in the month of 

19 June following the filing of any peti20 tion, with a schedule of requested infor21 mation and additional proceedings, as 

22 described in clause (iii)(III). The me23 chanical licensing collective and digital 

24 licensee coordinator shall participate 

25 in such proceeding, along with any in-
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1 terested copyright owners, digital 

2 music providers, or significant non3 blanket licensees that have notified the 

4 Copyright Royalty Judges of their de5 sire to participate. 

6 ‘‘(III) The determination of the 

7 adjusted administrative assessment, 

8 which shall be supported by a written 

9 record, shall be published in the Fed10 eral Register during June of the cal11 endar year following the commence12 ment of the proceeding. The adjusted 

13 administrative assessment shall take ef14 fect January 1 of the year following 

15 such publication. 

16 ‘‘(v) ADOPTION OF VOLUNTARY AGREE17 MENTS.—In lieu of reaching their own de18 termination based on evaluation of relevant 

19 data, the Copyright Royalty Judges shall 

20 approve and adopt a negotiated agreement 

21 to establish the amount and terms of the ad22 ministrative assessment that has been 

23 agreed to by the mechanical licensing collec24 tive and the digital licensee coordinator (or 

25 if none has been designated, interested dig-
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1 ital music providers and significant non2 blanket licensees representing more than 

3 half of the market for uses of musical works 

4 in covered activities), except that the Copy5 right Royalty Judges shall have the discre6 tion to reject any such agreement for good 

7 cause shown. An administrative assessment 

8 adopted under this clause shall apply to all 

9 digital music providers and significant 

10 nonblanket licensees engaged in covered ac11 tivities during the period the administrative 

12 assessment is in effect. 

13 ‘‘(vi) CONTINUING AUTHORITY TO

14 AMEND.—The Copyright Royalty Judges 

15 shall retain continuing authority to amend 

16 a determination of an administrative as17 sessment to correct technical or clerical er18 rors, or modify the terms of implementa19 tion, for good cause, with any such amend20 ment to be published in the Federal Reg21 ister. 

22 ‘‘(vii) APPEAL OF ADMINISTRATIVE AS23 SESSMENT.—The determination of an ad24 ministrative assessment by the Copyright 

25 Royalty Judges shall be appealable, not 
100 

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1 later than 30 calendar days after publica2 tion in the Federal Register, to the Court of 

3 Appeals for the District of Columbia Circuit 

4 by any party that fully participated in the 

5 proceeding. The administrative assessment 

6 as established by the Copyright Royalty 

7 Judges shall remain in effect pending the 

8 final outcome of any such appeal, and the 

9 mechanical licensing collective, digital li10 censee coordinator, digital music providers, 

11 and significant nonblanket licensees shall 

12 implement appropriate financial or other 

13 measures not later than 90 days after any 

14 modification of the assessment to reflect and 

15 account for such outcome. 

16 ‘‘(viii) REGULATIONS.—The Copyright 

17 Royalty Judges may adopt regulations to 

18 govern the conduct of proceedings under this 

19 paragraph. 

20 ‘‘(8) ESTABLISHMENT OF RATES AND TERMS

21 UNDER BLANKET LICENSE.— 

22 ‘‘(A) RESTRICTIONS ON RATESETTING PAR23 TICIPATION.—Neither the mechanical licensing 

24 collective nor the digital licensee coordinator 

25 shall be a party to a proceeding described in sub-
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1 section (c)(1)(E), except that the mechanical li2 censing collective or the digital licensee coordi3 nator may gather and provide financial and 

4 other information for the use of a party to such 

5 a proceeding and comply with requests for infor6 mation as required under applicable statutory 

7 and regulatory provisions and rulings of the 

8 Copyright Royalty Judges. 

9 ‘‘(B) APPLICATION OF LATE FEES.—In any 

10 proceeding described in subparagraph (A) in 

11 which the Copyright Royalty Judges establish a 

12 late fee for late payment of royalties for uses of 

13 musical works under this section, such fee shall 

14 apply to covered activities under blanket licenses, 

15 as follows: 

16 ‘‘(i) Late fees for past due royalty pay17 ments shall accrue from the due date for 

18 payment until payment is received by the 

19 mechanical licensing collective. 

20 ‘‘(ii) The availability of late fees shall 

21 in no way prevent a copyright owner or the 

22 mechanical licensing collective from assert23 ing any other rights or remedies to which 

24 such copyright owner or the mechanical li-
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1 censing collective may be entitled under this 

2 title. 

3 ‘‘(C) INTERIM RATE AGREEMENTS IN GEN4 ERAL.—For any covered activity for which no 

5 rate or terms have been established by the Copy6 right Royalty Judges, the mechanical licensing 

7 collective and any digital music provider may 

8 agree to an interim rate and terms for such ac9 tivity under the blanket license, and any such 

10 rate and terms— 

11 ‘‘(i) shall be treated as nonprecedential 

12 and not cited or relied upon in any rate13 setting proceeding before the Copyright Roy14 alty Judges or any other tribunal; and 

15 ‘‘(ii) shall automatically expire upon 

16 the establishment of a rate and terms for 

17 such covered activity by the Copyright Roy18 alty Judges, under subsection (c)(1)(E). 

19 ‘‘(D) ADJUSTMENTS FOR INTERIM RATES.— 

20 The rate and terms established by the Copyright 

21 Royalty Judges for a covered activity to which 

22 an interim rate and terms have been agreed 

23 under subparagraph (C) shall supersede the in24 terim rate and terms and apply retroactively to 

25 the inception of the activity under the blanket li-
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1 cense. In such case, not later than 90 days after 

2 the effective date of the rate and terms estab3 lished by the Copyright Royalty Judges— 

4 ‘‘(i) if the rate established by the Copy5 right Royalty Judges exceeds the interim 

6 rate, the digital music provider shall pay to 

7 the mechanical licensing collective the 

8 amount of any underpayment of royalties 

9 due; or 

10 ‘‘(ii) if the interim rate exceeds the 

11 rate established by the Copyright Royalty 

12 Judges, the mechanical licensing collective 

13 shall credit the account of the digital music 

14 provider for the amount of any overpay15 ment of royalties due. 

16 ‘‘(9) TRANSITION TO BLANKET LICENSES.— 

17 ‘‘(A) SUBSTITUTION OF BLANKET LI18 CENSE.—On the license availability date, a blan19 ket license shall, without any interruption in li20 cense authority enjoyed by such digital music 

21 provider, be automatically substituted for and 

22 supersede any existing compulsory license pre23 viously obtained under this section by the digital 

24 music provider from a copyright owner to engage 

25 in 1 or more covered activities with respect to a 
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1 musical work, except that such substitution shall 

2 not apply to any authority obtained from a 

3 record company pursuant to a compulsory li4 cense to make and distribute permanent 

5 downloads unless and until such record company 

6 terminates such authority in writing to take ef7 fect at the end of a monthly reporting period, 

8 with a copy to the mechanical licensing collec9 tive. 

10 ‘‘(B) EXPIRATION OF EXISTING LICENSES.— 

11 Except to the extent provided in subparagraph 

12 (A), on and after the license availability date, li13 censes other than individual download licenses 

14 obtained under this section for covered activities 

15 prior to the license availability date shall no 

16 longer continue in effect. 

17 ‘‘(C) TREATMENT OF VOLUNTARY LI18 CENSES.—A voluntary license for a covered ac19 tivity in effect on the license availability date 

20 will remain in effect unless and until the vol21 untary license expires according to the terms of 

22 the voluntary license, or the parties agree to 

23 amend or terminate the voluntary license. In a 

24 case where a voluntary license for a covered ac25 tivity entered into before the license availability 
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1 date incorporates the terms of this section by ref2 erence, the terms so incorporated (but not the 

3 rates) shall be those in effect immediately prior 

4 to the license availability date, and those terms 

5 shall continue to apply unless and until such 

6 voluntary license is terminated or amended, or 

7 the parties enter into a new voluntary license. 

8 ‘‘(D) FURTHER ACCEPTANCE OF NOTICES

9 FOR COVERED ACTIVITIES BY COPYRIGHT OF10 FICE.—On and after the enactment date— 

11 ‘‘(i) the Copyright Office shall no 

12 longer accept notices of intention with re13 spect to covered activities; and 

14 ‘‘(ii) notices of intention filed before 

15 the enactment date will no longer be effec16 tive or provide license authority with re17 spect to covered activities, except that, before 

18 the license availability date, there shall be 

19 no liability under section 501 for the repro20 duction or distribution of a musical work 

21 (or share thereof) in covered activities if a 

22 valid notice of intention was filed for such 

23 work (or share) before the enactment date. 

24 ‘‘(10) PRIOR UNLICENSED USES.— 
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1 ‘‘(A) LIMITATION ON LIABILITY IN GEN2 ERAL.—A copyright owner that commences an 

3 action under section 501 on or after January 1, 

4 2018, against a digital music provider for the 

5 infringement of the exclusive rights provided by 

6 paragraph (1) or (3) of section 106 arising from 

7 the unauthorized reproduction or distribution of 

8 a musical work by such digital music provider 

9 in the course of engaging in covered activities 

10 prior to the license availability date, shall, as the 

11 copyright owner’s sole and exclusive remedy 

12 against the digital music provider, be eligible to 

13 recover the royalty prescribed under subsection 

14 (c)(1)(C) and chapter 8, from the digital music 

15 provider, provided that such digital music pro16 vider can demonstrate compliance with the re17 quirements of subparagraph (B), as applicable. 

18 In all other cases the limitation on liability 

19 under this subparagraph shall not apply. 

20 ‘‘(B) REQUIREMENTS FOR LIMITATION ON

21 LIABILITY.—The following requirements shall 

22 apply on the enactment date and through the 

23 end of the period that expires 90 days after the 

24 license availability date to digital music pro-
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1 viders seeking to avail themselves of the limita2 tion on liability described in subparagraph (A): 

3 ‘‘(i) Not later than 30 calendar days 

4 after first making a particular sound re5 cording of a musical work available through 

6 its service via one or more covered activi7 ties, or 30 calendar days after the enact8 ment date, whichever occurs later, a digital 

9 music provider shall engage in good-faith, 

10 commercially reasonable efforts to identify 

11 and locate each copyright owner of such 

12 musical work (or share thereof). Such re13 quired matching efforts shall include the fol14 lowing: 

15 ‘‘(I) Good-faith, commercially rea16 sonable efforts to obtain from the owner 

17 of the corresponding sound recording 

18 made available through the digital 

19 music provider’s service the following 

20 information: 

21 ‘‘(aa) Sound recording name, 

22 featured artist, sound recording 

23 copyright owner, producer, inter24 national standard recording code, 

25 and other information commonly 
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1 used in the industry to identify 

2 sound recordings and match them 

3 to the musical works they embody. 

4 ‘‘(bb) Any available musical 

5 work ownership information, in6 cluding each songwriter and pub7 lisher name, percentage ownership 

8 share, and international standard 

9 musical work code. 

10 ‘‘(II) Employment of 1 or more 

11 bulk electronic matching processes that 

12 are available to the digital music pro13 vider through a third-party vendor on 

14 commercially reasonable terms, except 

15 that a digital music provider may rely 

16 on its own bulk electronic matching 

17 process if that process has capabilities 

18 comparable to or better than those 

19 available from a third-party vendor on 

20 commercially reasonable terms. 

21 ‘‘(ii) The required matching efforts 

22 shall be repeated by the digital music pro23 vider not less than once per month for so 

24 long as the copyright owner remains un25 identified or has not been located. 
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1 ‘‘(iii) If the required matching efforts 

2 are successful in identifying and locating a 

3 copyright owner of a musical work (or share 

4 thereof) by the end of the calendar month in 

5 which the digital music provider first makes 

6 use of the work, the digital music provider 

7 shall provide statements of account and pay 

8 royalties to such copyright owner in accord9 ance with this section and applicable regu10 lations. 

11 ‘‘(iv) If the copyright owner is not 

12 identified or located by the end of the cal13 endar month in which the digital music 

14 provider first makes use of the work, the 

15 digital music provider shall accrue and hold 

16 royalties calculated under the applicable 

17 statutory rate in accordance with usage of 

18 the work, from initial use of the work until 

19 the accrued royalties can be paid to the 

20 copyright owner or are required to be trans21 ferred to the mechanical licensing collective, 

22 as follows: 

23 ‘‘(I) Accrued royalties shall be 

24 maintained by the digital music pro-
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† HR 1551 EAS 

1 vider in accordance with generally ac2 cepted accounting principles. 

3 ‘‘(II) If a copyright owner of an 

4 unmatched musical work (or share 

5 thereof) is identified and located by or 

6 to the digital music provider before the 

7 license availability date, the digital 

8 music provider shall— 

9 ‘‘(aa) not later than 45 cal10 endar days after the end of the 

11 calendar month during which the 

12 copyright owner was identified 

13 and located, pay the copyright 

14 owner all accrued royalties, such 

15 payment to be accompanied by a 

16 cumulative statement of account 

17 that includes all of the informa18 tion that would have been pro19 vided to the copyright owner had 

20 the digital music provider been 

21 providing monthly statements of 

22 account to the copyright owner 

23 from initial use of the work in ac24 cordance with this section and ap25 plicable regulations, including the 
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1 requisite certification under sub2 section (c)(2)(I); 

3 ‘‘(bb) beginning with the ac4 counting period following the cal5 endar month in which the copy6 right owner was identified and lo7 cated, and for all other accounting 

8 periods prior to the license avail9 ability date, provide monthly 

10 statements of account and pay 

11 royalties to the copyright owner 

12 as required under this section and 

13 applicable regulations; and 

14 ‘‘(cc) beginning with the 

15 monthly royalty reporting period 

16 commencing on the license avail17 ability date, report usage and pay 

18 royalties for such musical work 

19 (or share thereof) for such report20 ing period and reporting periods 

21 thereafter to the mechanical li22 censing collective, as required 

23 under this subsection and applica24 ble regulations. 
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1 ‘‘(III) If a copyright owner of an 

2 unmatched musical work (or share 

3 thereof) is not identified and located by 

4 the license availability date, the digital 

5 music provider shall— 

6 ‘‘(aa) not later than 45 cal7 endar days after the license avail8 ability date, transfer all accrued 

9 royalties to the mechanical licens10 ing collective, such payment to be 

11 accompanied by a cumulative 

12 statement of account that includes 

13 all of the information that would 

14 have been provided to the copy15 right owner had the digital music 

16 provider been serving monthly 

17 statements of account on the copy18 right owner from initial use of the 

19 work in accordance with this sec20 tion and applicable regulations, 

21 including the requisite certifi22 cation under subsection (c)(2)(I), 

23 and accompanied by an addi24 tional certification by a duly au25 thorized officer of the digital 
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1 music provider that the digital 

2 music provider has fulfilled the 

3 requirements of clauses (i) and 

4 (ii) of subparagraph (B) but has 

5 not been successful in locating or 

6 identifying the copyright owner; 

7 and 

8 ‘‘(bb) beginning with the 

9 monthly royalty reporting period 

10 commencing on the license avail11 ability date, report usage and pay 

12 royalties for such musical work 

13 (or share thereof) for such period 

14 and reporting periods thereafter to 

15 the mechanical licensing collective, 

16 as required under this subsection 

17 and applicable regulations. 

18 ‘‘(v) A digital music provider that 

19 complies with the requirements of this sub20 paragraph with respect to unmatched musi21 cal works (or shares of works) shall not be 

22 liable for or accrue late fees for late pay23 ments of royalties for such works until such 

24 time as the digital music provider is re25 quired to begin paying monthly royalties to 
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1 the copyright owner or the mechanical li2 censing collective, as applicable. 

3 ‘‘(C) ADJUSTED STATUTE OF LIMITA4 TIONS.—Notwithstanding anything to the con5 trary in section 507(b), with respect to any 

6 claim of infringement of the exclusive rights pro7 vided by paragraphs (1) and (3) of section 106 

8 against a digital music provider arising from 

9 the unauthorized reproduction or distribution of 

10 a musical work by such digital music provider 

11 in the course of engaging in covered activities 

12 that accrued not more than 3 years prior to the 

13 license availability date, such action may be 

14 commenced not later than the later of— 

15 ‘‘(i) 3 years after the date on which the 

16 claim accrued; or 

17 ‘‘(ii) 2 years after the license avail18 ability date. 

19 ‘‘(D) OTHER RIGHTS AND REMEDIES PRE20 SERVED.—Except as expressly provided in this 

21 paragraph, nothing in this paragraph shall be 

22 construed to alter, limit, or negate any right or 

23 remedy of a copyright owner with respect to un24 authorized use of a musical work. 
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1 ‘‘(11) LEGAL PROTECTIONS FOR LICENSING AC2 TIVITIES.— 

3 ‘‘(A) EXEMPTION FOR COMPULSORY LI4 CENSE ACTIVITIES.—The antitrust exemption de5 scribed in subsection (c)(1)(D) shall apply to ne6 gotiations and agreements between and among 

7 copyright owners and persons entitled to obtain 

8 a compulsory license for covered activities, and 

9 common agents acting on behalf of such copy10 right owners or persons, including with respect 

11 to the administrative assessment established 

12 under this subsection. 

13 ‘‘(B) LIMITATION ON COMMON AGENT EX14 EMPTION.—Notwithstanding the antitrust ex15 emption provided in subsection (c)(1)(D) and 

16 subparagraph (A) of this paragraph (except for 

17 the administrative assessment referenced in such 

18 subparagraph (A) and except as provided in 

19 paragraph (8)(C)), neither the mechanical licens20 ing collective nor the digital licensee coordinator 

21 shall serve as a common agent with respect to the 

22 establishment of royalty rates or terms under 

23 this section. 

24 ‘‘(C) ANTITRUST EXEMPTION FOR ADMINIS25 TRATIVE ACTIVITIES.—Notwithstanding any pro-
116 

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1 vision of the antitrust laws, copyright owners 

2 and persons entitled to obtain a compulsory li3 cense under this section may designate the me4 chanical licensing collective to administer vol5 untary licenses for the reproduction or distribu6 tion of musical works in covered activities on be7 half of such copyright owners and persons, sub8 ject to the following conditions: 

9 ‘‘(i) Each copyright owner shall estab10 lish the royalty rates and material terms of 

11 any such voluntary license individually and 

12 not in agreement, combination, or concert 

13 with any other copyright owner. 

14 ‘‘(ii) Each person entitled to obtain a 

15 compulsory license under this section shall 

16 establish the royalty rates and material 

17 terms of any such voluntary license individ18 ually and not in agreement, combination, 

19 or concert with any other digital music pro20 vider. 

21 ‘‘(iii) The mechanical licensing collec22 tive shall maintain the confidentiality of 

23 the voluntary licenses in accordance with 

24 the confidentiality provisions prescribed by 
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1 the Register of Copyrights under paragraph 

2 (12)(C). 

3 ‘‘(D) LIABILITY FOR GOOD-FAITH ACTIVI4 TIES.—The mechanical licensing collective shall 

5 not be liable to any person or entity based on a 

6 claim arising from its good-faith administration 

7 of policies and procedures adopted and imple8 mented to carry out the responsibilities described 

9 in subparagraphs (J) and (K) of paragraph (3), 

10 except to the extent of correcting an under11 payment or overpayment of royalties as provided 

12 in paragraph (3)(L)(i)(VI), but the collective 

13 may participate in a legal proceeding as a stake14 holder party if the collective is holding funds 

15 that are the subject of a dispute between copy16 right owners. For purposes of this subparagraph, 

17 the term ‘good-faith administration’ means ad18 ministration in a manner that is not grossly 

19 negligent. 

20 ‘‘(E) PREEMPTION OF STATE PROPERTY

21 LAWS.—The holding and distribution of funds by 

22 the mechanical licensing collective in accordance 

23 with this subsection shall supersede and preempt 

24 any State law (including common law) con25 cerning escheatment or abandoned property, or 
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† HR 1551 EAS 

1 any analogous provision, that might otherwise 

2 apply. 

3 ‘‘(F) RULE OF CONSTRUCTION.—Except as 

4 expressly provided in this subsection, nothing in 

5 this subsection shall negate or limit the ability 

6 of any person to pursue an action in Federal 

7 court against the mechanical licensing collective 

8 or any other person based upon a claim arising 

9 under this title or other applicable law. 

10 ‘‘(12) REGULATIONS.— 

11 ‘‘(A) ADOPTION BY REGISTER OF COPY12 RIGHTS AND COPYRIGHT ROYALTY JUDGES.—The 

13 Register of Copyrights may conduct such pro14 ceedings and adopt such regulations as may be 

15 necessary or appropriate to effectuate the provi16 sions of this subsection, except for regulations 

17 concerning proceedings before the Copyright Roy18 alty Judges to establish the administrative as19 sessment, which shall be adopted by the Copy20 right Royalty Judges. 

21 ‘‘(B) JUDICIAL REVIEW OF REGULATIONS.— 

22 Except as provided in paragraph (7)(D)(vii), 

23 regulations adopted under this subsection shall 

24 be subject to judicial review pursuant to chapter 

25 7 of title 5. 
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1 ‘‘(C) PROTECTION OF CONFIDENTIAL INFOR2 MATION.—The Register of Copyrights shall adopt 

3 regulations to provide for the appropriate proce4 dures to ensure that confidential, private, pro5 prietary, or privileged information contained in 

6 the records of the mechanical licensing collective 

7 and digital licensee coordinator is not improp8 erly disclosed or used, including through any 

9 disclosure or use by the board of directors or per10 sonnel of either entity, and specifically including 

11 the unclaimed royalties oversight committee and 

12 the dispute resolution committee of the mechan13 ical licensing collective. 

14 ‘‘(13) SAVINGS CLAUSES.— 

15 ‘‘(A) LIMITATION ON ACTIVITIES AND

16 RIGHTS COVERED.—This subsection applies sole17 ly to uses of musical works subject to licensing 

18 under this section. The blanket license shall not 

19 be construed to extend or apply to activities 

20 other than covered activities or to rights other 

21 than the exclusive rights of reproduction and dis22 tribution licensed under this section, or serve or 

23 act as the basis to extend or expand the compul24 sory license under this section to activities and 
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1 rights not covered by this section on the day be2 fore the enactment date. 

3 ‘‘(B) RIGHTS OF PUBLIC PERFORMANCE

4 NOT AFFECTED.—The rights, protections, and 

5 immunities granted under this subsection, the 

6 data concerning musical works collected and 

7 made available under this subsection, and the 

8 definitions under subsection (e) shall not extend 

9 to, limit, or otherwise affect any right of public 

10 performance in a musical work.’’; and 

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

12 ‘‘(e) DEFINITIONS.—As used in this section: 

13 ‘‘(1) ACCRUED INTEREST.—The term ‘accrued 

14 interest’ means interest accrued on accrued royalties, 

15 as described in subsection (d)(3)(H)(ii). 

16 ‘‘(2) ACCRUED ROYALTIES.—The term ‘accrued 

17 royalties’ means royalties accrued for the reproduc18 tion or distribution of a musical work (or share there19 of) in a covered activity, calculated in accordance 

20 with the applicable royalty rate under this section. 

21 ‘‘(3) ADMINISTRATIVE ASSESSMENT.—The term 

22 ‘administrative assessment’ means the fee established 

23 pursuant to subsection (d)(7)(D). 

24 ‘‘(4) AUDIT.—The term ‘audit’ means a royalty 

25 compliance examination to verify the accuracy of roy-
121 

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1 alty payments, or the conduct of such an examina2 tion, as applicable. 

3 ‘‘(5) BLANKET LICENSE.—The term ‘blanket li4 cense’ means a compulsory license described in sub5 section (d)(1)(A) to engage in covered activities. 

6 ‘‘(6) COLLECTIVE TOTAL COSTS.—The term ‘col7 lective total costs’— 

8 ‘‘(A) means the total costs of establishing, 

9 maintaining, and operating the mechanical li10 censing collective to fulfill its statutory functions, 

11 including— 

12 ‘‘(i) startup costs; 

13 ‘‘(ii) financing, legal, audit, and in14 surance costs; 

15 ‘‘(iii) investments in information tech16 nology, infrastructure, and other long-term 

17 resources; 

18 ‘‘(iv) outside vendor costs; 

19 ‘‘(v) costs of licensing, royalty admin20 istration, and enforcement of rights; 

21 ‘‘(vi) costs of bad debt; and 

22 ‘‘(vii) costs of automated and manual 

23 efforts to identify and locate copyright own24 ers of musical works (and shares of such 

25 musical works) and match sound recordings 
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1 to the musical works the sound recordings 

2 embody; and 

3 ‘‘(B) does not include any added costs in4 curred by the mechanical licensing collective to 

5 provide services under voluntary licenses. 

6 ‘‘(7) COVERED ACTIVITY.—The term ‘covered ac7 tivity’ means the activity of making a digital phono8 record delivery of a musical work, including in the 

9 form of a permanent download, limited download, or 

10 interactive stream, where such activity qualifies for a 

11 compulsory license under this section. 

12 ‘‘(8) DIGITAL MUSIC PROVIDER.—The term ‘dig13 ital music provider’ means a person (or persons oper14 ating under the authority of that person) that, with 

15 respect to a service engaged in covered activities— 

16 ‘‘(A) has a direct contractual, subscription, 

17 or other economic relationship with end users of 

18 the service, or, if no such relationship with end 

19 users exists, exercises direct control over the pro20 vision of the service to end users; 

21 ‘‘(B) is able to fully report on any revenues 

22 and consideration generated by the service; and 

23 ‘‘(C) is able to fully report on usage of 

24 sound recordings of musical works by the service 

25 (or procure such reporting). 
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1 ‘‘(9) DIGITAL LICENSEE COORDINATOR.—The 

2 term ‘digital licensee coordinator’ means the entity 

3 most recently designated pursuant to subsection 

4 (d)(5). 

5 ‘‘(10) DIGITAL PHONORECORD DELIVERY.—The 

6 term ‘digital phonorecord delivery’ means each indi7 vidual delivery of a phonorecord by digital trans8 mission of a sound recording that results in a specifi9 cally identifiable reproduction by or for any trans10 mission recipient of a phonorecord of that sound re11 cording, regardless of whether the digital transmission 

12 is also a public performance of the sound recording 

13 or any musical work embodied therein, and includes 

14 a permanent download, a limited download, or an 

15 interactive stream. A digital phonorecord delivery 

16 does not result from a real-time, noninteractive sub17 scription transmission of a sound recording where no 

18 reproduction of the sound recording or the musical 

19 work embodied therein is made from the inception of 

20 the transmission through to its receipt by the trans21 mission recipient in order to make the sound record22 ing audible. A digital phonorecord delivery does not 

23 include the digital transmission of sounds accom24 panying a motion picture or other audiovisual work 

25 as defined in section 101. 
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1 ‘‘(11) ENACTMENT DATE.—The term ‘enactment 

2 date’ means the date of the enactment of the Musical 

3 Works Modernization Act. 

4 ‘‘(12) INDIVIDUAL DOWNLOAD LICENSE.—The 

5 term ‘individual download license’ means a compul6 sory license obtained by a record company to make 

7 and distribute, or authorize the making and distribu8 tion of, permanent downloads embodying a specific 

9 individual musical work. 

10 ‘‘(13) INTERACTIVE STREAM.—The term ‘inter11 active stream’ means a digital transmission of a 

12 sound recording of a musical work in the form of a 

13 stream, where the performance of the sound recording 

14 by means of such transmission is not exempt under 

15 section 114(d)(1) and does not in itself, or as a result 

16 of a program in which it is included, qualify for stat17 utory licensing under section 114(d)(2). An inter18 active stream is a digital phonorecord delivery. 

19 ‘‘(14) INTERESTED.—The term ‘interested’, as 

20 applied to a party seeking to participate in a pro21 ceeding under subsection (d)(7)(D), is a party as to 

22 which the Copyright Royalty Judges have not deter23 mined that the party lacks a significant interest in 

24 such proceeding. 
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1 ‘‘(15) LICENSE AVAILABILITY DATE.—The term 

2 ‘license availability date’ means January 1 following 

3 the expiration of the 2-year period beginning on the 

4 enactment date. 

5 ‘‘(16) LIMITED DOWNLOAD.—The term ‘limited 

6 download’ means a digital transmission of a sound 

7 recording of a musical work in the form of a 

8 download, where such sound recording is accessible for 

9 listening only for a limited amount of time or speci10 fied number of times. 

11 ‘‘(17) MATCHED.—The term ‘matched’, as ap12 plied to a musical work (or share thereof), means that 

13 the copyright owner of such work (or share thereof) 

14 has been identified and located. 

15 ‘‘(18) MECHANICAL LICENSING COLLECTIVE.— 

16 The term ‘mechanical licensing collective’ means the 

17 entity most recently designated as such by the Reg18 ister of Copyrights under subsection (d)(3). 

19 ‘‘(19) MECHANICAL LICENSING COLLECTIVE

20 BUDGET.—The term ‘mechanical licensing collective 

21 budget’ means a statement of the financial position of 

22 the mechanical licensing collective for a fiscal year or 

23 quarter thereof based on estimates of expenditures 

24 during the period and proposals for financing those 
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1 expenditures, including a calculation of the collective 

2 total costs. 

3 ‘‘(20) MUSICAL WORKS DATABASE.—The term 

4 ‘musical works database’ means the database de5 scribed in subsection (d)(3)(E). 

6 ‘‘(21) NONPROFIT.—The term ‘nonprofit’ means 

7 a nonprofit created or organized in a State. 

8 ‘‘(22) NOTICE OF LICENSE.—The term ‘notice of 

9 license’ means a notice from a digital music provider 

10 provided under subsection (d)(2)(A) for purposes of 

11 obtaining a blanket license. 

12 ‘‘(23) NOTICE OF NONBLANKET ACTIVITY.—The 

13 term ‘notice of nonblanket activity’ means a notice 

14 from a significant nonblanket licensee provided under 

15 subsection (d)(6)(A) for purposes of notifying the me16 chanical licensing collective that the licensee has been 

17 engaging in covered activities. 

18 ‘‘(24) PERMANENT DOWNLOAD.—The term ‘per19 manent download’ means a digital transmission of a 

20 sound recording of a musical work in the form of a 

21 download, where such sound recording is accessible for 

22 listening without restriction as to the amount of time 

23 or number of times it may be accessed. 

24 ‘‘(25) QUALIFIED AUDITOR.—The term ‘qualified 

25 auditor’ means an independent, certified public ac-
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1 countant with experience performing music royalty 

2 audits. 

3 ‘‘(26) RECORD COMPANY.—The term ‘record com4 pany’ means an entity that invests in, produces, and 

5 markets sound recordings of musical works, and dis6 tributes such sound recordings for remuneration 

7 through multiple sales channels, including a corporate 

8 affiliate of such an entity engaged in distribution of 

9 sound recordings. 

10 ‘‘(27) REPORT OF USAGE.—The term ‘report of 

11 usage’ means a report reflecting an entity’s usage of 

12 musical works in covered activities described in sub13 section (d)(4)(A). 

14 ‘‘(28) REQUIRED MATCHING EFFORTS.—The 

15 term ‘required matching efforts’ means efforts to iden16 tify and locate copyright owners of musical works as 

17 described in subsection (d)(10)(B)(i). 

18 ‘‘(29) SERVICE.—The term ‘service’, as used in 

19 relation to covered activities, means any site, facility, 

20 or offering by or through which sound recordings of 

21 musical works are digitally transmitted to members of 

22 the public. 

23 ‘‘(30) SHARE.—The term ‘share’, as applied to a 

24 musical work, means a fractional ownership interest 

25 in such work. 
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1 ‘‘(31) SIGNIFICANT NONBLANKET LICENSEE.— 

2 The term ‘significant nonblanket licensee’— 

3 ‘‘(A) means an entity, including a group of 

4 entities under common ownership or control 

5 that, acting under the authority of one or more 

6 voluntary licenses or individual download li7 censes, offers a service engaged in covered activi8 ties, and such entity or group of entities— 

9 ‘‘(i) is not currently operating under a 

10 blanket license and is not obligated to pro11 vide reports of usage reflecting covered ac12 tivities under subsection (d)(4)(A); 

13 ‘‘(ii) has a direct contractual, subscrip14 tion, or other economic relationship with 

15 end users of the service or, if no such rela16 tionship with end users exists, exercises di17 rect control over the provision of the service 

18 to end users; and 

19 ‘‘(iii) either— 

20 ‘‘(I) on any day in a calendar 

21 month, makes more than 5,000 dif22 ferent sound recordings of musical 

23 works available through such service; 

24 or 
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1 ‘‘(II) derives revenue or other con2 sideration in connection with such cov3 ered activities greater than $50,000 in 

4 a calendar month, or total revenue or 

5 other consideration greater than 

6 $500,000 during the preceding 12 cal7 endar months; and 

8 ‘‘(B) does not include— 

9 ‘‘(i) an entity whose covered activity 

10 consists solely of free-to-the-user streams of 

11 segments of sound recordings of musical 

12 works that do not exceed 90 seconds in 

13 length, are offered only to facilitate a li14 censed use of musical works that is not a 

15 covered activity, and have no revenue di16 rectly attributable to such streams consti17 tuting the covered activity; or 

18 ‘‘(ii) a ‘public broadcasting entity’ as 

19 defined in section 118(f). 

20 ‘‘(32) SONGWRITER.—The term ‘songwriter’ 

21 means the author of all or part of a musical work, 

22 including a composer or lyricist. 

23 ‘‘(33) STATE.—The term ‘State’ means each 

24 State of the United States, the District of Columbia, 

25 and each territory or possession of the United States. 
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1 ‘‘(34) UNCLAIMED ACCRUED ROYALTIES.—The 

2 term ‘unclaimed accrued royalties’ means accrued 

3 royalties eligible for distribution under subsection 

4 (d)(3)(J). 

5 ‘‘(35) UNMATCHED.—The term ‘unmatched’, as 

6 applied to a musical work (or share thereof), means 

7 that the copyright owner of such work (or share there8 of) has not been identified or located. 

9 ‘‘(36) VOLUNTARY LICENSE.—The term ‘vol10 untary license’ means a license for use of a musical 

11 work (or share thereof) other than a compulsory li12 cense obtained under this section.’’. 

13 (b) TECHNICAL AND CONFORMING AMENDMENTS TO

14 SECTION 801.—Section 801(b) of title 17, United States 

15 Code, is amended— 

16 (1) by redesignating paragraph (8) as para17 graph (9); and 

18 (2) by inserting after paragraph (7) the fol19 lowing: 

20 ‘‘(8) To determine the administrative assessment 

21 to be paid by digital music providers under section 

22 115(d). The provisions of section 115(d) shall apply 

23 to the conduct of proceedings by the Copyright Roy24 alty Judges under section 115(d) and not the proce-
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1 dures described in this section, or section 803, 804, or 

2 805.’’. 

3 (c) EFFECTIVE DATE OF AMENDED RATE SETTING

4 STANDARD.—The amendments made by subsection (a)(3) 

5 and section 103(g)(2) shall apply to any proceeding before 

6 the Copyright Royalty Judges that is commenced on or after 

7 the date of the enactment of this Act. 

8 (d) TECHNICAL AND CONFORMING AMENDMENTS TO

9 TITLE 37, PART 385 OF THE CODE OF FEDERAL REGULA10 TIONS.—Not later than 270 days after the date of enactment 

11 of this Act, the Copyright Royalty Judges shall amend the 

12 regulations for section 115 of title 17, United States Code, 

13 in part 385 of title 37, Code of Federal Regulations, to con14 form the definitions used in such part to the definitions 

15 of the same terms described in section 115(e) of title 17, 

16 United States Code, as added by subsection (a). In so doing, 

17 the Copyright Royalty Judges shall make adjustments to 

18 the language of the regulations as necessary to achieve the 

19 same purpose and effect as the original regulations with 

20 respect to the rates and terms previously adopted by the 

21 Copyright Royalty Judges. 

22 (e) COPYRIGHT OFFICE ACTIVITIES.—The Register of 

23 Copyrights shall engage in public outreach and educational 

24 activities— 
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1 (1) regarding the amendments made by sub2 section (a) to section 115 of title 17, United States 

3 Code, including the responsibilities of the mechanical 

4 licensing collective designated under those amend5 ments; 

6 (2) which shall include educating songwriters 

7 and other interested parties with respect to the process 

8 established under section 115(d)(3)(C)(i)(V) of title 

9 17, United States Code, as added by subsection (a), 

10 by which— 

11 (A) a copyright owner may claim owner12 ship of musical works (and shares of such 

13 works); and 

14 (B) royalties for works for which the owner 

15 is not identified or located shall be equitably dis16 tributed to known copyright owners; and 

17 (3) which the Register shall make available on18 line. 

19 (f) UNCLAIMED ROYALTIES STUDY AND RECOMMENDA20 TIONS.— 

21 (1) IN GENERAL.—Not later than 2 years after 

22 the date on which the Register of Copyrights initially 

23 designates the mechanical licensing collective under 

24 section 115(d)(3)(B)(i) of title 17, United States 

25 Code, as added by subsection (a)(4), the Register, in 
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1 consultation with the Comptroller General of the 

2 United States, and after soliciting and reviewing 

3 comments and relevant information from music in4 dustry participants and other interested parties, shall 

5 submit to the Committee on the Judiciary of the Sen6 ate and the Committee on the Judiciary of the House 

7 of Representatives a report that recommends best 

8 practices that the collective may implement in order 

9 to— 

10 (A) identify and locate musical work copy11 right owners with unclaimed accrued royalties 

12 held by the collective; 

13 (B) encourage musical work copyright own14 ers to claim the royalties of those owners; and 

15 (C) reduce the incidence of unclaimed royal16 ties. 

17 (2) CONSIDERATION OF RECOMMENDATIONS.— 

18 The mechanical licensing collective shall carefully 

19 consider, and give substantial weight to, the rec20 ommendations submitted by the Register of Copy21 rights under paragraph (1) when establishing the pro22 cedures of the collective with respect to the— 

23 (A) identification and location of musical 

24 work copyright owners; and 

25 (B) distribution of unclaimed royalties. 
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1 SEC. 103. AMENDMENTS TO SECTION 114. 

2 (a) UNIFORM RATE STANDARD.—Section 114(f) of 

3 title 17, United States Code, is amended— 

4 (1) by striking paragraphs (1) and (2) and in5 serting the following: 

6 ‘‘(1)(A) Proceedings under chapter 8 shall deter7 mine reasonable rates and terms of royalty payments 

8 for transmissions subject to statutory licensing under 

9 subsection (d)(2) during the 5-year period beginning 

10 on January 1 of the second year following the year 

11 in which the proceedings are to be commenced pursu12 ant to subparagraph (A) or (B) of section 804(b)(3), 

13 as the case may be, or such other period as the parties 

14 may agree. The parties to each proceeding shall bear 

15 their own costs. 

16 ‘‘(B) The schedule of reasonable rates and terms 

17 determined by the Copyright Royalty Judges shall, 

18 subject to paragraph (2), be binding on all copyright 

19 owners of sound recordings and entities performing 

20 sound recordings affected by this paragraph during 

21 the 5-year period specified in subparagraph (A), or 

22 such other period as the parties may agree. Such rates 

23 and terms shall distinguish among the different types 

24 of services then in operation and shall include a min25 imum fee for each such type of service, such dif26 ferences to be based on criteria including the quantity 
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1 and nature of the use of sound recordings and the de2 gree to which use of the service may substitute for or 

3 may promote the purchase of phonorecords by con4 sumers. The Copyright Royalty Judges shall establish 

5 rates and terms that most clearly represent the rates 

6 and terms that would have been negotiated in the 

7 marketplace between a willing buyer and a willing 

8 seller. In determining such rates and terms, the Copy9 right Royalty Judges— 

10 ‘‘(i) shall base their decision on economic, 

11 competitive, and programming information pre12 sented by the parties, including— 

13 ‘‘(I) whether use of the service may 

14 substitute for or may promote the sales of 

15 phonorecords or otherwise may interfere 

16 with or may enhance the sound recording 

17 copyright owner’s other streams of revenue 

18 from the copyright owner’s sound record19 ings; and 

20 ‘‘(II) the relative roles of the copyright 

21 owner and the transmitting entity in the 

22 copyrighted work and the service made 

23 available to the public with respect to rel24 ative creative contribution, technological 
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1 contribution, capital investment, cost, and 

2 risk; and 

3 ‘‘(ii) may consider the rates and terms for 

4 comparable types of audio transmission services 

5 and comparable circumstances under voluntary 

6 license agreements. 

7 ‘‘(C) The procedures under subparagraphs (A) 

8 and (B) shall also be initiated pursuant to a petition 

9 filed by any sound recording copyright owner or any 

10 transmitting entity indicating that a new type of 

11 service on which sound recordings are performed is or 

12 is about to become operational, for the purpose of de13 termining reasonable terms and rates of royalty pay14 ments with respect to such new type of service for the 

15 period beginning with the inception of such new type 

16 of service and ending on the date on which the roy17 alty rates and terms for eligible nonsubscription serv18 ices and new subscription services, or preexisting sub19 scription services and preexisting satellite digital 

20 audio radio services, as the case may be, most re21 cently determined under subparagraph (A) or (B) 

22 and chapter 8 expire, or such other period as the par23 ties may agree.’’; and 

24 (2) by redesignating paragraphs (3), (4), and (5) 

25 as paragraphs (2), (3), and (4), respectively. 
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1 (b) REPEAL.—Subsection (i) of section 114 of title 17, 

2 United States Code, is repealed. 

3 (c) USE IN MUSICAL WORK PROCEEDINGS.— 

4 (1) IN GENERAL.—License fees payable for the 

5 public performance of sound recordings under section 

6 106(6) of title 17, United States Code, shall not be 

7 taken into account in any administrative, judicial, or 

8 other governmental proceeding to set or adjust the 

9 royalties payable to musical work copyright owners 

10 for the public performance of their works except in 

11 such a proceeding to set or adjust royalties for the 

12 public performance of musical works by means of a 

13 digital audio transmission other than a transmission 

14 by a broadcaster, and may be taken into account only 

15 with respect to such digital audio transmission. 

16 (2) DEFINITIONS.—In this subsection: 

17 (A) TRANSMISSION BY A BROADCASTER.— 

18 The term ‘‘transmission by a broadcaster’’ means 

19 a nonsubscription digital transmission made by 

20 a terrestrial broadcast station on its own behalf, 

21 or on the behalf of a terrestrial broadcast station 

22 under common ownership or control, that is not 

23 part of an interactive service or a music-inten24 sive service comprising the transmission of sound 
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1 recordings customized for or customizable by re2 cipients or service users. 

3 (B) TERRESTRIAL BROADCAST STATION.— 

4 The term ‘‘terrestrial broadcast station’’ means a 

5 terrestrial, over-the-air radio or television broad6 cast station, including an FM translator (as de7 fined in section 74.1201 of title 47, Code of Fed8 eral Regulations, and licensed as such by the 

9 Federal Communications Commission) whose 

10 primary business activities are comprised of, 

11 and whose revenues are generated through, ter12 restrial, over-the-air broadcast transmissions, or 

13 the simultaneous or substantially-simultaneous 

14 digital retransmission by the terrestrial, over15 the-air broadcast station of its over-the-air 

16 broadcast transmissions. 

17 (d) RULE OF CONSTRUCTION.—Subsection (c)(2) shall 

18 not be given effect in interpreting provisions of title 17, 

19 United States Code. 

20 (e) USE IN SOUND RECORDING PROCEEDINGS.—The 

21 repeal of section 114(i) of title 17, United States Code, by 

22 subsection (b) shall not be taken into account in any pro23 ceeding to set or adjust the rates and fees payable for the 

24 use of sound recordings under section 112(e) or 114(f) of 
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1 such title that is pending on, or commenced on or after, 

2 the date of enactment of this Act. 

3 (f) DECISIONS AND PRECEDENTS NOT AFFECTED.— 

4 The repeal of section 114(i) of title 17, United States Code, 

5 by subsection (b) shall not have any effect upon the deci6 sions, or the precedents established or relied upon, in any 

7 proceeding to set or adjust the rates and fees payable for 

8 the use of sound recordings under section 112(e) or 114(f) 

9 of such title before the date of enactment of this Act. 

10 (g) TECHNICAL AND CONFORMING AMENDMENTS.— 

11 (1) SECTION 114.—Section 114(f) of title 17, 

12 United States Code, as amended by subsection (a), is 

13 further amended in paragraph (4)(C), as so redesig14 nated, in the first sentence, by striking ‘‘under para15 graph (4)’’ and inserting ‘‘under paragraph (3)’’. 

16 (2) SECTION 801.—Section 801(b) of title 17, 

17 United States Code, is amended— 

18 (A) in paragraph (1), by striking ‘‘The 

19 rates applicable’’ and all that follows though 

20 ‘‘prevailing industry practices.’’; and 

21 (B) in paragraph (7)(B), by striking 

22 ‘‘114(f)(3)’’ and inserting ‘‘114(f)(2)’’. 

23 (3) SECTION 803.—Section 803(c)(2)(E)(i)(II) of 

24 title 17, United States Code, is amended— 

25 (A) by striking ‘‘or 114(f)(2)(C)’’; and 
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1 (B) by striking ‘‘114(f)(4)(B)’’ and insert2 ing ‘‘114(f)(3)(B)’’. 

3 (4) SECTION 804.—Section 804(b)(3)(C) of title 

4 17, United States Code, is amended— 

5 (A) in clause (i), by striking ‘‘and 

6 114(f)(2)(C)’’; 

7 (B) in clause (iii)(II), by striking 

8 ‘‘114(f)(4)(B)(ii)’’ and inserting 

9 ‘‘114(f)(3)(B)(ii)’’; and 

10 (C) in clause (iv), by striking ‘‘or 

11 114(f)(2)(C), as the case may be’’. 

12 (h) EFFECTIVE DATE OF AMENDED RATE SETTING

13 STANDARD.—The amendments made by subsection (a)(1) 

14 shall apply to any proceeding before the Copyright Royalty 

15 Judges that is commenced on or after the date of the enact16 ment of this Act. 

17 (i) TIMING OF RATE DETERMINATIONS.—Section 

18 804(b)(3)(B) of title 17, United States Code, is amended, 

19 in the third sentence, by inserting the following after ‘‘fifth 

20 calendar year’’: ‘‘, except that—(i) with respect to pre21 existing subscription services, the terms and rates finally 

22 determined for the rate period ending on December 31, 

23 2022, shall remain in effect through December 31, 2027, and 

24 there shall be no proceeding to determine terms and rates 

25 for preexisting subscription services for the period begin-
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1 ning on January 1, 2023, and ending on December 31, 

2 2027; and’’ ‘‘(ii) with respect to pre-existing satellite digital 

3 audio radio services, the terms and rates set forth by the 

4 Copyright Royalty Judges on December 14, 2017, in their 

5 initial determination for the rate period ending on Decem6 ber 31, 2022, shall be in effect through December 31, 2027, 

7 without any change based on a rehearing under section 

8 803(c)(2) and without the possibility of appeal under sec9 tion 803(d), and there shall be no proceeding to determine 

10 terms and rates for preexisting satellite digital audio radio 

11 services for the period beginning on January 1, 2023, and 

12 ending on December 31, 2027’’. 

13 SEC. 104. RANDOM ASSIGNMENT OF RATE COURT PRO14 CEEDINGS. 

15 Section 137 of title 28, United States Code, is amend16 ed— 

17 (1) by striking ‘‘The business’’ and inserting 

18 ‘‘(a) IN GENERAL.—The business’’; and 

19 (2) by adding at the end the following: 

20 ‘‘(b) RANDOM ASSIGNMENT OF RATE COURT PRO21 CEEDINGS.— 

22 ‘‘(1) IN GENERAL.— 

23 ‘‘(A) DEFINITION.—In this paragraph, the 

24 term ‘performing rights society’ has the meaning 

25 given the term in section 101 of title 17. 
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1 ‘‘(B) DETERMINATION OF LICENSE FEE.— 

2 Except as provided in subparagraph (C), in the 

3 case of any performing rights society subject to 

4 a consent decree, any application for the deter5 mination of a license fee for the public perform6 ance of music in accordance with the applicable 

7 consent decree shall be made in the district court 

8 with jurisdiction over that consent decree and 

9 randomly assigned to a judge of that district 

10 court according to the rules of that court for the 

11 division of business among district judges, pro12 vided that any such application shall not be as13 signed to— 

14 ‘‘(i) a judge to whom continuing juris15 diction over any performing rights society 

16 for any performing rights society consent 

17 decree is assigned or has previously been as18 signed; or 

19 ‘‘(ii) a judge to whom another pro20 ceeding concerning an application for the 

21 determination of a reasonable license fee is 

22 assigned at the time of the filing of the ap23 plication. 

24 ‘‘(C) EXCEPTION.—Subparagraph (B) does 

25 not apply to an application to determine reason-
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1 able license fees made by individual proprietors 

2 under section 513 of title 17. 

3 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 

4 paragraph (1) shall modify the rights of any party to 

5 a consent decree or to a proceeding to determine rea6 sonable license fees, to make an application for the 

7 construction of any provision of the applicable con8 sent decree. Such application shall be referred to the 

9 judge to whom continuing jurisdiction over the appli10 cable consent decree is currently assigned. If any such 

11 application is made in connection with a rate pro12 ceeding, such rate proceeding shall be stayed until the 

13 final determination of the construction application. 

14 Disputes in connection with a rate proceeding about 

15 whether a licensee is similarly situated to another li16 censee shall not be subject to referral to the judge with 

17 continuing jurisdiction over the applicable consent de18 cree.’’. 

19 SEC. 105. PERFORMING RIGHTS SOCIETY CONSENT DE20 CREES. 

21 (a) DEFINITION.—In this section, the term ‘‘per22 forming rights society’’ has the meaning given the term in 

23 section 101 of title 17, United States Code. 

24 (b) NOTIFICATION OF REVIEW.— 
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1 (1) IN GENERAL.—The Department of Justice 

2 shall provide timely briefings upon request of any 

3 Member of the Committee on the Judiciary of the 

4 Senate and the Committee on the Judiciary of the 

5 House of Representatives regarding the status of a re6 view in progress of a consent decree between the 

7 United States and a performing rights society. 

8 (2) CONFIDENTIALITY AND DELIBERATIVE PROC9 ESS.—In accordance with applicable rules relating to 

10 confidentiality and agency deliberative process, the 

11 Department of Justice shall share with such Members 

12 of Congress detailed and timely information and per13 tinent documents related to the consent decree review. 

14 (c) ACTION BEFORE MOTION TO TERMINATE.— 

15 (1) IN GENERAL.—Before filing with the appro16 priate district court of the United States a motion to 

17 terminate a consent decree between the United States 

18 and a performing rights society, including a motion 

19 to terminate a consent decree after the passage of a 

20 specified period of time, the Department of Justice 

21 shall— 

22 (A) notify Members of Congress and com23 mittees of Congress described in subsection (b); 

24 and 
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1 (B) provide to such Members of Congress 

2 and committees information regarding the im3 pact of the proposed termination on the market 

4 for licensing the public performance of musical 

5 works should the motion be granted. 

6 (2) NOTIFICATION.— 

7 (A) IN GENERAL.—During the notification 

8 described in paragraph (1), and not later than 

9 a reasonable time before the date on which the 

10 Department of Justice files with the appropriate 

11 district court of the United States a motion to 

12 terminate a consent decree between the United 

13 States and a performing rights society, the De14 partment of Justice should submit to the chair15 men and ranking members of the Committee on 

16 the Judiciary of the Senate and the Committee 

17 on the Judiciary of the House of Representatives 

18 a written notification of the intent of the De19 partment of Justice to file the motion. 

20 (B) CONTENTS.—The notification provided 

21 in subparagraph (A) shall include a written re22 port to the chairmen and ranking members of the 

23 Committee on the Judiciary of Senate and the 

24 Committee on the Judiciary of the House of Rep25 resentatives setting forth— 
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1 (i) an explanation of the process used 

2 by the Department of Justice to review the 

3 consent decree; 

4 (ii) a summary of the public comments 

5 received by the Department of Justice dur6 ing the review by the Department; and 

7 (iii) other information provided to 

8 Congress under paragraph (1)(B). 

9 (d) SCOPE.—This section applies only to a consent de10 cree between the United States and a performing rights soci11 ety. 

12 SEC. 106. EFFECTIVE DATE. 

13 This title, and the amendments made by this title, 

14 shall take effect on the date of enactment of this Act. 

15 TITLE II—CLASSICS 

16 PROTECTION AND ACCESS 

17 SEC. 201. SHORT TITLE. 

18 This title may be cited as the ‘‘Classics Protection and 

19 Access Act’’. 

20 SEC. 202. UNAUTHORIZED USE OF PRE-1972 SOUND RE21 CORDINGS. 

22 (a) PREEMPTION OF STATE LAW RIGHTS; PROTEC23 TION FOR UNAUTHORIZED USE.—Title 17, United States 

24 Code, is amended— 
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1 (1) in section 301, by striking subsection (c) and 

2 inserting the following: 

3 ‘‘(c) Notwithstanding the provisions of section 303, 

4 and in accordance with chapter 14, no sound recording 

5 fixed before February 15, 1972, shall be subject to copyright 

6 under this title. With respect to sound recordings fixed be7 fore February 15, 1972, the preemptive provisions of sub8 section (a) shall apply to activities that are commenced on 

9 and after the date of enactment of the Classics Protection 

10 and Access Act. Nothing in this subsection may be construed 

11 to affirm or negate the preemption of rights and remedies 

12 pertaining to any cause of action arising from the non13 subscription broadcast transmission of sound recordings 

14 under the common law or statutes of any State for activities 

15 that do not qualify as covered activities under chapter 14 

16 undertaken during the period between the date of enactment 

17 of the Classics Protection and Access Act and the date on 

18 which the term of prohibition on unauthorized acts under 

19 section 1401(a)(2) expires for such sound recordings. Any 

20 potential preemption of rights and remedies related to such 

21 activities undertaken during that period shall apply in all 

22 respects as it did the day before the date of enactment of 

23 the Classics Protection and Access Act.’’; and 

24 (2) by adding at the end the following: 
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1 ‘‘CHAPTER 14—UNAUTHORIZED USE OF 

2 PRE-1972 SOUND RECORDINGS 

‘‘Sec. 

‘‘1401. Unauthorized use of pre-1972 sound recordings. 

3 ‘‘§ 1401. Unauthorized use of pre-1972 sound record4 ings 

5 ‘‘(a) IN GENERAL.— 

6 ‘‘(1) UNAUTHORIZED ACTS.—Anyone who, on or 

7 before the last day of the applicable transition period 

8 under paragraph (2), and without the consent of the 

9 rights owner, engages in covered activity with respect 

10 to a sound recording fixed before February 15, 1972, 

11 shall be subject to the remedies provided in sections 

12 502 through 505 and 1203 to the same extent as an 

13 infringer of copyright or a person that engages in un14 authorized activity under chapter 12. 

15 ‘‘(2) TERM OF PROHIBITION.— 

16 ‘‘(A) IN GENERAL.—The prohibition under 

17 paragraph (1)— 

18 ‘‘(i) subject to clause (ii), shall apply 

19 to a sound recording described in that para20 graph— 

21 ‘‘(I) through December 31 of the 

22 year that is 95 years after the year of 

23 first publication; and 
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1 ‘‘(II) for a further transition pe2 riod as prescribed under subparagraph 

3 (B) of this paragraph; and 

4 ‘‘(ii) shall not apply to any sound re5 cording after February 15, 2067. 

6 ‘‘(B) TRANSITION PERIODS.— 

7 ‘‘(i) PRE-1923 RECORDINGS.—In the 

8 case of a sound recording first published be9 fore January 1, 1923, the transition period 

10 described in subparagraph (A)(i)(II) shall 

11 end on December 31 of the year that is 3 

12 years after the date of enactment of this sec13 tion. 

14 ‘‘(ii) 1923–1946 RECORDINGS.—In the 

15 case of a sound recording first published 

16 during the period beginning on January 1, 

17 1923, and ending on December 31, 1946, the 

18 transition period described in subparagraph 

19 (A)(i)(II) shall end on the date that is 5 

20 years after the last day of the period de21 scribed in subparagraph (A)(i)(I). 

22 ‘‘(iii) 1947–1956 RECORDINGS.—In the 

23 case of a sound recording first published 

24 during the period beginning on January 1, 

25 1947, and ending on December 31, 1956, the 
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1 transition period described in subparagraph 

2 (A)(i)(II) shall end on the date that is 15 

3 years after the last day of the period de4 scribed in subparagraph (A)(i)(I). 

5 ‘‘(iv) POST-1956 RECORDINGS.—In the 

6 case of a sound recording fixed before Feb7 ruary 15, 1972, that is not described in 

8 clause (i), (ii), or (iii), the transition period 

9 described in subparagraph (A)(i)(II) shall 

10 end on February 15, 2067. 

11 ‘‘(3) RULE OF CONSTRUCTION.—For the purposes 

12 of this subsection, the term ‘anyone’ includes any 

13 State, any instrumentality of a State, and any officer 

14 or employee of a State or instrumentality of a State 

15 acting in the official capacity of the officer or em16 ployee, as applicable. 

17 ‘‘(b) CERTAIN AUTHORIZED TRANSMISSIONS AND RE18 PRODUCTIONS.—A public performance by means of a dig19 ital audio transmission of a sound recording fixed before 

20 February 15, 1972, or a reproduction in an ephemeral pho21 norecord or copy of a sound recording fixed before February 

22 15, 1972, shall, for purposes of subsection (a), be considered 

23 to be authorized and made with the consent of the rights 

24 owner if— 
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1 ‘‘(1) the transmission or reproduction would sat2 isfy the requirements for statutory licensing under 

3 section 112(e)(1) or section 114(d)(2), or would be ex4 empt under section 114(d)(1), as the case may be, if 

5 the sound recording were fixed on or after February 

6 15, 1972; and 

7 ‘‘(2) the transmitting entity pays the statutory 

8 royalty for the transmission or reproduction pursuant 

9 to the rates and terms adopted under sections 112(e) 

10 and 114(f), and complies with other obligations, in 

11 the same manner as required by regulations adopted 

12 by the Copyright Royalty Judges under sections 

13 112(e) and 114(f) for sound recordings that are fixed 

14 on or after February 15, 1972, except in the case of 

15 a transmission that would be exempt under section 

16 114(d)(1). 

17 ‘‘(c) CERTAIN NONCOMMERCIAL USES OF SOUND RE18 CORDINGS THAT ARE NOT BEING COMMERCIALLY EX19 PLOITED.— 

20 ‘‘(1) IN GENERAL.—Noncommercial use of a 

21 sound recording fixed before February 15, 1972, that 

22 is not being commercially exploited by or under the 

23 authority of the rights owner shall not violate sub24 section (a) if— 
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1 ‘‘(A) the person engaging in the non2 commercial use, in order to determine whether 

3 the sound recording is being commercially ex4 ploited by or under the authority of the rights 

5 owner, makes a good faith, reasonable search for, 

6 but does not find, the sound recording— 

7 ‘‘(i) in the records of schedules filed in 

8 the Copyright Office as described in sub9 section (f)(5)(A); and 

10 ‘‘(ii) on services offering a comprehen11 sive set of sound recordings for sale or 

12 streaming; 

13 ‘‘(B) the person engaging in the non14 commercial use files a notice identifying the 

15 sound recording and the nature of the use in the 

16 Copyright Office in accordance with the regula17 tions issued under paragraph (3)(B); and 

18 ‘‘(C) during the 90-day period beginning on 

19 the date on which the notice described in sub20 paragraph (B) is indexed into the public records 

21 of the Copyright Office, the rights owner of the 

22 sound recording does not, in its discretion, opt 

23 out of the noncommercial use by filing notice 

24 thereof in the Copyright Office in accordance 

25 with the regulations issued under paragraph (5). 
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1 ‘‘(2) RULES OF CONSTRUCTION.—For purposes of 

2 this subsection— 

3 ‘‘(A) merely recovering costs of production 

4 and distribution of a sound recording resulting 

5 from a use otherwise permitted under this sub6 section does not itself necessarily constitute a 

7 commercial use of the sound recording; 

8 ‘‘(B) the fact that a person engaging in the 

9 use of a sound recording also engages in commer10 cial activities does not itself necessarily render 

11 the use commercial; and 

12 ‘‘(C) the fact that a person files notice of a 

13 noncommercial use of a sound recording in ac14 cordance with the regulations issued under para15 graph (3)(B) does not itself affect any limitation 

16 on the exclusive rights of a copyright owner de17 scribed in section 107, 108, 109, 110, or 112(f) 

18 as applied to a claim under subsection (a) of this 

19 section pursuant to subsection (f)(1)(A) of this 

20 section. 

21 ‘‘(3) NOTICE OF COVERED ACTIVITY.—Not later 

22 than 180 days after the date of enactment of this sec23 tion, the Register of Copyrights shall issue regulations 

24 that— 
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1 ‘‘(A) provide specific, reasonable steps that, 

2 if taken by a filer, are sufficient to constitute a 

3 good faith, reasonable search under paragraph 

4 (1)(A) to determine whether a recording is being 

5 commercially exploited, including the services 

6 that satisfy the good faith, reasonable search re7 quirement under paragraph (1)(A) for purposes 

8 of the safe harbor described in paragraph (4)(A); 

9 and 

10 ‘‘(B) establish the form, content, and proce11 dures for the filing of notices under paragraph 

12 (1)(B). 

13 ‘‘(4) SAFE HARBOR.— 

14 ‘‘(A) IN GENERAL.—A person engaging in a 

15 noncommercial use of a sound recording other16 wise permitted under this subsection who estab17 lishes that the person made a good faith, reason18 able search under paragraph (1)(A) without 

19 finding commercial exploitation of the sound re20 cording by or under the authority of the rights 

21 owner shall not be found to be in violation of 

22 subsection (a). 

23 ‘‘(B) STEPS SUFFICIENT BUT NOT NEC24 ESSARY.—Taking the specific, reasonable steps 

25 identified by the Register of Copyrights in the 
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1 regulations issued under paragraph (3)(A) shall 

2 be sufficient, but not necessary, for a filer to sat3 isfy the requirement to conduct a good faith, rea4 sonable search under paragraph (1)(A) for pur5 poses of subparagraph (A) of this paragraph. 

6 ‘‘(5) OPTING OUT OF COVERED ACTIVITY.— 

7 ‘‘(A) IN GENERAL.—Not later than 180 

8 days after the date of enactment of this section, 

9 the Register of Copyrights shall issue regulations 

10 establishing the form, content, and procedures for 

11 the rights owner of a sound recording that is the 

12 subject of a notice under paragraph (1)(B) to, in 

13 its discretion, file notice opting out of the covered 

14 activity described in the notice under paragraph 

15 (1)(B) during the 90-day period beginning on 

16 the date on which the notice under paragraph 

17 (1)(B) is indexed into the public records of the 

18 Copyright Office. 

19 ‘‘(B) RULE OF CONSTRUCTION.—The fact 

20 that a rights holder opts out of a noncommercial 

21 use of a sound recording by filing notice thereof 

22 in the Copyright Office in accordance with the 

23 regulations issued under subparagraph (A) does 

24 not itself enlarge or diminish any limitation on 

25 the exclusive rights of a copyright owner de-
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1 scribed in section 107, 108, 109, 110, or 112(f) 

2 as applied to a claim under subsection (a) of this 

3 section pursuant to subsection (f)(1)(A) of this 

4 section. 

5 ‘‘(6) CIVIL PENALTIES FOR CERTAIN ACTS.— 

6 ‘‘(A) FILING OF NOTICES OF NONCOMMER7 CIAL USE.—Any person who willfully engages in 

8 a pattern or practice of filing a notice of non9 commercial use of a sound recording as described 

10 in paragraph (1)(B) fraudulently describing the 

11 use proposed, or knowing that the use proposed 

12 is not permitted under this subsection, shall be 

13 assessed a civil penalty in an amount that is not 

14 less than $250, and not more than $1000, for 

15 each such notice, in addition to any other rem16 edies that may be available under this title based 

17 on the actual use made. 

18 ‘‘(B) FILING OF OPT-OUT NOTICES.— 

19 ‘‘(i) IN GENERAL.—Any person who 

20 files an opt-out notice as described in para21 graph (1)(C), knowing that the person is 

22 not the rights owner or authorized to act on 

23 behalf of the rights owner of the sound re24 cording to which the notice pertains, shall 

25 be assessed a civil penalty in an amount 
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1 not less than $250, and not more than 

2 $1,000, for each such notice. 

3 ‘‘(ii) PATTERN OR PRACTICE.—Any 

4 person who engages in a pattern or practice 

5 of making filings as described in clause (i) 

6 shall be assessed a civil penalty in an 

7 amount not less than $10,000 for each such 

8 filing. 

9 ‘‘(C) DEFINITION.—For purposes of this 

10 paragraph, the term ‘knowing’— 

11 ‘‘(i) does not require specific intent to 

12 defraud; and 

13 ‘‘(ii) with respect to information about 

14 ownership of the sound recording in ques15 tion, means that the person— 

16 ‘‘(I) has actual knowledge of the 

17 information; 

18 ‘‘(II) acts in deliberate ignorance 

19 of the truth or falsity of the informa20 tion; or 

21 ‘‘(III) acts in grossly negligent 

22 disregard of the truth or falsity of the 

23 information. 
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1 ‘‘(d) PAYMENT OF ROYALTIES FOR TRANSMISSIONS OF

2 PERFORMANCES BY DIRECT LICENSING OF STATUTORY

3 SERVICES.— 

4 ‘‘(1) IN GENERAL.—A public performance by 

5 means of a digital audio transmission of a sound re6 cording fixed before February 15, 1972, shall, for pur7 poses of subsection (a), be considered to be authorized 

8 and made with the consent of the rights owner if the 

9 transmission is made pursuant to a license agreement 

10 voluntarily negotiated at any time between the rights 

11 owner and the entity performing the sound recording. 

12 ‘‘(2) PAYMENT OF ROYALTIES TO NONPROFIT

13 COLLECTIVE UNDER CERTAIN LICENSE AGREE14 MENTS.— 

15 ‘‘(A) LICENSES ENTERED INTO ON OR

16 AFTER DATE OF ENACTMENT.—To the extent that 

17 a license agreement described in paragraph (1) 

18 entered into on or after the date of enactment of 

19 this section extends to a public performance by 

20 means of a digital audio transmission of a sound 

21 recording fixed before February 15, 1972, that 

22 meets the conditions of subsection (b)— 

23 ‘‘(i) the licensee shall, with respect to 

24 such transmission, pay to the collective des25 ignated to distribute receipts from the li-
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1 censing of transmissions in accordance with 

2 section 114(f), 50 percent of the performance 

3 royalties for that transmission due under 

4 the license; and 

5 ‘‘(ii) the royalties paid under clause (i) 

6 shall be fully credited as payments due 

7 under the license. 

8 ‘‘(B) CERTAIN AGREEMENTS ENTERED INTO

9 BEFORE ENACTMENT.—To the extent that a li10 cense agreement described in paragraph (1), en11 tered into during the period beginning on Janu12 ary 1 of the year in which this section is enacted 

13 and ending on the day before the date of enact14 ment of this section, or a settlement agreement 

15 with a preexisting satellite digital audio radio 

16 service (as defined in section 114(j)) entered into 

17 during the period beginning on January 1, 2015, 

18 and ending on the day before the date of enact19 ment of this section, extends to a public perform20 ance by means of a digital audio transmission of 

21 a sound recording fixed before February 15, 

22 1972, that meets the conditions of subsection 

23 (b)— 

24 ‘‘(i) the rights owner shall, with respect 

25 to such transmission, pay to the collective 
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1 designated to distribute receipts from the li2 censing of transmissions in accordance with 

3 section 114(f) an amount that is equal to 

4 the difference between— 

5 ‘‘(I) 50 percent of the difference 

6 between— 

7 ‘‘(aa) the rights owner’s total 

8 gross performance royalty fee re9 ceipts or settlement monies re10 ceived for all such transmissions 

11 covered under the license or settle12 ment agreement, as applicable; 

13 and 

14 ‘‘(bb) the rights owner’s total 

15 payments for outside legal ex16 penses, including any payments of 

17 third-party claims, that are di18 rectly attributable to the license or 

19 settlement agreement, as applica20 ble; and 

21 ‘‘(II) the amount of any royalty 

22 receipts or settlement monies under the 

23 agreement that are distributed by the 

24 rights owner to featured and nonfea-
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1 tured artists before the date of enact2 ment of this section; and 

3 ‘‘(ii) the royalties paid under clause (i) 

4 shall be fully credited as payments due 

5 under the license or settlement agreement, 

6 as applicable. 

7 ‘‘(3) DISTRIBUTION OF ROYALTIES AND SETTLE8 MENT MONIES BY COLLECTIVE.—The collective de9 scribed in paragraph (2) shall, in accordance with 

10 subparagraphs (B) through (D) of section 114(g)(2), 

11 and paragraphs (5) and (6) of section 114(g), dis12 tribute the royalties or settlement monies received 

13 under paragraph (2) under a license or settlement de14 scribed in paragraph (2), which shall be the only pay15 ments to which featured and nonfeatured artists are 

16 entitled by virtue of the transmissions described in 

17 paragraph (2), except for settlement monies described 

18 in paragraph (2) that are distributed by the rights 

19 owner to featured and nonfeatured artists before the 

20 date of enactment of this section. 

21 ‘‘(4) PAYMENT OF ROYALTIES UNDER LICENSE

22 AGREEMENTS ENTERED BEFORE ENACTMENT OR NOT

23 OTHERWISE DESCRIBED IN PARAGRAPH (2).— 

24 ‘‘(A) IN GENERAL.—To the extent that a li25 cense agreement described in paragraph (1) en-
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1 tered into before the date of enactment of this 

2 section, or any other license agreement not as de3 scribed in paragraph (2), extends to a public 

4 performance by means of a digital audio trans5 mission of a sound recording fixed before Feb6 ruary 15, 1972, that meets the conditions of sub7 section (b), the payments made by the licensee 

8 pursuant to the license shall be made in accord9 ance with the agreement. 

10 ‘‘(B) ADDITIONAL PAYMENTS NOT RE11 QUIRED.—To the extent that a licensee has made, 

12 or will make in the future, payments pursuant 

13 to a license as described in subparagraph (A), 

14 the provisions of paragraphs (2) and (3) shall 

15 not require any additional payments from, or 

16 additional financial obligations on the part of, 

17 the licensee. 

18 ‘‘(C) RULE OF CONSTRUCTION.—Nothing in 

19 this subsection may be construed to prohibit the 

20 collective designated to distribute receipts from 

21 the licensing of transmissions in accordance with 

22 section 114(f) from administering royalty pay23 ments under any license not described in para24 graph (2). 
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1 ‘‘(e) PREEMPTION WITH RESPECT TO CERTAIN PAST

2 ACTS.— 

3 ‘‘(1) IN GENERAL.—This section preempts any 

4 claim of common law copyright or equivalent right 

5 under the laws of any State arising from a digital 

6 audio transmission or reproduction that is made be7 fore the date of enactment of this section of a sound 

8 recording fixed before February 15, 1972, if— 

9 ‘‘(A) the digital audio transmission would 

10 have satisfied the requirements for statutory li11 censing under section 114(d)(2) or been exempt 

12 under section 114(d)(1), or the reproduction 

13 would have satisfied the requirements of section 

14 112(e)(1), as the case may be, if the sound re15 cording were fixed on or after February 15, 

16 1972; and 

17 ‘‘(B) either— 

18 ‘‘(i) except in the case of a trans19 mission that would have been exempt under 

20 section 114(d)(1), not later than 270 days 

21 after the date of enactment of this section, 

22 the transmitting entity pays statutory roy23 alties and provides notice of the use of the 

24 relevant sound recordings in the same man25 ner as required by regulations adopted by 
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1 the Copyright Royalty Judges for sound re2 cordings that are fixed on or after February 

3 15, 1972, for all the digital audio trans4 missions and reproductions satisfying the 

5 requirements for statutory licensing under 

6 sections 112(e)(1) and 114(d)(2) during the 

7 3 years before that date of enactment; or 

8 ‘‘(ii) an agreement voluntarily nego9 tiated between the rights owner and the en10 tity performing the sound recording (in11 cluding a litigation settlement agreement 

12 entered into before the date of enactment of 

13 this section) authorizes or waives liability 

14 for any such transmission or reproduction 

15 and the transmitting entity has paid for 

16 and reported such digital audio trans17 mission under that agreement. 

18 ‘‘(2) RULE OF CONSTRUCTION FOR COMMON LAW

19 COPYRIGHT.—For purposes of paragraph (1), a claim 

20 of common law copyright or equivalent right under 

21 the laws of any State includes a claim that character22 izes conduct subject to that paragraph as an unlawful 

23 distribution, act of record piracy, or similar viola24 tion. 
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1 ‘‘(3) RULE OF CONSTRUCTION FOR PUBLIC PER2 FORMANCE RIGHTS.—Nothing in this section may be 

3 construed to recognize or negate the existence of public 

4 performance rights in sound recordings under the 

5 laws of any State. 

6 ‘‘(f) LIMITATIONS ON REMEDIES.— 

7 ‘‘(1) FAIR USE; USES BY LIBRARIES, ARCHIVES, 

8 AND EDUCATIONAL INSTITUTIONS.— 

9 ‘‘(A) IN GENERAL.—The limitations on the 

10 exclusive rights of a copyright owner described in 

11 sections 107, 108, 109, 110, and 112(f) shall 

12 apply to a claim under subsection (a) with re13 spect to a sound recording fixed before February 

14 15, 1972. 

15 ‘‘(B) RULE OF CONSTRUCTION FOR SECTION

16 108(H).—With respect to the application of sec17 tion 108(h) to a claim under subsection (a) with 

18 respect to a sound recording fixed before Feb19 ruary 15, 1972, the phrase ‘during the last 20 

20 years of any term of copyright of a published 

21 work’ in such section 108(h) shall be construed 

22 to mean at any time after the date of enactment 

23 of this section. 

24 ‘‘(2) ACTIONS.—The limitations on actions de25 scribed in section 507 shall apply to a claim under 
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1 subsection (a) with respect to a sound recording fixed 

2 before February 15, 1972. 

3 ‘‘(3) MATERIAL ONLINE.—Section 512 shall 

4 apply to a claim under subsection (a) with respect to 

5 a sound recording fixed before February 15, 1972. 

6 ‘‘(4) PRINCIPLES OF EQUITY.—Principles of eq7 uity apply to remedies for a violation of this section 

8 to the same extent as such principles apply to rem9 edies for infringement of copyright. 

10 ‘‘(5) FILING REQUIREMENT FOR STATUTORY

11 DAMAGES AND ATTORNEYS’ FEES.— 

12 ‘‘(A) FILING OF INFORMATION ON SOUND

13 RECORDINGS.— 

14 ‘‘(i) FILING REQUIREMENT.—Except in 

15 the case of a transmitting entity that has 

16 filed contact information for that transmit17 ting entity under subparagraph (B), in any 

18 action under this section, an award of stat19 utory damages or of attorneys’ fees under 

20 section 504 or 505 may be made with re21 spect to an unauthorized use of a sound re22 cording under subsection (a) only if— 

23 ‘‘(I) the rights owner has filed 

24 with the Copyright Office a schedule 

25 that specifies the title, artist, and 
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1 rights owner of the sound recording 

2 and contains such other information, 

3 as practicable, as the Register of Copy4 rights prescribes by regulation; and 

5 ‘‘(II) the use occurs after the end 

6 of the 90-day period beginning on the 

7 date on which the information de8 scribed in subclause (I) is indexed into 

9 the public records of the Copyright Of10 fice. 

11 ‘‘(ii) REGULATIONS.—Not later than 

12 180 days after the date of enactment of this 

13 section, the Register of Copyrights shall 

14 issue regulations that— 

15 ‘‘(I) establish the form, content, 

16 and procedures for the filing of sched17 ules under clause (i); 

18 ‘‘(II) provide that a person may 

19 request that the person receive timely 

20 notification of a filing described in 

21 subclause (I); and 

22 ‘‘(III) set forth the manner in 

23 which a person may make a request 

24 under subclause (II). 
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1 ‘‘(B) FILING OF CONTACT INFORMATION FOR

2 TRANSMITTING ENTITIES.— 

3 ‘‘(i) FILING REQUIREMENT.—Not later 

4 than 30 days after the date of enactment of 

5 this section, the Register of Copyrights shall 

6 issue regulations establishing the form, con7 tent, and procedures for the filing of contact 

8 information by any entity that, as of the 

9 date of enactment of this section, performs 

10 a sound recording fixed before February 15, 

11 1972, by means of a digital audio trans12 mission. 

13 ‘‘(ii) TIME LIMIT ON FILINGS.—The 

14 Register of Copyrights may accept filings 

15 under clause (i) only until the 180th day 

16 after the date of enactment of this section. 

17 ‘‘(iii) LIMITATION ON STATUTORY DAM18 AGES AND ATTORNEYS’ FEES.— 

19 ‘‘(I) LIMITATION.—An award of 

20 statutory damages or of attorneys’ fees 

21 under section 504 or 505 may not be 

22 made against an entity that has filed 

23 contact information for that entity 

24 under clause (i) with respect to an un25 authorized use by that entity of a 
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1 sound recording under subsection (a) if 

2 the use occurs before the end of the 90- 

3 day period beginning on the date on 

4 which the entity receives a notice 

5 that— 

6 ‘‘(aa) is sent by or on behalf 

7 of the rights owner of the sound 

8 recording; 

9 ‘‘(bb) states that the entity is 

10 not legally authorized to use that 

11 sound recording under subsection 

12 (a); and 

13 ‘‘(cc) identifies the sound re14 cording in a schedule conforming 

15 to the requirements prescribed by 

16 the regulations issued under sub17 paragraph (A)(ii). 

18 ‘‘(II) UNDELIVERABLE NO19 TICES.—In any case in which a notice 

20 under subclause (I) is sent to an entity 

21 by mail or courier service and the no22 tice is returned to the sender because 

23 the entity either is no longer located at 

24 the address provided in the contact in25 formation filed under clause (i) or has 
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1 refused to accept delivery, or the notice 

2 is sent by electronic mail and is un3 deliverable, the 90-day period under 

4 subclause (I) shall begin on the date of 

5 the attempted delivery. 

6 ‘‘(C) SECTION 412.—Section 412 shall not 

7 limit an award of statutory damages under sec8 tion 504(c) or attorneys’ fees under section 505 

9 with respect to a covered activity in violation of 

10 subsection (a). 

11 ‘‘(6) APPLICABILITY OF OTHER PROVISIONS.— 

12 ‘‘(A) IN GENERAL.—Subject to subpara13 graph (B), no provision of this title shall apply 

14 to or limit the remedies available under this sec15 tion except as otherwise provided in this section. 

16 ‘‘(B) APPLICABILITY OF DEFINITIONS.—Any 

17 term used in this section that is defined in sec18 tion 101 shall have the meaning given that term 

19 in section 101. 

20 ‘‘(g) APPLICATION OF SECTION 230 SAFE HARBOR.— 

21 For purposes of section 230 of the Communications Act of 

22 1934 (47 U.S.C. 230), subsection (a) shall be considered to 

23 be a ‘law pertaining to intellectual property’ under sub24 section (e)(2) of such section 230. 

25 ‘‘(h) APPLICATION TO RIGHTS OWNERS.— 
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1 ‘‘(1) TRANSFERS.—With respect to a rights 

2 owner described in subsection (l)(2)(B)— 

3 ‘‘(A) subsections (d) and (e) of section 201 

4 and section 204 shall apply to a transfer de5 scribed in subsection (l)(2)(B) to the same extent 

6 as with respect to a transfer of copyright owner7 ship; and 

8 ‘‘(B) notwithstanding section 411, that 

9 rights owner may institute an action with re10 spect to a violation of this section to the same ex11 tent as the owner of an exclusive right under a 

12 copyright may institute an action under section 

13 501(b). 

14 ‘‘(2) APPLICATION OF OTHER PROVISIONS.—The 

15 following provisions shall apply to a rights owner 

16 under this section to the same extent as any copyright 

17 owner: 

18 ‘‘(A) Section 112(e)(2). 

19 ‘‘(B) Section 112(e)(7). 

20 ‘‘(C) Section 114(e). 

21 ‘‘(D) Section 114(h). 

22 ‘‘(i) EPHEMERAL RECORDINGS.—An authorized repro23 duction made under this section shall be subject to section 

24 112(g) to the same extent as a reproduction of a sound re25 cording fixed on or after February 15, 1972. 
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1 ‘‘(j) RULE OF CONSTRUCTION.—A rights owner of, or 

2 featured recording artist who performs on, a sound record3 ing under this chapter shall be deemed to be an interested 

4 copyright party, as defined in section 1001, to the same 

5 extent as a copyright owner or featured recording artist 

6 under chapter 10. 

7 ‘‘(k) TREATMENT OF STATES AND STATE INSTRUMEN8 TALITIES, OFFICERS, AND EMPLOYEES.—Any State, and 

9 any instrumentality, officer, or employee described in sub10 section (a)(3), shall be subject to the provisions of this sec11 tion in the same manner and to the same extent as any 

12 nongovernmental entity. 

13 ‘‘(l) DEFINITIONS.—In this section: 

14 ‘‘(1) COVERED ACTIVITY.—The term ‘covered ac15 tivity’ means any activity that the copyright owner 

16 of a sound recording would have the exclusive right 

17 to do or authorize under section 106 or 602, or that 

18 would violate section 1201 or 1202, if the sound re19 cording were fixed on or after February 15, 1972. 

20 ‘‘(2) RIGHTS OWNER.—The term ‘rights owner’ 

21 means— 

22 ‘‘(A) the person that has the exclusive right 

23 to reproduce a sound recording under the laws of 

24 any State, as of the day before the date of enact25 ment of this section; or 
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1 ‘‘(B) any person to which a right to enforce 

2 a violation of this section may be transferred, in 

3 whole or in part, after the date of enactment of 

4 this section, under— 

5 ‘‘(i) subsections (d) and (e) of section 

6 201; and 

7 ‘‘(ii) section 204.’’. 

8 (b) CONFORMING AMENDMENT.—The table of chapters 

9 for title 17, United States Code, is amended by adding at 

10 the end the following: 

‘‘14. Unauthorized use of pre-1972 sound recordings ................................. 1401’’. 

11 TITLE III—ALLOCATION FOR 

12 MUSIC PRODUCERS 

13 SEC. 301. SHORT TITLE. 

14 This title may be cited as the ‘‘Allocation for Music 

15 Producers Act’’ or the ‘‘AMP Act’’. 

16 SEC. 302. PAYMENT OF STATUTORY PERFORMANCE ROYAL17 TIES. 

18 (a) LETTER OF DIRECTION.—Section 114(g) of title 

19 17, United States Code, is amended by adding at the end 

20 the following: 

21 ‘‘(5) LETTER OF DIRECTION.— 

22 ‘‘(A) IN GENERAL.—A nonprofit collective 

23 designated by the Copyright Royalty Judges to 

24 distribute receipts from the licensing of trans25 missions in accordance with subsection (f) shall 
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1 adopt and reasonably implement a policy that 

2 provides, in circumstances determined by the col3 lective to be appropriate, for acceptance of in4 structions from a payee identified under sub5 paragraph (A) or (D) of paragraph (2) to dis6 tribute, to a producer, mixer, or sound engineer 

7 who was part of the creative process that created 

8 a sound recording, a portion of the payments to 

9 which the payee would otherwise be entitled from 

10 the licensing of transmissions of the sound re11 cording. In this section, such instructions shall 

12 be referred to as a ‘letter of direction’. 

13 ‘‘(B) ACCEPTANCE OF LETTER.—To the ex14 tent that a collective described in subparagraph 

15 (A) accepts a letter of direction under that sub16 paragraph, the person entitled to payment pur17 suant to the letter of direction shall, during the 

18 period in which the letter of direction is in effect 

19 and carried out by the collective, be treated for 

20 all purposes as the owner of the right to receive 

21 such payment, and the payee providing the letter 

22 of direction to the collective shall be treated as 

23 having no interest in such payment. 

24 ‘‘(C) AUTHORITY OF COLLECTIVE.—This 

25 paragraph shall not be construed in such a man-
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1 ner so that the collective is not authorized to ac2 cept or act upon payment instructions in cir3 cumstances other than those to which this para4 graph applies.’’. 

5 (b) ADDITIONAL PROVISIONS FOR RECORDINGS FIXED

6 BEFORE NOVEMBER 1, 1995.—Section 114(g) of title 17, 

7 United States Code, as amended by subsection (a), is further 

8 amended by adding at the end the following: 

9 ‘‘(6) SOUND RECORDINGS FIXED BEFORE NOVEM10 BER 1, 1995.— 

11 ‘‘(A) PAYMENT ABSENT LETTER OF DIREC12 TION.—A nonprofit collective designated by the 

13 Copyright Royalty Judges to distribute receipts 

14 from the licensing of transmissions in accordance 

15 with subsection (f) (in this paragraph referred to 

16 as the ‘collective’) shall adopt and reasonably 

17 implement a policy that provides, in cir18 cumstances determined by the collective to be ap19 propriate, for the deduction of 2 percent of all 

20 the receipts that are collected from the licensing 

21 of transmissions of a sound recording fixed be22 fore November 1, 1995, but which is withdrawn 

23 from the amount otherwise payable under para24 graph (2)(D) to the recording artist or artists 

25 featured on the sound recording (or the persons 
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1 conveying rights in the artists’ performance in 

2 the sound recording), and the distribution of 

3 such amount to 1 or more persons described in 

4 subparagraph (B) of this paragraph, after deduc5 tion of costs described in paragraph (3) or (4), 

6 as applicable, if each of the following require7 ments is met: 

8 ‘‘(i) CERTIFICATION OF ATTEMPT TO

9 OBTAIN A LETTER OF DIRECTION.—The per10 son described in subparagraph (B) who is 

11 to receive the distribution has certified to 

12 the collective, under penalty of perjury, 

13 that— 

14 ‘‘(I) for a period of not less than 

15 120 days, that person made reasonable 

16 efforts to contact the artist payee for 

17 such sound recording to request and 

18 obtain a letter of direction instructing 

19 the collective to pay to that person a 

20 portion of the royalties payable to the 

21 featured recording artist or artists; and 

22 ‘‘(II) during the period beginning 

23 on the date on which that person began 

24 the reasonable efforts described in sub25 clause (I) and ending on the date of 
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1 that person’s certification to the collec2 tive, the artist payee did not affirm or 

3 deny in writing the request for a letter 

4 of direction. 

5 ‘‘(ii) COLLECTIVE ATTEMPT TO CON6 TACT ARTIST.—After receipt of the certifi7 cation described in clause (i) and for a pe8 riod of not less than 120 days before the 

9 first distribution by the collective to the per10 son described in subparagraph (B), the col11 lective attempts, in a reasonable manner as 

12 determined by the collective, to notify the 

13 artist payee of the certification made by the 

14 person described in subparagraph (B). 

15 ‘‘(iii) NO OBJECTION RECEIVED.—The 

16 artist payee does not, as of the date that 

17 was 10 business days before the date on 

18 which the first distribution is made, submit 

19 to the collective in writing an objection to 

20 the distribution. 

21 ‘‘(B) ELIGIBILITY FOR PAYMENT.—A person 

22 shall be eligible for payment under subparagraph 

23 (A) if the person— 

24 ‘‘(i) is a producer, mixer, or sound en25 gineer of the sound recording; 
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1 ‘‘(ii) has entered into a written con2 tract with a record company involved in the 

3 creation or lawful exploitation of the sound 

4 recording, or with the recording artist or 

5 artists featured on the sound recording (or 

6 the persons conveying rights in the artists’ 

7 performance in the sound recording), under 

8 which the person seeking payment is enti9 tled to participate in royalty payments that 

10 are based on the exploitation of the sound 

11 recording and are payable from royalties 

12 otherwise payable to the recording artist or 

13 artists featured on the sound recording (or 

14 the persons conveying rights in the artists’ 

15 performance in the sound recording); 

16 ‘‘(iii) made a creative contribution to 

17 the creation of the sound recording; and 

18 ‘‘(iv) submits to the collective— 

19 ‘‘(I) a written certification stat20 ing, under penalty of perjury, that the 

21 person meets the requirements in 

22 clauses (i) through (iii); and 

23 ‘‘(II) a true copy of the contract 

24 described in clause (ii). 
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1 ‘‘(C) MULTIPLE CERTIFICATIONS.—Subject 

2 to subparagraph (D), in a case in which more 

3 than 1 person described in subparagraph (B) has 

4 met the requirements for a distribution under 

5 subparagraph (A) with respect to a sound re6 cording as of the date that is 10 business days 

7 before the date on which the distribution is 

8 made, the collective shall divide the 2 percent 

9 distribution equally among all such persons. 

10 ‘‘(D) OBJECTION TO PAYMENT.—Not later 

11 than 10 business days after the date on which 

12 the collective receives from the artist payee a 

13 written objection to a distribution made pursu14 ant to subparagraph (A), the collective shall 

15 cease making any further payment relating to 

16 such distribution. In any case in which the col17 lective has made 1 or more distributions pursu18 ant to subparagraph (A) to a person described in 

19 subparagraph (B) before the date that is 10 busi20 ness days after the date on which the collective 

21 receives from the artist payee an objection to 

22 such distribution, the objection shall not affect 

23 that person’s entitlement to any distribution 

24 made before the collective ceases such distribution 

25 under this subparagraph. 
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1 ‘‘(E) OWNERSHIP OF THE RIGHT TO RE2 CEIVE PAYMENTS.—To the extent that the collec3 tive determines that a distribution will be made 

4 under subparagraph (A) to a person described in 

5 subparagraph (B), such person shall, during the 

6 period covered by such distribution, be treated 

7 for all purposes as the owner of the right to re8 ceive such payments, and the artist payee to 

9 whom such payments would otherwise be payable 

10 shall be treated as having no interest in such 

11 payments. 

12 ‘‘(F) ARTIST PAYEE DEFINED.—In this 

13 paragraph, the term ‘artist payee’ means a per14 son, other than a person described in subpara15 graph (B), who owns the right to receive all or 

16 part of the receipts payable under paragraph 

17 (2)(D) with respect to a sound recording. In a 

18 case in which there are multiple artist payees 

19 with respect to a sound recording, an objection 

20 by 1 such payee shall apply only to that payee’s 

21 share of the receipts payable under paragraph 

22 (2)(D), and shall not preclude payment under 

23 subparagraph (A) from the share of an artist 

24 payee that does not so object.’’. 
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1 (c) TECHNICAL AND CONFORMING AMENDMENTS.— 

2 Section 114(g) of title 17, United States Code, as amended 

3 by subsections (a) and (b), is further amended— 

4 (1) in paragraph (2), by striking ‘‘An agent des5 ignated’’ and inserting ‘‘Except as provided for in 

6 paragraph (6), a nonprofit collective designated by 

7 the Copyright Royalty Judges’’; 

8 (2) in paragraph (3)— 

9 (A) by striking ‘‘nonprofit agent des10 ignated’’ and inserting ‘‘nonprofit collective des11 ignated by the Copyright Royalty Judges’’; 

12 (B) by striking ‘‘another designated agent’’ 

13 and inserting ‘‘another designated nonprofit col14 lective’’; and 

15 (C) by striking ‘‘agent’’ and inserting ‘‘col16 lective’’ each subsequent place it appears; 

17 (3) in paragraph (4)— 

18 (A) by striking ‘‘designated agent’’ and in19 serting ‘‘nonprofit collective’’; and 

20 (B) by striking ‘‘agent’’ and inserting ‘‘col21 lective’’ each subsequent place it appears; and 

22 (4) by adding at the end the following: 

23 ‘‘(7) PREEMPTION OF STATE PROPERTY LAWS.— 

24 The holding and distribution of receipts under section 

25 112 and this section by a nonprofit collective des-
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1 ignated by the Copyright Royalty Judges in accord2 ance with this subsection and regulations adopted by 

3 the Copyright Royalty Judges, or by an independent 

4 administrator pursuant to subparagraphs (B) and 

5 (C) of section 114(g)(2), shall supersede and preempt 

6 any State law (including common law) concerning 

7 escheatment or abandoned property, or any analogous 

8 provision, that might otherwise apply.’’. 

9 SEC. 303. EFFECTIVE DATE. 

10 (a) IN GENERAL.—Except as provided in subsection 

11 (b), this title and the amendments made by this title shall 

12 take effect on the date of enactment of this Act. 

13 (b) DELAYED EFFECTIVE DATE.—Paragraphs (5)(B) 

14 and (6)(E) of section 114(g) of title 17, United States Code, 

15 as added by section 302, shall take effect on January 1, 

16 2020. 

17 TITLE IV—SEVERABILITY 

18 SEC. 401. SEVERABILITY. 

19 If any provision of this Act or any amendment made 

20 by this Act, or any application of such provision or amend21 ment to any person or circumstance, is held to be unconsti22 tutional, the remainder of the provisions of this Act and 

23 the amendments made by this Act, and the application of 
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1 the provision or amendment to any other person or cir2 cumstance, shall not be affected. 

Attest: 

Secretary. 
115TH CONGRESS 

2D SESSION H.R. 1551 

AMENDMENT