115TH CONGRESS 

2D SESSION H. R. 5447 

AN ACT 

To modernize copyright law, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

3 ‘‘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. Rescission Of Unobligated Balances In The Department Of Justice Assets Forfeiture Fund. 

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. 

TITLE II—COMPENSATING LEGACY ARTISTS FOR THEIR SONGS, 

SERVICE, AND IMPORTANT CONTRIBUTIONS TO SOCIETY 

Sec. 201. Short title. 

Sec. 202. Unauthorized digital performance of pre-1972 sound recordings. 

Sec. 203. Effective date. 

TITLE III—ALLOCATION FOR MUSIC PRODUCERS 

Sec. 301. Short title. 

Sec. 302. Payment of statutory performance royalties. 

Sec. 303. Effective date. 

6 SEC. 2. RESCISSION OF UNOBLIGATED BALANCES IN THE 

7 DEPARTMENT OF JUSTICE ASSETS FOR8 FEITURE FUND. 

9 Of the unobligated balances available under the De10 partment of Justice Assets Forfeiture Fund, $47,000,000 

11 is hereby permanently rescinded. 
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1 TITLE I—MUSIC LICENSING 

2 MODERNIZATION 

3 SEC. 101. SHORT TITLE. 

4 This title may be cited as the ‘‘Musical Works Mod5 ernization Act’’. 

6 SEC. 102. BLANKET LICENSE FOR DIGITAL USES AND ME7 CHANICAL LICENSING COLLECTIVE. 

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

9 States Code, is amended— 

10 (1) in subsection (a)— 

11 (A) by inserting ‘‘IN GENERAL’’ after 

12 ‘‘AVAILABILITY AND SCOPE OF COMPULSORY

13 LICENSE’’; 

14 (B) by striking paragraph (1) and insert15 ing the following new paragraph: 

16 ‘‘(1) ELIGIBILITY FOR COMPULSORY LI17 CENSE.— 

18 ‘‘(A) CONDITIONS FOR COMPULSORY LI19 CENSE.—A person may by complying with the 

20 provisions of this section obtain a compulsory li21 cense to make and distribute phonorecords of a 

22 nondramatic musical work, including by means 

23 of digital phonorecord delivery. A person may 

24 obtain a compulsory license only if the primary 

25 purpose in making phonorecords of the musical 
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1 work is to distribute them to the public for pri2 vate use, including by means of digital phono3 record delivery, and— 

4 ‘‘(i) phonorecords of such musical 

5 work have previously been distributed to 

6 the public in the United States under the 

7 authority of the copyright owner of the 

8 work, including by means of digital phono9 record delivery; or 

10 ‘‘(ii) in the case of a digital music 

11 provider seeking to make and distribute 

12 digital phonorecord deliveries of a sound 

13 recording embodying a musical work under 

14 a compulsory license for which clause (i) 

15 does not apply— 

16 ‘‘(I) the first fixation of such 

17 sound recording was made under the 

18 authority of the musical work copy19 right owner, and sound recording 

20 copyright owner has the authority of 

21 the musical work copyright owner to 

22 make and distribute digital phono23 record deliveries embodying such work 

24 to the public in the United States; 

25 and 
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1 ‘‘(II) the sound recording copy2 right owner or its authorized dis3 tributor has authorized the digital 

4 music provider to make and distribute 

5 digital phonorecord deliveries of the 

6 sound recording to the public in the 

7 United States. 

8 ‘‘(B) DUPLICATION OF SOUND RECORD9 ING.—A person may not obtain a compulsory li10 cense for the use of the work in the making of 

11 phonorecords duplicating a sound recording 

12 fixed by another, including by means of digital 

13 phonorecord delivery, unless— 

14 ‘‘(i) such sound recording was fixed 

15 lawfully; and 

16 ‘‘(ii) the making of the phonorecords 

17 was authorized by the owner of the copy18 right in the sound recording or, if the 

19 sound recording was fixed before February 

20 15, 1972, by any person who fixed the 

21 sound recording pursuant to an express li22 cense from the owner of the copyright in 

23 the musical work or pursuant to a valid 

24 compulsory license for use of such work in 

25 a sound recording.’’; and 
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1 (C) in paragraph (2), by striking ‘‘A com2 pulsory license’’ and inserting ‘‘MUSICAL AR3 RANGEMENT.—A compulsory license’’; 

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

5 following: 

6 ‘‘(b) PROCEDURES TO OBTAIN A COMPULSORY LI7 CENSE.— 

8 ‘‘(1) PHONORECORDS OTHER THAN DIGITAL

9 PHONORECORD DELIVERIES.—A person who seeks to 

10 obtain a compulsory license under subsection (a) to 

11 make and distribute phonorecords of a musical work 

12 other than by means of digital phonorecord delivery 

13 shall, before or within 30 calendar days after mak14 ing, and before distributing, any phonorecord of the 

15 work, serve notice of intention to do so on the copy16 right owner. If the registration or other public 

17 records of the Copyright Office do not identify the 

18 copyright owner and include an address at which no19 tice can be served, it shall be sufficient to file the 

20 notice of intention with the Copyright Office. The 

21 notice shall comply, in form, content, and manner of 

22 service, with requirements that the Register of Copy23 rights shall prescribe by regulation. 

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

25 person who seeks to obtain a compulsory license 
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1 under subsection (a) to make and distribute 

2 phonorecords of a musical work by means of digital 

3 phonorecord delivery— 

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

5 shall, before or within 30 calendar days after 

6 first making any such digital phonorecord deliv7 ery, serve a notice of intention to do so on the 

8 copyright owner (but may not file the notice 

9 with the Copyright Office, even if the public 

10 records of the Office do not identify the owner 

11 or the owner’s address), and such notice shall 

12 comply, in form, content, and manner of serv13 ice, with requirements that the Register of 

14 Copyrights shall prescribe by regulation; or 

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

16 date, shall, before making any such digital pho17 norecord delivery, follow the procedure de18 scribed in subsection (d)(2), except as provided 

19 in paragraph (3). 

20 ‘‘(3) RECORD COMPANY INDIVIDUAL DOWNLOAD

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

22 record company may, on or after the license avail23 ability date, obtain an individual download license in 

24 accordance with the notice requirements described in 

25 paragraph (2)(A) (except for the requirement that 
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1 notice occur prior to the license availability date). A 

2 record company that obtains an individual download 

3 license as permitted under this paragraph shall pro4 vide statements of account and pay royalties as pro5 vided in subsection (c)(2)(I). 

6 ‘‘(4) FAILURE TO OBTAIN LICENSE.— 

7 ‘‘(A) PHONORECORDS OTHER THAN DIG8 ITAL PHONORECORD DELIVERIES.—In the case 

9 of phonorecords made and distributed other 

10 than by means of digital phonorecord delivery, 

11 the failure to serve or file the notice of inten12 tion required by paragraph (1) forecloses the 

13 possibility of a compulsory license under para14 graph (1). In the absence of a voluntary license, 

15 the failure to obtain a compulsory license ren16 ders the making and distribution of 

17 phonorecords actionable as acts of infringement 

18 under section 501 and subject to the remedies 

19 provided by sections 502 through 506. 

20 ‘‘(B) DIGITAL PHONORECORD DELIV21 ERIES.— 

22 ‘‘(i) In the case of phonorecords made 

23 and distributed by means of digital phono24 record delivery: 
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1 ‘‘(I) The failure to serve the no2 tice of intention required by para3 graph (2)(A) or paragraph (3), as ap4 plicable, forecloses the possibility of a 

5 compulsory license under such para6 graph. 

7 ‘‘(II) The failure to comply with 

8 paragraph (2)(B) forecloses the possi9 bility of a blanket license for a period 

10 of 3 years after the last calendar day 

11 on which the notice of license was re12 quired to be submitted to the mechan13 ical licensing collective under such 

14 paragraph. 

15 ‘‘(ii) In either case described in clause 

16 (i), in the absence of a voluntary license, 

17 the failure to obtain a compulsory license 

18 renders the making and distribution of 

19 phonorecords by means of digital phono20 record delivery actionable as acts of in21 fringement under section 501 and subject 

22 to the remedies provided by sections 502 

23 through 506.’’; 

24 (3) by amending subsection (c) to read as fol25 lows: 
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1 ‘‘(c) GENERAL CONDITIONS APPLICABLE TO COM2 PULSORY LICENSE.— 

3 ‘‘(1) ROYALTY PAYABLE UNDER COMPULSORY

4 LICENSE.— 

5 ‘‘(A) IDENTIFICATION REQUIREMENT.—To 

6 be entitled to receive royalties under a compul7 sory license obtained under subsection (b)(1) 

8 the copyright owner must be identified in the 

9 registration or other public records of the Copy10 right Office. The owner is entitled to royalties 

11 for phonorecords made and distributed after 

12 being so identified, but is not entitled to recover 

13 for any phonorecords previously made and dis14 tributed. 

15 ‘‘(B) ROYALTY FOR PHONORECORDS

16 OTHER THAN DIGITAL PHONORECORD DELIV17 ERIES.—Except as provided by subparagraph 

18 (A), for every phonorecord made and distrib19 uted under a compulsory license under sub20 section (a) other than by means of digital pho21 norecord delivery, with respect to each work 

22 embodied in the phonorecord, the royalty shall 

23 be the royalty prescribed under subparagraphs 

24 (D) through (F) and paragraph (2)(A) and 

25 chapter 8 of this title. For purposes of this sub-
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1 paragraph, a phonorecord is considered ‘distrib2 uted’ if the person exercising the compulsory li3 cense has voluntarily and permanently parted 

4 with its possession. 

5 ‘‘(C) ROYALTY FOR DIGITAL PHONO6 RECORD DELIVERIES.—For every digital phono7 record delivery of a musical work made under 

8 a compulsory license under this section, the roy9 alty payable shall be the royalty prescribed 

10 under subparagraphs (D) through (F) and 

11 paragraph (2)(A) and chapter 8 of this title. 

12 ‘‘(D) AUTHORITY TO NEGOTIATE.—Not13 withstanding any provision of the antitrust 

14 laws, any copyright owners of nondramatic mu15 sical works and any persons entitled to obtain 

16 a compulsory license under subsection (a) may 

17 negotiate and agree upon the terms and rates 

18 of royalty payments under this section and the 

19 proportionate division of fees paid among copy20 right owners, and may designate common 

21 agents on a nonexclusive basis to negotiate, 

22 agree to, pay or receive such royalty payments. 

23 Such authority to negotiate the terms and rates 

24 of royalty payments includes, but is not limited 

25 to, the authority to negotiate the year during 
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1 which the royalty rates prescribed under this 

2 subparagraph and subparagraphs (E) and (F) 

3 and paragraph (2)(A) and chapter 8 of this 

4 title shall next be determined. 

5 ‘‘(E) DETERMINATION OF REASONABLE

6 RATES AND TERMS.—Proceedings under chap7 ter 8 shall determine reasonable rates and 

8 terms of royalty payments for the activities 

9 specified by this section during the period be10 ginning with the effective date of such rates 

11 and terms, but not earlier than January 1 of 

12 the second year following the year in which the 

13 petition requesting the proceeding is filed, and 

14 ending on the effective date of successor rates 

15 and terms, or such other period as the parties 

16 may agree. Any copyright owners of nondra17 matic musical works and any persons entitled 

18 to obtain a compulsory license under subsection 

19 (a) may submit to the Copyright Royalty 

20 Judges licenses covering such activities. The 

21 parties to each proceeding shall bear their own 

22 costs. 

23 ‘‘(F) SCHEDULE OF REASONABLE

24 RATES.—The schedule of reasonable rates and 

25 terms determined by the Copyright Royalty 
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1 Judges shall, subject to paragraph (2)(A), be 

2 binding on all copyright owners of nondramatic 

3 musical works and persons entitled to obtain a 

4 compulsory license under subsection (a) during 

5 the period specified in subparagraph (E), such 

6 other period as may be determined pursuant to 

7 subparagraphs (D) and (E), or such other pe8 riod as the parties may agree. The Copyright 

9 Royalty Judges shall establish rates and terms 

10 that most clearly represent the rates and terms 

11 that would have been negotiated in the market12 place between a willing buyer and a willing sell13 er. In determining such rates and terms for dig14 ital phonorecord deliveries, the Copyright Roy15 alty Judges shall base their decision on eco16 nomic, competitive, and programming informa17 tion presented by the parties, including— 

18 ‘‘(i) whether use of the compulsory li19 censee’s service may substitute for or may 

20 promote the sales of phonorecords or oth21 erwise may interfere with or may enhance 

22 the musical work copyright owner’s other 

23 streams of revenue from its musical works; 

24 and 
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1 ‘‘(ii) the relative roles of the copyright 

2 owner and the compulsory licensee in the 

3 copyrighted work and the service made 

4 available to the public with respect to the 

5 relative creative contribution, technological 

6 contribution, capital investment, cost, and 

7 risk. 

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

9 ‘‘(A) VOLUNTARY LICENSES AND CON10 TRACTUAL ROYALTY RATES.— 

11 ‘‘(i) License agreements voluntarily 

12 negotiated at any time between one or 

13 more copyright owners of nondramatic mu14 sical works and one or more persons enti15 tled to obtain a compulsory license under 

16 subsection (a) shall be given effect in lieu 

17 of any determination by the Copyright 

18 Royalty Judges. Subject to clause (ii), the 

19 royalty rates determined pursuant to sub20 paragraphs (E) and (F) of paragraph (1) 

21 shall be given effect as to digital phono22 record deliveries in lieu of any contrary 

23 royalty rates specified in a contract pursu24 ant to which a recording artist who is the 

25 author of a nondramatic musical work 
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1 grants a license under that person’s exclu2 sive rights in the musical work under para3 graphs (1) and (3) of section 106 or com4 mits another person to grant a license in 

5 that musical work under paragraphs (1) 

6 and (3) of section 106, to a person desir7 ing to fix in a tangible medium of expres8 sion a sound recording embodying the mu9 sical work. 

10 ‘‘(ii) The second sentence of clause (i) 

11 shall not apply to— 

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

13 before June 22, 1995, and not modi14 fied thereafter for the purpose of re15 ducing the royalty rates determined 

16 pursuant to subparagraphs (E) and 

17 (F) of paragraph (1) or of increasing 

18 the number of musical works within 

19 the scope of the contract covered by 

20 the reduced rates, except if a contract 

21 entered into on or before June 22, 

22 1995, is modified thereafter for the 

23 purpose of increasing the number of 

24 musical works within the scope of the 

25 contract, any contrary royalty rates 
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1 specified in the contract shall be given 

2 effect in lieu of royalty rates deter3 mined pursuant to subparagraphs (E) 

4 and (F) of paragraph (1) for the 

5 number of musical works within the 

6 scope of the contract as of June 22, 

7 1995; and 

8 ‘‘(II) a contract entered into 

9 after the date that the sound record10 ing is fixed in a tangible medium of 

11 expression substantially in a form in12 tended for commercial release, if at 

13 the time the contract is entered into, 

14 the recording artist retains the right 

15 to grant licenses as to the musical 

16 work under paragraphs (1) and (3) of 

17 section 106. 

18 ‘‘(B) SOUND RECORDING INFORMATION.— 

19 Except as provided in section 1002(e) of this 

20 title, a digital phonorecord delivery licensed 

21 under this paragraph shall be accompanied by 

22 the information encoded in the sound recording, 

23 if any, by or under the authority of the copy24 right owner of that sound recording, that iden25 tifies the title of the sound recording, the fea-
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1 tured recording artist who performs on the 

2 sound recording, and related information, in3 cluding information concerning the underlying 

4 musical work and its writer. 

5 ‘‘(C) INFRINGEMENT REMEDIES.— 

6 ‘‘(i) A digital phonorecord delivery of 

7 a sound recording is actionable as an act 

8 of infringement under section 501, and is 

9 fully subject to the remedies provided by 

10 sections 502 through 506, unless— 

11 ‘‘(I) the digital phonorecord de12 livery has been authorized by the 

13 sound recording copyright owner; and 

14 ‘‘(II) the entity making the dig15 ital phonorecord delivery has obtained 

16 a compulsory license under subsection 

17 (a) or has otherwise been authorized 

18 by the musical work copyright owner, 

19 or by a record company pursuant to 

20 an individual download license, to 

21 make and distribute phonorecords of 

22 each musical work embodied in the 

23 sound recording by means of digital 

24 phonorecord delivery. 
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1 ‘‘(ii) Any cause of action under this 

2 subparagraph shall be in addition to those 

3 available to the owner of the copyright in 

4 the nondramatic musical work under sub5 paragraph (J) and section 106(4) and the 

6 owner of the copyright in the sound record7 ing under section 106(6). 

8 ‘‘(D) LIABILITY OF SOUND RECORDING

9 OWNERS.—The liability of the copyright owner 

10 of a sound recording for infringement of the 

11 copyright in a nondramatic musical work em12 bodied in the sound recording shall be deter13 mined in accordance with applicable law, except 

14 that the owner of a copyright in a sound re15 cording shall not be liable for a digital phono16 record delivery by a third party if the owner of 

17 the copyright in the sound recording does not 

18 license the distribution of a phonorecord of the 

19 nondramatic musical work. 

20 ‘‘(E) RECORDING DEVICES AND MEDIA.— 

21 Nothing in section 1008 shall be construed to 

22 prevent the exercise of the rights and remedies 

23 allowed by this paragraph, subparagraph (J), 

24 and chapter 5 in the event of a digital phono25 record delivery, except that no action alleging 
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1 infringement of copyright may be brought 

2 under this title against a manufacturer, im3 porter or distributor of a digital audio recording 

4 device, a digital audio recording medium, an 

5 analog recording device, or an analog recording 

6 medium, or against a consumer, based on the 

7 actions described in such section. 

8 ‘‘(F) PRESERVATION OF RIGHTS.—Noth9 ing in this section annuls or limits (i) the exclu10 sive right to publicly perform a sound recording 

11 or the musical work embodied therein, including 

12 by means of a digital transmission, under sec13 tions 106(4) and 106(6), (ii) except for compul14 sory licensing under the conditions specified by 

15 this section, the exclusive rights to reproduce 

16 and distribute the sound recording and the mu17 sical work embodied therein under sections 

18 106(1) and 106(3), including by means of a 

19 digital phonorecord delivery, or (iii) any other 

20 rights under any other provision of section 106, 

21 or remedies available under this title, as such 

22 rights or remedies exist either before or after 

23 the date of enactment of the Digital Perform24 ance Right in Sound Recordings Act of 1995. 
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1 ‘‘(G) EXEMPT TRANSMISSIONS AND RE2 TRANSMISSIONS.—The provisions of this section 

3 concerning digital phonorecord deliveries shall 

4 not apply to any exempt transmissions or re5 transmissions under section 114(d)(1). The ex6 emptions created in section 114(d)(1) do not 

7 expand or reduce the rights of copyright owners 

8 under section 106(1) through (5) with respect 

9 to such transmissions and retransmissions. 

10 ‘‘(H) DISTRIBUTION BY RENTAL, LEASE, 

11 OR LENDING.—A compulsory license obtained 

12 under subsection (b)(1) to make and distribute 

13 phonorecords includes the right of the maker of 

14 such a phonorecord to distribute or authorize 

15 distribution of such phonorecord, other than by 

16 means of a digital phonorecord delivery, by 

17 rental, lease, or lending (or by acts or practices 

18 in the nature of rental, lease, or lending). With 

19 respect to each nondramatic musical work em20 bodied in the phonorecord, the royalty shall be 

21 a proportion of the revenue received by the 

22 compulsory licensee from every such act of dis23 tribution of the phonorecord under this clause 

24 equal to the proportion of the revenue received 

25 by the compulsory licensee from distribution of 
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1 the phonorecord under subsection 

2 (a)(1)(A)(ii)(II) that is payable by a compulsory 

3 licensee under that clause and under chapter 8. 

4 The Register of Copyrights shall issue regula5 tions to carry out the purpose of this clause. 

6 ‘‘(I) PAYMENT OF ROYALTIES AND STATE7 MENTS OF ACCOUNT.—Except as provided in 

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

9 (d), royalty payments shall be made on or be10 fore the twentieth day of each month and shall 

11 include all royalties for the month next pre12 ceding. Each monthly payment shall be made 

13 under oath and shall comply with requirements 

14 that the Register of Copyrights shall prescribe 

15 by regulation. The Register shall also prescribe 

16 regulations under which detailed cumulative an17 nual statements of account, certified by a cer18 tified public accountant, shall be filed for every 

19 compulsory license under subsection (a). The 

20 regulations covering both the monthly and the 

21 annual statements of account shall prescribe 

22 the form, content, and manner of certification 

23 with respect to the number of records made and 

24 the number of records distributed. 
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1 ‘‘(J) NOTICE OF DEFAULT AND TERMI2 NATION OF COMPULSORY LICENSE.—In the 

3 case of a license obtained under subsection 

4 (b)(1), (b)(2)(A), or (b)(3), if the copyright 

5 owner does not receive the monthly payment 

6 and the monthly and annual statements of ac7 count when due, the owner may give written no8 tice to the licensee that, unless the default is 

9 remedied within 30 days from the date of the 

10 notice, the compulsory license will be automati11 cally terminated. Such termination renders ei12 ther the making or the distribution, or both, of 

13 all phonorecords for which the royalty has not 

14 been paid, actionable as acts of infringement 

15 under section 501 and fully subject to the rem16 edies provided by sections 502 through 506. In 

17 the case of a license obtained under subsection 

18 (b)(2)(B), license authority under the compul19 sory license may be terminated as provided in 

20 subsection (d)(4)(E).’’; 

21 (4) by amending subsection (d) to read as fol22 lows: 

23 ‘‘(d) BLANKET LICENSE FOR DIGITAL USES, ME24 CHANICAL LICENSING COLLECTIVE, AND DIGITAL LI25 CENSEE COORDINATOR.— 
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1 ‘‘(1) BLANKET LICENSE FOR DIGITAL USES.— 

2 ‘‘(A) IN GENERAL.—A digital music pro3 vider that qualifies for a compulsory license 

4 under subsection (a) may, by complying with 

5 the terms and conditions of this subsection, ob6 tain a blanket license from copyright owners 

7 through the mechanical licensing collective to 

8 make and distribute digital phonorecord deliv9 eries of musical works through one or more cov10 ered activities. 

11 ‘‘(B) INCLUDED ACTIVITIES.—A blanket li12 cense— 

13 ‘‘(i) covers all musical works (or 

14 shares of such works) available for compul15 sory licensing under this section for pur16 poses of engaging in covered activities, ex17 cept as provided in subparagraph (C); 

18 ‘‘(ii) includes the making and dis19 tribution of server, intermediate, archival, 

20 and incidental reproductions of musical 

21 works that are reasonable and necessary 

22 for the digital music provider to engage in 

23 covered activities licensed under this sub24 section, solely for the purpose of engaging 

25 in such covered activities; and 
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1 ‘‘(iii) does not cover or include any 

2 rights or uses other than those described 

3 in clauses (i) and (ii). 

4 ‘‘(C) OTHER LICENSES.—A voluntary li5 cense for covered activities entered into by or 

6 under the authority of one or more copyright 

7 owners and one or more digital music providers, 

8 or authority to make and distribute permanent 

9 downloads of a musical work obtained by a dig10 ital music provider from a sound recording 

11 copyright owner pursuant to an individual 

12 download license, shall be given effect in lieu of 

13 a blanket license under this subsection with re14 spect to the musical works (or shares thereof) 

15 covered by such voluntary license or individual 

16 download authority and the following conditions 

17 apply: 

18 ‘‘(i) Where a voluntary license or indi19 vidual download license applies, the license 

20 authority provided under the blanket li21 cense shall exclude any musical works (or 

22 shares thereof) subject to the voluntary li23 cense or individual download license. 

24 ‘‘(ii) An entity engaged in covered ac25 tivities under a voluntary license or author-
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1 ity obtained pursuant to an individual 

2 download license that is a significant non3 blanket licensee shall comply with para4 graph (6)(A). 

5 ‘‘(iii) The rates and terms of any vol6 untary license shall be subject to the sec7 ond sentence of clause (i) and clause (ii) of 

8 subsection (c)(2)(A) and paragraph (9)(C), 

9 as applicable. 

10 ‘‘(D) PROTECTION AGAINST INFRINGE11 MENT ACTIONS.—A digital music provider that 

12 obtains and complies with the terms of a valid 

13 blanket license under this subsection shall not 

14 be subject to an action for infringement of the 

15 exclusive rights provided by paragraphs (1) and 

16 (3) of section 106 under this title arising from 

17 use of a musical work (or share thereof) to en18 gage in covered activities authorized by such li19 cense, subject to paragraph (4)(E). 

20 ‘‘(E) OTHER REQUIREMENTS AND CONDI21 TIONS APPLY.—Except as expressly provided in 

22 this subsection, each requirement, limitation, 

23 condition, privilege, right, and remedy otherwise 

24 applicable to compulsory licenses under this sec-
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1 tion shall apply to compulsory blanket licenses 

2 under this subsection. 

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

4 ‘‘(A) PROCEDURE FOR OBTAINING LI5 CENSE.—A digital music provider may obtain a 

6 blanket license by submitting a notice of license 

7 to the mechanical licensing collective that speci8 fies the particular covered activities in which 

9 the digital music provider seeks to engage, as 

10 follows: 

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

12 in form and substance with requirements 

13 that the Register of Copyrights shall estab14 lish by regulation. 

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

16 mechanical licensing collective within 30 

17 calendar days after receipt, the blanket li18 cense shall be effective as of the date the 

19 notice of license was sent by the digital 

20 music provider as shown by a physical or 

21 electronic record. 

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

23 rejected by the mechanical licensing collec24 tive if— 
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1 ‘‘(I) the digital music provider or 

2 notice of license does not meet the re3 quirements of this section or applica4 ble regulations, in which case the re5 quirements at issue shall be specified 

6 with reasonable particularity in the 

7 notice of rejection; or 

8 ‘‘(II) the digital music provider 

9 has had a blanket license terminated 

10 by the mechanical licensing collective 

11 within the past 3 years pursuant to 

12 paragraph (4)(E). 

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

14 under clause (iii)(I), the digital music pro15 vider shall have 30 calendar days after re16 ceipt of the notice of rejection to cure any 

17 deficiency and submit an amended notice 

18 of license to the mechanical licensing col19 lective. If the deficiency has been cured, 

20 the mechanical licensing collective shall so 

21 confirm in writing, and the license shall be 

22 effective as of the date that the original 

23 notice of license was provided by the dig24 ital music provider. 
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1 ‘‘(v) A digital music provider that be2 lieves a notice of license was improperly re3 jected by the mechanical licensing collec4 tive may seek review of such rejection in 

5 Federal district court. The district court 

6 shall determine the matter de novo based 

7 on the record before the mechanical licens8 ing collective and any additional evidence 

9 presented by the parties. 

10 ‘‘(B) BLANKET LICENSE EFFECTIVE

11 DATE.—Blanket licenses shall be made available 

12 by the mechanical licensing collective on and 

13 after the license availability date. No such li14 cense shall be effective prior to the license avail15 ability date. 

16 ‘‘(3) MECHANICAL LICENSING COLLECTIVE.— 

17 ‘‘(A) IN GENERAL.—The mechanical li18 censing collective shall be a single entity that— 

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

20 other entity, that is created by copyright 

21 owners to carry out responsibilities under 

22 this subsection; 

23 ‘‘(ii) is endorsed by and enjoys sub24 stantial support from musical work copy25 right owners that together represent the 
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1 greatest percentage of the licensor market 

2 for uses of such works in covered activities, 

3 as measured over the preceding 3 full cal4 endar years; 

5 ‘‘(iii) is able to demonstrate to the 

6 Register of Copyrights that it has, or will 

7 have prior to the license availability date, 

8 the administrative and technological capa9 bilities to perform the required functions of 

10 the mechanical licensing collective under 

11 this subsection; and 

12 ‘‘(iv) has been designated by the Reg13 ister of Copyrights in accordance with sub14 paragraph (B). 

15 ‘‘(B) DESIGNATION OF MECHANICAL LI16 CENSING COLLECTIVE.— 

17 ‘‘(i) INITIAL DESIGNATION.—The 

18 Register of Copyrights shall initially des19 ignate the mechanical licensing collective 

20 within 9 months after the enactment date 

21 as follows: 

22 ‘‘(I) Within 90 calendar days 

23 after the enactment date, the Register 

24 shall publish notice in the Federal 

25 Register soliciting information to as-
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•HR 5447 EH

1 sist in identifying the appropriate en2 tity to serve as the mechanical licens3 ing collective, including the name and 

4 affiliation of each member of the 

5 board of directors described under 

6 subparagraph (D)(i) and each com7 mittee established pursuant to clauses 

8 (iii), (iv), and (v) of subparagraph 

9 (D). 

10 ‘‘(II) After reviewing the infor11 mation requested under subclause (I) 

12 and making a designation, the Reg13 ister shall publish notice in the Fed14 eral Register setting forth the identity 

15 of and contact information for the me16 chanical licensing collective. 

17 ‘‘(ii) PERIODIC REVIEW OF DESIGNA18 TION.—Following the initial designation of 

19 the mechanical licensing collective, the 

20 Register shall, every 5 years, beginning 

21 with the fifth full calendar year to com22 mence after the initial designation, publish 

23 notice in the Federal Register in the 

24 month of January soliciting information 

25 concerning whether the existing designa-
31 

•HR 5447 EH

1 tion should be continued, or a different en2 tity meeting the criteria described in 

3 clauses (i) through (iii) of subparagraph 

4 (A) shall be designated. Following publica5 tion of such notice: 

6 ‘‘(I) The Register shall, after re7 viewing the information submitted and 

8 conducting additional proceedings as 

9 appropriate, publish notice in the Fed10 eral Register of a continuing designa11 tion or new designation of the me12 chanical licensing collective, as the 

13 case may be, with any new designa14 tion to be effective as of the first day 

15 of a month that is no less than 6 

16 months and no longer than 9 months 

17 after the date of publication of such 

18 notice, as specified by the Register. 

19 ‘‘(II) If a new entity is des20 ignated as a mechanical licensing col21 lective, the Register shall adopt regu22 lations to govern the transfer of li23 censes, funds, records, data, and ad24 ministrative responsibilities from the 
32 

•HR 5447 EH

1 existing mechanical licensing collective 

2 to the new entity. 

3 ‘‘(iii) CLOSEST ALTERNATIVE DES4 IGNATION.—If the Register is unable to 

5 identify an entity that fulfills each of the 

6 qualifications set forth in clauses (i) 

7 through (iii) of subparagraph (A), the Reg8 ister shall designate the entity that most 

9 nearly fulfills such qualifications for pur10 poses of carrying out the responsibilities of 

11 the mechanical licensing collective. 

12 ‘‘(C) AUTHORITIES AND FUNCTIONS.— 

13 ‘‘(i) IN GENERAL.—The mechanical li14 censing collective is authorized to perform 

15 the following functions, subject to more 

16 particular requirements as described in 

17 this subsection: 

18 ‘‘(I) Offer and administer blanket 

19 licenses, including receipt of notices of 

20 license and reports of usage from dig21 ital music providers. 

22 ‘‘(II) Collect and distribute royal23 ties from digital music providers for 

24 covered activities. 
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•HR 5447 EH

1 ‘‘(III) Engage in efforts to iden2 tify musical works (and shares of such 

3 works) embodied in particular sound 

4 recordings, and to identify and locate 

5 the copyright owners of such musical 

6 works (and shares of such works). 

7 ‘‘(IV) Maintain the musical 

8 works database and other information 

9 relevant to the administration of li10 censing activities under this section. 

11 ‘‘(V) Administer a process by 

12 which copyright owners can claim 

13 ownership of musical works (and 

14 shares of such works), and a process 

15 by which royalties for works for which 

16 the owner is not identified or located 

17 are equitably distributed to known 

18 copyright owners. 

19 ‘‘(VI) Administer collections of 

20 the administrative assessment from 

21 digital music providers and significant 

22 nonblanket licensees, including receipt 

23 of notices of nonblanket activity. 

24 ‘‘(VII) Invest in relevant re25 sources, and arrange for services of 
34 

•HR 5447 EH

1 outside vendors and others, to support 

2 its activities. 

3 ‘‘(VIII) Engage in legal and 

4 other efforts to enforce rights and ob5 ligations under this subsection, includ6 ing by filing bankruptcy proofs of 

7 claims for amounts owed under li8 censes, and acting in coordination 

9 with the digital licensee coordinator. 

10 ‘‘(IX) Initiate and participate in 

11 proceedings before the Copyright Roy12 alty Judges to establish the adminis13 trative assessment under this sub14 section. 

15 ‘‘(X) Initiate and participate in 

16 proceedings before the Copyright Of17 fice with respect to activities under 

18 this subsection. 

19 ‘‘(XI) Gather and provide docu20 mentation for use in proceedings be21 fore the Copyright Royalty Judges to 

22 set rates and terms under this section. 

23 ‘‘(XII) Maintain records of its 

24 activities and engage in and respond 
35 

•HR 5447 EH

1 to audits described under this sub2 section. 

3 ‘‘(XIII) Engage in such other ac4 tivities as may be necessary or appro5 priate to fulfill its responsibilities 

6 under this subsection. 

7 ‘‘(ii) ADDITIONAL ADMINISTRATIVE

8 ACTIVITIES.—Subject to paragraph 

9 (11)(C) and clause (iii), the mechanical li10 censing collective may also administer, or 

11 assist in administering, voluntary licenses 

12 issued by or individual download licenses 

13 obtained from copyright owners for uses of 

14 musical works, for which the mechanical li15 censing collective shall charge reasonable 

16 fees for such services. 

17 ‘‘(iii) RESTRICTION CONCERNING PUB18 LIC PERFORMANCE RIGHTS.—The mechan19 ical licensing collective may, pursuant to 

20 clause (ii), provide administration services 

21 with respect to voluntary licenses that in22 clude the right of public performance in 

23 musical works, but may not itself negotiate 

24 or grant licenses for the right of public 

25 performance in musical works, and may 
36 

•HR 5447 EH

1 not be the exclusive or nonexclusive as2 signee or grantee of the right of public per3 formance in musical works. 

4 ‘‘(iv) RESTRICTION ON LOBBYING.— 

5 The mechanical licensing collective may 

6 not engage in government lobbying activi7 ties, but may engage in the activities de8 scribed in subclauses (IX), (X), and (XI) 

9 of clause (i). 

10 ‘‘(D) GOVERNANCE.— 

11 ‘‘(i) BOARD OF DIRECTORS.—The me12 chanical licensing collective shall have a 

13 board of directors consisting of 14 voting 

14 members and 3 nonvoting members, as fol15 lows: 

16 ‘‘(I) Ten voting members shall be 

17 representatives of music publishers to 

18 which songwriters have assigned ex19 clusive rights of reproduction and dis20 tribution of musical works with re21 spect to covered activities and no such 

22 music publisher member may be 

23 owned by, or under common control 

24 with, any other board member. 
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•HR 5447 EH

1 ‘‘(II) Four voting members shall 

2 be professional songwriters who have 

3 retained and exercise exclusive rights 

4 of reproduction and distribution with 

5 respect to covered activities with re6 spect to musical works they have au7 thored. 

8 ‘‘(III) One nonvoting member 

9 shall be a representative of the non10 profit trade association of music pub11 lishers that represents the greatest 

12 percentage of the licensor market for 

13 uses of musical works in covered ac14 tivities, as measured over the pre15 ceding 3 full calendar years. 

16 ‘‘(IV) One nonvoting member 

17 shall be a representative of the digital 

18 licensee coordinator, provided that a 

19 digital licensee coordinator has been 

20 designated pursuant to paragraph 

21 (5)(B). Otherwise, the nonvoting 

22 member shall be the nonprofit trade 

23 association of digital licensees that 

24 represents the greatest percentage of 

25 the licensee market for uses of musi-
38 

•HR 5447 EH

1 cal works in covered activities, as 

2 measured over the preceding 3 full 

3 calendar years. 

4 ‘‘(V) One nonvoting member 

5 shall be a representative of a nation6 ally recognized nonprofit trade asso7 ciation whose primary mission is advo8 cacy on behalf of songwriters in the 

9 United States. 

10 ‘‘(ii) BOARD MEETINGS.—The board 

11 of directors shall meet no less than two 

12 times per year and discuss matters perti13 nent to the operations, including the me14 chanical licensing collective budget. 

15 ‘‘(iii) OPERATIONS ADVISORY COM16 MITTEE.—The board of directors of the 

17 mechanical licensing collective shall estab18 lish an operations advisory committee con19 sisting of no fewer than six members to 

20 make recommendations to the board of di21 rectors concerning the operations of the 

22 mechanical licensing collective, including 

23 the efficient investment in and deployment 

24 of information technology and data re25 sources. Such committee shall have an 
39 

•HR 5447 EH

1 equal number of members of the committee 

2 who are— 

3 ‘‘(I) musical work copyright own4 ers who are appointed by the board of 

5 directors of the mechanical licensing 

6 collective; and 

7 ‘‘(II) representatives of digital 

8 music providers who are appointed by 

9 the digital licensee coordinator. 

10 ‘‘(iv) UNCLAIMED ROYALTIES OVER11 SIGHT COMMITTEE.—The board of direc12 tors of the mechanical licensing collective 

13 shall establish and appoint an unclaimed 

14 royalties oversight committee consisting of 

15 10 members, 5 of which shall be musical 

16 work copyright owners and 5 of which 

17 shall be professional songwriters whose 

18 works are used in covered activities. 

19 ‘‘(v) DISPUTE RESOLUTION COM20 MITTEE.—The board of directors of the 

21 mechanical licensing collective shall estab22 lish and appoint a dispute resolution com23 mittee consisting of no fewer than six 

24 members, which committee shall include an 

25 equal number of representatives of musical 
40 

•HR 5447 EH

1 work copyright owners and professional 

2 songwriters. 

3 ‘‘(vi) MECHANICAL LICENSING COL4 LECTIVE ANNUAL REPORT.—Not later 

5 than June 30 of each year commencing 

6 after the license availability date, the me7 chanical licensing collective shall post, and 

8 make available online for a period of at 

9 least 3 years, an annual report that sets 

10 forth how the collective operates, how roy11 alties are collected and distributed, and the 

12 collective total costs for the preceding cal13 endar year. At the time of posting, a copy 

14 of the report shall be provided to the Reg15 ister of Copyrights. 

16 ‘‘(E) MUSICAL WORKS DATABASE.— 

17 ‘‘(i) ESTABLISHMENT AND MAINTE18 NANCE OF DATABASE.—The mechanical li19 censing collective shall establish and main20 tain a database containing information re21 lating to musical works (and shares of 

22 such works) and, to the extent known, the 

23 identity and location of the copyright own24 ers of such works (and shares thereof) and 

25 the sound recordings in which the musical 
41 

•HR 5447 EH

1 works are embodied. In furtherance of 

2 maintaining such database, the mechanical 

3 licensing collective shall engage in efforts 

4 to identify the musical works embodied in 

5 particular sound recordings, as well as to 

6 identify and locate the copyright owners of 

7 such works (and shares thereof), and up8 date such data as appropriate. 

9 ‘‘(ii) MATCHED WORKS.—With respect 

10 to musical works (and shares thereof) that 

11 have been matched to copyright owners, 

12 the musical works database shall include— 

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

14 ‘‘(II) the copyright owner of the 

15 work (or share thereof), and such 

16 owner’s ownership percentage; 

17 ‘‘(III) contact information for 

18 such copyright owner; 

19 ‘‘(IV) to the extent reasonably 

20 available to the mechanical licensing 

21 collective— 

22 ‘‘(aa) the international 

23 standard musical work code for 

24 the work; and 
42 

•HR 5447 EH

1 ‘‘(bb) identifying informa2 tion for sound recordings in 

3 which the musical work is em4 bodied, including the name of the 

5 sound recording, featured artist, 

6 sound recording copyright owner, 

7 producer, international standard 

8 recording code, and other infor9 mation commonly used to assist 

10 in associating sound recordings 

11 with musical works; and 

12 ‘‘(V) such other information as 

13 the Register of Copyrights may pre14 scribe by regulation. 

15 ‘‘(iii) UNMATCHED WORKS.—With re16 spect to unmatched musical works (and 

17 shares of works) in the database, the musi18 cal works database shall include— 

19 ‘‘(I) to the extent reasonably 

20 available to the mechanical licensing 

21 collective— 

22 ‘‘(aa) the title of the musical 

23 work; 
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•HR 5447 EH

1 ‘‘(bb) the ownership percent2 age for which an owner has not 

3 been identified; 

4 ‘‘(cc) if a copyright owner 

5 has been identified but not lo6 cated, the identity of such owner 

7 and such owner’s ownership per8 centage; 

9 ‘‘(dd) identifying informa10 tion for sound recordings in 

11 which the work is embodied, in12 cluding sound recording name, 

13 featured artist, sound recording 

14 copyright owner, producer, inter15 national standard recording code, 

16 and other information commonly 

17 used to assist in associating 

18 sound recordings with musical 

19 works; and 

20 ‘‘(ee) any additional infor21 mation reported to the mechan22 ical licensing collective that may 

23 assist in identifying the work; 

24 and 
44 

•HR 5447 EH

1 ‘‘(II) such other information re2 lating to the identity and ownership of 

3 musical works (and shares of such 

4 works) as the Register of Copyrights 

5 may prescribe by regulation. 

6 ‘‘(iv) SOUND RECORDING INFORMA7 TION.—Each musical work copyright 

8 owner with any musical work listed in the 

9 musical works database shall engage in 

10 commercially reasonable efforts to deliver 

11 to the mechanical licensing collective, in12 cluding for use in the musical works data13 base, to the extent such information is not 

14 then available in the database, information 

15 regarding the names of the sound record16 ings in which that copyright owner’s musi17 cal works (or shares thereof) are embodied, 

18 to the extent practicable. 

19 ‘‘(v) ACCESSIBILITY OF DATABASE.— 

20 The musical works database shall be made 

21 available to members of the public in a 

22 searchable, online format, free of charge. 

23 The mechanical licensing collective shall 

24 make such database available in a bulk, 

25 machine-readable format, through a widely 
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•HR 5447 EH

1 available software application, to the fol2 lowing entities: 

3 ‘‘(I) Digital music providers oper4 ating under the authority of valid no5 tices of license, free of charge. 

6 ‘‘(II) Significant nonblanket li7 censees in compliance with their obli8 gations under paragraph (6), free of 

9 charge. 

10 ‘‘(III) Authorized vendors of the 

11 entities described in subclauses (I) 

12 and (II), free of charge. 

13 ‘‘(IV) The Register of Copy14 rights, free of charge (but the Reg15 ister shall not treat such database or 

16 any information therein as a Govern17 ment record). 

18 ‘‘(V) Any member of the public, 

19 for a fee not to exceed the marginal 

20 cost to the mechanical licensing collec21 tive of providing the database to such 

22 person. 

23 ‘‘(vi) ADDITIONAL REQUIREMENTS.— 

24 The Register of Copyrights shall establish 

25 requirements by regulations to ensure the 
46 

•HR 5447 EH

1 usability, interoperability, and usage re2 strictions of the musical works database. 

3 ‘‘(F) NOTICES OF LICENSE AND NON4 BLANKET ACTIVITY.— 

5 ‘‘(i) NOTICES OF LICENSES.—The me6 chanical licensing collective shall receive, 

7 review, and confirm or reject notices of li8 cense from digital music providers, as pro9 vided in paragraph (2)(A). The collective 

10 shall maintain a current, publicly acces11 sible list of blanket licenses that includes 

12 contact information for the licensees and 

13 the effective dates of such licenses. 

14 ‘‘(ii) NOTICES OF NONBLANKET AC15 TIVITY.—The mechanical licensing collec16 tive shall receive notices of nonblanket ac17 tivity from significant nonblanket licensees, 

18 as provided in paragraph (6)(A). The col19 lective shall maintain a current, publicly 

20 accessible list of notices of nonblanket ac21 tivity that includes contact information for 

22 significant nonblanket licensees and the 

23 dates of receipt of such notices. 

24 ‘‘(G) COLLECTION AND DISTRIBUTION OF

25 ROYALTIES.— 
47 

•HR 5447 EH

1 ‘‘(i) IN GENERAL.—Upon receiving re2 ports of usage and payments of royalties 

3 from digital music providers for covered 

4 activities, the mechanical licensing collec5 tive shall— 

6 ‘‘(I) engage in efforts to— 

7 ‘‘(aa) identify the musical 

8 works embodied in sound record9 ings reflected in such reports, 

10 and the copyright owners of such 

11 musical works (and shares there12 of); 

13 ‘‘(bb) confirm uses of musi14 cal works subject to voluntary li15 censes and individual download 

16 licenses, and the corresponding 

17 pro rata amounts to be deducted 

18 from royalties that would other19 wise be due under the blanket li20 cense; and 

21 ‘‘(cc) confirm proper pay22 ment of royalties due; 

23 ‘‘(II) distribute royalties to copy24 right owners in accordance with the 

25 usage and other information contained 
48 

•HR 5447 EH

1 in such reports, as well as the owner2 ship and other information contained 

3 in the records of the collective; and 

4 ‘‘(III) deposit into an interest5 bearing account, as provided in sub6 paragraph (H)(ii), royalties that can7 not be distributed due to— 

8 ‘‘(aa) an inability to identify 

9 or locate a copyright owner of a 

10 musical work (or share thereof); 

11 or 

12 ‘‘(bb) a pending dispute be13 fore the dispute resolution com14 mittee of the mechanical licens15 ing collective. 

16 ‘‘(ii) OTHER COLLECTION EFFORTS.— 

17 Any royalties recovered by the mechanical 

18 licensing collective as a result of efforts to 

19 enforce rights or obligations under a blan20 ket license, including through a bankruptcy 

21 proceeding or other legal action, shall be 

22 distributed to copyright owners based on 

23 available usage information and in accord24 ance with the procedures described in sub25 clauses (I) and (II) of clause (i), on a pro 
49 

•HR 5447 EH

1 rata basis in proportion to the overall per2 centage recovery of the total royalties 

3 owed, with any pro rata share of royalties 

4 that cannot be distributed deposited in an 

5 interest-bearing account as provided in 

6 subparagraph (H)(ii). 

7 ‘‘(H) HOLDING OF ACCRUED ROYAL8 TIES.— 

9 ‘‘(i) HOLDING PERIOD.—The mechan10 ical licensing collective shall hold accrued 

11 royalties associated with particular musical 

12 works (and shares of works) that remain 

13 unmatched for a period of at least 3 years 

14 after the date on which the funds were re15 ceived by the mechanical licensing collec16 tive, or at least 3 years after the date on 

17 which they were accrued by a digital music 

18 provider that subsequently transferred 

19 such funds to the mechanical licensing col20 lective pursuant to paragraph (10)(B), 

21 whichever period expires sooner. 

22 ‘‘(ii) INTEREST-BEARING ACCOUNT.— 

23 Accrued royalties for unmatched works 

24 (and shares thereof) shall be maintained 

25 by the mechanical licensing collective in an 
50 

•HR 5447 EH

1 interest-bearing account that earns month2 ly interest at the Federal, short-term rate, 

3 such interest to accrue for the benefit of 

4 copyright owners entitled to payment of 

5 such accrued royalties. 

6 ‘‘(I) MUSICAL WORKS CLAIMING PROC7 ESS.—The mechanical licensing collective shall 

8 publicize the existence of accrued royalties for 

9 unmatched musical works (and shares of such 

10 works) within 6 months of receiving a transfer 

11 of accrued royalties for such works by publicly 

12 listing the works and the procedures by which 

13 copyright owners may identify themselves and 

14 provide ownership, contact, and other relevant 

15 information to the mechanical licensing collec16 tive in order to receive payment of accrued roy17 alties. When a copyright owner of an un18 matched work (or share of a work) has been 

19 identified and located in accordance with the 

20 procedures of the mechanical licensing collec21 tive, the collective shall— 

22 ‘‘(i) update the musical works data23 base and its other records accordingly; and 

24 ‘‘(ii) provided that accrued royalties 

25 for the musical work (or share thereof) 
51 

•HR 5447 EH

1 have not yet been included in a distribution 

2 pursuant to subparagraph (J)(i), pay such 

3 accrued royalties and a proportionate 

4 amount of accrued interest associated with 

5 that work (or share thereof) to the copy6 right owner, accompanied by a cumulative 

7 statement of account reflecting usage of 

8 such work and accrued royalties based on 

9 information provided by digital music pro10 viders to the mechanical licensing collec11 tive. 

12 ‘‘(J) DISTRIBUTION OF UNCLAIMED AC13 CRUED ROYALTIES.— 

14 ‘‘(i) DISTRIBUTION PROCEDURES.— 

15 After the expiration of the prescribed hold16 ing period for accrued royalties provided in 

17 paragraph (H)(i), the mechanical licensing 

18 collective shall distribute such accrued roy19 alties, along with a proportionate share of 

20 accrued interest, to copyright owners iden21 tified in the records of the collective, sub22 ject to the following requirements, and in 

23 accordance with the policies and proce24 dures established under clause (ii): 
52 

•HR 5447 EH

1 ‘‘(I) The first such distribution 

2 shall occur on or after July 1 of the 

3 first full calendar year to commence 

4 after the license availability date, with 

5 at least one such distribution to take 

6 place during each calendar year there7 after. 

8 ‘‘(II) Copyright owners’ payment 

9 shares for unclaimed accrued royalties 

10 for particular reporting periods shall 

11 be determined in a transparent and 

12 equitable manner based on data indi13 cating the relative market shares of 

14 such copyright owners as reflected by 

15 royalty payments made by digital 

16 music providers for covered activities 

17 for the periods in question, including, 

18 in addition to royalty payments made 

19 to the mechanical licensing collective, 

20 royalty payments made to copyright 

21 owners under voluntary licenses and 

22 individual download licenses for cov23 ered activities, to the extent such in24 formation is available to the mechan25 ical licensing collective. In furtherance 
53 

•HR 5447 EH

1 of the determination of equitable mar2 ket shares under this subparagraph— 

3 ‘‘(aa) the mechanical licens4 ing collective may require copy5 right owners seeking distribu6 tions of unclaimed accrued royal7 ties to provide, or direct the pro8 vision of, information concerning 

9 royalties received under voluntary 

10 licenses and individual download 

11 licenses for covered activities; and 

12 ‘‘(bb) the mechanical licens13 ing collective shall take appro14 priate steps to safeguard the con15 fidentiality and security of finan16 cial and other sensitive data used 

17 to compute market shares in ac18 cordance with the confidentiality 

19 provisions prescribed by the Reg20 ister of Copyrights under para21 graph (12)(C). 

22 ‘‘(ii) ESTABLISHMENT OF DISTRIBU23 TION POLICIES.—The unclaimed royalties 

24 oversight committee established under 

25 paragraph (3)(D)(iv) shall establish poli-
54 

•HR 5447 EH

1 cies and procedures for the distribution of 

2 unclaimed accrued royalties and accrued 

3 interest in accordance with this subpara4 graph, including the provision of usage 

5 data to copyright owners to allocate pay6 ments and credits to songwriters pursuant 

7 to clause (iv), subject to the approval of 

8 the board of directors of the mechanical li9 censing collective. 

10 ‘‘(iii) ADVANCE NOTICE OF DISTRIBU11 TIONS.—The mechanical licensing collec12 tive shall publicize a pending distribution 

13 of unclaimed accrued royalties and accrued 

14 interest at least 90 calendar days in ad15 vance of such distribution. 

16 ‘‘(iv) SONGWRITER PAYMENTS.— 

17 Copyright owners that receive a distribu18 tion of unclaimed accrued royalties and ac19 crued interest shall pay or credit a portion 

20 to songwriters (or the authorized agents of 

21 songwriters) on whose behalf the copyright 

22 owners license or administer musical works 

23 for covered activities, in accordance with 

24 applicable contractual terms, but notwith25 standing any agreement to the contrary— 
55 

•HR 5447 EH

1 ‘‘(I) such payments and credits 

2 to songwriters shall be allocated in 

3 proportion to reported usage of indi4 vidual musical works by digital music 

5 providers during the reporting periods 

6 covered by the distribution from the 

7 mechanical licensing collective; and 

8 ‘‘(II) in no case shall the pay9 ment or credit to an individual song10 writer be less than 50 percent of the 

11 payment received by the copyright 

12 owner attributable to usage of musical 

13 works (or shares of works) of that 

14 songwriter. 

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

16 resolution committee established under para17 graph (3)(D)(v) shall address and resolve in a 

18 timely and equitable manner disputes among 

19 copyright owners relating to ownership interests 

20 in musical works licensed under this section and 

21 allocation and distribution of royalties by the 

22 mechanical licensing collective, according to a 

23 process approved by the board of directors of 

24 the mechanical licensing collective. Such proc25 ess— 
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•HR 5447 EH

1 ‘‘(i) shall include a mechanism to hold 

2 disputed funds in accordance with the re3 quirements described in subparagraph 

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

5 and 

6 ‘‘(ii) except as provided in paragraph 

7 (11)(D), shall not affect any legal or equi8 table rights or remedies available to any 

9 copyright owner or songwriter concerning 

10 ownership of, and entitlement to royalties 

11 for, a musical work. 

12 ‘‘(L) VERIFICATION OF PAYMENTS BY ME13 CHANICAL LICENSING COLLECTIVE.— 

14 ‘‘(i) VERIFICATION PROCESS.—A 

15 copyright owner entitled to receive pay16 ments of royalties for covered activities 

17 from the mechanical licensing collective 

18 may, individually or with other copyright 

19 owners, conduct an audit of the mechanical 

20 licensing collective to verify the accuracy of 

21 royalty payments by the mechanical licens22 ing collective to such copyright owner, as 

23 follows: 

24 ‘‘(I) A copyright owner may 

25 audit the mechanical licensing collec-
57 

•HR 5447 EH

1 tive only once in a year for any or all 

2 of the prior 3 calendar years, and may 

3 not audit records for any calendar 

4 year more than once. 

5 ‘‘(II) The audit shall be con6 ducted by a qualified auditor, who 

7 shall perform the audit during the or8 dinary course of business by exam9 ining the books, records, and data of 

10 the mechanical licensing collective, ac11 cording to generally accepted auditing 

12 standards and subject to applicable 

13 confidentiality requirements pre14 scribed by the Register of Copyrights 

15 under paragraph (12)(C). 

16 ‘‘(III) The mechanical licensing 

17 collective shall make such books, 

18 records, and data available to the 

19 qualified auditor and respond to rea20 sonable requests for relevant informa21 tion, and shall use commercially rea22 sonable efforts to facilitate access to 

23 relevant information maintained by 

24 third parties. 
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•HR 5447 EH

1 ‘‘(IV) To commence the audit, 

2 any copyright owner shall file with the 

3 Copyright Office a notice of intent to 

4 conduct an audit of the mechanical li5 censing collective, identifying the pe6 riod of time to be audited, and shall 

7 simultaneously deliver a copy of such 

8 notice to the mechanical licensing col9 lective. The Register of Copyrights 

10 shall cause the notice of audit to be 

11 published in the Federal Register 

12 within 45 calendar days after receipt. 

13 ‘‘(V) The qualified auditor shall 

14 determine the accuracy of royalty pay15 ments, including whether an under16 payment or overpayment of royalties 

17 was made by the mechanical licensing 

18 collective to each auditing copyright 

19 owner, but before providing a final 

20 audit report to any such copyright 

21 owner, the qualified auditor shall pro22 vide a tentative draft of the report to 

23 the mechanical licensing collective and 

24 allow the mechanical licensing collec25 tive a reasonable opportunity to re-
59 

•HR 5447 EH

1 spond to the findings, including by 

2 clarifying issues and correcting factual 

3 errors. 

4 ‘‘(VI) The auditing copyright 

5 owner or owners shall bear the cost of 

6 the audit. In case of an underpayment 

7 to any copyright owner, the mechan8 ical licensing collective shall pay the 

9 amounts of any such underpayment to 

10 such auditing copyright owner, as ap11 propriate. In case of an overpayment 

12 by the mechanical licensing collective, 

13 the mechanical licensing collective 

14 may debit the account of the auditing 

15 copyright owner or owners for such 

16 overpaid amounts, or such owner(s) 

17 shall refund overpaid amounts to the 

18 mechanical licensing collective, as ap19 propriate. 

20 ‘‘(ii) ALTERNATIVE VERIFICATION

21 PROCEDURES.—Nothing in this subpara22 graph shall preclude a copyright owner and 

23 the mechanical licensing collective from 

24 agreeing to audit procedures different from 

25 those described herein, but a notice of the 
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•HR 5447 EH

1 audit shall be provided to and published by 

2 the Copyright Office as described in clause 

3 (i)(IV). 

4 ‘‘(M) RECORDS OF MECHANICAL LICENS5 ING COLLECTIVE.— 

6 ‘‘(i) RECORDS MAINTENANCE.—The 

7 mechanical licensing collective shall ensure 

8 that all material records of its operations, 

9 including those relating to notices of li10 cense, the administration of its claims 

11 process, reports of usage, royalty pay12 ments, receipt and maintenance of accrued 

13 royalties, royalty distribution processes, 

14 and legal matters, are preserved and main15 tained in a secure and reliable manner, 

16 with appropriate commercially reasonable 

17 safeguards against unauthorized access, 

18 copying, and disclosure, and subject to the 

19 confidentiality requirements prescribed by 

20 the Register of Copyrights under para21 graph (12)(C) for a period of no less than 

22 7 years after the date of creation or re23 ceipt, whichever occurs later. 

24 ‘‘(ii) RECORDS ACCESS.—The mechan25 ical licensing collective shall provide 
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•HR 5447 EH

1 prompt access to electronic and other 

2 records pertaining to the administration of 

3 a copyright owner’s musical works upon 

4 reasonable written request of such owner 

5 or the owner’s authorized representative. 

6 ‘‘(4) TERMS AND CONDITIONS OF BLANKET LI7 CENSE.—A blanket license is subject to, and condi8 tioned upon, the following requirements: 

9 ‘‘(A) ROYALTY REPORTING AND PAY10 MENTS.— 

11 ‘‘(i) MONTHLY REPORTS AND PAY12 MENT.—A digital music provider shall re13 port and pay royalties to the mechanical li14 censing collective under the blanket license 

15 on a monthly basis in accordance with 

16 clause (ii) and subsection (c)(2)(I), but the 

17 monthly reporting shall be due 45 calendar 

18 days, rather than 20 calendar days, after 

19 the end of the monthly reporting period. 

20 ‘‘(ii) DATA TO BE REPORTED.—In re21 porting usage of musical works to the me22 chanical licensing collective, a digital music 

23 provider shall provide usage data for musi24 cal works used under the blanket license 

25 and usage data for musical works used in 
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1 covered activities under voluntary licenses 

2 and individual download licenses. In the re3 port of usage, the digital music provider 

4 shall— 

5 ‘‘(I) with respect to each sound 

6 recording embodying a musical 

7 work— 

8 ‘‘(aa) provide identifying in9 formation for the sound record10 ing, including sound recording 

11 name, featured artist and, to the 

12 extent acquired by the digital 

13 music provider in connection with 

14 its use of sound recordings of 

15 musical works to engage in cov16 ered activities, including pursu17 ant to subparagraph (B), pro18 ducer, international standard re19 cording code, and other informa20 tion commonly used in the indus21 try to identify sound recordings 

22 and match them to the musical 

23 works the sound recordings em24 body; 
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1 ‘‘(bb) to the extent acquired 

2 by the digital music provider in 

3 the metadata in connection with 

4 its use of sound recordings of 

5 musical works to engage in cov6 ered activities, including pursu7 ant to subparagraph (B), provide 

8 information concerning author9 ship and ownership of the appli10 cable rights in the musical work 

11 embodied in the sound recording 

12 (including each songwriter, pub13 lisher name, and respective own14 ership share) and the inter15 national standard musical work 

16 code; and 

17 ‘‘(cc) provide the number of 

18 digital phonorecord deliveries of 

19 the sound recording, including 

20 limited downloads and interactive 

21 streams; 

22 ‘‘(II) identify and provide contact 

23 information for all musical work copy24 right owners for works embodied in 

25 sound recordings as to which a vol-
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•HR 5447 EH

1 untary license, rather than the blan2 ket license, is in effect with respect to 

3 the uses being reported; and 

4 ‘‘(III) provide such other infor5 mation as the Register of Copyrights 

6 shall require by regulation. 

7 ‘‘(iii) FORMAT AND MAINTENANCE OF

8 REPORTS.—Reports of usage provided by 

9 digital music providers to the mechanical 

10 licensing collective shall be in a machine11 readable format that is compatible with the 

12 information technology systems of the me13 chanical licensing collective and meets the 

14 requirements of regulations adopted by the 

15 Register of Copyrights. The Register shall 

16 also adopt regulations setting forth re17 quirements under which records of use 

18 shall be maintained and made available to 

19 the mechanical licensing collective by dig20 ital music providers engaged in covered ac21 tivities under a blanket license. 

22 ‘‘(iv) ADOPTION OF REGULATIONS.— 

23 The Register shall adopt regulations— 

24 ‘‘(I) setting forth requirements 

25 under which records of use shall be 
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1 maintained and made available to the 

2 mechanical licensing collective by dig3 ital music providers engaged in cov4 ered activities under a blanket license; 

5 and 

6 ‘‘(II) regarding adjustments to 

7 reports of usage by digital music pro8 viders, including mechanisms to ac9 count for overpayment and under10 payment of royalties in prior periods. 

11 ‘‘(B) COLLECTION OF SOUND RECORDING

12 INFORMATION.—A digital music provider shall 

13 engage in good-faith, commercially reasonable 

14 efforts to obtain from copyright owners of 

15 sound recordings made available through the 

16 service of such digital music provider— 

17 ‘‘(i) sound recording copyright owners, 

18 producers, international standard recording 

19 codes, and other information commonly 

20 used in the industry to identify sound re21 cordings and match them to the musical 

22 works the sound recordings embody; and 

23 ‘‘(ii) information concerning the au24 thorship and ownership of musical works, 

25 including songwriters, publisher names, 
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1 ownership shares, and international stand2 ard musical work codes. 

3 ‘‘(C) PAYMENT OF ADMINISTRATIVE AS4 SESSMENT.—A digital music provider and any 

5 significant nonblanket licensee shall pay the ad6 ministrative assessment established under para7 graph (7)(D) in accordance with this subsection 

8 and applicable regulations. 

9 ‘‘(D) VERIFICATION OF PAYMENTS BY DIG10 ITAL MUSIC PROVIDERS.— 

11 ‘‘(i) VERIFICATION PROCESS.—The 

12 mechanical licensing collective may conduct 

13 an audit of a digital music provider oper14 ating under the blanket license to verify 

15 the accuracy of royalty payments by the 

16 digital music provider to the mechanical li17 censing collective as follows: 

18 ‘‘(I) The mechanical licensing 

19 collective may commence an audit of a 

20 digital music provider no more than 

21 once in any 3-calendar-year period to 

22 cover a verification period of no more 

23 than the 3 full calendar years pre24 ceding the date of commencement of 

25 the audit, and such audit may not 
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1 audit records for any such 3-year 

2 verification period more than once. 

3 ‘‘(II) The audit shall be con4 ducted by a qualified auditor, who 

5 shall perform the audit during the or6 dinary course of business by exam7 ining the books, records, and data of 

8 the digital music provider, according 

9 to generally accepted auditing stand10 ards and subject to applicable con11 fidentiality requirements prescribed by 

12 the Register of Copyrights under 

13 paragraph (12)(C). 

14 ‘‘(III) The digital music provider 

15 shall make such books, records, and 

16 data available to the qualified auditor 

17 and respond to reasonable requests 

18 for relevant information, and shall use 

19 commercially reasonable efforts to 

20 provide access to relevant information 

21 maintained with respect to a digital 

22 music provider by third parties. 

23 ‘‘(IV) To commence the audit, 

24 the mechanical licensing collective 

25 shall file with the Copyright Office a 
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1 notice of intent to conduct an audit of 

2 the digital music provider, identifying 

3 the period of time to be audited, and 

4 shall simultaneously deliver a copy of 

5 such notice to the digital music pro6 vider. The Register of Copyrights 

7 shall cause the notice of audit to be 

8 published in the Federal Register 

9 within 45 calendar days after receipt. 

10 ‘‘(V) The qualified auditor shall 

11 determine the accuracy of royalty pay12 ments, including whether an under13 payment or overpayment of royalties 

14 was made by the digital music pro15 vider to the mechanical licensing col16 lective, but before providing a final 

17 audit report to the mechanical licens18 ing collective, the qualified auditor 

19 shall provide a tentative draft of the 

20 report to the digital music provider 

21 and allow the digital music provider a 

22 reasonable opportunity to respond to 

23 the findings, including by clarifying 

24 issues and correcting factual errors. 
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1 ‘‘(VI) The mechanical licensing 

2 collective shall pay the cost of the 

3 audit, unless the qualified auditor de4 termines that there was an under5 payment by the digital music provider 

6 of 10 percent or more, in which case 

7 the digital music provider shall bear 

8 the reasonable costs of the audit, in 

9 addition to paying the amount of any 

10 underpayment to the mechanical li11 censing collective. In case of an over12 payment by the digital music provider, 

13 the mechanical licensing collective 

14 shall provide a credit to the account 

15 of the digital music provider. 

16 ‘‘(VII) A digital music provider 

17 may not assert section 507 or any 

18 other Federal or State statute of limi19 tations, doctrine of laches or estoppel, 

20 or similar provision as a defense to a 

21 legal action arising from an audit 

22 under this subparagraph if such legal 

23 action is commenced no more than 6 

24 years after the commencement of the 

25 audit that is the basis for such action. 
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1 ‘‘(ii) ALTERNATIVE VERIFICATION

2 PROCEDURES.—Nothing in this subpara3 graph shall preclude the mechanical licens4 ing collective and a digital music provider 

5 from agreeing to audit procedures different 

6 from those described herein, but a notice 

7 of the audit shall be provided to and pub8 lished by the Copyright Office as described 

9 in clause (i)(IV). 

10 ‘‘(E) DEFAULT UNDER BLANKET LI11 CENSE.— 

12 ‘‘(i) CONDITIONS OF DEFAULT.—A 

13 digital music provider shall be in default 

14 under a blanket license if the digital music 

15 provider— 

16 ‘‘(I) fails to provide one or more 

17 monthly reports of usage to the me18 chanical licensing collective when due; 

19 ‘‘(II) fails to make a monthly 

20 royalty or late fee payment to the me21 chanical licensing collective when due, 

22 in all or material part; 

23 ‘‘(III) provides one or more 

24 monthly reports of usage to the me25 chanical licensing collective that, on 
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•HR 5447 EH

1 the whole, is or are materially defi2 cient as a result of inaccurate, miss3 ing, or unreadable data, where the 

4 correct data was available to the dig5 ital music provider and required to be 

6 reported under this section and appli7 cable regulations; 

8 ‘‘(IV) fails to pay the administra9 tive assessment as required under this 

10 subsection and applicable regulations; 

11 or 

12 ‘‘(V) after being provided written 

13 notice by the mechanical licensing col14 lective, refuses to comply with any 

15 other material term or condition of 

16 the blanket license under this section 

17 for a period of 60 calendar days or 

18 longer. 

19 ‘‘(ii) NOTICE OF DEFAULT AND TER20 MINATION.—In case of a default by a dig21 ital music provider, the mechanical licens22 ing collective may proceed to terminate the 

23 blanket license of the digital music pro24 vider as follows: 
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1 ‘‘(I) The mechanical licensing 

2 collective shall provide written notice 

3 to the digital music provider describ4 ing with reasonable particularity the 

5 default and advising that unless such 

6 default is cured within 60 calendar 

7 days after the date of the notice, the 

8 blanket license will automatically ter9 minate at the end of that period. 

10 ‘‘(II) If the digital music provider 

11 fails to remedy the default within the 

12 60-day period referenced in subclause 

13 (I), the license shall terminate without 

14 any further action on the part of the 

15 mechanical licensing collective. Such 

16 termination renders the making of all 

17 digital phonorecord deliveries of all 

18 musical works (and shares thereof) 

19 covered by the blanket license for 

20 which the royalty or administrative 

21 assessment has not been paid action22 able as acts of infringement under 

23 section 501 and subject to the rem24 edies provided by sections 502 

25 through 506. 
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1 ‘‘(iii) NOTICE TO COPYRIGHT OWN2 ERS.—The mechanical licensing collective 

3 shall provide written notice of any termi4 nation under this subparagraph to copy5 right owners of affected works. 

6 ‘‘(iv) REVIEW BY FEDERAL DISTRICT

7 COURT.—A digital music provider that be8 lieves a blanket license was improperly ter9 minated by the mechanical licensing collec10 tive may seek review of such termination in 

11 Federal district court. The district court 

12 shall determine the matter de novo based 

13 on the record before the mechanical licens14 ing collective and any additional sup15 porting evidence presented by the parties. 

16 ‘‘(5) DIGITAL LICENSEE COORDINATOR.— 

17 ‘‘(A) IN GENERAL.—The digital licensee 

18 coordinator shall be a single entity that— 

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

20 other entity, that is created to carry out 

21 responsibilities under this subsection; 

22 ‘‘(ii) is endorsed by and enjoys sub23 stantial support from digital music pro24 viders and significant nonblanket licensees 

25 that together represent the greatest per-
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•HR 5447 EH

1 centage of the licensee market for uses of 

2 musical works in covered activities, as 

3 measured over the preceding 3 calendar 

4 years; 

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

6 has, or will have prior to the license avail7 ability date, the administrative capabilities 

8 to perform the required functions of the 

9 digital licensee coordinator under this sub10 section; and 

11 ‘‘(iv) has been designated by the Reg12 ister of Copyrights in accordance with sub13 paragraph (B). 

14 ‘‘(B) DESIGNATION OF DIGITAL LICENSEE

15 COORDINATOR.— 

16 ‘‘(i) INITIAL DESIGNATION.—The 

17 Register of Copyrights shall initially des18 ignate the digital licensee coordinator with19 in 9 months after the enactment date, in 

20 accordance with the same procedure de21 scribed for designation of the mechanical 

22 licensing collective in paragraph (3)(B)(i). 

23 ‘‘(ii) PERIODIC REVIEW OF DESIGNA24 TION.—Following the initial designation of 

25 the digital licensee coordinator, the Reg-
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•HR 5447 EH

1 ister shall, every 5 years, beginning with 

2 the fifth full calendar year to commence 

3 after the initial designation, determine 

4 whether the existing designation should be 

5 continued, or a different entity meeting the 

6 criteria described in clauses (i) through 

7 (iii) of subparagraph (A) should be des8 ignated, in accordance with the same pro9 cedure described for the mechanical licens10 ing collective in paragraph (3)(B)(ii). 

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

12 the Register is unable to identify an entity 

13 that fulfills each of the qualifications de14 scribed in clauses (i) through (iii) of sub15 paragraph (A) to serve as the digital li16 censee coordinator, the Register may de17 cline to designate a digital licensee coordi18 nator. The Register’s determination not to 

19 designate a digital licensee coordinator 

20 shall not negate or otherwise affect any 

21 provision of this subsection except to the 

22 limited extent that a provision references 

23 the digital licensee coordinator. In such 

24 case, the reference to the digital licensee 

25 coordinator shall be without effect unless 
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•HR 5447 EH

1 and until a new digital licensee coordinator 

2 is designated. 

3 ‘‘(C) AUTHORITIES AND FUNCTIONS.— 

4 ‘‘(i) IN GENERAL.—The digital li5 censee coordinator is authorized to perform 

6 the following functions, subject to more 

7 particular requirements as described in 

8 this subsection: 

9 ‘‘(I) Establish a governance 

10 structure, criteria for membership, 

11 and any dues to be paid by its mem12 bers. 

13 ‘‘(II) Engage in efforts to enforce 

14 notice and payment obligations with 

15 respect to the administrative assess16 ment, including by receiving informa17 tion from and coordinating with the 

18 mechanical licensing collective. 

19 ‘‘(III) Initiate and participate in 

20 proceedings before the Copyright Roy21 alty Judges to establish the adminis22 trative assessment under this sub23 section. 

24 ‘‘(IV) Initiate and participate in 

25 proceedings before the Copyright Of-
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•HR 5447 EH

1 fice with respect to activities under 

2 this subsection. 

3 ‘‘(V) Gather and provide docu4 mentation for use in proceedings be5 fore the Copyright Royalty Judges to 

6 set rates and terms under this section. 

7 ‘‘(VI) Maintain records of its ac8 tivities. 

9 ‘‘(VII) Engage in such other ac10 tivities as may be necessary or appro11 priate to fulfill its responsibilities 

12 under this subsection. 

13 ‘‘(ii) RESTRICTION ON LOBBYING.— 

14 The digital licensee coordinator may not 

15 engage in government lobbying activities, 

16 but may engage in the activities described 

17 in subclauses (III), (IV), and (V) of clause 

18 (i). 

19 ‘‘(6) REQUIREMENTS FOR SIGNIFICANT NON20 BLANKET LICENSEES.— 

21 ‘‘(A) IN GENERAL.— 

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

23 than 45 calendar days after the license 

24 availability date, or 45 calendar days after 

25 the end of the first full calendar month in 
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1 which an entity initially qualifies as a sig2 nificant nonblanket licensee, whichever oc3 curs later, a significant nonblanket licensee 

4 shall submit a notice of nonblanket activity 

5 to the mechanical licensing collective. The 

6 notice of nonblanket activity shall comply 

7 in form and substance with requirements 

8 that the Register of Copyrights shall estab9 lish by regulation, and a copy shall be 

10 made available to the digital licensee coor11 dinator. 

12 ‘‘(ii) REPORTING AND PAYMENT OBLI13 GATIONS.—The notice of nonblanket activ14 ity submitted to the mechanical licensing 

15 collective shall be accompanied by a report 

16 of usage that contains the information de17 scribed in paragraph (4)(A)(ii), as well as 

18 any payment of the administrative assess19 ment required under this subsection and 

20 applicable regulations. Thereafter, subject 

21 to clause (iii), a significant nonblanket li22 censee shall continue to provide monthly 

23 reports of usage, accompanied by any re24 quired payment of the administrative as25 sessment, to the mechanical licensing col-
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•HR 5447 EH

1 lective. Such reports and payments shall be 

2 submitted not later than 45 calendar days 

3 after the end of the calendar month being 

4 reported. 

5 ‘‘(iii) DISCONTINUATION OF OBLIGA6 TIONS.—An entity that has submitted a 

7 notice of nonblanket activity to the me8 chanical licensing collective that has ceased 

9 to qualify as a significant nonblanket li10 censee may so notify the collective in writ11 ing. In such case, as of the calendar month 

12 in which such notice is provided, such enti13 ty shall no longer be required to provide 

14 reports of usage or pay the administrative 

15 assessment, but if such entity later quali16 fies as a significant nonblanket licensee, 

17 such entity shall again be required to com18 ply with clauses (i) and (ii). 

19 ‘‘(B) REPORTING BY MECHANICAL LICENS20 ING COLLECTIVE TO DIGITAL LICENSEE COOR21 DINATOR.— 

22 ‘‘(i) MONTHLY REPORTS OF NON23 COMPLIANT LICENSEES.—The mechanical 

24 licensing collective shall provide monthly 

25 reports to the digital licensee coordinator 
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•HR 5447 EH

1 setting forth any significant nonblanket li2 censees of which the collective is aware 

3 that have failed to comply with subpara4 graph (A). 

5 ‘‘(ii) TREATMENT OF CONFIDENTIAL

6 INFORMATION.—The mechanical licensing 

7 collective and digital licensee coordinator 

8 shall take appropriate steps to safeguard 

9 the confidentiality and security of financial 

10 and other sensitive data shared under this 

11 subparagraph, in accordance with the con12 fidentiality requirements prescribed by the 

13 Register of Copyrights under paragraph 

14 (12)(C). 

15 ‘‘(C) LEGAL ENFORCEMENT EFFORTS.— 

16 ‘‘(i) FEDERAL COURT ACTION.— 

17 Should the mechanical licensing collective 

18 or digital licensee coordinator become 

19 aware that a significant nonblanket li20 censee has failed to comply with subpara21 graph (A), either may commence an action 

22 in Federal district court for damages and 

23 injunctive relief. If the significant non24 blanket licensee is found liable, the court 

25 shall, absent a finding of excusable neglect, 
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•HR 5447 EH

1 award damages in an amount equal to 

2 three times the total amount of the unpaid 

3 administrative assessment and, notwith4 standing anything to the contrary in sec5 tion 505, reasonable attorney’s fees and 

6 costs, as well as such other relief as the 

7 court deems appropriate. In all other 

8 cases, the court shall award relief as ap9 propriate. Any recovery of damages shall 

10 be payable to the mechanical licensing col11 lective as an offset to the collective total 

12 costs. 

13 ‘‘(ii) STATUTE OF LIMITATIONS FOR

14 ENFORCEMENT ACTION.—Any action de15 scribed in this subparagraph shall be com16 menced within the time period described in 

17 section 507(b). 

18 ‘‘(iii) OTHER RIGHTS AND REMEDIES

19 PRESERVED.—The ability of the mechan20 ical licensing collective or digital licensee 

21 coordinator to bring an action under this 

22 subparagraph shall in no way alter, limit 

23 or negate any other right or remedy that 

24 may be available to any party at law or in 

25 equity. 
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1 ‘‘(7) FUNDING OF MECHANICAL LICENSING

2 COLLECTIVE.— 

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

4 costs shall be funded by— 

5 ‘‘(i) an administrative assessment, as 

6 such assessment is established by the 

7 Copyright Royalty Judges pursuant to sub8 paragraph (D) from time to time, to be 

9 paid by— 

10 ‘‘(I) digital music providers that 

11 are engaged, in all or in part, in cov12 ered activities pursuant to a blanket 

13 license; and 

14 ‘‘(II) significant nonblanket li15 censees; and 

16 ‘‘(ii) voluntary contributions from dig17 ital music providers and significant non18 blanket licensees as may be agreed with 

19 copyright owners. 

20 ‘‘(B) VOLUNTARY CONTRIBUTIONS.— 

21 ‘‘(i) AGREEMENTS CONCERNING CON22 TRIBUTIONS.—Except as provided in 

23 clause (ii), voluntary contributions by dig24 ital music providers and significant non25 blanket licensees shall be determined by 
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•HR 5447 EH

1 private negotiation and agreement, and the 

2 following conditions apply: 

3 ‘‘(I) The date and amount of 

4 each voluntary contribution to the me5 chanical licensing collective shall be 

6 documented in a writing signed by an 

7 authorized agent of the mechanical li8 censing collective and the contributing 

9 party. 

10 ‘‘(II) Such agreement shall be 

11 made available as required in pro12 ceedings before the Copyright Royalty 

13 Judges to establish or adjust the ad14 ministrative assessment in accordance 

15 with applicable statutory and regu16 latory provisions and rulings of the 

17 Copyright Royalty Judges. 

18 ‘‘(ii) TREATMENT OF CONTRIBU19 TIONS.—Each such voluntary contribution 

20 shall be treated for purposes of an admin21 istrative assessment proceeding as an off22 set to the collective total costs that would 

23 otherwise be recovered through the admin24 istrative assessment. Any allocation or re25 allocation of voluntary contributions be-
84 

•HR 5447 EH

1 tween or among individual digital music 

2 providers or significant nonblanket licens3 ees shall be a matter of private negotiation 

4 and agreement among such parties and 

5 outside the scope of the administrative as6 sessment proceeding. 

7 ‘‘(C) INTERIM APPLICATION OF ACCRUED

8 ROYALTIES.—In the event that the administra9 tive assessment, together with any funding from 

10 voluntary contributions as provided in subpara11 graphs (A) and (B), is inadequate to cover cur12 rent collective total costs, the collective, with 

13 approval of its board of directors, may apply 

14 unclaimed accrued royalties on an interim basis 

15 to defray such costs, subject to future reim16 bursement of such royalties from future collec17 tions of the assessment. 

18 ‘‘(D) DETERMINATION OF ADMINISTRA19 TIVE ASSESSMENT.— 

20 ‘‘(i) ADMINISTRATIVE ASSESSMENT TO

21 COVER COLLECTIVE TOTAL COSTS.—The 

22 administrative assessment shall be used 

23 solely and exclusively to fund the collective 

24 total costs. 
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•HR 5447 EH

1 ‘‘(ii) SEPARATE PROCEEDING BEFORE

2 COPYRIGHT ROYALTY JUDGES.—The 

3 amount and terms of the administrative 

4 assessment shall be determined and estab5 lished in a separate and independent pro6 ceeding before the Copyright Royalty 

7 Judges, according to the procedures de8 scribed in clauses (iii) and (iv). The admin9 istrative assessment determined in such 

10 proceeding shall— 

11 ‘‘(I) be wholly independent of 

12 royalty rates and terms applicable to 

13 digital music providers, which shall 

14 not be taken into consideration in any 

15 manner in establishing the adminis16 trative assessment; 

17 ‘‘(II) be established by the Copy18 right Royalty Judges in an amount 

19 that is calculated to defray the rea20 sonable collective total costs; 

21 ‘‘(III) be assessed based on usage 

22 of musical works by digital music pro23 viders and significant nonblanket li24 censees in covered activities under 
86 

•HR 5447 EH

1 both compulsory and nonblanket li2 censes; 

3 ‘‘(IV) may be in the form of a 

4 percentage of royalties payable under 

5 this section for usage of musical 

6 works in covered activities (regardless 

7 of whether a different rate applies 

8 under a voluntary license), or any 

9 other usage-based metric reasonably 

10 calculated to equitably allocate the 

11 collective total costs across digital 

12 music providers and significant non13 blanket licensees engaged in covered 

14 activities, but shall include as a com15 ponent a minimum fee for all digital 

16 music providers and significant non17 blanket licensees; and 

18 ‘‘(V) take into consideration an19 ticipated future collective total costs 

20 and collections of the administrative 

21 assessment, but also, as applicable— 

22 ‘‘(aa) any portion of past ac23 tual collective total costs of the 

24 mechanical licensing collective 

25 not funded by previous collections 
87 

•HR 5447 EH

1 of the administrative assessment 

2 or voluntary contributions be3 cause such collections or con4 tributions together were insuffi5 cient to fund such costs; 

6 ‘‘(bb) any past collections of 

7 the administrative assessment 

8 and voluntary contributions that 

9 exceeded past actual collective 

10 total costs, resulting in a surplus; 

11 and 

12 ‘‘(cc) the amount of any vol13 untary contributions by digital 

14 music providers or significant 

15 nonblanket licensees in relevant 

16 periods, described in subpara17 graphs (A) and (B) of paragraph 

18 (7). 

19 ‘‘(iii) INITIAL ADMINISTRATIVE AS20 SESSMENT.—The procedure for estab21 lishing the initial administrative assess22 ment shall be as follows: 

23 ‘‘(I) The Copyright Royalty 

24 Judges shall commence a proceeding 

25 to establish the initial administrative 
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•HR 5447 EH

1 assessment within 9 months after the 

2 enactment date by publishing a notice 

3 in the Federal Register seeking peti4 tions to participate. 

5 ‘‘(II) The mechanical licensing 

6 collective and digital licensee coordi7 nator shall participate in such pro8 ceeding, along with any interested 

9 copyright owners, digital music pro10 viders or significant nonblanket licens11 ees that have notified the Copyright 

12 Royalty Judges of their desire to par13 ticipate. 

14 ‘‘(III) The Copyright Royalty 

15 Judges shall establish a schedule for 

16 submission by the parties of informa17 tion that may be relevant to estab18 lishing the administrative assessment, 

19 including actual and anticipated col20 lective total costs of the mechanical li21 censing collective, actual and antici22 pated collections from digital music 

23 providers and significant nonblanket 

24 licensees, and documentation of vol25 untary contributions, as well as a 
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•HR 5447 EH

1 schedule for further proceedings, 

2 which shall include a hearing, as they 

3 deem appropriate. 

4 ‘‘(IV) The initial administrative 

5 assessment shall be determined, and 

6 such determination shall be published 

7 in the Federal Register by the Copy8 right Royalty Judges, within 1 year 

9 after commencement of the proceeding 

10 described in this clause. The deter11 mination shall be supported by a writ12 ten record. The initial administrative 

13 assessment shall be effective as of the 

14 license availability date, and shall con15 tinue in effect unless and until an ad16 justed administrative assessment is 

17 established pursuant to an adjustment 

18 proceeding under clause (iii). 

19 ‘‘(iv) ADJUSTMENT OF ADMINISTRA20 TIVE ASSESSMENT.—The administrative 

21 assessment may be adjusted by the Copy22 right Royalty Judges periodically, in ac23 cordance with the following procedures: 

24 ‘‘(I) No earlier than 1 year after 

25 the most recent publication of a deter-
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•HR 5447 EH

1 mination of the administrative assess2 ment by the Copyright Royalty 

3 Judges, the mechanical licensing col4 lective, the digital licensee coordi5 nator, or one or more interested copy6 right owners, digital music providers, 

7 or significant nonblanket licensees, 

8 may file a petition with the Copyright 

9 Royalty Judges in the month of Octo10 ber to commence a proceeding to ad11 just the administrative assessment. 

12 ‘‘(II) Notice of the commence13 ment of such proceeding shall be pub14 lished in the Federal Register in the 

15 month of November following the fil16 ing of any petition, with a schedule of 

17 requested information and additional 

18 proceedings, as described in clause 

19 (iii)(III). The mechanical licensing 

20 collective and digital licensee coordi21 nator shall participate in such pro22 ceeding, along with any interested 

23 copyright owners, digital music pro24 viders, or significant nonblanket li25 censees that have notified the Copy-
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•HR 5447 EH

1 right Royalty Judges of their desire to 

2 participate. 

3 ‘‘(III) The determination of the 

4 adjusted administrative assessment, 

5 which shall be supported by a written 

6 record, shall be published in the Fed7 eral Register during November of the 

8 calendar year following the commence9 ment of the proceeding. The adjusted 

10 administrative assessment shall take 

11 effect January 1 of the year following 

12 such publication. 

13 ‘‘(v) ADOPTION OF VOLUNTARY

14 AGREEMENTS.—In lieu of reaching their 

15 own determination based on evaluation of 

16 relevant data, the Copyright Royalty 

17 Judges shall approve and adopt a nego18 tiated agreement to establish the amount 

19 and terms of the administrative assessment 

20 that has been agreed to by the mechanical 

21 licensing collective and the digital licensee 

22 coordinator (or if none has been des23 ignated, interested digital music providers 

24 and significant nonblanket licensees rep25 resenting more than half of the market for 
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•HR 5447 EH

1 uses of musical works in covered activi2 ties), but the Copyright Royalty Judges 

3 shall have the discretion to reject any such 

4 agreement for good cause shown. An ad5 ministrative assessment adopted under this 

6 clause shall apply to all digital music pro7 viders and significant nonblanket licensees 

8 engaged in covered activities during the pe9 riod it is in effect. 

10 ‘‘(vi) CONTINUING AUTHORITY TO

11 AMEND.—The Copyright Royalty Judges 

12 shall retain continuing authority to amend 

13 a determination of an administrative as14 sessment to correct technical or clerical er15 rors, or modify the terms of implementa16 tion, for good cause, with any such amend17 ment to be published in the Federal Reg18 ister. 

19 ‘‘(vii) APPEAL OF ADMINISTRATIVE

20 ASSESSMENT.—The determination of an 

21 administrative assessment by the Copy22 right Royalty Judges shall be appealable, 

23 within 30 calendar days after publication 

24 in the Federal Register, to the Court of 

25 Appeals for the District of Columbia Cir-
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1 cuit by any party that fully participated in 

2 the proceeding. The administrative assess3 ment as established by the Copyright Roy4 alty Judges shall remain in effect pending 

5 the final outcome of any such appeal, and 

6 the mechanical licensing collective, digital 

7 licensee coordinator, digital music pro8 viders, and significant nonblanket licensees 

9 shall implement appropriate financial or 

10 other measures within 3 months after any 

11 modification of the assessment to reflect 

12 and account for such outcome. 

13 ‘‘(viii) REGULATIONS.—The Copyright 

14 Royalty Judges may adopt regulations to 

15 govern the conduct of proceedings under 

16 this paragraph. 

17 ‘‘(8) ESTABLISHMENT OF RATES AND TERMS

18 UNDER BLANKET LICENSE.— 

19 ‘‘(A) RESTRICTIONS ON RATESETTING

20 PARTICIPATION.—Neither the mechanical li21 censing collective nor the digital licensee coordi22 nator shall be a party to a proceeding described 

23 in subsection (c)(1)(E), but either may gather 

24 and provide financial and other information for 

25 the use of a party to such a proceeding and 
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1 comply with requests for information as re2 quired under applicable statutory and regu3 latory provisions and rulings of the Copyright 

4 Royalty Judges. 

5 ‘‘(B) APPLICATION OF LATE FEES.—In 

6 any proceeding described in subparagraph (A) 

7 in which the Copyright Royalty Judges estab8 lish a late fee for late payment of royalties for 

9 uses of musical works under this section, such 

10 fee shall apply to covered activities under blan11 ket licenses, as follows: 

12 ‘‘(i) Late fees for past due royalty 

13 payments shall accrue from the due date 

14 for payment until payment is received by 

15 the mechanical licensing collective. 

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

17 in no way prevent a copyright owner or the 

18 mechanical licensing collective from assert19 ing any other rights or remedies to which 

20 such copyright owner or the mechanical li21 censing collective may be entitled under 

22 this title. 

23 ‘‘(C) INTERIM RATE AGREEMENTS IN GEN24 ERAL.—For any covered activity for which no 

25 rate or terms have been established by the 
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1 Copyright Royalty Judges, the mechanical li2 censing collective and any digital music provider 

3 may agree to an interim rate and terms for 

4 such activity under the blanket license, and any 

5 such rate and terms— 

6 ‘‘(i) shall be treated as nonpreceden7 tial and not cited or relied upon in any 

8 ratesetting proceeding before the Copyright 

9 Royalty Judges or any other tribunal; and 

10 ‘‘(ii) shall automatically expire upon 

11 the establishment of a rate and terms for 

12 such covered activity by the Copyright 

13 Royalty Judges, under subsection 

14 (c)(1)(E). 

15 ‘‘(D) ADJUSTMENTS FOR INTERIM

16 RATES.—The rate and terms established by the 

17 Copyright Royalty Judges for a covered activity 

18 to which an interim rate and terms have been 

19 agreed under subparagraph (C) shall supersede 

20 the interim rate and terms and apply retro21 actively to the inception of the activity under 

22 the blanket license. In such case, within 3 

23 months after the rate and terms established by 

24 the Copyright Royalty Judges become effec25 tive— 
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1 ‘‘(i) if the rate established by the 

2 Copyright Royalty Judges exceeds the in3 terim rate, the digital music provider shall 

4 pay to the mechanical licensing collective 

5 the amount of any underpayment of royal6 ties due; or 

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

8 rate established by the Copyright Royalty 

9 Judges, the mechanical licensing collective 

10 shall credit the account of the digital music 

11 provider for the amount of any overpay12 ment of royalties due. 

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

14 ‘‘(A) SUBSTITUTION OF BLANKET LI15 CENSE.—On the license availability date, a 

16 blanket license shall, without any interruption 

17 in license authority enjoyed by such digital 

18 music provider, be automatically substituted for 

19 and supersede any existing compulsory license 

20 previously obtained under this section by the 

21 digital music provider from a copyright owner 

22 to engage in one or more covered activities with 

23 respect to a musical work, but the foregoing 

24 shall not apply to any authority obtained from 

25 a record company pursuant to a compulsory li-
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1 cense to make and distribute permanent 

2 downloads unless and until such record com3 pany terminates such authority in writing to 

4 take effect at the end of a monthly reporting 

5 period, with a copy to the mechanical licensing 

6 collective. 

7 ‘‘(B) EXPIRATION OF EXISTING LI8 CENSES.—Except to the extent provided in sub9 paragraph (A), on and after the license avail10 ability date, licenses other than individual 

11 download licenses obtained under this section 

12 for covered activities prior to the license avail13 ability date shall no longer continue in effect. 

14 ‘‘(C) TREATMENT OF VOLUNTARY LI15 CENSES.—A voluntary license for a covered ac16 tivity in effect on the license availability date 

17 will remain in effect unless and until the vol18 untary license expires according to the terms of 

19 the voluntary license, or the parties agree to 

20 amend or terminate the voluntary license. In a 

21 case where a voluntary license for a covered ac22 tivity entered into before the license availability 

23 date incorporates the terms of this section by 

24 reference, the terms so incorporated (but not 

25 the rates) shall be those in effect immediately 
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1 prior to the license availability date, and those 

2 terms shall continue to apply unless and until 

3 such voluntary license is terminated or amend4 ed, or the parties enter into a new voluntary li5 cense. 

6 ‘‘(D) FURTHER ACCEPTANCE OF NOTICES

7 FOR COVERED ACTIVITIES BY COPYRIGHT OF8 FICE.—On and after the enactment date— 

9 ‘‘(i) the Copyright Office shall no 

10 longer accept notices of intention with re11 spect to covered activities; and 

12 ‘‘(ii) previously filed notices of inten13 tion will no longer be effective or provide 

14 license authority with respect to covered 

15 activities, but before the license availability 

16 date there shall be no liability under sec17 tion 501 for the reproduction or distribu18 tion of a musical work (or share thereof) 

19 in covered activities if a valid notice of in20 tention was filed for such work (or share) 

21 before the enactment date. 

22 ‘‘(10) PRIOR UNLICENSED USES.— 

23 ‘‘(A) LIMITATION ON LIABILITY IN GEN24 ERAL.—A copyright owner that commences an 

25 action under section 501 on or after January 1, 
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1 2018, against a digital music provider for the 

2 infringement of the exclusive rights provided by 

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

4 from the unauthorized reproduction or distribu5 tion of a musical work by such digital music 

6 provider in the course of engaging in covered 

7 activities prior to the license availability date, 

8 shall, as the copyright owner’s sole and exclu9 sive remedy against the digital music provider, 

10 be eligible to recover the royalty prescribed 

11 under subsection (c)(1)(C) and chapter 8 of 

12 this title, from the digital music provider, pro13 vided that such digital music provider can dem14 onstrate compliance with the requirements of 

15 subparagraph (B), as applicable. In all other 

16 cases the limitation on liability under this sub17 paragraph shall not apply. 

18 ‘‘(B) REQUIREMENTS FOR LIMITATION ON

19 LIABILITY.—The following requirements shall 

20 apply on the enactment date and through the 

21 end of the period that expires 90 days after the 

22 license availability date to digital music pro23 viders seeking to avail themselves of the limita24 tion on liability described in subparagraph (A): 
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1 ‘‘(i) No later than 30 calendar days 

2 after first making a particular sound re3 cording of a musical work available 

4 through its service via one or more covered 

5 activities, or 30 calendar days after the en6 actment date, whichever occurs later, a 

7 digital music provider shall engage in 

8 good-faith, commercially reasonable efforts 

9 to identify and locate each copyright owner 

10 of such musical work (or share thereof). 

11 Such required matching efforts shall in12 clude the following: 

13 ‘‘(I) Good-faith, commercially 

14 reasonable efforts to obtain from the 

15 owner of the corresponding sound re16 cording made available through the 

17 digital music provider’s service the fol18 lowing information: 

19 ‘‘(aa) Sound recording 

20 name, featured artist, sound re21 cording copyright owner, pro22 ducer, international standard re23 cording code, and other informa24 tion commonly used in the indus25 try to identify sound recordings 
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1 and match them to the musical 

2 works they embody. 

3 ‘‘(bb) Any available musical 

4 work ownership information, in5 cluding each songwriter and pub6 lisher name, percentage owner7 ship share, and international 

8 standard musical work code. 

9 ‘‘(II) Employment of one or more 

10 bulk electronic matching processes 

11 that are available to the digital music 

12 provider through a third-party vendor 

13 on commercially reasonable terms, but 

14 a digital music provider may rely on 

15 its own bulk electronic matching proc16 ess if it has capabilities comparable to 

17 or better than those available from a 

18 third-party vendor on commercially 

19 reasonable terms. 

20 ‘‘(ii) The required matching efforts 

21 shall be repeated by the digital music pro22 vider no less than once per month for so 

23 long as the copyright owner remains un24 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 

4 share thereof) by the end of the calendar 

5 month in which the digital music provider 

6 first makes use of the work, the digital 

7 music provider shall provide statements of 

8 account and pay royalties to such copy9 right owner in accordance with this section 

10 and applicable regulations. 

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 

16 hold royalties calculated under the applica17 ble statutory rate in accordance with usage 

18 of the work, from initial use of the work 

19 until the accrued royalties can be paid to 

20 the copyright owner or are required to be 

21 transferred to the mechanical licensing col22 lective, as follows: 

23 ‘‘(I) Accrued royalties shall be 

24 maintained by the digital music pro-
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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 

7 the license availability date, the digital 

8 music provider shall— 

9 ‘‘(aa) within 45 calendar 

10 days after the end of the cal11 endar 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 

24 accordance with this section and 

25 applicable regulations, including 
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1 the requisite certification under 

2 subsection (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 account8 ing periods prior to the license 

9 availability date, provide monthly 

10 statements of account and pay 

11 royalties to the copyright owner 

12 as required under this section 

13 and 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 re20 porting period and reporting pe21 riods thereafter to the mechanical 

22 licensing collective, as required 

23 under this subsection and appli24 cable 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 

4 by the license availability date, the 

5 digital music provider shall— 

6 ‘‘(aa) within 45 calendar 

7 days after the license availability 

8 date, transfer all accrued royal9 ties to the mechanical licensing 

10 collective, such payment to be ac11 companied by a cumulative state12 ment of account that includes all 

13 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 

18 copyright owner from initial use 

19 of the work in accordance with 

20 this section and applicable regu21 lations, including the requisite 

22 certification under subsection 

23 (c)(2)(I), and accompanied by an 

24 additional certification by a duly 

25 authorized 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 

15 to the mechanical licensing collec16 tive, as required under this sub17 section and applicable regula18 tions. 

19 ‘‘(v) SUSPENSION OF LATE FEES.—A 

20 digital music provider that complies with 

21 the requirements of this paragraph with 

22 respect to unmatched musical works (or 

23 shares of works) shall not be liable for or 

24 accrue late fees for late payments of royal25 ties for such works until such time as the 
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1 digital music provider is required to begin 

2 paying monthly royalties to the copyright 

3 owner or the mechanical licensing collec4 tive, as applicable. 

5 ‘‘(C) ADJUSTED STATUTE OF LIMITA6 TIONS.—Notwithstanding anything to the con7 trary in section 507(b), with respect to any 

8 claim of infringement of the exclusive rights 

9 provided by paragraphs (1) and (3) of section 

10 106 against a digital music provider arising 

11 from the unauthorized reproduction or distribu12 tion of a musical work by such digital music 

13 provider to engage in covered activities that ac14 crued no more than 3 years prior to the license 

15 availability date, such action may be com16 menced within 3 years of the date the claim ac17 crued, or up to 2 years after the license avail18 ability date, whichever is later. 

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 

5 described in subsection (c)(1)(D) shall apply to 

6 negotiations and agreements between and 

7 among copyright owners and persons entitled to 

8 obtain a compulsory license for covered activi9 ties, and common agents acting on behalf of 

10 such copyright owners or persons, including 

11 with respect to the administrative assessment 

12 established 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) (except for the administrative 

17 assessment referenced therein and except as 

18 provided in paragraph (8)(C)), neither the me19 chanical licensing collective nor the digital li20 censee coordinator shall serve as a common 

21 agent with respect to the establishment of roy22 alty rates or terms under this section. 

23 ‘‘(C) ANTITRUST EXEMPTION FOR ADMIN24 ISTRATIVE ACTIVITIES.—Notwithstanding any 

25 provision of the antitrust laws, copyright own-
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1 ers and persons entitled to obtain a compulsory 

2 license under this section may designate the 

3 mechanical licensing collective to administer vol4 untary licenses for the reproduction or distribu5 tion of musical works in covered activities on 

6 behalf of such copyright owners and persons, 

7 but the following conditions apply: 

8 ‘‘(i) Each copyright owner shall estab9 lish the royalty rates and material terms of 

10 any such voluntary license individually and 

11 not in agreement, combination, or concert 

12 with any other copyright owner. 

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

14 compulsory license under this section shall 

15 establish the royalty rates and material 

16 terms of any such voluntary license indi17 vidually and not in agreement, combina18 tion, or concert with any other digital 

19 music provider. 

20 ‘‘(iii) The mechanical licensing collec21 tive shall maintain the confidentiality of 

22 the voluntary licenses in accordance with 

23 the confidentiality provisions prescribed by 

24 the Register of Copyrights under para25 graph (12)(C). 
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1 ‘‘(D) LIABILITY FOR GOOD-FAITH ACTIVI2 TIES.—The mechanical licensing collective shall 

3 not be liable to any person or entity based on 

4 a claim arising from its good-faith administra5 tion of policies and procedures adopted and im6 plemented to carry out the responsibilities de7 scribed in subparagraphs (J) and (K) of para8 graph (3), except to the extent of correcting an 

9 underpayment or overpayment of royalties as 

10 provided in paragraph (3)(L)(i)(VI), but the 

11 collective may participate in a legal proceeding 

12 as a stakeholder party if the collective is hold13 ing funds that are the subject of a dispute be14 tween copyright owners. For purposes of this 

15 subparagraph, ‘good-faith administration’ 

16 means administration in a manner that is not 

17 grossly negligent. 

18 ‘‘(E) PREEMPTION OF STATE PROPERTY

19 LAWS.—The holding and distribution of funds 

20 by the mechanical licensing collective in accord21 ance with this subsection shall supersede and 

22 preempt any State law (including common law) 

23 concerning escheatment or abandoned property, 

24 or any analogous provision, that might other25 wise apply. 
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1 ‘‘(F) RULE OF CONSTRUCTION.—Except as 

2 expressly provided in this subsection, nothing in 

3 this subsection shall negate or limit the ability 

4 of any person to pursue an action in Federal 

5 court against the mechanical licensing collective 

6 or any other person based upon a claim arising 

7 under this title or other applicable law. 

8 ‘‘(12) REGULATIONS.— 

9 ‘‘(A) ADOPTION BY REGISTER OF COPY10 RIGHTS AND COPYRIGHT ROYALTY JUDGES.— 

11 The Register of Copyrights may conduct such 

12 proceedings and adopt such regulations as may 

13 be necessary or appropriate to effectuate the 

14 provisions of this subsection, except for regula15 tions concerning proceedings before the Copy16 right Royalty Judges to establish the adminis17 trative assessment, which shall be adopted by 

18 the Copyright Royalty Judges. 

19 ‘‘(B) JUDICIAL REVIEW OF REGULA20 TIONS.—Except as provided in paragraph 

21 (7)(D)(vii), regulations adopted under this sub22 section shall be subject to judicial review pursu23 ant to chapter 7 of title 5. 

24 ‘‘(C) PROTECTION OF CONFIDENTIAL IN25 FORMATION.—The Register of Copyrights shall 
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1 adopt regulations to provide for the appropriate 

2 procedures to ensure that confidential, private, 

3 proprietary, or privileged information contained 

4 in the records of the mechanical licensing collec5 tive and digital licensee coordinator is not im6 properly disclosed or used, including through 

7 any disclosure or use by the board of directors 

8 or personnel of either entity, and specifically in9 cluding the unclaimed royalties oversight com10 mittee and the dispute resolution committee of 

11 the mechanical licensing collective. 

12 ‘‘(13) SAVINGS CLAUSES.— 

13 ‘‘(A) LIMITATION ON ACTIVITIES AND

14 RIGHTS COVERED.—This subsection applies 

15 solely to uses of musical works subject to licens16 ing under this section. The blanket license shall 

17 not be construed to extend or apply to activities 

18 other than covered activities or to rights other 

19 than the exclusive rights of reproduction and 

20 distribution licensed under this section, or serve 

21 or act as the basis to extend or expand the 

22 compulsory license under this section to activi23 ties and rights not covered by this section on 

24 the enactment date. 
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1 ‘‘(B) RIGHTS OF PUBLIC PERFORMANCE

2 NOT AFFECTED.—The rights, protections, and 

3 immunities granted under this subsection, the 

4 data concerning musical works collected and 

5 made available under this subsection, and the 

6 definitions described in subsection (e) shall not 

7 extend to, limit, or otherwise affect any right of 

8 public performance in a musical work.’’; and 

9 (5) by adding at the end the following new sub10 section: 

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

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

13 interest’ means interest accrued on accrued royal14 ties, as described in subsection (d)(3)(H)(ii). 

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

16 royalties’ means royalties accrued for the reproduc17 tion or distribution of a musical work (or share 

18 thereof) in a covered activity, calculated in accord19 ance with the applicable royalty rate under this sec20 tion. 

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

22 ‘administrative assessment’ means the fee estab23 lished pursuant to subsection (d)(7)(D). 

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

25 compliance examination to verify the accuracy of 
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1 royalty payments, or the conduct of such an exam2 ination, 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 

7 ‘collective total costs’— 

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

9 maintaining, and operating the mechanical li10 censing collective to fulfill its statutory func11 tions, including— 

12 ‘‘(i) startup costs; 

13 ‘‘(ii) financing, legal, and insurance 

14 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 

24 owners of musical works (and shares of 

25 such musical works) and match sound re-
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1 cordings to the musical works the sound 

2 recordings 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 

7 activity’ means the activity of making a digital pho8 norecord delivery of a musical work, including in the 

9 form of a permanent download, limited download, or 

10 interactive stream, where such activity qualified for 

11 a compulsory license under this section. 

12 ‘‘(8) DIGITAL MUSIC PROVIDER.—The term 

13 ‘digital music provider’ means a person (or persons 

14 operating under the authority of that person) that, 

15 with respect to a service engaged in covered activi16 ties— 

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

18 or other economic relationship with end users of 

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

20 users exists, exercises direct control over the 

21 provision of the service to end users; 

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

23 and consideration generated by the service; and 
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1 ‘‘(C) is able to fully report on usage of 

2 sound recordings of musical works by the serv3 ice (or procure such reporting). 

4 ‘‘(9) DIGITAL LICENSEE COORDINATOR.—The 

5 term ‘digital licensee coordinator’ means the entity 

6 most recently designated pursuant to subsection 

7 (d)(5). 

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

9 term ‘digital phonorecord delivery’ means each indi10 vidual delivery of a phonorecord by digital trans11 mission of a sound recording that results in a spe12 cifically identifiable reproduction by or for any 

13 transmission recipient of a phonorecord of that 

14 sound recording, regardless of whether the digital 

15 transmission is also a public performance of the 

16 sound recording or any musical work embodied 

17 therein, and includes a permanent download, a lim18 ited download, or an interactive stream. A digital 

19 phonorecord delivery does not result from a real20 time, noninteractive subscription transmission of a 

21 sound recording where no reproduction of the sound 

22 recording or the musical work embodied therein is 

23 made from the inception of the transmission through 

24 to its receipt by the transmission recipient in order 

25 to make the sound recording audible. A digital pho-
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1 norecord delivery does not include the digital trans2 mission of sounds accompanying a motion picture or 

3 other audiovisual work as defined in section 101 of 

4 this title. 

5 ‘‘(11) ENACTMENT DATE.—The term ‘enact6 ment date’ means the date of the enactment of the 

7 Musical Works Modernization Act. 

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

9 term ‘individual download license’ means a compul10 sory license obtained by a record company to make 

11 and distribute, or authorize the making and distribu12 tion of, permanent downloads embodying a specific 

13 individual musical work. 

14 ‘‘(13) INTERACTIVE STREAM.—The term ‘inter15 active stream’ means a digital transmission of a 

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

17 stream, where the performance of the sound record18 ing by means of such transmission is not exempt 

19 under section 114(d)(1) and does not in itself, or as 

20 a result of a program in which it is included, qualify 

21 for statutory licensing under section 114(d)(2). An 

22 interactive stream is a digital phonorecord delivery. 

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

24 applied to a party seeking to participate in a pro25 ceeding under subsection (d)(7)(D), is a party as to 
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1 which the Copyright Royalty Judges have not deter2 mined that the party lacks a significant interest in 

3 such proceeding. 

4 ‘‘(15) LICENSE AVAILABILITY DATE.—The term 

5 ‘license availability date’ means the next January 1 

6 following the expiration of the 2-year period begin7 ning on the enactment date. 

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

9 download’ means a digital transmission of a sound 

10 recording of a musical work in the form of a 

11 download, where such sound recording is accessible 

12 for listening only for a limited amount of time or 

13 specified number of times. 

14 ‘‘(17) MATCHED.—The term ‘matched’, as ap15 plied to a musical work (or share thereof), means 

16 that the copyright owner of such work (or share 

17 thereof) has been identified and located. 

18 ‘‘(18) MECHANICAL LICENSING COLLECTIVE.— 

19 The term ‘mechanical licensing collective’ means the 

20 entity most recently designated as such by the Reg21 ister of Copyrights under subsection (d)(3). 

22 ‘‘(19) MECHANICAL LICENSING COLLECTIVE

23 BUDGET.—The term ‘mechanical licensing collective 

24 budget’ means a statement of the financial position 

25 of the mechanical licensing collective for a fiscal year 
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1 or quarter thereof based on estimates of expendi2 tures during the period and proposals for financing 

3 them, including a calculation of the collective total 

4 costs. 

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

6 ‘musical works database’ means the database de7 scribed in subsection (d)(3)(E). 

8 ‘‘(21) NONPROFIT.—The term ‘nonprofit’ 

9 means a nonprofit created or organized in a State. 

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

11 of license’ means a notice from a digital music pro12 vider provided under subsection (d)(2)(A) for pur13 poses of obtaining a blanket license. 

14 ‘‘(23) NOTICE OF NONBLANKET ACTIVITY.— 

15 The term ‘notice of nonblanket activity’ means a no16 tice from a significant nonblanket licensee provided 

17 under subsection (d)(6)(A) for purposes of notifying 

18 the mechanical licensing collective that the licensee 

19 has been engaging in covered activities. 

20 ‘‘(24) PERMANENT DOWNLOAD.—The term 

21 ‘permanent download’ means a digital transmission 

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

23 of a download, where such sound recording is acces24 sible for listening without restriction as to the 
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1 amount of time or number of times it may be 

2 accessed. 

3 ‘‘(25) QUALIFIED AUDITOR.—The term ‘quali4 fied auditor’ means an independent, certified public 

5 accountant with experience performing music royalty 

6 audits. 

7 ‘‘(26) RECORD COMPANY.—The term ‘record 

8 company’ means an entity that invests in, produces, 

9 and markets sound recordings of musical works, and 

10 distributes such sound recordings for remuneration 

11 through multiple sales channels, including a cor12 porate affiliate of such an entity engaged in distribu13 tion of sound recordings. 

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

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

16 musical works in covered activities described in sub17 section (d)(4)(A). 

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

19 term ‘required matching efforts’ means efforts to 

20 identify and locate copyright owners of musical 

21 works as described in subsection (d)(10)(B)(i). 

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

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

24 or offering by or through which sound recordings of 
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1 musical works are digitally transmitted to members 

2 of the public. 

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

4 a musical work, means a fractional ownership inter5 est in such work. 

6 ‘‘(31) SIGNIFICANT NONBLANKET LICENSEE.— 

7 The term ‘significant nonblanket licensee’— 

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

9 entities under common ownership or control 

10 that, acting under the authority of one or more 

11 voluntary licenses or individual download li12 censes, offers a service engaged in covered ac13 tivities, and such entity or group of entities— 

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

15 blanket license and is not obligated to pro16 vide reports of usage reflecting covered ac17 tivities under subsection (d)(4)(A); 

18 ‘‘(ii) has a direct contractual, sub19 scription, or other economic relationship 

20 with end users of the service or, if no such 

21 relationship with end users exists, exercises 

22 direct control over the provision of the 

23 service to end users; and 

24 ‘‘(iii) either— 
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1 ‘‘(I) on any day in a calendar 

2 month, makes more than 5,000 dif3 ferent sound recordings of musical 

4 works available through such service; 

5 or 

6 ‘‘(II) derives revenue or other 

7 consideration in connection with such 

8 covered activities greater than 

9 $50,000 in a calendar month, or total 

10 revenue or other consideration greater 

11 than $500,000 during the preceding 

12 12 calendar months; and 

13 ‘‘(B) does not include— 

14 ‘‘(i) an entity whose covered activity 

15 consists solely of free-to-the-user streams 

16 of segments of sound recordings of musical 

17 works that do not exceed 90 seconds in 

18 length, are offered only to facilitate a li19 censed use of musical works that is not a 

20 covered activity, and have no revenue di21 rectly attributable to such streams consti22 tuting the covered activity; or 

23 ‘‘(ii) a ‘public broadcasting entity’ as 

24 defined in section 118(f). 
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1 ‘‘(32) SONGWRITER.—The term ‘songwriter’ 

2 means the author of all or part of a musical work, 

3 including a composer or lyricist. 

4 ‘‘(33) STATE.—The term ‘State’ means each 

5 State of the United States, the District of Columbia, 

6 and each territory or possession of the United 

7 States. 

8 ‘‘(34) UNCLAIMED ACCRUED ROYALTIES.—The 

9 term ‘unclaimed accrued royalties’ means accrued 

10 royalties eligible for distribution under subsection 

11 (d)(3)(J). 

12 ‘‘(35) UNMATCHED.—The term ‘unmatched’, as 

13 applied to a musical work (or share thereof), means 

14 that the copyright owner of such work (or share 

15 thereof) has not been identified or located. 

16 ‘‘(36) VOLUNTARY LICENSE.—The term ‘vol17 untary license’ means a license for use of a musical 

18 work (or share thereof) other than a compulsory li19 cense obtained under this section.’’. 

20 (b) TECHNICAL AND CONFORMING AMENDMENTS TO

21 SECTION 801.—Section 801(b) of title 17, United States 

22 Code, is amended— 

23 (1) by redesignating paragraph (8) as para24 graph (9); and 
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1 (2) by inserting after paragraph (7) the fol2 lowing new paragraph: 

3 ‘‘(8) To determine the administrative assess4 ment to be paid by digital music providers under 

5 section 115(d). The provisions of section 115(d) 

6 shall apply to the conduct of proceedings by the 

7 Copyright Royalty Judges under section 115(d) and 

8 not the procedures described in this section, or sec9 tion 803, 804, or 805.’’. 

10 (c) EFFECTIVE DATE OF AMENDED RATE SETTING

11 STANDARD.—The amendments made by subsections 

12 (a)(3)(D) and (b)(1) shall apply to any proceeding before 

13 the Copyright Royalty Judges that is pending on, or com14 menced on or after, the date of the enactment of this Act. 

15 (d) TECHNICAL AND CONFORMING AMENDMENTS TO

16 TITLE 37, PART 385 OF THE CODE OF FEDERAL REGU17 LATIONS.—Within 9 months after the date of the enact18 ment of this Act, the Copyright Royalty Judges shall 

19 amend the regulations for section 115 in part 385 of title 

20 37, Code of Federal Regulations to conform the definitions 

21 used in such part to the definitions of the same terms de22 scribed in section 115(e) of title 17, United States Code, 

23 as amended by subsection (a). In so doing, the Copyright 

24 Royalty Judges shall make adjustments to the language 

25 of the regulations as necessary to achieve the same pur-
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1 pose and effect as the original regulations with respect to 

2 the rates and terms previously adopted by the Copyright 

3 Royalty Judges. 

4 SEC. 103. AMENDMENTS TO SECTION 114. 

5 (a) UNIFORM RATE STANDARD.—Section 114(f) of 

6 title 17, United States Code, is amended— 

7 (1) by striking paragraphs (1) and (2) and in8 serting the following: 

9 ‘‘(1)(A) Proceedings under chapter 8 shall de10 termine reasonable rates and terms of royalty pay11 ments for transmissions subject to statutory licens12 ing under subsection (d)(2) during the 5-year period 

13 beginning on January 1 of the second year following 

14 the year in which the proceedings are to be com15 menced pursuant to subparagraph (A) or (B) of sec16 tion 804(b)(3), as the case may be, or such other pe17 riod as the parties may agree. The parties to each 

18 proceeding shall bear their own costs. 

19 ‘‘(B) The schedule of reasonable rates and 

20 terms determined by the Copyright Royalty Judges 

21 shall, subject to paragraph (2), be binding on all 

22 copyright owners of sound recordings and entities 

23 performing sound recordings affected by this para24 graph during the 5-year period specified in subpara25 graph (A), or such other period as the parties may 
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1 agree. Such rates and terms shall distinguish among 

2 the different types of services then in operation and 

3 shall include a minimum fee for each such type of 

4 service, such differences to be based on criteria in5 cluding the quantity and nature of the use of sound 

6 recordings and the degree to which use of the service 

7 may substitute for or may promote the purchase of 

8 phonorecords by consumers. The Copyright Royalty 

9 Judges shall establish rates and terms that most 

10 clearly represent the rates and terms that would 

11 have been negotiated in the marketplace between a 

12 willing buyer and a willing seller. In determining 

13 such rates and terms, the Copyright Royalty 

14 Judges— 

15 ‘‘(i) shall base their decision on economic, 

16 competitive, and programming information pre17 sented by the parties, including— 

18 ‘‘(I) whether use of the service may 

19 substitute for or may promote the sales of 

20 phonorecords or otherwise may interfere 

21 with or may enhance the sound recording 

22 copyright owner’s other streams of revenue 

23 from the copyright owner’s sound record24 ings; and 
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1 ‘‘(II) the relative roles of the copy2 right owner and the transmitting entity in 

3 the copyrighted work and the service made 

4 available to the public with respect to rel5 ative creative contribution, technological 

6 contribution, capital investment, cost, and 

7 risk; and 

8 ‘‘(ii) may consider the rates and terms for 

9 comparable types of audio transmission services 

10 and comparable circumstances under voluntary 

11 license agreements. 

12 ‘‘(C) The procedures under subparagraphs (A) 

13 and (B) shall also be initiated pursuant to a petition 

14 filed by any sound recording copyright owner or any 

15 transmitting entity indicating that a new type of 

16 service on which sound recordings are performed is 

17 or is about to become operational, for the purpose 

18 of determining reasonable terms and rates of royalty 

19 payments with respect to such new type of service 

20 for the period beginning with the inception of such 

21 new type of service and ending on the date on which 

22 the royalty rates and terms for eligible nonsubscrip23 tion services and new subscription services, or pre24 existing services, as the case may be, most recently 

25 determined under subparagraph (A) or (B) and 
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1 chapter 8 expire, or such other period as the parties 

2 may agree.’’; and 

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

4 (5) as paragraphs (2), (3), and (4), respectively. 

5 (b) REPEAL.—Subsection (i) of section 114 of title 

6 17, United States Code, is repealed. 

7 (c) USE IN MUSICAL WORK PROCEEDINGS.— 

8 (1) IN GENERAL.—License fees payable for the 

9 public performance of sound recordings under sec10 tion 106(6) of title 17, United States Code, shall not 

11 be taken into account in any administrative, judicial, 

12 or other governmental proceeding to set or adjust 

13 the royalties payable to musical work copyright own14 ers for the public performance of their works except 

15 in such a proceeding to set or adjust royalties for 

16 the public performance of musical works by means 

17 of a digital audio transmission other than a trans18 mission by a broadcaster, and may be taken into ac19 count only with respect to such digital audio trans20 mission. 

21 (2) DEFINITIONS.—In this subsection: 

22 (A) TRANSMISSION BY A BROADCASTER.— 

23 A ‘‘transmission by a broadcaster’’ means a 

24 nonsubscription digital transmission made by a 

25 terrestrial broadcast station on its own behalf, 
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1 or on the behalf of a terrestrial broadcast sta2 tion under common ownership or control, that 

3 is not part of an interactive service or a music4 intensive service comprising the transmission of 

5 sound recordings customized for or 

6 customizable by recipients or service users. 

7 (B) TERRESTRIAL BROADCAST STATION.— 

8 A ‘‘terrestrial broadcast station’’ means a ter9 restrial, over-the-air radio or television broad10 cast station, licensed as such by the Federal 

11 Communications Commission, including an FM 

12 Translator as defined in section 74.1231 of title 

13 47, Code of Federal Regulations, and whose 

14 primary business activities are comprised of, 

15 and revenues are generated through, terrestrial, 

16 over-the-air broadcast transmissions, or the si17 multaneous or substantially-simultaneous digital 

18 retransmission by the terrestrial, over-the-air 

19 broadcast station of its over-the-air broadcast 

20 transmissions. 

21 (d) RULE OF CONSTRUCTION.—Subsection (c)(2) 

22 shall not be given effect in interpreting provisions of title 

23 17, United States Code. 

24 (e) USE IN SOUND RECORDING PROCEEDINGS.—The 

25 repeal of section 114(i) of title 17, United States Code, 
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1 by subsection (b) shall not be taken into account in any 

2 proceeding to set or adjust the rates and fees payable for 

3 the use of sound recordings under section 112(e) or sec4 tion 114(f) of such title that is pending on, or commenced 

5 on or after, the date of the enactment of this Act. 

6 (f) DECISIONS AND PRECEDENTS NOT AFFECTED.— 

7 The repeal of section 114(i) of title 17, United States 

8 Code, by subsection (b) shall not have any effect upon the 

9 decisions, or the precedents established or relied upon, in 

10 any proceeding to set or adjust the rates and fees payable 

11 for the use of sound recordings under section 112(e) or 

12 section 114(f) of such title before the date of the enact13 ment of this Act. 

14 (g) TECHNICAL AND CONFORMING AMENDMENTS.— 

15 (1) SECTION 114.—Section 114(f) of title 17, 

16 United States Code, as amended by subsection (a), 

17 is further amended in paragraph (4)(C), as so redes18 ignated, by striking ‘‘under paragraph (4)’’ and in19 serting ‘‘under paragraph (3)’’. 

20 (2) SECTION 801.—Section 801(b)(1) of title 

21 17, United States Code, is amended by striking 

22 ‘‘The rates applicable’’ and all that follows though 

23 ‘‘prevailing industry practices.’’. 

24 (3) SECTION 804.—Section 804(b)(3)(C) of title 

25 17, United States Code, is amended— 
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1 (A) in clause (i), by striking ‘‘and 

2 114(f)(2)(C)’’; 

3 (B) in clause (iii)(II), by striking 

4 ‘‘114(f)(4)(B)(ii)’’ and inserting 

5 ‘‘114(f)(3)(B)(ii)’’; and 

6 (C) in clause (iv), by striking ‘‘or 

7 114(f)(2)(C), as the case may be’’. 

8 SEC. 104. RANDOM ASSIGNMENT OF RATE COURT PRO9 CEEDINGS. 

10 Section 137 of title 28, United States Code, is 

11 amended— 

12 (1) by striking ‘‘The business’’ and inserting 

13 ‘‘(a) IN GENERAL.—The business’’; and 

14 (2) by adding at the end the following new sub15 section: 

16 ‘‘(b) RANDOM ASSIGNMENT OF RATE COURT PRO17 CEEDINGS.— 

18 ‘‘(1) IN GENERAL.— 

19 ‘‘(A) DETERMINATION OF LICENSE FEE.— 

20 Except as provided in subparagraph (B), in the 

21 case of any performing rights society subject to 

22 a consent decree, any application for the deter23 mination of a license fee for the public perform24 ance of music in accordance with the applicable 

25 consent decree shall be made in the district 
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1 court with jurisdiction over that consent decree 

2 and randomly assigned to a judge of that dis3 trict court according to that court’s rules for 

4 the division of business among district judges 

5 currently in effect or as may be amended from 

6 time to time, provided that any such application 

7 shall not be assigned to— 

8 ‘‘(i) a judge to whom continuing juris9 diction over any performing rights society 

10 for any performing rights society consent 

11 decree is assigned or has previously been 

12 assigned; or 

13 ‘‘(ii) a judge to whom another pro14 ceeding concerning an application for the 

15 determination of a reasonable license fee is 

16 assigned at the time of the filing of the ap17 plication. 

18 ‘‘(B) EXCEPTION.—Subparagraph (A) 

19 does not apply to an application to determine 

20 reasonable license fees made by individual pro21 prietors under section 513 of title 17. 

22 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 

23 paragraph (1) shall modify the rights of any party 

24 to a consent decree or to a proceeding to determine 

25 reasonable license fees, to make an application for 
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1 the construction of any provision of the applicable 

2 consent decree. Such application shall be referred to 

3 the judge to whom continuing jurisdiction over the 

4 applicable consent decree is currently assigned. If 

5 any such application is made in connection with a 

6 rate proceeding, such rate proceeding shall be stayed 

7 until the final determination of the construction ap8 plication. Disputes in connection with a rate pro9 ceeding about whether a licensee is similarly situated 

10 to another licensee shall not be subject to referral to 

11 the judge with continuing jurisdiction over the appli12 cable consent decree.’’. 

13 TITLE II—COMPENSATING LEG14 ACY ARTISTS FOR THEIR 

15 SONGS, SERVICE, AND IMPOR16 TANT CONTRIBUTIONS TO SO17 CIETY 

18 SEC. 201. SHORT TITLE. 

19 This title may be cited as the ‘‘Compensating Legacy 

20 Artists for their Songs, Service, and Important Contribu21 tions to Society Act’’ or the ‘‘CLASSICS Act’’. 
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1 SEC. 202. UNAUTHORIZED DIGITAL PERFORMANCE OF PRE2 1972 SOUND RECORDINGS. 

3 (a) PROTECTION FOR UNAUTHORIZED DIGITAL PER4 FORMANCES.—Title 17, United States Code, is amended 

5 by adding at the end the following new chapter: 

6 ‘‘CHAPTER 14—UNAUTHORIZED DIGITAL 

7 PERFORMANCE OF PRE-1972 SOUND 

8 RECORDINGS 

‘‘Sec. 

‘‘1401. Unauthorized digital performance of pre-1972 sound recordings. 

9 ‘‘§ 1401. Unauthorized digital performance of pre10 1972 sound recordings 

11 ‘‘(a) UNAUTHORIZED ACTS.—Anyone who, before 

12 February 15, 2067, and without the consent of the rights 

13 owner, performs publicly, by means of a digital audio 

14 transmission, a sound recording fixed on or after January 

15 1, 1923, and before February 15, 1972, shall be subject 

16 to the remedies provided in sections 502 through 505 to 

17 the same extent as an infringer of copyright. 

18 ‘‘(b) CERTAIN AUTHORIZED TRANSMISSIONS.—A 

19 digital audio transmission of a sound recording fixed on 

20 or after January 1, 1923, and before February 15, 1972, 

21 shall, for purposes of subsection (a), be considered to be 

22 authorized and made with the consent of the rights owner 

23 if— 
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1 ‘‘(1) the transmission is made by a transmitting 

2 entity that is publicly performing sound recordings 

3 fixed on or after February 15, 1972, by means of 

4 digital audio transmissions subject to section 114; 

5 ‘‘(2) the transmission would satisfy the require6 ments for statutory licensing under section 

7 114(d)(2), or would be exempt under section 

8 114(d)(1), if the sound recording were fixed on or 

9 after February 15, 1972; 

10 ‘‘(3) in the case of a transmission that would 

11 not be exempt under section 114(d)(1) as described 

12 in paragraph (2), the transmitting entity pays statu13 tory royalties and provides notice of its use of the 

14 relevant sound recordings in the same manner as is 

15 required by regulations adopted by the Copyright 

16 Royalty Judges for sound recordings fixed on or 

17 after February 15, 1972; and 

18 ‘‘(4) in the case of a transmission that would 

19 not be exempt under section 114(d)(1) as described 

20 in paragraph (2), the transmitting entity otherwise 

21 satisfies the requirements for statutory licensing 

22 under section 114(f)(4)(B). 

23 ‘‘(c) TRANSMISSIONS BY DIRECT LICENSING OF

24 STATUTORY SERVICES.— 
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1 ‘‘(1) IN GENERAL.—A transmission of a sound 

2 recording fixed on or after January 1, 1923, and be3 fore February 15, 1972, shall, for purposes of sub4 section (a), be considered to be authorized and made 

5 with the consent of the rights owner if such trans6 mission is included in a license agreement volun7 tarily negotiated at any time between the rights 

8 owner and the entity performing the sound record9 ing. 

10 ‘‘(2) PAYMENT OF ROYALTIES TO NONPROFIT

11 COLLECTIVE.—To the extent that such a license 

12 agreement entered into on or after the date of the 

13 enactment of this section extends to digital audio 

14 transmissions of a sound recording fixed on or after 

15 January 1, 1923, and before February 15, 1972, 

16 that meet the conditions of subsection (b), the li17 censee shall pay, to the collective designated to dis18 tribute receipts from the licensing of transmissions 

19 in accordance with section 114(f), 50 percent of the 

20 performance royalties for the transmissions due 

21 under the license, with such royalties fully credited 

22 as payments due under the license. 

23 ‘‘(3) DISTRIBUTION OF ROYALTIES BY COLLEC24 TIVE.—The collective described in paragraph (2) 

25 shall, in accordance with subparagraphs (B) through 
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1 (D) of section 114(g)(2), and paragraphs (5) and 

2 (6) of section 114(g)), distribute the royalties re3 ceived under paragraph (2) under the license de4 scribed in paragraph (2). Such payments shall be 

5 the only payments to which featured and nonfea6 tured artists are entitled by virtue of the trans7 missions described in paragraph (2) under the li8 cense. 

9 ‘‘(4) RULE OF CONSTRUCTION.—This section 

10 does not prohibit any other license from directing 

11 the licensee to pay other royalties due to featured 

12 and nonfeatured artists for such transmissions to 

13 the collective designated to distribute receipts from 

14 the licensing of transmissions in accordance with 

15 section 114(f). 

16 ‘‘(d) RELATIONSHIP TO STATE LAW.— 

17 ‘‘(1) IN GENERAL.—Nothing in this section 

18 shall be construed to annul or limit any rights or 

19 remedies under the common law or statutes of any 

20 State for sound recordings fixed before February 15, 

21 1972, except, notwithstanding section 301(c), for the 

22 following: 

23 ‘‘(A) This section preempts any claim of 

24 common law copyright or equivalent right under 

25 the laws of any State arising from any digital 
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1 audio transmission that is made, on and after 

2 the date of the enactment of this section, of a 

3 sound recording fixed on or after January 1, 

4 1923, and before February 15, 1972. 

5 ‘‘(B) This section preempts any claim of 

6 common law copyright or equivalent right under 

7 the laws of any State arising from any repro8 duction that is made, on and after the date of 

9 the enactment of this section, of a sound re10 cording fixed on or after January 1, 1923, and 

11 before February 15, 1972, and that would sat12 isfy the requirements for statutory licensing 

13 under paragraphs (1) and (6) of section 112(e), 

14 if the sound recording were fixed on or after 

15 February 15, 1972. 

16 ‘‘(C) This section preempts any claim of 

17 common law copyright or equivalent right under 

18 the laws of any State arising from any digital 

19 audio transmission or reproduction that is 

20 made, before the date of the enactment of this 

21 section, of a sound recording fixed on or after 

22 January 1, 1923, and before February 15, 

23 1972, if— 

24 ‘‘(i) the digital audio transmission 

25 would have satisfied the requirements for 
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1 statutory licensing under section 114(d)(2) 

2 or been exempt under section 114(d)(1), or 

3 the reproduction would have satisfied the 

4 requirements of section 112(e)(1), as the 

5 case may be, if the sound recording were 

6 fixed on or after February 15, 1972; and 

7 ‘‘(ii) except in the case of trans8 missions that would have been exempt 

9 under section 114(d)(1), the transmitting 

10 entity, before the end of the 270-day pe11 riod beginning on the date of the enact12 ment of this section, pays statutory royal13 ties and provides notice of the use of the 

14 relevant sound recordings in the same 

15 manner as is required by regulations 

16 adopted by the Copyright Royalty Judges 

17 for sound recordings that are protected 

18 under this title for all the digital audio 

19 transmissions and reproductions satisfying 

20 the requirements for statutory licensing 

21 under section 114(d)(2) and section 

22 112(e)(1) during the 3 years prior to the 

23 date of the enactment of this section. 

24 ‘‘(2) RULE OF CONSTRUCTION FOR COMMON

25 LAW COPYRIGHT.—For purposes of subparagraphs 
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1 (A) through (C) of paragraph (1), a claim of com2 mon law copyright or equivalent right under the 

3 laws of any State includes a claim that characterizes 

4 conduct subject to such subparagraphs as an unlaw5 ful distribution, act of record piracy, or similar viola6 tion. 

7 ‘‘(3) RULE OF CONSTRUCTION FOR PUBLIC

8 PERFORMANCE RIGHTS.—Nothing in this section 

9 shall be construed to recognize or negate the exist10 ence of public performance rights in sound record11 ings under the laws of any State. 

12 ‘‘(e) LIMITATIONS ON REMEDIES.— 

13 ‘‘(1) FAIR USE; USES BY LIBRARIES, ARCHIVES, 

14 AND EDUCATIONAL INSTITUTIONS.—The limitations 

15 on the exclusive rights of a copyright owner de16 scribed in sections 107, 108, and 110(1) and (2) 

17 shall apply to a claim under subsection (a) for the 

18 unauthorized performance of a sound recording fixed 

19 on or after January 1, 1923, and before February 

20 15, 1972. 

21 ‘‘(2) ACTIONS.—The limitations on actions de22 scribed in section 507 shall apply to a claim under 

23 subsection (a) for the unauthorized performance of 

24 a sound recording fixed on or after January 1, 1923, 

25 and before February 15, 1972. 
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1 ‘‘(3) MATERIAL ONLINE.—Section 512 shall 

2 apply to a claim under subsection (a) for the unau3 thorized performance of a sound recording fixed on 

4 or after January 1, 1923, and before February 15, 

5 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 

15 in the case of a transmitting entity that 

16 has filed contact information for that 

17 transmitting entity under subparagraph 

18 (B), in any action under this section, an 

19 award of statutory damages or of attor20 neys’ fees under section 504 or 505 may 

21 be made with respect to an unauthorized 

22 transmission of a sound recording under 

23 subsection (a) only if— 

24 ‘‘(I) the rights owner has filed 

25 with the Copyright Office a schedule 
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1 that specifies the title, artist, and 

2 rights owner of the sound recording 

3 and contains such other information, 

4 as practicable, as the Register of 

5 Copyrights prescribes by regulation; 

6 and 

7 ‘‘(II) the transmission is made 

8 after the end of the 90-day period be9 ginning on the date on which the in10 formation filed under subclause (I) is 

11 indexed into the public records of the 

12 Copyright Office. 

13 ‘‘(ii) REGULATIONS.—The Register of 

14 Copyrights shall, before the end of the 

15 180-day period beginning on the date of 

16 the enactment of this section, issue regula17 tions establishing the form, content, and 

18 procedures for the filing of schedules under 

19 clause (i). Such regulations shall provide 

20 that persons may request that they receive 

21 timely notification of such filings, and shall 

22 set forth the manner in which such re23 quests may be made. 

24 ‘‘(B) FILING OF CONTACT INFORMATION

25 FOR TRANSMITTING ENTITIES.— 
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1 ‘‘(i) FILING REQUIREMENT.—The 

2 Register of Copyrights shall, before the 

3 end of the 30-day period beginning on the 

4 date of the enactment of this section, issue 

5 regulations establishing the form, content, 

6 and procedures for the filing, by any entity 

7 that, as of the date of the enactment of 

8 this section, performs sound recordings 

9 fixed before February 15, 1972, by means 

10 of digital audio transmissions, of contact 

11 information for such entity. 

12 ‘‘(ii) TIME LIMIT ON FILINGS.—The 

13 Register of Copyrights may accept filings 

14 under clause (i) only until the 180th day 

15 after the date of the enactment of this sec16 tion. 

17 ‘‘(iii) LIMITATION ON STATUTORY

18 DAMAGES AND ATTORNEYS’ FEES.— 

19 ‘‘(I) LIMITATION.—An award of 

20 statutory damages or of attorneys’ 

21 fees under section 504 or 505 may 

22 not be made, against an entity that 

23 has filed contact information for that 

24 entity under clause (i), with respect to 

25 an unauthorized transmission by that 
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1 entity of a sound recording under sub2 section (a) if the transmission is made 

3 before the end of the 90-day period 

4 beginning on the date on which the 

5 entity receives a notice 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 

10 is not legally authorized to trans11 mit that sound recording under 

12 subsection (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 enti21 ty by mail or courier service and the 

22 notice is returned to the sender be23 cause the entity either is no longer lo24 cated at the address provided in the 

25 contact information filed under clause 
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1 (i) or has refused to accept delivery, 

2 or the notice is sent by electronic mail 

3 and is undeliverable, the 90-day pe4 riod under subclause (I) shall begin 

5 on the date of 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 an unauthorized transmission of 

10 a sound recording under 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 

15 section except as otherwise provided in this sec16 tion. 

17 ‘‘(B) APPLICABILITY OF DEFINITIONS.— 

18 Any term used in this section that is defined in 

19 section 101 shall have the meaning given that 

20 term in section 101. 

21 ‘‘(f) APPLICATION OF SECTION 230 SAFE HAR22 BOR.—For purposes of section 230 of the Communica23 tions Act of 1934 (47 U.S.C. 230), subsection (a) shall 

24 be considered to be a ‘law pertaining to intellectual prop25 erty’ under subsection (e)(2) of such section. 
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1 ‘‘(g) RIGHTS OWNER DEFINED.—In this section, the 

2 term ‘rights owner’ means the person who has the exclu3 sive right to reproduce a sound recording under the laws 

4 of any State.’’. 

5 (b) CONFORMING AMENDMENT.—The table of chap6 ters for title 17, United States Code, is amended by add7 ing at the end the following new chapter: 

‘‘14. Unauthorized digital performance of pre-1972 sound recordings ... 1401’’. 

8 SEC. 203. EFFECTIVE DATE. 

9 This title and the amendments made by this title 

10 shall take effect on the date of the enactment of this Act. 

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 new paragraph: 

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 

3 collective to be appropriate, for acceptance of 

4 instructions from an artist payee identified 

5 under subparagraph (A) or (D) of paragraph 

6 (2) to distribute, to a producer, mixer, or sound 

7 engineer who was part of the creative process 

8 that created a sound recording, a portion of the 

9 payments to which the artist payee would other10 wise be entitled from the licensing of trans11 missions of the sound recording. In this section, 

12 such instructions shall be referred to as a ‘letter 

13 of direction’. 

14 ‘‘(B) ACCEPTANCE OF LETTER.—To the 

15 extent that the collective accepts a letter of di16 rection under subparagraph (A), the person en17 titled to payment pursuant to the letter of di18 rection shall, during the period in which the let19 ter of direction is in effect and carried out by 

20 the collective, be treated for all purposes as the 

21 owner of the right to receive such payment, and 

22 the artist payee providing the letter of direction 

23 to the collective shall be treated as having no 

24 interest in such payment. 
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1 ‘‘(C) AUTHORITY OF COLLECTIVE.—This 

2 paragraph shall not be construed in such a 

3 manner so that the collective is not authorized 

4 to accept or act upon payment instructions in 

5 circumstances other than those to which this 

6 paragraph applies.’’. 

7 (b) ADDITIONAL PROVISIONS FOR RECORDINGS

8 FIXED BEFORE NOVEMBER 1, 1995.—Section 114(g) of 

9 title 17, United States Code, as amended by subsection 

10 (a), is further amended by adding at the end the following 

11 new paragraph: 

12 ‘‘(6) SOUND RECORDINGS FIXED BEFORE NO13 VEMBER 1, 1995.— 

14 ‘‘(A) PAYMENT ABSENT LETTER OF DI15 RECTION.—A nonprofit collective designated by 

16 the Copyright Royalty Judges to distribute re17 ceipts from the licensing of transmissions in ac18 cordance with subsection (f) (in this paragraph 

19 referred to as the ‘collective’) shall adopt and 

20 reasonably implement a policy that provides, in 

21 circumstances determined by the collective to be 

22 appropriate, for the deduction of 2 percent of 

23 all the receipts that are collected from the li24 censing of transmissions of a sound recording 

25 fixed before November 1, 1995, but which is 
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1 withdrawn from the amount otherwise payable 

2 under paragraph (2)(D) to the recording artist 

3 or artists featured on the sound recording (or 

4 the persons conveying rights in the artists’ per5 formance in the sound recording), and the dis6 tribution of such amount to one or more per7 sons described in subparagraph (B), after de8 duction of costs described in paragraph (3) or 

9 (4), as applicable, if each of the following re10 quirements is met: 

11 ‘‘(i) CERTIFICATION OF ATTEMPT TO

12 OBTAIN A LETTER OF DIRECTION.—The 

13 person described in subparagraph (B) who 

14 is to receive the distribution has certified 

15 to the collective, under penalty of perjury, 

16 that— 

17 ‘‘(I) for a period of at least 4 

18 months, that person made reasonable 

19 efforts to contact the artist payee for 

20 such sound recording to request and 

21 obtain a letter of direction instructing 

22 the collective to pay to that person a 

23 portion of the royalties payable to the 

24 featured recording artist or artists; 

25 and 
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1 ‘‘(II) during the period beginning 

2 on the date that person began the rea3 sonable efforts described in subclause 

4 (I) and ending on the date of that 

5 person’s certification to the collective, 

6 the artist payee did not affirm or 

7 deny in writing the request for a let8 ter of direction. 

9 ‘‘(ii) COLLECTIVE ATTEMPT TO CON10 TACT ARTIST.—After receipt of the certifi11 cation described in clause (i) and for a pe12 riod of at least 4 months before the collec13 tive’s first distribution to the person de14 scribed in subparagraph (B), the collective 

15 attempted, in a reasonable manner as de16 termined by the collective, to notify the 

17 artist payee of the certification made by 

18 the person described in subparagraph (B). 

19 ‘‘(iii) NO OBJECTION RECEIVED.—The 

20 artist payee did not, as of the date that is 

21 10 business days before the date on which 

22 the first distribution is made, submit to 

23 the collective in writing an objection to the 

24 distribution. 
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1 ‘‘(B) ELIGIBILITY FOR PAYMENT.—A per2 son shall be eligible for payment under subpara3 graph (A) if the person— 

4 ‘‘(i) is a producer, mixer, or sound en5 gineer of the sound recording; 

6 ‘‘(ii) has entered into a written con7 tract with a record company involved in 

8 the creation or lawful exploitation of the 

9 sound recording, or with the recording art10 ist or artists featured on the sound record11 ing (or the persons conveying rights in the 

12 artists’ performance in the sound record13 ing), under which the person seeking pay14 ment is entitled to participate in royalty 

15 payments that are based on the exploi16 tation of the sound recording and are pay17 able from royalties otherwise payable to 

18 the recording artist or artists featured on 

19 the sound recording (or the persons con20 veying rights in the artists’ performance in 

21 the sound recording); 

22 ‘‘(iii) made a creative contribution to 

23 the creation of the sound recording; and 

24 ‘‘(iv) submits a written certification to 

25 the collective stating, under penalty of per-
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1 jury, that the person meets the require2 ments in clauses (i) through (iii) and in3 cludes a true copy of the contract de4 scribed in clause (ii). 

5 ‘‘(C) MULTIPLE CERTIFICATIONS.—Sub6 ject to subparagraph (D), in a case in which 

7 more than one person described in subpara8 graph (B) has met the requirements for a dis9 tribution under subparagraph (A) with respect 

10 to a sound recording as of the date that is 10 

11 business days before the date on which a dis12 tribution is made, the collective shall divide the 

13 2 percent distribution equally among all such 

14 persons. 

15 ‘‘(D) OBJECTION TO PAYMENT.—Not later 

16 than 10 business days after the date on which 

17 the collective receives from the artist payee a 

18 written objection to a distribution made pursu19 ant to subparagraph (A), the collective shall 

20 cease making any further payment relating to 

21 such distribution. In any case in which the col22 lective has made one or more distributions pur23 suant to subparagraph (A) to a person de24 scribed in subparagraph (B) before the date 

25 that is 10 business days after the date on which 
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1 the collective receives from the artist payee an 

2 objection to such distribution, the objection 

3 shall not affect that person’s entitlement to any 

4 distribution made before the collective ceases 

5 such distribution under this subparagraph. 

6 ‘‘(E) OWNERSHIP OF THE RIGHT TO RE7 CEIVE PAYMENTS.—To the extent that the col8 lective determines that a distribution will be 

9 made under subparagraph (A) to a person de10 scribed in subparagraph (B), such person shall, 

11 during the period covered by such distribution, 

12 be treated for all purposes as the owner of the 

13 right to receive such payments, and the artist 

14 payee to whom such payments would otherwise 

15 be payable shall be treated as having no inter16 est in such payments. 

17 ‘‘(F) ARTIST PAYEE DEFINED.—In this 

18 paragraph, the term ‘artist payee’ means a per19 son, other than a person described in subpara20 graph (B), who owns the right to receive all or 

21 part of the receipts payable under paragraph 

22 (2)(D) with respect to a sound recording. In a 

23 case in which there are multiple artist payees 

24 with respect to a sound recording, an objection 

25 by one such payee shall apply only to that pay-
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1 ee’s share of the receipts payable under para2 graph (2)(D), and does not preclude payment 

3 under subparagraph (A) from the share of an 

4 artist payee that does not so object.’’. 

5 (c) TECHNICAL AND CONFORMING AMENDMENTS.— 

6 Section 114(g) of title 17, United States Code, as amend7 ed by subsections (a) and (b), is further amended— 

8 (1) in paragraph (2), by striking ‘‘An agent 

9 designated’’ and inserting ‘‘Except as provided for in 

10 paragraph (6), a nonprofit collective designated by 

11 the Copyright Royalty Judges’’; 

12 (2) in paragraph (3)— 

13 (A) by striking ‘‘nonprofit agent des14 ignated’’ and inserting ‘‘nonprofit collective des15 ignated by the Copyright Royalty Judges’’; 

16 (B) by striking ‘‘another designated agent’’ 

17 and inserting ‘‘another designated nonprofit col18 lective’’; and 

19 (C) by striking ‘‘agent’’ and inserting ‘‘col20 lective’’ each subsequent place it appears; 

21 (3) in paragraph (4)— 

22 (A) by striking ‘‘designated agent’’ and in23 serting ‘‘nonprofit collective’’; and 

24 (B) by striking ‘‘agent’’ and inserting ‘‘col25 lective’’ each subsequent place it appears; and 
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1 (4) by adding at the end the following new 

2 paragraph: 

3 ‘‘(7) PREEMPTION OF STATE PROPERTY

4 LAWS.—The holding and distribution of receipts 

5 under section 112 and this section by a nonprofit 

6 collective designated by the Copyright Royalty 

7 Judges in accordance with this subsection and regu8 lations adopted by the Copyright Royalty Judges 

9 shall supersede and preempt any State law (includ10 ing common law) concerning escheatment or aban11 doned property, or any analogous provision, that 

12 might otherwise apply.’’. 

13 SEC. 303. EFFECTIVE DATE. 

14 (a) IN GENERAL.—Except as provided in subsection 

15 (b), this title and the amendments made by this title shall 

16 take effect on the date of the enactment of this Act. 

17 (b) DELAYED EFFECTIVE DATE.—The effective date 

18 for paragraphs (5)(B) and (6)(E) of section 114(g) of title 

19 17, United States Code, as added by section 302, shall 

20 be January 1, 2020. 

Passed the House of Representatives April 25, 2018. 

Attest: 

Clerk. 
115TH CONGRESS 

2D SESSION H. R. 5447 

AN ACT 

To modernize copyright law, and for other 

purposes.