I 

115TH CONGRESS 

2D SESSION H. R. 5447 

To modernize copyright law, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 10, 2018 

Mr. GOODLATTE (for himself, Mr. NADLER, Mr. COLLINS of Georgia, Mr. 

JEFFRIES, Mr. ISSA, Mr. DEUTCH, Mr. THOMAS J. ROONEY of Florida, 

Mr. CROWLEY, Ms. BASS, Mrs. BLACKBURN, Mr. CHABOT, Mr. COHEN, 

Mr. COOPER, Mrs. DEMINGS, Mr. JOHNSON of Georgia, Mr. JOHNSON of 

Louisiana, Ms. JACKSON LEE, Mr. TED LIEU of California, Mr. MARINO, 

Mr. PAYNE, Mrs. ROBY, Mr. SCHIFF, Mr. SCHNEIDER, Mr. SHERMAN, 

Mr. SMITH of Texas, Mr. SWALWELL of California, Mr. RASKIN, Mr. 

CICILLINE, Ms. JUDY CHU of California, Ms. JAYAPAL, and Mr. BIGGS) 

introduced the following bill; which was referred to the Committee on the 

Judiciary 

A BILL 

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, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Music Modernization Act’’. 

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

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 


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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. 

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.— 


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1 ‘‘(A) CONDITIONS FOR COMPULSORY LI2 CENSE.—A person may by complying with the 

3 provisions of this section obtain a compulsory li4 cense to make and distribute phonorecords of a 

5 nondramatic musical work, including by means 

6 of digital phonorecord delivery. A person may 

7 obtain a compulsory license only if the primary 

8 purpose in making phonorecords of the musical 

9 work is to distribute them to the public for pri10 vate use, including by means of digital phono11 record delivery, and— 

12 ‘‘(i) phonorecords of such musical 

13 work have previously been distributed to 

14 the public in the United States under the 

15 authority of the copyright owner of the 

16 work, including by means of digital phono17 record delivery; or 

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

19 provider seeking to make and distribute 

20 digital phonorecord deliveries of a sound 

21 recording embodying a musical work under 

22 a compulsory license for which clause (i) 

23 does not apply— 

24 ‘‘(I) the first fixation of such 

25 sound recording was made under the 


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1 authority of the musical work copy2 right owner, and sound recording 

3 copyright owner has the authority of 

4 the musical work copyright owner to 

5 make and distribute digital phono6 record deliveries embodying such work 

7 to the public in the United States; 

8 and 

9 ‘‘(II) the sound recording copy10 right owner or its authorized dis11 tributor has authorized the digital 

12 music provider to make and distribute 

13 digital phonorecord deliveries of the 

14 sound recording to the public in the 

15 United States. 

16 ‘‘(B) DUPLICATION OF SOUND RECORD17 ING.—A person may not obtain a compulsory li18 cense for the use of the work in the making of 

19 phonorecords duplicating a sound recording 

20 fixed by another, including by means of digital 

21 phonorecord delivery, unless— 

22 ‘‘(i) such sound recording was fixed 

23 lawfully; and 

24 ‘‘(ii) the making of the phonorecords 

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1 right in the sound recording or, if the 

2 sound recording was fixed before February 

3 15, 1972, by any person who fixed the 

4 sound recording pursuant to an express li5 cense from the owner of the copyright in 

6 the musical work or pursuant to a valid 

7 compulsory license for use of such work in 

8 a sound recording.’’; and 

9 (C) in paragraph (2), by striking ‘‘A com10 pulsory license’’ and inserting ‘‘MUSICAL AR11 RANGEMENT.—A compulsory license’’; 

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

13 following: 

14 ‘‘(b) PROCEDURES TO OBTAIN A COMPULSORY LI15 CENSE.— 

16 ‘‘(1) PHONORECORDS OTHER THAN DIGITAL

17 PHONORECORD DELIVERIES.—A person who seeks to 

18 obtain a compulsory license under subsection (a) to 

19 make and distribute phonorecords of a musical work 

20 other than by means of digital phonorecord delivery 

21 shall, before or within 30 calendar days after mak22 ing, and before distributing, any phonorecord of the 

23 work, serve notice of intention to do so on the copy24 right owner. If the registration or other public 

25 records of the Copyright Office do not identify the 


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1 copyright owner and include an address at which no2 tice can be served, it shall be sufficient to file the 

3 notice of intention with the Copyright Office. The 

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

5 service, with requirements that the Register of Copy6 rights shall prescribe by regulation. 

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

8 person who seeks to obtain a compulsory license 

9 under subsection (a) to make and distribute 

10 phonorecords of a musical work by means of digital 

11 phonorecord delivery— 

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

13 shall, before or within 30 calendar days after 

14 first making any such digital phonorecord deliv15 ery, serve a notice of intention to do so on the 

16 copyright owner (but may not file the notice 

17 with the Copyright Office, even if the public 

18 records of the Office do not identify the owner 

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

20 comply, in form, content, and manner of serv21 ice, with requirements that the Register of 

22 Copyrights shall prescribe by regulation; or 

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

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1 scribed in subsection (d)(2), except as provided 

2 in paragraph (3). 

3 ‘‘(3) RECORD COMPANY INDIVIDUAL DOWNLOAD

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

5 record company may, on or after the license avail6 ability date, obtain an individual download license in 

7 accordance with the notice requirements described in 

8 paragraph (2)(A) (except for the requirement that 

9 notice occur prior to the license availability date). A 

10 record company that obtains an individual download 

11 license as permitted under this paragraph shall pro12 vide statements of account and pay royalties as pro13 vided in subsection (c)(2)(I). 

14 ‘‘(4) FAILURE TO OBTAIN LICENSE.— 

15 ‘‘(A) PHONORECORDS OTHER THAN DIG16 ITAL PHONORECORD DELIVERIES.—In the case 

17 of phonorecords made and distributed other 

18 than by means of digital phonorecord delivery, 

19 the failure to serve or file the notice of inten20 tion required by paragraph (1) forecloses the 

21 possibility of a compulsory license under para22 graph (1). In the absence of a voluntary license, 

23 the failure to obtain a compulsory license ren24 ders the making and distribution of phonore25 cords actionable as acts of infringement under 


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1 section 501 and subject to the remedies pro2 vided by sections 502 through 506. 

3 ‘‘(B) DIGITAL PHONORECORD DELIV4 ERIES.— 

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

6 and distributed by means of digital phono7 record delivery: 

8 ‘‘(I) The failure to serve the no9 tice of intention required by para10 graph (2)(A) or paragraph (3), as ap11 plicable, forecloses the possibility of a 

12 compulsory license under such para13 graph. 

14 ‘‘(II) The failure to comply with 

15 paragraph (2)(B) forecloses the possi16 bility of a blanket license for a period 

17 of 3 years after the last calendar day 

18 on which the notice of license was re19 quired to be submitted to the mechan20 ical licensing collective under such 

21 paragraph. 

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

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

24 the failure to obtain a compulsory license 

25 renders the making and distribution of 


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1 phonorecords by means of digital phono2 record delivery actionable as acts of in3 fringement under section 501 and subject 

4 to the remedies provided by sections 502 

5 through 506.’’; 

6 (3) by amending subsection (c) to read as fol7 lows: 

8 ‘‘(c) GENERAL CONDITIONS APPLICABLE TO COM9 PULSORY LICENSE.— 

10 ‘‘(1) ROYALTY PAYABLE UNDER COMPULSORY

11 LICENSE.— 

12 ‘‘(A) IDENTIFICATION REQUIREMENT.—To 

13 be entitled to receive royalties under a compul14 sory license obtained under subsection (b)(1) 

15 the copyright owner must be identified in the 

16 registration or other public records of the Copy17 right Office. The owner is entitled to royalties 

18 for phonorecords made and distributed after 

19 being so identified, but is not entitled to recover 

20 for any phonorecords previously made and dis21 tributed. 

22 ‘‘(B) ROYALTY FOR PHONORECORDS

23 OTHER THAN DIGITAL PHONORECORD DELIV24 ERIES.—Except as provided by subparagraph 

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1 uted under a compulsory license under sub2 section (a) other than by means of digital pho3 norecord delivery, with respect to each work 

4 embodied in the phonorecord, the royalty shall 

5 be the royalty prescribed under subparagraphs 

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

7 chapter 8 of this title. For purposes of this sub8 paragraph, a phonorecord is considered ‘distrib9 uted’ if the person exercising the compulsory li10 cense has voluntarily and permanently parted 

11 with its possession. 

12 ‘‘(C) ROYALTY FOR DIGITAL PHONO13 RECORD DELIVERIES.—For every digital phono14 record delivery of a musical work made under 

15 a compulsory license under this section, the roy16 alty payable shall be the royalty prescribed 

17 under subparagraphs (D) through (F) and 

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

19 ‘‘(D) AUTHORITY TO NEGOTIATE.—Not20 withstanding any provision of the antitrust 

21 laws, any copyright owners of nondramatic mu22 sical works and any persons entitled to obtain 

23 a compulsory license under subsection (a) may 

24 negotiate and agree upon the terms and rates 

25 of royalty payments under this section and the 


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1 proportionate division of fees paid among copy2 right owners, and may designate common 

3 agents on a nonexclusive basis to negotiate, 

4 agree to, pay or receive such royalty payments. 

5 Such authority to negotiate the terms and rates 

6 of royalty payments includes, but is not limited 

7 to, the authority to negotiate the year during 

8 which the royalty rates prescribed under this 

9 subparagraph and subparagraphs (E) and (F) 

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

11 title shall next be determined. 

12 ‘‘(E) DETERMINATION OF REASONABLE

13 RATES AND TERMS.—Proceedings under chap14 ter 8 shall determine reasonable rates and 

15 terms of royalty payments for the activities 

16 specified by this section during the period be17 ginning with the effective date of such rates 

18 and terms, but not earlier than January 1 of 

19 the second year following the year in which the 

20 petition requesting the proceeding is filed, and 

21 ending on the effective date of successor rates 

22 and terms, or such other period as the parties 

23 may agree. Any copyright owners of nondra24 matic musical works and any persons entitled 

25 to obtain a compulsory license under subsection 


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1 (a) may submit to the Copyright Royalty 

2 Judges licenses covering such activities. The 

3 parties to each proceeding shall bear their own 

4 costs. 

5 ‘‘(F) SCHEDULE OF REASONABLE

6 RATES.—The schedule of reasonable rates and 

7 terms determined by the Copyright Royalty 

8 Judges shall, subject to paragraph (2)(A), be 

9 binding on all copyright owners of nondramatic 

10 musical works and persons entitled to obtain a 

11 compulsory license under subsection (a) during 

12 the period specified in subparagraph (E), such 

13 other period as may be determined pursuant to 

14 subparagraphs (D) and (E), or such other pe15 riod as the parties may agree. The Copyright 

16 Royalty Judges shall establish rates and terms 

17 that most clearly represent the rates and terms 

18 that would have been negotiated in the market19 place between a willing buyer and a willing sell20 er. In determining such rates and terms for dig21 ital phonorecord deliveries, the Copyright Roy22 alty Judges shall base their decision on eco23 nomic, competitive, and programming informa24 tion presented by the parties, including— 


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1 ‘‘(i) whether use of the compulsory li2 censee’s service may substitute for or may 

3 promote the sales of phonorecords or oth4 erwise may interfere with or may enhance 

5 the musical work copyright owner’s other 

6 streams of revenue from its musical works; 

7 and 

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

9 owner and the compulsory licensee in the 

10 copyrighted work and the service made 

11 available to the public with respect to the 

12 relative creative contribution, technological 

13 contribution, capital investment, cost, and 

14 risk. 

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

16 ‘‘(A) VOLUNTARY LICENSES AND CON17 TRACTUAL ROYALTY RATES.— 

18 ‘‘(i) License agreements voluntarily 

19 negotiated at any time between one or 

20 more copyright owners of nondramatic mu21 sical works and one or more persons enti22 tled to obtain a compulsory license under 

23 subsection (a) shall be given effect in lieu 

24 of any determination by the Copyright 

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


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1 royalty rates determined pursuant to sub2 paragraphs (E) and (F) of paragraph (1) 

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

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

7 author of a nondramatic musical work 

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

12 that musical work under paragraphs (1) 

13 and (3) of section 106, to a person desir14 ing to fix in a tangible medium of expres15 sion a sound recording embodying the mu16 sical work. 

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

18 shall not apply to— 

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

20 before June 22, 1995, and not modi21 fied thereafter for the purpose of re22 ducing the royalty rates determined 

23 pursuant to subparagraphs (E) and 

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

25 the number of musical works within 


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1 the scope of the contract covered by 

2 the reduced rates, except if a contract 

3 entered into on or before June 22, 

4 1995, is modified thereafter for the 

5 purpose of increasing the number of 

6 musical works within the scope of the 

7 contract, any contrary royalty rates 

8 specified in the contract shall be given 

9 effect in lieu of royalty rates deter10 mined pursuant to subparagraphs (E) 

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

12 number of musical works within the 

13 scope of the contract as of June 22, 

14 1995; and 

15 ‘‘(II) a contract entered into 

16 after the date that the sound record17 ing is fixed in a tangible medium of 

18 expression substantially in a form in19 tended for commercial release, if at 

20 the time the contract is entered into, 

21 the recording artist retains the right 

22 to grant licenses as to the musical 

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

24 section 106. 


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1 ‘‘(B) SOUND RECORDING INFORMATION.— 

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

3 title, a digital phonorecord delivery licensed 

4 under this paragraph shall be accompanied by 

5 the information encoded in the sound recording, 

6 if any, by or under the authority of the copy7 right owner of that sound recording, that iden8 tifies the title of the sound recording, the fea9 tured recording artist who performs on the 

10 sound recording, and related information, in11 cluding information concerning the underlying 

12 musical work and its writer. 

13 ‘‘(C) INFRINGEMENT REMEDIES.— 

14 ‘‘(i) A digital phonorecord delivery of 

15 a sound recording is actionable as an act 

16 of infringement under section 501, and is 

17 fully subject to the remedies provided by 

18 sections 502 through 506, unless— 

19 ‘‘(I) the digital phonorecord de20 livery has been authorized by the 

21 sound recording copyright owner; and 

22 ‘‘(II) the entity making the dig23 ital phonorecord delivery has obtained 

24 a compulsory license under subsection 

25 (a) or has otherwise been authorized 


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1 by the musical work copyright owner, 

2 or by a record company pursuant to 

3 an individual download license, to 

4 make and distribute phonorecords of 

5 each musical work embodied in the 

6 sound recording by means of digital 

7 phonorecord delivery. 

8 ‘‘(ii) Any cause of action under this 

9 subparagraph shall be in addition to those 

10 available to the owner of the copyright in 

11 the nondramatic musical work under sub12 paragraph (J) and section 106(4) and the 

13 owner of the copyright in the sound record14 ing under section 106(6). 

15 ‘‘(D) LIABILITY OF SOUND RECORDING

16 OWNERS.—The liability of the copyright owner 

17 of a sound recording for infringement of the 

18 copyright in a nondramatic musical work em19 bodied in the sound recording shall be deter20 mined in accordance with applicable law, except 

21 that the owner of a copyright in a sound re22 cording shall not be liable for a digital phono23 record delivery by a third party if the owner of 

24 the copyright in the sound recording does not 


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1 license the distribution of a phonorecord of the 

2 nondramatic musical work. 

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

4 Nothing in section 1008 shall be construed to 

5 prevent the exercise of the rights and remedies 

6 allowed by this paragraph, subparagraph (J), 

7 and chapter 5 in the event of a digital phono8 record delivery, except that no action alleging 

9 infringement of copyright may be brought 

10 under this title against a manufacturer, im11 porter or distributor of a digital audio recording 

12 device, a digital audio recording medium, an 

13 analog recording device, or an analog recording 

14 medium, or against a consumer, based on the 

15 actions described in such section. 

16 ‘‘(F) PRESERVATION OF RIGHTS.—Noth17 ing in this section annuls or limits (i) the exclu18 sive right to publicly perform a sound recording 

19 or the musical work embodied therein, including 

20 by means of a digital transmission, under sec21 tions 106(4) and 106(6), (ii) except for compul22 sory licensing under the conditions specified by 

23 this section, the exclusive rights to reproduce 

24 and distribute the sound recording and the mu25 sical work embodied therein under sections 


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

2 digital phonorecord delivery, or (iii) any other 

3 rights under any other provision of section 106, 

4 or remedies available under this title, as such 

5 rights or remedies exist either before or after 

6 the date of enactment of the Digital Perform7 ance Right in Sound Recordings Act of 1995. 

8 ‘‘(G) EXEMPT TRANSMISSIONS AND RE9 TRANSMISSIONS.—The provisions of this section 

10 concerning digital phonorecord deliveries shall 

11 not apply to any exempt transmissions or re12 transmissions under section 114(d)(1). The ex13 emptions created in section 114(d)(1) do not 

14 expand or reduce the rights of copyright owners 

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

16 to such transmissions and retransmissions. 

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

18 OR LENDING.—A compulsory license obtained 

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

20 phonorecords includes the right of the maker of 

21 such a phonorecord to distribute or authorize 

22 distribution of such phonorecord, other than by 

23 means of a digital phonorecord delivery, by 

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

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


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1 respect to each nondramatic musical work em2 bodied in the phonorecord, the royalty shall be 

3 a proportion of the revenue received by the 

4 compulsory licensee from every such act of dis5 tribution of the phonorecord under this clause 

6 equal to the proportion of the revenue received 

7 by the compulsory licensee from distribution of 

8 the phonorecord under subsection 

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

10 licensee under that clause and under chapter 8. 

11 The Register of Copyrights shall issue regula12 tions to carry out the purpose of this clause. 

13 ‘‘(I) PAYMENT OF ROYALTIES AND STATE14 MENTS OF ACCOUNT.—Except as provided in 

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

16 (d), royalty payments shall be made on or be17 fore the twentieth day of each month and shall 

18 include all royalties for the month next pre19 ceding. Each monthly payment shall be made 

20 under oath and shall comply with requirements 

21 that the Register of Copyrights shall prescribe 

22 by regulation. The Register shall also prescribe 

23 regulations under which detailed cumulative an24 nual statements of account, certified by a cer25 tified public accountant, shall be filed for every 


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1 compulsory license under subsection (a). The 

2 regulations covering both the monthly and the 

3 annual statements of account shall prescribe 

4 the form, content, and manner of certification 

5 with respect to the number of records made and 

6 the number of records distributed. 

7 ‘‘(J) NOTICE OF DEFAULT AND TERMI8 NATION OF COMPULSORY LICENSE.—In the 

9 case of a license obtained under subsection 

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

11 owner does not receive the monthly payment 

12 and the monthly and annual statements of ac13 count when due, the owner may give written no14 tice to the licensee that, unless the default is 

15 remedied within thirty days from the date of 

16 the notice, the compulsory license will be auto17 matically terminated. Such termination renders 

18 either the making or the distribution, or both, 

19 of all phonorecords for which the royalty has 

20 not been paid, actionable as acts of infringe21 ment under section 501 and fully subject to the 

22 remedies provided by sections 502 through 506. 

23 In the case of a license obtained under sub24 section (b)(2)(B), license authority under the 


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1 compulsory license may be terminated as pro2 vided in subsection (d)(4)(E).’’; 

3 (4) by amending subsection (d) to read as fol4 lows: 

5 ‘‘(d) BLANKET LICENSE FOR DIGITAL USES, ME6 CHANICAL LICENSING COLLECTIVE, AND DIGITAL LI7 CENSEE COORDINATOR.— 

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

9 ‘‘(A) IN GENERAL.—A digital music pro10 vider that qualifies for a compulsory license 

11 under subsection (a) may, by complying with 

12 the terms and conditions of this subsection, ob13 tain a blanket license from copyright owners 

14 through the mechanical licensing collective to 

15 make and distribute digital phonorecord deliv16 eries of musical works through one or more cov17 ered activities. 

18 ‘‘(B) INCLUDED ACTIVITIES.—A blanket li19 cense— 

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

21 shares of such works) available for compul22 sory licensing under this section for pur23 poses of engaging in covered activities, ex24 cept as provided in subparagraph (C); 


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1 ‘‘(ii) includes the making and dis2 tribution of server, intermediate, archival, 

3 and incidental reproductions of musical 

4 works that are reasonable and necessary 

5 for the digital music provider to engage in 

6 covered activities licensed under this sub7 section, solely for the purpose of engaging 

8 in such covered activities; and 

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

10 rights or uses other than those described 

11 in clauses (i) and (ii). 

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

14 under the authority of one or more copyright 

15 owners and one or more digital music providers, 

16 or authority to make and distribute permanent 

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

19 copyright owner pursuant to an individual 

20 download license, shall be given effect in lieu of 

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

23 covered by such voluntary license or individual 

24 download authority and the following conditions 

25 apply: 


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

3 authority provided under the blanket li4 cense shall exclude any musical works (or 

5 shares thereof) subject to the voluntary li6 cense or individual download license. 

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

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

13 ‘‘(iii) The rates and terms of any vol14 untary license shall be subject to the sec15 ond sentence of clause (i) and clause (ii) of 

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

17 as applicable. 

18 ‘‘(D) PROTECTION AGAINST INFRINGE19 MENT ACTIONS.—A digital music provider that 

20 obtains and complies with the terms of a valid 

21 blanket license under this subsection shall not 

22 be subject to an action for infringement of the 

23 exclusive rights provided by paragraphs (1) and 

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

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1 gage in covered activities authorized by such li2 cense, subject to paragraph (4)(E). 

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

5 this subsection, each requirement, limitation, 

6 condition, privilege, right, and remedy otherwise 

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

9 under this subsection. 

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

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

13 blanket license by submitting a notice of license 

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

16 the digital music provider seeks to engage, as 

17 follows: 

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

19 in form and substance with requirements 

20 that the Register of Copyrights shall estab21 lish by regulation. 

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

23 mechanical licensing collective within 30 

24 calendar days after receipt, the blanket li25 cense shall be effective as of the date the 


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1 notice of license was sent by the digital 

2 music provider as shown by a physical or 

3 electronic record. 

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

5 rejected by the mechanical licensing collec6 tive if— 

7 ‘‘(I) the digital music provider or 

8 notice of license does not meet the re9 quirements of this section or applica10 ble regulations, in which case the re11 quirements at issue shall be specified 

12 with reasonable particularity in the 

13 notice of rejection; or 

14 ‘‘(II) the digital music provider 

15 has had a blanket license terminated 

16 by the mechanical licensing collective 

17 within the past 3 years pursuant to 

18 paragraph (4)(E). 

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

20 under clause (iii)(I), the digital music pro21 vider shall have 30 calendar days after re22 ceipt of the notice of rejection to cure any 

23 deficiency and submit an amended notice 

24 of license to the mechanical licensing col25 lective. If the deficiency has been cured, 


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1 the mechanical licensing collective shall so 

2 confirm in writing, and the license shall be 

3 effective as of the date that the original 

4 notice of license was provided by the dig5 ital music provider. 

6 ‘‘(v) A digital music provider that be7 lieves a notice of license was improperly re8 jected by the mechanical licensing collec9 tive may seek review of such rejection in 

10 Federal district court. The district court 

11 shall determine the matter de novo based 

12 on the record before the mechanical licens13 ing collective and any additional evidence 

14 presented by the parties. 

15 ‘‘(B) BLANKET LICENSE EFFECTIVE

16 DATE.—Blanket licenses shall be made available 

17 by the mechanical licensing collective on and 

18 after the license availability date. No such li19 cense shall be effective prior to the license avail20 ability date. 

21 ‘‘(3) MECHANICAL LICENSING COLLECTIVE.— 

22 ‘‘(A) IN GENERAL.—The mechanical li23 censing collective shall be a single entity that— 

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

25 other entity, that is created by copyright 


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1 owners to carry out responsibilities under 

2 this subsection; 

3 ‘‘(ii) is endorsed by and enjoys sub4 stantial support from musical work copy5 right owners that together represent the 

6 greatest percentage of the licensor market 

7 for uses of such works in covered activities, 

8 as measured over the preceding 3 full cal9 endar years; 

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

11 Register of Copyrights that it has, or will 

12 have prior to the license availability date, 

13 the administrative and technological capa14 bilities to perform the required functions of 

15 the mechanical licensing collective under 

16 this subsection; and 

17 ‘‘(iv) has been designated by the Reg18 ister of Copyrights in accordance with sub19 paragraph (B). 

20 ‘‘(B) DESIGNATION OF MECHANICAL LI21 CENSING COLLECTIVE.— 

22 ‘‘(i) INITIAL DESIGNATION.—The 

23 Register of Copyrights shall initially des24 ignate the mechanical licensing collective 


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1 within 9 months after the enactment date 

2 as follows: 

3 ‘‘(I) Within 90 calendar days 

4 after the enactment date, the Register 

5 shall publish notice in the Federal 

6 Register soliciting information to as7 sist in identifying the appropriate en8 tity to serve as the mechanical licens9 ing collective, including the name and 

10 affiliation of each member of the 

11 board of directors described under 

12 subparagraph (D)(i) and each com13 mittee established pursuant to clauses 

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

15 (D). 

16 ‘‘(II) After reviewing the infor17 mation requested under subclause (I) 

18 and making a designation, the Reg19 ister shall publish notice in the Fed20 eral Register setting forth the identity 

21 of and contact information for the me22 chanical licensing collective. 

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

25 the mechanical licensing collective, the 


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1 Register shall, every 5 years, beginning 

2 with the fifth full calendar year to com3 mence after the initial designation, publish 

4 notice in the Federal Register in the 

5 month of January soliciting information 

6 concerning whether the existing designa7 tion should be continued, or a different en8 tity meeting the criteria described in 

9 clauses (i) through (iii) of subparagraph 

10 (A) shall be designated. Following publica11 tion of such notice: 

12 ‘‘(I) The Register shall, after re13 viewing the information submitted and 

14 conducting additional proceedings as 

15 appropriate, publish notice in the Fed16 eral Register of a continuing designa17 tion or new designation of the me18 chanical licensing collective, as the 

19 case may be, with any new designa20 tion to be effective as of the first day 

21 of a month that is no less than 6 

22 months and no longer than 9 months 

23 after the date of publication of such 

24 notice, as specified by the Register. 


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1 ‘‘(II) If a new entity is des2 ignated as a mechanical licensing col3 lective, the Register shall adopt regu4 lations to govern the transfer of li5 censes, funds, records, data, and ad6 ministrative responsibilities from the 

7 existing mechanical licensing collective 

8 to the new entity. 

9 ‘‘(iii) CLOSEST ALTERNATIVE DES10 IGNATION.—If the Register is unable to 

11 identify an entity that fulfills each of the 

12 qualifications set forth in clauses (i) 

13 through (iii) of subparagraph (A), the Reg14 ister shall designate the entity that most 

15 nearly fulfills such qualifications for pur16 poses of carrying out the responsibilities of 

17 the mechanical licensing collective. 

18 ‘‘(C) AUTHORITIES AND FUNCTIONS.— 

19 ‘‘(i) IN GENERAL.—The mechanical li20 censing collective is authorized to perform 

21 the following functions, subject to more 

22 particular requirements as described in 

23 this subsection: 

24 ‘‘(I) Offer and administer blanket 

25 licenses, including receipt of notices of 


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1 license and reports of usage from dig2 ital music providers. 

3 ‘‘(II) Collect and distribute royal4 ties from digital music providers for 

5 covered activities. 

6 ‘‘(III) Engage in efforts to iden7 tify musical works (and shares of such 

8 works) embodied in particular sound 

9 recordings, and to identify and locate 

10 the copyright owners of such musical 

11 works (and shares of such works). 

12 ‘‘(IV) Maintain the musical 

13 works database and other information 

14 relevant to the administration of li15 censing activities under this section. 

16 ‘‘(V) Administer a process by 

17 which copyright owners can claim 

18 ownership of musical works (and 

19 shares of such works), and a process 

20 by which royalties for works for which 

21 the owner is not identified or located 

22 are equitably distributed to known 

23 copyright owners. 

24 ‘‘(VI) Administer collections of 

25 the administrative assessment from 


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1 digital music providers and significant 

2 nonblanket licensees, including receipt 

3 of notices of nonblanket activity. 

4 ‘‘(VII) Invest in relevant re5 sources, and arrange for services of 

6 outside vendors and others, to support 

7 its activities. 

8 ‘‘(VIII) Engage in legal and 

9 other efforts to enforce rights and ob10 ligations under this subsection, includ11 ing by filing bankruptcy proofs of 

12 claims for amounts owed under li13 censes, and acting in coordination 

14 with the digital licensee coordinator.. 

15 ‘‘(IX) Initiate and participate in 

16 proceedings before the Copyright Roy17 alty Judges to establish the adminis18 trative assessment under this sub19 section. 

20 ‘‘(X) Initiate and participate in 

21 proceedings before the Copyright Of22 fice with respect to activities under 

23 this subsection. 

24 ‘‘(XI) Gather and provide docu25 mentation for use in proceedings beVerDate Sep 11 2014 01:21 Apr 11, 2018 Jkt 079200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.IH H5447

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1 fore the Copyright Royalty Judges to 

2 set rates and terms under this section. 

3 ‘‘(XII) Maintain records of its 

4 activities and engage in and respond 

5 to audits described under this sub6 section. 

7 ‘‘(XIII) Engage in such other ac8 tivities as may be necessary or appro9 priate to fulfill its responsibilities 

10 under this subsection. 

11 ‘‘(ii) ADDITIONAL ADMINISTRATIVE

12 ACTIVITIES.—Subject to paragraph 

13 (11)(C) and clause (iii), the mechanical li14 censing collective may also administer, or 

15 assist in administering, voluntary licenses 

16 issued by or individual download licenses 

17 obtained from copyright owners for uses of 

18 musical works, for which the mechanical li19 censing collective shall charge reasonable 

20 fees for such services. 

21 ‘‘(iii) RESTRICTION CONCERNING PUB22 LIC PERFORMANCE RIGHTS.—The mechan23 ical licensing collective may, pursuant to 

24 clause (ii), provide administration services 

25 with respect to voluntary licenses that inVerDate Sep 11 2014 01:21 Apr 11, 2018 Jkt 079200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.IH H5447

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1 clude the right of public performance in 

2 musical works, but may not itself negotiate 

3 or grant licenses for the right of public 

4 performance in musical works, and may 

5 not be the exclusive or nonexclusive as6 signee or grantee of the right of public per7 formance in musical works. 

8 ‘‘(iv) RESTRICTION ON LOBBYING.— 

9 The mechanical licensing collective may 

10 not engage in government lobbying activi11 ties, but may engage in the activities de12 scribed in subclauses (IX), (X), and (XI) 

13 of clause (i). 

14 ‘‘(D) GOVERNANCE.— 

15 ‘‘(i) BOARD OF DIRECTORS.—The me16 chanical licensing collective shall have a 

17 board of directors consisting of 14 voting 

18 members and 3 nonvoting members, as fol19 lows: 

20 ‘‘(I) Ten voting members shall be 

21 representatives of music publishers to 

22 which songwriters have assigned ex23 clusive rights of reproduction and dis24 tribution of musical works with re25 spect to covered activities and no such 


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1 music publisher member may be 

2 owned by, or under common control 

3 with, any other board member. 

4 ‘‘(II) Four voting members shall 

5 be professional songwriters who have 

6 retained and exercise exclusive rights 

7 of reproduction and distribution with 

8 respect to covered activities with re9 spect to musical works they have au10 thored. 

11 ‘‘(III) One nonvoting member 

12 shall be a representative of the non13 profit trade association of music pub14 lishers that represents the greatest 

15 percentage of the licensor market for 

16 uses of musical works in covered ac17 tivities, as measured over the pre18 ceding 3 full calendar years. 

19 ‘‘(IV) One nonvoting member 

20 shall be a representative of the digital 

21 licensee coordinator, provided that a 

22 digital licensee coordinator has been 

23 designated pursuant to paragraph 

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

25 member shall be the nonprofit trade 


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1 association of digital licensees that 

2 represents the greatest percentage of 

3 the licensee market for uses of musi4 cal works in covered activities, as 

5 measured over the preceding 3 full 

6 calendar years. 

7 ‘‘(V) One nonvoting member 

8 shall be a representative of a nation9 ally recognized nonprofit trade asso10 ciation whose primary mission is advo11 cacy on behalf of songwriters in the 

12 United States. 

13 ‘‘(ii) BOARD MEETINGS.—The board 

14 of directors shall meet no less than 2 times 

15 per year and discuss matters pertinent to 

16 the operations, including the mechanical li17 censing collective budget. 

18 ‘‘(iii) OPERATIONS ADVISORY COM19 MITTEE.—The board of directors of the 

20 mechanical licensing collective shall estab21 lish an operations advisory committee con22 sisting of no fewer than 6 members to 

23 make recommendations to the board of di24 rectors concerning the operations of the 

25 mechanical licensing collective, including 


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1 the efficient investment in and deployment 

2 of information technology and data re3 sources. Such committee shall have an 

4 equal number of members of the committee 

5 who are— 

6 ‘‘(I) musical work copyright own7 ers who are appointed by the board of 

8 directors of the mechanical licensing 

9 collective; and 

10 ‘‘(II) representatives of digital 

11 music providers who are appointed by 

12 the digital licensee coordinator. 

13 ‘‘(iv) UNCLAIMED ROYALTIES OVER14 SIGHT COMMITTEE.—The board of direc15 tors of the mechanical licensing collective 

16 shall establish and appoint an unclaimed 

17 royalties oversight committee consisting of 

18 10 members, 5 of which shall be musical 

19 work copyright owners and 5 of which 

20 shall be professional songwriters whose 

21 works are used in covered activities. 

22 ‘‘(v) DISPUTE RESOLUTION COM23 MITTEE.—The board of directors of the 

24 mechanical licensing collective shall estab25 lish and appoint a dispute resolution comVerDate Sep 11 2014 01:21 Apr 11, 2018 Jkt 079200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.IH H5447

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1 mittee consisting of no fewer than 6 mem2 bers, which committee shall include an 

3 equal number of representatives of musical 

4 work copyright owners and professional 

5 songwriters. 

6 ‘‘(vi) MECHANICAL LICENSING COL7 LECTIVE ANNUAL REPORT.—Not later 

8 than June 30 of each year commencing 

9 after the license availability date, the me10 chanical licensing collective shall post, and 

11 make available online for a period of at 

12 least 3 years, an annual report that sets 

13 forth how the collective operates, how roy14 alties are collected and distributed, and the 

15 collective total costs for the preceding cal16 endar year. At the time of posting, a copy 

17 of the report shall be provided to the Reg18 ister of Copyrights. 

19 ‘‘(E) MUSICAL WORKS DATABASE.— 

20 ‘‘(i) ESTABLISHMENT AND MAINTE21 NANCE OF DATABASE.—The mechanical li22 censing collective shall establish and main23 tain a database containing information re24 lating to musical works (and shares of 

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


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1 identity and location of the copyright own2 ers of such works (and shares thereof) and 

3 the sound recordings in which the musical 

4 works are embodied. In furtherance of 

5 maintaining such database, the mechanical 

6 licensing collective shall engage in efforts 

7 to identify the musical works embodied in 

8 particular sound recordings, as well as to 

9 identify and locate the copyright owners of 

10 such works (and shares thereof), and up11 date such data as appropriate. 

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

13 to musical works (and shares thereof) that 

14 have been matched to copyright owners, 

15 the musical works database shall include— 

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

17 ‘‘(II) the copyright owner of the 

18 work (or share thereof), and such 

19 owner’s ownership percentage; 

20 ‘‘(III) contact information for 

21 such copyright owner; 

22 ‘‘(IV) to the extent reasonably 

23 available to the mechanical licensing 

24 collective— 


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1 ‘‘(aa) the international 

2 standard musical work code for 

3 the work; and 

4 ‘‘(bb) identifying informa5 tion for sound recordings in 

6 which the musical work is em7 bodied, including the name of the 

8 sound recording, featured artist, 

9 sound recording copyright owner, 

10 international standard recording 

11 code, and other information com12 monly used to assist in associ13 ating sound recordings with mu14 sical works; and 

15 ‘‘(V) such other information as 

16 the Register of Copyrights may pre17 scribe by regulation. 

18 ‘‘(iii) UNMATCHED WORKS.—With re19 spect to unmatched musical works (and 

20 shares of works) in the database, the musi21 cal works database shall include— 

22 ‘‘(I) to the extent reasonably 

23 available to the mechanical licensing 

24 collective— 


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1 ‘‘(aa) the title of the musical 

2 work; 

3 ‘‘(bb) the ownership percent4 age for which an owner has not 

5 been identified; 

6 ‘‘(cc) if a copyright owner 

7 has been identified but not lo8 cated, the identity of such owner 

9 and such owner’s ownership per10 centage; 

11 ‘‘(dd) identifying informa12 tion for sound recordings in 

13 which the work is embodied, in14 cluding sound recording name, 

15 featured artist, sound recording 

16 copyright owner, international 

17 standard recording code, and 

18 other information commonly used 

19 to assist in associating sound re20 cordings with musical works; and 

21 ‘‘(ee) any additional infor22 mation reported to the mechan23 ical licensing collective that may 

24 assist in identifying the work; 

25 and 


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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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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 


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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.— 


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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 


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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 


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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 


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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) 


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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): 


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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 


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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 poliVerDate Sep 11 2014 01:21 Apr 11, 2018 Jkt 079200 PO 00000 Frm 00052 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.IH H5447

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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— 


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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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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 

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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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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 

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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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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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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 reasonably available to the 

13 digital music provider, sound re14 cording copyright owner, inter15 national standard recording code, 

16 and other information commonly 

17 used in the industry to identify 

18 sound recordings and match 

19 them to the musical works the 

20 sound recordings embody; 

21 ‘‘(bb) to the extent reason22 ably available to the digital music 

23 provider, provide information 

24 concerning authorship and own25 ership of the applicable rights in 


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1 the musical work embodied in the 

2 sound recording (including each 

3 songwriter, publisher name, and 

4 respective ownership share) and 

5 the international standard musi6 cal work code; and 

7 ‘‘(cc) provide the number of 

8 digital phonorecord deliveries of 

9 the sound recording, including 

10 limited downloads and interactive 

11 streams; 

12 ‘‘(II) identify and provide contact 

13 information for all musical work copy14 right owners for works embodied in 

15 sound recordings as to which a vol16 untary license, rather than the blan17 ket license, is in effect with respect to 

18 the uses being reported; and 

19 ‘‘(III) provide such other infor20 mation as the Register of Copyrights 

21 shall require by regulation. 

22 ‘‘(iii) FORMAT AND MAINTENANCE OF

23 REPORTS.—Reports of usage provided by 

24 digital music providers to the mechanical 

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1 readable format that is compatible with the 

2 information technology systems of the me3 chanical licensing collective and meets the 

4 requirements of regulations adopted by the 

5 Register of Copyrights. The Register shall 

6 also adopt regulations setting forth re7 quirements under which records of use 

8 shall be maintained and made available to 

9 the mechanical licensing collective by dig10 ital music providers engaged in covered ac11 tivities under a blanket license. 

12 ‘‘(iv) ADOPTION OF REGULATIONS.— 

13 The Register shall adopt regulations— 

14 ‘‘(I) setting forth requirements 

15 under which records of use shall be 

16 maintained and made available to the 

17 mechanical licensing collective by dig18 ital music providers engaged in cov19 ered activities under a blanket license; 

20 and 

21 ‘‘(II) regarding adjustments to 

22 reports of usage by digital music pro23 viders, including mechanisms to ac24 count for overpayment and under25 payment of royalties in prior periods. 


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1 ‘‘(B) COLLECTION OF SOUND RECORDING

2 INFORMATION.—A digital music provider shall 

3 engage in good-faith, commercially reasonable 

4 efforts to obtain from copyright owners of 

5 sound recordings made available through the 

6 service of such digital music provider— 

7 ‘‘(i) sound recording copyright owners, 

8 international standard recording codes, 

9 and other information commonly used in 

10 the industry to identify sound recordings 

11 and match them to the musical works the 

12 sound recordings embody; and 

13 ‘‘(ii) information concerning the au14 thorship and ownership of musical works, 

15 including songwriters, publisher names, 

16 ownership shares, and international stand17 ard musical work codes. 

18 ‘‘(C) PAYMENT OF ADMINISTRATIVE AS19 SESSMENT.—A digital music provider and any 

20 significant nonblanket licensee shall pay the ad21 ministrative assessment established under para22 graph (7)(D) in accordance with this subsection 

23 and applicable regulations. 

24 ‘‘(D) VERIFICATION OF PAYMENTS BY DIG25 ITAL MUSIC PROVIDERS.— 


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1 ‘‘(i) VERIFICATION PROCESS.—The 

2 mechanical licensing collective may conduct 

3 an audit of a digital music provider oper4 ating under the blanket license to verify 

5 the accuracy of royalty payments by the 

6 digital music provider to the mechanical li7 censing collective as follows: 

8 ‘‘(I) The mechanical licensing 

9 collective may commence an audit of a 

10 digital music provider no more than 

11 once in any 3-calendar-year period to 

12 cover a verification period of no more 

13 than the 3 full calendar years pre14 ceding the date of commencement of 

15 the audit, and such audit may not 

16 audit records for any such 3-year 

17 verification period more than once. 

18 ‘‘(II) The audit shall be con19 ducted by a qualified auditor, who 

20 shall perform the audit during the or21 dinary course of business by exam22 ining the books, records, and data of 

23 the digital music provider, according 

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1 fidentiality requirements prescribed by 

2 the Register of Copyrights under 

3 paragraph (12)(C). 

4 ‘‘(III) The digital music provider 

5 shall make such books, records, and 

6 data available to the qualified auditor 

7 and respond to reasonable requests 

8 for relevant information, and shall use 

9 commercially reasonable efforts to 

10 provide access to relevant information 

11 maintained with respect to a digital 

12 music provider by third parties. 

13 ‘‘(IV) To commence the audit, 

14 the mechanical licensing collective 

15 shall file with the Copyright Office a 

16 notice of intent to conduct an audit of 

17 the digital music provider, identifying 

18 the period of time to be audited, and 

19 shall simultaneously deliver a copy of 

20 such notice to the digital music pro21 vider. The Register of Copyrights 

22 shall cause the notice of audit to be 

23 published in the Federal Register 

24 within 45 calendar days after receipt. 


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1 ‘‘(V) The qualified auditor shall 

2 determine the accuracy of royalty pay3 ments, including whether an under4 payment or overpayment of royalties 

5 was made by the digital music pro6 vider to the mechanical licensing col7 lective, but before providing a final 

8 audit report to the mechanical licens9 ing collective, the qualified auditor 

10 shall provide a tentative draft of the 

11 report to the digital music provider 

12 and allow the digital music provider a 

13 reasonable opportunity to respond to 

14 the findings, including by clarifying 

15 issues and correcting factual errors. 

16 ‘‘(VI) The mechanical licensing 

17 collective shall pay the cost of the 

18 audit, unless the qualified auditor de19 termines that there was an under20 payment by the digital music provider 

21 of 10 percent or more, in which case 

22 the digital music provider shall bear 

23 the reasonable costs of the audit, in 

24 addition to paying the amount of any 

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1 censing collective. In case of an over2 payment by the digital music provider, 

3 the mechanical licensing collective 

4 shall provide a credit to the account 

5 of the digital music provider. 

6 ‘‘(VII) A digital music provider 

7 may not assert section 507 or any 

8 other Federal or State statute of limi9 tations, doctrine of laches or estoppel, 

10 or similar provision as a defense to a 

11 legal action arising from an audit 

12 under this subparagraph if such legal 

13 action is commenced no more than 6 

14 years after the commencement of the 

15 audit that is the basis for such action. 

16 ‘‘(ii) ALTERNATIVE VERIFICATION

17 PROCEDURES.—Nothing in this subpara18 graph shall preclude the mechanical licens19 ing collective and a digital music provider 

20 from agreeing to audit procedures different 

21 from those described herein, but a notice 

22 of the audit shall be provided to and pub23 lished by the Copyright Office as described 

24 in clause (i)(IV). 


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1 ‘‘(E) DEFAULT UNDER BLANKET LI2 CENSE.— 

3 ‘‘(i) CONDITIONS OF DEFAULT.—A 

4 digital music provider shall be in default 

5 under a blanket license if the digital music 

6 provider— 

7 ‘‘(I) fails to provide one or more 

8 monthly reports of usage to the me9 chanical licensing collective when due; 

10 ‘‘(II) fails to make a monthly 

11 royalty or late fee payment to the me12 chanical licensing collective when due, 

13 in all or material part; 

14 ‘‘(III) provides one or more 

15 monthly reports of usage to the me16 chanical licensing collective that, on 

17 the whole, is or are materially defi18 cient as a result of inaccurate, miss19 ing, or unreadable data, where the 

20 correct data was available to the dig21 ital music provider and required to be 

22 reported under this section and appli23 cable regulations; 

24 ‘‘(IV) fails to pay the administra25 tive assessment as required under this 


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1 subsection and applicable regulations; 

2 or 

3 ‘‘(V) after being provided written 

4 notice by the mechanical licensing col5 lective, refuses to comply with any 

6 other material term or condition of 

7 the blanket license under this section 

8 for a period of 60 calendar days or 

9 longer. 

10 ‘‘(ii) NOTICE OF DEFAULT AND TER11 MINATION.—In case of a default by a dig12 ital music provider, the mechanical licens13 ing collective may proceed to terminate the 

14 blanket license of the digital music pro15 vider as follows: 

16 ‘‘(I) The mechanical licensing 

17 collective shall provide written notice 

18 to the digital music provider describ19 ing with reasonable particularity the 

20 default and advising that unless such 

21 default is cured within 60 calendar 

22 days after the date of the notice, the 

23 blanket license will automatically ter24 minate at the end of that period. 


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1 ‘‘(II) If the digital music provider 

2 fails to remedy the default within the 

3 60-day period referenced in subclause 

4 (I), the license shall terminate without 

5 any further action on the part of the 

6 mechanical licensing collective. Such 

7 termination renders the making of all 

8 digital phonorecord deliveries of all 

9 musical works (and shares thereof) 

10 covered by the blanket license for 

11 which the royalty or administrative 

12 assessment has not been paid action13 able as acts of infringement under 

14 section 501 and subject to the rem15 edies provided by sections 502 

16 through 506. 

17 ‘‘(iii) NOTICE TO COPYRIGHT OWN18 ERS.—The mechanical licensing collective 

19 shall provide written notice of any termi20 nation under this subparagraph to copy21 right owners of affected works. 

22 ‘‘(iv) REVIEW BY FEDERAL DISTRICT

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1 tive may seek review of such termination in 

2 Federal district court. The district court 

3 shall determine the matter de novo based 

4 on the record before the mechanical licens5 ing collective and any additional sup6 porting evidence presented by the parties. 

7 ‘‘(5) DIGITAL LICENSEE COORDINATOR.— 

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

9 coordinator shall be a single entity that— 

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

11 other entity, that is created to carry out 

12 responsibilities under this subsection; 

13 ‘‘(ii) is endorsed by and enjoys sub14 stantial support from digital music pro15 viders and significant nonblanket licensees 

16 that together represent the greatest per17 centage of the licensee market for uses of 

18 musical works in covered activities, as 

19 measured over the preceding 3 calendar 

20 years; 

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

22 has, or will have prior to the license avail23 ability date, the administrative capabilities 

24 to perform the required functions of the 


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1 digital licensee coordinator under this sub2 section; and 

3 ‘‘(iv) has been designated by the Reg4 ister of Copyrights in accordance with sub5 paragraph (B). 

6 ‘‘(B) DESIGNATION OF DIGITAL LICENSEE

7 COORDINATOR.— 

8 ‘‘(i) INITIAL DESIGNATION.—The 

9 Register of Copyrights shall initially des10 ignate the digital licensee coordinator with11 in 9 months after the enactment date, in 

12 accordance with the same procedure de13 scribed for designation of the mechanical 

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

15 ‘‘(ii) PERIODIC REVIEW OF DESIGNA16 TION.—Following the initial designation of 

17 the digital licensee coordinator, the Reg18 ister shall, every 5 years, beginning with 

19 the fifth full calendar year to commence 

20 after the initial designation, determine 

21 whether the existing designation should be 

22 continued, or a different entity meeting the 

23 criteria described in clauses (i) through 

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1 cedure described for the mechanical licens2 ing collective in paragraph (3)(B)(ii). 

3 ‘‘(iii) INABILITY TO DESIGNATE.—If 

4 the Register is unable to identify an entity 

5 that fulfills each of the qualifications de6 scribed in clauses (i) through (iii) of sub7 paragraph (A) to serve as the digital li8 censee coordinator, the Register may de9 cline to designate a digital licensee coordi10 nator. The Register’s determination not to 

11 designate a digital licensee coordinator 

12 shall not negate or otherwise affect any 

13 provision of this subsection except to the 

14 limited extent that a provision references 

15 the digital licensee coordinator. In such 

16 case, the reference to the digital licensee 

17 coordinator shall be without effect unless 

18 and until a new digital licensee coordinator 

19 is designated. 

20 ‘‘(C) AUTHORITIES AND FUNCTIONS.— 

21 ‘‘(i) IN GENERAL.—The digital li22 censee coordinator is authorized to perform 

23 the following functions, subject to more 

24 particular requirements as described in 

25 this subsection: 


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1 ‘‘(I) Establish a governance 

2 structure, criteria for membership, 

3 and any dues to be paid by its mem4 bers. 

5 ‘‘(II) Engage in efforts to enforce 

6 notice and payment obligations with 

7 respect to the administrative assess8 ment, including by receiving informa9 tion from and coordinating with the 

10 mechanical licensing collective. 

11 ‘‘(III) Initiate and participate in 

12 proceedings before the Copyright Roy13 alty Judges to establish the adminis14 trative assessment under this sub15 section. 

16 ‘‘(IV) Initiate and participate in 

17 proceedings before the Copyright Of18 fice with respect to activities under 

19 this subsection. 

20 ‘‘(V) Gather and provide docu21 mentation for use in proceedings be22 fore the Copyright Royalty Judges to 

23 set rates and terms under this section. 

24 ‘‘(VI) Maintain records of its ac25 tivities. 


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1 ‘‘(VII) Engage in such other ac2 tivities as may be necessary or appro3 priate to fulfill its responsibilities 

4 under this subsection. 

5 ‘‘(ii) RESTRICTION ON LOBBYING.— 

6 The digital licensee coordinator may not 

7 engage in government lobbying activities, 

8 but may engage in the activities described 

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

10 (i). 

11 ‘‘(6) REQUIREMENTS FOR SIGNIFICANT NON12 BLANKET LICENSEES.— 

13 ‘‘(A) IN GENERAL.— 

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

15 than 45 calendar days after the license 

16 availability date, or 45 calendar days after 

17 the end of the first full calendar month in 

18 which an entity initially qualifies as a sig19 nificant nonblanket licensee, whichever oc20 curs later, a significant nonblanket licensee 

21 shall submit a notice of nonblanket activity 

22 to the mechanical licensing collective. The 

23 notice of nonblanket activity shall comply 

24 in form and substance with requirements 

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1 lish by regulation, and a copy shall be 

2 made available to the digital licensee coor3 dinator. 

4 ‘‘(ii) REPORTING AND PAYMENT OBLI5 GATIONS.—The notice of nonblanket activ6 ity submitted to the mechanical licensing 

7 collective shall be accompanied by a report 

8 of usage that contains the information de9 scribed in paragraph (4)(A)(ii), as well as 

10 any payment of the administrative assess11 ment required under this subsection and 

12 applicable regulations. Thereafter, subject 

13 to clause (iii), a significant nonblanket li14 censee shall continue to provide monthly 

15 reports of usage, accompanied by any re16 quired payment of the administrative as17 sessment, to the mechanical licensing col18 lective. Such reports and payments shall be 

19 submitted not later than 45 calendar days 

20 after the end of the calendar month being 

21 reported. 

22 ‘‘(iii) DISCONTINUATION OF OBLIGA23 TIONS.—An entity that has submitted a 

24 notice of nonblanket activity to the me25 chanical licensing collective that has ceased 


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1 to qualify as a significant nonblanket li2 censee may so notify the collective in writ3 ing. In such case, as of the calendar month 

4 in which such notice is provided, such enti5 ty shall no longer be required to provide 

6 reports of usage or pay the administrative 

7 assessment, but if such entity later quali8 fies as a significant nonblanket licensee, 

9 such entity shall again be required to com10 ply with clauses (i) and (ii). 

11 ‘‘(B) REPORTING BY MECHANICAL LICENS12 ING COLLECTIVE TO DIGITAL LICENSEE COOR13 DINATOR.— 

14 ‘‘(i) MONTHLY REPORTS OF NON15 COMPLIANT LICENSEES.—The mechanical 

16 licensing collective shall provide monthly 

17 reports to the digital licensee coordinator 

18 setting forth any significant nonblanket li19 censees of which the collective is aware 

20 that have failed to comply with subpara21 graph (A). 

22 ‘‘(ii) TREATMENT OF CONFIDENTIAL

23 INFORMATION.—The mechanical licensing 

24 collective and digital licensee coordinator 

25 shall take appropriate steps to safeguard 


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1 the confidentiality and security of financial 

2 and other sensitive data shared under this 

3 subparagraph, in accordance with the con4 fidentiality requirements prescribed by the 

5 Register of Copyrights under paragraph 

6 (12)(C). 

7 ‘‘(C) LEGAL ENFORCEMENT EFFORTS.— 

8 ‘‘(i) FEDERAL COURT ACTION.— 

9 Should the mechanical licensing collective 

10 or digital licensee coordinator become 

11 aware that a significant nonblanket li12 censee has failed to comply with subpara13 graph (A), either may commence an action 

14 in Federal district court for damages and 

15 injunctive relief. If the significant non16 blanket licensee is found liable, the court 

17 shall, absent a finding of excusable neglect, 

18 award damages in an amount equal to 

19 three times the total amount of the unpaid 

20 administrative assessment and, notwith21 standing anything to the contrary in sec22 tion 505, reasonable attorney’s fees and 

23 costs, as well as such other relief as the 

24 court deems appropriate. In all other 

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1 propriate. Any recovery of damages shall 

2 be payable to the mechanical licensing col3 lective as an offset to the collective total 

4 costs. 

5 ‘‘(ii) STATUTE OF LIMITATIONS FOR

6 ENFORCEMENT ACTION.—Any action de7 scribed in this subparagraph shall be com8 menced within the time period described in 

9 section 507(b). 

10 ‘‘(iii) OTHER RIGHTS AND REMEDIES

11 PRESERVED.—The ability of the mechan12 ical licensing collective or digital licensee 

13 coordinator to bring an action under this 

14 subparagraph shall in no way alter, limit 

15 or negate any other right or remedy that 

16 may be available to any party at law or in 

17 equity. 

18 ‘‘(7) FUNDING OF MECHANICAL LICENSING

19 COLLECTIVE.— 

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

21 costs shall be funded by— 

22 ‘‘(i) an administrative assessment, as 

23 such assessment is established by the 

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1 paragraph (D) from time to time, to be 

2 paid by— 

3 ‘‘(I) digital music providers that 

4 are engaged, in all or in part, in cov5 ered activities pursuant to a blanket 

6 license; and 

7 ‘‘(II) significant nonblanket li8 censees; and 

9 ‘‘(ii) voluntary contributions from dig10 ital music providers and significant non11 blanket licensees as may be agreed with 

12 copyright owners. 

13 ‘‘(B) VOLUNTARY CONTRIBUTIONS.— 

14 ‘‘(i) AGREEMENTS CONCERNING CON15 TRIBUTIONS.—Except as provided in 

16 clause (ii), voluntary contributions by dig17 ital music providers and significant non18 blanket licensees shall be determined by 

19 private negotiation and agreement, and the 

20 following conditions apply: 

21 ‘‘(I) The date and amount of 

22 each voluntary contribution to the me23 chanical licensing collective shall be 

24 documented in a writing signed by an 

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1 censing collective and the contributing 

2 party. 

3 ‘‘(II) Such agreement shall be 

4 made available as required in pro5 ceedings before the Copyright Royalty 

6 Judges to establish or adjust the ad7 ministrative assessment in accordance 

8 with applicable statutory and regu9 latory provisions and rulings of the 

10 Copyright Royalty Judges. 

11 ‘‘(ii) TREATMENT OF CONTRIBU12 TIONS.—Each such voluntary contribution 

13 shall be treated for purposes of an admin14 istrative assessment proceeding as an off15 set to the collective total costs that would 

16 otherwise be recovered through the admin17 istrative assessment. Any allocation or re18 allocation of voluntary contributions be19 tween or among individual digital music 

20 providers or significant nonblanket licens21 ees shall be a matter of private negotiation 

22 and agreement among such parties and 

23 outside the scope of the administrative as24 sessment proceeding. 


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1 ‘‘(C) INTERIM APPLICATION OF ACCRUED

2 ROYALTIES.—In the event that the administra3 tive assessment, together with any funding from 

4 voluntary contributions as provided in subpara5 graphs (A) and (B), is inadequate to cover cur6 rent collective total costs, the collective, with 

7 approval of its board of directors, may apply 

8 unclaimed accrued royalties on an interim basis 

9 to defray such costs, subject to future reim10 bursement of such royalties from future collec11 tions of the assessment. 

12 ‘‘(D) DETERMINATION OF ADMINISTRA13 TIVE ASSESSMENT.— 

14 ‘‘(i) ADMINISTRATIVE ASSESSMENT TO

15 COVER COLLECTIVE TOTAL COSTS.—The 

16 administrative assessment shall be used 

17 solely and exclusively to fund the collective 

18 total costs. 

19 ‘‘(ii) SEPARATE PROCEEDING BEFORE

20 COPYRIGHT ROYALTY JUDGES.—The 

21 amount and terms of the administrative 

22 assessment shall be determined and estab23 lished in a separate and independent pro24 ceeding before the Copyright Royalty 

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1 scribed in clauses (iii) and (iv). The admin2 istrative assessment determined in such 

3 proceeding shall— 

4 ‘‘(I) be wholly independent of 

5 royalty rates and terms applicable to 

6 digital music providers, which shall 

7 not be taken into consideration in any 

8 manner in establishing the adminis9 trative assessment; 

10 ‘‘(II) be established by the Copy11 right Royalty Judges in an amount 

12 that is calculated to defray the rea13 sonable collective total costs; 

14 ‘‘(III) be assessed based on usage 

15 of musical works by digital music pro16 viders and significant nonblanket li17 censees in covered activities under 

18 both compulsory and nonblanket li19 censes; 

20 ‘‘(IV) may be in the form of a 

21 percentage of royalties payable under 

22 this section for usage of musical 

23 works in covered activities (regardless 

24 of whether a different rate applies 

25 under a voluntary license), or any 


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1 other usage-based metric reasonably 

2 calculated to equitably allocate the 

3 collective total costs across digital 

4 music providers and significant non5 blanket licensees engaged in covered 

6 activities, but shall include as a com7 ponent a minimum fee for all digital 

8 music providers and significant non9 blanket licensees; and 

10 ‘‘(V) take into consideration an11 ticipated future collective total costs 

12 and collections of the administrative 

13 assessment, but also, as applicable— 

14 ‘‘(aa) any portion of past ac15 tual collective total costs of the 

16 mechanical licensing collective 

17 not funded by previous collections 

18 of the administrative assessment 

19 or voluntary contributions be20 cause such collections or con21 tributions together were insuffi22 cient to fund such costs; 

23 ‘‘(bb) any past collections of 

24 the administrative assessment 

25 and voluntary contributions that 


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1 exceeded past actual collective 

2 total costs, resulting in a surplus; 

3 and 

4 ‘‘(cc) the amount of any vol5 untary contributions by digital 

6 music providers or significant 

7 nonblanket licensees in relevant 

8 periods, described in subpara9 graphs (A) and (B) of paragraph 

10 (7). 

11 ‘‘(iii) INITIAL ADMINISTRATIVE AS12 SESSMENT.—The procedure for estab13 lishing the initial administrative assess14 ment shall be as follows: 

15 ‘‘(I) The Copyright Royalty 

16 Judges shall commence a proceeding 

17 to establish the initial administrative 

18 assessment within 9 months after the 

19 enactment date by publishing a notice 

20 in the Federal Register seeking peti21 tions to participate. 

22 ‘‘(II) The mechanical licensing 

23 collective and digital licensee coordi24 nator shall participate in such pro25 ceeding, along with any interested 


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1 copyright owners, digital music pro2 viders or significant nonblanket licens3 ees that have notified the Copyright 

4 Royalty Judges of their desire to par5 ticipate. 

6 ‘‘(III) The Copyright Royalty 

7 Judges shall establish a schedule for 

8 submission by the parties of informa9 tion that may be relevant to estab10 lishing the administrative assessment, 

11 including actual and anticipated col12 lective total costs of the mechanical li13 censing collective, actual and antici14 pated collections from digital music 

15 providers and significant nonblanket 

16 licensees, and documentation of vol17 untary contributions, as well as a 

18 schedule for further proceedings, 

19 which shall include a hearing, as they 

20 deem appropriate. 

21 ‘‘(IV) The initial administrative 

22 assessment shall be determined, and 

23 such determination shall be published 

24 in the Federal Register by the Copy25 right Royalty Judges, within 1 year 


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1 after commencement of the proceeding 

2 described in this clause. The deter3 mination shall be supported by a writ4 ten record. The initial administrative 

5 assessment shall be effective as of the 

6 license availability date, and shall con7 tinue in effect unless and until an ad8 justed administrative assessment is 

9 established pursuant to an adjustment 

10 proceeding under clause (iii). 

11 ‘‘(iv) ADJUSTMENT OF ADMINISTRA12 TIVE ASSESSMENT.—The administrative 

13 assessment may be adjusted by the Copy14 right Royalty Judges periodically, in ac15 cordance with the following procedures: 

16 ‘‘(I) No earlier than one year 

17 after the most recent publication of a 

18 determination of the administrative 

19 assessment by the Copyright Royalty 

20 Judges, the mechanical licensing col21 lective, the digital licensee coordi22 nator, or one or more interested copy23 right owners, digital music providers, 

24 or significant nonblanket licensees, 

25 may file a petition with the Copyright 


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1 Royalty Judges in the month of Octo2 ber to commence a proceeding to ad3 just the administrative assessment. 

4 ‘‘(II) Notice of the commence5 ment of such proceeding shall be pub6 lished in the Federal Register in the 

7 month of November following the fil8 ing of any petition, with a schedule of 

9 requested information and additional 

10 proceedings, as described in clause 

11 (iii)(III). The mechanical licensing 

12 collective and digital licensee coordi13 nator shall participate in such pro14 ceeding, along with any interested 

15 copyright owners, digital music pro16 viders, or significant nonblanket li17 censees that have notified the Copy18 right Royalty Judges of their desire to 

19 participate. 

20 ‘‘(III) The determination of the 

21 adjusted administrative assessment, 

22 which shall be supported by a written 

23 record, shall be published in the Fed24 eral Register during November of the 

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1 ment of the proceeding. The adjusted 

2 administrative assessment shall take 

3 effect January 1 of the year following 

4 such publication. 

5 ‘‘(v) ADOPTION OF VOLUNTARY

6 AGREEMENTS.—In lieu of reaching their 

7 own determination based on evaluation of 

8 relevant data, the Copyright Royalty 

9 Judges shall approve and adopt a nego10 tiated agreement to establish the amount 

11 and terms of the administrative assessment 

12 that has been agreed to by the mechanical 

13 licensing collective and the digital licensee 

14 coordinator (or if none has been des15 ignated, interested digital music providers 

16 and significant nonblanket licensees rep17 resenting more than half of the market for 

18 uses of musical works in covered activi19 ties), but the Copyright Royalty Judges 

20 shall have the discretion to reject any such 

21 agreement for good cause shown. An ad22 ministrative assessment adopted under this 

23 clause shall apply to all digital music pro24 viders and significant nonblanket licensees 


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1 engaged in covered activities during the pe2 riod it is in effect. 

3 ‘‘(vi) CONTINUING AUTHORITY TO

4 AMEND.—The Copyright Royalty Judges 

5 shall retain continuing authority to amend 

6 a determination of an administrative as7 sessment to correct technical or clerical er8 rors, or modify the terms of implementa9 tion, for good cause, with any such amend10 ment to be published in the Federal Reg11 ister. 

12 ‘‘(vii) APPEAL OF ADMINISTRATIVE

13 ASSESSMENT.—The determination of an 

14 administrative assessment by the Copy15 right Royalty Judges shall be appealable, 

16 within 30 calendar days after publication 

17 in the Federal Register, to the Court of 

18 Appeals for the District of Columbia Cir19 cuit by any party that fully participated in 

20 the proceeding. The administrative assess21 ment as established by the Copyright Roy22 alty Judges shall remain in effect pending 

23 the final outcome of any such appeal, and 

24 the mechanical licensing collective, digital 

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1 viders, and significant nonblanket licensees 

2 shall implement appropriate financial or 

3 other measures within 3 months after any 

4 modification of the assessment to reflect 

5 and account for such outcome. 

6 ‘‘(viii) REGULATIONS.—The Copyright 

7 Royalty Judges may adopt regulations to 

8 govern the conduct of proceedings under 

9 this paragraph. 

10 ‘‘(8) ESTABLISHMENT OF RATES AND TERMS

11 UNDER BLANKET LICENSE.— 

12 ‘‘(A) RESTRICTIONS ON RATESETTING

13 PARTICIPATION.—Neither the mechanical li14 censing collective nor the digital licensee coordi15 nator shall be a party to a proceeding described 

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

17 and provide financial and other information for 

18 the use of a party to such a proceeding and 

19 comply with requests for information as re20 quired under applicable statutory and regu21 latory provisions and rulings of the Copyright 

22 Royalty Judges. 

23 ‘‘(B) APPLICATION OF LATE FEES.—In 

24 any proceeding described in subparagraph (A) 

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1 lish a late fee for late payment of royalties for 

2 uses of musical works under this section, such 

3 fee shall apply to covered activities under blan4 ket licenses, as follows: 

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

6 payments shall accrue from the due date 

7 for payment until payment is received by 

8 the mechanical licensing collective. 

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

10 in no way prevent a copyright owner or the 

11 mechanical licensing collective from assert12 ing any other rights or remedies to which 

13 such copyright owner or the mechanical li14 censing collective may be entitled under 

15 this title. 

16 ‘‘(C) INTERIM RATE AGREEMENTS IN GEN17 ERAL.—For any covered activity for which no 

18 rate or terms have been established by the 

19 Copyright Royalty Judges, the mechanical li20 censing collective and any digital music provider 

21 may agree to an interim rate and terms for 

22 such activity under the blanket license, and any 

23 such rate and terms— 

24 ‘‘(i) shall be treated as nonpreceden25 tial and not cited or relied upon in any 


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1 ratesetting proceeding before the Copyright 

2 Royalty Judges or any other tribunal; and 

3 ‘‘(ii) shall automatically expire upon 

4 the establishment of a rate and terms for 

5 such covered activity by the Copyright 

6 Royalty Judges, under subsection 

7 (c)(1)(E). 

8 ‘‘(D) ADJUSTMENTS FOR INTERIM

9 RATES.—The rate and terms established by the 

10 Copyright Royalty Judges for a covered activity 

11 to which an interim rate and terms have been 

12 agreed under subparagraph (C) shall supersede 

13 the interim rate and terms and apply retro14 actively to the inception of the activity under 

15 the blanket license. In such case, within 3 

16 months after the rate and terms established by 

17 the Copyright Royalty Judges become effec18 tive— 

19 ‘‘(i) if the rate established by the 

20 Copyright Royalty Judges exceeds the in21 terim rate, the digital music provider shall 

22 pay to the mechanical licensing collective 

23 the amount of any underpayment of royal24 ties due; or 


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

2 rate established by the Copyright Royalty 

3 Judges, the mechanical licensing collective 

4 shall credit the account of the digital music 

5 provider for the amount of any overpay6 ment of royalties due. 

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

8 ‘‘(A) SUBSTITUTION OF BLANKET LI9 CENSE.—On the license availability date, a 

10 blanket license shall, without any interruption 

11 in license authority enjoyed by such digital 

12 music provider, be automatically substituted for 

13 and supersede any existing compulsory license 

14 previously obtained under this section by the 

15 digital music provider from a copyright owner 

16 to engage in one or more covered activities with 

17 respect to a musical work, but the foregoing 

18 shall not apply to any authority obtained from 

19 a record company pursuant to a compulsory li20 cense to make and distribute permanent 

21 downloads unless and until such record com22 pany terminates such authority in writing to 

23 take effect at the end of a monthly reporting 

24 period, with a copy to the mechanical licensing 

25 collective. 


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1 ‘‘(B) EXPIRATION OF EXISTING LI2 CENSES.—Except to the extent provided in sub3 paragraph (A), on and after the license avail4 ability date, licenses other than individual 

5 download licenses obtained under this section 

6 for covered activities prior to the license avail7 ability date shall no longer continue in effect. 

8 ‘‘(C) TREATMENT OF VOLUNTARY LI9 CENSES.—A voluntary license for a covered ac10 tivity in effect on the license availability date 

11 will remain in effect unless and until the vol12 untary license expires according to the terms of 

13 the voluntary license, or the parties agree to 

14 amend or terminate the voluntary license. In a 

15 case where a voluntary license for a covered ac16 tivity entered into before the license availability 

17 date incorporates the terms of this section by 

18 reference, the terms so incorporated (but not 

19 the rates) shall be those in effect immediately 

20 prior to the license availability date, and those 

21 terms shall continue to apply unless and until 

22 such voluntary license is terminated or amend23 ed, or the parties enter into a new voluntary li24 cense. 


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1 ‘‘(D) FURTHER ACCEPTANCE OF NOTICES

2 FOR COVERED ACTIVITIES BY COPYRIGHT OF3 FICE.—On and after the enactment date— 

4 ‘‘(i) the Copyright Office shall no 

5 longer accept notices of intention with re6 spect to covered activities; and 

7 ‘‘(ii) previously filed notices of inten8 tion will no longer be effective or provide 

9 license authority with respect to covered 

10 activities, but before the license availability 

11 date there shall be no liability under sec12 tion 501 for the reproduction or distribu13 tion of a musical work (or share thereof) 

14 in covered activities if a valid notice of in15 tention was filed for such work (or share) 

16 before the enactment date. 

17 ‘‘(10) PRIOR UNLICENSED USES.— 

18 ‘‘(A) LIMITATION ON LIABILITY IN GEN19 ERAL.—A copyright owner that commences an 

20 action under section 501 on or after January 1, 

21 2018, against a digital music provider for the 

22 infringement of the exclusive rights provided by 

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

24 from the unauthorized reproduction or distribu25 tion of a musical work by such digital music 


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1 provider in the course of engaging in covered 

2 activities prior to the license availability date, 

3 shall, as the copyright owner’s sole and exclu4 sive remedy against the digital music provider, 

5 be eligible to recover the royalty prescribed 

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

7 this title, from the digital music provider, pro8 vided that such digital music provider can dem9 onstrate compliance with the requirements of 

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

11 cases the limitation on liability under this sub12 paragraph shall not apply. 

13 ‘‘(B) REQUIREMENTS FOR LIMITATION ON

14 LIABILITY.—The following requirements shall 

15 apply on the enactment date and through the 

16 end of the period that expires 90 days after the 

17 license availability date to digital music pro18 viders seeking to avail themselves of the limita19 tion on liability described in subparagraph (A): 

20 ‘‘(i) No later than 30 calendar days 

21 after first making a particular sound re22 cording of a musical work available 

23 through its service via one or more covered 

24 activities, or 30 calendar days after the en25 actment date, whichever occurs later, a 


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1 digital music provider shall engage in 

2 good-faith, commercially reasonable efforts 

3 to identify and locate each copyright owner 

4 of such musical work (or share thereof). 

5 Such required matching efforts shall in6 clude the following: 

7 ‘‘(I) Good-faith, commercially 

8 reasonable efforts to obtain from the 

9 owner of the corresponding sound re10 cording made available through the 

11 digital music provider’s service the fol12 lowing information: 

13 ‘‘(aa) Sound recording 

14 name, featured artist, sound re15 cording copyright owner, inter16 national standard recording code, 

17 and other information commonly 

18 used in the industry to identify 

19 sound recordings and match 

20 them to the musical works they 

21 embody. 

22 ‘‘(bb) Any available musical 

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1 ship share, and international 

2 standard musical work code. 

3 ‘‘(II) Employment of one or more 

4 bulk electronic matching processes 

5 that are available to the digital music 

6 provider through a third-party vendor 

7 on commercially reasonable terms, but 

8 a digital music provider may rely on 

9 its own bulk electronic matching proc10 ess if it has capabilities comparable to 

11 or better than those available from a 

12 third-party vendor on commercially 

13 reasonable terms. 

14 ‘‘(ii) The required matching efforts 

15 shall be repeated by the digital music pro16 vider no less than once per month for so 

17 long as the copyright owner remains un18 identified or has not been located. 

19 ‘‘(iii) If the required matching efforts 

20 are successful in identifying and locating a 

21 copyright owner of a musical work (or 

22 share thereof) by the end of the calendar 

23 month in which the digital music provider 

24 first makes use of the work, the digital 

25 music provider shall provide statements of 


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1 account and pay royalties to such copy2 right owner in accordance with this section 

3 and applicable regulations. 

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

5 identified or located by the end of the cal6 endar month in which the digital music 

7 provider first makes use of the work, the 

8 digital music provider shall accrue and 

9 hold royalties calculated under the applica10 ble statutory rate in accordance with usage 

11 of the work, from initial use of the work 

12 until the accrued royalties can be paid to 

13 the copyright owner or are required to be 

14 transferred to the mechanical licensing col15 lective, as follows: 

16 ‘‘(I) Accrued royalties shall be 

17 maintained by the digital music pro18 vider in accordance with generally ac19 cepted accounting principles. 

20 ‘‘(II) If a copyright owner of an 

21 unmatched musical work (or share 

22 thereof) is identified and located by or 

23 to the digital music provider before 

24 the license availability date, the digital 

25 music provider shall— 


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1 ‘‘(aa) within 45 calendar 

2 days after the end of the cal3 endar month during which the 

4 copyright owner was identified 

5 and located, pay the copyright 

6 owner all accrued royalties, such 

7 payment to be accompanied by a 

8 cumulative statement of account 

9 that includes all of the informa10 tion that would have been pro11 vided to the copyright owner had 

12 the digital music provider been 

13 providing monthly statements of 

14 account to the copyright owner 

15 from initial use of the work in 

16 accordance with this section and 

17 applicable regulations, including 

18 the requisite certification under 

19 subsection (c)(2)(I); 

20 ‘‘(bb) beginning with the ac21 counting period following the cal22 endar month in which the copy23 right owner was identified and lo24 cated, and for all other account25 ing periods prior to the license 


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1 availability date, provide monthly 

2 statements of account and pay 

3 royalties to the copyright owner 

4 as required under this section 

5 and applicable regulations; and 

6 ‘‘(cc) beginning with the 

7 monthly royalty reporting period 

8 commencing on the license avail9 ability date, report usage and pay 

10 royalties for such musical work 

11 (or share thereof) for such re12 porting period and reporting pe13 riods thereafter to the mechanical 

14 licensing collective, as required 

15 under this subsection and appli16 cable regulations. 

17 ‘‘(III) If a copyright owner of an 

18 unmatched musical work (or share 

19 thereof) is not identified and located 

20 by the license availability date, the 

21 digital music provider shall— 

22 ‘‘(aa) within 45 calendar 

23 days after the license availability 

24 date, transfer all accrued royal25 ties to the mechanical licensing 


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1 collective, such payment to be ac2 companied by a cumulative state3 ment of account that includes all 

4 of the information that would 

5 have been provided to the copy6 right owner had the digital music 

7 provider been serving monthly 

8 statements of account on the 

9 copyright owner from initial use 

10 of the work in accordance with 

11 this section and applicable regu12 lations, including the requisite 

13 certification under subsection 

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

15 additional certification by a duly 

16 authorized officer of the digital 

17 music provider that the digital 

18 music provider has fulfilled the 

19 requirements of clauses (i) and 

20 (ii) of subparagraph (B) but has 

21 not been successful in locating or 

22 identifying the copyright owner; 

23 and 

24 ‘‘(bb) beginning with the 

25 monthly royalty reporting period 


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1 commencing on the license avail2 ability date, report usage and pay 

3 royalties for such musical work 

4 (or share thereof) for such period 

5 and reporting periods thereafter 

6 to the mechanical licensing collec7 tive, as required under this sub8 section and applicable regula9 tions. 

10 ‘‘(v) SUSPENSION OF LATE FEES.—A 

11 digital music provider that complies with 

12 the requirements of this paragraph with 

13 respect to unmatched musical works (or 

14 shares of works) shall not be liable for or 

15 accrue late fees for late payments of royal16 ties for such works until such time as the 

17 digital music provider is required to begin 

18 paying monthly royalties to the copyright 

19 owner or the mechanical licensing collec20 tive, as applicable. 

21 ‘‘(C) ADJUSTED STATUTE OF LIMITA22 TIONS.—Notwithstanding anything to the con23 trary in section 507(b), with respect to any 

24 claim of infringement of the exclusive rights 

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


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1 106 against a digital music provider arising 

2 from the unauthorized reproduction or distribu3 tion of a musical work by such digital music 

4 provider to engage in covered activities that ac5 crued no more than 3 years prior to the license 

6 availability date, such action may be com7 menced within 3 years of the date the claim ac8 crued, or up to 2 years after the license avail9 ability date, whichever is later. 

10 ‘‘(D) OTHER RIGHTS AND REMEDIES PRE11 SERVED.—Except as expressly provided in this 

12 paragraph, nothing in this paragraph shall be 

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

14 remedy of a copyright owner with respect to un15 authorized use of a musical work. 

16 ‘‘(E) REMEDY IN FEDERAL DISTRICT

17 COURT.—A person may bring a claim in a Fed18 eral district court of competent jurisdiction for 

19 an issue that is not adequately resolved by the 

20 board of directors or a committee of the me21 chanical licensing collective, as applicable. 

22 ‘‘(11) LEGAL PROTECTIONS FOR LICENSING AC23 TIVITIES.— 

24 ‘‘(A) EXEMPTION FOR COMPULSORY LI25 CENSE ACTIVITIES.—The antitrust exemption 


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

2 negotiations and agreements between and 

3 among copyright owners and persons entitled to 

4 obtain a compulsory license for covered activi5 ties, and common agents acting on behalf of 

6 such copyright owners or persons, including 

7 with respect to the administrative assessment 

8 established under this subsection. 

9 ‘‘(B) LIMITATION ON COMMON AGENT EX10 EMPTION.—Notwithstanding the antitrust ex11 emption provided in subsection (c)(1)(D) and 

12 subparagraph (A) (except for the administrative 

13 assessment referenced therein and except as 

14 provided in paragraph (8)(C)), neither the me15 chanical licensing collective nor the digital li16 censee coordinator shall serve as a common 

17 agent with respect to the establishment of roy18 alty rates or terms under this section. 

19 ‘‘(C) ANTITRUST EXEMPTION FOR ADMIN20 ISTRATIVE ACTIVITIES.—Notwithstanding any 

21 provision of the antitrust laws, copyright own22 ers and persons entitled to obtain a compulsory 

23 license under this section may designate the 

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1 tion of musical works in covered activities on 

2 behalf of such copyright owners and persons, 

3 but the following conditions apply: 

4 ‘‘(i) Each copyright owner shall estab5 lish the royalty rates and material terms of 

6 any such voluntary license individually and 

7 not in agreement, combination, or concert 

8 with any other copyright owner. 

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

10 compulsory license under this section shall 

11 establish the royalty rates and material 

12 terms of any such voluntary license indi13 vidually and not in agreement, combina14 tion, or concert with any other digital 

15 music provider. 

16 ‘‘(iii) The mechanical licensing collec17 tive shall maintain the confidentiality of 

18 the voluntary licenses in accordance with 

19 the confidentiality provisions prescribed by 

20 the Register of Copyrights under para21 graph (12)(C). 

22 ‘‘(D) LIABILITY FOR GOOD-FAITH ACTIVI23 TIES.—The mechanical licensing collective shall 

24 not be liable to any person or entity based on 

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1 tion of policies and procedures adopted and im2 plemented to carry out the responsibilities de3 scribed in subparagraphs (J) and (K) of para4 graph (3), except to the extent of correcting an 

5 underpayment or overpayment of royalties as 

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

7 collective may participate in a legal proceeding 

8 as a stakeholder party if the collective is hold9 ing funds that are the subject of a dispute be10 tween copyright owners. For purposes of this 

11 subparagraph, ‘good-faith administration’ 

12 means administration in a manner that is not 

13 grossly negligent. 

14 ‘‘(E) PREEMPTION OF STATE PROPERTY

15 LAWS.—The holding and distribution of funds 

16 by the mechanical licensing collective in accord17 ance with this subsection shall supersede and 

18 preempt any State law (including common law) 

19 concerning escheatment or abandoned property, 

20 or any analogous provision, that might other21 wise apply. 

22 ‘‘(12) REGULATIONS.— 

23 ‘‘(A) ADOPTION BY REGISTER OF COPY24 RIGHTS AND COPYRIGHT ROYALTY JUDGES.— 

25 The Register of Copyrights may conduct such 


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1 proceedings and adopt such regulations as may 

2 be necessary or appropriate to effectuate the 

3 provisions of this subsection, except for regula4 tions concerning proceedings before the Copy5 right Royalty Judges to establish the adminis6 trative assessment, which shall be adopted by 

7 the Copyright Royalty Judges. 

8 ‘‘(B) JUDICIAL REVIEW OF REGULA9 TIONS.—Except as provided in paragraph 

10 (7)(D)(vii), regulations adopted under this sub11 section shall be subject to judicial review pursu12 ant to chapter 7 of title 5. 

13 ‘‘(C) PROTECTION OF CONFIDENTIAL IN14 FORMATION.—The Register of Copyrights shall 

15 adopt regulations to provide for the appropriate 

16 procedures to ensure that confidential, private, 

17 proprietary, or privileged information contained 

18 in the records of the mechanical licensing collec19 tive and digital licensee coordinator is not im20 properly disclosed or used, including through 

21 any disclosure or use by the board of directors 

22 or personnel of either entity, and specifically in23 cluding the unclaimed royalties oversight com24 mittee and the dispute resolution committee of 

25 the mechanical licensing collective. 


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1 ‘‘(13) SAVINGS CLAUSES.— 

2 ‘‘(A) LIMITATION ON ACTIVITIES AND

3 RIGHTS COVERED.—This subsection applies 

4 solely to uses of musical works subject to licens5 ing under this section. The blanket license shall 

6 not be construed to extend or apply to activities 

7 other than covered activities or to rights other 

8 than the exclusive rights of reproduction and 

9 distribution licensed under this section, or serve 

10 or act as the basis to extend or expand the 

11 compulsory license under this section to activi12 ties and rights not covered by this section on 

13 the enactment date. 

14 ‘‘(B) RIGHTS OF PUBLIC PERFORMANCE

15 NOT AFFECTED.—The rights, protections, and 

16 immunities granted under this subsection, the 

17 data concerning musical works collected and 

18 made available under this subsection, and the 

19 definitions described in subsection (e) shall not 

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

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

22 (5) by adding at the end the following new sub23 section: 

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


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

2 interest’ means interest accrued on accrued royal3 ties, as described in subsection (d)(3)(H)(ii). 

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

5 royalties’ means royalties accrued for the reproduc6 tion or distribution of a musical work (or share 

7 thereof) in a covered activity, calculated in accord8 ance with the applicable royalty rate under this sec9 tion. 

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

11 ‘administrative assessment’ means the fee estab12 lished pursuant to subsection (d)(7)(D). 

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

14 compliance examination to verify the accuracy of 

15 royalty payments, or the conduct of such an exam16 ination, as applicable. 

17 ‘‘(5) BLANKET LICENSE.—The term ‘blanket li18 cense’ means a compulsory license described in sub19 section (d)(1)(A) to engage in covered activities. 

20 ‘‘(6) COLLECTIVE TOTAL COSTS.—The term 

21 ‘collective total costs’— 

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

23 maintaining, and operating the mechanical li24 censing collective to fulfill its statutory func25 tions, including— 


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1 ‘‘(i) startup costs; 

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

3 costs; 

4 ‘‘(iii) investments in information tech5 nology, infrastructure, and other long-term 

6 resources; 

7 ‘‘(iv) outside vendor costs; 

8 ‘‘(v) costs of licensing, royalty admin9 istration, and enforcement of rights; 

10 ‘‘(vi) costs of bad debt; and 

11 ‘‘(vii) costs of automated and manual 

12 efforts to identify and locate copyright 

13 owners of musical works (and shares of 

14 such musical works) and match sound re15 cordings to the musical works the sound 

16 recordings embody; and 

17 ‘‘(B) does not include any added costs in18 curred by the mechanical licensing collective to 

19 provide services under voluntary licenses. 

20 ‘‘(7) COVERED ACTIVITY.—The term ‘covered 

21 activity’ means the activity of making a digital pho22 norecord delivery of a musical work, including in the 

23 form of a permanent download, limited download, or 

24 interactive stream, where such activity qualified for 

25 a compulsory license under this section. 


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

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

3 operating under the authority of that person) that, 

4 with respect to a service engaged in covered activi5 ties— 

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

7 or other economic relationship with end users of 

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

9 users exists, exercises direct control over the 

10 provision of the service to end users; 

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

12 and consideration generated by the service; and 

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

14 sound recordings of musical works by the serv15 ice (or procure such reporting). 

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

17 term ‘digital licensee coordinator’ means the entity 

18 most recently designated pursuant to subsection 

19 (d)(5). 

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

21 term ‘digital phonorecord delivery’ means each indi22 vidual delivery of a phonorecord by digital trans23 mission of a sound recording that results in a spe24 cifically identifiable reproduction by or for any 

25 transmission recipient of a phonorecord of that 


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1 sound recording, regardless of whether the digital 

2 transmission is also a public performance of the 

3 sound recording or any musical work embodied 

4 therein, and includes a permanent download, a lim5 ited download, or an interactive stream. A digital 

6 phonorecord delivery does not result from a real7 time, noninteractive subscription transmission of a 

8 sound recording where no reproduction of the sound 

9 recording or the musical work embodied therein is 

10 made from the inception of the transmission through 

11 to its receipt by the transmission recipient in order 

12 to make the sound recording audible. A digital pho13 norecord delivery does not include the digital trans14 mission of sounds accompanying a motion picture or 

15 other audiovisual work as defined in section 101 of 

16 this title. 

17 ‘‘(11) ENACTMENT DATE.—The term ‘enact18 ment date’ means the date of the enactment of the 

19 Musical Works Modernization Act. 

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

21 term ‘individual download license’ means a compul22 sory license obtained by a record company to make 

23 and distribute, or authorize the making and distribu24 tion of, permanent downloads embodying a specific 

25 individual musical work. 


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1 ‘‘(13) INTERACTIVE STREAM.—The term ‘inter2 active stream’ means a digital transmission of a 

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

4 stream, where the performance of the sound record5 ing by means of such transmission is not exempt 

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

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

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

9 interactive stream is a digital phonorecord delivery. 

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

11 applied to a party seeking to participate in a pro12 ceeding under subsection (d)(7)(D), is a party as to 

13 which the Copyright Royalty Judges have not deter14 mined that the party lacks a significant interest in 

15 such proceeding. 

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

17 ‘license availability date’ means the next January 1 

18 following the expiration of the two-year period begin19 ning on the enactment date. 

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

21 download’ means a digital transmission of a sound 

22 recording of a musical work in the form of a 

23 download, where such sound recording is accessible 

24 for listening only for a limited amount of time or 

25 specified number of times. 


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1 ‘‘(17) MATCHED.—The term ‘matched’, as ap2 plied to a musical work (or share thereof), means 

3 that the copyright owner of such work (or share 

4 thereof) has been identified and located. 

5 ‘‘(18) MECHANICAL LICENSING COLLECTIVE.— 

6 The term ‘mechanical licensing collective’ means the 

7 entity most recently designated as such by the Reg8 ister of Copyrights under subsection (d)(3). 

9 ‘‘(19) MECHANICAL LICENSING COLLECTIVE

10 BUDGET.—The term ‘mechanical licensing collective 

11 budget’ means a statement of the financial position 

12 of the mechanical licensing collective for a fiscal year 

13 or quarter thereof based on estimates of expendi14 tures during the period and proposals for financing 

15 them, including a calculation of the collective total 

16 costs. 

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

18 ‘musical works database’ means the database de19 scribed in subsection (d)(3)(E). 

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

21 means a nonprofit created or organized in a State. 

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

23 of license’ means a notice from a digital music pro24 vider provided under subsection (d)(2)(A) for pur25 poses of obtaining a blanket license. 


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

2 The term ‘notice of nonblanket activity’ means a no3 tice from a significant nonblanket licensee provided 

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

5 the mechanical licensing collective that the licensee 

6 has been engaging in covered activities. 

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

8 ‘permanent download’ means a digital transmission 

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

10 of a download, where such sound recording is acces11 sible for listening without restriction as to the 

12 amount of time or number of times it may be 

13 accessed. 

14 ‘‘(25) QUALIFIED AUDITOR.—The term ‘quali15 fied auditor’ means an independent, certified public 

16 accountant with experience performing music royalty 

17 audits. 

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

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

20 and markets sound recordings of musical works, and 

21 distributes such sound recordings for remuneration 

22 through multiple sales channels, including a cor23 porate affiliate of such an entity engaged in distribu24 tion of sound recordings. 


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

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

3 musical works in covered activities described in sub4 section (d)(4)(A). 

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

6 term ‘required matching efforts’ means efforts to 

7 identify and locate copyright owners of musical 

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

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

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

11 or offering by or through which sound recordings of 

12 musical works are digitally transmitted to members 

13 of the public. 

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

15 a musical work, means a fractional ownership inter16 est in such work. 

17 ‘‘(31) SIGNIFICANT NONBLANKET LICENSEE.— 

18 The term ‘significant nonblanket licensee’— 

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

20 entities under common ownership or control 

21 that, acting under the authority of one or more 

22 voluntary licenses or individual download li23 censes, offers a service engaged in covered ac24 tivities, and such entity or group of entities— 


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

2 blanket license and is not obligated to pro3 vide reports of usage reflecting covered ac4 tivities under subsection (d)(4)(A); 

5 ‘‘(ii) has a direct contractual, sub6 scription, or other economic relationship 

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

8 relationship with end users exists, exercises 

9 direct control over the provision of the 

10 service to end users; and 

11 ‘‘(iii) either— 

12 ‘‘(I) on any day in a calendar 

13 month, makes more than 5,000 dif14 ferent sound recordings of musical 

15 works available through such service; 

16 or 

17 ‘‘(II) derives revenue or other 

18 consideration in connection with such 

19 covered activities greater than 

20 $50,000 in a calendar month, or total 

21 revenue or other consideration greater 

22 than $500,000 during the preceding 

23 12 calendar months; and 

24 ‘‘(B) does not include— 


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1 ‘‘(i) an entity whose covered activity 

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

3 of segments of sound recordings of musical 

4 works that do not exceed 90 seconds in 

5 length, are offered only to facilitate a li6 censed use of musical works that is not a 

7 covered activity, and have no revenue di8 rectly attributable to such streams consti9 tuting the covered activity; or 

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

11 defined in section 118(f). 

12 ‘‘(32) SONGWRITER.—The term ‘songwriter’ 

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

14 including a composer or lyricist. 

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

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

17 and each territory or possession of the United 

18 States. 

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

20 term ‘unclaimed accrued royalties’ means accrued 

21 royalties eligible for distribution under subsection 

22 (d)(3)(J). 

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

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


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1 that the copyright owner of such work (or share 

2 thereof) has not been identified or located. 

3 ‘‘(36) VOLUNTARY LICENSE.—The term ‘vol4 untary license’ means a license for use of a musical 

5 work (or share thereof) other than a compulsory li6 cense obtained under this section.’’. 

7 (b) TECHNICAL AND CONFORMING AMENDMENTS TO

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

9 Code, is amended— 

10 (1) by redesignating paragraph (8) as para11 graph (9); and 

12 (2) by inserting after paragraph (7) the fol13 lowing new paragraph: 

14 ‘‘(8) To determine the administrative assess15 ment to be paid by digital music providers under 

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

17 shall apply to the conduct of proceedings by the 

18 Copyright Royalty Judges under section 115(d) and 

19 not the procedures described in this section, or sec20 tion 803, 804, or 805.’’. 

21 (c) EFFECTIVE DATE OF AMENDED RATE SETTING

22 STANDARD.—The amendments made by subsections 

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

24 the Copyright Royalty Judges that is pending on, or com25 menced on or after, the date of the enactment of this Act. 


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1 (d) TECHNICAL AND CONFORMING AMENDMENTS TO

2 TITLE 37, PART 385 OF THE CODE OF FEDERAL REGU3 LATIONS.—Within 9 months after the date of the enact4 ment of this Act, the Copyright Royalty Judges shall 

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

6 37, Code of Federal Regulations to conform the definitions 

7 used in such part to the definitions of the same terms de8 scribed in section 115(e) of title 17, United States Code, 

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

10 Royalty Judges shall make adjustments to the language 

11 of the regulations as necessary to achieve the same pur12 pose and effect as the original regulations with respect to 

13 the rates and terms previously adopted by the Copyright 

14 Royalty Judges. 

15 SEC. 103. AMENDMENTS TO SECTION 114. 

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

17 title 17, United States Code, is amended— 

18 (1) by striking paragraphs (1) and (2) and in19 serting the following: 

20 ‘‘(1)(A) Proceedings under chapter 8 shall de21 termine reasonable rates and terms of royalty pay22 ments for transmissions subject to statutory licens23 ing under subsection (d)(2) during the 5-year period 

24 beginning on January 1 of the second year following 

25 the year in which the proceedings are to be comVerDate Sep 11 2014 01:21 Apr 11, 2018 Jkt 079200 PO 00000 Frm 00123 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.IH H5447

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1 menced pursuant to subparagraph (A) or (B) of sec2 tion 804(b)(3), as the case may be, or such other pe3 riod as the parties may agree. The parties to each 

4 proceeding shall bear their own costs. 

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

6 terms determined by the Copyright Royalty Judges 

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

8 copyright owners of sound recordings and entities 

9 performing sound recordings affected by this para10 graph during the 5-year period specified in subpara11 graph (A), or such other period as the parties may 

12 agree. Such rates and terms shall distinguish among 

13 the different types of services then in operation and 

14 shall include a minimum fee for each such type of 

15 service, such differences to be based on criteria in16 cluding the quantity and nature of the use of sound 

17 recordings and the degree to which use of the service 

18 may substitute for or may promote the purchase of 

19 phonorecords by consumers. The Copyright Royalty 

20 Judges shall establish rates and terms that most 

21 clearly represent the rates and terms that would 

22 have been negotiated in the marketplace between a 

23 willing buyer and a willing seller. In determining 

24 such rates and terms, the Copyright Royalty 

25 Judges— 


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

2 competitive, and programming information pre3 sented by the parties, including— 

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

5 substitute for or may promote the sales of 

6 phonorecords or otherwise may interfere 

7 with or may enhance the sound recording 

8 copyright owner’s other streams of revenue 

9 from the copyright owner’s sound record10 ings; and 

11 ‘‘(II) the relative roles of the copy12 right owner and the transmitting entity in 

13 the copyrighted work and the service made 

14 available to the public with respect to rel15 ative creative contribution, technological 

16 contribution, capital investment, cost, and 

17 risk; and 

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

19 comparable types of audio transmission services 

20 and comparable circumstances under voluntary 

21 license agreements. 

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

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

24 filed by any sound recording copyright owner or any 

25 transmitting entity indicating that a new type of 


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1 service on which sound recordings are performed is 

2 or is about to become operational, for the purpose 

3 of determining reasonable terms and rates of royalty 

4 payments with respect to such new type of service 

5 for the period beginning with the inception of such 

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

7 the royalty rates and terms for eligible nonsubscrip8 tion services and new subscription services, or pre9 existing services, as the case may be, most recently 

10 determined under subparagraph (A) or (B) and 

11 chapter 8 expire, or such other period as the parties 

12 may agree.’’; and 

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

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

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

16 17, United States Code, is repealed. 

17 (c) USE IN MUSICAL WORK PROCEEDINGS.— 

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

19 public performance of sound recordings under sec20 tion 106(6) of title 17, United States Code, shall not 

21 be taken into account in any administrative, judicial, 

22 or other governmental proceeding to set or adjust 

23 the royalties payable to musical work copyright own24 ers for the public performance of their works except 

25 in such a proceeding to set or adjust royalties for 


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1 the public performance of musical works by means 

2 of a digital audio transmission other than a trans3 mission by a broadcaster, and may be taken into ac4 count only with respect to such digital audio trans5 mission. 

6 (2) DEFINITIONS.—In this subsection: 

7 (A) TRANSMISSION BY A BROADCASTER.— 

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

9 nonsubscription digital transmission made by a 

10 terrestrial broadcast station on its own behalf, 

11 or on the behalf of a terrestrial broadcast sta12 tion under common ownership or control, that 

13 is not part of an interactive service or a music14 intensive service comprising the transmission of 

15 sound recordings customized for or customiz16 able by recipients or service users. 

17 (B) TERRESTRIAL BROADCAST STATION.— 

18 A ‘‘terrestrial broadcast station’’ means a ter19 restrial, over-the-air radio or television broad20 cast station, licensed as such by the Federal 

21 Communications Commission, including an FM 

22 Translator as defined in section 74.1231 of title 

23 47, Code of Federal Regulations, and whose 

24 primary business activities are comprised of, 

25 and revenues are generated through, terrestrial, 


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1 over-the-air broadcast transmissions, or the si2 multaneous or substantially-simultaneous digital 

3 retransmission by the terrestrial, over-the-air 

4 broadcast station of its over-the-air broadcast 

5 transmissions. 

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

7 shall not be given effect in interpreting provisions of title 

8 17, United States Code. 

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

10 repeal of section 114(i) of title 17, United States Code, 

11 by subsection (b) shall not be taken into account in any 

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

13 the use of sound recordings under section 112(e) or sec14 tion 114(f) of such title that is pending on, or commenced 

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

16 (f) DECISIONS AND PRECEDENTS NOT AFFECTED.— 

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

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

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

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

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

22 section 114(f) of such title before the date of the enact23 ment of this Act. 

24 (g) TECHNICAL AND CONFORMING AMENDMENTS.— 


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

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

3 is further amended in paragraph (4)(C), as so redes4 ignated, by striking ‘‘under paragraph (4)’’ and in5 serting ‘‘under paragraph (3)’’. 

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

7 17, United States Code, is amended by striking 

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

9 ‘‘prevailing industry practices’’. 

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

11 17, United States Code, is amended— 

12 (A) in clause (i), by striking ‘‘and 

13 114(f)(2)(C)’’; 

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

15 ‘‘114(f)(4)(B)(ii)’’ and inserting 

16 ‘‘114(f)(3)(B)(ii)’’; and 

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

18 114(f)(2)(C), as the case may be’’. 

19 SEC. 104. RANDOM ASSIGNMENT OF RATE COURT PRO20 CEEDINGS. 

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

22 amended— 

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

24 ‘‘(A) IN GENERAL. The business’’; and 


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1 (2) by adding at the end the following new sub2 section: 

3 ‘‘(b) RANDOM ASSIGNMENT OF RATE COURT PRO4 CEEDINGS.— 

5 ‘‘(1) IN GENERAL.— 

6 ‘‘(A) DETERMINATION OF LICENSE FEE.— 

7 Except as provided in subparagraph (B), in the 

8 case of any performing rights society subject to 

9 a consent decree, any application for the deter10 mination of a license fee for the public perform11 ance of music in accordance with the applicable 

12 consent decree shall be made in the district 

13 court with jurisdiction over that consent decree 

14 and randomly assigned to a judge of that dis15 trict court according to that court’s rules for 

16 the division of business among district judges 

17 currently in effect or as may be amended from 

18 time to time, provided that any such application 

19 shall not be assigned to— 

20 ‘‘(i) a judge to whom continuing juris21 diction over any performing rights society 

22 for any performing rights society consent 

23 decree is assigned or has previously been 

24 assigned; or 


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1 ‘‘(ii) a judge to whom another pro2 ceeding concerning an application for the 

3 determination of a reasonable license fee is 

4 assigned at the time of the filing of the ap5 plication. 

6 ‘‘(B) EXCEPTION.—Subparagraph (A) 

7 does not apply to an application to determine 

8 reasonable license fees made by individual pro9 prietors under section 513 of title 17. 

10 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 

11 paragraph (1) shall modify the rights of any party 

12 to a consent decree or to a proceeding to determine 

13 reasonable license fees, to make an application for 

14 the construction of any provision of the applicable 

15 consent decree. Such application shall be referred to 

16 the judge to whom continuing jurisdiction over the 

17 applicable consent decree is currently assigned. If 

18 any such application is made in connection with a 

19 rate proceeding, such rate proceeding shall be stayed 

20 until the final determination of the construction ap21 plication. Disputes in connection with a rate pro22 ceeding about whether a licensee is similarly situated 

23 to another licensee shall not be subject to referral to 

24 the judge with continuing jurisdiction over the appli25 cable consent decree.’’. 


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1 TITLE II—COMPENSATING LEG2 ACY ARTISTS FOR THEIR 

3 SONGS, SERVICE, AND IMPOR4 TANT CONTRIBUTIONS TO SO5 CIETY 

6 SEC. 201. SHORT TITLE. 

7 This title may be cited as the ‘‘Compensating Legacy 

8 Artists for their Songs, Service, and Important Contribu9 tions to Society Act’’ or the ‘‘CLASSICS Act’’. 

10 SEC. 202. UNAUTHORIZED DIGITAL PERFORMANCE OF PRE11 1972 SOUND RECORDINGS. 

12 (a) PROTECTION FOR UNAUTHORIZED DIGITAL PER13 FORMANCES.—Title 17, United States Code, is amended 

14 by adding at the end the following new chapter: 

15 ‘‘CHAPTER 14—UNAUTHORIZED DIGITAL 

16 PERFORMANCE OF PRE-1972 SOUND 

17 RECORDINGS 

‘‘Sec. 

‘‘1401. Unauthorized digital performance of pre-1972 sound recordings. 

18 ‘‘§ 1401. Unauthorized digital performance of pre19 1972 sound recordings 

20 ‘‘(a) UNAUTHORIZED ACTS.—Anyone who, before 

21 February 15, 2067, and without the consent of the rights 

22 owner, performs publicly, by means of a digital audio 

23 transmission, a sound recording fixed on or after January 

24 1, 1923, and before February 15, 1972, shall be subject 


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1 to the remedies provided in sections 502 through 505 to 

2 the same extent as an infringer of copyright. 

3 ‘‘(b) CERTAIN AUTHORIZED TRANSMISSIONS.—A 

4 digital audio transmission of a sound recording fixed on 

5 or after January 1, 1923, and before February 15, 1972, 

6 shall, for purposes of subsection (a), be considered to be 

7 authorized and made with the consent of the rights owner 

8 if— 

9 ‘‘(1) the transmission is made by a transmitting 

10 entity that is publicly performing sound recordings 

11 fixed on or after February 15, 1972, by means of 

12 digital audio transmissions subject to section 114; 

13 ‘‘(2) the transmission would satisfy the require14 ments for statutory licensing under section 

15 114(d)(2), or would be exempt under section 

16 114(d)(1), if the sound recording were fixed on or 

17 after February 15, 1972; 

18 ‘‘(3) 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 pays statu21 tory royalties and provides notice of its use of the 

22 relevant sound recordings in the same manner as is 

23 required by regulations adopted by the Copyright 

24 Royalty Judges for sound recordings fixed on or 

25 after February 15, 1972; and 


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1 ‘‘(4) in the case of a transmission that would 

2 not be exempt under section 114(d)(1) as described 

3 in paragraph (2), the transmitting entity otherwise 

4 satisfies the requirements for statutory licensing 

5 under section 114(f)(4)(B). 

6 ‘‘(c) TRANSMISSIONS BY DIRECT LICENSING OF

7 STATUTORY SERVICES.— 

8 ‘‘(1) IN GENERAL.—A transmission of a sound 

9 recording fixed on or after January 1, 1923, and be10 fore February 15, 1972, shall, for purposes of sub11 section (a), be considered to be authorized and made 

12 with the consent of the rights owner if such trans13 mission is included in a license agreement volun14 tarily negotiated at any time between the rights 

15 owner and the entity performing the sound record16 ing. 

17 ‘‘(2) PAYMENT OF ROYALTIES TO NONPROFIT

18 COLLECTIVE.—To the extent that such a license 

19 agreement entered into on or after the date of the 

20 enactment of this section extends to digital audio 

21 transmissions of a sound recording fixed on or after 

22 January 1, 1923, and before February 15, 1972, 

23 that meet the conditions of subsection (b), the li24 censee shall pay, to the collective designated to dis25 tribute receipts from the licensing of transmissions 


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1 in accordance with section 114(f), 50 percent of the 

2 performance royalties for the transmissions due 

3 under the license, with such royalties fully credited 

4 as payments due under the license. 

5 ‘‘(3) DISTRIBUTION OF ROYALTIES BY COLLEC6 TIVE.—The collective described in paragraph (2) 

7 shall, in accordance with subparagraphs (B) through 

8 (D) of section 114(g)(2), and paragraphs (5) and 

9 (6) of section 114(g)), distribute the royalties re10 ceived under paragraph (2) under the license de11 scribed in paragraph (2). Such payments shall be 

12 the only payments to which featured and nonfea13 tured artists are entitled by virtue of the trans14 missions described in paragraph (2) under the li15 cense. 

16 ‘‘(4) RULE OF CONSTRUCTION.—This section 

17 does not prohibit any other license from directing 

18 the licensee to pay other royalties due to featured 

19 and nonfeatured artists for such transmissions to 

20 the collective designated to distribute receipts from 

21 the licensing of transmissions in accordance with 

22 section 114(f). 

23 ‘‘(d) RELATIONSHIP TO STATE LAW.— 

24 ‘‘(1) IN GENERAL.—Nothing in this section 

25 shall be construed to annul or limit any rights or 


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1 remedies under the common law or statutes of any 

2 State for sound recordings fixed before February 15, 

3 1972, except, notwithstanding section 301(c), for the 

4 following: 

5 ‘‘(A) This section preempts any claim of 

6 common law copyright or equivalent right under 

7 the laws of any State arising from any digital 

8 audio transmission that is made, on and after 

9 the date of the enactment of this section, of a 

10 sound recording fixed on or after January 1, 

11 1923, and before February 15, 1972. 

12 ‘‘(B) This section preempts any claim of 

13 common law copyright or equivalent right under 

14 the laws of any State arising from any repro15 duction that is made, on and after the date of 

16 the enactment of this section, of a sound re17 cording fixed on or after January 1, 1923, and 

18 before February 15, 1972, and that would sat19 isfy the requirements for statutory licensing 

20 under paragraphs (1) and (6) of section 112(e), 

21 if the sound recording were fixed on or after 

22 February 15, 1972. 

23 ‘‘(C) 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 or reproduction that is 

2 made, before the date of the enactment of this 

3 section, of a sound recording fixed on or after 

4 January 1, 1923, and before February 15, 

5 1972, if— 

6 ‘‘(i) the digital audio transmission 

7 would have satisfied the requirements for 

8 statutory licensing under section 114(d)(2) 

9 or been exempt under section 114(d)(1), or 

10 the reproduction would have satisfied the 

11 requirements of section 112(e)(1), as the 

12 case may be, if the sound recording were 

13 fixed on or after February 15, 1972; and 

14 ‘‘(ii) except in the case of trans15 missions that would have been exempt 

16 under section 114(d)(1), the transmitting 

17 entity, before the end of the 270-day pe18 riod beginning on the date of the enact19 ment of this section, pays statutory royal20 ties and provides notice of the use of the 

21 relevant sound recordings in the same 

22 manner as is required by regulations 

23 adopted by the Copyright Royalty Judges 

24 for sound recordings that are protected 

25 under this title for all the digital audio 


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1 transmissions and reproductions satisfying 

2 the requirements for statutory licensing 

3 under section 114(d)(2) and section 

4 112(e)(1) during the 3 years prior to the 

5 date of the enactment of this section. 

6 ‘‘(2) RULE OF CONSTRUCTION FOR COMMON

7 LAW COPYRIGHT.—For purposes of subparagraphs 

8 (A) through (C) of paragraph (1), a claim of com9 mon law copyright or equivalent right under the 

10 laws of any State includes a claim that characterizes 

11 conduct subject to such subparagraphs as an unlaw12 ful distribution, act of record piracy, or similar viola13 tion. 

14 ‘‘(3) RULE OF CONSTRUCTION FOR PUBLIC

15 PERFORMANCE RIGHTS.—Nothing in this section 

16 shall be construed to recognize or negate the exist17 ence of public performance rights in sound record18 ings under the laws of any State. 

19 ‘‘(e) LIMITATIONS ON REMEDIES.— 

20 ‘‘(1) FAIR USE; USES BY LIBRARIES, ARCHIVES, 

21 AND EDUCATIONAL INSTITUTIONS.—The limitations 

22 on the exclusive rights of a copyright owner de23 scribed in sections 107, 108, and 110(1) and (2) 

24 shall apply to a claim under subsection (a) for the 

25 unauthorized performance of a sound recording fixed 


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1 on or after January 1, 1923, and before February 

2 15, 1972. 

3 ‘‘(2) ACTIONS.—The limitations on actions de4 scribed in section 507 shall apply to a claim under 

5 subsection (a) for the unauthorized performance of 

6 a sound recording fixed on or after January 1, 1923, 

7 and before February 15, 1972. 

8 ‘‘(3) MATERIAL ONLINE.—Section 512 shall 

9 apply to a claim under subsection (a) for the unau10 thorized performance of a sound recording fixed on 

11 or after January 1, 1923, and before February 15, 

12 1972. 

13 ‘‘(4) PRINCIPLES OF EQUITY.—Principles of eq14 uity apply to remedies for a violation of this section 

15 to the same extent as such principles apply to rem16 edies for infringement of copyright. 

17 ‘‘(5) FILING REQUIREMENT FOR STATUTORY

18 DAMAGES AND ATTORNEYS’ FEES.— 

19 ‘‘(A) FILING OF INFORMATION ON SOUND

20 RECORDINGS.— 

21 ‘‘(i) FILING REQUIREMENT.—Except 

22 in the case of a transmitting entity that 

23 has filed contact information for that 

24 transmitting entity under subparagraph 

25 (B), in any action under this section, an 


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1 award of statutory damages or of attor2 neys’ fees under section 504 or 505 may 

3 be made with respect to an unauthorized 

4 transmission of a sound recording under 

5 subsection (a) only if— 

6 ‘‘(I) the rights owner has filed 

7 with the Copyright Office a schedule 

8 that specifies the title, artist, and 

9 rights owner of the sound recording 

10 and contains such other information, 

11 as practicable, as the Register of 

12 Copyrights prescribes by regulation; 

13 and 

14 ‘‘(II) the transmission is made 

15 after the end of the 90-day period be16 ginning on the date on which the in17 formation filed under subclause (I) is 

18 indexed into the public records of the 

19 Copyright Office. 

20 ‘‘(ii) REGULATIONS.—The Register of 

21 Copyrights shall, before the end of the 

22 180-day period beginning on the date of 

23 the enactment of this section, issue regula24 tions establishing the form, content, and 

25 procedures for the filing of schedules under 


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1 clause (i). Such regulations shall provide 

2 that persons may request that they receive 

3 timely notification of such filings, and shall 

4 set forth the manner in which such re5 quests may be made. 

6 ‘‘(B) FILING OF CONTACT INFORMATION

7 FOR TRANSMITTING ENTITIES.— 

8 ‘‘(i) FILING REQUIREMENT.—The 

9 Register of Copyrights shall, before the 

10 end of the 30-day period beginning on the 

11 date of the enactment of this section, issue 

12 regulations establishing the form, content, 

13 and procedures for the filing, by any entity 

14 that, as of the date of the enactment of 

15 this section, performs sound recordings 

16 fixed before February 15, 1972, by means 

17 of digital audio transmissions, of contact 

18 information for such entity. 

19 ‘‘(ii) TIME LIMIT ON FILINGS.—The 

20 Register of Copyrights may accept filings 

21 under clause (i) only until the 180th day 

22 after the date of the enactment of this sec23 tion. 

24 ‘‘(iii) LIMITATION ON STATUTORY

25 DAMAGES AND ATTORNEYS’ FEES.— 


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1 ‘‘(I) LIMITATION.—An award of 

2 statutory damages or of attorneys’ 

3 fees under section 504 or 505 may 

4 not be made, against an entity that 

5 has filed contact information for that 

6 entity under clause (i), with respect to 

7 an unauthorized transmission by that 

8 entity of a sound recording under sub9 section (a) if the transmission is made 

10 before the end of the 90-day period 

11 beginning on the date on which the 

12 entity receives a notice that— 

13 ‘‘(aa) is sent by or on behalf 

14 of the rights owner of the sound 

15 recording; 

16 ‘‘(bb) states that the entity 

17 is not legally authorized to trans18 mit that sound recording under 

19 subsection (a); and 

20 ‘‘(cc) identifies the sound re21 cording in a schedule conforming 

22 to the requirements prescribed by 

23 the regulations issued under sub24 paragraph (A)(ii). 


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1 ‘‘(II) UNDELIVERABLE NO2 TICES.—In any case in which a notice 

3 under subclause (I) is sent to an enti4 ty by mail or courier service and the 

5 notice is returned to the sender be6 cause the entity either is no longer lo7 cated at the address provided in the 

8 contact information filed under clause 

9 (i) or has refused to accept delivery, 

10 or the notice is sent by electronic mail 

11 and is undeliverable, the 90-day pe12 riod under subclause (I) shall begin 

13 on the date of the attempted delivery. 

14 ‘‘(C) SECTION 412.—Section 412 shall not 

15 limit an award of statutory damages under sec16 tion 504(c) or attorneys’ fees under section 505 

17 with respect to an unauthorized transmission of 

18 a sound recording under subsection (a). 

19 ‘‘(6) APPLICABILITY OF OTHER PROVISIONS.— 

20 ‘‘(A) IN GENERAL.—Subject to subpara21 graph (B), no provision of this title shall apply 

22 to or limit the remedies available under this 

23 section except as otherwise provided in this sec24 tion. 


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1 ‘‘(B) APPLICABILITY OF DEFINITIONS.— 

2 Any term used in this section that is defined in 

3 section 101 shall have the meaning given that 

4 term in section 101. 

5 ‘‘(f) APPLICATION OF SECTION 230 SAFE HAR6 BOR.—For purposes of section 230 of the Communica7 tions Act of 1934 (47 U.S.C. 230), subsection (a) shall 

8 be considered to be a ‘law pertaining to intellectual prop9 erty’ under subsection (e)(2) of such section. 

10 ‘‘(g) RIGHTS OWNER DEFINED.—In this section, the 

11 term ‘rights owner’ means the person who has the exclu12 sive right to reproduce a sound recording under the laws 

13 of any State.’’. 

14 (b) CONFORMING AMENDMENT.—The table of chap15 ters for title 17, United States Code, is amended by add16 ing at the end the following new chapter: 

‘‘14. Unauthorized digital performance of pre-1972 sound recordings ... 1401’’. 

17 SEC. 203. EFFECTIVE DATE. 

18 This title and the amendments made by this title 

19 shall take effect on the date of the enactment of this Act. 

20 TITLE III—ALLOCATION FOR 

21 MUSIC PRODUCERS 

22 SEC. 301. SHORT TITLE. 

23 This title may be cited as the ‘‘Allocation for Music 

24 Producers Act’’ or the ‘‘AMP Act’’. 


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1 SEC. 302. PAYMENT OF STATUTORY PERFORMANCE ROYAL2 TIES. 

3 (a) LETTER OF DIRECTION.—Section 114(g) of title 

4 17, United States Code, is amended by adding at the end 

5 the following new paragraph: 

6 ‘‘(5) LETTER OF DIRECTION.— 

7 ‘‘(A) IN GENERAL.—A nonprofit collective 

8 designated by the Copyright Royalty Judges to 

9 distribute receipts from the licensing of trans10 missions in accordance with subsection (f) shall 

11 adopt and reasonably implement a policy that 

12 provides, in circumstances determined by the 

13 collective to be appropriate, for acceptance of 

14 instructions from an artist payee identified 

15 under subparagraph (A) or (D) of paragraph 

16 (2) to distribute, to a producer, mixer, or sound 

17 engineer who was part of the creative process 

18 that created a sound recording, a portion of the 

19 payments to which the artist payee would other20 wise be entitled from the licensing of trans21 missions of the sound recording. In this section, 

22 such instructions shall be referred to as a ‘letter 

23 of direction’. 

24 ‘‘(B) ACCEPTANCE OF LETTER.—To the 

25 extent that the collective accepts a letter of di26 rection under subparagraph (A), the person enVerDate Sep 11 2014 01:21 Apr 11, 2018 Jkt 079200 PO 00000 Frm 00145 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.IH H5447

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1 titled to payment pursuant to the letter of di2 rection shall, during the period in which the let3 ter of direction is in effect and carried out by 

4 the collective, be treated for all purposes as the 

5 owner of the right to receive such payment, and 

6 the artist payee providing the letter of direction 

7 to the collective shall be treated as having no 

8 interest in such payment. 

9 ‘‘(C) AUTHORITY OF COLLECTIVE.—This 

10 paragraph shall not be construed in such a 

11 manner so that the collective is not authorized 

12 to accept or act upon payment instructions in 

13 circumstances other than those to which this 

14 paragraph applies.’’. 

15 (b) ADDITIONAL PROVISIONS FOR RECORDINGS

16 FIXED BEFORE NOVEMBER 1, 1995.—Section 114(g) of 

17 title 17, United States Code, as amended by subsection 

18 (a), is further amended by adding at the end the following 

19 new paragraph: 

20 ‘‘(6) SOUND RECORDINGS FIXED BEFORE NO21 VEMBER 1, 1995.— 

22 ‘‘(A) PAYMENT ABSENT LETTER OF DI23 RECTION.—A nonprofit collective designated by 

24 the Copyright Royalty Judges to distribute re25 ceipts from the licensing of transmissions in acVerDate Sep 11 2014 01:21 Apr 11, 2018 Jkt 079200 PO 00000 Frm 00146 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.IH H5447

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1 cordance with subsection (f) (in this paragraph 

2 referred to as the ‘collective’) shall adopt and 

3 reasonably implement a policy that provides, in 

4 circumstances determined by the collective to be 

5 appropriate, for the deduction of 2 percent of 

6 all the receipts that are collected from the li7 censing of transmissions of a sound recording 

8 fixed before November 1, 1995, but which is 

9 withdrawn from the amount otherwise payable 

10 under paragraph (2)(D) to the recording artist 

11 or artists featured on the sound recording (or 

12 the persons conveying rights in the artists’ per13 formance in the sound recording), and the dis14 tribution of such amount to one or more per15 sons described in subparagraph (B), after de16 duction of costs described in paragraph (3) or 

17 (4), as applicable, if each of the following re18 quirements is met: 

19 ‘‘(i) CERTIFICATION OF ATTEMPT TO

20 OBTAIN A LETTER OF DIRECTION.—The 

21 person described in subparagraph (B) who 

22 is to receive the distribution has certified 

23 to the collective, under penalty of perjury, 

24 that— 


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1 ‘‘(I) for a period of at least 4 

2 months, that person made reasonable 

3 efforts to contact the artist payee for 

4 such sound recording to request and 

5 obtain a letter of direction instructing 

6 the collective to pay to that person a 

7 portion of the royalties payable to the 

8 featured recording artist or artists; 

9 and 

10 ‘‘(II) during the period beginning 

11 on the date that person began the rea12 sonable efforts described in subclause 

13 (I) and ending on the date of that 

14 person’s certification to the collective, 

15 the artist payee did not affirm or 

16 deny in writing the request for a let17 ter of direction. 

18 ‘‘(ii) COLLECTIVE ATTEMPT TO CON19 TACT ARTIST.—After receipt of the certifi20 cation described in clause (i) and for a pe21 riod of at least 4 months before the collec22 tive’s first distribution to the person de23 scribed in subparagraph (B), the collective 

24 attempted, in a reasonable manner as de25 termined by the collective, to notify the 


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1 artist payee of the certification made by 

2 the person described in subparagraph (B). 

3 ‘‘(iii) NO OBJECTION RECEIVED.—The 

4 artist payee did not, as of the date that is 

5 10 business days before the date on which 

6 the first distribution is made, submit to 

7 the collective in writing an objection to the 

8 distribution. 

9 ‘‘(B) ELIGIBILITY FOR PAYMENT.—A per10 son shall be eligible for payment under subpara11 graph (A) if the person— 

12 ‘‘(i) is a producer, mixer, or sound en13 gineer of the sound recording; 

14 ‘‘(ii) has entered into a written con15 tract with a record company involved in 

16 the creation or lawful exploitation of the 

17 sound recording, or with the recording art18 ist or artists featured on the sound record19 ing (or the persons conveying rights in the 

20 artists’ performance in the sound record21 ing), under which the person seeking pay22 ment is entitled to participate in royalty 

23 payments that are based on the exploi24 tation of the sound recording and are pay25 able from royalties otherwise payable to 


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1 the recording artist or artists featured on 

2 the sound recording (or the persons con3 veying rights in the artists’ performance in 

4 the sound recording); 

5 ‘‘(iii) made a creative contribution to 

6 the creation of the sound recording; and 

7 ‘‘(iv) submits a written certification to 

8 the collective stating, under penalty of per9 jury, that the person meets the require10 ments in clauses (i) through (iii) and in11 cludes a true copy of the contract de12 scribed in clause (ii). 

13 ‘‘(C) MULTIPLE CERTIFICATIONS.—Sub14 ject to subparagraph (D), in a case in which 

15 more than one person described in subpara16 graph (B) has met the requirements for a dis17 tribution under subparagraph (A) with respect 

18 to a sound recording as of the date that is 10 

19 business days before the date on which a dis20 tribution is made, the collective shall divide the 

21 2 percent distribution equally among all such 

22 persons. 

23 ‘‘(D) OBJECTION TO PAYMENT.—Not later 

24 than 10 business days after the date on which 

25 the collective receives from the artist payee a 


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1 written objection to a distribution made pursu2 ant to subparagraph (A), the collective shall 

3 cease making any further payment relating to 

4 such distribution. In any case in which the col5 lective has made one or more distributions pur6 suant to subparagraph (A) to a person de7 scribed in subparagraph (B) before the date 

8 that is 10 business days after the date on which 

9 the collective receives from the artist payee an 

10 objection to such distribution, the objection 

11 shall not affect that person’s entitlement to any 

12 distribution made before the collective ceases 

13 such distribution under this subparagraph. 

14 ‘‘(E) OWNERSHIP OF THE RIGHT TO RE15 CEIVE PAYMENTS.—To the extent that the col16 lective determines that a distribution will be 

17 made under subparagraph (A) to a person de18 scribed in subparagraph (B), such person shall, 

19 during the period covered by such distribution, 

20 be treated for all purposes as the owner of the 

21 right to receive such payments, and the artist 

22 payee to whom such payments would otherwise 

23 be payable shall be treated as having no inter24 est in such payments. 


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1 ‘‘(F) ARTIST PAYEE DEFINED.—In this 

2 paragraph, the term ‘artist payee’ means a per3 son, other than a person described in subpara4 graph (B), who owns the right to receive all or 

5 part of the receipts payable under paragraph 

6 (2)(D) with respect to a sound recording. In a 

7 case in which there are multiple artist payees 

8 with respect to a sound recording, an objection 

9 by one such payee shall apply only to that pay10 ee’s share of the receipts payable under para11 graph (2)(D), and does not preclude payment 

12 under subparagraph (A) from the share of an 

13 artist payee that does not so object.’’. 

14 (c) TECHNICAL AND CONFORMING AMENDMENTS.— 

15 Section 114(g) of title 17, United States Code, as amend16 ed by subsections (a) and (b), is further amended— 

17 (1) in paragraph (2), by striking ‘‘An agent 

18 designated’’ and inserting ‘‘Except as provided for in 

19 paragraph (6), a nonprofit collective designated by 

20 the Copyright Royalty Judges’’; 

21 (2) in paragraph (3)— 

22 (A) by striking ‘‘nonprofit agent des23 ignated’’ and inserting ‘‘nonprofit collective des24 ignated by the Copyright Royalty Judges’’; 


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1 (B) by striking ‘‘another designated agent’’ 

2 and inserting ‘‘another designated nonprofit col3 lective’’; and 

4 (C) by striking ‘‘agent’’ and inserting ‘‘col5 lective’’ each subsequent place it appears; and 

6 (3) in paragraph (4)— 

7 (A) by striking ‘‘designated agent’’ and in8 serting ‘‘nonprofit collective’’; and 

9 (B) by striking ‘‘agent’’ and inserting ‘‘col10 lective’’ each subsequent place it appears. 

11 SEC. 303. EFFECTIVE DATE. 

12 (a) IN GENERAL.—Except as provided in subsection 

13 (b), this title and the amendments made by this title shall 

14 take effect on the date of the enactment of this Act. 

15 (b) DELAYED EFFECTIVE DATE.—The effective date 

16 for paragraphs (5)(B) and (6)(E) of section 114(g) of title 

17 17, United States Code, as added by section 302, shall 

18 be January 1, 2020. 

Æ 


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