IB 

Union Calendar No. 499 

115TH CONGRESS 

2D SESSION H. R. 5447 

[Report No. 115–651] 

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 

APRIL 25, 2018 

Additional sponsors: Mr. MCCARTHY, Mr. HOYER, Mr. BUCK, Mr. ESTES of 

Kansas, Mrs. HANDEL, Mr. RUTHERFORD, Mr. YOHO, Mrs. BROOKS of 

Indiana, Mr. HURD, Ms. ESHOO, Mr. CA ́RDENAS, Mr. GOMEZ, Ms. 

SA ́NCHEZ, Mr. DUNCAN of Tennessee, Mr. CRAMER, Mr. GROTHMAN, Mr. 

SCALISE, Mr. LAMALFA, and Mr. DESAULNIER

APRIL 25, 2018 

Committed to the Committee of the Whole House on the State of the Union 

and ordered to be printed 


pbinns on DSK79D2C42PROD with BILLS
2 

•HR 5447 RH

A BILL 

To modernize copyright law, and for other purposes. 


pbinns on DSK79D2C42PROD with BILLS
3 

•HR 5447 RH

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. 

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. 

8 TITLE I—MUSIC LICENSING 

9 MODERNIZATION 

10 SEC. 101. SHORT TITLE. 

11 This title may be cited as the ‘‘Musical Works Mod12 ernization Act’’. 

13 SEC. 102. BLANKET LICENSE FOR DIGITAL USES AND ME14 CHANICAL LICENSING COLLECTIVE. 

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

16 States Code, is amended— 


pbinns on DSK79D2C42PROD with BILLS
4 

•HR 5447 RH

1 (1) in subsection (a)— 

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

3 ‘‘AVAILABILITY AND SCOPE OF COMPULSORY

4 LICENSE’’; 

5 (B) by striking paragraph (1) and insert6 ing the following new paragraph: 

7 ‘‘(1) ELIGIBILITY FOR COMPULSORY LI8 CENSE.— 

9 ‘‘(A) CONDITIONS FOR COMPULSORY LI10 CENSE.—A person may by complying with the 

11 provisions of this section obtain a compulsory li12 cense to make and distribute phonorecords of a 

13 nondramatic musical work, including by means 

14 of digital phonorecord delivery. A person may 

15 obtain a compulsory license only if the primary 

16 purpose in making phonorecords of the musical 

17 work is to distribute them to the public for pri18 vate use, including by means of digital phono19 record delivery, and— 

20 ‘‘(i) phonorecords of such musical 

21 work have previously been distributed to 

22 the public in the United States under the 

23 authority of the copyright owner of the 

24 work, including by means of digital phono25 record delivery; or 


pbinns on DSK79D2C42PROD with BILLS
5 

•HR 5447 RH

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

2 provider seeking to make and distribute 

3 digital phonorecord deliveries of a sound 

4 recording embodying a musical work under 

5 a compulsory license for which clause (i) 

6 does not apply— 

7 ‘‘(I) the first fixation of such 

8 sound recording was made under the 

9 authority of the musical work copy10 right owner, and sound recording 

11 copyright owner has the authority of 

12 the musical work copyright owner to 

13 make and distribute digital phono14 record deliveries embodying such work 

15 to the public in the United States; 

16 and 

17 ‘‘(II) the sound recording copy18 right owner or its authorized dis19 tributor has authorized the digital 

20 music provider to make and distribute 

21 digital phonorecord deliveries of the 

22 sound recording to the public in the 

23 United States. 

24 ‘‘(B) DUPLICATION OF SOUND RECORD25 ING.—A person may not obtain a compulsory liVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
6 

•HR 5447 RH

1 cense for the use of the work in the making of 

2 phonorecords duplicating a sound recording 

3 fixed by another, including by means of digital 

4 phonorecord delivery, unless— 

5 ‘‘(i) such sound recording was fixed 

6 lawfully; and 

7 ‘‘(ii) the making of the phonorecords 

8 was authorized by the owner of the copy9 right in the sound recording or, if the 

10 sound recording was fixed before February 

11 15, 1972, by any person who fixed the 

12 sound recording pursuant to an express li13 cense from the owner of the copyright in 

14 the musical work or pursuant to a valid 

15 compulsory license for use of such work in 

16 a sound recording.’’; and 

17 (C) in paragraph (2), by striking ‘‘A com18 pulsory license’’ and inserting ‘‘MUSICAL AR19 RANGEMENT.—A compulsory license’’; 

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

21 following: 

22 ‘‘(b) PROCEDURES TO OBTAIN A COMPULSORY LI23 CENSE.— 

24 ‘‘(1) PHONORECORDS OTHER THAN DIGITAL

25 PHONORECORD DELIVERIES.—A person who seeks to 


pbinns on DSK79D2C42PROD with BILLS
7 

•HR 5447 RH

1 obtain a compulsory license under subsection (a) to 

2 make and distribute phonorecords of a musical work 

3 other than by means of digital phonorecord delivery 

4 shall, before or within 30 calendar days after mak5 ing, and before distributing, any phonorecord of the 

6 work, serve notice of intention to do so on the copy7 right owner. If the registration or other public 

8 records of the Copyright Office do not identify the 

9 copyright owner and include an address at which no10 tice can be served, it shall be sufficient to file the 

11 notice of intention with the Copyright Office. The 

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

13 service, with requirements that the Register of Copy14 rights shall prescribe by regulation. 

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

16 person who seeks to obtain a compulsory license 

17 under subsection (a) to make and distribute 

18 phonorecords of a musical work by means of digital 

19 phonorecord delivery— 

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

21 shall, before or within 30 calendar days after 

22 first making any such digital phonorecord deliv23 ery, serve a notice of intention to do so on the 

24 copyright owner (but may not file the notice 

25 with the Copyright Office, even if the public 


pbinns on DSK79D2C42PROD with BILLS
8 

•HR 5447 RH

1 records of the Office do not identify the owner 

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

3 comply, in form, content, and manner of serv4 ice, with requirements that the Register of 

5 Copyrights shall prescribe by regulation; or 

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

7 date, shall, before making any such digital pho8 norecord delivery, follow the procedure de9 scribed in subsection (d)(2), except as provided 

10 in paragraph (3). 

11 ‘‘(3) RECORD COMPANY INDIVIDUAL DOWNLOAD

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

13 record company may, on or after the license avail14 ability date, obtain an individual download license in 

15 accordance with the notice requirements described in 

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

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

18 record company that obtains an individual download 

19 license as permitted under this paragraph shall pro20 vide statements of account and pay royalties as pro21 vided in subsection (c)(2)(I). 

22 ‘‘(4) FAILURE TO OBTAIN LICENSE.— 

23 ‘‘(A) PHONORECORDS OTHER THAN DIG24 ITAL PHONORECORD DELIVERIES.—In the case 

25 of phonorecords made and distributed other 


pbinns on DSK79D2C42PROD with BILLS
9 

•HR 5447 RH

1 than by means of digital phonorecord delivery, 

2 the failure to serve or file the notice of inten3 tion required by paragraph (1) forecloses the 

4 possibility of a compulsory license under para5 graph (1). In the absence of a voluntary license, 

6 the failure to obtain a compulsory license ren7 ders the making and distribution of phonore8 cords actionable as acts of infringement under 

9 section 501 and subject to the remedies pro10 vided by sections 502 through 506. 

11 ‘‘(B) DIGITAL PHONORECORD DELIV12 ERIES.— 

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

14 and distributed by means of digital phono15 record delivery: 

16 ‘‘(I) The failure to serve the no17 tice of intention required by para18 graph (2)(A) or paragraph (3), as ap19 plicable, forecloses the possibility of a 

20 compulsory license under such para21 graph. 

22 ‘‘(II) The failure to comply with 

23 paragraph (2)(B) forecloses the possi24 bility of a blanket license for a period 

25 of 3 years after the last calendar day 


pbinns on DSK79D2C42PROD with BILLS
10 

•HR 5447 RH

1 on which the notice of license was re2 quired to be submitted to the mechan3 ical licensing collective under such 

4 paragraph. 

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

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

7 the failure to obtain a compulsory license 

8 renders the making and distribution of 

9 phonorecords by means of digital phono10 record delivery actionable as acts of in11 fringement under section 501 and subject 

12 to the remedies provided by sections 502 

13 through 506.’’; 

14 (3) by amending subsection (c) to read as fol15 lows: 

16 ‘‘(c) GENERAL CONDITIONS APPLICABLE TO COM17 PULSORY LICENSE.— 

18 ‘‘(1) ROYALTY PAYABLE UNDER COMPULSORY

19 LICENSE.— 

20 ‘‘(A) IDENTIFICATION REQUIREMENT.—To 

21 be entitled to receive royalties under a compul22 sory license obtained under subsection (b)(1) 

23 the copyright owner must be identified in the 

24 registration or other public records of the Copy25 right Office. The owner is entitled to royalties 


pbinns on DSK79D2C42PROD with BILLS
11 

•HR 5447 RH

1 for phonorecords made and distributed after 

2 being so identified, but is not entitled to recover 

3 for any phonorecords previously made and dis4 tributed. 

5 ‘‘(B) ROYALTY FOR PHONORECORDS

6 OTHER THAN DIGITAL PHONORECORD DELIV7 ERIES.—Except as provided by subparagraph 

8 (A), for every phonorecord made and distrib9 uted under a compulsory license under sub10 section (a) other than by means of digital pho11 norecord delivery, with respect to each work 

12 embodied in the phonorecord, the royalty shall 

13 be the royalty prescribed under subparagraphs 

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

15 chapter 8 of this title. For purposes of this sub16 paragraph, a phonorecord is considered ‘distrib17 uted’ if the person exercising the compulsory li18 cense has voluntarily and permanently parted 

19 with its possession. 

20 ‘‘(C) ROYALTY FOR DIGITAL PHONO21 RECORD DELIVERIES.—For every digital phono22 record delivery of a musical work made under 

23 a compulsory license under this section, the roy24 alty payable shall be the royalty prescribed 


pbinns on DSK79D2C42PROD with BILLS
12 

•HR 5447 RH

1 under subparagraphs (D) through (F) and 

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

3 ‘‘(D) AUTHORITY TO NEGOTIATE.—Not4 withstanding any provision of the antitrust 

5 laws, any copyright owners of nondramatic mu6 sical works and any persons entitled to obtain 

7 a compulsory license under subsection (a) may 

8 negotiate and agree upon the terms and rates 

9 of royalty payments under this section and the 

10 proportionate division of fees paid among copy11 right owners, and may designate common 

12 agents on a nonexclusive basis to negotiate, 

13 agree to, pay or receive such royalty payments. 

14 Such authority to negotiate the terms and rates 

15 of royalty payments includes, but is not limited 

16 to, the authority to negotiate the year during 

17 which the royalty rates prescribed under this 

18 subparagraph and subparagraphs (E) and (F) 

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

20 title shall next be determined. 

21 ‘‘(E) DETERMINATION OF REASONABLE

22 RATES AND TERMS.—Proceedings under chap23 ter 8 shall determine reasonable rates and 

24 terms of royalty payments for the activities 

25 specified by this section during the period beVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
13 

•HR 5447 RH

1 ginning with the effective date of such rates 

2 and terms, but not earlier than January 1 of 

3 the second year following the year in which the 

4 petition requesting the proceeding is filed, and 

5 ending on the effective date of successor rates 

6 and terms, or such other period as the parties 

7 may agree. Any copyright owners of nondra8 matic musical works and any persons entitled 

9 to obtain a compulsory license under subsection 

10 (a) may submit to the Copyright Royalty 

11 Judges licenses covering such activities. The 

12 parties to each proceeding shall bear their own 

13 costs. 

14 ‘‘(F) SCHEDULE OF REASONABLE

15 RATES.—The schedule of reasonable rates and 

16 terms determined by the Copyright Royalty 

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

18 binding on all copyright owners of nondramatic 

19 musical works and persons entitled to obtain a 

20 compulsory license under subsection (a) during 

21 the period specified in subparagraph (E), such 

22 other period as may be determined pursuant to 

23 subparagraphs (D) and (E), or such other pe24 riod as the parties may agree. The Copyright 

25 Royalty Judges shall establish rates and terms 


pbinns on DSK79D2C42PROD with BILLS
14 

•HR 5447 RH

1 that most clearly represent the rates and terms 

2 that would have been negotiated in the market3 place between a willing buyer and a willing sell4 er. In determining such rates and terms for dig5 ital phonorecord deliveries, the Copyright Roy6 alty Judges shall base their decision on eco7 nomic, competitive, and programming informa8 tion presented by the parties, including— 

9 ‘‘(i) whether use of the compulsory li10 censee’s service may substitute for or may 

11 promote the sales of phonorecords or oth12 erwise may interfere with or may enhance 

13 the musical work copyright owner’s other 

14 streams of revenue from its musical works; 

15 and 

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

17 owner and the compulsory licensee in the 

18 copyrighted work and the service made 

19 available to the public with respect to the 

20 relative creative contribution, technological 

21 contribution, capital investment, cost, and 

22 risk. 

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

24 ‘‘(A) VOLUNTARY LICENSES AND CON25 TRACTUAL ROYALTY RATES.— 


pbinns on DSK79D2C42PROD with BILLS
15 

•HR 5447 RH

1 ‘‘(i) License agreements voluntarily 

2 negotiated at any time between one or 

3 more copyright owners of nondramatic mu4 sical works and one or more persons enti5 tled to obtain a compulsory license under 

6 subsection (a) shall be given effect in lieu 

7 of any determination by the Copyright 

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

9 royalty rates determined pursuant to sub10 paragraphs (E) and (F) of paragraph (1) 

11 shall be given effect as to digital phono12 record deliveries in lieu of any contrary 

13 royalty rates specified in a contract pursu14 ant to which a recording artist who is the 

15 author of a nondramatic musical work 

16 grants a license under that person’s exclu17 sive rights in the musical work under para18 graphs (1) and (3) of section 106 or com19 mits another person to grant a license in 

20 that musical work under paragraphs (1) 

21 and (3) of section 106, to a person desir22 ing to fix in a tangible medium of expres23 sion a sound recording embodying the mu24 sical work. 


pbinns on DSK79D2C42PROD with BILLS
16 

•HR 5447 RH

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

2 shall not apply to— 

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

4 before June 22, 1995, and not modi5 fied thereafter for the purpose of re6 ducing the royalty rates determined 

7 pursuant to subparagraphs (E) and 

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

9 the number of musical works within 

10 the scope of the contract covered by 

11 the reduced rates, except if a contract 

12 entered into on or before June 22, 

13 1995, is modified thereafter for the 

14 purpose of increasing the number of 

15 musical works within the scope of the 

16 contract, any contrary royalty rates 

17 specified in the contract shall be given 

18 effect in lieu of royalty rates deter19 mined pursuant to subparagraphs (E) 

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

21 number of musical works within the 

22 scope of the contract as of June 22, 

23 1995; and 

24 ‘‘(II) a contract entered into 

25 after the date that the sound recordVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
17 

•HR 5447 RH

1 ing is fixed in a tangible medium of 

2 expression substantially in a form in3 tended for commercial release, if at 

4 the time the contract is entered into, 

5 the recording artist retains the right 

6 to grant licenses as to the musical 

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

8 section 106. 

9 ‘‘(B) SOUND RECORDING INFORMATION.— 

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

11 title, a digital phonorecord delivery licensed 

12 under this paragraph shall be accompanied by 

13 the information encoded in the sound recording, 

14 if any, by or under the authority of the copy15 right owner of that sound recording, that iden16 tifies the title of the sound recording, the fea17 tured recording artist who performs on the 

18 sound recording, and related information, in19 cluding information concerning the underlying 

20 musical work and its writer. 

21 ‘‘(C) INFRINGEMENT REMEDIES.— 

22 ‘‘(i) A digital phonorecord delivery of 

23 a sound recording is actionable as an act 

24 of infringement under section 501, and is 


pbinns on DSK79D2C42PROD with BILLS
18 

•HR 5447 RH

1 fully subject to the remedies provided by 

2 sections 502 through 506, unless— 

3 ‘‘(I) the digital phonorecord de4 livery has been authorized by the 

5 sound recording copyright owner; and 

6 ‘‘(II) the entity making the dig7 ital phonorecord delivery has obtained 

8 a compulsory license under subsection 

9 (a) or has otherwise been authorized 

10 by the musical work copyright owner, 

11 or by a record company pursuant to 

12 an individual download license, to 

13 make and distribute phonorecords of 

14 each musical work embodied in the 

15 sound recording by means of digital 

16 phonorecord delivery. 

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

18 subparagraph shall be in addition to those 

19 available to the owner of the copyright in 

20 the nondramatic musical work under sub21 paragraph (J) and section 106(4) and the 

22 owner of the copyright in the sound record23 ing under section 106(6). 

24 ‘‘(D) LIABILITY OF SOUND RECORDING

25 OWNERS.—The liability of the copyright owner 


pbinns on DSK79D2C42PROD with BILLS
19 

•HR 5447 RH

1 of a sound recording for infringement of the 

2 copyright in a nondramatic musical work em3 bodied in the sound recording shall be deter4 mined in accordance with applicable law, except 

5 that the owner of a copyright in a sound re6 cording shall not be liable for a digital phono7 record delivery by a third party if the owner of 

8 the copyright in the sound recording does not 

9 license the distribution of a phonorecord of the 

10 nondramatic musical work. 

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

12 Nothing in section 1008 shall be construed to 

13 prevent the exercise of the rights and remedies 

14 allowed by this paragraph, subparagraph (J), 

15 and chapter 5 in the event of a digital phono16 record delivery, except that no action alleging 

17 infringement of copyright may be brought 

18 under this title against a manufacturer, im19 porter or distributor of a digital audio recording 

20 device, a digital audio recording medium, an 

21 analog recording device, or an analog recording 

22 medium, or against a consumer, based on the 

23 actions described in such section. 

24 ‘‘(F) PRESERVATION OF RIGHTS.—Noth25 ing in this section annuls or limits (i) the excluVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
20 

•HR 5447 RH

1 sive right to publicly perform a sound recording 

2 or the musical work embodied therein, including 

3 by means of a digital transmission, under sec4 tions 106(4) and 106(6), (ii) except for compul5 sory licensing under the conditions specified by 

6 this section, the exclusive rights to reproduce 

7 and distribute the sound recording and the mu8 sical work embodied therein under sections 

9 106(1) and 106(3), including by means of a 

10 digital phonorecord delivery, or (iii) any other 

11 rights under any other provision of section 106, 

12 or remedies available under this title, as such 

13 rights or remedies exist either before or after 

14 the date of enactment of the Digital Perform15 ance Right in Sound Recordings Act of 1995. 

16 ‘‘(G) EXEMPT TRANSMISSIONS AND RE17 TRANSMISSIONS.—The provisions of this section 

18 concerning digital phonorecord deliveries shall 

19 not apply to any exempt transmissions or re20 transmissions under section 114(d)(1). The ex21 emptions created in section 114(d)(1) do not 

22 expand or reduce the rights of copyright owners 

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

24 to such transmissions and retransmissions. 


pbinns on DSK79D2C42PROD with BILLS
21 

•HR 5447 RH

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

2 OR LENDING.—A compulsory license obtained 

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

4 phonorecords includes the right of the maker of 

5 such a phonorecord to distribute or authorize 

6 distribution of such phonorecord, other than by 

7 means of a digital phonorecord delivery, by 

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

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

10 respect to each nondramatic musical work em11 bodied in the phonorecord, the royalty shall be 

12 a proportion of the revenue received by the 

13 compulsory licensee from every such act of dis14 tribution of the phonorecord under this clause 

15 equal to the proportion of the revenue received 

16 by the compulsory licensee from distribution of 

17 the phonorecord under subsection 

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

19 licensee under that clause and under chapter 8. 

20 The Register of Copyrights shall issue regula21 tions to carry out the purpose of this clause. 

22 ‘‘(I) PAYMENT OF ROYALTIES AND STATE23 MENTS OF ACCOUNT.—Except as provided in 

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

25 (d), royalty payments shall be made on or beVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00021 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
22 

•HR 5447 RH

1 fore the twentieth day of each month and shall 

2 include all royalties for the month next pre3 ceding. Each monthly payment shall be made 

4 under oath and shall comply with requirements 

5 that the Register of Copyrights shall prescribe 

6 by regulation. The Register shall also prescribe 

7 regulations under which detailed cumulative an8 nual statements of account, certified by a cer9 tified public accountant, shall be filed for every 

10 compulsory license under subsection (a). The 

11 regulations covering both the monthly and the 

12 annual statements of account shall prescribe 

13 the form, content, and manner of certification 

14 with respect to the number of records made and 

15 the number of records distributed. 

16 ‘‘(J) NOTICE OF DEFAULT AND TERMI17 NATION OF COMPULSORY LICENSE.—In the 

18 case of a license obtained under subsection 

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

20 owner does not receive the monthly payment 

21 and the monthly and annual statements of ac22 count when due, the owner may give written no23 tice to the licensee that, unless the default is 

24 remedied within thirty days from the date of 

25 the notice, the compulsory license will be autoVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
23 

•HR 5447 RH

1 matically terminated. Such termination renders 

2 either the making or the distribution, or both, 

3 of all phonorecords for which the royalty has 

4 not been paid, actionable as acts of infringe5 ment under section 501 and fully subject to the 

6 remedies provided by sections 502 through 506. 

7 In the case of a license obtained under sub8 section (b)(2)(B), license authority under the 

9 compulsory license may be terminated as pro10 vided in subsection (d)(4)(E).’’; 

11 (4) by amending subsection (d) to read as fol12 lows: 

13 ‘‘(d) BLANKET LICENSE FOR DIGITAL USES, ME14 CHANICAL LICENSING COLLECTIVE, AND DIGITAL LI15 CENSEE COORDINATOR.— 

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

17 ‘‘(A) IN GENERAL.—A digital music pro18 vider that qualifies for a compulsory license 

19 under subsection (a) may, by complying with 

20 the terms and conditions of this subsection, ob21 tain a blanket license from copyright owners 

22 through the mechanical licensing collective to 

23 make and distribute digital phonorecord deliv24 eries of musical works through one or more cov25 ered activities. 


pbinns on DSK79D2C42PROD with BILLS
24 

•HR 5447 RH

1 ‘‘(B) INCLUDED ACTIVITIES.—A blanket li2 cense— 

3 ‘‘(i) covers all musical works (or 

4 shares of such works) available for compul5 sory licensing under this section for pur6 poses of engaging in covered activities, ex7 cept as provided in subparagraph (C); 

8 ‘‘(ii) includes the making and dis9 tribution of server, intermediate, archival, 

10 and incidental reproductions of musical 

11 works that are reasonable and necessary 

12 for the digital music provider to engage in 

13 covered activities licensed under this sub14 section, solely for the purpose of engaging 

15 in such covered activities; and 

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

17 rights or uses other than those described 

18 in clauses (i) and (ii). 

19 ‘‘(C) OTHER LICENSES.—A voluntary li20 cense for covered activities entered into by or 

21 under the authority of one or more copyright 

22 owners and one or more digital music providers, 

23 or authority to make and distribute permanent 

24 downloads of a musical work obtained by a dig25 ital music provider from a sound recording 


pbinns on DSK79D2C42PROD with BILLS
25 

•HR 5447 RH

1 copyright owner pursuant to an individual 

2 download license, shall be given effect in lieu of 

3 a blanket license under this subsection with re4 spect to the musical works (or shares thereof) 

5 covered by such voluntary license or individual 

6 download authority and the following conditions 

7 apply: 

8 ‘‘(i) Where a voluntary license or indi9 vidual download license applies, the license 

10 authority provided under the blanket li11 cense shall exclude any musical works (or 

12 shares thereof) subject to the voluntary li13 cense or individual download license. 

14 ‘‘(ii) An entity engaged in covered ac15 tivities under a voluntary license or author16 ity obtained pursuant to an individual 

17 download license that is a significant non18 blanket licensee shall comply with para19 graph (6)(A). 

20 ‘‘(iii) The rates and terms of any vol21 untary license shall be subject to the sec22 ond sentence of clause (i) and clause (ii) of 

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

24 as applicable. 


pbinns on DSK79D2C42PROD with BILLS
26 

•HR 5447 RH

1 ‘‘(D) PROTECTION AGAINST INFRINGE2 MENT ACTIONS.—A digital music provider that 

3 obtains and complies with the terms of a valid 

4 blanket license under this subsection shall not 

5 be subject to an action for infringement of the 

6 exclusive rights provided by paragraphs (1) and 

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

8 use of a musical work (or share thereof) to en9 gage in covered activities authorized by such li10 cense, subject to paragraph (4)(E). 

11 ‘‘(E) OTHER REQUIREMENTS AND CONDI12 TIONS APPLY.—Except as expressly provided in 

13 this subsection, each requirement, limitation, 

14 condition, privilege, right, and remedy otherwise 

15 applicable to compulsory licenses under this sec16 tion shall apply to compulsory blanket licenses 

17 under this subsection. 

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

19 ‘‘(A) PROCEDURE FOR OBTAINING LI20 CENSE.—A digital music provider may obtain a 

21 blanket license by submitting a notice of license 

22 to the mechanical licensing collective that speci23 fies the particular covered activities in which 

24 the digital music provider seeks to engage, as 

25 follows: 


pbinns on DSK79D2C42PROD with BILLS
27 

•HR 5447 RH

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

2 in form and substance with requirements 

3 that the Register of Copyrights shall estab4 lish by regulation. 

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

6 mechanical licensing collective within 30 

7 calendar days after receipt, the blanket li8 cense shall be effective as of the date the 

9 notice of license was sent by the digital 

10 music provider as shown by a physical or 

11 electronic record. 

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

13 rejected by the mechanical licensing collec14 tive if— 

15 ‘‘(I) the digital music provider or 

16 notice of license does not meet the re17 quirements of this section or applica18 ble regulations, in which case the re19 quirements at issue shall be specified 

20 with reasonable particularity in the 

21 notice of rejection; or 

22 ‘‘(II) the digital music provider 

23 has had a blanket license terminated 

24 by the mechanical licensing collective 


pbinns on DSK79D2C42PROD with BILLS
28 

•HR 5447 RH

1 within the past 3 years pursuant to 

2 paragraph (4)(E). 

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

4 under clause (iii)(I), the digital music pro5 vider shall have 30 calendar days after re6 ceipt of the notice of rejection to cure any 

7 deficiency and submit an amended notice 

8 of license to the mechanical licensing col9 lective. If the deficiency has been cured, 

10 the mechanical licensing collective shall so 

11 confirm in writing, and the license shall be 

12 effective as of the date that the original 

13 notice of license was provided by the dig14 ital music provider. 

15 ‘‘(v) A digital music provider that be16 lieves a notice of license was improperly re17 jected by the mechanical licensing collec18 tive may seek review of such rejection in 

19 Federal district court. The district court 

20 shall determine the matter de novo based 

21 on the record before the mechanical licens22 ing collective and any additional evidence 

23 presented by the parties. 

24 ‘‘(B) BLANKET LICENSE EFFECTIVE

25 DATE.—Blanket licenses shall be made available 


pbinns on DSK79D2C42PROD with BILLS
29 

•HR 5447 RH

1 by the mechanical licensing collective on and 

2 after the license availability date. No such li3 cense shall be effective prior to the license avail4 ability date. 

5 ‘‘(3) MECHANICAL LICENSING COLLECTIVE.— 

6 ‘‘(A) IN GENERAL.—The mechanical li7 censing collective shall be a single entity that— 

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

9 other entity, that is created by copyright 

10 owners to carry out responsibilities under 

11 this subsection; 

12 ‘‘(ii) is endorsed by and enjoys sub13 stantial support from musical work copy14 right owners that together represent the 

15 greatest percentage of the licensor market 

16 for uses of such works in covered activities, 

17 as measured over the preceding 3 full cal18 endar years; 

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

20 Register of Copyrights that it has, or will 

21 have prior to the license availability date, 

22 the administrative and technological capa23 bilities to perform the required functions of 

24 the mechanical licensing collective under 

25 this subsection; and 


pbinns on DSK79D2C42PROD with BILLS
30 

•HR 5447 RH

1 ‘‘(iv) has been designated by the Reg2 ister of Copyrights in accordance with sub3 paragraph (B). 

4 ‘‘(B) DESIGNATION OF MECHANICAL LI5 CENSING COLLECTIVE.— 

6 ‘‘(i) INITIAL DESIGNATION.—The 

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

9 within 9 months after the enactment date 

10 as follows: 

11 ‘‘(I) Within 90 calendar days 

12 after the enactment date, the Register 

13 shall publish notice in the Federal 

14 Register soliciting information to as15 sist in identifying the appropriate en16 tity to serve as the mechanical licens17 ing collective, including the name and 

18 affiliation of each member of the 

19 board of directors described under 

20 subparagraph (D)(i) and each com21 mittee established pursuant to clauses 

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

23 (D). 

24 ‘‘(II) After reviewing the infor25 mation requested under subclause (I) 


pbinns on DSK79D2C42PROD with BILLS
31 

•HR 5447 RH

1 and making a designation, the Reg2 ister shall publish notice in the Fed3 eral Register setting forth the identity 

4 of and contact information for the me5 chanical licensing collective. 

6 ‘‘(ii) PERIODIC REVIEW OF DESIGNA7 TION.—Following the initial designation of 

8 the mechanical licensing collective, the 

9 Register shall, every 5 years, beginning 

10 with the fifth full calendar year to com11 mence after the initial designation, publish 

12 notice in the Federal Register in the 

13 month of January soliciting information 

14 concerning whether the existing designa15 tion should be continued, or a different en16 tity meeting the criteria described in 

17 clauses (i) through (iii) of subparagraph 

18 (A) shall be designated. Following publica19 tion of such notice: 

20 ‘‘(I) The Register shall, after re21 viewing the information submitted and 

22 conducting additional proceedings as 

23 appropriate, publish notice in the Fed24 eral Register of a continuing designa25 tion or new designation of the meVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
32 

•HR 5447 RH

1 chanical licensing collective, as the 

2 case may be, with any new designa3 tion to be effective as of the first day 

4 of a month that is no less than 6 

5 months and no longer than 9 months 

6 after the date of publication of such 

7 notice, as specified by the Register. 

8 ‘‘(II) If a new entity is des9 ignated as a mechanical licensing col10 lective, the Register shall adopt regu11 lations to govern the transfer of li12 censes, funds, records, data, and ad13 ministrative responsibilities from the 

14 existing mechanical licensing collective 

15 to the new entity. 

16 ‘‘(iii) CLOSEST ALTERNATIVE DES17 IGNATION.—If the Register is unable to 

18 identify an entity that fulfills each of the 

19 qualifications set forth in clauses (i) 

20 through (iii) of subparagraph (A), the Reg21 ister shall designate the entity that most 

22 nearly fulfills such qualifications for pur23 poses of carrying out the responsibilities of 

24 the mechanical licensing collective. 

25 ‘‘(C) AUTHORITIES AND FUNCTIONS.— 


pbinns on DSK79D2C42PROD with BILLS
33 

•HR 5447 RH

1 ‘‘(i) IN GENERAL.—The mechanical li2 censing collective is authorized to perform 

3 the following functions, subject to more 

4 particular requirements as described in 

5 this subsection: 

6 ‘‘(I) Offer and administer blanket 

7 licenses, including receipt of notices of 

8 license and reports of usage from dig9 ital music providers. 

10 ‘‘(II) Collect and distribute royal11 ties from digital music providers for 

12 covered activities. 

13 ‘‘(III) Engage in efforts to iden14 tify musical works (and shares of such 

15 works) embodied in particular sound 

16 recordings, and to identify and locate 

17 the copyright owners of such musical 

18 works (and shares of such works). 

19 ‘‘(IV) Maintain the musical 

20 works database and other information 

21 relevant to the administration of li22 censing activities under this section. 

23 ‘‘(V) Administer a process by 

24 which copyright owners can claim 

25 ownership of musical works (and 


pbinns on DSK79D2C42PROD with BILLS
34 

•HR 5447 RH

1 shares of such works), and a process 

2 by which royalties for works for which 

3 the owner is not identified or located 

4 are equitably distributed to known 

5 copyright owners. 

6 ‘‘(VI) Administer collections of 

7 the administrative assessment from 

8 digital music providers and significant 

9 nonblanket licensees, including receipt 

10 of notices of nonblanket activity. 

11 ‘‘(VII) Invest in relevant re12 sources, and arrange for services of 

13 outside vendors and others, to support 

14 its activities. 

15 ‘‘(VIII) Engage in legal and 

16 other efforts to enforce rights and ob17 ligations under this subsection, includ18 ing by filing bankruptcy proofs of 

19 claims for amounts owed under li20 censes, and acting in coordination 

21 with the digital licensee coordinator.. 

22 ‘‘(IX) Initiate and participate in 

23 proceedings before the Copyright Roy24 alty Judges to establish the adminisVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
35 

•HR 5447 RH

1 trative assessment under this sub2 section. 

3 ‘‘(X) Initiate and participate in 

4 proceedings before the Copyright Of5 fice with respect to activities under 

6 this subsection. 

7 ‘‘(XI) Gather and provide docu8 mentation for use in proceedings be9 fore the Copyright Royalty Judges to 

10 set rates and terms under this section. 

11 ‘‘(XII) Maintain records of its 

12 activities and engage in and respond 

13 to audits described under this sub14 section. 

15 ‘‘(XIII) Engage in such other ac16 tivities as may be necessary or appro17 priate to fulfill its responsibilities 

18 under this subsection. 

19 ‘‘(ii) ADDITIONAL ADMINISTRATIVE

20 ACTIVITIES.—Subject to paragraph 

21 (11)(C) and clause (iii), the mechanical li22 censing collective may also administer, or 

23 assist in administering, voluntary licenses 

24 issued by or individual download licenses 

25 obtained from copyright owners for uses of 


pbinns on DSK79D2C42PROD with BILLS
36 

•HR 5447 RH

1 musical works, for which the mechanical li2 censing collective shall charge reasonable 

3 fees for such services. 

4 ‘‘(iii) RESTRICTION CONCERNING PUB5 LIC PERFORMANCE RIGHTS.—The mechan6 ical licensing collective may, pursuant to 

7 clause (ii), provide administration services 

8 with respect to voluntary licenses that in9 clude the right of public performance in 

10 musical works, but may not itself negotiate 

11 or grant licenses for the right of public 

12 performance in musical works, and may 

13 not be the exclusive or nonexclusive as14 signee or grantee of the right of public per15 formance in musical works. 

16 ‘‘(iv) RESTRICTION ON LOBBYING.— 

17 The mechanical licensing collective may 

18 not engage in government lobbying activi19 ties, but may engage in the activities de20 scribed in subclauses (IX), (X), and (XI) 

21 of clause (i). 

22 ‘‘(D) GOVERNANCE.— 

23 ‘‘(i) BOARD OF DIRECTORS.—The me24 chanical licensing collective shall have a 

25 board of directors consisting of 14 voting 


pbinns on DSK79D2C42PROD with BILLS
37 

•HR 5447 RH

1 members and 3 nonvoting members, as fol2 lows: 

3 ‘‘(I) Ten voting members shall be 

4 representatives of music publishers to 

5 which songwriters have assigned ex6 clusive rights of reproduction and dis7 tribution of musical works with re8 spect to covered activities and no such 

9 music publisher member may be 

10 owned by, or under common control 

11 with, any other board member. 

12 ‘‘(II) Four voting members shall 

13 be professional songwriters who have 

14 retained and exercise exclusive rights 

15 of reproduction and distribution with 

16 respect to covered activities with re17 spect to musical works they have au18 thored. 

19 ‘‘(III) One nonvoting member 

20 shall be a representative of the non21 profit trade association of music pub22 lishers that represents the greatest 

23 percentage of the licensor market for 

24 uses of musical works in covered acVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00037 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
38 

•HR 5447 RH

1 tivities, as measured over the pre2 ceding 3 full calendar years. 

3 ‘‘(IV) One nonvoting member 

4 shall be a representative of the digital 

5 licensee coordinator, provided that a 

6 digital licensee coordinator has been 

7 designated pursuant to paragraph 

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

9 member shall be the nonprofit trade 

10 association of digital licensees that 

11 represents the greatest percentage of 

12 the licensee market for uses of musi13 cal works in covered activities, as 

14 measured over the preceding 3 full 

15 calendar years. 

16 ‘‘(V) One nonvoting member 

17 shall be a representative of a nation18 ally recognized nonprofit trade asso19 ciation whose primary mission is advo20 cacy on behalf of songwriters in the 

21 United States. 

22 ‘‘(ii) BOARD MEETINGS.—The board 

23 of directors shall meet no less than 2 times 

24 per year and discuss matters pertinent to 


pbinns on DSK79D2C42PROD with BILLS
39 

•HR 5447 RH

1 the operations, including the mechanical li2 censing collective budget. 

3 ‘‘(iii) OPERATIONS ADVISORY COM4 MITTEE.—The board of directors of the 

5 mechanical licensing collective shall estab6 lish an operations advisory committee con7 sisting of no fewer than 6 members to 

8 make recommendations to the board of di9 rectors concerning the operations of the 

10 mechanical licensing collective, including 

11 the efficient investment in and deployment 

12 of information technology and data re13 sources. Such committee shall have an 

14 equal number of members of the committee 

15 who are— 

16 ‘‘(I) musical work copyright own17 ers who are appointed by the board of 

18 directors of the mechanical licensing 

19 collective; and 

20 ‘‘(II) representatives of digital 

21 music providers who are appointed by 

22 the digital licensee coordinator. 

23 ‘‘(iv) UNCLAIMED ROYALTIES OVER24 SIGHT COMMITTEE.—The board of direc25 tors of the mechanical licensing collective 


pbinns on DSK79D2C42PROD with BILLS
40 

•HR 5447 RH

1 shall establish and appoint an unclaimed 

2 royalties oversight committee consisting of 

3 10 members, 5 of which shall be musical 

4 work copyright owners and 5 of which 

5 shall be professional songwriters whose 

6 works are used in covered activities. 

7 ‘‘(v) DISPUTE RESOLUTION COM8 MITTEE.—The board of directors of the 

9 mechanical licensing collective shall estab10 lish and appoint a dispute resolution com11 mittee consisting of no fewer than 6 mem12 bers, which committee shall include an 

13 equal number of representatives of musical 

14 work copyright owners and professional 

15 songwriters. 

16 ‘‘(vi) MECHANICAL LICENSING COL17 LECTIVE ANNUAL REPORT.—Not later 

18 than June 30 of each year commencing 

19 after the license availability date, the me20 chanical licensing collective shall post, and 

21 make available online for a period of at 

22 least 3 years, an annual report that sets 

23 forth how the collective operates, how roy24 alties are collected and distributed, and the 

25 collective total costs for the preceding calVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
41 

•HR 5447 RH

1 endar year. At the time of posting, a copy 

2 of the report shall be provided to the Reg3 ister of Copyrights. 

4 ‘‘(E) MUSICAL WORKS DATABASE.— 

5 ‘‘(i) ESTABLISHMENT AND MAINTE6 NANCE OF DATABASE.—The mechanical li7 censing collective shall establish and main8 tain a database containing information re9 lating to musical works (and shares of 

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

11 identity and location of the copyright own12 ers of such works (and shares thereof) and 

13 the sound recordings in which the musical 

14 works are embodied. In furtherance of 

15 maintaining such database, the mechanical 

16 licensing collective shall engage in efforts 

17 to identify the musical works embodied in 

18 particular sound recordings, as well as to 

19 identify and locate the copyright owners of 

20 such works (and shares thereof), and up21 date such data as appropriate. 

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

23 to musical works (and shares thereof) that 

24 have been matched to copyright owners, 

25 the musical works database shall include— 


pbinns on DSK79D2C42PROD with BILLS
42 

•HR 5447 RH

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

2 ‘‘(II) the copyright owner of the 

3 work (or share thereof), and such 

4 owner’s ownership percentage; 

5 ‘‘(III) contact information for 

6 such copyright owner; 

7 ‘‘(IV) to the extent reasonably 

8 available to the mechanical licensing 

9 collective— 

10 ‘‘(aa) the international 

11 standard musical work code for 

12 the work; and 

13 ‘‘(bb) identifying informa14 tion for sound recordings in 

15 which the musical work is em16 bodied, including the name of the 

17 sound recording, featured artist, 

18 sound recording copyright owner, 

19 international standard recording 

20 code, and other information com21 monly used to assist in associ22 ating sound recordings with mu23 sical works; and 


pbinns on DSK79D2C42PROD with BILLS
43 

•HR 5447 RH

1 ‘‘(V) such other information as 

2 the Register of Copyrights may pre3 scribe by regulation. 

4 ‘‘(iii) UNMATCHED WORKS.—With re5 spect to unmatched musical works (and 

6 shares of works) in the database, the musi7 cal works database shall include— 

8 ‘‘(I) to the extent reasonably 

9 available to the mechanical licensing 

10 collective— 

11 ‘‘(aa) the title of the musical 

12 work; 

13 ‘‘(bb) the ownership percent14 age for which an owner has not 

15 been identified; 

16 ‘‘(cc) if a copyright owner 

17 has been identified but not lo18 cated, the identity of such owner 

19 and such owner’s ownership per20 centage; 

21 ‘‘(dd) identifying informa22 tion for sound recordings in 

23 which the work is embodied, in24 cluding sound recording name, 

25 featured artist, sound recording 


pbinns on DSK79D2C42PROD with BILLS
44 

•HR 5447 RH

1 copyright owner, international 

2 standard recording code, and 

3 other information commonly used 

4 to assist in associating sound re5 cordings with musical works; and 

6 ‘‘(ee) any additional infor7 mation reported to the mechan8 ical licensing collective that may 

9 assist in identifying the work; 

10 and 

11 ‘‘(II) such other information re12 lating to the identity and ownership of 

13 musical works (and shares of such 

14 works) as the Register of Copyrights 

15 may prescribe by regulation. 

16 ‘‘(iv) SOUND RECORDING INFORMA17 TION.—Each musical work copyright 

18 owner with any musical work listed in the 

19 musical works database shall engage in 

20 commercially reasonable efforts to deliver 

21 to the mechanical licensing collective, in22 cluding for use in the musical works data23 base, to the extent such information is not 

24 then available in the database, information 

25 regarding the names of the sound recordVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00044 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
45 

•HR 5447 RH

1 ings in which that copyright owner’s musi2 cal works (or shares thereof) are embodied, 

3 to the extent practicable. 

4 ‘‘(v) ACCESSIBILITY OF DATABASE.— 

5 The musical works database shall be made 

6 available to members of the public in a 

7 searchable, online format, free of charge. 

8 The mechanical licensing collective shall 

9 make such database available in a bulk, 

10 machine-readable format, through a widely 

11 available software application, to the fol12 lowing entities: 

13 ‘‘(I) Digital music providers oper14 ating under the authority of valid no15 tices of license, free of charge. 

16 ‘‘(II) Significant nonblanket li17 censees in compliance with their obli18 gations under paragraph (6), free of 

19 charge. 

20 ‘‘(III) Authorized vendors of the 

21 entities described in subclauses (I) 

22 and (II), free of charge. 

23 ‘‘(IV) The Register of Copy24 rights, free of charge (but the Reg25 ister shall not treat such database or 


pbinns on DSK79D2C42PROD with BILLS
46 

•HR 5447 RH

1 any information therein as a Govern2 ment record). 

3 ‘‘(V) Any member of the public, 

4 for a fee not to exceed the marginal 

5 cost to the mechanical licensing collec6 tive of providing the database to such 

7 person. 

8 ‘‘(vi) ADDITIONAL REQUIREMENTS.— 

9 The Register of Copyrights shall establish 

10 requirements by regulations to ensure the 

11 usability, interoperability, and usage re12 strictions of the musical works database. 

13 ‘‘(F) NOTICES OF LICENSE AND NON14 BLANKET ACTIVITY.— 

15 ‘‘(i) NOTICES OF LICENSES.—The me16 chanical licensing collective shall receive, 

17 review, and confirm or reject notices of li18 cense from digital music providers, as pro19 vided in paragraph (2)(A). The collective 

20 shall maintain a current, publicly acces21 sible list of blanket licenses that includes 

22 contact information for the licensees and 

23 the effective dates of such licenses. 

24 ‘‘(ii) NOTICES OF NONBLANKET AC25 TIVITY.—The mechanical licensing collecVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00046 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
47 

•HR 5447 RH

1 tive shall receive notices of nonblanket ac2 tivity from significant nonblanket licensees, 

3 as provided in paragraph (6)(A). The col4 lective shall maintain a current, publicly 

5 accessible list of notices of nonblanket ac6 tivity that includes contact information for 

7 significant nonblanket licensees and the 

8 dates of receipt of such notices. 

9 ‘‘(G) COLLECTION AND DISTRIBUTION OF

10 ROYALTIES.— 

11 ‘‘(i) IN GENERAL.—Upon receiving re12 ports of usage and payments of royalties 

13 from digital music providers for covered 

14 activities, the mechanical licensing collec15 tive shall— 

16 ‘‘(I) engage in efforts to— 

17 ‘‘(aa) identify the musical 

18 works embodied in sound record19 ings reflected in such reports, 

20 and the copyright owners of such 

21 musical works (and shares there22 of); 

23 ‘‘(bb) confirm uses of musi24 cal works subject to voluntary li25 censes and individual download 


pbinns on DSK79D2C42PROD with BILLS
48 

•HR 5447 RH

1 licenses, and the corresponding 

2 pro rata amounts to be deducted 

3 from royalties that would other4 wise be due under the blanket li5 cense; and 

6 ‘‘(cc) confirm proper pay7 ment of royalties due; 

8 ‘‘(II) distribute royalties to copy9 right owners in accordance with the 

10 usage and other information contained 

11 in such reports, as well as the owner12 ship and other information contained 

13 in the records of the collective; and 

14 ‘‘(III) deposit into an interest15 bearing account, as provided in sub16 paragraph (H)(ii), royalties that can17 not be distributed due to— 

18 ‘‘(aa) an inability to identify 

19 or locate a copyright owner of a 

20 musical work (or share thereof); 

21 or 

22 ‘‘(bb) a pending dispute be23 fore the dispute resolution com24 mittee of the mechanical licens25 ing collective. 


pbinns on DSK79D2C42PROD with BILLS
49 

•HR 5447 RH

1 ‘‘(ii) OTHER COLLECTION EFFORTS.— 

2 Any royalties recovered by the mechanical 

3 licensing collective as a result of efforts to 

4 enforce rights or obligations under a blan5 ket license, including through a bankruptcy 

6 proceeding or other legal action, shall be 

7 distributed to copyright owners based on 

8 available usage information and in accord9 ance with the procedures described in sub10 clauses (I) and (II) of clause (i), on a pro 

11 rata basis in proportion to the overall per12 centage recovery of the total royalties 

13 owed, with any pro rata share of royalties 

14 that cannot be distributed deposited in an 

15 interest-bearing account as provided in 

16 subparagraph (H)(ii). 

17 ‘‘(H) HOLDING OF ACCRUED ROYAL18 TIES.— 

19 ‘‘(i) HOLDING PERIOD.—The mechan20 ical licensing collective shall hold accrued 

21 royalties associated with particular musical 

22 works (and shares of works) that remain 

23 unmatched for a period of at least 3 years 

24 after the date on which the funds were re25 ceived by the mechanical licensing collecVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00049 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
50 

•HR 5447 RH

1 tive, or at least 3 years after the date on 

2 which they were accrued by a digital music 

3 provider that subsequently transferred 

4 such funds to the mechanical licensing col5 lective pursuant to paragraph (10)(B), 

6 whichever period expires sooner. 

7 ‘‘(ii) INTEREST-BEARING ACCOUNT.— 

8 Accrued royalties for unmatched works 

9 (and shares thereof) shall be maintained 

10 by the mechanical licensing collective in an 

11 interest-bearing account that earns month12 ly interest at the Federal, short-term rate, 

13 such interest to accrue for the benefit of 

14 copyright owners entitled to payment of 

15 such accrued royalties. 

16 ‘‘(I) MUSICAL WORKS CLAIMING PROC17 ESS.—The mechanical licensing collective shall 

18 publicize the existence of accrued royalties for 

19 unmatched musical works (and shares of such 

20 works) within 6 months of receiving a transfer 

21 of accrued royalties for such works by publicly 

22 listing the works and the procedures by which 

23 copyright owners may identify themselves and 

24 provide ownership, contact, and other relevant 

25 information to the mechanical licensing collecVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00050 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
51 

•HR 5447 RH

1 tive in order to receive payment of accrued roy2 alties. When a copyright owner of an un3 matched work (or share of a work) has been 

4 identified and located in accordance with the 

5 procedures of the mechanical licensing collec6 tive, the collective shall— 

7 ‘‘(i) update the musical works data8 base and its other records accordingly; and 

9 ‘‘(ii) provided that accrued royalties 

10 for the musical work (or share thereof) 

11 have not yet been included in a distribution 

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

13 accrued royalties and a proportionate 

14 amount of accrued interest associated with 

15 that work (or share thereof) to the copy16 right owner, accompanied by a cumulative 

17 statement of account reflecting usage of 

18 such work and accrued royalties based on 

19 information provided by digital music pro20 viders to the mechanical licensing collec21 tive. 

22 ‘‘(J) DISTRIBUTION OF UNCLAIMED AC23 CRUED ROYALTIES.— 

24 ‘‘(i) DISTRIBUTION PROCEDURES.— 

25 After the expiration of the prescribed holdVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00051 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
52 

•HR 5447 RH

1 ing period for accrued royalties provided in 

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

3 collective shall distribute such accrued roy4 alties, along with a proportionate share of 

5 accrued interest, to copyright owners iden6 tified in the records of the collective, sub7 ject to the following requirements, and in 

8 accordance with the policies and proce9 dures established under clause (ii): 

10 ‘‘(I) The first such distribution 

11 shall occur on or after July 1 of the 

12 first full calendar year to commence 

13 after the license availability date, with 

14 at least one such distribution to take 

15 place during each calendar year there16 after. 

17 ‘‘(II) Copyright owners’ payment 

18 shares for unclaimed accrued royalties 

19 for particular reporting periods shall 

20 be determined in a transparent and 

21 equitable manner based on data indi22 cating the relative market shares of 

23 such copyright owners as reflected by 

24 royalty payments made by digital 

25 music providers for covered activities 


pbinns on DSK79D2C42PROD with BILLS
53 

•HR 5447 RH

1 for the periods in question, including, 

2 in addition to royalty payments made 

3 to the mechanical licensing collective, 

4 royalty payments made to copyright 

5 owners under voluntary licenses and 

6 individual download licenses for cov7 ered activities, to the extent such in8 formation is available to the mechan9 ical licensing collective. In furtherance 

10 of the determination of equitable mar11 ket shares under this subparagraph— 

12 ‘‘(aa) the mechanical licens13 ing collective may require copy14 right owners seeking distribu15 tions of unclaimed accrued royal16 ties to provide, or direct the pro17 vision of, information concerning 

18 royalties received under voluntary 

19 licenses and individual download 

20 licenses for covered activities, and 

21 ‘‘(bb) the mechanical licens22 ing collective shall take appro23 priate steps to safeguard the con24 fidentiality and security of finan25 cial and other sensitive data used 


pbinns on DSK79D2C42PROD with BILLS
54 

•HR 5447 RH

1 to compute market shares in ac2 cordance with the confidentiality 

3 provisions prescribed by the Reg4 ister of Copyrights under para5 graph (12)(C). 

6 ‘‘(ii) ESTABLISHMENT OF DISTRIBU7 TION POLICIES.—The unclaimed royalties 

8 oversight committee established under 

9 paragraph (3)(D)(iv) shall establish poli10 cies and procedures for the distribution of 

11 unclaimed accrued royalties and accrued 

12 interest in accordance with this subpara13 graph, including the provision of usage 

14 data to copyright owners to allocate pay15 ments and credits to songwriters pursuant 

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

17 the board of directors of the mechanical li18 censing collective. 

19 ‘‘(iii) ADVANCE NOTICE OF DISTRIBU20 TIONS.—The mechanical licensing collec21 tive shall publicize a pending distribution 

22 of unclaimed accrued royalties and accrued 

23 interest at least 90 calendar days in ad24 vance of such distribution. 


pbinns on DSK79D2C42PROD with BILLS
55 

•HR 5447 RH

1 ‘‘(iv) SONGWRITER PAYMENTS.— 

2 Copyright owners that receive a distribu3 tion of unclaimed accrued royalties and ac4 crued interest shall pay or credit a portion 

5 to songwriters (or the authorized agents of 

6 songwriters) on whose behalf the copyright 

7 owners license or administer musical works 

8 for covered activities, in accordance with 

9 applicable contractual terms, but notwith10 standing any agreement to the contrary— 

11 ‘‘(I) such payments and credits 

12 to songwriters shall be allocated in 

13 proportion to reported usage of indi14 vidual musical works by digital music 

15 providers during the reporting periods 

16 covered by the distribution from the 

17 mechanical licensing collective; and 

18 ‘‘(II) in no case shall the pay19 ment or credit to an individual song20 writer be less than 50 percent of the 

21 payment received by the copyright 

22 owner attributable to usage of musical 

23 works (or shares of works) of that 

24 songwriter. 


pbinns on DSK79D2C42PROD with BILLS
56 

•HR 5447 RH

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

2 resolution committee established under para3 graph (3)(D)(v) shall address and resolve in a 

4 timely and equitable manner disputes among 

5 copyright owners relating to ownership interests 

6 in musical works licensed under this section and 

7 allocation and distribution of royalties by the 

8 mechanical licensing collective, according to a 

9 process approved by the board of directors of 

10 the mechanical licensing collective. Such proc11 ess— 

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

13 disputed funds in accordance with the re14 quirements described in subparagraph 

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

16 and 

17 ‘‘(ii) except as provided in paragraph 

18 (11)(D), shall not affect any legal or equi19 table rights or remedies available to any 

20 copyright owner or songwriter concerning 

21 ownership of, and entitlement to royalties 

22 for, a musical work. 

23 ‘‘(L) VERIFICATION OF PAYMENTS BY ME24 CHANICAL LICENSING COLLECTIVE.— 


pbinns on DSK79D2C42PROD with BILLS
57 

•HR 5447 RH

1 ‘‘(i) VERIFICATION PROCESS.—A 

2 copyright owner entitled to receive pay3 ments of royalties for covered activities 

4 from the mechanical licensing collective 

5 may, individually or with other copyright 

6 owners, conduct an audit of the mechanical 

7 licensing collective to verify the accuracy of 

8 royalty payments by the mechanical licens9 ing collective to such copyright owner, as 

10 follows: 

11 ‘‘(I) A copyright owner may 

12 audit the mechanical licensing collec13 tive only once in a year for any or all 

14 of the prior 3 calendar years, and may 

15 not audit records for any calendar 

16 year more than once. 

17 ‘‘(II) The audit shall be con18 ducted by a qualified auditor, who 

19 shall perform the audit during the or20 dinary course of business by exam21 ining the books, records, and data of 

22 the mechanical licensing collective, ac23 cording to generally accepted auditing 

24 standards and subject to applicable 

25 confidentiality requirements preVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00057 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
58 

•HR 5447 RH

1 scribed by the Register of Copyrights 

2 under paragraph (12)(C). 

3 ‘‘(III) The mechanical licensing 

4 collective shall make such books, 

5 records, and data available to the 

6 qualified auditor and respond to rea7 sonable requests for relevant informa8 tion, and shall use commercially rea9 sonable efforts to facilitate access to 

10 relevant information maintained by 

11 third parties. 

12 ‘‘(IV) To commence the audit, 

13 any copyright owner shall file with the 

14 Copyright Office a notice of intent to 

15 conduct an audit of the mechanical li16 censing collective, identifying the pe17 riod of time to be audited, and shall 

18 simultaneously deliver a copy of such 

19 notice to the mechanical licensing col20 lective. The Register of Copyrights 

21 shall cause the notice of audit to be 

22 published in the Federal Register 

23 within 45 calendar days after receipt. 

24 ‘‘(V) The qualified auditor shall 

25 determine the accuracy of royalty payVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00058 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
59 

•HR 5447 RH

1 ments, including whether an under2 payment or overpayment of royalties 

3 was made by the mechanical licensing 

4 collective to each auditing copyright 

5 owner, but before providing a final 

6 audit report to any such copyright 

7 owner, the qualified auditor shall pro8 vide a tentative draft of the report to 

9 the mechanical licensing collective and 

10 allow the mechanical licensing collec11 tive a reasonable opportunity to re12 spond to the findings, including by 

13 clarifying issues and correcting factual 

14 errors. 

15 ‘‘(VI) The auditing copyright 

16 owner or owners shall bear the cost of 

17 the audit. In case of an underpayment 

18 to any copyright owner, the mechan19 ical licensing collective shall pay the 

20 amounts of any such underpayment to 

21 such auditing copyright owner, as ap22 propriate. In case of an overpayment 

23 by the mechanical licensing collective, 

24 the mechanical licensing collective 

25 may debit the account of the auditing 


pbinns on DSK79D2C42PROD with BILLS
60 

•HR 5447 RH

1 copyright owner or owners for such 

2 overpaid amounts, or such owner(s) 

3 shall refund overpaid amounts to the 

4 mechanical licensing collective, as ap5 propriate. 

6 ‘‘(ii) ALTERNATIVE VERIFICATION

7 PROCEDURES.—Nothing in this subpara8 graph shall preclude a copyright owner and 

9 the mechanical licensing collective from 

10 agreeing to audit procedures different from 

11 those described herein, but a notice of the 

12 audit shall be provided to and published by 

13 the Copyright Office as described in clause 

14 (i)(IV). 

15 ‘‘(M) RECORDS OF MECHANICAL LICENS16 ING COLLECTIVE.— 

17 ‘‘(i) RECORDS MAINTENANCE.—The 

18 mechanical licensing collective shall ensure 

19 that all material records of its operations, 

20 including those relating to notices of li21 cense, the administration of its claims 

22 process, reports of usage, royalty pay23 ments, receipt and maintenance of accrued 

24 royalties, royalty distribution processes, 

25 and legal matters, are preserved and mainVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00060 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
61 

•HR 5447 RH

1 tained in a secure and reliable manner, 

2 with appropriate commercially reasonable 

3 safeguards against unauthorized access, 

4 copying, and disclosure, and subject to the 

5 confidentiality requirements prescribed by 

6 the Register of Copyrights under para7 graph (12)(C) for a period of no less than 

8 7 years after the date of creation or re9 ceipt, whichever occurs later. 

10 ‘‘(ii) RECORDS ACCESS.—The mechan11 ical licensing collective shall provide 

12 prompt access to electronic and other 

13 records pertaining to the administration of 

14 a copyright owner’s musical works upon 

15 reasonable written request of such owner 

16 or the owner’s authorized representative. 

17 ‘‘(4) TERMS AND CONDITIONS OF BLANKET LI18 CENSE.—A blanket license is subject to, and condi19 tioned upon, the following requirements: 

20 ‘‘(A) ROYALTY REPORTING AND PAY21 MENTS.— 

22 ‘‘(i) MONTHLY REPORTS AND PAY23 MENT.—A digital music provider shall re24 port and pay royalties to the mechanical li25 censing collective under the blanket license 


pbinns on DSK79D2C42PROD with BILLS
62 

•HR 5447 RH

1 on a monthly basis in accordance with 

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

3 monthly reporting shall be due 45 calendar 

4 days, rather than 20 calendar days, after 

5 the end of the monthly reporting period. 

6 ‘‘(ii) DATA TO BE REPORTED.—In re7 porting usage of musical works to the me8 chanical licensing collective, a digital music 

9 provider shall provide usage data for musi10 cal works used under the blanket license 

11 and usage data for musical works used in 

12 covered activities under voluntary licenses 

13 and individual download licenses. In the re14 port of usage, the digital music provider 

15 shall— 

16 ‘‘(I) with respect to each sound 

17 recording embodying a musical 

18 work— 

19 ‘‘(aa) provide identifying in20 formation for the sound record21 ing, including sound recording 

22 name, featured artist, and, to the 

23 extent reasonably available to the 

24 digital music provider, sound re25 cording copyright owner, interVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00062 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
63 

•HR 5447 RH

1 national standard recording code, 

2 and other information commonly 

3 used in the industry to identify 

4 sound recordings and match 

5 them to the musical works the 

6 sound recordings embody; 

7 ‘‘(bb) to the extent reason8 ably available to the digital music 

9 provider, provide information 

10 concerning authorship and own11 ership of the applicable rights in 

12 the musical work embodied in the 

13 sound recording (including each 

14 songwriter, publisher name, and 

15 respective ownership share) and 

16 the international standard musi17 cal work code; and 

18 ‘‘(cc) provide the number of 

19 digital phonorecord deliveries of 

20 the sound recording, including 

21 limited downloads and interactive 

22 streams; 

23 ‘‘(II) identify and provide contact 

24 information for all musical work copy25 right owners for works embodied in 


pbinns on DSK79D2C42PROD with BILLS
64 

•HR 5447 RH

1 sound recordings as to which a vol2 untary license, rather than the blan3 ket license, is in effect with respect to 

4 the uses being reported; and 

5 ‘‘(III) provide such other infor6 mation as the Register of Copyrights 

7 shall require by regulation. 

8 ‘‘(iii) FORMAT AND MAINTENANCE OF

9 REPORTS.—Reports of usage provided by 

10 digital music providers to the mechanical 

11 licensing collective shall be in a machine12 readable format that is compatible with the 

13 information technology systems of the me14 chanical licensing collective and meets the 

15 requirements of regulations adopted by the 

16 Register of Copyrights. The Register shall 

17 also adopt regulations setting forth re18 quirements under which records of use 

19 shall be maintained and made available to 

20 the mechanical licensing collective by dig21 ital music providers engaged in covered ac22 tivities under a blanket license. 

23 ‘‘(iv) ADOPTION OF REGULATIONS.— 

24 The Register shall adopt regulations— 


pbinns on DSK79D2C42PROD with BILLS
65 

•HR 5447 RH

1 ‘‘(I) setting forth requirements 

2 under which records of use shall be 

3 maintained and made available to the 

4 mechanical licensing collective by dig5 ital music providers engaged in cov6 ered activities under a blanket license; 

7 and 

8 ‘‘(II) regarding adjustments to 

9 reports of usage by digital music pro10 viders, including mechanisms to ac11 count for overpayment and under12 payment of royalties in prior periods. 

13 ‘‘(B) COLLECTION OF SOUND RECORDING

14 INFORMATION.—A digital music provider shall 

15 engage in good-faith, commercially reasonable 

16 efforts to obtain from copyright owners of 

17 sound recordings made available through the 

18 service of such digital music provider— 

19 ‘‘(i) sound recording copyright owners, 

20 international standard recording codes, 

21 and other information commonly used in 

22 the industry to identify sound recordings 

23 and match them to the musical works the 

24 sound recordings embody; and 


pbinns on DSK79D2C42PROD with BILLS
66 

•HR 5447 RH

1 ‘‘(ii) information concerning the au2 thorship and ownership of musical works, 

3 including songwriters, publisher names, 

4 ownership shares, and international stand5 ard musical work codes. 

6 ‘‘(C) PAYMENT OF ADMINISTRATIVE AS7 SESSMENT.—A digital music provider and any 

8 significant nonblanket licensee shall pay the ad9 ministrative assessment established under para10 graph (7)(D) in accordance with this subsection 

11 and applicable regulations. 

12 ‘‘(D) VERIFICATION OF PAYMENTS BY DIG13 ITAL MUSIC PROVIDERS.— 

14 ‘‘(i) VERIFICATION PROCESS.—The 

15 mechanical licensing collective may conduct 

16 an audit of a digital music provider oper17 ating under the blanket license to verify 

18 the accuracy of royalty payments by the 

19 digital music provider to the mechanical li20 censing collective as follows: 

21 ‘‘(I) The mechanical licensing 

22 collective may commence an audit of a 

23 digital music provider no more than 

24 once in any 3-calendar-year period to 

25 cover a verification period of no more 


pbinns on DSK79D2C42PROD with BILLS
67 

•HR 5447 RH

1 than the 3 full calendar years pre2 ceding the date of commencement of 

3 the audit, and such audit may not 

4 audit records for any such 3-year 

5 verification period more than once. 

6 ‘‘(II) The audit shall be con7 ducted by a qualified auditor, who 

8 shall perform the audit during the or9 dinary course of business by exam10 ining the books, records, and data of 

11 the digital music provider, according 

12 to generally accepted auditing stand13 ards and subject to applicable con14 fidentiality requirements prescribed by 

15 the Register of Copyrights under 

16 paragraph (12)(C). 

17 ‘‘(III) The digital music provider 

18 shall make such books, records, and 

19 data available to the qualified auditor 

20 and respond to reasonable requests 

21 for relevant information, and shall use 

22 commercially reasonable efforts to 

23 provide access to relevant information 

24 maintained with respect to a digital 

25 music provider by third parties. 


pbinns on DSK79D2C42PROD with BILLS
68 

•HR 5447 RH

1 ‘‘(IV) To commence the audit, 

2 the mechanical licensing collective 

3 shall file with the Copyright Office a 

4 notice of intent to conduct an audit of 

5 the digital music provider, identifying 

6 the period of time to be audited, and 

7 shall simultaneously deliver a copy of 

8 such notice to the digital music pro9 vider. 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 digital music pro18 vider to the mechanical licensing col19 lective, but before providing a final 

20 audit report to the mechanical licens21 ing collective, the qualified auditor 

22 shall provide a tentative draft of the 

23 report to the digital music provider 

24 and allow the digital music provider a 

25 reasonable opportunity to respond to 


pbinns on DSK79D2C42PROD with BILLS
69 

•HR 5447 RH

1 the findings, including by clarifying 

2 issues and correcting factual errors. 

3 ‘‘(VI) The mechanical licensing 

4 collective shall pay the cost of the 

5 audit, unless the qualified auditor de6 termines that there was an under7 payment by the digital music provider 

8 of 10 percent or more, in which case 

9 the digital music provider shall bear 

10 the reasonable costs of the audit, in 

11 addition to paying the amount of any 

12 underpayment to the mechanical li13 censing collective. In case of an over14 payment by the digital music provider, 

15 the mechanical licensing collective 

16 shall provide a credit to the account 

17 of the digital music provider. 

18 ‘‘(VII) A digital music provider 

19 may not assert section 507 or any 

20 other Federal or State statute of limi21 tations, doctrine of laches or estoppel, 

22 or similar provision as a defense to a 

23 legal action arising from an audit 

24 under this subparagraph if such legal 

25 action is commenced no more than 6 


pbinns on DSK79D2C42PROD with BILLS
70 

•HR 5447 RH

1 years after the commencement of the 

2 audit that is the basis for such action. 

3 ‘‘(ii) ALTERNATIVE VERIFICATION

4 PROCEDURES.—Nothing in this subpara5 graph shall preclude the mechanical licens6 ing collective and a digital music provider 

7 from agreeing to audit procedures different 

8 from those described herein, but a notice 

9 of the audit shall be provided to and pub10 lished by the Copyright Office as described 

11 in clause (i)(IV). 

12 ‘‘(E) DEFAULT UNDER BLANKET LI13 CENSE.— 

14 ‘‘(i) CONDITIONS OF DEFAULT.—A 

15 digital music provider shall be in default 

16 under a blanket license if the digital music 

17 provider— 

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

19 monthly reports of usage to the me20 chanical licensing collective when due; 

21 ‘‘(II) fails to make a monthly 

22 royalty or late fee payment to the me23 chanical licensing collective when due, 

24 in all or material part; 


pbinns on DSK79D2C42PROD with BILLS
71 

•HR 5447 RH

1 ‘‘(III) provides one or more 

2 monthly reports of usage to the me3 chanical licensing collective that, on 

4 the whole, is or are materially defi5 cient as a result of inaccurate, miss6 ing, or unreadable data, where the 

7 correct data was available to the dig8 ital music provider and required to be 

9 reported under this section and appli10 cable regulations; 

11 ‘‘(IV) fails to pay the administra12 tive assessment as required under this 

13 subsection and applicable regulations; 

14 or 

15 ‘‘(V) after being provided written 

16 notice by the mechanical licensing col17 lective, refuses to comply with any 

18 other material term or condition of 

19 the blanket license under this section 

20 for a period of 60 calendar days or 

21 longer. 

22 ‘‘(ii) NOTICE OF DEFAULT AND TER23 MINATION.—In case of a default by a dig24 ital music provider, the mechanical licens25 ing collective may proceed to terminate the 


pbinns on DSK79D2C42PROD with BILLS
72 

•HR 5447 RH

1 blanket license of the digital music pro2 vider as follows: 

3 ‘‘(I) The mechanical licensing 

4 collective shall provide written notice 

5 to the digital music provider describ6 ing with reasonable particularity the 

7 default and advising that unless such 

8 default is cured within 60 calendar 

9 days after the date of the notice, the 

10 blanket license will automatically ter11 minate at the end of that period. 

12 ‘‘(II) If the digital music provider 

13 fails to remedy the default within the 

14 60-day period referenced in subclause 

15 (I), the license shall terminate without 

16 any further action on the part of the 

17 mechanical licensing collective. Such 

18 termination renders the making of all 

19 digital phonorecord deliveries of all 

20 musical works (and shares thereof) 

21 covered by the blanket license for 

22 which the royalty or administrative 

23 assessment has not been paid action24 able as acts of infringement under 

25 section 501 and subject to the remVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00072 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
73 

•HR 5447 RH

1 edies provided by sections 502 

2 through 506. 

3 ‘‘(iii) NOTICE TO COPYRIGHT OWN4 ERS.—The mechanical licensing collective 

5 shall provide written notice of any termi6 nation under this subparagraph to copy7 right owners of affected works. 

8 ‘‘(iv) REVIEW BY FEDERAL DISTRICT

9 COURT.—A digital music provider that be10 lieves a blanket license was improperly ter11 minated by the mechanical licensing collec12 tive may seek review of such termination in 

13 Federal district court. The district court 

14 shall determine the matter de novo based 

15 on the record before the mechanical licens16 ing collective and any additional sup17 porting evidence presented by the parties. 

18 ‘‘(5) DIGITAL LICENSEE COORDINATOR.— 

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

20 coordinator shall be a single entity that— 

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

22 other entity, that is created to carry out 

23 responsibilities under this subsection; 

24 ‘‘(ii) is endorsed by and enjoys sub25 stantial support from digital music proVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00073 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
74 

•HR 5447 RH

1 viders and significant nonblanket licensees 

2 that together represent the greatest per3 centage of the licensee market for uses of 

4 musical works in covered activities, as 

5 measured over the preceding 3 calendar 

6 years; 

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

8 has, or will have prior to the license avail9 ability date, the administrative capabilities 

10 to perform the required functions of the 

11 digital licensee coordinator under this sub12 section; and 

13 ‘‘(iv) has been designated by the Reg14 ister of Copyrights in accordance with sub15 paragraph (B). 

16 ‘‘(B) DESIGNATION OF DIGITAL LICENSEE

17 COORDINATOR.— 

18 ‘‘(i) INITIAL DESIGNATION.—The 

19 Register of Copyrights shall initially des20 ignate the digital licensee coordinator with21 in 9 months after the enactment date, in 

22 accordance with the same procedure de23 scribed for designation of the mechanical 

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


pbinns on DSK79D2C42PROD with BILLS
75 

•HR 5447 RH

1 ‘‘(ii) PERIODIC REVIEW OF DESIGNA2 TION.—Following the initial designation of 

3 the digital licensee coordinator, the Reg4 ister shall, every 5 years, beginning with 

5 the fifth full calendar year to commence 

6 after the initial designation, determine 

7 whether the existing designation should be 

8 continued, or a different entity meeting the 

9 criteria described in clauses (i) through 

10 (iii) of subparagraph (A) should be des11 ignated, in accordance with the same pro12 cedure described for the mechanical licens13 ing collective in paragraph (3)(B)(ii). 

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

15 the Register is unable to identify an entity 

16 that fulfills each of the qualifications de17 scribed in clauses (i) through (iii) of sub18 paragraph (A) to serve as the digital li19 censee coordinator, the Register may de20 cline to designate a digital licensee coordi21 nator. The Register’s determination not to 

22 designate a digital licensee coordinator 

23 shall not negate or otherwise affect any 

24 provision of this subsection except to the 

25 limited extent that a provision references 


pbinns on DSK79D2C42PROD with BILLS
76 

•HR 5447 RH

1 the digital licensee coordinator. In such 

2 case, the reference to the digital licensee 

3 coordinator shall be without effect unless 

4 and until a new digital licensee coordinator 

5 is designated. 

6 ‘‘(C) AUTHORITIES AND FUNCTIONS.— 

7 ‘‘(i) IN GENERAL.—The digital li8 censee coordinator is authorized to perform 

9 the following functions, subject to more 

10 particular requirements as described in 

11 this subsection: 

12 ‘‘(I) Establish a governance 

13 structure, criteria for membership, 

14 and any dues to be paid by its mem15 bers. 

16 ‘‘(II) Engage in efforts to enforce 

17 notice and payment obligations with 

18 respect to the administrative assess19 ment, including by receiving informa20 tion from and coordinating with the 

21 mechanical licensing collective. 

22 ‘‘(III) Initiate and participate in 

23 proceedings before the Copyright Roy24 alty Judges to establish the adminisVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00076 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
77 

•HR 5447 RH

1 trative assessment under this sub2 section. 

3 ‘‘(IV) Initiate and participate in 

4 proceedings before the Copyright Of5 fice with respect to activities under 

6 this subsection. 

7 ‘‘(V) Gather and provide docu8 mentation for use in proceedings be9 fore the Copyright Royalty Judges to 

10 set rates and terms under this section. 

11 ‘‘(VI) Maintain records of its ac12 tivities. 

13 ‘‘(VII) Engage in such other ac14 tivities as may be necessary or appro15 priate to fulfill its responsibilities 

16 under this subsection. 

17 ‘‘(ii) RESTRICTION ON LOBBYING.— 

18 The digital licensee coordinator may not 

19 engage in government lobbying activities, 

20 but may engage in the activities described 

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

22 (i). 

23 ‘‘(6) REQUIREMENTS FOR SIGNIFICANT NON24 BLANKET LICENSEES.— 

25 ‘‘(A) IN GENERAL.— 


pbinns on DSK79D2C42PROD with BILLS
78 

•HR 5447 RH

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

2 than 45 calendar days after the license 

3 availability date, or 45 calendar days after 

4 the end of the first full calendar month in 

5 which an entity initially qualifies as a sig6 nificant nonblanket licensee, whichever oc7 curs later, a significant nonblanket licensee 

8 shall submit a notice of nonblanket activity 

9 to the mechanical licensing collective. The 

10 notice of nonblanket activity shall comply 

11 in form and substance with requirements 

12 that the Register of Copyrights shall estab13 lish by regulation, and a copy shall be 

14 made available to the digital licensee coor15 dinator. 

16 ‘‘(ii) REPORTING AND PAYMENT OBLI17 GATIONS.—The notice of nonblanket activ18 ity submitted to the mechanical licensing 

19 collective shall be accompanied by a report 

20 of usage that contains the information de21 scribed in paragraph (4)(A)(ii), as well as 

22 any payment of the administrative assess23 ment required under this subsection and 

24 applicable regulations. Thereafter, subject 

25 to clause (iii), a significant nonblanket liVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00078 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
79 

•HR 5447 RH

1 censee shall continue to provide monthly 

2 reports of usage, accompanied by any re3 quired payment of the administrative as4 sessment, to the mechanical licensing col5 lective. Such reports and payments shall be 

6 submitted not later than 45 calendar days 

7 after the end of the calendar month being 

8 reported. 

9 ‘‘(iii) DISCONTINUATION OF OBLIGA10 TIONS.—An entity that has submitted a 

11 notice of nonblanket activity to the me12 chanical licensing collective that has ceased 

13 to qualify as a significant nonblanket li14 censee may so notify the collective in writ15 ing. In such case, as of the calendar month 

16 in which such notice is provided, such enti17 ty shall no longer be required to provide 

18 reports of usage or pay the administrative 

19 assessment, but if such entity later quali20 fies as a significant nonblanket licensee, 

21 such entity shall again be required to com22 ply with clauses (i) and (ii). 

23 ‘‘(B) REPORTING BY MECHANICAL LICENS24 ING COLLECTIVE TO DIGITAL LICENSEE COOR25 DINATOR.— 


pbinns on DSK79D2C42PROD with BILLS
80 

•HR 5447 RH

1 ‘‘(i) MONTHLY REPORTS OF NON2 COMPLIANT LICENSEES.—The mechanical 

3 licensing collective shall provide monthly 

4 reports to the digital licensee coordinator 

5 setting forth any significant nonblanket li6 censees of which the collective is aware 

7 that have failed to comply with subpara8 graph (A). 

9 ‘‘(ii) TREATMENT OF CONFIDENTIAL

10 INFORMATION.—The mechanical licensing 

11 collective and digital licensee coordinator 

12 shall take appropriate steps to safeguard 

13 the confidentiality and security of financial 

14 and other sensitive data shared under this 

15 subparagraph, in accordance with the con16 fidentiality requirements prescribed by the 

17 Register of Copyrights under paragraph 

18 (12)(C). 

19 ‘‘(C) LEGAL ENFORCEMENT EFFORTS.— 

20 ‘‘(i) FEDERAL COURT ACTION.— 

21 Should the mechanical licensing collective 

22 or digital licensee coordinator become 

23 aware that a significant nonblanket li24 censee has failed to comply with subpara25 graph (A), either may commence an action 


pbinns on DSK79D2C42PROD with BILLS
81 

•HR 5447 RH

1 in Federal district court for damages and 

2 injunctive relief. If the significant non3 blanket licensee is found liable, the court 

4 shall, absent a finding of excusable neglect, 

5 award damages in an amount equal to 

6 three times the total amount of the unpaid 

7 administrative assessment and, notwith8 standing anything to the contrary in sec9 tion 505, reasonable attorney’s fees and 

10 costs, as well as such other relief as the 

11 court deems appropriate. In all other 

12 cases, the court shall award relief as ap13 propriate. Any recovery of damages shall 

14 be payable to the mechanical licensing col15 lective as an offset to the collective total 

16 costs. 

17 ‘‘(ii) STATUTE OF LIMITATIONS FOR

18 ENFORCEMENT ACTION.—Any action de19 scribed in this subparagraph shall be com20 menced within the time period described in 

21 section 507(b). 

22 ‘‘(iii) OTHER RIGHTS AND REMEDIES

23 PRESERVED.—The ability of the mechan24 ical licensing collective or digital licensee 

25 coordinator to bring an action under this 


pbinns on DSK79D2C42PROD with BILLS
82 

•HR 5447 RH

1 subparagraph shall in no way alter, limit 

2 or negate any other right or remedy that 

3 may be available to any party at law or in 

4 equity. 

5 ‘‘(7) FUNDING OF MECHANICAL LICENSING

6 COLLECTIVE.— 

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

8 costs shall be funded by— 

9 ‘‘(i) an administrative assessment, as 

10 such assessment is established by the 

11 Copyright Royalty Judges pursuant to sub12 paragraph (D) from time to time, to be 

13 paid by— 

14 ‘‘(I) digital music providers that 

15 are engaged, in all or in part, in cov16 ered activities pursuant to a blanket 

17 license; and 

18 ‘‘(II) significant nonblanket li19 censees; and 

20 ‘‘(ii) voluntary contributions from dig21 ital music providers and significant non22 blanket licensees as may be agreed with 

23 copyright owners. 

24 ‘‘(B) VOLUNTARY CONTRIBUTIONS.— 


pbinns on DSK79D2C42PROD with BILLS
83 

•HR 5447 RH

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

3 clause (ii), voluntary contributions by dig4 ital music providers and significant non5 blanket licensees shall be determined by 

6 private negotiation and agreement, and the 

7 following conditions apply: 

8 ‘‘(I) The date and amount of 

9 each voluntary contribution to the me10 chanical licensing collective shall be 

11 documented in a writing signed by an 

12 authorized agent of the mechanical li13 censing collective and the contributing 

14 party. 

15 ‘‘(II) Such agreement shall be 

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

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

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

22 Copyright Royalty Judges. 

23 ‘‘(ii) TREATMENT OF CONTRIBU24 TIONS.—Each such voluntary contribution 

25 shall be treated for purposes of an adminVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00083 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
84 

•HR 5447 RH

1 istrative assessment proceeding as an off2 set to the collective total costs that would 

3 otherwise be recovered through the admin4 istrative assessment. Any allocation or re5 allocation of voluntary contributions be6 tween or among individual digital music 

7 providers or significant nonblanket licens8 ees shall be a matter of private negotiation 

9 and agreement among such parties and 

10 outside the scope of the administrative as11 sessment proceeding. 

12 ‘‘(C) INTERIM APPLICATION OF ACCRUED

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

15 voluntary contributions as provided in subpara16 graphs (A) and (B), is inadequate to cover cur17 rent collective total costs, the collective, with 

18 approval of its board of directors, may apply 

19 unclaimed accrued royalties on an interim basis 

20 to defray such costs, subject to future reim21 bursement of such royalties from future collec22 tions of the assessment. 

23 ‘‘(D) DETERMINATION OF ADMINISTRA24 TIVE ASSESSMENT.— 


pbinns on DSK79D2C42PROD with BILLS
85 

•HR 5447 RH

1 ‘‘(i) ADMINISTRATIVE ASSESSMENT TO

2 COVER COLLECTIVE TOTAL COSTS.—The 

3 administrative assessment shall be used 

4 solely and exclusively to fund the collective 

5 total costs. 

6 ‘‘(ii) SEPARATE PROCEEDING BEFORE

7 COPYRIGHT ROYALTY JUDGES.—The 

8 amount and terms of the administrative 

9 assessment shall be determined and estab10 lished in a separate and independent pro11 ceeding before the Copyright Royalty 

12 Judges, according to the procedures de13 scribed in clauses (iii) and (iv). The admin14 istrative assessment determined in such 

15 proceeding shall— 

16 ‘‘(I) be wholly independent of 

17 royalty rates and terms applicable to 

18 digital music providers, which shall 

19 not be taken into consideration in any 

20 manner in establishing the adminis21 trative assessment; 

22 ‘‘(II) be established by the Copy23 right Royalty Judges in an amount 

24 that is calculated to defray the rea25 sonable collective total costs; 


pbinns on DSK79D2C42PROD with BILLS
86 

•HR 5447 RH

1 ‘‘(III) be assessed based on usage 

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

5 both compulsory and nonblanket li6 censes; 

7 ‘‘(IV) may be in the form of a 

8 percentage of royalties payable under 

9 this section for usage of musical 

10 works in covered activities (regardless 

11 of whether a different rate applies 

12 under a voluntary license), or any 

13 other usage-based metric reasonably 

14 calculated to equitably allocate the 

15 collective total costs across digital 

16 music providers and significant non17 blanket licensees engaged in covered 

18 activities, but shall include as a com19 ponent a minimum fee for all digital 

20 music providers and significant non21 blanket licensees; and 

22 ‘‘(V) take into consideration an23 ticipated future collective total costs 

24 and collections of the administrative 

25 assessment, but also, as applicable— 


pbinns on DSK79D2C42PROD with BILLS
87 

•HR 5447 RH

1 ‘‘(aa) any portion of past ac2 tual collective total costs of the 

3 mechanical licensing collective 

4 not funded by previous collections 

5 of the administrative assessment 

6 or voluntary contributions be7 cause such collections or con8 tributions together were insuffi9 cient to fund such costs; 

10 ‘‘(bb) any past collections of 

11 the administrative assessment 

12 and voluntary contributions that 

13 exceeded past actual collective 

14 total costs, resulting in a surplus; 

15 and 

16 ‘‘(cc) the amount of any vol17 untary contributions by digital 

18 music providers or significant 

19 nonblanket licensees in relevant 

20 periods, described in subpara21 graphs (A) and (B) of paragraph 

22 (7). 

23 ‘‘(iii) INITIAL ADMINISTRATIVE AS24 SESSMENT.—The procedure for estabVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00087 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
88 

•HR 5447 RH

1 lishing the initial administrative assess2 ment shall be as follows: 

3 ‘‘(I) The Copyright Royalty 

4 Judges shall commence a proceeding 

5 to establish the initial administrative 

6 assessment within 9 months after the 

7 enactment date by publishing a notice 

8 in the Federal Register seeking peti9 tions to participate. 

10 ‘‘(II) The mechanical licensing 

11 collective and digital licensee coordi12 nator shall participate in such pro13 ceeding, along with any interested 

14 copyright owners, digital music pro15 viders or significant nonblanket licens16 ees that have notified the Copyright 

17 Royalty Judges of their desire to par18 ticipate. 

19 ‘‘(III) The Copyright Royalty 

20 Judges shall establish a schedule for 

21 submission by the parties of informa22 tion that may be relevant to estab23 lishing the administrative assessment, 

24 including actual and anticipated col25 lective total costs of the mechanical liVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00088 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
89 

•HR 5447 RH

1 censing collective, actual and antici2 pated collections from digital music 

3 providers and significant nonblanket 

4 licensees, and documentation of vol5 untary contributions, as well as a 

6 schedule for further proceedings, 

7 which shall include a hearing, as they 

8 deem appropriate. 

9 ‘‘(IV) The initial administrative 

10 assessment shall be determined, and 

11 such determination shall be published 

12 in the Federal Register by the Copy13 right Royalty Judges, within 1 year 

14 after commencement of the proceeding 

15 described in this clause. The deter16 mination shall be supported by a writ17 ten record. The initial administrative 

18 assessment shall be effective as of the 

19 license availability date, and shall con20 tinue in effect unless and until an ad21 justed administrative assessment is 

22 established pursuant to an adjustment 

23 proceeding under clause (iii). 

24 ‘‘(iv) ADJUSTMENT OF ADMINISTRA25 TIVE ASSESSMENT.—The administrative 


pbinns on DSK79D2C42PROD with BILLS
90 

•HR 5447 RH

1 assessment may be adjusted by the Copy2 right Royalty Judges periodically, in ac3 cordance with the following procedures: 

4 ‘‘(I) No earlier than one year 

5 after the most recent publication of a 

6 determination of the administrative 

7 assessment by the Copyright Royalty 

8 Judges, the mechanical licensing col9 lective, the digital licensee coordi10 nator, or one or more interested copy11 right owners, digital music providers, 

12 or significant nonblanket licensees, 

13 may file a petition with the Copyright 

14 Royalty Judges in the month of Octo15 ber to commence a proceeding to ad16 just the administrative assessment. 

17 ‘‘(II) Notice of the commence18 ment of such proceeding shall be pub19 lished in the Federal Register in the 

20 month of November following the fil21 ing of any petition, with a schedule of 

22 requested information and additional 

23 proceedings, as described in clause 

24 (iii)(III). The mechanical licensing 

25 collective and digital licensee coordiVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00090 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
91 

•HR 5447 RH

1 nator shall participate in such pro2 ceeding, along with any interested 

3 copyright owners, digital music pro4 viders, or significant nonblanket li5 censees that have notified the Copy6 right Royalty Judges of their desire to 

7 participate. 

8 ‘‘(III) The determination of the 

9 adjusted administrative assessment, 

10 which shall be supported by a written 

11 record, shall be published in the Fed12 eral Register during November of the 

13 calendar year following the commence14 ment of the proceeding. The adjusted 

15 administrative assessment shall take 

16 effect January 1 of the year following 

17 such publication. 

18 ‘‘(v) ADOPTION OF VOLUNTARY

19 AGREEMENTS.—In lieu of reaching their 

20 own determination based on evaluation of 

21 relevant data, the Copyright Royalty 

22 Judges shall approve and adopt a nego23 tiated agreement to establish the amount 

24 and terms of the administrative assessment 

25 that has been agreed to by the mechanical 


pbinns on DSK79D2C42PROD with BILLS
92 

•HR 5447 RH

1 licensing collective and the digital licensee 

2 coordinator (or if none has been des3 ignated, interested digital music providers 

4 and significant nonblanket licensees rep5 resenting more than half of the market for 

6 uses of musical works in covered activi7 ties), but the Copyright Royalty Judges 

8 shall have the discretion to reject any such 

9 agreement for good cause shown. An ad10 ministrative assessment adopted under this 

11 clause shall apply to all digital music pro12 viders and significant nonblanket licensees 

13 engaged in covered activities during the pe14 riod it is in effect. 

15 ‘‘(vi) CONTINUING AUTHORITY TO

16 AMEND.—The Copyright Royalty Judges 

17 shall retain continuing authority to amend 

18 a determination of an administrative as19 sessment to correct technical or clerical er20 rors, or modify the terms of implementa21 tion, for good cause, with any such amend22 ment to be published in the Federal Reg23 ister. 

24 ‘‘(vii) APPEAL OF ADMINISTRATIVE

25 ASSESSMENT.—The determination of an 


pbinns on DSK79D2C42PROD with BILLS
93 

•HR 5447 RH

1 administrative assessment by the Copy2 right Royalty Judges shall be appealable, 

3 within 30 calendar days after publication 

4 in the Federal Register, to the Court of 

5 Appeals for the District of Columbia Cir6 cuit by any party that fully participated in 

7 the proceeding. The administrative assess8 ment as established by the Copyright Roy9 alty Judges shall remain in effect pending 

10 the final outcome of any such appeal, and 

11 the mechanical licensing collective, digital 

12 licensee coordinator, digital music pro13 viders, and significant nonblanket licensees 

14 shall implement appropriate financial or 

15 other measures within 3 months after any 

16 modification of the assessment to reflect 

17 and account for such outcome. 

18 ‘‘(viii) REGULATIONS.—The Copyright 

19 Royalty Judges may adopt regulations to 

20 govern the conduct of proceedings under 

21 this paragraph. 

22 ‘‘(8) ESTABLISHMENT OF RATES AND TERMS

23 UNDER BLANKET LICENSE.— 

24 ‘‘(A) RESTRICTIONS ON RATESETTING

25 PARTICIPATION.—Neither the mechanical liVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00093 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
94 

•HR 5447 RH

1 censing collective nor the digital licensee coordi2 nator shall be a party to a proceeding described 

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

4 and provide financial and other information for 

5 the use of a party to such a proceeding and 

6 comply with requests for information as re7 quired under applicable statutory and regu8 latory provisions and rulings of the Copyright 

9 Royalty Judges. 

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

11 any proceeding described in subparagraph (A) 

12 in which the Copyright Royalty Judges estab13 lish a late fee for late payment of royalties for 

14 uses of musical works under this section, such 

15 fee shall apply to covered activities under blan16 ket licenses, as follows: 

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

18 payments shall accrue from the due date 

19 for payment until payment is received by 

20 the mechanical licensing collective. 

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

22 in no way prevent a copyright owner or the 

23 mechanical licensing collective from assert24 ing any other rights or remedies to which 

25 such copyright owner or the mechanical liVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00094 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
95 

•HR 5447 RH

1 censing collective may be entitled under 

2 this title. 

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

5 rate or terms have been established by the 

6 Copyright Royalty Judges, the mechanical li7 censing collective and any digital music provider 

8 may agree to an interim rate and terms for 

9 such activity under the blanket license, and any 

10 such rate and terms— 

11 ‘‘(i) shall be treated as nonpreceden12 tial and not cited or relied upon in any 

13 ratesetting proceeding before the Copyright 

14 Royalty Judges or any other tribunal; and 

15 ‘‘(ii) shall automatically expire upon 

16 the establishment of a rate and terms for 

17 such covered activity by the Copyright 

18 Royalty Judges, under subsection 

19 (c)(1)(E). 

20 ‘‘(D) ADJUSTMENTS FOR INTERIM

21 RATES.—The rate and terms established by the 

22 Copyright Royalty Judges for a covered activity 

23 to which an interim rate and terms have been 

24 agreed under subparagraph (C) shall supersede 

25 the interim rate and terms and apply retroVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00095 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
96 

•HR 5447 RH

1 actively to the inception of the activity under 

2 the blanket license. In such case, within 3 

3 months after the rate and terms established by 

4 the Copyright Royalty Judges become effec5 tive— 

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

7 Copyright Royalty Judges exceeds the in8 terim rate, the digital music provider shall 

9 pay to the mechanical licensing collective 

10 the amount of any underpayment of royal11 ties due; or 

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

13 rate established by the Copyright Royalty 

14 Judges, the mechanical licensing collective 

15 shall credit the account of the digital music 

16 provider for the amount of any overpay17 ment of royalties due. 

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

19 ‘‘(A) SUBSTITUTION OF BLANKET LI20 CENSE.—On the license availability date, a 

21 blanket license shall, without any interruption 

22 in license authority enjoyed by such digital 

23 music provider, be automatically substituted for 

24 and supersede any existing compulsory license 

25 previously obtained under this section by the 


pbinns on DSK79D2C42PROD with BILLS
97 

•HR 5447 RH

1 digital music provider from a copyright owner 

2 to engage in one or more covered activities with 

3 respect to a musical work, but the foregoing 

4 shall not apply to any authority obtained from 

5 a record company pursuant to a compulsory li6 cense to make and distribute permanent 

7 downloads unless and until such record com8 pany terminates such authority in writing to 

9 take effect at the end of a monthly reporting 

10 period, with a copy to the mechanical licensing 

11 collective. 

12 ‘‘(B) EXPIRATION OF EXISTING LI13 CENSES.—Except to the extent provided in sub14 paragraph (A), on and after the license avail15 ability date, licenses other than individual 

16 download licenses obtained under this section 

17 for covered activities prior to the license avail18 ability date shall no longer continue in effect. 

19 ‘‘(C) TREATMENT OF VOLUNTARY LI20 CENSES.—A voluntary license for a covered ac21 tivity in effect on the license availability date 

22 will remain in effect unless and until the vol23 untary license expires according to the terms of 

24 the voluntary license, or the parties agree to 

25 amend or terminate the voluntary license. In a 


pbinns on DSK79D2C42PROD with BILLS
98 

•HR 5447 RH

1 case where a voluntary license for a covered ac2 tivity entered into before the license availability 

3 date incorporates the terms of this section by 

4 reference, the terms so incorporated (but not 

5 the rates) shall be those in effect immediately 

6 prior to the license availability date, and those 

7 terms shall continue to apply unless and until 

8 such voluntary license is terminated or amend9 ed, or the parties enter into a new voluntary li10 cense. 

11 ‘‘(D) FURTHER ACCEPTANCE OF NOTICES

12 FOR COVERED ACTIVITIES BY COPYRIGHT OF13 FICE.—On and after the enactment date— 

14 ‘‘(i) the Copyright Office shall no 

15 longer accept notices of intention with re16 spect to covered activities; and 

17 ‘‘(ii) previously filed notices of inten18 tion will no longer be effective or provide 

19 license authority with respect to covered 

20 activities, but before the license availability 

21 date there shall be no liability under sec22 tion 501 for the reproduction or distribu23 tion of a musical work (or share thereof) 

24 in covered activities if a valid notice of inVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00098 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
99 

•HR 5447 RH

1 tention was filed for such work (or share) 

2 before the enactment date. 

3 ‘‘(10) PRIOR UNLICENSED USES.— 

4 ‘‘(A) LIMITATION ON LIABILITY IN GEN5 ERAL.—A copyright owner that commences an 

6 action under section 501 on or after January 1, 

7 2018, against a digital music provider for the 

8 infringement of the exclusive rights provided by 

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

10 from the unauthorized reproduction or distribu11 tion of a musical work by such digital music 

12 provider in the course of engaging in covered 

13 activities prior to the license availability date, 

14 shall, as the copyright owner’s sole and exclu15 sive remedy against the digital music provider, 

16 be eligible to recover the royalty prescribed 

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

18 this title, from the digital music provider, pro19 vided that such digital music provider can dem20 onstrate compliance with the requirements of 

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

22 cases the limitation on liability under this sub23 paragraph shall not apply. 

24 ‘‘(B) REQUIREMENTS FOR LIMITATION ON

25 LIABILITY.—The following requirements shall 


pbinns on DSK79D2C42PROD with BILLS
100 

•HR 5447 RH

1 apply on the enactment date and through the 

2 end of the period that expires 90 days after the 

3 license availability date to digital music pro4 viders seeking to avail themselves of the limita5 tion on liability described in subparagraph (A): 

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

7 after first making a particular sound re8 cording of a musical work available 

9 through its service via one or more covered 

10 activities, or 30 calendar days after the en11 actment date, whichever occurs later, a 

12 digital music provider shall engage in 

13 good-faith, commercially reasonable efforts 

14 to identify and locate each copyright owner 

15 of such musical work (or share thereof). 

16 Such required matching efforts shall in17 clude the following: 

18 ‘‘(I) Good-faith, commercially 

19 reasonable efforts to obtain from the 

20 owner of the corresponding sound re21 cording made available through the 

22 digital music provider’s service the fol23 lowing information: 

24 ‘‘(aa) Sound recording 

25 name, featured artist, sound reVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00100 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
101 

•HR 5447 RH

1 cording copyright owner, inter2 national standard recording code, 

3 and other information commonly 

4 used in the industry to identify 

5 sound recordings and match 

6 them to the musical works they 

7 embody. 

8 ‘‘(bb) Any available musical 

9 work ownership information, in10 cluding each songwriter and pub11 lisher name, percentage owner12 ship share, and international 

13 standard musical work code. 

14 ‘‘(II) Employment of one or more 

15 bulk electronic matching processes 

16 that are available to the digital music 

17 provider through a third-party vendor 

18 on commercially reasonable terms, but 

19 a digital music provider may rely on 

20 its own bulk electronic matching proc21 ess if it has capabilities comparable to 

22 or better than those available from a 

23 third-party vendor on commercially 

24 reasonable terms. 


pbinns on DSK79D2C42PROD with BILLS
102 

•HR 5447 RH

1 ‘‘(ii) The required matching efforts 

2 shall be repeated by the digital music pro3 vider no less than once per month for so 

4 long as the copyright owner remains un5 identified or has not been located. 

6 ‘‘(iii) If the required matching efforts 

7 are successful in identifying and locating a 

8 copyright owner of a musical work (or 

9 share thereof) by the end of the calendar 

10 month in which the digital music provider 

11 first makes use of the work, the digital 

12 music provider shall provide statements of 

13 account and pay royalties to such copy14 right owner in accordance with this section 

15 and applicable regulations. 

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

17 identified or located by the end of the cal18 endar month in which the digital music 

19 provider first makes use of the work, the 

20 digital music provider shall accrue and 

21 hold royalties calculated under the applica22 ble statutory rate in accordance with usage 

23 of the work, from initial use of the work 

24 until the accrued royalties can be paid to 

25 the copyright owner or are required to be 


pbinns on DSK79D2C42PROD with BILLS
103 

•HR 5447 RH

1 transferred to the mechanical licensing col2 lective, as follows: 

3 ‘‘(I) Accrued royalties shall be 

4 maintained by the digital music pro5 vider in accordance with generally ac6 cepted accounting principles. 

7 ‘‘(II) If a copyright owner of an 

8 unmatched musical work (or share 

9 thereof) is identified and located by or 

10 to the digital music provider before 

11 the license availability date, the digital 

12 music provider shall— 

13 ‘‘(aa) within 45 calendar 

14 days after the end of the cal15 endar month during which the 

16 copyright owner was identified 

17 and located, pay the copyright 

18 owner all accrued royalties, such 

19 payment to be accompanied by a 

20 cumulative statement of account 

21 that includes all of the informa22 tion that would have been pro23 vided to the copyright owner had 

24 the digital music provider been 

25 providing monthly statements of 


pbinns on DSK79D2C42PROD with BILLS
104 

•HR 5447 RH

1 account to the copyright owner 

2 from initial use of the work in 

3 accordance with this section and 

4 applicable regulations, including 

5 the requisite certification under 

6 subsection (c)(2)(I); 

7 ‘‘(bb) beginning with the ac8 counting period following the cal9 endar month in which the copy10 right owner was identified and lo11 cated, and for all other account12 ing periods prior to the license 

13 availability date, provide monthly 

14 statements of account and pay 

15 royalties to the copyright owner 

16 as required under this section 

17 and applicable regulations; and 

18 ‘‘(cc) beginning with the 

19 monthly royalty reporting period 

20 commencing on the license avail21 ability date, report usage and pay 

22 royalties for such musical work 

23 (or share thereof) for such re24 porting period and reporting pe25 riods thereafter to the mechanical 


pbinns on DSK79D2C42PROD with BILLS
105 

•HR 5447 RH

1 licensing collective, as required 

2 under this subsection and appli3 cable regulations. 

4 ‘‘(III) If a copyright owner of an 

5 unmatched musical work (or share 

6 thereof) is not identified and located 

7 by the license availability date, the 

8 digital music provider shall— 

9 ‘‘(aa) within 45 calendar 

10 days after the license availability 

11 date, transfer all accrued royal12 ties to the mechanical licensing 

13 collective, such payment to be ac14 companied by a cumulative state15 ment of account that includes all 

16 of the information that would 

17 have been provided to the copy18 right owner had the digital music 

19 provider been serving monthly 

20 statements of account on the 

21 copyright owner from initial use 

22 of the work in accordance with 

23 this section and applicable regu24 lations, including the requisite 

25 certification under subsection 


pbinns on DSK79D2C42PROD with BILLS
106 

•HR 5447 RH

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

2 additional certification by a duly 

3 authorized officer of the digital 

4 music provider that the digital 

5 music provider has fulfilled the 

6 requirements of clauses (i) and 

7 (ii) of subparagraph (B) but has 

8 not been successful in locating or 

9 identifying the copyright owner; 

10 and 

11 ‘‘(bb) beginning with the 

12 monthly royalty reporting period 

13 commencing on the license avail14 ability date, report usage and pay 

15 royalties for such musical work 

16 (or share thereof) for such period 

17 and reporting periods thereafter 

18 to the mechanical licensing collec19 tive, as required under this sub20 section and applicable regula21 tions. 

22 ‘‘(v) SUSPENSION OF LATE FEES.—A 

23 digital music provider that complies with 

24 the requirements of this paragraph with 

25 respect to unmatched musical works (or 


pbinns on DSK79D2C42PROD with BILLS
107 

•HR 5447 RH

1 shares of works) shall not be liable for or 

2 accrue late fees for late payments of royal3 ties for such works until such time as the 

4 digital music provider is required to begin 

5 paying monthly royalties to the copyright 

6 owner or the mechanical licensing collec7 tive, as applicable. 

8 ‘‘(C) ADJUSTED STATUTE OF LIMITA9 TIONS.—Notwithstanding anything to the con10 trary in section 507(b), with respect to any 

11 claim of infringement of the exclusive rights 

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

13 106 against a digital music provider arising 

14 from the unauthorized reproduction or distribu15 tion of a musical work by such digital music 

16 provider to engage in covered activities that ac17 crued no more than 3 years prior to the license 

18 availability date, such action may be com19 menced within 3 years of the date the claim ac20 crued, or up to 2 years after the license avail21 ability date, whichever is later. 

22 ‘‘(D) OTHER RIGHTS AND REMEDIES PRE23 SERVED.—Except as expressly provided in this 

24 paragraph, nothing in this paragraph shall be 

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


pbinns on DSK79D2C42PROD with BILLS
108 

•HR 5447 RH

1 remedy of a copyright owner with respect to un2 authorized use of a musical work. 

3 ‘‘(E) REMEDY IN FEDERAL DISTRICT

4 COURT.—A person may bring a claim in a Fed5 eral district court of competent jurisdiction for 

6 an issue that is not adequately resolved by the 

7 board of directors or a committee of the me8 chanical licensing collective, as applicable. 

9 ‘‘(11) LEGAL PROTECTIONS FOR LICENSING AC10 TIVITIES.— 

11 ‘‘(A) EXEMPTION FOR COMPULSORY LI12 CENSE ACTIVITIES.—The antitrust exemption 

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

14 negotiations and agreements between and 

15 among copyright owners and persons entitled to 

16 obtain a compulsory license for covered activi17 ties, and common agents acting on behalf of 

18 such copyright owners or persons, including 

19 with respect to the administrative assessment 

20 established under this subsection. 

21 ‘‘(B) LIMITATION ON COMMON AGENT EX22 EMPTION.—Notwithstanding the antitrust ex23 emption provided in subsection (c)(1)(D) and 

24 subparagraph (A) (except for the administrative 

25 assessment referenced therein and except as 


pbinns on DSK79D2C42PROD with BILLS
109 

•HR 5447 RH

1 provided in paragraph (8)(C)), neither the me2 chanical licensing collective nor the digital li3 censee coordinator shall serve as a common 

4 agent with respect to the establishment of roy5 alty rates or terms under this section. 

6 ‘‘(C) ANTITRUST EXEMPTION FOR ADMIN7 ISTRATIVE ACTIVITIES.—Notwithstanding any 

8 provision of the antitrust laws, copyright own9 ers and persons entitled to obtain a compulsory 

10 license under this section may designate the 

11 mechanical licensing collective to administer vol12 untary licenses for the reproduction or distribu13 tion of musical works in covered activities on 

14 behalf of such copyright owners and persons, 

15 but the following conditions apply: 

16 ‘‘(i) Each copyright owner shall estab17 lish the royalty rates and material terms of 

18 any such voluntary license individually and 

19 not in agreement, combination, or concert 

20 with any other copyright owner. 

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

22 compulsory license under this section shall 

23 establish the royalty rates and material 

24 terms of any such voluntary license indi25 vidually and not in agreement, combinaVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00109 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
110 

•HR 5447 RH

1 tion, or concert with any other digital 

2 music provider. 

3 ‘‘(iii) The mechanical licensing collec4 tive shall maintain the confidentiality of 

5 the voluntary licenses in accordance with 

6 the confidentiality provisions prescribed by 

7 the Register of Copyrights under para8 graph (12)(C). 

9 ‘‘(D) LIABILITY FOR GOOD-FAITH ACTIVI10 TIES.—The mechanical licensing collective shall 

11 not be liable to any person or entity based on 

12 a claim arising from its good-faith administra13 tion of policies and procedures adopted and im14 plemented to carry out the responsibilities de15 scribed in subparagraphs (J) and (K) of para16 graph (3), except to the extent of correcting an 

17 underpayment or overpayment of royalties as 

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

19 collective may participate in a legal proceeding 

20 as a stakeholder party if the collective is hold21 ing funds that are the subject of a dispute be22 tween copyright owners. For purposes of this 

23 subparagraph, ‘good-faith administration’ 

24 means administration in a manner that is not 

25 grossly negligent. 


pbinns on DSK79D2C42PROD with BILLS
111 

•HR 5447 RH

1 ‘‘(E) PREEMPTION OF STATE PROPERTY

2 LAWS.—The holding and distribution of funds 

3 by the mechanical licensing collective in accord4 ance with this subsection shall supersede and 

5 preempt any State law (including common law) 

6 concerning escheatment or abandoned property, 

7 or any analogous provision, that might other8 wise apply. 

9 ‘‘(12) REGULATIONS.— 

10 ‘‘(A) ADOPTION BY REGISTER OF COPY11 RIGHTS AND COPYRIGHT ROYALTY JUDGES.— 

12 The Register of Copyrights may conduct such 

13 proceedings and adopt such regulations as may 

14 be necessary or appropriate to effectuate the 

15 provisions of this subsection, except for regula16 tions concerning proceedings before the Copy17 right Royalty Judges to establish the adminis18 trative assessment, which shall be adopted by 

19 the Copyright Royalty Judges. 

20 ‘‘(B) JUDICIAL REVIEW OF REGULA21 TIONS.—Except as provided in paragraph 

22 (7)(D)(vii), regulations adopted under this sub23 section shall be subject to judicial review pursu24 ant to chapter 7 of title 5. 


pbinns on DSK79D2C42PROD with BILLS
112 

•HR 5447 RH

1 ‘‘(C) PROTECTION OF CONFIDENTIAL IN2 FORMATION.—The Register of Copyrights shall 

3 adopt regulations to provide for the appropriate 

4 procedures to ensure that confidential, private, 

5 proprietary, or privileged information contained 

6 in the records of the mechanical licensing collec7 tive and digital licensee coordinator is not im8 properly disclosed or used, including through 

9 any disclosure or use by the board of directors 

10 or personnel of either entity, and specifically in11 cluding the unclaimed royalties oversight com12 mittee and the dispute resolution committee of 

13 the mechanical licensing collective. 

14 ‘‘(13) SAVINGS CLAUSES.— 

15 ‘‘(A) LIMITATION ON ACTIVITIES AND

16 RIGHTS COVERED.—This subsection applies 

17 solely to uses of musical works subject to licens18 ing under this section. The blanket license shall 

19 not be construed to extend or apply to activities 

20 other than covered activities or to rights other 

21 than the exclusive rights of reproduction and 

22 distribution licensed under this section, or serve 

23 or act as the basis to extend or expand the 

24 compulsory license under this section to activiVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00112 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
113 

•HR 5447 RH

1 ties and rights not covered by this section on 

2 the enactment date. 

3 ‘‘(B) RIGHTS OF PUBLIC PERFORMANCE

4 NOT AFFECTED.—The rights, protections, and 

5 immunities granted under this subsection, the 

6 data concerning musical works collected and 

7 made available under this subsection, and the 

8 definitions described in subsection (e) shall not 

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

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

11 (5) by adding at the end the following new sub12 section: 

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

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

15 interest’ means interest accrued on accrued royal16 ties, as described in subsection (d)(3)(H)(ii). 

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

18 royalties’ means royalties accrued for the reproduc19 tion or distribution of a musical work (or share 

20 thereof) in a covered activity, calculated in accord21 ance with the applicable royalty rate under this sec22 tion. 

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

24 ‘administrative assessment’ means the fee estab25 lished pursuant to subsection (d)(7)(D). 


pbinns on DSK79D2C42PROD with BILLS
114 

•HR 5447 RH

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

2 compliance examination to verify the accuracy of 

3 royalty payments, or the conduct of such an exam4 ination, as applicable. 

5 ‘‘(5) BLANKET LICENSE.—The term ‘blanket li6 cense’ means a compulsory license described in sub7 section (d)(1)(A) to engage in covered activities. 

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

9 ‘collective total costs’— 

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

11 maintaining, and operating the mechanical li12 censing collective to fulfill its statutory func13 tions, including— 

14 ‘‘(i) startup costs; 

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

16 costs; 

17 ‘‘(iii) investments in information tech18 nology, infrastructure, and other long-term 

19 resources; 

20 ‘‘(iv) outside vendor costs; 

21 ‘‘(v) costs of licensing, royalty admin22 istration, and enforcement of rights; 

23 ‘‘(vi) costs of bad debt; and 

24 ‘‘(vii) costs of automated and manual 

25 efforts to identify and locate copyright 


pbinns on DSK79D2C42PROD with BILLS
115 

•HR 5447 RH

1 owners of musical works (and shares of 

2 such musical works) and match sound re3 cordings to the musical works the sound 

4 recordings embody; and 

5 ‘‘(B) does not include any added costs in6 curred by the mechanical licensing collective to 

7 provide services under voluntary licenses. 

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

9 activity’ means the activity of making a digital pho10 norecord delivery of a musical work, including in the 

11 form of a permanent download, limited download, or 

12 interactive stream, where such activity qualified for 

13 a compulsory license under this section. 

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

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

16 operating under the authority of that person) that, 

17 with respect to a service engaged in covered activi18 ties— 

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

20 or other economic relationship with end users of 

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

22 users exists, exercises direct control over the 

23 provision of the service to end users; 

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

25 and consideration generated by the service; and 


pbinns on DSK79D2C42PROD with BILLS
116 

•HR 5447 RH

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

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

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

5 term ‘digital licensee coordinator’ means the entity 

6 most recently designated pursuant to subsection 

7 (d)(5). 

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

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

13 transmission recipient of a phonorecord of that 

14 sound recording, regardless of whether the digital 

15 transmission is also a public performance of the 

16 sound recording or any musical work embodied 

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

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

21 sound recording where no reproduction of the sound 

22 recording or the musical work embodied therein is 

23 made from the inception of the transmission through 

24 to its receipt by the transmission recipient in order 

25 to make the sound recording audible. A digital phoVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00116 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
117 

•HR 5447 RH

1 norecord delivery does not include the digital trans2 mission of sounds accompanying a motion picture or 

3 other audiovisual work as defined in section 101 of 

4 this title. 

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

7 Musical Works Modernization Act. 

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

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

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

13 individual musical work. 

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

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

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

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

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

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

22 interactive stream is a digital phonorecord delivery. 

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

24 applied to a party seeking to participate in a pro25 ceeding under subsection (d)(7)(D), is a party as to 


pbinns on DSK79D2C42PROD with BILLS
118 

•HR 5447 RH

1 which the Copyright Royalty Judges have not deter2 mined that the party lacks a significant interest in 

3 such proceeding. 

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

5 ‘license availability date’ means the next January 1 

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

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

9 download’ means a digital transmission of a sound 

10 recording of a musical work in the form of a 

11 download, where such sound recording is accessible 

12 for listening only for a limited amount of time or 

13 specified number of times. 

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

16 that the copyright owner of such work (or share 

17 thereof) has been identified and located. 

18 ‘‘(18) MECHANICAL LICENSING COLLECTIVE.— 

19 The term ‘mechanical licensing collective’ means the 

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

22 ‘‘(19) MECHANICAL LICENSING COLLECTIVE

23 BUDGET.—The term ‘mechanical licensing collective 

24 budget’ means a statement of the financial position 

25 of the mechanical licensing collective for a fiscal year 


pbinns on DSK79D2C42PROD with BILLS
119 

•HR 5447 RH

1 or quarter thereof based on estimates of expendi2 tures during the period and proposals for financing 

3 them, including a calculation of the collective total 

4 costs. 

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

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

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

9 means a nonprofit created or organized in a State. 

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

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

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

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

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

18 the mechanical licensing collective that the licensee 

19 has been engaging in covered activities. 

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

21 ‘permanent download’ means a digital transmission 

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

23 of a download, where such sound recording is acces24 sible for listening without restriction as to the 


pbinns on DSK79D2C42PROD with BILLS
120 

•HR 5447 RH

1 amount of time or number of times it may be 

2 accessed. 

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

5 accountant with experience performing music royalty 

6 audits. 

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

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

9 and markets sound recordings of musical works, and 

10 distributes such sound recordings for remuneration 

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

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

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

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

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

19 term ‘required matching efforts’ means efforts to 

20 identify and locate copyright owners of musical 

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

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

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

24 or offering by or through which sound recordings of 


pbinns on DSK79D2C42PROD with BILLS
121 

•HR 5447 RH

1 musical works are digitally transmitted to members 

2 of the public. 

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

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

6 ‘‘(31) SIGNIFICANT NONBLANKET LICENSEE.— 

7 The term ‘significant nonblanket licensee’— 

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

9 entities under common ownership or control 

10 that, acting under the authority of one or more 

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

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

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

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

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

21 relationship with end users exists, exercises 

22 direct control over the provision of the 

23 service to end users; and 

24 ‘‘(iii) either— 


pbinns on DSK79D2C42PROD with BILLS
122 

•HR 5447 RH

1 ‘‘(I) on any day in a calendar 

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

4 works available through such service; 

5 or 

6 ‘‘(II) derives revenue or other 

7 consideration in connection with such 

8 covered activities greater than 

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

10 revenue or other consideration greater 

11 than $500,000 during the preceding 

12 12 calendar months; and 

13 ‘‘(B) does not include— 

14 ‘‘(i) an entity whose covered activity 

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

16 of segments of sound recordings of musical 

17 works that do not exceed 90 seconds in 

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

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

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

24 defined in section 118(f). 


pbinns on DSK79D2C42PROD with BILLS
123 

•HR 5447 RH

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

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

3 including a composer or lyricist. 

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

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

6 and each territory or possession of the United 

7 States. 

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

9 term ‘unclaimed accrued royalties’ means accrued 

10 royalties eligible for distribution under subsection 

11 (d)(3)(J). 

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

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

14 that the copyright owner of such work (or share 

15 thereof) has not been identified or located. 

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

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

20 (b) TECHNICAL AND CONFORMING AMENDMENTS TO

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

22 Code, is amended— 

23 (1) by redesignating paragraph (8) as para24 graph (9); and 


pbinns on DSK79D2C42PROD with BILLS
124 

•HR 5447 RH

1 (2) by inserting after paragraph (7) the fol2 lowing new paragraph: 

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

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

6 shall apply to the conduct of proceedings by the 

7 Copyright Royalty Judges under section 115(d) and 

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

10 (c) EFFECTIVE DATE OF AMENDED RATE SETTING

11 STANDARD.—The amendments made by subsections 

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

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

15 (d) TECHNICAL AND CONFORMING AMENDMENTS TO

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

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

20 37, Code of Federal Regulations to conform the definitions 

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

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

24 Royalty Judges shall make adjustments to the language 

25 of the regulations as necessary to achieve the same purVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00124 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
125 

•HR 5447 RH

1 pose and effect as the original regulations with respect to 

2 the rates and terms previously adopted by the Copyright 

3 Royalty Judges. 

4 SEC. 103. AMENDMENTS TO SECTION 114. 

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

6 title 17, United States Code, is amended— 

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

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

13 beginning on January 1 of the second year following 

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

18 proceeding shall bear their own costs. 

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

20 terms determined by the Copyright Royalty Judges 

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

22 copyright owners of sound recordings and entities 

23 performing sound recordings affected by this para24 graph during the 5-year period specified in subpara25 graph (A), or such other period as the parties may 


pbinns on DSK79D2C42PROD with BILLS
126 

•HR 5447 RH

1 agree. Such rates and terms shall distinguish among 

2 the different types of services then in operation and 

3 shall include a minimum fee for each such type of 

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

6 recordings and the degree to which use of the service 

7 may substitute for or may promote the purchase of 

8 phonorecords by consumers. The Copyright Royalty 

9 Judges shall establish rates and terms that most 

10 clearly represent the rates and terms that would 

11 have been negotiated in the marketplace between a 

12 willing buyer and a willing seller. In determining 

13 such rates and terms, the Copyright Royalty 

14 Judges— 

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

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

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

19 substitute for or may promote the sales of 

20 phonorecords or otherwise may interfere 

21 with or may enhance the sound recording 

22 copyright owner’s other streams of revenue 

23 from the copyright owner’s sound record24 ings; and 


pbinns on DSK79D2C42PROD with BILLS
127 

•HR 5447 RH

1 ‘‘(II) the relative roles of the copy2 right owner and the transmitting entity in 

3 the copyrighted work and the service made 

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

6 contribution, capital investment, cost, and 

7 risk; and 

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

9 comparable types of audio transmission services 

10 and comparable circumstances under voluntary 

11 license agreements. 

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

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

14 filed by any sound recording copyright owner or any 

15 transmitting entity indicating that a new type of 

16 service on which sound recordings are performed is 

17 or is about to become operational, for the purpose 

18 of determining reasonable terms and rates of royalty 

19 payments with respect to such new type of service 

20 for the period beginning with the inception of such 

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

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

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


pbinns on DSK79D2C42PROD with BILLS
128 

•HR 5447 RH

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

2 may agree.’’; and 

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

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

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

6 17, United States Code, is repealed. 

7 (c) USE IN MUSICAL WORK PROCEEDINGS.— 

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

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

11 be taken into account in any administrative, judicial, 

12 or other governmental proceeding to set or adjust 

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

15 in such a proceeding to set or adjust royalties for 

16 the public performance of musical works by means 

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

21 (2) DEFINITIONS.—In this subsection: 

22 (A) TRANSMISSION BY A BROADCASTER.— 

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

24 nonsubscription digital transmission made by a 

25 terrestrial broadcast station on its own behalf, 


pbinns on DSK79D2C42PROD with BILLS
129 

•HR 5447 RH

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

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

5 sound recordings customized for or customiz6 able by recipients or service users. 

7 (B) TERRESTRIAL BROADCAST STATION.— 

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

11 Communications Commission, including an FM 

12 Translator as defined in section 74.1231 of title 

13 47, Code of Federal Regulations, and whose 

14 primary business activities are comprised of, 

15 and revenues are generated through, terrestrial, 

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

18 retransmission by the terrestrial, over-the-air 

19 broadcast station of its over-the-air broadcast 

20 transmissions. 

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

22 shall not be given effect in interpreting provisions of title 

23 17, United States Code. 

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

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


pbinns on DSK79D2C42PROD with BILLS
130 

•HR 5447 RH

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

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

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

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

6 (f) DECISIONS AND PRECEDENTS NOT AFFECTED.— 

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

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

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

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

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

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

14 (g) TECHNICAL AND CONFORMING AMENDMENTS.— 

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

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

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

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

21 17, United States Code, is amended by striking 

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

23 ‘‘prevailing industry practices’’. 

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

25 17, United States Code, is amended— 


pbinns on DSK79D2C42PROD with BILLS
131 

•HR 5447 RH

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

2 114(f)(2)(C)’’; 

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

4 ‘‘114(f)(4)(B)(ii)’’ and inserting 

5 ‘‘114(f)(3)(B)(ii)’’; and 

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

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

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

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

11 amended— 

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

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

14 (2) by adding at the end the following new sub15 section: 

16 ‘‘(b) RANDOM ASSIGNMENT OF RATE COURT PRO17 CEEDINGS.— 

18 ‘‘(1) IN GENERAL.— 

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

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

21 case of any performing rights society subject to 

22 a consent decree, any application for the deter23 mination of a license fee for the public perform24 ance of music in accordance with the applicable 

25 consent decree shall be made in the district 


pbinns on DSK79D2C42PROD with BILLS
132 

•HR 5447 RH

1 court with jurisdiction over that consent decree 

2 and randomly assigned to a judge of that dis3 trict court according to that court’s rules for 

4 the division of business among district judges 

5 currently in effect or as may be amended from 

6 time to time, provided that any such application 

7 shall not be assigned to— 

8 ‘‘(i) a judge to whom continuing juris9 diction over any performing rights society 

10 for any performing rights society consent 

11 decree is assigned or has previously been 

12 assigned; or 

13 ‘‘(ii) a judge to whom another pro14 ceeding concerning an application for the 

15 determination of a reasonable license fee is 

16 assigned at the time of the filing of the ap17 plication. 

18 ‘‘(B) EXCEPTION.—Subparagraph (A) 

19 does not apply to an application to determine 

20 reasonable license fees made by individual pro21 prietors under section 513 of title 17. 

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

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

24 to a consent decree or to a proceeding to determine 

25 reasonable license fees, to make an application for 


pbinns on DSK79D2C42PROD with BILLS
133 

•HR 5447 RH

1 the construction of any provision of the applicable 

2 consent decree. Such application shall be referred to 

3 the judge to whom continuing jurisdiction over the 

4 applicable consent decree is currently assigned. If 

5 any such application is made in connection with a 

6 rate proceeding, such rate proceeding shall be stayed 

7 until the final determination of the construction ap8 plication. Disputes in connection with a rate pro9 ceeding about whether a licensee is similarly situated 

10 to another licensee shall not be subject to referral to 

11 the judge with continuing jurisdiction over the appli12 cable consent decree.’’. 

13 TITLE II—COMPENSATING LEG14 ACY ARTISTS FOR THEIR 

15 SONGS, SERVICE, AND IMPOR16 TANT CONTRIBUTIONS TO SO17 CIETY 

18 SEC. 201. SHORT TITLE. 

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

20 Artists for their Songs, Service, and Important Contribu21 tions to Society Act’’ or the ‘‘CLASSICS Act’’. 


pbinns on DSK79D2C42PROD with BILLS
134 

•HR 5447 RH

1 SEC. 202. UNAUTHORIZED DIGITAL PERFORMANCE OF PRE2 1972 SOUND RECORDINGS. 

3 (a) PROTECTION FOR UNAUTHORIZED DIGITAL PER4 FORMANCES.—Title 17, United States Code, is amended 

5 by adding at the end the following new chapter: 

6 ‘‘CHAPTER 14—UNAUTHORIZED DIGITAL 

7 PERFORMANCE OF PRE-1972 SOUND 

8 RECORDINGS 

‘‘Sec. 

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

9 ‘‘§ 1401. Unauthorized digital performance of pre10 1972 sound recordings 

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

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

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

14 transmission, a sound recording fixed on or after January 

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

16 to the remedies provided in sections 502 through 505 to 

17 the same extent as an infringer of copyright. 

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

19 digital audio transmission of a sound recording fixed on 

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

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

22 authorized and made with the consent of the rights owner 

23 if— 


pbinns on DSK79D2C42PROD with BILLS
135 

•HR 5447 RH

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

2 entity that is publicly performing sound recordings 

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

4 digital audio transmissions subject to section 114; 

5 ‘‘(2) the transmission would satisfy the require6 ments for statutory licensing under section 

7 114(d)(2), or would be exempt under section 

8 114(d)(1), if the sound recording were fixed on or 

9 after February 15, 1972; 

10 ‘‘(3) in the case of a transmission that would 

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

12 in paragraph (2), the transmitting entity pays statu13 tory royalties and provides notice of its use of the 

14 relevant sound recordings in the same manner as is 

15 required by regulations adopted by the Copyright 

16 Royalty Judges for sound recordings fixed on or 

17 after February 15, 1972; and 

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

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

20 in paragraph (2), the transmitting entity otherwise 

21 satisfies the requirements for statutory licensing 

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

23 ‘‘(c) TRANSMISSIONS BY DIRECT LICENSING OF

24 STATUTORY SERVICES.— 


pbinns on DSK79D2C42PROD with BILLS
136 

•HR 5447 RH

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

2 recording fixed on or after January 1, 1923, and be3 fore February 15, 1972, shall, for purposes of sub4 section (a), be considered to be authorized and made 

5 with the consent of the rights owner if such trans6 mission is included in a license agreement volun7 tarily negotiated at any time between the rights 

8 owner and the entity performing the sound record9 ing. 

10 ‘‘(2) PAYMENT OF ROYALTIES TO NONPROFIT

11 COLLECTIVE.—To the extent that such a license 

12 agreement entered into on or after the date of the 

13 enactment of this section extends to digital audio 

14 transmissions of a sound recording fixed on or after 

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

16 that meet the conditions of subsection (b), the li17 censee shall pay, to the collective designated to dis18 tribute receipts from the licensing of transmissions 

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

20 performance royalties for the transmissions due 

21 under the license, with such royalties fully credited 

22 as payments due under the license. 

23 ‘‘(3) DISTRIBUTION OF ROYALTIES BY COLLEC24 TIVE.—The collective described in paragraph (2) 

25 shall, in accordance with subparagraphs (B) through 


pbinns on DSK79D2C42PROD with BILLS
137 

•HR 5447 RH

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

2 (6) of section 114(g)), distribute the royalties re3 ceived under paragraph (2) under the license de4 scribed in paragraph (2). Such payments shall be 

5 the only payments to which featured and nonfea6 tured artists are entitled by virtue of the trans7 missions described in paragraph (2) under the li8 cense. 

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

10 does not prohibit any other license from directing 

11 the licensee to pay other royalties due to featured 

12 and nonfeatured artists for such transmissions to 

13 the collective designated to distribute receipts from 

14 the licensing of transmissions in accordance with 

15 section 114(f). 

16 ‘‘(d) RELATIONSHIP TO STATE LAW.— 

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

18 shall be construed to annul or limit any rights or 

19 remedies under the common law or statutes of any 

20 State for sound recordings fixed before February 15, 

21 1972, except, notwithstanding section 301(c), for the 

22 following: 

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

24 common law copyright or equivalent right under 

25 the laws of any State arising from any digital 


pbinns on DSK79D2C42PROD with BILLS
138 

•HR 5447 RH

1 audio transmission that is made, on and after 

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

3 sound recording fixed on or after January 1, 

4 1923, and before February 15, 1972. 

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

6 common law copyright or equivalent right under 

7 the laws of any State arising from any repro8 duction that is made, on and after the date of 

9 the enactment of this section, of a sound re10 cording fixed on or after January 1, 1923, and 

11 before February 15, 1972, and that would sat12 isfy the requirements for statutory licensing 

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

14 if the sound recording were fixed on or after 

15 February 15, 1972. 

16 ‘‘(C) This section preempts any claim of 

17 common law copyright or equivalent right under 

18 the laws of any State arising from any digital 

19 audio transmission or reproduction that is 

20 made, before the date of the enactment of this 

21 section, of a sound recording fixed on or after 

22 January 1, 1923, and before February 15, 

23 1972, if— 

24 ‘‘(i) the digital audio transmission 

25 would have satisfied the requirements for 


pbinns on DSK79D2C42PROD with BILLS
139 

•HR 5447 RH

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

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

3 the reproduction would have satisfied the 

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

5 case may be, if the sound recording were 

6 fixed on or after February 15, 1972; and 

7 ‘‘(ii) except in the case of trans8 missions that would have been exempt 

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

10 entity, before the end of the 270-day pe11 riod beginning on the date of the enact12 ment of this section, pays statutory royal13 ties and provides notice of the use of the 

14 relevant sound recordings in the same 

15 manner as is required by regulations 

16 adopted by the Copyright Royalty Judges 

17 for sound recordings that are protected 

18 under this title for all the digital audio 

19 transmissions and reproductions satisfying 

20 the requirements for statutory licensing 

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

22 112(e)(1) during the 3 years prior to the 

23 date of the enactment of this section. 

24 ‘‘(2) RULE OF CONSTRUCTION FOR COMMON

25 LAW COPYRIGHT.—For purposes of subparagraphs 


pbinns on DSK79D2C42PROD with BILLS
140 

•HR 5447 RH

1 (A) through (C) of paragraph (1), a claim of com2 mon law copyright or equivalent right under the 

3 laws of any State includes a claim that characterizes 

4 conduct subject to such subparagraphs as an unlaw5 ful distribution, act of record piracy, or similar viola6 tion. 

7 ‘‘(3) RULE OF CONSTRUCTION FOR PUBLIC

8 PERFORMANCE RIGHTS.—Nothing in this section 

9 shall be construed to recognize or negate the exist10 ence of public performance rights in sound record11 ings under the laws of any State. 

12 ‘‘(e) LIMITATIONS ON REMEDIES.— 

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

14 AND EDUCATIONAL INSTITUTIONS.—The limitations 

15 on the exclusive rights of a copyright owner de16 scribed in sections 107, 108, and 110(1) and (2) 

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

18 unauthorized performance of a sound recording fixed 

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

20 15, 1972. 

21 ‘‘(2) ACTIONS.—The limitations on actions de22 scribed in section 507 shall apply to a claim under 

23 subsection (a) for the unauthorized performance of 

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

25 and before February 15, 1972. 


pbinns on DSK79D2C42PROD with BILLS
141 

•HR 5447 RH

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

2 apply to a claim under subsection (a) for the unau3 thorized performance of a sound recording fixed on 

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

5 1972. 

6 ‘‘(4) PRINCIPLES OF EQUITY.—Principles of eq7 uity apply to remedies for a violation of this section 

8 to the same extent as such principles apply to rem9 edies for infringement of copyright. 

10 ‘‘(5) FILING REQUIREMENT FOR STATUTORY

11 DAMAGES AND ATTORNEYS’ FEES.— 

12 ‘‘(A) FILING OF INFORMATION ON SOUND

13 RECORDINGS.— 

14 ‘‘(i) FILING REQUIREMENT.—Except 

15 in the case of a transmitting entity that 

16 has filed contact information for that 

17 transmitting entity under subparagraph 

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

19 award of statutory damages or of attor20 neys’ fees under section 504 or 505 may 

21 be made with respect to an unauthorized 

22 transmission of a sound recording under 

23 subsection (a) only if— 

24 ‘‘(I) the rights owner has filed 

25 with the Copyright Office a schedule 


pbinns on DSK79D2C42PROD with BILLS
142 

•HR 5447 RH

1 that specifies the title, artist, and 

2 rights owner of the sound recording 

3 and contains such other information, 

4 as practicable, as the Register of 

5 Copyrights prescribes by regulation; 

6 and 

7 ‘‘(II) the transmission is made 

8 after the end of the 90-day period be9 ginning on the date on which the in10 formation filed under subclause (I) is 

11 indexed into the public records of the 

12 Copyright Office. 

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

14 Copyrights shall, before the end of the 

15 180-day period beginning on the date of 

16 the enactment of this section, issue regula17 tions establishing the form, content, and 

18 procedures for the filing of schedules under 

19 clause (i). Such regulations shall provide 

20 that persons may request that they receive 

21 timely notification of such filings, and shall 

22 set forth the manner in which such re23 quests may be made. 

24 ‘‘(B) FILING OF CONTACT INFORMATION

25 FOR TRANSMITTING ENTITIES.— 


pbinns on DSK79D2C42PROD with BILLS
143 

•HR 5447 RH

1 ‘‘(i) FILING REQUIREMENT.—The 

2 Register of Copyrights shall, before the 

3 end of the 30-day period beginning on the 

4 date of the enactment of this section, issue 

5 regulations establishing the form, content, 

6 and procedures for the filing, by any entity 

7 that, as of the date of the enactment of 

8 this section, performs sound recordings 

9 fixed before February 15, 1972, by means 

10 of digital audio transmissions, of contact 

11 information for such entity. 

12 ‘‘(ii) TIME LIMIT ON FILINGS.—The 

13 Register of Copyrights may accept filings 

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

15 after the date of the enactment of this sec16 tion. 

17 ‘‘(iii) LIMITATION ON STATUTORY

18 DAMAGES AND ATTORNEYS’ FEES.— 

19 ‘‘(I) LIMITATION.—An award of 

20 statutory damages or of attorneys’ 

21 fees under section 504 or 505 may 

22 not be made, against an entity that 

23 has filed contact information for that 

24 entity under clause (i), with respect to 

25 an unauthorized transmission by that 


pbinns on DSK79D2C42PROD with BILLS
144 

•HR 5447 RH

1 entity of a sound recording under sub2 section (a) if the transmission is made 

3 before the end of the 90-day period 

4 beginning on the date on which the 

5 entity receives a notice that— 

6 ‘‘(aa) is sent by or on behalf 

7 of the rights owner of the sound 

8 recording; 

9 ‘‘(bb) states that the entity 

10 is not legally authorized to trans11 mit that sound recording under 

12 subsection (a); and 

13 ‘‘(cc) identifies the sound re14 cording in a schedule conforming 

15 to the requirements prescribed by 

16 the regulations issued under sub17 paragraph (A)(ii). 

18 ‘‘(II) UNDELIVERABLE NO19 TICES.—In any case in which a notice 

20 under subclause (I) is sent to an enti21 ty by mail or courier service and the 

22 notice is returned to the sender be23 cause the entity either is no longer lo24 cated at the address provided in the 

25 contact information filed under clause 


pbinns on DSK79D2C42PROD with BILLS
145 

•HR 5447 RH

1 (i) or has refused to accept delivery, 

2 or the notice is sent by electronic mail 

3 and is undeliverable, the 90-day pe4 riod under subclause (I) shall begin 

5 on the date of the attempted delivery. 

6 ‘‘(C) SECTION 412.—Section 412 shall not 

7 limit an award of statutory damages under sec8 tion 504(c) or attorneys’ fees under section 505 

9 with respect to an unauthorized transmission of 

10 a sound recording under subsection (a). 

11 ‘‘(6) APPLICABILITY OF OTHER PROVISIONS.— 

12 ‘‘(A) IN GENERAL.—Subject to subpara13 graph (B), no provision of this title shall apply 

14 to or limit the remedies available under this 

15 section except as otherwise provided in this sec16 tion. 

17 ‘‘(B) APPLICABILITY OF DEFINITIONS.— 

18 Any term used in this section that is defined in 

19 section 101 shall have the meaning given that 

20 term in section 101. 

21 ‘‘(f) APPLICATION OF SECTION 230 SAFE HAR22 BOR.—For purposes of section 230 of the Communica23 tions Act of 1934 (47 U.S.C. 230), subsection (a) shall 

24 be considered to be a ‘law pertaining to intellectual prop25 erty’ under subsection (e)(2) of such section. 


pbinns on DSK79D2C42PROD with BILLS
146 

•HR 5447 RH

1 ‘‘(g) RIGHTS OWNER DEFINED.—In this section, the 

2 term ‘rights owner’ means the person who has the exclu3 sive right to reproduce a sound recording under the laws 

4 of any State.’’. 

5 (b) CONFORMING AMENDMENT.—The table of chap6 ters for title 17, United States Code, is amended by add7 ing at the end the following new chapter: 

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

8 SEC. 203. EFFECTIVE DATE. 

9 This title and the amendments made by this title 

10 shall take effect on the date of the enactment of this Act. 

11 TITLE III—ALLOCATION FOR 

12 MUSIC PRODUCERS 

13 SEC. 301. SHORT TITLE. 

14 This title may be cited as the ‘‘Allocation for Music 

15 Producers Act’’ or the ‘‘AMP Act’’. 

16 SEC. 302. PAYMENT OF STATUTORY PERFORMANCE ROYAL17 TIES. 

18 (a) LETTER OF DIRECTION.—Section 114(g) of title 

19 17, United States Code, is amended by adding at the end 

20 the following new paragraph: 

21 ‘‘(5) LETTER OF DIRECTION.— 

22 ‘‘(A) IN GENERAL.—A nonprofit collective 

23 designated by the Copyright Royalty Judges to 

24 distribute receipts from the licensing of trans25 missions in accordance with subsection (f) shall 


pbinns on DSK79D2C42PROD with BILLS
147 

•HR 5447 RH

1 adopt and reasonably implement a policy that 

2 provides, in circumstances determined by the 

3 collective to be appropriate, for acceptance of 

4 instructions from an artist payee identified 

5 under subparagraph (A) or (D) of paragraph 

6 (2) to distribute, to a producer, mixer, or sound 

7 engineer who was part of the creative process 

8 that created a sound recording, a portion of the 

9 payments to which the artist payee would other10 wise be entitled from the licensing of trans11 missions of the sound recording. In this section, 

12 such instructions shall be referred to as a ‘letter 

13 of direction’. 

14 ‘‘(B) ACCEPTANCE OF LETTER.—To the 

15 extent that the collective accepts a letter of di16 rection under subparagraph (A), the person en17 titled to payment pursuant to the letter of di18 rection shall, during the period in which the let19 ter of direction is in effect and carried out by 

20 the collective, be treated for all purposes as the 

21 owner of the right to receive such payment, and 

22 the artist payee providing the letter of direction 

23 to the collective shall be treated as having no 

24 interest in such payment. 


pbinns on DSK79D2C42PROD with BILLS
148 

•HR 5447 RH

1 ‘‘(C) AUTHORITY OF COLLECTIVE.—This 

2 paragraph shall not be construed in such a 

3 manner so that the collective is not authorized 

4 to accept or act upon payment instructions in 

5 circumstances other than those to which this 

6 paragraph applies.’’. 

7 (b) ADDITIONAL PROVISIONS FOR RECORDINGS

8 FIXED BEFORE NOVEMBER 1, 1995.—Section 114(g) of 

9 title 17, United States Code, as amended by subsection 

10 (a), is further amended by adding at the end the following 

11 new paragraph: 

12 ‘‘(6) SOUND RECORDINGS FIXED BEFORE NO13 VEMBER 1, 1995.— 

14 ‘‘(A) PAYMENT ABSENT LETTER OF DI15 RECTION.—A nonprofit collective designated by 

16 the Copyright Royalty Judges to distribute re17 ceipts from the licensing of transmissions in ac18 cordance with subsection (f) (in this paragraph 

19 referred to as the ‘collective’) shall adopt and 

20 reasonably implement a policy that provides, in 

21 circumstances determined by the collective to be 

22 appropriate, for the deduction of 2 percent of 

23 all the receipts that are collected from the li24 censing of transmissions of a sound recording 

25 fixed before November 1, 1995, but which is 


pbinns on DSK79D2C42PROD with BILLS
149 

•HR 5447 RH

1 withdrawn from the amount otherwise payable 

2 under paragraph (2)(D) to the recording artist 

3 or artists featured on the sound recording (or 

4 the persons conveying rights in the artists’ per5 formance in the sound recording), and the dis6 tribution of such amount to one or more per7 sons described in subparagraph (B), after de8 duction of costs described in paragraph (3) or 

9 (4), as applicable, if each of the following re10 quirements is met: 

11 ‘‘(i) CERTIFICATION OF ATTEMPT TO

12 OBTAIN A LETTER OF DIRECTION.—The 

13 person described in subparagraph (B) who 

14 is to receive the distribution has certified 

15 to the collective, under penalty of perjury, 

16 that— 

17 ‘‘(I) for a period of at least 4 

18 months, that person made reasonable 

19 efforts to contact the artist payee for 

20 such sound recording to request and 

21 obtain a letter of direction instructing 

22 the collective to pay to that person a 

23 portion of the royalties payable to the 

24 featured recording artist or artists; 

25 and 


pbinns on DSK79D2C42PROD with BILLS
150 

•HR 5447 RH

1 ‘‘(II) during the period beginning 

2 on the date that person began the rea3 sonable efforts described in subclause 

4 (I) and ending on the date of that 

5 person’s certification to the collective, 

6 the artist payee did not affirm or 

7 deny in writing the request for a let8 ter of direction. 

9 ‘‘(ii) COLLECTIVE ATTEMPT TO CON10 TACT ARTIST.—After receipt of the certifi11 cation described in clause (i) and for a pe12 riod of at least 4 months before the collec13 tive’s first distribution to the person de14 scribed in subparagraph (B), the collective 

15 attempted, in a reasonable manner as de16 termined by the collective, to notify the 

17 artist payee of the certification made by 

18 the person described in subparagraph (B). 

19 ‘‘(iii) NO OBJECTION RECEIVED.—The 

20 artist payee did not, as of the date that is 

21 10 business days before the date on which 

22 the first distribution is made, submit to 

23 the collective in writing an objection to the 

24 distribution. 


pbinns on DSK79D2C42PROD with BILLS
151 

•HR 5447 RH

1 ‘‘(B) ELIGIBILITY FOR PAYMENT.—A per2 son shall be eligible for payment under subpara3 graph (A) if the person— 

4 ‘‘(i) is a producer, mixer, or sound en5 gineer of the sound recording; 

6 ‘‘(ii) has entered into a written con7 tract with a record company involved in 

8 the creation or lawful exploitation of the 

9 sound recording, or with the recording art10 ist or artists featured on the sound record11 ing (or the persons conveying rights in the 

12 artists’ performance in the sound record13 ing), under which the person seeking pay14 ment is entitled to participate in royalty 

15 payments that are based on the exploi16 tation of the sound recording and are pay17 able from royalties otherwise payable to 

18 the recording artist or artists featured on 

19 the sound recording (or the persons con20 veying rights in the artists’ performance in 

21 the sound recording); 

22 ‘‘(iii) made a creative contribution to 

23 the creation of the sound recording; and 

24 ‘‘(iv) submits a written certification to 

25 the collective stating, under penalty of perVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00151 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
152 

•HR 5447 RH

1 jury, that the person meets the require2 ments in clauses (i) through (iii) and in3 cludes a true copy of the contract de4 scribed in clause (ii). 

5 ‘‘(C) MULTIPLE CERTIFICATIONS.—Sub6 ject to subparagraph (D), in a case in which 

7 more than one person described in subpara8 graph (B) has met the requirements for a dis9 tribution under subparagraph (A) with respect 

10 to a sound recording as of the date that is 10 

11 business days before the date on which a dis12 tribution is made, the collective shall divide the 

13 2 percent distribution equally among all such 

14 persons. 

15 ‘‘(D) OBJECTION TO PAYMENT.—Not later 

16 than 10 business days after the date on which 

17 the collective receives from the artist payee a 

18 written objection to a distribution made pursu19 ant to subparagraph (A), the collective shall 

20 cease making any further payment relating to 

21 such distribution. In any case in which the col22 lective has made one or more distributions pur23 suant to subparagraph (A) to a person de24 scribed in subparagraph (B) before the date 

25 that is 10 business days after the date on which 


pbinns on DSK79D2C42PROD with BILLS
153 

•HR 5447 RH

1 the collective receives from the artist payee an 

2 objection to such distribution, the objection 

3 shall not affect that person’s entitlement to any 

4 distribution made before the collective ceases 

5 such distribution under this subparagraph. 

6 ‘‘(E) OWNERSHIP OF THE RIGHT TO RE7 CEIVE PAYMENTS.—To the extent that the col8 lective determines that a distribution will be 

9 made under subparagraph (A) to a person de10 scribed in subparagraph (B), such person shall, 

11 during the period covered by such distribution, 

12 be treated for all purposes as the owner of the 

13 right to receive such payments, and the artist 

14 payee to whom such payments would otherwise 

15 be payable shall be treated as having no inter16 est in such payments. 

17 ‘‘(F) ARTIST PAYEE DEFINED.—In this 

18 paragraph, the term ‘artist payee’ means a per19 son, other than a person described in subpara20 graph (B), who owns the right to receive all or 

21 part of the receipts payable under paragraph 

22 (2)(D) with respect to a sound recording. In a 

23 case in which there are multiple artist payees 

24 with respect to a sound recording, an objection 

25 by one such payee shall apply only to that payVerDate Sep 11 2014 20:49 Apr 25, 2018 Jkt 079200 PO 00000 Frm 00153 Fmt 6652 Sfmt 6201 E:\BILLS\H5447.RH H5447

pbinns on DSK79D2C42PROD with BILLS
154 

•HR 5447 RH

1 ee’s share of the receipts payable under para2 graph (2)(D), and does not preclude payment 

3 under subparagraph (A) from the share of an 

4 artist payee that does not so object.’’. 

5 (c) TECHNICAL AND CONFORMING AMENDMENTS.— 

6 Section 114(g) of title 17, United States Code, as amend7 ed by subsections (a) and (b), is further amended— 

8 (1) in paragraph (2), by striking ‘‘An agent 

9 designated’’ and inserting ‘‘Except as provided for in 

10 paragraph (6), a nonprofit collective designated by 

11 the Copyright Royalty Judges’’; 

12 (2) in paragraph (3)— 

13 (A) by striking ‘‘nonprofit agent des14 ignated’’ and inserting ‘‘nonprofit collective des15 ignated by the Copyright Royalty Judges’’; 

16 (B) by striking ‘‘another designated agent’’ 

17 and inserting ‘‘another designated nonprofit col18 lective’’; and 

19 (C) by striking ‘‘agent’’ and inserting ‘‘col20 lective’’ each subsequent place it appears; and 

21 (3) in paragraph (4)— 

22 (A) by striking ‘‘designated agent’’ and in23 serting ‘‘nonprofit collective’’; and 

24 (B) by striking ‘‘agent’’ and inserting ‘‘col25 lective’’ each subsequent place it appears. 


pbinns on DSK79D2C42PROD with BILLS
155 

•HR 5447 RH

1 SEC. 303. EFFECTIVE DATE. 

2 (a) IN GENERAL.—Except as provided in subsection 

3 (b), this title and the amendments made by this title shall 

4 take effect on the date of the enactment of this Act. 

5 (b) DELAYED EFFECTIVE DATE.—The effective date 

6 for paragraphs (5)(B) and (6)(E) of section 114(g) of title 

7 17, United States Code, as added by section 302, shall 

8 be January 1, 2020. 


pbinns on DSK79D2C42PROD with BILLS
Union Calendar No. 499 

115TH CONGRESS 

2D SESSION H. R. 5447 

[Report No. 115–651] 

A BILL 

To modernize copyright law, and for other 

purposes. 

APRIL 25, 2018 

Committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed 


pbinns on DSK79D2C42PROD with BILLS