I

104TH CONGRESS

1ST SESSION H. R. 789

To amend title 17, United States Code, with respect to the licensing of

music, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 1, 1995

Mr. SENSENBRENNER introduced the following bill; which was referred to the

Committee on the Judiciary

A BILL

To amend title 17, United States Code, with respect to

the licensing of music, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Fairness in Musical

5 Licensing Act of 1995’’.

6 SEC. 2. BUSINESS EXEMPTION.

7 Section 110(5) of title 17, United States Code, is

8 amended to read as follows:

9 ‘‘(5) communication by electronic device of a

10 transmission embodying a performance or display of
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1 a work by the reception of a broadcast, cable, sat2 ellite, or other transmission, unless—

3 ‘‘(A) an admission fee is charged specifi4 cally to see or hear the transmission, or

5 ‘‘(B) the transmission is not properly

6 licensed,

7 except that this paragraph shall apply in the case of

8 a performance or display in a commercial establish9 ment only if the performance or display is incidental

10 to the main purpose of the establishment;’’.

11 SEC. 3. BINDING ARBITRATION OF RATE DISPUTES INVOLV12 ING PERFORMING RIGHTS SOCIETIES.

13 (a) IN GENERAL.—Section 504 of title 17, United

14 States Code, is amended by adding at the end the follow15 ing new subsection:

16 ‘‘(d) PERFORMING RIGHTS SOCIETIES; BINDING AR17 BITRATION.—

18 ‘‘(1) ARBITRATION OF DISPUTES PRIOR TO

19 COURT ACTION.—

20 ‘‘(A) ARBITRATION.—(i) If a general music

21 user and a performing rights society are unable

22 to agree on the appropriate fee to be paid for

23 the user’s past or future performance of musi24 cal works in the repertoire of the performing

25 rights society, the general music user shall, in
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1 lieu of any other dispute-resolution mechanism

2 established by any judgment or decree govern3 ing the operation of the performing rights soci4 ety, be entitled to binding arbitration of such

5 disagreement pursuant to the rules of the

6 American Arbitration Association. The music

7 user may initiate such arbitration.

8 ‘‘(ii) The arbitrator in such binding arbi9 tration shall determine a fair and reasonable fee

10 for the general music user’s past and future

11 performance of musical works in such society’s

12 repertoire and shall determine whether the

13 user’s past performances of such musical works,

14 if any, infringed the copyrights of works in the

15 society’s repertoire. If the arbitrator determines

16 that the general music user’s past performances

17 of such musical works infringed the copyrights

18 of works in the society’s repertoire, the arbitra19 tor shall impose a penalty for such infringe20 ment. Such penalty shall not exceed the arbitra21 tor’s determination of the fair and reasonable

22 license fee for the performances at issue.

23 ‘‘(B) DEFINITION.—For purposes of this

24 paragraph, a ‘general music user’ is any person

25 who performs musical works publicly but is not
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1 engaged in the transmission of musical works to

2 the general public or to subscribers through

3 broadcast, cable, satellite, or other trans4 mission. For purposes of this paragraph, trans5 missions within a single commercial establish6 ment or within establishments under common

7 ownership or control are not transmissions to

8 the general public.

9 ‘‘(C) ENFORCEMENT OF ARBITRATOR’S

10 DETERMINATIONS.—An arbitrator’s determina11 tion under this paragraph is binding on the

12 parties and may be enforced pursuant to sec13 tions 9 through 13 of title 9.

14 ‘‘(2) COURT-ANNEXED ARBITRATION.—In any

15 civil action for infringement of the right granted in

16 section 106(4) involving a musical work that is in

17 the repertoire of a performing rights society, if the

18 defendant admits the prior public performance of

19 one or more works in the repertoire of the perform20 ing rights society but contests the amount of the li21 cense fee demanded by such society for such per22 formance, the dispute shall, if requested by the de23 fendant, be submitted to arbitration under section

24 652(e) of title 28. In such arbitration proceeding,

25 the arbitrator shall determine the amount owed by
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1 the defendant to the performing rights society for

2 all past public performances of musical works in the

3 society’s repertoire. Such amount shall not exceed

4 two times the amount of the blanket license fee that

5 would be applied by the society to the defendant for

6 the year or years in which the performances oc7 curred. In addition, the arbitrator shall, if requested

8 by the defendant, determine a fair and reasonable

9 license fee for the defendant’s future public perform10 ances of the musical works in such society’s rep11 ertoire.

12 ‘‘(3) TERM OF LICENSE FEE DETERMINA13 TION.—In any arbitration proceeding initiated under

14 this subsection, the arbitrator’s determination of a

15 fair and reasonable license fee for the performance

16 of the music in the repertoire of the performing

17 rights society concerned shall apply for a period of

18 not less than 3 years nor more than 5 years after

19 the date of the arbitrator’s determination.’’.

20 (b) ACTIONS THAT SHALL BE REFERRED TO ARBI21 TRATION.—Section 652 of title 28, United States Code,

22 is amended by adding at the end the following:

23 ‘‘(e) ACTIONS THAT SHALL BE REFERRED TO ARBI24 TRATION.—In any civil action for infringement of the

25 right granted in section 106(4) of title 17 involving a mu-
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1 sical work that is in the repertoire of a performing rights

2 society, if the defendant admits the public performance of

3 any musical work in the repertoire of the performing

4 rights society but contests the amount of the license fee

5 demanded for such performance by the society, the district

6 court shall, if requested by the defendant, refer the dispute

7 to arbitration, which shall be conducted in accordance with

8 section 504(d)(2) of title 17. Each district court shall es9 tablish procedures by local rule authorizing the use of ar10 bitration under this subsection. The definitions set forth

11 in title 17 apply to the terms used in this subsection.’’.

12 SEC. 4. RADIO PER PROGRAMMING PERIOD LICENSE.

13 Section 504 of title 17, United States Code, as

14 amended by section 3 of this Act, is further amended by

15 adding at the end thereof the following new subsection:

16 ‘‘(e) RADIO PER PROGRAMMING PERIOD LI17 CENSES.—

18 ‘‘(1) IN GENERAL.—Each performing rights so19 ciety shall offer, to any radio broadcaster that so re20 quests, a per programming period license to perform

21 nondramatic musical works in the repertoire of the

22 performing rights society. Such license shall be of23 fered on reasonable terms and conditions that pro24 vide an economically and administratively viable al-
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1 ternative to the society’s blanket license for all such

2 broadcasters.

3 ‘‘(2) PRICE OF PER PROGRAMMING PERIOD LI4 CENSES.—(A) The total price of a per programming

5 period license described in paragraph (1)—

6 ‘‘(i) shall include separate components for

7 incidental and feature performances, which are

8 independent of the quantity of such perform9 ances by the broadcaster and do not exceed the

10 relative value the performing rights society as11 signs to such performances in its distribution of

12 royalties; and

13 ‘‘(ii) shall not exceed the fee that would be

14 payable by the broadcaster under the lowest

15 price blanket license offered to radio broad16 casters, and shall be in direct proportion to the

17 percentage of the broadcaster’s revenue attrib18 utable to programming periods containing

19 feature performances of musical works in the

20 society’s repertoire compared to the industry

21 average percentage of revenue attributable to

22 programming periods containing feature per23 formances of musical works in the society’s rep24 ertoire.
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1 ‘‘(B) Nondramatic musical works that have

2 been licensed directly or at the source, or whose per3 formance constitutes fair use or is otherwise exempt

4 from liability under this title, shall not be considered

5 in calculating any per programming period license

6 fee under this subsection.

7 ‘‘(3) ADMINISTRATION OF LICENSE.—Begin8 ning January 1, 1998, the performance of

9 nondramatic musical works by a broadcaster under

10 any per programming period license shall be deter11 mined on the basis of statistically reliable sampling

12 or monitoring by the performing rights society, and

13 the society may not require the broadcaster to report

14 such performance to the society. The society shall

15 provide the broadcaster with a report detailing the

16 results of such sampling or monitoring, identifying

17 each programming period containing the perform18 ance of nondramatic musical works in the society’s

19 repertoire and the nondramatic musical works

20 performed.

21 ‘‘(4) IMPLEMENTATION.—Any radio broad22 caster entitled to a per programming period license

23 under this subsection may bring an action to require

24 compliance with this subsection in an appropriate

25 United States district court, including any district
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1 court established by court order or statute as a

2 court that resolves disputes, with respect to license

3 rates, that may arise between performing rights soci4 eties and persons who perform musical works in the

5 society’s repertoire.

6 ‘‘(5) DEFINITIONS.—As used in this sub7 section—

8 ‘‘(A) the term ‘blanket license’ means a li9 cense provided by a performing rights society

10 that authorizes the unlimited performance of

11 musical works in the society’s repertoire, for a

12 fee that does not vary with the quantity or type

13 of performances of musical works in the soci14 ety’s repertoire;

15 ‘‘(B) the term ‘incidental’ means commer16 cial jingles not exceeding 60 seconds in dura17 tion, bridges, themes or signatures, arrange18 ments of works in the public domain, and back19 ground music, including music used in conjunc20 tion with sporting events; and

21 ‘‘(C) the term ‘programming period’ means

22 any 15-minute period of radio broadcasting

23 commencing on the hour, or at 15, 30, or 45

24 minutes past the hour.’’.
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1 SEC. 5. ACCESS TO REPERTOIRE AND LICENSING INFORMA2 TION.

3 Section 504 of title 17, United States Code, as

4 amended by sections 3 and 4 of this Act, is further amend5 ed by adding at the end the following:

6 ‘‘(f) ACCESS TO MUSICAL REPERTOIRE.—

7 ‘‘(1) ONLINE COMPUTER ACCESS.—Each per8 forming rights society shall make available, free of

9 charge, to all interested persons, online computer ac10 cess to copyright and licensing information for each

11 work in its repertoire. Such access shall, for each

12 such musical work, identify the work by title of the

13 work, the name, address, and telephone number of

14 both the author and the copyright owner, when the

15 work will enter the public domain, and the names of

16 any artists known to have performed the work. Such

17 online computer access shall permit the efficient re18 view of multiple musical works consistent with rea19 sonably available technology.

20 ‘‘(2) DIRECTORY OF TITLES.—Each performing

21 rights society shall make available at no charge, not

22 less frequently than semiannually, a printed direc23 tory of each title in its repertoire, as of the date

24 which is not more than 30 days before the date on

25 which the directory is published, containing the in26 formation set forth in paragraph (1).
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1 ‘‘(3) DOCUMENTATION OF RIGHT TO LI2 CENSE.—A performing rights society shall, upon the

3 request of any person who performs or may perform

4 musical works in the society’s repertoire, provide to

5 that person copies of the documentation establishing

6 the society’s right to license the public performance

7 of such musical works.

8 ‘‘(4) RESTRICTIONS ON INFRINGEMENT AC9 TIONS.—

10 ‘‘(A) RESTRICTIONS.—A performing rights

11 society may not institute or be a party to, or

12 pay the costs of another party in, any action al13 leging the infringement of the copyright in, or

14 charge a fee under any per programming period

15 license for, any work in that society’s repertoire

16 that is not identified and documented as re17 quired by paragraphs (1), (2), and (3).

18 ‘‘(B) EXCEPTION.—Subparagraph (A)

19 shall not apply on the basis of a failure to com20 ply with paragraph (2) with respect to a musi21 cal work first entering the society’s repertoire

22 within the 6-month period beginning 30 days

23 before the date on which the society’s last direc24 tory was published under paragraph (2), if the

25 society establishes that such musical work was
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1 included in the online database required by

2 paragraph (1) not less than 10 days before the

3 performance giving rise to the alleged infringe4 ment or charge.

5 ‘‘(g) ACCESS TO LICENSING INFORMATION.—

6 ‘‘(1) TERMS OF LICENSES.—Each performing

7 rights society shall provide, within 5 business days

8 after it receives a written request from a licensee of

9 any musical work in the society’s repertoire, or from

10 any person that is negotiating to become such a

11 licensee—

12 ‘‘(A) a schedule of the society’s license

13 rates for those licensees in the same locality as

14 the licensee or person making the request, that

15 have characteristics similar to such licensee or

16 person, except that the society shall provide in17 formation with respect to at least 5 but not

18 more than 10 such licensees;

19 ‘‘(B) the formulas by which the rates are

20 derived; and

21 ‘‘(C) license terms under agreements exe22 cuted by the performing rights society and li23 censees described in subparagraph (A).

24 ‘‘(2) COPIES OF LICENSES.—Each performing

25 rights society shall provide, within 5 business days
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1 after receiving a written request from an entity au2 thorized to negotiate license fees and terms on be3 half of any group of persons who perform or may

4 perform musical works within that society’s rep5 ertoire, copies of all forms of licenses negotiated be6 tween that society and other entities authorized to

7 negotiate license fees and terms on behalf of any

8 group of persons who perform musical works in that

9 society’s repertoire, except that the society shall not

10 disclose individual licensee’s names, addresses, or

11 business confidential information.’’.

12 SEC. 6. ANNUAL REPORTS.

13 Not later than March 1 of each year, the Attorney

14 General of the United States shall submit a written report

15 to the Congress on the activities of the Department of

16 Justice during the preceding calendar year relating to the

17 continuing supervision and enforcement by the Depart18 ment of the consent decree of the American Society of

19 Composers, Authors, and Publishers of March 14, 1950,

20 and the consent decree of Broadcast Music, Inc. of Decem21 ber 29, 1966. Such report shall include a description of

22 all issues raised or complaints filed with the Department

23 of Justice relating to the operations of those performing

24 rights societies, and a summary of the Department’s ac-
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1 tions or investigations undertaken by the Department in

2 response to such issues and complaints.

3 SEC. 7. VICARIOUS LIABILITY PROHIBITED.

4 A landlord, an organizer or sponsor of a convention,

5 exposition, or meeting, a facility owner, or any other per6 son making space available to another party by contract,

7 shall not be liable under any theory of vicarious or con8 tributory infringement with respect to an infringing public

9 performance of a copyrighted work by a tenant, lessee,

10 subtenant, sublessee, licensee, exhibitor, or other user of

11 such space on the ground that—

12 (1) a contract for such space provides the land13 lord, organizer or sponsor, facility owner, or other

14 person a right or ability to control such space and

15 compensation for the use of such space; or

16 (2) the landlord, organizer or sponsor, facility

17 owner, or other person has or had at the time of the

18 infringing performance actual control over some as19 pects of the use of such space,

20 if the contract for the use of such space prohibits infring21 ing public performances and the landlord, organizer or

22 sponsor, facility owner, or other person does not exercise

23 control over the selection of works performed.
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1 SEC. 8. RELIGIOUS SERVICE EXEMPTION.

2 Section 110(3) of title 17, United States Code, is

3 amended by inserting after ‘‘religious assembly’’ the fol4 lowing: ‘‘, the transmission of such services, whether live

5 or recorded, or the recording of copies or phonorecords

6 of a transmission program embodying such services in

7 their entirety’’.

8 SEC. 9. CONFORMING AMENDMENTS.

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

10 States Code, is amended by inserting after the undesig11 nated paragraph relating to the definition of ‘‘perform’’

12 the following:

13 ‘‘A ‘performing rights society’ is an association,

14 corporation, or other entity that licenses the public

15 performance of nondramatical musical works on be16 half of copyright owners of such works, such as the

17 American Society of Composers, Authors, and Pub18 lishers, Broadcast Music, Inc., and SESAC, Inc. The

19 ‘repertoire’ of a performing rights society consists of

20 those works for which the society provides licenses

21 on behalf of the owners of copyright in the works.’’.

22 SEC. 10. CONSTRUCTION OF ACT.

23 Except as provided in section 504(d)(1) of title 17,

24 United States Code, as added by section 3(a) of this Act,

25 nothing in this Act shall be construed to relieve any per26 forming rights society (as defined in section 101 of title
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1 17, United States Code) of any obligation under any con2 sent decree or other court order governing its operation,

3 as such decree or order is in effect on the date of the

4 enactment of this Act, as it may be amended after such

5 date, or as it may be issued or agreed to after such date.

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