I

105TH CONGRESS

1ST SESSION H. R. 789

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

from copyright, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 13, 1997

Mr. SENSENBRENNER (for himself, Mr. BURR of North Carolina, Mr.

CUNNINGHAM, Mr. GILLMOR, Mr. NORWOOD, Mr. MCHUGH, Mr. ANDREWS, Mr. ENSIGN, Mr. MASCARA, Mr. HERGER, Mr. LEWIS of California, Mr. BURTON of Indiana, Mr. PETRI, Mr. SMITH of New Jersey, Mr.

PARKER, Mr. MCDERMOTT, Mr. THORNBERRY, Mr. CHRISTENSEN, Mr.

INGLIS of South Carolina, Mr. DAVIS of Virginia, Mr. LATOURETTE, Mr.

EHLERS, Mr. EHRLICH, Mr. HOEKSTRA, Ms. JACKSON-LEE of Texas,

Mr. PETERSON of Minnesota, Mr. LOBIONDO, Mrs. SMITH of Washington, Mr. HOLDEN, Mr. SCHIFF, Mr. STUMP, Mr. WYNN, Mr. CALVERT,

Mr. BARTON of Texas, Mr. LEWIS of Kentucky, Mr. BAESLER, Mr.

SAXTON, Mr. WOLF, Mr. DOYLE, Mr. SPRATT, Mr. SKEEN, Mrs. CUBIN,

Mr. KNOLLENBERG, Mr. PORTER, Mr. BACHUS, Mr. HASTERT, Mr. COLLINS, Mr. PICKETT, Mr. DUNCAN, Mr. UPTON, Mr. WELLER, Mr.

POSHARD, Mr. CRANE, Mr. METCALF, Mr. PRYCE of Ohio, Mr. SALMON,

Mrs. EMERSON, Mr. YOUNG of Alaska, Mr. MCHALE, Mr. HORN, Mr.

KLUG, Mr. LATHAM, Mr. TALENT, Mr. FRANKS of New Jersey, Mr.

BARCIA, Mr. CHAMBLISS, Mr. BARTLETT of Maryland, Mr. MCINNIS, Mr.

OBERSTAR, Mr. TIAHRT, Mr. PACKARD, Mr. BONILLA, Mr. SKELTON,

Mr. KOLBE, Mr. MANZULLO, Mr. STEARNS, Mr. GEKAS, Mr. LIPINSKI,

Mr. COMBEST, Mr. QUINN, Mr. WALSH, Mr. SAM JOHNSON of Texas,

Mr. GILCHREST, Mr. DICKEY, Mr. STENHOLM, Mr. SESSIONS, and Mr.

HOBSON) 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

certain exemptions from copyright, and for other purposes.
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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 1997’’.

6 SEC. 2. EXEMPTION OF CERTAIN MUSIC USES FROM COPY7 RIGHT PROTECTION.

8 (a) BUSINESS EXEMPTION.—Section 110(5) of title

9 17, United States Code, is amended to read as follows:

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

11 transmission embodying a performance or display of

12 a nondramatic musical work by the reception of a

13 broadcast, cable, satellite, or other transmission, un14 less—

15 ‘‘(A) an admission fee is charged specifi16 cally to see or hear the transmission at a par17 ticular time or on a particular date or dates, or

18 ‘‘(B) the transmission is not properly li19 censed;’’.

20 (b) AGRICULTURAL EVENTS.—Section 110(6) of title

21 17, United States Code, is amended to read as follows:

22 ‘‘(6) performance of a nondramatic musical

23 work by a governmental body or a nonprofit agricul24 tural or horticultural organization, in the course of

25 an agricultural or horticultural fair, convention,
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1 meeting, event, or exhibition conducted by such body

2 or organization; the exception provided by this para3 graph shall extend to any liability for copyright in4 fringement that would otherwise be imposed on such

5 body or organization, including under the doctrines

6 of vicarious liability, contributory infringement, or

7 related infringement, for a performance by a conces8 sionaire, business establishment, or other person at

9 such fair, convention, meeting, event, or exhibition,

10 but shall not excuse any such person from liability

11 for the performance;’’.

12 (c) EXEMPTION RELATING TO PROMOTION.—Section

13 110(7) of title 17, United States Code, is amended—

14 (1) by striking ‘‘a vending’’ and inserting ‘‘an’’;

15 (2) by striking ‘‘sole’’;

16 (3) by inserting ‘‘or of the audio, video, or other

17 devices utilized in the performance,’’ after

18 ‘‘phonorecords of the work,’’; and

19 (4) by striking ‘‘and is within the immediate

20 area where the sale is occurring’’.

21 (d) PERFORMANCES AT CHILDREN’S CAMPS.—Sec22 tion 110 of title 17, United States Code, is amended—

23 (1) by striking the periods at the end of para24 graphs (8) and (9) and inserting semicolons;
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1 (2) in paragraph (10) by striking the period at

2 the end and inserting ‘‘; and’’; and

3 (3) by adding at the end thereof the following:

4 ‘‘(11) performance of a nondramatic musical

5 work at an organized children’s camp, if children in

6 attendance sing all or a portion of the work, children

7 in attendance engage in games or dance to the ac8 companiment of all or a portion of the work, or the

9 performance is of an instructional nature.’’.

10 SEC. 3. BINDING ARBITRATION OF RATE DISPUTES INVOLV11 ING PERFORMING RIGHTS SOCIETIES.

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

13 States Code, is amended by adding at the end the follow14 ing new subsection:

15 ‘‘(d) PERFORMING RIGHTS SOCIETIES; BINDING AR16 BITRATION.—

17 ‘‘(1) ARBITRATION OF DISPUTES PRIOR TO

18 COURT ACTION.—

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

20 user and a performing rights society are unable

21 to agree on the appropriate fee to be paid for

22 the user’s past or future performance of musi23 cal works in the repertoire of the performing

24 rights society, the general music user shall, in

25 lieu of any other dispute-resolution mechanism
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1 established by any judgment or decree govern2 ing the operation of the performing rights soci3 ety, be entitled to binding arbitration of such

4 disagreement pursuant to the rules of the

5 American Arbitration Association. The music

6 user may initiate such arbitration.

7 ‘‘(ii) The arbitrator in such binding arbi8 tration shall determine a fair and reasonable fee

9 for the general music user’s past and future

10 performance of musical works in such society’s

11 repertoire and shall determine whether the

12 user’s past performances of such musical works,

13 if any, infringed the copyrights of works in the

14 society’s repertoire. If the arbitrator determines

15 that the general music user’s past performances

16 of such musical works infringed the copyrights

17 of works in the society’s repertoire, the arbitra18 tor shall impose a penalty for such infringe19 ment. Such penalty shall not exceed the arbitra20 tor’s determination of the fair and reasonable

21 license fee for the performances at issue.

22 ‘‘(B) DEFINITIONS.—(i) For purposes of

23 this paragraph, a ‘general music user’ is any

24 person who performs musical works publicly but

25 is not engaged in the transmission of musical
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1 works to the general public or to subscribers

2 through broadcast, cable, satellite, or other

3 transmission.

4 ‘‘(ii) For purposes of this paragraph,

5 transmissions within a single commercial estab6 lishment or within establishments under com7 mon ownership or control are not transmissions

8 to the general public.

9 ‘‘(iii) For purposes of clause (ii), an ‘estab10 lishment’ is a retail business, restaurant, bar,

11 inn, tavern, or any other place of business in

12 which the public may assemble.

13 ‘‘(C) ENFORCEMENT OF ARBITRATOR’S

14 DETERMINATIONS.—An arbitrator’s determina15 tion under this paragraph is binding on the

16 parties and may be enforced pursuant to sec17 tions 9 through 13 of title 9.

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

19 civil action for infringement of the right granted in

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

21 the repertoire of a performing rights society, if the

22 defendant admits the prior public performance of
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1 one or more works in the repertoire of the perform2 ing rights society but contests the amount of the li3 cense fee demanded by such society for such per4 formance, the dispute shall, if requested by the de5 fendant, be submitted to arbitration under section

6 652(e) of title 28. In such arbitration proceeding,

7 the arbitrator shall determine the amount owed by

8 the defendant to the performing rights society for all

9 past public performances of musical works in the so10 ciety’s repertoire. Such amount shall not exceed two

11 times the amount of the blanket license fee that

12 would be applied by the society to the defendant for

13 the year or years in which the performances oc14 curred. In addition, the arbitrator shall, if requested

15 by the defendant, determine a fair and reasonable li16 cense fee for the defendant’s future public perform17 ances of the musical works in such society’s rep18 ertoire.

19 ‘‘(3) TERM OF LICENSE FEE DETERMINA20 TION.—In any arbitration proceeding initiated under

21 this subsection, the arbitrator’s determination of a

22 fair and reasonable license fee for the performance

23 of the music in the repertoire of the performing

24 rights society concerned shall apply for a period of
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1 not less than 3 years nor more than 5 years after

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

3 (b) ACTIONS THAT SHALL BE REFERRED TO ARBI4 TRATION.—Section 652 of title 28, United States Code,

5 is amended by adding at the end the following:

6 ‘‘(e) ACTIONS THAT SHALL BE REFERRED TO ARBI7 TRATION.—In any civil action for infringement of the

8 right granted in section 106(4) of title 17 involving a mu9 sical work that is in the repertoire of a performing rights

10 society, if the defendant admits the public performance of

11 any musical work in the repertoire of the performing

12 rights society but contests the amount of the license fee

13 demanded for such performance by the society, the district

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

15 to arbitration, which shall be conducted in accordance with

16 section 504(d)(2) of title 17. Each district court shall es17 tablish procedures by local rule authorizing the use of ar18 bitration under this subsection. The definitions set forth

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

20 SEC. 4. RADIO PER PROGRAMMING PERIOD LICENSE.

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

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

23 adding at the end thereof the following new subsection:

24 ‘‘(e) RADIO PER PROGRAMMING PERIOD LI25 CENSES.—
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1 ‘‘(1) IN GENERAL.—Each performing rights so2 ciety shall offer, to any radio broadcaster that so re3 quests, a per programming period license to perform

4 nondramatic musical works in the repertoire of the

5 performing rights society. Such license shall be of6 fered on reasonable terms and conditions that pro7 vide an economically and administratively viable al8 ternative to the society’s blanket license for all such

9 broadcasters.

10 ‘‘(2) PRICE OF PER PROGRAMMING PERIOD LI11 CENSES.—(A) The total price of a per programming

12 period license described in paragraph (1)—

13 ‘‘(i) shall include separate components for

14 incidental and feature performances, with the

15 incidental performance component to be inde16 pendent of the quantity of such performances

17 by the broadcaster and not to exceed the rel18 ative value that the performing rights society

19 assigns to such performances in its distribution

20 of royalties; and

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

22 payable by the broadcaster under the lowest

23 price blanket license offered to radio broad24 casters, and shall vary between the incidental

25 performance component, for a broadcaster that
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1 makes only incidental performances of music in

2 the society’s repertoire, and such blanket license

3 fee, in direct proportion to the percentage of

4 the broadcaster’s revenue attributable to pro5 gramming periods containing feature perform6 ances of musical works in the society’s rep7 ertoire compared to the industry average per8 centage of revenue attributable to programming

9 periods containing feature performances of such

10 musical works.

11 ‘‘(B) Nondramatic musical works that have

12 been licensed directly or at the source, or whose per13 formance constitutes fair use or is otherwise exempt

14 from liability under this title, shall not be considered

15 in calculating any per programming period license

16 fee under this subsection.

17 ‘‘(3) IMPLEMENTATION.—Any radio broad18 caster entitled to a per programming period license

19 under this subsection may bring an action to require

20 compliance with this subsection in an appropriate

21 United States district court, including any district

22 court established by court order or statute as a

23 court that resolves disputes, with respect to license
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1 rates, that may arise between performing rights soci2 eties and persons who perform musical works in the

3 society’s repertoire.

4 ‘‘(4) DEFINITIONS.—As used in this sub5 section—

6 ‘‘(A) the term ‘blanket license’ means a li7 cense provided by a performing rights society

8 that authorizes the unlimited performance of

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

10 fee that does not vary with the quantity or type

11 of performances of musical works in the soci12 ety’s repertoire;

13 ‘‘(B) the term ‘incidental’ refers to com14 mercial jingles not exceeding 60 seconds in du15 ration, bridges, themes or signatures, arrange16 ments of works in the public domain, and back17 ground music, including music used in conjunc18 tion with sporting events; and

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

20 any 15-minute period of radio broadcasting

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

22 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 of the author and the copyright

14 owner, and the names of any artists known to have

15 performed the work. Such online computer access

16 shall permit the efficient review of multiple musical

17 works consistent with reasonably available tech18 nology.

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

20 rights society shall make available at cost, not less

21 frequently than semiannually, a printed directory of

22 each title in its repertoire, as of the date which is

23 not more than 30 days before the date on which the

24 directory is published, containing the information set

25 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) the schedule of the society’s license

13 rates and terms of the license fees to be paid

14 under the license agreement, including any slid15 ing scale or schedule for any increase or de16 crease in rates for the duration of the license

17 agreement;

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

19 derived; and

20 ‘‘(C) license terms under agreements exe21 cuted by the performing rights society and li22 censees described in subparagraph (A).

23 ‘‘(2) COPIES OF LICENSES.—Any performing

24 rights society that receives a written request from an

25 entity that has been requested to enter into a license
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1 agreement with the performing rights society on be2 half of persons who perform or may perform musical

3 works within that society’s repertoire, shall provide

4 to that entity, within 5 business days after receiving

5 that request, a schedule of fees for such perform6 ances by similar persons.’’.

7 SEC. 6. ANNUAL REPORTS.

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

9 General of the United States shall submit a written report

10 to the Congress on the activities of the Department of

11 Justice during the preceding calendar year relating to the

12 continuing supervision and enforcement by the Depart13 ment of the consent decree of the American Society of

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

15 and the consent decree of Broadcast Music, Inc. of Decem16 ber 29, 1966. Such report shall include a description of

17 all issues raised or complaints filed with the Department

18 of Justice relating to the operations of those performing

19 rights societies, and a summary of the Department’s ac20 tions or investigations undertaken by the Department in

21 response to such issues and complaints.

22 SEC. 7. VICARIOUS LIABILITY PROHIBITED.

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

24 exposition, or meeting, a facility owner, or any other per25 son making space available to another party by contract,
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1 shall not be liable under any theory of vicarious or con2 tributory infringement with respect to an infringing public

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

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

5 such space on the ground that—

6 (1) a contract for such space provides the land7 lord, organizer or sponsor, facility owner, or other

8 person a right or ability to control such space and

9 compensation for the use of such space; or

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

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

12 infringing performance actual control over some as13 pects of the use of such space,

14 if the contract for the use of such space prohibits infring15 ing public performances and the landlord, organizer or

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

17 control over the selection of works performed.

18 SEC. 8. CONFORMING AMENDMENTS.

19 Section 101 of title 17, United States Code, is

20 amended by inserting after the undesignated paragraph

21 relating to the definition of ‘‘perform’’ the following:

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

23 corporation, or other entity that licenses the public

24 performance of nondramatic musical works on behalf

25 of copyright owners of such works, such as the
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1 American Society of Composers, Authors, and Pub2 lishers, Broadcast Music, Inc., and SESAC, Inc. The

3 ‘repertoire’ of a performing rights society consists of

4 those works for which the society provides licenses

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

6 SEC. 9. CONSTRUCTION OF ACT.

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

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

9 nothing in this Act shall be construed to relieve any per10 forming rights society (as defined in section 101 of title

11 17, United States Code) of any obligation under any con12 sent decree, State statute, or other court order governing

13 its operation, as such decree or order is in effect on the

14 date of the enactment of this Act, as it may be amended

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

16 such date.

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