SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Copyright Royalty and
Distribution Reform Act of 2004’’.
SEC. 2. REFERENCE.
Except as otherwise expressly provided, whenever in
this Act an amendment or repeal is expressed in terms
of an amendment to, or repeal of, a section or other provi-
sion, the reference shall be considered to be made to a
section or other provision of title 17, United States Code.
SEC. 3. COPYRIGHT ROYALTY JUDGE AND STAFF.
(a) IN GENERAL.—Chapter 8 is amended to read as
follows:
‘‘CHAPTER 8—PROCEEDINGS BY
COPYRIGHT ROYALTY JUDGES
‘‘Sec.
‘‘801. Copyright Royalty Judges; appointment and functions.
‘‘802. Copyright Royalty Judgeships; staff.
‘‘803. Proceedings of Copyright Royalty Judges.
‘‘804. Institution of proceedings.
‘‘805. General rule for voluntarily negotiated agreements.
‘‘§ 801. Copyright Royalty Judges; appointment and
functions
‘‘(a) APPOINTMENT.—The Librarian of Congress
shall appoint 3 full-time Copyright Royalty Judges, and
shall appoint one of the three as the Chief Copyright Roy-
alty Judge. In making such appointments, the Librarian
shall consult with the Register of Copyrights.
‘‘(b) FUNCTIONS.—Subject to the provisions of this
chapter, the functions of the Copyright Royalty Judges
shall be as follows:
‘‘(1) To make determinations and adjustments
of reasonable terms and rates of royalty payments as
provided in sections 112(e), 114, 115, 116, 118, 119
and 1004. The rates applicable under sections
114(f)(1)(B), 115, and 116 shall be calculated to
achieve the following objectives:
‘‘(A) To maximize the availability of cre-
ative works to the public.
‘‘(B) To afford the copyright owner a fair
return for his or her creative work and the
copyright user a fair income under existing eco-
nomic conditions.
‘‘(C) To reflect the relative roles of the
copyright owner and the copyright user in the
product made available to the public with re-
spect to relative creative contribution, techno-
logical contribution, capital investment, cost,
risk, and contribution to the opening of new
markets for creative expression and media for
their communication.
‘‘(D) To minimize any disruptive impact
on the structure of the industries involved and
on generally prevailing industry practices.
‘‘(2) To make determinations concerning the
adjustment of the copyright royalty rates under sec-
tion 111 solely in accordance with the following pro-
visions:
‘‘(A) The rates established by section
111(d)(1)(B) may be adjusted to reflect—
‘‘(i) national monetary inflation or de-
flation; or
‘‘(ii) changes in the average rates
charged cable subscribers for the basic
service of providing secondary trans-
missions to maintain the real constant dol-
lar level of the royalty fee per subscriber
which existed as of the date of October 19,
1976,
except that—
‘‘(I) if the average rates charged cable
system subscribers for the basic service of
providing 
secondary 
transmissions 
are
changed so that the average rates exceed
national monetary inflation, no change in
the 
rates 
established 
by 
section
111(d)(1)(B) shall be permitted; and
‘‘(II) no increase in the royalty fee
shall be permitted based on any reduction
in the average number of distant signal
equivalents per subscriber.
The Copyright Royalty Judges may consider all
factors relating to the maintenance of such level
of payments, including, as an extenuating fac-
tor, whether the industry has been restrained
by subscriber rate regulating authorities from
increasing the rates for the basic service of pro-
viding secondary transmissions.
‘‘(B) In the event that the rules and regu-
lations of the Federal Communications Com-
mission are amended at any time after April 8,
1976, to permit the carriage by cable systems
of additional television broadcast signals beyond
the local service area of the primary transmit-
ters of such signals, the royalty rates estab-
lished by section 111(d)(1)(B) may be adjusted
to insure that the rates for the additional dis-
tant signal equivalents resulting from such car-
riage are reasonable in the light of the changes
effected by the amendment to such rules and
regulations. In determining the reasonableness
of rates proposed following an amendment of
Federal Communications Commission rules and
regulations, the Copyright Royalty Judges shall
consider, among other factors, the economic im-
pact on copyright owners and users; except that
no adjustment in royalty rates shall be made
under this subparagraph with respect to any
distant signal equivalent or fraction thereof rep-
resented by—
‘‘(i) carriage of any signal permitted
under the rules and regulations of the Fed-
eral Communications Commission in effect
on April 15, 1976, or the carriage of a sig-
nal of the same type (that is, independent,
network, or noncommercial educational)
substituted for such permitted signal; or
‘‘(ii) a television broadcast signal first
carried after April 15, 1976, pursuant to
an individual waiver of the rules and regu-
lations of the Federal Communications
Commission, as such rules and regulations
were in effect on April 15, 1976.
‘‘(C) In the event of any change in the
rules and regulations of the Federal Commu-
nications Commission with respect to syn-
dicated and sports program exclusivity after
April 15, 1976, the rates established by section
111(d)(1)(B) may be adjusted to assure that
such rates are reasonable in light of the
changes to such rules and regulations, but any
such adjustment shall apply only to the affected
television broadcast signals carried on those
systems affected by the change.
‘‘(D) The gross receipts limitations estab-
lished by section 111(d)(1)(C) and (D) shall be
adjusted to reflect national monetary inflation
or deflation or changes in the average rates
charged cable system subscribers for the basic
service of providing secondary transmissions to
maintain the real constant dollar value of the
exemption provided by such section, and the
royalty rate specified therein shall not be sub-
ject to adjustment.
‘‘(3)(A) To authorize the distribution, under
sections 111, 119, and 1007, of those royalty fees
collected under sections 111, 119, and 1005, as the
case may be, to the extent that the Copyright Roy-
alty Judges have found that the distribution of such
fees is not subject to controversy.
‘‘(B) In cases where the Copyright Royalty
Judges determine that controversy exists, the Copy-
right Royalty Judges shall determine the distribu-
tion of such fees, including partial distributions, in
accordance with section 111, 119, or 1007, as the
case may be.
‘‘(C) the Copyright Royalty Judges shall make
a partial distribution of such fees during the pend-
ency of the proceeding under subparagraph (B) if all
participants under section 803(b)(2) in the pro-
ceeding that are entitled to receive those fees that
are to be partially distributed—
‘‘(i) agree to such partial distribution;
‘‘(ii) sign an agreement obligating them to
return any excess amounts to the extent nec-
essary to comply with the final determination
on the distribution of the fees made under sub-
paragraph (B); and
‘‘(iii) file the agreement with the Copyright
Royalty Judges.
‘‘(D) The Copyright Royalty Judges and any
other officer or employee acting in good faith in dis-
tributing funds under subparagraph (C) shall not be
held liable for the payment of any excess fees under
subparagraph (C). The Copyright Royalty Judges
to its adoption as the basis for statutory terms
and rates or as a basis for the distribution of
statutory royalty payments, as the case may be;
and
‘‘(ii) the Copyright Royalty Judges may
decline to adopt the agreement as the basis for
statutory terms and rates or as the basis for
the distribution of statutory royalty payments,
as the case may be, if any other participant de-
scribed in subparagraph (A) objects to the
agreement and the Copyright Royalty Judges
find, based on the record before them, that the
agreement is not likely to meet the statutory
standard for setting the terms and rates, or for
distributing the royalty payments, as the case
may be.
‘‘(B) License agreements voluntarily negotiated
pursuant 
to 
section 
112(e)(5), 
114(f)(3),
115(c)(3)(E)(i), 116(c), or 118(b)(2) that do not re-
sult in statutory terms and rates shall not be subject
to clauses (i) and (ii) of subparagraph (A).
‘‘(c) RULINGS.—The Copyright Royalty Judges may
make any necessary procedural or evidentiary rulings in
any proceeding under this chapter and may, before com-
mencing a proceeding under this chapter, make any such
rulings that would apply to the proceedings conducted by
the Copyright Royalty Judges. The Copyright Royalty
Judges may consult with the Register of Copyrights in
making any rulings under section 802(f)(1).
‘‘(d) ADMINISTRATIVE SUPPORT.—The Librarian of
Congress shall provide the Copyright Royalty Judges with
the necessary administrative services related to pro-
ceedings under this chapter.
‘‘(e) LOCATION IN LIBRARY OF CONGRESS.—The of-
fices of the Copyright Royalty Judges and staff shall be
in the Library of Congress.
‘‘§ 802. Copyright Royalty Judgeships; staff
‘‘(a) QUALIFICATIONS
OF
COPYRIGHT
ROYALTY
JUDGES.—Each Copyright Royalty Judge shall be an at-
torney who has at least 7 years of legal experience. The
Chief Copyright Royalty Judge shall have at least 5 years
of experience in adjudications, arbitrations, or court trials.
Of the other two Copyright Royalty Judges, one shall have
significant knowledge of copyright law, and the other shall
have significant knowledge of economics. An individual
may serve as a Copyright Royalty Judge only if the indi-
vidual is free of any financial conflict of interest under
subsection (h). In this subsection, ‘adjudication’ has the
meaning given that term in section 551 of title 5, but does
not include mediation.
‘‘(b) STAFF.—The Chief Copyright Royalty Judge
shall hire 3 full-time staff members to assist the Copyright
Royalty Judges in performing their functions.
‘‘(c) TERMS.—The terms of the Copyright Royalty
Judges shall each be 6 years, except of the individuals first
appointed, the Chief Copyright Royalty Judge shall be ap-
pointed to a term of 6 years, and of the remaining Copy-
right Royalty Judges, one shall be appointed to a term
of 2 years, and the other shall be appointed to a term
of 4 years. An individual serving as a Copyright Royalty
Judge may be reappointed to subsequent terms. The term
of a Copyright Royalty Judge shall begin when the term
of the predecessor of that Copyright Royalty Judge ends.
When the term of office of a Copyright Royalty Judge
ends, the individual serving that term may continue to
serve until a successor is selected.
‘‘(d) VACANCIES OR INCAPACITY.—
‘‘(1) VACANCIES.—If a vacancy should occur in
the position of Copyright Royalty Judge, the Librar-
ian of Congress shall act expeditiously to fill the va-
cancy, and may appoint an interim Copyright Roy-
alty Judge to serve until another Copyright Royalty
Judge is appointed under this section. An individual
appointed to fill the vacancy occurring before the ex-
piration of the term for which the predecessor of
that individual was appointed shall be appointed for
the remainder of that term.
‘‘(2) INCAPACITY.—In the case in which a
Copyright Royalty Judge is temporarily unable to
perform his or her duties, the Librarian of Congress
may appoint an interim Copyright Royalty Judge to
perform such duties during the period of such inca-
pacity.
‘‘(e) COMPENSATION.—
‘‘(1) JUDGES.—The Chief Copyright Royalty
Judge shall receive compensation at the rate of basic
pay payable for level AL–1 for administrative law
judges pursuant to section 5372(b) of title 5, and
each of the other two Copyright Royalty Judges
shall receive compensation at the rate of basic pay
payable for level AL–2 for administrative law judges
pursuant to such section. The compensation of the
Copyright Royalty Judges shall not be subject to
any regulations adopted by the Office of Personnel
Management pursuant to its authority under section
5376(b)(1) of title 5.
‘‘(2) STAFF MEMBERS.—Of the staff members
appointed under subsection (b)—
‘‘(A) the rate of pay of one staff member
shall be not more than the basic rate of pay
payable for GS–15 of the General Schedule;
‘‘(B) the rate of pay of one staff member
shall be not less than the basic rate of pay pay-
able for GS–13 of the General Schedule and not
more than the basic rate of pay payable for
GS–14 of such Schedule; and
‘‘(C) the rate of pay for the third staff
member shall be not less than the basic rate of
pay payable for GS–8 of the General Schedule
and not more than the basic rate of pay payable
for GS–11 of such Schedule.
‘‘(f) INDEPENDENCE
OF
COPYRIGHT
ROYALTY
JUDGE.—
‘‘(1) IN MAKING DETERMINATIONS.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the Copyright Royalty Judges shall
have full independence in making determina-
tions concerning adjustments and determina-
tions of copyright royalty rates and terms, the
distribution of copyright royalties, the accept-
ance or rejection of royalty claims, rate adjust-
ment petitions, and petitions to participate, and
in issuing other rulings under this title, except
that the Copyright Royalty Judges may consult
with the Register of Copyrights on any matter
other than a question of fact. Any such con-
sultations 
between 
the 
Copyright 
Royalty
Judges and the Register of Copyright on any
question of law shall be in writing or on the
record.
‘‘(B) NOVEL
QUESTIONS.—(i) Notwith-
standing the provisions of subparagraph (A), in
any case in which the Copyright Royalty Judges
in a proceeding under this title are presented
with a novel question of law concerning an in-
terpretation of those provisions of this title that
are the subject of the proceeding, the Copyright
Royalty Judges shall request the Register of
Copyrights, in writing, to submit a written
opinion on the resolution of such novel question.
The Register shall submit and make public that
opinion within such time period as the Copy-
right Royalty Judges may prescribe. Any con-
sultations under this subparagraph between the
Copyright Royalty Judges and the Register of
Copyrights shall be in writing or on the record.
The opinion of the Register shall not be binding
on the Copyright Royalty Judges, but the Copy-
right Royalty Judges shall take the opinion of
the Register into account in making the judges’
determination on the question concerned.
‘‘(ii) In clause (i), a ‘novel question of law’
is a question of law that has not been deter-
mined in prior decisions, determinations, and
rulings described in section 803(a).
‘‘(2) PERFORMANCE APPRAISALS.—
‘‘(A) IN GENERAL.—Notwithstanding any
other provision of law or any regulation of the
Library of Congress, and subject to subpara-
graph (B), the Copyright Royalty Judges shall
not receive performance appraisals.
‘‘(B) RELATING
TO
SANCTION
OR
RE-
MOVAL.—To the extent that the Librarian of
Congress adopts regulations under subsection
(h) relating to the sanction or removal of a
Copyright Royalty Judge and such regulations
require documentation to establish the cause of
such sanction or removal, the Copyright Roy-
alty Judge may receive an appraisal related
specifically to the cause of the sanction or re-
moval.
‘‘(g) INCONSISTENT DUTIES BARRED.—No Copy-
right Royalty Judge may undertake duties inconsistent
with his or her duties and responsibilities as Copyright
Royalty Judge.
‘‘(h) STANDARDS OF CONDUCT.—The Librarian of
Congress shall adopt regulations regarding the standards
of conduct, including financial conflict of interest and re-
strictions against ex parte communications, which shall
govern the Copyright Royalty Judges and the proceedings
under this chapter.
‘‘(i) REMOVAL OR SANCTION.—The Librarian of Con-
gress may sanction or remove a Copyright Royalty Judge
for violation of the standards of conduct adopted under
subsection (h), misconduct, neglect of duty, or any dis-
qualifying physical or mental disability. Any such sanction
or removal may be made only after notice and opportunity
for a hearing, but the Librarian of Congress may suspend
the Copyright Royalty Judge during the pendency of such
hearing. The Librarian shall appoint an interim Copyright
Royalty Judge during the period of any such suspension.
‘‘§ 803. Proceedings of Copyright Royalty Judges
‘‘(a) PROCEEDINGS.—
‘‘(1) IN
GENERAL.—The Copyright Royalty
Judges shall act in accordance with this title, and to
the extent not inconsistent with this title, in accord-
ance with subchapter II of chapter 5 of title 5, in
carrying out the purposes set forth in section 801.
The Copyright Royalty Judges shall act in accord-
ance with regulations issued by the Copyright Roy-
alty Judges and on the basis of a fully documented
written record, prior decisions of the Copyright Roy-
alty Tribunal, prior copyright arbitration royalty
panel determinations, rulings by the Librarian of
Congress before the effective date of the Copyright
Royalty and Distribution Reform Act of 2004, prior
determinations of Copyright Royalty Judges under
this chapter, and decisions of the court in appeals
under this chapter before, on, or after such effective
date. Any participant in a proceeding under sub-
section (b)(2) may submit relevant information and
proposals to the Copyright Royalty Judges.
‘‘(2) JUDGES ACTING AS PANEL AND INDIVID-
UALLY.—The Copyright Royalty Judges shall pre-
side over hearings in proceedings under this chapter
en banc. The Chief Copyright Royalty Judge may
designate a Copyright Royalty Judge to preside indi-
vidually over such collateral and administrative pro-
ceedings, and over such proceedings under para-
graphs (1) through (5) of subsection (b), as the
Chief Judge considers appropriate.
‘‘(3) DETERMINATIONS.—Final determinations
of the Copyright Royalty Judges in proceedings
under this chapter shall be made by majority vote.
A Copyright Royalty Judge dissenting from the ma-
jority on any determination under this chapter may
issue his or her dissenting opinion, which shall be in-
cluded with the determination.
‘‘(b) PROCEDURES.—
‘‘(1) INITIATION.—
‘‘(A) CALL
FOR
PETITIONS
TO
PARTICI-
PATE.—(i) Promptly upon the filing of a peti-
tion for a rate adjustment or determination
under section 804(a) or 804(b)(8), or by no
later than January 5 of a year specified in sec-
tion 804 for the commencement of a proceeding
if a petition has not been filed by that date, the
Copyright Royalty Judges shall cause to be
published in the Federal Register notice of com-
mencement of proceedings under this chapter
calling for the filing of petitions to participate
in a proceeding under this chapter for the pur-
pose of making the relevant determination
under section 111, 112, 114, 115, 116, 118,
119, 1004 or 1007, as the case may be.
‘‘(ii) Petitions to participate shall be filed
by no later than 30 days after publication of
notice of commencement of a proceeding, under
clause (i), except that the Copyright Royalty
Judges may, for substantial good cause shown
and if there is no prejudice to the participants
that have already filed petitions, accept late pe-
titions to participate at any time up to the date
that is 90 days before the date on which par-
ticipants in the proceeding are to file their writ-
ten direct statements.
‘‘(B) PETITIONS TO PARTICIPATE.—Each
petition to participate in a proceeding shall de-
scribe the petitioner’s interest in the subject
matter of the proceeding. Parties with similar
interests may file a single petition to partici-
pate.
‘‘(2) PARTICIPATION IN GENERAL.—Subject to
paragraph (4), a person may participate in a pro-
ceeding under this chapter, including through the
submission of briefs or other information, only if—
‘‘(A) that person has filed a petition to
participate in accordance with paragraph (1)
(either individually or as a group under para-
graph (1)(B)), together with a filing fee of
$150;
materials relevant and material to the pro-
ceeding. Any objection to any such dis-
covery request shall be resolved by a mo-
tion or request to compel discovery made
to the Copyright Royalty Judges. Each
motion or request to compel discovery shall
be determined by the Copyright Royalty
Judges, or by a Copyright Royalty Judge
when permitted under subsection (a)(2),
who may approve the request only if the
evidence that would be produced is relevant
and material. A Copyright Royalty Judge
may refuse a request to compel discovery
of evidence that has been found to be rel-
evant and material, only upon good cause
shown. For purposes of the preceding sen-
tence, the basis for ‘good cause’ may only
be that—
‘‘(I) the discovery sought is un-
reasonably cumulative or duplicative,
or is obtainable from another source
that is more convenient, less burden-
some, or less expensive;
‘‘(II) the participant seeking dis-
covery has had ample opportunity by