H. R. 1417
One Hundred Eighth Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Tuesday,
the twentieth day of January, two thousand and four
An Act
To amend title 17, United States Code, to replace copyright arbitration royalty
panels with Copyright Royalty Judges, and for other purposes.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Copyright Royalty and Distribu-
tion 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 provision, 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 1 of the
3 as the Chief Copyright Royalty Judge. The Librarian shall make
appointments to such positions after consultation 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 creative works
to the public.
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‘‘(B) To afford the copyright owner a fair return for
his or her creative work and the copyright user a fair
income under existing economic conditions.
‘‘(C) To reflect the relative roles of the copyright owner
and the copyright user in the product made available to
the public with respect to relative creative contribution,
technological 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 struc-
ture of the industries involved and on generally prevailing
industry practices.
‘‘(2) To make determinations concerning the adjustment
of the copyright royalty rates under section 111 solely in accord-
ance with the following provisions:
‘‘(A) The rates established by section 111(d)(1)(B) may
be adjusted to reflect—
‘‘(i) national monetary inflation or deflation; or
‘‘(ii) changes in the average rates charged cable
subscribers for the basic service of providing secondary
transmissions to maintain the real constant dollar 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 sub-
scribers 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 per-
mitted; and
‘‘(II) no increase in the royalty fee shall be per-
mitted 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 factor, whether the industry
has been restrained by subscriber rate regulating authori-
ties from increasing the rates for the basic service of pro-
viding secondary transmissions.
‘‘(B) In the event that the rules and regulations of
the Federal Communications Commission are amended at
any time after April 15, 1976, to permit the carriage by
cable systems of additional television broadcast signals
beyond the local service area of the primary transmitters
of such signals, the royalty rates established by section
111(d)(1)(B) may be adjusted to ensure that the rates for
the additional distant signal equivalents resulting from
such carriage are reasonable in the light of the changes
effected by the amendment to such rules and regulations.
In determining the reasonableness of rates proposed fol-
lowing an amendment of Federal Communications Commis-
sion rules and regulations, the Copyright Royalty Judges
shall consider, among other factors, the economic impact
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 represented by—
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‘‘(i) carriage of any signal permitted under the
rules and regulations of the Federal Communications
Commission in effect on April 15, 1976, or the carriage
of a signal 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 regulations of the Federal Communica-
tions Commission, as such rules and regulations were
in effect on April 15, 1976.
‘‘(C) In the event of any change in the rules and regula-
tions of the Federal Communications Commission with
respect to syndicated 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 tele-
vision broadcast signals carried on those systems affected
by the change.
‘‘(D) The gross receipts limitations established by sec-
tion 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 main-
tain the real constant dollar value of the exemption pro-
vided by such section, and the royalty rate specified therein
shall not be subject 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 Royalty Judges have found that the distribution
of such fees is not subject to controversy.
‘‘(B) In cases where the Copyright Royalty Judges deter-
mine that controversy exists, the Copyright Royalty Judges
shall determine the distribution of such fees, including partial
distributions, in accordance with section 111, 119, or 1007,
as the case may be.
‘‘(C) The Copyright Royalty Judges may make a partial
distribution of such fees during the pendency of the proceeding
under subparagraph (B) if all participants under section
803(b)(2) in the proceeding 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 necessary to comply with
the final determination on the distribution of the fees made
under subparagraph (B);
‘‘(iii) file the agreement with the Copyright Royalty
Judges; and
‘‘(iv) agree that such funds are available for distribu-
tion.
‘‘(D) The Copyright Royalty Judges and any other officer
or employee acting in good faith in distributing funds under
subparagraph (C) shall not be held liable for the payment
of any excess fees under subparagraph (C). The Copyright