In the Senate of the United States,
October 6, 2004.
Resolved, That the bill from the House of Representa-
tives (H.R. 1417) entitled ‘‘An Act to amend title 17, United
States Code, to replace copyright arbitration royalty panels
with Copyright Royalty Judges, and for other purposes.’’, do
pass with the following
AMENDMENT:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Copyright Royalty and
Distribution Reform Act of 2004’’.
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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:
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‘‘(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 copy-
right user a fair income under existing economic
conditions.
‘‘(C) To reflect the relative roles of the copy-
right owner and the copyright user in the prod-
uct made available to the public with respect to
relative creative contribution, technological con-
tribution, capital investment, cost, risk, and con-
tribution to the opening of new markets for cre-
ative expression and media for their communica-
tion.
‘‘(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 ad-
justment of the copyright royalty rates under section
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111 solely in accordance with the following provi-
sions:
‘‘(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 serv-
ice 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 subscribers for the basic service of
providing 
secondary 
transmissions 
are
changed so that the average rates exceed na-
tional 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.
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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 sub-
scriber rate regulating authorities from increas-
ing the rates for the basic service of providing
secondary transmissions.
‘‘(B) In the event that the rules and regula-
tions of the Federal Communications Commis-
sion 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 rea-
sonable in the light of the changes effected by the
amendment to such rules and regulations. In de-
termining the reasonableness of rates proposed
following an amendment of Federal Communica-
tions Commission 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
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royalty rates shall be made under this subpara-
graph with respect to any distant signal equiva-
lent or fraction thereof represented 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 regula-
tions of the Federal Communications Com-
mission, 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 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 reason-
able in light of the changes to such rules and reg-
ulations, but any such adjustment shall apply
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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 subject to adjust-
ment.
‘‘(3)(A) To authorize the distribution, under sec-
tions 111, 119, and 1007, of those royalty fees col-
lected 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 determine that controversy exists, the Copy-
right Royalty Judges shall determine the distribution
of such fees, including partial distributions, in ac-
cordance with section 111, 119, or 1007, as the case
may be.
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‘‘(C) The Copyright Royalty Judges may make a
partial distribution of such fees during the pendency
of the proceeding under subparagraph (B) if all par-
ticipants 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 nec-
essary to comply with the final determination on
the distribution of the fees made under subpara-
graph (B);
‘‘(iii) file the agreement with the Copyright
Royalty Judges; and
‘‘(iv) agree that such funds are available for
distribution.
‘‘(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
shall, at the time the final determination is made,
calculate any such excess amounts.
‘‘(4) To accept or reject royalty claims filed
under sections 111, 119, and 1007, on the basis of
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timeliness or the failure to establish the basis for a
claim.
‘‘(5) To accept or reject rate adjustment petitions
as provided in section 804 and petitions to partici-
pate as provided in section 803(b) (1) and (2).
‘‘(6) To determine the status of a digital audio
recording device or a digital audio interface device
under sections 1002 and 1003, as provided in section
1010.
‘‘(7)(A) To adopt as a basis for statutory terms
and rates or as a basis for the distribution of statu-
tory royalty payments, an agreement concerning such
matters reached among some or all of the participants
in a proceeding at any time during the proceeding,
except that—
‘‘(i) the Copyright Royalty Judges shall
provide to those that would be bound by the
terms, rates, or other determination set by any
agreement in a proceeding to determine royalty
rates an opportunity to comment on the agree-
ment and shall provide to the other participants
in the proceeding under section 803(b)(2) that
would be bound by the terms, rates, or other de-
termination set by the agreement an opportunity
to comment on the agreement and object to its
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adoption as a basis for statutory terms and
rates; and
‘‘(ii) the Copyright Royalty Judges may de-
cline to adopt the agreement as a basis for statu-
tory terms and rates for participants that are
not parties to the agreement, if any other partic-
ipant described in subparagraph (A) objects to
the agreement and the Copyright Royalty Judges
conclude, based on the record before them if one
exists, that the agreement does not provide a rea-
sonable basis for setting statutory terms or rates.
‘‘(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) or (3) that do
not result in statutory terms and rates shall not be
subject to clauses (i) and (ii) of subparagraph (A).
‘‘(C) Interested parties may negotiate and agree
to, and the Copyright Royalty Judges may adopt, an
agreement that specifies as terms notice and record-
keeping requirements that apply in lieu of those that
would otherwise apply under regulations.
‘‘(8) To perform other duties, as assigned by the
Register of Copyrights within the Library of Con-
gress, except as provided in section 802(g) at times
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adopted by the Office of Personnel Management pur-
suant to its authority under section 5376(b)(1) of title
5.
‘‘(2) STAFF MEMBERS.—Of the staff members ap-
pointed under subsection (b)—
‘‘(A) the rate of pay of 1 staff member shall
be not more than the basic rate of pay payable
for level 10 of GS–15 of the General Schedule;
‘‘(B) the rate of pay of 1 staff member shall
be not less than the basic rate of pay payable for
GS–13 of the General Schedule and not more
than the basic rate of pay payable for level 10
of GS–14 of such Schedule; and
‘‘(C) the rate of pay for the third staff mem-
ber 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
level 10 of GS–11 of such Schedule.
‘‘(3) LOCALITY PAY.—All rates of pay referred to
under this subsection shall include locality pay.
‘‘(f) 
INDEPENDENCE
OF
COPYRIGHT
ROYALTY
JUDGE.—
‘‘(1) IN MAKING DETERMINATIONS.—
‘‘(A) IN
GENERAL.—(i) Subject to clause
(ii) of this subparagraph and subparagraph (B),
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the Copyright Royalty Judges shall have full
independence in making determinations con-
cerning adjustments and determinations of copy-
right royalty rates and terms, the distribution of
copyright royalties, the acceptance or rejection of
royalty claims, rate adjustment petitions, and
petitions to participate, and in issuing other rul-
ings 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.
‘‘(ii) A Copyright Royalty Judge or Judges,
or, by motion to the Copyright Royalty Judge or
Judges, any participant in a proceeding may re-
quest an interpretation by the Register of Copy-
rights concerning any material question of sub-
stantive law (not including questions of proce-
dure before the Copyright Royalty Judges, the ul-
timate adjustments and determinations of copy-
right royalty rates and terms, the ultimate dis-
tribution of copyright royalties, or the accept-
ance or rejection of royalty claims, rate adjust-
ment petitions, or petitions to participate) con-
cerning an interpretation or construction of
those provisions of this title that are the subject
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of the proceeding. Any such request for a written
interpretation by the Register of Copyrights shall
be on the record. Reasonable provision shall be
made for comment by the participants in the
proceeding on the material question of sub-
stantive law in such a way as to minimize du-
plication and delay. Except as provided in sub-
paragraph (B), the Register of Copyrights shall
deliver to the Copyright Royalty Judges a re-
sponse within 14 days of receipt by the Register
of Copyrights of all of the briefs or comments of
the participants. Such decision shall be in writ-
ing and shall be included by the Copyright Roy-
alty Judges in the record that accompanies their
final determination. If such a decision is timely
delivered to the Copyright Royalty Judges, the
Copyright Royalty Judges shall apply the legal
interpretation embodied in the response of the
Register of Copyrights in resolving material
questions of substantive law.
‘‘(B) NOVEL QUESTIONS.—(i) In any case
in which a novel material question of substantive
law concerning an interpretation of those provi-
sions of this title that are the subject of the pro-
ceeding is presented, the Copyright Royalty
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Judges shall request a decision of the Register of
Copyrights, in writing, to resolve such novel
question. Reasonable provision shall be made for
comment on such request by the participants in
the proceeding, in such a way as to minimize
duplication and delay. The Register shall trans-
mit his or her decision to the Copyright Royalty
Judges within 30 days of receipt by the Register
of Copyrights of all of the briefs or comments of
the participants. Such decision shall be in writ-
ing and included by the Copyright Royalty
Judges in the record that accompanies their final
determination. If such a decision is timely deliv-
ered, the Copyright Royalty Judges shall apply
the legal determinations embodied in the decision
of the Register of Copyrights in resolving mate-
rial questions of substantive law.
‘‘(ii) In clause (i), a ‘novel question of law’
is a question of law that has not been determined
in prior decisions, determinations, and rulings
described in section 803(a).
‘‘(C) CONSULTATION.—Notwithstanding the
provisions of subparagraph (A), the Copyright
Royalty Judges shall consult with the Register of
Copyrights with respect to any determination or
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ruling that would require that any act be per-
formed by the Copyright Office, and any such de-
termination or ruling shall not be binding upon
the Register of Copyrights.
‘‘(D) REVIEW OF LEGAL CONCLUSIONS BY
THE REGISTER OF COPYRIGHTS.—The Register
of Copyrights may review for legal error the reso-
lution by the Copyright Royalty Judges of a ma-
terial question of substantive law under this title
that underlies or is contained in a final deter-
mination of the Copyright Royalty Judges. If the
Register of Copyrights concludes, after taking
into consideration the views of the participants
in the proceeding, that any resolution reached by
the Copyright Royalty Judges was in material
error, the Register of Copyrights shall issue a
written decision correcting such legal error,
which shall be made part of the record of the
proceeding. Additionally, the Register of Copy-
rights shall cause to be published in the Federal
Register such written decision together with a
specific identification of the legal conclusion of
the Copyright Royalty Judges that is determined
to be erroneous. As to conclusions of substantive
law involving an interpretation of the statutory
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provisions of this title, the decision of the Reg-
ister of Copyrights shall be binding as precedent
upon the Copyright Royalty Judges in subse-
quent proceedings under this chapter. When a
decision has been rendered pursuant to section
802(f)(1)(D), the Register of Copyrights may, on
the basis of and in accordance with such deci-
sion, intervene as of right in any appeal of a
final determination of the Copyright Royalty
Judges pursuant to section 803(d) in the United
States Court of Appeals for the District of Co-
lumbia Circuit. If, prior to intervening in such
an appeal, the Register of Copyrights gives noti-
fication and undertakes to consult with the At-
torney General with respect to such intervention,
and the Attorney General fails within reasonable
period after receipt of such notification to inter-
vene in such appeal, the Register of Copyrights
may intervene in such appeal in his or her own
name by any attorney designated by the Register
of Copyrights for such purpose. Intervention by
the Register of Copyrights in his or her own
name shall not preclude the Attorney General
from intervening on behalf of the United States
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in such an appeal as may be otherwise provided
or required by law.
‘‘(E) EFFECT ON JUDICIAL REVIEW.—Noth-
ing in this section shall be interpreted to alter
the standard applied by a court in reviewing
legal determinations involving an interpretation
or construction of the provisions of this title or
to affect the extent to which any construction or
interpretation of the provisions of this title shall
be accorded deference by a reviewing court.
‘‘(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 Copy-
right Royalty Judge and such regulations re-
quire documentation to establish the cause of
such sanction or removal, the Copyright Royalty
Judge may receive an appraisal related specifi-
cally to the cause of the sanction or removal.
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‘‘(g) INCONSISTENT DUTIES BARRED.—No Copyright
Royalty Judge may undertake duties that conflict with his
or her duties and responsibilities as a 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 sub-
section (h), misconduct, neglect of duty, or any disquali-
fying 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 regulations issued
by the Copyright Royalty Judges and the Librarian
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of Congress, and on the basis of a written record,
prior determinations and interpretations of the Copy-
right Royalty Tribunal, Librarian of Congress, copy-
right arbitration royalty panels, the Register of Copy-
rights, and the Copyright Royalty Judges (to the ex-
tent those determinations are not inconsistent with a
decision of the Register of Copyrights that was timely
delivered to the Copyright Royalty Judges pursuant
to section 802(f)(1) (A) or (B), or with a decision of
the Register of Copyrights pursuant to section
802(f)(1)(D)), under this chapter, and decisions of the
court of appeals under this chapter before, on, or after
the effective date of the Copyright Royalty and Dis-
tribution Reform Act of 2004.
‘‘(2) JUDGES ACTING AS PANEL AND INDIVID-
UALLY.—The Copyright Royalty Judges shall preside
over hearings in proceedings under this chapter en
banc. The Chief Copyright Royalty Judge may des-
ignate a Copyright Royalty Judge to preside individ-
ually over such collateral and administrative pro-
ceedings, and over such proceedings under paragraphs
(1) through (5) of subsection (b), as the Chief Judge
considers appropriate.
‘‘(3) DETERMINATIONS.—Final determinations
of the Copyright Royalty Judges in proceedings under
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this chapter shall be made by majority vote. A Copy-
right Royalty Judge dissenting from the majority on
any determination under this chapter may issue his
or her dissenting opinion, which shall be included
with the determination.
‘‘(b) PROCEDURES.—
‘‘(1) INITIATION.—
‘‘(A) CALL
FOR
PETITIONS
TO
PARTICI-
PATE.—(i) Promptly upon a determination
made under section 804(a), or no later than Jan-
uary 5 of a year specified in section 804(b) (2)
or (3), or as provided under section 804(b)(8), or
by no later than January 5 of a year specified
in section 804 for the commencement of a pro-
ceeding 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
commencement 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 no-
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tice 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 peti-
tions to participate at any time up to the date
that is 90 days before the date on which partici-
pants in the proceeding are to file their written
direct statements. Notwithstanding the preceding
sentence, petitioners whose petitions are filed
more than 30 days after publication of notice of
commencement of a proceeding are not eligible to
object to a settlement reached during the vol-
untary 
negotiation 
period 
under 
section
803(b)(3), and any objection filed by such a peti-
tioner shall not be taken into account by the
Copyright Royalty Judges.
‘‘(B) PETITIONS
TO
PARTICIPATE.—Each
petition to participate in a proceeding shall de-
scribe the petitioner’s interest in the subject mat-
ter of the proceeding. Parties with similar inter-
ests may file a single petition to participate.
‘‘(2) PARTICIPATION
IN
GENERAL.—Subject to
paragraph (4), a person may participate in a pro-
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ceeding under this chapter, including through the sub-
mission of briefs or other information, only if—
‘‘(A) that person has filed a petition to par-
ticipate in accordance with paragraph (1) (ei-
ther individually or as a group under paragraph
(1)(B)), together with a filing fee of $150;
‘‘(B) the Copyright Royalty Judges have not
determined that the petition to participate is
facially invalid; and
‘‘(C) the Copyright Royalty Judges have not
determined, sua sponte or on the motion of an-
other participant in the proceeding, that the per-
son lacks a significant interest in the proceeding.
‘‘(3) VOLUNTARY NEGOTIATION PERIOD.—
‘‘(A) IN GENERAL.—Promptly after the date
for filing of petitions to participate in a pro-
ceeding, the Copyright Royalty Judges shall
make available to all participants in the pro-
ceeding a list of such participants and shall ini-
tiate a voluntary negotiation period among the
participants.
‘‘(B) LENGTH OF PROCEEDINGS.—The vol-
untary negotiation period initiated under sub-
paragraph (A) shall be 3 months.
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‘‘(C) 
DETERMINATION
OF
SUBSEQUENT
PROCEEDINGS.—At the close of the voluntary ne-
gotiation proceedings, the Copyright Royalty
Judges shall, if further proceedings under this
chapter are necessary, determine whether and to
what extent paragraphs (4) and (5) will apply
to the parties.
‘‘(4) SMALL CLAIMS PROCEDURE IN DISTRIBU-
TION PROCEEDINGS.—
‘‘(A) IN
GENERAL.—If, in a proceeding
under this chapter to determine the distribution
of royalties, a participant in the proceeding as-
serts a claim in the amount of $10,000 or less,
the Copyright Royalty Judges shall decide the
controversy on the basis of the filing of the writ-
ten direct statement by the participant, the re-
sponse by any opposing participant, and 1 addi-
tional response by each such party. The partici-
pant asserting the claim shall not be required to
pay the filing fee under paragraph (2).
‘‘(B) BAD FAITH INFLATION OF CLAIM.—If
the Copyright Royalty Judges determine that a
participant asserts in bad faith an amount in
controversy in excess of $10,000 for the purpose
of avoiding a determination under the procedure