no such controversy exists, the Copyright Roy-
alty Judge shall, after deducting reasonable ad-
ministrative costs under this paragraph, dis-
tribute such fees to the copyright owners enti-
tled to receive them, or to their designated 
agents. If the Copyright Royalty Judge finds 
the existence of a controversy, the Copyright 
Royalty Judge shall, pursuant to chapter 8 of 
this title, conduct a proceeding to determine the 
distribution of royalty fees. 
‘‘(C) WITHHOLDING
OF
FEES
DURING 
CONTROVERSY.—During the pendency of any 
proceeding under this subsection, the Copyright 
Royalty Judge shall withhold from distribution 
an amount sufficient to satisfy all claims with 
respect to which a controversy exists, but shall
have discretion to proceed to distribute any 
amounts that are not in controversy.’’. 
(h) DIGITAL AUDIO RECORDING DEVICES.—
(1) ROYALTY PAYMENTS.—Section 1004(a)(3) 
is amended by amending the third sentence to read 
as follows: ‘‘Not more than once each year, any in-
terested copyright party may petition the Copyright 
Royalty Judge to increase the royalty maximum and, 
if more than 20 percent of the royalty payments are
at the relevant royalty maximum, the Copyright 
Royalty Judge shall prospectively increase such roy-
alty maximum with the goal of having no more than 
10 percent of such payments at the new royalty 
maximum; however the amount of any such increase 
as a percentage of the royalty maximum shall in no 
event exceed the percentage increase in the Con-
sumer Price Index during the period under review.’’. 
(2) ENTITLEMENT TO ROYALTY PAYMENTS.—
Section 1006(c) is amended by striking ‘‘Librarian 
of Congress shall convene a copyright arbitration royalty 
panel which’’ and inserting ‘‘Copyright Royalty Judge’’. 
(3) PROCEDURES FOR DISTRIBUTING ROYALTY 
PAYMENTS.—Section 1007 is amended—
(A) in subsection (a), by amending para-
graph (1) to read as follows: 
‘‘(1) FILING OF CLAIMS.—During the first 2 
months of each calendar year, every interested copy-
right party seeking to receive royalty payments to 
which such party is entitled under section 1006 shall 
file with the Copyright Royalty Judge a claim for 
payments collected during the preceding year in such 
form and manner as the Librarian of Congress shall 
prescribe by regulation.’’; and
(B) by amending subsections (b) and (c) to 
read as follows: 
‘‘(b) DISTRIBUTION OF PAYMENTS IN THE ABSENCE 
OF A DISPUTE.—After the period established for the filing 
of claims under subsection (a), in each year, the Copyright 
Royalty Judge shall determine whether there exists a con-
troversy concerning the distribution of royalty payments 
under section 1006(c). If the Copyright Royalty Judge de-
termines that no such controversy exists, the copyright 
royalty judge shall, within 30 days after such determina-
tion, authorize the distribution of the royalty payments as 
set forth in the agreements regarding the distribution of 
royalty payments entered into pursuant to subsection (a). 
The Librarian of Congress shall, before such royalty pay-
ments are distributed, deduct the reasonable administra-
tive costs incurred by the Librarian and the Copyright Of-
fice under this section. 
‘‘(c) RESOLUTION OF DISPUTES.—If the Copyright 
Royalty Judge finds the existence of a controversy, the 
Copyright Royalty Judge shall, pursuant to chapter 8 of 
this title, conduct a proceeding to determine the distribu-
tion of royalty payments. During the pendency of such a 
proceeding, the Copyright Royalty Judge shall withhold 
from distribution an amount sufficient to satisfy all claims 
with respect to which a controversy exists, but shall, to
the extent feasible, authorize the distribution of any 
amounts that are not in controversy. The Librarian of 
Congress shall, before such royalty payments are distrib-
uted, deduct the reasonable administrative costs incurred 
by the Librarian and the Copyright Office under this sec-
tion.’’. 
(4) DETERMINATION OF CERTAIN DISPUTES.—
(A) Section 1010 is amended to read as follows: 
‘‘§ 1010. Determination of certain disputes 
‘‘(a) SCOPE OF DETERMINATION.—Before the date 
of first distribution in the United States of a digital audio 
recording device or a digital audio interface device, any 
party manufacturing, importing, or distributing such de-
vice, and any interested copyright party may mutually 
agree to petition the Copyright Royalty Judge to deter-
mine whether such device is subject to section 1002, or 
the basis on which royalty payments for such device are 
to be made under section 1003. 
‘‘(b) INITIATION
OF PROCEEDINGS.—The parties 
under subsection (a) shall file the petition with the Copy-
right Royalty Judge requesting the commencement of a 
proceeding. Within 2 weeks after receiving such a petition, 
the Librarian of Congress shall cause notice to be pub-
lished in the Federal Register of the initiation of the pro-
ceeding.
‘‘(c) STAY OF JUDICIAL PROCEEDINGS.—Any civil 
action brought under section 1009 against a party to a 
proceeding under this section shall, on application of one 
of the parties to the proceeding, be stayed until completion 
of the proceeding. 
‘‘(d) PROCEEDING.—The Copyright Royalty Judge 
shall conduct a proceeding with respect to the matter con-
cerned, in accordance with such procedures as the Copy-
right Royalty Judge may adopt. The Copyright Royalty 
Judge shall act on the basis of a fully documented written 
record. Any party to the proceeding may submit relevant 
information and proposals to the Copyright Royalty 
Judge. The parties to the proceeding shall bear the entire 
cost thereof in such manner and proportion as the Copy-
right Royalty Judge shall direct. 
‘‘(e) JUDICIAL REVIEW.—Any determination of the 
Copyright Royalty Judge under subsection (d) may be ap-
pealed, by a party to the proceeding, in accordance with 
section 803(d) of this title. The pendency of an appeal 
under this subsection shall not stay the determination of 
the Copyright Royalty Judge. If the court modifies the de-
termination of the Copyright Royalty Judge, the court 
shall have jurisdiction to enter its own decision in accord-
ance with its final judgment. The court may further vacate 
the determination of the Copyright Royalty Judge and re-
mand the case for proceedings as provided in this sec-
tion.’’. 
(B) The item relating to section 1010 in the 
table of sections for chapter 10 is amended to read 
as follows:
‘‘1010. Determination of certain disputes.’’.
SEC. 6. TRANSITION PROVISIONS. 
(a) IN GENERAL.—Subject to subsection (b), the 
amendments made by this Act shall not affect any pro-
ceedings commenced before the enactment of this Act 
under the provisions of title 17, United States Code, 
amended by this Act, and pending on such date of enact-
ment. Such proceedings shall continue, determinations 
made in such proceedings, and appeals taken therefrom, 
as if this Act had not been enacted, and shall continue 
in effect until modified under title 17, United States Code, 
as amended by this Act. 
(b) EFFECTIVE PERIODS FOR CERTAIN RATEMAKING 
PROCEEDINGS.—Notwithstanding subsection (a), terms 
and rates determined under proceedings under section 
114(f)(2) or 112(e) of title 17, United States Code, com-
menced in 2002 shall be effective for an additional period 
of 3 years, or until such later date as the parties may 
agree, in lieu of the 2-year period otherwise provided for 
under such sections.
Æ