Source: https://www.govinfo.gov/content/pkg/USCODE-2017-title17/html/USCODE-2017-title17-chap1-sec115.htm
Timestamp: 2019-07-24 00:21:16
Document Index: 344558480

Matched Legal Cases: ['§101', '§3', '§4', '§4', '§5', '§4', '§209', '§6', '§209', '§209', '§4', '§5', '§4', '§4', '§106']

Sec. 115 - Scope of exclusive rights in nondramatic musical works: Compulsory license for making and distributing phonorecords
(3)(A) A compulsory license under this section includes the right of the compulsory licensee to distribute or authorize the distribution of a phonorecord of a nondramatic musical work by means of a digital transmission which constitutes a digital phonorecord delivery, regardless of whether the digital transmission is also a public performance of the sound recording under section 106(6) of this title or of any nondramatic musical work embodied therein under section 106(4) of this title. For every digital phonorecord delivery by or under the authority of the compulsory licensee—
(E)(i) License agreements voluntarily negotiated at any time between one or more copyright owners of nondramatic musical works and one or more persons entitled to obtain a compulsory license under subsection (a)(1) shall be given effect in lieu of any determination by the Librarian of Congress and Copyright Royalty Judges. Subject to clause (ii), the royalty rates determined pursuant to subparagraph 1 (C) and (D) shall be given effect as to digital phonorecord deliveries in lieu of any contrary royalty rates specified in a contract pursuant to which a recording artist who is the author of a nondramatic musical work grants a license under that person's exclusive rights in the musical work under paragraphs (1) and (3) of section 106 or commits another person to grant a license in that musical work under paragraphs (1) and (3) of section 106, to a person desiring to fix in a tangible medium of expression a sound recording embodying the musical work.
(G)(i) A digital phonorecord delivery of a sound recording is actionable as an act of infringement under section 501, and is fully subject to the remedies provided by sections 502 through 506, unless—
(Pub. L. 94–553, title I, §101, Oct. 19, 1976, 90 Stat. 2561; Pub. L. 98–450, §3, Oct. 4, 1984, 98 Stat. 1727; Pub. L. 104–39, §4, Nov. 1, 1995, 109 Stat. 344; Pub. L. 105–80, §§4, 10, 12(a)(7), Nov. 13, 1997, 111 Stat. 1531, 1534; Pub. L. 108–419, §5(d), Nov. 30, 2004, 118 Stat. 2364; Pub. L. 109–303, §4(c), Oct. 6, 2006, 120 Stat. 1482; Pub. L. 110–403, title II, §209(a)(3), Oct. 13, 2008, 122 Stat. 4264; Pub. L. 111–295, §6(g), Dec. 9, 2010, 124 Stat. 3181.)
Royalty Payable Under Compulsory License. Identification of Copyright Owner.—Under the present law a copyright owner is obliged to file a "notice of use" in the Copyright Office, stating that the initial recording of the copyrighted work has been made or licensed, in order to recover against an unauthorized record manufacturer. This requirement has resulted in a technical loss of rights in some cases, and serves little or no purpose where the registration and assignment records of the Copyright Office already show the facts of ownership. Section 115(c)(1) therefore drops any formal "notice of use" requirements and merely provides that, "to be entitled to receive royalties under a compulsory license, the copyright owner must be identified in the registration or other public records of the Copyright Office." On the other hand, since proper identification is an important precondition of recovery, the bill further provides that "the owner is entitled to royalties for phonorecords manufactured and distributed after being so identified, but is not entitled to recover for any phonorecords previously made and distributed."
Basis of Royalty.—Under the present statute the specified royalty is payable "on each such part manufactured," regardless of how many "parts" (i.e., records) are sold. This basis for calculating the royalty has been revised in section 115(c)(2) to provide that "the royalty under a compulsory license shall be payable for every phonorecord made and distributed in accordance with the license." This basis is more compatible with the general practice in negotiated licenses today. It is unjustified to require a compulsory licensee to pay license fees on records which merely go into inventory, which may later be destroyed, and from which the record producer gains no economic benefit.
It is intended that the Register of Copyrights will prescribe regulations insuring that copyright owners will receive full and prompt payment for all phonorecords made and distributed. Section 115(c)(2) states that "a phonorecord is considered &apos;distributed&apos; if the person exercising the compulsory license has voluntarily and permanently parted with its possession." For this purpose, the concept of "distribution" comprises any act by which the person exercising the compulsory license voluntarily relinquishes possession of a phonorecord (considered as a fungible unit), regardless of whether the distribution is to the public, passes title, constitutes a gift, or is sold, rented, leased, or loaned, unless it is actually returned and the transaction cancelled. Neither involuntary relinquishment, as through theft or fire, nor the destruction of unwanted records, would constitute "distribution."
Under existing practices in the record industry, phonorecords are distributed to wholesalers and retailers with the privilege of returning unsold copies for credit or exchange. As a result, the number of recordings that have been "permanently" distributed will not usually be known until some time—six or seven months on the average—after the initial distribution. In recognition of this problem, it has become a well-established industry practice, under negotiated licenses, for record companies to maintain reasonable reserves of the mechanical royalties due the copyright owners, against which royalties on the returns can be offset. The Committee recognizes that this practice may be consistent with the statutory requirements for monthly compulsory license accounting reports, but recognizes the possibility that, without proper safeguards, the maintenance of such reserves could be manipulated to avoid making payments of the full amounts owing to copyright owners. Under these circumstances, the regulations prescribed by the Register of Copyrights should contain detailed provisions ensuring that the ultimate disposition of every phonorecord made under a compulsory license is accounted for, and that payment is made for every phonorecord "voluntarily and permanently" distributed. In particular, the Register should prescribe a point in time when, for accounting purposes under section 115, a phonorecord will be considered "permanently distributed," and should prescribe the situations in which a compulsory licensee is barred from maintaining reserves (e.g., situations in which the compulsory licensee has frequently failed to make payments in the past.)
The date of enactment of the Digital Performance Right in Sound Recordings Act of 1995, referred to in subsec. (c)(3)(J), is the date of enactment of Pub. L. 104–39, which was approved Nov. 1, 1995.
2010—Subsec. (c)(3)(G)(i). Pub. L. 111–295 made technical correction to directory language of Pub. L. 110–403, §209(a)(3)(A). See 2008 Amendment note below.
2008—Subsec. (c)(3)(G)(i). Pub. L. 110–403, §209(a)(3)(A), as amended by Pub. L. 111–295 struck out "and section 509" after "506" in introductory provisions.
2006—Subsec. (c)(3)(B). Pub. L. 109–303, §4(c)(1), substituted "this subparagraph and subparagraphs (C) through (E)" for "subparagraphs (B) through (F)".
2004—Subsec. (c)(3)(A)(ii). Pub. L. 108–419, §5(d)(1), substituted "(E)" for "(F)".
1997—Subsec. (c)(3)(D). Pub. L. 105–80, §4, struck out "and publish in the Federal Register" before "a schedule of rates and terms".
1995—Subsec. (a)(1). Pub. L. 104–39, §4(1), substituted "any other person, including those who make phonorecords or digital phonorecord deliveries," for "any other person" in first sentence and inserted before period at end of second sentence ", including by means of a digital phonorecord delivery".
Pub. L. 94–553, title I, §106, Oct. 19, 1976, 90 Stat. 2599, provided that: "In any case where, before January 1, 1978, a person has lawfully made parts of instruments serving to reproduce mechanically a copyrighted work under the compulsory license provisions of section 1(e) of title 17 as it existed on December 31, 1977, such person may continue to make and distribute such parts embodying the same mechanical reproduction without obtaining a new compulsory license under the terms of section 115 of title 17 as amended by the first section of this Act [this section]. However, such parts made on or after January 1, 1978, constitute phonorecords and are otherwise subject to the provisions of said section 115 [this section]."