Copyrights - 17 USC Section 114

01/19/04

Sec. 114. Scope of exclusive rights in sound recordings

(a) The exclusive rights of the owner of copyright in a sound
recording are limited to the rights specified by clauses (1), (2),
(3) and (6) of section 106, and do not include any right of
performance under section 106(4).
(b) The exclusive right of the owner of copyright in a sound
recording under clause (1) of section 106 is limited to the right
to duplicate the sound recording in the form of phonorecords or
copies that directly or indirectly recapture the actual sounds
fixed in the recording. The exclusive right of the owner of
copyright in a sound recording under clause (2) of section 106 is
limited to the right to prepare a derivative work in which the
actual sounds fixed in the sound recording are rearranged, remixed,
or otherwise altered in sequence or quality. The exclusive rights
of the owner of copyright in a sound recording under clauses (1)
and (2) of section 106 do not extend to the making or duplication
of another sound recording that consists entirely of an independent
fixation of other sounds, even though such sounds imitate or
simulate those in the copyrighted sound recording. The exclusive
rights of the owner of copyright in a sound recording under clauses
(1), (2), and (3) of section 106 do not apply to sound recordings
included in educational television and radio programs (as defined
in section 397 of title 47) distributed or transmitted by or
through public broadcasting entities (as defined by section
118(g)): Provided, That copies or phonorecords of said programs are
not commercially distributed by or through public broadcasting
entities to the general public.
(c) This section does not limit or impair the exclusive right to
perform publicly, by means of a phonorecord, any of the works
specified by section 106(4).
(d) Limitations on Exclusive Right. - Notwithstanding the
provisions of section 106(6) -
(1) Exempt transmissions and retransmissions. - The performance
of a sound recording publicly by means of a digital audio
transmission, other than as a part of an interactive service, is
not an infringement of section 106(6) if the performance is part
of -
(A) a nonsubscription broadcast transmission;
(B) a retransmission of a nonsubscription broadcast
transmission: Provided, That, in the case of a retransmission
of a radio station's broadcast transmission -
(i) the radio station's broadcast transmission is not
willfully or repeatedly retransmitted more than a radius of
150 miles from the site of the radio broadcast transmitter,
however -
(I) the 150 mile limitation under this clause shall not
apply when a nonsubscription broadcast transmission by a
radio station licensed by the Federal Communications
Commission is retransmitted on a nonsubscription basis by a
terrestrial broadcast station, terrestrial translator, or
terrestrial repeater licensed by the Federal Communications
Commission; and
(II) in the case of a subscription retransmission of a
nonsubscription broadcast retransmission covered by
subclause (I), the 150 mile radius shall be measured from
the transmitter site of such broadcast retransmitter;
(ii) the retransmission is of radio station broadcast
transmissions that are -
(I) obtained by the retransmitter over the air;
(II) not electronically processed by the retransmitter to
deliver separate and discrete signals; and
(III) retransmitted only within the local communities
served by the retransmitter;
(iii) the radio station's broadcast transmission was being
retransmitted to cable systems (as defined in section 111(f))
by a satellite carrier on January 1, 1995, and that
retransmission was being retransmitted by cable systems as a
separate and discrete signal, and the satellite carrier
obtains the radio station's broadcast transmission in an
analog format: Provided, That the broadcast transmission
being retransmitted may embody the programming of no more
than one radio station; or
(iv) the radio station's broadcast transmission is made by
a noncommercial educational broadcast station funded on or
after January 1, 1995, under section 396(k) of the
Communications Act of 1934 (47 U.S.C. 396(k)), consists
solely of noncommercial educational and cultural radio
programs, and the retransmission, whether or not
simultaneous, is a nonsubscription terrestrial broadcast
retransmission; or
(C) a transmission that comes within any of the following
categories -
(i) a prior or simultaneous transmission incidental to an
exempt transmission, such as a feed received by and then
retransmitted by an exempt transmitter: Provided, That such
incidental transmissions do not include any subscription
transmission directly for reception by members of the public;
(ii) a transmission within a business establishment,
confined to its premises or the immediately surrounding
vicinity;
(iii) a retransmission by any retransmitter, including a
multichannel video programming distributor as defined in
section 602(12) (!1) of the Communications Act of 1934 (47
U.S.C. 522(12)), of a transmission by a transmitter licensed
to publicly perform the sound recording as a part of that
transmission, if the retransmission is simultaneous with the
licensed transmission and authorized by the transmitter; or
(iv) a transmission to a business establishment for use in
the ordinary course of its business: Provided, That the
business recipient does not retransmit the transmission
outside of its premises or the immediately surrounding
vicinity, and that the transmission does not exceed the sound
recording performance complement. Nothing in this clause
shall limit the scope of the exemption in clause (ii).
(2) Statutory licensing of certain transmissions. - The
performance of a sound recording publicly by means of a
subscription digital audio transmission not exempt under
paragraph (1), an eligible nonsubscription transmission, or a
transmission not exempt under paragraph (1) that is made by a
preexisting satellite digital audio radio service shall be
subject to statutory licensing, in accordance with subsection (f)
if -
(A)(i) the transmission is not part of an interactive
service;
(ii) except in the case of a transmission to a business
establishment, the transmitting entity does not automatically
and intentionally cause any device receiving the transmission
to switch from one program channel to another; and
(iii) except as provided in section 1002(e), the transmission
of the sound recording is accompanied, if technically feasible,
by the information encoded in that sound recording, if any, by
or under the authority of the copyright owner of that sound
recording, that identifies the title of the sound recording,
the featured recording artist who performs on the sound
recording, and related information, including information
concerning the underlying musical work and its writer;
(B) in the case of a subscription transmission not exempt
under paragraph (1) that is made by a preexisting subscription
service in the same transmission medium used by such service on
July 31, 1998, or in the case of a transmission not exempt
under paragraph (1) that is made by a preexisting satellite
digital audio radio service -
(i) the transmission does not exceed the sound recording
performance complement; and
(ii) the transmitting entity does not cause to be published
by means of an advance program schedule or prior announcement
the titles of the specific sound recordings or phonorecords
embodying such sound recordings to be transmitted; and
(C) in the case of an eligible nonsubscription transmission
or a subscription transmission not exempt under paragraph (1)
that is made by a new subscription service or by a preexisting
subscription service other than in the same transmission medium
used by such service on July 31, 1998 -
(i) the transmission does not exceed the sound recording
performance complement, except that this requirement shall
not apply in the case of a retransmission of a broadcast
transmission if the retransmission is made by a transmitting
entity that does not have the right or ability to control the
programming of the broadcast station making the broadcast
transmission, unless -
(I) the broadcast station makes broadcast transmissions -

(aa) in digital format that regularly exceed the sound
recording performance complement; or
(bb) in analog format, a substantial portion of which,
on a weekly basis, exceed the sound recording performance
complement; and
(II) the sound recording copyright owner or its
representative has notified the transmitting entity in
writing that broadcast transmissions of the copyright
owner's sound recordings exceed the sound recording
performance complement as provided in this clause;
(ii) the transmitting entity does not cause to be
published, or induce or facilitate the publication, by means
of an advance program schedule or prior announcement, the
titles of the specific sound recordings to be transmitted,
the phonorecords embodying such sound recordings, or, other
than for illustrative purposes, the names of the featured
recording artists, except that this clause does not
disqualify a transmitting entity that makes a prior
announcement that a particular artist will be featured within
an unspecified future time period, and in the case of a
retransmission of a broadcast transmission by a transmitting
entity that does not have the right or ability to control the
programming of the broadcast transmission, the requirement of
this clause shall not apply to a prior oral announcement by
the broadcast station, or to an advance program schedule
published, induced, or facilitated by the broadcast station,
if the transmitting entity does not have actual knowledge and
has not received written notice from the copyright owner or
its representative that the broadcast station publishes or
induces or facilitates the publication of such advance
program schedule, or if such advance program schedule is a
schedule of classical music programming published by the
broadcast station in the same manner as published by that
broadcast station on or before September 30, 1998;
(iii) the transmission -
(I) is not part of an archived program of less than 5
hours duration;
(II) is not part of an archived program of 5 hours or
greater in duration that is made available for a period
exceeding 2 weeks;
(III) is not part of a continuous program which is of
less than 3 hours duration; or
(IV) is not part of an identifiable program in which
performances of sound recordings are rendered in a
predetermined order, other than an archived or continuous
program, that is transmitted at -
(aa) more than 3 times in any 2-week period that have
been publicly announced in advance, in the case of a
program of less than 1 hour in duration, or
(bb) more than 4 times in any 2-week period that have
been publicly announced in advance, in the case of a
program of 1 hour or more in duration,
except that the requirement of this subclause shall not
apply in the case of a retransmission of a broadcast
transmission by a transmitting entity that does not have
the right or ability to control the programming of the
broadcast transmission, unless the transmitting entity is
given notice in writing by the copyright owner of the sound
recording that the broadcast station makes broadcast
transmissions that regularly violate such requirement;
(iv) the transmitting entity does not knowingly perform the
sound recording, as part of a service that offers
transmissions of visual images contemporaneously with
transmissions of sound recordings, in a manner that is likely
to cause confusion, to cause mistake, or to deceive, as to
the affiliation, connection, or association of the copyright
owner or featured recording artist with the transmitting
entity or a particular product or service advertised by the
transmitting entity, or as to the origin, sponsorship, or
approval by the copyright owner or featured recording artist
of the activities of the transmitting entity other than the
performance of the sound recording itself;
(v) the transmitting entity cooperates to prevent, to the
extent feasible without imposing substantial costs or
burdens, a transmission recipient or any other person or
entity from automatically scanning the transmitting entity's
transmissions alone or together with transmissions by other
transmitting entities in order to select a particular sound
recording to be transmitted to the transmission recipient,
except that the requirement of this clause shall not apply to
a satellite digital audio service that is in operation, or
that is licensed by the Federal Communications Commission, on
or before July 31, 1998;
(vi) the transmitting entity takes no affirmative steps to
cause or induce the making of a phonorecord by the
transmission recipient, and if the technology used by the
transmitting entity enables the transmitting entity to limit
the making by the transmission recipient of phonorecords of
the transmission directly in a digital format, the
transmitting entity sets such technology to limit such making
of phonorecords to the extent permitted by such technology;
(vii) phonorecords of the sound recording have been
distributed to the public under the authority of the
copyright owner or the copyright owner authorizes the
transmitting entity to transmit the sound recording, and the
transmitting entity makes the transmission from a phonorecord
lawfully made under the authority of the copyright owner,
except that the requirement of this clause shall not apply to
a retransmission of a broadcast transmission by a
transmitting entity that does not have the right or ability
to control the programming of the broadcast transmission,
unless the transmitting entity is given notice in writing by
the copyright owner of the sound recording that the broadcast
station makes broadcast transmissions that regularly violate
such requirement;
(viii) the transmitting entity accommodates and does not
interfere with the transmission of technical measures that
are widely used by sound recording copyright owners to
identify or protect copyrighted works, and that are
technically feasible of being transmitted by the transmitting
entity without imposing substantial costs on the transmitting
entity or resulting in perceptible aural or visual
degradation of the digital signal, except that the
requirement of this clause shall not apply to a satellite
digital audio service that is in operation, or that is
licensed under the authority of the Federal Communications
Commission, on or before July 31, 1998, to the extent that
such service has designed, developed, or made commitments to
procure equipment or technology that is not compatible with
such technical measures before such technical measures are
widely adopted by sound recording copyright owners; and
(ix) the transmitting entity identifies in textual data the
sound recording during, but not before, the time it is
performed, including the title of the sound recording, the
title of the phonorecord embodying such sound recording, if
any, and the featured recording artist, in a manner to permit
it to be displayed to the transmission recipient by the
device or technology intended for receiving the service
provided by the transmitting entity, except that the
obligation in this clause shall not take effect until 1 year
after the date of the enactment of the Digital Millennium
Copyright Act and shall not apply in the case of a
retransmission of a broadcast transmission by a transmitting
entity that does not have the right or ability to control the
programming of the broadcast transmission, or in the case in
which devices or technology intended for receiving the
service provided by the transmitting entity that have the
capability to display such textual data are not common in the
marketplace.
(3) Licenses for transmissions by interactive services. -
(A) No interactive service shall be granted an exclusive
license under section 106(6) for the performance of a sound
recording publicly by means of digital audio transmission for a
period in excess of 12 months, except that with respect to an
exclusive license granted to an interactive service by a
licensor that holds the copyright to 1,000 or fewer sound
recordings, the period of such license shall not exceed 24
months: Provided, however, That the grantee of such exclusive
license shall be ineligible to receive another exclusive
license for the performance of that sound recording for a
period of 13 months from the expiration of the prior exclusive
license.
(B) The limitation set forth in subparagraph (A) of this
paragraph shall not apply if -
(i) the licensor has granted and there remain in effect
licenses under section 106(6) for the public performance of
sound recordings by means of digital audio transmission by at
least 5 different interactive services: Provided, however,
That each such license must be for a minimum of 10 percent of
the copyrighted sound recordings owned by the licensor that
have been licensed to interactive services, but in no event
less than 50 sound recordings; or
(ii) the exclusive license is granted to perform publicly
up to 45 seconds of a sound recording and the sole purpose of
the performance is to promote the distribution or performance
of that sound recording.
(C) Notwithstanding the grant of an exclusive or nonexclusive
license of the right of public performance under section
106(6), an interactive service may not publicly perform a sound
recording unless a license has been granted for the public
performance of any copyrighted musical work contained in the
sound recording: Provided, That such license to publicly
perform the copyrighted musical work may be granted either by a
performing rights society representing the copyright owner or
by the copyright owner.
(D) The performance of a sound recording by means of a
retransmission of a digital audio transmission is not an
infringement of section 106(6) if -
(i) the retransmission is of a transmission by an
interactive service licensed to publicly perform the sound
recording to a particular member of the public as part of
that transmission; and
(ii) the retransmission is simultaneous with the licensed
transmission, authorized by the transmitter, and limited to
that particular member of the public intended by the
interactive service to be the recipient of the transmission.
(E) For the purposes of this paragraph -
(i) a "licensor" shall include the licensing entity and any
other entity under any material degree of common ownership,
management, or control that owns copyrights in sound
recordings; and
(ii) a "performing rights society" is an association or
corporation that licenses the public performance of
nondramatic musical works on behalf of the copyright owner,
such as the American Society of Composers, Authors and
Publishers, Broadcast Music, Inc., and SESAC, Inc.
(4) Rights not otherwise limited. -
(A) Except as expressly provided in this section, this
section does not limit or impair the exclusive right to perform
a sound recording publicly by means of a digital audio
transmission under section 106(6).
(B) Nothing in this section annuls or limits in any way -
(i) the exclusive right to publicly perform a musical work,
including by means of a digital audio transmission, under
section 106(4);
(ii) the exclusive rights in a sound recording or the
musical work embodied therein under sections 106(1), 106(2)
and 106(3); or
(iii) any other rights under any other clause of section
106, or remedies available under this title, as such rights
or remedies exist either before or after the date of
enactment of the Digital Performance Right in Sound
Recordings Act of 1995.
(C) Any limitations in this section on the exclusive right
under section 106(6) apply only to the exclusive right under
section 106(6) and not to any other exclusive rights under
section 106. Nothing in this section shall be construed to
annul, limit, impair or otherwise affect in any way the ability
of the owner of a copyright in a sound recording to exercise
the rights under sections 106(1), 106(2) and 106(3), or to
obtain the remedies available under this title pursuant to such
rights, as such rights and remedies exist either before or
after the date of enactment of the Digital Performance Right in
Sound Recordings Act of 1995.
(e) Authority for Negotiations. -
(1) Notwithstanding any provision of the antitrust laws, in
negotiating statutory licenses in accordance with subsection (f),
any copyright owners of sound recordings and any entities
performing sound recordings affected by this section may
negotiate and agree upon the royalty rates and license terms and
conditions for the performance of such sound recordings and the
proportionate division of fees paid among copyright owners, and
may designate common agents on a nonexclusive basis to negotiate,
agree to, pay, or receive payments.
(2) For licenses granted under section 106(6), other than
statutory licenses, such as for performances by interactive
services or performances that exceed the sound recording
performance complement -
(A) copyright owners of sound recordings affected by this
section may designate common agents to act on their behalf to
grant licenses and receive and remit royalty payments:
Provided, That each copyright owner shall establish the royalty
rates and material license terms and conditions unilaterally,
that is, not in agreement, combination, or concert with other
copyright owners of sound recordings; and
(B) entities performing sound recordings affected by this
section may designate common agents to act on their behalf to
obtain licenses and collect and pay royalty fees: Provided,
That each entity performing sound recordings shall determine
the royalty rates and material license terms and conditions
unilaterally, that is, not in agreement, combination, or
concert with other entities performing sound recordings.
(f) Licenses for Certain Nonexempt Transmissions. -
(1)(A) No later than 30 days after the enactment of the Digital
Performance Right in Sound Recordings Act of 1995, the Librarian
of Congress shall cause notice to be published in the Federal
Register of the initiation of voluntary negotiation proceedings
for the purpose of determining reasonable terms and rates of
royalty payments for subscription transmissions by preexisting
subscription services and transmissions by preexisting satellite
digital audio radio services specified by subsection (d)(2) of
this section during the period beginning on the effective date of
such Act and ending on December 31, 2001, or, if a copyright
arbitration royalty panel is convened, ending 30 days after the
Librarian issues and publishes in the Federal Register an order
adopting the determination of the copyright arbitration royalty
panel or an order setting the terms and rates (if the Librarian
rejects the panel's determination). Such terms and rates shall
distinguish among the different types of digital audio
transmission services then in operation. Any copyright owners of
sound recordings, preexisting subscription services, or
preexisting satellite digital audio radio services may submit to
the Librarian of Congress licenses covering such subscription
transmissions with respect to such sound recordings. The parties
to each negotiation proceeding shall bear their own costs.
(B) In the absence of license agreements negotiated under
subparagraph (A), during the 60-day period commencing 6 months
after publication of the notice specified in subparagraph (A),
and upon the filing of a petition in accordance with section
803(a)(1), the Librarian of Congress shall, pursuant to chapter
8, convene a copyright arbitration royalty panel to determine and
publish in the Federal Register a schedule of rates and terms
which, subject to paragraph (3), shall be binding on all
copyright owners of sound recordings and entities performing
sound recordings affected by this paragraph. In establishing
rates and terms for preexisting subscription services and
preexisting satellite digital audio radio services, in addition
to the objectives set forth in section 801(b)(1), the copyright
arbitration royalty panel may consider the rates and terms for
comparable types of subscription digital audio transmission
services and comparable circumstances under voluntary license
agreements negotiated as provided in subparagraph (A).
(C)(i) Publication of a notice of the initiation of voluntary
negotiation proceedings as specified in subparagraph (A) shall be
repeated, in accordance with regulations that the Librarian of
Congress shall prescribe -
(I) no later than 30 days after a petition is filed by any
copyright owners of sound recordings, any preexisting
subscription services, or any preexisting satellite digital
audio radio services indicating that a new type of subscription
digital audio transmission service on which sound recordings
are performed is or is about to become operational; and
(II) in the first week of January 2001, and at 5-year
intervals thereafter.
(ii) The procedures specified in subparagraph (B) shall be
repeated, in accordance with regulations that the Librarian of
Congress shall prescribe, upon filing of a petition in accordance
with section 803(a)(1) during a 60-day period commencing -
(I) 6 months after publication of a notice of the initiation
of voluntary negotiation proceedings under subparagraph (A)
pursuant to a petition under clause (i)(I) of this
subparagraph; or
(II) on July 1, 2001, and at 5-year intervals thereafter.
(iii) The procedures specified in subparagraph (B) shall be
concluded in accordance with section 802.
(2)(A) No later than 30 days after the date of the enactment of
the Digital Millennium Copyright Act, the Librarian of Congress
shall cause notice to be published in the Federal Register of the
initiation of voluntary negotiation proceedings for the purpose
of determining reasonable terms and rates of royalty payments for
public performances of sound recordings by means of eligible
nonsubscription transmissions and transmissions by new
subscription services specified by subsection (d)(2) during the
period beginning on the date of the enactment of such Act and
ending on December 31, 2000, or such other date as the parties
may agree. Such rates and terms shall distinguish among the
different types of eligible nonsubscription transmission services
and new subscription services then in operation and shall include
a minimum fee for each such type of service. Any copyright owners
of sound recordings or any entities performing sound recordings
affected by this paragraph may submit to the Librarian of
Congress licenses covering such eligible nonsubscription
transmissions and new subscription services with respect to such
sound recordings. The parties to each negotiation proceeding
shall bear their own costs.
(B) In the absence of license agreements negotiated under
subparagraph (A), during the 60-day period commencing 6 months
after publication of the notice specified in subparagraph (A),
and upon the filing of a petition in accordance with section
803(a)(1), the Librarian of Congress shall, pursuant to chapter
8, convene a copyright arbitration royalty panel to determine and
publish in the Federal Register a schedule of rates and terms
which, subject to paragraph (3), shall be binding on all
copyright owners of sound recordings and entities performing
sound recordings affected by this paragraph during the period
beginning on the date of the enactment of the Digital Millennium
Copyright Act and ending on December 31, 2000, or such other date
as the parties may agree. Such rates and terms shall distinguish
among the different types of eligible nonsubscription
transmission services then in operation and shall include a
minimum fee for each such type of service, such differences to be
based on criteria including, but not limited to, the quantity and
nature of the use of sound recordings and the degree to which use
of the service may substitute for or may promote the purchase of
phonorecords by consumers. In establishing rates and terms for
transmissions by eligible nonsubscription services and new
subscription services, the copyright arbitration royalty panel
shall establish rates and terms that most clearly represent the
rates and terms that would have been negotiated in the
marketplace between a willing buyer and a willing seller. In
determining such rates and terms, the copyright arbitration
royalty panel shall base its decision on economic, competitive
and programming information presented by the parties, including -

(i) whether use of the service may substitute for or may
promote the sales of phonorecords or otherwise may interfere
with or may enhance the sound recording copyright owner's other
streams of revenue from its sound recordings; and
(ii) the relative roles of the copyright owner and the
transmitting entity in the copyrighted work and the service
made available to the public with respect to relative creative
contribution, technological contribution, capital investment,
cost, and risk.
In establishing such rates and terms, the copyright arbitration
royalty panel may consider the rates and terms for comparable
types of digital audio transmission services and comparable
circumstances under voluntary license agreements negotiated under
subparagraph (A).
(C)(i) Publication of a notice of the initiation of voluntary
negotiation proceedings as specified in subparagraph (A) shall be
repeated in accordance with regulations that the Librarian of
Congress shall prescribe -
(I) no later than 30 days after a petition is filed by any
copyright owners of sound recordings or any eligible
nonsubscription service or new subscription service indicating
that a new type of eligible nonsubscription service or new
subscription service on which sound recordings are performed is
or is about to become operational; and
(II) in the first week of January 2000, and at 2-year
intervals thereafter, except to the extent that different years
for the repeating of such proceedings may be determined in
accordance with subparagraph (A).
(ii) The procedures specified in subparagraph (B) shall be
repeated, in accordance with regulations that the Librarian of
Congress shall prescribe, upon filing of a petition in accordance
with section 803(a)(1) during a 60-day period commencing -
(I) 6 months after publication of a notice of the initiation
of voluntary negotiation proceedings under subparagraph (A)
pursuant to a petition under clause (i)(I); or
(II) on July 1, 2000, and at 2-year intervals thereafter,
except to the extent that different years for the repeating of
such proceedings may be determined in accordance with
subparagraph (A).
(iii) The procedures specified in subparagraph (B) shall be
concluded in accordance with section 802.
(3) License agreements voluntarily negotiated at any time
between 1 or more copyright owners of sound recordings and 1 or
more entities performing sound recordings shall be given effect
in lieu of any determination by a copyright arbitration royalty
panel or decision by the Librarian of Congress.
(4)(A) The Librarian of Congress shall also establish
requirements by which copyright owners may receive reasonable
notice of the use of their sound recordings under this section,
and under which records of such use shall be kept and made
available by entities performing sound recordings.
(B) Any person who wishes to perform a sound recording publicly
by means of a transmission eligible for statutory licensing under
this subsection may do so without infringing the exclusive right
of the copyright owner of the sound recording -
(i) by complying with such notice requirements as the
Librarian of Congress shall prescribe by regulation and by
paying royalty fees in accordance with this subsection; or
(ii) if such royalty fees have not been set, by agreeing to
pay such royalty fees as shall be determined in accordance with
this subsection.
(C) Any royalty payments in arrears shall be made on or before
the twentieth day of the month next succeeding the month in which
the royalty fees are set.
(5)(A) Notwithstanding section 112(e) and the other provisions
of this subsection, the receiving agent may enter into agreements
for the reproduction and performance of sound recordings under
section 112(e) and this section by any 1 or more small commercial
webcasters or noncommercial webcasters during the period
beginning on October 28, 1998, and ending on December 31, 2004,
that, once published in the Federal Register pursuant to
subparagraph (B), shall be binding on all copyright owners of
sound recordings and other persons entitled to payment under this
section, in lieu of any determination by a copyright arbitration
royalty panel or decision by the Librarian of Congress. Any such
agreement for small commercial webcasters shall include
provisions for payment of royalties on the basis of a percentage
of revenue or expenses, or both, and include a minimum fee. Any
such agreement may include other terms and conditions, including
requirements by which copyright owners may receive notice of the
use of their sound recordings and under which records of such use
shall be kept and made available by small commercial webcasters
or noncommercial webcasters. The receiving agent shall be under
no obligation to negotiate any such agreement. The receiving
agent shall have no obligation to any copyright owner of sound
recordings or any other person entitled to payment under this
section in negotiating any such agreement, and no liability to
any copyright owner of sound recordings or any other person
entitled to payment under this section for having entered into
such agreement.
(B) The Copyright Office shall cause to be published in the
Federal Register any agreement entered into pursuant to
subparagraph (A). Such publication shall include a statement
containing the substance of subparagraph (C). Such agreements
shall not be included in the Code of Federal Regulations.
Thereafter, the terms of such agreement shall be available, as an
option, to any small commercial webcaster or noncommercial
webcaster meeting the eligibility conditions of such agreement.
(C) Neither subparagraph (A) nor any provisions of any
agreement entered into pursuant to subparagraph (A), including
any rate structure, fees, terms, conditions, or notice and
recordkeeping requirements set forth therein, shall be admissible
as evidence or otherwise taken into account in any
administrative, judicial, or other government proceeding
involving the setting or adjustment of the royalties payable for
the public performance or reproduction in ephemeral phonorecords
or copies of sound recordings, the determination of terms or
conditions related thereto, or the establishment of notice or
recordkeeping requirements by the Librarian of Congress under
paragraph (4) or section 112(e)(4). It is the intent of Congress
that any royalty rates, rate structure, definitions, terms,
conditions, or notice and recordkeeping requirements, included in
such agreements shall be considered as a compromise motivated by
the unique business, economic and political circumstances of
small webcasters, copyright owners, and performers rather than as
matters that would have been negotiated in the marketplace
between a willing buyer and a willing seller, or otherwise meet
the objectives set forth in section 801(b).
(D) Nothing in the Small Webcaster Settlement Act of 2002 or
any agreement entered into pursuant to subparagraph (A) shall be
taken into account by the United States Court of Appeals for the
District of Columbia Circuit in its review of the determination
by the Librarian of Congress of July 8, 2002, of rates and terms
for the digital performance of sound recordings and ephemeral
recordings, pursuant to sections 112 and 114.
(E) As used in this paragraph -
(i) the term "noncommercial webcaster" means a webcaster that
-
(I) is exempt from taxation under section 501 of the
Internal Revenue Code of 1986 (26 U.S.C. 501);
(II) has applied in good faith to the Internal Revenue
Service for exemption from taxation under section 501 of the
Internal Revenue Code and has a commercially reasonable
expectation that such exemption shall be granted; or
(III) is operated by a State or possession or any
governmental entity or subordinate thereof, or by the United
States or District of Columbia, for exclusively public
purposes;
(ii) the term "receiving agent" shall have the meaning given
that term in section 261.2 of title 37, Code of Federal
Regulations, as published in the Federal Register on July 8,
2002; and
(iii) the term "webcaster" means a person or entity that has
obtained a compulsory license under section 112 or 114 and the
implementing regulations therefor to make eligible
nonsubscription transmissions and ephemeral recordings.
(F) The authority to make settlements pursuant to subparagraph
(A) shall expire December 15, 2002, except with respect to
noncommercial webcasters for whom the authority shall expire May
31, 2003.
(g) Proceeds From Licensing of Transmissions. -
(1) Except in the case of a transmission licensed under a
statutory license in accordance with subsection (f) of this
section -
(A) a featured recording artist who performs on a sound
recording that has been licensed for a transmission shall be
entitled to receive payments from the copyright owner of the
sound recording in accordance with the terms of the artist's
contract; and
(B) a nonfeatured recording artist who performs on a sound
recording that has been licensed for a transmission shall be
entitled to receive payments from the copyright owner of the
sound recording in accordance with the terms of the nonfeatured
recording artist's applicable contract or other applicable
agreement.
(2) An agent designated to distribute receipts from the
licensing of transmissions in accordance with subsection (f)
shall distribute such receipts as follows:
(A) 50 percent of the receipts shall be paid to the copyright
owner of the exclusive right under section 106(6) of this title
to publicly perform a sound recording by means of a digital
audio transmission.
(B) 2 1/2 percent of the receipts shall be deposited in an
escrow account managed by an independent administrator jointly
appointed by copyright owners of sound recordings and the
American Federation of Musicians (or any successor entity) to
be distributed to nonfeatured musicians (whether or not members
of the American Federation of Musicians) who have performed on
sound recordings.
(C) 2 1/2 percent of the receipts shall be deposited in an
escrow account managed by an independent administrator jointly
appointed by copyright owners of sound recordings and the
American Federation of Television and Radio Artists (or any
successor entity) to be distributed to nonfeatured vocalists
(whether or not members of the American Federation of
Television and Radio Artists) who have performed on sound
recordings.
(D) 45 percent of the receipts shall be paid, on a per sound
recording basis, to the recording artist or artists featured on
such sound recording (or the persons conveying rights in the
artists' performance in the sound recordings).
(3) A nonprofit agent designated to distribute receipts from
the licensing of transmissions in accordance with subsection (f)
may deduct from any of its receipts, prior to the distribution of
such receipts to any person or entity entitled thereto other than
copyright owners and performers who have elected to receive
royalties from another designated agent and have notified such
nonprofit agent in writing of such election, the reasonable costs
of such agent incurred after November 1, 1995, in -
(A) the administration of the collection, distribution, and
calculation of the royalties;
(B) the settlement of disputes relating to the collection and
calculation of the royalties; and
(C) the licensing and enforcement of rights with respect to
the making of ephemeral recordings and performances subject to
licensing under section 112 and this section, including those
incurred in participating in negotiations or arbitration
proceedings under section 112 and this section, except that all
costs incurred relating to the section 112 ephemeral recordings
right may only be deducted from the royalties received pursuant
to section 112.
(4) Notwithstanding paragraph (3), any designated agent
designated to distribute receipts from the licensing of
transmissions in accordance with subsection (f) may deduct from
any of its receipts, prior to the distribution of such receipts,
the reasonable costs identified in paragraph (3) of such agent
incurred after November 1, 1995, with respect to such copyright
owners and performers who have entered with such agent a
contractual relationship that specifies that such costs may be
deducted from such royalty receipts.
(h) Licensing to Affiliates. -
(1) If the copyright owner of a sound recording licenses an
affiliated entity the right to publicly perform a sound recording
by means of a digital audio transmission under section 106(6),
the copyright owner shall make the licensed sound recording
available under section 106(6) on no less favorable terms and
conditions to all bona fide entities that offer similar services,
except that, if there are material differences in the scope of
the requested license with respect to the type of service, the
particular sound recordings licensed, the frequency of use, the
number of subscribers served, or the duration, then the copyright
owner may establish different terms and conditions for such other
services.
(2) The limitation set forth in paragraph (1) of this
subsection shall not apply in the case where the copyright owner
of a sound recording licenses -
(A) an interactive service; or
(B) an entity to perform publicly up to 45 seconds of the
sound recording and the sole purpose of the performance is to
promote the distribution or performance of that sound
recording.
(i) No Effect on Royalties for Underlying Works. - License fees
payable for the public performance of sound recordings under
section 106(6) shall not be taken into account in any
administrative, judicial, or other governmental proceeding to set
or adjust the royalties payable to copyright owners of musical
works for the public performance of their works. It is the intent
of Congress that royalties payable to copyright owners of musical
works for the public performance of their works shall not be
diminished in any respect as a result of the rights granted by
section 106(6).
(j) Definitions. - As used in this section, the following terms
have the following meanings:
(1) An "affiliated entity" is an entity engaging in digital
audio transmissions covered by section 106(6), other than an
interactive service, in which the licensor has any direct or
indirect partnership or any ownership interest amounting to 5
percent or more of the outstanding voting or non-voting stock.
(2) An "archived program" is a predetermined program that is
available repeatedly on the demand of the transmission recipient
and that is performed in the same order from the beginning,
except that an archived program shall not include a recorded
event or broadcast transmission that makes no more than an
incidental use of sound recordings, as long as such recorded
event or broadcast transmission does not contain an entire sound
recording or feature a particular sound recording.
(3) A "broadcast" transmission is a transmission made by a
terrestrial broadcast station licensed as such by the Federal
Communications Commission.
(4) A "continuous program" is a predetermined program that is
continuously performed in the same order and that is accessed at
a point in the program that is beyond the control of the
transmission recipient.
(5) A "digital audio transmission" is a digital transmission as
defined in section 101, that embodies the transmission of a sound
recording. This term does not include the transmission of any
audiovisual work.
(6) An "eligible nonsubscription transmission" is a
noninteractive nonsubscription digital audio transmission not
exempt under subsection (d)(1) that is made as part of a service
that provides audio programming consisting, in whole or in part,
of performances of sound recordings, including retransmissions of
broadcast transmissions, if the primary purpose of the service is
to provide to the public such audio or other entertainment
programming, and the primary purpose of the service is not to
sell, advertise, or promote particular products or services other
than sound recordings, live concerts, or other music-related
events.
(7) An "interactive service" is one that enables a member of
the public to receive a transmission of a program specially
created for the recipient, or on request, a transmission of a
particular sound recording, whether or not as part of a program,
which is selected by or on behalf of the recipient. The ability
of individuals to request that particular sound recordings be
performed for reception by the public at large, or in the case of
a subscription service, by all subscribers of the service, does
not make a service interactive, if the programming on each
channel of the service does not substantially consist of sound
recordings that are performed within 1 hour of the request or at
a time designated by either the transmitting entity or the
individual making such request. If an entity offers both
interactive and noninteractive services (either concurrently or
at different times), the noninteractive component shall not be
treated as part of an interactive service.
(8) A "new subscription service" is a service that performs
sound recordings by means of noninteractive subscription digital
audio transmissions and that is not a preexisting subscription
service or a preexisting satellite digital audio radio service.
(9) A "nonsubscription" transmission is any transmission that
is not a subscription transmission.
(10) A "preexisting satellite digital audio radio service" is a
subscription satellite digital audio radio service provided
pursuant to a satellite digital audio radio service license
issued by the Federal Communications Commission on or before July
31, 1998, and any renewal of such license to the extent of the
scope of the original license, and may include a limited number
of sample channels representative of the subscription service
that are made available on a nonsubscription basis in order to
promote the subscription service.
(11) A "preexisting subscription service" is a service that
performs sound recordings by means of noninteractive audio-only
subscription digital audio transmissions, which was in existence
and was making such transmissions to the public for a fee on or
before July 31, 1998, and may include a limited number of sample
channels representative of the subscription service that are made
available on a nonsubscription basis in order to promote the
subscription service.
(12) A "retransmission" is a further transmission of an initial
transmission, and includes any further retransmission of the same
transmission. Except as provided in this section, a transmission
qualifies as a "retransmission" only if it is simultaneous with
the initial transmission. Nothing in this definition shall be
construed to exempt a transmission that fails to satisfy a
separate element required to qualify for an exemption under
section 114(d)(1).
(13) The "sound recording performance complement" is the
transmission during any 3-hour period, on a particular channel
used by a transmitting entity, of no more than -
(A) 3 different selections of sound recordings from any one
phonorecord lawfully distributed for public performance or sale
in the United States, if no more than 2 such selections are
transmitted consecutively; or
(B) 4 different selections of sound recordings -
(i) by the same featured recording artist; or
(ii) from any set or compilation of phonorecords lawfully
distributed together as a unit for public performance or sale
in the United States,
if no more than three such selections are transmitted
consecutively:
Provided, That the transmission of selections in excess of the
numerical limits provided for in clauses (A) and (B) from
multiple phonorecords shall nonetheless qualify as a sound
recording performance complement if the programming of the
multiple phonorecords was not willfully intended to avoid the
numerical limitations prescribed in such clauses.
(14) A "subscription" transmission is a transmission that is
controlled and limited to particular recipients, and for which
consideration is required to be paid or otherwise given by or on
behalf of the recipient to receive the transmission or a package
of transmissions including the transmission.
(15) A "transmission" is either an initial transmission or a
retransmission.

HISTORICAL AND REVISION NOTES
HOUSE REPORT NO. 94-1476
Subsection (a) of Section 114 specified that the exclusive rights
of the owner of copyright in a sound recording are limited to the
rights to reproduce the sound recording in copies or phonorecords,
to prepare derivative works based on the copyrighted sound
recording, and to distribute copies or phonorecords of the sound
recording to the public. Subsection (a) states explicitly that the
owner's rights "do not include any right of performance under
section 106(4)." The Committee considered at length the arguments
in favor of establishing a limited performance right, in the form
of a compulsory license, for copyrighted sound recordings, but
concluded that the problem requires further study. It therefore
added a new subsection (d) to the bill requiring the Register of
Copyrights to submit to Congress, on January 3, 1978, "a report
setting forth recommendations as to whether this section should be
amended to provide for performers and copyright owners * * * any
performance rights" in copyrighted sound recordings. Under the new
subsection, the report "should describe the status of such rights
in foreign countries, the views of major interested parties, and
specific legislative or other recommendations, if any."
Subsection (b) of section 114 makes clear that statutory
protection for sound recordings extends only to the particular
sounds of which the recording consists, and would not prevent a
separate recording of another performance in which those sounds are
imitated. Thus, infringement takes place whenever all or any
substantial portion of the actual sounds that go to make up a
copyrighted sound recording are reproduced in phonorecords by
repressing, transcribing, recapturing off the air, or any other
method, or by reproducing them in the soundtrack or audio portion
of a motion picture or other audiovisual work. Mere imitation of a
recorded performance would not constitute a copyright infringement
even where one performer deliberately sets out to simulate
another's performance as exactly as possible.
Under section 114, the exclusive right of owner of copyright in a
sound recording to prepare derivative works based on the
copyrighted sound recording is recognized. However, in view of the
expressed intention not to give exclusive rights against imitative
or simulated performances and recordings, the Committee adopted an
amendment to make clear the scope of rights under section 106(2) in
this context. Section 114(b) provides that the "exclusive right of
the owner of copyright in a sound recording under clause (2) of
section 106 is limited to the right to prepare a derivative work in
which the actual sounds fixed in the sound recording are
rearranged, remixed, or otherwise altered in sequence or quality."
Another amendment deals with the use of copyrighted sound
recordings "included in educational television and radio programs *
* * distributed or transmitted by or through public broadcasting
entities." This use of recordings is permissible without
authorization from the owner of copyright in the sound recording,
as long as "copies or phonorecords of said programs are not
commercially distributed by or through public broadcasting entities
to the general public."
During the 1975 hearings, the Register of Copyrights expressed
some concern that an invaluable segment of this country's musical
heritage - in the form of sound recordings - had become
inaccessible to musicologists and to others for scholarly purposes.
Several of the major recording companies have responded to the
Register's concern by granting blanket licenses to the Library of
Congress to permit it to make single copy duplications of sound
recordings maintained in the Library's archives for research
purposes. Moreover, steps are being taken to determine the
feasibility of additional licensing arrangements as a means of
satisfying the needs of key regional music libraries across the
country. The Register has agreed to report to Congress if further
legislative consideration should be undertaken.
Section 114(c) states explicitly that nothing in the provisions
of section 114 should be construed to "limit or impair the
exclusive right to perform publicly, by means of a phonorecord, any
of the works specified by section 106(4)." This principle is
already implicit in the bill, but it is restated to avoid the
danger of confusion between rights in a sound recording and rights
in the musical composition or other work embodied in the recording.

AMENDMENTS
2002 - Subsec. (f)(5). Pub. L. 107-321, Sec. 4, added par. (5).
Subsec. (g)(2). Pub. L. 107-321, Sec. 5(c), amended par. (2)
generally. Prior to amendment, par. (2) read as follows: "The
copyright owner of the exclusive right under section 106(6) of this
title to publicly perform a sound recording by means of a digital
audio transmission shall allocate to recording artists in the
following manner its receipts from the statutory licensing of
transmission performances of the sound recording in accordance with
subsection (f) of this section:
"(A) 2 1/2 percent of the receipts shall be deposited in an
escrow account managed by an independent administrator jointly
appointed by copyright owners of sound recordings and the
American Federation of Musicians (or any successor entity) to be
distributed to nonfeatured musicians (whether or not members of
the American Federation of Musicians) who have performed on sound
recordings.
"(B) 2 1/2 percent of the receipts shall be deposited in an
escrow account managed by an independent administrator jointly
appointed by copyright owners of sound recordings and the
American Federation of Television and Radio Artists (or any
successor entity) to be distributed to nonfeatured vocalists
(whether or not members of the American Federation of Television
and Radio Artists) who have performed on sound recordings.
"(C) 45 percent of the receipts shall be allocated, on a per
sound recording basis, to the recording artist or artists
featured on such sound recording (or the persons conveying rights
in the artists' performance in the sound recordings)."
Subsec. (g)(3), (4). Pub. L. 107-321, Sec. 5(b), added pars. (3)
and (4).
1998 - Subsec. (d)(1)(A). Pub. L. 105-304, Sec. 405(a)(1)(A),
added subpar. (A) and struck out former subpar. (A) which read as
follows:
"(A)(i) a nonsubscription transmission other than a
retransmission;
"(ii) an initial nonsubscription retransmission made for direct
reception by members of the public of a prior or simultaneous
incidental transmission that is not made for direct reception by
members of the public; or
"(iii) a nonsubscription broadcast transmission;".
Subsec. (d)(2). Pub. L. 105-304, Sec. 405(a)(1)(B), amended
heading and text of par. (2) generally. Prior to amendment, text
read as follows: "In the case of a subscription transmission not
exempt under subsection (d)(1), the performance of a sound
recording publicly by means of a digital audio transmission shall
be subject to statutory licensing, in accordance with subsection
(f) of this section, if -
"(A) the transmission is not part of an interactive service;
"(B) the transmission does not exceed the sound recording
performance complement;
"(C) the transmitting entity does not cause to be published by
means of an advance program schedule or prior announcement the
titles of the specific sound recordings or phonorecords embodying
such sound recordings to be transmitted;
"(D) except in the case of transmission to a business
establishment, the transmitting entity does not automatically and
intentionally cause any device receiving the transmission to
switch from one program channel to another; and
"(E) except as provided in section 1002(e) of this title, the
transmission of the sound recording is accompanied by the
information encoded in that sound recording, if any, by or under
the authority of the copyright owner of that sound recording,
that identifies the title of the sound recording, the featured
recording artist who performs on the sound recording, and related
information, including information concerning the underlying
musical work and its writer."
Subsec. (f). Pub. L. 105-304, Sec. 405(a)(2)(A), substituted
"Certain Nonexempt" for "Nonexempt Subscription" in heading.
Subsec. (f)(1)(A). Pub. L. 105-304, Sec. 405(a)(2)(B), designated
existing provisions as subpar. (A), in first sentence, substituted
"subscription transmissions by preexisting subscription services
and transmissions by preexisting satellite digital audio radio
services" for "the activities" and "2001" for "2000", and amended
third sentence generally. Prior to amendment, third sentence read
as follows: "Any copyright owners of sound recordings or any
entities performing sound recordings affected by this section may
submit to the Librarian of Congress licenses covering such
activities with respect to such sound recordings."
Subsec. (f)(1)(B), (C). Pub. L. 105-304, Sec. 405(a)(2)(C), added
subpars. (B) and (C).
Subsec. (f)(2) to (5). Pub. L. 105-304, Sec. 405(a)(2)(C), added
pars. (2) to (4) and struck out former pars. (2) to (5), which
provided: in par. (2) that Librarian of Congress would convene a
copyright arbitration royalty panel to determine schedule of rates
and terms, that panel could consider rates and terms for comparable
types of services under voluntary license agreements, and that
requirements would be established by which copyright owners would
receive notice of use of their recordings; in par. (3) that
voluntarily negotiated license agreements would be given effect in
lieu of determination by panel or decision by Librarian; in par.
(4) that publication of notice of negotiations would be repeated no
later than 30 days after petition was filed, in the first week of
January, 2000, and at 5-year intervals thereafter, and that par.
(2) procedures would be repeated upon filing of petition during a
60-day period commencing six months after publication of notice or
on July 1, 2000 and at 5-year intervals thereafter; and in par. (5)
that performance by non-exempt subscription transmission without
infringing copyright was permissible by compliance with notice
requirements and payment of royalty fees or agreement to pay such
fees.
Subsec. (g). Pub. L. 105-304, Sec. 405(a)(3)(A), struck out
"Subscription" before "Transmissions" in heading.
Subsec. (g)(1). Pub. L. 105-304, Sec. 405(a)(3)(B), substituted
"transmission licensed under a statutory license" for "subscription
transmission licensed" in introductory provisions.
Subsec. (g)(1)(A), (B). Pub. L. 105-304, Sec. 405(a)(3)(C),
struck out "subscription" before "transmission".
Subsec. (g)(2). Pub. L. 105-304, Sec. 405(a)(3)(D), struck out
"subscription" before "transmission performances" in introductory
provisions.
Subsec. (j)(2), (3). Pub. L. 105-304, Sec. 405(a)(4)(A), (B),
added par. (2) and redesignated former par. (2) as (3). Former par.
(3) redesignated (5).
Subsec. (j)(4). Pub. L. 105-304, Sec. 405(a)(4)(A), (C), added
par. (4) and struck out former par. (4) which read as follows: "An
'interactive service' is one that enables a member of the public to
receive, on request, a transmission of a particular sound recording
chosen by or on behalf of the recipient. The ability of individuals
to request that particular sound recordings be performed for
reception by the public at large does not make a service
interactive. If an entity offers both interactive and
non-interactive services (either concurrently or at different
times), the non-interactive component shall not be treated as part
of an interactive service."
Subsec. (j)(5). Pub. L. 105-304, Sec. 405(a)(4)(A), redesignated
par. (3) as (5). Former par. (5) redesignated (9).
Subsec. (j)(6) to (8). Pub. L. 105-304, Sec. 405(a)(4)(A), (D),
added pars. (6) to (8). Former pars. (6) to (8) redesignated (12)
to (14), respectively.
Subsec. (j)(9). Pub. L. 105-304, Sec. 405(a)(4)(A), redesignated
par. (5) as (9) and struck out former par. (9) which read as
follows: "A 'transmission' includes both an initial transmission
and a retransmission."
Subsec. (j)(10), (11). Pub. L. 105-304, Sec. 405(a)(4)(E), added
pars. (10) and (11).
Subsec. (j)(12) to (14). Pub. L. 105-304, Sec. 405(a)(4)(A),
redesignated pars. (6) to (8) as (12) to (14), respectively.
Subsec. (j)(15). Pub. L. 105-304, Sec. 405(a)(4)(F), added par.
(15).
1997 - Subsec. (f)(1). Pub. L. 105-80, Sec. 3(1), inserted ", or,
if a copyright arbitration royalty panel is convened, ending 30
days after the Librarian issues and publishes in the Federal
Register an order adopting the determination of the copyright
arbitration royalty panel or an order setting the terms and rates
(if the Librarian rejects the panel's determination)" after
"December 31, 2000".
Subsec. (f)(2). Pub. L. 105-80, Sec. 3(2), struck out "and
publish in the Federal Register" before "a schedule of rates and
terms".
1995 - Subsec. (a). Pub. L. 104-39, Sec. 3(1), substituted "(3)
and (6) of section 106" for "and (3) of section 106".
Subsec. (b). Pub. L. 104-39, Sec. 3(2), substituted "phonorecords
or copies" for "phonorecords, or of copies of motion pictures and
other audiovisual works," in first sentence.
Subsec. (d). Pub. L. 104-39, Sec. 3(3), added subsec. (d) and
struck out former subsec. (d), which read as follows: "On January
3, 1978, the Register of Copyrights, after consulting with
representatives of owners of copyrighted materials, representatives
of the broadcasting, recording, motion picture, entertainment
industries, and arts organizations, representatives of organized
labor and performers of copyrighted materials, shall submit to the
Congress a report setting forth recommendations as to whether this
section should be amended to provide for performers and copyright
owners of copyrighted material any performance rights in such
material. The report should describe the status of such rights in
foreign countries, the views of major interested parties, and
specific legislative or other recommendations, if any."
Subsecs. (e) to (j). Pub. L. 104-39, Sec. 3(4), added subsecs.
(e) to (j).
EFFECTIVE DATE OF 1998 AMENDMENT
Amendment by section 405(a)(1), (2)(A), (B)(i)(I), (II), (ii),
(3), (4) of Pub. L. 105-304 effective Oct. 28, 1998, except as
otherwise provided, see section 407 of Pub. L. 105-304, set out as
a note under section 108 of this title.
Pub. L. 105-304, title IV, Sec. 405(a)(5), Oct. 28, 1998, 112
Stat. 2899, provided that: "The amendment made by paragraph
(2)(B)(i)(III) of this subsection [amending this section] shall be
deemed to have been enacted as part of the Digital Performance
Right in Sound Recordings Act of 1995 [Pub. L. 104-39], and the
publication of notice of proceedings under section 114(f)(1) of
title 17, United States Code, as in effect upon the effective date
of that Act [see Effective Date of 1995 Amendment note set out
under section 101 of this title], for the determination of royalty
payments shall be deemed to have been made for the period beginning
on the effective date of that Act and ending on December 1, 2001."
EFFECTIVE DATE OF 1995 AMENDMENT
Amendment by Pub. L. 104-39 effective 3 months after Nov. 1,
1995, except that provisions of subsecs. (e) and (f) of this
section effective Nov. 1, 1995, see section 6 of Pub. L. 104-39,
set out as a note under section 101 of this title.
CONSTRUCTION OF 1998 AMENDMENT
Pub. L. 105-304, title IV, Sec. 405(a)(6), Oct. 28, 1998, 112
Stat. 2899, provided that: "The amendments made by this subsection
[amending this section] do not annul, limit, or otherwise impair
the rights that are preserved by section 114 of title 17, United
States Code, including the rights preserved by subsections (c),
(d)(4), and (i) of such section."
FINDINGS RELATING TO PUB. L. 107-321
Pub. L. 107-321, Sec. 2, Dec. 4, 2002, 116 Stat. 2780, provided
that: "Congress finds the following:
"(1) Some small webcasters who did not participate in the
copyright arbitration royalty panel proceeding leading to the
July 8, 2002 order of the Librarian of Congress establishing
rates and terms for certain digital performances and ephemeral
reproductions of sound recordings, as provided in part 261 of the
Code of Federal Regulations (published in the Federal Register on
July 8, 2002) (referred to in this section as 'small
webcasters'), have expressed reservations about the fee structure
set forth in such order, and have expressed their desire for a
fee based on a percentage of revenue.
"(2) Congress has strongly encouraged representatives of
copyright owners of sound recordings and representatives of the
small webcasters to engage in negotiations to arrive at an
agreement that would include a fee based on a percentage of
revenue.
"(3) The representatives have arrived at an agreement that they
can accept in the extraordinary and unique circumstances here
presented, specifically as to the small webcasters, their belief
in their inability to pay the fees due pursuant to the July 8
order, and as to the copyright owners of sound recordings and
performers, the strong encouragement of Congress to reach an
accommodation with the small webcasters on an expedited basis.
"(4) The representatives have indicated that they do not
believe the agreement provides for or in any way approximates
fair or reasonable royalty rates and terms, or rates and terms
that would have been negotiated in the marketplace between a
willing buyer and a willing seller.
"(5) Congress has made no determination as to whether the
agreement provides for or in any way approximates fair or
reasonable fees and terms, or rates and terms that would have
been negotiated in the marketplace between a willing buyer and a
willing seller.
"(6) Congress likewise has made no determination as to whether
the July 8 order is reasonable or arbitrary, and nothing in this
Act [amending this section and enacting provisions set out as
notes under this section and section 101 of this title] shall be
taken into account by the United States Court of Appeals for the
District of Columbia Circuit in its review of such order.
"(7) It is, nevertheless, in the public interest for the
parties to be able to enter into such an agreement without fear
of liability for deviating from the fees and terms of the July 8
order, if it is clear that the agreement will not be admissible
as evidence or otherwise taken into account in any government
proceeding involving the setting or adjustment of the royalties
payable to copyright owners of sound recordings for the public
performance or reproduction in ephemeral phonorecords or copies
of such works, the determination of terms or conditions related
thereto, or the establishment of notice or recordkeeping
requirements."
Pub. L. 107-321, Sec. 5(a), Dec. 4, 2002, 116 Stat. 2783,
provided that: "Congress finds that -
"(1) in the case of royalty payments from the licensing of
digital transmissions of sound recordings under subsection (f) of
section 114 of title 17, United States Code, the parties have
voluntarily negotiated arrangements under which payments shall be
made directly to featured recording artists and the
administrators of the accounts provided in subsection (g)(2) of
that section;
"(2) such voluntarily negotiated payment arrangements have been
codified in regulations issued by the Librarian of Congress,
currently found in section 261.4 of title 37, Code of Federal
Regulations, as published in the Federal Register on July 8,
2002;
"(3) other regulations issued by the Librarian of Congress were
inconsistent with the voluntarily negotiated arrangements by such
parties concerning the deductibility of certain costs incurred
for licensing and arbitration, and Congress is therefore
restoring those terms as originally negotiated among the parties;
and
"(4) in light of the special circumstances described in this
subsection, the uncertainty created by the regulations issued by
the Librarian of Congress, and the fact that all of the
interested parties have reached agreement, the voluntarily
negotiated arrangements agreed to among the parties are being
codified."
SUSPENSION OF CERTAIN PAYMENTS
Pub. L. 107-321, Sec. 3, Dec. 4, 2002, 116 Stat. 2781, provided
that:
"(a) Noncommercial Webcasters. -
"(1) In general. - The payments to be made by noncommercial
webcasters for the digital performance of sound recordings under
section 114 of title 17, United States Code, and the making of
ephemeral phonorecords under section 112 of title 17, United
States Code, during the period beginning on October 28, 1998, and
ending on May 31, 2003, which have not already been paid, shall
not be due until June 20, 2003.
"(2) Definition. - In this subsection, the term 'noncommercial
webcaster' has the meaning given that term in section
114(f)(5)(E)(i) of title 17, United States Code, as added by
section 4 of this Act.
"(b) Small Commercial Webcasters. -
"(1) In general. - The receiving agent may, in a writing signed
by an authorized representative thereof, delay the obligation of
any 1 or more small commercial webcasters to make payments
pursuant to sections 112 and 114 of title 17, United States Code,
for a period determined by such entity to allow negotiations as
permitted in section 4 of this Act [amending this section],
except that any such period shall end no later than December 15,
2002. The duration and terms of any such delay shall be as set
forth in such writing.
"(2) Definitions. - In this subsection -
"(A) the term 'webcaster' has the meaning given that term in
section 114(f)(5)(E)(iii) of title 17, United States Code, as
added by section 4 of this Act; and
"(B) the term 'receiving agent' shall have the meaning given
that term in section 261.2 of title 37, Code of Federal
Regulations, as published in the Federal Register on July 8,
2002."
REPORT TO CONGRESS
Pub. L. 107-321, Sec. 6, Dec. 4, 2002, 116 Stat. 2785, provided
that: "By not later than June 1, 2004, the Comptroller General of
the United States, in consultation with the Register of Copyrights,
shall conduct and submit to the Committee on the Judiciary of the
House of Representatives and the Committee on the Judiciary of the
Senate a study concerning the economic arrangements among small
commercial webcasters covered by agreements entered into pursuant
to section 114(f)(5)(A) of title 17, United States Code, as added
by section 4 of this Act, and third parties, and the effect of
those arrangements on royalty fees payable on a percentage of
revenue or expense basis."

Last modified: April 19, 2006