Copyright Office Proposes Amendments to Regulations Governing the Reporting of Statements of Account under the Section 115 License

The Copyright Office is proposing to amend its regulations governing the reporting of monthly and annual statements of account for the making and distribution of phonorecords under the compulsory license, 17 U.S.C. 115, to bring the regulations up to date to reflect recent and pending rate determinations by the Copyright Royalty Judges (CRJ).

Among other things, these CRJ determinations provide rates for limited downloads, interactive streaming, and incidental digital phonorecord deliveries.

The proposed amendments include new provisions for reporting phonorecords made during the course of an interactive stream and those offered by different types of digital phonorecord services and, to the extent possible, harmonize these reporting requirements with the existing regulations for reporting the making and distribution of physical phonorecords, permanent downloads, and ringtones. Comments are due September 25, 2012.

By way of background, Section 115 of the Copyright Act provides a compulsory license for reproducing and distributing phonorecords of a musical work. The mechanical license limits the exclusive rights granted to copyright owners by enabling anyone to make a phonorecord of an eligible musical work for the purpose of distributing it to the public for private use.

The mechanical license may be used once phonorecords of a nondramatic musical work have been distributed to the public in the United States under the authority of the copyright owner. In order to legally use the mechanical license, the licensee has to comply with the requirements in the statute and pay a royalty fee to the copyright owner. The mechanical license has its limitations; it is only available to make and distribute phonorecords of a musical work and it does not allow the licensee to reproduce and distribute another’s sound recording, or change the ‘‘basic melody or fundamental character of the work.’’ 17 U.S.C. 115(a)(2).

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