Copyright Law Updates | New Statutes, Regulations and Rules
May 31, 2012
CRJ Proposes Regulations Setting Rates and Terms for Use of Musical Works under Section 115 Statutory License
Adjustment of Determination of Compulsory License Rates for Mechanical and Digital Phonorecords
37 CFR Part 385, Docket No. 2011–3 CRB Phonorecords, 5/17/2012
The Copyright Royalty Judges (CRJ) are publishing for comment proposed regulations that set rates and terms under the section 115 statutory license for use of musical works in physical phonorecord deliveries, permanent digital downloads, ringtones, interactive streaming, limited downloads, limited offerings, mixed service bundles, music bundles, paid locker services, and purchased content locker services.
Comments are due June 18, 2012.
By way of background, Section 115 of the Copyright Act, title 17 of the United States Code, also known as the mechanical compulsory license, requires a copyright owner of a nondramatic musical work to grant a license to any person who wants to make and distribute phonorecords of that work, provided that the copyright owner has allowed phonorecords of the work to be produced and distributed, and that the licensee complies with the statute and regulations.
On November 1, 1995, Congress passed the Digital Performance Right in Sound Recordings Act of 1995 (‘‘DPRSRA’’), Public Law 104–39, 109 Stat. 336, which extended the mechanical license to digital phonorecord deliveries. 17 U.S.C. 115(c)(3).
Consequently, the license now covers digital transmissions of phonorecords in addition to the physical copies such as compact discs, vinyl and cassette tapes. Chapter 8 of the Copyright Act requires the Copyright Royalty Judges (‘‘Judges’’) to conduct proceedings every five years to determine the rates and terms for the section 115 license.
Section 801(b)(7)(A) of the Copyright Act authorizes the Judges to adopt rates and terms negotiated by ‘‘some or all of the participants in a proceeding at any time during the proceeding’’ provided they are submitted to the Judges for approval. This section provides that in such event:
(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 agreement and shall provide to participants in the proceeding under section 803(b)(2) that would be bound by the terms, rates, or other determination set by the agreement an opportunity to comment on the agreement and object to its adoption as a basis for statutory terms and rates; and
(ii) The Copyright Royalty Judges may decline to adopt the agreement as a basis for statutory terms and rates for participants that are not parties to the agreement, if any participant described in clause (i) 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 reasonable basis for setting statutory terms or rates.
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