Copyright Royalty Board Regulations Regarding Procedures for Determination and Allocation of Assessment To Fund Mechanical Licensing Collective and Other Amendments Required by the Hatch-Goodlatte Music Modernization Act
| Citation | 84 FR 9053 |
| Record Number | 2019-04067 |
| Published date | 13 March 2019 |
| Court | Copyright Royalty Board,Library Of Congress |
Federal Register, Volume 84 Issue 49 (Wednesday, March 13, 2019)
[Federal Register Volume 84, Number 49 (Wednesday, March 13, 2019)]
[Proposed Rules]
[Pages 9053-9073]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-04067]
=======================================================================
-----------------------------------------------------------------------
LIBRARY OF CONGRESS
Copyright Royalty Board
37 CFR Parts 303, 350, 355, 370, 380, 382, 383, 384, and 385
[Docket No. 18-CRB-0012 RM]
Copyright Royalty Board Regulations Regarding Procedures for
Determination and Allocation of Assessment To Fund Mechanical Licensing
Collective and Other Amendments Required by the Hatch-Goodlatte Music
Modernization Act
AGENCY: Copyright Royalty Board, Library of Congress.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Copyright Royalty Judges (Judges) propose regulations
governing proceedings to determine the reasonableness of and allocate
responsibility to fund the operating budget of the Mechanical Licensing
Collective authorized by the Music Modernization Act (MMA). The Judges
also propose amendments to extant rules as required by the MMA. The
Judges solicit comments on the proposed rules.
DATES: Comments are due no later than April 12, 2019.
ADDRESSES: You may submit comments and proposals, identified by docket
[[Page 9054]]
number 18-CRB-0012-RM, by any of the following methods:
CRB's electronic filing application: Submit comments and proposals
online in eCRB at https://app.crb.gov/.
U.S. mail: Copyright Royalty Board, P.O. Box 70977, Washington, DC
20024-0977; or
Overnight service (only USPS Express Mail is acceptable): Copyright
Royalty Board, P.O. Box 70977, Washington, DC 20024-0977; or
Commercial courier: Address package to: Copyright Royalty Board,
Library of Congress, James Madison Memorial Building, LM-403, 101
Independence Avenue SE, Washington, DC 20559-6000. Deliver to:
Congressional Courier Acceptance Site, 2nd Street NE and D Street NE,
Washington, DC; or
Hand delivery: Library of Congress, James Madison Memorial
Building, LM-401, 101 Independence Avenue SE, Washington, DC 20559-
6000.
Instructions: Unless submitting online, commenters must submit an
original, two paper copies, and an electronic version on a CD. All
submissions must include a reference to the CRB and this docket number.
All submissions will be posted without change to eCRB at https://app.crb.gov/ including any personal information provided.
Docket: For access to the docket to read submitted background
documents or comments, go to eCRB, the Copyright Royalty Board's
electronic filing and case management system, at https://app.crb.gov/
and search for docket number 18-CRB-0012-RM.
FOR FURTHER INFORMATION CONTACT: Anita Blaine, CRB Program Specialist,
by telephone at (202) 707-7658 or email at [email protected].
SUPPLEMENTARY INFORMATION: On November 5, 2018, the Copyright Royalty
Judges (Judges) published a notification of inquiry (NOI) seeking
recommendations regarding necessary and appropriate modifications and
amendments that must or should be made to agency regulations following
enactment of The Orrin G. Hatch-Bob Goodlatte Music Modernization Act,
Public Law 115-264, 132 Stat. 3676 (Oct. 11, 2018) (MMA), a new law
regarding the music industry. See 83 FR 55334 (Nov. 5, 2018). In the
NOI, the Judges requested input from persons and entities who
reasonably believe they have a significant interest in the content of
necessary or appropriate changes to the regulations in chapter III,
title 37, Code of Federal Regulations (CFR) as a result of Congress's
passage of the MMA.
The Judges requested input relating to interpretation and
application of the changes the MMA makes to chapter 8 of the Copyright
Act. Specifically, but not exclusively, the Judges requested comments
regarding the following questions:
(1) What regulations in chapter III, title 37 CFR, if any, must be
changed and how?
(2) What regulations in chapter III, title 37 CFR, if any, should
be changed and how?
(3) What effect, if any, does the new language in subparagraph 8 of
sec. 801(b) have on the Judges' ability to make necessary procedural or
evidentiary rulings under secs. 801, 803, 804, and/or 805 of the
Copyright Act, and, in particular, does the new language have the
effect that the Judges are now required to adopt new regulations,
notwithstanding their general authority under sec. 801(c)?
(4) If the new language in subparagraph 8 of sec. 801(b) affects
the Judges' authority under other subsections of sec. 801, how does it
change that authority or the procedures to exercise that authority?
The Judges also requested proposed new or modified regulatory
language that may be necessary to fully implement the MMA. 83 FR at
55335.
The Judges received five comments in response to the NOI: A joint
comment from The National Music Publishers Association (NMPA) and the
Digital Music Association (DiMA) and single comments from
SoundExchange, Inc. (SoundExchange), Iconic Artists LLC (Iconic),\1\
Seattle Theatre Group (STG),\2\ and George Johnson.\3\
---------------------------------------------------------------------------
\1\ Mr. Michael Flynn, Executive Director of Iconic, submitted
comments focusing on security, fiduciary protections, and oversight
of the operations of the MLC. Mr. Flynn made eleven suggestions
regarding provisions in the MMA and about music licensing more
generally (e.g., fractional licenses, the need for an independent
auditor to oversee digital service providers, the need for sound
recording meta data, the structure of the MLC, the authority of MLC
board members, desirability of a third-party fact checking service
to aid the MLC). None of the Iconic suggestions is pertinent to the
issues on which the Judges sought comments in the NOI or relevant to
the task of the Judges (i.e., to bring the Judges' rules into
compliance with the MMA).
\2\ STG submitted its comment through Josh Labelle, its
Executive Director. Mr. Labelle's comment focuses on live
performances of musical works and raises concerns about the amount
of money artists are paid for working with Live Nation or AEG versus
non-profit presenters. He also contends that organizations should
have the right to audit organizations like ASCAP and BMI. Finally,
he questions why STG should be required to pay ASCAP, BMI, and SESAC
for every performance regardless of whether the artist has a
contract with all three of these organizations. The Judges take no
position on any of these issues, but note that each is outside the
scope of the NOI and the task of the Judges.
\3\ Mr. Johnson recommends that the Judges ``abolish the
`limited download' found in [37 CFR 385.10] and throughout subparts
B and C.'' Johnson Comment at 2. The scope of the NOI is limited to
changes that the Judges must or should appropriately make to their
regulations to implement the provisions of the MMA. The Judges find
no provision in the MMA that would authorize the Judges to abolish
the limited download as Mr. Johnson recommends. Therefore, the
Judges find that his comment is beyond the scope of the NOI and not
relevant to the task of the Judges.
---------------------------------------------------------------------------
NMPA and DiMA filed proposed regulatory language that would create
a new part 355 of title 37 of the CFR focusing on procedural practices.
They also recommended conforming amendments to parts 350 and 385.
SoundExchange submitted comments regarding changes the MMA made that
relate to the treatment of sound recordings fixed before February 15,
1972, under the secs. 112 and 114 statutory licenses and proposed
changes to part 382.
In response to the comments and consistent with the Judges'
obligations under the MMA, the Judges now publish proposed rules to
implement the provisions of the MMA that affect the Judges' program.
Background
The MMA amended title 17 of the United States Code (Copyright Act)
to authorize, among other things, designation by the Register of
Copyrights (with the approval of the Librarian of Congress) of a
Mechanical Licensing Collective (MLC). 17 U.S.C. 115(d)(3)(A)(iv) and
17 U.S.C. 115(d)(3)(B)(i). The MLC is to be a nonprofit entity created
by copyright owners to carry out responsibilities set forth in sec. 115
of the Copyright Act. 17 U.S.C. 115(d)(3)(A)(i). The Copyright Act sets
forth the governance of the MLC, which shall include representatives of
songwriters and music publishers (with nonvoting members representing
licensees of musical works and trade associations). 17 U.S.C.
115(d)(3)(D). The MLC is authorized expressly to carry out several
functions under the Copyright Act, including offering and administering
blanket licenses and collecting and distributing royalties. 17 U.S.C.
115(d)(3)(C)(i) and (iii).
The MMA provides that the Judges must, within 270 days of the
effective date of the MMA, commence a proceeding to determine an
initial administrative assessment that digital music providers and any
significant nonblanket licensees shall pay to fund the operations of
the MLC. 17 U.S.C. 115(d)(7)(D)(iii)(I).\4\ The Judges may also
[[Page 9055]]
conduct periodic proceedings to adjust the administrative assessment.
17 U.S.C. 115(d)(7)(D)(iv). In the proceedings to determine the initial
and adjusted administrative assessments, the Judges must determine an
assessment ``in an amount that is calculated to defray the reasonable
collective total costs.'' 17 U.S.C. 115(d)(7)(D)(ii)(II).
---------------------------------------------------------------------------
\4\ The assessment may also be paid through voluntary
contributions from digital music providers and significant
nonblanket licensees as may be agreed with copyright owners. 17
U.S.C. 115(d)(7)(A)(ii).
---------------------------------------------------------------------------
Creation of the MLC and the other statutory changes in the MMA
require or authorize modification of the Judges' regulations relating
to sec. 115. For example, sec. 102(d) of the MMA requires the Judges,
not later than 270 days after enactment of the MMA, to amend part 385
of title 37, CFR, ``to conform the definitions used in such part to the
definitions of the same terms described in sec. 115(e) of title 17,
United States Code, as added by'' sec. 102(a) of the MMA. That
provision also directs the Judges to ``make adjustments to the language
of the regulations as necessary to achieve the same purpose and effect
as the original regulations with respect to the rates and terms
previously adopted by the [Judges].'' In addition, the MMA authorizes
the Judges to adopt regulations concerning proceedings to set the
administrative assessment established by the statute to fund the MLC.
17 U.S.C. 115(d)(7)(D)(viii) and 115(d)(12)(A).
The MMA also adds a new section 801(b)(8) to the Copyright Act,
which authorizes the Judges ``to determine the administrative
assessment to be paid by digital music providers under section 115(d)''
and states that ``[t]he provisions of section 115(d) shall apply to the
conduct of proceedings by the [Judges] under section 115(d) and not the
procedures in this section, or section 803, 804, or 805.'' 17 U.S.C.
801(b)(8).
A. Discussion of Comments
1. NMPA/DiMA Joint Comments
NMPA and DiMA submitted joint comments proposing regulatory changes
in three areas: A new part 355 to include procedures for MLC
administrative assessment proceedings under sec. 115(d) (Proposed
Procedures), modifications to part 385, the regulations relating to the
phonorecords mechanical license, and minor changes to the Judges'
general administrative provisions.
a. Proposed Regulations for MLC Administrative Assessment Proceedings
In its joint comment, NMPA/DiMA noted that
the MMA establishes a new, streamlined procedure before the CRJs to
establish an administrative assessment to be paid by digital music
providers and significant nonblanket licensees in order to fund the
MLC. Under the statute, administrative assessment proceedings, which
are wholly separate from royalty ratesetting proceedings, are to be
conducted under simplified, abbreviated procedures.
NMPA/DiMA Comment at 2.
According to NMPA/DiMA, the MMA
expressly provides that the procedures set forth in Section 115(d)
[of the Copyright Act] are to apply to administrative assessment
proceedings, rather than the more complex procedures for royalty
ratesetting and distribution proceedings set forth in Sections 801,
803, 804 and 805. Accordingly, the CRJs should establish new
procedures and practices to govern administrative assessment
proceedings that conform to the framework set forth in the MMA.
Id. at 3, (footnote omitted). To that end, NMPA and DiMA proposed rules
to govern administrative assessment proceedings that purport to track
the requirements of the MMA, which, they assert, are efficient and fair
``while also avoiding unwarranted costs for the parties or undue
administrative burden on the CRJs.'' Id.
According to NMPA/DiMA, the MMA requires the Judges to conduct
administrative assessment proceedings under sec. 115(d) and not under
the procedures described in secs. 801, 803, 804, or 805 of the
Copyright Act. Id. at 4.
NMPA/DiMA state:
Section 801(c), [provides] that the CRJs ``may make any
necessary procedural or evidentiary rulings in any proceeding under
this chapter [8] and may, before commencing a proceeding under this
chapter, make any such rulings that would apply to the proceedings.
. . .'' By its terms, this provision applies to proceedings
``under'' chapter 8 that are ``commenced'' under chapter 8, while
administrative assessment proceedings are commenced and conducted
under chapter 1. Thus, while Section 801(c) provides the CRJs with
authority to make procedural and evidentiary rulings in proceedings
commenced and conducted under Section 801 et seq., that authority
does not extend to the administrative assessment proceedings.
NMPA/DiMA Comment at 6 (footnotes omitted).
NMPA/DiMA note, however, that the MMA affords the Judges broad
authority to establish rules ``to govern the conduct of proceedings
under [sec. 115(d)(7)]'' to set the administrative assessment. They
opine that ``[a]ny such regulations can and should include rules to
govern decisions on procedural and evidentiary matters.'' Id. at 7.
NMPA/DiMA included, among other things, the substance of sec. 801(c) of
the Copyright Act in their proposed regulatory language.
With respect to the specific regulations that the Judges should
adopt to govern administrative assessment proceedings, NMPA/DiMA noted
that the MMA
requires the [Judges] to establish (1) ``a schedule for submission
by the parties of information that may be relevant to establishing
the administrative assessment, including actual and anticipated
collective total costs of the mechanical licensing collective,
actual and anticipated collections from digital music providers and
significant nonblanket licensees, and documentation of voluntary
contributions''; and (2) a schedule for further proceedings, which
shall include a hearing, as the [Judges] determine appropriate.
NMPA/DiMA Comment at 11.
NMPA/DiMA proposed a set of procedures to effectuate the
administrative assessment proceedings, modeled in some respects on
summary judgment proceedings and on certain aspects of the Judges'
procedures in other types of proceedings, albeit in a more compressed
form. Specifically, NMPA/DiMA proposed to add a new part 355 to title
37, chapter III, subchapter B of the CFR (Proposed Procedures). NMPA/
DiMA intended that the Proposed Procedures would apply solely to
administrative assessment proceedings under sec. 115(d).
Under the Proposed Procedures, the initial administrative
assessment proceeding would commence with the Judges' publication of a
notice in the Federal Register. Subsequent proceedings to adjust the
administrative assessment could be triggered by a petition of the MLC,
the digital licensee coordinator (DLC), or another interested party.
With respect to the process for the filing and acceptance of petitions,
the Proposed Procedures would track the statutory requirements. NMPA/
DiMA Comment at 11.
The MMA directs the Judges to set a schedule for administrative
assessment proceedings and for a hearing and authorizes the Judges to
``adopt regulations to govern the conduct of [such] proceedings.'' 17
U.S.C. 115(d)(7)(D)(viii). NMPA/DiMA proposed a submission process
presumably attempting to expedite discovery between the participating
parties and still allow the Judges sufficient time to make their
ultimate determination of the administrative assessment. Under the
schedule that NMPA/DiMA proposed, the MLC's submission deadlines
overlap with the voluntary negotiation periods required by the MMA,
during which the MLC and DLC could reach a voluntary agreement that the
Judges could adopt in lieu of a litigated determination of the
administrative assessment.
[[Page 9056]]
NMPA/DiMA's apparent goal was to assure that the parties would
complete and file all submissions in advance of a hearing, which, as
they proposed, would be held within approximately eight months. NMPA/
DiMA concluded that approximately four months would suffice for the
Judges to make their determination. NMPA/DiMA Comment at 13. The
procedures that NMPA/DiMA proposed also would authorize the Judges to
modify the schedule, albeit without modifying the one-year statutory
deadline to complete the determination of the administrative
assessment. Id. at n.37.
Under the NMPA/DiMA Proposed Procedures, the MLC would file the
first submission, followed by responsive submissions from the DLC and
other participating parties, followed by a discretionary reply
submission by the MLC. The Proposed Procedures also specify the content
of these submissions in a manner that NMPA/DiMA contended is consistent
with the statutory directives of the MMA. Specifically, they
recommended that the submissions consist of a written statement
supporting (or disputing) the proposed administrative assessment to
fund reasonable collective total costs, as well as analysis to support
(or dispute) the proposal's compliance with MMA requirements. NMPA/DiMA
Comment at 13-14.
Under the Proposed Procedures, concurrently with the parties'
submissions, the parties would produce to each other documents to
demonstrate actual and anticipated reasonable collective total costs,
among other elements specified in the MMA. NMPA/DiMA argued that the
procedures they proposed would provide for an integrated discovery
process that would require each party to produce at the outset, without
document discovery requests, the documents necessary to demonstrate
whether the submissions meet the requirements of the MMA. The Proposed
Procedures would also allow parties to seek additional supporting
documents from another party upon a showing that the documents are
relevant and not unduly burdensome. Id. at 14.
Under the NMPA/DiMA proposal, the MLC and DLC also would be
permitted to take a limited number of depositions during their
respective discovery periods, with other participants able to attend
and potentially examine deponents for a portion of the allotted time.
Id. The proposal would allow participants to request rulings from the
Judges in a manner that NMPA/DiMA envision as efficient and expedient
for both the participants and the Judges.
The NMPA/DiMA proposal also included provisions to guide the
hearing, which would be limited to oral argument addressed to the
parties' submissions unless the Judges determined a need for
examination of witnesses. The proposal also included procedures and
timing for the Judges' ultimate determination of the administrative
assessment that NMPA/DiMA propose to be consistent with the statutory
requirements of the MMA. Id. at 15.
b. Proposed Modifications to Mechanical License Regulations
According to NMPA/DiMA, the MMA also requires consideration and
adjustment of existing definitions in part 385 of 37 CFR to conform
existing regulatory definitions to those in sec. 115(e) of the
Copyright Act. NMPA/DiMA Comment at 3. NMPA/DiMA proposed amended
definitions for the affected sections of part 385, as well as other
changes that they contended are required for conformity with the
MMA.\5\ Id.
---------------------------------------------------------------------------
\5\ NMPA/DiMA assert that the Judges might need to modify other
provisions within part 385 when the MLC becomes operational in 2021,
such as ``provisions that govern the complex calculation of
royalties due for streaming and other digital uses under section
115, and the related accounting provision.'' NMPA/DiMA Comment at
15. At this time, the Judges take no position on whether such
additional modifications will be necessary or appropriate.
---------------------------------------------------------------------------
With respect to the most recent sec. 115 ratesetting proceeding,
NMPA/DiMA suggested modifications to the Judges' recently adopted
regulations in part 385 to conform definitions to the ones provided in
the MMA. See Determination of Royalty Rates and Terms for Making and
Distributing Phonorecords (Phonorecords III), 84 FR 1918 (Feb. 5,
2019). They stated that in a few cases where a definition in the MMA
employs different terminology for the same concept, the Proposed
Definitions would replace the CFR terminology with the MMA terminology.
Id. at 9. For example, the MMA term ``Permanent Download'' and related
definition would be substituted for the term ``Permanent Digital
Download'' and definition in the current regulations.
Where an MMA term is conceptually similar to or employs similar
terminology as, but is not fully congruent with, the CFR term--and
could thus cause confusion or have an impact on the application of the
ratesetting regulations--the definitions that NMPA/DiMA proposed would
adopt separate nomenclature so that the distinction is maintained. Id.
For example, because the definition of ``Limited Download'' \6\ differs
as between the MMA and the CFR, NMPA/DiMA proposed substituting the
term ``Eligible Limited Download'' for ``Limited Download'' in the CFR
provisions.
---------------------------------------------------------------------------
\6\ The MMA defines limited download as ``a digital transmission
of a sound recording of a musical work in the form of a download,
where such sound recording is accessible for listening only for a
limited amount of time or specified number of times.'' In
Phonorecords III, the Judges adopted a two-pronged definition of
Limited Download that is based on the amount of time that the sound
recording is available to the end user or the number of times the
end user plays the sound recording.
---------------------------------------------------------------------------
Similarly, the proposal would change the term ``Record Company'' in
the regulations to ``Sound Recording Company'' because the CFR
definition, while similar in some ways to the MMA definition,
``substantively departs from the MMA definition.'' \7\ Id. NMPA/DiMA
propose substituting the term ``Service Provider'' for the term
``Service'' throughout part 385.\8\
---------------------------------------------------------------------------
\7\ The MMA defines the term record company as an entity that
invests in, produces, and markets sound recordings of musical works,
and distributes such sound recordings for remuneration through
multiple sales channels, including a corporate affiliate of such an
entity engaged in distribution of sound recordings. In Phonorecords
III, the Judges adopted the following definition of record company:
A person or entity that (1) Is a copyright owner of a sound
recording embodying a musical work; (2) In the case of a sound
recording of a musical work fixed before February 15, 1972, has
rights to the sound recording, under the common law or statutes of
any State, that are equivalent to the rights of a copyright owner of
a sound recording of a musical work under title 17, United States
Code; (3) Is an exclusive Licensee of the rights to reproduce and
distribute a sound recording of a musical work; or (4) Performs the
functions of marketing and authorizing the distribution of a sound
recording of a musical work under its own label, under the authority
of the Copyright Owner of the sound recording.
\8\ The MMA defines the term ``service'' as follows: ``The term
`service', as used in relation to covered activities, means any
site, facility, or offering by or through which sound recordings of
musical works are digitally transmitted to members of the public.''
17 U.S.C. 115(e)(29). Section 385.2 defines ``service'' as that
entity governed by subparts C and D of this part, which might or
might not be the Licensee, that with respect to the section 115
license: (1) Contracts with or has a direct relationship with End
Users or otherwise controls the content made available to End Users;
(2) Is able to report fully on Service Revenue from the provision of
musical works embodied in phonorecords to the public, and to the
extent applicable, verify Service Revenue through an audit; and (3)
Is able to report fully on its usage of musical works, or procure
such reporting and, to the extent applicable, verify usage through
an audit. 37 CFR 385.2.
---------------------------------------------------------------------------
c. General Administrative Regulations
According to NMPA/DiMA, although administrative assessment
proceedings are to be separate from and simpler than other types of CRJ
proceedings, a number of the procedures that NMPA/DiMA propose are
adapted from existing
[[Page 9057]]
regulations that apply to other of the Judges' procedures in Parts 351
and 352 of Title 37, Chapter III, Subchapter B of the CFR. NMPA/DiMA
Comment at 12. Moreover, a proposed revision to 37 CFR 350.1
purportedly would make clear that a series of existing general
administrative provisions in part 350, including provisions relating to
document formats and electronic filing via eCRB, would still apply to
administrative assessment proceedings. NMPA/DiMA Comment at 12.
d. Judges' Response to the NMPA/DiMA Proposals and Request for Comments
The Judges found NMPA/DiMA's response to the NOI to be helpful in
formulating rules to satisfy the requirements of the MMA. As a result,
the rules that the Judges now propose incorporate many elements of that
proposal. The Judges' proposal, however, varies in certain respects.
Nevertheless, the Judges seek comments generally on whether the Judges'
proposal is consistent with the MMA and if not, which provisions of the
proposal should be changed to make the proposal consistent with the
MMA.
As an overarching proposition, the Judges' proposed regulations do
not restate definitions or other language that is part of the MMA
because, preliminarily, the Judges believe that such restatement is
superfluous and are concerned that slight variations from the statutory
language could give rise to unnecessary debate. Nevertheless, the
Judges seek comment on whether the rules they propose should include a
restatement of terms in the MMA, and if so, which provisions should be
restated and why.
The Judges preliminarily agree with NMPA/DiMA as regards
modification of some of the regulatory language in part 385. Defined
terms in the Judges' rules should conform to the terms Congress used in
the MMA for the same purpose. Hence, the Judges propose to add
``Eligible'' before defined terms ``Interactive Stream'' and ``Limited
Download.'' \9\ In part 385, the Judges' used the term ``Record
Company;'' whereas the term in the MMA is ``Sound Recording Company.''
The Judges have proposed using the term Sound Recording Company.
Likewise, the Judges propose using the term ``Service Provider'' rather
than the term ``Service'' to distinguish the entities envisioned in the
Judges' rules from those referenced in the MMA. The MMA refers to
Permanent Downloads for the licensed activity the Judges called
``Permanent Digital Download'' or ``PDD.'' The Judges propose, with few
modifications,\10\ the changes in the definitions that NMPA/DiMA
propose but seek comment on whether adopting those definitions is
consistent with the Judges' obligations under the MMA or whether one or
more of the changes that the Judges adopt would materially change the
way in which those terms should be interpreted in the Judges'
regulations.
---------------------------------------------------------------------------
\9\ The Judges, however, decline to include NMPA/DiMA's proposed
addition of a new sentence at the end of the definition of
``Eligible Interactive Stream,'' stating ``[a]n Eligible Interactive
Stream is a digital phonorecord delivery.'' ``Digital phonorecord
delivery'' is defined in 17 U.S.C. 115(d). Eligible Interactive
Streams are digital phonorecord deliveries if, and only if they
conform to the statutory definition. To the extent the proposed
language confirms this fact, it is unnecessary. To the extent the
proposed language seeks to expand the statutory definition, it is
impermissible.
\10\ One such proposed modification that the Judges
preliminarily decline to adopt is the insertion of the phrase ``for
the purposes of this part 385'' in the current definitions of the
terms ``end user'' and ``stream''. Generally, the Judges do not
believe that such language is necessary and might raise the question
of whether the other definitions where the phrase does not appear
are intended to be read to apply more broadly across regulations.
Nevertheless, the Judges seek comment on why the definitions of the
terms ``end user'' and ``stream'' should uniquely be expressly
limited to part 385 and whether the language that NMPA/DiMA propose
to add would accomplish that goal.
---------------------------------------------------------------------------
With regard to the specifics of the Proposed Procedures, the Judges
decline to codify a strict schedule for each stage in the
administrative assessment proceeding. The Judges acknowledge the
prescribed statutory timeline for commencement, adjudication, and
completion of the proceeding. With that timeline in mind, the Judges
will best be able to assess when and how the stages of these
administrative assessment proceedings interface with other matters
(also prescribed by statute) on their calendar and will decide how much
time is necessary and appropriate to reach a determination by the
statutory deadline.
Preliminarily, the Judges believe that NMPA/DiMA's Proposed
Procedures attempted to achieve an efficiency that is not possible. For
example, NMPA/DiMA suggested that the initial negotiation period
commence simultaneously with the Judges' notice of commencement of the
proceeding. A notice of commencement sets a time (usually, but not
necessarily, 30 days) for interested parties to file a petition to
participate in the proceeding. The Judges are loathe to encourage the
MLC and the DLC, or other significant participants to engage in
negotiations for up to a month (or up to half the suggested negotiating
period) before the Judges identify and give notice of the full roster
of participants.
The Judges seek comment on whether the Judges' more flexible timing
proposal will allow the Judges to conduct an assessment proceeding in a
prompt and efficient manner or whether the Judges should instead
incorporate a more structured schedule such as the one NMPA/DiMA
proposed. The Judges also seek comment on a specific aspect of the
proposal that relates to proposed new Sec. 355.3, which would require
the MLA to submit an opening submission that includes reasons why the
proposed initial assessment fulfills the requirements in 17 U.S.C.
115(d)(7). The proposed rule would then authorize parties such as the
DLC that oppose the initial assessment to submit evidence in
opposition. Presumably in a proceeding to adjust the assessment, if the
Judges found that the MLA's proposal did not fulfill the requirements
of 17 U.S.C. 115(d)(7), the Judges could simply retain the extant
assessment. But what course would the Judges have available to them if
they found that the initial assessment that the MLC proposed were not
consistent with 17 U.S.C. 115(d)(7) and no other party presented an
acceptable alternative proposed assessment? Would the Judges be
required to request additional information and assessment proposals
from the parties, or would another alternative be available? If so,
what would that alternative be? For example, should the DLC be required
(rather than permitted) to submit and support a counterproposal? Should
this scenario be addressed in the Judges regulations? If so, why? If
not, why not?
The Judges also seek specific comments on proposed new Sec.
355.3(i) regarding reply submissions of the MLC. The proposal currently
would authorize the MLC to respond to submissions of the DLC and other
opposing parties but the proposal would not authorize the MLC to seek
discovery from those parties to support its submission. Should the
Judges adopt a discovery provision authorizing the MLC to conduct
discovery subsequent to submission of oppositions to the MLC's opening
submission? If so, why would such supplemental discovery be beneficial?
What limitations, if any, should the Judges place on such discovery? If
the Judges should not authorize a subsequent discovery, why not?
Another area in which the rules the Judges propose differs from the
Proposed Procedures suggested by NMPA/DiMA is in the conduct of
discovery depositions. The Judges believe it is appropriate to limit
the
[[Page 9058]]
number of depositions. The Judges preliminarily find that the NMPA/DiMA
proposal is overly restrictive in that they provided that the MLC and
the DLC may take depositions and that ``other participants may attend .
. . and except as otherwise agreed by those attending the deposition,
shall be provided an opportunity to examine the deponent during the
final hour of the deposition.'' NMPA/DiMA Comment, App. A, vi-vii
(proposed Sec. 355.3(e) regarding discovery on initial submission).
The Judges are concerned that under the NMPA/DiMA proposal certain
parties could possess veto power over the ability of other parties to
conduct discovery through depositions. To address this concern, the
Judges propose that the parties agree among themselves regarding the
allocation of time for the taking of depositions and, if they are
unable to agree, to file a motion with the Judges seeking relief in the
form of an order setting a particularized discovery schedule.
In the Proposed Procedures, NMPA/DiMA clearly intended depositions
to be for purposes of discovery relevant to the parties' submissions.
In their proposed Sec. 355.5(c), however, NMPA/DiMA proposed that the
Judges admit into evidence the parties' written submissions ``as well
as deposition transcripts . . . .'' NMPA/DiMA Comment, App. A, at x
(proposed Sec. 355.5(c)). The Judges recognize the value of discovery
depositions in narrowing issues for adjudication. A discovery
deposition is exploratory, however, and differs in scope from a
deposition intended to preserve testimony of a witness whose sponsor
cannot assure a timely appearance at trial.
In discovery, the parties note objections for the record and the
questioning proceeds. In a preservation deposition, the participants
must make evidentiary objections to avoid waiver, and the record should
contain argument of counsel relating to the objection. In some critical
instances, the participants may require a contemporaneous ruling, e.g.,
by telephone, before continuing with questioning. The participants may
submit the preservation deposition transcript for evidentiary rulings
before offering the transcript for admission.
The Judges believe that wholesale admission of discovery deposition
transcripts could shift to them the process of separating the wheat
from the chaff and refining the parties' issues. In general, in
litigation, parties may use deposition transcripts for any purpose at
trial. See Fed. R. Civ. P. 32. The Judges are not eager to burden the
record with the parties' back and forth in discovery. Therefore, the
Judges decline to propose this provision presented by NMPA/DiMA but
seek comment on the need or usefulness of such transcripts.
The Judges also propose to expand the scope of the NMPA/DiMA
proposal regarding the allowable methods of receiving oral testimony
from expert witnesses. In particular, the Judges propose the allowable
use, in the Judges' discretion, of a ``concurrent evidence'' approach.
More particularly, before, after or in lieu of the direct, cross and
redirect testimony of expert witnesses, the experts testifying as to a
common issue would be required to testify concurrently, responding to
questions posed by the Judges and/or counsel (at the Judges'
discretion). Under the Judges' proposal, an expert witness could
address questions to another expert witness, and the latter would be
required to respond to the question, with the expert-to-expert colloquy
subject to the control of the Judges and to valid objections by
counsel. The Judges could permit the expert witnesses to make an
opening statement summarizing his or her testimony. The Judges
anticipate that this concurrent evidence approach, in appropriate
circumstances, would allow for a fuller and more probing presentation
and defense of expert opinions and the bases for those opinions.
Rules regarding the procedure for examination of witnesses
typically do not distinguish between the examination of lay witnesses
and expert witnesses. However, there is a fundamental difference
between the two types of witnesses. Whereas lay witnesses are
essentially fact witnesses, expert witnesses do not proffer otherwise
admissible facts, but rather testify in support of theories and data on
which they may properly rely (even if based on hearsay or not otherwise
admissible). Experts are permitted to testify as to these matters
because their qualifications allow them to assist the trier of fact.
Accordingly, the use of additional or alternative procedures for
receiving the testimony of expert witnesses--other than only the
typical direct, cross and redirect forms of examination--is appropriate
if it can assist the Judges in understanding and applying or rejecting
expert testimony and reports. In fact, a number of jurisdictions and
adjudicatory authorities have adopted a ``concurrent evidence''
approach. For example, the approach has been utilized in courts in
Canada, the United Kingdom, Australia, and Northern Ireland, as well as
in arbitrations conducted under the rules of the International Bar
Association. Further, the concurrent evidence approach has been found
particularly appropriate when used by specialized courts,
administrative judges, regulatory boards and valuation agencies. This
is the additional or alternative approach set forth in this proposed
regulation.
A core element in the concurrent evidence approach is the use of
immediately sequential expert testimony to answer questions, whether
from counsel and/or the Judges. The process can be differentiated in
individual cases, based upon the interests of the parties and the
Judges. This flexibility is made explicit in the language of the
proposed regulation, including the flexibility not to utilize a
concurrent evidence approach and, at the other end of the spectrum, to
substitute this approach for the traditional approach to witness
examination. The ultimate decision would be made only after input from
counsel in connection with the drafting of a Scheduling Order regarding
witness questioning. Further, the proposed regulation does not presume
that any particular form of expert witness questioning is appropriate
for a given proceeding, or should serve as a default procedure.
Participants in concurrent evidence proceedings, as well as legal
scholars and experts, have identified a number of benefits associated
with the use of a concurrent evidence approach to receiving testimony
from expert witnesses. These benefits include (without limitation): (1)
Narrowing and clarifying issues; (2) immediate correction of testimony
by one expert when mistakes are identified by another expert; (3)
explicit identification of implicit assumptions; (4) highlighting of
alternative and tactical ``framing'' of issues; (5) promotion of
scholarly consensus; (6) encouragement of fuller testimony by virtue of
the relative informality of the process, compared with the rigidity of
traditional witness examination; and (7) immediate ability for counsel
and judges to use one witness's hearing testimony to challenge or
impeach another witness, rather than uncover the issue after-the-fact
by reading hearing transcripts. The Judges recognize from their own
experience that such benefits are not necessarily as likely to be
realized through the use of only the traditional form of witness
examination.
The Judges do not suggest that the concurrent evidence approach is
a panacea. In such a proceeding, a relatively more charismatic or
dominating expert may overwhelm other experts. Further, an expert may
[[Page 9059]]
use the process for advocacy on behalf of a party rather than solely to
provide expert opinion. Additionally, any wealth/income disparity
between or among the parties may allow one party to engage experts
better-suited to participate in a concurrent evidence proceeding.
Finally, the Judges are not overly sanguine that scholarly consensus
will regularly arise, particularly when the academic and professional
communities from which experts are selected do not demonstrate such a
consensus. However, all of these imperfections also arise under the
traditional method of receiving expert witness testimony. Thus, the
real issue is whether the availability of the concurrent evidence
alternative improves, on the margin, the Judges' ability to utilize
expert testimony to make better findings of fact without adding undue
cost or complexity to the proceeding.
The Judges also underscore that they continue to recognize the
significant value of traditional witness examination by litigation
counsel, via direct, cross, redirect and any further examination by
counsel the Judges find to be necessary. In particular, an adverse
counsel's skillful cross-examination can reveal weaknesses in testimony
that non-attorneys may fail to notice. For this reason, the proposed
regulation continues to provide the option for maintaining the use of
the traditional method for examining expert witnesses, either as the
exclusive method or in combination with the concurrent evidence
approach.
The Judges seek comment on the efficacy of the proposed concurrent
evidence approach. In particular, the Judges seek comment on whether
the proposed approach would be more likely than not to yield a more
fulsome record upon which the Judges can base their determination than
the approach the Judges employ in ratemaking and distribution
proceedings. The Judges also seek comments on whether the likely
benefits of making the concurrent evidence approach an available option
on a case-by-case basis, as the proposed regulation provides, would--
whenever that option was exercised--inevitably create additional costs,
in terms of money, time and inconvenience to the parties and the
witnesses, that would outweigh, in all proceedings, the benefits of
creating the concurrent evidence option.
Inspired by the NMPA/DiMA comments focusing on rules of general
application, the Judges propose redesignating the general
administrative provisions currently located in part 350 to keep them
separate from rules specific to the types of proceedings the Judges
oversee. These provisions would be transferred to a new part 303 and
redesignated. The Judges seek comment in support of or in opposition to
this proposed transfer and redesignation.
2. SoundExchange's Comment
In its comment, SoundExchange noted that the MMA made changes
relevant to the treatment of sound recordings fixed before February 15,
1972 (pre-1972 recordings) under the secs. 112 and 114 statutory
licenses. SoundExchange suggested three groups of changes to the
Judges' regulations under sections 112 and 114 that it asserted are
appropriate under the MMA:
Clarifying in chapter III of title 37 CFR that a
``copyright owner'' of sound recordings should be more broadly defined
to include a ``rights owner'' as defined in 17 U.S.C. 1401(l)(2);
Generalizing scattered references to ``copyright'' or
``protection under copyright law'' in chapter III of title 37 CFR to
include the protection provided by 17 U.S.C. 1401; and
Deleting the provisions of new part 382 subpart C
concerning adjustment of statutory royalty payments for SDARS to
reflect use of pre-1972 recordings.
SoundExchange Comment at 2.
a. Definition of ``Copyright Owner''
SoundExchange noted that the MMA added to title 17 of the U.S. Code
a new section 1401 that federalizes protection of pre-1972 recordings
in a manner that is not technically copyright protection, but that, in
SoundExchange's view, substantially parallels copyright protection. As
such, SoundExchange recommended that the Judges amend their regulations
in chapter III of title 37 CFR to reflect that a ``copyright owner''
includes a ``rights owner'' of pre-1972 recordings as defined in 17
U.S.C. 1401(l)(2). Id. at 2-3.
According to SoundExchange, under sec. 1401, when a digital music
service makes an ephemeral reproduction of a pre-1972 recording or
publicly performs a pre-1972 recording, the provider engages in
``covered activity'' as defined in sec. 1401(l)(1). SoundExchange
stated that engaging in that covered activity ``without the consent of
the rights owner'' is a violation of sec. 1401(a) subjecting the user
``to the remedies provided in sections 502 through 505 . . . to the
same extent as an infringer of copyright.'' SoundExchange Comment at 3,
quoting 17 U.S.C. 1401(a). According to SoundExchange, a user of pre-
1972 recordings may make the types of uses subject to statutory
licensing under secs. 112 and 114 without violating sec. 1401(a) if it
pays the statutory royalty for the transmission or reproduction
pursuant to the rates and terms adopted under secs. 112(e) and 114(f),
and complies with other obligations, in the same manner as required by
regulations adopted by the Judges under secs. 112(e) and 114(f) for
sound recordings that are fixed on or after February 15, 1972.
SoundExchange Comment at 3.
As a result of these provisions, SoundExchange asserted that
statutory licensees will commence making statutory royalty payments for
pre-1972 recordings (to the extent they were not already paying such
royalties), and that SoundExchange will handle those payments in the
same manner that it handles statutory royalties paid with respect to
post-1972 recordings.
SoundExchange does not contend that the Judges must amend chapter
III of title 37 CFR to reflect that a rights owner under sec.
1401(l)(2) is to be treated the same as a copyright owner. Nonetheless,
in SoundExchange's view, it would be most accurate and clearer if the
term copyright owner were defined to include a rights owner under sec.
1401(l)(2) for all relevant purposes of chapter III. SoundExchange
Comment at 3-4.
Toward that end, SoundExchange proposed adding a new definition of
``copyright owners'' in Sec. 370.1 that would state, ``Copyright
owners means sound recording copyright owners, and rights owners under
17 U.S.C. 1401(l)(2), who are entitled to royalty payments made
pursuant to the statutory licenses under 17 U.S.C. 112(e) and 114.''
SoundExchange suggested that the existing definitions of ``copyright
owner'' in Sec. Sec. 380.7, 380.21, 380.31, 382.1, 383.2(b),\11\ and
384.2 of the Judges' rules similarly should include a reference to
rights owners. SoundExchange Comment at 4.
---------------------------------------------------------------------------
\11\ In its comment SoundExchange identified the applicable rule
as Rule 383.3(b), but the ``Copyright Owner'' definition currently
resides in Rule 383.2(b). The related definitions in the other rules
are plural. To make the definitions consistent, the Judges propose
to amend the definition in Rule 383.2(b) to make it plural also.
---------------------------------------------------------------------------
SoundExchange also noted that various other scattered references to
``copyright'' in chapter III of title 37 CFR should be ``generalized to
contemplate the protection provided by Section 1401.'' SoundExchange
Comment at 4. SoundExchange did not assert that these references must
be changed to reflect the MMA, because, according to SoundExchange,
sec. 1401(b) specifies that pre-1972 recordings are subject to
statutory licensing on the same terms as post-1972 recordings.
Nevertheless,
[[Page 9060]]
SoundExchange believed that ``it would be most accurate and clearer if
the regulations reflected Section 1401(b)'' and therefore proposed
revisions to the following rules: 37 CFR 370.4 (Definition of Aggregate
Tuning Hours); 37 CFR 370.4 (Definition of Performance, paragraph (1));
37 CFR 380.7 (Definition of Performance, paragraph (1)); 37 CFR 380.21
(Definition of ATH); 37 CFR 380.21 (Definition of Performance,
paragraph (1)); and 37 CFR 384.3(a) (relating to the term Basic royalty
rate). SoundExchange Comment at 5-6.
b. Pre-1972 Recordings
SoundExchange also stated that the provisions of subpart C of part
382 concerning adjustment of statutory royalty payments for SDARS
relating to use of sound recordings fixed before February 15, 1972,
have become inoperative by their terms. To avoid confusion,
SoundExchange recommended that the Judges delete those provisions.
SoundExchange stated that Sec. 382.23(b) contains a formula for
reducing an SDARS provider's statutory royalty payment based on its use
of ``Pre-1972 Recordings.'' \12\ According to SoundExchange, the term
``Pre-1972 Recording'' as used in that provision is defined in Sec.
382.20 as ``a sound recording fixed before February 15, 1972, that is
not a restored work as defined in 17 U.S.C. 104A(h)(6) or otherwise
subject to protection under title 17, United States Code.''
SoundExchange Comment at 6-7 (emphasis from SoundExchange). According
to SoundExchange, with the enactment of the MMA, all sound recordings
fixed before February 15, 1972 are now ``subject to protection under
title 17, United States Code.'' See 17 U.S.C. 1401(a). Therefore,
SoundExchange concluded that there is no longer such a thing as a
``Pre-1972 Recording'' as defined in Sec. 382.20. According to
SoundExchange, therefore, applying the formula in Sec. 382.23(b)(2)
will always yield a ``Pre-1972 Recording Share'' of zero. SoundExchange
contended that is precisely the right result under the MMA, because a
service making use of pre-1972 recordings under the statutory licenses
is to:
---------------------------------------------------------------------------
\12\ SoundExchange noted that the capitalized term ``Pre-1972
Recordings'' is used herein as it is used in part 382, subpart C.
SoundExchange stated that that term is narrower than what are
otherwise referred to in its comment as lower-case ``pre-1972
recordings.'' SoundExchange Comment at 6 n.3.
Pay[ ] the statutory royalty for the transmission or
reproduction pursuant to the rates and terms adopted under sections
112(e) and 114(f), and compl[y] with other obligations, in the same
manner as required by regulations adopted by the Copyright Royalty
Judges under sections 112(e) and 114(f) for sound recordings that
---------------------------------------------------------------------------
are fixed on or after February 15, 1972.
SoundExchange Comment at 7 (quoting 17 U.S.C. 1401(b)).
SoundExchange reasoned that, if the definition of Pre-1972
Recording in Sec. 382.20 had not anticipated the possibility of
protection such as that now provided by sec. 1401, it would have been
necessary to eliminate the adjustment in Sec. 382.23(b).
SoundExchange noted that the definition of Pre-1972 Recording in
Sec. 382.20 does accommodate the protection now provided by sec. 1401.
Accordingly, SoundExchange concluded, it is not necessary to change
subpart C of part 382 to provide for payment of statutory royalties for
use of pre-1972 recordings. However, SoundExchange concluded that
enactment of the MMA makes that definition and the formula in Sec.
382.23(b) superfluous. Additionally, SoundExchange noted, Sec.
382.23(a)(3) establishes the priority between the pre-1972 deduction
and a parallel adjustment for direct licenses, which remains operative.
SoundExchange reasoned that because there can never be a pre-1972
deduction, Sec. 382.23(a)(3) is also superfluous. To avoid confusion,
SoundExchange contended that these provisions should all be deleted.
SoundExchange Comment at 8.
c. Judges' Response to SoundExchange's Proposals
As with the NMPA/DiMA comment, the Judges found SoundExchange's
comment to provide useful insights into how the Judges should approach
implementing provisions of the MMA.
SoundExchange proposed adding the definition of ``copyright owner''
in part 370, relating to notice and recordkeeping requirements, and
enlarging the definition of ``copyright owner'' in numerous other
places in chapter III. The MMA is carefully crafted to bestow certain
rights on owners of Pre-1972 Recordings without extending (or in some
cases resuscitating) a copyright.
Preliminarily, the Judges are sympathetic to SoundExchange's desire
to adjust the Judges' rules to make them consistent with applicable
provisions of the MMA. Nevertheless, the Judges believe that doing so
requires caution and should be done in a way that avoids unintended
consequences. As a result, although the Judges propose the amendments
that SoundExchange recommends, they seek specific comments on, and
alternatives to, each of SoundExchange's proposed changes to ensure
that the proposed amendments will achieve the desired goal of enhancing
clarity without creating uncertainty regarding how the rules should be
interpreted in practice. In particular, the Judges seek detailed
comment on, and alternatives to, the proposal to add a new definition
of ``copyright owners'' to Sec. 370.1, which would include rights
owners in pre-1972 sound recordings, and make corresponding changes to
the ``copyright owners'' definitions in Sec. Sec. 380.7, 380.21,
380.31, 382.1, 383. 2(b), and 384.2 and references to ``copyright'' in
Sec. Sec. 370.4 (definitions of ``Aggregate Tuning Hours'' and
``Performance''), 380.7 (definition of ``Performance''), 380.21
(definitions of ``ATH'' and ``Performance''), and 384.3(a) (relating to
the term ``Basic Royalty Rate''). See SoundExchange Comment at 4. As
SoundExchange correctly notes, the MMA did not extend copyright owner
status to owners of pre-1972 sound recordings. Do the amendments that
SoundExchange proposed to the definition of ``copyright owners'' and
related changes to ``copyright'' imply a broader right to rights owners
than Congress intended to grant? If so, what are the ramifications of
such a broadened right? The Judges note that ``copyright owner'' is a
defined term in section 101 of the Copyright Act. Is the definition of
``copyright owners'' proposed by SoundExchange consistent or compatible
with the statutory term? Are there other alternatives that the Judges
should consider to make the Judges' rules with respect to pre-1972
sound recordings consistent with the applicable provisions of the MMA?
SoundExchange contends that none of the changes it proposes in this
regard are necessary under the MMA? Is that correct? If so, should the
Judges leave the current rules regarding pre-1972 sound recordings as
they are?
The Judges also seek comments on SoundExchange's proposals
regarding part 382, subpart C, concerning adjustment of statutory
royalty payments for SDARS to reflect use of sound recordings fixed
before February 15, 1972, which, SoundExchange contends, ``have become
inoperative by their terms.'' See SoundExchange Comment at 6 (proposed
elimination of the formula in Sec. 382.23(b) (``Reduction for Pre-72
Recording Share''), the related definition of ``Pre-1972 Recording'' in
Sec. 382.20, and Sec. 382.23(a)(3), which ``establishes the priority
between the pre-1972 deduction and a parallel adjustment for direct
licenses,'' which
[[Page 9061]]
SoundExchange contends is now superfluous). See id. at 7.3.
Specifically, the Judges seek comments on the effect, if any, the
proposal would have on computation of royalties when an SDARS plays
pre-1972 sound recordings that have fallen into the public domain
(e.g., foreign sound recordings that were given protection under 17
U.S.C. 104A, which protection has since expired in their country of
origin, or, after January 1, 2022, pre-1923 U.S. sound recordings).
3. Comments of Other Parties
The Judges do not promulgate any regulations or propose any
modifications to regulations based on the comments of Iconic, STG, and
George Johnson because their comments were not relevant to the Judges'
task in this rulemaking proceeding.
List of Subjects
37 CFR Part 303
Administrative practice and procedure, Copyright, Lawyers.
37 CFR Part 350
Administrative practice and procedure, Copyright.
37 CFR Part 355
Administrative assessment, Administrative practice and procedure,
Copyright.
37 CFR Parts 370 and 380
Copyright, Sound recordings.
37 CFR Parts 382 and 383
Copyright, Digital audio transmissions, Performance right, Sound
recordings.
37 CFR Part 384
Copyright, Digital audio transmissions, Ephemeral recordings,
Performance right, Sound recordings.
37 CFR Part 385
Copyright, Phonorecords, Recordings.
For the reasons stated in the preamble, the Copyright Royalty
Judges propose to amend 37 CFR chapter III as set forth below:
Subchapter A--General Provisions
0
1. Add part 303 to read as follows:
PART 303--GENERAL ADMINISTRATIVE PROVISIONS
Sec.
303.1 [Reserved]
303.2 Representation.
303.3 Documents: format and length.
303.4 Content of motion and responsive pleadings.
303.5 Electronic filing system (eCRB).
303.6 Filing and delivery.
303.7 Time.
303.8 Construction and waiver.
Authority: 17 U.S.C. 803.
Sec. 303.1 [Reserved]
Sec. 303.2 Representation.
Individual parties in proceedings before the Judges may represent
themselves or be represented by an attorney. All other parties must be
represented by an attorney. Cf. Rule 49(c)(11) of the Rules of the
District of Columbia Court of Appeals. The appearance of an attorney on
behalf of any party constitutes a representation that the attorney is a
member of the bar, in one or more states, in good standing.
Sec. 303.3 Documents: format and length.
(a) Format--(1) Caption and description. Parties filing pleadings
and documents in a proceeding before the Copyright Royalty Judges must
include on the first page of each filing a caption that identifies the
proceeding by proceeding type and docket number, and a heading under
the caption describing the nature of the document. In addition, to the
extent technologically feasible using software available to the general
public, Parties must include a footer on each page after the page
bearing the caption that includes the name and posture of the filing
party, e.g., [Party's] Motion, [Party's] Response in Opposition, etc.
(2) Page layout. Parties must submit documents that are typed
(double spaced) using a serif typeface (e.g., Times New Roman) no
smaller than 12 points for text or 10 points for footnotes and
formatted for 8 \1/2\ by 11 inch pages with no less than 1 inch
margins. Parties must assure that, to the extent technologically
feasible using software available to the general public, any exhibit or
attachment to documents reflects the docket number of the proceeding in
which it is filed and that all pages are numbered appropriately. Any
party submitting a document to the Copyright Royalty Board in paper
format must submit it unfolded and produced on opaque 8 \1/2\ by 11
inch white paper using clear black text, and color to the extent the
document uses color to convey information or enhance readability.
(3) Binding or securing. Parties submitting any paper document to
the Copyright Royalty Board must bind or secure the document in a
manner that will prevent pages from becoming separated from the
document. For example, acceptable forms of binding or securing include:
Ring binders; spiral binding; comb binding; and for documents of fifty
pages or fewer, a binder clip or single staple in the top left corner
of the document. Rubber bands and paper clips are not acceptable means
of securing a document.
(b) Additional format requirements for electronic documents--(1) In
general. Parties filing documents electronically through eCRB must
follow the requirements of paragraphs (a)(1) and (2) of this section
and the additional requirements in paragraphs (b)(2) through (10) of
this section.
(2) Pleadings; file type. Parties must file all pleadings, such as
motions, responses, replies, briefs, notices, declarations of counsel,
and memoranda, in Portable Document Format (PDF).
(3) Proposed orders; file type. Parties filing a proposed order as
required by Sec. 303.4 must prepare the proposed order as a separate
Word document and submit it together with the main pleading.
(4) Exhibits and attachments; file types. Parties must convert
electronically (not scan) to PDF format all exhibits or attachments
that are in electronic form, with the exception of proposed orders and
any exhibits or attachments in electronic form that cannot be converted
into a usable PDF file (such as audio and video files, files that
contain text or images that would not be sufficiently legible after
conversion, or spreadsheets that contain too many columns to be
displayed legibly on an 8 \1/2\ '' x 11'' page). Participants must
provide electronic copies in their native electronic format of any
exhibits or attachments that cannot be converted into a usable PDF
file. In addition, participants may provide copies of other electronic
files in their native format, in addition to PDF versions of those
files, if doing so is likely to assist the Judges in perceiving the
content of those files.
(5) No scanned pleadings. Parties must convert every filed document
directly to PDF format (using ``print to pdf'' or ``save to pdf''),
rather than submitting a scanned PDF image. The Copyright Royalty Board
will NOT accept scanned documents, except in the case of specific
exhibits or attachments that are available to the filing party only in
paper form.
(6) Scanned exhibits. Parties must scan exhibits or other documents
that are only available in paper form at no less than 300 dpi. All
exhibits must be searchable. Parties must scan in color any exhibit
that uses color to convey information or enhance readability.
(7) Bookmarks. Parties must include in all electronic documents
appropriate electronic bookmarks to designate the
[[Page 9062]]
tabs and/or tables of contents that would appear in a paper version of
the same document.
(8) Page rotation. Parties must ensure that all pages in electronic
documents are right side up, regardless of whether they are formatted
for portrait or landscape printing.
(9) Signature. The signature line of an electronic pleading must
contain ``/s/'' followed by the signer's typed name. The name on the
signature line must match the name of the user logged into eCRB to file
the document.
(10) File size. The eCRB system will not accept PDF or Word files
that exceed 128 MB, or files in any other format that exceed 500 MB.
Parties may divide excessively large files into multiple parts if
necessary to conform to this limitation.
(c) Length of submissions. Whether filing in paper or
electronically, parties must adhere to the following space limitations
or such other space limitations as the Copyright Royalty Judges may
direct by order. Any party seeking an enlargement of the applicable
page limit must make the request by a motion to the Copyright Royalty
Judges filed no fewer than three days prior to the applicable filing
deadline. Any order granting an enlargement of the page limit for a
motion or response shall be deemed to grant the same enlargement of the
page limit for a response or reply, respectively.
(1) Motions. Motions must not exceed 20 pages and must not exceed
5,000 words (exclusive of cover pages, tables of contents, tables of
authorities, signature blocks, exhibits, and proof of delivery).
(2) Responses. Responses in support of or opposition to motions
must not exceed 20 pages and must not exceed 5,000 words (exclusive of
cover pages, tables of contents, tables of authorities, signature
blocks, exhibits, and proof of delivery).
(3) Replies. Replies in support of motions must not exceed 10 pages
and must not exceed 2,500 words (exclusive of cover pages, tables of
contents, tables of authorities, signature blocks, exhibits, and proof
of delivery).
Sec. 303.4 Content of motion and responsive pleadings.
A motion, responsive pleading, or reply must, at a minimum, state
concisely the specific relief the party seeks from the Copyright
Royalty Judges, and the legal, factual, and evidentiary basis for
granting that relief (or denying the relief sought by the moving
party). A motion, or a responsive pleading that seeks alternative
relief, must be accompanied by a proposed order.
Sec. 303.5 Electronic filing system (eCRB).
(a) Documents to be filed by electronic means--(1) Transition
period. For the period commencing with the initial deployment of the
Copyright Royalty Board's electronic filing and case management system
(eCRB) and ending January 1, 2018, all parties having the technological
capability must file all documents with the Copyright Royalty Board
through eCRB in addition to filing paper documents in conformity with
applicable Copyright Royalty Board rules. The Copyright Royalty Board
must announce the date of the initial deployment of eCRB on the
Copyright Royalty Board website (www.loc.gov/crb), as well as the
conclusion of the dual-system transition period.
(2) Subsequent to transition period. Except as otherwise provided
in this chapter, all attorneys must file documents with the Copyright
Royalty Board through eCRB. Pro se parties may file documents with the
Copyright Royalty Board through eCRB, subject to Sec. 303.4(c)(2).
(b) Official record. The electronic version of a document filed
through and stored in eCRB will be the official record of the Copyright
Royalty Board.
(c) Obtaining an electronic filing password--(1) Attorneys. An
attorney must obtain an eCRB password from the Copyright Royalty Board
in order to file documents or to receive copies of orders and
determinations of the Copyright Royalty Judges. The Copyright Royalty
Board will issue an eCRB password after the attorney applicant
completes the application form available on the CRB website.
(2) Pro se parties. A party not represented by an attorney (a pro
se party) may obtain an eCRB password from the Copyright Royalty Board
with permission from the Copyright Royalty Judges, in their discretion.
To obtain permission, the pro se party must submit an application on
the form available on the CRB website, describing the party's access to
the internet and confirming the party's ability and capacity to file
documents and receive electronically the filings of other parties on a
regular basis. If the Copyright Royalty Judges grant permission, the
pro se party must complete the eCRB training provided by the Copyright
Royalty Board to all electronic filers before receiving an eCRB
password. Once the Copyright Royalty Board has issued an eCRB password
to a pro se party, that party must make all subsequent filings by
electronic means through eCRB.
(3) Claimants. Any person desiring to file a claim with the
Copyright Royalty Board for copyright royalties may obtain an eCRB
password for the limited purpose of filing claims by completing the
application form available on the CRB website.
(d) Use of an eCRB password. An eCRB password may be used only by
the person to whom it is assigned, or, in the case of an attorney, by
that attorney or an authorized employee or agent of that attorney's law
office or organization. The person to whom an eCRB password is assigned
is responsible for any document filed using that password.
(e) Signature. The use of an eCRB password to login and submit
documents creates an electronic record. The password operates and
serves as the signature of the person to whom the password is assigned
for all purposes under this chapter.
(f) Originals of sworn documents. The electronic filing of a
document that contains a sworn declaration, verification, certificate,
statement, oath, or affidavit certifies that the original signed
document is in the possession of the attorney or pro se party
responsible for the filing and that it is available for review upon
request by a party or by the Copyright Royalty Judges. The filer must
file through eCRB a scanned copy of the signature page of the sworn
document together with the document itself.
(g) Consent to delivery by electronic means. An attorney or pro se
party who obtains an eCRB password consents to electronic delivery of
all documents, subsequent to the petition to participate, that are
filed by electronic means through eCRB. Counsel and pro se parties are
responsible for monitoring their email accounts and, upon receipt of
notice of an electronic filing, for retrieving the noticed filing.
Parties and their counsel bear the responsibility to keep the contact
information in their eCRB profiles current.
(h) Accuracy of docket entry. A person filing a document by
electronic means is responsible for ensuring the accuracy of the
official docket entry generated by the eCRB system, including proper
identification of the proceeding, the filing party, and the description
of the document. The Copyright Royalty Board will maintain on its
website (www.loc.gov/crb) appropriate guidance regarding naming
protocols for eCRB filers.
(i) Documents subject to a protective order. A person filing a
document by electronic means must ensure, at the time of filing, that
any documents subject to a protective order are identified to the eCRB
system as ``restricted'' documents. This
[[Page 9063]]
requirement is in addition to any requirements detailed in the
applicable protective order. Failure to identify documents as
``restricted'' to the eCRB system may result in inadvertent publication
of sensitive, protected material.
(j) Exceptions to requirement of electronic filing--(1) Certain
exhibits or attachments. Parties may file in paper form any exhibits or
attachments that are not in a format that readily permits electronic
filing, such as oversized documents; or are illegible when scanned into
electronic format. Parties filing paper documents or things pursuant to
this paragraph must deliver legible or usable copies of the documents
or things in accordance with Sec. 303.6(a)(2) and must file
electronically a notice of filing that includes a certificate of
delivery.
(2) Pro se parties. A pro se party may file documents in paper form
and must deliver and accept delivery of documents in paper form, unless
the pro se party has obtained an eCRB password.
(k) Privacy requirements. (1) Unless otherwise instructed by the
Copyright Royalty Judges, parties must exclude or redact from all
electronically filed documents, whether designated ``restricted'' or
not:
(i) Social Security numbers. If an individual's Social Security
number must be included in a filed document for evidentiary reasons,
the filer must use only the last four digits of that number.
(ii) Names of minor children. If a minor child must be mentioned in
a document for evidentiary reasons, the filer must use only the
initials of that child.
(iii) Dates of birth. If an individual's date of birth must be
included in a pleading for evidentiary reasons, the filer must use only
the year of birth.
(iv) Financial account numbers. If a financial account number must
be included in a pleading for evidentiary reasons, the filer must use
only the last four digits of the account identifier.
(2) Protection of personally identifiable information. If any
information identified in paragraph (k)(1) of this section must be
included in a filed document, the filing party must treat it as
confidential information subject to the applicable protective order. In
addition, parties may treat as confidential, and subject to the
applicable protective order, other personal information that is not
material to the proceeding.
(l) Incorrectly filed documents. (1) The Copyright Royalty Board
may direct an eCRB filer to re-file a document that has been
incorrectly filed, or to correct an erroneous or inaccurate docket
entry.
(2) After the transition period, if an attorney or a pro se party
who has been issued an eCRB password inadvertently presents a document
for filing in paper form, the Copyright Royalty Board may direct the
attorney or pro se party to file the document electronically. The
document will be deemed filed on the date it was first presented for
filing if, no later than the next business day after being so directed
by the Copyright Royalty Board, the attorney or pro se participant
files the document electronically. If the party fails to make the
electronic filing on the next business day, the document will be deemed
filed on the date of the electronic filing.
(m) Technical difficulties. (1) A filer encountering technical
problems with an eCRB filing must immediately notify the Copyright
Royalty Board of the problem either by email or by telephone, followed
promptly by written confirmation.
(2) If a filer is unable due to technical problems to make a filing
with eCRB by an applicable deadline, and makes the notification
required by paragraph (m)(1) of this section, the filer shall use
electronic mail to make the filing with the CRB and deliver the filing
to the other parties to the proceeding. The filing shall be considered
to have been made at the time it was filed by electronic mail. The
Judges may direct the filer to refile the document through eCRB when
the technical problem has been resolved, but the document shall retain
its original filing date.
(3) The inability to complete an electronic filing because of
technical problems arising in the eCRB system may constitute ``good
cause'' (as used in Sec. 303.6(b)(4)) for an order enlarging time or
excusable neglect for the failure to act within the specified time,
provided the filer complies with paragraph (m)(1) of this section. This
section does not provide authority to extend statutory time limits.
Sec. 303.6 Filing and delivery.
(a) Filing of pleadings--(1) Electronic filing through eCRB. Except
as described in Sec. 303.5(l)(2), any document filed by electronic
means through eCRB in accordance with Sec. 303.5 constitutes filing
for all purposes under this chapter, effective as of the date and time
the document is received and timestamped by eCRB.
(2) All other filings. For all filings not submitted by electronic
means through eCRB, the submitting party must deliver an original, five
paper copies, and one electronic copy in Portable Document Format (PDF)
on an optical data storage medium such as a CD or DVD, a flash memory
device, or an external hard disk drive to the Copyright Royalty Board
in accordance with the provisions described in Sec. 301.2 of this
chapter. In no case will the Copyright Royalty Board accept any
document by facsimile transmission or electronic mail, except with
prior express authorization of the Copyright Royalty Judges.
(b) Exhibits. Filers must include all exhibits with the pleadings
they support. In the case of exhibits not submitted by electronic means
through eCRB, whose bulk or whose cost of reproduction would
unnecessarily encumber the record or burden the party, the Copyright
Royalty Judges will consider a motion, made in advance of the filing,
to reduce the number of required copies. See Sec. 303.5(j).
(c) English language translations. Filers must accompany each
submission that is in a language other than English with an English-
language translation, duly verified under oath to be a true
translation. Any other party to the proceeding may, in response, submit
its own English-language translation, similarly verified, so long as
the responding party's translation proves a substantive, relevant
difference in the document.
(d) Affidavits. The testimony of each witness must be accompanied
by an affidavit or a declaration made pursuant to 28 U.S.C. 1746
supporting the testimony. See Sec. 303.5(f).
(e) Subscription--(1) Parties represented by counsel. Subject to
Sec. 303.5(e), all documents filed electronically by counsel must be
signed by at least one attorney of record and must list the attorney's
full name, mailing address, email address (if any), telephone number,
and a state bar identification number. See Sec. 303.5(e). Submissions
signed by an attorney for a party need not be verified or accompanied
by an affidavit. The signature of an attorney constitutes certification
that the contents of the document are true and correct, to the best of
the signer's knowledge, information, and belief, formed after an
inquiry reasonable under the circumstances and:
(i) The document is not being presented for any improper purpose,
such as to harass or to cause unnecessary delay or needless increase in
the cost of litigation;
(ii) The claims, defenses, and other legal contentions therein are
warranted by existing law or by a nonfrivolous argument for the
extension, modification, or reversal of existing law or the
establishment of new law;
[[Page 9064]]
(iii) The allegations and other factual contentions have
evidentiary support or, if specifically so identified, are likely to
have evidentiary support after a reasonable opportunity for further
investigation or discovery; and
(iv) The denials of factual contentions are warranted by the
evidence or, if specifically so identified, are reasonably based on a
lack of information or belief.
(2) Parties representing themselves. The original of all paper
documents filed by a party not represented by counsel must be signed by
that party and list that party's full name, mailing address, email
address (if any), and telephone number. The party's signature will
constitute the party's certification that, to the best of his or her
knowledge and belief, there is good ground to support the document, and
that it has not been interposed for purposes of delay.
(f) Responses and replies. Responses in support of or opposition to
motions must be filed within ten days of the filing of the motion.
Replies to responses must be filed within five days of the filing of
the response.
(g) Participant list. The Copyright Royalty Judges will compile and
distribute to those parties who have filed a valid petition to
participate the official participant list for each proceeding,
including each participant's mailing address, email address, and
whether the participant is using the eCRB system for filing and receipt
of documents in the proceeding. For all paper filings, a party must
deliver a copy of the document to counsel for all other parties
identified in the participant list, or, if the party is unrepresented
by counsel, to the party itself. Parties must notify the Copyright
Royalty Judges and all parties of any change in the name or address at
which they will accept delivery and must update their eCRB profiles
accordingly.
(h) Delivery method and proof of delivery--(1) Electronic filings
through eCRB. Electronic filing of any document through eCRB operates
to effect delivery of the document to counsel or pro se participants
who have obtained eCRB passwords, and the automatic notice of filing
sent by eCRB to the filer constitutes proof of delivery. Counsel or
parties who have not yet obtained eCRB passwords must deliver and
receive delivery as provided in paragraph (h)(2) of this section.
Parties making electronic filings are responsible for assuring delivery
of all filed documents to parties that do not use the eCRB system.
(2) Other filings. During the course of a proceeding, each party
must deliver all documents that they have filed other than through eCRB
to the other parties or their counsel by means no slower than overnight
express mail sent on the same day they file the documents, or by such
other means as the parties may agree in writing among themselves.
Parties must include a proof of delivery with any document delivered in
accordance with this paragraph.
Sec. 303.7 Time.
(a) Computation. To compute the due date for filing and delivering
any document or performing any other act directed by an order of the
Copyright Royalty Judges or the rules of the Copyright Royalty Board:
(1) Exclude the day of the act, event, or default that begins the
period.
(2) Exclude intermediate Saturdays, Sundays, and Federal holidays
when the period is less than 11 days, unless computation of the due
date is stated in calendar days.
(3) Include the last day of the period, unless it is a Saturday,
Sunday, Federal holiday, or a day on which the weather or other
conditions render the Copyright Royalty Board's office inaccessible.
(4) As used in this rule, ``Federal holiday'' means the date
designated for the observance of New Year's Day, Inauguration Day,
Birthday of Martin Luther King, Jr., George Washington's Birthday,
Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day,
Thanksgiving Day, Christmas Day, and any other day declared a Federal
holiday by the President or the Congress.
(5) Except as otherwise described in this chapter or in an order by
the Copyright Royalty Judges, the Copyright Royalty Board will consider
documents to be timely filed only if:
(i) They are filed electronically through eCRB and time-stamped by
11:59:59 p.m. Eastern time on the due date;
(ii) They are sent by U.S. mail, are addressed in accordance with
Sec. 301.2(a) of this chapter, have sufficient postage, and bear a
USPS postmark on or before the due date;
(iii) They are hand-delivered by private party to the Copyright
Office Public Information Office in accordance with Sec. 301.2(b) of
this chapter and received by 5:00 p.m. Eastern time on the due date; or
(iv) They are hand-delivered by commercial courier to the
Congressional Courier Acceptance Site in accordance with Sec. 301.2(c)
of this chapter and received by 4:00 p.m. Eastern time on the due date.
(6) Any document sent by mail and dated only with a business postal
meter will be considered filed on the date it is actually received by
the Library of Congress.
(b) Extensions. A party seeking an extension must do so by written
motion. Prior to filing such a motion, a party must attempt to obtain
consent from the other parties to the proceeding. An extension motion
must state:
(1) The date on which the action or submission is due;
(2) The length of the extension sought;
(3) The date on which the action or submission would be due if the
extension were allowed;
(4) The reason or reasons why there is good cause for the delay;
(5) The justification for the amount of additional time being
sought; and
(6) The attempts that have been made to obtain consent from the
other parties to the proceeding and the position of the other parties
on the motion.
Sec. 303.8 Construction and waiver.
The regulations of the Copyright Royalty Judges in this chapter are
intended to provide efficient and just administrative proceedings and
will be construed to advance these purposes. For purposes of an
individual proceeding, the provisions of subchapters A and B may be
suspended or waived, in whole or in part, upon a showing of good cause,
to the extent allowable by law.
Subchapter B--Copyright Royalty Judges Rules and Procedures
0
2. Revise part 350 to read as follows:
PART 350-SCOPE
Sec.
350.1 Scope.
350.2-350.4 [Reserved]
Authority: 17 U.S.C. 803.
Sec. 350.1 Scope.
This subchapter governs procedures applicable to proceedings before
the Copyright Royalty Judges in making determinations and adjustments
pursuant to 17 U.S.C. 115(d) and 801(b). The procedures set forth in
part 355 of this subchapter shall govern administrative assessment
proceedings pursuant to 17 U.S.C. 115(d), and the procedures set forth
in parts 351 through 354 of this subchapter shall govern all
proceedings pursuant to 17 U.S.C. 801(b).
Sec. Sec. 350.2-350.4 [Reserved]
0
4. Add part 355 to read as follows:
PART 355--ADMINISTRATIVE ASSESSMENT PROCEEDINGS
Sec.
355.1 Proceedings in general.
355.2 Commencement of proceedings.
[[Page 9065]]
355.3 Submissions and discovery.
355.4 Voluntary negotiation periods.
355.5 Hearing procedures.
355.6 Determinations.
355.7 Definitions.
Authority: 17 U.S.C. 801; 17 U.S.C. 115.
Sec. 355.1 Proceedings in general.
(a) Scope. This section governs proceedings before the Copyright
Royalty Judges to determine or adjust the Administrative Assessment
pursuant to the Copyright Act, 17 U.S.C. 115(d), including establishing
procedures to enable the Copyright Royalty Judges to make necessary
evidentiary or procedural rulings.
(b) Rulings. The Copyright Royalty Judges may make any necessary
procedural or evidentiary rulings during any proceeding under this
section and may, before commencing a proceeding under this section,
make any rulings that will apply to proceedings to be conducted under
this section.
(c) Role of Chief Judge. The Chief Copyright Royalty Judge, or an
individual Copyright Royalty Judge designated by the Chief Copyright
Royalty Judge, shall:
(1) Administer an oath or affirmation to any witness; and
(2) Rule on objections and motions.
(d) Failure to designate Digital Licensee Coordinator. Any
reference to actions of the Digital Licensee Coordinator in this
section shall be without effect unless and until the Register of
Copyrights designates a Digital Licensee Coordinator in accordance with
17 U.S.C. 115(d)(5).
Sec. 355.2 Commencement of proceedings.
(a) Commencement of initial Administrative Assessment proceeding.
The Copyright Royalty Judges shall commence a proceeding to determine
the initial Administrative Assessment by publication no later than July
8, 2019, of a notice in the Federal Register seeking the filing of
petitions to participate in the proceeding.
(b) Adjustments of the Administrative Assessment. Following the
determination of the initial Administrative Assessment, the Mechanical
Licensing Collective, the Digital Licensee Coordinator, if any, and
interested copyright owners, Digital Music Providers, or Significant
Nonblanket Licensees may file a petition with the Copyright Royalty
Judges to commence a proceeding to adjust the Administrative
Assessment. Any petition for adjustment of the Administrative
Assessment must be filed during the month of May and may not be filed
earlier than 1 year following the most recent publication in the
Federal Register of a determination of the Administrative Assessment by
the Copyright Royalty Judges. The Copyright Royalty Judges shall accept
a properly filed petition under this paragraph (b) as sufficient
grounds to commence a proceeding to adjust the Administrative
Assessment and shall publish a notice in the Federal Register in the
month of June seeking petitions to participate in the proceeding.
(c) Required participants. The Mechanical Licensing Collective and
the Digital Licensee Coordinator, if any, shall each file a petition to
participate and shall participate in each Administrative Assessment
proceeding under this section.
(d) Other eligible participants. A copyright owner, Digital Music
Provider, or Significant Nonblanket Licensee may file a petition to
participate in a proceeding under paragraph (a) or (b) of this section.
The Copyright Royalty Judges shall accept petitions to participate
filed under this paragraph (d) unless the Judges find that the
petitioner lacks a significant interest in the proceeding.
(e) Petitions to participate. Each petition to participate filed
under this section must include:
(1) A filing fee of $150;
(2) The full name, address, telephone number, and email address of
the petitioner;
(3) The full name, address, telephone number, and email address of
the person filing the petition and of the petitioner's representative,
if either differs from the filer; and
(4) Factual information sufficient to establish that the petitioner
has a significant interest in the determination of the Administrative
Assessment.
(f) Notice of identity of petitioners. The Copyright Royalty Judges
shall give notice to all petitioners of the identity of all other
petitioners.
(g) Schedules for submissions and hearing. (1) The Copyright
Royalty Judges shall establish a schedule for the proceeding, which
shall include dates for:
(i) An initial voluntary negotiation period of 45 days;
(ii) Filing of the opening submission by the Mechanical Licensing
Collective described in Sec. 355.3(b) or (c), with concurrent
production of required documents and disclosures;
(iii) A period of 60 days, beginning on the date the Mechanical
Licensing Collective files its opening submission, for the Digital
Licensee Coordinator and any other participant in the proceeding, other
than the Mechanical Licensing Collective, to serve discovery requests
and complete discovery pursuant to Sec. 355.3(d);
(iv) Filing of responsive submissions by the Digital Licensee
Coordinator and any other participant in the proceeding, with
concurrent production of required documents and disclosures;
(v) A period of 60 days, beginning on the day after the due date
for filing responsive submissions, for the Mechanical Licensing
Collective to serve discovery requests and complete discovery of the
Digital Licensee Coordinator and any other participant in the
proceeding pursuant to Sec. 355.3(g);
(vi) A second voluntary negotiation period of 14 days, commencing
on the day after the end of the Mechanical Licensing Collective's
discovery period;
(vii) Filing of a reply submission, if any, by the Mechanical
Licensing Collective;
(viii) Filing of a joint pre-hearing submission by the Mechanical
Licensing Collective, the Digital Licensee Coordinator, and any other
participant in the hearing; and
(ix) A hearing on the record.
(2) The Copyright Royalty Judges may, for good cause shown and upon
reasonable notice to all participants, modify the schedule, except no
participant in the proceeding may rely on a schedule modification as a
basis for delaying the scheduled hearing date. The Copyright Royalty
Judges may alter the hearing schedule only upon a showing of
extraordinary circumstances. No alteration of the schedule shall change
the due date of the determination.
Sec. 355.3 Submissions and discovery.
(a) Protective orders. During the initial voluntary negotiation
period, the Mechanical Licensing Collective, the Digital Licensee
Coordinator, and any other participants that are represented by counsel
shall negotiate and agree upon a written protective order to preserve
the confidentiality of any confidential documents, depositions, or
other information exchanged or filed by the participants in the
proceeding. No later than 15 days after the Judges' identification of
participants, proponents of a protective order shall file with the
Copyright Royalty Judges a motion for review and approval of the order.
No participant in the proceeding shall distribute or exchange
confidential documents, depositions, or other information with any
other participant in the proceeding until the receiving participant
affirms in writing its consent to the protective order governing the
proceeding.
(b) Submission by the Mechanical Licensing Collective in the
initial
[[Page 9066]]
Administrative Assessment proceeding. (1) The Mechanical Licensing
Collective shall file an opening submission, in accordance with the
schedule the Copyright Royalty Judges adopt pursuant to Sec. 355.2(g),
setting forth and supporting the Mechanical Licensing Collective's
proposed initial Administrative Assessment. The opening submission
shall consist of a written statement, including any written testimony
and accompanying exhibits, and include reasons why the proposed initial
Administrative Assessment fulfills the requirements in 17 U.S.C.
115(d)(7).
(2) Concurrently with the filing of the opening submission, the
Mechanical Licensing Collective shall file with the Copyright Royalty
Judges and deliver by email to the other participants in the proceeding
documents that identify and demonstrate:
(i) Costs, collections, and contributions as required by 17 U.S.C.
115(d)(7);
(ii) The reasonableness of the Collective Total Costs;
(iii) The Collective's processes for requesting proposals, inviting
bids, ranking and selecting the proposals and bids of potential
contracting and sub-contracting parties competitively (or by another
method); ensuring the absence of overlapping ownership or other
overlapping economic interests between the Collective or its members
and any selected contracting or sub-contracting party; and
(iv) The reasons why the proposal fulfills the requirements in 17
U.S.C. 115(d)(7).
(3) Concurrently with the filing of the opening submission, the
Mechanical Licensing Collective shall provide electronically and
deliver by email to the other participants in the proceeding written
disclosures that:
(i) List the individuals with material knowledge of, and
availability to provide testimony concerning, the proposed initial
Administrative Assessment; and
(ii) For each listed individual, describe the subject(s) of his or
her knowledge.
(c) Submission by the Mechanical Licensing Collective in
proceedings to adjust the Administrative Assessment. (1) The Mechanical
Licensing Collective shall file an opening submission according to the
schedule the Copyright Royalty Judges adopt pursuant to Sec. 355.2(g).
The opening submission shall set forth and support the Mechanical
Licensing Collective's proposal to maintain or adjust the
Administrative Assessment, including reasons why the proposal fulfills
the requirements in 17 U.S.C. 115(d)(7). The opening submission shall
include a written statement, any written testimony and accompanying
exhibits, including financial statements from the three most recent
years' operations of the Mechanical Licensing Collective with annual
budgets as well as annual actual income and expense statements.
(2) Concurrently with the filing of the opening submission, the
Mechanical Licensing Collective shall produce electronically and
deliver by email to the other participants in the proceeding documents
that identify and demonstrate:
(i) Costs, collections, and contributions as required by 17 U.S.C.
115(d)(7) for the preceding three calendar years and the three calendar
years following thereafter, including Collective Total Costs;
(ii) For the preceding three calendar years, the amount of actual
Collective Total Costs that was not sufficiently funded by the prior
Administrative Assessment, or the amount of any surplus from the prior
Administrative Assessment after funding actual Collective Total Costs;
(iii) Actual collections from Digital Music Providers and
Significant Nonblanket Licensees for the preceding three calendar years
and anticipated collections for the three calendar years following
thereafter;
(iv) The reasonableness of the Collective Total Costs; and
(v) The Collective's processes for requesting proposals, inviting
bids, ranking and selecting the proposals and bids of potential
contracting and sub-contracting parties competitively (or by another
method), including processes for ensuring the absence of overlapping
ownership or other overlapping economic interests between the
Collective or its members and any selected contracting or sub-
contracting party.
(3) Concurrently with the filing of the opening submission, the
Mechanical Licensing Collective shall provide electronically and
deliver by email to the other participants in the proceeding a list of
individuals with material knowledge of the proposed adjusted
Administrative Assessment, including the subject(s) of his or her
knowledge and availability to provide testimony regarding the proposal.
(d) First discovery period. During the first discovery period, the
Digital Licensee Coordinator, interested copyright owners, interested
Digital Music Providers, and interested Significant Nonblanket
Licensees, acting separately, or represented jointly to the extent
permitted by the concurrence of their interests, and any other
participant in the proceeding may serve requests for additional
documents on the Mechanical Licensing Collective and any other
participant in the proceeding. Any document request shall be limited to
documents that are Discoverable.
(e) Depositions. The Digital Licensee Coordinator, interested
copyright owners, interested Digital Music Providers, and interested
Significant Nonblanket Licensees, acting separately, or represented
jointly to the extent permitted by the concurrence of their interests,
may give notice of and take up to five depositions collectively during
the first discovery period. The Mechanical Licensing Collective may
give notice of and take up to five depositions during the first
discovery period. Any deposition under this paragraph (e) shall be no
longer than seven hours in duration (exclusive of adjournments for
lunch and other personal needs), with each deponent subject to a
maximum of one seven-hour deposition in any Administrative Assessment
proceeding, except as otherwise extended in this part, or upon a motion
demonstrating good cause to extend the hour and day limits. Any parties
to the proceeding may attend any depositions and shall have a right,
but not an obligation, to examine the deponent, provided that any
participant exercising its right to examine a deponent provides notice
of that intent no later than two days prior to the scheduled deposition
date. The initial notice of deposition under this paragraph (e) must be
delivered by email or other electronic means to all participants in the
proceeding no later than seven days prior to the scheduled deposition
date, absent agreement of the deponent or good cause shown. An
individual is properly named as a deponent if that individual likely
possesses information that meets the standards for document production
under this part.
(f) Responsive submissions by the Digital Licensee Coordinator and
other participants. The Digital Licensee Coordinator and any
participant in the proceeding shall file responsive submissions with
the Copyright Royalty Judges in accordance with the schedule adopted by
the Copyright Royalty Judges.
(1) Responsive submissions of the Digital Licensee Coordinator,
interested copyright owners, interested digital music providers, or
interested Significant Nonblanket Licensees shall consist of a written
statement, including any written testimony and accompanying exhibits,
stating the extent to which the filing participant
[[Page 9067]]
agrees with the Administrative Assessment proposed by the Mechanical
Licensing Collective. If the filing participant disagrees with all or
part of the Administrative Assessment proposed by the Mechanical
Licensing Collective, then the written statement, including any written
testimony and accompanying exhibits, shall include analysis necessary
to demonstrate why the Administrative Assessment proposed by the
Mechanical Licensing Collective does not fulfill the requirements set
forth in 17 U.S.C. 115(d)(7).
(2) Concurrently with the filing of a responsive submission
indicating disagreement with the Administrative Assessment proposed by
the Mechanical Licensing Collective, the filing participant shall
produce electronically and deliver by email to the participants in and
parties to the proceeding documents that demonstrate why the
Administrative Assessment proposed by the Mechanical Licensing
Collective does not fulfill the requirements set forth in 17 U.S.C.
115(d)(7).
(3) Concurrently with the filing of responsive submission(s), the
filing participant shall electronically provide by email to the other
participants in the proceeding a list of individuals with material
knowledge of the reasons why the Administrative Assessment proposed by
the Mechanical Licensing Collective does not fulfill the requirements
set forth in 17 U.S.C. 115(d)(7). The filing participant shall describe
the subject(s) of each listed individual's knowledge and state his or
her availability to provide testimony.
(g) Second discovery period. (1) During the discovery period
described in Sec. 355.2(g)(1)(v), the Mechanical Licensing Collective
may serve requests for additional documents on the Digital Licensee
Coordinator and other parties to the proceeding. Such requests shall be
limited to documents that are Discoverable and relevant to
consideration of whether any counter-proposal fulfills the requirements
of 17 U.S.C. 115(d)(7) or one or more of the elements of this part.
(2) The Mechanical Licensing Collective may note and take
depositions as provided in paragraph (e) of this section.
(h) Discovery disputes. (1) In the event that two or more
participants are unable to resolve a discovery dispute after good-faith
consultation, a participant requesting discovery may file a motion and
brief of no more than 1,500 words with the Copyright Royalty Judges.
For a dispute involving the provision of documents or deposition
testimony, the brief shall detail the reasons why the documents or
deposition testimony are Discoverable.
(2) The responding participant may file a responsive brief of no
more than 1,500 words within two business days of the submission of the
initial brief.
(3) Absent unusual circumstances, the Copyright Royalty Judges will
rule on the dispute within three business days of the filing of the
responsive brief. Upon reasonable notice to the participants, the Chief
Copyright Royalty Judge, or an individual Copyright Royalty Judge
designated by the Chief Copyright Royalty Judge may consider and rule
on any discovery dispute in a telephone conference with the relevant
participants.
(i) Reply submissions by the Mechanical Licensing Collective. The
Mechanical Licensing Collective may file a written reply submission
addressed only to the issues raised in any responsive submission(s)
filed under paragraph (f) of this section in accordance with the
schedule adopted by the Copyright Royalty Judges, which reply may
include written testimony, documentation, and analysis addressed only
to the issues raised in responsive submission(s).
(j) Joint pre-hearing submission. No later than 14 days prior to
the commencement of the hearing, the Mechanical Licensing Collective,
the Digital Licensee Coordinator, and any other parties to the
proceeding shall file jointly a written submission with the Copyright
Royalty Judges, stating:
(1) Specific areas of agreement between the parties; and
(2) A concise statement of issues remaining in dispute with respect
to the determination of the Administrative Assessment.
Sec. 355.4 Voluntary negotiation periods.
(a) Initial voluntary negotiation period. The Mechanical Licensing
Collective, the Digital Licensee Coordinator, interested copyright
owners, interested Digital Music Providers, and interested Significant
Nonblanket Licensees shall participate in good faith in an initial
voluntary negotiation, commencing on the day after the Copyright
Royalty Judges give notice of all participants in the proceeding and
lasting 60 days. By the close of the initial voluntary negotiation
period, the parties shall file a joint written notification with the
Copyright Royalty Judges indicating whether they have reached a
settlement, in whole or in part, with respect to determination of the
Administrative Assessment.
(b) Second voluntary negotiation period. The Mechanical Licensing
Collective, the Digital Licensee Coordinator, interested copyright
owners, interested Digital Music Providers, and Significant Nonblanket
Licensees shall participate in good faith in a second voluntary
negotiation period commencing on a date set by the Copyright Royalty
Judges and lasting 14 days. By the close of the second voluntary
negotiation period, the parties shall file a joint written notification
with the Copyright Royalty Judges indicating whether they have reached
a settlement, in whole or in part, with respect to determination of the
Administrative Assessment, identifying and describing any issues as to
which they have reached a settlement.
Sec. 355.5 Hearing procedures.
(a) En banc panel. The Copyright Royalty Judges shall preside en
banc over any hearing to determine the reasonableness of and the
allocation of responsibility to contribute to the Administrative
Assessment and shall, if they deem circumstances appropriate, consider
en banc all filings submitted for a determination without a hearing.
(b) Attendance and participation. The Mechanical Licensing
Collective, through an authorized officer or other managing agent, and
the Digital Licensee Coordinator, if any, through an authorized officer
or other managing agent, shall attend and participate in the hearing.
Any other entity that has filed a valid Petition to Participate and
that the Copyright Royalty Judges have not found to be disqualified
shall participate in an Administrative Assessment proceeding hearing.
If the Copyright Royalty Judges find, sua sponte or upon motion of a
participant, that a participant has failed substantially to comply with
any of the requirements of this part, the Copyright Royalty Judges may
exclude that participant from participating in the hearing; provided,
however, that the Mechanical Licensing Collective and the Digital
Licensee Coordinator shall not be subject to exclusion.
(c) Admission of written submissions, deposition transcripts, and
other documents. Subject to any valid objections of a participant, the
Copyright Royalty Judges shall admit into evidence at an Administrative
Assessment hearing the complete initial, responsive, and reply
submissions that the participants have filed. Participants shall not
file deposition transcripts, but may utilize deposition transcripts for
the purposes and under the conditions described in Fed. R. Civ. P. 32
and interpreting case law. Any participant may expand upon excerpts at
the hearing or counter-designate excerpts in the written record to the
extent
[[Page 9068]]
necessary to provide appropriate context for the record. During the
hearing, upon the oral request of any participant, any document
proposed as an exhibit by any participant shall be admitted into
evidence so long as that document was produced previously by any
participant, subject only to a valid evidentiary objection.
(d) Argument and examination of witnesses. An Administrative
Assessment hearing shall consist of the oral testimony of witnesses at
the hearing and arguments addressed to the written submissions and oral
testimony proffered by the participants, except that the Copyright
Royalty Judges may, sua sponte or upon written or oral request of a
participant, find good cause to dispense with the oral direct, cross,
or redirect examination of a witness, and rely, in whole or in part, on
that witness's written testimony. The Copyright Royalty Judges may, at
their discretion, and in a format they describe in a prehearing
Scheduling Order, require expert witnesses to be examined concurrently
by the Judges and/or the attorneys. If the Judges so order, the expert
witnesses may then also testify through a colloquy among themselves,
including questions addressed to each other, as limited and directed by
the Judges and subject to valid objections by counsel and ruled upon by
the Judges. Only witnesses who have submitted written testimony or who
were deposed in the proceeding may be examined at the hearing. A
witness's oral testimony shall not exceed the subject matter of his or
her written or deposition testimony. Unless the Copyright Royalty
Judges, on motion of a participant, order otherwise, no witness, other
than a person designated as a party representative for the proceeding,
may listen to, or review a transcript of, testimony of another witness
or witnesses prior to testifying.
(e) Objections. Participants may object to evidence on any proper
ground, by written or oral objection, including on the ground that a
participant seeking to offer evidence for admission has failed without
good cause to produce the evidence during the discovery process. The
Copyright Royalty Judges may, but are not required to, admit hearsay
evidence to the extent they deem it appropriate.
(f) Transcript and record. The Copyright Royalty Judges shall
designate an official reporter for the recording and transcribing of
hearings. Anyone wishing to inspect the transcript of a hearing, to the
extent the transcript is not restricted under a protective order, may
do so when the hearing transcript is filed in the Copyright Royalty
Judges' electronic filing and case management system, eCRB, at https://app.crb.gov after the hearing concludes. The availability of restricted
portions of any transcript shall be described in the protective order.
Any participant desiring daily or expedited transcripts shall make
separate arrangements with the designated court reporter.
Sec. 355.6 Determinations.
(a) How made. The Copyright Royalty Judges shall determine the
amount and terms of the Administrative Assessment in accordance with 17
U.S.C. 115(d)(7). The Copyright Royalty Judges shall base their
determination on their evaluation of the totality of the evidence
before them, including oral testimony, written submissions, admitted
exhibits, designated deposition testimony, the record associated with
any motions and objections by participants, the arguments presented,
and prior determinations and interpretations of the Copyright Royalty
Judges (to the extent those prior determinations and interpretations
are not inconsistent with a decision of the Register of Copyrights that
was timely delivered to the Copyright Royalty Judges pursuant to 17
U.S.C. 802(f)(1)(A) or (B), or with a decision of the Register of
Copyrights made pursuant to 17 U.S.C. 802(f)(1)(D), or with a decision
of the U.S. Court of Appeals for the D.C. Circuit).
(b) Timing. The Copyright Royalty Judges shall issue and publish
their determination in the Federal Register not later than one year
after commencement of the proceeding under Sec. 355.2(a) or, in a
proceeding commenced under Sec. 355.2(b), during June of the calendar
year following the commencement of the proceeding.
(c) Effectiveness. (1) The initial Administrative Assessment
determined in the proceeding under Sec. 355.2(a) shall be effective as
of the License Availability Date and shall continue in effect until the
Copyright Royalty Judges determine or approve an adjusted
Administrative Assessment under Sec. 355.2(b).
(2) Any adjusted Administrative Assessment determined in a
proceeding under Sec. 355.2(b) shall take effect January 1 of the year
following its publication in the Federal Register.
(d) Adoption of voluntary agreements. In lieu of reaching and
publishing a determination, the Copyright Royalty Judges shall approve
and adopt the amount and terms of an Administrative Assessment that has
been negotiated and agreed to by the Mechanical Licensing Collective
and the Digital Licensee Coordinator, interested copyright owners,
interested Digital Music Providers, and interested Significant
Nonblanket Licensees pursuant to Sec. 355.4. Notwithstanding the
voluntary negotiation of an agreed Administrative Assessment, however,
the Copyright Royalty Judges may, for good cause shown, reject an
agreement. If the Copyright Royalty Judges reject a negotiated agreed
Administrative Assessment, they shall proceed with adjudication in
accordance with the schedule in place in the proceeding. Rejection by
the Copyright Royalty Judges of a negotiated agreed Administrative
Assessment shall not prejudice the parties' ability to continue to
negotiate and submit to the Copyright Royalty Judges an alternate
agreed Administrative Assessment or resubmit an amended prior
negotiated agreement that addresses the Judges' reasons for initial
rejection at any time, including during a hearing or after a hearing at
any time before the Copyright Royalty Judges issue a determination.
(e) Continuing authority to amend. The Copyright Royalty Judges
shall retain continuing authority to amend a determination of an
Administrative Assessment to correct technical or clerical errors, or
modify the terms of implementation, for good cause shown, with any
amendment to be published in the Federal Register.
Sec. 355.7 Definitions.
Capitalized terms in this part that are defined terms in 17 U.S.C.
115(e) shall have the same meaning as set forth in 17 U.S.C. 115(e). In
addition, for purposes of this part, the following definitions apply:
Discoverable documents or deposition testimony are documents or
deposition testimony that are:
(1) Nonprivileged;
(2) Relevant to consideration of whether a proposal fulfills the
requirements in 17 U.S.C. 115(d)(7); and
(3) Proportional to the needs of the proceeding, considering the
importance of the issues at stake in the proceeding, the requested
participant's relative access to responsive information, the
participants' resources, the importance of the document or deposition
request in resolving or clarifying the issues presented in the
proceeding, and whether the burden or expense of producing the
requested document or deposition testimony outweighs its likely
benefit. Documents or deposition testimony need not be admissible in
evidence to be Discoverable.
[[Page 9069]]
Subchapter D--Notice and Recordkeeping Requirements for Statutory
Licenses
PART 370--NOTICE AND RECORDKEEPING REQUIREMENTS FOR STATUTORY
LICENSES
0
5. The authority citation for part 370 continues to read as follows:
Authority: 17 U.S.C. 112(e)(4), 114(f)(4)(A).
0
6. In Sec. 370.1:
0
a. Remove the alphabetical paragraph designations;
0
b. Remove the word ``A'' at the beginning of each definition;
0
c. Place the definitions in alphabetical order; and
0
d. Add the definition of ``Copyright Owners'' in alphabetical order.
The addition reads as follows:
Sec. 370.1 General definitions.
* * * * *
Copyright Owners means sound recording copyright owners, and rights
owners under 17 U.S.C. 1401(l)(2), who are entitled to royalty payments
made pursuant to the statutory licenses under 17 U.S.C. 112(e) and 114.
* * * * *
Sec. 370.4 [Amended]
0
7. In Sec. 370.4(b):
0
a. In the definition of ``Aggregate Tuning Hours'', remove ``United
States copyright law'' and add in its place ``title 17, United States
Code''; and
0
b. In paragraph (i) of the definition of ``Performance'', remove
``copyrighted'' and add in its place ``subject to protection under
title 17, United States Code''.
Subchapter E--Rates and Terms for Statutory Licenses
PART 380--RATES AND TERMS FOR TRANSMISSIONS BY ELIGIBLE
NONSUBSCRIPTION SERVICES AND NEW SUBSCRIPTION SERVICES AND FOR THE
MAKING OF EPHEMERAL REPRODUCTIONS TO FACILITATE THOSE TRANSMISSIONS
0
8. The authority citation for part 380 continues to read:
Authority: 17 U.S.C. 112(e), 114(f), 804(b)(3).
0
9. In Sec. 380.7:
0
a. Add introductory text;
0
b. Revise the definition of ``Copyright Owners''; and
0
c. In paragraph (1) of the definition of ``Performance'', remove
``copyrighted'' and add in its place ``subject to protection under
title 17, United States Code''.
The addition and revision read as follows:
Sec. 380.7 Definitions.
For purposes of this subpart, the following definitions apply:
* * * * *
Copyright Owners means sound recording copyright owners, and rights
owners under 17 U.S.C. 1401(l)(2), who are entitled to royalty payments
made under this part pursuant to the statutory licenses under 17 U.S.C.
112(e) and 114.
* * * * *
0
10. In Sec. 380.21:
0
a. In the definition of ``ATH'', remove ``United States copyright law''
and add in its place ``title 17, United States Code'';
0
b. Revise the definition of ``Copyright Owners''; and
0
c. In paragraph (1) of the definition of ``Performance'', remove
``copyrighted'' and add in its place ``subject to protection under
title 17, United States Code''.
The revision reads as follows:
Sec. 380.21 Definitions.
* * * * *
Copyright Owners are sound recording copyright owners, and rights
owners under 17 U.S.C. 1401(l)(2), who are entitled to royalty payments
made under this subpart pursuant to the statutory licenses under 17
U.S.C. 112(e) and 114(f).
* * * * *
0
11. In Sec. 380.31 revise the definition of ``Copyright Owners'' to
read as follows:
Sec. 380.31 Definitions.
* * * * *
Copyright Owners are Sound Recording copyright owners, and rights
owners under 17 U.S.C. 1401(l)(2), who are entitled to royalty payments
made under this subpart pursuant to the statutory licenses under 17
U.S.C. 112(e) and 114(f).
* * * * *
PART 382--RATES AND TERMS FOR TRANSMISSIONS OF SOUND RECORDINGS BY
PREEXISTING SUBSCRIPTION SERVICES AND PREEXISTING SATELLITE DIGITAL
AUDIO RADIO SERVICES AND FOR THE MAKING OF EPHEMERAL REPRODUCTIONS
TO FACILITATE THOSE TRANSMISSIONS
0
12. The authority citation for part 382 continues to read as follows:
Authority: 17 U.S.C. 112(e), 114 and 801(b)(1).
0
13. In Sec. 382.1, revise the definition of ``Copyright Owners'' to
read as follows:
Sec. 382.1 Definitions.
* * * * *
Copyright Owners means sound recording copyright owners, and rights
owners under 17 U.S.C. 1401(l)(2), who are entitled to royalty payments
made under this part pursuant to the statutory licenses under 17 U.S.C.
112(e) and 114.
* * * * *
Sec. 382.20 [Amended]
0
14. In Sec. 382.20, remove the definition of ``Pre-1972 Recording''.
Sec. 382.23 [Amended]
0
15. In Sec. 382.23, remove paragraphs (a)(3) and (b) and redesignate
paragraph (c) as paragraph (b).
PART 383--RATES AND TERMS FOR SUBSCRIPTION TRANSMISSIONS AND THE
REPRODUCTION OF EMPHEMERAL RECORDINGS BY CERTAIN NEW SUBSCRIPTION
SERVICES
0
16. The authority citation for part 383 continues to read as follows:
Authority: 17 U.S.C. 112(e), 114, and 801(b)(1).
0
17. In Sec. 383.2, revise paragraph (b) to read as follows:
Sec. 383.2 Definitions.
* * * * *
(b) Copyright Owner means a sound recording copyright owner, and a
rights owner under 17 U.S.C. 1401(l)(2), who is entitled to receive
royalty payments made under this part pursuant to the statutory
licenses under 17 U.S.C. 112(e) and 114.
* * * * *
PART 384--RATES AND TERMS FOR THE MAKING OF EPHEMERAL RECORDINGS BY
BUSINESS ESTABLISHMENT SERVICES
0
19. The authority citation for part 384 continues to read as follows:
Authority: 17 U.S.C. 112(e), 801(b)(1).
0
21. In Sec. 384.2, revise the definition of ``Copyright Owners'' to
read as follows:
Sec. 384.2 Definitions.
* * * * *
Copyright Owners are sound recording copyright owners, and rights
owners under 17 U.S.C. 1401(l)(2), who are entitled to royalty payments
made under this part pursuant to the statutory license under 17 U.S.C.
112(e).
* * * * *
Sec. 384.3 [Amended]
0
22. In Sec. 384.3:
0
a. In paragraph (a)(1), remove the word ``copyrighted'' and add the
phrase ``subject to protection under title 17, United States Code''
after the word ``recordings'';
[[Page 9070]]
0
b. In paragraph (a)(2) introductory text:
0
i. Remove the word ``copyrighted'' in the first sentence and add the
phrase ``subject to protection under title 17, United States Code,''
after the word ``recordings''; and
0
ii. Remove the word ``copyrighted'' in the second sentence and add the
phrase ``subject to protection under title 17, United States Code,''
after the word ``recordings''; and
0
c. In paragraphs (a)(2)(i) and (ii), remove the word ``copyrighted''
each time it appears and add the phrase ``subject to protection under
title 17, United States Code,'' after the word ``recordings'' each time
it appears.
PART 385--RATES AND TERMS FOR USE OF NONDRAMATIC MUSICAL WORKS IN
THE MAKING AND DISTRIBUTING OF PHYSICAL AND DIGITAL PHONORECORDS
0
23. The authority citation for part 385 continues to read as follows:
Authority: 17 U.S.C. 115, 801(b)(1), 804(b)(4).
0
24. In Sec. 385.2:
0
a. Add introductory text:
0
b. Revise the definitions of ``Accounting Period'' and ``Affiliate'';
0
c. In the definition of ``Bundled Subscription Offering'', add the term
``Eligible'' before the term ``Limited Downloads'' and remove the comma
at the end of the definition and add a period in its place;
0
d. In the definition of ``Digital Phonorecord'', remove ``or DPD'' and
remove ``17 U.S.C. 115(d)'' and add in its place ``17 U.S.C. 115(e)'';
0
e. Add definitions for ``Eligible Interactive Stream'' and ``Eligible
Limited Download'' in alphabetical order;
0
f. Revise the definition for ``Free Trial Offering'';
0
g. Remove the definition of ``Interactive Stream'';
0
h. In the definition for ``Licensed Activity'':
0
i. Remove the word ``Digital'' between the words ``Permanent'' and
``Downloads'';
0
ii. Add the word ``Eligible'' before the term ``Interactive Streams'';
and
0
iii. Add the word ``Eligible'' before the term ``Limited Downloads'';
0
i. Remove the definition for ``Limited Download'';
0
j Revise the definition for ``Limited Offering'';
0
k. In the definition for ``Locker Service'':
0
i. Add the term ``Eligible'' before the term ``Interactive Streams'';
0
ii. Remove the term ``Digital'' between the terms ``Permanent'' and
``Downloads''; and
0
iii. Remove the term ``the Service'' and add in its place ``the Service
Provider'' each time it appears; and
0
iv. Remove the term ``Service's'' and add in its place ``Service
Provider's'';
0
l. In the definition of ``Mixed Service Bundle'':
0
i. Remove the term ``Digital'' between the terms ``Permanent'' and
``Downloads''; and
0
ii. Remove the term ``a Service'' and add in its place ``a Service
Provider'';
0
m. In the definition for ``Music Bundle'':
0
i. Remove the term ``Digital'' between the words ``Permanent'' and
``Downloads'';
0
ii. Remove the term ``Service'' and add in its place the term ``Service
Provider'' each time it appears; and
0
iii. Remove the term ``Record Company'' and add in its place the term
``Sound Recording Company'';
0
n. In the definition for ``Offering'' remove the term ``Service's'' and
add in its place the term ``Service Provider's'';
0
o. In the definition of ``Paid Locker Service'', remove the term ``the
Service'' and add in its place the term ``the Service Provider'';
0
p. Remove the definition of ``Permanent Digital Download'';
0
q. Add a definition for ``Permanent Download'' in alphabetical order;
0
r. In the definition for ``Play'':
0
i. Add the term ``Eligible'' before the term ``Interactive Stream''
each time it appears; and
0
ii. Remove the term ``a Limited Download'' and add in its place the
term ``an Eligible Limited Download'' each time it appears;
0
s. Revise the definitions for ``Promotional Offering'' and ``Purchased
Content Locker Service'';
0
t. Remove the definition for ``Record Company'';
0
u. In the definition of ``Relevant Page'':
0
i. In the first sentence, remove the term ``Service's'' and add in its
place the term ``Service Provider's'' and add the term ``Eligible''
before the term ``Limited Downloads''; and
0
ii. In the second sentence, add the term ``Eligible'' before the term
``Limited Download'' and before the term ``Interactive Stream'';
0
v. In the definition of ``Restricted Download'', remove the term ``a
Limited Download'' add in its place the term ``an Eligible Limited
Download'';
0
w. Remove the definition of ``Service'';
0
x. Add the definitions for ``Service Provider'' and ``Service Provider
Revenue'' in alphabetical order;
0
y. Remove the definition for ``Service Revenue'';
0
z. Add the definition for ``Sound Recording Company'' in alphabetical
order;
0
aa. In the definition of ``Streaming Cache Reproduction'', remove the
term ``Service'' and add in its place the term ``Service Provider''
each time it appears; and
0
bb. In the definition of ``Total Cost of Content'':
0
i. Remove the term ``Service'' and add in its place the term ``Service
Provider'' each time it appears;
0
ii. Remove the term ``interactive streams'' and add in its place the
term ``Eligible Interactive Streams'';
0
iii. Remove the term ``limited downloads'' and add in its place the
term ``Eligible Limited Downloads''; and
0
iv. Remove the terms ``Record Company'' and ``record company'' and add
in their place the term ``Sound Recording Company'' each time they
appear.
The additions and revisions read as follows:
Sec. 385.2 Definitions.
For the purposes of this part, the following definitions apply:
Accounting Period means the monthly period specified in 17 U.S.C.
115(c)(2)(I) and in 17 U.S.C. 115(d)(4)(A)(i), and any related
regulations, as applicable.
Affiliate means an entity controlling, controlled by, or under
common control with another entity, except that an affiliate of a Sound
Recording Company shall not include a Copyright Owner to the extent it
is engaging in business as to musical works.
* * * * *
Eligible Interactive Stream means a Stream in which the performance
of the sound recording is not exempt from the sound recording
performance royalty under 17 U.S.C. 114(d)(1) and does not in itself,
or as a result of a program in which it is included, qualify for
statutory licensing under 17 U.S.C. 114(d)(2).
Eligible Limited Download means a transmission of a sound recording
embodying a musical work to an End User of a digital phonorecord under
17 U.S.C. 115(c)(3)(C) and (D) that results in a Digital Phonorecord
Delivery of that sound recording that is only accessible for listening
for--
(1) An amount of time not to exceed one month from the time of the
transmission (unless the Licensee, in lieu of retransmitting the same
sound recording as another Eligible Limited Download, separately, and
upon specific request of the End User made through a live network
connection,
[[Page 9071]]
reauthorizes use for another time period not to exceed one month), or
in the case of a subscription plan, a period of time following the end
of the applicable subscription no longer than a subscription renewal
period or three months, whichever is shorter; or
(2) A number of times not to exceed 12 (unless the Licensee, in
lieu of retransmitting the same sound recording as another Eligible
Limited Download, separately, and upon specific request of the End User
made through a live network connection, reauthorizes use of another
series of 12 or fewer plays), or in the case of a subscription
transmission, 12 times after the end of the applicable subscription.
* * * * *
Free Trial Offering means a subscription to a Service Provider's
transmissions of sound recordings embodying musical works when:
(1) Neither the Service Provider, the Sound Recording Company, the
Copyright Owner, nor any person or entity acting on behalf of or in
lieu of any of them receives any monetary consideration for the
Offering;
(2) The free usage does not exceed 30 consecutive days per
subscriber per two-year period;
(3) In connection with the Offering, the Service Provider is
operating with appropriate musical license authority and complies with
the recordkeeping requirements in Sec. 385.4;
(4) Upon receipt by the Service Provider of written notice from the
Copyright Owner or its agent stating in good faith that the Service
Provider is in a material manner operating without appropriate license
authority from the Copyright Owner under 17 U.S.C. 115, the Service
Provider shall within 5 business days cease transmission of the sound
recording embodying that musical work and withdraw it from the
repertoire available as part of a Free Trial Offering;
(5) The Free Trial Offering is made available to the End User free
of any charge; and
(6) The Service Provider offers the End User periodically during
the free usage an opportunity to subscribe to a non-free Offering of
the Service Provider.
* * * * *
Limited Offering means a subscription plan providing Eligible
Interactive Streams or Eligible Limited Downloads for which--
(1) An End User cannot choose to listen to a particular sound
recording (i.e., the Service Provider does not provide Eligible
Interactive Streams of individual recordings that are on-demand, and
Eligible Limited Downloads are rendered only as part of programs rather
than as individual recordings that are on-demand); or
(2) The particular sound recordings available to the End User over
a period of time are substantially limited relative to Service
Providers in the marketplace providing access to a comprehensive
catalog of recordings (e.g., a product limited to a particular genre or
permitting Eligible Interactive Streaming only from a monthly playlist
consisting of a limited set of recordings).
* * * * *
Permanent Download has the same meaning as in 17 U.S.C. 115(e).
* * * * *
Promotional Offering means a digital transmission of a sound
recording, in the form of an Eligible Interactive Stream or an Eligible
Limited Download, embodying a musical work, the primary purpose of
which is to promote the sale or other paid use of that sound recording
or to promote the artist performing on that sound recording and not to
promote or suggest promotion or endorsement of any other good or
service and:
(1) A Sound Recording Company is lawfully distributing the sound
recording through established retail channels or, if the sound
recording is not yet released, the Sound Recording Company has a good
faith intention to lawfully distribute the sound recording or a
different version of the sound recording embodying the same musical
work;
(2) For Eligible Interactive Streaming or Eligible Limited
Downloads, the Sound Recording Company requires a writing signed by an
authorized representative of the Service Provider representing that the
Service Provider is operating with appropriate musical works license
authority and that the Service Provider is in compliance with the
recordkeeping requirements of Sec. 385.4;
(3) For Eligible Interactive Streaming of segments of sound
recordings not exceeding 90 seconds, the Sound Recording Company
delivers or authorizes delivery of the segments for promotional
purposes and neither the Service Provider nor the Sound Recording
Company creates or uses a segment of a sound recording in violation of
17 U.S.C. 106(2) or 115(a)(2);
(4) The Promotional Offering is made available to an End User free
of any charge; and
(5) The Service Provider provides to the End User at the same time
as the Promotional Offering stream an opportunity to purchase the sound
recording or the Service Provider periodically offers End Users the
opportunity to subscribe to a paid Offering of the Service Provider.
Purchased Content Locker Service means:
(1) A Locker Service made available to End User purchasers of
Permanent Downloads, Ringtones, or physical phonorecords at no
incremental charge above the otherwise applicable purchase price of the
Permanent Downloads, Ringtones, or physical phonorecords acquired from
a qualifying seller. With a Purchased Content Locker Service, an End
User may receive one or more additional phonorecords of the purchased
sound recordings of musical works in the form of Permanent Downloads or
Ringtones at the time of purchase, or subsequently have digital access
to the purchased sound recordings of musical works in the form of
Eligible Interactive Streams, additional Permanent Downloads,
Restricted Downloads, or Ringtones.
(2) A qualifying seller for purposes of this definition is the
entity operating the Service Provider, including affiliates,
predecessors, or successors in interest, or--
(i) In the case of Permanent Downloads or Ringtones, a seller
having a legitimate connection to the locker service provider pursuant
to one or more written agreements (including that the Purchased Content
Locker Service and Permanent Downloads or Ringtones are offered through
the same third party); or
(ii) In the case of physical phonorecords:
(A) The seller of the physical phonorecord has an agreement with
the Purchased Content Locker Service provider establishing an
integrated offer that creates a consumer experience commensurate with
having the same Service Provider both sell the physical phonorecord and
offer the integrated locker service; or
(B) The Service Provider has an agreement with the entity offering
the Purchased Content Locker Service establishing an integrated offer
that creates a consumer experience commensurate with having the same
Service Provider both sell the physical phonorecord and offer the
integrated locker service.
* * * * *
Service Provider means that entity governed by subparts C and D of
this part, which might or might not be the Licensee, that with respect
to the section 115 license:
(1) Contracts with or has a direct relationship with End Users or
[[Page 9072]]
otherwise controls the content made available to End Users;
(2) Is able to report fully on Service Provider Revenue from the
provision of musical works embodied in phonorecords to the public, and
to the extent applicable, verify Service Provider Revenue through an
audit; and
(3) Is able to report fully on its usage of musical works, or
procure such reporting and, to the extent applicable, verify usage
through an audit.
Service Provider Revenue. (1) Subject to paragraphs (2) through (5)
of this definition and subject to GAAP, Service Provider Revenue shall
mean:
(i) All revenue from End Users recognized by a Service Provider for
the provision of any Offering;
(ii) All revenue recognized by a Service Provider by way of
sponsorship and commissions as a result of the inclusion of third-party
``in-stream'' or ``in-download'' advertising as part of any Offering,
i.e., advertising placed immediately at the start or end of, or during
the actual delivery of, a musical work, by way of Eligible Interactive
Streaming or Eligible Limited Downloads; and
(iii) All revenue recognized by the Service Provider, including by
way of sponsorship and commissions, as a result of the placement of
third-party advertising on a Relevant Page of the Service Provider or
on any page that directly follows a Relevant Page leading up to and
including the Eligible Limited Download or Eligible Interactive Stream
of a musical work; provided that, in case more than one Offering is
available to End Users from a Relevant Page, any advertising revenue
shall be allocated between or among the Service Providers on the basis
of the relative amounts of the page they occupy.
(2) Service Provider Revenue shall:
(i) Include revenue recognized by the Service Provider, or by any
associate, affiliate, agent, or representative of the Service Provider
in lieu of its being recognized by the Service Provider; and
(ii) Include the value of any barter or other nonmonetary
consideration; and
(iii) Except as expressly detailed in this part, not be subject to
any other deduction or set-off other than refunds to End Users for
Offerings that the End Users were unable to use because of technical
faults in the Offering or other bona fide refunds or credits issued to
End Users in the ordinary course of business.
(3) Service Provider Revenue shall exclude revenue derived by the
Service Provider solely in connection with activities other than
Offering(s), whereas advertising or sponsorship revenue derived in
connection with any Offering(s) shall be treated as provided in
paragraphs (2) and (4) of this definition.
(4) For purposes of paragraph (1) of this definition, advertising
or sponsorship revenue shall be reduced by the actual cost of obtaining
that revenue, not to exceed 15%.
(5) In instances in which a Service Provider provides an Offering
to End Users as part of the same transaction with one or more other
products or services that are not Licensed Activities, then the revenue
from End Users deemed to be recognized by the Service Provider for the
Offering for the purpose of paragraph (1) of this definition shall be
the lesser of the revenue recognized from End Users for the bundle and
the aggregate standalone published prices for End Users for each of the
component(s) of the bundle that are Licensed Activities; provided that,
if there is no standalone published price for a component of the
bundle, then the Service Provider shall use the average standalone
published price for End Users for the most closely comparable product
or service in the U.S. or, if more than one comparable exists, the
average of standalone prices for comparables.
Sound Recording Company means a person or entity that:
(1) Is a copyright owner of a sound recording embodying a musical
work;
(2) In the case of a sound recording of a musical work fixed before
February 15, 1972, has rights to the sound recording, under chapter 14
of title 17, United States Code, that are equivalent to the rights of a
copyright owner of a sound recording of a musical work under title 17,
United States Code;
(3) Is an exclusive Licensee of the rights to reproduce and
distribute a sound recording of a musical work; or
(4) Performs the functions of marketing and authorizing the
distribution of a sound recording of a musical work under its own
label, under the authority of the Copyright Owner of the sound
recording.
* * * * *
Sec. 385.3 [Amended]
0
25. In Sec. 385.3, remove the phrase ``after the due date established
in 17 U.S.C. 115(c)(5)'' and add in its place ``after the due date
established in 17 U.S.C. 115(c)(2)(I) or 115(d)(4)(A)(i), as
applicable''.
Sec. 385.4 [Amended]
0
26. In Sec. 385.4:
0
a. In paragraph (a), add the term ``Eligible'' before each of the terms
``Interactive Streams'' and ``Limited Downloads''; and
0
b. In paragraph (b), remove the term ``Service'' and add in its place
the term ``Service Provider'' each time it appears.
0
27. Revise the heading for subpart B to read as follows:
Subpart B--Physical Phonorecord Deliveries, Permanent Downloads,
Ringtones, and Music Bundles
0
28. In Sec. 385.11, revise paragraph (a) to read as follows:
Sec. 385.11 Royalty rates.
(a) Physical phonorecord deliveries and Permanent Downloads. For
every physical phonorecord and Permanent Download the Licensee makes
and distributes or authorizes to be made and distributed, the royalty
rate payable for each work embodied in the phonorecord or Permanent
Download shall be either 9.1 cents or 1.75 cents per minute of playing
time or fraction thereof, whichever amount is larger.
* * * * *
0
29. Revise the heading for subpart C to read as follows:
Subpart C--Eligible Interactive Streaming, Eligible Limited
Downloads, Limited Offerings, Mixed Service Bundles, Bundled
Subscription Offerings, Locker Services, and Other Delivery
Configurations
0
30. Revise Sec. 385.20 to read as follows:
Sec. 385.20 Scope.
This subpart establishes rates and terms of royalty payments for
Eligible Interactive Streams and Eligible Limited Downloads of musical
works, and other reproductions or distributions of musical works
through Limited Offerings, Mixed Service Bundles, Bundled Subscription
Offerings, Paid Locker Services, and Purchased Content Locker Services
provided through subscription and nonsubscription digital music Service
Providers in accordance with the provisions of 17 U.S.C. 115, exclusive
of Offerings subject to subpart D of this part.
0
31. In Sec. 385.21:
0
a. In paragraph (b):
0
i. Remove the term ``Service'' each time it appears and add in its
place the term ``Service Provider''; and
0
ii. Remove the term ``Service's'' and add in its place the term
``Service Provider's'';
0
b. In paragraph (b)(4):
0
i. Revise the second sentence; and
0
ii. Remove the phrase ``methodology used by the Service for making
royalty payment allocations'' and add in its place ``methodology used
for making royalty payment allocations''; and
[[Page 9073]]
0
c. In paragraph (d), remove the statutory citation ``17
U.S.C.115(c)(5)'' and add in its place ``17 U.S.C. 115(c)(2)(I), 17
U.S.C. 115(d)(4)(A)(i),''.
The revision reads as follows:
Sec. 385.21 Royalty rates and calculations.
* * * * *
(b) * * *
(4) * * * To determine this amount, the result determined in step 3
in paragraph (b)(3) of this section must be allocated to each musical
work used through the Offering. * * *
* * * * *
Sec. 385.22 [Amended]
0
31. In Sec. 385.22:
0
a. In paragraph (a)(1), add the term ``Eligible'' before the term
``Interactive Streams'';
0
b. In paragraph (a)(2), add the term ``Eligible'' before the term
``Interactive Streams'' and add the term ``Eligible'' before the term
``Limited Downloads'' each time it appears; and
0
c. In paragraph (a)(3), add the term ``Eligible'' before the term
``Interactive Streams'' and add the term ``Eligible'' before the term
``Limited Downloads''.
0
32. Revise Sec. 385.30 to read as follows:
Sec. 385.30 Scope.
This subpart establishes rates and terms of royalty payments for
Promotional Offerings, Free Trial Offerings, and Certain Purchased
Content Locker Services provided by subscription and nonsubscription
digital music Service Providers in accordance with the provisions of 17
U.S.C. 115.
0
33. Revise Sec. 385.31 to read as follows:
Sec. 385.31 Royalty rates.
(a) Promotional Offerings. For Promotional Offerings of audio-only
Eligible Interactive Streaming and Eligible Limited Downloads of sound
recordings embodying musical works that the Sound Recording Company
authorizes royalty-free to the Service Provider, the royalty rate is
zero.
(b) Free Trial Offerings. For Free Trial Offerings for which the
Service Provider receives no monetary consideration, the royalty rate
is zero.
(c) Certain Purchased Content Locker Services. For every Purchased
Content Locker Service for which the Service Provider receives no
monetary consideration, the royalty rate is zero.
Dated: March 1, 2019.
Jesse M. Feder,
Chief Copyright Royalty Judge.
[FR Doc. 2019-04067 Filed 3-12-19; 8:45 am]
BILLING CODE 1410-72-P
