Copyright Royalty Board Proposes Compulsory License Rates and Terms for Mechanical and Digital Phonorecords | Practical Law

Copyright Royalty Board Proposes Compulsory License Rates and Terms for Mechanical and Digital Phonorecords | Practical Law

On May 17, 2012, the Copyright Royalty Judges published proposed rules setting the complusory license rates and terms for mechanical and digital phonorecords under Section 115 of the Copyright Act.

Copyright Royalty Board Proposes Compulsory License Rates and Terms for Mechanical and Digital Phonorecords

by PLC Intellectual Property & Technology
Published on 16 May 2012 • USA (National/Federal)
On May 17, 2012, the Copyright Royalty Judges published proposed rules setting the complusory license rates and terms for mechanical and digital phonorecords under Section 115 of the Copyright Act.
On May 17, 2012, the Copyright Royalty Judges (Judges) published for comment proposed regulations for the compulsory license rates and terms for statutory licenses under Section 115 of the Copyright Act for the use of:
  • Musical works in physical phonorecord deliveries.
  • Permanent digital downloads.
  • Ringtones.
  • Interactive streaming.
  • Limited downloads.
  • Mixed service bundles.
  • Music bundles.
  • Paid locker services.
  • Purchased content locker services.
The proposed regulations follow the April 10, 2012 Motion to Adopt Settlement (Settlement) concerning the rates and terms of the compulsory license filed by the parties to In re Adjustment or Determination of Compulsory License Rates for Making and Distributing Phonorecords, see Legal Update, Music Industry Settlement Creates New Compulsory Licensing Categories Under Copyright Act. The Judges are proposing to adopt substantially all of the Settlement except that they:
  • Propose removing two provisions.
  • Seek comment on two other provisions.
The Judges propose removing the "shall not constitute evidence" language from portions of proposed Sections 385.10(c) and 385.20(c) of Title 37 of the Code of Federal Regulations (Code) that contain the following language:
"Neither this subpart nor the act of obtaining a license under 17 U.S.C. § 115 is intended to express or imply any conclusion, and shall not constitute evidence, as to the circumstances in which any of the exclusive rights of a copyright owner are implicated or a license, including a compulsory license pursuant to 17 U.S.C. § 115, must be obtained."
The Judges note that their task is to adopt compulsory license rates and terms for the making and distributing of physical and digital phonorecords, not to offer evaluations, limitations, or characterizations of rates and terms. Therefore, the Judges declined to include the language in the proposed regulations.
The Judges also seek comment on Sections 385.12(e) and 385.22(d) of the Code. These provisions are virtually identical and concern licensees' statements of account. The Judges note that:
  • These provisions appear to propose requirements beyond those set out by the Register of Copyrights (Register) in Section 201.19 of Title 37 of the Code.
  • The authority to prescribe regulations concerning statements of account is the exclusive domain of the Register.
  • Judges cannot alter requirements concerning statements of account issued by the Register.
Comments and objections on the proposed regulations must be filed by June 16, 2012.