Rule2022-13944
Regulation Concerning Proxy Distributions for Unmatched Royalties Deposited During 2010-2018
Primary source
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Published
June 30, 2022
Effective
August 1, 2022
Issuing agencies
Library of CongressCopyright Royalty Board
Abstract
The Copyright Royalty Judges (Judges) are amending the applicable regulations to authorize the use of proxy reports of use to facilitate distribution of royalties collected for periods prior to January 1, 2019, for the licenses to make ephemeral reproduction and perform publicly sound recordings by means of digital audio transmissions. Proxy reports of use will be used for those services for which no reports of use were submitted or for which the reports of use were unusable.
Full Text
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<title>Federal Register, Volume 87 Issue 125 (Thursday, June 30, 2022)</title>
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[Federal Register Volume 87, Number 125 (Thursday, June 30, 2022)]
[Rules and Regulations]
[Pages 39000-39001]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-13944]
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LIBRARY OF CONGRESS
Copyright Royalty Board
37 CFR Part 370
[Docket No. 20-CRB-0007-RM]
Regulation Concerning Proxy Distributions for Unmatched Royalties
Deposited During 2010-2018
AGENCY: Copyright Royalty Board, Library of Congress.
ACTION: Final rule.
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SUMMARY: The Copyright Royalty Judges (Judges) are amending the
applicable regulations to authorize the use of proxy reports of use to
facilitate distribution of royalties collected for periods prior to
January 1, 2019, for the licenses to make ephemeral reproduction and
perform publicly sound recordings by means of digital audio
transmissions. Proxy reports of use will be used for those services for
which no reports of use were submitted or for which the reports of use
were unusable.
DATES: Effective August 1, 2022.
FOR FURTHER INFORMATION CONTACT: Anita Brown, CRB Program Specialist,
(202) 707-7658, <a href="/cdn-cgi/l/email-protection#1b7869795b777478357c746d"><span class="__cf_email__" data-cfemail="5f3c2d3d1f33303c71383029">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Background
Sections 112 and 114 of the Copyright Act, title 17 of the United
States Code, are the statutory licenses governing the public
performance of sound recordings by certain types of eligible services
\1\ by means of a digital audio transmission. 17 U.S.C. 112(e), 114.
Services operating under these licenses are required to, among other
things, pay royalty fees and report to copyright owners of sound
recordings on the use of their works. Id. The Copyright Act directs the
Judges to determine the royalty rates to be paid, 17 U.S.C.
114(f)(1)(A), (f)(2)(A) and 17 U.S.C. 112(e)(3), and to establish
regulations to give copyright owners reasonable notice of the use of
their works and create and maintain records of use for delivery to
copyright owners. 17 U.S.C. 114(f)(4)(A) and 17 U.S.C. 112(e)(4).
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\1\ The types of eligible services consist of subscription,
nonsubscription, satellite digital audio radio services, and
business establishment services.
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The purpose of the notice and recordkeeping requirement is to
ensure that the royalties collected under the statutory licenses are
distributed by a central source--a Collective--or other agents
designated to receive royalties from the Collective to the correct
recipients. The Judges promulgated final notice and recordkeeping
regulations on October 13, 2009.\2\ See 74 FR 52418.
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\2\ Until that time, interim regulations were in effect. See 71
FR 59010 (Oct. 6, 2006).
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On November 20, 2018, SoundExchange, Inc., the entity designated by
the Judges as the Collective, requested that the Judges amend the
applicable regulations to authorize SoundExchange ``to use proxy
reporting data to distribute to copyright owners and performers certain
sound recording royalties for periods before 2019 that are otherwise
undistributable due to licensees' failure to provide reports of use''
or their provision of ``reports of use that are so deficient as to be
unusable.'' Letter from Steven R. Englund, counsel for SoundExchange,
Inc., Docket No. 20-CRB-0007-RM at 1 & n.1.
In a second letter dated April 23, 2020 (April Letter),
SoundExchange renewed its request. In the April Letter, SoundExchange
stated it was holding approximately $32 million in statutory royalties
for the period 2010 through 2018 and requested that the Judges
authorize SoundExchange to distribute these royalties using the same
``annual/license type methodology'' that the Judges approved in 2011.
April Letter at 2, citing 37 CFR 370.3(i), 370.4(f). SoundExchange
requested that the Judges change the dates in the cited regulations
from ``2010'' to ``2019.''
In May 2020, the Judges published a notice of proposed rulemaking
(NPRM) seeking comment on SoundExchange's proposal. 85 FR 32323 (May
29, 2020). In the notice, the Judges also announced that, if they
adopted the proposed regulations, they intended to change the mandatory
``shall'' to a permissive ``may'' to authorize the subject
distributions. Comments responsive to the NPRM were due June 29, 2020.
The Judges received three comments in response to the NPRM. One
commenter, David Powell, filed a comment that in no way revealed an
interest in the rulemaking proceeding. The comment of Sun-Glo Records,
Inc. asserted an interest in recording royalties, but did not oppose
the proposed rule change.
The third comment was submitted by SoundExchange, and addresses
specific topics concerning which the Judges had previously inquired in
connection with this NPRM. Specifically, SoundExchange states in this
comment that:
(1) It agrees with the Judges that it is preferable to use
permissive language (the word ``may'') that would merely allow
SoundExchange to use proxy data to distribute the relevant royalties,
rather than mandatory regulatory language (the word ``shall'');
(2) It has exhausted all reasonable alternative means to obtain
missing reports; and
(3) Use of the proposed annual/license type method, as set forth in
the proposed regulations, is a reasonable option.
Given that the proxy will be applied to a small percentage of
royalties for the relevant time period and that no viable alternatives
have been provided, the Judges are adopting as final the proposed
regulations as set forth in the NPRM allowing for the use of the proxy
proposed by SoundExchange for the distribution of royalties for all
periods before January 1, 2019. Adoption of the proposed regulations,
especially in the absence of opposition to the proposed proxy, will
promote the expeditious distribution of the affected royalties.
List of Subjects in 37 CFR Part 370
Copyright, Sound recordings.
Final Regulations
For the reasons set forth in the preamble, the Copyright Royalty
Judges amend 37 CFR part 370 as follows:
[[Page 39001]]
PART 370--NOTICE AND RECORDKEEPING REQUIREMENTS FOR STATUTORY
LICENSES
0
1. The authority citation for part 370 continues to read as follows:
Authority: 17 U.S.C. 112(e)(4), 114(f)(4)(A), 803(b)(6)(A).
0
2. Section 370.3 is amended by revising paragraph (i) to read as
follows:
Sec. 370.3 Reports of use of sound recordings under statutory license
for preexisting subscription services.
* * * * *
(i) In any case in which a preexisting subscription service has not
provided a report of use required under this section for use of sound
recordings under section 112(e) or section 114 of title 17 of the
United States Code, or both, prior to January 1, 2019, reports of use
for the corresponding calendar year filed by other preexisting
subscription services may serve as the reports of use for the non-
reporting service, solely for purposes of distribution of any
corresponding royalties by the Collective.
0
3. Section 370.4 is amended by revising paragraph (f) to read as
follows:
Sec. 370.4 Reports of use of sound recordings under statutory license
for nonsubscription transmission services, preexisting satellite
digital audio radio services, new subscription services and business
establishment services.
* * * * *
(f) In any case in which a nonsubscription transmission service,
preexisting satellite digital audio radio service, new subscription
service, or business establishment service has not provided a report of
use required under this section for use of sound recordings under
section 112(e) or section 114 of title 17 of the United States Code, or
both, prior to January 1, 2019, reports of use for the corresponding
calendar year filed by other services of the same type may serve as the
reports of use for the non-reporting service, solely for purposes of
distribution of any corresponding royalties by the Collective.
Dated: June 13, 2022.
Suzanne M. Barnett,
Chief U.S. Copyright Royalty Judge.
Approved by:
Carla D. Hayden,
Librarian of Congress.
[FR Doc. 2022-13944 Filed 6-29-22; 8:45 am]
BILLING CODE 1410-72-P
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