Free Market Royalty Act - Amends federal copyright law to provide a public performance right for all audio transmissions of sound recordings, thereby extending such right to require terrestrial AM/FM broadcast radio stations to pay royalties for non-digital audio transmissions. (Currently, a performance right for sound recordings is provided only with respect to digital transmissions by cable, satellite, and Internet radio stations.)
Eliminates statutory licensing royalty rates set by Copyright Royalty Judges (CRJs) for the public performance of sound recordings by noninteractive digital audio services.
Allows any noninteractive services performing sound recordings publicly by means of an audio transmission (including cable, satellite, Internet, and AM/FM broadcasters) to collectively negotiate royalty rates for such performances.
Designates SoundExchange, Inc. (an independent, nonprofit organization that collects and distributes royalties), or any successor entity, as the sole common agent to negotiate, agree to, pay, and receive royalty payments.
Authorizes copyright owners of sound recordings, if a license is agreed to by the common agent, to subsequently negotiate and agree to royalty rates and license terms and conditions with any noninteractive services for the performance of such sound recordings (thus allows copyright owners to opt-out of rates or conditions negotiated by the common agent and to instead negotiate direct licenses for their recordings).
Sets forth the royalty payment distributions to be made by the common agent to copyright owners, featured recording artists, and non-featured musicians and vocalists.
Establishes procedures for CRJs to set rates and terms for nonsubscription broadcasts consisting solely of noncommercial educational and cultural radio programs when such rates and terms are not negotiated and agreed upon collectively between the common agent and the noncommercial educational broadcast station.
Modifies ephemeral recording requirements (licenses to reproduce phonorecords to facilitate transmissions) to account for the removal of statutory licensing procedures.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3219 Introduced in House (IH)]
113th CONGRESS
1st Session
H. R. 3219
To amend title 17, United States Code, to provide copyright owners in
sound recordings with the exclusive right to negotiate in the
marketplace the performance of their works to the public by means of an
audio transmission, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 30, 2013
Mr. Watt introduced the following bill; which was referred to the
Committee on the Judiciary
_______________________________________________________________________
A BILL
To amend title 17, United States Code, to provide copyright owners in
sound recordings with the exclusive right to negotiate in the
marketplace the performance of their works to the public by means of an
audio transmission, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Free Market Royalty Act''.
SEC. 2. BROADCAST PERFORMANCE RIGHT IN SOUND RECORDINGS.
Section 106(6) of title 17, United States Code, is amended by
striking ``a digital audio'' and inserting ``an audio''.
SEC. 3. FREE MARKET FOR LICENSING OF PUBLIC PERFORMANCES.
Section 114 of title 17, United States Code, is amended as follows:
(1) Subsection (d) is amended--
(A) in paragraph (1)--
(i) in the matter preceding subparagraph
(A), by striking ``a digital audio'' and
inserting ``an audio'';
(ii) by striking subparagraph (A); and
(iii) by redesignating subparagraphs (B)
and (C) as subparagraphs (A) and (B),
respectively;
(B) by striking paragraph (2);
(C) in paragraph (3)--
(i) in subparagraphs (A) and (B)(i), by
striking ``of digital audio'' and inserting
``of an audio''; and
(ii) in subparagraph (D), by striking ``a
digital audio'' and inserting ``an audio'';
(D) in paragraph (4), in subparagraphs (A) and
(B)(i), by striking ``a digital audio'' and inserting
``an audio''; and
(E) by redesignating paragraphs (3) and (4) as
paragraphs (2) and (3), respectively.
(2) Section 114 of title 17, United States Code, is amended
by striking subsections (e), (f), and (g), and inserting the
following:
``(e) Efficiency of Licensing.--
``(1) Collective negotiation for noninteractive services.--
Pursuant to section 106(6), and notwithstanding any other
provision of law, any noninteractive services performing sound
recordings publicly by means of an audio transmission may
collectively negotiate and agree to royalty rates and license
terms and conditions for the performance of such sound
recordings.
``(2) One-stop licensing for noninteractive services.--
``(A) Negotiation of licenses by common agent.--
Pursuant to section 106(6), and notwithstanding any
other provision of law, for licenses for noninteractive
audio transmissions, SoundExchange, Inc., or any
successor entity is designated as the sole common agent
to negotiate, agree to, pay, and receive payments under
this section. If a license for noninteractive audio
transmissions is agreed to by such common agent,
copyright owners of sound recordings may subsequently
negotiate and agree to royalty rates and license terms
and conditions with any noninteractive services
performing sound recordings publicly by means of an
audio transmission for the performance of such sound
recordings.
``(B) Direct payment and equal compensation.--The
common agent under subparagraph (A) shall make
distributions directly to the following recipients from
payments collected under this section as follows:
``(i) 50 percent shall be paid to the
copyright owner.
``(ii) 45 percent shall be paid to featured
recording artists.
``(iii) 5 percent shall be paid to
nonfeatured musicians and vocalists (through
the American Federation of Musicians and Screen
Actors Guild-American Federation of Television
and Radio Artists Intellectual Property Rights
Distribution Fund, or their successors).
``(f) Payments From Individual Licenses for Noninteractive Audio
Transmissions.--In the case of a license granted by the copyright owner
of a sound recording to a noninteractive service performing sound
recordings publicly by means of an audio transmission, such service
shall pay to the common agent described in subsection (e) receipts from
the licensing of such transmissions in an amount equal to 50 percent of
the total royalties and other compensation that the service is required
to pay for such transmissions under the applicable license agreement.
Such common agent shall distribute such payments in proportion to the
distributions provided in clauses (ii) and (iii) of subsection
(e)(2)(B), and such payments shall be the sole payments to which
featured and nonfeatured artists are entitled by reason of such
transmissions under the license with that service.
``(g) Backstop for Public and Noncommercial Stations.--
``(1) Establishment of rates and terms.--If royalty rates
and license terms and conditions for the audio transmission or
retransmission of a nonsubscription broadcast consisting solely
of noncommercial educational and cultural radio programs are
not negotiated and agreed upon collectively under subsection
(e) between the common agent and a noncommercial educational
broadcast station funded on or after January 1, 1995, under
section 396(k) of the Communications Act of 1934 (47 U.S.C.
396(k)), a proceeding under chapter 8 of this title shall
determine the rates and terms for such transmissions and
retransmissions. The Copyright Royalty Judges shall establish
such rates and terms that most clearly represent the rates and
terms that would have been negotiated in the marketplace
between a willing buyer and a willing seller. In determining
such rates and terms, the Copyright Royalty Judges shall base
their decision on economic, competitive, and programming
information presented by the parties.
``(2) Payment of royalties.--All royalty payments under
this subsection for over-the-air nonsubscription broadcast
transmissions required to be paid by public broadcasting
entities that are eligible to receive funding on the basis of
the formula set forth in section 396(k)(6)(B) of the
Communications Act of 1934 (47 U.S.C. 396(k)(6)(B)) or that are
authorized to transmit over-the-air nonsubscription broadcast
performances of nondramatic musical works pursuant to
arrangements negotiated or otherwise made by the Corporation
for Public Broadcasting under section 118, shall first be made
using funds made available pursuant to section
396(k)(3)(A)(I)(II) of the Communications Act of 1934.''.
(3) Subsection (h)(1) is amended by striking ``a digital
audio'' and inserting ``an audio''.
(4) Subsection (j) is amended--
(A) in paragraph (1), by striking ``digital audio''
and inserting ``audio'';
(B) by striking paragraphs (2), (4), (5), (6), (8),
(10), and (11);
(C) by inserting after paragraph (1) the following:
``(2) An `audio transmission' is a transmission that
embodies the transmission of a sound recording, and does not
include the transmission of any audiovisual work.'';
(D) by redesignating paragraph (7) as paragraph
(4);
(E) by inserting after paragraph (4), as
redesignated, the following:
``(5) A `noninteractive service' is a service that would
have been eligible for statutory licensing under subsection
(d)(2) of this section, as such subsection was in effect on
September 1, 2013''; and
(F) by redesignating paragraphs (9), (12), (13),
(14), and (15) as paragraphs (6), (7), (8), (9), and
(10) respectively.
SEC. 4. EPHEMERAL RECORDINGS.
Section 112 of title 17, United States Code, is amended--
(1) in subsection (a)(1), by striking ``including a
statutory license under section 114(f)'' and inserting
``including a license to perform a sound recording under
section 114''; and
(2) by striking subsection (e) and inserting the following:
``(e) Efficiency of Licensing.--The provisions of subsections
(e)(1), (e)(2)(A), and (g) of section 114 shall apply to licensing of
the right to reproduce phonorecords of a sound recording under section
106(1)--
``(1) for use solely to make noninteractive audio
transmissions licensable under such subsections of section 114,
or
``(2) for use solely under the limitation on exclusive
rights specified by section 114(d)(1)(B)(iv),
under circumstances in which such reproductions would have been
eligible for statutory licensing under this subsection, as this
subsection was in effect on September 1, 2013.''.
SEC. 5. CHAPTER 8 PROCEEDINGS OF COPYRIGHT ROYALTY JUDGES; TECHNICAL
AMENDMENTS.
(a) Functions.--Section 801(b) of title 17, United States Code, is
amended--
(1) in paragraph (1)--
(A) by striking ``112(e), 114,''; and
(B) by striking ``sections 114(f)(1)(B), 115,'' and
inserting ``sections 115'';
(2) in paragraph (3)(C), by striking ``804(b)(8)'' and
inserting ``804(b)(7)'';
(3) in paragraph (7)(B), by striking ``112(e)(5),
114(f)(3),'';
(4) by redesignating paragraph (8) as paragraph (9); and
(5) by inserting after paragraph (7) the following:
``(8) To determine the rates and terms for transmissions
under section 114(g) and reproductions under section 112(e).''.
(b) Proceedings.--Section 803 of title 17, United States Code, is
amended--
(1) in subsection (b)(1)(A)(i)--
(A) by striking subclauses (II) and (III);
(B) in subclause (IV), by striking ``804(b)(8)''
and inserting ``804(b)(7)''; and
(C) by redesignating subclauses (IV) and (V) as
subclauses (II) and (III), respectively; and
(2) in subsection (c)(2)(E)(i), by striking ``on a
specified date, then--'' and all that follows through ``as of
the date of that determination.'' and inserting ``on a
specified date, then the initial determination of the Copyright
Royalty Judges that is the subject of the rehearing motion
shall be effective as of the day following the date on which
the rates and terms that were previously in effect expire.''.
(c) Judicial Review.--Section 803(d)(2)(C)(ii) of title 17, United
States Code, is amended by striking ``by the Copyright Royalty Judges''
and inserting ``under section 114(e)(2) or 112(e), or, in any other
case, by the Copyright Royalty Judges,''.
(d) Institution of Proceedings.--Section 804 of title 17, United
States Code, is amended--
(1) in subsection (a)--
(A) in the first sentence, by striking ``112,
114,''; and
(B) by striking the last sentence; and
(2) in subsection (b)--
(A) by striking paragraph (2);
(B) by striking paragraph (3) and inserting the
following:
``(2) Certain sections 114 and 112 proceedings.--
Proceedings under this chapter to determine terms and rates of
royalty payments under section 114(g) or 112(e) may be
commenced only pursuant to petitions filed after the end of the
6-month period beginning on the effective date of the Free
Market Royalty Act. Thereafter, proceedings described in the
preceding sentence may be commenced only pursuant to a petition
filed at any time within 1 year after negotiated licenses
authorized by section 114 or 112(e) (as the case may be) expire
and are not replaced by subsequent agreements. For purposes of
proceedings to determine terms and rates under this paragraph,
the Copyright Royalty Judges shall make a determination as to
whether the petitioner has a significant interest in the terms
and rates in which a determination by the Judges is requested.
If the Copyright Royalty Judges determine that the petitioner
has such a significant interest, the Copyright Royalty Judges
shall cause notice of this determination, with the reasons for
such determination, to be published in the Federal Register,
together with the notice of commencement of proceedings under
this chapter.''; and
(C) by redesignating paragraphs (4) through (8) as
paragraphs (3) through (7), respectively.
(e) Technical Amendments.--Section 114 of title 17, United States
Code, is amended as follows:
(1) Subsection (a) is amended by striking ``clauses'' and
inserting ``paragraphs''.
(2) Subsection (b) is amended--
(A) by striking ``clause'' each place it appears
and inserting ``paragraph'';
(B) by striking ``clauses'' each place it appears
and inserting ``paragraphs''; and
(C) by striking ``section 397 of title 47'' and
inserting ``section 397 of the Communications Act of
1934 (47 U.S.C. 397)''.
SEC. 6. STUDY BY COPYRIGHT OFFICE.
The Register of Copyrights shall--
(1) conduct a study on the protection of making available
to the public copyrighted works under paragraph (3) of section
106 of title 17, United States Code, and communicating to the
public copyrighted works under paragraph (4) of such section,
and recommend any amendments to such paragraphs necessary to so
protect the rights of making available to the public
copyrighted works and communicating to the public copyrighted
works; and
(2) not later than 9 months after the date of the enactment
of this Act, submit to the Committees on the Judiciary of the
House of Representatives and the Senate a report on the results
of the studies conducted under paragraph (1), including any
recommendations under such paragraph.
SEC. 7. EFFECTIVE DATE.
(a) Phase-Out of Statutory Licenses.--The amendments made by
sections 2, 3, 4, and 5--
(1) shall take effect upon the expiration of the 1-year
period beginning on the date of the enactment of this Act; and
(2) shall apply with respect to audio transmissions of
sound recordings that are made on or after the effective date
under paragraph (1).
(b) Other Provisions.--Sections 1 and 6 shall take effect on the
date of the enactment of this Act.
<all>
Introduced in House
Introduced in House
Sponsor introductory remarks on measure. (CR E1404-1405)
Referred to the House Committee on the Judiciary.
Referred to the Subcommittee on Courts, Intellectual Property, and the Internet.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line