[Federal Register: June 1, 2001 (Volume 66, Number 106)]
[Rules and Regulations]
[Page 29700-29704]
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LIBRARY OF CONGRESS
Copyright Office
37 CFR Parts 252 and 257
[Docket No. RM 2001-3A CARP]
Cable and Satellite Statutory Licenses
AGENCY: Copyright Office, Library of Congress.
ACTION: Final rule.
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SUMMARY: The Copyright Office of the Library of Congress is adopting
final regulations for filing a claim to royalties collected under the
cable statutory license, 17 U.S.C. 111, and the satellite statutory
license, 17 U.S.C. 119. Under the new rules, a party who files a joint
claim on behalf of multiple copyright owners must list the name and
address of each copyright owner to the joint claim.
EFFECTIVE DATE: July 1, 2001.
FOR FURTHER INFORMATION CONTACT: David O. Carson, General Counsel or
Tanya M. Sandros, Senior Attorney for Compulsory Licenses, Copyright
Arbitration Royalty Panel, P.O. Box 70977, Southwest Station,
Washington, D.C. 20024. Telephone: (202) 707-8380. Telefax: (202) 252-
3423.
SUPPLEMENTARY INFORMATION:
Background
Each July, persons who are entitled to statutory license fees
collected under the provisions of the cable statutory license, 17
U.S.C. 111, and the satellite statutory license, 17 U.S.C. 119, must
file a claim with the Copyright Office in accordance with its
regulations in order to establish their claim to a share of the royalty
fees. See 37 CFR 252.3 and 257.3. Historically, the filing requirements
have been minimal, requiring only the identification of the claimant,
contact information, a statement of the nature of the claimant's
copyrighted work, at least one example of a secondary retransmission of
the claimant's work during the previous calender year, an original
signature of the claimant or a duly authorized representative of the
claimant, and, in the case of a joint claim, a statement on the part of
the entity filing the claim that authorization for filing the claim
exists.
On April 26, 2001, the Copyright Office published a Notice of
Proposed Rulemaking, seeking comment on proposed amendments which were
offered to clarify that the identity of each copyright owner must be
listed on each claim. 66 FR 20958 (April 26, 2001). The need for this
clarification
[[Page 29701]]
became apparent during a recent cable royalty distribution proceeding,
when a party filed a claim for cable royalties in the name of a
corporate entity that held no copyrights to programming which had been
secondarily transmitted by a cable system during the relevant calendar
year. See Docket No. 2000-2 CARP CD 93-97. The disputed claim was filed
under the current regulations which allow ``any party'' claiming to be
entitled to cable fees to make the claim. During the course of that
proceeding, the Office observed that the language ``any party'' was
quite broad and could include holders of one or more exclusive rights
granted by copyright, as well as agents and representatives of
copyright owners. See Order in Docket No. 2000-2 CARP CD 93-97 (June
22, 2000).
Specifically, the Office found that this language might plausibly
be interpreted by the public as allowing the filing of a
``placeholder'' claim. A ``placeholder'' claim is a claim filed by a
person who is not a copyright owner, but who files a cable or satellite
claim in his or her own name, and then later asserts claims to
royalties on behalf of copyright owners whose works were retransmitted
by a cable system or satellite carrier. Placeholder claims may be filed
with the Copyright Office in the form of single claims, but in
substance they are joint claims. Because the Copyright Office does not
inquire as to the identity of the person or entity filing a cable or
satellite claim (i.e. whether that person or entity is a copyright
owner or another party), we cannot determine whether the claim is a
properly filed single claim, or should be a joint claim identifying the
appropriate represented copyright owners.
Placeholder claims run afoul of the distribution process for cable
and satellite royalties. The law states that cable and satellite
royalties may only be distributed to copyright owners whose works were
retransmitted by either cable systems or satellite carriers.\1\ Indeed,
the purpose of filing claims is to permit identification of all
copyright owners who are entitled to a distribution.\2\ Placeholder
claims make it impossible to identify the copyright owners entitled to
distribution. Further, both section 111 and section 119 plainly state
that claims for royalty fees must be filed in the month of July to be
eligible for distribution. Placeholder claims can circumvent this
requirement by allowing the filer to enter into representation
agreements with copyright owners after the July deadline, and
effectively secure a distribution for those owners who had not filed
timely claims. The Office has stated previously that it will not allow
joint claims to be amended to add new parties after the July deadline,
because this would thwart the purpose of the July filing requirement.
59 FR 63025, 63028 (December 7, 1994). Placeholder claims can produce
this result, because the identity of the copyright owners represented
by the party filing the placeholder claim will not be known until
Notices of Intent to Participate in a CARP proceeding are filed.
Presumably, the party filing the placeholder claim could then sign
representation agreements with copyright owners who had not filed their
own claims up until that date.
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\1\ Both section 111 and section 119 permit copyright owners to
designate a common agent for payment of royalty fees. 17 U.S.C.
111(d)(4)(A) & 119(b)(4)(A). We do not interpret this language as
authorizing the filing of placeholder claims. Rather, this language,
``[claimants] may designate a common agent to receive payment on
their behalf,'' allows the Library to distribute royalties to
someone other than the copyright owner, provided that the owner has
previously informed the Copyright Office of the identity of the
common agent.
\2\ The one exception to this is allowing performing rights
societies, who literally represent thousands of copyright owners, to
file one claim on behalf of all their members and affiliates. As
discussed above, the Copyright Royalty Tribunal created this
exception, and the Copyright Office has adopted this practice.
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We wish to put an end to placeholder claims. To this end, we
proposed amendments to parts 252 and 257 of the rules to clarify that a
claim filed with the Copyright Office must list the name of each
copyright owner covered by the claim; and today, we are adopting the
proposed amendments as final regulations. In addition, the amended
rules will also require that a joint claim specify the name of the
copyright owner for each listed copyrighted work. These rules shall
govern the filing of cable and satellite claims beginning July 1, 2001.
Comments
The Copyright Office received comments to its proposed rules from
seven parties: the American Society of Composers, Authors and
Publishers, Broadcast Music, Inc., and SESAC, Inc. (collectively, the
``Performing Rights Organizations''); the Office of the Commissioner of
Baseball, the National Basketball Association, the National Football
League, and the National Hockey League (collectively, the
``Professional Sports Leagues''); the Canadian Claimants Group; the
National Association of Broadcasters (``NAB''); the Motion Picture
Association of America (``MPAA''); Worldwide Subsidy Group (``WSG'');
and Mark J. Davis (``Davis'').
The commenters, in general, support the Office's endeavor to
clarify its rules to eliminate any opportunity for a claimant to expand
its claim after the July 31 filing deadline. The Performing Rights
Organizations and the Professional Sports Leagues support the proposed
modifications to Secs. 252.3 and 257.3 of title 37 of the Code of
Federal Regulations without change. The remaining five commenters
agreed with the proposed amendments but each sought additional
modifications to the rules and/or clarification of the nature of the
problem that prompted the Office to amend its rule.
Identification of Copyright Owners
First, the purpose of the filing requirements is to establish each
copyright owner's entitlement to the cable and satellite royalties in
accordance with the provisions set forth in the law. A fundamental
requirement is to file a claim with the Copyright Office during the
month of July for royalties collected the prior calendar year. No claim
can be filed without identifying the copyright owner.
Prior to the recent cable distribution proceeding, Docket No. 2000-
2 CARP CD 93-97, we had thought the rules had made it clear that the
identity of each copyright owner must be disclosed. Consequently, a
joint claim had to include the name of each copyright owner on whose
behalf the claim was made. Certain parties, e.g. the Professional
Sports Leagues and the MPAA, who have historically participated in
these proceedings, also understood this to be the law and saw no
ambiguity in the wording of the rules.
But what was clear and unambiguous to these parties and the Office
was not so obvious to new participants. In July of 1998, the Office
received a claim from a single entity which turned out to be an agent
filing on behalf of a number of copyright owners. Because the Office
recognized that there were arguably ambiguities in the regulation at
that time, the Office allowed the claim and further fact-finding was
conducted by a Copyright Arbitration Royalty Panel (``CARP'') for the
purpose of establishing which copyright owners and which programs were
covered by the initial filing.
To avoid such problems in the future, the Office issued proposed
rules for the purpose of clarifying that each claim must list the name
of each copyright owner on whose behalf the claim is filed and it must
do so during the time period established by Congress.
Only WSG makes any objection to the new rules. WSG argues that the
[[Page 29702]]
proposed rules ``are little more than another obstacle that could
result in the denial of valid claims.'' WSG comment at 4. WSG reaches
this conclusion based upon its analysis of the United States statutory
mechanism for filing claims for retransmission royalties with
procedures used in Europe, Australia and Asia. It concludes that the
United States system is more complex, restrictive, time consuming and
expensive. To make its case, WSG highlights the statutory requirement
that claims to cable and satellite royalties must be filed with the
Copyright Office during the month of July each year. It cites this
requirement as an example of the formalistic restrictions placed on the
copyright owners and seems to urge the Office to impose fewer
restrictions on the claimants, such as not requiring the identification
of the copyright owner at the time the claim is filed. Moreover, WSG
argues that the imposition of the requirement could result in the
denial of a valid claim, especially where the agent has secured timely
and proper authority to make the filing.
However, we fail to see how an agent or a copyright owner is
disadvantaged because the agent is required to list the name of each
copyright owner to a joint claim. First, the agent must know who his
clients are when he files the claim. Second, an initial claim may be
further amended to add new copyright owners at any time during the
month of July. Alternatively, the agent can file the claim on the last
day of the filing period provided that the claim is either hand
delivered to the Copyright Office or it is sent via first class mail
and bears a July date stamp from the United States Postal Service. The
only requirement is that the claim be timely filed with the Copyright
Office and that it meet the minimal filing requirements, including a
complete list of the copyright owners who are covered by the claim,
their respective addresses and an example of a secondary transmission
of a work owned by one of the listed copyright owners. The copyright
owner of this work must be identified.
Adherence to this fundamental filing requirement will, as MPAA
points out, simplify litigation and reduce the associated costs. MPAA
also contends that the simple rule change will facilitate settlement
negotiations at an earlier phase in the distribution process. Even WSG
agrees that the requirement to list each copyright owner to a joint
claim will allow other parties a mechanism by which they can ascertain
the extent of the claim and verify that the party making the claim has
the necessary authority to make the filing.
The name of each copyright owner is among the most fundamental
elements required to establish a claim to copyright royalties and there
can be no serious challenge to a rule requiring the identification of
the party who is the beneficiary of the claim. Thus, we are adopting
the amended rules.\3\
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\3\ Although this rule change will resolve the identity of the
claimants eligible to seek royalties, it does not identify which
entity will ultimately represent the interests of the claimant in a
proceeding before the Copyright Office or a CARP. This is the case
because many copyright owners decide to engage independent counsel
or an agent to negotiate on their behalf only after they file the
initial claim. In these instances, it may not be clear who
represents whom in a distribution proceeding until notices of intent
to participate are filed with the Office. For example, in the 1997
cable distribution proceeding, MPAA represented the interests of
over 100 copyright owners but did not identify itself as the agent
of these claimants until it filed its direct case on their behalf.
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Address and Contact Information
The proposed rules also require that a joint claim include the
address for each listed copyright owner. WSG does not object to the
additional requirement, but it does not agree that the requested
contact information need be filed at the same time as the initial
claim. It argues that the information may not be readily available to
the party filing the claim, especially when a first time claimant
decides at the last minute to pursue its entitlement. For this reason,
WSG proposes that the Office require a subsequent filing with the
address and contact information for each claimant. In addition, WSG
suggests that this information be submitted to the Copyright Office
under seal of a protective order to avoid misuse of the information.
WSG's arguments are unavailing on this point. Undoubtedly, most
people could benefit from more time to meet a deadline, but the time
for completing the process is limited. Thus, it is incumbent upon the
claimant to begin the process early enough to gather the necessary
information and submit it to the Office in a timely manner, either in
his or her own claim or in a joint claim filed by the copyright owner's
agent. Moreover, there is no justification for granting a copyright
owner who chooses to file through an agent more time to submit the
required information than that allotted to a copyright owner who
submits a single claim in his or her own name. Identifying the address
of a claimant is a simple matter involving information that should be
readily available to the person filing the claim.
For this reason, the Copyright Office rejects WSG's suggestion that
copyright owners to a joint claim receive additional time to meet the
Office's filing requirements. The Office also rejects the suggestion
that the addresses and contact information for each joint claimant be
submitted under a protective order. The requested information is by no
means confidential. Quite the contrary, it is the most mundane,
ordinary variety of information that is routinely disclosed in the
ordinary course of business. There is no justification for redacting
such information from a public record.
Program Listings
Two commenters, WSG and Davis, seek modifications to the rules to
require claimants to identify in their initial filing all programs for
which they are making a claim. Davis maintains that the purpose of the
claim in July is to clearly identify the claimants who are entitled to
receive the royalty fees and the works upon which they base their
claim. Davis argues that the identification of all programs at the
initial stage of the distribution process will foster an early
resolution of any outstanding controversies. He believes that an
additional requirement to list all programs in the initial claim will
not overburden the filer because the information is readily available
from Cable Data Corporation or readily accessible from the claimant's
business records.
WSG supports similar modifications of the rules because it had
difficulty ascertaining the validity of a claimant's entitlement to
particular programs in a recent cable distribution proceeding. It too
believes that a rule requiring disclosure of the programs owned or
claimed by each claimant would aid in the just resolution of
outstanding controversies.
Davis and WSG, however, have formed their opinions based on a
single experience in a Phase II distribution proceeding which, by its
very nature, required the fact finders to sort out individual claims
and determine the value of each claimant's programming. Lists of
programs associated with particular claimants, however, are not needed
in the early stages of the distribution process. Historically, parties
have been able to negotiate settlement agreements between program
categories without the aid of specific program information.
Furthermore, parties have indicated that, in the case of a joint claim,
it is both unnecessary and expensive to require the listing of a single
specific program for each copyright owner listed in the claim. 59 FR
23964 (May 9, 1994).
The Office concludes that before making a determination on these
proposals, it would be necessary to
[[Page 29703]]
explore this issue in a separate proceeding and provide an opportunity
for comment from other parties.
Parent/Subsidiary Claims
NAB supports the proposed rule changes, but it seeks clarification
of the rule for filing a joint claim when the claim is filed in the
name of a parent company on behalf of all its subsidiaries. It notes
that ``group broadcast station owners sometimes follow the practice of
filing a single claim on behalf of their entire group of owned
stations,'' even though the parent company may only be the beneficial
owner and not the legal owner of the retransmitted works. NAB comment
at 2.
However, it is clear that a claim which asserts rights to royalties
on behalf of more than a single entity is a joint claim. Thus, the
preceding example cited by NAB must be considered a joint claim and as
such, it must list each claimant and include a concise statement of
authorization. On this point, NAB asserts that the practice of reciting
the relationship between the parent and the subsidiary should be
sufficient to establish the parent entity's authority for filing the
claim on behalf of itself and its subsidiaries and seeks to codify this
understanding by including additional regulatory language.
Specifically, NAB requests that the proposed regulation be amended to
state that:
A parent corporation of a copyright owner, or an entity
controlling a copyright owner, may establish its authorization to
file jointly on behalf of its subsidiary copyright owners by
identifying the nature of the ownership or control relationship.
NAB comment at 3. The Office, however, declines to codify this practice
without giving the public an opportunity to comment on the proposed
changes.
Moreover, what is required under the final rule is that the person
or entity filing the claim, e.g., the parent corporation, ascertain
whether it has the authority to file the claim on behalf of the listed
joint claimants and include a concise statement of the authorization it
has for making such claim. Of course, this statement is merely a
representation to the Office that the authority for filing the claim
exists and its validity may be tested at a later point in the
distribution process.
In the event the Office determines that a parent/subsidiary claim
is a joint claim, NAB makes a second request. It asks for a liberal
amendment policy under which the parent corporation can amend its claim
to add additional subsidiaries not listed on the original claim. It
argues that such amendments do not prejudice other parties because the
original claim would provide notice to all parties of the scope and
nature of the claim. While NAB suggests that the Office can offer such
relief informally without a change to its rules, the Office disagrees.
The final rule requires that, with one exception, a joint claim
list each copyright owner. The one express exception--a longstanding
one--applies to performing rights organizations. This exception to the
requirement to list all copyright owners exists because the Office has
recognized that the organizations' standard membership or affiliate
agreements are a proper indication of authorization. Because the
proposed rule states the circumstances under which a party need not
adhere to specific filing requirements, the Office concludes that NAB's
proposal would require promulgation of a similar regulation
specifically granting liberal amendment procedures for parent
corporations. Moreover, such change is beyond the scope of the proposal
made in the current rulemaking proceeding, and other parties have not
had the opportunity to comment on it. Thus, at this time the Office
cannot entertain the NAB proposal.
Authorization
The Canadian Claimant Group files a joint claim annually and
``supports [the Office's] efforts to insure the integrity and
transparency of the claims process.'' Canadian Claimant Group comment
at 2. However, it has asked the Office to amend its rules further and
make written authorizations available for inspection by other copyright
owners upon request. This suggestion goes beyond the scope of the
Office's proposal made in the current rulemaking proceeding, and the
Office is not prepared to make such a change without giving other
interested parties an opportunity to comment on the efficiencies and
burdens associated with the additional requirement.
Statutory Authority
The Library of Congress is adopting final regulations under its
authority to establish regulations for the submission of cable
statutory license claims and satellite statutory license claims. 17
U.S.C. 111(d)(4)(A) and 119(b)(4)(A).
List of Subjects
37 CFR Part 252
Copyright, cable television, claims.
37 CFR Part 257
Copyright, satellite television, claims.
For the reasons set forth in the preamble, the Library is amending
parts 252 and 257 of 37 CFR Chapter II as follows:
PART 252--FILING OF CLAIMS TO CABLE ROYALTY FEES
1. The authority citation for part 252 continues to read as
follows:
Authority: 17 U.S.C. 111(d)(4), 801, 803.
2. Section 252.3 is revised to read as follows:
Sec. 252.3 Content of Claims.
(a) Single claim. A claim filed on behalf of a single copyright
owner of a work or works secondarily transmitted by a cable system
shall include the following information:
(1) The full legal name and address of the copyright owner entitled
to claim the royalty fees.
(2) A general statement of the nature of the copyright owner's work
or works, and identification of at least one secondary transmission by
a cable system of such work or works establishing a basis for the
claim.
(3) The name, telephone number, facsimile number, if any, and full
address, including a specific number and street name or rural route, of
the person or entity filing the single claim.
(4) An original signature of the copyright owner or of a duly
authorized representative of the copyright owner.
(b) Joint claim. A claim filed on behalf of more than one copyright
owner whose works have been secondarily transmitted by a cable system
shall include the following information:
(1) A list including the full legal name and address of each
copyright owner to the joint claim entitled to claim royalty fees.
(2) A concise statement of the authorization for the person or
entity filing the joint claim. For this purpose, a performing rights
society shall not be required to obtain from its members or affiliates
separate authorizations, apart from their standard membership affiliate
agreements, or to list the name of each of its members or affiliates in
the joint claim as required by paragraph (b)(1) of this section.
(3) A general statement of the nature of the copyright owners'
works and identification of at least one secondary transmission of one
of the copyright owners' works by a cable system establishing a basis
for the joint claim and the identification of the copyright owner of
each work so identified.
(4) The name, telephone number, facsimile number, if any, and full
address, including a specific number
[[Page 29704]]
and street name or rural route, of the person filing the joint claim.
(5) Original signatures of the copyright owners to the joint claim
or of a duly authorized representative or representatives of the
copyright owners.
(c) In the event that the legal name and/or address of the
copyright owner entitled to royalties or the person or entity filing
the claim changes after the filing of the claim, the Copyright Office
shall be notified of the change. If the good faith efforts of the
Copyright Office to contact the copyright owner or person or entity
filing the claim are frustrated because of failure to notify the Office
of a name and/or address change, the claim may be subject to dismissal.
PART 257--FILING OF CLAIMS TO SATELLITE CARRIER ROYALTY FEES
3. The authority citation for part 257 continues to read as
follows:
Authority: 17 U.S.C. 119(b)(4).
4. Section 257.3 is revised to read as follows:
Sec. 257.3 Content of Claims.
(a) Single claim. A claim filed on behalf of a single copyright
owner of a work or works secondarily transmitted by a satellite carrier
shall include the following information:
(1) The full legal name and address of the copyright owner entitled
to claim the royalty fees.
(2) A general statement of the nature of the copyright owner's work
or works, and identification of at least one secondary transmission by
a satellite carrier of such work or works establishing a basis for the
claim.
(3) The name, telephone number, facsimile number, if any, and full
address, including a specific number and street name or rural route, of
the person or entity filing the single claim.
(4) An original signature of the copyright owner or of a duly
authorized representative of the copyright owner.
(b) Joint claim. A claim filed on behalf of more than one copyright
owner whose works have been secondarily transmitted by a satellite
carrier shall include the following information:
(1) A list including the full legal name and address of each
copyright owner to the joint claim entitled to claim royalty fees.
(2) A concise statement of the authorization for the person or
entity filing the joint claim. For this purpose, a performing rights
society shall not be required to obtain from its members or affiliates
separate authorizations, apart from their standard membership affiliate
agreements, or to list the name of each of its members or affiliates in
the joint claim as required by paragraph (b)(1) of this section.
(3) A general statement of the nature of the copyright owners'
works, identification of at least one secondary transmission of one of
the copyright owners' works by a satellite carrier establishing a basis
for the joint claim, and the identification of the copyright owner of
each work so identified.
(4) The name, telephone number, facsimile number, if any, and full
address, including a specific number and street name or rural route, of
the person filing the joint claim.
(5) Original signatures of the copyright owners to the joint claim
or of a duly authorized representative or representatives of the
copyright owners.
(c) In the event that the legal name and/or address of the
copyright owner entitled to royalties or the person or entity filing
the claim changes after the filing of the claim, the Copyright Office
shall be notified of the change. If the good faith efforts of the
Copyright Office to contact the copyright owner or person or entity
filing the claim are frustrated because of failure to notify the Office
of a name and/or address change, the claim may be subject to dismissal.
Dated: May 25, 2001.
Marybeth Peters,
Register of Copyrights.
James H. Billington,
The Librarian of Congress.
[FR Doc. 01-13787 Filed 5-31-01; 8:45 am]
BILLING CODE 1410-33-P