[Federal Register: July 16, 2002 (Volume 67, Number 136)]
[Notices]
[Page 46698-46699]
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LIBRARY OF CONGRESS
Copyright Office
[Docket No. 2002-6 DD 99-01]
Ascertainment of Controversy for the Distribution of the 1999,
2000 and 2001 Digital Audio Recording Royalty Funds
AGENCY: Copyright Office, Library of Congress.
ACTION: Notice with request for comments and notices of intention to
participate.
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SUMMARY: The Copyright Office of the Library of Congress directs all
claimants to royalty fees collected in 1999, 2000 and 2001 for the
distribution of digital audio recording devices and media to submit
comments as to whether a controversy exists as to the distribution of
the royalty fees in the 1999, 2000 and 2001 Musical Works Funds.
DATES: Comments and Notices of Intention to Participate are due
September 16, 2002.
ADDRESSES: If sent by mail, an original and five copies of written
comments and a Notice of Intention to Participate should be addressed
to: Copyright Arbitration Royalty Panel (CARP), P.O. Box 70977,
Southwest Station, Washington, DC 20024. If hand delivered, an original
and five copies should be brought to the Office of the General Counsel,
James Madison Memorial Building, Room LM-403, First and Independence
Ave., SE., Washington, DC 20540.
FOR FURTHER INFORMATION CONTACT: Tanya M. Sandros, Senior Attorney,
Copyright Arbitration Royalty Panel, P.O. Box 70977, Southwest Station,
Washington, DC 20024. Telephone: (202) 707-8380. Telefax: (202) 252-
3423.
SUPPLEMENTARY INFORMATION:
I. Background
The Audio Home Recording Act of 1992 (the ``Act''), Public Law 102-
563, requires manufacturers and importers to pay royalties on digital
audio recording devices and media that are distributed in the United
States. 17 U.S.C. 1003. These royalties are deposited with the
Copyright Office for further distribution among interested copyright
parties, provided that the copyright owners file a claim with the
Copyright Office each year during January and February. 17 U.S.C. 1005,
1007.
The Act provides that the royalties are divided between two funds:
the Sound Recordings Fund and the Musical Works Fund. The Sound
Recordings Fund receives 66-2/3% of the royalties and the Musical
Works Fund receives the remaining 33-1/3%. These fees are allocated
further to specific subfunds.
The Sound Recordings Fund consists of four subfunds: the Featured
Recording Artists Subfund, the Copyright Owners Subfund, the
Nonfeatured Musicians Subfund, and the Nonfeatured Vocalists Subfund.
The two subfunds created for the benefit of nonfeatured artists receive
a total of 4% of the funds allocated to the Sound Recordings Fund. Of
the remaining royalty fees in the Sound Recordings Fund, 60% is
allocated to the Copyright Owners Subfund and 40% is allocated to the
Featured Recording Artists Subfund. Similarly, the royalty fees
allocated to the Musical Works Fund are equally divided between two
subfunds, the Publishers Subfund and the Writers Subfund. 17 U.S.C.
1006(b).
Distribution of these fees may occur in one of two ways. If the
claimants within each subfund agree among themselves how to distribute
the royalty fees, the Librarian of Congress distributes the royalties
to the claimants in accordance with their negotiated agreement.\1\ 17
U.S.C. 1007(b). Alternatively, if the parties cannot reach an
agreement, the Librarian of Congress must convene a copyright
arbitration royalty panel ("CARP") to determine the distribution of
royalty payments.\2\ 17 U.S.C. 1007(c). Before commencing a
distribution proceeding, however, the Copyright Office must first
ascertain whether and to what extent a controversy exists concerning
the distribution of the royalty fees among the copyright claimants to
the funds available for distribution. 17 U.S.C. 803(d) and 1007(b).
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\1\ Each year, the claimants to the royalty fees in the Sound
Recordings Funds have negotiated a universal settlement agreement
among themselves as to the proportionate share that each claimant
receives from the subfunds. These agreements have made it
unnecessary for the Librarian to convene a CARP and have allowed him
to distribute all royalty fees allocated to the Sound Recordings
Funds, including those fees allocated to the 1999, 2000 and 2001
Sound Recordings Funds. See Orders, Docket No. 2000-5 DD 99 (June 2,
2000); Docket No. 2001-4 CARP DD 2000 ((May 21, 2001); and Docket
No. 2002-6 CARP DD 2001 (July 10, 2002).
\2\ There have been two CARP proceedings to determine the final
distribution of the royalty fees in the Musical Works Funds. In
1996, the Librarian convened a CARP to determine the distribution of
the 1992, 1993, and 1994 Musical Works Funds, and in 1998, the
Librarian convened a second CARP to determine the distribution of
the 1995, 1996, 1997, and 1998 Musical Works Funds. See 62 FR 6558
(February 12, 1997) and 66 FR 9360 (February 7, 2001), respectively.
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II. Ascertainment of Controversy and Notices of Intention To
Participate
Section 251.45(a) of the Copyright Office regulations, title 37 of
the Code of Federal Regulations, requires that:
[T]he Librarian of Congress shall, after the time period for filing
claims, publish in the Federal Register a notice requesting each
claimant on the claimant list to negotiate with each other a
settlement of their differences, and to comment by a date certain as
to the existence of controversies with respect to the royalty funds
described in the notice. Such notice shall also establish a date
certain by which parties wishing to participate in the proceeding
must file with the Librarian a notice of intention to participate.
The purpose of the negotiation requirement is to make all of the
claimants within each fund/subfund aware of each other and to encourage
active participation and open discussion on how to resolve each party's
claim. The Copyright Office has compiled a list of claimants who have
timely filed a claim to either of the two subfunds comprising each of
the 1999, 2000, and 2001 Musical Works Funds.\3\ Claimants must use
these lists in negotiating settlement agreements concerning the
distribution of the royalty fees.
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\3\ Copies of the claimant lists are available for viewing and
copying between the hours of 8:30 a.m. and 5 p.m. at the: Library of
Congress, Copyright Office, Licensing Division, Room LM-458, James
Madison Building, 101 Independence Avenue, SE., Washington, DC
20557-6400.
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At the conclusion of the negotiation period, the claimants must
submit to the Copyright Office comments identifying the existence of
any settlement agreements and the existence of any remaining
controversies. Participants must identify each subfund in the Musical
Works Funds by year and indicate whether any controversy remains over
the distribution of the royalty fees in that subfund or whether an
agreement has been reached. In the case of an agreement, the notice
must list the name of all claimants covered by the agreement.
Participants must advise the Copyright Office of any controversy by the
end of the comment period. The Office will not consider controversies
which are brought to its attention after the close of the comment
period.
Each claimant who intends to participate in the distribution of the
[1999, 2000, and 2001]* Musical Works Funds must also file a Notice
of Intention to participate. The notice must identify each year and
each subfund in which the copyright owner has an interest. Failure to
file a timely Notice
[[Page 46699]]
of Intention may preclude a party from participating in the
distribution proceeding. These notices are due September 16, 2002.
III. Motion of Phase I Claimants for Partial Distribution
During the pendency of any proceeding, the Librarian of Congress
may distribute any amounts that are not in controversy, provided that
sufficient funds are withheld to cover reasonable administrative costs
and to satisfy all claims with respect to which a controversy exists
under his authority set forth in section 1007(c) of the Copyright Act,
title 17 of the United States Code. Pursuant to this provision, the
American Society of Composers, Authors and Publishers; Broadcast Music,
Inc.; SESAC, Inc.; The Harry Fox Agency, Inc.; and The Songwriters
Guild of America (collectively, the "Settling Parties") submitted a
motion to the Copyright Office on June 13, 2002, for a partial
distribution of 95% of the Digital Audio Recording Funds Writers and
Publishers Subfunds of 1999, 2000, and 2001 Musical Works royalty
funds. The Motion states that the Settling Parties have reached a
confidential settlement concerning their respective shares for the
1999, 2000 and 2001 Musical Works Funds.
A claimant who is not a party to the Settling Parties' Motion, but
who files a Notice of Intention to Participate, may file a response to
the motion no later than the due date set forth in this notice for
comments on the existence of controversies and the Notices of Intention
to Participate. The Motion of the Settling Parties for Partial
Distribution of the 1999, 2000 and 2001 Musical Works Funds is
available for inspection and copying in the Office of the General
Counsel. The Office will consider the merits of this motion once all
interested parties have been identified by the Notices of Intention
requested herein and have had an opportunity to file responses to the
motion.
IV. Consolidation of Proceedings
The Copyright Office is consolidating the consideration of the
distribution of the 1999, 2000 and 2001 Musical Works Funds into a
single proceeding in order to address the merits of the Settling
Parties' motion for a partial distribution of funds from the 1999, 2000
and 2001 Musical Works Funds. The Copyright Office has routinely
consolidated the consideration of the distribution of the Musical Works
Funds for several years into a single proceeding where, as here, the
issues regarding the distribution of the royalty fees are the same for
each year. The Copyright Office continues this practice because
consolidation of the consideration of the distribution of the 1999,
2000 and 2001 Musical Works Funds provides a cost savings to the
parties and to the Copyright Office and because it promotes
administrative efficiencies.
Dated: July 11, 2002.
Marilyn J. Kretsinger,
Assistant General Counsel.
[FR Doc. 02-17897 Filed 7-15-02; 8:45 am]
BILLING CODE 1410-33-P
*Corrected text.