S 28

S 28 NOTE: PROVISIONS SIMILAR TO THIS BILL WERE

105th CONGRESS ENACTED AS TITLE II OF S. 505 (P.L. 105-298).

1st Session

To amend title 17, United States Code, with respect to certain

exemptions from copyright, and for other purposes.

IN THE SENATE OF THE UNITED STATES

January 21, 1997

Mr. THURMOND (for himself and Mr. HELMS) introduced the following

bill; which was read twice and referred to the Committee on the

Judiciary

A BILL

To amend title 17, United States Code, with respect to certain

exemptions from copyright, 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 `Fairness in Musical Licensing Act

of 1997'.

SEC. 2. EXEMPTION OF CERTAIN MUSIC USES FROM COPYRIGHT PROTECTION.

(a) BUSINESS EXEMPTION- Section 110(5) of title 17, United States

Code, is amended to read as follows:

`(5) communication by electronic device of a transmission

embodying a performance or display of a nondramatic musical

work by the reception of a broadcast, cable, satellite, or

other transmission, unless--

`(A) an admission fee is charged specifically to see or

hear the transmission, or

`(B) the transmission is not properly licensed;'.

(b) AGRICULTURAL EVENTS- Section 110(6) of title 17, United

States Code, is amended to read as follows:

`(6) performance of a nondramatic musical work by a

governmental body or a nonprofit agricultural or horticultural

organization, in the course of an agricultural or horticultural

fair, convention, meeting, event, or exhibition conducted by

such body or organization; the exception provided by this

paragraph shall extend to any liability for copyright

infringement that would otherwise be imposed on such body or

organization, including under the doctrines of vicarious

liability, contributory infringement, or related infringement,

for a performance by a concessionaire, business establishment,

or other person at such fair, convention, meeting, event, or

exhibition, but shall not excuse any such person from liability

for the performance;'.

United States Code, is amended--

(1) by striking `vending';

(2) by striking `sole';

(3) by inserting `or of the audio, video or other devices

utilized in the performance,' after `phonorecords of the

work,'; and

(4) by striking `and is within the immediate area where the

sale is occurring'.

(d) PERFORMANCES AT CHILDREN'S CAMPS- Section 110 of title 17,

United States Code, is amended--

(1) by striking the periods at the end of paragraphs (8) and

(9) and inserting semicolons;

(2) in paragraph (10) by striking the period at the end and

inserting `; and'; and

(3) by adding at the end thereof the following:

`(11) performance of a nondramatic musical work at an

organized children's camp, if children in attendance sing all

or a portion of the work, children in attendance engage in

games or dance to the accompaniment of all or a portion of the

work, or the performance is of an instructional nature.'.

SEC. 3. BINDING ARBITRATION OF RATE DISPUTES INVOLVING PERFORMING

RIGHTS SOCIETIES.

(a) IN GENERAL- Section 504 of title 17, United States Code, is

amended by adding at the end the following new subsection:

`(d) PERFORMING RIGHTS SOCIETIES; BINDING ARBITRATION-

`(1) ARBITRATION OF DISPUTES PRIOR TO COURT ACTION-

`(A) ARBITRATION- (i) If a general music user and a

performing rights society are unable to agree on the

appropriate fee to be paid for the user's past or future

performance of musical works in the repertoire of the

performing rights society, the general music user shall, in

lieu of any other dispute-resolution mechanism established

by any judgment or decree governing the operation of the

performing rights society, be entitled to binding

arbitration of such disagreement pursuant to the rules of

the American Arbitration Association. The music user may

initiate such arbitration.

`(ii) The arbitrator in such binding arbitration shall

determine a fair and reasonable fee for the general music

user's past and future performance of musical works in such

society's repertoire and shall determine whether the user's

past performances of such musical works, if any, infringed

the copyrights of works in the society's repertoire. If the

arbitrator determines that the general music user's past

performances of such musical works infringed the copyrights

of works in the society's repertoire, the arbitrator shall

impose a penalty for such infringement. Such penalty shall

not exceed the arbitrator's determination of the fair and

reasonable license fee for the performances at issue.

`(B) DEFINITIONS- (i) For purposes of this paragraph, a

`general music user' is any person who performs musical

works publicly but is not engaged in the transmission of

musical works to the general public or to subscribers

through broadcast, cable, satellite, or other transmission.

`(ii) For purposes of this paragraph, transmissions

within a single commercial establishment or within

establishments under common ownership or control are not

transmissions to the general public.

`(iii) For purposes of clause (ii), an `establishment' is

a retail business, restaurant, bar, inn, tavern, or any

other place of business in which the public may assemble.

`(C) ENFORCEMENT OF ARBITRATOR'S DETERMINATIONS- An

arbitrator's determination under this paragraph is binding

on the parties and may be enforced pursuant to sections 9

through 13 of title 9.

`(2) COURT-ANNEXED ARBITRATION- In any civil action for

infringement of the right granted in section 106(4) involving a

musical work that is in the repertoire of a performing rights

society, if the defendant admits the prior public performance

of one or more works in the repertoire of the performing rights

society but contests the amount of the license fee demanded by

such society for such performance, the dispute shall, if

requested by the defendant, be submitted to arbitration under

section 652(e) of title 28. In such arbitration proceeding, the

arbitrator shall determine the amount owed by the defendant to

the performing rights society for all past public performances

of musical works in the society's repertoire. Such amount shall

not exceed two times the amount of the blanket license fee that

would be applied by the society to the defendant for the year

or years in which the performances occurred. In addition, the

arbitrator shall, if requested by the defendant, determine a

fair and reasonable license fee for the defendant's future

public performances of the musical works in such society's

repertoire.

`(3) TERM OF LICENSE FEE DETERMINATION- In any arbitration

proceeding initiated under this subsection, the arbitrator's

determination of a fair and reasonable license fee for the

performance of the music in the repertoire of the performing

rights society concerned shall apply for a period of not less

than 3 years nor more than 5 years after the date of the

arbitrator's determination.'.

(b) ACTIONS THAT SHALL BE REFERRED TO ARBITRATION- Section 652 of

title 28, United States Code, is amended by adding at the end the

following:

`(e) ACTIONS THAT SHALL BE REFERRED TO ARBITRATION- In any civil

action for infringement of the right granted in section 106(4) of

title 17 involving a musical work that is in the repertoire of a

performing rights society, if the defendant admits the public

performance of any musical work in the repertoire of the performing

rights society but contests the amount of the license fee demanded

for such performance by the society, the district court shall, if

requested by the defendant, refer the dispute

to arbitration, which shall be conducted in accordance with section

504(d)(2) of title 17. Each district court shall establish

procedures by local rule authorizing the use of arbitration under

this subsection. The definitions set forth in title 17 apply to the

terms used in this subsection.'.

SEC. 4. RADIO PER PROGRAMMING PERIOD LICENSE.

Section 504 of title 17, United States Code, as amended by

section 3 of this Act, is further amended by adding at the end

thereof the following new subsection:

`(e) RADIO PER PROGRAMMING PERIOD LICENSES-

`(1) IN GENERAL- Each performing rights society shall offer,

to any radio broadcaster that so requests, a per programming

period license to perform nondramatic musical works in the

repertoire of the performing rights society. Such license shall

be offered on reasonable terms and conditions that provide an

economically and administratively viable alternative to the

society's blanket license for all such broadcasters.

`(2) PRICE OF PER PROGRAMMING PERIOD LICENSES- (A) The total

price of a per programming period license described in

paragraph (1)--

`(i) shall include separate components for incidental and

feature performances, with the incidental performance

component to be independent of the quantity of such

performances by the broadcaster and not to exceed the

relative value that the performing rights society assigns

to such performances in its distribution of royalties; and

`(ii) shall not exceed the fee that would be payable by

the broadcaster under the lowest price blanket license

offered to radio broadcasters, and shall vary between the

incidental performance component, for a broadcaster that

makes only incidental performances of music in the

society's repertoire, and such blanket license fee, in

direct proportion to the percentage of the broadcaster's

revenue attributable to programming periods containing

feature performances of musical works in the society's

repertoire compared to the industry average percentage of

revenue attributable to programming periods containing

feature performances of such musical works.

`(B) Nondramatic musical works that have been licensed

directly or at the source, or whose performance constitutes

fair use or is otherwise exempt from liability under this

title, shall not be considered in calculating any per

programming period license fee under this subsection.

`(3) IMPLEMENTATION- Any radio broadcaster entitled to a per

programming period license under this subsection may bring an

action to require compliance with this subsection in an

appropriate United States district court, including any

district court established by court order or statute as a court

that resolves disputes, with respect to license rates, that may

arise between performing rights societies and persons who

perform musical works in the society's repertoire.

`(4) DEFINITIONS- As used in this subsection--

`(A) the term `blanket license' means a license provided

by a performing rights society that authorizes the

unlimited performance of musical works in the society's

repertoire, for a fee that does not vary with the quantity

or type of performances of musical works in the society's

repertoire;

`(B) the term `incidental' means commercial jingles not

exceeding 60 seconds in duration, bridges, themes or

signatures, arrangements of works in the public domain, and

background music, including music used in conjunction with

sporting events; and

`(C) the term `programming period' means any 15-minute

period of radio broadcasting commencing on the hour, or at

15, 30, or 45 minutes past the hour.'.

SEC. 5. ACCESS TO REPERTOIRE AND LICENSING INFORMATION.

Section 504 of title 17, United States Code, as amended by

sections 3 and 4 of this Act, is further amended by adding at the

end the following:

`(f) ACCESS TO MUSICAL REPERTOIRE-

`(1) ONLINE COMPUTER ACCESS- Each performing rights society

shall make available, free of charge, to all interested

persons, online computer access to copyright and licensing

information for each work in its repertoire. Such access shall,

for each such musical work, identify the work by title of the

work, the name of the author and the copyright owner, and the

names of any artists known to have performed the work. Such

online computer access shall permit the efficient review of

multiple musical works consistent with reasonably available

technology.

`(2) DIRECTORY OF TITLES- Each performing rights society

shall make available at cost, not less frequently than

semiannually, a printed directory of each title in its

repertoire, as of the date which is not more than 30 days

before the date on which the directory is published, containing

the information set forth in paragraph (1).

`(3) DOCUMENTATION OF RIGHT TO LICENSE- A performing rights

society shall, upon the request of any person who performs or

may perform musical works in the society's repertoire, provide

to that person copies of the documentation establishing the

society's right to license the public performance of such

musical works.

`(4) RESTRICTIONS ON INFRINGEMENT ACTIONS-

`(A) RESTRICTIONS- A performing rights society may not

institute or be a party to, or pay the costs of another

party in, any action alleging the infringement of the

period license for, any work in that society's repertoire

that is not identified and documented as required by

paragraphs (1), (2), and (3).

`(B) EXCEPTION- Subparagraph (A) shall not apply on the

basis of a failure to comply with paragraph (2) with

respect to a musical work first entering the society's

repertoire within the 6-month period beginning 30 days

before the date on which the society's last directory was

published under paragraph (2), if the society establishes

that such musical work was included in the online database

required by paragraph (1) not less than 10 days before the

performance giving rise to the alleged infringement or

charge.

`(g) ACCESS TO LICENSING INFORMATION-

`(1) TERMS OF LICENSES- Each performing rights society shall

provide, within 5 business days after it receives a written

request from a licensee of any musical work in the society's

repertoire, or from any person that is negotiating to become

such a licensee--

`(A) the schedule of the society's license rates and

terms of the license fees to be paid under the license

agreement, including any sliding scale or schedule for any

increase or decrease in rates for the duration of the

license agreement;

`(B) the formulas by which the rates are derived; and

`(C) license terms under agreements executed by the

performing rights society and licensees described in

subparagraph (A).

`(2) COPIES OF LICENSES- Any performing rights society that

receives a written request from an entity that has been

requested to enter into a license agreement with the performing

rights society on behalf of persons who perform or may perform

musical works within that society's repertoire, shall provide

to that entity, within 5 business days after receiving that

request, a schedule of fees for such performances by similar

persons.'.

SEC. 6. ANNUAL REPORTS.

Not later than March 1 of each year, the Attorney General of the

United States shall submit a written report to the Congress on the

activities of the Department of Justice during the preceding

calendar year relating to the continuing supervision and

enforcement by the Department of the consent decree of the American

Society of Composers, Authors, and Publishers of March 14, 1950,

and the consent decree of Broadcast Music, Inc. of December 29,

1966. Such report shall include a description of all issues raised

or complaints filed with the Department of Justice relating to the

operations of those performing rights societies, and a summary of

the Department's actions or investigations undertaken by the

Department in response to such issues and complaints.

SEC. 7. VICARIOUS LIABILITY PROHIBITED.

A landlord, an organizer or sponsor of a convention, exposition,

or meeting, a facility owner, or any other person making space

available to another party by contract, shall not be liable under

any theory of vicarious or contributory infringement with respect

to an infringing public performance of a copyrighted work by a

tenant, lessee, subtenant, sublessee, licensee, exhibitor, or other

user of such space on the ground that--

(1) a contract for such space provides the landlord,

organizer or sponsor, facility owner, or other person a right

or ability to control such space and compensation for the use

of such space; or

(2) the landlord, organizer or sponsor, facility owner, or

other person has or had at the time of the infringing

performance actual control over some aspects of the use of such

space,

if the contract for the use of such space prohibits infringing

public performances and the landlord, organizer or sponsor,

facility owner, or other person does not exercise control over the

selection of works performed.

SEC. 8. CONFORMING AMENDMENTS.

Section 101 of title 17, United States Code, is amended by

inserting after the undesignated paragraph relating to the

definition of `perform' the following:

`A `performing rights society' is an association,

corporation, or other entity that licenses the public

performance of nondramatic musical works on behalf of copyright

owners of such works, such as the American Society of

Composers, Authors, and Publishers, Broadcast Music, Inc., and

SESAC, Inc. The `repertoire' of a performing rights society

consists of those works for which the society provides licenses

on behalf of the owners of copyright in the works.'.

SEC. 9. CONSTRUCTION OF ACT.

Except as provided in section 504(d)(1) of title 17, United

States Code, as added by section 3(a) of this Act, nothing in this

Act shall be construed to relieve any performing rights society (as

defined in section 101 of title 17, United States Code) of any

obligation under any consent decree, State statute, or other court

order governing its operation, as such decree or order is in effect

on the date of the enactment of this Act, as it may be amended

after such date, or as it may be issued or agreed to after such date.