PUBL264.PS

PUBLIC LAW 115–264—OCT. 11, 2018

ORRIN G. HATCH–BOB GOODLATTE

MUSIC MODERNIZATION ACT

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00001 Fmt 6579 Sfmt 6579 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3676 PUBLIC LAW 115–264—OCT. 11, 2018

Public Law 115–264

115th Congress

An Act

To modernize copyright law, 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; TABLE OF CONTENTS.

(a) S

HORT

ITLE

.—This Act may be cited as the ‘‘Orrin G.

Hatch–Bob Goodlatte Music Modernization Act’’.

(b) T

ABLE OF

ONTENTS

.—The table of contents for this Act

is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Customs user fees.

TITLE I—MUSIC LICENSING MODERNIZATION

Sec. 101. Short title.

Sec. 102. Blanket license for digital uses and mechanical licensing collective.

Sec. 103. Amendments to section 114.

Sec. 104. Random assignment of rate court proceedings.

Sec. 105. Performing rights society consent decrees.

Sec. 106. Effective date.

TITLE II—CLASSICS PROTECTION AND ACCESS

Sec. 201. Short title.

Sec. 202. Unauthorized use of pre-1972 sound recordings.

TITLE III—ALLOCATION FOR MUSIC PRODUCERS

Sec. 301. Short title.

Sec. 302. Payment of statutory performance royalties.

Sec. 303. Effective date.

TITLE IV—SEVERABILITY

Sec. 401. Severability.

SEC. 2. CUSTOMS USER FEES.

Section 13031(j)(3)(A) of the Consolidated Omnibus Budget Rec-

onciliation Act of 1985 (19 U.S.C. 58c(j)(3)(A)) is amended by

striking ‘‘October 13, 2027’’ and inserting ‘‘October 20, 2027’’.

TITLE I—MUSIC LICENSING

MODERNIZATION

SEC. 101. SHORT TITLE.

This title may be cited as the ‘‘Musical Works Modernization

Act’’.

17 USC 101 note.

Musical Works

Modernization

Act.

17 USC 101 note.

Orrin G. Hatch–

Bob Goodlatte

Music

Modernization

Act.

Oct. 11, 2018

[H.R. 1551]

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00002 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3677 PUBLIC LAW 115–264—OCT. 11, 2018

SEC. 102. BLANKET LICENSE FOR DIGITAL USES AND MECHANICAL

LICENSING COLLECTIVE.

(a) A

MENDMENT

.—Section 115 of title 17, United States Code,

is amended—

(1) in subsection (a)—

(A) in the subsection heading, by inserting ‘‘

ERAL

’’ after ‘‘A

VAILABILITY AND

COPE OF

OMPULSORY

ICENSE

’’;

(B) by striking paragraph (1) and inserting the fol-

lowing:

‘‘(1) E

LIGIBILITY FOR COMPULSORY LICENSE

.—

‘‘(A) C

ONDITIONS FOR COMPULSORY LICENSE

.—A person

may by complying with the provisions of this section obtain

a compulsory license to make and distribute phonorecords

of a nondramatic musical work, including by means of

digital phonorecord delivery. A person may obtain a

compulsory license only if the primary purpose in making

phonorecords of the musical work is to distribute them

to the public for private use, including by means of digital

phonorecord delivery, and—

‘‘(i) phonorecords of such musical work have pre-

viously been distributed to the public in the United

States under the authority of the copyright owner of

the work, including by means of digital phonorecord

delivery; or

‘‘(ii) in the case of a digital music provider seeking

to make and distribute digital phonorecord deliveries

of a sound recording embodying a musical work under

a compulsory license for which clause (i) does not

apply—

‘‘(I) the first fixation of such sound recording

was made under the authority of the musical work

right owner has the authority of the musical work

phonorecord deliveries embodying such work to

the public in the United States; and

‘‘(II) the sound recording copyright owner, or

the authorized distributor of the sound recording

provider to make and distribute digital phono-

record deliveries of the sound recording to the

public in the United States.

‘‘(B) D

UPLICATION OF SOUND RECORDING

.—A person

may not obtain a compulsory license for the use of the

work in the making of phonorecords duplicating a sound

recording fixed by another, including by means of digital

phonorecord delivery, unless—

‘‘(i) such sound recording was fixed lawfully; and

‘‘(ii) the making of the phonorecords was author-

ized by the owner of the copyright in the sound

recording or, if the sound recording was fixed before

February 15, 1972, by any person who fixed the sound

recording pursuant to an express license from the

owner of the copyright in the musical work or pursuant

to a valid compulsory license for use of such work

in a sound recording.’’; and

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00003 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3678 PUBLIC LAW 115–264–OCT. 11, 2018

and inserting ‘‘M

USICAL ARRANGEMENT

.—A compulsory

license’’;

(2) by striking subsection (b) and inserting the following:

‘‘(b) P

ROCEDURES

BTAIN A

OMPULSORY

ICENSE

.—

‘‘(1) P

HONORECORDS OTHER THAN DIGITAL PHONORECORD

DELIVERIES

.—A person who seeks to obtain a compulsory license

under subsection (a) to make and distribute phonorecords of

a musical work other than by means of digital phonorecord

delivery shall, before, or not later than 30 calendar days after,

making, and before distributing, any phonorecord of the work,

serve notice of intention to do so on the copyright owner.

If the registration or other public records of the Copyright

Office do not identify the copyright owner and include an

address at which notice can be served, it shall be sufficient

to file the notice of intention with the Copyright Office. The

notice shall comply, in form, content, and manner of service,

with requirements that the Register of Copyrights shall pre-

scribe by regulation.

‘‘(2) D

IGITAL PHONORECORD DELIVERIES

.—A person who

seeks to obtain a compulsory license under subsection (a) to

make and distribute phonorecords of a musical work by means

of digital phonorecord delivery—

‘‘(A) prior to the license availability date, shall, before,

or not later than 30 calendar days after, first making

any such digital phonorecord delivery, serve a notice of

intention to do so on the copyright owner (but may not

file the notice with the Copyright Office, even if the public

records of the Office do not identify the owner or the

owner’s address), and such notice shall comply, in form,

content, and manner of service, with requirements that

the Register of Copyrights shall prescribe by regulation;

‘‘(B) on or after the license availability date, shall,

before making any such digital phonorecord delivery, follow

the procedure described in subsection (d)(2), except as pro-

vided in paragraph (3).

‘‘(3) R

ECORD COMPANY INDIVIDUAL DOWNLOAD LICENSES

.—

Notwithstanding paragraph (2)(B), a record company may, on

or after the license availability date, obtain an individual

download license in accordance with the notice requirements

described in paragraph (2)(A) (except for the requirement that

notice occur prior to the license availability date). A record

company that obtains an individual download license as per-

mitted under this paragraph shall provide statements of

account and pay royalties as provided in subsection (c)(2)(I).

‘‘(4) F

AILURE TO OBTAIN LICENSE

.—

‘‘(A) P

HONORECORDS OTHER THAN DIGITAL PHONO

RECORD DELIVERIES

.—In the case of phonorecords made

and distributed other than by means of digital phonorecord

delivery, the failure to serve or file the notice of intention

required by paragraph (1) forecloses the possibility of a

compulsory license under paragraph (1). In the absence

of a voluntary license, the failure to obtain a compulsory

license renders the making and distribution of

Account

statements.

Royalties.

Compliance.

Regulations.

Compliance.

Regulations.

Deadlines.

Notices.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00004 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3679 PUBLIC LAW 115–264—OCT. 11, 2018

phonorecords actionable as acts of infringement under sec-

tion 501 and subject to the remedies provided by sections

502 through 506.

‘‘(B) D

IGITAL PHONORECORD DELIVERIES

.—

‘‘(i) I

N GENERAL

.—In the case of phonorecords made

and distributed by means of digital phonorecord

delivery:

‘‘(I) The failure to serve the notice of intention

required by paragraph (2)(A) or paragraph (3), as

applicable, forecloses the possibility of a compul-

sory license under such paragraph.

‘‘(II) The failure to comply with paragraph

(2)(B) forecloses the possibility of a blanket license

for a period of 3 years after the last calendar

day on which the notice of license was required

to be submitted to the mechanical licensing collec-

tive under such paragraph.

‘‘(ii) E

FFECT OF FAILURE

.—In either case described

in subclause (I) or (II) of clause (i), in the absence

of a voluntary license, the failure to obtain a compul-

sory license renders the making and distribution of

phonorecords by means of digital phonorecord delivery

actionable as acts of infringement under section 501

and subject to the remedies provided by sections 502

through 506.’’;

(3) by amending subsection (c) to read as follows:

‘‘(c) G

ENERAL

ONDITIONS

PPLICABLE TO

OMPULSORY

ICENSE

.—

‘‘(1) R

OYALTY PAYABLE UNDER COMPULSORY LICENSE

.—

‘‘(A) I

DENTIFICATION REQUIREMENT

.—To be entitled to

receive royalties under a compulsory license obtained under

subsection (b)(1) the copyright owner must be identified

in the registration or other public records of the Copyright

Office. The owner is entitled to royalties for phonorecords

made and distributed after being so identified, but is not

entitled to recover for any phonorecords previously made

and distributed.

‘‘(B) R

OYALTY FOR PHONORECORDS OTHER THAN DIGITAL

PHONORECORD DELIVERIES

.—Except as provided by

subparagraph (A), for every phonorecord made and distrib-

uted under a compulsory license under subsection (a) other

than by means of digital phonorecord delivery, with respect

to each work embodied in the phonorecord, the royalty

shall be the royalty prescribed under subparagraphs (D)

through (F), paragraph (2)(A), and chapter 8. For purposes

of this subparagraph, a phonorecord is considered ‘distrib-

uted’ if the person exercising the compulsory license has

voluntarily and permanently parted with its possession.

‘‘(C) R

OYALTY FOR DIGITAL PHONORECORD DELIVERIES

.—

For every digital phonorecord delivery of a musical work

made under a compulsory license under this section, the

royalty payable shall be the royalty prescribed under sub-

paragraphs (D) through (F), paragraph (2)(A), and chapter

‘‘(D) A

UTHORITY TO NEGOTIATE

.—Notwithstanding any

provision of the antitrust laws, any copyright owners of

nondramatic musical works and any persons entitled to

Time period.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00005 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3680 PUBLIC LAW 115–264–OCT. 11, 2018

obtain a compulsory license under subsection (a) may nego-

tiate and agree upon the terms and rates of royalty pay-

ments under this section and the proportionate division

of fees paid among copyright owners, and may designate

common agents on a nonexclusive basis to negotiate, agree

to, pay or receive such royalty payments. Such authority

to negotiate the terms and rates of royalty payments

includes, but is not limited to, the authority to negotiate

the year during which the royalty rates prescribed under

this subparagraph, subparagraphs (E) and (F), paragraph

(2)(A), and chapter 8 shall next be determined.

‘‘(E) D

ETERMINATION OF REASONABLE RATES AND

TERMS

.—Proceedings under chapter 8 shall determine

reasonable rates and terms of royalty payments for the

activities specified by this section during the period begin-

ning with the effective date of such rates and terms, but

not earlier than January 1 of the second year following

the year in which the petition requesting the proceeding

is filed, and ending on the effective date of successor rates

and terms, or such other period as the parties may agree.

Any copyright owners of nondramatic musical works and

any persons entitled to obtain a compulsory license under

subsection (a) may submit to the Copyright Royalty Judges

licenses covering such activities. The parties to each pro-

ceeding shall bear their own costs.

‘‘(F) S

CHEDULE OF REASONABLE RATES

.—The schedule

of reasonable rates and terms determined by the Copyright

Royalty Judges shall, subject to paragraph (2)(A), be

binding on all copyright owners of nondramatic musical

works and persons entitled to obtain a compulsory license

under subsection (a) during the period specified in subpara-

graph (E), such other period as may be determined pursu-

ant to subparagraphs (D) and (E), or such other period

as the parties may agree. The Copyright Royalty Judges

shall establish 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 for digital

phonorecord deliveries, the Copyright Royalty Judges shall

base their decision on economic, competitive, and program-

ming information presented by the parties, including—

‘‘(i) whether use of the compulsory licensee’s

service may substitute for or may promote the sales

of phonorecords or otherwise may interfere with or

may enhance the musical work copyright owner’s other

streams of revenue from its musical works; and

‘‘(ii) the relative roles of the copyright owner and

the compulsory licensee in the copyrighted work and

the service made available to the public with respect

to the relative creative contribution, technological con-

tribution, capital investment, cost, and risk.

‘‘(2) A

DDITIONAL TERMS AND CONDITIONS

.—

‘‘(A) V

OLUNTARY LICENSES AND CONTRACTUAL ROYALTY

RATES

.—

‘‘(i) I

N GENERAL

.—License agreements voluntarily

negotiated at any time between one or more copyright

owners of nondramatic musical works and one or more

Time period.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00006 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3681 PUBLIC LAW 115–264—OCT. 11, 2018

persons entitled to obtain a compulsory license under

subsection (a) shall be given effect in lieu of any deter-

mination by the Copyright Royalty Judges. Subject

to clause (ii), the royalty rates determined pursuant

to subparagraphs (E) and (F) of paragraph (1) shall

be given effect as to digital phonorecord deliveries in

lieu of any contrary royalty rates specified in a contract

pursuant to which a recording artist who is the author

of a nondramatic musical work grants a license under

that person’s exclusive rights in the musical work

under paragraphs (1) and (3) of section 106 or commits

another person to grant a license in that musical work

under paragraphs (1) and (3) of section 106, to a person

desiring to fix in a tangible medium of expression

a sound recording embodying the musical work.

‘‘(ii) A

PPLICABILITY

.—The second sentence of clause

(i) shall not apply to—

‘‘(I) a contract entered into on or before June

22, 1995, and not modified thereafter for the pur-

pose of reducing the royalty rates determined

pursuant to subparagraphs (E) and (F) of para-

graph (1) or of increasing the number of musical

works within the scope of the contract covered

by the reduced rates, except if a contract entered

into on or before June 22, 1995, is modified there-

after for the purpose of increasing the number

of musical works within the scope of the contract,

any contrary royalty rates specified in the contract

shall be given effect in lieu of royalty rates deter-

mined pursuant to subparagraphs (E) and (F) of

paragraph (1) for the number of musical works

within the scope of the contract as of June 22,

1995; and

‘‘(II) a contract entered into after the date

that the sound recording is fixed in a tangible

medium of expression substantially in a form

intended for commercial release, if at the time

the contract is entered into, the recording artist

retains the right to grant licenses as to the musical

work under paragraphs (1) and (3) of section 106.

‘‘(B) S

OUND RECORDING INFORMATION

.—Except as pro-

vided in section 1002(e), a digital phonorecord delivery

licensed under this paragraph shall be accompanied by

the information encoded in the sound recording, if any,

by or under the authority of the copyright owner of that

sound recording, that identifies the title of the sound

recording, the featured recording artist who performs on

the sound recording, and related information, including

information concerning the underlying musical work and

its writer.

‘‘(C) I

NFRINGEMENT REMEDIES

.—

‘‘(i) I

N GENERAL

.—A digital phonorecord delivery

of a sound recording is actionable as an act of infringe-

ment under section 501, and is fully subject to the

remedies provided by sections 502 through 506,

unless—

Effective date.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00007 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3682 PUBLIC LAW 115–264–OCT. 11, 2018

‘‘(I) the digital phonorecord delivery has been

authorized by the sound recording copyright

owner; and

‘‘(II) the entity making the digital phonorecord

delivery has obtained a compulsory license under

subsection (a) or has otherwise been authorized

by the musical work copyright owner, or by a

record company pursuant to an individual

download license, to make and distribute

phonorecords of each musical work embodied in

the sound recording by means of digital phono-

record delivery.

‘‘(ii) O

THER REMEDIES

.—Any cause of action under

this subparagraph shall be in addition to those avail-

able to the owner of the copyright in the nondramatic

musical work under subparagraph (J) and section

106(4) and the owner of the copyright in the sound

recording under section 106(6).

‘‘(D) L

IABILITY OF SOUND RECORDING OWNERS

.—The

liability of the copyright owner of a sound recording for

infringement of the copyright in a nondramatic musical

work embodied in the sound recording shall be determined

in accordance with applicable law, except that the owner

of a copyright in a sound recording shall not be liable

for a digital phonorecord delivery by a third party if the

owner of the copyright in the sound recording does not

license the distribution of a phonorecord of the nondramatic

musical work.

‘‘(E) R

ECORDING DEVICES AND MEDIA

.—Nothing in sec-

tion 1008 shall be construed to prevent the exercise of

the rights and remedies allowed by this paragraph,

subparagraph (J), and chapter 5 in the event of a digital

phonorecord delivery, except that no action alleging

infringement of copyright may be brought under this title

against a manufacturer, importer or distributor of a digital

audio recording device, a digital audio recording medium,

an analog recording device, or an analog recording medium,

or against a consumer, based on the actions described

in such section.

‘‘(F) P

RESERVATION OF RIGHTS

.—Nothing in this section

annuls or limits—

‘‘(i) the exclusive right to publicly perform a sound

recording or the musical work embodied therein,

including by means of a digital transmission, under

paragraphs (4) and (6) of section 106;

‘‘(ii) except for compulsory licensing under the

conditions specified by this section, the exclusive rights

to reproduce and distribute the sound recording and

the musical work embodied therein under paragraphs

(1) and (3) of section 106, including by means of a

digital phonorecord delivery; or

‘‘(iii) any other rights under any other provision

of section 106, or remedies available under this title,

as such rights or remedies exist before, on, or after

the date of enactment of the Digital Performance Right

in Sound Recordings Act of 1995.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00008 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3683 PUBLIC LAW 115–264—OCT. 11, 2018

‘‘(G) E

XEMPT TRANSMISSIONS AND RETRANSMISSIONS

.—

The provisions of this section concerning digital phono-

record deliveries shall not apply to any exempt trans-

missions or retransmissions under section 114(d)(1). The

exemptions created in section 114(d)(1) do not expand or

reduce the rights of copyright owners under paragraphs

(1) through (5) of section 106 with respect to such trans-

missions and retransmissions.

‘‘(H) D

ISTRIBUTION BY RENTAL

LEASE

OR LENDING

.—

A compulsory license obtained under subsection (b)(1) to

make and distribute phonorecords includes the right of

the maker of such a phonorecord to distribute or authorize

distribution of such phonorecord, other than by means of

a digital phonorecord delivery, by rental, lease, or lending

(or by acts or practices in the nature of rental, lease,

or lending). With respect to each nondramatic musical work

embodied in the phonorecord, the royalty shall be a propor-

tion of the revenue received by the compulsory licensee

from every such act of distribution of the phonorecord

under this clause equal to the proportion of the revenue

received by the compulsory licensee from distribution of

the phonorecord under subsection (a)(1)(A)(ii)(II) that is

payable by a compulsory licensee under that clause and

under chapter 8. The Register of Copyrights shall issue

regulations to carry out the purpose of this subparagraph.

‘‘(I) P

AYMENT OF ROYALTIES AND STATEMENTS OF

ACCOUNT

.—Except as provided in paragraphs (4)(A)(i) and

(10)(B) of subsection (d), royalty payments shall be made

on or before the twentieth day of each month and shall

include all royalties for the month next preceding. Each

monthly payment shall be made under oath and shall

comply with requirements that the Register of Copyrights

shall prescribe by regulation. The Register shall also pre-

scribe regulations under which detailed cumulative annual

statements of account, certified by a certified public

accountant, shall be filed for every compulsory license

under subsection (a). The regulations covering both the

monthly and the annual statements of account shall pre-

scribe the form, content, and manner of certification with

respect to the number of records made and the number

of records distributed.

‘‘(J) N

OTICE OF DEFAULT AND TERMINATION OF COMPUL

SORY LICENSE

.—In the case of a license obtained under

paragraph (1), (2)(A), or (3) of subsection (b), if the copy-

right owner does not receive the monthly payment and

the monthly and annual statements of account when due,

the owner may give written notice to the licensee that,

unless the default is remedied not later than 30 days

after the date on which the notice is sent, the compulsory

license will be automatically terminated. Such termination

renders either the making or the distribution, or both,

of all phonorecords for which the royalty has not been

paid, actionable as acts of infringement under section 501

and fully subject to the remedies provided by sections 502

through 506. In the case of a license obtained under sub-

section (b)(2)(B), license authority under the compulsory

Deadline.

Regulations.

Certification.

Regulations.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00009 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3684 PUBLIC LAW 115–264–OCT. 11, 2018

license may be terminated as provided in subsection

(d)(4)(E).’’;

(4) by amending subsection (d) to read as follows:

‘‘(d) B

LANKET

ICENSE FOR

IGITAL

SES

, M

ECHANICAL

ICENSING

OLLECTIVE

AND

IGITAL

ICENSEE

OORDINATOR

.—

‘‘(1) B

LANKET LICENSE FOR DIGITAL USES

.—

‘‘(A) I

N GENERAL

.—A digital music provider that quali-

fies for a compulsory license under subsection (a) may,

by complying with the terms and conditions of this sub-

section, obtain a blanket license from copyright owners

through the mechanical licensing collective to make and

distribute digital phonorecord deliveries of musical works

through one or more covered activities.

‘‘(B) I

NCLUDED ACTIVITIES

.—A blanket license—

‘‘(i) covers all musical works (or shares of such

works) available for compulsory licensing under this

section for purposes of engaging in covered activities,

except as provided in subparagraph (C);

‘‘(ii) includes the making and distribution of server,

intermediate, archival, and incidental reproductions of

musical works that are reasonable and necessary for

the digital music provider to engage in covered activi-

ties licensed under this subsection, solely for the pur-

pose of engaging in such covered activities; and

‘‘(iii) does not cover or include any rights or uses

other than those described in clauses (i) and (ii).

‘‘(C) O

THER LICENSES

.—A voluntary license for covered

activities entered into by or under the authority of 1 or

more copyright owners and 1 or more digital music pro-

viders, or authority to make and distribute permanent

downloads of a musical work obtained by a digital music

provider from a sound recording copyright owner pursuant

to an individual download license, shall be given effect

in lieu of a blanket license under this subsection with

respect to the musical works (or shares thereof) covered

by such voluntary license or individual download authority

and the following conditions apply:

‘‘(i) Where a voluntary license or individual

download license applies, the license authority provided

under the blanket license shall exclude any musical

works (or shares thereof) subject to the voluntary

license or individual download license.

‘‘(ii) An entity engaged in covered activities under

a voluntary license or authority obtained pursuant to

an individual download license that is a significant

nonblanket licensee shall comply with paragraph

(6)(A).

‘‘(iii) The rates and terms of any voluntary license

shall be subject to the second sentence of clause (i)

and clause (ii) of subsection (c)(2)(A) and paragraph

(9)(C), as applicable.

‘‘(D) P

ROTECTION AGAINST INFRINGEMENT ACTIONS

.—

A digital music provider that obtains and complies with

the terms of a valid blanket license under this subsection

shall not be subject to an action for infringement of the

exclusive rights provided by paragraphs (1) and (3) of sec-

tion 106 under this title arising from use of a musical

Compliance.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00010 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3685 PUBLIC LAW 115–264—OCT. 11, 2018

work (or share thereof) to engage in covered activities

authorized by such license, subject to paragraph (4)(E).

‘‘(E) O

THER REQUIREMENTS AND CONDITIONS APPLY

.—

Except as expressly provided in this subsection, each

requirement, limitation, condition, privilege, right, and

remedy otherwise applicable to compulsory licenses under

this section shall apply to compulsory blanket licenses

under this subsection.

‘‘(2) A

VAILABILITY OF BLANKET LICENSE

.—

‘‘(A) P

ROCEDURE FOR OBTAINING LICENSE

.—A digital

music provider may obtain a blanket license by submitting

a notice of license to the mechanical licensing collective

that specifies the particular covered activities in which

the digital music provider seeks to engage, as follows:

‘‘(i) The notice of license shall comply in form and

substance with requirements that the Register of Copy-

rights shall establish by regulation.

‘‘(ii) Unless rejected in writing by the mechanical

licensing collective not later than 30 calendar days

after the date on which the mechanical licensing collec-

tive receives the notice, the blanket license shall be

effective as of the date on which the notice of license

was sent by the digital music provider, as shown by

a physical or electronic record.

‘‘(iii) A notice of license may only be rejected by

the mechanical licensing collective if—

‘‘(I) the digital music provider or notice of

license does not meet the requirements of this

section or applicable regulations, in which case

the requirements at issue shall be specified with

reasonable particularity in the notice of rejection;

‘‘(II) the digital music provider has had a

blanket license terminated by the mechanical

licensing collective during the 3-year period pre-

ceding the date on which the mechanical licensing

collective receives the notice pursuant to para-

graph (4)(E).

‘‘(iv) If a notice of license is rejected under clause

(iii)(I), the digital music provider shall have 30 cal-

endar days after receipt of the notice of rejection to

cure any deficiency and submit an amended notice

of license to the mechanical licensing collective. If the

deficiency has been cured, the mechanical licensing

collective shall so confirm in writing, and the license

shall be effective as of the date that the original notice

of license was provided by the digital music provider.

‘‘(v) A digital music provider that believes a notice

of license was improperly rejected by the mechanical

licensing collective may seek review of such rejection

in an appropriate district court of the United States.

The district court shall determine the matter de novo

based on the record before the mechanical licensing

collective and any additional evidence presented by

the parties.

‘‘(B) B

LANKET LICENSE EFFECTIVE DATE

.—Blanket

licenses shall be made available by the mechanical licensing

Determination.

Review.

Courts.

Deadline.

Time period.

Deadline.

Effective date.

Compliance.

Regulations.

Notices.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00011 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3686 PUBLIC LAW 115–264–OCT. 11, 2018

collective on and after the license availability date. No

such license shall be effective prior to the license avail-

ability date.

‘‘(3) M

ECHANICAL LICENSING COLLECTIVE

.—

‘‘(A) I

N GENERAL

.—The mechanical licensing collective

shall be a single entity that—

‘‘(i) is a nonprofit entity, not owned by any other

entity, that is created by copyright owners to carry

out responsibilities under this subsection;

‘‘(ii) is endorsed by, and enjoys substantial support

from, musical work copyright owners that together rep-

resent the greatest percentage of the licensor market

for uses of such works in covered activities, as meas-

ured over the preceding 3 full calendar years;

‘‘(iii) is able to demonstrate to the Register of Copy-

rights that the entity has, or will have prior to the

license availability date, the administrative and

technological capabilities to perform the required func-

tions of the mechanical licensing collective under this

subsection and that is governed by a board of directors

in accordance with subparagraph (D)(i); and

‘‘(iv) has been designated by the Register of Copy-

rights, with the approval of the Librarian of Congress

pursuant to section 702, in accordance with subpara-

graph (B).

‘‘(B) D

ESIGNATION OF MECHANICAL LICENSING COLLEC

TIVE

.—

‘‘(i) I

NITIAL DESIGNATION

.—Not later than 270 days

after the enactment date, the Register of Copyrights

shall initially designate the mechanical licensing collec-

tive as follows:

‘‘(I) Not later than 90 calendar days after the

enactment date, the Register shall publish notice

in the Federal Register soliciting information to

assist in identifying the appropriate entity to serve

as the mechanical licensing collective, including

the name and affiliation of each member of the

board of directors described under subparagraph

(D)(i) and each committee established pursuant

to clauses (iii), (iv), and (v) of subparagraph (D).

‘‘(II) After reviewing the information requested

under subclause (I) and making a designation, the

ister setting forth—

‘‘(aa) the identity of and contact informa-

tion for the mechanical licensing collective;

and

‘‘(bb) the reasons for the designation.

‘‘(ii) P

ERIODIC REVIEW OF DESIGNATION

.—Following

the initial designation of the mechanical licensing

collective, the Register shall, every 5 years, beginning

with the fifth full calendar year to commence after

the initial designation, publish notice in the Federal

concerning whether the existing designation should be

continued, or a different entity meeting the criteria

described in clauses (i) through (iii) of subparagraph

Review.

Deadlines.

Notices.

Federal Register,

publications.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00012 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3687 PUBLIC LAW 115–264—OCT. 11, 2018

(A) shall be designated. Following publication of such

notice, the Register shall—

‘‘(I) after reviewing the information submitted

and conducting additional proceedings as appro-

priate, publish notice in the Federal Register of

a continuing designation or new designation of

the mechanical licensing collective, as the case

may be, and the reasons for such a designation,

with any new designation to be effective as of

the first day of a month that is not less than

6 months and not longer than 9 months after

the date on which the Register publishes the

notice, as specified by the Register; and

‘‘(II) if a new entity is designated as the

mechanical licensing collective, adopt regulations

to govern the transfer of licenses, funds, records,

data, and administrative responsibilities from the

existing mechanical licensing collective to the new

entity.

‘‘(iii) C

LOSEST ALTERNATIVE DESIGNATION

.—If the

each of the qualifications set forth in clauses (i) through

(iii) of subparagraph (A), the Register shall designate

the entity that most nearly fulfills such qualifications

for purposes of carrying out the responsibilities of the

mechanical licensing collective.

‘‘(C) A

UTHORITIES AND FUNCTIONS

.—

‘‘(i) I

N GENERAL

.—The mechanical licensing collec-

tive is authorized to perform the following functions,

subject to more particular requirements as described

in this subsection:

‘‘(I) Offer and administer blanket licenses,

including receipt of notices of license and reports

of usage from digital music providers.

‘‘(II) Collect and distribute royalties from dig-

ital music providers for covered activities.

‘‘(III) Engage in efforts to identify musical

works (and shares of such works) embodied in

particular sound recordings, and to identify and

locate the copyright owners of such musical works

(and shares of such works).

‘‘(IV) Maintain the musical works database

and other information relevant to the administra-

tion of licensing activities under this section.

‘‘(V) Administer a process by which copyright

owners can claim ownership of musical works (and

shares of such works), and a process by which

royalties for works for which the owner is not

identified or located are equitably distributed to

known copyright owners.

‘‘(VI) Administer collections of the administra-

tive assessment from digital music providers and

significant nonblanket licensees, including receipt

of notices of nonblanket activity.

‘‘(VII) Invest in relevant resources, and

arrange for services of outside vendors and others,

Royalties.

Database.

Royalties.

Regulations.

Effective date.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00013 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3688 PUBLIC LAW 115–264–OCT. 11, 2018

to support the activities of the mechanical licensing

collective.

‘‘(VIII) Engage in legal and other efforts to

enforce rights and obligations under this sub-

section, including by filing bankruptcy proofs of

claims for amounts owed under licenses, and acting

in coordination with the digital licensee coordi-

nator.

‘‘(IX) Initiate and participate in proceedings

before the Copyright Royalty Judges to establish

the administrative assessment under this sub-

section.

‘‘(X) Initiate and participate in proceedings

before the Copyright Office with respect to activi-

ties under this subsection.

‘‘(XI) Gather and provide documentation for

use in proceedings before the Copyright Royalty

Judges to set rates and terms under this section.

‘‘(XII) Maintain records of the activities of the

mechanical licensing collective and engage in and

respond to audits described in this subsection.

‘‘(XIII) Engage in such other activities as may

be necessary or appropriate to fulfill the respon-

sibilities of the mechanical licensing collective

under this subsection.

‘‘(ii) R

ESTRICTIONS CONCERNING LICENSING AND

ADMINISTRATIVE ACTIVITIES

.—With respect to the

administration of licenses, except as provided in

clauses (i) and (iii) and subparagraph (E)(v), the

mechanical licensing collective may only—

‘‘(I) issue blanket licenses pursuant to sub-

section (d)(1); and

‘‘(II) administer blanket licenses for reproduc-

tion or distribution rights in musical works for

covered activities, including collecting and distrib-

uting royalties, pursuant to blanket licenses.

‘‘(iii) A

DDITIONAL ADMINISTRATIVE ACTIVITIES

.—

Subject to paragraph (11)(C), the mechanical licensing

collective may also administer, including by collecting

and distributing royalties, voluntary licenses issued

by, or individual download licenses obtained from,

rights in musical works for covered activities, for which

the mechanical licensing collective shall charge reason-

able fees for such services.

‘‘(iv) R

ESTRICTION ON LOBBYING

.—The mechanical

licensing collective may not engage in government lob-

bying activities, but may engage in the activities

described in subclauses (IX), (X), and (XI) of clause

(i).

‘‘(D) G

OVERNANCE

.—

‘‘(i) B

OARD OF DIRECTORS

.—The mechanical

licensing collective shall have a board of directors con-

sisting of 14 voting members and 3 nonvoting members,

as follows:

‘‘(I) Ten voting members shall be representa-

tives of music publishers—

Royalties.

Proceedings.

Coordination.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00014 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3689 PUBLIC LAW 115–264—OCT. 11, 2018

‘‘(aa) to which songwriters have assigned

exclusive rights of reproduction and distribu-

tion of musical works with respect to covered

activities; and

‘‘(bb) none of which may be owned by,

or under common control with, any other board

member.

‘‘(II) Four voting members shall be professional

songwriters who have retained and exercise exclu-

sive rights of reproduction and distribution with

respect to covered activities with respect to musical

works they have authored.

‘‘(III) One nonvoting member shall be a rep-

resentative of the nonprofit trade association of

music publishers that represents the greatest

percentage of the licensor market for uses of

musical works in covered activities, as measured

for the 3-year period preceding the date on which

the member is appointed.

‘‘(IV) One nonvoting member shall be a rep-

resentative of the digital licensee coordinator, pro-

vided that a digital licensee coordinator has been

designated pursuant to paragraph (5)(B). Other-

wise, the nonvoting member shall be the nonprofit

trade association of digital licensees that rep-

resents the greatest percentage of the licensee

market for uses of musical works in covered activi-

ties, as measured over the preceding 3 full calendar

years.

‘‘(V) One nonvoting member shall be a rep-

resentative of a nationally recognized nonprofit

trade association whose primary mission is

advocacy on behalf of songwriters in the United

States.

‘‘(ii) B

YLAWS

.—

‘‘(I) E

STABLISHMENT

.—Not later than 1 year

after the date on which the mechanical licensing

collective is initially designated by the Register

of Copyrights under subparagraph (B)(i), the collec-

tive shall establish bylaws to determine issues

relating to the governance of the collective,

including, but not limited to—

‘‘(aa) the length of the term for each

member of the board of directors;

‘‘(bb) the staggering of the terms of the

members of the board of directors;

‘‘(cc) a process for filling a seat on the

board of directors that is vacated before the

end of the term with respect to that seat;

‘‘(dd) a process for electing a member to

the board of directors; and

‘‘(ee) a management structure for daily

operation of the collective.

‘‘(II) P

UBLIC AVAILABILITY

.—The mechanical

licensing collective shall make the bylaws estab-

lished under subclause (I) available to the public.

Deadline.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00015 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3690 PUBLIC LAW 115–264–OCT. 11, 2018

‘‘(iii) B

OARD MEETINGS

.—The board of directors

shall meet not less frequently than biannually and

discuss matters pertinent to the operations of the

mechanical licensing collective, including the mechan-

ical licensing collective budget.

‘‘(iv) O

PERATIONS ADVISORY COMMITTEE

.—The

board of directors of the mechanical licensing collective

shall establish an operations advisory committee con-

sisting of not fewer than 6 members to make rec-

ommendations to the board of directors concerning the

operations of the mechanical licensing collective,

including the efficient investment in and deployment

of information technology and data resources. Such

committee shall have an equal number of members

of the committee who are—

‘‘(I) musical work copyright owners who are

appointed by the board of directors of the mechan-

ical licensing collective; and

‘‘(II) representatives of digital music providers

who are appointed by the digital licensee coordi-

nator.

‘‘(v) U

NCLAIMED ROYALTIES OVERSIGHT COM

MITTEE

.—The board of directors of the mechanical

licensing collective shall establish and appoint an

unclaimed royalties oversight committee consisting of

10 members, 5 of which shall be musical work copy-

right owners and 5 of which shall be professional song-

writers whose works are used in covered activities.

‘‘(vi) D

ISPUTE RESOLUTION COMMITTEE

.—The board

of directors of the mechanical licensing collective shall

establish and appoint a dispute resolution committee

that shall—

‘‘(I) consist of not fewer than 6 members; and

‘‘(II) include an equal number of representa-

tives of musical work copyright owners and profes-

sional songwriters.

‘‘(vii) M

ECHANICAL LICENSING COLLECTIVE ANNUAL

REPORT

.—

‘‘(I) I

N GENERAL

.—Not later than June 30 of

each year commencing after the license availability

date, the mechanical licensing collective shall post,

and make available online for a period of not less

than 3 years, an annual report that sets forth

information regarding—

‘‘(aa) the operational and licensing prac-

tices of the collective;

‘‘(bb) how royalties are collected and

distributed;

‘‘(cc) budgeting and expenditures;

‘‘(dd) the collective total costs for the pre-

ceding calendar year;

‘‘(ee) the projected annual mechanical

licensing collective budget;

‘‘(ff) aggregated royalty receipts and pay-

ments;

Web posting.

Time period.

Appointments.

Recommenda-

tions.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00016 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3691 PUBLIC LAW 115–264—OCT. 11, 2018

‘‘(gg) expenses that are more than 10 per-

cent of the annual mechanical licensing collec-

tive budget; and

‘‘(hh) the efforts of the collective to locate

and identify copyright owners of unmatched

musical works (and shares of works).

‘‘(II) S

UBMISSION

.—On the date on which the

mechanical licensing collective posts each report

required under subclause (I), the collective shall

provide a copy of the report to the Register of

Copyrights.

‘‘(viii) I

NDEPENDENT OFFICERS

.—An individual

serving as an officer of the mechanical licensing collec-

tive may not, at the same time, also be an employee

or agent of any member of the board of directors of

the collective or any entity represented by a member

of the board of directors, as described in clause (i).

‘‘(ix) O

VERSIGHT AND ACCOUNTABILITY

.—

‘‘(I) I

N GENERAL

.—The mechanical licensing

collective shall—

‘‘(aa) ensure that the policies and practices

of the collective are transparent and account-

able;

‘‘(bb) identify a point of contact for pub-

lisher inquiries and complaints with timely

redress; and

‘‘(cc) establish an anti-comingling policy

for funds not collected under this section and

royalties collected under this section.

‘‘(II) A

UDITS

.—

‘‘(aa) I

N GENERAL

.—Beginning in the

fourth full calendar year that begins after the

initial designation of the mechanical licensing

collective by the Register of Copyrights under

subparagraph (B)(i), and in every fifth cal-

endar year thereafter, the collective shall

retain a qualified auditor that shall—

‘‘(AA) examine the books, records, and

operations of the collective;

‘‘(BB) prepare a report for the board

of directors of the collective with respect

to the matters described in item (bb); and

‘‘(CC) not later than December 31 of

the year in which the qualified auditor

is retained, deliver the report described

in subitem (BB) to the board of directors

of the collective.

‘‘(bb) M

ATTERS ADDRESSED

.—Each report

prepared under item (aa) shall address the

implementation and efficacy of procedures of

the mechanical licensing collective—

‘‘(AA) for the receipt, handling, and

distribution of royalty funds, including

any amounts held as unclaimed royalties;

‘‘(BB) to guard against fraud, abuse,

waste, and the unreasonable use of funds;

and

Royalties.

Reports.

Effective dates.

Royalties.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00017 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3692 PUBLIC LAW 115–264–OCT. 11, 2018

‘‘(CC) to protect the confidentiality of

financial, proprietary, and other sensitive

information.

‘‘(cc) P

UBLIC AVAILABILITY

.—With respect

to each report prepared under item (aa), the

mechanical licensing collective shall—

‘‘(AA) submit the report to the Reg-

ister of Copyrights; and

‘‘(BB) make the report available to

the public.

‘‘(E) M

USICAL WORKS DATABASE

.—

‘‘(i) E

STABLISHMENT AND MAINTENANCE OF DATA

BASE

.—The mechanical licensing collective shall estab-

lish and maintain a database containing information

relating to musical works (and shares of such works)

and, to the extent known, the identity and location

of the copyright owners of such works (and shares

thereof) and the sound recordings in which the musical

works are embodied. In furtherance of maintaining

such database, the mechanical licensing collective shall

engage in efforts to identify the musical works

embodied in particular sound recordings, as well as

to identify and locate the copyright owners of such

works (and shares thereof), and update such data as

appropriate.

‘‘(ii) M

ATCHED WORKS

.—With respect to musical

works (and shares thereof) that have been matched

to copyright owners, the musical works database shall

include—

‘‘(I) the title of the musical work;

‘‘(II) the copyright owner of the work (or share

thereof), and the ownership percentage of that

owner;

‘‘(III) contact information for such copyright

owner;

‘‘(IV) to the extent reasonably available to the

mechanical licensing collective—

‘‘(aa) the international standard musical

work code for the work; and

‘‘(bb) identifying information for sound

recordings in which the musical work is

embodied, including the name of the sound

recording, featured artist, sound recording

standard recording code, and other informa-

tion commonly used to assist in associating

sound recordings with musical works; and

‘‘(V) such other information as the Register

of Copyrights may prescribe by regulation.

‘‘(iii) U

NMATCHED WORKS

.—With respect to

unmatched musical works (and shares of works) in

the database, the musical works database shall

include—

‘‘(I) to the extent reasonably available to the

mechanical licensing collective—

‘‘(aa) the title of the musical work;

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00018 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3693 PUBLIC LAW 115–264—OCT. 11, 2018

‘‘(bb) the ownership percentage for which

an owner has not been identified;

‘‘(cc) if a copyright owner has been identi-

fied but not located, the identity of such owner

and the ownership percentage of that owner;

‘‘(dd) identifying information for sound

recordings in which the work is embodied,

including sound recording name, featured

artist, sound recording copyright owner, pro-

ducer, international standard recording code,

and other information commonly used to assist

in associating sound recordings with musical

works; and

‘‘(ee) any additional information reported

to the mechanical licensing collective that may

assist in identifying the work; and

‘‘(II) such other information relating to the

identity and ownership of musical works (and

shares of such works) as the Register of Copyrights

may prescribe by regulation.

‘‘(iv) S

OUND RECORDING INFORMATION

.—Each

musical work copyright owner with any musical work

listed in the musical works database shall engage in

commercially reasonable efforts to deliver to the

mechanical licensing collective, including for use in

the musical works database, to the extent such

information is not then available in the database,

information regarding the names of the sound

recordings in which that copyright owner’s musical

works (or shares thereof) are embodied, to the extent

practicable.

‘‘(v) A

CCESSIBILITY OF DATABASE

.—The musical

works database shall be made available to members

of the public in a searchable, online format, free of

charge. The mechanical licensing collective shall make

such database available in a bulk, machine-readable

format, through a widely available software applica-

tion, to the following entities:

‘‘(I) Digital music providers operating under

the authority of valid notices of license, free of

charge.

‘‘(II) Significant nonblanket licensees in

compliance with their obligations under paragraph

(6), free of charge.

‘‘(III) Authorized vendors of the entities

described in subclauses (I) and (II), free of charge.

‘‘(IV) The Register of Copyrights, free of charge

(but the Register shall not treat such database

or any information therein as a Government

record).

‘‘(V) Any other person or entity for a fee not

to exceed the marginal cost to the mechanical

licensing collective of providing the database to

such person or entity.

‘‘(vi) A

DDITIONAL REQUIREMENTS

.—The Register of

Copyrights shall establish requirements by regulations

Regulations.

Public

information.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00019 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3694 PUBLIC LAW 115–264–OCT. 11, 2018

to ensure the usability, interoperability, and usage

restrictions of the musical works database.

‘‘(F) N

OTICES OF LICENSE AND NONBLANKET ACTIVITY

.—

‘‘(i) N

OTICES OF LICENSES

.—The mechanical

licensing collective shall receive, review, and confirm

or reject notices of license from digital music providers,

as provided in paragraph (2)(A). The collective shall

maintain a current, publicly accessible list of blanket

licenses that includes contact information for the

licensees and the effective dates of such licenses.

‘‘(ii) N

OTICES OF NONBLANKET ACTIVITY

.—The

mechanical licensing collective shall receive notices of

nonblanket activity from significant nonblanket

licensees, as provided in paragraph (6)(A). The collec-

tive shall maintain a current, publicly accessible list

of notices of nonblanket activity that includes contact

information for significant nonblanket licensees and

the dates of receipt of such notices.

‘‘(G) C

OLLECTION AND DISTRIBUTION OF ROYALTIES

.—

‘‘(i) I

N GENERAL

.—Upon receiving reports of usage

and payments of royalties from digital music providers

for covered activities, the mechanical licensing collec-

tive shall—

‘‘(I) engage in efforts to—

‘‘(aa) identify the musical works embodied

in sound recordings reflected in such reports,

and the copyright owners of such musical

works (and shares thereof);

‘‘(bb) confirm uses of musical works sub-

ject to voluntary licenses and individual

download licenses, and the corresponding pro

rata amounts to be deducted from royalties

that would otherwise be due under the blanket

license; and

‘‘(cc) confirm proper payment of royalties

due;

‘‘(II) distribute royalties to copyright owners

in accordance with the usage and other informa-

tion contained in such reports, as well as the

ownership and other information contained in the

records of the collective; and

‘‘(III) deposit into an interest-bearing account,

as provided in subparagraph (H)(ii), royalties that

cannot be distributed due to—

‘‘(aa) an inability to identify or locate a

thereof); or

‘‘(bb) a pending dispute before the dispute

resolution committee of the mechanical

licensing collective.

‘‘(ii) O

THER COLLECTION EFFORTS

.—Any royalties

recovered by the mechanical licensing collective as a

result of efforts to enforce rights or obligations under

a blanket license, including through a bankruptcy pro-

ceeding or other legal action, shall be distributed to

and in accordance with the procedures described in

Public

information.

Lists.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00020 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3695 PUBLIC LAW 115–264—OCT. 11, 2018

subclauses (I) and (II) of clause (i), on a pro rata

basis in proportion to the overall percentage recovery

of the total royalties owed, with any pro rata share

of royalties that cannot be distributed deposited in

an interest-bearing account as provided in subpara-

graph (H)(ii).

‘‘(H) H

OLDING OF ACCRUED ROYALTIES

.—

‘‘(i) H

OLDING PERIOD

.—The mechanical licensing

collective shall hold accrued royalties associated with

particular musical works (and shares of works) that

remain unmatched for a period of not less than 3

years after the date on which the funds were received

by the mechanical licensing collective, or not less than

3 years after the date on which the funds were accrued

by a digital music provider that subsequently trans-

ferred such funds to the mechanical licensing collective

pursuant to paragraph (10)(B), whichever period

expires sooner.

‘‘(ii) I

NTEREST

BEARING ACCOUNT

.—Accrued royal-

ties for unmatched works (and shares thereof) shall

be maintained by the mechanical licensing collective

in an interest-bearing account that earns monthly

interest—

‘‘(I) at the Federal, short-term rate; and

‘‘(II) that accrues for the benefit of copyright

owners entitled to payment of such accrued royal-

ties.

‘‘(I) M

USICAL WORKS CLAIMING PROCESS

.—When a copy-

right owner of an unmatched work (or share of a work)

has been identified and located in accordance with the

procedures of the mechanical licensing collective, the collec-

tive shall—

‘‘(i) update the musical works database and the

other records of the collective accordingly; and

‘‘(ii) provided that accrued royalties for the musical

work (or share thereof) have not yet been included

in a distribution pursuant to subparagraph (J)(i), pay

such accrued royalties and a proportionate amount

of accrued interest associated with that work (or share

thereof) to the copyright owner, accompanied by a

cumulative statement of account reflecting usage of

such work and accrued royalties based on information

provided by digital music providers to the mechanical

licensing collective.

‘‘(J) D

ISTRIBUTION OF UNCLAIMED ACCRUED ROYAL

TIES

.—

‘‘(i) D

ISTRIBUTION PROCEDURES

.—After the expira-

tion of the prescribed holding period for accrued royal-

ties provided in subparagraph (H)(i), the mechanical

licensing collective shall distribute such accrued royal-

ties, along with a proportionate share of accrued

interest, to copyright owners identified in the records

of the collective, subject to the following requirements,

and in accordance with the policies and procedures

established under clause (ii):

‘‘(I) The first such distribution shall occur on

or after January 1 of the second full calendar

Effective date.

Royalties.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00021 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3696 PUBLIC LAW 115–264–OCT. 11, 2018

year to commence after the license availability

date, with not less than 1 such distribution to

take place during each calendar year thereafter.

‘‘(II) Copyright owners’ payment shares for

unclaimed accrued royalties for particular

reporting periods shall be determined in a trans-

parent and equitable manner based on data indi-

cating the relative market shares of such copyright

owners as reflected in reports of usage provided

by digital music providers for covered activities

for the periods in question, including, in addition

to usage data provided to the mechanical licensing

collective, usage data provided to copyright owners

under voluntary licenses and individual download

licenses for covered activities, to the extent such

information is available to the mechanical

licensing collective. In furtherance of the deter-

mination of equitable market shares under this

subparagraph—

‘‘(aa) the mechanical licensing collective

may require copyright owners seeking dis-

tributions of unclaimed accrued royalties to

provide, or direct the provision of, information

concerning the usage of musical works under

voluntary licenses and individual download

licenses for covered activities; and

‘‘(bb) the mechanical licensing collective

shall take appropriate steps to safeguard the

confidentiality and security of usage, financial,

and other sensitive data used to compute

market shares in accordance with the con-

fidentiality provisions prescribed by the Reg-

ister of Copyrights under paragraph (12)(C).

‘‘(ii) E

STABLISHMENT OF DISTRIBUTION POLICIES

.—

The unclaimed royalties oversight committee estab-

lished under subparagraph (D)(v) shall establish poli-

cies and procedures for the distribution of unclaimed

accrued royalties and accrued interest in accordance

with this subparagraph, including the provision of

usage data to copyright owners to allocate payments

and credits to songwriters pursuant to clause (iv), sub-

ject to the approval of the board of directors of the

mechanical licensing collective.

‘‘(iii) P

UBLIC NOTICE OF UNCLAIMED ACCRUED

ROYALTIES

.—The mechanical licensing collective

shall—

‘‘(I) maintain a publicly accessible online

facility with contact information for the collective

that lists unmatched musical works (and shares

of works), through which a copyright owner may

assert an ownership claim with respect to such

a work (and a share of such a work);

‘‘(II) engage in diligent, good-faith efforts to

publicize, throughout the music industry—

Determination.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00022 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3697 PUBLIC LAW 115–264—OCT. 11, 2018

‘‘(aa) the existence of the collective and

the ability to claim unclaimed accrued royal-

ties for unmatched musical works (and shares

of such works) held by the collective;

‘‘(bb) the procedures by which copyright

owners may identify themselves and provide

contact, ownership, and other relevant

information to the collective in order to receive

payments of accrued royalties;

‘‘(cc) any transfer of accrued royalties for

musical works under paragraph (10)(B), not

later than 180 days after the date on which

the transfer is received; and

‘‘(dd) any pending distribution of

unclaimed accrued royalties and accrued

interest, not less than 90 days before the date

on which the distribution is made; and

‘‘(III) as appropriate, participate in music

industry conferences and events for the purpose

of publicizing the matters described in subclause

(II).

‘‘(iv) S

ONGWRITER PAYMENTS

.—Copyright owners

that receive a distribution of unclaimed accrued royal-

ties and accrued interest shall pay or credit a portion

to songwriters (or the authorized agents of songwriters)

on whose behalf the copyright owners license or admin-

ister musical works for covered activities, in accordance

with applicable contractual terms, but notwithstanding

any agreement to the contrary—

‘‘(I) such payments and credits to songwriters

shall be allocated in proportion to reported usage

of individual musical works by digital music pro-

viders during the reporting periods covered by the

distribution from the mechanical licensing collec-

tive; and

‘‘(II) in no case shall the payment or credit

to an individual songwriter be less than 50 percent

of the payment received by the copyright owner

attributable to usage of musical works (or shares

of works) of that songwriter.

‘‘(K) D

ISPUTE RESOLUTION

.—The dispute resolution

committee established under subparagraph (D)(vi) shall

establish policies and procedures—

‘‘(i) for copyright owners to address in a timely

and equitable manner disputes relating to ownership

interests in musical works licensed under this section

and allocation and distribution of royalties by the

mechanical licensing collective, subject to the approval

of the board of directors of the mechanical licensing

collective;

‘‘(ii) that shall include a mechanism to hold dis-

puted funds in accordance with the requirements

described in subparagraph (H)(ii) pending resolution

of the dispute; and

‘‘(iii) except as provided in paragraph (11)(D), that

shall not affect any legal or equitable rights or rem-

edies available to any copyright owner or songwriter

Time period.

Deadline.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00023 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3698 PUBLIC LAW 115–264–OCT. 11, 2018

concerning ownership of, and entitlement to royalties

for, a musical work.

‘‘(L) V

ERIFICATION OF PAYMENTS BY MECHANICAL

LICENSING COLLECTIVE

.—

‘‘(i) V

ERIFICATION PROCESS

.—A copyright owner

entitled to receive payments of royalties for covered

activities from the mechanical licensing collective may,

individually or with other copyright owners, conduct

an audit of the mechanical licensing collective to verify

the accuracy of royalty payments by the mechanical

licensing collective to such copyright owner, as follows:

‘‘(I) A copyright owner may audit the mechan-

ical licensing collective only once in a year for

any or all of the 3 calendar years preceding the

year in which the audit is commenced, and may

not audit records for any calendar year more than

once.

‘‘(II) The audit shall be conducted by a quali-

fied auditor, who shall perform the audit during

the ordinary course of business by examining the

books, records, and data of the mechanical

licensing collective, according to generally accepted

auditing standards and subject to applicable con-

fidentiality requirements prescribed by the Reg-

ister of Copyrights under paragraph (12)(C).

‘‘(III) The mechanical licensing collective shall

make such books, records, and data available to

the qualified auditor and respond to reasonable

requests for relevant information, and shall use

commercially reasonable efforts to facilitate access

to relevant information maintained by third par-

ties.

‘‘(IV) To commence the audit, any copyright

owner shall file with the Copyright Office a notice

of intent to conduct an audit of the mechanical

licensing collective, identifying the period of time

to be audited, and shall simultaneously deliver

a copy of such notice to the mechanical licensing

collective. The Register of Copyrights shall cause

the notice of audit to be published in the Federal

the date on which the notice is received.

‘‘(V) The qualified auditor shall determine the

accuracy of royalty payments, including whether

an underpayment or overpayment of royalties was

made by the mechanical licensing collective to each

auditing copyright owner, except that, before pro-

viding a final audit report to any such copyright

owner, the qualified auditor shall provide a ten-

tative draft of the report to the mechanical

licensing collective and allow the mechanical

licensing collective a reasonable opportunity to

respond to the findings, including by clarifying

issues and correcting factual errors.

‘‘(VI) The auditing copyright owner or owners

shall bear the cost of the audit. In case of an

underpayment to any copyright owner, the

Determination.

Reports.

Federal Register,

publication.

Deadline.

Notice.

Time periods.

Audits.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00024 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3699 PUBLIC LAW 115–264—OCT. 11, 2018

mechanical licensing collective shall pay the

amounts of any such underpayment to such

auditing copyright owner, as appropriate. In case

of an overpayment by the mechanical licensing

collective, the mechanical licensing collective may

debit the account of the auditing copyright owner

or owners for such overpaid amounts, or such

owner or owners shall refund overpaid amounts

to the mechanical licensing collective, as appro-

priate.

‘‘(ii) A

LTERNATIVE VERIFICATION PROCEDURES

.—

Nothing in this subparagraph shall preclude a copy-

right owner and the mechanical licensing collective

from agreeing to audit procedures different from those

described in this subparagraph, except that a notice

of the audit shall be provided to and published by

the Copyright Office as described in clause (i)(IV).

‘‘(M) R

ECORDS OF MECHANICAL LICENSING COLLEC

TIVE

.—

‘‘(i) R

ECORDS MAINTENANCE

.—The mechanical

licensing collective shall ensure that all material

records of the operations of the mechanical licensing

collective, including those relating to notices of license,

the administration of the claims process of the mechan-

ical licensing collective, reports of usage, royalty pay-

ments, receipt and maintenance of accrued royalties,

royalty distribution processes, and legal matters, are

preserved and maintained in a secure and reliable

manner, with appropriate commercially reasonable

safeguards against unauthorized access, copying, and

disclosure, and subject to the confidentiality require-

ments prescribed by the Register of Copyrights under

paragraph (12)(C) for a period of not less than 7 years

after the date of creation or receipt, whichever occurs

later.

‘‘(ii) R

ECORDS ACCESS

.—The mechanical licensing

collective shall provide prompt access to electronic and

other records pertaining to the administration of a

ten request of the owner or the authorized representa-

tive of the owner.

‘‘(4) T

ERMS AND CONDITIONS OF BLANKET LICENSE

.—A

blanket license is subject to, and conditioned upon, the following

requirements:

‘‘(A) R

OYALTY REPORTING AND PAYMENTS

.—

‘‘(i) M

ONTHLY REPORTS AND PAYMENT

.—A digital

music provider shall report and pay royalties to the

mechanical licensing collective under the blanket

license on a monthly basis in accordance with clause

(ii) and subsection (c)(2)(I), except that the monthly

reporting shall be due on the date that is 45 calendar

days, rather than 20 calendar days, after the end of

the monthly reporting period.

‘‘(ii) D

ATA TO BE REPORTED

.—In reporting usage

of musical works to the mechanical licensing collective,

a digital music provider shall provide usage data for

musical works used under the blanket license and

Time period.

Notice.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00025 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3700 PUBLIC LAW 115–264–OCT. 11, 2018

usage data for musical works used in covered activities

under voluntary licenses and individual download

licenses. In the report of usage, the digital music pro-

vider shall—

‘‘(I) with respect to each sound recording

embodying a musical work—

‘‘(aa) provide identifying information for

the sound recording, including sound recording

name, featured artist, and, to the extent

acquired by the digital music provider in

connection with its use of sound recordings

of musical works to engage in covered activi-

ties, including pursuant to subparagraph (B),

sound recording copyright owner, producer,

international standard recording code, and

other information commonly used in the

industry to identify sound recordings and

match them to the musical works the sound

recordings embody;

‘‘(bb) to the extent acquired by the digital

music provider in the metadata provided by

sound recording copyright owners or other

licensors of sound recordings in connection

with the use of sound recordings of musical

works to engage in covered activities,

including pursuant to subparagraph (B), pro-

vide information concerning authorship and

ownership of the applicable rights in the

musical work embodied in the sound recording

(including each songwriter, publisher name,

and respective ownership share) and the inter-

national standard musical work code; and

‘‘(cc) provide the number of digital phono-

record deliveries of the sound recording,

including limited downloads and interactive

streams;

‘‘(II) identify and provide contact information

for all musical work copyright owners for works

embodied in sound recordings as to which a vol-

untary license, rather than the blanket license,

is in effect with respect to the uses being reported;

and

‘‘(III) provide such other information as the

‘‘(iii) F

ORMAT AND MAINTENANCE OF REPORTS

.—

Reports of usage provided by digital music providers

to the mechanical licensing collective shall be in a

machine-readable format that is compatible with the

information technology systems of the mechanical

licensing collective and meets the requirements of regu-

lations adopted by the Register of Copyrights. The

requirements under which records of use shall be main-

tained and made available to the mechanical licensing

collective by digital music providers engaged in covered

activities under a blanket license.

Regulations.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00026 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3701 PUBLIC LAW 115–264—OCT. 11, 2018

‘‘(iv) A

DOPTION OF REGULATIONS

.—The Register of

Copyrights shall adopt regulations—

‘‘(I) setting forth requirements under which

records of use shall be maintained and made avail-

able to the mechanical licensing collective by dig-

ital music providers engaged in covered activities

under a blanket license; and

‘‘(II) regarding adjustments to reports of usage

by digital music providers, including mechanisms

to account for overpayment and underpayment of

royalties in prior periods.

‘‘(B) C

OLLECTION OF SOUND RECORDING INFORMATION

.—

A digital music provider shall engage in good-faith,

commercially reasonable efforts to obtain from sound

recording copyright owners and other licensors of sound

recordings made available through the service of such dig-

ital music provider information concerning—

‘‘(i) sound recording copyright owners, producers,

international standard recording codes, and other

information commonly used in the industry to identify

sound recordings and match them to the musical works

the sound recordings embody; and

‘‘(ii) the authorship and ownership of musical

works, including songwriters, publisher names, owner-

ship shares, and international standard musical work

codes.

‘‘(C) P

AYMENT OF ADMINISTRATIVE ASSESSMENT

.—A dig-

ital music provider and any significant nonblanket licensee

shall pay the administrative assessment established under

paragraph (7)(D) in accordance with this subsection and

applicable regulations.

‘‘(D) V

ERIFICATION OF PAYMENTS BY DIGITAL MUSIC PRO

VIDERS

.—

‘‘(i) V

ERIFICATION PROCESS

.—The mechanical

licensing collective may conduct an audit of a digital

music provider operating under the blanket license

to verify the accuracy of royalty payments by the digital

music provider to the mechanical licensing collective

as follows:

‘‘(I) The mechanical licensing collective may

commence an audit of a digital music provider

not more frequently than once in any 3-calendar-

year period to cover a verification period of not

more than the 3 full calendar years preceding the

date of commencement of the audit, and such audit

may not audit records for any such 3-year

verification period more than once.

‘‘(II) The audit shall be conducted by a quali-

fied auditor, who shall perform the audit during

the ordinary course of business by examining the

books, records, and data of the digital music pro-

vider, according to generally accepted auditing

standards and subject to applicable confidentiality

requirements prescribed by the Register of Copy-

rights under paragraph (12)(C).

‘‘(III) The digital music provider shall make

such books, records, and data available to the

Time periods.

Audits.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00027 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3702 PUBLIC LAW 115–264–OCT. 11, 2018

qualified auditor and respond to reasonable

requests for relevant information, and shall use

commercially reasonable efforts to provide access

to relevant information maintained with respect

to a digital music provider by third parties.

‘‘(IV) To commence the audit, the mechanical

licensing collective shall file with the Copyright

Office a notice of intent to conduct an audit of

the digital music provider, identifying the period

of time to be audited, and shall simultaneously

deliver a copy of such notice to the digital music

provider. The Register of Copyrights shall cause

the notice of audit to be published in the Federal

the date on which notice is received.

‘‘(V) The qualified auditor shall determine the

accuracy of royalty payments, including whether

an underpayment or overpayment of royalties was

made by the digital music provider to the mechan-

ical licensing collective, except that, before pro-

viding a final audit report to the mechanical

licensing collective, the qualified auditor shall pro-

vide a tentative draft of the report to the digital

music provider and allow the digital music pro-

vider a reasonable opportunity to respond to the

findings, including by clarifying issues and cor-

recting factual errors.

‘‘(VI) The mechanical licensing collective shall

pay the cost of the audit, unless the qualified

auditor determines that there was an under-

payment by the digital music provider of not less

than 10 percent, in which case the digital music

provider shall bear the reasonable costs of the

audit, in addition to paying the amount of any

underpayment to the mechanical licensing collec-

tive. In case of an overpayment by the digital

music provider, the mechanical licensing collective

shall provide a credit to the account of the digital

music provider.

‘‘(VII) A digital music provider may not assert

section 507 or any other Federal or State statute

of limitations, doctrine of laches or estoppel, or

similar provision as a defense to a legal action

arising from an audit under this subparagraph

if such legal action is commenced not more than

6 years after the commencement of the audit that

is the basis for such action.

‘‘(ii) A

LTERNATIVE VERIFICATION PROCEDURES

.—

Nothing in this subparagraph shall preclude the

mechanical licensing collective and a digital music pro-

vider from agreeing to audit procedures different from

those described in this subparagraph, except that a

notice of the audit shall be provided to and published

by the Copyright Office as described in clause (i)(IV).

‘‘(E) D

EFAULT UNDER BLANKET LICENSE

.—

Effective date.

Determination.

Reports.

Federal Register,

publication.

Deadline.

Notice.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00028 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3703 PUBLIC LAW 115–264—OCT. 11, 2018

‘‘(i) C

ONDITIONS OF DEFAULT

.—A digital music pro-

vider shall be in default under a blanket license if

the digital music provider—

‘‘(I) fails to provide 1 or more monthly reports

of usage to the mechanical licensing collective

when due;

‘‘(II) fails to make a monthly royalty or late

fee payment to the mechanical licensing collective

when due, in all or material part;

‘‘(III) provides 1 or more monthly reports of

usage to the mechanical licensing collective that,

on the whole, is or are materially deficient as

a result of inaccurate, missing, or unreadable data,

where the correct data was available to the digital

music provider and required to be reported under

this section and applicable regulations;

‘‘(IV) fails to pay the administrative assess-

ment as required under this subsection and

applicable regulations; or

‘‘(V) after being provided written notice by the

mechanical licensing collective, refuses to comply

with any other material term or condition of the

blanket license under this section for a period of

not less than 60 calendar days.

‘‘(ii) N

OTICE OF DEFAULT AND TERMINATION

.—In

case of a default by a digital music provider, the

mechanical licensing collective may proceed to termi-

nate the blanket license of the digital music provider

as follows:

‘‘(I) The mechanical licensing collective shall

provide written notice to the digital music provider

describing with reasonable particularity the

default and advising that unless such default is

cured not later than 60 calendar days after the

date of the notice, the blanket license will auto-

matically terminate at the end of that period.

‘‘(II) If the digital music provider fails to

remedy the default before the end of the 60-day

period described in subclause (I), the license shall

terminate without any further action on the part

of the mechanical licensing collective. Such termi-

nation renders the making of all digital phono-

record deliveries of all musical works (and shares

thereof) covered by the blanket license for which

the royalty or administrative assessment has not

been paid actionable as acts of infringement under

section 501 and subject to the remedies provided

by sections 502 through 506.

‘‘(iii) N

OTICE TO COPYRIGHT OWNERS

.—The mechan-

ical licensing collective shall provide written notice

of any termination under this subparagraph to copy-

right owners of affected works.

‘‘(iv) R

EVIEW BY FEDERAL DISTRICT COURT

.—A dig-

ital music provider that believes a blanket license was

improperly terminated by the mechanical licensing

collective may seek review of such termination in an

appropriate district court of the United States. The

Determination.

Courts.

Deadline.

Time period.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00029 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3704 PUBLIC LAW 115–264–OCT. 11, 2018

district court shall determine the matter de novo based

on the record before the mechanical licensing collective

and any additional supporting evidence presented by

the parties.

‘‘(5) D

IGITAL LICENSEE COORDINATOR

.—

‘‘(A) I

N GENERAL

.—The digital licensee coordinator

shall be a single entity that—

‘‘(i) is a nonprofit, not owned by any other entity,

that is created to carry out responsibilities under this

subsection;

‘‘(ii) is endorsed by and enjoys substantial support

from digital music providers and significant nonblanket

licensees that together represent the greatest percent-

age of the licensee market for uses of musical works

in covered activities, as measured over the preceding

3 calendar years;

‘‘(iii) is able to demonstrate that it has, or will

have prior to the license availability date, the adminis-

trative capabilities to perform the required functions

of the digital licensee coordinator under this sub-

section; and

‘‘(iv) has been designated by the Register of Copy-

rights, with the approval of the Librarian of Congress

pursuant to section 702, in accordance with subpara-

graph (B).

‘‘(B) D

ESIGNATION OF DIGITAL LICENSEE COORDI

NATOR

.—

‘‘(i) I

NITIAL DESIGNATION

.—The Register of Copy-

rights shall initially designate the digital licensee

coordinator not later than 270 days after the enactment

date, in accordance with the same procedure described

for designation of the mechanical licensing collective

in paragraph (3)(B)(i).

‘‘(ii) P

ERIODIC REVIEW OF DESIGNATION

.—Following

the initial designation of the digital licensee coordi-

nator, the Register of Copyrights shall, every 5 years,

beginning with the fifth full calendar year to commence

after the initial designation, determine whether the

existing designation should be continued, or a different

entity meeting the criteria described in clauses (i)

through (iii) of subparagraph (A) should be designated,

in accordance with the same procedure described for

the mechanical licensing collective in paragraph

(3)(B)(ii).

‘‘(iii) I

NABILITY TO DESIGNATE

.—If the Register of

Copyrights is unable to identify an entity that fulfills

each of the qualifications described in clauses (i)

through (iii) of subparagraph (A) to serve as the digital

licensee coordinator, the Register may decline to des-

ignate a digital licensee coordinator. The determination

of the Register not to designate a digital licensee

coordinator shall not negate or otherwise affect any

provision of this subsection except to the limited extent

that a provision references the digital licensee coordi-

nator. In such case, the reference to the digital licensee

coordinator shall be without effect unless and until

a new digital licensee coordinator is designated.

Time periods.

Deadline.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00030 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3705 PUBLIC LAW 115–264—OCT. 11, 2018

‘‘(C) A

UTHORITIES AND FUNCTIONS

.—

‘‘(i) I

N GENERAL

.—The digital licensee coordinator

is authorized to perform the following functions, subject

to more particular requirements as described in this

subsection:

‘‘(I) Establish a governance structure, criteria

for membership, and any dues to be paid by its

members.

‘‘(II) Engage in efforts to enforce notice and

payment obligations with respect to the adminis-

trative assessment, including by receiving informa-

tion from and coordinating with the mechanical

licensing collective.

‘‘(III) Initiate and participate in proceedings

before the Copyright Royalty Judges to establish

the administrative assessment under this sub-

section.

‘‘(IV) Initiate and participate in proceedings

before the Copyright Office with respect to activi-

ties under this subsection.

‘‘(V) Gather and provide documentation for use

in proceedings before the Copyright Royalty Judges

to set rates and terms under this section.

‘‘(VI) Maintain records of its activities.

‘‘(VII) Assist in publicizing the existence of

the mechanical licensing collective and the ability

of copyright owners to claim royalties for

unmatched musical works (and shares of works)

through the collective.

‘‘(VIII) Engage in such other activities as may

be necessary or appropriate to fulfill its respon-

sibilities under this subsection.

‘‘(ii) R

ESTRICTION ON LOBBYING

.—The digital

licensee coordinator may not engage in government

lobbying activities, but may engage in the activities

described in subclauses (III), (IV), and (V) of clause

(i).

‘‘(iii) A

SSISTANCE WITH PUBLICITY FOR UNCLAIMED

ROYALTIES

.—The digital licensee coordinator shall

make reasonable, good-faith efforts to assist the

mechanical licensing collective in the efforts of the

collective to locate and identify copyright owners of

unmatched musical works (and shares of such works)

by encouraging digital music providers to publicize the

existence of the collective and the ability of copyright

owners to claim unclaimed accrued royalties, including

by—

‘‘(I) posting contact information for the collec-

tive at reasonably prominent locations on digital

music provider websites and applications; and

‘‘(II) conducting in-person outreach activities

with songwriters.

‘‘(6) R

EQUIREMENTS FOR SIGNIFICANT NONBLANKET

LICENSEES

.—

‘‘(A) I

N GENERAL

.—

‘‘(i) N

OTICE OF ACTIVITY

.—Not later than 45 cal-

endar days after the license availability date, or 45

Deadline.

Web posting.

Proceedings.

Criteria.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00031 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3706 PUBLIC LAW 115–264–OCT. 11, 2018

calendar days after the end of the first full calendar

month in which an entity initially qualifies as a signifi-

cant nonblanket licensee, whichever occurs later, a

significant nonblanket licensee shall submit a notice

of nonblanket activity to the mechanical licensing

collective. The notice of nonblanket activity shall

comply in form and substance with requirements that

the Register of Copyrights shall establish by regulation,

and a copy shall be made available to the digital

licensee coordinator.

‘‘(ii) R

EPORTING AND PAYMENT OBLIGATIONS

.—The

notice of nonblanket activity submitted to the mechan-

ical licensing collective shall be accompanied by a

report of usage that contains the information described

in paragraph (4)(A)(ii), as well as any payment of the

administrative assessment required under this sub-

section and applicable regulations. Thereafter, subject

to clause (iii), a significant nonblanket licensee shall

continue to provide monthly reports of usage, accom-

panied by any required payment of the administrative

assessment, to the mechanical licensing collective. Such

reports and payments shall be submitted not later

than 45 calendar days after the end of the calendar

month being reported.

‘‘(iii) D

ISCONTINUATION OF OBLIGATIONS

.—An

entity that has submitted a notice of nonblanket

activity to the mechanical licensing collective that has

ceased to qualify as a significant nonblanket licensee

may so notify the collective in writing. In such case,

as of the calendar month in which such notice is pro-

vided, such entity shall no longer be required to provide

reports of usage or pay the administrative assessment,

but if such entity later qualifies as a significant non-

blanket licensee, such entity shall again be required

to comply with clauses (i) and (ii).

‘‘(B) R

EPORTING BY MECHANICAL LICENSING COLLECTIVE

TO DIGITAL LICENSEE COORDINATOR

.—

‘‘(i) M

ONTHLY REPORTS OF NONCOMPLIANT

LICENSEES

.—The mechanical licensing collective shall

provide monthly reports to the digital licensee coordi-

nator setting forth any significant nonblanket licensees

of which the collective is aware that have failed to

comply with subparagraph (A).

‘‘(ii) T

REATMENT OF CONFIDENTIAL INFORMATION

.—

The mechanical licensing collective and digital licensee

coordinator shall take appropriate steps to safeguard

the confidentiality and security of financial and other

sensitive data shared under this subparagraph, in

accordance with the confidentiality requirements pre-

scribed by the Register of Copyrights under paragraph

(12)(C).

‘‘(C) L

EGAL ENFORCEMENT EFFORTS

.—

‘‘(i) F

EDERAL COURT ACTION

.—Should the mechan-

ical licensing collective or digital licensee coordinator

become aware that a significant nonblanket licensee

has failed to comply with subparagraph (A), either

may commence an action in an appropriate district

Notification.

Compliance.

Regulations.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00032 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3707 PUBLIC LAW 115–264—OCT. 11, 2018

court of the United States for damages and injunctive

relief. If the significant nonblanket licensee is found

liable, the court shall, absent a finding of excusable

neglect, award damages in an amount equal to three

times the total amount of the unpaid administrative

assessment and, notwithstanding anything to the con-

trary in section 505, reasonable attorney’s fees and

costs, as well as such other relief as the court deter-

mines appropriate. In all other cases, the court shall

award relief as appropriate. Any recovery of damages

shall be payable to the mechanical licensing collective

as an offset to the collective total costs.

‘‘(ii) S

TATUTE OF LIMITATIONS FOR ENFORCEMENT

ACTION

.—Any action described in this subparagraph

shall be commenced within the time period described

in section 507(b).

‘‘(iii) O

THER RIGHTS AND REMEDIES PRESERVED

.—

The ability of the mechanical licensing collective or

digital licensee coordinator to bring an action under

this subparagraph shall in no way alter, limit or negate

any other right or remedy that may be available to

any party at law or in equity.

‘‘(7) F

UNDING OF MECHANICAL LICENSING COLLECTIVE

.—

‘‘(A) I

N GENERAL

.—The collective total costs shall be

funded by—

‘‘(i) an administrative assessment, as such assess-

ment is established by the Copyright Royalty Judges

pursuant to subparagraph (D) from time to time, to

be paid by—

‘‘(I) digital music providers that are engaged,

in all or in part, in covered activities pursuant

to a blanket license; and

‘‘(II) significant nonblanket licensees; and

‘‘(ii) voluntary contributions from digital music pro-

viders and significant nonblanket licensees as may be

agreed with copyright owners.

‘‘(B) V

OLUNTARY CONTRIBUTIONS

.—

‘‘(i) A

GREEMENTS CONCERNING CONTRIBUTIONS

.—

Except as provided in clause (ii), voluntary contribu-

tions by digital music providers and significant non-

blanket licensees shall be determined by private nego-

tiation and agreement, and the following conditions

apply:

‘‘(I) The date and amount of each voluntary

contribution to the mechanical licensing collective

shall be documented in a writing signed by an

authorized agent of the mechanical licensing collec-

tive and the contributing party.

‘‘(II) Such agreement shall be made available

as required in proceedings before the Copyright

Royalty Judges to establish or adjust the adminis-

trative assessment in accordance with applicable

statutory and regulatory provisions and rulings

of the Copyright Royalty Judges.

‘‘(ii) T

REATMENT OF CONTRIBUTIONS

.—Each vol-

untary contribution described in clause (i) shall be

treated for purposes of an administrative assessment

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00033 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3708 PUBLIC LAW 115–264–OCT. 11, 2018

proceeding as an offset to the collective total costs

that would otherwise be recovered through the

administrative assessment. Any allocation or realloca-

tion of voluntary contributions between or among indi-

vidual digital music providers or significant nonblanket

licensees shall be a matter of private negotiation and

agreement among such parties and outside the scope

of the administrative assessment proceeding.

‘‘(C) I

NTERIM APPLICATION OF ACCRUED ROYALTIES

.—

In the event that the administrative assessment, together

with any funding from voluntary contributions as provided

in subparagraphs (A) and (B), is inadequate to cover cur-

rent collective total costs, the collective, with approval of

its board of directors, may apply unclaimed accrued royal-

ties on an interim basis to defray such costs, subject to

future reimbursement of such royalties from future collec-

tions of the assessment.

‘‘(D) D

ETERMINATION OF ADMINISTRATIVE ASSESS

MENT

.—

‘‘(i) A

DMINISTRATIVE ASSESSMENT TO COVER

COLLECTIVE TOTAL COSTS

.—The administrative assess-

ment shall be used solely and exclusively to fund the

collective total costs.

‘‘(ii) S

EPARATE PROCEEDING BEFORE COPYRIGHT

ROYALTY JUDGES

.—The amount and terms of the

administrative assessment shall be determined and

established in a separate and independent proceeding

before the Copyright Royalty Judges, according to the

procedures described in clauses (iii) and (iv). The

administrative assessment determined in such pro-

ceeding shall—

‘‘(I) be wholly independent of royalty rates and

terms applicable to digital music providers, which

shall not be taken into consideration in any

manner in establishing the administrative assess-

ment;

‘‘(II) be established by the Copyright Royalty

Judges in an amount that is calculated to defray

the reasonable collective total costs;

‘‘(III) be assessed based on usage of musical

works by digital music providers and significant

nonblanket licensees in covered activities under

both compulsory and nonblanket licenses;

‘‘(IV) may be in the form of a percentage of

royalties payable under this section for usage of

musical works in covered activities (regardless of

whether a different rate applies under a voluntary

license), or any other usage-based metric reason-

ably calculated to equitably allocate the collective

total costs across digital music providers and

significant nonblanket licensees engaged in cov-

ered activities, and shall include as a component

a minimum fee for all digital music providers and

significant nonblanket licensees; and

‘‘(V) take into consideration anticipated future

collective total costs and collections of the adminis-

trative assessment, including, as applicable—

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00034 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3709 PUBLIC LAW 115–264—OCT. 11, 2018

‘‘(aa) any portion of past actual collective

total costs of the mechanical licensing collec-

tive not funded by previous collections of the

administrative assessment or voluntary con-

tributions because such collections or contribu-

tions together were insufficient to fund such

costs;

‘‘(bb) any past collections of the adminis-

trative assessment and voluntary contribu-

tions that exceeded past actual collective total

costs, resulting in a surplus; and

‘‘(cc) the amount of any voluntary con-

tributions by digital music providers or signifi-

cant nonblanket licensees in relevant periods,

described in subparagraphs (A) and (B) of

paragraph (7).

‘‘(iii) I

NITIAL ADMINISTRATIVE ASSESSMENT

.—The

procedure for establishing the initial administrative

assessment shall be as follows:

‘‘(I) Not later than 270 days after the enact-

ment date, the Copyright Royalty Judges shall

commence a proceeding to establish the initial

administrative assessment by publishing a notice

in the Federal Register seeking petitions to partici-

pate.

‘‘(II) The mechanical licensing collective and

digital licensee coordinator shall participate in the

proceeding described in subclause (I), along with

any interested copyright owners, digital music pro-

viders or significant nonblanket licensees that

have notified the Copyright Royalty Judges of their

desire to participate.

‘‘(III) The Copyright Royalty Judges shall

establish a schedule for submission by the parties

of information that may be relevant to establishing

the administrative assessment, including actual

and anticipated collective total costs of the

mechanical licensing collective, actual and antici-

pated collections from digital music providers and

significant nonblanket licensees, and documenta-

tion of voluntary contributions, as well as a

schedule for further proceedings, which shall

include a hearing, as the Copyright Royalty Judges

determine appropriate.

‘‘(IV) The initial administrative assessment

shall be determined, and such determination shall

be published in the Federal Register by the Copy-

right Royalty Judges, not later than 1 year after

commencement of the proceeding described in this

clause. The determination shall be supported by

a written record. The initial administrative assess-

ment shall be effective as of the license availability

date, and shall continue in effect unless and until

an adjusted administrative assessment is estab-

lished pursuant to an adjustment proceeding under

clause (iv).

Effective date.

Determination.

Federal Register,

publication.

Deadline.

Schedule.

Hearings.

Deadline.

Proceedings.

Notice.

Federal Register,

publication.

Procedures.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00035 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3710 PUBLIC LAW 115–264–OCT. 11, 2018

‘‘(iv) A

DJUSTMENT OF ADMINISTRATIVE ASSESS

MENT

.—The administrative assessment may be

adjusted by the Copyright Royalty Judges periodically,

in accordance with the following procedures:

‘‘(I) Not earlier than 1 year after the most

recent publication of a determination of the

administrative assessment by the Copyright Roy-

alty Judges, the mechanical licensing collective,

the digital licensee coordinator, or one or more

interested copyright owners, digital music pro-

viders, or significant nonblanket licensees, may

file a petition with the Copyright Royalty Judges

in the month of May to commence a proceeding

to adjust the administrative assessment.

‘‘(II) Notice of the commencement of such pro-

ceeding shall be published in the Federal Register

in the month of June following the filing of any

petition, with a schedule of requested information

and additional proceedings, as described in clause

(iii)(III). The mechanical licensing collective and

digital licensee coordinator shall participate in

such proceeding, along with any interested copy-

right owners, digital music providers, or significant

nonblanket licensees that have notified the Copy-

right Royalty Judges of their desire to participate.

‘‘(III) The determination of the adjusted

administrative assessment, which shall be sup-

ported by a written record, shall be published in

the Federal Register during June of the calendar

year following the commencement of the pro-

ceeding. The adjusted administrative assessment

shall take effect January 1 of the year following

such publication.

‘‘(v) A

DOPTION OF VOLUNTARY AGREEMENTS

.—In

lieu of reaching their own determination based on

evaluation of relevant data, the Copyright Royalty

Judges shall approve and adopt a negotiated agreement

to establish the amount and terms of the administra-

tive assessment that has been agreed to by the mechan-

ical licensing collective and the digital licensee coordi-

nator (or if none has been designated, interested digital

music providers and significant nonblanket licensees

representing more than half of the market for uses

of musical works in covered activities), except that

the Copyright Royalty Judges shall have the discretion

to reject any such agreement for good cause shown.

An administrative assessment adopted under this

clause shall apply to all digital music providers and

significant nonblanket licensees engaged in covered

activities during the period the administrative assess-

ment is in effect.

‘‘(vi) C

ONTINUING AUTHORITY TO AMEND

.—The

authority to amend a determination of an administra-

tive assessment to correct technical or clerical errors,

or modify the terms of implementation, for good cause,

Federal Register,

publication.

Applicability.

Effective date.

Determination.

Notice.

Time period.

Effective date.

Federal Register,

publications.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00036 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3711 PUBLIC LAW 115–264—OCT. 11, 2018

with any such amendment to be published in the Fed-

eral Register.

‘‘(vii) A

PPEAL OF ADMINISTRATIVE ASSESSMENT

.—

The determination of an administrative assessment

by the Copyright Royalty Judges shall be appealable,

not later than 30 calendar days after publication in

the Federal Register, to the Court of Appeals for the

District of Columbia Circuit by any party that fully

participated in the proceeding. The administrative

assessment as established by the Copyright Royalty

Judges shall remain in effect pending the final outcome

of any such appeal, and the mechanical licensing collec-

tive, digital licensee coordinator, digital music pro-

viders, and significant nonblanket licensees shall

implement appropriate financial or other measures not

later than 90 days after any modification of the assess-

ment to reflect and account for such outcome.

‘‘(viii) R

EGULATIONS

.—The Copyright Royalty

Judges may adopt regulations to govern the conduct

of proceedings under this paragraph.

‘‘(8) E

STABLISHMENT OF RATES AND TERMS UNDER BLANKET

LICENSE

.—

‘‘(A) R

ESTRICTIONS ON RATESETTING PARTICIPATION

.—

Neither the mechanical licensing collective nor the digital

licensee coordinator shall be a party to a proceeding

described in subsection (c)(1)(E), except that the mechanical

licensing collective or the digital licensee coordinator may

gather and provide financial and other information for

the use of a party to such a proceeding and comply with

requests for information as required under applicable statu-

tory and regulatory provisions and rulings of the Copyright

Royalty Judges.

‘‘(B) A

PPLICATION OF LATE FEES

.—In any proceeding

described in subparagraph (A) in which the Copyright Roy-

alty Judges establish a late fee for late payment of royalties

for uses of musical works under this section, such fee

shall apply to covered activities under blanket licenses,

as follows:

‘‘(i) Late fees for past due royalty payments shall

accrue from the due date for payment until payment

is received by the mechanical licensing collective.

‘‘(ii) The availability of late fees shall in no way

prevent a copyright owner or the mechanical licensing

collective from asserting any other rights or remedies

to which such copyright owner or the mechanical

licensing collective may be entitled under this title.

‘‘(C) I

NTERIM RATE AGREEMENTS IN GENERAL

.—For any

covered activity for which no rate or terms have been

established by the Copyright Royalty Judges, the mechan-

ical licensing collective and any digital music provider may

agree to an interim rate and terms for such activity under

the blanket license, and any such rate and terms—

‘‘(i) shall be treated as nonprecedential and not

cited or relied upon in any ratesetting proceeding

before the Copyright Royalty Judges or any other tri-

bunal; and

Federal Register,

publication.

Deadlines.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00037 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3712 PUBLIC LAW 115–264–OCT. 11, 2018

‘‘(ii) shall automatically expire upon the establish-

ment of a rate and terms for such covered activity

by the Copyright Royalty Judges, under subsection

(c)(1)(E).

‘‘(D) A

DJUSTMENTS FOR INTERIM RATES

.—The rate and

terms established by the Copyright Royalty Judges for

a covered activity to which an interim rate and terms

have been agreed under subparagraph (C) shall supersede

the interim rate and terms and apply retroactively to the

inception of the activity under the blanket license. In such

case, not later than 90 days after the effective date of

the rate and terms established by the Copyright Royalty

Judges—

‘‘(i) if the rate established by the Copyright Royalty

Judges exceeds the interim rate, the digital music pro-

vider shall pay to the mechanical licensing collective

the amount of any underpayment of royalties due;

‘‘(ii) if the interim rate exceeds the rate established

by the Copyright Royalty Judges, the mechanical

licensing collective shall credit the account of the dig-

ital music provider for the amount of any overpayment

of royalties due.

‘‘(9) T

RANSITION TO BLANKET LICENSES

.—

‘‘(A) S

UBSTITUTION OF BLANKET LICENSE

.—On the

license availability date, a blanket license shall, without

any interruption in license authority enjoyed by such digital

music provider, be automatically substituted for and super-

sede any existing compulsory license previously obtained

under this section by the digital music provider from a

with respect to a musical work, except that such substi-

tution shall not apply to any authority obtained from a

record company pursuant to a compulsory license to make

and distribute permanent downloads unless and until such

record company terminates such authority in writing to

take effect at the end of a monthly reporting period, with

a copy to the mechanical licensing collective.

‘‘(B) E

XPIRATION OF EXISTING LICENSES

.—Except to the

extent provided in subparagraph (A), on and after the

license availability date, licenses other than individual

download licenses obtained under this section for covered

activities prior to the license availability date shall no

longer continue in effect.

‘‘(C) T

REATMENT OF VOLUNTARY LICENSES

.—A vol-

untary license for a covered activity in effect on the license

availability date will remain in effect unless and until

the voluntary license expires according to the terms of

the voluntary license, or the parties agree to amend or

terminate the voluntary license. In a case where a vol-

untary license for a covered activity entered into before

the license availability date incorporates the terms of this

section by reference, the terms so incorporated (but not

the rates) shall be those in effect immediately prior to

the license availability date, and those terms shall continue

Deadline.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00038 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3713 PUBLIC LAW 115–264—OCT. 11, 2018

to apply unless and until such voluntary license is termi-

nated or amended, or the parties enter into a new voluntary

license.

‘‘(D) F

URTHER ACCEPTANCE OF NOTICES FOR COVERED

ACTIVITIES BY COPYRIGHT OFFICE

.—On and after the enact-

ment date—

‘‘(i) the Copyright Office shall no longer accept

notices of intention with respect to covered activities;

and

‘‘(ii) notices of intention filed before the enactment

date will no longer be effective or provide license

authority with respect to covered activities, except that,

before the license availability date, there shall be no

liability under section 501 for the reproduction or dis-

tribution of a musical work (or share thereof) in covered

activities if a valid notice of intention was filed for

such work (or share) before the enactment date.

‘‘(10) P

RIOR UNLICENSED USES

.—

‘‘(A) L

IMITATION ON LIABILITY IN GENERAL

.—A copyright

owner that commences an action under section 501 on

or after January 1, 2018, against a digital music provider

for the infringement of the exclusive rights provided by

paragraph (1) or (3) of section 106 arising from the

unauthorized reproduction or distribution of a musical work

by such digital music provider in the course of engaging

in covered activities prior to the license availability date,

shall, as the copyright owner’s sole and exclusive remedy

against the digital music provider, be eligible to recover

the royalty prescribed under subsection (c)(1)(C) and

chapter 8, from the digital music provider, provided that

such digital music provider can demonstrate compliance

with the requirements of subparagraph (B), as applicable.

In all other cases the limitation on liability under this

subparagraph shall not apply.

‘‘(B) R

EQUIREMENTS FOR LIMITATION ON LIABILITY

.—

The following requirements shall apply on the enactment

date and through the end of the period that expires 90

days after the license availability date to digital music

providers seeking to avail themselves of the limitation on

liability described in subparagraph (A):

‘‘(i) Not later than 30 calendar days after first

making a particular sound recording of a musical work

available through its service via one or more covered

activities, or 30 calendar days after the enactment

date, whichever occurs later, a digital music provider

shall engage in good-faith, commercially reasonable

efforts to identify and locate each copyright owner of

such musical work (or share thereof). Such required

matching efforts shall include the following:

‘‘(I) Good-faith, commercially reasonable

efforts to obtain from the owner of the cor-

responding sound recording made available

through the digital music provider’s service the

following information:

‘‘(aa) Sound recording name, featured

artist, sound recording copyright owner, pro-

ducer, international standard recording code,

Deadlines.

Applicability.

Time period.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00039 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3714 PUBLIC LAW 115–264–OCT. 11, 2018

and other information commonly used in the

industry to identify sound recordings and

match them to the musical works they

embody.

‘‘(bb) Any available musical work owner-

ship information, including each songwriter

and publisher name, percentage ownership

share, and international standard musical

work code.

‘‘(II) Employment of 1 or more bulk electronic

matching processes that are available to the digital

music provider through a third-party vendor on

commercially reasonable terms, except that a dig-

ital music provider may rely on its own bulk elec-

tronic matching process if that process has

capabilities comparable to or better than those

available from a third-party vendor on commer-

cially reasonable terms.

‘‘(ii) The required matching efforts shall be

repeated by the digital music provider not less than

once per month for so long as the copyright owner

remains unidentified or has not been located.

‘‘(iii) If the required matching efforts are successful

in identifying and locating a copyright owner of a

musical work (or share thereof) by the end of the

calendar month in which the digital music provider

first makes use of the work, the digital music provider

shall provide statements of account and pay royalties

to such copyright owner in accordance with this section

and applicable regulations.

‘‘(iv) If the copyright owner is not identified or

located by the end of the calendar month in which

the digital music provider first makes use of the work,

the digital music provider shall accrue and hold royal-

ties calculated under the applicable statutory rate in

accordance with usage of the work, from initial use

of the work until the accrued royalties can be paid

to the copyright owner or are required to be transferred

to the mechanical licensing collective, as follows:

‘‘(I) Accrued royalties shall be maintained by

the digital music provider in accordance with gen-

erally accepted accounting principles.

‘‘(II) If a copyright owner of an unmatched

musical work (or share thereof) is identified and

located by or to the digital music provider before

the license availability date, the digital music pro-

vider shall—

‘‘(aa) not later than 45 calendar days after

the end of the calendar month during which

the copyright owner was identified and

located, pay the copyright owner all accrued

royalties, such payment to be accompanied by

a cumulative statement of account that

includes all of the information that would have

been provided to the copyright owner had the

digital music provider been providing monthly

statements of account to the copyright owner

Deadline.

Effective dates.

Account

statements.

Royalties.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00040 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3715 PUBLIC LAW 115–264—OCT. 11, 2018

from initial use of the work in accordance

with this section and applicable regulations,

including the requisite certification under sub-

section (c)(2)(I);

‘‘(bb) beginning with the accounting period

following the calendar month in which the

and for all other accounting periods prior to

the license availability date, provide monthly

statements of account and pay royalties to

the copyright owner as required under this

section and applicable regulations; and

‘‘(cc) beginning with the monthly royalty

reporting period commencing on the license

availability date, report usage and pay royal-

ties for such musical work (or share thereof)

for such reporting period and reporting periods

thereafter to the mechanical licensing collec-

tive, as required under this subsection and

applicable regulations.

‘‘(III) If a copyright owner of an unmatched

musical work (or share thereof) is not identified

and located by the license availability date, the

digital music provider shall—

‘‘(aa) not later than 45 calendar days after

the license availability date, transfer all

accrued royalties to the mechanical licensing

collective, such payment to be accompanied

by a cumulative statement of account that

includes all of the information that would have

been provided to the copyright owner had the

digital music provider been serving monthly

statements of account on the copyright owner

from initial use of the work in accordance

with this section and applicable regulations,

including the requisite certification under sub-

section (c)(2)(I), and accompanied by an addi-

tional certification by a duly authorized officer

of the digital music provider that the digital

music provider has fulfilled the requirements

of clauses (i) and (ii) of subparagraph (B) but

has not been successful in locating or identi-

fying the copyright owner; and

‘‘(bb) beginning with the monthly royalty

reporting period commencing on the license

availability date, report usage and pay royal-

ties for such musical work (or share thereof)

for such period and reporting periods there-

after to the mechanical licensing collective, as

required under this subsection and applicable

regulations.

‘‘(v) A digital music provider that complies with

the requirements of this subparagraph with respect

to unmatched musical works (or shares of works) shall

not be liable for or accrue late fees for late payments

of royalties for such works until such time as the

digital music provider is required to begin paying

Effective date.

Deadline.

Certification.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00041 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3716 PUBLIC LAW 115–264–OCT. 11, 2018

monthly royalties to the copyright owner or the

mechanical licensing collective, as applicable.

‘‘(C) A

DJUSTED STATUTE OF LIMITATIONS

.—Notwith-

standing anything to the contrary in section 507(b), with

respect to any claim of infringement of the exclusive rights

provided by paragraphs (1) and (3) of section 106 against

a digital music provider arising from the unauthorized

reproduction or distribution of a musical work by such

digital music provider in the course of engaging in covered

activities that accrued not more than 3 years prior to

the license availability date, such action may be commenced

not later than the later of—

‘‘(i) 3 years after the date on which the claim

accrued; or

‘‘(ii) 2 years after the license availability date.

‘‘(D) O

THER RIGHTS AND REMEDIES PRESERVED

.—Except

as expressly provided in this paragraph, nothing in this

paragraph shall be construed to alter, limit, or negate

any right or remedy of a copyright owner with respect

to unauthorized use of a musical work.

‘‘(11) L

EGAL PROTECTIONS FOR LICENSING ACTIVITIES

.—

‘‘(A) E

XEMPTION FOR COMPULSORY LICENSE ACTIVI

TIES

.—The antitrust exemption described in subsection

(c)(1)(D) shall apply to negotiations and agreements

between and among copyright owners and persons entitled

to obtain a compulsory license for covered activities, and

common agents acting on behalf of such copyright owners

or persons, including with respect to the administrative

assessment established under this subsection.

‘‘(B) L

IMITATION ON COMMON AGENT EXEMPTION

.—Not-

withstanding the antitrust exemption provided in sub-

section (c)(1)(D) and subparagraph (A) of this paragraph

(except for the administrative assessment referenced in

such subparagraph (A) and except as provided in paragraph

(8)(C)), neither the mechanical licensing collective nor the

digital licensee coordinator shall serve as a common agent

with respect to the establishment of royalty rates or terms

under this section.

‘‘(C) A

NTITRUST EXEMPTION FOR ADMINISTRATIVE ACTIVI

TIES

.—Notwithstanding any provision of the antitrust laws,

sory license under this section may designate the mechan-

ical licensing collective to administer voluntary licenses

for the reproduction or distribution of musical works in

covered activities on behalf of such copyright owners and

persons, subject to the following conditions:

‘‘(i) Each copyright owner shall establish the roy-

alty rates and material terms of any such voluntary

license individually and not in agreement, combination,

or concert with any other copyright owner.

‘‘(ii) Each person entitled to obtain a compulsory

license under this section shall establish the royalty

rates and material terms of any such voluntary license

individually and not in agreement, combination, or

concert with any other digital music provider.

‘‘(iii) The mechanical licensing collective shall

maintain the confidentiality of the voluntary licenses

Applicability.

Deadlines.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00042 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3717 PUBLIC LAW 115–264—OCT. 11, 2018

in accordance with the confidentiality provisions pre-

scribed by the Register of Copyrights under paragraph

(12)(C).

‘‘(D) L

IABILITY FOR GOOD

FAITH ACTIVITIES

.—The

mechanical licensing collective shall not be liable to any

person or entity based on a claim arising from its good-

faith administration of policies and procedures adopted

and implemented to carry out the responsibilities described

in subparagraphs (J) and (K) of paragraph (3), except to

the extent of correcting an underpayment or overpayment

of royalties as provided in paragraph (3)(L)(i)(VI), but the

collective may participate in a legal proceeding as a stake-

holder party if the collective is holding funds that are

the subject of a dispute between copyright owners. For

purposes of this subparagraph, the term ‘good-faith

administration’ means administration in a manner that

is not grossly negligent.

‘‘(E) P

REEMPTION OF STATE PROPERTY LAWS

.—The

holding and distribution of funds by the mechanical

licensing collective in accordance with this subsection shall

supersede and preempt any State law (including common

law) concerning escheatment or abandoned property, or

any analogous provision, that might otherwise apply.

‘‘(F) R

ULE OF CONSTRUCTION

.—Except as expressly pro-

vided in this subsection, nothing in this subsection shall

negate or limit the ability of any person to pursue an

action in Federal court against the mechanical licensing

collective or any other person based upon a claim arising

under this title or other applicable law.

‘‘(12) R

EGULATIONS

.—

‘‘(A) A

DOPTION BY REGISTER OF COPYRIGHTS AND COPY

RIGHT ROYALTY JUDGES

.—The Register of Copyrights may

conduct such proceedings and adopt such regulations as

may be necessary or appropriate to effectuate the provisions

of this subsection, except for regulations concerning pro-

ceedings before the Copyright Royalty Judges to establish

the administrative assessment, which shall be adopted by

the Copyright Royalty Judges.

‘‘(B) J

UDICIAL REVIEW OF REGULATIONS

.—Except as pro-

vided in paragraph (7)(D)(vii), regulations adopted under

this subsection shall be subject to judicial review pursuant

to chapter 7 of title 5.

‘‘(C) P

ROTECTION OF CONFIDENTIAL INFORMATION

.—The

for the appropriate procedures to ensure that confidential,

private, proprietary, or privileged information contained

in the records of the mechanical licensing collective and

digital licensee coordinator is not improperly disclosed or

used, including through any disclosure or use by the board

of directors or personnel of either entity, and specifically

including the unclaimed royalties oversight committee and

the dispute resolution committee of the mechanical

licensing collective.

‘‘(13) S

AVINGS CLAUSES

.—

‘‘(A) L

IMITATION ON ACTIVITIES AND RIGHTS COVERED

.—

This subsection applies solely to uses of musical works

subject to licensing under this section. The blanket license

Applicability.

Definition.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00043 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3718 PUBLIC LAW 115–264–OCT. 11, 2018

shall not be construed to extend or apply to activities

other than covered activities or to rights other than the

exclusive rights of reproduction and distribution licensed

under this section, or serve or act as the basis to extend

or expand the compulsory license under this section to

activities and rights not covered by this section on the

day before the enactment date.

‘‘(B) R

IGHTS OF PUBLIC PERFORMANCE NOT AFFECTED

.—

The rights, protections, and immunities granted under this

subsection, the data concerning musical works collected

and made available under this subsection, and the defini-

tions under subsection (e) shall not extend to, limit, or

otherwise affect any right of public performance in a

musical work.’’; and

(5) by adding at the end the following:

‘‘(e) D

EFINITIONS

.—As used in this section:

‘‘(1) A

CCRUED INTEREST

.—The term ‘accrued interest’ means

interest accrued on accrued royalties, as described in subsection

(d)(3)(H)(ii).

‘‘(2) A

CCRUED ROYALTIES

.—The term ‘accrued royalties’

means royalties accrued for the reproduction or distribution

of a musical work (or share thereof) in a covered activity,

calculated in accordance with the applicable royalty rate under

this section.

‘‘(3) A

DMINISTRATIVE ASSESSMENT

.—The term ‘administra-

tive assessment’ means the fee established pursuant to sub-

section (d)(7)(D).

‘‘(4) A

UDIT

.—The term ‘audit’ means a royalty compliance

examination to verify the accuracy of royalty payments, or

the conduct of such an examination, as applicable.

‘‘(5) B

LANKET LICENSE

.—The term ‘blanket license’ means

a compulsory license described in subsection (d)(1)(A) to engage

in covered activities.

‘‘(6) C

OLLECTIVE TOTAL COSTS

.—The term ‘collective total

costs’—

‘‘(A) means the total costs of establishing, maintaining,

and operating the mechanical licensing collective to fulfill

its statutory functions, including—

‘‘(i) startup costs;

‘‘(ii) financing, legal, audit, and insurance costs;

‘‘(iii) investments in information technology, infra-

structure, and other long-term resources;

‘‘(iv) outside vendor costs;

‘‘(v) costs of licensing, royalty administration, and

enforcement of rights;

‘‘(vi) costs of bad debt; and

‘‘(vii) costs of automated and manual efforts to

identify and locate copyright owners of musical works

(and shares of such musical works) and match sound

recordings to the musical works the sound recordings

embody; and

‘‘(B) does not include any added costs incurred by the

mechanical licensing collective to provide services under

voluntary licenses.

‘‘(7) C

OVERED ACTIVITY

.—The term ‘covered activity’ means

the activity of making a digital phonorecord delivery of a

musical work, including in the form of a permanent download,

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00044 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3719 PUBLIC LAW 115–264—OCT. 11, 2018

limited download, or interactive stream, where such activity

qualifies for a compulsory license under this section.

‘‘(8) D

IGITAL MUSIC PROVIDER

.—The term ‘digital music pro-

vider’ means a person (or persons operating under the authority

of that person) that, with respect to a service engaged in

covered activities—

‘‘(A) has a direct contractual, subscription, or other

economic relationship with end users of the service, or,

if no such relationship with end users exists, exercises

direct control over the provision of the service to end users;

‘‘(B) is able to fully report on any revenues and consid-

eration generated by the service; and

‘‘(C) is able to fully report on usage of sound recordings

of musical works by the service (or procure such reporting).

‘‘(9) D

IGITAL LICENSEE COORDINATOR

.—The term ‘digital

licensee coordinator’ means the entity most recently designated

pursuant to subsection (d)(5).

‘‘(10) D

IGITAL PHONORECORD DELIVERY

.—The term ‘digital

phonorecord delivery’ means each individual delivery of a

phonorecord by digital transmission of a sound recording that

results in a specifically identifiable reproduction by or for any

transmission recipient of a phonorecord of that sound recording,

regardless of whether the digital transmission is also a public

performance of the sound recording or any musical work

embodied therein, and includes a permanent download, a lim-

ited download, or an interactive stream. A digital phonorecord

delivery does not result from a real-time, noninteractive

subscription transmission of a sound recording where no repro-

duction of the sound recording or the musical work embodied

therein is made from the inception of the transmission through

to its receipt by the transmission recipient in order to make

the sound recording audible. A digital phonorecord delivery

does not include the digital transmission of sounds accom-

panying a motion picture or other audiovisual work as defined

in section 101.

‘‘(11) E

NACTMENT DATE

.—The term ‘enactment date’ means

the date of the enactment of the Musical Works Modernization

Act.

‘‘(12) I

NDIVIDUAL DOWNLOAD LICENSE

.—The term ‘indi-

vidual download license’ means a compulsory license obtained

by a record company to make and distribute, or authorize

the making and distribution of, permanent downloads

embodying a specific individual musical work.

‘‘(13) I

NTERACTIVE STREAM

.—The term ‘interactive stream’

means a digital transmission of a sound recording of a musical

work in the form of a stream, where the performance of the

sound recording by means of such transmission is not exempt

under section 114(d)(1) and does not in itself, or as a result

of a program in which it is included, qualify for statutory

licensing under section 114(d)(2). An interactive stream is a

digital phonorecord delivery.

‘‘(14) I

NTERESTED

.—The term ‘interested’, as applied to a

party seeking to participate in a proceeding under subsection

(d)(7)(D), is a party as to which the Copyright Royalty Judges

have not determined that the party lacks a significant interest

in such proceeding.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00045 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3720 PUBLIC LAW 115–264–OCT. 11, 2018

‘‘(15) L

ICENSE AVAILABILITY DATE

.—The term ‘license avail-

ability date’ means January 1 following the expiration of the

2-year period beginning on the enactment date.

‘‘(16) L

IMITED DOWNLOAD

.—The term ‘limited download’

means a digital transmission of a sound recording of a musical

work in the form of a download, where such sound recording

is accessible for listening only for a limited amount of time

or specified number of times.

‘‘(17) M

ATCHED

.—The term ‘matched’, as applied to a

musical work (or share thereof), means that the copyright owner

of such work (or share thereof) has been identified and located.

‘‘(18) M

ECHANICAL LICENSING COLLECTIVE

.—The term

‘mechanical licensing collective’ means the entity most recently

designated as such by the Register of Copyrights under sub-

section (d)(3).

‘‘(19) M

ECHANICAL LICENSING COLLECTIVE BUDGET

.—The

term ‘mechanical licensing collective budget’ means a statement

of the financial position of the mechanical licensing collective

for a fiscal year or quarter thereof based on estimates of

expenditures during the period and proposals for financing

those expenditures, including a calculation of the collective

total costs.

‘‘(20) M

USICAL WORKS DATABASE

.—The term ‘musical works

database’ means the database described in subsection (d)(3)(E).

‘‘(21) N

ONPROFIT

.—The term ‘nonprofit’ means a nonprofit

created or organized in a State.

‘‘(22) N

OTICE OF LICENSE

.—The term ‘notice of license’

means a notice from a digital music provider provided under

subsection (d)(2)(A) for purposes of obtaining a blanket license.

‘‘(23) N

OTICE OF NONBLANKET ACTIVITY

.—The term ‘notice

of nonblanket activity’ means a notice from a significant non-

blanket licensee provided under subsection (d)(6)(A) for pur-

poses of notifying the mechanical licensing collective that the

licensee has been engaging in covered activities.

‘‘(24) P

ERMANENT DOWNLOAD

.—The term ‘permanent

download’ means a digital transmission of a sound recording

of a musical work in the form of a download, where such

sound recording is accessible for listening without restriction

as to the amount of time or number of times it may be accessed.

‘‘(25) Q

UALIFIED AUDITOR

.—The term ‘qualified auditor’

means an independent, certified public accountant with experi-

ence performing music royalty audits.

‘‘(26) R

ECORD COMPANY

.—The term ‘record company’ means

an entity that invests in, produces, and markets sound

recordings of musical works, and distributes such sound

recordings for remuneration through multiple sales channels,

including a corporate affiliate of such an entity engaged in

distribution of sound recordings.

‘‘(27) R

EPORT OF USAGE

.—The term ‘report of usage’ means

a report reflecting an entity’s usage of musical works in covered

activities described in subsection (d)(4)(A).

‘‘(28) R

EQUIRED MATCHING EFFORTS

.—The term ‘required

matching efforts’ means efforts to identify and locate copyright

owners of musical works as described in subsection (d)(10)(B)(i).

‘‘(29) S

ERVICE

.—The term ‘service’, as used in relation to

covered activities, means any site, facility, or offering by or

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00046 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3721 PUBLIC LAW 115–264—OCT. 11, 2018

through which sound recordings of musical works are digitally

transmitted to members of the public.

‘‘(30) S

HARE

.—The term ‘share’, as applied to a musical

work, means a fractional ownership interest in such work.

‘‘(31) S

IGNIFICANT NONBLANKET LICENSEE

.—The term

‘significant nonblanket licensee’—

‘‘(A) means an entity, including a group of entities

under common ownership or control that, acting under

the authority of one or more voluntary licenses or indi-

vidual download licenses, offers a service engaged in cov-

ered activities, and such entity or group of entities—

‘‘(i) is not currently operating under a blanket

license and is not obligated to provide reports of usage

reflecting covered activities under subsection (d)(4)(A);

‘‘(ii) has a direct contractual, subscription, or other

economic relationship with end users of the service

or, if no such relationship with end users exists, exer-

cises direct control over the provision of the service

to end users; and

‘‘(iii) either—

‘‘(I) on any day in a calendar month, makes

more than 5,000 different sound recordings of

musical works available through such service; or

‘‘(II) derives revenue or other consideration

in connection with such covered activities greater

than $50,000 in a calendar month, or total revenue

or other consideration greater than $500,000

during the preceding 12 calendar months; and

‘‘(B) does not include—

‘‘(i) an entity whose covered activity consists solely

of free-to-the-user streams of segments of sound

recordings of musical works that do not exceed 90

seconds in length, are offered only to facilitate a

licensed use of musical works that is not a covered

activity, and have no revenue directly attributable to

such streams constituting the covered activity; or

‘‘(ii) a ‘public broadcasting entity’ as defined in

section 118(f).

‘‘(32) S

ONGWRITER

.—The term ‘songwriter’ means the

author of all or part of a musical work, including a composer

or lyricist.

‘‘(33) S

TATE

.—The term ‘State’ means each State of the

United States, the District of Columbia, and each territory

or possession of the United States.

‘‘(34) U

NCLAIMED ACCRUED ROYALTIES

.—The term

‘unclaimed accrued royalties’ means accrued royalties eligible

for distribution under subsection (d)(3)(J).

‘‘(35) U

NMATCHED

.—The term ‘unmatched’, as applied to

a musical work (or share thereof), means that the copyright

owner of such work (or share thereof) has not been identified

or located.

‘‘(36) V

OLUNTARY LICENSE

.—The term ‘voluntary license’

means a license for use of a musical work (or share thereof)

other than a compulsory license obtained under this section.’’.

(b) T

ECHNICAL AND

ONFORMING

MENDMENTS TO

ECTION

801.—Section 801(b) of title 17, United States Code, is amended—

(1) by redesignating paragraph (8) as paragraph (9); and

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00047 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3722 PUBLIC LAW 115–264–OCT. 11, 2018

(2) by inserting after paragraph (7) the following:

‘‘(8) To determine the administrative assessment to be paid

by digital music providers under section 115(d). The provisions

of section 115(d) shall apply to the conduct of proceedings

by the Copyright Royalty Judges under section 115(d) and

not the procedures described in this section, or section 803,

804, or 805.’’.

FFECTIVE

ATE OF

MENDED

ATE

ETTING

TANDARD

.—

The amendments made by subsection (a)(3) and section 103(g)(2)

shall apply to any proceeding before the Copyright Royalty Judges

that is commenced on or after the date of the enactment of this

Act.

(d) T

ECHNICAL AND

ONFORMING

MENDMENTS TO

ITLE

37,

ART

385

OF THE

ODE OF

EDERAL

EGULATIONS

.—Not later than

270 days after the date of enactment of this Act, the Copyright

Royalty Judges shall amend the regulations for section 115 of

title 17, United States Code, in part 385 of title 37, Code of Federal

Regulations, to conform the definitions used in such part to the

definitions of the same terms described in section 115(e) of title

17, United States Code, as added by subsection (a). In so doing,

the Copyright Royalty Judges shall make adjustments to the lan-

guage of the regulations as necessary to achieve the same purpose

and effect as the original regulations with respect to the rates

and terms previously adopted by the Copyright Royalty Judges.

(e) C

OPYRIGHT

FFICE

CTIVITIES

.—The Register of Copyrights

shall engage in public outreach and educational activities—

(1) regarding the amendments made by subsection (a) to

section 115 of title 17, United States Code, including the respon-

sibilities of the mechanical licensing collective designated under

those amendments;

(2) which shall include educating songwriters and other

interested parties with respect to the process established under

section 115(d)(3)(C)(i)(V) of title 17, United States Code, as

added by subsection (a), by which—

(A) a copyright owner may claim ownership of musical

works (and shares of such works); and

(B) royalties for works for which the owner is not

identified or located shall be equitably distributed to known

(3) which the Register shall make available online.

(f) U

NCLAIMED

OYALTIES

TUDY AND

ECOMMENDATIONS

.—

(1) I

N GENERAL

.—Not later than 2 years after the date

on which the Register of Copyrights initially designates the

mechanical licensing collective under section 115(d)(3)(B)(i) of

title 17, United States Code, as added by subsection (a)(4),

the Register, in consultation with the Comptroller General of

the United States, and after soliciting and reviewing comments

and relevant information from music industry participants and

other interested parties, shall submit to the Committee on

the Judiciary of the Senate and the Committee on the Judiciary

of the House of Representatives a report that recommends

best practices that the collective may implement in order to—

(A) identify and locate musical work copyright owners

with unclaimed accrued royalties held by the collective;

(B) encourage musical work copyright owners to claim

the royalties of those owners; and

Consultation.

Deadline.

Reports.

17 USC 115 note.

Web posting.

17 USC 115 note.

Deadline.

17 USC 115 note.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00048 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3723 PUBLIC LAW 115–264—OCT. 11, 2018

(2) C

ONSIDERATION OF RECOMMENDATIONS

.—The mechan-

ical licensing collective shall carefully consider, and give

substantial weight to, the recommendations submitted by the

the procedures of the collective with respect to the—

(A) identification and location of musical work copy-

right owners; and

(B) distribution of unclaimed royalties.

SEC. 103. AMENDMENTS TO SECTION 114.

(a) U

NIFORM

ATE

TANDARD

.—Section 114(f) of title 17, United

States Code, is amended—

(1) by striking paragraphs (1) and (2) and inserting the

following:

‘‘(1)(A) Proceedings under chapter 8 shall determine reason-

able rates and terms of royalty payments for transmissions

subject to statutory licensing under subsection (d)(2) during

the 5-year period beginning on January 1 of the second year

following the year in which the proceedings are to be com-

menced pursuant to subparagraph (A) or (B) of section 804(b)(3),

as the case may be, or such other period as the parties may

agree. The parties to each proceeding shall bear their own

costs.

‘‘(B) The schedule of reasonable rates and terms determined

by the Copyright Royalty Judges shall, subject to paragraph

(2), be binding on all copyright owners of sound recordings

and entities performing sound recordings affected by this para-

graph during the 5-year period specified in subparagraph (A),

or such other period as the parties may agree. Such rates

and terms shall distinguish among the different types of serv-

ices then in operation and shall include a minimum fee for

each such type of service, such differences to be based on

criteria including the quantity and nature of the use of sound

recordings and the degree to which use of the service may

substitute for or may promote the purchase of phonorecords

by consumers. The Copyright Royalty Judges shall establish

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—

‘‘(i) shall base their decision on economic, competitive,

and programming information presented by the parties,

including—

‘‘(I) whether use of the service may substitute for

or may promote the sales of phonorecords or otherwise

may interfere with or may enhance the sound recording

‘‘(II) the relative roles of the copyright owner and

the transmitting entity in the copyrighted work and

the service made available to the public with respect

to relative creative contribution, technological contribu-

tion, capital investment, cost, and risk; and

‘‘(ii) may consider the rates and terms for comparable

types of audio transmission services and comparable cir-

cumstances under voluntary license agreements.

Time period.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00049 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3724 PUBLIC LAW 115–264–OCT. 11, 2018

‘‘(C) The procedures under subparagraphs (A) and (B) shall

also be initiated pursuant to a petition filed by any sound

recording copyright owner or any transmitting entity indicating

that a new type of service on which sound recordings are

performed is or is about to become operational, for the purpose

of determining reasonable terms and rates of royalty payments

with respect to such new type of service for the period beginning

with the inception of such new type of service and ending

on the date on which the royalty rates and terms for eligible

nonsubscription services and new subscription services, or pre-

existing subscription services and preexisting satellite digital

audio radio services, as the case may be, most recently deter-

mined under subparagraph (A) or (B) and chapter 8 expire,

or such other period as the parties may agree.’’; and

(2) by redesignating paragraphs (3), (4), and (5) as para-

graphs (2), (3), and (4), respectively.

(b) R

EPEAL

.—Subsection (i) of section 114 of title 17, United

States Code, is repealed.

SE IN

USICAL

ORK

ROCEEDINGS

.—

(1) I

N GENERAL

.—License fees payable for the public

performance of sound recordings under section 106(6) of title

17, United States Code, shall not be taken into account in

any administrative, judicial, or other governmental proceeding

to set or adjust the royalties payable to musical work copyright

owners for the public performance of their works except in

such a proceeding to set or adjust royalties for the public

performance of musical works by means of a digital audio

transmission other than a transmission by a broadcaster, and

may be taken into account only with respect to such digital

audio transmission.

(2) D

EFINITIONS

.—In this subsection:

(A) T

RANSMISSION BY A BROADCASTER

.—The term

‘‘transmission by a broadcaster’’ means a nonsubscription

digital transmission made by a terrestrial broadcast station

on its own behalf, or on the behalf of a terrestrial broadcast

station under common ownership or control, that is not

part of an interactive service or a music-intensive service

comprising the transmission of sound recordings cus-

tomized for or customizable by recipients or service users.

(B) T

ERRESTRIAL BROADCAST STATION

.—The term

‘‘terrestrial broadcast station’’ means a terrestrial, over-

the-air radio or television broadcast station, including an

FM translator (as defined in section 74.1201 of title 47,

Code of Federal Regulations, and licensed as such by the

Federal Communications Commission) whose primary busi-

ness activities are comprised of, and whose revenues are

generated through, terrestrial, over-the-air broadcast trans-

missions, or the simultaneous or substantially-simulta-

neous digital retransmission by the terrestrial, over-the-

air broadcast station of its over-the-air broadcast trans-

missions.

(d) R

ULE OF

ONSTRUCTION

.—Subsection (c)(2) shall not be

given effect in interpreting provisions of title 17, United States

Code.

(e) U

SE IN

OUND

ECORDING

ROCEEDINGS

.—The repeal of

section 114(i) of title 17, United States Code, by subsection (b)

shall not be taken into account in any proceeding to set or adjust

17 USC 114 note.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00050 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3725 PUBLIC LAW 115–264—OCT. 11, 2018

the rates and fees payable for the use of sound recordings under

section 112(e) or 114(f) of such title that is pending on, or com-

menced on or after, the date of enactment of this Act.

(f) D

ECISIONS AND

RECEDENTS

FFECTED

.—The repeal

of section 114(i) of title 17, United States Code, by subsection

(b) shall not have any effect upon the decisions, or the precedents

established or relied upon, in any proceeding to set or adjust the

rates and fees payable for the use of sound recordings under section

112(e) or 114(f) of such title before the date of enactment of this

Act.

(g) T

ECHNICAL AND

ONFORMING

MENDMENTS

.—

(1) S

ECTION 114

.—Section 114(f) of title 17, United States

Code, as amended by subsection (a), is further amended in

paragraph (4)(C), as so redesignated, in the first sentence,

by striking ‘‘under paragraph (4)’’ and inserting ‘‘under para-

graph (3)’’.

(2) S

ECTION 801

.—Section 801(b) of title 17, United States

Code, is amended—

(A) in paragraph (1), by striking ‘‘The rates applicable’’

and all that follows though ‘‘prevailing industry practices.’’;

and

(B) in paragraph (7)(B), by striking ‘‘114(f)(3)’’ and

inserting ‘‘114(f)(2)’’.

(3) S

ECTION 803

.—Section 803(c)(2)(E)(i)(II) of title 17,

United States Code, is amended—

(A) by striking ‘‘or 114(f)(2)(C)’’; and

(B) by striking ‘‘114(f)(4)(B)’’ and inserting

‘‘114(f)(3)(B)’’.

(4) S

ECTION 804

.—Section 804(b)(3)(C) of title 17, United

States Code, is amended—

(A) in clause (i), by striking ‘‘and 114(f)(2)(C)’’;

(B) in clause (iii)(II), by striking ‘‘114(f)(4)(B)(ii)’’ and

inserting ‘‘114(f)(3)(B)(ii)’’; and

case may be’’.

(h) E

FFECTIVE

ATE OF

MENDED

ATE

ETTING

TANDARD

.—

The amendments made by subsection (a)(1) shall apply to any

proceeding before the Copyright Royalty Judges that is commenced

on or after the date of the enactment of this Act.

(i) T

IMING OF

ATE

ETERMINATIONS

.—Section 804(b)(3)(B) of

title 17, United States Code, is amended, in the third sentence,

by inserting the following after ‘‘fifth calendar year’’: ‘‘, except

that—(i) with respect to preexisting subscription services, the terms

and rates finally determined for the rate period ending on December

31, 2022, shall remain in effect through December 31, 2027, and

there shall be no proceeding to determine terms and rates for

preexisting subscription services for the period beginning on

January 1, 2023, and ending on December 31, 2027; and’’ ‘‘(ii)

with respect to pre-existing satellite digital audio radio services,

the terms and rates set forth by the Copyright Royalty Judges

on December 14, 2017, in their initial determination for the rate

period ending on December 31, 2022, shall be in effect through

December 31, 2027, without any change based on a rehearing

under section 803(c)(2) and without the possibility of appeal under

section 803(d), and there shall be no proceeding to determine terms

and rates for preexisting satellite digital audio radio services for

17 USC 114 note.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00051 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3726 PUBLIC LAW 115–264–OCT. 11, 2018

the period beginning on January 1, 2023, and ending on December

31, 2027’’.

SEC. 104. RANDOM ASSIGNMENT OF RATE COURT PROCEEDINGS.

Section 137 of title 28, United States Code, is amended—

(1) by striking ‘‘The business’’ and inserting ‘‘(a) I

ERAL

.—The business’’; and

(2) by adding at the end the following:

‘‘(b) R

ANDOM

SSIGNMENT OF

ATE

OURT

ROCEEDINGS

.—

‘‘(1) I

N GENERAL

.—

‘‘(A) D

EFINITION

.—In this paragraph, the term ‘per-

forming rights society’ has the meaning given the term

in section 101 of title 17.

‘‘(B) D

ETERMINATION OF LICENSE FEE

.—Except as pro-

vided in subparagraph (C), in the case of any performing

rights society subject to a consent decree, any application

for the determination of a license fee for the public perform-

ance of music in accordance with the applicable consent

decree shall be made in the district court with jurisdiction

over that consent decree and randomly assigned to a judge

of that district court according to the rules of that court

for the division of business among district judges, provided

that any such application shall not be assigned to—

‘‘(i) a judge to whom continuing jurisdiction over

any performing rights society for any performing rights

society consent decree is assigned or has previously

been assigned; or

‘‘(ii) a judge to whom another proceeding con-

cerning an application for the determination of a

reasonable license fee is assigned at the time of the

filing of the application.

‘‘(C) E

XCEPTION

.—Subparagraph (B) does not apply to

an application to determine reasonable license fees made

by individual proprietors under section 513 of title 17.

‘‘(2) R

ULE OF CONSTRUCTION

.—Nothing in paragraph (1)

shall modify the rights of any party to a consent decree or

to a proceeding to determine reasonable license fees, to make

an application for the construction of any provision of the

applicable consent decree. Such application shall be referred

to the judge to whom continuing jurisdiction over the applicable

consent decree is currently assigned. If any such application

is made in connection with a rate proceeding, such rate pro-

ceeding shall be stayed until the final determination of the

construction application. Disputes in connection with a rate

proceeding about whether a licensee is similarly situated to

another licensee shall not be subject to referral to the judge

with continuing jurisdiction over the applicable consent

decree.’’.

SEC. 105. PERFORMING RIGHTS SOCIETY CONSENT DECREES.

(a) D

EFINITION

.—In this section, the term ‘‘performing rights

society’’ has the meaning given the term in section 101 of title

17, United States Code.

(b) N

OTIFICATION OF

EVIEW

.—

(1) I

N GENERAL

.—The Department of Justice shall provide

timely briefings upon request of any Member of the Committee

on the Judiciary of the Senate and the Committee on the

Judiciary of the House of Representatives regarding the status

Briefings.

17 USC 106 note.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00052 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3727 PUBLIC LAW 115–264—OCT. 11, 2018

of a review in progress of a consent decree between the United

States and a performing rights society.

(2) C

ONFIDENTIALITY AND DELIBERATIVE PROCESS

.—In

accordance with applicable rules relating to confidentiality and

agency deliberative process, the Department of Justice shall

share with such Members of Congress detailed and timely

information and pertinent documents related to the consent

decree review.

CTION

EFORE

OTION TO

ERMINATE

.—

(1) I

N GENERAL

.—Before filing with the appropriate district

court of the United States a motion to terminate a consent

decree between the United States and a performing rights

society, including a motion to terminate a consent decree after

the passage of a specified period of time, the Department of

Justice shall—

(A) notify Members of Congress and committees of

Congress described in subsection (b); and

(B) provide to such Members of Congress and commit-

tees information regarding the impact of the proposed

termination on the market for licensing the public perform-

ance of musical works should the motion be granted.

(2) N

OTIFICATION

.—

(A) I

N GENERAL

.—During the notification described in

paragraph (1), and not later than a reasonable time before

the date on which the Department of Justice files with

the appropriate district court of the United States a motion

to terminate a consent decree between the United States

and a performing rights society, the Department of Justice

should submit to the chairmen and ranking members of

the Committee on the Judiciary of the Senate and the

Committee on the Judiciary of the House of Representatives

a written notification of the intent of the Department of

Justice to file the motion.

(B) C

ONTENTS

.—The notification provided in subpara-

graph (A) shall include a written report to the chairmen

and ranking members of the Committee on the Judiciary

of Senate and the Committee on the Judiciary of the House

of Representatives setting forth—

(i) an explanation of the process used by the

Department of Justice to review the consent decree;

(ii) a summary of the public comments received

by the Department of Justice during the review by

the Department; and

(iii) other information provided to Congress under

paragraph (1)(B).

(d) S

COPE

.—This section applies only to a consent decree

between the United States and a performing rights society.

SEC. 106. EFFECTIVE DATE.

This title, and the amendments made by this title, shall take

effect on the date of enactment of this Act.

17 USC 114 note.

Summary.

Reports.

Notification.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00053 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3728 PUBLIC LAW 115–264–OCT. 11, 2018

TITLE II—CLASSICS PROTECTION AND

ACCESS

SEC. 201. SHORT TITLE.

This title may be cited as the ‘‘Classics Protection and Access

Act’’.

SEC. 202. UNAUTHORIZED USE OF PRE-1972 SOUND RECORDINGS.

(a) P

REEMPTION OF

TATE

IGHTS

; P

ROTECTION FOR

NAUTHORIZED

.—Title 17, United States Code, is amended—

(1) in section 301, by striking subsection (c) and inserting

the following:

‘‘(c) Notwithstanding the provisions of section 303, and in

accordance with chapter 14, no sound recording fixed before Feb-

ruary 15, 1972, shall be subject to copyright under this title. With

respect to sound recordings fixed before February 15, 1972, the

preemptive provisions of subsection (a) shall apply to activities

that are commenced on and after the date of enactment of the

Classics Protection and Access Act. Nothing in this subsection may

be construed to affirm or negate the preemption of rights and

remedies pertaining to any cause of action arising from the non-

subscription broadcast transmission of sound recordings under the

common law or statutes of any State for activities that do not

qualify as covered activities under chapter 14 undertaken during

the period between the date of enactment of the Classics Protection

and Access Act and the date on which the term of prohibition

on unauthorized acts under section 1401(a)(2) expires for such

sound recordings. Any potential preemption of rights and remedies

related to such activities undertaken during that period shall apply

in all respects as it did the day before the date of enactment

of the Classics Protection and Access Act.’’; and

(2) by adding at the end the following:

‘‘CHAPTER 14—UNAUTHORIZED USE OF PRE-1972 SOUND

RECORDINGS

‘‘Sec.

‘‘1401. Unauthorized use of pre-1972 sound recordings.

‘‘§ 1401. Unauthorized use of pre-1972 sound recordings

‘‘(a) I

ENERAL

.—

‘‘(1) U

NAUTHORIZED ACTS

.—Anyone who, on or before the

last day of the applicable transition period under paragraph

(2), and without the consent of the rights owner, engages in

covered activity with respect to a sound recording fixed before

February 15, 1972, shall be subject to the remedies provided

in sections 502 through 505 and 1203 to the same extent

as an infringer of copyright or a person that engages in

unauthorized activity under chapter 12.

‘‘(2) T

ERM OF PROHIBITION

.—

‘‘(A) I

N GENERAL

.—The prohibition under paragraph

(1)—

‘‘(i) subject to clause (ii), shall apply to a sound

recording described in that paragraph—

‘‘(I) through December 31 of the year that

is 95 years after the year of first publication; and

17 USC 1401.

17 USC 1401

prec.

Applicability.

Time period.

Applicability.

17 USC 101 note.

Classics

Protection and

Access Act.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00054 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3729 PUBLIC LAW 115–264—OCT. 11, 2018

‘‘(II) for a further transition period as pre-

scribed under subparagraph (B) of this paragraph;

and

‘‘(ii) shall not apply to any sound recording after

February 15, 2067.

‘‘(B) T

RANSITION PERIODS

.—

‘‘(i) P

1923 RECORDINGS

.—In the case of a sound

recording first published before January 1, 1923, the

transition period described in subparagraph (A)(i)(II)

shall end on December 31 of the year that is 3 years

after the date of enactment of this section.

‘‘(ii) 1923–1946

RECORDINGS

.—In the case of a

sound recording first published during the period

beginning on January 1, 1923, and ending on December

31, 1946, the transition period described in subpara-

graph (A)(i)(II) shall end on the date that is 5 years

after the last day of the period described in subpara-

graph (A)(i)(I).

‘‘(iii) 1947–1956

RECORDINGS

.—In the case of a

sound recording first published during the period

beginning on January 1, 1947, and ending on December

31, 1956, the transition period described in subpara-

graph (A)(i)(II) shall end on the date that is 15 years

after the last day of the period described in subpara-

graph (A)(i)(I).

‘‘(iv) P

OST

1956 RECORDINGS

.—In the case of a

sound recording fixed before February 15, 1972, that

is not described in clause (i), (ii), or (iii), the transition

period described in subparagraph (A)(i)(II) shall end

on February 15, 2067.

‘‘(3) R

ULE OF CONSTRUCTION

.—For the purposes of this

subsection, the term ‘anyone’ includes any State, any

instrumentality of a State, and any officer or employee of

a State or instrumentality of a State acting in the official

capacity of the officer or employee, as applicable.

‘‘(b) C

ERTAIN

UTHORIZED

RANSMISSIONS AND

EPRODUC

TIONS

.—A public performance by means of a digital audio trans-

mission of a sound recording fixed before February 15, 1972, or

a reproduction in an ephemeral phonorecord or copy of a sound

recording fixed before February 15, 1972, shall, for purposes of

subsection (a), be considered to be authorized and made with the

consent of the rights owner if—

‘‘(1) the transmission or reproduction would satisfy the

requirements for statutory licensing under section 112(e)(1)

or section 114(d)(2), or would be exempt under section 114(d)(1),

as the case may be, if the sound recording were fixed on

or after February 15, 1972; and

‘‘(2) the transmitting entity pays the statutory royalty for

the transmission or reproduction pursuant to the rates and

terms adopted under sections 112(e) and 114(f), and complies

with other obligations, in the same manner as required by

regulations adopted by the Copyright Royalty Judges under

sections 112(e) and 114(f) for sound recordings that are fixed

on or after February 15, 1972, except in the case of a trans-

mission that would be exempt under section 114(d)(1).

‘‘(c) C

ERTAIN

ONCOMMERCIAL

SES OF

OUND

ECORDINGS

HAT

EING

OMMERCIALLY

XPLOITED

.—

Definition.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00055 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3730 PUBLIC LAW 115–264–OCT. 11, 2018

‘‘(1) I

N GENERAL

.—Noncommercial use of a sound recording

fixed before February 15, 1972, that is not being commercially

exploited by or under the authority of the rights owner shall

not violate subsection (a) if—

‘‘(A) the person engaging in the noncommercial use,

in order to determine whether the sound recording is being

commercially exploited by or under the authority of the

rights owner, makes a good faith, reasonable search for,

but does not find, the sound recording—

‘‘(i) in the records of schedules filed in the Copy-

right Office as described in subsection (f)(5)(A); and

‘‘(ii) on services offering a comprehensive set of

sound recordings for sale or streaming;

‘‘(B) the person engaging in the noncommercial use

files a notice identifying the sound recording and the nature

of the use in the Copyright Office in accordance with the

regulations issued under paragraph (3)(B); and

‘‘(C) during the 90-day period beginning on the date

on which the notice described in subparagraph (B) is

indexed into the public records of the Copyright Office,

the rights owner of the sound recording does not, in its

discretion, opt out of the noncommercial use by filing notice

thereof in the Copyright Office in accordance with the

regulations issued under paragraph (5).

‘‘(2) R

ULES OF CONSTRUCTION

.—For purposes of this sub-

section—

‘‘(A) merely recovering costs of production and distribu-

tion of a sound recording resulting from a use otherwise

permitted under this subsection does not itself necessarily

constitute a commercial use of the sound recording;

‘‘(B) the fact that a person engaging in the use of

a sound recording also engages in commercial activities

does not itself necessarily render the use commercial; and

‘‘(C) the fact that a person files notice of a noncommer-

cial use of a sound recording in accordance with the regula-

tions issued under paragraph (3)(B) does not itself affect

any limitation on the exclusive rights of a copyright owner

described in section 107, 108, 109, 110, or 112(f) as applied

to a claim under subsection (a) of this section pursuant

to subsection (f)(1)(A) of this section.

‘‘(3) N

OTICE OF COVERED ACTIVITY

.—Not later than 180

days after the date of enactment of this section, the Register

of Copyrights shall issue regulations that—

‘‘(A) provide specific, reasonable steps that, if taken

by a filer, are sufficient to constitute a good faith, reason-

able search under paragraph (1)(A) to determine whether

a recording is being commercially exploited, including the

services that satisfy the good faith, reasonable search

requirement under paragraph (1)(A) for purposes of the

safe harbor described in paragraph (4)(A); and

‘‘(B) establish the form, content, and procedures for

the filing of notices under paragraph (1)(B).

‘‘(4) S

AFE HARBOR

.—

‘‘(A) I

N GENERAL

.—A person engaging in a noncommer-

cial use of a sound recording otherwise permitted under

this subsection who establishes that the person made a

Deadline.

Regulations.

Time period.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00056 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3731 PUBLIC LAW 115–264—OCT. 11, 2018

good faith, reasonable search under paragraph (1)(A) with-

out finding commercial exploitation of the sound recording

by or under the authority of the rights owner shall not

be found to be in violation of subsection (a).

‘‘(B) S

TEPS SUFFICIENT BUT NOT NECESSARY

.—Taking

the specific, reasonable steps identified by the Register

of Copyrights in the regulations issued under paragraph

(3)(A) shall be sufficient, but not necessary, for a filer

to satisfy the requirement to conduct a good faith, reason-

able search under paragraph (1)(A) for purposes of subpara-

graph (A) of this paragraph.

‘‘(5) O

PTING OUT OF COVERED ACTIVITY

.—

‘‘(A) I

N GENERAL

.—Not later than 180 days after the

date of enactment of this section, the Register of Copyrights

shall issue regulations establishing the form, content, and

procedures for the rights owner of a sound recording that

is the subject of a notice under paragraph (1)(B) to, in

its discretion, file notice opting out of the covered activity

described in the notice under paragraph (1)(B) during the

90-day period beginning on the date on which the notice

under paragraph (1)(B) is indexed into the public records

of the Copyright Office.

‘‘(B) R

ULE OF CONSTRUCTION

.—The fact that a rights

holder opts out of a noncommercial use of a sound recording

by filing notice thereof in the Copyright Office in accordance

with the regulations issued under subparagraph (A) does

not itself enlarge or diminish any limitation on the exclu-

sive rights of a copyright owner described in section 107,

108, 109, 110, or 112(f) as applied to a claim under sub-

section (a) of this section pursuant to subsection (f)(1)(A)

of this section.

‘‘(6) C

IVIL PENALTIES FOR CERTAIN ACTS

.—

‘‘(A) F

ILING OF NOTICES OF NONCOMMERCIAL USE

.—

Any person who willfully engages in a pattern or practice

of filing a notice of noncommercial use of a sound recording

as described in paragraph (1)(B) fraudulently describing

the use proposed, or knowing that the use proposed is

not permitted under this subsection, shall be assessed a

civil penalty in an amount that is not less than $250,

and not more than $1000, for each such notice, in addition

to any other remedies that may be available under this

title based on the actual use made.

‘‘(B) F

ILING OF OPT

OUT NOTICES

.—

‘‘(i) I

N GENERAL

.—Any person who files an opt-

out notice as described in paragraph (1)(C), knowing

that the person is not the rights owner or authorized

to act on behalf of the rights owner of the sound

recording to which the notice pertains, shall be

assessed a civil penalty in an amount not less than

$250, and not more than $1,000, for each such notice.

‘‘(ii) P

ATTERN OR PRACTICE

.—Any person who

engages in a pattern or practice of making filings as

described in clause (i) shall be assessed a civil penalty

in an amount not less than $10,000 for each such

filing.

‘‘(C) D

EFINITION

.—For purposes of this paragraph, the

term ‘knowing’—

Deadline.

Regulations.

Time period.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00057 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3732 PUBLIC LAW 115–264–OCT. 11, 2018

‘‘(i) does not require specific intent to defraud;

and

‘‘(ii) with respect to information about ownership

of the sound recording in question, means that the

person—

‘‘(I) has actual knowledge of the information;

‘‘(II) acts in deliberate ignorance of the truth

or falsity of the information; or

‘‘(III) acts in grossly negligent disregard of

the truth or falsity of the information.

‘‘(d) P

AYMENT OF

OYALTIES FOR

RANSMISSIONS OF

ERFORM

ANCES BY

IRECT

ICENSING OF

TATUTORY

ERVICES

.—

‘‘(1) I

N GENERAL

.—A public performance by means of a

digital audio transmission of a sound recording fixed before

February 15, 1972, shall, for purposes of subsection (a), be

considered to be authorized and made with the consent of

the rights owner if the transmission is made pursuant to a

license agreement voluntarily negotiated at any time between

the rights owner and the entity performing the sound recording.

‘‘(2) P

AYMENT OF ROYALTIES TO NONPROFIT COLLECTIVE

UNDER CERTAIN LICENSE AGREEMENTS

.—

‘‘(A) L

ICENSES ENTERED INTO ON OR AFTER DATE OF

ENACTMENT

.—To the extent that a license agreement

described in paragraph (1) entered into on or after the

date of enactment of this section extends to a public

performance by means of a digital audio transmission of

a sound recording fixed before February 15, 1972, that

meets the conditions of subsection (b)—

‘‘(i) the licensee shall, with respect to such trans-

mission, pay to the collective designated to distribute

receipts from the licensing of transmissions in accord-

ance with section 114(f), 50 percent of the performance

royalties for that transmission due under the license;

and

‘‘(ii) the royalties paid under clause (i) shall be

fully credited as payments due under the license.

‘‘(B) C

ERTAIN AGREEMENTS ENTERED INTO BEFORE

ENACTMENT

.—To the extent that a license agreement

described in paragraph (1), entered into during the period

beginning on January 1 of the year in which this section

is enacted and ending on the day before the date of enact-

ment of this section, or a settlement agreement with a

preexisting satellite digital audio radio service (as defined

in section 114(j)) entered into during the period beginning

on January 1, 2015, and ending on the day before the

date of enactment of this section, extends to a public

performance by means of a digital audio transmission of

a sound recording fixed before February 15, 1972, that

meets the conditions of subsection (b)—

‘‘(i) the rights owner shall, with respect to such

transmission, pay to the collective designated to dis-

tribute receipts from the licensing of transmissions

in accordance with section 114(f) an amount that is

equal to the difference between—

‘‘(I) 50 percent of the difference between—

‘‘(aa) the rights owner’s total gross

performance royalty fee receipts or settlement

Time periods.

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00058 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3733 PUBLIC LAW 115–264—OCT. 11, 2018

monies received for all such transmissions cov-

ered under the license or settlement agree-

ment, as applicable; and

‘‘(bb) the rights owner’s total payments

for outside legal expenses, including any pay-

ments of third-party claims, that are directly

attributable to the license or settlement agree-

ment, as applicable; and

‘‘(II) the amount of any royalty receipts or

settlement monies under the agreement that are

distributed by the rights owner to featured and

nonfeatured artists before the date of enactment

of this section; and

‘‘(ii) the royalties paid under clause (i) shall be

fully credited as payments due under the license or

settlement agreement, as applicable.

‘‘(3) D

ISTRIBUTION OF ROYALTIES AND SETTLEMENT MONIES

BY COLLECTIVE

.—The collective described in paragraph (2) shall,

in accordance with subparagraphs (B) through (D) of section

114(g)(2), and paragraphs (5) and (6) of section 114(g), dis-

tribute the royalties or settlement monies received under para-

graph (2) under a license or settlement described in paragraph

(2), which shall be the only payments to which featured and

nonfeatured artists are entitled by virtue of the transmissions

described in paragraph (2), except for settlement monies

described in paragraph (2) that are distributed by the rights

owner to featured and nonfeatured artists before the date of

enactment of this section.

‘‘(4) P

AYMENT OF ROYALTIES UNDER LICENSE AGREEMENTS

ENTERED BEFORE ENACTMENT OR NOT OTHERWISE DESCRIBED

IN PARAGRAPH (2)

.—

‘‘(A) I

N GENERAL

.—To the extent that a license agree-

ment described in paragraph (1) entered into before the

date of enactment of this section, or any other license

agreement not as described in paragraph (2), extends to

a public performance by means of a digital audio trans-

mission of a sound recording fixed before February 15,

1972, that meets the conditions of subsection (b), the pay-

ments made by the licensee pursuant to the license shall

be made in accordance with the agreement.

‘‘(B) A

DDITIONAL PAYMENTS NOT REQUIRED

.—To the

extent that a licensee has made, or will make in the future,

payments pursuant to a license as described in subpara-

graph (A), the provisions of paragraphs (2) and (3) shall

not require any additional payments from, or additional

financial obligations on the part of, the licensee.

‘‘(C) R

ULE OF CONSTRUCTION

.—Nothing in this sub-

section may be construed to prohibit the collective des-

ignated to distribute receipts from the licensing of trans-

missions in accordance with section 114(f) from admin-

istering royalty payments under any license not described

in paragraph (2).

‘‘(e) P

REEMPTION

ITH

ESPECT TO

ERTAIN

AST

CTS

.—

‘‘(1) I

N GENERAL

.—This section preempts any claim of

common law copyright or equivalent right under the laws of

VerDate Sep 11 2014 15:33 Sep 16, 2019 Jkt 089139 PO 00264 Frm 00059 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL264.115 PUBL264

dkrause on DSKBC28HB2PROD with PUBLAWS

132 STAT. 3734 PUBLIC LAW 115–264–OCT. 11, 2018

any State arising from a digital audio transmission or reproduc-

tion that is made before the date of enactment of this section

of a sound recording fixed before February 15, 1972, if—

‘‘(A) the digital audio transmission would have satisfied

the requirements for statutory licensing under section

114(d)(2) or been exempt under section 114(d)(1), or the

reproduction would have satisfied the requirements of sec-

tion 112(e)(1), as the case may be, if the sound recording

were fixed on or after February 15, 1972; and

‘‘(B) either—

‘‘(i) except in the case of a transmission that would

have been exempt under section 114(d)(1), not later

than 270 days after the date of enactment of this

section, the transmitting entity pays statutory royalties

and provides notice of the use of the relevant sound

recordings in the same manner as required by regula-

tions adopted by the Copyright Royalty Judges for

sound recordings that are fixed on or after February

15, 1972, for all the digital audio transmissions and

reproductions satisfying the requirements for statutory

licensing under sections 112(e)(1) and 114(d)(2) during

the 3 years before that date of enactment; or

‘‘(ii) an agreement voluntarily negotiated between

the rights owner and the entity performing the sound

recording (including a litigation settlement agreement

entered into before the date of enactment of this sec-

tion) authorizes or waives liability for any such trans-

mission or reproduction and the transmitting entity

has paid for and reported such digital audio trans-

mission under that agreement.

‘‘(2) R

ULE OF CONSTRUCTION FOR COMMON LAW COPY

RIGHT

.—For purposes of paragraph (1), a claim of common

law copyright or equivalent right under the laws of any State

includes a claim that characterizes conduct subject to that

paragraph as an unlawful distribution, act of record piracy,

or similar violation.

‘‘(3) R

ULE OF CONSTRUCTION FOR PUBLIC PERFORMANCE

RIGHTS

.—Nothing in this section may be construed to recognize

or negate the existence of public performance rights in sound

recordings under the laws of any State.

‘‘(f) L

IMITATIONS ON

EMEDIES

.—

‘‘(1) F

AIR USE

;

USES BY LIBRARIES