FILE s1619.is S 1619 IS 104th CONGRESS 2d Session To amend the provisions of title 17, United States Code, to provide for an exemption of copyright infringement for the performance of nondramatic musical works in small commercial establishments, and for other purposes. IN THE SENATE OF THE UNITED STATES March 15, 1996 Mr. HATCH introduced the following bill; which was read twice and referred to the Committee on the Judiciary A BILL To amend the provisions of title 17, United States Code, to provide for an exemption of copyright infringement for the performance of nondramatic musical works in small commercial establishments, and for other purposes. [Italic->] Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, [<-Italic] SECTION 1. SHORT TITLE. This Act may be cited as the `Music Licensing Reform Act of 1996'. SEC. 2. EXEMPTION OF COPYRIGHT INFRINGEMENT FOR PERFORMANCE OF NONDRAMATIC MUSICAL WORKS IN SMALL COMMERCIAL ESTABLISHMENTS. (a) IN GENERAL- Section 110 of title 17, United States Code, is amended-- (1) in the matter preceding paragraph (1) by inserting `(a)' before `Notwithstanding'; (2) by amending paragraph (5) to read as follows: `(5)(A) communication of a transmission embodying a performance or display of a work (except a nondramatic musical work) by the public reception of the transmission on a single receiving apparatus of a kind commonly used in private homes, unless-- `(i) a direct charge is made to see or hear the transmission; or `(ii) the transmission thus received is further transmitted to the public; or `(B) communication of a transmission embodying a performance or display of a nondramatic musical work by the public reception of the transmission on the premises of a small commercial establishment, unless-- `(i) a direct charge is made to see or hear the transmission; or `(ii) the transmission thus received is further transmitted to the public;'; and (3) by adding at the end thereof the following new subsection: `(b)(1) For purposes of subsection (a)(5)(B), the Register of Copyrights shall define the term `small commercial establishment' by regulation, which shall include specific, verifiable criteria. Such criteria may relate to-- `(A) the area of the establishment, including whether the establishment is of sufficient size to justify, as a practical matter, a subscription to a commercial background music service; `(B) the kind, number, and location of equipment used; `(C) the gross revenue of the establishment; `(D) the number of employees; and `(E) other relevant factors. `(2) The definition of small commercial establishment shall not result in an exemption to the right of public performance or to the right of public display the scope of which exceeds that permitted under the international treaty obligations of the United States.'. (b) TECHNICAL AND CONFORMING AMENDMENTS- Chapter 1 of title 17, United States Code, is amended-- (1) in section 111(a)(2) by striking out `section 110' and inserting in lieu thereof `section 110(a)'; (2) in section 112(d) by striking out `section 110(8)' each place such term appears and inserting in each such place `section 110(a)(8)'; and (3) in section 118(d)(3) by striking out `section 110' and inserting in lieu thereof `section 110(a)'. SEC. 3. NEGOTIATIONS AND LICENSING BETWEEN PROPRIETORS AND PERFORMING RIGHTS SOCIETIES. (a) IN GENERAL- The provisions of title 17, United States Code, are amended by adding after chapter 11 the following new chapter: [BOLD->] `CHAPTER 12--NEGOTIATIONS AND LICENSING BETWEEN PROPRIETORS AND PERFORMING RIGHTS SOCIETIES [<-BOLD] `Sec. `1201. Definitions. `1202. Code of conduct. `1203. Access to repertoire. `Sec. 1201. Definitions `For purposes of this chapter, the term-- `(1) `performing rights society' means an association, corporation, or other entity that licenses the public performance of nondramatic musical works on behalf of copyright owners of such works, such as the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI), and SESAC, Inc.; and `(2) `proprietor'-- `(A) means the owner of a retail establishment, restaurant, inn, bar, tavern, or any other similar place of business in which-- `(i) the public may assemble; and `(ii) nondramatic musical works may be publicly performed; and `(B) shall not include any owner or operator of-- `(i) a radio or television station licensed by the Federal Communications Commission; `(ii) a cable system or satellite carrier; `(iii) a cable or satellite carrier service or programmer; `(iv) a commercial subscription music service; or `(v) any other transmission service. `Sec. 1202. Code of conduct `(a) IN GENERAL- The Register of Copyrights shall promulgate regulations to establish a code of conduct for the licensing negotiations and practices between a proprietor and a performing rights society. Such regulations shall include reasonable disclosure requirements for proprietors and performing rights societies and the content and form of licensing agreements. `(b) GENERAL ENFORCEMENT- (1) A proprietor or performing rights society may file a civil action in any United States district court of appropriate jurisdiction to enforce the code of conduct established under this section. `(2) For purposes of an action filed under this subsection-- `(A) all parties shall be deemed to have exhausted all administrative remedies; and `(B) the court shall conduct a trial de novo without an agency record. `(c) ENFORCEMENT IN ACTIONS INVOLVING LICENSING AGREEMENTS- (1) This subsection applies to any civil action filed under this section to enforce the code of conduct in which a proprietor and a performing rights society have a licensing agreement. `(2) If a proprietor violates a provision of the code of conduct, the court shall assess a civil fine against the proprietor, payable to the performing rights society, equal to the cost of the applicable annual license fee. `(3) If a performing rights society violates a provision of the code of conduct, the court shall order the society to grant a license to the proprietor for the nondramatic public performance of musical works in the repertoire of the society at no fee for a period of 1 year beginning on the date on which judgment is entered. `Sec. 1203. Access to repertoire `(a) IN GENERAL- (1) The Register of Copyrights shall promulgate regulations to ensure that a performing rights society shall provide reasonable access to its repertoire so that a person engaged in the public performance of a nondramatic musical work may determine with reasonable certainty whether the public performance of a particular work may be licensed by a particular licensor. `(2) Reasonable access to repertoire under this section shall not include access to works rarely publicly performed. `(b) ENFORCEMENT- (1) A proprietor or performing rights society may file a civil action in any United States district court of appropriate jurisdiction to enforce the regulations promulgated under this section. `(2) For purposes of an action filed under this section-- `(A) all parties shall be deemed to have exhausted all administrative remedies; and `(B) the court shall conduct a trial de novo without an agency record. `(c) RESTRICTIONS ON PERFORMING RIGHTS SOCIETY NOT IN COMPLIANCE WITH REGULATIONS- (1) A performing rights society may not-- `(A) file, be a party, or pay the costs of any party in any civil action alleging the infringement of the copyright in a work described under paragraph (2); or `(B) charge a fee under any per programming period license for a work described under paragraph (2). `(2) A work referred to under paragraph (1) is any work in such performing rights society's repertoire that is not identified and documented as required by the regulations promulgated under this section.'. (b) TECHNICAL AND CONFORMING AMENDMENT- The table of chapters for title 17, United States Code, is amended by adding after the item relating to chapter 11 the following: [Bold->] 1201'. [<-Bold] SEC. 4. REPORT ON CONSENT DECREE. (a) IN GENERAL- No later than 1 year after the date of the enactment of this Act, the Register of Copyrights shall submit a report to the Senate Committee on the Judiciary and the House of Representatives Committee on the Judiciary on the administration by the United States District Court for the Southern District of New York of the consent decree of March 14, 1950, in United States v. American Society of Composers, Authors, and Publishers, 1950 Trade Cas. 62,595 (S.D.N.Y. 1950) and the consent decree of December 29, 1966, in United States v. Broadcast Music, Inc., 1966 Trade Cas. 71,941 (S.D.N.Y. 1966). (b) CONTENTS- The report under this section shall include-- (1) any recommendation for improvements so that adjudication under the consent decree may be less time-consuming and more cost-effective, especially for parties with fewer resources; and (2) a determination whether a system of local or regional arbitration should be implemented. SEC. 5. STATE COPYRIGHT LICENSING LAWS PREEMPTED. Section 301 of title 17, United States Code, is amended by adding at the end the following: `(g)(1) Any law, statute, or regulation of any State or local government which requires a performing rights society to license copyrighted musical compositions to a proprietor in a particular manner not required by this title, or to conduct such society's business in any manner not applicable to all businesses as a general manner, shall be deemed to be preempted by subsection (a) and of no force or effect. `(2) For purposes of this subsection, the terms `proprietor' and `performing rights society' have the same meanings as such terms are defined under section 1201.'. SEC. 6. RULE OF CONSTRUCTION. Nothing in this Act shall be construed to relieve any performing rights society of any obligation under any consent decree or other court order governing the operation of such society, as such decree or order-- (1) is in effect on the date of the enactment of this Act; (2) may be amended after such date; or (3) may be issued or agreed to after such date. SEC. 7. EFFECTIVE DATE. This Act shall take effect 90 days after the date of the enactment of this Act.