IP Law Daily Congress passes bills to revamp music licensing regime, broaden visually impaired persons’ access to published works
Wednesday, September 26, 2018

Congress passes bills to revamp music licensing regime, broaden visually impaired persons’ access to published works

By Cheryl Beise, J.D.

The U.S. House of Representatives yesterday unanimously approved by voice vote the Senate version of bipartisan legislation that would revise and modernize the music licensing regime codified in the Copyright Act. The newly titled "Orrin G. Hatch-Bob Goodlatte Music Modernization Act" (H.R. 1551) now heads to President Trump, who is expected to sign the measure into law. The House also unanimously passed the noncontroversial Marrakesh Treaty Implementation Act (H.R. 2559), which would amend the Copyright Act to facilitate access to published works for persons who are blind or have print disabilities.

Music Modernization Act. The House passed a version of the Music Modernization Act (H.R. 5447) in April, while the Senate unanimously passed its own version of the "Music Modernization Act" (S. 2823) on September 18. The bill was renamed the "Orrin G. Hatch Music Modernization Act." Rather than reconcile the two versions, the House adopted S. 2823, but added House Judiciary Chairman Bob Goodlatte’s name to the bill’s title. Both Senator Hatch (R-Utah) and Representative Goodlatte (R-Va) will retire at the end of the current Congress.

Title I of the legislation, titled "Music Licensing Modernization," would create a Mechanical Licensing Collective (MLC) to administer royalties covering the right to reproduce musical compositions via interactive digital streaming and downloading services. The MLC would manage a blanket licensing scheme for interactive streaming services (similar to SoundExchange’s function for performance rights licensing for non-interactive Internet radio services, such as Pandora). It also would eliminate the Copyright Office’s bulk "Notice of Intent" system, which now essentially allows interactive streaming services to stream songs without paying any royalty to the owners of compositions when they are unable to find the rights owners. Importantly, the measure proposes changing the royalty rate setting standard to a "willing buyer/willing seller" for mechanical licenses, which is likely to mean that rights owners can expect to see mechanical royalties paid on more compositions and at higher rates. This title also changes the judge assignment system for ASCAP/BMI performance royalty rate proceedings in the Southern District of New York to a random, rotating "wheel" of judges.

Title II—the "CLASSICS Act" (or "Compensating Legacy Artists for their Songs, Service, & Important Contributions to Society Act")—would provide owners of sound recordings made prior to February 1, 1972 (which currently are excluded from the digital performance right created in 1995) an exclusive right to digital performances.

Title III—the "AMP Act" (or "Allocation for Music Producers Act")—would create procedures to facilitate collection of digital performance royalties by sound engineers and record producers, when they have negotiated agreements with artists to receive a share of such royalties.

Chairman Goodlatte and Ranking Member Jerrold Nadler (D-NY) released a joint statement yesterday applauding the vote. "Today’s House passage of the bipartisan Hatch-Goodlatte Music Modernization Act is a major victory for American music creators, music distributors, and the music listening public," Goodlatte said. "This legislation, which modernizes our music copyright laws so music creators are fairly compensated for their works, finally brings our music laws into the digital age." Noting the benefits to both creators and digital music providers, Nadler described passage of the bill as an "historic opportunity to resolve some longstanding inequities in the music marketplace by helping digital services more efficiently license and distribute musical works, while ensuring artists, songwriters, and other music creators receive fair market value for their work."

Marrakesh Treaty Implementation Act. The Marrakesh Treaty to Facilitate Access to Published Works for Persons by Visually Impaired Persons and Persons with Print Disabilities (Marrakesh Treaty) was signed by the United States in 2013. The Treaty requires signatory nations to include exemptions and limitations in their national copyright laws to allow for the creation and distribution of accessible format copies of material for the exclusive use by blind and other print-disabled individuals. The treaty also requires parties to provide assurances that such distribution will be limited to use by those with such disabilities to prevent copyright infringement.

The Senate passed the bipartisan Marrakesh Treaty Implementation Act (S. 2559) on June 28, 2018. The Act would establish how the United States will comply with the treaty. The legislation would broaden the scope of accessible works under U.S. copyright law to include published musical works in the form of text and notation. It would also create a new Section 121A of Title 17 to establish requirements regarding the export and import of accessible format copies to authorized entities or eligible persons. President Trump is expected to sign the bill.

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