From: no...@house.gov
Subject: 1998CRH1456A COPYRIGHT TERM EXTENSION ACT, Part 2/4
Date: 1998/03/26
Message-ID: <1998CRH1456Ap2@us.govnews.org>
X-Deja-AN: 337923113
Approved: gov-us-fed-congress-record-modera...@us.govnews.org (GPO Gateway)
References: <1998CRH1456Ap1@us.govnews.org>
X-Content-Type: Message/Partial; number=2; total=4; id="1998CRH14...@us.govnews.org"
Mime-Version: 1.0
Organization: The House of Representatives
Newsgroups: gov.us.fed.congress.record.house
Archive-Name: gov/us/fed/congress/record/1998/mar/25/1998CRH1456A/part2
[[Page H1463]]
Last but not least, there is a compromise in what I am going to offer
out here in a little while dealing with the question of complaints we
have had for some time about the fact that restaurants in particular,
small businesses, have had to go a long way, to New York, to go appeal
a fee dispute with these associations collecting the music licensing
fees, because there is a rate commission set up to do it.
What the gentleman from Wisconsin (Mr. Sensenbrenner) would provide
would be that there would be arbitration in every locality around the
country. That would provide uniformity. That would be expensive the
other way around.
What we have tried to do in a compromise is say we will set up a
provision for circuit riders from this rate commission to go around to
the sitting seats of all 12 Federal judicial circuits to sit regularly
to settle these disputes, so people do not have to travel as far.
I think what I am offering in a little while out here truly is the
compromise substitute. Let us do it now so we can get on with the main,
underlying thrust of this bill, and that is copyright extension. That
is what we are here about today. It is long overdue. We cannot afford
to have this dispute between the restaurants and the songwriters tie up
this legislation any longer. The bill, underlying bill, is too
important. I urge my colleagues to both vote for my substitute when the
time comes and vote for the underlying bill.
Mr. DELAHUNT. Mr. Chairman, I yield myself such time as I may
consume.
Mr. Chairman, I rise in strong support of the underlying bill. I
think it is important to understand that this bill is not simply a
means to encourage American creativity and to protect the products of
that creativity. Just as importantly, it is about the future of our
national economy. I suggest that is not an exaggeration.
Most importantly, it is about our balance of trade, a balance of
trade that for some time has registered a substantial deficit, a
deficit that exploded last month as a result of the financial crisis in
Asia, and according to most economists, a deficit that will continue to
escalate because of that crisis.
Mr. Chairman, we cannot afford to not pass this bill if we hope to
control this burgeoning trade deficit and protect our national economic
well-being. Furthermore, it is essential that the Sensenbrenner
amendment that we will be considering shortly be defeated and the
McCollum-Conyers substitute pass. Otherwise our trading partners will
claim that Congress has enacted an overly broad exemption to our
copyright laws that violates our international treaty obligations. If
we do not defeat the Sensenbrenner amendment, not only will this be
unfair to songwriters, but it will further exacerbate our trade
deficit.
America is the world's leading producer and exporter of copyrighted
products. The entire world clamors for American software, American
movies, American television programs, American videos, American
literature, and American music. Just these core copyrighted industries
produce a surplus of $50 billion annually in our trade with the rest of
the world.
Just imagine what our trade deficit would be if that $50 billion
annual surplus were at risk or declining. Imagine how many well-paying
American jobs would be jeopardized in just these industries, which
create new jobs for American workers at nearly three times the rate of
the rest of the economy.
{time} 1145
Well, if we want to avoid that disastrous scenario, we must pass this
bill; because if we are to maintain American leadership and retain our
comparative advantage in this aspect of international commerce, we must
adapt to changing international standards of copyright protection, and
this bill does just that.
The emerging world standard for the term of copyright protection in
Europe and throughout most of the developed world is the life of the
author plus 70 years. In 1995, the European Union adopted this
standard, but only with respect to works that enjoy comparable
protection in the country of origin. This means that until the United
States extends its copyright term to 70 years from its current term of
50 years, U.S. works will not be entitled to protection for the full
term accorded to works in the European markets. If this situation
persists, it will put our creative industries at a serious competitive
disadvantage and will substantially and adversely affect our overall
trade posture. Rather, we should foster and nurture our creative
industries for the sake of our economic future.
So, Mr. Chairman, I urge my colleagues to vote for American
prosperity. Support the bill as amended by the McCollum-Conyers
substitute.
Mr. Chairman, I yield back the balance of my time.
Mr. COBLE. Mr. Chairman, I yield 3 minutes to the gentleman from
California (Mr. Gallegly), a member of the Committee on the Judiciary.
Mr. GALLEGLY. Mr. Chairman, I thank the gentleman from North Carolina
(Mr. Coble) for giving me the opportunity to speak today in support of
this important piece of legislation.
In February of last year, I introduced a copyright term extension
bill which is almost identical to the legislation we are considering
here today. This legislation extends the term for copyrighted products
by 20 years. This will allow the U.S. copyright term to keep pace with
the term of European countries that are now our main competitors for
copyrighted products such as motion pictures and music.
In 1995, the European Union required member Nations to extend the
copyright term to life of the author plus 70 years. This is 20 years
more than is currently granted to the U.S.-based copyrighted works.
Moreover, under the rules of an international treaty, most of our
economic competitors are not required to give U.S. works the same term
of protection as they give their domestic works if the U.S. has a
shorter copyright term.
The European Union has exercised this rule and now requires EU member
States to limit protection of U.S. works to the shorter term granted in
the United States. Let me emphasize this point: Under a current
European Union directive, member nations are actually required to
discriminate against American copyrighted works. The result, unless
this bill becomes law, is to place our copyright industries at a
competitive disadvantage with other nations, threatening the incomes of
U.S. authors, artists, songwriters, and other copyright holders.
As many of my colleagues know, our copyright industry employs over 6
million Americans and is one of the fastest growing segments of our
economy. Moreover, with estimated foreign sales of over $53 billion
last year, the copyright industry is one of the few areas in the U.S.
actually enjoying a healthy trade surplus.
Copyright term extension has enjoyed strong bipartisan backing and is
supported by a wide-ranging coalition in the current Congress. Among
many of the groups that support term extension legislation are the
Songwriters Guild of America, National Academy of Songwriters, the
Motion Picture Association of America, the Intellectual Property Law
Section of the American Bar Association, the Recorded Industry
Association of America, National Music Publishers Association, the
Information Technology Association of America, and many, many others.
Mr. Chairman, I would like to congratulate the gentleman from North
Carolina (Mr. Coble), my friend and colleague, the chairman of the
Subcommittee on Courts and Intellectual Property of the Committee on
the Judiciary, for recognizing the importance of the copyright industry
to the U.S. economy and the need to update our copyright law to the
current legal and competitive climate faced by the U.S. from countries
throughout the world.
Mr. Chairman, I urge my colleagues to support this commonsense yet
very critical piece of legislation.
Mr. CONYERS. Mr. Chairman, I urge my colleagues to support this
amendment which is a fair and balanced compromise to the current
dispute surrounding music licensing. This dispute really revolves
around big business seeking an exemption to paying public performance
royalties for radio, television and other broadcast in their
restaurants. Copyright owners have the exclusive right to authorize
others to publicly perform their works. When a commercial establishment
turns on the radio or television, that is a public performance of
another's intellectual property.
[[Page H1464]]
Why should all commercial establishments be exempted from licensing
fees? Representative Sensenbrenner's amendment is far from a fair
approach to music licensing. His amendment would create a carve out for
all commercial establishment using music via any transmission, not just
standard radio and TV broadcast. Adopting this provision would mean an
outrageous give away of music by allowing big restaurants to stop
paying a mere $1.58 a day! Meanwhile ninety percent of music writers
make less than $10,000 a year! Most songwriters don't perform, so
licensing fees are critical to their incomes. This amendment is a
direct big business attack on the livelihood of songwriters.
My amendment, offered with Representative McCollum, represents
provisions of an agreement which the parties came close to at the end
of recent negotiations. The McCollum-Conyers substitute expands the
current exemption from music licensing to cover all restaurants of less
than 3,500 square feet, excluding parking lots, no matter what kind of
radio or television devices are being used. It also exempts restaurants
of 3,500 square feet or larger if they use only four television sets
and six speakers, with no more than four speakers in one room and
reasonable television screen sizes. This compromise offers a fair
approach by providing a broad exemption to small businesses and
protecting royalties of songwriters.
Many of you have heard the song, ``I Heard It Through the Grapevine''
which has been recorded by the Temptations, Gladys Knight and the Pips,
Marvin Gaye and many others. But I bet you have never heard of Barrett
Strong, the songwriter. Music licensing fees collected by performing
rights organization (e.g. BMI, ASCAP and SESAC) is the only income Mr.
Strong receives from his creative work. Don't let big businesses ``rip
off' artists!
It is time to end this long dispute--but not by giving away artists'
rights to just compensation for their creative works. I urge my
colleagues to vote for the McCollum-Conyers substitute.
Mr. HOYER. Mr. Chairman, I rise in strong support of the legislation,
in strong support of the McCollum amendment, and in opposition to the
Sensenbrenner amendment.
The Sensenbrenner amendment is nothing short for a ``takings''
provision. I have heard a lot about taking. This is about taking,
whether to or not to. It would force songwriters to provide their music
for free to restaurants and others. These restaurants then, in turn,
use this music to enhance their business.
How is this fair? For the thousands of songwriters, composers and
music publishers, this amendment is a two-fold insult. First, it says
to them, ``Your hard work and creative talent aren't worth
protecting.'' Then it says, ``And by the way, it's not worth a dime
either.''
My colleague, Stephen Foster died a pauper. Why did Stephen Foster
die a pauper? Because the product he created was not popular, was not
wanted, was not used? No. Because Stephen Foster put his product on the
table, it was eaten--if you will--listened to, more appropriately, but
not paid for. And so Stephen Foster, one of the great songwriters of
America, and indeed the world, died a pauper because the world enjoyed
his music but did not compensate him for his music.
The McCollum amendment tries in a reasonable way to get at what is a
problem that is by some perceived as cataclysmic and by others
perceived as procedural. It is a reasonable alternative. It is one that
I will support. But if it does not pass, I will as strongly as I know
how oppose this legislation, even though I believe its underlying 20-
year extension of the copyright protecting one's property is
appropriate.
Mr. Speaker, I have been and always will be opposed to any
legislation that infringes upon the property rights of anyone. I cannot
digest ``taking'' someone else's hard work from them for free. This
amendment is an affront to the tens of thousands of individuals who
spend a lifetime trying to sell their work in a competitive and
sparsely rewarded field--especially after considering the cost benefit
analysis.
It is estimated that the restaurant business is a $289.7 billion
industry, while thousands of songwriters draw an income that is
minuscule in comparison and subsist largely off of royalties. Music
licensing fees account for less than one percent of expenses for a full
service restaurant, and the average cost for a restaurant business that
uses music is $1.58 a day--equivalent to one draft beer.
Mr. Chairman, let me make it plain: we are considering stripping
individuals of their intellectual property rights over what boils down
to a mug of beer.
Mr. Chairman, I would hope that my colleagues who in fact have some
property that we put in the public sphere, not expecting remuneration,
at least not in money, the remuneration we expect is votes when we put
our property, our ideas, our thoughts, our opinions in the public
wheel. But when a songwriter sits down to create art, that songwriter
does so for their own personal enjoyment, but they also do so with the
expectation that if someone wants to use their product, they will do in
a capitalistic society what we expect, and that is to compensate them
fairly for that.
The previous speaker spoke about the problem with small business.
Government does not require a small business in America to turn on the
radio in their place of business or to turn on the television in their
place of business, not one. They do so because they think to some
degree it enhances the ambiance of their establishment, and I agree
with them. And if they thought curtains did or tablecloths did or
pretty windows did, they would have to pay for all of those increases
to the ambiance of their establishment. If the restaurant pays for the
hamburger, it should also face the music and pay for the licensing.
I have a lot of restaurants in my district and in my State. I
understand some of them are concerned, and I believe that the McCollum
amendment tries to reach out to them and say yes, we understand there
is a problem, let us try to solve it and let us try to solve it where
there is a meeting of the minds. And in fact, I understand there was a
meeting of the minds until one party thought perhaps they could win
without agreement. I do not know that; I have heard that.
But let us, as we vote on the Sensenbrenner amendment, remember
Stephen Foster, remember that Stephen Foster gave us so much, this
Nation and this world, enriched our lives, enriched our culture,
enriched our enjoyment, and let us not say to the Stephen Fosters of
the world what they do is not worth us compensating them for it.
Let me share with you part of a concise perspective offered by former
Chief Justice Oliver Wendell Holmes: ``If music did not pay, it would
be given up. If it pays, it pays out of the public's pocket. Whether it
pays or not, the purpose of employing it is profit, and that is
enough.''
I would hope that we would defeat the Sensenbrenner amendment, pass
the McCollum amendment and pass the bill.
Mr. HYDE. Mr. Chairman, I rise in support of the bill H.R. 2589, the
``Copyright Term Extension Act,'' reported by the Committee on the
Judiciary by voice vote, without objection.
This is an important bill for our economy. It will mean 20 more years
of foreign sales revenue coming back into the United States for our
intellectual property products sold abroad. We are by far the world's
largest producers of intellectual property and it is one of our most
significant trade surpluses.
Copyright is a property right. It is meant to be handed down by its
creator to his or her children and grandchildren. This amendment
provides for a small extension in the term of copyright which will
allow the heirs of our nation's creators to benefit from the work of
their family members. Writing a song or a novel is no less significant
than contributing to a family business to be passed on to those we
choose.
The Berne Convention for Literary and Artistic Works, of which we are
a Member, has a provision called the ``Rule of the Shorter Term.'' It
states that a country need not give a foreign work any more protection
than that work is given in its country of origin. The European Union
countries recently adopted the term for copyright that we propose in
this bill, life of the author plus 70 years. Under the Berne
Convention, they need not give American copyrighted works the benefit
of that term, but may limit protection in their countries of our works
to our current term of life of the author plus 50 years. That, of
course, means that their works are protected in their countries for 20
years longer than our works are protected in their countries. While
that may be good for their products, it is not good for ours.
I am proud of the fact that American creators and owners of creations
have made the U.S. the dominant producer in the world of copyrighted
material. It reflects the ingenuity of our people and indicates that
through freedom and democracy, people will use their powers of
creativity for their own benefit and, consequently, for society's
benefit. This bill will maintain our dominance and continue to allow
for the exploitation of that creativity which brings it to consumers
for their enjoyment.
I want to say a special word about the creative community that is the
bedrock of our great film and television business. I refer to the
screenwriters, the directors and the performers. Through their
respective guilds, they have consistently supported the extension of
the copyright term, and have asked that they be specifically made
beneficiaries of the extension. In particular, they requested
remuneration during the new term for those who currently receive no
residuals and no royalties for films made before 1960. These films
include such masterpieces as Casablanca, The Best Years of Our Lives,
and Sunset Boulevard.
This bill does not give them that because the Committee believes that
private negotiation between private parties is always the best place to
start when determining remuneration. I am certainly a believer in the
marketplace. But this bill does contain a very strong and
[[Page H1465]]
very serious admonition, a ``Sense of the Congress,'' that urges film
studios and the guilds to voluntarily negotiate what remuneration
screenwriters, directors and performers of pre-1960 films shall receive
for the new term. Congress will be watching the negotiations. I expect
that both sides in good faith will negotiate a fair outcome, and it
will certainly not be taken lightly if the ``Sense of the Congress'' is
not turned into a contractual reality.
Mr. Speaker, this is a good and balanced bill which will ensure our
global competitiveness while urging fair compensation for the creators
who, with the investors and owners, make great copyrighted works our
national treasures.
I urge my colleagues to support this fine legislation.
Mr. CONYERS. Mr. Chairman, I rise in strong support of H.R. 2589, the
``Copyright Term Extension Act''. This bill will allow the United
States to keep pace with the copyright terms of European countries that
are our main competitors for copyright products such as motion pictures
and music.
In 1995, the European Union harmonized the copyright term in its
member countries at a minimum of life plus 70 years--20 years longer
than the term in the United States. By directive, EU countries will not
provide copyright protection for U.S. intellectual property in Europe
beyond what our own law provides. This approach is known as the ``rule
of the shorter term.'' As a result, absent congressional action, U.S.
copyright owners will not receive income from uses of their works
during the 20 additional years of protection available in European
countries and will therefore be at a relative disadvantage to their
European competitors.
Changes in technology that have increased the commercial value of
works created many years ago. In music, for instance, copyright owners
are now digitizing musical works and reissuing them to a receptive
market. A short copyright term is harmful to works of art and music
whose value may not be recognized until many years since they were
initially created.
The world loves American-made music, movies, computer software and
books. Creators of these works should not be placed at a competitive
disadvantage in overseas markets. American intellectual property is the
most sought after abroad and is one of the few bright spots in our
balance of trade. By acting on copyright extension, Congress will be
furthering American innovation and protecting American jobs.
H.R. 2589 also includes a carefully crafted, balanced library
exemption that ensures that the legitimate needs of the libraries are
met. In addition the ``fair use doctrine'' is unaffected by the bill.
Therefore, users continue to enjoy the full benefits of ``fair use''
under Section 107 of the Copyright Act.
I urge all Members to support extending the copyright term which will
protect American creators and keep U.S. copyright laws in proper
balance domestically and abroad.
Mr. COBLE. Mr. Chairman, I have no further speakers, and I yield back
the balance of my time.
The CHAIRMAN. All time for general debate has expired.
Pursuant to the rule, the committee amendment in the nature of a
substitute printed in the bill is considered as an original bill for
the purpose of amendment and is considered read.
The text of the committee amendment in the nature of a substitute is
as follows:
H.R. 2589
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Copyright Term Extension
Act''.
SEC. 2. DURATION OF COPYRIGHT PROVISIONS.
(a) Preemption With Respect to Other Laws.--Section 301(c)
of title 17, United States Code, is amended by striking
``February 15, 2047'' each place it appears and inserting
``February 15, 2067''.
(b) Duration of Copyright: Works Created on or After
January 1, 1978.--Section 302 of title 17, United States
Code, is amended--
(1) in subsection (a) by striking ``fifty'' and inserting
``70'';
(2) in subsection (b) by striking ``fifty'' and inserting
``70'';
(3) in subsection (c) in the first sentence--
(A) by striking ``seventy-five'' and inserting ``95''; and
(B) by striking ``one hundred'' and inserting ``120''; and
(4) in subsection (e) in the first sentence--
(A) by striking ``seventy-five'' and inserting ``95'';
(B) by striking ``one hundred'' and inserting ``120''; and
(C) by striking ``fifty'' each place it appears and
inserting ``70''.
(c) Duration of Copyright: Works Created but Not Published
or Copyrighted Before January 1, 1978.--Section 303 of title
17, United States Code, is amended in the second sentence by
striking ``December 31, 2027'' and inserting ``December 31,
2047''.
(d) Duration of Copyright: Subsisting Copyrights.--
(1) In general.--Section 304 of title 17, United States
Code, is amended--
(A) in subsection (a)--
(i) in paragraph (1)--
(I) in subparagraph (B) by striking ``47'' and inserting
``67''; and
(II) in subparagraph (C) by striking ``47'' and inserting
``67'';
(ii) in paragraph (2)--
(I) in subparagraph (A) by striking ``47'' and inserting
``67''; and
(II) in subparagraph (B) by striking ``47'' and inserting
``67''; and
(iii) in paragraph (3)--
(I) in subparagraph (A)(i) by striking ``47'' and inserting
``67''; and
(II) in subparagraph (B) by striking ``47'' and inserting
``67'';
(B) by amending subsection (b) to read as follows:
``(b) Copyrights in Their Renewal Term at the Time of the
Effective Date of the Copyright Term Extension Act of 1997.--
Any copyright still in its renewal term at the time that the
Copyright Term Extension Act of 1997 becomes effective shall
have a copyright term of 95 years from the date copyright was
originally secured.'';
(C) in subsection (c)(4)(A) in the first sentence by
inserting ``or, in the case of a termination under subsection
(d), within the five-year period specified by subsection
(d)(2),'' after ``specified by clause (3) of this
subsection,''; and
(D) by adding at the end the following new subsection:
``(d) Termination Rights Provided in Subsection (c) Which
Have Expired on or Before the Effective Date of the Copyright
Term Extension Act of 1997.--In the case of any copyright
other than a work made for hire, subsisting in its renewal
term on the effective date of the Copyright Term Extension
Act of 1997 for which the termination right provided in
subsection (c) has expired by such date, where the author or
owner of the termination right has not previously
exercised such termination right, the exclusive or
nonexclusive grant of a transfer or license of the renewal
copyright or any right under it, executed before January
1, 1978, by any of the persons designated in subsection
(a)(1)(C) of this section, other than by will, is subject
to termination under the following conditions:
``(1) The conditions specified in subsection (c) (1), (2),
(4), (5), and (6) of this section apply to terminations of
the last 20 years of copyright term as provided by the
amendments made by the Copyright Term Extension Act of 1997.
``(2) Termination of the grant may be effected at any time
during a period of 5 years beginning at the end of 75 years
from the date copyright was originally secured.''.
(2) Copyright renewal act of 1992.--Section 102 of the
Copyright Renewal Act of 1992 (Public Law 102-307; 106 Stat.
266; 17 U.S.C. 304 note) is amended--
(A) in subsection (c)--
(i) by striking ``47'' and inserting ``67'';
(ii) by striking ``(as amended by subsection (a) of this
section)''; and
(iii) by striking ``effective date of this section'' each
place it appears and inserting ``effective date of the
Copyright Term Extension Act of 1997''; and
(B) in subsection (g)(2) in the second sentence by
inserting before the period the following: ``, except each
reference to forty-seven years in such provisions shall be
deemed to be 67 years''.
SEC. 3. TERMINATION OF TRANSFERS AND LICENSES COVERING
EXTENDED RENEWAL TERM.
Sections 203(a)(2) and 304(c)(2) of title 17, United States
Code, are each amended--
(1) by striking ``by his widow or her widower and his or
her children or grandchildren''; and
(2) by inserting after subparagraph (C) the following:
``(D) In the event that the author's widow, widower,
children, and grandchildren are not living, the author's
executors shall own the author's entire termination interest,
or, in the absence of a will of the author, the author's next
of kin shall own the author's entire termination interest, on
a per stirpes basis according to the number of such author's
next of kin represented. The share of the children of a dead
next of kin at the same level of relationship to the author
eligible to take a share of a termination interest can be
exercised only by the action of a majority of them.''.
SEC. 4. REPRODUCTION BY LIBRARIES AND ARCHIVES.
Section 108 of title 17, United States Code, is amended--
(1) by redesignating subsection (h) as subsection (i); and
(2) by inserting after subsection (g) the following:
``(h)(1) For purposes of this section, during the last 20
years of any term of copyright of a published work, a library
or archives, including a nonprofit educational institution
that functions as such, may reproduce, distribute, display,
or perform in facsimile or digital form a copy or phonorecord
of such work, or portions thereof, for purposes of
preservation, scholarship, or research, if such library or
archives has first determined, on the basis of a reasonable
investigation, that none of the conditions set forth in
subparagraphs (A), (B), and (C) of paragraph (2) apply.
``(2) No reproduction, distribution, display, or
performance is authorized under this subsection if--
``(A) the work is subject to normal commercial
exploitation;
``(B) a copy or phonorecord of the work can be obtained at
a reasonable price; or
``(C) the copyright owner or its agent provides notice
pursuant to regulations promulgated by
[[Page H1466]]
the Register of Copyrights that either of the conditions set
forth in subparagraphs (A) and (B) applies.
``(3) The exemption provided in this subsection does not
apply to any subsequent uses by users other than such library
or archives.''.
SEC. 5. VOLUNTARY NEGOTIATION REGARDING DIVISION OF
ROYALTIES.
It is the sense of the Congress that copyright owners of
audiovisual works for which the term of copyright protection
is extended by the amendments made by this Act, and the
screenwriters, directors, and performers of those audiovisual
works, should negotiate in good faith in an effort to reach a
voluntary agreement or voluntary agreements with respect to
the establishment of a fund or other mechanism for the amount
of remuneration to be divided among the parties for the
exploitation of those audiovisual works.
SEC. 6. EFFECTIVE DATE.
This Act and the amendments made by this Act shall take
effect on the date of the enactment of this Act.
The CHAIRMAN. No amendment to the bill is in order unless printed in
the portion of the Congressional Record designated for that purpose.
The Chairman of the Committee of the Whole may postpone a request for
a recorded vote on any amendment and may reduce to a minimum of 5
minutes the time for voting on any postponed question that immediately
follows another vote, provided that the time for voting on the first
question shall be a minimum of 15 minutes.
Are there any amendments?
Amendment No. 2 Offered by Mr. Coble
Mr. COBLE. Mr. Chairman, I offer an amendment.
The Clerk read as follows:
Amendment No. 2 offered by Mr. Coble:
Page 4, line 9, strike ``of 1997''.
Page 4, line 24, strike ``of 1997''.
Page 5, line 12, strike ``of 1997''.
Page 6, line 4, strike ``of 1997''.
Page 6, strike line 17 and all that follows through page 7,
line 4 and insert the following:
``(D) In the event that the author's widow or widower,
children, and grandchildren are not living, the author's
executor, administrator, personal representative, or trustee
shall own the author's entire termination interest.''.
Insert the following after section 5 and redesignate the
succeeding section accordingly:
SEC. 6. ASSUMPTION OF CONTRACTUAL OBLIGATIONS RELATED TO
TRANSFERS OF RIGHTS IN MOTION PICTURES.
(a) In General.--Part VI of title 28, United States Code,
is amended by adding at the end the following new chapter:
``CHAPTER 180--ASSUMPTION OF CERTAIN CONTRACTUAL OBLIGATIONS
``Sec.
``4001. Assumption of contractual obligations related to transfers of
rights in motion pictures.
``Sec. 4001. Assumption of contractual obligations related to
transfers of rights in motion pictures
``(a) Assumption of Obligations.--In the case of a transfer
of copyright ownership in a motion picture (as defined in
section 101 of title 17) that is produced subject to 1 or
more collective bargaining agreements negotiated under the
laws of the United States, if the transfer is executed on or
after the effective date of this Act and is not limited to
public performance rights, the transfer instrument shall be
deemed to incorporate the assumption agreements applicable to
the copyright ownership being transferred that are required
by the applicable collective bargaining agreement, and the
transferee shall be subject to the obligations under each
such assumption agreement to make residual payments and
provide related notices, accruing after the effective date of
the transfer and applicable to the exploitation of the rights
transferred, and any remedies under each such assumption
agreement for breach of those obligations, as those
obligations and remedies are set forth in the applicable
collective bargaining agreement, if--
``(1) the transferee knows or has reason to know at the
time of the transfer that such collective bargaining
agreement was or will be applicable to the motion picture; or
``(2) in the event of a court order confirming an
arbitration award against the transferor under the collective
bargaining agreement, the transferor does not have the
financial ability to satisfy the award within 90 days after
the order is issued.
``(b) Failure To Notify.--If the transferor under
subsection (a) fails to notify the transferee under
subsection (a) of applicable collective bargaining
obligations before the execution of the transfer instrument,
and subsection (a) is made applicable to the transferee
solely by virtue of subsection (a)(2), the transferor shall
be liable to the transferee for any damages suffered by the
transferee as a result of the failure to notify.
``(c) Determination of Disputes and Claims.--Any dispute
concerning the application of subsection (a) and any claim
made under subsection (b) shall be determined by an action in
United States district court, and the court in its discretion
may allow the recovery of full costs by or against any party
and may also award a reasonable attorney's fee to the
prevailing party as part of the costs.''.
(b) Conforming Amendment.--The table of chapters for part
VI of title 28, United States Code, is amended by adding at
the end the following:
``180. Assumption of Certain Contractual Obligations........4001''.....
Mr. COBLE (during the reading). Mr. Chairman, I ask unanimous consent
that the amendment be considered as read and printed in the Record.
The CHAIRMAN. Is there objection to the request of the gentleman from
North Carolina?
There was no objection.
Mr. COBLE. Mr. Chairman, this amendment will make technical changes
to further clarify who owns the termination interest in a copyrighted
work when an author passes away, and provide for the proper transfer of
contractual obligations when a copyright is transferred.
Regarding the transfer of contractual obligations provision, I would
like to clarify the meaning of a certain term. The ``reason to know''
language is intended to be interpreted in light of common sense and
industry practice. Because many motion pictures made in the United
States are produced subject to one or more collective bargaining
agreements, the distributor would ordinarily perform some check on
whether the motion picture is subject to such an agreement. The
provision would not, however, require a burdensome or exhaustive
examination. Publicly available information that indicates a work's
status, such as records of a guild's security interest in the motion
picture filed with the copyright office, would ordinarily provide
``reason to know'' within the meaning of the act.
Mr. Chairman, this amendment is noncontroversial and as best I can
determine is not opposed, and I urge my colleagues to support it.
Mr. FRANK of Massachusetts. Mr. Chairman, I move to strike the last
word.
Mr. Chairman, the gentleman from North Carolina (Mr. Coble) is right.
It is not controversial and there is no opposition.
The CHAIRMAN. The question is on the amendment offered by the
gentleman from North Carolina (Mr. Coble).
The amendment was agreed to.
Amendment No. 1 Offered by Mr. Sensenbrenner
Mr. SENSENBRENNER. Mr. Chairman, I offer an amendment.
The Clerk read as follows:
Amendment No. 1 offered by Mr. Sensenbrenner:
Page 1, insert before section 1 the following:
TITLE I--COPYRIGHT TERM EXTENSION
Strike section 1 and insert the following:
SEC. 101. SHORT TITLE.
This title may be referred to as the ``Copyright Term
Extension Act''.
Redesignate sections 2 through 5 as sections 102 through
105, respectively.
In section 105, as so redesignated, strike ``this Act'' and
insert ``this title''.
Strike section 6 and insert the following:
SEC. 106. EFFECTIVE DATE.
This title and the amendments made by this title shall take
effect on the date of the enactment of this Act.
Add at the end the following:
TITLE II--MUSIC LICENSING
SEC. 201. SHORT TITLE.
This title may be cited as the ``Fairness in Musical
Licensing Act of 1998''.
SEC. 202. EXEMPTION OF CERTAIN MUSIC USES FROM COPYRIGHT
PROTECTION.
(a) Business Exemption.--Section 110(5) of title 17, United
States Code, is amended to read as follows:
``(5) communication by electronic device of a transmission
embodying a performance or display of a nondramatic musical
work by the public reception of a broadcast, cable,
satellite, or other transmission, if--
``(A)(i) the rooms or areas within the establishment where
the transmission is intended to be received by the general
public contains less than 3,500 square feet, excluding any
space used for customer parking; or
``(ii) the rooms or areas within the establishment where
the transmission is intended to be received by the general
public contains 3,500 square feet or more, excluding any
space used for customer parking, if--
``(I) in the case of performance by audio means only, the
performance is transmitted by means of a total of not more
than 6 speakers (excluding any speakers in the device
receiving the communication), of which not more than 4
speakers are located in any 1 room or area; or
``(II) in the case of a performance or display by visual or
audiovisual means, any visual portion of the performance or
display is communicated by means of not more than 2 audio
visual devices, if no such audio visual device has a diagonal
screen size greater
[[Page H1467]]
than 55 inches, and any audio portion of the performance or
display is transmitted by means of a total of not more than 6
speakers (excluding any speakers in the device receiving the
communication), of which not more than 4 speakers are located
in any 1 room or area;
``(B) no direct charge is made to see or hear the
transmission;
``(C) the transmission is not further transmitted to the
public beyond the establishment where it is received; and
``(D) the transmission is licensed.''.
(b) Exemption Relating to Promotion.--Section 110(7) of
title 17, United States Code, is amended--
(1) by striking ``a vending'' and inserting ``an'';
(2) by striking ``sole'';
(3) by inserting ``or of the audio, video, or other devices
utilized in the performance,'' after ``phonorecords of the
work,''; and
(4) by striking ``and is within the immediate area where
the sale is occurring''.
SEC. 203. BINDING ARBITRATION OF RATE DISPUTES INVOLVING
PERFORMING RIGHTS SOCIETIES.
(a) In General.--Section 504 of title 17, United States
Code, is amended by adding at the end the following new
subsection:
``(d) Performing Rights Societies; Binding Arbitration.--
``(1) Arbitration of disputes prior to court action.--
``(A) Arbitration.--(i) If a general music user and a
performing rights society are unable to agree on the
appropriate rate or fee to be paid for the user's past or
future performance of musical works in the repertoire of the
performing rights society, the general music user shall, in
lieu of any other dispute-resolution mechanism established by
any judgment or decree governing the operation of the
performing rights society, be entitled to binding arbitration
of such disagreement pursuant to the rules of the American
Arbitration Association. The music user may initiate such
arbitration.
``(ii) The arbitrator in such binding arbitration shall
determine a fair and reasonable rate or fee for the general
music user's past and future performance of musical works in
such society's repertoire and shall determine whether the
user's past performances of such musical works, if any,
infringed the copyrights of works in the society's
repertoire. If the arbitrator determines that the general
music user's past performances of such musical works
infringed the copyrights of works in the society's
repertoire, the arbitrator shall impose a penalty for such
infringement. Such penalty shall not exceed the arbitrator's
determination of the fair and reasonable license fee for the
performances at issue.
``(B) Definitions.--(i) For purposes of this paragraph, a
`general music user' is any person who performs musical works
publicly but is not engaged in the transmission of musical
works to the general public or to subscribers through
broadcast, cable, satellite, or other transmission.
``(ii) For purposes of this paragraph, transmissions within
a single commercial establishment or within establishments
under common ownership or control are not transmissions to
the general public.
``(iii) For purposes of clause (ii), an `establishment' is
a retail business, restaurant, bar, inn, tavern, or any other
place of business in which the public may assemble.
``(C) Enforcement of arbitrator's determinations.--An
arbitrator's determination under this paragraph is binding on
the parties and may be enforced pursuant to sections 9
through 13 of title 9.
``(2) Court-annexed arbitration.--(A) In any civil action
brought against a general music user, as defined in paragraph
(1) for infringement of the right granted in section 106(4)
involving a musical work that is in the repertoire of a
performing rights society, if the general music user admits
the prior public performance of one or more works in the
repertoire of the performing rights society but contests the
rate or the amount of the license fee demanded by such
society for such performance, the dispute shall, if requested
by the general music user, be submitted to arbitration under
section 652(e) of title 28. In such arbitration proceeding,
the arbitrator shall determine the appropriate rate and
amount owed by the music user to the performing rights
society for all past public performances of musical works in
the society's repertoire. The amount of the license fee shall
not exceed two times the amount of the blanket license fee
that would be applied by the society to the music user for
the year or years in which the performances occurred. In
addition, the arbitrator shall, if requested by the music
user, determine a fair and reasonable rate or license fee for
the music user's future public performances of the musical
works in such society's repertoire.
``(B) As used in this paragraph, the term `blanket license'
means a license provided by a performing rights society that
authorizes the unlimited performance of musical works in the
society's repertoire, for a fee that does not vary with the
quantity or type of performances of musical works in the
society's repertoire.
``(3) Term of license fee determination.--In any
arbitration proceeding initiated under this subsection, the
arbitrator's determination of a fair and reasonable rate or
license fee for the performance of the music in the
repertoire of the performing rights society concerned shall
apply for a period of not less than 3 years nor more than 5
years after the date of the arbitrator's determination.''.
(b) Actions That Shall Be Referred to Arbitration.--Section
652 of title 28, United States Code, is amended by adding at
the end the following:
``(e) Actions That Shall Be Referred to Arbitration.--In
any civil action against a general music user for
infringement of the right granted in section 106(4) of title
17 involving a musical work that is in the repertoire of a
performing rights society, if the general music user admits
the public performance of any musical work in the repertoire
of the performing rights society but contests the rate or the
amount of the license fee demanded by the society for such
performance, the district court shall, if requested by the
general music user, refer the dispute to arbitration, which
shall be conducted in accordance with section 504(d)(2) of
title 17. Each district court shall establish procedures by
local rule authorizing the use of arbitration under this
subsection. The definitions set forth in title 17 apply to
the terms used in this subsection.''.
SEC. 204. VICARIOUS LIABILITY PROHIBITED.
Section 501 of title 17, United States Code, is amended by
adding at the end the following:
``(f) A landlord, an organizer or sponsor of a convention,
exposition, or meeting, a facility owner, or any other person
making space available to another party by contract, shall
not be liable under any theory of vicarious or contributory
infringement with respect to an infringing public performance
of a copyrighted work by a tenant, lessee, subtenant,
sublessee, licensee, exhibitor, or other user of such space
on the ground that--
``(1) a contract for such space provides the landlord,
organizer or sponsor, facility owner, or other person a right
or ability to control such space and compensation for the use
of such space; or
``(2) the landlord, organizer or sponsor, facility owner,
or other person has or had at the time of the infringing
performance actual control over some aspects of the use of
such space, if the contract for the use of such space
prohibits infringing public performances and the landlord,
organizer or sponsor, facility owner, or other person does
not exercise control over the selection of works
performed.''.
SEC. 205. CONFORMING AMENDMENTS.
Section 101 of title 17, United States Code, is amended by
inserting after the undesignated paragraph relating to the
definition of ``perform'' the following:
``A `performing rights society' is an association,
corporation, or other entity that licenses the public
performance of nondramatic musical works on behalf of
copyright owners of such works, such as the American Society
of Composers, Authors, and Publishers, Broadcast Music, Inc.,
and SESAC, Inc. The `repertoire' of a performing rights
society consists of those works for which the society
provides licenses on behalf of the owners of copyright in the
works.''.
SEC. 206. CONSTRUCTION OF TITLE.
Except as provided in section 504(d)(1) of title 17, United
States Code, as added by section 203(a) of this Act, nothing
in this title shall be construed to relieve any performing
rights society (as defined in section 101 of title 17, United
States Code) of any obligation under any consent decree,
State statute, or other court order governing its operation,
as such statute, decree, or order is in effect on the date of
the enactment of this Act, as it may be amended after such
date, or as it may be enacted, issued, or agreed to after
such date.
SEC. 207. EFFECTIVE DATE.
This title and the amendments made by this title shall take
effect on the date of the enactment of this Act, and shall
apply to actions filed on or after such date.
Mr. SENSENBRENNER (during the reading). Mr. Chairman, I ask unanimous
consent that the amendment be considered as read and printed in the
Record.
The CHAIRMAN. Is there objection to the request of the gentleman from
Wisconsin?
There was no objection.
Mr. SENSENBRENNER. Mr. Chairman, the amendment that I offer today is
the culmination of nearly 4 years of effort to provide relief for the
small business community from the unfair music licensing system
administered by the performance rights monopolies.
My involvement in this issue stems from the tactics of an ASCAP
operative who circumnavigated a lake in my district, hitting up every
bar or restaurant with the standard take-or-leave-it proposition.
Needless to say, I received a number of calls from perplexed and
outraged owners. The tactics of ASCAP's representative prompted me to
make a more thorough investigation of how these performance rights
organizations function and who, if anybody, controls their behavior.
What I learned was an eye opener. ASCAP and BMI, the two largest
music licensing societies, are virtual monopolies operating under
consent decrees administered by the Justice Department. Unfortunately,
the Justice Department's priorities have been elsewhere, allowing the
two monopolies to
[[Page H1468]]
operate with impunity. The conduct of these monopolies has prompted 22
States to adopt code of conduct laws. Given the licensing society's'
record of heavy-handed action, a Justice Department that has looked the
other way, and a Federal law that is either ambiguous or clearly
skewed, now is the time for Congress to act.
My amendment incorporates three of the core principles embodied in my
original bill, H.R. 789, the Fairness in Music Licensing Act. First it
eliminates the most unfair aspect of the current system. Under the
consent decrees, any business in the United States that wishes to
dispute a licensing fee with ASCAP or BMI is forced to travel to New
York City, hire a New York attorney, and fight it out in the Federal
District Court for the Southern District of New York, the so-called
rate court.
My amendment establishes local arbitration of these rate disputes so
no one is coerced into accepting a license rate simply because it would
be foolish to spend thousands of dollars to travel to New York to
challenge the licensing monopolies and their litigation war chest.
Let me point out that the current law requires that these disputes be
resolved in court. My amendment takes it out of court, eliminates the
necessity of hiring an attorney, and has local arbitration decide the
issue.
Second, the amendment updates the existing home-style exemption.
Under the amendment, businesses whose public space is 3,500 square feet
or less would be exempt from paying royalties for playing the radio or
TV unless they charge admission. Those over 3,500 square feet would be
exempt if they had two TVs or less and no more than six speakers.
It is important to note that the exemption provided in my amendment
does not, and I repeat, does not apply to live or recorded music where
the proprietor controls the content. Only TV and radio broadcasts for
which the broadcaster has already paid the royalty are exempt.
Let me give an example of how far down the food chain the licensing
societies go in pursuit of royalties. A marching band plays a song
during the half time of a football game. First the stadium pays the
licensing society to use the song played by the band. Then the national
TV network pays to broadcast the song. Next the local TV station pays
to broadcast the song. Then the local cable system pays for the song
again. And finally, the bar in Pewaukee Lake, Wisconsin pays for airing
the song on TV. That is right. The music licensing societies are paid
five times, five times for the right, the one playing of one song. That
is a scam and that is what my amendment reforms.
The provision also exempts retailers of stereos and television sets
who under existing laws must pay licensing fees simply to demonstrate
that their product works so that a customer may buy it. You go into
your local appliance store to buy a TV. The proprietor turns the TV on
so that you can see the quality of the picture. And because the
proprietor did that to sell the TV, they have to pay ASCAP under this
current law. My amendment eliminates that.
And finally, the amendment protects landlords and convention owners
from vicarious liability for music licensing fees for music played by a
tenant or an exhibitor.
The CHAIRMAN. The time of the gentleman from Wisconsin (Mr.
Sensenbrenner) has expired.
(By unanimous consent, Mr. Sensenbrenner was allowed to proceed for 2
additional minutes.)
Mr. SENSENBRENNER. Mr. Chairman, many of our communities do operate
convention centers and they lease out space. If somebody turns on a TV
set because they are selling a product or asking to go on vacation
someplace, then the city or the owner of the convention center gets hit
up for a licensing fee because they could not turn the hand of the
tenant on the dial to turn the TV set off.
Mr. Chairman, while considering the underlying bill, we have
suggested that Congress is the appropriate place for the expansion of
the scope of copyright expansion of business' obligations to pay
additional fees. Meanwhile, the licensing societies and their defenders
in the Congress claim that this body has no role in the music licensing
debate where the central issue is a proposal to perhaps modestly
diminish their ability to extract fees. But the Constitution itself
suggests the need for balanced intellectual property rights. That is
precisely what my amendment accomplishes.
Mr. Chairman, I urge my colleagues not to stand aside and permit this
Congress to do the bidding of the copyright holders who seek a one-way
street to expand their rights while denying balance and fairness to the
small business users of intellectual property. My amendment is
supported by virtually every small business organization in the
country, including the NFIB, the National Restaurant Association, the
National Retail Federation, home builders, florists, and the list goes
on.
In the name of balance and in the name of America's small business, I
ask my colleagues for an ``aye'' vote on the Sensenbrenner amendment.
{time} 1200
Amendment No. 3 Offered by Mr. McCollum to Amendment No. 1 Offered by
Mr. Sensenbrenner
Mr. McCOLLUM. Mr. Chairman, I offer an amendment.
The Clerk read as follows:
Amendment No. 3 offered by Mr. McCollum to Amendment No. 1
offered by Mr. Sensenbrenner:
In lieu of the matter proposed to be inserted as title II,
insert the following:
TITLE II--MUSIC LICENSING EXEMPTION FOR FOOD SERVICE OR DRINKING
ESTABLISHMENTS
SEC. 201. SHORT TITLE.
This title may be cited as the ``Fairness In Music
Licensing Act of 1998.''
SEC. 202. EXEMPTION.
Section 110(5) of title 17, United States Code is amended--
(1) by striking ``(5)'' and inserting ``(5)(A) except as
provided in subparagraph (B),'';
(2) by adding at the end the following:
``(B) communication by a food service or drinking
establishment of a transmission or retransmission embodying a
performance or display of a nondramatic musical work intended
to be received by the general public, originated by a radio
or television broadcast station licensed by the Federal
Communications Commission, or, if an audiovisual
transmission, by a cable system or satellite carrier, if--
``(i) either the establishment in which the communication
occurs has less than 3500 gross square feet of space
(excluding space used for customer parking), or the
establishment in which the communication occurs has 3500
gross square feet of space or more (excluding space used for
customer parking) and--
``(I) if the performance is by audio means only, the
performance is communicated by means of a total of not more
than 6 loudspeakers, of which not more than 4 loudspeakers
are located in any 1 room or adjoining outdoor space; or
``(II) if the performance or display is by audiovisual
means, any visual portion of the performance or display is
communicated by means of a total of not more than 4
audiovisual devices, of which not more than one audiovisual
device is located in any 1 room, and no such audiovisual
device has a diagonal screen size greater than 55 inches, and
any audio portion of the performance or display is
communicated by means of a total of not more than 6
loudspeakers, of which not more than 4 loudspeakers are
located in any 1 room or adjoining outdoor space;
``(ii) no direct charge is made to see or hear the
transmission or retransmission;
``(iii) the transmission or retransmission is not further
transmitted beyond the food service or drinking establishment
where it is received; and
``(iv) the transmission or retransmission is licensed by
the copyright owner of the work so publicly performed or
displayed;''; and
(3) by adding after paragraph (10) the following:
``The exemptions provided under paragraph (5) shall not be
taken into account in any administrative, judicial, or other
governmental proceeding to set or adjust the royalties
payable to copyright owners for the public performance or
display of their works. Royalties payable to copyright owners
for any public performance or display of their works other
than such performances or displays as are exempted under
paragraph (5) shall not be diminished in any respect as a
result of such exemption''.
SEC. 203. LICENSING BY PERFORMING RIGHTS SOCIETIES.
(a) In General.--Chapter 5 of title 17, United States Code,
is amended by adding at the end the following:
``Sec. 512. determinations of reasonable license fee for
individual proprietors
``In the case of any performing rights society subject to a
consent decree which provides for the determination of
reasonable license fees to be charged by the performing
rights society, notwithstanding the provisions of that
consent decree, an individual proprietor who owns or operates
fewer than 3