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Archived updates for Tuesday, July 13, 2004

Proposed Recordkeeping Rules for Sound Recordings Under Stautory License before April 2004

On March 11, 2004, the Copyright Office published interim regulations specifying notice and recordkeeping requirements for use of sound recordings under the section 112 and 114 licenses. However, those interim regulations apply only prospectively to the use of sound recordings commencing during the second calendar quarter of 2004, leaving the question of what records of use must be prescribed for uses of sound recordings from October 28, 1998 (the date the statutory licenses first became available for services other than preexisting subscription services), to March 31, 2004 (the ``historic period'').

The task of crafting regulations to govern records of prior use is complicated by the fact that many services have maintained few or, in many instances, no records of such use. Because there is no feasible way to obtain meaningful and useful data through the imposition of reporting requirements, the Office agreed with the commenters that use of a proxy in lieu thereof is the proper course to take. Furthermore, the Office was persuaded by the comments that the reports of the preexisting subscription services represent the most appropriate proxy. Therefore, the Office is proposing to adopt regulations specifying that the records of use submitted by the preexisting subscription services during the period between October 28, 1998 and March 31, 2004, shall be considered the records of use for all services operating under the section 112(e) and
section 114 licenses.

The proxy that emerged as the one most favored by the commenters was the data already provided by the preexisting subscription services to SoundExchange under the regulations announced in 1998 and now codified at 37 CFR 270.2 for transmissions made under section 114(f). Specifically, SoundExchange would take the royalties paid for a given period in the historic timeframe and then would "allocate those royalties according to the same percentages used for the allocation of royalties paid by the preexisting subscription services for the corresponding period.''
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