Copyright Office On SIRA

The United States Copyright Office 
has issued a statement to the
Subcommittee on Courts, 
the Internet, and Intellectual Property,
Committee on the Judiciary. The statement provides the Copyright Office’s overview of its initial positions on the Section 115 Reform Act (SIRA) of 2006. According to the Copyright Office, SIRA “represents a significant advancement towards modernizing the Copyright Act to facilitate digital audio transmissions of music while balancing the interests of songwriters, music publishers, and online music services, as well as the consuming public.”

There are, nonetheless, several particular dissatisfactions that the Copyright Office has with SIRA as proposed. The first is that the Copyright Office strongly discourages the treatment of streaming as a form of distribution:

“Copyright Office strongly urges that the SIRA not characterize streaming as a distribution or as a form of ‘digital phonorecord delivery,’ or DPD. A stream, whether interactive or noninteractive, is predominantly a public performance, although the various reproductions such a transmission requires makes it appropriate to address in section 115. A stream does not, however, constitute a “distribution,” the object of which is to deliver a usable copy of the work to the recipient; the buffer and other intermediate copies or portions of copies that may temporarily exist on a recipient’s computer to facilitate the stream and are for all practical purposes useless (apart from their role in facilitating the single performance) and most likely unknown to the recipient simply do not qualify. Similarly, a stream should not be considered a DPD as that term is presently defined by 17 U.S.C. 115(d), because it most likely does not result in ‘a specifically identifiable reproduction by or for any transmission recipient of a phonorecord.’”

The Copyright Office also has concerns with how collective licensing agencies under SIRA may use the fees that they collect on the behalf of copyright holders:

“[T]he Copyright Office has some concerns regarding designated agents’ authority to collect and expend administrative fees. The SIRA appears to give designated agents too much discretion to use these fees - and even royalties collected under the license - to inappropriately fund tangential activities. The Office believes that the designated agents should be permitted to use such moneys only for activities directly related to licensing music works under section 115 and the collection and distribution of royalty fees. Administrative fees collected from licensees should not be used for other purposes, such as “industry negotiations, rate setting proceedings, litigation, and legislative efforts,” as provided in proposed subparagraph115(e)(9)(D), and it is also questionable whether it is appropriate to apply royalty collections to those activities, rather than simply distribute those royalties to copyright owners after deducting the actual costs of collecting and distributing the royalties.”

Furthermore, the Copyright Office feels that SIRA is deficient in explaining how royalties will be distributed to copyright holders:

“SIRA appears to omit a provision governing one of the most significant and necessary aspects of any blanket licensing scheme: there is no provision that addresses how royalties are to be distributed by designated agents to copyright owners. Clearly, a designated agent should not have unfettered discretion to determine how the royalties it collects should be allocated among copyright owners. The statute should prescribe guidelines to ensure that royalties are distributed in a fair and equitable fashion, giving each copyright owner the royalties to which it is entitled based on the uses licensees make of that copyright owner’s works.”

(Click Here For The Statement)