CHAPTER 8--COPYRIGHT ARBITRATION ROYALTY PANELS

           Current through P.L. 103-251, approved May 16th 1994



Sec.  801. Copyright arbitration royalty panels:  Establishment and purpose

   (a) Establishment.--The Librarian of Congress, upon the recommendation of the
Register of Copyrights, is authorized to appoint and convene copyright arbitration royalty
panels.

   (b) Purposes.--Subject to the provisions of this chapter, the purposes of the copyright
arbitration royalty panels shall be--

      (1) to make determinations concerning the adjustment of reasonable copyright royalty
rates as provided in sections 115 and 116, and to make determinations as to reasonable
terms and rates of royalty payments as provided in section 118.  The rates applicable
under sections 115 and 116 shall be calculated to achieve the following objectives:

         (A) To maximize the availability of creative works to the public;

         (B) To afford the copyright owner a fair return for his creative work and the
copyright user a fair income under existing economic conditions;

         (C) To reflect the relative roles of the copyright owner and the copyright user in the
product made available to the public with respect to relative creative contribution,
technological contribution, capital investment, cost, risk, and contribution to the opening
of new markets for creative expression and media for their communication;

         (D) To minimize any disruptive impact on the structure of the industries involved
and on generally prevailing industry practices.

      (2) to make determinations concerning the adjustment of the copyright royalty rates
in section 111 solely in accordance with the following provisions:

         (A) The rates established by section 111(d)(1)(B) may be adjusted to reflect (i)
national monetary inflation or deflation or (ii) changes in the average rates charged cable
subscribers for the basic service of providing secondary transmissions to maintain the real
constant dollar level of the royalty fee per subscriber which existed as of the date of
enactment of this Act:  Provided, That if the average rates charged cable system
subscribers for the basic service of providing secondary transmissions are changed so
that the average rates exceed national monetary inflation, no change in the rates
established by section 111(d)(1)(B) shall be permitted:  And provided further, That no
increase in the royalty fee shall be permitted based on any reduction in the average
number of distant signal equivalents per subscriber.  The copyright arbitration royalty
panels may consider all factors relating to the maintenance of such level of payments
including, as an extenuating factor, whether the cable industry has been restrained by
subscriber rate regulating authorities from increasing the rates for the basic service of
providing secondary transmissions.

         (B) In the event that the rules and regulations of the Federal Communications
Commission are amended at any time after April 15, 1976, to permit the carriage by cable
systems of additional television broadcast signals beyond the local service area of the
primary transmitters of such signals, the royalty rates established by section 111(d)(1)(B)
may be adjusted to insure that the rates for the additional distant signal equivalents
resulting from such carriage are reasonable in the light of the changes effected by the
amendment to such rules and regulations.  In determining the reasonableness of rates
proposed following an amendment of Federal Communications Commission rules and
regulations, the copyright arbitration royalty panels shall consider, among other factors,
the economic impact on copyright owners and users:  Provided, That no adjustment in
royalty rates shall be made under this subclause with respect to any distant signal
equivalent or fraction thereof represented by (i) carriage of any signal permitted under the
rules and regulations of the Federal Communications Commission in effect on April 15,
1976, or the carriage of a signal of the same type (that is, independent, network, or
noncommercial educational) substituted for such permitted signal, or (ii) a television
broadcast signal first carried after April 15, 1976, pursuant to an individual waiver of the
rules and regulations of the Federal Communications Commission, as such rules and
regulations were in effect on April 15, 1976.

         (C) In the event of any change in the rules and regulations of the Federal
Communications Commission with respect to syndicated and sports program exclusivity
after April 15, 1976, the rates established by section 111(d)(1)(B) may be adjusted to
assure that such rates are reasonable in light of the changes to such rules and
regulations, but any such adjustment shall apply only to the affected television broadcast
signals carried on those systems affected by the change.

         (D) The gross receipts limitations established by section 111(d)(1)(C) and (D) shall
be adjusted to reflect national monetary inflation or deflation or changes in the average
rates charged cable system subscribers for the basic service of providing secondary
transmissions to maintain the real constant dollar value of the exemption provided by
such section;  and the royalty rate specified therein shall not be subject to adjustment;
and

      (3) to distribute royalty fees deposited with the Register of Copyrights under sections
111, 116, 119(b), and 1003, and to determine, in cases where controversy exists, the
distribution of such fees.

   (c) Rulings.--The Librarian of Congress, upon the recommendation of the Register of
Copyrights, may, before a copyright arbitration royalty panel is convened, make any
necessary procedural or evidentiary rulings that would apply to the proceedings
conducted by such panel.

   (d) Administrative support of copyright arbitration royalty panels.--The Library of
Congress, upon the recommendation of the Register of Copyrights, shall provide the
copyright arbitration royalty panels with the necessary administrative services related to
proceedings under this chapter.


 

Sec.  802. Membership and proceedings of copyright arbitration royalty panels

   (a) Composition of copyright arbitration royalty panels.--A copyright arbitration royalty
panel shall consist of 3 arbitrators selected by the Librarian of Congress pursuant to
subsection (b).

   (b) Selection of arbitration panel.--Not later than 10 days after publication of a notice
in the Federal Register initiating an arbitration proceeding under section 803, and in
accordance with procedures specified by the Register of Copyrights, the Librarian of
Congress shall, upon the recommendation of the Register of Copyrights, select 2
arbitrators from lists provided by professional arbitration associations.  Qualifications of
the arbitrators shall include experience in conducting arbitration proceedings and
facilitating the resolution and settlement of disputes, and any qualifications which the
Librarian of Congress, upon the recommendation of the Register of Copyrights, shall
adopt by regulation.  The 2 arbitrators so selected shall, within 10 days after their
selection, choose a third arbitrator from the same lists, who shall serve as the chairperson
of the arbitrators.  If such 2 arbitrators fail to agree upon the selection of a third arbitrator,
the Librarian of Congress shall promptly select the third arbitrator.  The Librarian of
Congress, upon the recommendation of the Register of Copyrights, shall adopt
regulations regarding standards of conduct which shall govern arbitrators and the
proceedings under this chapter.

   (c) Arbitration proceedings.--Copyright arbitration royalty panels shall conduct
arbitration proceedings, subject to subchapter II of chapter 5 of title 5, for the purpose of
making their determinations in carrying out the purposes set forth in section 801.  The
arbitration panels shall act on the basis of a fully documented written record, prior
decisions of the Copyright Royalty Tribunal, prior copyright arbitration panel
determinations, and rulings by the Librarian of Congress under section 801(c).  Any
copyright owner who claims to be entitled to royalties under section 111, 116, or 119,
or any interested copyright party who claims to be entitled to royalties under section
1006, may submit relevant information and proposals to the arbitration panels in
proceedings applicable to such copyright owner or interested copyright party, and any
other person participating in arbitration proceedings may submit such relevant information
and proposals to the arbitration panel conducting the proceedings.  In ratemaking
proceedings, the parties to the proceedings shall bear the entire cost thereof in such
manner and proportion as the arbitration panels shall direct.  In distribution proceedings,
the parties shall bear the cost in direct proportion to their share of the distribution.

   (d) Procedures.--Effective on the date of the enactment of the Copyright Royalty
Tribunal Reform Act of 1993, the Librarian of Congress shall adopt the rules and
regulations set forth in chapter 3 of title 37 of the Code of Federal Regulations to govern
proceedings under this chapter.  Such rules and regulations shall remain in effect unless
and until the Librarian, upon the recommendation of the Register of Copyrights, adopts
supplemental or superseding regulations under subchapter II of chapter 5 of title 5.

   (e) Report to the Librarian of Congress.--Not later than 180 days after publication of the
notice in the Federal Register initiating an arbitration proceeding, the copyright arbitration
royalty panel conducting the proceeding shall report to the Librarian of Congress its
determination concerning the royalty fee or distribution of royalty fees, as the case may
be.  Such report shall be accompanied by the written record, and shall set forth the facts
that the arbitration panel found relevant to its determination.

   (f) Action by Librarian of Congress.--Within 60 days after receiving the report of a
copyright arbitration royalty panel under subsection (e), the Librarian of Congress, upon
the recommendation of the Register of Copyrights, shall adopt or reject the determination
of the arbitration panel.  The Librarian shall adopt the determination of the arbitration
panel unless the Librarian finds that the determination is arbitrary or contrary to the
applicable provisions of this title.  If the Librarian rejects the determination of the
arbitration panel, the Librarian shall, before the end of that 60-day period, and after full
examination of the record created in the arbitration proceeding, issue an order setting the
royalty fee or distribution of fees, as the case may be.  The Librarian shall cause to be
published in the Federal Register the determination of the arbitration panel, and the
decision of the Librarian (including an order issued under the preceding sentence).  The
Librarian shall also publicize such determination and decision in such other manner as
the Librarian considers appropriate.  The Librarian shall also make the report of the
arbitration panel and the accompanying record available for public inspection and copying.

   (g) Judicial review.--Any decision of the Librarian of Congress under subsection (f) with
respect to a determination of an arbitration panel may be appealed, by any aggrieved
party who would be bound by the determination, to the United States Court of Appeals
for the District of Columbia Circuit, within 30 days after the publication of the decision in
the Federal Register.  If no appeal is brought within such 30-day period, the decision of
the Librarian is final, and the royalty fee or determination with respect to the distribution
of fees, as the case may be, shall take effect as set forth in the decision.  The pendency
of an appeal under this paragraph shall not relieve persons obligated to make royalty
payments under sections 111, 115, 116, 118, 119, or 1003 who would be affected by the
determination on appeal to deposit the statement of account and royalty fees specified
in those sections.  The court shall have jurisdiction to modify or vacate a decision of the
Librarian only if it finds, on the basis of the record before the Librarian, that the Librarian
acted in an arbitrary manner.  If the court modifies the decision of the Librarian, the court
shall have jurisdiction to enter its own determination with respect to the amount or
distribution of royalty fees and costs, to order the repayment of any excess fees, and to
order the payment of any underpaid fees, and the interest pertaining respectively thereto,
in accordance with its final judgment.  The court may further vacate the decision of the
arbitration panel and remand the case to the Librarian for arbitration proceedings in
accordance with subsection (c).

   (h) Administrative matters.--

      (1) Deduction of costs from royalty fees.--The Librarian of Congress and the Register
of Copyrights may, to the extent not otherwise provided under this title, deduct from
royalty fees deposited or collected under this title the reasonable costs incurred by the
Library of Congress and the Copyright Office under this chapter.  Such deduction may
be made before the fees are distributed to any copyright claimants.  If no royalty pool
exists from which their costs can be deducted, the Librarian of Congress and the
Copyright Office may assess their reasonable costs directly to the parties to the most
recent relevant arbitration proceeding.

      (2) Positions required for administration of compulsory licensing.--Section 307 of the
Legislative Branch Appropriations Act, 1994, shall not apply to employee positions in the
Library of Congress that are required to be filled in order to carry out section 111, 115,
116, 118, or 119 or chapter 10.



Sec.  803. Institution and conclusion of proceedings

   (a)(1) With respect to proceedings under section 801(b)(1) concerning the adjustment
of royalty rates as provided in sections 115 and 116, and with respect to proceedings
under subparagraphs (A) and (D) of section 801(b)(2), during the calendar years specified
in the schedule set forth in paragraphs (2), (3), and (4), any owner or user of a
copyrighted work whose royalty rates are specified by this title, established by the
Copyright Royalty Tribunal before the date of the enactment of the Copyright Royalty
Tribunal Reform Act of 1993, or established by a copyright arbitration royalty panel after
such date of enactment, may file a petition with the Librarian of Congress declaring that
the petitioner requests an adjustment of the rate.  The Librarian of Congress shall, upon
the recommendation of the Register of Copyrights, make a determination as to whether
the petitioner has such a significant interest in the royalty rate in which an adjustment is
requested.  If the Librarian determines that the petitioner has such a significant interest,
the Librarian shall cause notice of this determination, with the reasons therefor, to be
published in the Federal Register, together with the notice of commencement of
proceedings under this chapter.

   (2) In proceedings under section 801(b)(2)(A) and (D), a petition described in paragraph
(1) may be filed during 1995 and in each subsequent fifth calendar year.

   (3) In proceedings under section 801(b)(1) concerning the adjustment of royalty rates
as provided in section 115, a petition described in paragraph (1) may be filed in 1997 and
in each subsequent tenth calendar year.

   (4)(A) In proceedings under section 801(b)(1) concerning the adjustment of royalty
rates as provided in section 116, a petition described in paragraph (1) may be filed at any
time within 1 year after negotiated licenses authorized by section 116 are terminated or
expire and are not replaced by subsequent agreements.

   (B) If a negotiated license authorized by section 116 is terminated or expires and is not
replaced by another such license agreement which provides permission to use a quantity
of musical works not substantially smaller than the quantity of such works performed on
coin-operated phonorecord players during the 1-year period ending March 1, 1989, the
Librarian of Congress shall, upon petition filed under paragraph (1) within 1 year after
such termination or expiration, convene a copyright arbitration royalty panel.  The
arbitration panel shall promptly establish an interim royalty rate or rates for the public
performance by means of a coin-operated phonorecord player of non-dramatic musical
works embodied in phonorecords which had been subject to the terminated or expired
negotiated license agreement.  Such rate or rates shall be the same as the last such rate
or rates and shall remain in force until the conclusion of proceedings by the arbitration
panel, in accordance with section 802, to adjust the royalty rates applicable to such
works, or until superseded by a new negotiated license agreement, as provided in section
116(b).

   (b) With respect to proceedings under subparagraph (B) or (C) of section 801(b)(2),
following an event described in either of those subsections, any owner or user of a
copyrighted work whose royalty rates are specified by section 111, or by a rate
established by the Copyright Royalty Tribunal or the Librarian of Congress, may, within
twelve months, file a petition with the Librarian declaring that the petitioner requests an
adjustment of the rate.  In this event the Librarian shall proceed as in subsection (FN1)
subsection (a) of this section.  Any change in royalty rates made by the Copyright
Royalty Tribunal or the Librarian of Congress pursuant to this subsection may be
reconsidered in 1980, 1985, and each fifth calendar year thereafter, in accordance with
the provisions in section 801(b)(2)(B) or (C), as the case may be.

   (c) With respect to proceedings under section 801(b)(1), concerning the determination
of reasonable terms and rates of royalty payments as provided in section 118, the
Librarian of Congress shall proceed when and as provided by that section.

   (d) With respect to proceedings under section 801(b)(3) or (4), concerning the
distribution of royalty fees in certain circumstances under section 111, 116, 119, or 1007
the Librarian of Congress shall, upon a determination that a controversy exists concerning
such distribution, cause to be published in the Federal Register notice of commencement
of proceedings under this chapter.







           CHAPTER 9--PROTECTION OF SEMICONDUCTOR CHIP PRODUCTS



Sec.  901. Definitions

   (a) As used in this chapter--

      (1) a "semiconductor chip product" is the final or intermediate form of any product--

         (A) having two or more layers of metallic, insulating, or semiconductor material,
deposited or otherwise placed on, or etched away or otherwise removed from, a piece of
semiconductor material in accordance with a predetermined pattern;  and

         (B) intended to perform electronic circuitry functions;

      (2) a "mask work" is a series of related images, however fixed or encoded--

         (A) having or representing the predetermined, three-dimensional pattern of metallic,
insulating, or semiconductor material present or removed from the layers of a
semiconductor chip product;  and

         (B) in which series the relation of the images to one another is that each image
has the pattern of the surface of one form of the semiconductor chip product;

      (3) a mask work is "fixed" in a semiconductor chip product when its embodiment in
the product is sufficiently permanent or stable to permit the mask work to be perceived
or reproduced from the product for a period of more than transitory duration;

      (4) to "distribute" means to sell, or to lease, bail, or otherwise transfer, or to offer to
sell, lease, bail, or otherwise transfer;

      (5) to "commercially exploit" a mask work is to distribute to the public for commercial
purposes a semiconductor chip product embodying the mask work; except that such term
includes an offer to sell or transfer a semiconductor chip product only when the offer is
in writing and occurs after the mask work is fixed in the semiconductor chip product;

      (6) the "owner" of a mask work is the person who created the mask work, the legal
representative of that person if that person is deceased or under a legal incapacity, or a
party to whom all the rights under this chapter of such person or representative are
transferred in accordance with section 903(b);  except that, in the case of a work made
within the scope of a person's employment, the owner is the employer for whom the
person created the mask work or a party to whom all the rights under this chapter of the
employer are transferred in accordance with section 903(b);

      (7) an "innocent purchaser" is a person who purchases a semiconductor chip product
in good faith and without having notice of protection with respect to the semiconductor
chip product;

      (8) having "notice of protection" means having actual knowledge that, or reasonable
grounds to believe that, a mask work is protected under this chapter;  and

      (9) an "infringing semiconductor chip product" is a semiconductor chip product which
is made, imported, or distributed in violation of the exclusive rights of the owner of a mask
work under this chapter.

   (b) For purposes of this chapter, the distribution or importation of a product
incorporating a semiconductor chip product as a part thereof is a distribution or
importation of that semiconductor chip product.




Sec.  902. Subject matter of protection

   (a)(1) Subject to the provisions of subsection (b), a mask work fixed in a semiconductor
chip product, by or under the authority of the owner of the mask work, is eligible for
protection under this chapter if--

      (A) on the date on which the mask work is registered under section 908, or is first
commercially exploited anywhere in the world, whichever occurs first, the owner of the
mask work is (i) a national or domiciliary of the United States, (ii) a national, domiciliary,
or sovereign authority of a foreign nation that is a party to a treaty affording protection to
mask works to which the United States is also a party, or (iii) a stateless person,
wherever that person may be domiciled;

      (B) the mask work is first commercially exploited in the United States; or

      (C) the mask work comes within the scope of a Presidential proclamation issued
under paragraph (2).

   (2) Whenever the President finds that a foreign nation extends, to mask works of
owners who are nationals or domiciliaries of the United States protection (A) on
substantially the same basis as that on which the foreign nation extends protection to
mask works of its own nationals and domiciliaries and mask works first commercially
exploited in that nation, or (B) on substantially the same basis as provided in this chapter,
the President may by proclamation extend protection under this chapter to mask works
(i) of owners who are, on the date on which the mask works are registered under section
908, or the date on which the mask works are first commercially exploited anywhere in
the world, whichever occurs first, nationals, domiciliaries, or sovereign authorities of that
nation, or (ii) which are first commercially exploited in that nation.  The President may
revise, suspend, or revoke any such proclamation or impose any conditions or limitations
on protection extended under any such proclamation.

   (b) Protection under this chapter shall not be available for a mask work that--

      (1) is not original;  or

      (2) consists of designs that are staple, commonplace, or familiar in the semiconductor
industry, or variations of such designs, combined in a way that, considered as a whole,
is not original.

   (c) In no case does protection under this chapter for a mask work extend to any idea,
procedure, process, system, method of operation, concept, principle, or discovery,
regardless of the form in which it is described, explained, illustrated, or embodied in such
work.



Sec.  903. Ownership, transfer, licensing, and recordation

   (a) The exclusive rights in a mask work subject to protection under this chapter belong
to the owner of the mask work.

   (b) The owner of the exclusive rights in a mask work may transfer all of those rights,
or license all or less than all of those rights, by any written instrument signed by such
owner or a duly authorized agent of the owner.  Such rights may be transferred or
licensed by operation of law, may be bequeathed by will, and may pass as personal
property by the applicable laws of intestate succession.

   (c)(1) Any document pertaining to a mask work may be recorded in the Copyright
Office if the document filed for recordation bears the actual signature of the person who
executed it, or if it is accompanied by a sworn or official certification that it is a true copy
of the original, signed document. The Register of Copyrights shall, upon receipt of the
document and the fee specified pursuant to section 908(d), record the document and
return it with a certificate of recordation.  The recordation of any transfer or license under
this paragraph gives all persons constructive notice of the facts stated in the recorded
document concerning the transfer or license.

   (2) In any case in which conflicting transfers of the exclusive rights in a mask work are
made, the transfer first executed shall be void as against a subsequent transfer which is
made for a valuable consideration and without notice of the first transfer, unless the first
transfer is recorded in accordance with paragraph (1) within three months after the date
on which it is executed, but in no case later than the day before the date of such
subsequent transfer.

   (d) Mask works prepared by an officer or employee of the United States Government
as part of that person's official duties are not protected under this chapter, but the United
States Government is not precluded from receiving and holding exclusive rights in mask
works transferred to the Government under subsection (b).




Sec.  904. Duration of protection

   (a) The protection provided for a mask work under this chapter shall commence on the
date on which the mask work is registered under section 908, or the date on which the
mask work is first commercially exploited anywhere in the world, whichever occurs first.

   (b) Subject to subsection (c) and the provisions of this chapter, the protection provided
under this chapter to a mask work shall end ten years after the date on which such
protection commences under subsection (a).

   (c) All terms of protection provided in this section shall run to the end of the calendar
year in which they would otherwise expire.



Sec.  905. Exclusive rights in mask works

   The owner of a mask work provided protection under this chapter has the exclusive
rights to do and to authorize any of the following:

      (1) to reproduce the mask work by optical, electronic, or any other means;

      (2) to import or distribute a semiconductor chip product in which the mask work is
embodied;  and

      (3) to induce or knowingly to cause another person to do any of the acts described
in paragraphs (1) and (2).




Sec.  906. Limitation on exclusive rights:  reverse engineering;  first sale

   (a) Notwithstanding the provisions of section 905, it is not an infringement of the
exclusive rights of the owner of a mask work for--

      (1) a person to reproduce the mask work solely for the purpose of teaching,
analyzing, or evaluating the concepts or techniques embodied in the mask work or the
circuitry, logic flow, or organization of components used in the mask work;  or

      (2) a person who performs the analysis or evaluation described in paragraph (1) to
incorporate the results of such conduct in an original mask work which is made to be
distributed.

   (b) Notwithstanding the provisions of section 905(2), the owner of a particular
semiconductor chip product made by the owner of the mask work, or by any person
authorized by the owner of the mask work, may import, distribute, or otherwise dispose
of or use, but not reproduce, that particular semiconductor chip product without the
authority of the owner of the mask work.




Sec.  907. Limitation on exclusive rights:  innocent infringement

   (a) Notwithstanding any other provision of this chapter, an innocent purchaser of an
infringing semiconductor chip product--

      (1) shall incur no liability under this chapter with respect to the importation or
distribution of units of the infringing semiconductor chip product that occurs before the
innocent purchaser has notice of protection with respect to the mask work embodied in
the semiconductor chip product; and

      (2) shall be liable only for a reasonable royalty on each unit of the infringing
semiconductor chip product that the innocent purchaser imports or distributes after having
notice of protection with respect to the mask work embodied in the semiconductor chip
product.

   (b) The amount of the royalty referred to in subsection (a)(2) shall be determined by
the court in a civil action for infringement unless the parties resolve the issue by voluntary
negotiation, mediation, or binding arbitration.

   (c) The immunity of an innocent purchaser from liability referred to in subsection (a)(1)
and the limitation of remedies with respect to an innocent purchaser referred to in
subsection (a)(2) shall extend to any person who directly or indirectly purchases an
infringing semiconductor chip product from an innocent purchaser.

   (d) The provisions of subsections (a), (b), and (c) apply only with respect to those units
of an infringing semiconductor chip product that an innocent purchaser purchased before
having notice of protection with respect to the mask work embodied in the semiconductor
chip product.




Sec.  908. Registration of claims of protection

   (a) The owner of a mask work may apply to the Register of Copyrights for registration
of a claim of protection in a mask work.  Protection of a mask work under this chapter
shall terminate if application for registration of a claim of protection in the mask work is
not made as provided in this chapter within two years after the date on which the mask
work is first commercially exploited anywhere in the world.

   (b) The Register of Copyrights shall be responsible for all administrative functions and
duties under this chapter.  Except for section 708, the provisions of chapter 7 of this title
relating to the general responsibilities, organization, regulatory authority, actions, records,
and publications of the Copyright Office shall apply to this chapter, except that the
Register of Copyrights may make such changes as may be necessary in applying those
provisions to this chapter.

   (c) The application for registration of a mask work shall be made on a form prescribed
by the Register of Copyrights.  Such form may require any information regarded by the
Register as bearing upon the preparation or identification of the mask work, the existence
or duration of protection of the mask work under this chapter, or ownership of the mask
work.  The application shall be accompanied by the fee set pursuant to subsection (d)
and the identifying material specified pursuant to such subsection.

   (d) The Register of Copyrights shall by regulation set reasonable fees for the filing of
applications to register claims of protection in mask works under this chapter, and for
other services relating to the administration of this chapter or the rights under this chapter,
taking into consideration the cost of providing those services, the benefits of a publicrecord, and statutory fee schedules under this title.  The Register shall also specify the
identifying material to be deposited in connection with the claim for registration.

   (e) If the Register of Copyrights, after examining an application for registration,
determines, in accordance with the provisions of this chapter, that the application relates
to a mask work which is entitled to protection under this chapter, then the Register shall
register the claim of protection and issue to the applicant a certificate of registration of the
claim of protection under the seal of the Copyright Office.  The effective date of
registration of a claim of protection shall be the date on which an application, deposit of
identifying material, and fee, which are determined by the Register of Copyrights or by
a court of competent jurisdiction to be acceptable for registration of the claim, have all
been received in the Copyright Office.

   (f) In any action for infringement under this chapter, the certificate of registration of a
mask work shall constitute prima facie evidence (1) of the facts stated in the certificate,
and (2) that the applicant issued the certificate has met the requirements of this chapter,
and the regulations issued under this chapter, with respect to the registration of claims.

   (g) Any applicant for registration under this section who is dissatisfied with the refusal
of the Register of Copyrights to issue a certificate of registration under this section may
seek judicial review of that refusal by bringing an action for such review in an appropriate
United States district court not later than sixty days after the refusal.  The provisions of
chapter 7 of title 5 shall apply to such judicial review.  The failure of the Register of
Copyrights to issue a certificate of registration within four months after an application for
registration is filed shall be deemed to be a refusal to issue a certificate of registration for
purposes of this subsection and section 910(b)(2), except that, upon a showing of good
cause, the district court may shorten such four-month period.





Sec.  909. Mask work notice

   (a) The owner of a mask work provided protection under this chapter may affix notice
to the mask work, and to masks and semiconductor chip products embodying the mask
work, in such manner and location as to give reasonable notice of such protection.  The
Register of Copyrights shall prescribe by regulation, as examples, specific methods of
affixation and positions of notice for purposes of this section, but these specifications shall
not be considered exhaustive.  The affixation of such notice is not a condition of
protection under this chapter, but shall constitute prima facie evidence of notice of
protection.

   (b) The notice referred to in subsection (a) shall consist of--

      (1) the words "mask force", the sumbol (FN1) *M*, or the symbol  TMM (the letter M
in a circle);  and

      (2) the name of the owner or owners of the mask work or an abbreviation by which
the name is recognized or is generally known.




Sec.  910. Enforcement of exclusive rights

   (a) Except as otherwise provided in this chapter, any person who violates any of the
exclusive rights of the owner of a mask work under this chapter, by conduct in or affecting
commerce, shall be liable as an infringer of such rights as used in this subsection, the
term 'any person' includes any State, any instrumentality of a State, and any officer or
employee of a State or instrumentality of a State acting in his or her official capacity.  Any
State, and any such instrumentality, officer, or employee, shall be subject to the
provisions of this chapter in the same manner and to the same extent as any
nongovernmental entity.

   (b)(1) The owner of a mask work protected under this chapter, or the exclusive licensee
of all rights under this chapter with respect to the mask work, shall, after a certificate of
registration of a claim of protection in that mask work has been issued under section 908,
be entitled to institute a civil action for any infringement with respect to the mask work
which is committed after the commencement of protection of the mask work under section
904(a).

   (2) In any case in which an application for registration of a claim of protection in a mask
work and the required deposit of identifying material and fee have been received in the
Copyright Office in proper form and registration of the mask work has been refused, the
applicant is entitled to institute a civil action for infringement under this chapter with
respect to the mask work if notice of the action, together with a copy of the complaint, is
served on the Register of Copyrights, in accordance with the Federal Rules of Civil
Procedure. The Register may, at his or her option, become a party to the action with
respect to the issue of whether the claim of protection is eligible for registration by
entering an appearance within sixty days after such service, but the failure of the Register
to become a party to the action shall not deprive the court of jurisdiction to determine that
issue.

   (c)(1) The Secretary of the Treasury and the United States Postal Service shall
separately or jointly issue regulations for the enforcement of the rights set forth in section
905 with respect to importation.  These regulations may require, as a condition for the
exclusion of articles from the United States, that the person seeking exclusion take any
one or more of the following actions:

      (A) Obtain a court order enjoining, or an order of the International Trade Commission
under section 337 of the Tariff Act of 1930 excluding, importation of the articles.

      (B) Furnish proof that the mask work involved is protected under this chapter and that
the importation of the articles would infringe the rights in the mask work under this
chapter.

      (C) Post a surety bond for any injury that may result if the detention or exclusion of
the articles proves to be unjustified.

   (2) Articles imported in violation of the rights set forth in section 905 are subject to
seizure and forfeiture in the same manner as property imported in violation of the customs
laws.  Any such forfeited articles shall be destroyed as directed by the Secretary of the
Treasury or the court, as the case may be, except that the articles may be returned to the
country of export whenever it is shown to the satisfaction of the Secretary of the Treasury
that the importer had no reasonable grounds for believing that his or her acts constituted
a violation of the law.




Sec.  911. Civil actions

   (a) Any court having jurisdiction of a civil action arising under this chapter may grant
temporary restraining orders, preliminary injunctions, and permanent injunctions on such
terms as the court may deem reasonable to prevent or restrain infringement of the
exclusive rights in a mask work under this chapter.

   (b) Upon finding an infringer liable, to a person entitled under section 910(b)(1) to
institute a civil action, for an infringement of any exclusive right under this chapter, the
court shall award such person actual damages suffered by the person as a result of the
infringement.  The court shall also award such person the infringer's profits that are
attributable to the infringement and are not taken into account in computing the award of
actual damages.  In establishing the infringer's profits, such person is required to present
proof only of the infringer's gross revenue, and the infringer is required to prove his or her
deductible expenses and the elements of profit attributable to factors other than the mask
work.

   (c) At any time before final judgment is rendered, a person entitled to institute a civil
action for infringement may elect, instead of actual damages and profits as provided by
subsection (b), an award of statutory damages for all infringements involved in the action,
with respect to any one mask work for which any one infringer is liable individually, or for
which any two or more infringers are liable jointly and severally, in an amount not more
than $250,000 as the court considers just.

   (d) An action for infringement under this chapter shall be barred unless the action is
commenced within three years after the claim accrues.

   (e)(1) At any time while an action for infringement of the exclusive rights in a mask
work under this chapter is pending, the court may order the impounding, on such terms
as it may deem reasonable, of all semiconductor chip products, and any drawings, tapes,
masks, or other products by means of which such products may be reproduced, that are
claimed to have been made, imported, or used in violation of those exclusive rights. 
Insofar as practicable, applications for orders under this paragraph shall be heard and
determined in the same manner as an application for a temporary restraining order or
preliminary injunction.

   (2) As part of a final judgment or decree, the court may order the destruction or other
disposition of any infringing semiconductor chip products, and any masks, tapes, or other
articles by means of which such products may be reproduced.

   (f) In any civil action arising under this chapter, the court in its discretion may allow the
recovery of full costs, including reasonable attorneys' fees, to the prevailing party.

   (g)(1) Any State, any instrumentality of a State, and any officer or employee of a State
or instrumentality of a State acting in his or her official capacity, shall not be immune,
under the Eleventh Amendment of the Constitution of the United States or under any
other doctrine of sovereign immunity, from suit in Federal court by any person, including
any governmental or nongovernmental entity, for a violation of any of the exclusive rights
of the owner of a mask work under this chapter, or for any other violation under this
chapter.

   (2) In a suit described in paragraph (1) for a violation described in that paragraph,
remedies (including remedies both at law and in equity) are available for the violation to
the same extent as such remedies are available for such a violation in a suit against any
public or private entity other than a State, instrumentality of a State, or officer or
employee of a State acting in his or her official capacity.  Such remedies include actual
damages and profits under subsection (b), statutory damages under subsection (c),
impounding and disposition of infringing articles under subsection (e), and costs and
attorney's fees under subsection (f).




Sec.  912. Relation to other laws

   (a) Nothing in this chapter shall affect any right or remedy held by any person under
chapters 1 through 8 or 10 of this title, or under title 35.

   (b) Except as provided in section 908(b) of this title, references to "this title" or "title 17"
in chapters 1 through 8 or 10 of this title shall be deemed not to apply to this chapter.

   (c) The provisions of this chapter shall preempt the laws of any State to the extent
those laws provide any rights or remedies with respect to a mask work which are
equivalent to those rights or remedies provided by this chapter, except that such
preemption shall be effective only with respect to actions filed on or after January 1, 1986.

   (d) Notwithstanding subsection (c), nothing in this chapter shall detract from any rights
of a mask work owner, whether under Federal law (exclusive of this chapter) or under the
common law or the statutes of a State, heretofore or hereafter declared or enacted, with
respect to any mask work first commercially exploited before July 1, 1983.





Sec.  913. Transitional provisions

   (a) No application for registration under section 908 may be filed, and no civil action
under section 910 or other enforcement proceeding under this chapter may be instituted,
until sixty days after the date of the enactment of this chapter.

   (b) No monetary relief under section 911 may be granted with respect to any conduct
that occurred before the date of the enactment of this chapter, except as provided in
subsection (d).

   (c) Subject to subsection (a), the provisions of this chapter apply to all mask works that
are first commercially exploited or are registered under this chapter, or both, on or after
the date of the enactment of this chapter.

   (d)(1) Subject to subsection (a), protection is available under this chapter to any mask
work that was first commercially exploited on or after July 1, 1983, and before the date
of the enactment of this chapter, if a claim of protection in the mask work is registered
in the Copyright Office before July 1, 1985, under section 908.

   (2) In the case of any mask work described in paragraph (1) that is provided protection
under this chapter, infringing semiconductor chip product units manufactured before the
date of the enactment of this chapter may, without liability under sections 910 and 911,
be imported into or distributed in the United States, or both, until two years after the date
of registration of the mask work under section 908, but only if the importer or distributor,
as the case may be, first pays or offers to pay the reasonable royalty referred to in
section 907(a)(2) to the mask work owner, on all such units imported or distributed, or
both, after the date of the enactment of this chapter.

   (3) In the event that a person imports or distributes infringing semiconductor chip
product units described in paragraph (2) of this subsection without first paying or offering
to pay the reasonable royalty specified in such paragraph, or if the person refuses or fails
to make such payment, the mask work owner shall be entitled to the relief provided in
sections 910 and 911.





Sec.  914. International transitional provisions

   (a) Notwithstanding the conditions set forth in subparagraphs (A) and (C) of section
902(a)(1) with respect to the availability of protection under this chapter to nationals,
domiciliaries, and sovereign authorities of a foreign nation, the Secretary of Commerce
may, upon the petition of any person, or upon the Secretary's own motion, issue an order
extending protection under this chapter to such foreign nationals, domiciliaries, and
sovereign authorities if the Secretary finds--

      (1) that the foreign nation is making good faith efforts and reasonable progress
toward--

         (A) entering into a treaty described in section 902(a)(1)(A);  or

         (B) enacting or implementing legislation that would be in compliance with
subparagraph (A) or (B) of section 902(a)(2);  and

      (2) that the nationals, domiciliaries, and sovereign authorities of the foreign nation,
and persons controlled by them, are not engaged in the misappropriation, or unauthorized
distribution or commercial exploitation, of mask works;  and

      (3) that issuing the order would promote the purposes of this chapter and
international comity with respect to the protection of mask works.

   (b) While an order under subsection (a) is in effect with respect to a foreign nation, no
application for registration of a claim for protection in a mask work under this chapter may
be denied solely because the owner of the mask work is a national, domiciliary, or
sovereign authority of that foreign nation, or solely because the mask work was first
commercially exploited in that foreign nation.

   (c) Any order issued by the Secretary of Commerce under subsection (a) shall be
effective for such period as the Secretary designates in the order, except that no such
order may be effective after the date on which the authority of the Secretary of
Commerce terminates under subsection (e).  The effective date of any such order shall
also be designated in the order.  In the case of an order issued upon the petition of a
person, such effective date may be no earlier than the date on which the Secretary
receives such petition.

   (d)(1) Any order issued under this section shall terminate if--

      (A) the Secretary of Commerce finds that any of the conditions set forth in
paragraphs (1), (2), and (3) of subsection (a) no longer exist;  or

      (B) mask works of nationals, domiciliaries, and sovereign authorities of that foreign
nation or mask works first commercially exploited in that foreign nation become eligible
for protection under subparagraph (A) or (C) of section 902(a)(1).

   (2) Upon the termination or expiration of an order issued under this section,
registrations of claims of protection in mask works made pursuant to that order shall
remain valid for the period specified in section 904.

   (e) The authority of the Secretary of Commerce under this section shall commence on
the date of the enactment of this chapter, and shall terminate on July 1, 1995.

   (f)(1) The Secretary of Commerce shall promptly notify the Register of Copyrights and
the Committees on the Judiciary of the Senate and the House of Representatives of the
issuance or termination of any order under this section, together with a statement of the
reasons for such action.  The Secretary shall also publish such notification and statement
of reasons in the Federal Register.

   (2) Two years after the date of the enactment of this chapter, the Secretary of
Commerce, in consultation with the Register of Copyrights, shall transmit to the
Committees on the Judiciary of the Senate and the House of Representatives a report
on the actions taken under this section and on the current status of international
recognition of mask work protection.  The report shall include such recommendations for
modifications of the protection accorded under this chapter to mask works owned by
nationals, domiciliaries, or sovereign authorities of foreign nations as the Secretary, in
consultation with the Register of Copyrights, considers would promote the purposes of
this chapter and international comity with respect to mask work protection.  Not later than
July 1, 1994, the Secretary of Commerce, in consultation with the Register of Copyrights,
shall transmit to the Committees on the Judiciary of the Senate and the House of
Representatives a report updating the matters contained in the report transmitted under
the preceding sentence.







           CHAPTER 10--DIGITAL AUDIO RECORDING DEVICES AND MEDIA


Sec.  1001. Definitions

   As used in this chapter, the following terms have the following meanings:

      (1) A "digital audio copied recording" is a reproduction in a digital recording format
of a digital musical recording, whether that reproduction is made directly from another
digital musical recording or indirectly from a transmission.

      (2) A "digital audio interface device" is any machine or device that is designed
specifically to communicate digital audio information and related interface data to a digital
audio recording device through a nonprofessional interface.

      (3) A "digital audio recording device" is any machine or device of a type commonly
distributed to individuals for use by individuals, whether or not included with or as part of
some other machine or device, the digital recording function of which is designed or
marketed for the primary purpose of, and that is capable of, making a digital audio copied
recording for private use, except for--

         (A) professional model products, and

         (B) dictation machines, answering machines, and other audio recording equipment
that is designed and marketed primarily for the creation of sound recordings resulting from
the fixation of nonmusical sounds.

      (4)(A) A "digital audio recording medium" is any material object in a form commonly
distributed for use by individuals, that is primarily marketed or most commonly used by
consumers for the purpose of making digital audio copied recordings by use of a digital
audio recording device.

      (B) Such term does not include any material object--

         (i) that embodies a sound recording at the time it is first distributed by the importer
or manufacturer;  or

         (ii) that is primarily marketed and most commonly used by consumers either for thepurpose of making copies of motion pictures or other audiovisual works or for the purpose
of making copies of nonmusical literary works, including computer programs or data
bases.

      (5)(A) A "digital musical recording" is a material object--

         (i) in which are fixed, in a digital recording format, only sounds, and material,
statements, or instructions incidental to those fixed sounds, if any, and

         (ii) from which the sounds and material can be perceived, reproduced, or otherwise
communicated, either directly or with the aid of a machine or device.

      (B) A "digital musical recording" does not include a material object--

         (i) in which the fixed sounds consist entirely of spoken word recordings, or

         (ii) in which one or more computer programs are fixed, except that a digital musical
recording may contain statements or instructions constituting the fixed sounds and
incidental material, and statements or instructions to be used directly or indirectly in order
to bring about the perception, reproduction, or communication of the fixed sounds and
incidental material.

      (C) For purposes of this paragraph--

         (i) a "spoken word recording" is a sound recording in which are fixed only a series
of spoken words, except that the spoken words may be accompanied by incidental
musical or other sounds, and

         (ii) the term "incidental" means related to and relatively minor by comparison.

      (6) "Distribute" means to sell, lease, or assign a product to consumers in the United
States, or to sell, lease, or assign a product in the United States for ultimate transfer to
consumers in the United States.

      (7) An "interested copyright party" is--

         (A) the owner of the exclusive right under section 106(1) of this title to reproduce
a sound recording of a musical work that has been embodied in a digital musical
recording or analog musical recording lawfully made under this title that has been
distributed;

         (B) the legal or beneficial owner of, or the person that controls, the right to
reproduce in a digital musical recording or analog musical recording a musical work that
has been embodied in a digital musical recording or analog musical recording lawfully
made under this title that has been distributed;

         (C) a featured recording artist who performs on a sound recording that has been
distributed;  or

         (D) any association or other organization--

            (i) representing persons specified in subparagraph (A), (B), or (C), or

            (ii) engaged in licensing rights in musical works to music users on behalf of
writers and publishers.

      (8) To "manufacture" means to produce or assemble a product in the United States. 
A "manufacturer" is a person who manufactures.

      (9) A "music publisher" is a person that is authorized to license the reproduction of
a particular musical work in a sound recording.

      (10) A "professional model product" is an audio recording device that is designed,
manufactured, marketed, and intended for use by recording professionals in the ordinary
course of a lawful business, in accordance with such requirements as the Secretary of
Commerce shall establish by regulation.

      (11) The term "serial copying" means the duplication in a digital format of a
copyrighted musical work or sound recording from a digital reproduction of a digital
musical recording.  The term "digital reproduction of a digital musical recording" does not
include a digital musical recording as distributed, by authority of the copyright owner, for
ultimate sale to consumers.

      (12) The "transfer price" of a digital audio recording device or a digital audio
recording medium--

         (A) is, subject to subparagraph (B)--

            (i) in the case of an imported product, the actual entered value at United States
Customs (exclusive of any freight, insurance, and applicable duty), and

            (ii) in the case of a domestic product, the manufacturer's transfer price (FOB the
manufacturer, and exclusive of any direct sales taxes or excise taxes incurred in
connection with the sale);  and

         (B) shall, in a case in which the transferor and transferee are related entities or
within a single entity, not be less than a reasonable arms-length price under the principles
of the regulations adopted pursuant to section 482 of the Internal Revenue Code of 1986,
or any successor provision to such section.

      (13) A "writer" is the composer or lyricist of a particular musical work.




Sec.  1002. Incorporation of copying controls

   (a) Prohibition on importation, manufacture, and distribution.--No person shall import,
manufacture, or distribute any digital audio recording device or digital audio interface
device that does not conform to--

      (1) the Serial Copy Management System;

      (2) a system that has the same functional characteristics as the Serial Copy
Management System and requires that copyright and generation status information be
accurately sent, received, and acted upon between devices using the system's method
of serial copying regulation and devices using the Serial Copy Management System;  or

      (3) any other system certified by the Secretary of Commerce as prohibiting
unauthorized serial copying.

   (b) Development of verification procedure.--The Secretary of Commerce shall establish
a procedure to verify, upon the petition of an interested party, that a system meets the
standards set forth in subsection (a)(2).

   (c) Prohibition on circumvention of the system.--No person shall import, manufacture,
or distribute any device, or offer or perform any service, the primary purpose or effect of
which is to avoid, bypass, remove, deactivate, or otherwise circumvent any program or
circuit which implements, in whole or in part, a system described in subsection (a).

   (d) Encoding of information on digital musical recordings.--

      (1) Prohibition on encoding inaccurate information.--No person shall encode a digital
musical recording of a sound recording with inaccurate information relating to the category
code, copyright status, or generation status of the source material for the recording.

      (2) Encoding of copyright status not required.--Nothing in this chapter requires any
person engaged in the importation or manufacture of digital musical recordings to encode
any such digital musical recording with respect to its copyright status.

   (e) Information accompanying transmissions in digital format.--Any person who
transmits or otherwise communicates to the public any sound recording in digital format
is not required under this chapter to transmit or otherwise communicate the information
relating to the copyright status of the sound recording.  Any such person who does
transmit or otherwise communicate such copyright status information shall transmit or
communicate such information accurately.




Sec.  1003. Obligation to make royalty payments

   (a) Prohibition on importation and manufacture.--No person shall import into and
distribute, or manufacture and distribute, any digital audio recording device or digital audio
recording medium unless such person records the notice specified by this section and
subsequently deposits the statements of account and applicable royalty payments for
such device or medium specified in section 1004.

   (b) Filing of notice.--The importer or manufacturer of any digital audio recording device
or digital audio recording medium, within a product category or utilizing a technology with
respect to which such manufacturer or importer has not previously filed a notice under
this subsection, shall file with the Register of Copyrights a notice with respect to such
device or medium, in such form and content as the Register shall prescribe by regulation.

   (c) Filing of quarterly and annual statements of account.--

      (1) Generally.--Any importer or manufacturer that distributes any digital audio
recording device or digital audio recording medium that it manufactured or imported shall
file with the Register of Copyrights, in such form and content as the Register shall
prescribe by regulation, such quarterly and annual statements of account with respect to
such distribution as the Register shall prescribe by regulation.

      (2) Certification, verification, and confidentiality.--Each such statement shall be
certified as accurate by an authorized officer or principal of the importer or manufacturer. 
The Register shall issue regulations to provide for the verification and audit of such
statements and to protect the confidentiality of the information contained in such
statements.  Such regulations shall provide for the disclosure, in confidence, of such
statements to interested copyright parties.

      (3) Royalty payments.--Each such statement shall be accompanied by the royalty
payments specified in section 1004.




Sec.  1004. Royalty payments

   (a) Digital audio recording devices.--

      (1) Amount of payment.--The royalty payment due under section 1003 for each digital
audio recording device imported into and distributed in the United States, or manufactured
and distributed in the United States, shall be 2 percent of the transfer price.  Only the first
person to manufacture and distribute or import and distribute such device shall be
required to pay the royalty with respect to such device.

      (2) Calculation for devices distributed with other devices.--With respect to a digital
audio recording device first distributed in combination with one or more devices, either
as a physically integrated unit or as separate components, the royalty payment shall be
calculated as follows:

         (A) If the digital audio recording device and such other devices are part of a
physically integrated unit, the royalty payment shall be based on the transfer price of the
unit, but shall be reduced by any royalty payment made on any digital audio recording
device included within the unit that was not first distributed in combination with the unit.

         (B) If the digital audio recording device is not part of a physically integrated unit
and substantially similar devices have been distributed separately at any time during the
preceding 4 calendar quarters, the royalty payment shall be based on the average
transfer price of such devices during those 4 quarters.

         (C) If the digital audio recording device is not part of a physically integrated unit
and substantially similar devices have not been distributed separately at any time during
the preceding 4 calendar quarters, the royalty payment shall be based on a constructed
price reflecting the proportional value of such device to the combination as a whole.

      (3) Limits on royalties.--Notwithstanding paragraph (1) or (2), the amount of the
royalty payment for each digital audio recording device shall not be less than $1 nor more
than the royalty maximum.  The royalty maximum shall be $8 per device, except that in
the case of a physically integrated unit containing more than 1 digital audio recording
device, the royalty maximum for such unit shall be $12.  During the 6th year after the
effective date of this chapter, and not more than once each year thereafter, any interested
copyright party may petition the Librarian of Congress to increase the royalty maximum
and, if more than 20 percent of the royalty payments are at the relevant royalty maximum,
the Librarian of Congress shall prospectively increase such royalty maximum with the goal
of having no more than 10 percent of such payments at the new royalty maximum; 
however the amount of any such increase as a percentage of the royalty maximum shall
in no event exceed the percentage increase in the Consumer Price Index during the
period under review.

   (b) Digital audio recording media.--The royalty payment due under section 1003 for
each digital audio recording medium imported into and distributed in the United States,
or manufactured and distributed in the United States, shall be 3 percent of the transfer
price.  Only the first person to manufacture and distribute or import and distribute suchmedium shall be required to pay the royalty with respect to such medium.




Sec.  1005. Deposit of royalty payments and deduction of expenses

   The Register of Copyrights shall receive all royalty payments deposited under this
chapter and, after deducting the reasonable costs incurred by the Copyright Office under
this chapter, shall deposit the balance in the Treasury of the United States as offsetting
receipts, in such manner as the Secretary of the Treasury directs.  All funds held by the
Secretary of the Treasury shall be invested in interest-bearing United States securities
for later distribution with interest under section 1007.    The Register may, in the
Register's discretion, 4 years after the close of any calendar year, close out the royalty
payments account for that calendar year, and may treat any funds remaining in such
account and any subsequent deposits that would otherwise be attributable to that
calendar year as attributable to the succeeding calendar year.




Sec.  1006. Entitlement to royalty payments

   (a) Interested copyright parties.--The royalty payments deposited pursuant to section
1005 shall, in accordance with the procedures specified in section 1007, be distributed
to any interested copyright party--

      (1) whose musical work or sound recording has been--

         (A) embodied in a digital musical recording or an analog musical recording lawfully
made under this title that has been distributed, and

         (B) distributed in the form of digital musical recordings or analog musical
recordings or disseminated to the public in transmissions, during the period to which such
payments pertain;  and

      (2) who has filed a claim under section 1007.

   (b) Allocation of royalty payments to groups.--The royalty payments shall be divided into
2 funds as follows:

      (1) The Sound Recordings Fund.--66 2/3 percent of the royalty payments shall be
allocated to the Sound Recordings Fund.  2 5/8 percent of the royalty payments allocated
to the Sound Recordings Fund shall be placed in an escrow account managed by an
independent administrator jointly appointed by the interested copyright parties described
in section 1001(7)(A) and the American Federation of Musicians (or any successor entity)
to be distributed to nonfeatured musicians (whether or not members of the American
Federation of Musicians or any successor entity) who have performed on sound
recordings distributed in the United States.  1 3/8 percent of the royalty payments
allocated to the Sound Recordings Fund shall be placed in an escrow account managed
by an independent administrator jointly appointed by the interested copyright parties
described in section 1001(7)(A) and the American Federation of Television and Radio
Artists (or any successor entity) to be distributed to nonfeatured vocalists (whether or not
members of the American Federation Television and Radio Artists or any successor
entity) who have performed on sound recordings distributed in the United States.  40
percent of the remaining royalty payments in the Sound Recordings Fund shall be
distributed to the interested copyright parties described in section 1001(7)(C), and 60
percent of such remaining royalty payments shall be distributed to the interested
copyright parties described in section 1001(7)(A).


      (2) The Musical Works Fund.--

         (A) 33 1/3 percent of the royalty payments shall be allocated to the Musical Works
Fund for distribution to interested copyright parties described in section 1001(7)(B).

         (B)(i) Music publishers shall be entitled to 50 percent of the royalty payments
allocated to the Musical Works Fund.

         (ii) Writers shall be entitled to the other 50 percent of the royalty payments
allocated to the Musical Works Fund.

   (c) Allocation of royalty payments within groups.--If all interested copyright parties
within a group specified in subsection (b) do not agree on a voluntary proposal for the
distribution of the royalty payments within each group, the Librarian of Congress shall
convene a copyright arbitration royalty panel which shall, pursuant to the procedures
specified under section 1007(c), allocate royalty payments under this section based on
the extent to which, during the relevant period--

      (1) for the Sound Recordings Fund, each sound recording was distributed in the form
of digital musical recordings or analog musical recordings;  and

      (2) for the Musical Works Fund, each musical work was distributed in the form of
digital musical recordings or analog musical recordings or disseminated to the public in
transmissions.




Sec.  1007. Procedures for distributing royalty payments

   (a) Filing of claims and negotiations.--

      (1) Filing of claims.--During the first 2 months of each calendar year after the
calendar year in which this chapter takes effect, every interested copyright party seeking
to receive royalty payments to which such party is entitled under section 1006 shall file
with the Librarian of Congress a claim for payments collected during the preceding year
in such form and manner as the Librarian of Congress shall prescribe by regulation.

      (2) Negotiations.--Notwithstanding any provision of the antitrust laws, for purposes
of this section interested copyright parties within each group specified in section 1006(b)
may agree among themselves to the proportionate division of royalty payments, may lump
their claims together and file them jointly or as a single claim, or may designate a
common agent, including any organization described in section 1001(7)(D), to negotiate
or receive payment on their behalf;  except that no agreement under this subsection may
modify the allocation of royalties specified in section 1006(b).

   (b) Distribution of payments in the absence of a dispute.--Within 30 days after the
period established for the filing of claims under subsection (a), in each year after the year
in which this section takes effect, the Librarian of Congress shall determine whether there
exists a controversy concerning the distribution of royalty payments under section
1006(c).  If the Librarian of Congress determines that no such controversy exists, the
Librarian of Congress shall, within 30 days after such determination, authorize the
distribution of the royalty payments as set forth in the agreements regarding the
distribution of royalty payments entered into pursuant to subsection (a), after deducting
its reasonable administrative costs under this section.

   (c) Resolution of disputes.--If the Librarian of Congress finds the existence of a
controversy, the Librarian shall, pursuant to chapter 8 of this title, convene a copyright
arbitration royalty panel to determine the distribution of royalty payments.  During the
pendency of such a proceeding, the Librarian of Congress shall withhold from distribution
an amount sufficient to satisfy all claims with respect to which a controversy exists, but
shall, to the extent feasible, authorize the distribution of any amounts that are not in
controversy. The Librarian of Congress shall, before authorizing the distribution of such
royalty payments, deduct the reasonable administrative costs incurred by the Librarian
under this section.




Sec.  1008. Prohibition on certain infringement actions


   No action may be brought under this title alleging infringement of copyright based on
the manufacture, importation, or distribution of a digital audio recording device, a digital
audio recording medium, an analog recording device, or an analog recording medium, or
based on the noncommercial use by a consumer of such a device or medium for making
digital musical recordings or analog musical recordings.




Sec.  1009. Civil remedies

   (a) Civil actions.--Any interested copyright party injured by a violation of section 1002
or 1003 may bring a civil action in an appropriate United States district court against any
person for such violation.

   (b) Other civil actions.--Any person injured by a violation of this chapter may bring a
civil action in an appropriate United States district court for actual damages incurred as
a result of such violation.

   (c) Powers of the court.--In an action brought under subsection (a), the court--

      (1) may grant temporary and permanent injunctions on such terms as it deems
reasonable to prevent or restrain such violation;

      (2) in the case of a violation of section 1002, or in the case of an injury resulting from
a failure to make royalty payments required by section 1003, shall award damages under
subsection (d);

      (3) in its discretion may allow the recovery of costs by or against any party other than
the United States or an officer thereof;  and

      (4) in its discretion may award a reasonable attorney's fee to the prevailing party.

   (d) Award of damages.--

      (1) Damages for section 1002 or 1003 violations.--

         (A) Actual damages.--(i) In an action brought under subsection (a), if the court finds
that a violation of section 1002 or 1003 has occurred, the court shall award to the
complaining party its actual damages if the complaining party elects such damages at any
time before final judgment is entered.

         (ii) In the case of section 1003, actual damages shall constitute the royalty
payments that should have been paid under section 1004 and deposited under section
1005.  In such a case, the court, in its discretion, may award an additional amount of not
to exceed 50 percent of the actual damages.

         (B) Statutory damages for section 1002 violations.--

            (i) Device.--A complaining party may recover an award of statutory damages for
each violation of section 1002(a) or (c) in the sum of not more than $2,500 per device
involved in such violation or per device on which a service prohibited by section 1002(c)
has been performed, as the court considers just.

            (ii) Digital musical recording.--A complaining party may recover an award of
statutory damages for each violation of section 1002(d) in the sum of not more than $25
per digital musical recording involved in such violation, as the court considers just.

            (iii) Transmission.--A complaining party may recover an award of damages for
each transmission or communication that violates section 1002(e) in the sum of not more
than $10,000, as the court considers just.

      (2) Repeated violations.--In any case in which the court finds that a person has
violated section 1002 or 1003 within 3 years after a final judgment against that person for
another such violation was entered, the court may increase the award of damages to not
more than double the amounts that would otherwise be awarded under paragraph (1), as
the court considers just.

      (3) Innocent violations of section 1002.--The court in its discretion may reduce the
total award of damages against a person violating section 1002 to a sum of not less than
$250 in any case in which the court finds that the violator was not aware and had no
reason to believe that its acts constituted a violation of section 1002.

   (e) Payment of damages.--Any award of damages under subsection (d) shall be
deposited with the Register pursuant to section 1005 for distribution to interested
copyright parties as though such funds were royalty payments made pursuant to section
1003.

   (f) Impounding of articles.--At any time while an action under subsection (a) is pending,
the court may order the impounding, on such terms as it deems reasonable, of any digital
audio recording device, digital musical recording, or device specified in section 1002(c)
that is in the custody or control of the alleged violator and that the court has reasonable
cause to believe does not comply with, or was involved in a violation of, section 1002.

   (g) Remedial modification and destruction of articles.--In an action brought under
subsection (a), the court may, as part of a final judgment or decree finding a violation of
section 1002, order the remedial modification or the destruction of any digital audio
recording device, digital musical recording, or device specified in section 1002(c) that--

      (1) does not comply with, or was involved in a violation of, section 1002, and

      (2) is in the custody or control of the violator or has been impounded under
subsection (f).




Sec.  1010. Arbitration of certain disputes

   (a) Scope of arbitration.--Before the date of first distribution in the United States of a
digital audio recording device or a digital audio interface device, any party manufacturing,
importing, or distributing such device, and any interested copyright party may mutually
agree to binding arbitration for the purpose of determining whether such device is subject
to section 1002, or the basis on which royalty payments for such device are to be made
under section 1003.

   (b) Initiation of arbitration proceedings.--Parties agreeing to such arbitration shall file
a petition with the Librarian of Congress requesting the commencement of an arbitration
proceeding.  The petition may include the names and qualifications of potential arbitrators. 
Within 2 weeks after receiving such a petition, the Librarian of Congress shall cause
notice to be published in the Federal Register of the initiation of an arbitration proceeding. 
Such notice shall include the names and qualifications of 3 arbitrators chosen by the
Librarian of Congress from a list of available arbitrators obtained from the American
Arbitration Association or such similar organization as the Librarian of Congress shall
select, and from potential arbitrators listed in the parties' petition.  The arbitrators selected
under this subsection shall constitute an Arbitration Panel.

   (c) Stay of judicial proceedings.--Any civil action brought under section 1009 against
a party to arbitration under this section shall, on application of one of the parties to the
arbitration, be stayed until completion of the arbitration proceeding.

   (d) Arbitration proceeding.--The Arbitration Panel shall conduct an arbitration
proceeding with respect to the matter concerned, in accordance with such procedures as
it may adopt.  The Panel shall act on the basis of a fully documented written record.  Any
party to the arbitration may submit relevant information and proposals to the Panel.  The
parties to the proceeding shall bear the entire cost thereof in such manner and proportion
as the Panel shall direct.

   (e) Report to Librarian of Congress.--Not later than 60 days after publication of the
notice under subsection (b) of the initiation of an arbitration proceeding, the Arbitration
Panel shall report to the Librarian of Congress its determination concerning whether the
device concerned is subject to section 1002, or the basis on which royalty payments for
the device are to be made under section 1003.  Such report shall be accompanied by the
written record, and shall set forth the facts that the Panel found relevant to its
determination.

   (f) Action by the Librarian of Congress.--Within 60 days after receiving the report of the
Arbitration Panel under subsection (e), the Librarian of Congress shall adopt or reject the
determination of the Panel.  The Librarian of Congress shall adopt the determination of
the Panel unless the Librarian of Congress finds that the determination is clearly
erroneous.  If the Librarian of Congress rejects the determination of the Panel, the
Librarian of Congress shall, before the end of that 60-day period, and after full
examination of the record created in the arbitration proceeding, issue an order setting
forth the Librarian's decision and the reasons therefor.  The Librarian of Congress shall
cause to be published in the Federal Register the determination of the Panel and the
decision of the Librarian of Congress under this subsection with respect to the
determination (including any order issued under the preceding sentence).

   (g) Judicial review.--Any decision of the Librarian of Congress under subsection (f) with
respect to a determination of the Arbitration Panel may be appealed, by a party to the
arbitration, to the United States Court of Appeals for the District of Columbia Circuit,
within 30 days after the publication of the decision in the Federal Register.  The pendency
of an appeal under this subsection shall not stay the decision of the Librarian of
Congress.  The court shall have jurisdiction to modify or vacate a decision of the Librarian
of Congress only if it finds, on the basis of the record before the Librarian of Congress,
that the Arbitration Panel or the Librarian of Congress acted in an arbitrary manner.  If
the court modifies the decision of the Librarian of Congress, the court shall have
jurisdiction to enter its own decision in accordance with its final judgment.  The court may
further vacate the decision of the Librarian of Congress and remand the case for
arbitration proceedings as provided in this section.

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