Statement of Marybeth Peters
The Register of Copyrights
before the
Subcommittee on Courts and Intellectual Property
Committee on the Judiciary

United States House of Representatives
106th Congress, 2nd Session

May 25, 2000

Copyright Office Operations, Accomplishments, and Challenges


Mr. Chairman and Members of the Subcommittee: I appreciate the opportunity to testify at this Oversight Hearing. My statement reviews our operations, major accomplishments and challenges.

The last two years have been very busy ones for the Copyright Office not only because of increased legislative mandates but also because of the changing nature of activity in certain areas of title 17. The adoption of new fees also increased the Office's work load. Despite the fact that its staffing levels remained about the same, the Office managed to make great strides in accomplishing these new responsibilities.

The Office responded aggressively to new Congressional directives including those contained in the Digital Millennium Copyright Act of 1998. This legislation, the most far reaching copyright bill in two decades, gave the Office new duties and responsibilities in the areas of liability limitations for infringement of copyright in a digital environment, for digital performance rights in sound recordings, and protection for vessel hull designs. In addition, the Office continued its role of advisor to Congress on national and international issues, and provided valuable and timely assistance to the United States Trade Representative and other executive branch agencies. The Office also continued to create and maintain the official public record of copyright registrations and recorded documents, administered the various compulsory licenses and statutory obligations, and provided technical, legal, and educational copyright assistance throughout the world. The Office took major steps forward in its systematic development and implementation of the CORDS system, a fully automated registration and deposit system, successfully implementing during the past year an innovative system-to-system communications capability for electronic submission of copyright claims and deposits for digital dissertations from the office's largest remitter. Additionally, the Office continued to make progress in providing a higher level of security for materials submitted for copyright registration.

In fiscal year 1999, the Copyright Office received approximately 619,022 claims to copyright representing over 800,000 work, of which 594,501 were registered. It recorded a total of 16,447 documents covering hundreds of thousands of titles. It forwarded more than 603,000 copies of works, with a value of more than $36 million dollars to the Library of Congress for its collections and exchange programs.

The Office processed 21,299 filings from cable operators, satellite carriers, and manufacturers and importers of digital audio recording devices and media, and processed claims to the various royalty pools. The Licensing Division collected a total of $214,888,724.96 in royalty fees (almost 85 percent in the form of electronic funds transfers through the automated Clearing House of a Fedwire transfer), and distributed royalties in the amount of $172,284,737.60,

When we last reported to you in 1998, we stated that we had lost ground in providing some essential copyright services, and observed that we had a significant arrearage with registration in some cases taking between six and eight months. We outline in part III of this statement what steps the Office is taking to reduce this arrearage.

Our focus this year is on:

    1. Progress in fulfilling legislative directives;

    2. Implementation of new fees;

    3. Improving our service by providing more timely registration of claims and recordation of documents;

    4. Making more information available to the public electronically;

    5. Acquiring materials through mandatory deposit; and

    6. Administration of compulsory licenses and CARP's.

I. Progress in Fulfilling Legislative Directives

During the period between October, 1998 and December 1999, Congress passed five bills, some of them addressing separate acts, concerning copyright. Several of these acts gave the Office major new responsibilities in developing and implementing new procedures and regulations and conducting studies or reports for Congress on critical and often controversial new and emerging areas of copyright law. The Office finds itself faced with new and challenging legal questions about webcasting, anticircumvention, and design protection for vessel hulls.

A. Overview of Certain Recently Enacted Legislation

Recently enacted legislation that has had a major impact on the Copyright Office's workload includes:

The Digital Millennium Act (DMCA)

The DMCA allowed the United States to ratify two new international treaties. It also confirms and clarifies the historic and vital role of the Copyright Office by affirming in statutory language the Copyright Office's longstanding role in copyright policy and international matters.

  • Title I of the DCMA added a new chapter 12 to title 17 United States Code, which among other things prohibits circumvention of access control technologies employed by or on behalf of copyright owners to protect their works. Specifically, new subsection 1201(a)(1)(A) provides, inter alia, that "No person shall circumvent a technological measure that effectively controls access to a work protected under this title." Subparagraph (B) limits this prohibition. It provides that anticircumvention "shall not apply to persons who are users of a copyrighted work which is in a particular class of works, if such persons are, or are likely to be in the succeeding 3-year period, adversely affected by virtue of such prohibition in their ability to make noninfringing uses of that particular class of works under this title" as determined in a rulemaking by the Librarian of Congress acting upon my recommendation . This prohibition on circumvention becomes effective two years after the date of enactment, on October 28, 2000.

  • Title II of the DMCA limits certain online infringement liability for Internet service providers. Specifically, subsection 512(c) provides limitations on service provider liability with respect to material residing, at the direction of a user, on a system or network that the service provider controls or operates, if the conditions set forth in subsection 512(c)(1) are satisfied.

  • Title V of the DMCA, establishes a new chapter 13 to title 17 which creates sui generis protection for certain original designs of vessel hulls and sets the terms, conditions, and limitations of design protection, including the rights granted to the designer or owner of the design, mandatory registration of designs with the Copyright Office, and enforcement of rights. Protection for registered vessel hull designs lasts for a period of ten years measured from the earlier of the date of registration with the Copyright Office or the date on which the design is first made public, and concludes at the end of the tenth calendar year. Unlike copyright law where registration is not a prerequisite to protection, registration of an otherwise eligible vessel hull design must be made with the Copyright Office within two years of the design being made public. Failure to make timely registration results in loss of protection. Notice must be attached to a protected design, and while failure to attach proper notice does not terminate protection, it does affect remedies in an infringement action.

The Sonny Bono Copyright Term Extension Act

This Act extends the term of copyright for most works to the life of the author plus 70 years. It similarly extends for an additional 20 years the terms of anonymous and pseudonymous works, works made for hire, and works in their renewal terms.

  • It addresses concerns of libraries and researchers about the unavailability, for 20 additional years, of works that are no longer commercially available. A new exemption allowing libraries and archives to use the works for preservation, scholarship, or research during the last 20 years of the copyright term is embodied in section 108(h) of the copyright law.

  • This same legislation also contained the "Fairness in Music Licensing Act of 1998" which broadens existing exemptions to the public performance right in broadcast music (sec.110(5) of title 17, United States Code) for qualifying establishments, primarily restaurants, bars, and retail businesses depending on their square footage or total number and size of loudspeakers or audiovisual "devices," and provided the business does not charge the customer to listen to the broadcast.

New Procedures and Regulations

The Copyright Office has aggressively undertaken these new responsibilities. Our progress is discussed more fully below and the status of each responsibility is illustrated on a separate chart.(1)

Anti-circumvention Rulemaking (Title I of DMCA)

The Librarian of Congress is required to make a determination as to whether or not particular classes of works are to be exempted from the anti-circumvention prohibition on access. This determination is to be made upon the recommendation of the Register of Copyrights in a rulemaking proceeding. The determination thus made will remain in effect during the succeeding three years. In making her recommendation, the Register of Copyrights is to consult with the Assistant Secretary for Communications and Information of the Department of Commerce and report and comment on the Assistant Secretary's views. 17 U.S.C. 1201(a)(1)(C).

The Office published a Notice of Inquiry seeking comments and held hearings early this month in Washington, D.C. and last week at Stanford University Law School in Palo Alto, California. Post hearing reply comment are due June 23, 2000. The Office will then evaluate and assess the evidence gathered.

Designation of Agent for Online Service Providers (Title II of the DMCA)

To take advantage of the Online Copyright Infringement Liability Limitation Act, service providers must designate agents whom copyright owners may notify if the owners believe their work is being infringed. The name and address of the agent must be filed with the Copyright Office and also posted on the service provider's website. Title II of the DMCA became effective on enactment; consequently, the Office had to act immediately. It published interim regulations on November 3, 1998, on an emergency basis, and stated that it would publish a Notice of Proposed Rulemaking at a later date. 63 Fed. Reg. 59233. In later meetings with the parties using the system, they indicated that the interim system was operating effectively, and the Office has continued to operate under these regulations. The Copyright Office maintains a list of the filings which are accessible on its website. As of May 12, 2000, approximately 2,121 agents had been designated.

Vessel Hull Design Protection (Title V of DMCA)

Shortly after passage of the DMCA, the Copyright Office began establishing the registration system for vessel hull designs. Recognizing the need for immediate implementation (because enforcement of rights under the new chapter 13 requires first obtaining a registration), the Office quickly took steps to establish a workable registration system. It established an internal task force to determine what needed to be done. The Office also consulted with representatives of the marine manufacturing industry, academics, and the Coast Guard. A new registration form, Form D-VH, to be used for all applications for registrations of vessel hull design was created and interim regulations were published on July 7, 1999. 64 Fed. Reg. 36,576 (1999). We received our first application for registration on July 29, 1999. So far the Office has received 23 design claims and registered 21. Most of the 23 were submitted after protection was made permanent on November 29, 1999.

Notice for Libraries and Archives (Copyright Extension Act)

While granting libraries and archives an exemption under 108(h)(1), the law makes it clear that a library or archive may not use a work 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 to the Copyright Office in accordance with Copyright Office regulations that either of the conditions set forth in (A) and (B) applies. The Copyright Office published interim regulations with requests for comments on December 30, 1998. 63 FR. 71785. Comments were due by February 15, 1999 and reply comments by April 1, 1999. The Office has not yet published final comments; no notice has been recorded under the interim regulation.

Completion of Reports Requested in DMCA

Report on Copyright and Digital Distance Education

The DMCA required the Copyright Office to prepare a report for Congress on the promotion of distance education through digital technologies, including interactive digital networks. To assist the Office in analyzing the relevant issues and in preparing its recommendations, on December 23, 1998, the Office requested comments from all interested parties, including representatives of copyright owners, nonprofit educational institutions, and nonprofit libraries and archives (63 FR 71167). In addition, a series of three public hearings were held in Washington, D.C. (January 26-27, 1999), Los Angeles, CA (February 10, 1999), and Chicago, IL (Feb 12, 1999). Over 175 individuals and interest groups responded in writing or in person at the hearings.

The Copyright Office released its report on "Copyright and Digital Distance Education" at a hearing of the Senate Judiciary Committee held on May 25, 1999. On June 24, 1999, this Subcommittee held its hearing on the report. The report is available on the Office's website and through the Government Printing Office.

The Office made several recommendations including: (1) that section 110(2) be updated to permit digital transmissions over computer networks; (2) elimination of the physical classroom requirement permitting transmissions to students officially enrolled in the course, regardless of their physical location; (3) adding language that focuses more clearly on the concept of mediated instruction; (4) adding safeguards to minimize the greater risks of uncontrolled copying and distribution posed by digital transmission; (5) retaining the current "nonprofit" requirement for education institutions seeking to invoke the exemption; (6) adding a new provision to the Copyright Act to allow digital distance education to take place asynchronously; and (7) expanding the categories of works exempted from the performance right beyond the current coverage of non-dramatic literary or musical works, adding other types of works but allowing performances of only reasonable and limited portions. The Office further recommended that Congress provide clarification of the fair use doctrine in legislative history to confirm that the doctrine applies in the digital environment, and to explain the function of fair use guidelines. No legislation has been introduced implementing the Office's recommendations.

Report on Effects of Encryption Research

The DMCA also required the Copyright Office and the National Telecommunications and Information Administration (NTIA) of the Department of Commerce to prepare a report for Congress on the effects on encryption research of section 1201(g) of title 17. Section 1201 establishes a prohibition on the act of circumventing technological measures that effectively control access to a copyrighted work. Subsection 1201(g) provides an exemption for this prohibition for certain acts of encryption research. The prohibition is scheduled to go into effect on October 28, 2000. The Office and NTIA solicited and received public comments. This joint report has been sent to Congress. It is now available on both the NTIA's and the Copyright Office's websites.

Report on Protection for the Designs of Vessel Hulls

The Office had been required to prepare a joint report with the Patent and Trademark Office evaluating the effects of the Vessel Hull Design Protection Act at one year and two year intervals after the effective date of this legislative. The Copyright Office had completed a draft of the first report which was being reviewed when Congress amended this Act on November 29, 1999, and rescinded the requirement. Under this amendment the Act is no longer set to expire in two years, and the Office is not to issue a report until November 1, 2003.

Report on Effects of Title I and Development of Electronic Commerce

Section 104 of the DMCA directs the Register of Copyrights and the Assistant Secretary for Communications and Information of the Department of Commerce to submit to the Congress no later than 24 months after the date of enactment a report evaluating the effects of the amendments made by title I of the Act and the development of electronic commerce and associated technology on the operation of sections 109 and 117 of title 17, United States Code, and the relationship between existing and emerging technology and the operation of those sections.

A Notice of Inquiry initiating this study has been completed by the Office and the Department of Commerce and should be published in the Federal Register in the near future.

Conditions in Motion Picture Industry

The Comptroller General in consultation with the Register of Copyrights is to study the conditions in the motion picture industry that gave rise to 4001 and the impact of 4001 on the motion picture industry. GAO has begun its study. The Office has engaged in consultation with the GAO and expects that these consultations will continue.

Ongoing Legislative Concerns

In its exhaustive review of title 17 in order to update the Copyright Office's publication of this title in its Circular 92, the Office identified a number of areas where amendments, most purely technical, should be made. It has forwarded these amendments to the Senate and the House.

International Activities

Ratification of two new international World Intellectual Property Organization (WIPO) treaties

The DMCA allowed the United State to ratify both the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty. Both of these treaties known as "the Internet Treaties," deal with significant digital issues. The Copyright assisted the Congress and the Executive Branch in the efforts necessary to implement and notify these treaties. The United States deposited its instruments of ratification with the World Intellectual Property Organization on September 14, 1999.

Dispute brought in World Trade Organization

Office staff provided technical assistance to the U.S. Trade Representative in the defense of a claim against the United States brought in the World Trade Organization by the European Union. The dispute concerned section 110(5)(a) and (b) of the U.S. Copyright Act, which the European Union alleged violated the U.S.'s international treaty obligations. Staff from the Copyright Office assisted in drafting the written submissions to the Dispute Settlement Body of the WTO, and participated in consultations and oral arguments before the Dispute Resolution Panel on behalf of the United States. In May of this year, the Panel issued a decision in the case, finding that section 110(5) subsection (a) of the U.S. Copyright Act was in compliance with all of the U.S. obligations, but that subsection (b) violated certain provisions of the TRIPs Agreement and the Berne Convention. The United States has two months from the date of formal publication of the decision (which has not yet occurred) to decide whether it will appeal the Panel's findings.

Law Enforcement Coordination Council

In September, 1999, President Clinton signed into law the Treasury/Postal Appropriations Bill, which created the "National Intellectual Property Law Enforcement Coordination Council ("NIPLECC"), which is comprised of executive branch law enforcement agencies, as well as the Department of Commerce's, International Trade Division, the Patent and Trademark Office, the U.S. Trade Representative and the State Department. It is chaired by the Patent and Trademark Office and the Justice Department. By statute, the NIPLECC is required to consult with the Register of Copyrights on law enforcement matters relating to copyrights and related matters. The Register and her staff have been involved at all levels of the NIPLECC's development, including discussing the appropriate scope of responsibility and action plan of the NIPLECC, drafting proposals and participating in meetings of the principals.

Continued Effort to Advise and Train Others to Improve Copyright Protection

The Office continued to participate in many international activities including the meeting of the Governing Bodies of the World Intellectual Property Organization and that organization's meetings of the Standing Committee on Copyright and Related Rights. In the Standing Committee discussion has focused on a new treaty for performers of audiovisual works (screen actors) and on potential new treaties for broadcasters and for producers of databases. Additionally, the Office assisted the United States Trade Representative in its many bilateral and multilateral activities.

The Office continued its program of international development cooperation through its International Copyright Institute, by meeting with many foreign delegations and high level officials and by participating in many programs on copyright and related rights held in countries all over the world.

The International Copyright Institute and the World Intellectual Property Organization's Worldwide Academy jointly hosted a "Worldwide Seminar on Copyright and Related Rights" in Washington, D.C. for participants from fifteen countries during the week of March 17-24, 1999. The objectives of the program were to discuss current and future copyright protection and to exchange experiences among the participants and U.S. experts. In particular the seminar focused on the new WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty, and the impact of new technology on the protection and enforcement of copyrights. Experts from both government and the private sector presented a series of talks on United States copyright law and practice. In addition, participants presented reports on the state of intellectual property protection in their countries.

The Office participated in WIPO seminars in Kazakhstan, Kyrgyzstan, Namibia, Australia, and in New Delhi, Calcutta and Hyderabad, India; and in USAID and Department of Commerce programs in Kyrgyzstan and Egypt.

The Office was also represented at the meeting of the Global Business Dialogue in Paris where the Register commented on the Intellectual Property Draft Paper and at the WIPO International Conference on Electronic Commerce and Intellectual Property and at MIDEM.

II. Implementation of New Copyright Office Fees and Their Impact on the Office

Implementation of New Fees

In July 1997, anticipating enactment of a new fee system, the Copyright Office began the process of determining the costs of registering claims, recording documents and providing related services. It hired two consulting firms with expertise in cost accounting and the new Federal Managerial Coast Accounting Standards and established a Copyright Office Fee Analysis Task Group.

As enacted by Congress, the new fee provisions contained specific directions as to how the Copyright Office should adjust its fees. They were:

  1. The Register shall conduct a study of the costs incurred by the Copyright Office for the registration of claims, the recordation of documents, and the provision of services. This study should also consider the timing of any increase in fees and the authority to use such fees consistent with the budget.

  2. On the basis of the study, and subject to congressional approval, the Register is authorized to fix fees to recover reasonable costs incurred for the services provided plus a reasonable adjustment for inflation.

  3. The fees should also be fair and equitable and give due consideration to the objectives of the copyright system.

  4. The Register must then submit a proposed fee schedule with the accompanying economic analysis to Congress for its approval. The Register may institute the new fees 120 days after the schedule is submitted to Congress unless Congress enacts a law within the 120 day period stating that it does not approve the schedule.

The Office contacted representatives of interested parties to invite them to discuss the forthcoming fee increases and identify their members' concerns. A number met with the Register; others submitted comments. The Office published a Notice of Proposed Rulemaking (NOPR) with two or more possible fee schedules and formally sought public input through a public hearing held on October 1, 1998, and a comment period. After considering the studies, the operational and policy issues and the input from the public, on February 1, 1999, the Register sent Congress a detailed analysis and proposed fee schedule. This report explained why careful evaluation of all relevant data led the Office to conclude that the basic registration fee could not be set to recover the full cost of registering a work, if it is to be reasonable, fair, and equitable and consider the objectives of the copyright system. It recommended recovery of Copyright Office costs for most other services. After receiving the report, Congress had 120 days to enact legislation rejecting the proposal, or the fees could go into effect. No such legislation was enacted; therefore, the Office published a new fee schedule on June 1, 1999, which went into effect July 1, 1999.(2) The Office announced that this fee schedule would remain in effect for at least three years.

Operational Impact of the New Fee Schedule

As detailed fully in the Office's Annual Report for 1999, the Office made significant efforts to inform the public of the fee change. Despite these efforts, 90 percent of the cash receipts received in the first week after the new fees went into effect contained insufficient funds. This percentage was reduced to about 50 percent by the end of the fiscal year. Currently, almost a year after the new fees went into effect, almost 15 percent of cash receipts are still insufficient.

Relationship to Copyright Office Appropriation

The Copyright Office collects fees for registration of copyright, recordation of documents and other services. Since fiscal year 1998 the Office has used its authority to earn interest on its Deposit Accounts( prepaid fees), which is deposited into a no year account. These funds are available to fund authorized activities within the level of appropriation. Effective July 1, 1999, the Office increased the cost of filing a basic registration from $20 to $30.

In fiscal year 1999, the Office collected $16,699,846 in copyright fees. The fees earned by the Copyright Office are deposited in a Copyright Office account in the U.S. Treasury. Earned fees are included when determining the level of appropriations for the Copyright Office. In fiscal year 1999, the Copyright Office received $34,891,000 in direct appropriations and authority to spend receipts. For fiscal year 2000 this level is $37,485,014. This appropriation supports 478 permanent staff and 23 temporary employees.

III. Improving Our Service by Providing More Timely Registration of Claims and Recordation of Documents

As noted above, the Copyright Office continues to experience serious processing arrearages, particularly in the Examining and Cataloging Divisions. The Office has developed and initiated a plan to streamline its registration and recordation processes through business process re-engineering. Further development of the Copyright Office Electronic Registration, Recordation and Deposit System (CORDS) will also help. In the short term, the Office has used overtime and hiring of temporaries to reduce arrearages in its examining and cataloguing divisions in order to expedite the registration of copyright claims and recordation of transfers and other documents pertaining to copyright. More importantly it is in the process of hiring new permanent staff in those areas. Such action is critical to further reduction.

Business Process Re-engineering of Copyright Office Registration and Recordation Processes

In fiscal year 2000, the Copyright Office initiated plans to re-engineer its processes. Authors, other copyright owners, users of copyrighted works, copyright industries, libraries, and members of the public rely on the Office's records of registered claims in copyrighted works and recorded documents concerning ownership of works. The value of the records is greatest when up-to-date information on new works is available to the public in a timely manner. Copyright owners also need timely issuance of certificates.

Re-engineering will accomplish the following objectives:

  • Improve operations and service to achieve better processing times and create timely public records;

  • Improve response times to requests from the public;

  • Enhance operational efficiency through use of new technologies;

  • Contain costs of registration, recordation and other services;

  • Strengthen security within the Copyright Office; and

  • Use staff and space more efficiently.

The Copyright Office prepared a Request For Quote (RFQ), received bids, convened an evaluation panel to rate them, and made a selection which has been submitted to the Library's Office of Contracts and Logistics for negotiation. The firm that is selected will provide for the Office a project plan, a baseline of existing operations, an analysis of current workflow, alternative plans for re-engineering of business processes, an implementation plan for the process selected by the Office, and procedures manuals. A Project Manager, who is an expert in Copyright Office procedures, will be responsible for working with the contractor, Copyright Office managers, staff and labor organizations during the study to coordinate the day-to-day implementation of the agreed-upon changes.

Further Development of CORDS

There was noteworthy progress in the Office's major automation initiative, CORDS, which enables electronic copyright registration and deposit of works in digital form. The CORDS system facilitates copyright registration and deposit process for online works by copyright claimants, helps the Copyright Office streamline its internal registration processes, improves efficiency, through- put time and internal security, and will provide the Library of Congress with new copyrighted works in electronic form for its digital collections. Almost 15,000 claims were received and processed electronically through CORDS during calendar year 1999. They were received from CORDS test partners: the University of Phoenix (study guides), American Geophysical Union, American Mathematical Society, and MIT Press/Journals Division (Ejournals), Adobe Systems (computer programs) and American National Standards Institute (standards).

CORDS testing and implementation during the year focused on successful establishment of system-to-system communications with the Office's largest copyright remitter - UMI Company (recently renamed Bell and Howell Information and Learning corporation) -- for electronic receipt and processing of claims for digital dissertations. This was a significant CORDS milestone; there was fully automated processing--both front-end preparation by claimants and full back-end electronic processing by the Copyright Office, with complex interfaces to six other major systems. In 1999, the Corporation for National Research Initiatives (CNRI) continued its research and development work on CORDS with support from the Copyright Office and DARPA (Defense Advanced Research Projects Agency) which funds a small part of the associated research to evaluate and refine the architectural components that can be applied to digital libraries and any registry system. In January of 1999, a three-year Extension of the Memorandum of Agreement with DARPA was approved for continued CORDS research and development work by CNRI during 1999-2001.

In the year 2000, the Copyright Office is initiating another major CORDS partnership with the Harry Fox Agency, a subsidiary of the National Music Publishers Association, for electronic claims and deposits of musical works on behalf of music publishers. Other CORDS partnerships are being planned and developed as well.

The Office is continuing to develop "Mixed CORDS," for receipt of electronic claims with hard copy deposit; more than two dozen potential test partners are eagerly awaiting test implementation of Mixed CORDS which is scheduled for later this year.

IV. Improving Communication to the Public

Overview

In fiscal year 1999, Copyright Office staff handled over 426,800 requests for information. The Office is continuing to implement a number of improvements to enhance public service including making more information available electronically. These improvements move the Office forward to a future that will permit instant access to its records and informational material and reduce distribution of paper copies. The Office also increased its acceptance of Electronic Fund Transfers.

A good example of the Office's electronic communication is seen in the way the Licensing Division and the General Counsel's Office responded to inquiries regarding various aspects of the Satellite Home Viewer Act in anticipation of satellite carriers "shutting off" satellite service of network stations to subscribers as a result of an injunction. The federal order required satellite carriers to drop certain network signals received by nearly 1.5 million subscriber by October 8, 1998.(3)

A "hotline" for callers was established to obtain a copy of the Copyright Office's Satellite Network Television factsheet. The factsheet was made available via the internet, FAX-on-demand, or by mail. This approach provided immediate information to the public, utilized staff in an efficient and effective manner, and was widely publicized in trade publications. A similar method was used upon passage of the Satellite Carrier Improvement Act.

Improvement in Communication with the Public

  1. Website. The Copyright Office's website played an increasingly important role in the dissemination of information to the copyright community and the general public. During the year, the website was redesigned to enable faster and easier information retrieval by users. Selected as one of the nation's top websites by PCNovice/Smart Computing magazine, the website had over 5.6 million hits during the year, almost a threefold increase over the prior year. The website continued to expand and provide the public with electronic access to all publications. A major improvement is the providing of all the application forms electronically as a fill-in version to enable the public to complete their applications directly on their PC terminals. More records were made available electronically to the public with the inclusion of the Vessel Hull Design registrations and the On-line Service Providers directory of designated agents. In an effort to provide wider public participation in and dissemination of Copyright Office studies and rule makings, the Office solicited and posted comments from the public on the website for public viewing, as well as find studies and regulation, e.g., the distant education study, and the rule making on exemptions from prohibition on circumvention of technological measures that control access to copyrighted works. The Office is also posting streaming audios of its public hearing in the anti-circumvention rulemaking, pursuant to 17 U.S.C. 1201(a)(1).

  2. NewsNet. In November of 1997, the Office developed NewsNet, an electronic publication, distributed via the Internet. NewsNet issues periodic e-mail messages to alert subscribers to hearings, deadlines for comments, new and proposed regulations, new publications and other copyright-related subjects of interest. The Office has a solid readership of over 4,000 subscribers to NewsNet, and it published 41 issues in fiscal year 1999.

  3. E-mail. E-mail information requests increased by 25 percent over the last fiscal year to [10,405.] In addition to the Public Information Office, the Licensing Division and two additional offices that deal directly with the public, the Reference and Bibliography Section and the Certifications and Documents Section of the Information and Reference Division began responding to public e-mail inquiries.

  4. Fax on demand. Through its automated Fax-on-demand system the Copyright Office continues to provide to the public via fax copies of various Copyright Office publications, with over 4,500 requests annually.

  5. Circular 92. In April the Office published a revision of circular 92, "Copyright Law of the United States of America and Related Laws Contained in Title 17 of the United States Code." With this revision, circular 92 is now a completed up to date edition of all of title 17. It is available online at the Copyright Office's website and in print through the Government Printing Office.

V. Acquiring Materials Received through Mandatory Deposit

The Copyright Office is a service unit within the Library of Congress and works with the Library in fulfilling the Library's mission of service to Congress and the American people. The Copyright Acquisition Division (CAD) staff works very closely with the service units of the Library to acquire copyrighted materials that have not been deposited through voluntary registration through the mandatory deposit requirement, 17 U.S.C. 407. Section 407 is an invaluable avenue for the Library to acquire needed and often expensive resources. CAD librarians communicate with more than 100 Recommending Officers to identify those works to be acquired via the mandatory deposit requirement.

During fiscal year 1999, the Copyright Office transferred to the Library an additional 349,713 pieces with an estimated value of $6,097,550, received from publishers under the mandatory deposit provisions of the Copyright Act.

VI. Overseeing the Compulsory Licenses and CARP Proceedings

Rate Adjustments

The Copyright Office continues to be involved with the administration of seven CARP proceedings. Three of the seven proceedings involve setting rates and terms for the cable compulsory license, 17 U.S.C. 111; the mechanical license, 17 U.S.C. 115; the digital performance right in sound recordings license, 17 U.S.C. 114, and the ephemeral recording license, 17 U.S.C. 112. The other three proceedings deal with the distribution of royalty fees collected in accordance with the Satellite Home Viewer Act of 1994, 17 U.S.C. 119, the Audio Home Recording Act of 1992, 17 U.S.C. chap. 10, and the cable compulsory license, 17 U.S.C. 111.

The proceeding to set rates for digital phonorecord deliveries (DPDs) and "incidental" DPDs under section 115 began in 1996 with the announcement of the voluntary negotiation period. With the assistance of the Office, certain parties with an interest in setting these rates reached a settlement agreement setting the rates and terms for DPDs but deferred until the next scheduled proceeding further consideration of the rate for an incidental DPD. On February 9, 1999, the parties' rates and terms were adopted in final regulations after the required notice and comment proceeding. The rates and terms announced on February 9, 1999, are effective through December 31, 2000.

On July 20, 1999, the Office announced the voluntary negotiation period for the next proceeding to adjust the rates and terms for the digital component of the section 115 license. The negotiation period ran from the date of publication of the announcement in the Federal Register to December 31, 1999. On January 24, 2000, Capital Bridge Co. Ltd. filed with the Copyright Office a petition to convene a CARP to set new rates and terms for DPDs and incidental DPDs. Later this year, the Copyright Office will publish a notice in the Federal Register seeking comment on whether Capital Bridge Co. Ltd. qualifies as a party with a significant interest in setting the applicable rates and terms and requiring all interested parties to file their notice of intention to participate in a rate adjustment proceeding.

The Copyright Office has also begun another rate adjustment proceeding to establish rates and terms for the public performance of sound recordings by means of eligible nonsubscription transmissions (the section 114 license as amended by the Digital Millennium Copyright Act) and the making of ephemeral recordings in furtherance of the permitted public performance of sound recordings (the section 112 license) for the period 1998-2000. The Copyright Office announced the six-month voluntary negotiation periods associated with these licenses on November 27, 1998. The voluntary negotiation period concluded with no proposed settlement being filed with the Copyright Office.

Consequently, the Office announced the schedule for the arbitration proceeding to set the rates and terms for these two statutory licenses on September 27, 1999. The Office vacated the schedule announced in the Federal Register at the request of the parties in order to allow more time to negotiate a settlement.

The Office was about to announce the schedule for the CARP proceedings to set rates and terms for the 1998-2000 time period when, on March 1, 2000, the Recording Industry Association of America (RIAA) filed a petition for rulemaking with the Office asking that the Office determine the scope of the section 114(d)(1)(A) exemptions; specifically, asking the Office to adopt a rule "clarifying that a broadcaster's transmissions of its AM or FM radio station over the Internet. . . is not exempt from copyright liability under section 114(d)(1)(A)." In response, the Office published a Notice of Proposed Rulemaking in the Federal Register on March 16, 2000, requiring initial comments to be filed by April 17, 2000, and reply comments to be filed by May 1, 2000. The Office has decided to defer setting a schedule for the current CARP proceeding and to defer ruling on the motion to consolidate until the rulemaking proceeding has been completed, probably within the next several weeks. On May 23, 2000, the Office published a Notice of Inquiry in response to a petition filed by the Digital Media Association seeking clarification of the exclusion of "interactive services" from the section 114 compulsory license.

Pursuant to 17 U.S.C. 112(e)(7), 114(f)(2)(C)(i)(II), the Office announced the initiation of the voluntary negotiation period for determining reasonable rates and terms for the amended section 114 and section 112 licenses for the time period 2001-2002. The negotiation period began on January 13, 2000. If the parties are unable to reach a settlement, any party with a significant interest in establishing reasonable terms and rates for these licenses may file with the Office, during a sixty-day period beginning on July 1, 2000, a petition to initiate a CARP.

In January 2000, the Joint Sports Claimants and the Program Suppliers filed petitions asking the Office to commence a cable rate adjustment proceeding. On February 28, 2000, the Office published a notice in the Federal Register seeking comment on the two petitions and requesting that all interested parties file a notice of intent to participate in the rate adjustment proceeding. Several parties filed such notices on April 6, 2000. Later this year, the Office will set a schedule for the proceeding.

Distribution Proceedings

The Office also administered various phases of three different CARP proceedings to determine the distribution of the royalty fees: 1) the distribution of the 1992, 1993, 1994, and 1995 satellite royalty fees, Docket No. 97-1 CARP SD 92-95(a); 2) the distribution of the 1995, 1996, 1997, and 1998 royalty fees collected for the distribution of digital audio recording technology, Docket No. 98-3 CARP DD 95-98(b); and 3) the distribution of the 1993, 1994, 1995, 1996, and 1997 cable royalty fees.

The specific distribution figures are as follows:

  1. Satellite
  2. 100% of the 1992-1995 satellite royalties, totalling $71,478,402.00 has been distributed.

  3. DART
    1. Sound Recording Fund:

      100% of the 1995-1997 DART Sound Recording royalties, totalling $777,866.00, has been distributed.

      98% of the 1998 DART Sound Recording royalties, totalling $922,984.00, has been distributed.

    2. Musical Works Fund:

      21% of the 1995 DART Musical Works royalties, totalling $26,297.00, has been distributed.

    3. 100% of the 1996 DART Musical Works royalties, totalling $220,587.00, has been distributed.

      43% of the 1997 DART Musical Works royalties, totalling $92,697.00, has been distributed.

      84% of the 1998 DART Musical Works royalties, totalling $453,395.00, has been distributed.

  4. Cable
  5. 100% of the 1993-1996 cable royalties, totalling $756,605,110.00 has been distributed.

    82% of the 1997 cable royalties, totalling $158,912,749.00 has been distributed.

Conclusion

There is much work going on at the Office. We have a talented and dedicated staff, whose efforts I sincerely appreciate. I and the entire Copyright Office deeply appreciate the tremendous support received from members of this Subcommittee, and your exceptional staff. Without you, our tasks would be much more difficult. Thank you for all of your assistance. We look forward to working with you on the many important copyright issues the Congress is addressing.


1. See App. I.

2. A chart showing new fees for basic services in comparison with the old fees is attached as App. II. All current fees can be found in our regulations. 37 CFR 201.3 (1999).

3. This was later extended to January 1, 1999.


Appendix I
Status of Tasks to be Performed by the Copyright Office under the Digital Millennium Copyright Act and the Sonny Bono Term Extension Act

 

Section DMCA Task Statutory Responsibility Status
103 (17 USC 1201(a)(1)) Rulemaking on exemption to prohibition on circumvention of access control technologies Librarian of Congress on recommendation of the Register of Copyrights in consultation with the Assistant Secretary of Commerce for Communications and Information Ongoing.  Hearings held and comments received. Post Hearing comments due June 23.
103 (17 USC 1201(g)(5)) Study on encryption research (effect of 1201(g) exemption) Copyright Office and NTIA, jointly Forwarded to Congress May, 2000.
104 Study on the effects of Title I of the DMCA and the development of electronic commerce and associated technology on the operation of 109 and 117; relationship between existing and emergent technology and the operation of 109 and 117 Copyright Office and NTIA, jointly Notice of Inquiry completed. Publication pending.
202 (17 USC 512(c)(2)) Prepare regulations and maintain current directory of designated agents for online service providers; set fee Copyright Office Interim Regulations published on November 3, 1998. Directory being maintained.
403 Study on distance education. Copyright Office Report issued May 1999.
405(a) Revise regulations (37 CFR part 260) with respect to notice and recordkeeping and initiation of CARP proceedings regarding the use of sound recordings in digital transmissions under the DPRA compulsory license Copyright Office Interim regulations published June 24, 1998. Interim regulations amended on September 20, 1999.
405(a) (17 USC 114(f)(2)(A)) Publish Federal Register notice of initiation of voluntary negotiation proceedings to set royalty rates for eligible nonsubscription transmissions under DPRA compulsory license Copyright Office Notice of initiation of voluntary negotiation period for rates/terms for 1998-2000 published Nov. 27, 1998.

Notice of initiation of voluntary negotiation period for 2001-2002 published January 13, 2000.
405(b) (17 USC 112(e)) Issue new regulations regarding the new statutory license for ephemeral recordings Copyright Office Notices of Intent to Participate filed in November 1999. Proceeding currently stayed pending resolution of rulemaking proceedings regarding definition of a "service" for purposes of statutory license governing public performance of sound recordings by means of digital audio transmissions.
405(b) (17 USC 112(e)) Publish Federal Register notice of initiation of voluntary negotiation proceedings under the new statutory license for ephemeral recordings Copyright Office Notice of initiation of voluntary for negotiation period for rates/terms for 1998-2000 published November 27, 1998.

Notice of initiation of voluntary for negotiation period for rates/terms for 2001-2002 published January 13, 2000.
406 (28 USC 4001(h)) Study on the conditions in motion picture industry that gave rise to 4001 and impact of 4001 on motion picture industry Comptroller General, in consultation with Register of Copyrights GAO initiated and has consulted with the Register.
502 (17 USC 1317 Issue new regulations regarding registration of vessel hull designs, cancellation proceedings, and recordation of instruments of transfer; set fees Copyright Office Interim regulations implementing a new system with a new application form published July 7, 1999.

Notice of Inquiry on cancellation. published July 8, 1999.
504 Evaluation of the effects of the Vessel Hull Design Protection Act Copyright Office and PTO, jointly Initial report, due October 28, 1999, completed but requirement rescinded.

Report now due November 1, 2003.
108(h) Sonny Bono Copyright Term Extension Act Copyright Office to issue regulations Interim Regulations published on December 30, 1998.

 


Appendix II

Comparison of New and Old Fees for BasicRegistration and Recordation Services

Service New Fee Old Fee
(1) Basic registrations: Form TX, Form VA, Form PA, Form SE, (including Short Forms), and Form SR

$30


$20
(2) Registration of a claim in a group of contribution to periodicals (GR/CP) $30 $20
(3) Registration of a renewal claim (Form RE)

Claim without Addendum

Addendum



$45

$15



$20

------

(4) Registration of a claim in a Mask Work $75 $20
(5) Registration of a claim in a group of serials (Form SE/Group)

$30 minimum.

$10 per issue (Min. was $20)
(6) Registration of a claim in a group of daily newspapers, and qualified newsletters (Form G/DN)

$55


$40
(7) Registration of a restored copyright (Form GATT) $30 $30
(8) Registration of a claim in a group of restored works (Form GATT Group)

$30 minimum

$10 per claim (Min. was $20)
(9) Registration of a correction or amplification to a claim (Form CA) $65 $20
(10) Providing an additional certificate of registration $25 $ 8
(11) Any other certification, per hour $65 $20
(12) Search--report prepared from official records, per hour $65 $20
(13) Search--locating Copyright Office records, per hour $65 $20
(14) Recordation of documents (single title)

Additional titles (per group of 10 titles)

$50

$15

$20

$10