[Federal Register: July 28, 1994]



Copyright Office

37 CFR Part 201

[Docket No. RM 94-5A]

Copyright Office Fees; Deposit Accounts

AGENCY: Copyright Office, Library of Congress.

ACTION: Notice of intention to amend regulations and request for 


SUMMARY: This document is issued to inform the public that the 
Copyright Office intends to amend 37 CFR 201.6 to institute fees for 
Deposit Account services, as authorized by the Copyright Code. The new 
fees would reflect the actual cost of providing Deposit Account 
benefits and services. This document sets out our proposal for 
instituting fees and also requests comments on this proposal or other 

DATES: Written comments should be received by September 26, 1994.

ADDRESSES: Fifteen copies of written comments should be addressed, if 
sent by mail, to: Eric Schwartz, Acting General Counsel, Copyright GC/
I&R, P.O. Box 70400, Southwest Station, Washington, DC 20024.
    If delivered by hand, copies should be brought to: Office of the 
General Counsel, Copyright Office, James Madison Memorial Building, 
Room 407, First and Independence Avenue, SE., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Eric Schwartz, Acting General Counsel, 
U.S. Copyright Office Library of Congress, Washington, DC 20540. 
Telephone: (202) 707-8380. Telefax (202) 707-8366.


1. Background

    The Copyright Office today issues two separate, but associated 
documents about fees for providing certain discretionary services to 
the public. This Notice addresses proposals for instituting a schedule 
of fees for establishing, providing, and maintaining Deposit Accounts. 
Published elsewhere in today's Federal Register is an associated 
document covering increases or institution of fees for special services 
authorized under the Copyright Code. These documents are issued 
following a comprehensive analysis of the costs the Office incurs for 
providing special user services, including Deposit Accounts, and a 
determination that current fees charged for various special services do 
not offset the costs of providing them. In an effort to reflect more 
accurately the costs associated with providing certain services to the 
public, and because of limited Congressional appropriations and 
uncertain revenue flow, we have concluded that we must take action 
under title 17 of the United States Code, which authorizes the Register 
of Copyrights to require payment ``for any other special services 
requiring a substantial amount of time or expense . . .'' based on 
``the cost of providing the service.'' 17 U.S.C. 708(a)(10). In this 
document, we invite public comment on our proposal to improve the 
operation of the Deposit Account system and recover our expenses with 
respect to providing and maintaining Deposit Accounts.

2. The Deposit Account System

    The Copyright Office maintains a system of Deposit Accounts for the 
convenience of those who frequently use its services. The system allows 
an individual or firm to establish a Deposit Account in the Copyright 
Office and to make advance deposits into that account. Deposit Account 
holders can charge copyright fees against the balance in their accounts 
instead of sending separate remittances with applications and other 
requests for services.
    Deposit Accounts do not operate in the same way as commercial 
charge accounts, and cannot be overdrawn or used as a form of advance 
credit. The Copyright Office cannot perform any services before payment 
is made. Funds must, therefore, be available in a Deposit Account for 
the payment of copyright fees before an application for registration 
can be accepted or other services performed.
    As it currently operates, the Copyright Office Deposit Account 
system involves substantial benefits to the depositors and substantial 
costs to the Copyright Office. At present, however, the obligations 
imposed on depositors with respect to opening and maintaining Deposit 
Accounts are minimal. At the same time, the Office provides its Deposit 
Account services free of charge and makes no effort to recoup the costs 
incurred as a result of insufficient funds and uncollectible 
replenishment checks.

3. Current Requirements for Opening and Maintaining Deposit 

    Under our present regulations, the requirements for opening and 
maintaining a Deposit Account are that the holder make an initial 
deposit of at least $250.00, and that later replenishment amount to a 
minimum of $250.00. The Deposit Account holder is also obliged to make 
at least 12 transactions a year, to provide the exact name and number 
of the account on all applications for registration or requests for 
service, and to maintain a sufficient balance to cover all charges 
against the account.

4. Deposit Account Services Provided by the Copyright Office

    a. Basic Services. There is substantial workload involved in the 
initial establishment of a Deposit Account. A great deal of recurring 
clerical and accounting work is also required in maintaining and 
servicing accounts after they have been established: producing and 
mailing monthly statements of account; keeping account information up 
to date; entering replenishment checks; responding to inquiries from 
account holders; and providing additional statements of account or 
transaction histories upon request.
    b. Insufficient Funds and Uncollectible Checks. In the case of a 
Deposit Account holder whose account does not have sufficient funds to 
process new requests for services, or whose checks are returned as 
uncollectible, the Office faces a substantial burden of staff time and 
expense in handling both the Deposit Account and the fee service 
requests to be charged against it.
    When funds on hand are insufficient to process new claims or other 
fee service requests that are to be charged against a Deposit Account, 
the Office must put a hold on the account, identify and store the 
pertinent material, and notify the applicant by telephone, telefax, or 
mail that the account is depleted. When the account holder deposits 
additional funds, the Office staff must re-activate the account, update 
it to show the replenishment, then find the material, stamp the 
application with the ``funds received'' date, and forward the claim for 
regular processing. This is a substantial extra workload. In recent 
experience, the number of claims received for which there are 
insufficient funds available in the Deposit Account has grown to the 
point where a large-scale tagging and shelving system has been devised 
to keep track of the material and the account with which it is 
    There is also added work involved when replenishment checks are 
uncollectible. We must then remove the amount from the account balance, 
inform the Deposit Account holder of the problem, and solicit a 
replacement check which, when received, involves still more processing.

5. Summary of Copyright Office Proposals

    In summary, we are proposing to amend our regulations to establish 
a schedule of fees for various Deposit Account benefits and services;
    (1) An initial fee for opening a Deposit Account;
    (2) An annual service fee for maintaining and servicing a Deposit 
    (3) A handling fee in cases of insufficient funds; and
    (4) A fee for uncollectible replenishment checks.
    In addition, we propose to establish procedures for closing Deposit 
Accounts in cases of failure to respond to requests for replenishment 
or repeated attempts to charge fees against an account with 
insufficient funds.

6. Proposed Fee for Opening and Maintaining a Deposit Account

    When we began our study and cost analysis of the Deposit Account 
system we sought to identify each of the work load items associated 
with the system and to determine what it costs the Office to perform 
the particular service. The costs for opening an account run, on the 
average, to $50.00, to cover necessary correspondence, accounting 
procedures, and clerical work. We have also established that the same 
amount, $50.00, would cover the total annual cost involved in servicing 
the account. Thus, rather than establishing separate fees for each 
Deposit Account service performed, we believe that it would be more 
economical for both account holders and the Office to establish a flat 
fee of $50.00 for opening an account and another $50.00 annual fee to 
be deducted from accounts each January for maintaining the account. We 
also propose to remove the requirement that a Deposit Account holder 
must make 12 transactions a year.

7. Proposed Fee in Case of Insufficient Funds

    The storage and servicing of ``insufficient funds'' claims is not 
only costly, but it is also a service of direct benefit to Deposit 
Account holders. When an ordinary, non-Deposit Account claim comes in 
without funds its handling depends on whether the work is unpublished 
or published. If the work is unpublished, the entire case (application, 
deposit, and accompanying correspondence) is usually returned to the 
sender. If the work is published, the case is held and the sender is 
given an opportunity to remit the missing funds; then, lacking a prompt 
reply, we forward the deposits to the Library of Congress in accordance 
with our regulations based on Sections 407 and 408 of the Copyright 
Code. Copies forwarded to the Library are not retrievable for 
registration purposes and, if another copyright registration is 
attempted, the remitter must refile the application and replace the 
deposit materials.
    In contrast, when a Deposit Account holder submits a claim to be 
charged against an account with a balance insufficient to cover it, all 
of the material submitted is held to await replenishment of the 
account. Because their material is held rather than being returned or 
forwarded to the Library, account holders are spared the expenses of 
postage, handling, and replacing applications and deposits.
    Because of the substantial extra workload required, we have 
calculated the costs connected with handling each case of insufficient 
Deposit Account funds at no less than $50.00. We therefore propose to 
deduct a handling fee of $50.00 from any Deposit Account whose remitter 
attempts to charge a copyright claim (or other fee service) when there 
are insufficient funds in the Deposit Account. However, we do not 
propose to make this change cumulative. Regardless of how many or how 
long claims are pending during the period when the account is depleted, 
we propose to make only one $50.00 charge, to be deducted from the 
account at the time a replenishment check is credited.

8. Proposed Fee in Case of Uncollectible Check

    We have calculated the extra cost of handling each case involving a 
check received for replenishing a Deposit Account that is returned as 
uncollected at no less than $35.00 per check. We therefore propose to 
establish a fee of $35.00 to be charged against the account in each 
such case.

9. Proposed Changes in Minimum Account Requirements

    We do not propose to change the current monetary requirements with 
respect to the minimum amount required to open a Deposit Account 
($250.00) and the minimum amount required for a remittance to replenish 
an account (also $250.00). However, we now propose to establish new 
procedures and requirements for handling cases in which a balance drops 
below $100.00, as well as those in which the balance is insufficient to 
cover pending claims. In both cases (Deposit Accounts with a balance of 
less than the $100.00 minimum and those with a balance of any amount 
that is not sufficient to cover the charges made against it) the 
Copyright Office will notify the account holder of the deficiency and 
state a reasonable deadline (we recommend 60 days) after the date of 
the Notice by which replenishment must be received. If replenishment is 
not made before the deadline, we propose to dispose of pending claims, 
in the same way we dispose of ordinary, non-Deposit Account claims 
received with payment of insufficient fees.
    We also propose to set forth and implement a procedure for closing 
a Deposit Account when the holder has attempted to charge fees against 
an account with insufficient funds more than two times within a 
calendar year. In such cases, an initial service charge ($250 deposit 
plus $50 opening fee) would be required to re-open the account).

10. Official Point of Contact

    Traditionally we have had one contact person for each Deposit 
Account. We send monthly statements of account, notification of 
insufficient funds, and announcements relating to Deposit Accounts to 
this person. We have become aware that in some cases this contact 
person is in a corporate business office or accounting department and 
may have little communication with the persons in the organization who 
file copyright applications and make other fee service requests.
    Because we now intend to impose fees in cases where Deposit 
Accounts have insufficient funds to cover pending charges, or where a 
replenishment check is returned uncollectible, we believe that Deposit 
Account holders need to establish mechanisms for communicating 
information regarding account balances and copyright service requests 
when these are handled by different units in their organizations. 
Specifically, we believe that each Deposit Account holder should 
provide us with the name, organizational title, and organizational 
address and number of an ``official point of contact'' for the account. 
All statements and other communications with respect to the account 
will be diverted to that individual, who will then be held responsible 
for monitoring the account and maintaining sufficient funds in it. The 
Deposit Account holder would also need to inform us when the person who 
is the official point of ``contact'' has charged.

11. Conclusion

    It may be possible to implement some of these proposed changes 
without amending our existing regulations. We invite comments on the 
proposal in general and any other alternatives for improving Deposit 
Account operations and recovering costs.

    Dated: July 19, 1994.
Barbara Ringer,
Acting Register of Copyrights.

James H. Billington,
Librarian of Congress.
[FR Doc. 94-18307 Filed 7-27-94; 8:45 am]