[Federal Register: April 1, 1998 (Volume 63, Number 62)]
[Proposed Rules]               
[Page 15802-15806]


Copyright Office

37 CFR Parts 201, 202, 203, 204 and 211

[Docket No. 98-2]


AGENCY: Copyright Office, Library of Congress.

ACTION: Notice of proposed rulemaking.


SUMMARY: This notice is issued to inform the public that the Copyright 
Office is proposing new fees for special services. The effect of these 
proposed amendments is to increase existing fees and to institute fees 
for existing special services as authorized in the Copyright Act. These 
fees are limited to such special services, and each fee is based on the 
actual cost to the Office of providing that service. The proposed 
amendments include revisions to existing fees covering full-term 
storage, special handling of copyright

[[Page 15803]]

registration, and other expedited services. They also institute new 
fees for existing services such as processing appeals and handling 
underfunded deposit accounts.

DATES: Written comments are due by May 11, 1998.

ADDRESSES: An original and fifteen copies of the comments should be 
addressed, if sent by mail, to: David O. Carson, General Counsel, 
Copyright GC/I&R, P.O. Box 70400, Southwest Station, Washington, D.C. 
20024. If delivered by hand, copies should be brought to: Office of the 
General Counsel, United States Copyright Office, James Madison Memorial 
Building, Room 403, First Street and Independence Avenue, S.E., 
Washington, D.C.

FOR FURTHER INFORMATION CONTACT: Marilyn J. Kretsinger, Assistant 
General Counsel, or Patricia Sinn, Senior Attorney, Copyright GC/I&R, 
P.O. Box 70400, Southwest Station, Washington, D.C. 20024, or telephone 
(202) 707-8380. Fax: (202) 707-8366.


I. Background

A. Congressional Authorization

    The Copyright Office is funded annually by congressional 
appropriation; however, the total appropriation includes a credit based 
on an estimate of the projected fee income to be received during a 
fiscal year for services provided.
    Title 17, United States Code, section 708, authorizes the Register 
of Copyrights to require payment of fees for services specifically 
described in section 708(a)(1)-(9) such as registration, recordation, 
and certification. These ``statutory'' fees must be set or approved by 
Congress. See Pub. L. No. 105-80, 111 Stat. 1529 (1997). In addition, 
paragraph 708(a)(10) permits the Register to require for ``any other 
special services requiring a substantial amount of time or expense, 
such fees as the Register of Copyrights may fix on the basis of the 
cost of providing the service.'' Commonly referred to as discretionary 
fees, these latter fees relate to services not within the Office's 
ordinary functions such as special handling and other expedited 
services and may be set by the Register based on the cost to the Office 
of providing the service.
    Although the Office was authorized to increase statutory fees in 
1995, it did not do so. It did, however, increase discretionary fees in 
1994. See 58 FR 38369 (July 28, 1994).
    Congress continues to encourage every federal agency to recover the 
costs of its operations. Legislation was passed by the 105th Congress 
and signed into law on November 13, 1997, which amended 17 U.S.C. 
708(b) to give the Register in calendar year 1997, and in any 
subsequent calendar year, the authority to increase fees specified in 
17 U.S.C. 708(a), following study of the costs incurred by the Office 
for providing services. Pub.L. No. 105-80, 111 Stat. 1529 (1997). In 
that legislation Congress directed the Office to set fees that recover 
the reasonable costs, but to consider whether a proposed fee is fair 
and equitable and gives due consideration to the objectives of the 
copyright system.

B. Studies Emphasizing Cost Recovery

    In the past few years there have been several studies of existing 
Copyright Office fees. The General Accounting Office (GAO) reviewed 
Copyright Office practices and operations and issued a final report on 
May 9, 1997, titled Report to the Chairman, Committee on the Judiciary, 
U.S. Senate, INTELLECTUAL PROPERTY: Fees Are Not Always Commensurate 
with the Costs of Services. GAO concluded that ``Congress may wish to 
consider whether the Copyright Office should achieve full cost recovery 
through fees. GAO/RCED-97-113, at 7-8, May 9, 1997. GAO also issued a 
report following a management review of the Library which recommended 
full recovery of copyright costs (Library of Congress: Opportunities to 
Improve General and Financial Management, GAO/T-GGD/AIMD-96-115, May 7, 
1996). Congress has also indicated that the Office should recover a 
greater percentage of its costs.
    The Copyright Office has directed a comprehensive study by an 
outside consultant of the operating costs involved in providing 
services to users to determine whether fees should be adjusted. Working 
with a task force within the Office, the consultant examined existing 
fees for services, identified costs for other services, and calculated 
the costs of providing each service.

C. Office Assessment of Fees

    The Office then examined the fees identified by the consultant in 
light of operational and other considerations and determined what it 
should propose as a fee for each service. The Office has endeavored to 
ensure that each service it provides not only supports copyright owners 
and users but also recovers reasonable costs. It is aware that special 
services provided to identifiable recipients should carry a charge that 
recovers the cost of providing those services.
    Based on its analysis, the Office is proposing a number of new fees 
for existing special services.<SUP>1</SUP> In the past the costs of 
these special services have been absorbed by the Office. The new fees 
include fees for handling underfunded deposit accounts, and processing 
appeals. The Office is also proposing adjustments to existing fees for 
special services.

    \1\ The Office does not plan to amend statutory fees until next 
year; after extensive opportunity for public hearings, it will 
propose a new schedule for Congressional review.

II. Institution of New Fees for Special Services

A. Deposit Accounts

    The Copyright Office maintains a system of deposit accounts for the 
convenience of those who frequently use its services. A deposit account 
holder can charge copyright fees against the balance in his or her 
deposit account instead of sending separate remittances with 
applications and other requests for services. One advantage for the 
holder of a deposit account is that the Office may begin the work 
immediately if sufficient funds are in the account.
    The Office proposed a number of fees for maintaining deposit 
accounts in 1994. 59 FR 38400 (July 28, 1994). Based on the comments it 
received, the Office decided not to move forward with any charges at 
that time. Moreover, despite considerable expense to the Office in 
maintaining deposit accounts, it is not now proposing a maintenance fee 
for deposit accounts primarily because the use of deposit accounts is 
beneficial both to the holder and the Office. The Office is, however, 
proposing two new fees related to handling underfunded deposit 
accounts. A deposit account holder may avoid both of these charges by 
keeping his or her deposit account balance at a level sufficient to 
cover all claims submitted. A new system that produces timely deposit 
account statements is in place to assist account holders in regulating 
their business.

1. Service fee for Deposit Account Overdraft--$70.00

    The first new fee would cover overdrafts caused when a deposit 
account holder has insufficient funds to process claims. When deposit 
account funds are not sufficient to cover registration, the Office sets 
aside the claim until the account holder is contacted and funds are 
forwarded to the Office. To offset expenses incurred for handling an 
overdrawn account, the

[[Page 15804]]

Office proposes to charge a $70.00 fee per instance (not per claim). 
This fee will be deducted from the replenishment funds forwarded by the 
deposit account holder.
2. Dishonored Check Fee From Deposit Account Holder--$35.00
    The Office is also proposing a fee when a deposit account holder's 
check is dishonored because of insufficient funds in an applicant's 
account, or for other banking problems. By the time the Office 
discovers that a check cannot be negotiated, it has already expended 
staff time and resources to process the paperwork. The Office proposes 
to charge a fee of $35.00 to cover the administrative expenses incurred 
in processing the dishonored check. This fee will be deducted 
immediately or, if the account is in arrears, upon successful 

B. Short Fee Service Charge--$20.00

    A ``short fee'' is a remittance paid by cash, check, or money order 
to the Copyright Office which is not sufficient to pay for the 
requested service. Any time new statutory fees are instituted, the 
Office gets a number of fees that are insufficient. For the first year 
after the last statutory fee adjustment, 20% of the cash fees were 
insufficient. When a fee is insufficient, the Office deposits the money 
submitted, holds the claim, and asks the remitter for additional money 
to complete the fee. To recover the administrative cost of processing 
this material, the Office proposes to charge a $20.00 short fee per 
    Although the Office is still getting short fees from the 1991 
increase on statutory fees, it does not plan to implement a short fee 
service charge until on or about January 1, 2000. The Office will 
notify the public of the new statutory fees.

C. Appeals--1st Appeal $200.00, 2nd Appeal $500.00, Additional Related 
Claim $20.00

    The Office has long accepted appeals from initial refusals to 
register a claim to copyright, but there has been no separate charge 
above the initial registration fee for reconsidering the claim. The 
Office has a two level review of appeals; the first request for 
reconsideration goes to the Examining Division. Since 1995, the second 
request for reconsideration has been reviewed by a three member Board 
of Appeals. The processing of appeals is very labor intensive, and the 
fee to recover actual costs would be more than three times the fee the 
Office is proposing. The Office determined, however, that the fee for 
appeals should be less since U.S. applicants must attempt to register 
before initiating a copyright infringement suit and must exhaust 
administrative remedies before initiating an action against the 
Register under the Administrative Procedure Act for refusal to 
register. The Office is, therefore, proposing a fee of $200.00 for 
first appeals, plus an additional fee of $20.00 for each related claim 
after the first for a group of related works on which one appeal is 
filed. The Office is proposing a fee of $500.00 for second appeals, 
with an additional fee of $20.00 for each related claim. For example, 
if an appellant appeals the rejection of four related jewelry designs, 
the cost of the first appeal would be $260.00; if the same appeal goes 
to the Board, the cost would be $560.00.

D. Secure Tests Processing Fee Per Hour--$60.00

    Secure tests are nonmarketed tests administered under supervision 
at specified cites on specific dates, all copies of which are accounted 
for and either destroyed or returned to restricted locked storage 
following each administration. Publishers of these tests ensure the 
confidentiality of the tests by protecting and retaining the test 
materials. To maintain secrecy, the Office examines these test 
materials in the presence of the applicant, but outside the regular 
work station, and returns the test material to the applicant, keeping 
only a small portion of material photocopied from the original as the 
permanent deposit of identifying material. The applicant thus gets 
special treatment. In the past, the Office has made no assessment for 
special processing of these secure tests; it is proposing a $60.00 per 
hour fee to recover costs for labor and special arrangements.

III. Fee Adjustments to Fees for Special Services

A. The Office is Also Proposing the Following Increases to Current Fees 
for Special Services

1. Copying fee--$15.00 Minimum, $1.00/Page up to First 15, $.50 per 
Page Thereafter
    The Office will continue to duplicate records maintained in its 
custody under conditions detailed in the applicable regulatory 
provisions. The Office proposes to change its current charges for 
copying of black and white material that cannot leave the custody of 
the Office to $1.00 per page for the first 15 pages. For large 
documents the Office proposes a fee based on a sliding scale; it 
proposes a fee of $.50/page for every page after the fifteenth. Thus 
the proposed fee for copying a 50 page document will be $32.50. The 
higher copying cost for the first 15 pages of this material is 
justified because of the time staff needs to set up the material copied 
and to verify the complete accuracy of the copy. The minimum fee for 
black and white material will be $15.00. The Office is not changing its 
copying fee for color material.
2. Inspection Fee--$65.00
    The Office currently charges a daily fee of $10.00 to a customer 
who wishes to inspect deposits of Copyright Office records on the 
premises. The service is provided by the Certifications and Documents 
Section of the Information and Reference Division. A Copyright Office 
employee monitors the inspection to ascertain that no copying of the 
deposit takes place. The proposed fee of $65.00 will be charged in 
combination with the applicable search fee to locate and retrieve the 
material being inspected.
3. Special Handling fee for Registration--$500.00 Additional Claim 
    Although the effective date of registration is the date the 
application, required fee, and deposit are received, it takes the 
Office several months to process a claim and mail the certificate of 
registration. Special handling is granted at the discretion of the 
Register as a special service to copyright applicants who have a 
compelling reason for the expedited issuance of a certificate of 
registration. A request for special handling is granted in cases 
involving pending or prospective litigation, customs matters, or 
contract or publishing deadlines that necessitate expedited service.
    Special handling affects every step of the registration or 
recordation process. A claim that receives special handling must be 
processed outside the regular system of first in--first out, 
necessitating individual handling at each step and individual routing 
between work stations. A separate system of controls must be maintained 
for the special handling of a claim to assure both that it moves 
expeditiously through the necessary procedures and that it can be 
located quickly should the need arise.
    The fee for special handling was last increased in 1994 to $330 
plus the registration fee. 59 FR 38369 (July 28, 1994). The proposed 
new fee is $500.00 plus the registration fee. The terms under which a 
request for special handling is approved or denied will not be altered. 
If a claim is eligible for special handling, the Copyright Office

[[Page 15805]]

makes every effort to process the claim or notify the applicant of any 
problem in processing the claim within five working days after the 
request has been approved. To ensure expedited treatment, the claimant 
should deliver the material to the Public Information Office.
4. Special Handling fee for Recordation of a Document--$330.00
    The Office will maintain its fee of $330.00 for this service. The 
same factors involved in special handling for registration claims 
described above apply almost entirely to special handling for 
recordation of a document. One major difference is that the Office has 
centralized most aspects of the documents recordation process. This 
centralization means that special handling for documents is less costly 
to the Office than special handling for registration and no fee change 
is necessary.
5. Full Term Storage of Deposits of Published Works--$365.00
    Full term storage of unpublished works is mandated by the Copyright 
Act. The Office's policy is to retain deposit copies of published works 
for at least five years from the date of deposit; if practicable, it 
retains works of visual arts for ten years. The Office also offers full 
term retention of deposit copies of published works upon payment of a 
fee. The purpose of this service is to assure copyright owners that the 
deposit copies of their published works will be kept in the Copyright 
Office's custody for the full term of copyright, which can be up to 125 
    Congress authorizes a fee for full term storage in 17 U.S.C. 
704(e). Previously the cost for this service was $270.00; however, due 
to increased costs, the Office proposes a fee of $365.00.

B. Surcharge for Expedited Certifications and Documents Services

    Fees for services requested on an expedited basis from the 
Certification and Documents Section must be increased to reflect more 
accurately the Office's actual costs and expenses. The Office is aware, 
however, that some of these services can only be performed by the 
Office and that fact was considered in proposing new fees.
    Those who request special services do so for the same purposes that 
lead to requests for special handling. Special service requests require 
disruption of normal work flow; therefore, the service is more costly 
to the Office. These are all unique services, and the increased costs 
take into account the fact that extraordinary efforts are often 
required both in time and places searched. Often Copyright Office 
employees must travel to an off-site storage facility to expedite a 
1. Additional Certificate, in Process Search, Copy of Assignment--
    The current fee for providing an expedited additional certificate, 
performing an in-process search for material related to a claim, or 
furnishing a copy of an assignment or certification is $50.00 per hour. 
The Office proposes a $75.00 per hour fee for any of these services.
2. Copy of Registered Deposit--First Hour $95.00; Each Additional Hour 
    The fee for providing an expedited copy of a registered deposit 
which is stored off-site in a Copyright Office storage facility is 
currently $70.00 per hour. The Office proposes a fee for these services 
of $95.00 for the first hour required to perform the service, and 
$75.00 for each additional hour or portion thereof.
3. Copy of Correspondence File--First Hour $95.00, Each Additional Hour 
    The fee for expedited provision of a copy of a correspondence file 
whether stored on the Copyright Office premises or at an off-site 
Copyright Office storage facility is $70.00 per hour. The Office 
proposes a new fee of $95.00 per hour for the first hour and $75.00 for 
each additional hour.
    All of these expedited service fees are surcharges and will be 
added to the regular charge for the service provided. For example, if 
an applicant wants an expedited copy of a deposit and it takes the 
Office one hour to locate the deposit, the $95.00 charge will be added 
to the regular search fee for one hour, plus the appropriate copying 

C. Reference and Bibliography Search Fee--$125.00/Hour, $95.00/Hour

    Upon request, the Office's Reference and Bibliography Section will 
perform an expedited search of its records. Currently, the Office 
charges $100.00 for the first hour and $50.00 for each additional hour 
for such searches. The proposed fee for performing an expedited search 
is $125.00 for the first hour, and $95.00 per hour or portion of an 
hour thereafter. These expedited service fees are in addition to the 
regular charge for a reference search. Charges for providing searches, 
certifications, or copies that are not made on an expedited basis will 
remain at the same level.

D. Mask Work Registration--$75.00

    The Office proposes a fee of $75.00 to recover the full cost to the 
Office of processing claims in mask works. Mask works are provided an 
exclusive commercial right different from copyright as provided in the 
Semi-conductor Chip Protection Act. Claimants seeking mask work 
protection receive registration and the accompanying legal benefits, 
including an extended term of protection.

E. Recordation of Notices of Intent to Enforce (NIE)--$30.00, Each 
Group of 10 Additional Titles $10.00

    Although the consultants' study established that a higher fee would 
be necessary to recover costs of recording NIE's, the Office does not 
propose any amendment since the cost of publicizing the new charge 
would be more than the Office would recover with a higher fee. 
Moreover, the vast majority of rightsholders are no longer eligible to 
file NIE's with the Office.

List of Subjects

37 CFR Part 201

    Copyright, General Provisions.

37 CFR Part 202

    Copyright, Registration.

37 CFR Part 203

    Freedom of Information Act.

37 CFR Part 204


37 CFR Part 211

    Mask Work Protection, Fees.
    In consideration of the foregoing, parts 201, 202, 203, 204, and 
211 of 37 CFR chapter II are amended as follows:


    1. The authority citation for part 201 continues to read as 

    Authority: 17 U.S.C. 702.

Sec. 201.32  Fees for Copyright Office special services.

    2. Section 201.32 is amended by revising the special services fee 
chart to read as follows:
* * * * *

[[Page 15806]]

                       Special services                           Fees  
 1. Service charge for deposit account overdraft..............       $70
2. Service charge for dishonored deposit account replenishment          
 check........................................................        35
3. Service charge for short fee payment                                 
4. Appeals....................................................        20
a. First appeal                                                         
  Additional claim in related group...........................       200
  b. Second appeal............................................        20
    Additional claim in related group.........................       500
5. Secure test processing charge, per hour....................        20
6. Copying charge, first 15 pages, per page...................        60
    Each additional page......................................         1
7. Inspection charge..........................................        50
8. Special handling fee for a claim                                   65
    Each additional claim using the same deposit..............       500
9. Special handling for recordation of a document.............        50
10. Full-term storage of deposits.............................       330
11. Surcharge for expedited Certifications and Documents                
 Section services                                                    365
    a. Additional certificates, per hour                                
    b. In-process searches, per hour..........................        75
    c. Copy of assignment, per hour...........................        75
    d. Certification, per hour................................        75
    e. Copy of registered deposit.............................        75
      First hour                                                        
      Each additional hour....................................        95
    f. Copy of correspondence file............................        75
      First hour                                                        
      Each additional hour....................................        95
12. Surcharge for expedited Reference & Bibliography searches.        75
      First hour..............................................       125
      Each additional hour....................................        95


    3. The authority citation for part 202 continues to read as 

    Authority: 17 U.S.C. 702.

Sec. 202.23  [Amended]

    4. Section 202.23(e)(1) and (2) are amended by removing ``$270.00'' 
each place it appears and adding in its place ``$365.00.''


    5. The authority citation for part 203 continues to read as 

    Authority: 17 U.S.C. 702; and 5 U.S.C. 552(a)(1).

Sec. 203.6  [Amended]

    6. Section 203.6(b)(2) is amended by removing ``$7 for up to 15 
pages and $.45 per page over 15.'' and adding in its place ``$15.00 for 
up to 15 pages and $.50 per page over 15.''.


    7. The authority citation for part 204 continues to read as 

    Authority: 17 U.S.C. 702; and 5 U.S.C. 552(a).

Sec. 204.6  [Amended]

    8. Section 204.6(a) is amended by removing ``$7 for up to 15 pages 
and $.45 per page over 15.'' and adding in its place ``$15.00 for up to 
15 pages and $.50 per page over 15.''


    9. The authority citation for part 211 continues to read as 

    Authority: 17 U.S.C. 702 and 908.

Sec. 211.3  [Amended]

    10. In Sec. 211.3(a)(1) and (2) remove ``$20.00'' each place it 
appears and add in is place ``$75.00.''
    11. In Sec. 211.3(a)(7), remove ``$330'' and add in its place 

    Dated: March 24, 1998.
David O. Carson,
General Counsel.

    Approved by:
James H. Billington,
The Librarian of Congress.
[FR Doc. 98-8207 Filed 3-31-98; 8:45 am]