COPYRIGHT ARBITRATION ROYALTY PANEL
Three-member ad hoc board empowered to make
decisions regarding ratemaking and distributions
of COPYRIGHT ROYALTIES collected for compulsory
licenses under the Copyright Act of 1976.
In order for a person to use another’s copyrighted
work, the person must generally
obtain a license from the copyright owner. The
terms of the agreement normally depend upon
market conditions at the time of the agreement.
However, the Copyright Act of 1976,
codified in Title 17 of the United States Code,
creates an exception under some circumstances
whereby a prospective user may obtain a compulsory
license that allows the individual to use
a copyrighted work without the owner’s permission.
The compulsory license applies so long
as the person applying for the license meets
statutory requirements and pays the required
royalties.
Congress in the 1976 act created the COPYRIGHT
ROYALTY TRIBUNAL (CRT), an independent
federal agency empowered to distribute
royalties collected under the compulsory license
provisions, as well as to make periodic adjustments
to the royalty rates attached to the compulsory
licenses. The original copyright act
provided for four compulsory licenses, including
those for CABLE TELEVISION,musical mechanical,
noncommercial broadcasting, and jukeboxes. In
1992, Congress extended responsibility to the
CRT to include distribution of levies collected
from manufacturers and importers of digital
recording devices.
The Copyright Royalty Tribunal was controversial
from its inception. Although the
ratemaking provisions were generally clear, the
statute was rather ambiguous regarding the
methods by which the tribunal should distribute
royalties. The tribunal’s decisions with respect to
its ratemaking powers led to frequent criticism
and litigation. Moreover, critics charged that
Congress had created a full-time independent
agency to perform a part-time job. In 1990,
Congress reduced the number of commissioners
on the tribunal from five to three, and during
hearings in the House of Representatives in
1993, two of the three commissioners testified
that they were in favor of abolishing the Copyright
Royalty Tribunal.
In 1988, Congress enacted the Satellite
Home Viewer Act, Pub. L. No. 100-667, 102 Stat.
3935, which created, at that time, a fifth compulsory
license. However, the act required the
formation of ad hoc ARBITRATION panels to
amend royalty fees for satellite retransmissions,
thus bypassing the authority of the CRT. The
success of these arbitration panels persuaded
Congress to use them for the other forms of
compulsory licenses under the Copyright Act.
The Copyright Royalty Tribunal Reform Act of
1993, Pub. L.No. 103-198, 107 Stat. 2304, immediately
abolished the Copyright Royalty Tribunal
and allowed for the formation of ad hoc
copyright arbitration royalty panels.
The 1993 act did not change the system of
compulsory licenses, but rather it shifted
authority from the CRT to the new panels. Arbitrators
on these panels are appointed and convened
by the librarian of Congress, who acts on
the recommendation of the Register of Copyrights.
The arbitrators must meet minimum criteria
set forth under the statute in order to
quality for the position.
At the time of the creation of these arbitration
panels, the librarian of Congress was
directed to adopt the rules and regulations of the
CRT in their entirety, though the CRT no longer
existed. These rules and regulations were to
remain in force until the librarian decided to
supplement or supersede them. The adoption of
the tribunal’s former rules and regulations presented
problems, however, because the 1993 act
eliminated a single body—the CRT—and
replaced it with a system of ad hoc panels. In
December 1993, the librarian of Congress
adopted the former CRT rules on an interim
basis. One year later, the librarian issued new
rules governing the panels, effective January 6,
1995.Additional revisions to the rules governing
the panels have also been made since the 1994
revisions.
Like the CRT, the arbitration panels make
decisions regarding distribution of royalties and
ratemaking for royalties under the compulsory
license provisions. Unlike the CRT, the purposes
of the copyright arbitration royalty panels are
set out clearly in the statute. Among the many
purposes of the panels in the statute is the maximization
of the availability of creative works to
the public; the assurance that copyright owners
receive a fair return for their creative works; and
the guarantee that the roles of the copyright
owner and the copyright user in the product
made available to the public were reflected. 18
U.S.C.A. § 801(b) (1998). The statute lists other
purposes as well.
The copyright arbitration royalty panels
have proven more popular than the former CRT,
although disputes still arise regarding ratemaking
or distribution decisions by the panels. Convening
a panel to make a rate adjustment is
more difficult than the procedure that was followed
under the CRT, which was a permanent
body. The time frame under which a panel decision
must be completed is also a concern for
those involved in a panel proceeding. All actions
by the parties—including discovery, testimony,
studies, arguments, motions, and so forth—as
well as rulings, orders, and final report issued by
the panel, must be completed within 180 days
after the librarian of Congress directs the formation
of the arbitration panel. Nevertheless, these
procedures are generally believed to promote
efficiency when these panels make these determinations,
and the panels have not been subjected
to the same level of criticism as the former
tribunals.
FURTHER READINGS
Davis,Mark J. 2003. “Practice Before the Copyright Arbitration
Royalty Panel in 17 U.S.C. § 111 Distribution Proceedings.”
Vanderbilt Journal of Entertainment Law and
Practice 11.
Goldstein, Paul. 2003.Copyright. 2d ed. New York: Aspen.
Nimmer, Melville B., and David Nimmer. 2003. Nimmer on
Copyright. Newark, NJ: LexisNexis/Matthew Bender.
CROSS-REFERENCES
Copyright; Copyright, International; Copyright Society of
the U.S.A.
