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statements to interested copyright parties.

(3) Royalty Payments. Each such statement shall be accompanied by the

royalty payments specified in section 1004.

Section 1004. Royalty payments [2]

(a) Digital Audio Recording Devices.

(1) Amount of payment. The royalty payment due under section 1003 for

each digital audio recording device imported into and distributed in the

United States, or manufactured and distributed in the United States,

shall be 2 percent of the transfer price. Only the first person to

manufacture and distribute or import and distribute such device shall be

required to pay the royalty with respect to such device.

(2) Calculation for devices distributed with other devices. With respect

to a digital audio recording device first distributed in combination

with one or more devices, either as a physically integrated unit or as

separate components, the royalty payment shall be calculated as follows:

(A) If the digital audio recording device and such other devices are

part of a physically integrated unit, the royalty payment shall be based

on the transfer price of the unit, but shall be reduced by any royalty

payment made on any digital audio recording device included within the

unit that was not first distributed in combination with the unit.

(B) If the digital audio recording device is not part of a physically

integrated unit and substantially similar devices have been distributed

separately at any time during the preceding 4 calendar quarters, the

royalty payment shall be based on the average transfer price of such

devices during those 4 quarters.

integrated unit and substantially similar devices have not been

distributed separately at any time during the preceding 4 calendar

quarters, the royalty payment shall be based on a constructed price

reflecting the proportional value of such device to the combination as a

whole.

(3) Limits on royalties. Notwithstanding paragraph (1) or (2), the

amount of the royalty payment for each digital audio recording device

shall not be less than $1 nor more than the royalty maximum. The royalty

maximum shall be $8 per device, except that in the case of a physically

integrated unit containing more than 1 digital audio recording device,

the royalty maximum for such unit shall be $12. During the 6th year

after the effective date of this chapter, and not more than once each

year thereafter, any interested copyright party may petition the

Librarian of Congress to increase the royalty maximum and, if more than

20 percent of the royalty payments are at the relevant royalty maximum,

the Librarian of Congress shall prospectively increase such royalty

maximum with the goal of having no more than 10 percent of such payments

at the new royalty maximum; however the amount of any such increase as a

percentage of the royalty maximum shall in no event exceed the

percentage increase in the Consumer Price Index during the period under

review.

(b) Digital Audio Recording Media. The royalty payment due under section

1003 for each digital audio recording medium imported into and

distributed in the United States, or manufactured and distributed in the

United States, shall be 3 percent of the transfer price. Only the first

person to manufacture and distribute or import and distribute such

medium shall be required to pay the royalty with respect to such medium.

Section 1005. Deposit of royalty payments and deduction of expenses [3]

The Register of Copyrights shall receive all royalty payments deposited

under this chapter and, after deducting the reasonable costs incurred by

the Copyright Office under this chapter, shall deposit the balance in

the Treasury of the United States as offsetting receipts, in such manner

as the Secretary of the Treasury directs. All funds held by the

Secretary of the Treasury shall be invested in interest-bearing United

States securities for later distribution with interest under section

The Register may, in the Register's discretion, 4 years after the

close of any calendar year, close out the royalty payments account for

that calendar year, and may treat any funds remaining in such account

and any subsequent deposits that would otherwise be attributable to that

calendar year as attributable to the succeeding calendar year.

Section 1006. Entitlement to royalty payments [4]

(a) Interested Copyright Parties. The royalty payments deposited

pursuant to section 1005 shall, in accordance with the procedures

specified in section 1007, be distributed to any interested copyright

party-

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

(A) embodied in a digital musical recording or an analog musical

recording lawfully made under this title that has been distributed, and

(B) distributed in the form of digital musical recordings or analog

musical recordings or disseminated to the public in transmissions,

during the period to which such payments pertain; and

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

(b) Allocation of Royalty Payments to Groups. The royalty payments shall

be divided into 2 funds as follows:

(1) The sound recordings fund. 66 2/3 percent of the royalty payments

shall be allocated to the Sound Recordings Fund. 2 5/8 percent of the

royalty payments allocated to the Sound Recordings Fund shall be placed

in an escrow account managed by an independent administrator jointly

appointed by the interested copyright parties described in section

1001(7)(A) and the American Federation of Musicians (or any successor

entity) to be distributed to nonfeatured musicians (whether or not

members of the American Federation of Musicians or any successor entity)

who have performed on sound recordings distributed in the United States.

1 3/8 percent of the royalty payments allocated to the Sound Recordings

Fund shall be placed in an escrow account managed by an independent

administrator jointly appointed by the interested copyright parties

described in section 1001(7)(A) and the American Federation of

Television and Radio Artists (or any successor entity) to be distributed

to nonfeatured vocalists (whether or not members of the American

Federation of Television and Radio Artists or any successor entity) who

have performed on sound recordings distributed in the United States. 40

percent of the remaining royalty payments in the Sound Recordings Fund

shall be distributed to the interested copyright parties described in

section 1001(7)(C), and 60 percent of such remaining royalty payments

shall be distributed to the interested copyright parties described in

section 1001(7)(A).

(2) The musical works fund.

(A) 33 1/3 percent of the royalty payments shall be allocated to the

Musical Works Fund for distribution to interested copyright parties

described in section 1001(7)(B).

(B)(i) Music publishers shall be entitled to 50 percent of the royalty

payments allocated to the Musical Works Fund.

(ii) Writers shall be entitled to the other 50 percent of the royalty

payments allocated to the Musical Works Fund.

agree on a voluntary proposal for the distribution of the royalty

payments within each group, the Librarian of Congress shall convene a

procedures specified under section 1007(c), allocate royalty payments

under this section based on the extent to which, during the relevant

period-

(1) for the Sound Recordings Fund, each sound recording was distributed

in the form of digital musical recordings or analog musical recordings;

and

(2) for the Musical Works Fund, each musical work was distributed in the

form of digital musical recordings or analog musical recordings or

disseminated to the public in transmissions.

Section 1007. Procedures for distributing royalty payments [5]

(a) Filing of Claims and Negotiations.

(1) Filing of claims. During the first 2 months of each calendar year

after calendar year 1992, every interested copyright party seeking to

receive royalty payments to which such party is entitled under section

1006 shall file with the Librarian of Congress a claim for payments

collected during the preceding year in such form and manner as the

Librarian of Congress shall prescribe by regulation.

(2) Negotiations. Notwithstanding any provision of the antitrust laws,

for purposes of this section interested copyright parties within each

group specified in section 1006(b) may agree among themselves to the

proportionate division of royalty payments, may lump their claims

together and file them jointly or as a single claim, or may designate a

common agent, including any organization described in section 1001(7)

(D), to negotiate or receive payment on their behalf; except that no

agreement under this subsection may modify the allocation of royalties

specified in section 1006(b).

(b) Distribution of Payments in the Absence of a Dispute. After the

period established for the filing of claims under subsection (a), in

each year after 1992, the Librarian of Congress shall determine whether

there exists a controversy concerning the distribution of royalty

payments under section 1006(c). If the Librarian of Congress determines

that no such controversy exists, the Librarian of Congress shall, within

30 days after such determination, authorize the distribution of the

royalty payments as set forth in the agreements regarding the

distribution of royalty payments entered into pursuant to subsection

(a), after deducting its reasonable administrative costs under this

section.

existence of a controversy, the Librarian shall, pursuant to chapter 8

of this title, convene a copyright arbitration royalty panel to

determine the distribution of royalty payments. During the pendency of

such a proceeding, the Librarian of Congress shall withhold from

distribution an amount sufficient to satisfy all claims with respect to

which a controversy exists, but shall, to the extent feasible, authorize

the distribution of any amounts that are not in controversy. The

Librarian of Congress shall, before authorizing the distribution of such

royalty payments, deduct the reasonable administrative costs incurred by

the Librarian under this section.

Subchapter D - Prohibition on Certain Infringement Actions, Remedies,

and Arbitration

Section 1008. Prohibition on certain infringement actions

No action may be brought under this title alleging infringement of

digital audio recording device, a digital audio recording medium, an

analog recording device, or an analog recording medium, or based on the

noncommercial use by a consumer of such a device or medium for making

digital musical recordings or analog musical recordings.

Section 1009. Civil remedies

(a) Civil Actions. Any interested copyright party injured by a violation

of section 1002 or 1003 may bring a civil action in an appropriate

United States district court against any person for such violation.

(b) Other Civil Actions. Any person injured by a violation of this

chapter may bring a civil action in an appropriate United States

district court for actual damages incurred as a result of such

violation.

court-

(1) may grant temporary and permanent injunctions on such terms as it

deems reasonable to prevent or restrain such violation;

(2) in the case of a violation of section 1002, or in the case of an

injury resulting from a failure to make royalty payments required by

section 1003, shall award damages under subsection (d);

(3) in its discretion may allow the recovery of costs by or against any

party other than the United States or an officer thereof; and

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

prevailing party.

(d) Award of Damages.

(1) Damages for section 1002 or 1003 violations.

(A) Actual damages.

(i) In an action brought under subsection (a), if the court finds that a

violation of section 1002 or 1003 has occurred, the court shall award to

the complaining party its actual damages if the complaining party elects

such damages at any time before final judgment is entered.

(ii) In the case of section 1003, actual damages shall constitute the

royalty payments that should have been paid under section 1004 and

deposited under section 1005. In such a case, the court, in its

discretion, may award an additional amount of

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