Issue 299 -November 1, 2006

Copyright Office Announces Receipt of Notice of Intent to Audit

The Copyright Office of the Library of Congress announces receipt of a Notice of Intent from SoundExchange to audit 2005 statements of account concerning the eligible nonsubscription and subscription transmissions of sound recordings made by Live354, Inc., under statutory licenses. This audit expands a current audit by SoundExchange for the years 2002, 2003, and 2004 (71 FR 624). A copy of the new Notice of Intent to Audit Live365, Inc., is posted on the Copyright Office website.

Copyright Office Responds to Novel Questions of Law from Copyright Royalty Board

The Copyright Royalty Board, acting pursuant to statute, referred two novel questions of law to the Register of Copyrights. Specifically, the Copyright Royalty Board requested a decision by the Register regarding whether ringtones (monophonic, polyphonic, or mastertone) are subject to the statutory license for making and distributing phonorecords under the Copyright Act, and if so, what legal conditions and/or limitations would apply. The Register transmitted a Memorandum Opinion to the Copyright Royalty Board stating that, in general, a ringtone will fall within the scope of the statutory license unless it has so altered the musical composition as to constitute a derivative work. Simply excerpting a single portion of a licensed sound recording of a musical composition will not constitute the making of a derivative work. The Register states that it is clear that many, but not all, ringtones will fall within the scope of the section 115 license. Therefore, it is appropriate for the Copyright Royalty Judges to determine royalties to be payable for the making and distribution of ringtones under the compulsory license. (Read further information.)