[Code of Federal Regulations]
[Title 37, Volume 1]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 37CFR260.3]

[Page 601-602]
 
              TITLE 37--PATENTS, TRADEMARKS, AND COPYRIGHTS
 
                                CONGRESS
 
PART 260--USE OF SOUND RECORDINGS IN A DIGITAL PERFORMANCE--Table of 
Contents
 
Sec. 260.3  Terms for making payment of royalty fees.

    (a) All royalty payments shall be made to a designated agent(s), to 
be determined by the parties through voluntary license agreements or by 
a duly appointed Copyright Arbitration Royalty Panel pursuant to the 
procedures set forth in subchapter B of 37 CFR, part 251.
    (b) Payment shall be made on the twentieth day after the end of each 
month for that month, commencing with the month succeeding the month in 
which the royalty fees are set.
    (c) The agent designated to receive the royalty payments and the 
statements of account shall have the responsibility of making further 
distribution of these fees to those parties entitled to receive such 
payment according to the provisions set forth at 17 U.S.C. 114(g).
    (d) The designated agent may deduct reasonable costs incurred in the 
administration of the distribution of the royalties, so long as the 
reasonable costs do not exceed the actual costs incurred by the 
collecting entity.
    (e) Commencing June 1, 1998, and until such time as a new 
designation is made, the Recording Industry Association of America, Inc. 
shall be the agent receiving royalty payments and statements of account.

[63 FR 25413, May 8, 1998, as amended at 63 FR 30636, June 5, 1998]

    Effective Date Note: At 68 FR 36470, June 18, 2003, Sec. 260.3 was 
amended by revising paragraphs (c), (d), and (e), effective July 18, 
2003. For the convenience of the user, the revised text is set forth as 
follows:

Sec. 260.3  Terms for making payments of royalty fees.

                                * * * * *

    (c) The agent designated to receive the royalty payments and the 
statements of account shall have the responsibility of making further 
distribution of these payments to those parties entitled to receive such 
payments according to the provisions set forth at 17 U.S.C. 114(g)(2); 
Provided that the designated agent shall only be responsible for making 
distributions to those parties who provide the designated agent with 
such information as is necessary to identify and pay the correct 
recipient for such payments. The agent shall distribute royalty payments 
on a reasonable basis that values all performances by a Licensee equally 
based upon the information provided by the Licensee pursuant to the 
regulations governing records of use of performances by Licensees; 
Provided, however, that parties who have designated the agent may agree 
to allocate their shares of the royalty payments made by any Licensee 
among themselves on an alternative basis. Parties entitled to receive 
payments under 17 U.S.C. 114(g)(2) may agree with the designated agent 
upon payment protocols to

[[Page 602]]

be used by the designated agent that provide for alternative 
arrangements for the payment of royalties consistent with the 
percentages in 17 U.S.C. 114(g)(2).
    (d) The designated agent may deduct from the payments made by 
Licensees under Sec. 260.2, prior to the distribution of such payments 
to any person or entity entitled thereto, all incurred costs permitted 
to be deducted under 17 U.S.C. 114(g)(3); Provided, however, that any 
party entitled to receive royalty payments according to 17 U.S.C. 
114(g)(2) may agree to permit the designated agent to deduct any 
additional costs.
    (e) Commencing June 1, 1998, and until such time as a new 
designation is made, SoundExchange, which currently is an unincorporated 
division of the Recording Industry Association of America, Inc., shall 
be the agent that receives royalty payments and statements of account 
under this part 260 and shall continue to be designated as such if it 
should be separately incorporated.