[Code of Federal Regulations]
[Title 37, Volume 1]
[Revised as of July 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 37CFR384.4]

[Page 755-756]
 
              TITLE 37--PATENTS, TRADEMARKS, AND COPYRIGHTS
 
        CHAPTER III--COPYRIGHT ROYALTY BOARD, LIBRARY OF CONGRESS
 
PART 384_RATES AND TERMS FOR THE MAKING OF EPHEMERAL RECORDINGS BY BUSINESS ESTABLISHMENT SERVICES--Table of Contents
 
Sec. 384.4  Terms for making payment of royalty fees and statements of account.

    (a) Payment to Collective. A Licensee shall make the royalty 
payments due under Sec. 384.3 to the Collective.
    (b) Designation of the Collective. (1) Until such time as a new 
designation is made, SoundExchange, Inc., is designated as the 
Collective to receive statements of account and royalty payments from 
Licensees due under Sec. 384.3 and to distribute such royalty payments 
to each Copyright Owner, or their designated agents, entitled to receive 
royalties under 17 U.S.C. 112(e).
    (2) If SoundExchange, Inc. should dissolve or cease to be governed 
by a board consisting of equal numbers of representatives of Copyright 
Owners and Performers, then it shall be replaced by a successor 
Collective upon the fulfillment of the requirements set forth in 
paragraph (b)(2)(i) of this section.
    (i) By a majority vote of the nine Copyright Owner representatives 
and the nine Performer representatives on the SoundExchange board as of 
the last day preceding the condition precedent in paragraph (b)(2) of 
this section, such representatives shall file a petition with the 
Copyright Royalty Judges designating a successor to collect and 
distribute royalty payments to Copyright Owners entitled to receive 
royalties under 17 U.S.C. 112(e) that have themselves authorized such 
Collective.
    (ii) The Copyright Royalty Judges shall publish in the Federal 
Register within 30 days of receipt of a petition filed under paragraph 
(b)(2)(i) of this section an order designating the Collective named in 
such petition.
    (c) Monthly payments. A Licensee shall make any payments due under 
Sec. 384.3(a) by the 45th day after the end of each month for that 
month, except that if the Copyright Royalty Judges issue their final 
determination adopting these rates and terms after the commencement of 
the License Period, then payments due under Sec. 384.3(a) for the 
period from the beginning of the License Period through the last day of 
the month in which the Copyright Royalty Judges issue their final 
determination adopting these rates and terms shall be due 45 days after 
the end of such period. All monthly payments shall be rounded to the 
nearest cent.
    (d) Minimum payments. A Licensee shall make any payment due under 
Sec. 384.3(b) by January 31 of the applicable calendar year, except 
that:
    (1) If the Copyright Royalty Judges issue their final determination 
adopting these rates and terms after the commencement of the License 
Period, then payment due under Sec. 384.3(b) for 2009 shall be due 45 
days after the last day of the month in which these rates and terms are 
adopted by the Copyright Royalty Judges and published in the Federal 
Register; and
    (2) Payment for a Licensee that has not previously made Ephemeral 
Recordings pursuant to the license under 17 U.S.C. 112(e) shall be due 
by the 45th day after the end of the month in which the Licensee 
commences to do so.
    (e) Late payments. A Licensee shall pay a late fee of 0.75% per 
month, or

[[Page 756]]

the highest lawful rate, whichever is lower, for any payment received by 
the Collective after the due date. Late fees shall accrue from the due 
date until payment is received by the Collective.
    (f) Statements of account. For any part of the period beginning on 
the date the Copyright Royalty Judges issue their final determination 
adopting these rates and terms and ending on December 31, 2013, during 
which a Licensee operates a Business Establishment Service, by 45 days 
after the end of each month during the period, the Licensee shall 
deliver to the Collective a statement of account containing the 
information set forth in this paragraph (f) on a form prepared, and made 
available to Licensees, by the Collective. If a payment is owed for such 
month, the statement of account shall accompany the payment. A statement 
of account shall contain only the following information:
    (1) Such information as is necessary to calculate the accompanying 
royalty payment, or if no payment is owed for the month, to calculate 
any portion of the minimum fee recouped during the month;
    (2) The name, address, business title, telephone number, facsimile 
number, electronic mail address and other contact information of the 
individual or individuals to be contacted for information or questions 
concerning the content of the statement of account;
    (3) The handwritten signature of:
    (i) The owner of the Licensee or a duly authorized agent of the 
owner, if the Licensee is not a partnership or a corporation;
    (ii) A partner or delegee, if the Licensee is a partnership; or
    (iii) An officer of the corporation, if the Licensee is a 
corporation;
    (4) The printed or typewritten name of the person signing the 
statement of account;
    (5) The date of signature;
    (6) If the Licensee is a partnership or a corporation, the title or 
official position held in the partnership or corporation by the person 
signing the statement of account;
    (7) A certification of the capacity of the person signing; and
    (8) A statement to the following effect:

    I, the undersigned owner or agent of the Licensee, or officer or 
partner, if the Licensee is a corporation or partnership, have examined 
this statement of account and hereby state that it is true, accurate and 
complete to my knowledge after reasonable due diligence.

    (g) Distribution of payments. The Collective shall distribute 
royalty payments directly to Copyright Owners; Provided that the 
Collective shall only be responsible for making distributions to those 
Copyright Owners who provide the Collective with such information as is 
necessary to identify and pay the correct recipient of such payments. 
The Collective shall distribute royalty payments on a basis that values 
all Ephemeral Recordings by a Licensee equally based upon the 
information provided by the Licensee pursuant to the regulations 
governing reports of use of sound recordings by Licensees; Provided, 
however, that Copyright Owners that authorize the Collective may agree 
with the Collective to allocate their shares of the royalty payments 
made by any Licensee among themselves on an alternative basis. Copyright 
Owners entitled to receive payments may agree with the Collective upon 
payment protocols to be used by the Collective that provide for 
alternative arrangements for the payment of royalties.
    (h) Permitted deductions. The Collective may deduct from the 
payments made by Licensees under Sec. 384.3, 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 under 17 
U.S.C. 112(e) may agree to permit the Collective to make any other 
deductions.
    (i) Retention of records. Books and records of a Licensee and of the 
Collective relating to the payment, collection, and distribution of 
royalty payments shall be kept for a period of not less than 3 years.