Page:Copyright Law Revision (Senate Report No. 94-473).djvu/90

 to use” required by the present law. Under section 115, the notice must be served before any phonorecords are distributed, but service can take place “before or within 30 days after making” any phonorecords. The notice is to be served on the copyright owner, but if the owner is not identified in the Copyright Office records, “it shall be sufficient to file the notice of intention in the Copyright Office.”

Section 115(b)(2) requires that the compulsory licensee must, if requested within 10 days after he has served his notice of intention, designate the name of the copyright owner or his agent “on a label or container accompanying each phonorecord of the work distributed by him.”

Under the present law, a record manufacturer who fails to serve a “notice of intention to use” is liable to the copyright owner merely for the statutory royalty of 2 cents per record, plus an award of not more than 6 cents per record as damages. The limitations on liability has been strongly criticized as inadequate either to compensate the copyright owner or to deter infringement. Clause (3) of section 115(b) would remove any limitation on liability in this situation by providing that “failure to serve or file the notice required by clause (1) * * * forecloses the possibility of a compulsory license and, in the absence of a negotiated license, renders the making and distribution of phonorecords actionable as acts of infringment under section 501 and fully subject to the remedies provided by sections 502 through 506.” The same consequences follow from failure “to designate the name of the owner or agent as required by clause (2).” The remedies provided in section 501 are those applicable to infringments generally.

Royalty payable under compulsory license

Identification of copyright owner.—Under the present law a copyright owner is obliged to file a “notice of use” in the Copyright Office, stating that the initial recording of the copyrighted work has been made or licensed, in order to recover against an unauthorized record manufacturer. This requirement has resulted in a technical loss of rights in some cases, and serves little or no purpose where the registration and assignment records of the Copyright Office already show the facts of ownership. Section 115(c)(1) therefore drops any formal, “notice of use” requirements and merely provides that “to be entitled to receive royalties under a compulsory license, the copyright owner must be identified in the registration or other public records of the Copyright Office.” The bill further provides that “the owner is entitled to royalties for phonorecords manufactured and distributed after he is so identified but he is not entitled to recover for any phonorecords previously manufactured and distributed.”

Basis of royalty.—Under the present statute the specified royalty is payable “on each such part manufactured,” regardless of how many “parts” (i.e., records) are sold. This basis for caluclating the royalty has been revised in section 115(c)(2) to provide that “the royalty under a compulsory license shall be payable for every phonorecord manufactured and distributed in accordance with the license.” The committee concluded that it is unjustified to require a compulsory licensee to pay license fees on records which merely go into inventory, which may later be destroyed, and from which the manufacturer gains no economic benefit. Basing the royalty on records