17 U.S.C. § 114 — Scope of exclusive rights in sound recordings

(a) The owner of the copyright in a sound recording — the actual recorded performance, not the underlying song — only gets some of the rights other copyright owners get. Specifically, the owner gets only the rights in clauses (1), (2), (3), and (6) of section 106. The owner does NOT get the general public performance right in clause (4) of section 106. (b) The clause (1) right (making copies) only covers copies or phonorecords that directly or indirectly capture the actual sounds fixed in the original recording — not a new recording that merely sounds similar. The clause (2) right (making derivative works) only covers rearranging, remixing, or otherwise altering those same actual fixed sounds. Because of this, making or duplicating an entirely new recording of different sounds that just imitates or simulates the copyrighted recording does not infringe the clause (1) or (2) rights, even if it sounds alike. Also, the clause (1), (2), and (3) rights do not apply to sound recordings included in educational television and radio programs (as section 397 of title 47 defines those) that are distributed or transmitted by or through public broadcasting entities (as section 118(f) defines those) — as long as copies of those programs are not commercially sold by or through public broadcasting entities to the public. (c) This section does not limit or take away the separate right to publicly perform a musical work — the composition itself — by playing a phonorecord, under section 106(4). (d) Limitations on the Exclusive Right. This is the core of the section: it defines the digital public-performance right created by section 106(6), the right to perform a sound recording publicly by digital audio transmission. (1) Exempt transmissions and retransmissions. Some digital performances are not an infringement of section 106(6) at all, if they are part of: (A) an ordinary nonsubscription broadcast transmission; (B) a retransmission of that nonsubscription broadcast — but for a radio station's signal, only if it isn't willfully or repeatedly sent more than 150 miles from the transmitter, except that the 150-mile limit doesn't apply when an FCC-licensed station's nonsubscription signal is picked up and resent, still nonsubscription, by another FCC-licensed terrestrial broadcast station, translator, or repeater (and if that resent signal is then sent on a subscription basis, the 150 miles is measured from the new transmitter instead); or the retransmission is of a station's broadcast obtained over the air, not broken up into separate discrete signals, and resent only within the local communities the retransmitter serves; or the station's signal was already being resent to cable systems by a satellite carrier as of January 1, 1995 in analog format covering only one station; or the station is a noncommercial educational broadcaster funded on or after January 1, 1995 under a specific Communications Act provision, airing only noncommercial educational and cultural radio programs, and resent without subscription; or (C) certain other categories: (i) a transmission that feeds into an exempt transmission — like a signal received and then resent by an exempt broadcaster — as long as it isn't itself sent by subscription straight to the public; (ii) a transmission confined to a business's own premises or the area immediately around it; (iii) a retransmission — including by a cable or satellite TV provider — of a transmission made by someone licensed to publicly perform the recording, as long as the retransmission happens at the same time and is authorized by the original transmitter; or (iv) a transmission to a business for use in its ordinary business, as long as the business doesn't resend it beyond its own premises and doesn't exceed the "sound recording performance complement" (defined in (j)(13)) — this last requirement does not cut back the exemption in (ii). (2) Statutory licensing of certain transmissions. Performances that aren't exempt under paragraph (1) — subscription digital transmissions, "eligible nonsubscription transmissions," and transmissions by a "preexisting satellite digital audio radio service" — automatically get a statutory license under subsection (f) if they meet conditions that get progressively stricter: (A) for all of them, the transmission can't be part of an interactive (on-demand) service; the transmitting entity can't automatically switch a listener's channel for them (except for transmissions to a business); and, where technically possible, the transmission must carry whatever title, artist, and related information is already digitally encoded in the recording. (B) For a subscription service that already existed before July 31, 1998 using the same transmission technology, or for a "preexisting satellite digital audio radio service": the transmission can't go over the "sound recording performance complement," and the transmitter can't publish an advance schedule or announcement naming the specific recordings to be played. (C) For an "eligible nonsubscription transmission," a "new subscription service," or an old subscription service now using new technology, many more conditions apply: the transmission generally can't exceed the "sound recording performance complement" (except this cap doesn't apply to a plain retransmission of someone else's broadcast that the retransmitter doesn't control, unless that broadcaster is shown to regularly exceed the complement and the copyright owner has given written notice of it); the transmitter can't publish, induce, or facilitate publishing an advance schedule naming specific recordings, records, or (except for illustration) featured artists — with narrow exceptions for a vague "an artist will be featured sometime soon" announcement, for uncontrolled retransmissions of a broadcaster's own oral announcements or schedules (unless the retransmitter has actual knowledge or written notice that the broadcaster publishes such schedules), and for classical-music schedules published the same way since on or before September 30, 1998; the performance can't be part of a short archived program under 5 hours, or a longer archived program of 5 hours or more kept available for more than 2 weeks, can't be part of a continuous, uncontrollable program under 3 hours, and can't be part of a scheduled program that repeats recordings in a set order more than 3 times in any 2-week period if the program is under an hour, or more than 4 times in 2 weeks if it's an hour or longer — except this rule doesn't apply to a plain, uncontrolled retransmission of someone else's broadcast, unless the copyright owner gives written notice that the broadcaster regularly violates it; the transmitter can't knowingly perform the recording together with video in a way likely to cause confusion or falsely suggest the artist or copyright owner endorses the transmitting entity or its products; the transmitting entity must cooperate, as far as feasible without major cost, to stop people from using automated scanning across transmissions to grab specific recordings — except this duty doesn't apply to a satellite audio service already operating or FCC-licensed on or before July 31, 1998; the transmitting entity can't take steps to help a listener make a copy, and must use any technology it has that limits copying to whatever extent that technology allows; the recording performed must come from a phonorecord lawfully distributed to the public with the owner's authority, or the owner must have authorized the transmission directly — except this doesn't apply to an uncontrolled retransmission of someone else's broadcast, unless the copyright owner gives written notice of a violation; the transmitting entity must not interfere with copy-protection technical measures built into the signal, as long as doing so is technically feasible without major cost or audible/visible signal damage — except a satellite service already operating or FCC-licensed by July 31, 1998 is excused to the extent it already committed to incompatible equipment before those measures became standard; and the transmitting entity must display the recording's title, the title of the phonorecord it comes from (if any), and the featured artist in text, during (not before) the performance, once devices that can show this text become common — though this specific duty didn't start until a year after the Digital Millennium Copyright Act became law, and doesn't apply to an uncontrolled retransmission of someone else's broadcast. (3) Licenses for transmissions by interactive services. (A) An interactive (on-demand) service cannot get an exclusive license under section 106(6) for more than 12 months — or 24 months if the licensor owns copyrights in 1,000 or fewer sound recordings — and once an exclusive license to a service ends, that same service can't get another exclusive license for that recording for 13 months afterward. (B) These limits don't apply if the licensor already has 5 or more different interactive services under license (each covering at least 10% of the licensor's recordings that have been licensed to interactive services, but never fewer than 50 recordings), or if the exclusive license only covers performing up to 45 seconds of a recording solely to promote its distribution or performance. (C) Even with a valid recording license (exclusive or not), an interactive service still can't publicly perform a recording unless it also has a separate license to publicly perform the underlying musical work inside it, granted either by a performing-rights society or by the composition's copyright owner directly. (D) Retransmitting an interactive service's stream is not an infringement of section 106(6) if the retransmission is of a transmission the interactive service was licensed to send to one particular listener, and the retransmission happens at the same time, is authorized by the transmitter, and reaches only that same intended listener. (E) For this paragraph, a "licensor" includes any other entity under common ownership, management, or control that also owns sound recording copyrights; a "performing rights society" is an organization — like ASCAP, BMI, or SESAC — that licenses public performance of musical works for copyright owners. (4) Rights not otherwise limited. (A) Except as this section expressly says, it does not limit or impair the general exclusive right to publicly perform a sound recording by digital audio transmission under section 106(6). (B) Nothing here cuts back the separate right to publicly perform the underlying musical work under section 106(4); the reproduction, derivative-work, and distribution rights in the recording itself under sections 106(1), (2), and (3); or any other rights or remedies under section 106, as they existed before or after the 1995 Act that created this digital performance right. (C) Limits placed on the section 106(6) right here apply only to that right, not to any other exclusive right — a copyright owner's ability to exercise or enforce the rights in sections 106(1), (2), and (3) is not affected. (e) Authority for Negotiations. (1) Despite the antitrust laws, copyright owners of sound recordings and the entities that perform them may negotiate royalty rates, license terms, and how fees are divided among owners for statutory licenses under subsection (f), and may use shared, nonexclusive agents to negotiate, agree to, pay, or receive those payments. (2) For non-statutory section 106(6) licenses — such as licenses to interactive services, or performances above the sound recording performance complement — copyright owners may likewise use common agents to grant licenses and collect royalties, and performing entities may use common agents to obtain licenses and pay royalties, but in both cases each individual owner (and each individual performing entity) must set its own rates and material terms on its own, not in agreement with competitors. (f) Licenses for Certain Nonexempt Transmissions. (1) The Copyright Royalty Judges hold proceedings under chapter 8 to set reasonable royalty rates and terms for statutory-license transmissions under (d)(2), covering 5-year periods (or another period the parties agree to); each side pays its own costs. The rate schedule the Judges set binds everyone for that period (subject to paragraph (2)), must treat different kinds of services differently with a minimum fee for each type, and must reflect what a willing buyer and willing seller would have agreed to in the marketplace — based on economic and competitive evidence, including whether the service substitutes for or promotes record sales, and each side's creative, technological, and financial contribution; the Judges may also look at rates from comparable voluntary licenses. A new proceeding must also start whenever a copyright owner or transmitting entity petitions about a brand-new kind of service that is about to launch, to set rates for it until the next regular rate-setting cycle catches up. (2) Rates that owners and performing entities actually negotiate voluntarily control over anything the Judges would otherwise set. (3) The Judges also set rules for how copyright owners get notice that their recordings are being used, and how performing entities must keep records of that use; the rules in effect before the 2004 Act stay in place until replaced, and the Judges must try to avoid disrupting the agents already handling collection and distribution. A person can use the statutory license without infringing by following the notice rules and paying the set fee, or, if fees haven't been set yet, by agreeing to pay whatever gets set. Any back-owed royalties are due by the 20th of the month after the fee is set. (4) A special provision let the "receiving agent" make settlement agreements with individual webcasters — commercial or noncommercial — covering a period from January 1, 2005 for up to 11 years, on different terms than the standard process (for example, a percentage of revenue or expenses, with a minimum fee), and once published in the Federal Register, these agreements bind all copyright owners and became available as an option to any other webcaster who qualifies; the receiving agent had no duty to negotiate any such deal and no liability for making one. Such agreements couldn't be used as evidence in other royalty-rate proceedings unless both sides to the deal agreed otherwise — Congress intended them as one-off compromises, not evidence of a market rate. The court reviewing the Judges' May 1, 2007 rate decision could not take these settlement laws or agreements into account. This paragraph also defines "noncommercial webcaster" (a webcaster that is tax-exempt under IRS section 501, has applied in good faith for that exemption, or is run by a government body for public purposes), "receiving agent" (as defined in a specific 2002 federal regulation), and "webcaster" (anyone with a compulsory license under section 112 or 114). The authority to make these settlements expired 30 days after the Webcaster Settlement Act of 2009 was enacted. (g) Proceeds From Licensing of Transmissions. (1) Outside the statutory license, a featured recording artist and a nonfeatured recording artist who perform on a licensed recording are each entitled to be paid by the copyright owner according to their own contracts. (2) Except as described in paragraph (6), a nonprofit collective the Judges designate must divide statutory-license receipts this way: 50% to the copyright owner; 2.5% into an escrow account (jointly run with the musicians' union) for nonfeatured musicians; 2.5% into an escrow account (jointly run with the actors' union) for nonfeatured vocalists; and 45% paid directly, recording by recording, to the featured artist or artists (or whoever holds their rights). (3)-(4) Before paying out, the collective may deduct its reasonable costs of administering collections, resolving disputes, and licensing or enforcing this right and the related section 112 right — except costs tied specifically to the section 112 right can only be deducted from section 112 money — unless the owner or performer has instead signed a contract with the collective specifying its own cost-sharing terms, or has chosen to be paid through a different designated collective. (5) Letter of direction. The collective must have a reasonable policy for accepting written instructions — called a "letter of direction" — from an artist or owner entitled to payment, directing part of that payment to a producer, mixer, or sound engineer who helped create the recording. Once accepted, the redirected recipient is treated as the owner of that payment for as long as the letter is in effect, and the original artist or owner is treated as having no interest in it; this doesn't stop the collective from accepting other kinds of payment instructions too. (6) For recordings fixed before November 1, 1995, the collective must also have a policy for paying a producer, mixer, or sound engineer even without a letter of direction, by holding back 2% of what would otherwise go to the featured artist, if: the person seeking payment certifies under oath that they spent at least 120 days trying to get a letter of direction from the artist and got no written yes-or-no answer; the collective then spends at least another 120 days trying to notify the artist of that certification before any payment goes out; and the artist doesn't submit a written objection at least 10 business days before the first payment. To qualify for this payment, the person must be a producer, mixer, or sound engineer with a written contract entitling them to royalties tied to the recording's exploitation, must have made a real creative contribution to the recording, and must submit a sworn certification plus a copy of that contract. If more than one qualifying person applies for the same recording, the 2% is split equally among them. If the artist objects after payments have already started, the collective must stop future payments within 10 business days, but payments already made are not clawed back. While a redirected payment is in effect, the recipient — not the original artist — is treated as the owner of the right to that payment; where there are multiple artists sharing a recording's payments, one artist's objection only affects that artist's own share. (7) Money the collective or an independent administrator holds and distributes under section 112 and this section is not subject to state escheatment or abandoned-property laws — those state rules are overridden. (h) Licensing to Affiliates. (1) If a copyright owner licenses an "affiliated entity" (defined in (j)(1)) to publicly perform a recording under section 106(6), the owner must offer that same recording, on no less favorable terms, to any other legitimate business offering a similar service — though the owner can set different terms where there are real differences in the type of service, which recordings are covered, how often they're used, the number of subscribers, or the license's length. (2) This equal-treatment rule does not apply when the copyright owner licenses an interactive service, or licenses a performance limited to 45 seconds or less of the recording solely to promote its distribution or performance. (i) Repealed. This subsection was repealed by Public Law 115-264 in 2018 and no longer has any text or legal effect. (j) Definitions. As used in this section: An "affiliated entity" is a business making digital audio transmissions covered by section 106(6) (other than an interactive service) in which the licensor owns, directly or indirectly, 5% or more of the outstanding stock. An "archived program" is a set, pre-determined program available on demand and played back in the same order each time — except this doesn't include a recorded event or broadcast that only makes incidental use of recordings, without featuring or playing any of them whole. A "broadcast" transmission is one made by an FCC-licensed terrestrial broadcast station. A "continuous program" is a pre-determined program that plays continuously in the same order, joined at a point in the program the listener doesn't control. A "digital audio transmission" is a digital transmission (as section 101 defines that term) that carries a sound recording — it does not include the transmission of an audiovisual work. An "eligible nonsubscription transmission" is a free, noninteractive digital transmission that's part of a service mainly providing audio entertainment programming — including rebroadcasts of other broadcasts — where the service's main purpose is not to sell, advertise, or promote products or services other than sound recordings, live concerts, or other music-related events. An "interactive service" lets a listener get a program made specifically for them, or request a specific recording on demand; letting people request songs to be played for the whole audience does not make a service "interactive," as long as requested songs generally aren't played within an hour of the request — and if one entity runs both interactive and noninteractive offerings, the noninteractive part is not treated as part of the interactive service. A "new subscription service" performs recordings by noninteractive subscription transmission and is neither a "preexisting subscription service" nor a "preexisting satellite digital audio radio service." A "nonsubscription" transmission is simply any transmission that isn't a subscription transmission. A "preexisting satellite digital audio radio service" is a subscription satellite service licensed by the FCC on or before July 31, 1998 (and renewals of that license), which may also offer a limited number of free sample channels to promote the subscription service. A "preexisting subscription service" is a noninteractive, audio-only subscription service that was already charging the public for transmissions on or before July 31, 1998, which may likewise offer limited free sample channels. A "retransmission" is a further transmission of an initial transmission, including a retransmission of a retransmission; except as this section otherwise provides, a transmission only counts as a "retransmission" if it is simultaneous with the initial transmission — and this definition doesn't excuse a transmission from meeting any other separate requirement it needs to qualify for an exemption. The "sound recording performance complement" limits how many recordings from one source can play in any rolling 3-hour period on one channel: no more than 3 different selections from a single album (with no more than 2 played back to back), or no more than 4 different selections either by the same featured artist or from a single boxed set (with no more than 3 played back to back) — going over these numbers while pulling from several albums still counts as within the complement, as long as the mix wasn't deliberately arranged to dodge the limits. A "subscription" transmission is one that is controlled and limited to specific recipients who must pay or otherwise give something to receive it. A "transmission" means either an initial transmission or a retransmission.