Advanced Copyright Issues on the Internet - Fenwick & West LLP

Section 402 responds to Congress’ concern, expressed in the Conference Report, that ifuse of copy protection technologies becomes widespread, a transmitting organization might beprevented from engaging in its traditional activities of assembling transmission programs andmaking ephemeral recordings permitted by Section 112 of the copyright statute. Accordingly,Section 402 provides that where a transmitting organization entitled to make an ephemeralrecording is prevented from making such recording by the application by the copyright owner ofa technical measure that prevents reproduction of the work, the copyright owner must makeavailable to the transmitting organization the necessary means for making the recording, if ittechnologically feasible and economically reasonable to do so. If the copyright owner fails to doso in a timely manner, then the transmitting organization is granted an exemption from liabilityunder the provisions of the DMCA that would otherwise prohibit the transmitting organizationfrom circumventing the technical measure.Recordings(d) Statutory Licenses With Respect to Performances of SoundSection 405 of the DMCA contains provisions relating to statutory compulsory licenseswith respect to performances of sound recordings, including digital audio transmissions, and setsup procedures for voluntary negotiation proceedings to determine reasonable terms and rates ofroyalty payments for public performances of sound recordings. According to the ConferenceReport, Section 405 was intended to achieve two purposes: first, to further a stated objective ofCongress when it passed the Digital Performance Right in Sound Recordings Act of 1995 toensure that recording artists and record companies will be protected as new technologies affectthe ways in which their creative works are used; and second, to create fair and efficient licensingmechanisms that address the complex issues facing copyright owners and copyrights users as aresult of the rapid growth of digital audio services. 1021 The details of these provisions, which arelengthy and quite complex, are beyond the scope of this paper.(e) Assumption of Contractual Obligations Related to Transfers ofRights in Motion PicturesSection 406 of the DMCA adds a new Section 4001 to Title 28 of the United States Codeto address the problem caused by the failure of motion picture producers to obtain, as part of acollective bargaining agreement, assumption agreements from distributors to make residualpayments. New Section 4001 provides generally that transfers of copyright ownership notlimited to public performance rights by exhibitors in motion pictures produced subject to acollective bargaining agreement will be subject to the assumption agreements applicable to thecopyright ownership being transferred that are required by the applicable collective bargainingagreement, provided that the transferee knows or has reason to know at the time of the transferof the collective bargaining agreement, or, in the event of a court order confirming an arbitrationaward against the transferor under the collective bargaining agreement, the transferor does nothave the financial ability to satisfy the award within 90 days after the order is issued. Securityinterests and transfers related to exercise of security interests in such motion pictures areexempted from the provisions of Section 4001.1021 Id. at 79-80.- 232 -