Advanced Copyright Issues on the Internet - Fenwick & West LLP

companies and to any digital music service that is majority owned by one or more RIAAmembers. The rights under any such license can be extended to any service authorized by alicensee to make On-Demand Streams and/or Limited Downloads of a licensed musical work. Inaddition, NMPA and HFA publicly announced that it is their policy to license not only RIAAmembers but also other digital music services that wish to negotiate comparable agreements. 2277The agreement provides that a mechanical license obtained under it includes allreproduction and distribution rights for delivery of On-Demand Streams and LimitedDownloads. The agreement confirms that a mechanical license for these services includes theright to make server copies, buffer copies and other related copies used in the operation of theservices. The license does not include performance rights, which are licensable separatelythrough performing rights organizations such as ASCAP, BMI and SESAC. 2278 The agreementdoes not establish specific royalty rates. The parties to the agreement committed to negotiatethose rates pursuant to the procedures of Sections 115(c)(3)(B),(C), and (F) of the copyrightstatute (described in the opening paragraphs to Section III.E.4 above). If negotiations are notsuccessful, the applicable rates are to be determined through CARP proceedings. 2279Finally, under the agreement the parties agreed to the following legal points: (1) that theprocess of making On-Demand Streams and Limited Downloads, from the making of servercopies to the transmission and local storage of the stream or download, viewed in its entirety,involves the making and distribution of a DPD; (2) that a compulsory license is available underSection 115 for On-Demand Streams and Limited Downloads; and (3) radio-style and other noninteractivewebcasting that would qualify for a statutory license under Section 114(d)(2) does notinvolve the making or distribution of a DPD and thus does not require a mechanical license. 2280On Dec. 14, 2001, the <strong>Copyright</strong> Office sought public comments on the effect of theRIAA/NMPA/HFA agreement on the issues identified in its public comment proceedingsinitiated on Mar. 9, 2001. 2281 The period for comment on the RIAA/NMPA/HFA agreement wasextended to Feb. 6, 2002, with reply comments due on Feb. 27, 2002. 2282On June 22, 2004, the <strong>Copyright</strong> Office amended its regulations governing the contentand service of notices on the copyright owner required to take advantage of the compulsorylicense of Section 115. The purpose of the amended regulations was to simplify the noticeprocess for digital music services wishing to take advantage of the compulsory license for abroad spectrum of musical works embodied in sound recordings. 22832277 Id. at 3-4.2278 Id. at 4.2279 Id. at 5.2280 Id. at 6.2281 66 Fed. Reg. 64783 (Dec. 14, 2001).2282 67 Fed. Reg. 4694 (Jan. 31, 2002).2283 69 Fed. Reg. 34578 (June 22, 2004).- 497 -