[Code of Federal Regulations]
[Title 37, Volume 1]
[Revised as of July 1, 1999]
From the U.S. Government Printing Office via GPO Access
[CITE: 37CFR201.19]
[Page 373-382]
TITLE 37--PATENTS, TRADEMARKS, AND COPYRIGHTS
CONGRESS
PART 201--GENERAL PROVISIONS--Table of Contents
Sec. 201.19 Royalties and statements of account under compulsory license for making and distributing phonorecords of nondramatic musical works.
(a) Definitions. (1) A Monthly Statement of Account is a statement
accompanying monthly royalty payments identified in section 115(c)(3) of
title 17 of the United States Code, as amended by Pub. L. 94-553, and
required by that
[[Page 374]]
section to be made under the compulsory license to make and distribute
phonorecords of nondramatic musical works.
(2) An Annual Statement of Account is a statement identified in
section 115(c)(3) of title 17 of the United States Code, as amended by
Pub. L. 94-553, and required by that section to be filed for every
compulsory license to make and distribute phonorecords of nondramatic
musical works.
(3) For the purposes of this section, the term copyright owner, in
the case of any work having more than one copyright owner means any one
of the co-owners. In such cases, the service of a Statement of Account,
on one co-owner under paragraph (e)(7) or (f)(7) of this section shall
be sufficient with respect to all co-owners.
(4) For the purposes of this section, a compulsory licensee is a
person or entity exercising the compulsory license to make and
distribute phonorecords of nondramatic musical works as provided under
section 115 of title 17 of the United States Code, as amended by Pub. L.
94-553.
(5) A phonorecord is considered voluntarily distributed if the
compulsory licensee has voluntarily and permanently parted with
possession of the phonorecord. For this purpose, and subject to the
provisions of paragraph (d) of this section, a compulsory licensee shall
be considered to have ``permanently parted with possession'' of a
phonorecord made under the license:
(i) In the case of phonorecords relinquished from possession for
purposes other than sale, at the time at which the compulsory licensee
actually first parts with possession;
(ii) In the case of phonorecords relinquished from possession for
purposes of sale without a privilege of returning unsold phonorecords
for credit or exchange, at the time at which the compulsory licensee
actually first parts with possession;
(iii) In the case of phonorecords relinquished from possession for
purposes of sale accompanied by a privilege of returning unsold
phonorecords for credit or exchange:
(A) At the time when revenue from a sale of the phonorecord is
``recognized'' by the compulsory licensee; or
(B) Nine months from the month in which the compulsory licensee
actually first parted with possession, whichever occurs first.
For these purposes, a compulsory licensee shall be considered to
``recognize'' revenue from the sale of a phonorecord when sales revenue
would be recognized in accordance with generally accepted accounting
principles as expressed by the American Institute of Certified Public
Accountants or the Financial Accounting Standards Board, whichever would
cause sales revenue to be recognized first.
(6) A phonorecord reserve comprises the number of phonorecords, if
any, that have been relinquished from possession for purposes of sale in
a given month accompanied by a privilege of return, as described in
paragraph (a)(5)(iii) of this section, and that have not been considered
voluntarily distributed during the month in which the compulsory
licensee actually first parted with their possession. The initial number
of phonorecords comprising a phonorecord reserve shall be determined in
accordance with generally accepted accounting principles as expressed by
the American Institute of Certified Public Accountants or the Financial
Accounting Standards Board.
(7) A negative reserve balance comprises the aggregate number of
phonorecords, if any, that have been relinquished from possession for
purposes of sale accompanied by a privilege of return, as described in
paragraph (a)(5)(iii) of this section, and that have been returned to
the compulsory licensee, but because all available phonorecord reserves
have been eliminated, have not been used to reduce a phonorecord
reserve.
(b) Accounting requirements where sales revenue is ``recognized''.
Where under paragraph (a)(5)(iii)(A) of this section, revenue from the
sale of phonorecords is ``recognized'' during any month after the month
in which the compulsory licensee actually first parted with their
possession, said compulsory licensee shall reduce particular phonorecord
reserves by the number of phonorecords for which revenue is being
``recognized,'' as follows:
(1) If the number of phonorecords for which revenue is being
``recognized'' is
[[Page 375]]
smaller than the number of phonorecords comprising the earliest eligible
phonorecord reserve, this phonorecord reserve shall be reduced by the
number of phonorecords for which revenue is being ``recognized.''
Subject to the time limitations of subparagraph (B) of this
Sec. 201.19(a)(5)(iii), the number of phonorecords remaining in this
reserve shall be available for use in subsequent months.
(2) If the number of phonorecords for which revenue is being
``recognized'' is greater than the number of phonorecords comprising the
earliest eligible phonorecord reserve but less than the total number of
phonorecords comprising all eligible phonorecord reserves, the
compulsory licensee shall first eliminate those phonorecord reserves,
beginning with the earliest eligible phonorecord reserve and continuing
to the next succeeding phonorecord reserves, that are completely offset
by phonorecords for which revenue is being ``recognized.'' Said licensee
shall then reduce the next succeeding phonorecord reserve by the number
of phonorecords for which revenue is being ``recognized'' that have not
been used to eliminate a phonorecord reserve. Subject to the time
limitations of subparagraph (B) of this Sec. 201.19(a)(5)(iii), the
number of phonorecords remaining in this reserve shall be available for
use in subsequent months.
(3) If the number of phonorecords for which revenue is being
``recognized'' equals the number of phonorecords comprising all eligible
phonorecord reserves, the person or entity exercising the compulsory
license shall eliminate all of the phonorecord reserves.
(c) Accounting requirements for offsetting phonorecord reserves with
returned phonorecords. (1) In the case of a phonorecord that has been
relinquished from possession for purposes of sale accompanied by a
privilege of return, as described in paragraph (a)(5)(iii) of this
section, where the phonorecord is returned to the compulsory licensee
for credit or exchange before said compulsory licensee is considered to
have ``permanently parted with possession'' of the phonorecord under
paragraph (a)(5) of this section, the compulsory licensee may use such
phonorecord to reduce a ``phonorecord reserve,'' as defined in paragraph
(a)(6) of this section.
(2) In such cases, the compulsory licensee shall reduce particular
phonorecord reserves by the number of phonorecords that are returned
during the month covered by the Monthly Statement of Account in the
following manner:
(i) If the number of phonorecords that are returned during the month
covered by the Monthly Statement is smaller than the number comprising
the earliest eligible phonorecord reserve, the compulsory licensee shall
reduce this phonorecord reserve by the total number of returned
phonorecords. Subject to the time limitations of paragraph (B) of
Sec. 201.19(a)(5)(iii), the number of phonorecords remaining in this
reserve shall be available for use in subsequent months.
(ii) If the number of phonorecords that are returned during the
month covered by the Monthly Statement is greater than the number of
phonorecords comprising the earliest eligible phonorecord reserve but
less than the total number of phonorecords comprising all eligible
phonorecord reserves, the compulsory licensee shall first eliminate
those phonorecord reserves, beginning with the earliest eligible
phonorecord reserve, and continuing to the next succeeding phonorecord
reserves, that are completely offset by returned phonorecords. Said
licensee shall then reduce the next succeeding phonorecord reserve by
the number of returned phonorecords that have not been used to eliminate
a phonorecord reserve. Subject to the time limitations of paragraph (B)
of Sec. 201.19(a)(5)(iii), the number of phonorecords remaining in this
reserve shall be available for use in subsequent months.
(iii) If the number of phonorecords that are returned during the
month covered by the Monthly Statement is equal to or is greater than
the total number of phonorecords comprising all eligible phonorecord
reserves, the compulsory licensee shall eliminate all eligible
phonorecord reserves. Where said
[[Page 376]]
number is greater than the total number of phonorecords comprising all
eligible phonorecord reserves, said compulsory licensee shall establish
a ``negative reserve balance,'' as defined in paragraph (a)(7) of this
section.
(3) Except where a negative reserve balance exists, a separate and
distinct phonorecord reserve shall be established for each month during
which the compulsory licensee relinquishes phonorecords from possession
for purposes of sale accompanied by a privilege of return, as described
in paragraph (a)(5)(iii) of this section. In accordance with paragraph
(B) of Sec. 201.19(a)(5)(iii), any phonorecord remaining in a particular
phonorecord reserve nine months from the month in which the particular
reserve was established shall be considered ``voluntarily distributed'';
at that point, the particular monthly phonorecord reserve shall lapse
and royalties for the phonorecords remaining in it shall be paid as
provided in paragraph (e)(4)(ii) of this section.
(4) Where a negative reserve balance exists, the aggregate total of
phonorecords comprising it shall be accumulated into a single balance
rather than being separated into distinct monthly balances. Following
the establishment of a negative reserve balance, any phonorecords
relinquished from possession by the compulsory licensee for purposes of
sale or otherwise, shall be credited against such negative balance, and
the negative reserve balance shall be reduced accordingly. The nine
month limit provided by paragraph (B) of Sec. 201.19(a)(5)(iii) shall
have no effect upon a negative reserve balance; where a negative reserve
balance exists, relinquishment from possession of a phonorecord by the
compulsory licensee at any time shall be used to reduce such balance,
and shall not be considered a ``voluntary distribution'' within the
meaning of paragraph (a)(5) of this section.
(5) In no case shall a phonorecord reserve be established while a
negative reserve balance is in existence; conversely, in no case shall a
negative reserve balance be established before all available phonorecord
reserves have been eliminated.
(d) Situations in which a compulsory licensee is barred from
maintaining reserves. Notwithstanding any other provisions of this
section, in any case where, within three years before the phonorecord
was relinquished from possession, the compulsory licensee has had final
judgment entered against it for failure to pay royalties for the
reproduction of copyrighted music on phonorecords, or within such period
has been definitively found in any proceeding involving bankruptcy,
insolvency, receivership, assignment for the benefit of creditors, or
similar action, to have failed to pay such royalties, that compulsory
licensee shall be considered to have ``Permanently parted with
possession'' of a phonorecord made under the license at the time at
which that licensee actually first parts with possession. For these
purposes the ``compulsory licensee,'' as defined in Sec. 201.19(a)(4),
shall include:
(1) In the case of any corporation, the corporation or any director,
officer, or beneficial owner of twenty-five percent (25%) or more of the
outstanding securities of the corporation;
(2) In all other cases, any entity or individual owning a beneficial
interest of twenty-five percent (25%) or more in the entity exercising
the compulsory license.
(e) Monthly statements of account--(1) Forms. The Copyright Office
does not provide printed forms for the use of persons serving Monthly
Statements of Account.
(2) General content. A Monthly Statement of Account shall be clearly
and prominently identified as a ``Monthly Statement of Account Under
Compulsory License for Making and Distributing Phonorecords,'' and shall
include a clear statement of the following information:
(i) The period (month and year) covered by the Monthly Statement;
(ii) The full legal name of the compulsory licensee, together with
all fictitious or assumed names used by such person or entity for the
purpose of conducting the business of making and distributing
phonorecords;
(iii) The full address, including a specific number and street name
or rural route, of the place of business of the compulsory licensee. A
post office box
[[Page 377]]
or similar designation will not be sufficient for this purpose, except
where it is the only address that can be used in that geographic
location;
(iv) The title or titles of the nondramatic musical work or works
embodied in phonorecords made under the compulsory license and owned by
the copyright owner being served with the Monthly Statement and the name
of the author or authors of such work or works, if known;
(v) For each nondramatic musical work that is owned by the same
copyright owner being served with the Monthly Statement and that is
embodied in phonorecords covered by the compulsory license, a detailed
statement of all of the information called for in paragraph (e)(3) of
this section;
(vi) The total royalty payable for the month covered by the Monthly
Statement, computed in accordance with the requirements of this section
and the formula specified in paragraph (e)(4) of this section, together
with a statement of account showing in detail how the royalty was
computed; and
(vii) In any case where the compulsory licensee falls within the
provisions of paragraph (d) of this section, a clear description of the
action or proceeding involved, including the date of the final judgment
or definitive finding described in that paragraph.
(3) Specific content of monthly statements: Identification and
accounting of phonorecords. (i) The information called for by paragraph
(e)(2)(v) of this section shall, with respect to each nondramatic
musical work, include a separate listing of each of the following items
of information:
(A) The number of phonorecords made during the month covered by the
Monthly Statement;
(B) The number of phonorecords that, during the month covered by the
Monthly Statement and regardless of when made, were either:
Relinquished from possession for purposes other than sale;
Relinquished from possession for purposes of sale without any
privilege of returning unsold phonorecords for credit or exchange;
Relinquished from possession for purposes of sale accompanied by a
privilege of returning unsold phonorecords for credit or exchange;
Returned to the compulsory licensee for credit or exchange; or
Placed in a phonorecord reserve (except that if a negative reserve
balance exists give either the number of phonorecords added to the
negative reserve balance, or the number of phonorecords relinquished
from possession that have been used to reduce the negative reserve
balance);
(C) The number of phonorecords, regardless of when made, that were
relinquished from possession during a month earlier than the month
covered by the Monthly Statement but that, during the month covered by
the Monthly Statement either have had revenue from their sale
``recognized'' under paragraph (a)(5)(iii) of this section, or were
comprised in a phonorecord reserve that lapsed after nine months under
paragraph (B) of Sec. 201.19(a)(5)(iii).
(ii) Each of the items of information called for by paragraph
(e)(3)(i) of this section shall also include, and if necessary shall be
broken down to identify separately, the following:
(A) The catalog number or numbers and label name or names, used on
the phonorecords;
(B) The names of the principal recording artist or group engaged in
rendering the performances fixed on the phonorecords;
(C) The playing time on the phonorecords of each nondramatic musical
work covered by the statement; and
(D) Each phonorecord configuration involved (for example: single
disk, long-playing disk, cartridge, cassette, reel-to-reel).
(4) Royalty payment and accounting. (i) The total royalty called for
by paragraph (e)(2)(vi) of this section shall, as specified in section
115(c)(2) of title 17 of the United States Code, as amended by Pub. L.
94-553, be payable for every phonorecord ``voluntarily distributed''
during the month covered by the Monthly Statement.
(ii) The amount of the royalty payment shall be calculated in
accordance with the following formula:
Step 1: Compute the number of phonorecords shipped for sale with a
privilege of return. This is the total of phonorecords that, during the
month covered by the Monthly Statement, were relinquished from
possession by the compulsory licensee, accompanied by the
[[Page 378]]
privilege of returning unsold phonorecords to the compulsory licensee
for credit or exchange. This total does not include: (1) Any
phonorecords relinquished from possession by the compulsory licensee for
purposes of sale without the privilege of return; and (2) any
phonorecords relinquished from possession for purposes other than sale.
Step 2: Subtract the number of phonorecords reserved. This involves
deducting, from the subtotal arrived at in Step 1, the number of
phonorecords that have been placed in the phonorecord reserve for the
month covered by the Monthly Statement. The number of phonorecords
reserved is determined by multiplying the subtotal from Step 1 by the
percentage reserve level established under GAAP. This step should be
skipped by a compulsory licensee barred from maintaining reserves under
paragraph (d) of this section.
Step 3: Add the total of all phonorecords that were shipped during
the month and were not counted in Step 1. This total is the sum of two
figures: (1) The number of phonorecords that, during the month covered
by the Monthly Statement, were relinquished from possession by the
compulsory licensee for purposes of sale, without the privilege of
returning unsold phonorecords to the compulsory licensee for credit or
exchange; and (2) the number of phonorecords relinquished from
possession by the compulsory licensee, during the month covered by the
Monthly Statement, for purposes other than sale.
Step 4: Make any necessary adjustments for sales revenue
``recognized,'' lapsed reserves, or reduction of negative reserve
balance during the month. If necessary, this step involves adding to or
subtracting from the subtotal arrived at in Step 3 on the basis of three
possible types of adjustments:
(a) Sales revenue ``recognized.'' If, in the month covered by the
Monthly Statement, the compulsory licensee ``recognized'' revenue from
the sale of phonorecords that had been relinquished from possession in
an earlier month, the number of such phonorecords is added to the Step 3
subtotal;
(b) Lapsed reserves. If, in the month covered by the Monthly
Statement, there are any phonorecords remaining in the phonorecord
reserve for the ninth previous month (that is, any phonorecord reserves
from the ninth previous month that have not been offset under FOFI, the
first-out-first-in accounting convention, by actual returns during the
intervening months), the reserve lapses and the number of phonorecords
in it is added to the Step 3 subtotal.
(c) Reduction of negative reserve balance. If, in the month covered
by the Monthly Statement, the aggregate reserve balance for all previous
months is a negative amount, the number of phonorecords relinquished
from possession by the compulsory licensee during that month and used to
reduce the negative reserve balance is subtracted from the Step 3
subtotal.
Step 5: Multiply by the statutory royalty rate. The total monthly
royalty payment is obtained by multiplying the subtotal from Step 3, as
adjusted if necessary by Step 4, by the statutory royalty rate of 5.7
cents or 1.1 cents per minute or fraction of playing time, whichever is
larger.
(iii) Each step in computing the monthly payment, including the
arithmetical calculations involved in each step, shall be set out in
detail in the Monthly Statement.
(5) Clear statements. The information required by paragraphs (e) (2)
and (3) of this section involves intelligible, legible, and unambiguous
statements in the Monthly Statements of Account itself and without
incorporation of facts or information contained in other documents or
records.
(6) Oath and signature. Each Monthly Statement of Account shall
include the handwritten signature of the compulsory licensee. If that
compulsory licensee is a corporation, the signature shall be that of a
duly authorized officer of the corporation; if that compulsory licensee
is a partnership, the signature shall be that of a partner. The
signature shall be accompanied by:
(i) The printed or typewritten name of the person signing the
Monthly Statement of Account;
(ii) The date of signature;
(iii) If the compulsory licensee is a partnership or a corporation,
by the title or official position held in the partnership or corporation
by the person signing the Monthly Statement of Account;
(iv) A certification of the capacity of the person signing; and
(v) The following statement:
I certify that I have examined this Monthly Statement of Account and
that all statements of fact contained herein are true, complete, and
correct to the best of my knowledge, information, and belief, and are
made in good faith.
(7) Service. (i) Each Monthly Statement of Account shall be served
on the copyright owner to whom or which it is directed, together with
the total royalty for the month covered by the Monthly Statement, by
certified mail, or by registered mail on or before the 20th day of the
immediately succeeding month. It shall not be necessary to file
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a copy of the Monthly Statement in the Copyright Office.
(ii)(A) In any case where a Monthly Statement of Account is sent by
certified mail or registered mail and is returned to the sender because
the copyright owner is not located at that address or has refused to
accept delivery, or in any case where an address for the copyright owner
is not known, the Monthly Statement of Account, together with any
evidence of mailing, may be filed in the Licensing Division of the
Copyright Office. Any Monthly Statement of Account submitted for filing
in the Copyright Office shall be accompanied by a brief statement of the
reason why it was not served on the copyright owner. A written
acknowledgement of receipt and filing will be provided to the sender.
(B) The Copyright Office will not accept any royalty fees submitted
with Monthly Statements of Account under Sec. 202.19(e)(7)(ii).
(C) Neither the filing of a Monthly Statement of Account in the
Copyright Office, nor the failure to file such Monthly Statement, shall
have effect other than that which may be attributed to it by a court of
competent jurisdiction.
(D) No filing fee will be required in the case of Monthly Statements
of Account submitted to the Copyright Office under this
Sec. 201.19(e)(7)(ii). Upon request and payment of the fee specified in
Sec. 201.3(e), a Certificate of Filing will be provided to the sender.
(iii) A separate Monthly Statement of Account shall be served for
each month during which there is any activity relevant to the payment of
royalties under section 115 of Title 17, United States Code, as amended
by Pub. L. 94-553, and under this section. The Annual Statement of
Account identified in paragraph (f) of this section does not replace any
Monthly Statement of Account.
(f) Annual statements of account--(1) Forms. The Copyright Office
does not provide printed forms for the use of persons serving Annual
Statements of Account.
(2) Annual period. Any Annual Statement of Account shall cover the
full fiscal year of the compulsory licensee.
(3) General content. An Annual Statement of Account shall be clearly
and prominently identified as an ``Annual Statement of Account Under
Compulsory License for Making and Distributing Phonorecords,'' and shall
include a clear statement of the following information:
(i) The fiscal year covered by the Annual Statement;
(ii) The full legal name of the compulsory licensee, together with
all fictitious or assumed names used by such person or entity for the
purpose of conducting the business of making and distributing
phonorecords;
(iii) A statement of the nature of the business organization used by
the compulsory licensee in connection with the making and distribution
of phonorecords (for example, a corporation, a partnership, or an
individual proprietorship); additionally:
(A) If the compulsory licensee is a corporation registered with the
Securities and Exchange Commission under section 12 of the Securities
and Exchange Act of 1934, the Annual Statement shall state that this is
the case.
(B) If the compulsory licensee is a corporation that is not
registered with the Securities and Exchange Commission under section 12
of the Securities and Exchange Act of 1934, the Annual Statement shall
include a list of the names of the corporation's directors and officers,
and the names of each beneficial owner of twenty-five percent (25%) or
more of the outstanding securities of the corporation.
(C) In all other cases, the Annual Statement shall include the names
of each entity or individual owning a beneficial interest of twenty-five
percent (25%) or more in the entity exercising the compulsory license.
If a corporate entity is named in response to this paragraph (C), then:
If that corporation is registered with the Securities and Exchange
Commission under section 12 of the Securities and Exchange Act of 1934,
the Annual Statement shall so state; if that corporation is not so
registered, the Annual Statement shall include a list of the
corporation's directors and officers, and the names of each beneficial
owner of twenty-five percent (25%) or more of the outstanding securities
of that corporation;
[[Page 380]]
(iv) The full address, including a specific number and street name
or rural route, or the place of business of the compulsory licensee. A
post office box or similar designation will not be sufficient for this
purpose except where it is the only address that can be used in that
geographic location;
(v) The title or titles of the nondramatic musical work or works
embodied in phonorecords made under the compulsory license and owned by
the copyright owner being served with the Annual Statement and the name
of the author or authors of such work or works, if known;
(vi) The playing time of each nondramatic musical work on such
phonorecords;
(vii) For each nondramatic musical work that is owned by the same
copyright owner being served with the Annual Statement and that is
embodied in phonorecords covered by the compulsory license, a detailed
statement of all of the information called for in paragraph (f)(4) of
this section;
(viii) The total royalty payable for the fiscal year covered by the
Annual Statement computed in accordance with the requirements of this
section, together with a statement of account showing in detail how the
royalty was computed. For these purposes, the applicable royalty as
specified in section 115(c)(2) of title 17 of the United States Code, as
amended by Pub. L. 94-553, shall be payable for every phonorecord
``voluntarily distributed'' during the fiscal year covered by the Annual
Statement;
(ix) The total sum paid under Monthly Statements of Account by the
compulsory licensee to the copyright owner being served with the Annual
Statement during the fiscal year covered by the Annual Statement; and
(x) In any case where the compulsory license falls within the
provisions of paragraph (d) of this section, a clear description of the
action or proceeding involved, including the date of the final judgment
or definitive finding described in that paragraph.
(4) Specific content of annual statements: Identification and
accounting of phonorecords. (i) The information called for by paragraph
(f)(3)(vii) of this section shall, with respect to each nondramatic
musical work, include a separate listing of each of the following items
of information separately stated and identified for each phonorecord
configuration (for example, single disk, long playing disk, cartridge,
cassette, or reel-to-reel) made:
(A) The number of phonorecords made through the end of the fiscal
year covered by the Annual Statement, including any made during earlier
years;
(B) The number of phonorecords which have never been relinquished
from possession of the compulsory licensee through the end of the fiscal
year covered by the Annual Statement;
(C) The number of phonorecords involuntarily relinquished from
possession (as through fire or theft) of the compulsory licensee during
the fiscal year covered by the Annual Statement and any earlier years,
together with a description of the facts of such involuntary
relinquishment;
(D) The number of phonorecords ``voluntarily distributed'' by the
compulsory licensee during all years before the fiscal year covered by
the Annual Statement;
(E) The number of phonorecords relinquished from possession of the
compulsory licensee for purposes of sale during the fiscal year covered
by the Annual Statement accompanied by a privilege of returning unsold
records for credit or exchange, but not ``voluntarily distributed'' by
the end of that year;
(F) The number of phonorecords ``voluntarily distributed'' by the
compulsory licensee during the fiscal year covered by the Annual
Statement, together with:
(1) The catalog number or numbers, and label name or names, used on
such phonorecords; and
(2) The names of the principal recording artists or groups engaged
in rendering the performances fixed on such phonorecords.
(ii) If the information given under paragraphs (A) through (F) of
this Sec. 201.19(f)(4)(i) does not reconcile, the Annual Statement shall
also include a clear and detailed explanation of the difference. For
these purposes, the information given under such paragraphs shall be
considered not to reconcile if, after the number of phonorecords given
[[Page 381]]
under paragraphs (B), (C), (D), and (E) are added together and that sum
is deducted from the number of phonorecords given under paragraph (A),
the result is different from the amount given under paragraph (F).
(5) Clear statement. The information required by paragraph (f)(3) of
this section involves intelligible, legible, and unambiguous statements
in the Annual Statement of Account itself and [subject to paragraph
(f)(3)(iii)(A)] without incorporation by reference of facts or
information contained in other documents or records.
(6) Signature and certification. (i) Each Annual Statement of
Account shall include the handwritten signature of the compulsory
licensee. If that compulsory licensee is a corporation, the signature
shall be that of a duly authorized officer of the corporation; if that
compulsory licensee is a partnership, the signature shall be that of a
partner. The signature shall be accompanied by: (A) The printed or
typewritten name of the person signing the Annual Statement of Account;
(B) the date of signature; (C) if the compulsory licensee is a
partnership or a corporation, by the title or official position held in
the partnership or corporation by the person signing the Annual
Statement of Account; and (D) a certification of the capacity of the
person signing.
(ii)(A) Each Annual Statement of Account shall also be certified by
a licensed Certified Public Accountant. Such certification shall consist
of the following statement:
We have examined the attached ``Annual Statement of Account Under
Compulsory License For Making and Distributing Phonorecords'' for the
fiscal year ended (date) of (name of the compulsory licensee) applicable
to phonorecords embodying (title or titles of nondramatic musical works
embodied in phonorecords made under the compulsory license) made under
the provisions of section 115 of Title 17 of the United States Code, as
amended by Pub. L. 94-553, and applicable regulations of the United
States Copyright Office. Our examination was made in accordance with
generally accepted auditing standards and accordingly, included tests of
the accounting records and such other auditing procedures as we
considered necessary in the circumstances.
In our opinion the Annual Statement of Account referred to above
presents fairly the number of phonorecords embodying each of the above-
identified nondramatic musical works made under compulsory license and
voluntarily distributed by (name of the compulsory licensee) during the
fiscal year ending (date), and the amount of royalties applicable
thereto under such compulsory license, on a consistent basis and in
accordance with the above cited law and applicable regulations published
thereunder.
_______________________________________________________________________
(City and State of Execution)
_______________________________________________________________________
(Signature of Certified Public Accountant or CPA Firm)
_______________________________________________________________________
Certificate Number
_______________________________________________________________________
Jurisdiction of Certificate
_______________________________________________________________________
(Date of Opinion)
(B) The certificate shall be signed by an individual, or in the name
of a partnership or a professional corporation with two or more
shareholders. The certificate number and jurisdiction are not required
if the certificate is signed in the name of a partnership or a
professional corporation with two or more shareholders.
(7) Service. (i) Each Annual Statement of Account shall be served on
the copyright owner to whom or which it is directed by certified mail or
by registered mail on or before the twentieth day of the third month
following the end of the fiscal year covered by the Annual Statement. It
shall not be necessary to file a copy of the Annual Statement in the
Copyright Office. An Annual Statement of Account shall be served for
each fiscal year during which at least one Monthly Statement of Account
was required to have been served under paragraph (e)(7) of this section.
(ii) In any case where the amount required to be stated in the
Annual Statement of Account under paragraph (f)(3)(viii) of this section
is greater than the amount stated in that Annual Statement under
paragraph (f)(3)(ix) of this section, the difference between such
amounts shall be delivered to the copyright owner together with the
service of the Annual Statement. The
[[Page 382]]
delivery of such sum does not require the copyright owner to accept such
sum, or to forego any right, relief, or remedy which may be available
under law.
(iii)(A) In any case where an Annual Statement of Account is sent by
certified mail or registered mail and is returned to the sender because
the copyright owner is not located at that address or has refused to
accept delivery, or in any case where an address for the copyright owner
is not known, the Annual Statement of Account, together with any
evidence of mailing, may be filed in the Licensing Division of the
Copyright Office. Any Annual Statement of Account submitted for filing
shall be accompanied by a brief statement of the reason why it was not
served on the copyright owner. A written acknowledgment of receipt and
filing will be provided to the sender.
(B) The Copyright Office will not accept any royalty fees submitted
with Annual Statements of Account under Sec. 202.19(f)(7)(iii).
(C) Neither the filing of an Annual Statement of Account in the
Copyright Office, nor the failure to file such Annual Statement, shall
have any effect other than that which may be attributed to it by a court
of competent jurisdiction.
(D) No filing fee will be required in the case of Annual Statements
of Account submitted to the Copyright Office under this
Sec. 201.19(f)(7)(iii). Upon request and payment of the fee specified in
Sec. 201.3(e), a Certificate of Filing will be provided to the sender.
(g) Documentation. All compulsory licensees shall, for a period of
at least three years from the date of service of an Annual Statement of
Account, keep and retain in their possession all records and documents
necessary and appropriate to support fully the information set forth in
such Annual Statement and in Monthly Statements served during the fiscal
year covered by such Annual Statement.
(17 U.S.C. 115, 702, 708)
[45 FR 79046, Nov. 28, 1980, as amended at 56 FR 7813, Feb. 26, 1991; 56
FR 59885, Nov. 26, 1991; 63 FR 30635, June 5, 1998; 64 FR 29521, June 1,
1999]