COPYRIGHT ACT

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17 USC Sec. 1004 - Royalty payments

      (a) Digital Audio Recording Devices. -

        (1) Amount of payment. - The royalty payment due under section

      1003 for each digital audio recording device imported into and

      distributed in the United States, or manufactured and distributed

      in the United States, shall be 2 percent of the transfer price.

      Only the first person to manufacture and distribute or import and

      distribute such device shall be required to pay the royalty with

      respect to such device.

        (2) Calculation for devices distributed with other devices. -

      With respect to a digital audio recording device first

      distributed in combination with one or more devices, either as a

      physically integrated unit or as separate components, the royalty

      payment shall be calculated as follows:

          (A) If the digital audio recording device and such other

        devices are part of a physically integrated unit, the royalty

        payment shall be based on the transfer price of the unit, but

        shall be reduced by any royalty payment made on any digital

        audio recording device included within the unit that was not

        first distributed in combination with the unit.

          (B) If the digital audio recording device is not part of a

        physically integrated unit and substantially similar devices

        have been distributed separately at any time during the

        preceding 4 calendar quarters, the royalty payment shall be

        based on the average transfer price of such devices during

        those 4 quarters.

          (C) If the digital audio recording device is not part of a

        physically integrated unit and substantially similar devices

        have not been distributed separately at any time during the

        preceding 4 calendar quarters, the royalty payment shall be

        based on a constructed price reflecting the proportional value

        of such device to the combination as a whole.

        (3) Limits on royalties. - Notwithstanding paragraph (1) or

      (2), the amount of the royalty payment for each digital audio

      recording device shall not be less than $1 nor more than the

      royalty maximum.  The royalty maximum shall be $8 per device,

      except that in the case of a physically integrated unit

      containing more than 1 digital audio recording device, the

      royalty maximum for such unit shall be $12. During the 6th year

      after the effective date of this chapter, and not more than once

      each year thereafter, any interested copyright party may petition

      the Librarian of Congress to increase the royalty maximum and, if

      more than 20 percent of the royalty payments are at the relevant

      royalty maximum, the Librarian of Congress shall prospectively

      increase such royalty maximum with the goal of having no more

      than 10 percent of such payments at the new royalty maximum;

      however the amount of any such increase as a percentage of the

      royalty maximum shall in no event exceed the percentage increase

      in the Consumer Price Index during the period under review.

      (b) Digital Audio Recording Media. - The royalty payment due

    under section 1003 for each digital audio recording medium imported

    into and distributed in the United States, or manufactured and

    distributed in the United States, shall be 3 percent of the

    transfer price.  Only the first person to manufacture and

    distribute or import and distribute such medium shall be required

    to pay the royalty with respect to such medium.

-SOURCE-

    (Added Pub. L. 102-563, Sec. 2, Oct. 28, 1992, 106 Stat. 4241;

    amended Pub. L. 103-198, Sec. 6(b)(1), Dec. 17, 1993, 107 Stat.

    2312.)

-REFTEXT-

                             REFERENCES IN TEXT

      The effective date of this chapter, referred to in subsec.

    (a)(3), is Oct. 28, 1992. See Effective Date note set out under

    section 1001 of this title.

-MISC2-

                                 AMENDMENTS

      1993 - Subsec. (a)(3). Pub. L. 103-198 substituted ''Librarian of

    Congress'' for ''Copyright Royalty Tribunal'' after ''may petition

    the'' and for ''Tribunal'' before ''shall prospectively''.

-SECREF-

                   SECTION REFERRED TO IN OTHER SECTIONS

      This section is referred to in sections 1003, 1009 of this title.

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