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COMPULSORY ROYALTY

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Mechanical and Compulsory Licensing -- SMP Hot Links Supreme Join SMP
Copyright -- SMP Hot Links Supreme
Royalties -- SMP Hot Links Supreme

Also called a "compulsory license fee," it is the royalty fee paid to the copyright owner or to the Copyright Royalty Tribunal (for subsequent distribution, after service charge deductions, to the copyright owner) by any person or entity who uses copyrighted material under the compulsory licensing statutes of the federal copyright law.

The statute provides for fees to be paid for the following compulsory licenses:
a) Phonorecords,
b) Juke Boxes,
c) Cable Systems, and
d) Public Broadcasting.

1) Since the license fee charged for the phonorecord compulsory license is adjusted for inflation periodically, the current statutory royalty rate may be ascertained by contacting the Copyright Office. The mailing address is Copyright Office, Library of Congress, Washington, DC 20559. The telephone number is (202) 707-3000.

The law provides that the license fee royalty be paid each month. However, users are permitted to negotiate their own license, called a mechanical license, and because of this provision, the phonorecord compulsory license is normally not used. The main reason for this is because the statutory license stipulates that the user must account and pay royalties each month. Since the industry standard is quarterly, the user benefits if he negotiates his own mechanical license.

Also, the statutory royalty rate has become the industry standard for all mechanical license rates. Even for songs never before recorded. However, by law, since the copyright owner has the right to the first recording of a song, this rate is negotiable and could be increased for a first time recording. Any recording thereafter would be licensed at the statutory rate since the user could, as the copyright law permits, make his recording without the copyright owner's permission (by means of the statutory compulsory license provision).

2) Since the license fee charged for juke box performances is adjusted for inflation periodically, the current rate charged may be ascertained by contacting the Register of Copyrights. The mailing address is Register of Copyrights, Library of Congress, Washington, DC 20559. The telephone number is (202) 707-3000.

The license fee charged for juke box performances is paid to the Register of Copyrights by the juke box owner. These fees are then distributed with interest on a pro rata basis (after the Copyright Office deducts a reasonable accounting and service charge) to copyright owners (or their agents) who file a claim of entitlement each January. Distribution is paid after October 1st and only after all claims are validated by the Copyright Royalty Tribunal.

3 & 4) The license fees charged for secondary transmission by a cable system and for public broadcasting are legally complicated and beyond the scope of this writing, but may be ascertained by contacting the Copyright Office. The mailing address is Copyright Office, Library of Congress, Washington, DC 20559. The telephone number is (202) 707-3000.

See Cross-links: MECHANICAL LICENSE FEE, SYNCHRONIZATION LICENSE FEE, TRANSCRIPTION LICENSE FEE, PERFORMANCE LICENSE FEE, LICENSE, CONTRACT-RECORDING CONTRACT clause #31, CONTRACT-SONGWRITER/PUBLISHER CONTRACT clauses #22, #23, #24, COPYRIGHT LAW under "Compulsory License," "Statutory Royalty," "Notice of Intention," "Copyright Office," "Copyright," "Copyright Owner," "Exclusive Rights," "Limitations to Exclusive Rights," and "Copyright Royalty Tribunal."

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