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Copyright Royalty and Distribution Reform Act of 2004

Location: Washington, DC

COPYRIGHT ROYALTY AND DISTRIBUTION REFORM ACT OF 2004 -- (House of Representatives - March 03, 2004)


Mr. SENSENBRENNER. Mr. Speaker, I yield such time as he may consume to the gentleman from Texas (Mr. Smith), the chairman of the subcommittee.

Mr. SMITH of Texas. Mr. Speaker, I thank the gentleman from Wisconsin, the chairman of the Committee on the Judiciary, for yielding time.

Mr. Speaker, our country has long worked to support and protect copyright holders to ensure they receive fair compensation for their creative works.

Over the last 20 years, Congress has attempted to develop the appropriate mechanism to govern royalties; that is, how to distribute royalties to those who create and how to adjust royalties when necessary. In other words, we have tried to find a compromise that allows for the fair distribution of royalties when two parties cannot agree on the value of a creative work.

When I say "fair distribution of royalties" that could mean many things to different parties, particularly the creators of copyrighted works themselves. It is a major reason why this issue is again before Congress.

Congress established the first entity to deal with this in 1976. Ten years ago, that system was abolished to create the current Copyright Arbitration Royalty Panel, or CARP, system.

This legislation that I authored addresses the main problem: frivolous royalty claims, which is a growing trend, as well as decisions made by the copyright panel that are unpredictable and inconsistent.

Much like another intellectual property rights bill that reforms the Patent and Trademark Office, this legislation is critical to the entertainment industry and a growing economy. It is of great importance to artists, songwriters, music publishers and webcasters.

For example, take the case of a songwriter and a webcaster. If a songwriter cannot reach an agreement with a webcaster about the value of a song in the marketplace, the matter is brought to the copyright royalty and distribution system. The private parties involved, of course, pay for the process.

What happens now is the songwriter or the webcaster, or both, often are not left with much of a royalty payment because the process is too lengthy and too costly. If the songwriter cannot make enough on his creations to support himself, then he will no longer be able to create, and our economy and our society will be the loser.

This is the central reason why we are here today: to ensure that the songwriter has the incentive to create and the webcaster has the benefit of distributing enjoyable musical creations.

Unfortunately, American songwriters and webcasters today are caught up in a royalty system that is anything but fair. The current proceedings to establish royalty rates are long, laborious and costly. They harm our economy and take a tremendous toll on the businesses and persons involved. Congress must reform this broken system, which is exactly what this bill does.

I urge my colleagues to support a balanced and fair process that will, for example, help songwriters and bring a little more melody into the lives of the American people.

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