Report, Section 405 was intended to achieve two purposes: first, to further a stated objective of
Congress when it passed the Digital Performance Right in Sound Recordings Act of 1995 to
ensure that recording artists and record companies will be protected as new technologies affect
the ways in which their creative works are used; and second, to create fair and efficient licensing
mechanisms that address the complex issues facing copyright owners and copyrights users as a
result of the rapid growth of digital audio services.^1466 The details of these provisions, which are
lengthy and quite complex, are beyond the scope of this paper.
(e) Assumption of Contractual Obligations Related to Transfers of
Rights in Motion Pictures
Section 406 of the DMCA adds a new Section 4001 to Title 28 of the United States Code
to address the problem caused by the failure of motion picture producers to obtain, as part of a
collective bargaining agreement, assumption agreements from distributors to make residual
payments. New Section 4001 provides generally that transfers of copyright ownership not
limited to public performance rights by exhibitors in motion pictures produced subject to a
collective bargaining agreement will be subject to the assumption agreements applicable to the
copyright ownership being transferred that are required by the applicable collective bargaining
agreement, provided that the transferee knows or has reason to know at the time of the transfer
of the collective bargaining agreement, or, in the event of a court order confirming an arbitration
award against the transferor under the collective bargaining agreement, the transferor does not
have the financial ability to satisfy the award within 90 days after the order is issued. Security
interests and transfers related to exercise of security interests in such motion pictures are
exempted from the provisions of Section 4001.
(f) Protection of Certain Industrial DesignsTitle V of the DMCA adds a new Chapter 13 to the copyright statute entitled “Protection
of Original Designs.” Although as currently enacted, Chapter 13 protects only vessel hull
designs^1467 with a copyright-like design right, its provisions are drafted in the form of a general
industrial design protection statute. Merely by changing a definition in the statute, Congress can
in the future easily extend the scope of industrial designs that are protected. To obtain
protection, the statute requires that the owner of the design register the design with the Copyright
Office within two years of making the design public as embodied in a useful article. Title V of
the DMCA originally provided that the design protection statute would be effective for an initial
trial period of two years. However, Section 5005(a)(2) of the Intellectual Property and
Communications Omnibus Reform Act of 1999^1468 deleted this two-year sunset provision.
(^1466) Id. at 79-80.
(^1467) Title V overrules Bonita Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989), in which the Supreme
Court barred states from protecting unpatented boat hulls because such protection conflicts with the federal
policy favoring free competition in inventions not qualifying for patent protection.
(^1468) P.L. 106-113 (1999).