determination.”^3154 While the Register’s determination is binding on the CRB in subsequent
proceedings, it was unclear if it would have an effect on the rates already set through 2012.^3155
A partial answer came in the form of SoundExchange, Inc. v. Librarian of Congress,^3156
in which SoundExchange contested the CRB’s 2008 rate-setting decision, arguing that the rates
should be closer to 13% of royalties. The court rejected this argument, noting that the CRB’s
decision was not arbitrary and capricious. However, the court agreed with the Register’s
determination that the conflation of Section 112 and 114 rates was improper, but found that the
evidence in the record was insufficient for it to set a rate, and so remanded the case to the CRB
to set a royalty rate that disaggregated the Section 112 and 114 royalties.^3157
The CRB then adopted a final rule on rates and terms for preexisting subscription
services and satellite digital audio radio services, effective March 5, 2010, establishing monthly
royalties for the performances equal to the following percentages of monthly gross revenues
resulting from residential services in the U.S.:
6.0% for 2007 and 2008
6.5% for 2009
7.0% for 2010
7.5% for 2011
8.0% for 2012Additionally, royalties for ephemeral recordings made in connection with such performances
were set at 5% of the total royalties for the transmissions that they are made to facilitate (thereby
differentiating the Section 112 and 114 royalties).^3158
On April 17, 2013, after conducting a rate determination proceeding in 2012, the CRB
published its determination of the rates and terms of royalty payments payable by preexisting
subscription services and SDARS under Sections 112 and 114. The CRB set the Section
114(f)(1) rates for preexisting subscription services at 8% of gross revenues for 2013 and 8.5%
for 2014 through 2017. The Section 114(f)(1) rates for Sirius XM were set at 9% of gross
revenues for 2013, 9.5% for 2014, 10.0% for 2015, 10.5% for 2016, and 11.0% for 2017.^3159
The CRB further determined, pursuant to a joint stipulation of all parties to the proceeding, that
the value accorded the Section 112 license was combined with that of the Section 114 license
(^3154) 17 U.S.C. § 803(c)(4); “Copyright Office Declares Judges’ Ruling on Ephemeral Rates Was Legal Error,”
BNA’s Patent, Trademark & Copyright Journal (Feb. 29, 2008) at 447.
(^3155) “Copyright Office Declares Judges’ Ruling on Ephemeral Rates Was Legal Error,” BNA’s Patent, Trademark &
Copyright Journal (Feb. 29, 2008) at 446.
(^3156) 571 F.3d 1220 (D.C. Cir. 2009).
(^3157) SoundExchange, Inc. v. Librarian of Congress, 571 F.3d 1220, 1225- 26 (D.C. Cir. 2009); “Copyright Royalty
Judges’ Rate Determination for Satellite Radio Performances Stands,” Bloomberg Law Reports – Intellectual
Property, Vol. 3, No. 30 (July 27, 2009) at 1-2.
(^3158) 75 Fed. Reg. 5513 (Feb. 3, 2010).
(^3159) 78 Fed. Reg. 23054 (Apr. 17, 2013).