Fees

AGENCY:

Copyright Office, Library of Congress.

ACTION:

Notice of proposed rulemaking.

SUMMARY:

This notice of proposed rulemaking is issued to inform the public that the Copyright Office of the Library of Congress is considering adoption of new fees for registration of claims, special services and Licensing Division services, and that the Office intends to submit a schedule of proposed new statutory fees and fees for certain other services to Congress. The proposed fees would recover a significant part of the costs to the Office of registering claims and provide full cost recovery for many services provided by the Office which benefit only or primarily the user of that service. The new fees are based on reliable information regarding the costs of providing services, and reflect new electronic processing of most claims implemented in the Copyright Office in 2007.

DATES:

Comments should be in writing and received on or before November 13, 20083.

ADDRESSES:

If hand delivered by a private party, an original and ten copies of any comment should be brought to Room LM-401 of the James Madison Memorial Building between 8:30 a.m. and 5 p.m. and the envelope should be addressed as follows: Office of the General Counsel, U.S. Copyright Office, James Madison Memorial Building, Room LM-401, 101 Independence Avenue, SE., Washington, DC 20559-6000. If hand delivered by a commercial courier, an original and ten copies of any comment must be delivered to the Congressional Courier Acceptance Site located at Second and D Streets, NE., Washington, DC, between 8:30 a.m. and 4 p.m. The envelope should be addressed as follows: Office of the General Counsel, U.S. Copyright Office, LM 401, James Madison Building, 101 Independence Avenue, SE., Washington, DC. Please note that CCAS will not accept delivery by means of overnight delivery services such as Federal Express, United Parcel Service or DHL. If sent by mail (including overnight delivery using U.S. Postal Service Express Mail), an original and five copies should be addressed to U.S. Copyright Office, Copyright GC/I&R, P.O. Box 70400, Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT:

Tanya M. Sandros, General Counsel, or Kent Dunlap, Principal Legal Advisor for the General Counsel, Telephone: (202) 707-8380. Telefax: (202) 707-8366.

SUPPLEMENTARY INFORMATION:

Section 708 of the copyright law establishes two separate procedures for adjusting fees for Copyright Office services to account for increases in costs. For fees for services specifically enumerated in section 708(a)(1)-(9), “statutory fees,” the fees are adjusted according to the procedures set forth in section 708(b). This procedure includes the completion of a cost study, and the forwarding of an economic report and proposed fee schedule to Congress, which takes effect unless Congress enacts a law within 120 days disapproving of the new fees. The second procedure concerns fees for services not specifically enumerated in section 708(a)(1)-(9), and for the purposes of this rulemaking, these fees are termed “discretionary fees.” For these fees, section 708(a) authorizes the Register to set the fee at “the cost of providing the service.” As with the statutory fees, the Copyright Office adjusts the discretionary fees after conducting a cost study to determine the cost of providing the service.

The Copyright Office has instituted fee adjustments under this provision on four separate occasions. The first schedule was adopted in 1999. See 63 FR 43426 (August 13. 1998) and 64 FR 29518 (June 1, 1999). Three years later a second adjustment was made raising many copyright fees, but leaving the basic registration fee at $30. 67 FR 38003 (May 31, 2002). The third fee adjustment was adopted in 2006, in which most statutory fees were again raised due to an increase in costs. In this instance, the basic registration fee was increased from $30 to $45. 71 FR 15368 (March 28, 2006) and 71 FR 31089 (June 1, 2006). The last fee adjustment was adopted in 2007 establishing a lower basic registration fee of $35 for copyright claims submitted electronically. 72 FR 33690 (June 19, 2007).

In the 2007 adjustment lowering the fee for electronic submission of basic copyright registration, it was stated that fee adjustment would likely be revisited once the electronic, online process for registering a claim was operational for a sufficient period of time so as to yield reliable information on the actual costs involved in providing the service. Electronic submission of basic claims to copyright was opened to beta testers in July 2007 with an increasing number of beta testers added over the next 11 months. Beginning July 1, 2008, the Office made online, electronic submission of copyright claims available to the general public, and it also introduced a new application, Form CO. The advantage of Form CO is its 2-D barcode that captures the information as entered online on the application form and from which the Copyright Office retrieves the information for processing.

The Office has gained experience in the past 15 months in using its new IT system for processing three different types of submissions of claims to copyright. Claims may be submitted electronically, by mailing a completed Form CO that incorporates a 2-D barcode, or by submitting existing paper forms, i.e., Forms PA, VA, SR, TX or SE. Each type of submission requires a significantly different degree of effort to process. Therefore, the Office is proposing a fee adjustment for each of these three types of submissions to recover the appropriate portion of the cost of providing such service.

I. Overview

The expenses of the Copyright Office have always been substantially funded through the fees for providing services, although the percentage of cost recovery has varied. For the last fifty years, cost recovery through the charging of fees has ranged from 50% to 80% of the expenses of the Copyright Office. In fiscal year 2005, the Copyright Office collected $23,788,227 in fees, sufficient to offset 56.9% of the total expenditures of the Copyright Office. In fiscal year 2006, during the last three months of which higher fees applied, the Office collected $24,126,884 in fees, sufficient to offset only 51.3% of the total expenditures of the Copyright Office. In fiscal year 2007, the Copyright Office collected $29,261,052 in fees, offsetting 60.5% of the Copyright Office's total expenditures. Programs relating to mandatory deposit, domestic and international copyright policy and public information have been generally paid for by appropriated funds.

In order to meet the legal requirements for adjusting fees, the Copyright Office undertook a cost study to evaluate the cost of its fee services. Based upon that study, the Office proposes to adjust its fees to reflect the costs associated with the reengineered processes. The proposed new fees are being disclosed to the public at this time in order to provide an opportunity for public comment. The Copyright Office plans to implement the new fees on or about April 1, 2009.

II. Discretionary Fees

For services other than those mentioned in section 708(a)(1) through (9) identified as “other services” in the law, and identified in this notice as “Discretionary Fees,” the Register is authorized to fix the fees at the actual cost of providing the service. The fees proposed here are based on a study of the costs of providing these services. Where costs have increased, the fees have been raised. In some cases the fees remain the same, or where costs have decreased, the fees have been lowered.

This notice will not discuss each fee increase individually where fees have been adjusted either to recover the cost of the service or to account for the rate of inflation since the last fee adjustment. However, the Copyright Office believes further clarification is useful for the following fees:

1. Recordation of an Interim Designation of Agent to Receive Notification of Claimed Infringement under § 512(c)(2) (Online Service Provider Designation). The Copyright Office has recorded and indexed designations of online service providers at a flat rate up to the present time. In practice, some of these documents are very simple while others include several or even many domain names that must be indexed in the Office's online record. To recover the extra cost associated with processing the larger number of domain names, the Office proposes a fee for the filing itself, with an additional fee for each group of 1 to 10 additional domain names.

2. Service Charge for Uncollectible and Non-negotiable Checks. Before the reengineering of Copyright Office processes, the Office did not register in-process claims and canceled completed registrations when an uncollectible check was returned from the bank. Under the new system, processing is merely suspended until the filer sends a valid payment. Returning non-negotiable checks and writing for replacements for failed payments is a direct cost to the Office. Modern businesses recover such costs by imposing a service charge, and the Office is adopting the same approach.

3. Licensing Division Fees. The Licensing Division of the Copyright Office provides services related to statements of account for cable, satellite, and DART usage. In this case, fees are set based on a separate study relating to the budget and expenditures of the Licensing Division. In addition, it charges fees for searching, certification and copying of licensing records. These services are similar to those performed by the Information and Records Division and the costs are also parallel. Consequently, fees are adjusted on the basis of the cost of providing the service regarding the filing of an Amended Statement of Account in accordance with Sections 111, 112, 114, 119, & 1003, Recordation of Licensing Agreement under Section 118; and search, certification, and copying fees.

4. Refund Policy. The Copyright Office intends to harmonize its refund policy with respect to refunds of fees for non-registration services, including document recordation and Licensing Division non-royalty fees. Heretofore, when a document that had been filed was not recorded, the entire fee was refunded. In the future, the Office will retain a portion of the fee to offset the administrative cost of processing the request to record the document. In this case, under 37 CFR 201.6(c), the Office will retain a processing fee in an amount equivalent to the minimum fee set for the service, and will refund only the fees paid beyond that amount. With respect to the various Licensing Division fees, the regulation will be applied in the same manner.

III. Statutory Fees

The Copyright Office now offers two additional options for filing basic copyright claims beyond the traditional paper application: electronic filing via the Office's new “electronic Copyright Office” (eCo) and filing a new application Form CO filled out and printed from the Web site with the data encoded in 2-D barcodes.

In July 2006, the basic registration fee was increased to $45. At that time, the Office established prospectively a lower fee of $35 for filers who would use the electronic filing system still in development at that time. In July 2007, when the system became available to the public for beta testing, the lower fee was implemented. The cost study just completed validates the lower fee, demonstrating a substantial cost savings to the Office in processing electronic claims.

In its proposed schedule of fees, the Office has revised its registration schedule and presents a three tier system for basic registration fees to accommodate the addition of Form CO. On July 1, 2008, the Office implemented its new Form CO and 2-D barcode filing option on its Web site. The 2-D barcode captures the data entered into Form CO and, when scanned in the Office, populates the various fields with the digitized data, eliminating the need for any transcription. Users who complete the new Form CO on the Copyright Office Web site, print it from the Web site, and submit it with the fee and deposit copy or copies, will be charged a fee that is higher than the eCO filing fee, but lower than the fee for paper filings using old applications without the 2-D barcode. The fee level was determined from the cost study for processing applications by stripping out the known costs that would not be incurred in processing the Form CO claims. Review of the costs associated with implementation of Form CO has demonstrated that the deleted costs were in fact directly related to processing steps avoided in processing these claims.

The highest fee for submission of a claim for registration is reserved for filers who submit the traditional paper application forms. The higher fee reflects the level of manual intervention required to create the digitized information, and other associated costs. In turn, these filers, like their counterparts, will receive a certificate created from the digital data drawn from a scanned image of the application.

In addition to the registration fees associated with basic copyright registration, fees have been adjusted in some of the other areas of copyright registration, as have other statutory fees. The Copyright Office believes further clarification is useful for the following fees:

1. Supplementary Registration and Additional Certificate of Registration. These statutory fees are being adjusted downward. The cost of providing these services has declined over recent years due to automation of processing systems. In such circumstances, it is appropriate to pass these savings on to the customer.

2. Group Registration for Database Updates, Group Registration for Published Photographs, and Group Registration for Contributions to Periodicals. In the case of these three group registration options, the applicant files the traditional registration form, and in the case of published photographs, the use of an adjunct form listing the individual titles of the photographs. The fees for these groups are exactly the same as the fees for claims in individual works in these categories. A group submission reduces the Office's costs and is seen as a win-win for the Office and its customers. The fees for these groups will increase for paper fillings, in concert with the fees for individual basic registrations. When group registration is available in the 2-D barcode and electronic filing options, the fees will parallel those for individual claims, as well.

3. Making and Reporting of a Search. The fee for searching and preparing a report from Copyright Office records is adjusted for inflation to maintain the current level of cost recovery. The Office has determined, however, to apply a 2-hour minimum charge to searches performed by the Records Research & Certification Division. This step will bring the Office's charges more in line with the fees charged for this service by providers in the private sector and will make recovery fairly consistent with actual costs. The minimum fee for searches done by the Licensing Division remains at the current rate of a 1-hour minimum due to the limited scope of the typical search.

4. Notice of Intention to Obtain a Compulsory License under Section 115(b). This fee has not been adjusted since 1978 and it has become both a windfall for filers who have only one title in their notice and a burden for those notices with many titles. The Office intends to balance the fee so that it is fairer to users and better reflects the relative cost of processing the single-title versus multiple-title notices, by charging a fee for processing the notice itself, with an additional fee for each group of ten additional titles beyond the first. The proposed fee is based on the cost of providing this service and increases the basic filing fee, while reducing the cost per title when multiple titles are included in the filing. This is the same approach the Office uses to set fees for the recordation of a document with additional titles and the recordation of an Interim Designation of Agent to Receive Notification of Claimed Infringement under § 512(c)(2). The Office anticipates adjusting its processes to accept electronic filings in the future, at which time, it will consider an adjustment to these fees to reflect the efficiencies and savings associated with electronic filings.

IV. Proposed New Statutory and Filing Fees

Based upon the cost study prepared by the Copyright Office, the Copyright Office is proposing a new fee schedule for registration and related services, special services, and Licensing Division services. A comparison of existing and new fees is included in the following charts:

V. Request for Comments

The Copyright Office is publishing the proposed new fees and modification of the refund policy in order to provide the public with an opportunity to comment on the proposed adjustments. The Office anticipates implementation of the new fee schedule by April 1, 2009.