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U.S. Code as of:
01/19/04
Section 1004. Royalty payments
(a) Digital Audio Recording Devices. -
(1) Amount of payment. - The royalty payment due under section
1003 for each digital audio recording device imported into and
distributed in the United States, or manufactured and distributed
in the United States, shall be 2 percent of the transfer price.
Only the first person to manufacture and distribute or import and
distribute such device shall be required to pay the royalty with
respect to such device.
(2) Calculation for devices distributed with other devices. -
With respect to a digital audio recording device first
distributed in combination with one or more devices, either as a
physically integrated unit or as separate components, the royalty
payment shall be calculated as follows:
(A) If the digital audio recording device and such other
devices are part of a physically integrated unit, the royalty
payment shall be based on the transfer price of the unit, but
shall be reduced by any royalty payment made on any digital
audio recording device included within the unit that was not
first distributed in combination with the unit.
(B) If the digital audio recording device is not part of a
physically integrated unit and substantially similar devices
have been distributed separately at any time during the
preceding 4 calendar quarters, the royalty payment shall be
based on the average transfer price of such devices during
those 4 quarters.
(C) If the digital audio recording device is not part of a
physically integrated unit and substantially similar devices
have not been distributed separately at any time during the
preceding 4 calendar quarters, the royalty payment shall be
based on a constructed price reflecting the proportional value
of such device to the combination as a whole.
(3) Limits on royalties. - Notwithstanding paragraph (1) or
(2), the amount of the royalty payment for each digital audio
recording device shall not be less than $1 nor more than the
royalty maximum. The royalty maximum shall be $8 per device,
except that in the case of a physically integrated unit
containing more than 1 digital audio recording device, the
royalty maximum for such unit shall be $12. During the 6th year
after the effective date of this chapter, and not more than once
each year thereafter, any interested copyright party may petition
the Librarian of Congress to increase the royalty maximum and, if
more than 20 percent of the royalty payments are at the relevant
royalty maximum, the Librarian of Congress shall prospectively
increase such royalty maximum with the goal of having no more
than 10 percent of such payments at the new royalty maximum;
however the amount of any such increase as a percentage of the
royalty maximum shall in no event exceed the percentage increase
in the Consumer Price Index during the period under review.
(b) Digital Audio Recording Media. - The royalty payment due
under section 1003 for each digital audio recording medium imported
into and distributed in the United States, or manufactured and
distributed in the United States, shall be 3 percent of the
transfer price. Only the first person to manufacture and distribute
or import and distribute such medium shall be required to pay the
royalty with respect to such medium.
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