AGENCY:

U.S. Copyright Office, Library of Congress.

ACTION:

Final rule.

SUMMARY:

The Copyright Office is publishing a final rule establishing adjusted fees for its services. The adjusted fees will recover a significant portion of the costs to the Office of registering copyright claims and provide greater cost recovery for certain other services provided by the Office. The new fee schedule reflects some increased and decreased fees, as well as some fees that the Office determined did not require adjustment. For example, under the new fee structure, the online Standard Application registration fee will increase from $55 to $65; the fee to register a group of published or unpublished photographs, however, will remain at $55. In addition to fees for registration and recordation, this final rule establishes adjusted fees for special services and Licensing Division services.

DATES:

Effective March 20, 2020.

FOR FURTHER INFORMATION CONTACT:

Regan A. Smith, General Counsel and Associate Register of Copyrights, by email at regans@copyright.gov; Chris Weston, Senior Counsel, by email at cwes@copyright.gov; or Jalyce E. Mangum, Attorney-Advisor, by email at jmang@copyright.gov. They can be reached by telephone at 202-707-8350.

SUPPLEMENTARY INFORMATION:

I. Background

This final rule adjusts Copyright Office fees in accordance with section 708 of title 17, United States Code (the “Copyright Act” or “Act”). The Copyright Act requires that the Office charge fees for certain services.^[1] Pursuant to the Act, the Register of Copyrights may adjust the Office's fees based on a study of its costs for administering the registration of claims, the recordation of documents, and the provision of other services.^[2] Since 1997, the Copyright Office has undertaken a series of studies to determine what fees to charge for specific services.^[3] The Copyright Office revisits its schedule approximately every three to five years to conduct an analysis of its fees, and adjusts those fees to take into account changing costs and work processes. During this analysis, the Office seeks and considers public comment before finalizing a schedule of adjusted fees.^[4] The Office last adjusted its fees in 2014.^[5]

Section 708(a) of the Act specifies that “[f]ees shall be paid to the Register of Copyrights” for the following services:

(1) Filing an application under section 408 for registration of a copyright claim or for a supplementary registration, including the issuance of a certificate of registration if registration is made;

(2) Filing an application for registration of a claim for renewal of a subsisting copyright, including the issuance of a certificate of registration if registration is made;

(3) Issuing a receipt for a deposit under section 407;

(4) Recording a transfer of copyright ownership or other document;

(5) Filing a notice of intention to obtain a compulsory license under section 115(b);

(6) Recording a statement revealing the identity of an author of an anonymous or pseudonymous work, or recording a statement relating to the death of an author;

(7) Issuing an additional certificate of registration;

(8) Issuing any other certification;

(9) Making and reporting of a search, and any related services;

(10) Filing a statement of account based on secondary transmissions of primary transmissions pursuant to sections 119 and 122; and

(11) Filing a statement of account based on secondary transmissions of primary transmissions pursuant to section 111.

In addition, section 708(a) authorizes the Register to fix fees for other services, such as the cost of preparing copies of Office records.

Section 708 contemplates two different mechanisms for setting the above fees. Fees for the services described in section 708(a)(1) through (9)—which include the Office's registration and recordation functions and thus promote essential public policy objectives—must be outlined in a proposed schedule that is sent to Congress 120 days before the adjusted fees can take effect.^[6] Other fees, including those for filing cable and satellite statements of account under sections 708(a)(10) and (11) and additional Office services, are not submitted to Congress but instead are established by the Register based on the Office's costs, following a notice-and-comment rulemaking process.^[7]

Before proposing adjusted fees for the services enumerated in sections 708(a)(1) through (9), the Register must conduct a study of the Office's costs for registering claims, recording documents, and providing other services, and must consider the timing of any fee adjustments and the Office's authority to use the fees consistent with the Office's budget.^[8] Section 708(b) further provides that the Register may adjust these fees to “not more than necessary to cover the reasonable costs incurred by the Copyright Office for . . . [such services], plus a reasonable inflation adjustment to account for any estimated increase in costs.” ^[9] Finally, section 708(b) mandates that the “[f]ees established . . . shall be fair and equitable and give due consideration to the objectives of the copyright system.” ^[10]

The Office initiated its most recent fee study in 2017 by contracting with an outside consultant to analyze the Copyright Office's current and expected future costs.^[11] In conducting the Office's cost study, the outside consultant used an activity-based costing (“ABC”) model in line with industry best practices and recommendations from the Federal Accounting Standards Advisory Board's (“FASAB's”) guidelines for determining the full cost of federal agency program activities ^[12] and the Government Finance Officers Association's guidance regarding costing guidelines and establishing user fees.^[13] Working with the Office, the outside consultant calculated how much each service costs the Office to provide after reviewing both the direct and indirect costs in fiscal 2016 and salary data in fiscal 2017.^[14] This cost assessment process included anticipated expenses associated with the Office's ongoing information technology and business process modernization efforts, which was then estimated to be $70 million ^[15] and later updated in the Office's 2019 congressional budget request to reflect a more refined estimate of $61 million.^[16]

Using these cost determinations as a starting point, the outside consultant considered the other statutory fee-setting factors, including changes in costs due to inflation and the price elasticity of demand for the Copyright Office's services. Price elasticity measures how demand for a service fluctuates in response to a change in price. A service is elastic, or sensitive to price changes, if a small change in price is followed by a large fluctuation in demand. A service is inelastic if it is not responsive to price changes. As the consultant noted, “[t]he vast majority of the Copyright Office's revenue, 85%, is generated from fees deemed elastic.” ^[17] The consultant found an elasticity measure of −0.32 for the Copyright Office's primary services, including registration and recordation, using data on copyright registration volume, fee revenue, and fee changes from 1986 to 2018, and validated the resulting figures by referencing economic literature, econometric studies of European trademarks, and the fee setting report of the U.S. Patent and Trademark Office.^[18]

Using this validated measure of elasticity, the consultant concluded that the goal of full-cost recovery was “impossible to achieve” ^[19] and, instead, calculated that the maximum obtainable cost recovery for all Copyright Office services was 70.4%, with an annual revenue of $47,735,256.^[20] Achieving this rate of cost recovery, however, would be significantly detrimental to the public record and overall public interest—it would cause a 25% drop in use of Copyright Office services, including registration and recordation.^[21] Thus, in establishing a fee schedule, the targeted cost recovery rate in the consultant's study was set at 60% for all costs and included modernization costs at 50% for each fee based on volume, reflecting the Copyright Office's conclusion, following solicitation of public comments, that copyright IT modernization should not be fully fee-funded.^[22]

The consultant provided an initial proposed fee schedule as well as a fee-modeling tool that the Copyright Office could use to adjust the consultant's initial proposed fee schedule to ensure the proposed fees furthered the broad policy objectives of the copyright system.^[23]

After evaluating and adjusting the consultant's schedule,^[24] the Office published a proposed fee schedule in a Notice of Proposed Rulemaking (“NPRM”) on May 24, 2018, and also posted the consultant's study on the copyright.gov website at that time. The Office sought public comment on this schedule in part pursuant to the House Committee on Appropriations' request that the Office report on funding strategies “based on the comments received from the public regarding changes in fee structures.” ^[25] The NPRM analyzed potential changes to fees under section 708(a)(1)-(9) to ensure that they are “fair and equitable and give due consideration to the objectives of the copyright system,” as required by the statute.^[26] The proposed fees were directed at creating a fee schedule that supports the Office's policy goal of promoting creativity and protecting creators' rights while remaining a prudent fiduciary of public funds.^[27]

In the NPRM, the Office proposed an average fee increase of 41% to account for inflationary increases and the expected cost of information technology modernization over the next several years, and to more fully recover the costs of registration and recordation.^[28] While this was the average of proposed fee adjustments, all fees were analyzed on an individual basis, and some proposed fees increased at a lower rate, stayed the same, or even decreased, based on the principles established in the Office's methodology. For example, the Office proposed to continue to offer both paper and electronic registration forms for Standard Application claims and to continue to charge a higher fee for paper forms, which are less efficient than electronic forms for both the Office and applicants.^[29] The Office also proposed to continue offering a discounted registration fee for individual authors who file an online application for a single work that is not a work made for hire.^[30]

The NPRM proposed the following fees for basic registration claims: $125 for paper applications (up from $85); $75 for electronic claims submitted on the Standard Application (up from $55); and $55 for electronic claims submitted on the Single Application (up from $35).^[31] Even with those initially-proposed increases, the Copyright Office would not fully recover its costs to process these applications, which are $89 for the Standard Application and $84 for the Single Application.^[32]

The NPRM also proposed somewhat higher fees for other group registration options in according with the cost assessment, including fees for group registration of newsletters or newspapers, and for group registration of unpublished works.^[33] And specifically, the NPRM proposed raising to $100 the fees applicable to group registrations of published and unpublished photographs, an option that allows an applicant to gain individual copyright registration for up to 750 photographs for one price.^[34]

The Office also proposed adjusting fees for recordation services, including raising the basic recordation fee for paper filings from $105 to $125, and the fee for each additional ten titles recorded from $35 to $60.^[35] The Office suggested these increases because, on the whole, it has not approached cost recovery for processing recordation submissions in recent years.^[36] The Office further recommended a new, lower fee for electronic submissions to record documents of $95, in anticipation of the development of a new electronic recordation system at some point during the period that the new fee schedule is in place.

On June 21, 2019, the Office issued a supplemental NPRM (“June 2019 NPRM”) proposing limited revisions to the NPRM relating to document recordation and new prospective group registration options.^[37] To better distribute costs among remitters based on the size of a recordation filing, the June 2019 NPRM proposed adjusting document recordation fees by changing the calculation formula from one based solely on the number of recorded titles to one based on the number of works and alternate titles and registration numbers to which a document pertains.^[38] For its newly proposed group registration options for short online literary works and for works contained on an album of music, the June 2019 NPRM also announced the Office's intention to issue filing fees equal to the fee proposed for other claims submitted on the Standard Application when concluding rulemakings establishing those new group registration options.^[39]

The Office received approximately 164 comments from a variety of interested parties in response to the two NPRMs, raising a range of issues that are discussed further below.^[40] After carefully considering each comment, on October 16, 2019, the Office submitted a proposed fee schedule to Congress (“Fee Study”), concerning those fees authorized by section 708(a)(1)-(9), including registration and recordation.^[41] For the reasons explained in the Fee Study, also noted below, the Office made several adjustments to the fees proposed in the NPRM to reasonably take into account the range of public comments received. Now that 120 days have elapsed without Congress enacting a law disapproving the proposed fee schedule, the adjusted fee proposals that were presented to Congress are now adopted in this final rule. This final rule also sets forth fees for other additional Office services that the Acting Register is authorized to establish through her rulemaking authority without the need to submit them to Congress.^[42]

II. Adjustments to Proposed Fees

Having considered the public comments in light of its statutory duty to establish fees that are fair, equitable, and serve the objectives of the overall copyright system, the Copyright Office has further adjusted the fees it now establishes in this final rule. For the reasons explained below, the Office has determined that it is appropriate to further adjust certain fees to address concerns raised by commenters in the NPRM.

A. Consideration of Public Comments

The majority of commenters expressed general concern about the proposed fee increases to basic registrations.^[43] For example, the Copyright Alliance argued that “significant fee increases that precede added value will have considerable adverse effects on the filing of registration applications by creators.” ^[44] Likewise, the American Intellectual Property Law Association contended that “the costs attributable to [filing of the Standard Application] may be overstated and the increase, following a $20 increase in 2014, may cause a greater reduction in filings than the Office anticipated.” ^[45]

Similarly, others contended that the proposed adjusted fees would especially burden individual creators and small entities with limited resources.^[46]

In some cases, commenters also objected to the proposed increases for certain group registration options.^[47] While comments were received regarding multiple group registration options, in particular, commenters objected to proposed increases in group registration rates for published and unpublished photographs, contending that an 82% increase “disproportionately burdens small photographers.” ^[48] The Office also received a number of comments questioning the proposed increased fee for expedited processing of qualified claims from $800 to $1,000 and requesting relief from the new fee in cases of imminent litigation.^[49]

In addition, a wide variety of commenters specifically challenged the Copyright Office's proposal to increase certain fees to partially fund IT modernization.^[50] As noted in the Fee Study, those objections generally centered around three themes. First, commenters argued that modernization costs, as a “one-time capital investment,” are “not appropriate to pass . . . onto the Office's `customers.' ” ^[51] Specifically, A2IM noted that “the inclusion of non-recurring costs in the [outside consultant's] analysis has the effect of artificially inflating the fee estimates that underlie the current proposal.” ^[52] Second, commenters contended that “more appropriated dollars are in order to fund the Copyright Office's IT modernization.” ^[53] In AAP's view, “[since] the Library of Congress has effectively taken control over the Copyright Office's IT Modernization under the Modified Plan,” modernization costs should be funded by “a higher contribution from the Library of Congress' appropriated dollars,” and not higher fees.^[54] Similarly, the Coalition of Visual Artists argued that “Congress and the American taxpayers should provide the appropriations needed to fund modernization rather than place that burden on the backs of small creators who are already struggling under the cost and complexity of the existing copyright system.” ^[55] Third, commenters noted that “[s]ince IT modernization will increase efficiency and decrease long-term costs, any cost study associated with the fee increase should take into account the improved efficiencies and cost savings expected with a future IT modernization.” ^[56]

B. The Fee Study's Updates to Proposed Fees

As documented in the Fee Study as well as in this notice, the Office carefully considered each of these comments, including to ensure that adjustments to the Office's fee schedule would be fair, equitable, and reflect due consideration of the objectives of the copyright system. Specifically, the Office further considered the projected effect the proposed fee increases might have on use of these basic Office's services. As indicated in the outside consultant's study, demand for a majority of the Office's services is price elastic, and demand is reduced whenever fees are increased. While external factors, such as the overall national economic health, also influence filing volume, there is a demonstrated inverse relationship between an increase in fees and the number of claims filed. As fees increase, the number of applications decreases, at least initially.^[57]

When considering the issue of price elasticity, the Office found it instructive to compare Copyright Office fees to those of its closest sister agency, the U.S. Patent and Trademark Office (“USPTO”). Copyright Office fees are modest in relation to fees charged by USPTO because Copyright Office fees must take into account the voluntary nature of registration and recordation. In contrast, USPTO initial and maintenance patent filing fees are higher in reflection of the fact that patent rights vest only after USPTO action in a way that isn't true for copyright; federal trademark registration, similarly, conveys a legal presumption of ownership nationwide.

Registration filing and document recordation generate well over 90% of the Copyright Office's fee receipts and are particularly vulnerable to a decline in demand in response to increased fees. For example, in the months following a fee increase in 2007, registration filings dropped by 8.9%, and then increased by 3.7% the following year.^[58] Therefore, the Copyright Office expects a short-term decrease in filings with the introduction of increased fees, which should lessen as filers adjust to new fees. Recognizing this fact, the Copyright Office must set fees such that each new fee recovers a reasonable percentage of the cost of processing the claim, but does not result in a more permanent disincentive to register works and a long-term decrease in fee receipts.

As explained in the Fee Study, the elastic nature of Copyright Office fees also affects how its fees should be set to fund modernization activities. In light of the unique, comprehensive modernization effort and the significant concern over modernization costs raised by public comments, the Copyright Office is adjusting its proposed increases. As a general matter, of course, it is permissible for user fees to fund capital expenditures and ongoing system maintenance. However, the Office took note of the comments received by some stakeholders regarding the effect of concurrently supporting both an existing and a future IT system partially through fees.^[59]

Therefore, as reflected in the Fee Study, the Office has reduced the fee increases for certain in-demand services to lessen the impact on small, high-volume creators and encourage participation in other common or highly elastic registration services.^[60] These decreases from the fees proposed for the Single Application and electronic Standard Application, as well as the group photograph and contributions to periodicals applications, effectively offset the impact of modernization costs for these fees. While all fees can be used for Copyright Office expenses, which include modernization, the Copyright Office has reduced its targeted cost recovery in these cases to lessen the burden of modernization costs.

The Office also considered the fiscal and administrative impact of the Orrin G. Hatch-Bob Goodlatte Music Modernization Act (“MMA”). In accordance with the MMA, the Office no longer accepts section 115 notices of intention to obtain a compulsory license for making a digital phonorecord delivery of a musical work. In fiscal 2019, that change reduced amounts available for operations by $4.2 million. The MMA also directs the Office to engage in a number of new regulatory, administrative, and educational outreach tasks to implement this historic change to the copyright laws. The Office is not attempting to recoup any loss due to MMA through fees because doing so would increase fees beyond those proposed in the NPRM, potentially significantly reducing the number of filings, and thus undermining the copyright system overall. The Office is requesting increased appropriations to cover this shortfall amount.

Still, in adjusting fees, the Office must ensure that fee receipts are sufficient to anticipate the requisite level of Office operations, taking into account fluctuations in filing volumes, whether brought on by increased fees and/or other economic factors in the marketplace. While much of the anticipated costs associated with modernization will be covered through taxpayer-funded appropriations, the remainder is expected to be funded by fees collected in current and prior years. The Office considered these factors, along with stakeholder comments, in developing its fee schedule.

III. Final Regulation

Based on its study, the Office has determined that some fees should increase, some should decrease, and some should remain the same.

A. Registration, Recordation, and Related Services

1. Basic and Group Registrations

While voluntary, registration offers substantial benefits to the registrant and to the public. For this reason, fees must be affordable so that individual creators are not discouraged from registering their works.

In adjusting its registration fees, the Copyright Office sought to address two issues in particular. First, for the reasons noted above, the Copyright Office has reduced the amount of amortized IT modernization costs included in the cost assessment to reflect the Copyright Office's position that modernization costs should not be recovered solely through user fees. Second, as noted below, the Copyright Office noted the particular challenges faced by photographers, who expressed significant concern about the impact of fees on their ability to protect their works, especially in light of recent regulatory changes that have improved efficiency of the process for registering claims for group registration of photographs.

i. Basic Registrations

The Copyright Office adopts the following registration fees:

The most commonly utilized registration options, termed the Standard Application and the Paper Application, may be used to register any work that is eligible for registration under sections 408(a) and 409 of the Copyright Act, including a work by one author, a joint work, a work made for hire, a derivative work, a collective work, or a compilation. The Standard Application is filed electronically through the Copyright Office's eCO system. The Paper Application must be mailed to the Office for examination. Currently, the vast majority of applicants use the electronic filing option; the Copyright Office receives approximately 96% of copyright claims through eCO. Electronic filings cost the Copyright Office less to process than paper applications. Additionally, online applications are advantageous because, on average, the Copyright Office requires approximately three months to complete most claims that are filed electronically versus six months to complete most claims filed on paper applications.^[61]

In reviewing the basic registration fees, the Office closely examined its costs and the degree to which they are recovered under the existing fee structure. Using the average weighted by claim volume, the Office recovered only 51% of the cost to process an online application and 72% of the cost to process paper applications during fiscal 2016.^[62] These figures support the Office's proposal to increase fees for both options, in order to recover a larger percentage of its costs. It is estimated that the new fees (including the single author/single work fee discussed below) would recover 69% of the costs of processing electronic claims and 91% of the costs of processing paper applications.

As noted in the prior fee study,^[63] the substantially higher costs of processing paper applications as compared to the more efficient electronic process justifies a higher fee for paper applications, and the Office is trying to “incentivize electronic filings.” ^[64] The Office therefore is increasing the existing $85 fee for paper applications to $125. This increase will impact only a small percentage of filers, achieve a greater cost recovery for the inefficiencies of paper filings, and incentivize use of the electronic system.

For electronic claims submitted on the Standard Application, the Office is raising the current fee from $55 to $65. This is less than the $75 fee that was proposed in the NPRM—a change made in response to public comments expressing concern with the proposed increase.^[65] The Office believes that the $10 reduction from the original proposed fee will help to mitigate these concerns, and notes that the Office originally proposed a $65 fee for electronic claims in 2012 after conducting an analysis of the Office's costs.^[66]

The Office considered similar factors with respect to the Single Application, an option designed for those authors who file the simplest kind of claim. Specifically, the Single Application allows a single author to register a claim in one work that is solely owned by that author. This option was aimed at encouraging more individual creators to register their works and to foster the development of a more robust public record, and is part of the Copyright Office's commitment to maintaining an affordable copyright registration system. However, the Office believes that a small increase to the fee for the Single Application is warranted to recover at least 49% of the costs associated with processing these claims, in consideration of the Office's operational budget. The Office is therefore increasing the fee for claims filed using the Single Application from $35 to $45.

In setting this registration fee, the Copyright Office took into account a large number of public comments urging it to reduce fees for small creators. The NPRM proposed increasing this fee to $55, which would have achieved a 52% cost recovery. Commenters noted, however, that such an increase “would be yet another financial burden upon writers and artists looking to become small businesses.” ^[67] The Copyright Office understands that works of independent creators fuel the nation's economy while at the same time, these individual creators and small business owners may be most sensitive to price increases in the registration system.^[68] As such, the Office is raising the registration fee for the Single Application from $35 to $45, $10 less than initially proposed. This change also reflects cost efficiencies achieved through technical upgrades to the Single Application ^[69] and the promulgation of new regulations to streamline the application process.^[70]

ii. Group Registration

The Copyright Office adopts the following group registration fees:

Under the Copyright Act, the Register may allow the registration of groups of related works with one application and filing fee.^[72] Pursuant to this authority, the Register has promulgated regulations permitting the Copyright Office to issue group registrations for certain limited categories of works, provided certain conditions have been met.^[73] When implementing these options, however, the Copyright Office must balance the copyright owners' desire for more liberal registration options, the need for an accurate public record, and the need for an efficient method of facilitating the examination of each work. Group registration options encourage registration, especially for large-volume creators. But it can be more difficult to adequately capture information about each work within the technological constraints of the current electronic registration system.^[74] This creates a more time-consuming examination process, as information relating to each work in a group registration claim still needs to be evaluated individually. Additionally, group registration options necessarily have eligibility restrictions that may lead to increased correspondence if applicants fail to heed expressed requirements. Thus, group registration options cost the Copyright Office more to process than claims involving one work of authorship.

The Office is increasing the fees for certain group applications to maintain adequate resources for the Copyright Office's administration of these options in light of the disproportionate time it takes to process these applications. Perhaps most significantly, the fee to register a claim in updates and revisions to a database that predominantly consists of photographs will increase from $55 (electronic) and $65 (paper) to $250 (electronic or paper), and the fee to register a claim in updates and revisions to a database that predominantly consists of non-photographic works will increase from $85 to $500. The Office recognizes certain commenters' concern that such a steep increase may impact filing volumes.^[75] The Office, however, must ensure that it is maintaining an appropriate cost recovery for its services. These claims are quite costly to process, in part, because applicants may include up to three months' worth of content in each submission, there is no limit on the number of individual works that may be included in each update, and the Office must examine each update to determine if the selection, coordination, and arrangement of the content is sufficiently creative. In the case of non-photographic databases, the claim must be submitted with a paper application and a physical deposit, which further increases the amount of time needed to handle each claim. For instance, the Office calculates that processing an application for group registration of updates and revisions to a non-photographic database costs $693.^[76] Accordingly, the Office is increasing the fees for both services to achieve better cost recovery.

The Office is also making adjustments to the fees to register groups of serials, newspapers, and newsletters. To encourage use of the electronic system, the fee to register a claim in a group of serials using Form SE/Group will increase from $25 to $70.^[77] And the fee to register a claim in a group of serials using the electronic system will increase from $25 to $35 to recover more of the costs of providing this service without greatly decreasing demand. Likewise, the fee to register a claim in a group of newspapers or a group of newsletters will increase from $80 to $95.

Additionally, the Office is adjusting the recently promulgated fee to register a claim in a group of unpublished works. In the final rule establishing this new group option, the Office adopted a $55 fee, noting that the new option replaced a previously available option for registering an “unpublished collection” on the Standard Application.^[78] Unlike other group options, registering a claim in a group of unpublished works does not use the Standard Application, and, as explained in the final rule establishing this option, examination of up to ten claims necessarily requires more processing time than a single claim.^[79] Accordingly, the Copyright Office is increasing the fee from $55 to $85.

The Copyright Office is not, however, adjusting the fees for the registration of group claims for contributions to periodicals ^[80] or photographs. Photographers have noted that they typically produce a large number of works ^[81] and must register in order to receive the full range of judicial remedies for infringement.^[82] They also have cited difficulties in the registration process, noting that “[e]xisting registration procedures are not optimized for visual imagery” and “work[ ] better for small volume, large profit producers than for those who create dozens if not hundreds of works over a short period.” ^[83] However, recent changes to the regulations and upgrades to the electronic registration system have improved efficiency of claims for group registration of photographs. Under the current rule, each claim may include no more than 750 photos. Applicants are required to upload their photos in a digital format and use an electronic application form that is specifically designed for group photo claims. Furthermore, they are required to submit a separate spreadsheet that identifies the titles, file names, and publication dates (if any) for each photo. The Office concludes that these improvements have obviated the necessity of raising the fee for groups of photographs. Accordingly, this fee will remain at its current level.

Finally, the Office is planning to adopt fees for registering claims in a group of short online literary works ^[84] and a group of works on an album of music ^[85] in connection with the conclusion of separate active rulemakings to establish those group options. Because the Office anticipates that registration for these claims will require a workflow similar to claims submitted on the Standard Application, the Office proposed a $65 fee to match the fee that applies to any claim submitted on the Standard Application form.^[86] While comments responding to the June 2019 NPRM generally supported this approach,^[87] and the Office has already duly provided notice of proposed fees of $65 for these options in the Fee Study, to avoid potential confusion, the Office will adopt such fees in connection with subsequent rules finalizing the new group options.

2. Other Registration Fees

The Office provides other, less commonly used registration services, as authorized by various provisions of the Copyright Act. The Office adopts the following schedule of fees for such services:

After reconsidering its costs and the comments submitted in response to the NPRM, the Office maintains that current fees do not offset a sufficient percentage of the Office's costs in accepting registrations for paper-based claims, namely claims in restored copyrights (Form GATT) ^[88] and filings correcting or amplifying claims involving non-photographic databases, renewal registrations, or GATT registrations (Form CA).^[89] Paper-based processes are considerably less efficient than electronic registration. Reviewing Form GATT can be difficult and complex, requiring the work of higher-paid senior staff as well as multiple rounds of correspondence. Examining Form CAs is also inherently complex. And because these services must be on completed on paper forms, all information has to be typed into the cataloging system by hand. Accordingly, the Office is increasing both of these fees.

The Office is adopting increases to the renewal application fee (from $100 to $125) and the application for preregistration of unpublished works (from $140 to $200) to achieve a greater cost recovery. The Office did not receive comments objecting to either increase. Further, as explained in the NPRM, the Office has determined that adopting these increases is consistent with the Register's discretionary authority to use fee revenue to offset losses to further the objectives of the copyright system, particularly for less price sensitive filings like preregistration.^[90]

The Office is also raising the fees for the registration of vessel hull designs and mask works, two options that may be especially costly for the Office to process in light of their low volume of filings. Registrations of vessel hull designs (Form D-VH) cost the Office $6,528 to process, and the Office is raising this fee from $400 to $500. The Office is keeping the fee for correcting a vessel design registration (Form DC) at $100. Similarly, the Office spends $2,176 to process a registration of a mask work (Form MW), and the fee is increasing from $120 to $150 to achieve slightly higher cost recovery.

Next, the Office is adopting increased fees for appeals because the work necessary to process these requests is more time consuming than current pricing reflects and requires extensive work by attorney-advisors and senior officials.^[91] The Office is raising the fee for the first request for an appeal from $250 to $350 per claim, and is raising the fee for the second request for an appeal from $500 to $700 per claim.

Some commenters expressed concern about the low cost recovery the above increases would achieve. A2IM noted that “despite being among the most expensive services the Office offers,” the fees “barely increased.” ^[92] Arguing that the proposed schedule would essentially “subsidize services such as registering vessel hull designs, mask works, claims in a restored copyright for foreign works under GATT, as well as first and second appeals of denied registrations,” AAP found it “difficult to reconcile notions of fairness and equity with a proposal to benefit the few users of these services over the vast majority of registration applicants.” ^[93]

While the Office acknowledges that the cost recovery for these services is relatively low, the Office has determined these fees are appropriate in light of the important objectives of the national registration system. Setting fees to achieve full cost recovery would likely discourage registration for services that are already low-volume, which would negatively impact the public record. As the NPRM noted, the Office is examining its vessel hull and mask work registration processes to determine how to more efficiently process each option, and is optimistic significant improvements can be made.^[94] Similarly, the Office recognizes the value of the reconsideration process to applicants as well as others interested in the guidance that second appeals may provide,^[95] and the difficulty of achieving full cost recovery in light of the required senior level resources. Setting fees to make these services unavailable to all but the most well-off claimants would not be congruent with the objectives of the copyright system.

The Office is decreasing or maintaining a number of other registration-related fees. The fee to register a correction or amplification to a claim using the electronic system is decreasing from $130 to $100 due to the increased efficiency achieved on the supplementary registration process.^[96] The Office will also maintain the secure test examination fee (per staff member per hour) at $250, although the consultant concluded it costs the Office $900 per staff member per hour. The Office continues to assess the burdens that the secure tests interim rule, which established a group registration option that lets applicants submit an unlimited number of secure test items, is having on the operations of the Registration Program.^[97] The Office may adjust this fee in a later rulemaking based on this assessment.

The Office will not raise the special handling surcharge for expedited processing of a registration application. The NPRM proposed raising the fee from $800 to $1,000 per claim to help offset the cost of other registration services, and many commenters raised objections to this increase. For example, NMPA contended that the “increase in special handling fees in particular will increasingly make copyright enforcement a privilege rather than a right.” ^[98] Calling the fee “especially egregious,” AAP argued the increase was exploitative in the context of the then-ongoing litigation in Fourth Estate v. Wall-Street.com. ^[99] The Supreme Court since affirmed that merely applying for a registration is insufficient under section 411(a); rather, the Office must make or deny registration before an infringement suit can be commenced.^[100] The holding thus confirmed the need for the Office to have sufficient resources to ensure reasonable registration processing times; since the opinion issued, the average processing time for all claims has significantly declined from seven to four months.^[101] While the system is generally geared to incentivize early registration, the special handling surcharge is also a useful tool for some applicants, allowing those facing litigation to ask for their applications to be handled more quickly, with the Copyright Office generally responding within five business days.^[102] In light of these issues and in consideration of stakeholder comments, the Office will maintain the special handling surcharge at $800.

The Office is keeping the fee for full-term retention of physical published copyright deposits at $540 to account for projected storage costs for the full span of the full-term retention period, which is currently 75 years, but which the Office has indicated it will extend to 95 years to conform to the Copyright Term Extension Act.^[103] The Office is also adopting a new fee of $220 for full-term retention of electronic copyright deposits, which seeks to recover the full estimated cost of such a service, $221.

Finally, the Office is adopting several new fees that were introduced in the NPRM, none of which received significant public comment.^[104] The Office is permitted to cancel the registration of invalid claims,^[105] a process the cost of which the consultant calculated by assessing the time spent per employee, then analyzing that data under the ABC model.^[106] Because senior attorneys within the Registration Program must participate in this voluntary cancellation of registration process, the consultant calculated the cost at $369.^[107] The Office is setting this new fee at $150 to achieve a reasonable cost recovery for this service.

The Office is adopting a fee of $40 per half hour for the service of matching “deposit ticket” claims with unidentified deposits. As explained in the NPRM, a “deposit ticket” claim is one where the applicant submits an application and filing fee online, but separately submits a physical deposit copy of the work to the Office via mail.^[108] When sending the physical deposit copy, applicants are required to attach a system-generated shipping slip to the copy so that the Office can quickly match the deposit copy to the application.^[109] Often, however, applicants either submit deposit copies without the shipping slip, or include multiple deposits and multiple slips in one package without attaching each slip to its respective deposit. In such cases, Office personnel must manually match the unidentified deposits to the applications. The Office is adopting this fee in this new fee schedule to recoup the cost of the labor involved in matching these items. The estimated cost for this service is $38 per half hour, so this fee seeks to achieve full cost recovery.

3. Recordation Fees

The Copyright Office is adopting the following fees for recordation services:

As discussed in the Fee Study and NPRM, the Office is increasing certain recordation fees to help the Office better recover costs in this area. While the Office's eCO system permits electronic registration of most copyright claims, its recordation system remains a largely paper-driven process. The Office has never been able to recover the full cost associated with processing documents that include multiple and sometimes thousands of titles of copyrighted works, which must each be individually indexed. Thus, the Office is increasing the base fee for recordation of a document from $105 to $125 to achieve a better cost recovery. Likewise, the increase to $60 for each ten additional titles associated with a recorded document will allow for greater cost recovery in the case of more complicated filings without overly burdening filers. The Office is increasing the fee for recordation of notices of termination to $125 (from $105), which achieves only 23% cost recovery. Though some terminations require additional indexing work, the Office charges a flat fee for this service, which can involve more extensive examination of the notice and correspondence to record these notices given statutory requirements.

But the Office is lowering other certain fees for recordation. For instance, the fee for recordation of an additional transfer is decreasing from $105 to $95 because the Office incurs less cost in indexing the additional transaction.^[110] Additionally, the Office is working to migrate its recordation function to an electronic system. In fiscal year 2020, the Office anticipates launching a limited pilot for a new, digital recordation system. In anticipation of the launch of a new electronic recordation system during the period that the new fee schedule is in place, the Office is adopting a $95 fee to reflect the anticipated cost efficiencies that will be achieved with an electronic system. The Office appreciates the NMPA's concern that “because the electronic recordation process has not yet been developed or implemented, and lacks a specific timeline,” the Office should “maintain or decrease the current paper recordation processing fees at least until the electronic system is fully operational,” ^[111] but has determined this fee is appropriate in part to encourage the transition to an electronic system. The Office will reassess its costs after the new system is deployed and additional data are available.

The Office is also adopting a new fee structure for the recordation of additional titles that employs a formula based on a combination of the number of works, titles, and registration numbers, rather than the number of titles alone. The previous recordation filing fee was comprised of (1) a base fee that includes one title, and (2) a titles fee for any additional titles beyond the first (sometimes called “alternate titles”).^[112] To encourage the provision of a more robust public record, facilitate improved cost recovery, and more equitably allocate costs among remitters based on the size of their filings, the Office issued a supplemental June 2019 NPRM, which proposed to alter the fee structure from being titles-based to being works-based. This accounts for each additional title name and registration number provided beyond the first title name and/or first registration number, and allows remitters to record, at no additional cost, registration numbers to accompany title names, thus facilitating improved chain-of-title information into the Office's record.^[113] Receiving no significant comments expressing concern regarding the tier structure, and one in support, the Office now finalizes this adjustment in fee structure.^[114]

Last year, the Office also added several fees related to the implementation of title II of the Music Modernization Act (MMA) that are administered by the recordation program.^[115] The Office issued final regulations establishing new filing mechanisms to implement the protection and use of pre-1972 sound recordings into the federal scheme.^[116] These regulations established fees for the filing, and removal, of schedules and supplemental schedules by rights owners listing their sound recordings fixed before February 15, 1972 (“Pre-1972 Sound Recordings”). Because the Office anticipated that those fees would be analogous to that of processing electronic section 115 notices,^[117] the Office set the fee to be $75.^[118] This rule will not change that fee.

The Office also published a final rule regarding the noncommercial use exception to unauthorized uses of Pre-1972 Sound Recordings.^[119] That rule details the filing requirements for a user to submit a notice of noncommercial use and for a rights owner to submit a notice opting out of a proposed noncommercial use. The final rule set the fees for both services at $50. The Office finds no reason to change these fees.

Finally, the special handling surcharge for recordation of documents will be kept at $550, which will be charged in addition to the otherwise applicable processing fee.

B. Record Retrieval, Search, and Certification Services

The Office's Records Research and Certification Section (RRC) provides copies of completed and in-process registration and recordation records, search reports, and registration deposit materials. The Office is adopting the following fee schedule for records retrieval, search, and certification services:

The new fees are intended to be simpler and easier for the public to understand and for the Office to implement. For instance, instead of charging different copying fees based on the type of media involved (paper, audiocassette, videocassette, CD etc.), the Office is simplifying the copying fee to $12 regardless of media. Similarly, rather than try to distinguish among these various services, the Office is maintaining a simpler fee structure by maintaining a $200-per-hour fee in place for most RRC services, including a search estimate.

Likewise, instead of charging three different special handling fees for the different kinds of services RRC provides,^[120] the Office is adopting a standard $500 hourly fee for special handling of records retrieval, search, and certification services, which would apply in lieu of the $200-per-hour fees that are otherwise charged for such services. The Office charges special handling fees when the user requests expedited service. For example, when requesting a standard search report, the fee a user pays will be at least $400, or $200 per hour with a two-hour minimum. When requesting a search report with special handling, however, the fee will be $500 per hour to account for the expedited nature of the service. While the revenues from this service exceed the costs, those excess revenues help offset the cost of other services.

Finally, the Office is raising the fee for an additional certificate of registration from $40 to $55 to achieve greater cost recovery; this service costs $285 to provide. The Office is also adopting a new fee of $100 for litigation statements, which are requests for certified or uncertified reproductions of deposit copies, phonorecords, or identifying material involved in litigation (either actual or prospective),^[121] to achieve almost full cost recovery.

The Office did not receive any comments on its proposed adjusted fees for record retrieval, search, and certification services.

C. Miscellaneous Fees

The Office is adopting the following miscellaneous fees, as authorized by 17 U.S.C. 708 and other provisions of the Copyright Act:

As explained in the NPRM, the Office had insufficient volume to compute a transaction cost for the following fees, and therefore is keeping the cost of these services at their current levels or reducing them: Receipt for mandatory deposit without registration; notice to libraries and archives under 17 U.S.C. 108(h); initial request to remove requested personally identifiable information (PII) from registration records; and reconsideration of a denied request to remove PII. Similarly, the $1 and $45 fees to deliver documents by fax and by Federal Express mailing will remain unchanged.

The Office is raising the payment processing service charges to achieve near-complete cost recovery for those types of charges and discourage the incidence of such payment processing complications. The fee for overdraft of a deposit account will increase from $250 to $285 to account for the estimated cost of $280. The fee for dishonored replenishment checks for deposit accounts will increase from $100 to $500 to account for the $513 cost of such service. And the fee for uncollectable or nonnegotiable payments will increase from $30 to $115 to recover the $110 it costs the Office to address such a situation.

Finally, as proposed, the Office will maintain the fee for designation of an agent under 17 U.S.C. 512(c)(2) at $6, despite its $52 cost. The Office anticipates that the ongoing costs will be lower as system development nears completion.

D. Licensing Division and Related Fees

The Office is adopting the following Licensing Division fees:

As proposed in the NPRM, the Office is maintaining a flat fee for paper and electric versions of Forms SA 1, 2, and 3; however, after examining projected fee revenues as well as reasonable expenses incurred to administer these licenses, the Office has determined it is unnecessary to implement the slight increases to these fees originally proposed in the NPRM.^[122] The Office is also retaining the current fee for statements of account for satellite systems.^[123] Fees associated with section 111, 119, and 122 licenses will remain, in the aggregate over the next five year period, below 50% of the Office's reasonable expenses to administer the cable and satellite licensing programs, as is required by statute.^[124] The Office will continue to monitor costs and filing volume to ensure that it complies with the statutory limit.

The fee for an amended statement of account filed by cable systems, satellite systems, and digital audio recording device distributors will be reduced to $50. But as noted in the NPRM, the Office intends to charge that amendment fee in a wider range of circumstances, including when Office examination uncovers an error that requires the filing of an amended statement of account.

The Office is raising the fee for section 112 and 114 initial and amended notices from $40 to $50 to achieve greater recovery of the $300 cost associated with such notices.

Finally, the Music Modernization Act (“MMA”) makes significant changes to the section 115 compulsory license and adds several services, which the Licensing Division administers. The Office is keeping the fees for section 115 notices at their current levels, which, following passage of the MMA, now relate only to non-digital phonorecord deliveries of a musical work.^[125] Post-MMA, the Office has thus far received only nine section 115 notices, and has concluded that the best approach is to retain the current fee and reassess the utility and efficiency of this license in the next fee study with new data on this narrower subset of filers now eligible to file this notice. The Office is not changing any other fees for services of the Licensing Division.

List of Subjects in 37 CFR Part 201

• Copyright
• General provisions

Final Regulations

For the reasons set forth in the preamble, the Copyright Office amends 37 CFR part 201 as follows:

PART 201—GENERAL PROVISIONS

1. The authority citation for part 201 continues to read as follows:

Authority: 17 U.S.C. 702.

2. In § 201.3, revise paragraphs (c), (d), and (e) to read as follows:

Footnotes