U.s. Copyright Royalty Rates: Who Sets Them?

Copyright violations may certainly increase in the cyber world. The United States and the International Community are deliberately revising current copyright laws and principles to adapt them to the new technology, without impairing the development of the Internet. For instance, the United States adopted the Digital Millennium Copyright Act (DMCA) to which civil liberty groups oppose for its stringent provisions, while copyright holders support it for the vast protection it affords to their exclusive rights. The Council for Trade-Rated Aspects of Intellectual Property (TRIPS) of the World Trade Organization (WIPO) addressed the copyrights and e-commerce issue in a moderate agreement adopted by most WIPO members. The European Union adopted the WIPO treaties on copyrights and e-commerce by the Directive 2001/29/EC of the European Parliament. Hence, it is fair to say that copyright legislation is advancing along with the cyber world. Yet, copyright legislation is just the foundation of the economic incentive derived from this intellectual property right. We all know that certain copyrighted materials are worth millions of dollars. But, who sets the royalty rates? What government body has the authority to value your creation or determine how much a copyright violator must disburse? In the United States, the Librarian of Congress, upon recommendation of the Register of Copyrights, appoints the Copyright Arbitration Royalty Panels which will be the body in charge of adjusting the copyright rates. How this body is established, its functions, and the royalty ratemaking and disbursement process follows.

The following questions have been addressed in this article:

How the Copyright Arbitration Royalty Panel is Established and what are its Functions
How are the Arbitration Proceedings Carried out?

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