By Tiffany Hu

Law360 (April 6, 2020, 8:31 PM EDT) -- Citing the global COVID-19 pandemic, the U.S. Copyright Office on Monday announced that it is temporarily pausing the clock on certain requirements for serving notices and paying so-called mechanical royalties to songwriters and publishers.

The Copyright Office is offering "emergency relief" to those affected by COVID-19 by tolling some deadlines for paper filings and related royalty payments under Section 115 of the Copyright Act, which covers compulsory licenses for making and distributing phonorecords.

Under the interim policy, the requirements to provide a notice of intention, statement of account and associated royalty payment to a copyright owner will be tolled if an individual or entity has sent a declaration that it cannot process paper filings due to the pandemic, it said.

The individual or entity must also provide its contact information should the owner want to temporarily opt in to electronic delivery methods, the office added.

"As of April 6, 2020, this adjustment applies only to [notice of intention]s and [statement of account]s sent to persons or entities who had previously received them in paper format prior to the national emergency," the notice says.

Under the Copyright Act's Section 115 compulsory license, anyone can get an automatic mechanical license by filing a notice of intent through the Copyright Office. Once the notice is filed, the service must pay a set rate and then it has access to the song.

But the existing system lacked any sort of central database or organization, and with the massive growth in streaming services seeking mechanical licenses, both streaming services and songwriters alike have complained that the status quo isn't working anymore.

In October 2018, President Donald Trump signed into law the Music Modernization Act, which created a centralized Mechanical Licensing Collective to collect royalties and then distribute them to whichever songwriter or owner is due money.

The Copyright Office on Monday said although the MMA's "most significant change is to establish a new, blanket license for digital music providers," that type of license is not available yet. During the transition period, therefore, licensees must continue to follow the requirements under Section 115 for individual songs, it said.

"Recognizing that the Section 115 license reflects a complex balancing of interests most recently addressed by Congress through passage of the MMA and the existing reliance upon the current structure by various stakeholders, the office is providing a reasonable framework for relief that minimizes disruption to long-standing expectations, including with respect to royalty payments, and promotes transparency in compulsory licensing," it said.

The $2 trillion coronavirus rescue bill signed by Trump late last month gave the Copyright Office the temporary authority to push back filing and procedural deadlines for copyrights to alleviate the effects of the pandemic on agency operations.

The Coronavirus Aid, Relief and Economic Security Act includes a section that gives temporary authority to the register of copyrights to "toll, waive, adjust or modify" filing deadlines on a temporary basis to mitigate the disruption caused by COVID-19.

The Copyright Office has already extended registration deadlines as long as copyright owners provide statements that the delay was due to the pandemic. It has also issued temporary rules allowing individuals filing applications online to submit an electronic deposit of their work if a physical version is required within the applications.

--Additional reporting by Bill Donahue and Hailey Konnath. Editing by Stephen Berg.

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