The Copyright Royalty Board (CRB), created under the Copyright Royalty and Distribution Reform Act of 2004, is involved in the compulsory license for making and distributing phonorecords. Made up of three Copyright Royalty Judges, is the independent unit within the Library of Congress responsible for setting rates for the statutory licenses and distributing the royalty fees collected by the U.S. Copyright Office under three of these licenses.
The judges, who are full-time employees of the Library of Congress, are appointed for six years with the opportunity for reappointment. However, the first three judges, appointed in 2006, are serving staggered terms of two, four, and six years, to establish a cycle that avoids having to replace all three judges at the same time.
On July 6, 2012, in Intercollegiate Broadcasting System, Inc. v. Copyright Royalty Board, a unanimous panel of the D.C. Court of Appeals held that the structure of the Copyright Royalty Board violates the appointments clause because the judges exercise significant rate-making authority without effective control by a superior. That makes them "principal" officers who must be appointed by the President and confirmed by the Senate. The Judges could be considered "inferior" officers — and thus capable of being appointed by officials other than the President — only if their work was directed and supervised at some level by others who were appointed by Presidential nomination with the advice and consent of the Senate.
The Librarian of Congress, who is appointed by the President with the advice and consent of the Senate — was entrusted with approving the Judges' procedural regulations, with issuing ethical rules for the Judges, and with overseeing various logistical aspects of their duties. None of these supervisory powers seemed to give the Librarian room to play an influential role in the Judges' substantive decisions, in the court's view. In particular, the court pointed to statutory provisions specifying that the Judges could be removed by the Librarian only for misconduct or neglect of duty.
To remedy the violation, the court nullified statutory language that barred the Librarian of Congress from removing the judges, thus making them inferior officers. And because of the appointments clause violation, the court vacated a board ruling on royalty rates for digital webcasting of recorded music and remanded the case.
- See 17 U.S.C. §§801-05.
- 574 F. 3d 748 (D.C. Cir. 2009) (full-text).