Music Online Competition Act of 2001

Music Online Competition Act of 2001 - Revises Federal copyright law to extend the exemption from infringement liability to a performance of: (1) a sound recording by digital audio transmission, by or in a physical vending establishment open to the public at large without any direct or indirect admission charge, where the sole purpose of the performance is to promote the retail sale of copies or phonorecords of the work, or of the audiovisual or other devices utilized in such performance, and the performance is not transmitted beyond the place where the establishment is located and is within the immediate area where the sale is occurring; or (2) a sample of a nondramatic musical work or a sample of a sound recording by digital audio transmission, by or through a digital online service open to the public at large without such admission charge if the purpose of the performance is to promote the retail sale, distribution or license, by or through the service, of copies or phonorecords of the work, including by digital phonorecord delivery, the transmitting entity transmits the sample solely to the particular recipient requesting the transmission, and the length of the sample does not exceed 30 seconds or, in the case of a sound recording of more than five minutes in duration, ten percent of that sound recording not to exceed 60 seconds.

Modifies conditions under which the current ephemeral recording exemption is extended to multiple copies or phonorecords of a particular transmission program embodying the performance or display of certain copyright work, including broadcast transmission of a performance of a sound recording in a digital format on a nonsubscription basis.

Sets forth provisions: (1) revising the allocation of statutory performance license payments for digital audio transmission of public performances of sound recordings; (2) regarding licensing of affiliates by copyright owners of sound recordings to reproduce, to distribute to the public by means of a digital phonorecord delivery, or (as in current law) to perform the copyrighted work in public; and (3) revising requirements for the electronic administration of the compulsory license for making and distributing sound recordings (including the notice of intent, limited digital phonorecord delivery, and electronic filing of the notice of intent with the Copyright Office).

Extends the exemption of copyright infringement liability: (1) to the making of a copy or phonorecord of a sound recording or a work included in a sound recording, in a digital format, if such copy or phonorecord is created by and is incidental to the operation of a device in the ordinary course of the use of a work otherwise lawful; and (2) for the owner of a phonorecord lawfully acquired by digital phonorecord delivery, or a copy lawfully acquired by digital transmission of a literary work embodied in that phonorecord, to make another phonorecord or copy of such works, if such new phonorecord or copy is for archival purposes only and that all archival phonorecords or copies are destroyed in the event that continued possession of the phonorecord or copy should cease to be rightful.

Requires the Register of Copyrights to evaluate the impact of certain statutory sound recording performance license criteria on noninteractive digital audio transmissions.