United States v. ASCAP
United States v. ASCAP | |
---|---|
Court | United States Court of Appeals for the Second Circuit |
Full case name | United States v. American Society of Composers, Authors and Publishers et al. |
Decided | September 28, 2010 |
Citation(s) | No. 09-0539, 2010 WL 3749292 (2nd Cir. 2010) |
Court membership | |
Judge(s) sitting | Dennis Jacobs, John M. Walker, Jr. & Debra Ann Livingston |
United States v. American Society of Composers, Authors and Publishers (ASCAP) et al., No. 09-0539, 2010 WL 3749292 (2nd Cir. 2010), was a
Background information
Yahoo! and RealNetworks sought blanket licenses from ASCAP, a non-profit organization exclusively licensing more than 390,000 songwriters, composers, lyricists, and music publishers in the United States.[3] A blanket license is a "license that gives the licensee the right to perform all of the works in the repertory for a single stated fee that does not vary depending on how much music from the repertory the licensee actually uses."[1] In order to settle the royalty payments owed to the music owners represented by ASCAP, the companies and ASCAP sought an assessment from the United States District Court for the Southern District of New York.
During the proceedings to establish a reasonable royalty rate, ASCAP claimed that individual downloads count as public performances, allowing a copyright holder's exclusive performance rights to be factored into the assessment of fees in addition to the exclusive rights of reproduction and distribution. If downloads were to count as public performances, each download would serve to increase the rate of royalties owed to copyright holders that licensed through ASCAP. Yahoo! and RealNetworks disagreed, citing that downloads involved only reproduction and distribution rights, not performance rights.[4]
This case centers around the controversial issue of royalty rates for internet radio under the
This case falls under a consent decree originally entered into by ASCAP and the judicial department in 1941 as part of an antitrust case. Some scholars question the utility of such consent decrees as a means for resolving modern copyright issues, citing that such decrees failed to anticipate the modern complexities of copyright enforcement.[6]
Second Circuit's analysis
Facts
The Second Circuit established relevant facts regarding the nature of the online services provided by Yahoo! and RealNetworks. The court first identified two main categories of media provided: "radio-style"
Is a download a public performance?
The Second Circuit first reiterated the exclusive rights of copyright holders under Section 106 of the Copyright Act, including the right "to perform the copyrighted work publicly." The court also noted the undisputed fact that both Yahoo! and RealNetworks provided services by which users could download, and hence copy, musical works, thus requiring compensation to be paid to the owners of those works through ASCAP. The court then identified the main issue under review, whether or not a download is a public performance, which would require separate compensation for the copyright holders.[1]
The circuit court first referenced the definition of a performance under Section 101 of the Copyright Act, which states that "[t]o 'perform' a work means to recite, render, play, dance, or act it, either directly or by means of any device or process." The court immediately ruled out a download as being a dance or an act, and subsequently dissected the statutes of "recite," "render," and "play." Referencing Barnhart v. Sigmon Coal Co., 534 U.S. 438, 450 (2002), which held that plain statutes should be taken for "their ordinary, contemporary, common meaning," the court cited Webster's Third New International Dictionary 1895 (1981) to arrive at the definitions of the three remaining statutes. The court concluded that a musical performance "entails contemporaneous perceptibility," further citing the final clause of Section 101 as a confirmation of this definition. Thus, the circuit court upheld the district court's ruling:
The downloads at issue in this appeal are not musical performances that are contemporaneously perceived by the listener. They are simply transfers of electronic files containing digital copies from an on-line server to a local hard drive. The downloaded songs are not performed in any perceptible manner during the transfers; the user must take some further action to play the songs after they are downloaded. Because the electronic download itself involves no recitation, rendering, or playing of the musical work encoded in the digital transmission, we hold that such a download is not a performance of that work, as defined by § 101.[1]
ASCAP further argued that a download fulfilled the "public" portion of the definition under Section 101 since a download transmits a musical work to the public, thus constituting a public performance. However, the court dismissed this claim as a misreading of the definition of a performance, stating that "the definition of 'publicly' simply defines the circumstances under which a performance will be considered public; it does not define the meaning of 'performance.'"[1]
Assessment of fees
The Second Circuit also reviewed the district court's methods for determining royalty fees for each company. The circuit court found the district court's assessments flawed in the following two areas:[1]
- The district court did not adequately support its methodology in determining the number of performances of musical works that each company services provided, specifically with regards to the MUAF
- The district court did not supply an adequate explanation for the use of a uniform 2.5% royalty rate applied to each company
Conclusion and Precedence
The Second Circuit affirmed the district court's ruling that downloads are not performances, but it also
See also
References
- ^ a b c d e f g United States v. American Society of Composers, Authors and Publishers (ASCAP) et al., No. 09-0539, 2010 WL 3749292 (2nd Cir. 2010) (retrieved October 18, 2011)
- ^ Nathan, Deborah. "ASCAP asks high court to review 'public performance' ruling". Westlaw Journal Intellectual Property. Retrieved October 18, 2011.
- ^ McCool, Grant. "US Court Orders Music Download License Fee Review". Reuters UK. Retrieved November 6, 2011.
- ^ "Second Circuit Rules That Public Performance Rights Don't Apply to Certain Digital Downloads". Wilson Sonsini Goodrich & Rosati. Retrieved October 18, 2011.
- ^ Michael Roberts (May 2, 2002). "Digital Dilemma: Will new royalty fees kill Web radio?" Archived October 27, 2010, at the Wayback Machine. Westword. Retrieved November 6, 2011.
- ^ Hillman, Noel (1998), "Intractable Consent: A Legislative Solution to the Problem of the Aging Consent Decrees in United States v. ASCAP and United States v. BMI", Fordham Intellectual Property, Media & Entertainment Law Journal