ASCAP Loses Major Music Download Appeal Case; Blanket License Fee Calculation Remanded to District Court

By • October 6, 2010

The US Second District Court of Appeals has ruled against ASCAP in a landmark case involving internet companies RealNetworks and Yahoo that attempted to establish that music downloads constitute a public performance.

In a strongly worded opinion, the court affirmed the district court’s ruling that a download of a musical work does not constitute a public performance of that work. The court sent a related matter regarding the calculation of blanket license fees for RealNetworks and Yahoo back to the US Second District Court to be reconsidered.

Click here to download the complete court decision (PDF)

In the opinion written by Circuit Judge John M. Walker, Jr, the court analyzed existing copyright law and precedent, and made extensive references and explanations regarding the definition of “perform” in Section 101 of the US Copyright Act which states that “to perform a work means to recite, render, play, dance or act it, either directly or by means of any device or process.” The decision in large part hinged on the fact that a download does not include a “contemporaneously perceptible event” – that during a download, the musical work could not be heard or listened to.

After describing ASCAP’s legal conclusions as “flawed” and accusing ASCAP of misreading the court’s own opinion in a related case, Judge Walker writes, “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 [US Copyright Act] Section 101.”

ASCAP released a statement on the decision, stating, “ASCAP and its songwriter, composer and music publisher members are, of course, disappointed in the Court’s decision that there is no public performance in the transmission of certain musical downloads.  We are studying the decision and will determine what further action is appropriate. The Second Circuit remanded the rate calculation back to the district court with instructions to determine whether there are “more precise or practicable” methods of fixing a rate for the use of our members’ music.  We anticipate that in the end, the proceeding will result in a fair and favorable license fee to be paid by commercial online services for the valuable intellectual property they use to sustain their businesses — the music created and owned by the songwriters, composers and music publishers ASCAP represents.”

Comments

By Fernando Periera on October 7th, 2010 at 9:46 am

the court’s decision was the correct reading of the law as it stands. Of course, as an ASCAP member I am slightly disappointed, but I acknowledge the efficacy of the court’s opinion. That being said, the issue of just compensation for digital downloads should be viewed in the light of the litigation onslaught of the record labels via the RIAA against individual users as was demonstrated under NAPSTER. In the cases brought before the courts by the industry under the rubric of NAPSTER the foundation of record industry argument was the infringement of their ownership rights of the master recordings. that ownership right is is derivative of the underlying copyright of the writer-composers forming the basis of the master recordings. Hence, I am confident that a basis for writer-composer compensation will be derived sooner rather than later in the new media environment we find ourselves.

By Alan Palanker on October 7th, 2010 at 3:01 pm

Copying an album from a turntable to a cassette player, or a cassette to cassette transfer is the same thing as a download this court decision says. However there is a now a middleman (Yahoo,Real Networks, your cable co). As long as a fair license is reached and distributed in a fair manner,with all download providers, that’s the best we can hope for.

By Theresa Marchione on October 8th, 2010 at 2:01 pm

This is total BS. It’s just another rip off artists and songwriters. Disgusting.

By Gael MacGregor on October 10th, 2010 at 6:09 pm

As Alan stated, the Court has determined that a download is the digital equivalent of transferring music from a record or tape (or whatever) into another form or format.

What they did NOT take into account with that digital delivery, however, is that when one transferred music from the album or cassette, there was already ownership of the original source (cassette or vinyl, and later, CD) — a purchase at some source was made PRIOR to copying it to another spot.

With digital downloads, however, the download is actually the purchase. As such, there should be a fair formula for fixing compensation at a rate more than the piddling pennies currently being parsed out as if the work were nothing more than some ephemeral soundwave.

By The3rdManable on October 27th, 2010 at 5:11 am

It’s so obvious that copyright law needs to be reformed. It’s language cannot take into account the current business climate. So what. Fix the legislation. Weren’t the PROs originally formed as a stop gap to ensure artists had some hope of compensation? If so, we need a replacement model that works with existing distribution models.

Imagine a world where all one needs to do is note that a song is being used in a YouTube video before the upload. The video goes viral, with 3 million views, paying a tenth of a penny per view. That’s $3000 in the artist’s pocket, as well as a bunch of ad revenue for You Tube. It’s the way it SHOULD be. As it stands, you tube makes their ad revenue, the maker of the video gets their internet fame, and the creators of the content get…nothing. We need to FIX this.

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