|2nd Circuit Rules Webcasting Service is Not an
Interactive Service Under Section 114
8/21. The U.S. Court of Appeals (2ndCir) issued its
opinion [42 pages in PDF] in Arista Records v. Launch Media, affirming the
judgment of the District Court, and holding that a webcasting service is not an
interactive service within the meaning of
U.S.C. § 114(j)(7).
This is the first Court of Appeals opinion on this issue. (The Library of
Congress's Copyright Office declined to
rule on the meaning of interactive service back in 2000.)
This ruling is a victory for internet radio providers and a defeat for record companies.
Jonathan Potter, head of the Digital Media Association
(DiMA), which represents webcasters, stated in a
release that "After ten years of record industry threats and litigation,
DiMA is thrilled that the Second Circuit confirmed what Internet radio services
and listeners already know -- that consumer-influenced radio promotes the
discovery of new music, promotes artists and delivers to fans an experience that
benefits all participants in the music industry. Hopefully this verdict
will clear a path for a new wave of internet radio investment and innovation."
The Court of Appeals' decision turned on the meaning of obscure language in
Section 114(j)(7) of the Copyright Act.
Background. The plaintiffs in the District Court and appellants before the 2nd Circuit
are Arista Records, Bad Boy Records, BMG Music, and Zomba Recording. In
addition, several other record companies were plaintiffs below, but did not join
in the present appeal: Capitol Records, Virgin Records
America, Sony Music Entertainment, UMG Recordings, Interscope Records and Motown
Launch Media operates an internet radio website, or webcasting service, named
Launchcast. The Court of Appeals wrote that Launchcast "enables a user to create
``stations´´ that play songs that are within a particular genre or similar to a
particular artist or song the user selects", including sound recordings in which
the plaintiffs hold the copyrights.
The Court of Appeals described the users' control of content with Launchcast.
Among other things, "the user is prompted to select
artists whose music the user prefers. The user is then asked which music genres
the user enjoys and asked to rate the genres on a scale. The user is also asked
the percentage of new music -- songs the user has not previously rated -- the
user would like to incorporate into the user’s station (the ``unrated
quota´´) and whether the user permits playing songs with
profane lyrics." (Parentheses in original. Footnote omitted.)
Then, music is played "based on the user's preferred
artists and genres" and "the user rates the songs, artists, or albums LAUNCHcast
plays". Users can subscribe to the "stations" of other users. Users can pause or
skip songs. There are numerous other features. But, the user cannot select the
actual songs, or even a single song, on the playlist when it uses the Launchcast
service. Song selections are randomly generated by the Launchcast service.
The plaintiffs filed a complaint in the
U.S. District Court (SDNY) against
Launch Media alleging willful infringement of their copyrights in sound recordings in
violation of Section 114.
The plaintiffs alleged that between November 1999 and May 2001
Launchcast provided an interactive service and therefore was required to obtain
individual licenses from from the plaintiffs to play their sound recordings.
Yahoo acquired Launch Media.
The case proceeded to trial by jury in the District Court. The
jury returned a verdict that Launch Media does not provide an interactive
service and is therefore not liable for paying the copyright holders a licensing
fee for each individual song. This appeal followed.
17 U.S.C. § 106(6) provides that subject to the limitations contained in
Section 114 and elsewhere, "the owner of copyright ... has the
exclusive rights to do and to authorize any of the following ... (6) in the case
of sound recordings, to perform the copyrighted work publicly by means of a
digital audio transmission".
Section 114 pertains to "Scope of exclusive rights in sound recordings".
Subsection 114(d)(3)(C) provides that "(d) Limitations on exclusive right.
... (3) Licenses for transmissions by interactive services. ... (C)
Notwithstanding the grant of an exclusive or nonexclusive license of the right
of public performance under section 106 (6), an interactive service may not
publicly perform a sound recording unless a license has been granted for the
public performance of any copyrighted musical work contained in the sound
recording: Provided, That such license to publicly perform the copyrighted
musical work may be granted either by a performing rights society representing
the copyright owner or by the copyright owner."
Subsection 114(j) contains definitions. Subsection 114(j)(7) provides that
"An ``interactive service´´ is one that enables a member of the public to
receive a transmission of a program specially created for the recipient, or on
request, a transmission of a particular sound recording, whether or not as part
of a program, which is selected by or on behalf of the recipient. The ability of
individuals to request that particular sound recordings be performed for
reception by the public at large, or in the case of a subscription service, by
all subscribers of the service, does not make a service interactive, if the
programming on each channel of the service does not substantially consist of
sound recordings that are performed within 1 hour of the request or at a time
designated by either the transmitting entity or the individual making such
request. If an entity offers both interactive and noninteractive services
(either concurrently or at different times), the noninteractive component shall
not be treated as part of an interactive service." (Parentheses in original.)
Court of Appeals. The Court of Appeals affirmed.
It wrote that the issue is "whether a webcasting service that provides users with individualized internet radio stations
-- the content of which can be affected by users' ratings of songs, artists, and albums
-- is an interactive service within the meaning of 17 U.S.C. § 114(j)(7). If it is an interactive service, the webcasting service would be required to pay individual licensing fees to those copyright holders of the sound recordings of songs the webcasting service plays for its users. If it is not an interactive service, the webcasting service must only pay a statutory licensing fee set by the Copyright Royalty Board."
After a lengthy discussion of the legislative history, and analysis of the
statutory language, the Court of Appeals concluded that such a webcasting
service is not an interactive service.
This case is Arista Records, LLC, et al. v. Launch Media, Inc., U.S. Court of Appeals
for the 2nd Circuit, App. Ct. No. 07-2576-cv, an appeal from the U.S. District Court for the
Southern District of New York, Judge Owen presiding. Judge Wesley wrote the opinion of the
Court of Appeals, in which Judges Calabresi and Christopher Droni (USDC/DConn) joined.
Judge Richard Wesley also wrote in this opinion that
"The Commerce Department ... oversees the Copyright Office ..." (At page 13.)
He also wrote the 2004 opinion of the 2nd Circuit in
Swedenburg v. Kelly, 358 F.3d 223, which the Supreme Court
reversed in its 2005 opinion in Granholm v. Heald, 544 U.S. 460. See,
story titled "Supreme Court Rules in Internet Wine Sales Case" in
TLJ Daily E-Mail
Alert No. 1,137, May 17, 2005. Wesley also wrote the July 1, 2009, opinion
of the 2nd Circuit in Arnold's Wine v. Boyle. See, story titled "2nd Circuit Again
Addresses Wine Sales and Commerce Clause" in TLJ Daily E-Mail
Alert No. 1,965, July 2, 2009.
|District Court Enjoins RealDVD
8/11. The U.S. District Court (NDCal)
issued a preliminary injunction in litigation between RealNetworks and member
companies of the Motion Picture Association of
America (MPAA) regarding RealDVD software. The District Court enjoined sale
of RealDVD on the grounds that it violates the anti-circumvention provisions of the
Digital Millennium Copyright Act (DMCA) and the Content Scramble System (CSS) license.
MPAA member companies filed a
[18 pages in PDF] in U.S. District Court
(CDCal) against RealNetworks on September 30, 2008, alleging violation of
the anti-circumvention provisions of the DMCA, codified at
17 U.S.C. § 1201, and breach of contract. RealNetworks filed its own
complaint in U.S. District Court (NDCal)
against the movie companies seeking declaratory relief.
RealDVD software enables
users to make permanent copies of copyrighted and CSS protected content of DVDs,
including rental DVDs. See, story titled "Movie Companies Sue RealNetworks for
Selling DVD Copying Software" in
TLJ Daily E-Mail
Alert No. 1,835, September 30, 2008.
RealNetworks stated in a
release that "We are disappointed that a preliminary injunction has been
placed on the sale of RealDVD. We have just received the Judge's detailed ruling
and are reviewing it. After we have done so fully, we'll determine our course of
action and will have more to say at that time."
Dan Glickman, head of the MPAA, stated in a
release that "We are very pleased with the court’s decision. This is a
victory for the creators and producers of motion pictures and television shows
and for the rule of law in our digital economy. Judge Patel’s ruling affirms
what we have known all along: RealNetworks took a license to build a DVD-player
and instead made an illegal DVD-copier. Throughout the development of RealDVD,
RealNetworks demonstrated that it was willing to break the law at the expense of
those who create entertainment content."
This case is RealNetworks, Inc. and RealNetworks Home Entertainment, Inc.
v. DVD Copy Control Association, Inc., et al., and consolidated cases, U.S.
District Court for the Northern District of California, D.C. Nos. C08 04548 MHP
and C08 04719 MHP, Judge Marilyn Patel presiding.
|WTO Panel Rules in PRC IPR
8/11. A panel of the World Trade Organization
(WTO) released its
pages in PDF] on the complaint filed by the U.S. against the People's Republic
of China (PRC) regarding its access barriers for US content distributors. See also,
containing the final 9 pages, subtitled "Conclusions and Recommendations". The
panel concluded that the PRC's access barriers violate its WTO commitments.
On April 10, 2007, the U.S. filed its complaint (nominally a request for
consultations) with the WTO. See,
titled "US to Complain to WTO Regarding PR China's Failure to Protect IPR" in
TLJ Daily E-Mail
Alert No. 1,562, April 9, 2007. The European Communities joined in the
complaint in April. Japan, Korea, Taiwan and Australia reserved their third
Ron Kirk, head of the Office of the U.S. Trade
Representative (OUSTR) stated in a
release the "WTO panel handed a significant victory to America's creative
He continued that "These findings are an important step toward ensuring
market access for legitimate U.S. products in the Chinese market, as well as
ensuring market access for U.S. exporters and distributors of those products."
Kirk also said that "This decision promises to level the playing field for
American companies working to distribute high-quality entertainment products in
China, so that legitimate American products can get to market and beat out the
pirates. To me, that is a clear win. We believe that this report will help pave
the way toward more open trade between China and America."
The Motion Picture Association of America (MPAA)
stated in a
release that "The WTO decided in the U.S. government’s favor on virtually
every count, declaring some of China’s most difficult barriers to its
entertainment market to be clear violations of international trade rules. ...
The WTO struck down China's film import monopoly as well as the barriers that
keep U.S. companies from importing and distributing DVDs in China."
The MPAA added that the OUSTR "also challenged the monopoly China maintains
over the distribution of U.S. movies shown in Chinese theaters, and the WTO
ruled that -- based on the statements that China made during the proceeding --
China’s laws do not prevent opening this market to competition, another
long-sought objective of the industry."
The MPAA also stated that "This ruling will complement our strategy to fight
movie piracy in China. In spite of all the
restrictions we face, there is no shortage of U.S. filmed entertainment in
China. Unfortunately, far too much of it is pirated, benefiting neither the
legitimate Chinese businesses that are tied to and profit from showing U.S.
movies nor, of course, the U.S. companies that are playing by the rules. This
ruling represents a positive step in promoting the growth of legitimate U.S.
movies in a market that is growing rapidly, and with great potential."
The Recording Industry Association of America
(RIAA) stated in a
release that "We highlight one aspect of the report on which the finding was
not clear. The panel did not explicitly find that China’s discriminatory censorship
process violated their WTO commitments. However, this finding -- or lack thereof -- was
of a technical nature related to the panel's surprisingly narrow reading of
the relevant U.S. claim. The panel was troubled by the discriminatory elements
of the censorship review process, but was unclear that the U.S. has pled a
particular cause of action. Nonetheless, the panel report has essentially
provided a roadmap of how this measure could be challenged; having already
found that it is facially discriminatory."
Ed Black, head of the Computer &
Communications Industry Association (CCIA), stated in a
that "We're pleased with the ruling as it improves access to information for
Chinese citizens and can help clear up problems that were contributing to the
piracy of music and movies. The US government took on a legitimate concern of
US innovators trying to do business in China. This is a good first step, but
other US innovators continue to face trade barriers. We look forward to the US
government continuing the fight not just against limiting hard information
goods like a copyrighted song, but also attempts by China to block US
companies from offering information services on the Internet."
|This issue contains the following items:
• 2nd Circuit Rules Webcasting Service is Not an
Interactive Service Under Section 114
• District Court Enjoins RealDVD
• WTO Panel Rules in PRC IPR Case
• FCC Releases Agenda for August 27 Meeting
|FCC Releases Agenda for August
8/20. The Federal Communications Commission (FCC) released an
agenda for its event titled "Open Commission Meeting" scheduled for
Thursday, August 27, 2009. It is scheduled to adopt three Notices of Inquiry (NOI).
The FCC is scheduled to adopt a NOI regarding "factors that
encourage innovation and investment in wireless" communications. This proceeding
is GN Docket No. 09-51.
The FCC is scheduled to adopt a NOI regarding its next annual
report to the Congress on the status of competition in the mobile wireless
market. This proceeding is WT Docket No. 09-66.
The FCC is scheduled to adopt a
NOI regarding "whether there are opportunities to protect and empower
American consumers by ensuring sufficient access to relevant information about
communications services". This NOI references CC Docket No. 98-170 (a long
running proceeding regarding government regulation of what carriers may and/or must
put in their customers' bills), and WC Docket No. 04-36 (the far reaching IP
enabled services proceeding).
This event is scheduled for 10:00 AM on Thursday, August 27, 2009, in the
FCC's Commission Meeting Room, Room TW-C305, 445 12th Street, SW.
The FCC's events titled "Open Commission Meeting" do not always begin at the
scheduled time. These events sometimes do not take place. The FCC does not
always take up all of the items on its published agendas. The FCC sometimes adds
items to the program without providing the "one week" notice required
5 U.S.C. § 552b. The FCC does not release at its events copies of the items
that it adopts at its events.
New items are highlighted in
|Monday, August 24
The House will not meet. It will return
from its August recess on September 8.
The Senate will not meet. It will return from its August recess on
Deadline to submit comments to the Department of Homeland Security's (DHS)
U.S. Citizenship and Immigration Services (USCIS) regarding "the E-Verify Program
Designated Agent Process under which a participating employer may choose to outsource
submission of employment eligibility verification queries for newly hired employees to
a Designated Agent". See,
notice in the Federal Register, June 23, 2009, Vol. 74, No. 119, at Page 29711.
|Tuesday, August 25
12:00 NOON - 1:30 PM. The
Center for American Progress
(CAP) will host a panel discussion on immigration policy. See
and registration page. Lunch will be served. Location: 1333 H St., NW.
6:00 - 9:15 PM. The DC
Bar Association will host an event titled "How to Recognize
Critical Software Intellectual Property Issues in Everyday Practice".
The speakers will be David Temeles (Bean Kinney & Korman) and Todd Trivett
(Jeff Parmet & Associates). The price
to attend ranges from $89 to $129. Most DC Bar events are not open to the public. See,
notice. Location: DC Bar Conference Center, 1101 K St., NW.
Deadline to submit comments to the U.S.
Patent and Trademark Office (USPTO) regarding complaints concerning invention promoters
and responses from the invention promoters to these complaints. See,
notice in the
Federal Register, June 26, 2009, Vol. 74, No. 122, at Pages 30528-30529.
|Wednesday, August 26
No events listed.
|Thursday, August 27
The Federal Communications Committee (FCC) may hold a meeting titled
"August Agenda Meeting". Location: FCC, Commission Meeting Room, 445 12th
|Friday, August 28
The Federal Communications Commission (FCC) will
hold a mock auction in advance of
Auction 79, regarding 122 construction permits in the FM broadcast
service. See, May 29, 2009,
public notice (DA 09-152), and
notice in the
Federal Register, May 29, 2009, Vol. 74, No. 102, at Pages
Deadline to submit certain reply comments to the Federal Communications
Commission (FCC) in response to its supplemental
Notice of Inquiry [22 pages in PDF] regarding its preparation of a
video competition report for the years ending June 30, 2007, June 30,
2008, and June 20, 2009. This deadline pertains to comments regarding 2009.
See, notice in
the Federal Register, April 27, 2009, Vol. 74, No. 79, at Pages 19085-19091.
See also, story titled "FCC Resumes Its Statutory Obligation to Study Video
TLJ Daily E-Mail Alert No. 1,886, January 21, 2009, and story titled "FCC
Releases Amended NOI on Annual Video Competition Reports" in
TLJ Daily E-Mail
Alert No. 1924, April 11, 2009.
Deadline to submit comments to the
Copyright Office (CO) in response to
its notice of proposed rulemaking regarding requiring that applications for
registration paid for by deposit account debits be submitted electronically
using the electronic Copyright Office registration system. The CO is also
requesting comment as to whether deposit accounts offer sufficient
efficiencies to continue offering this service. See,
notice in the
Federal Register, July 14, 2009, Vol. 74, No. 133, at Pages 33930-33932.
|Monday, August 31
Further extended deadline to submit comments to the
U.S. Patent and Trademark Office (USPTO)
regarding deferral of examination for patent applications. See,
notice in the
Federal Register, June 16, 2009, Vol.74, No. 114, at Pages 28473-28474. The
extended deadline was May 29, 2009. See,
extension in the Federal Register, March 9, 2009, Vol. 74, No. 44, at Page
10036. The original deadline was February 27, 2009. See, original
notice in the
Federal Register, January 28, 2009, Vol. 74, No. 17, at Pages 4946-4947.
Deadline to submit reply comments to the Federal Communications
Commission (FCC) in response to its further notice of proposed rulemaking (FNPRM)
regarding number porting. The FCC adopted and released the
[56 pages in PDF] of this FNPRM on May 13, 2009. It is FCC 09-41 in WC Docket No. 07-244
and CC Docket No. 95-116. See,
notice in the Federal Register, July 2, 2009, Vol. 74, No. 126, at Pages 31667-31675.
Deadline to submit initial comments to the
Copyright Office regarding its proposed rules
regarding registration of copyright in online works. See,
notice in the Federal
Register, July 15, 2009, Vol. 74, No. 134, at Pages 34286-34290, and story titled
"Copyright Office Proposes New Rules for Registration of Online Only Works"
in TLJ Daily E-Mail Alert No. 1,970, July 15, 2009.
Deadline to submit comments to the
National Institute of Standards and Technology's (NIST)
Computer Security Division (CSD) regarding its draft
Publication (SP) 800-126 [42 pages in PDF] titled "The Technical Specification
for the Security Content Automation Protocol (SCAP)".
|About Tech Law
Tech Law Journal publishes a free access web site and
a subscription e-mail alert. The basic rate for a subscription
to the TLJ Daily E-Mail Alert is $250 per year for a single
recipient. There are discounts for subscribers with multiple
Free one month trial subscriptions are available. Also,
free subscriptions are available for journalists, federal
elected officials, and employees of the Congress, courts, and
executive branch. The TLJ web site is free access. However,
copies of the TLJ Daily E-Mail Alert are not published in the
web site until two months after writing.
For information about subscriptions, see
subscription information page.
Tech Law Journal now accepts credit card payments. See, TLJ
card payments page.
TLJ is published by
carney at techlawjournal dot com
P.O. Box 4851, Washington DC, 20008.
Copyright 1998-2009 David Carney. All rights reserved.