United States v. American Society of Composers, Authors & Publishers
2010 U.S. App. LEXIS 19983, 96 U.S.P.Q. 2d (BNA) 1360, 627 F.3d 64 (2010)
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Rule of Law:
The transmission of a digital file containing a musical work that is not contemporaneously perceptible to the recipient (a download) does not constitute a 'public performance' of that work under the Copyright Act.
Facts:
- Yahoo! Inc. and RealNetworks, Inc. (the Internet Companies) operate websites and online services that provide music content to users.
- In addition to streaming music, which allows users to listen to songs in real-time, the companies also offer users the ability to download digital files of musical works.
- A download is a transmission of an electronic file containing a digital copy of a musical work from a company's server to a user's local hard drive.
- During the download transmission, the musical work is not audible or otherwise perceptible to the user.
- After the file is completely transferred and saved, the user must take a separate action, such as using a software program, to play the music from their local drive.
Procedural Posture:
- Yahoo! Inc. and RealNetworks, Inc. sought a determination for reasonable blanket license fees from ASCAP in the U.S. District Court for the Southern District of New York, which was acting in its capacity as a 'rate court' under a consent decree.
- During the rate-setting proceedings, a dispute arose as to whether downloads of musical works constituted public performances for which ASCAP could collect royalties.
- In an April 2007 ruling, the district court granted partial summary judgment, holding that a download does not constitute a public performance.
- The district court later issued decisions in 2008 and 2009 determining the specific license fees payable by the Internet Companies for their public performances (i.e., streams).
- ASCAP appealed the district court's ruling on the public performance issue to the U.S. Court of Appeals for the Second Circuit.
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Issue:
Does the transmission of a digital file containing a musical work over the Internet (a download) constitute a public performance of that work under the Copyright Act?
Opinions:
Majority - John M. Walker, Jr.
No. A download of a musical work is not a public performance. The Copyright Act defines 'to perform' a work as to 'recite, render, play, dance, or act it.' The court found that the ordinary, contemporary meaning of these words implies a contemporaneous perceptibility—that is, the work must be seen or heard as the action takes place. A download is merely the transfer of a data file; it involves no recitation, rendering, or playing of the music encoded within it during the transmission. The court distinguished downloads from streams, noting that a stream is a performance because the music is audible to the user as it is being transmitted, akin to a radio broadcast. The act of transmitting a performance is itself a performance, whereas transmitting a copy of a work for later performance by the user is not.
Analysis:
This decision solidifies a crucial distinction in copyright law between the right of public performance and the rights of reproduction and distribution in the digital context. By holding that downloads are not performances, the court clarified that rights-licensing organizations like ASCAP, which primarily license performance rights, cannot collect royalties for downloads under that specific right. This ruling forces a clearer separation in licensing schemes, requiring copyright holders and digital music providers to distinguish between payments for delivering a copy (reproduction/distribution) and payments for real-time, perceptible transmissions (performance). It has had a lasting impact on how digital music services are structured and licensed, affirming that different methods of digital delivery implicate different exclusive rights under the Copyright Act.
