Source: http://www.techlawjournal.com/alert/2008/01/03.asp
Timestamp: 2019-04-20 12:17:13+00:00

Document:
TLJ Daily E-Mail Alert No. 1,694, January 3, 2008.
January 3, 2008, Alert No. 1,694.
1/2. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in Leadsinger v. BMG Music Publishing, a declaratory judgment action regarding the application of copyright law to karaoke music products. The Court of Appeals affirmed the judgment of the District Court in favor of the music publishers.
Background. Leadsinger is a karaoke device manufacturer. BMG Music Publishing and the other defendants are music publishers.
Leadsinger's product is a microphone that plugs into a television. There is also a microchip inside the microphone that stores recordings of songs. The Court of Appeals wrote that "When the microphone is plugged into a television, the lyrics of the song appear on the television screen in real time as the song is playing, enabling the consumer to sing along with the lyrics."
Other karaoke products employ different technologies, such as putting the recorded songs on cassette tapes, CDs, or DVDs, or retrieving them via internet connection. Karaoke products remove or reduce, or attempt to remove or reduce, the voice component of the recording, and then display the lyrics via a television or other video display, thereby enabling the consumers or users of the product to sing along.
Leadsinger's product also includes some printed lyrics to accompany recorded songs stored in the microphone' chip. Its product also stores and displays some copyrighted photographs.
Leadsinger obtained compulsory mechanical licenses to copyrighted musical compositions.
BMG demanded that Leadsinger and other karaoke product providers pay a lyric reprint fee and a synchronization fee. Leadsinger refused. Instead, it initiated the present litigation.
District Court. Leadsinger filed a complaint in U.S. District Court (CDCal) against BMG and the other defendants seeking a declaration that it is entitled to print or display song lyrics in real time with song recordings as long as it obtains a compulsory mechanical license under 17 U.S.C. § 115, or in the alternative, that it is entitled to do so under the fair use doctrine, which is codified at 17 U.S.C. § 107.
The District Court held, in an opinion reported at 429 F. Supp. 2d 1190, that a Section 115 compulsory license does not grant Leadsinger the right to display visual images and lyrics in real time with music, and that the allegations in Leadsinger's complaint do not support its fair use claim.
The District Court disposed of this case on a motion to dismiss. Hence, it ruled based solely on the allegations contained in Leadsinger's complaint, taking all allegations as true. This is an atypical way to dispose of fair use claims, which typically are fact intensive.
Statutes. 15 U.S.C. § 102 provides that the subject matter of copyright extends to, among other things, "musical works, including any accompanying words", "sound recordings", and "literary works".
15 U.S.C. § 106 provides that "the owner of copyright under this title has the exclusive rights to do and to authorize any of the following: (1) to reproduce the copyrighted work in copies or phonorecords; ... (3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending".
17 U.S.C. § 115 provides for compulsory licensing of phonerecords. It states that "the exclusive rights provided by clauses (1) and (3) of section 106, to make and to distribute phonorecords of such works, are subject to compulsory licensing", and then sets out the compulsory licensing scheme.
17 U.S.C. § 101, the definitional section of the Copyright Act, defines "phonorecord" as "material objects in which sounds, other than those accompanying a motion picture or other audiovisual work, are fixed by any method now known or later developed, and from which the sounds can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. ..."
Section 101 defines "sound recordings" as "works that result from the fixation of a series of musical, spoken, or other sounds, but not including the sounds accompanying a motion picture or other audiovisual work, regardless of the nature of the material objects, such as disks, tapes, or other phonorecords, in which they are embodied."
Section 101 defines "audiovisual works" as "works that consist of a series of related images which are intrinsically intended to be shown by the use of machines, or devices such as projectors, viewers, or electronic equipment, together with accompanying sounds, if any, regardless of the nature of the material objects, such as films or tapes, in which the works are embodied."
There is no right titled "synchronization right" in the Copyright Act. Nor does the Copyright Act define the term "synchronization".
Court of Appeals: Section 115. Leadsinger brought the present appeal. The Court of Appeals affirmed in a unanimous opinion.
Leadsinger has only compulsory mechanical licenses obtained pursuant to Section 115. It asserted that this is sufficient to make and sell its product. The Court of Appeals reasoned that Section 115 mechanical licenses cover only "phonorecords". But, Section 101 defines phonorecords as "material objects in which sounds, other than those accompanying a motion picture or other audiovisual work, are fixed ..." It wrote that "audiovisual works are not phonorecords and are excluded from § 115's compulsory licensing scheme." And, since Leadsinger's product is an "audiovisual work", it cannot be a "phonorecord", and thus its Section 115 argument fails.
The Court of Appeals elaborated on its conclusion that Leadsinger makes an "audiovisual work" within the meaning of the Copyright Act. It explained that Leadsinger's product's "visual representation of successive portions of song lyrics" fits the statute's definition of a "series of related images which are intrinsically intended to be shown by the use of machines".
The Court of Appeals added that "The fact that the related images are comprised of song lyrics, which constitute a literary work, does not preclude us from concluding that Leadsinger's device is an audiovisual work."
Leadsinger also provides customers with some printed song lyrics. The Court of Appeals concluded that Leadsinger "is not entitled to a declaration that compulsory mechanical licenses under § 115 allow it to reprint lyrics in booklets that accompany its karaoke products". It reasoned that the lyrics are also literary works subject to copyright protection. Section 115 is an exception to the exclusive rights of copyright for phonorecords only. It wrote that "the reproduction of song lyrics on paper is not within the scope of § 115."
The Court of Appeals also noted, with little discussion, that "Though it is not explicit in the Copyright Act, courts have recognized a copyright holder's right to control the synchronization of musical compositions with the content of audiovisual works and have required parties to obtain synchronization licenses from copyright holders."
It summed up its holding regarding Leadsinger's Section 115 argument. "We hold that Leadsinger's device falls within the definition of an audiovisual work. As a result, in addition to any § 115 compulsory licenses necessary to make and distribute phonorecords and reprint licenses necessary to reprint song lyrics, Leadsinger is also required to secure synchronization licenses to display images of song lyrics in timed relation with recorded music."
Court of Appeals: Fair Use. The Court of Appeals next rejected Leadsinger's fair use argument.
The Court of Appeals applied the four part test of Section 107. First, it concluded that the first prong ("the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes") supports BMG because Leadsinger's complaint supports "only a commercial use" and "does not allege that Leadsinger's use of copyrighted lyrics is transformative".
Second, the Court of Appeals found that the second prong ("the nature of the copyrighted work") supports BMG. It wrote that "Original song lyrics are a work of creative expression, as opposed to an informational work, which is precisely the sort of expression that the copyright law aims to protect."
Third, the Court of Appeals found that the third prong ("the amount and substantiality of the portion used in relation to the copyrighted work as a whole") weighs in BMG's favor because Leadsinger uses the entirety of the copyrighted lyrics.
Fourth, the Court of Appeals wrote with respect to the fourth prong ("the effect of the use upon the potential market for or value of the copyrighted work") that the complaint is lacking. It wrote that "In arguing that its use will not affect the potential market, Leadsinger contends that there is no market for song lyrics standing alone. Leadsinger failed to allege this in its complaint and we are not willing to assume that there is no such market."
The Court of Appeals then concluded that "The showing on all other factors under § 107 is strong: the purpose and character of Leadsinger’s use is commercial; song lyrics fall within the core of copyright protection; and Leadsinger uses song lyrics in their entirety. On this basis, we affirm the district court’s dismissal of Leadsinger’s request for a declaration based on the fair use doctrine."
Other Karaoke Copyright Cases. The U.S. Court of Appeals (6thCir) issued its opinion [12 pages in PDF] in Zomba v. Panorama Records. on June 26, 2007, affirming the judgment of copyright infringement against a maker of karaoke CDs. That opinion is also reported at 491 F.3d 574.
See, also, ABKCO Music, Inc. v. Stellar Records, Inc., 96 F.3d 60 (2d Cir. 1996).
The present case is Leadsinger, Inc. v. BMG Music Publishing, et al., U.S. Court of Appeals for the 9th Circuit, App. Ct. No. 06-55102, an appeal from the U.S. District Court for the Central District of California, D.C. No. CV-04-08099-VAP, Judge Virginia Phillips presiding. Judge Milan Smith wrote the opinion of the Court of Appeals, in which Judges Diarmuid O'Scannlain and Michael Mosman joined.
12/28. The U.S. Court of Appeals (4thCir) issued yet another opinion [10 pages in PDF] in Doe v. Chao, a Privacy Act case. In this opinion the Court of Appeals reversed the District Court's token award of attorneys fees to Buck Doe.
This proceeding began a decade ago following the Secretary of Labor's publication of Social Security Numbers (SSN) of claimants to the Department of Labor for black lung benefits. The government thereby violated the Privacy Act of 1974 and the privacy of individuals.
This case has involved extensive litigation in the District Court, three appeals, and one Supreme Court opinion. The government has prevailed, not on the basis that it did not violate the statute, but on the the basis that the plaintiffs did not prove actual damages. In 2006 the District Court nevertheless awarded Buck Doe $15,887 in attorneys fees. The federal government, which zealously contests privacy claims against it, appealed. And in the just released opinion, the Court of Appeals reversed.
On September 20, 2002, the Court of Appeals issued its split opinion [53 pages in PDF] holding that a plaintiff must prove actual damages to recover under the Privacy Act for improper disclosure of SSNs by the federal government. See, story titled "4th Circuit Rules No Recovery Under Privacy Act for Disclosure of SSNs Without Showing of Actual Damages" in TLJ Daily E-Mail Alert No. 514, September 23, 2002.
The Supreme Court issued its 6-3 opinion [33 pages in PDF] affirming the Court of Appeals on February 24, 2004. See, story titled "Supreme Court Holds No Recovery Against Federal Government Under Privacy Act for Disclosure of SSNs Without Showing of Actual Damages" in TLJ Daily E-Mail Alert No. 843, February 25, 2004.
This case is Buck Doe, et al. v. Elaine Chao, U.S. Court of Appeals for the 4th Circuit, App. Ct. No. 06-2015, an appeal from the U.S. District Court for the Western District of Virginia, at Big Stone Gap, Judge Glen Williams presiding, D.C. No. 2:97-cv-00043. Judge Wilkinson wrote the opinion of the Court of Appeals, in which Judge Williams and Michael joined.
1/3. James Assey joined the National Cable and Telecommunications Association (NCTA) as Executive Vice President. He was previously Senior Democratic Counsel to the Senate Commerce Committee (SCC).
Kyle McSlarrow remains the head of the NCTA. The NCTA stated in a release that Assey will be the "NCTA's second most senior executive".
Assey replaces David Krone, who recently joined Comcast as SVP of Corporate Affairs.
Before becoming Senior Democratic Counsel to the SCC, Assey was Telecommunications Counsel for former Sen. Ernest Hollings (D-SC), who was either the SCC Chairman, or ranking Democrat, depending on which party was in the majority at the time.
Before that, Assey worked for the law firm of Willkie Farr & Gallagher. He is also an adjunct faculty member at Georgetown University's law school, where he teaches a course titled "Communications Law: Law, Policy, and Politics in the Internet Age". See also, Georgetown bio.
1:00 - 4:00 PM. The Architectural and Transportation Barriers Compliance Board's (ATBCB) Telecommunications and Electronic and Information Technology Advisory Committee will hold a meeting by teleconference. See, notice in the Federal Register, December 18, 2007, Vol. 72, No. 242, at Pages 71613-71614.
Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding ancillary terrestrial components (ATC), which allow mobile satellite service (MSS) operators to integrate terrestrial services into their satellite networks in order to augment coverage in areas where their satellite signals are largely unavailable due to blocking, by re-using their assigned MSS frequencies. This item is FCC 07-194 in IB Docket No. 07-253. See, notice in the Federal Register, November 19, 2007, Vol. 72, No. 222, at Pages 64979-64980.

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