Source: http://www.justice.gov/atr/cases/f249400/249468.htm
Timestamp: 2014-11-26 23:13:53
Document Index: 267835041

Matched Legal Cases: ['§ 102', '§ 102', '§ 115', '§ 115', '§ 115', '§ 115', '§ 8', '§ 8', '§ 1331', '§ 106', '§ 101', '§ 102', '§ 101', '§ 101', '§ 115', '§ 101']

Brief for the United States : U.S. v. American Society of Composers, Authors and Publishers, et al.
formatting). To view the PDF you will need Acrobat Reader, which may be downloaded from the Adobe site. For an official signed copy, please contact the Antitrust Documents Group. 09-0539-cv(L),
09-0542-cv(CON) / 09-0666-cv(XAP) / 09-0692-cv(XAP) / 09-1527-cv(XAP) IN THE UNITED STATES COURT OF APPEALS
Defendant-Appellant-Cross-Appellee,
In Matter of the Applications of
REALNETWORKS, INC., YAHOO! INC.,
Applicants-Appellees-Cross-Appellants.
for the Southern District of New York (Conner, J.)
BRIEF FOR THE UNITED STATES TONY WEST
Assistant Attorney General SCOTT R. MCINTOSH
NICHOLAS BAGLEY (202) 514-2498 Attorneys, Appellate Staff
Civil Division, Room 7226
Antitrust Division, Room 3224
TABLE OF CONTENTS JURISDICTIONAL STATEMENT
ARGUMENTDOWNLOADING A MUSICAL WORK OVER THE INTERNET DOES NOT CONSTITUTE "PERFORM[ING] THE COPYRIGHTED WORK PUBLICLY."
A Download Is Not a Performance
The Definition of "Publicly" Does Not Eliminate the Need for a Perceptible Performance
The District Court's Conclusion Finds Additional Support in the Compulsory Licensing Scheme for Downloads
The District Court's Decision Accords with Past Determinations of Expert Agencies
Music Authors Are Already Fairly Compensated for Downloads
CERTIFICATE OF SERVICE CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMITATION, TYPEFACE REQUIREMENTS, AND TYPE STYLE REQUIREMENTS ANTI-VIRUS CERTIFICATION TABLE OF AUTHORITIES Cases:
Bob Jones v. United States, 461 U.S. 574 (1983) Broadcast Music, Inc. v. Claire's Boutiques, 949 F.2d 1482 (7th Cir. 1991)
Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008)
Coleman v. ESPN, Inc., 764 F. Supp. 290 (S.D.N.Y. 1991)
Columbia Pictures Industries, Inc. v. Professional Real Estate Investors, Inc., 866 F.2d 278 (9th Cir. 1989)
Columbia Pictures Industries, Inc. v. Redd Horne, Inc., 749 F.2d 154 (3d Cir. 1984)
Hubbard Broadcasting, Inc. v. Southern Satellite Systems, Inc., 593 F. Supp. 808 (D. Minn. 1984), aff'd, 777 F.2d 393 (8th Cir. 1985)
Jarecki v. G.D. Searle & Co., 367 U.S. 303 (1961)
Larry Spier, Inc. v. Bourne Co., 953 F.2d 774 (2d Cir. 1992)
NFL v. PrimeTime 24 Joint Venture, 211 F.3d 10 (2d Cir. 2000)
Norton v. Sam's Club, 145 F.3d 114 (2d Cir. 1998)
United States v. ASCAP, 32 F.3d 727 (2d Cir. 1994)
United States v. ASCAP, 442 F.2d 601 (2d Cir. 1971)
United States v. ASCAP, 485 F. Supp. 2d 438 (S.D.N.Y. 2007)
WGN Continental Broadcasting Co. v. United Video, Inc., 693 F.2d 622 (7th Cir. 1982)
17 U.S.C. § 102(a)(2)
17 U.S.C. § 102(a)(7)
17 U.S.C. § 115
17 U.S.C. § 115(c)(3)(B) 17 U.S.C. § 115(c)(3)(C) 17 U.S.C. § 115(d)
Pub. L. No. 104-39 (Nov. 1, 1995)
74 Fed. Reg. 4510 (Jan. 26, 2009)
74 Fed. Reg. 4537 (Jan. 26, 2009)
H.R. Rep. No. 90-83 (1967)
H.R. Rep. No. 94-1476 (1976)
H.R. Rep. No. 105-551 (1998)
S. Rep. No. 104-128 (1995)
Other Authoritites:
Copyright Office Views on Music Licensing Reform, Hearing Before the House Subcommittee on Courts, the Internet, and Intellectual Property, 109th Cong. 20 (June 21, 2005) (available at www.copyright.gov/docs/regstat062105.html)
Digital Millenium Copyright Act Section 104 Report: Hearing Before the House Subcommittee on Courts, the Internet, and Intellectual Property, 107th Cong. 15 (2001) (available www.copyright.gov/docs/regstat121201.html)
Information Infrastructure Task Force, The Report of the Working Group on Intellectual Property Rights (Sept. 1995)
M. Nimmer, Nimmer on Copyrights § 8.14[C][3] (1983) Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 8.14[C][3] (2006)
Music Licensing Reform: Hearing Before the Senate Subcommittee on Intellectual Property, 109th Cong. 118-19 (July 12, 2005) (available at www.copyright.gov/docs/regstat071205.html)
Reforming Section 115 of the Copyright Act for the Digital Age, Hearing Before the House Subcommittee on Courts, the Internet, and Intellectual Property, 110th Cong. 28-29 (Mar. 22, 2007) (available at www.copyright.gov/docs/regstat032207-1.html)
U.S. Copyright Office, Digital Millennium Copyright Act Section 104 Report to the United States Congress (2001)
Webster's New World College Dictionary (4th ed. 2006) World Intellectual Property Organization Copyright Treaty (Dec.20, 1996) IN THE UNITED STATES COURT OF APPEALS
09-0539-cv(L), 09-0542-cv(CON), 09-0666-cv(XAP), 09-0692-cv(XAP), 09-1527-cv(XAP) UNITED STATES,
BRIEF FOR THE UNITED STATES JURISDICTIONAL STATEMENT The district court had jurisdiction under 28 U.S.C. §§ 1331, 1337, and 1345. The court entered final judgment as to Yahoo! on January 16, 2009 and as to RealNetworks on January 20, 2009. ASCAP filed notices of appeal on February 9, 2009, within the time provided by Rule 4(a)(1) of the Federal Rules of Appellate Procedure. This Court has jurisdiction under 28 U.S.C. STATEMENT OF THE ISSUE PRESENTED FOR REVIEW Whether downloading an electronic file containing a digital sound recording of a copyrighted musical work constitutes "perform[ing] the copyrighted work publicly" within the meaning of the Copyright Act. STATEMENT OF THE CASE In 1941, the United States brought an antitrust action against the American Society of Composers, Authors and Publishers (ASCAP), which is in the business of licensing the rights to publicly perform musical works. ASCAP entered into a consent decree under which it agreed to provide, on a negotiated fee schedule, a license to anyone seeking to publicly perform the copyrighted works that it has authority to license. Should negotiations over licensing fees fall through, the consent decree provides that an aggrieved party can ask the United States District Court for the Southern District of New York to set a fair rate for a license to publicly perform copyrighted works. The consent decree remains in effect today. These appeals arise out of applications from three internet companies asking the district court to determine, among other things, whether the companies "perform [a] copyrighted work publicly" within the meaning of the Copyright Act � and thus are required to obtain licenses from ASCAP � when they allow their customers to download over the internet files containing digital copies of those works. The district court held that they did not, and ASCAP has appealed that determination. STATEMENT OF FACTS Statutory Background. The Copyright Act confers upon the owner of a copyrighted musical work various exclusive rights, chief among them the rights to reproduce the work, to distribute it, and to "perform [it] publicly." 17 U.S.C. § 106. For copyright purposes, a "musical work" consists of the notes and lyrics of a song, distinct from any single performance of that work. When a musical work is performed by a particular artist and the ensuing "series of musical, spoken, or other sounds" is fixed in a recording medium, the resulting work is a "sound recording." Id. § 101 (definition of "sound recording"). Although both a "musical work" and a "sound recording" are embodied in a phonorecord, they are distinct works under the Copyright Act, id. § 102(a)(2), (7), and may be owned and licensed separately. In its definitional section, the Copyright Act provides 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 or, in the case of a motion picture or other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible." 17 U.S.C. § 101. The Act further provides that performing a work "publicly" means to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times. Id. The Current Proceeding.
In 1941, the United States brought an action against the American Society of Composers, Authors and Publishers (ASCAP), for alleged violations of the Sherman Act. ASCAP, like Broadcast Music, Inc. and SESAC, Inc., is a membership organization that represents music publishers, songwriters, and composers. ASCAP's business is licensing the right to publicly perform its members' musical works. The company runs what is in essence a clearinghouse, providing those who want to publicly perform a copyrighted work with a straightforward mechanism to pay ASCAP members for the right to do so. ASCAP collects royalties on those transactions, which it distributes to the copyright holders (music publishers) and authors (composers and songwriters) that it represents. See 17 U.S.C. § 101 (defining "'performing rights society'" to include ASCAP). ASCAP only licenses the right to publicly perform a copyrighted work, and does not license the so-called "mechanical rights," which is to say, the rights to reproduce and distribute the work�traditionally on compact discs or sheet music, but more recently through downloads. Dividing the licensing of mechanical and performance rights made sense for most of the twentieth century: Radio stations would turn to clearinghouses like ASCAP to license public performances of musical works, and record companies would secure separate licenses to reproduce and distribute musical works for private listening. To settle the original antitrust action, ASCAP entered into a consent decree governing many aspects of how it could conduct its business. In part, the decree required ASCAP to provide, on a negotiated fee schedule, a license to anyone seeking to publicly perform copyrighted musical works. If fee negotiations reached an impasse, the decree provides for the United States District Court for the Southern District of New York, on an application from an aggrieved party, to take evidence and set an appropriate licensing fee. Since 1941, the decree has been amended several times, but its basic structure (at least as relevant here) remains intact. Consistent with the decree, the district court has acted from time to time as a rate-making body, and this Court has entertained appeals from decisions issued in connection with the consent decree. See, e.g., United States v. ASCAP, 442 F.2d 601 (2d Cir. 1971). These appeals arise out of applications filed in the district court pursuant to the consent decree by AOL, Yahoo! Inc., and RealNetworks, Inc. The applicants are internet companies, and, as part of their businesses, they provide downloads of recorded music to their customers. As a general matter, a download occurs when a consumer purchases a song from an on-line music service (such as iTunes) and a file containing a digital recording of the song is transferred from a remote server to the hard drive on the consumer's computer. In the downloads at issue in these appeals, the contents of the file are not played during the download; rather, after the download is complete, the customer uses software on his computer to play the recording, at which time � and only at which time � he perceives the music. See United States v. ASCAP, 485 F. Supp. 2d 438, 441 (S.D.N.Y. 2007) (providing a detailed technical description of an internet download). The transfer of a digital recording over the internet and the resulting creation of a copy on a local hard drive amount to the "distribution" and "reproduction" of the work. See 17 U.S.C. § 115(d). As a result, the applicants are required to pay copyright holders�and do pay them�for licenses to distribute and reproduce their works via downloading. ASCAP, however, does not license distribution or reproduction rights; it only licenses public performance rights. ASCAP has accordingly taken the position that each and every download of a musical work also amounts to a public performance of that work. In so arguing, ASCAP seeks to compel the applicants to pay it (or one of its competitors) a licensing fee for each song that is downloaded from the applicants' services. This would put the applicants in the position of having to pay the same copyright holder for two separate licenses to engage in the same act with respect to a single musical work. The applicants disagreed with ASCAP over whether downloading a song over the internet is a "public performance" of the copyrighted musical work, and that disagreement contributed significantly to the breakdown of licensing negotiations. The applicants therefore turned to the district court, arguing inter alia that a download does not constitute a "public performance" and hence that they are not obligated to obtain an additional license from ASCAP. The Decision on Appeal.
On April 25, 2007, the district court granted partial summary judgment for the applicants and held that "principles of statutory construction, as well as analogous case law and secondary authorities, dictate that, in order for a song to be performed, it must be transmitted in a manner designed for contemporaneous perception." United States v. ASCAP, 485 F. Supp. 2d 438, 443 (S.D.N.Y. 2007). The court began its analysis by noting that the Act defines "perform" to mean "to recite, render, [or] play" a musical work, 17 U.S.C. § 101, and that digitally downloading a work without listening to it does not fit within the ordinary meaning of any of those words. "All three terms require contemporaneous perceptibility." Id. For support, the court also pointed to statements by the Copyright Office that a digital download of an electronic music file does not constitut