Source: https://www.scribd.com/document/19040172/Arista-v-Launch
Timestamp: 2017-12-15 05:42:01
Document Index: 574099190

Matched Legal Cases: ['§ 114', '§ 114', '§ 114', '§ 114', '§ 106', '§ 106', '§ 106', '§ 101', '§ 114', '§ 114', '§ 114', '§ 114', '§ 114', '§ 114', '§ 114', '§ 106', '§ 114', '§ 114', '§ 114', '§ 114', '§ 114', '§ 1', '§ 114', '§ 114', '§ 114', '§ 114', '§ 101', '§ 114', '§ 114']

Arista v Launch | Copyright | Copyright Infringement
Arista Records, LLC, Bad Boy Records, BMG Music, and Zomba Recording LLC (collectively, “BMG”), appeal from the judgment of the United States District Court for the Southern District of New York (Owen, J.), and from interlocutory orders merged into the judgment, finding that the webcasting – internet radio – service LAUNCHcast provided by Defendant-Appellee Launch Media, Inc. (“Launch”) was not an interactive service within the meaning of 17 U.S.C. § 114(j)(7). We affirm because as a matter of law LAUNCHcast was not an interactive service. It does not provide copyrighted sound recordings on request, nor does it transmit a program specially created for the user within the meaning of § 114(j)(7). A FFIRMED. H ADRIAN R. K ATZ (Sarah M. Brackney, on the brief), Arnold & Porter, LLP, Washington, DC (Robert A. Goodman, on the brief, New York, NY), for Plaintiffs-Appellants. M ICHAEL S. E LKIN, (Thomas P. Lane, Shari Markowitz Savitt, on the brief), Winston & Strawn LLP, New York, NY, for Defendant-Appellee.
W ESLEY, Circuit Judge: We are the first federal appellate court called upon to determine 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
BMG Music, and Zomba Recording LLC (collectively, “BMG”) brought suit against Launch Media, Inc. (“Launch”) alleging that Launch violated provisions of the Digital Millennium Copyright Act of 1998, Pub. L. 105-304, 112 Stat. 2860 (1998) (the “DMCA”), codified in relevant part in 17 U.S.C. § 114, by willfully infringing sound recording copyrights of BMG from 1999 to 2001. The United States District Court for
recordings of some of the songs LAUNCHcast plays for users. BMG, as a sound recording copyright holder, has no copyright in the general performance of a sound recording, see 17 U.S.C. §§ 106(4), 114(a), but BMG does have the exclusive right “to perform the copyrighted [sound Page 4 of 42
recording] publicly by means of a digital audio transmission,” 17 U.S.C. § 106(6). Launch does not dispute
that LAUNCHcast provides a digital audio transmission within the definition of § 106(6). 114(j)(5). See 17 U.S.C. §§ 101,
– i.e., play or broadcast – its copyrighted sound recording pay an individual licensing fee to BMG if the performance of the sound recording occurs through an “interactive service.” See 17 U.S.C. § 114(d)(3)(C). An interactive service is defined as a service “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 . . . , which is selected by or on behalf of the recipient.” Id. § 114(j)(7). If a digital audio transmission is not an
interactive service and its “primary purpose . . . is to provide to the public such audio or other entertainment programming,” id. § 114(j)(6), the transmitter need only pay a compulsory or statutory licensing fee set by the Copyright Royalty Board made up of Copyright Royalty Judges appointed by the Library of Congress, 3 see id. § 114(f). Prior to 2004, parties were required to submit their claims for statutory licensing fees to Copyright Arbitration Royalty Panels. This system was phased out by the Copyright Page 5 of 42
Royalty and Distribution Reform Act of 2004, Pub. L. 108419, 118 Stat. 2341 (2004), codified in relevant part at 17 U.S.C. § 114(f). The substance of Boulter and Johnson’s accounts of LAUNCHcast operation are provided in greater detail infra. Page 6 of 42
claims the district court’s jury instruction was error in several respects. Discussion The district court charged the jury with determining whether LAUNCHcast was an interactive service within the meaning of § 114(j)(7). The district court indicated that it was for the jury “to decide how much influence a consumer or a recipient can have on the programing offered by the transmitting entity – . . . the broadcaster – before that activity must be characterized as interactive, keeping in mind the purpose of the statute.” On two separate occasions
(2d Cir. 1998). An “interactive service” according to the statute 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.” § 114(j)(7). 17 U.S.C. “is
Sound Recordings Act of 1995, Pub. L. No. 104-39, 109 Stat. 336, codified as 17 U.S.C. § 106. Therefore, holders of
Right in Sound Recording: Hearing on H.R. 1506 Before the H. Comm. on the Judiciary, Subcomm. on Courts & Intellectual Prop., 104th Cong. (1995) (statement of Jason Berman, Page 12 of 42
digital audio transmissions through paid subscriptions services and “interactive services.” (1995). See 17 U.S.C. § 114(d)
Music Copyrights, 53 C ASE W. R ES. L. R EV. 673, 692 (2003). Under the DPSR, interactive service was defined as one that enables a member of the public to receive, on request, a transmission of a particular sound recording chosen 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 does not make a service interactive. If an entity offers both interactive and non-interactive services (either concurrently or at different times), the non-interactive component shall not be treated as part of an interactive service. 17 U.S.C. § 114(j)(4) (1995). Page 14 of 42
Ginsburg, Copyright Legislation for the “Digital Millennium,” 23 C OLUM.-VLA J.L. & A RTS 137, 167 (1999) (emphasis added). The House also noted the importance of striking a balance between, on one hand, protecting sound recording copyright holders to promote sales, distribution, and development of new music, and, on the other hand, making development of new media and forms of distribution “economically []feasible.” H.R. Rep. No. 104-274, at 14.
provide free – i.e., nonsubscription – services that do not provide particular sound recording on request and are therefore not interactive within the meaning of term under the DPSR, at that time fell outside the sound recording copyright holder’s right of control. C OLUM.-VLA J.L. & A RTS at 167. See Ginsburg, 23
concerned that these webcasting services were allowing users to copy music transmitted to their computer via webcast for free, see Note, June Chung, The Digital Performance Right in Sound Recording Act and Its Failure to Address the Issue of Digital Music’s New Form of Distribution, 39 A RIZ. L. R EV. 1361, 1367 (1997) (explaining how a webcasting user could record and copy webcasted music onto the user’s computer), or to listen to these webcasting services in lieu of purchasing music, see Comment, Kimberly L. Craft, The Webcasting Music Revolution Is Ready to Begin, as Soon as We Figure Out the Copyright Law: The Story of the Music Industry at War with Itself, 24 H ASTINGS C OMM. & E NT. L.J. 1, Page 17 of 42
webcasting services were causing a diminution in record sales, which the companies feared would cut into profits and stunt development of the recording industry. H ASTINGS C OMM. & E NT. L.J. at 12-13. See Craft, 24
Internet: Hearing on H.R. 2265 Before H. Comm. on the Judiciary, Subcomm. on Courts & Intellectual Prop., 105th Cong. (1997) (statement of Cary H. Sherman, Senior Executive Vice President and General Counsel of the RIAA). In light of these concerns, Congress enacted the current version of § 114 under the DMCA in 1998. The term
§ 114(j)(7). According to the House conference report, The conferees intend that the phrase “program specially created for the recipient” be interpreted reasonably in light of the remainder of the definition of “interactive service.” For example, a service would be interactive if it allowed a small number of individuals to request that sound recordings be performed in a program specially created for that group and not available to any individuals outside of that group. In contrast, a service would not be interactive if it merely transmitted to a large number of recipients of the service’s transmissions a program consisting of sound recordings requested by a small number of those listeners. H.R. Rep. No. 105-796, at 87-88 (Conf. Rep.). The House report continued that a transmission is considered interactive “if a transmission recipient is permitted to select particular sound recordings in a prerecorded or predetermined program.” Id. at 88. “For
enacting the § 114(j)(7), “Congress sought to identify a service as interactive according to the amount of influence a member of the public would have on the selection and performance of a particular sound recording.” However, the
For the following analysis of LAUNCHcast’s service we rely on Plaintiffs’ Exhibits 260 and 262, in which Boulter describes how LAUNCHcast operated, as well as the report submitted by Johnson offering essentially the same analysis. Federal judges are appointed for life. U.S. C ONST. art. III, § 1. Our familiarity with the ever-changing terms and technology of the digital age is, to say the least, varied. We have attempted to portray the processes and procedures of LAUNCHcast in lay terms, understandable to ourselves and the public. LAUNCHcast disregards the unrated quota selected by the user if the number of rated songs LAUNCHcast uses to generate a playlist for the user is less than 100. This is Page 23 of 42
noted, a webcasting service such as LAUNCHcast is interactive under the statute if a user can either (1) request – and have played – a particular sound recording, or (2) receive a transmission of a program “specially created” for the user. 42 U.S.C. § 114(j)(7). A LAUNCHCAST user
This brings LAUNCHcast into compliance with the “sound recording performance complement,” which limits webcasters to playing no more than three selections from a given record in a three-hour period. 17 U.S.C. § 114(d)(2)(C)(i), (j)(13). While we have on other occasions noted that “administrative agencies have broad discretion to interpret the statutes they are charged with implementing,” Khan v. U.S. Dep’t of Justice, 494 F.3d 255, 258 (2d Cir. 2007), we will not give weight to the Copyright Office’s footnote regarding LAUNCHcast in its December 2000 letter. Notwithstanding the fact that the footnote specifically discusses LAUNCHcast, the footnote is surplusage to the issue before the Office, and the history of its revisions – complete reversals of opinion by the Copyright Office over a matter of days – seriously call into question the thought process, if any, that went into drafting the footnote. Page 32 of 42
concern about a diminution in record sales is the concern that an interactive service provides a degree of predictability – based on choices made by the user – that approximates the predictability the music listener seeks when purchasing music. The current version § 114(j)(7) was enacted because Congress determined that the DPSR was not up to the task of protecting sound recording copyright holders from diminution
definition, which was later included under the DMCA, is “transmission of a program.” 17 U.S.C. § 114(j)(7). While
not semantically identical, Title 17 defines “transmission program” as “a body of material that, as an aggregate, has been produced for the sole purpose of transmission to the public in sequence and as a unit.” 17 U.S.C. § 101. This
functions, it is clear that LAUNCHcast does not provide a specially created program within the meaning of § 114(j)(7) because the webcasting service does not provide sufficient control to users such that playlists are so predictable that users will choose to listen to the webcast in lieu of purchasing music, thereby – in the aggregate – diminishing
LAUNCHcast is not an interactive service within the meaning of 17 U.S.C. § 114(j)(7). Because we so conclude, we need
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