LaFrance on Music Downloads as Reproductions Rather than Public Performances

In a significant loss for music performing rights organizations, the Second Circuit held in United States v. ASCAP, 2010 U.S. App. LEXIS 19983 (2d Cir. Sept. 28, 2010) [enhanced version available to lexis.com subscribers / unenhanced version available from lexisONE Free Case Law], that digital downloads of music are not public performances if the music is not rendered perceptible during the download. In this Analysis, Mary LaFrance discusses this important case and the implications for the future. She writes:

     The service providers in this case, Yahoo! Inc. and RealNetworks, Inc., used the Internet to give their customers access to musical recordings and audiovisual works, including both streaming performances and digital downloads. When a recording was streamed to a user, the recording was rendered audible as it was being transmitted to the recipient's computer. In contrast, when a customer downloaded a recording, the transmitted recording was not audible to the recipient while it was being transmitted; however, once the download was complete, the recipient could then use his or her computer (or portable music player) to listen to an audible performance of the recording.

     . . . .

     When Yahoo and RealNetworks streamed music to users, these audible performances constituted "public performances" within the meaning of the copyright statutes. These performances were not at issue in this case.

     When Yahoo or RealNetworks provided a customer with a digital download of a musical recording, this constituted a reproduction of the musical composition embodied in the recording, and thus implicated a different exclusive right of the copyright owner -- the exclusive right to reproduce a work in copies or phonorecords - as recognized in section 106(1) of the Copyright Act, 17 U.S.C. § 106(1). When a performance of a copyrighted musical composition is recorded, or a recording of such a performance is reproduced, the copyright owner is ordinarily entitled to a mechanical royalty. However, the PROs [performing rights organizations] have no role in collecting mechanical royalties, and in this litigation Yahoo and RealNetworks did not dispute their mechanical royalty obligations.

     The dispute in this case arose because ASCAP sought to collect public performance royalties for the digital downloads provided by Yahoo and RealNetworks. ASCAP argued that these downloads were public performances as well as reproductions; thus, Yahoo and RealNetworks were obligated to pay not only mechanical royalties but public performance royalties as well.

(citations omitted)

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