United States v. Am. Soc'y of Composers - 627 F.3d 64 (2d Cir. 2010)

Rule:

Where an electronic music download itself involves no recitation, rendering, or playing of the musical work encoded in the digital transmission, such a download is not a performance of that work, as defined by 17 U.S.C.S. § 101.

Facts:

Appellee Internet companies sought blanket licenses to perform the entirety of the appellant licensor’s repertory for some of the companies' websites and services. The district court found that downloads of digital files containing musical works did not constitute public performances of the works within the meaning of 17 U.S.C.S. § 101 of the Copyright Act, so the downloads did not require separate compensation. In its decision, the district court determined a method for calculating the fees for the blanket licenses – it applied a uniform royalty rate of 2.5% to the companies' music-use revenue, which was calculated by multiplying the total revenue from licensed services by a music-use adjustment factor (MUAF). The appellant licensor appealed. 

Issue:

1. Did the downloads of digital files containing musical works constitute public performances of the work within the meaning of 17 U.S.C.S. § 101 of the Copyright Act? 
2. Did the district court correctly determine the method for calculating the fees for the blanket licenses? 

Answer:

1) No. 2) No.

Conclusion:

The court of appeals agreed held that the downloads of digital files containing musical works did not constitute public performances of the works within the meaning of 17 U.S.C.S. § 101 of the Copyright Act. "To perform" was defined under § 101 as, inter alia, to recite, render, or play, all of which referred to actions that could be perceived contemporaneously. The downloads were simply transfers of files; the downloaded songs were not performed in any perceptible manner during the transfers. However, the appellate court held that the district court erred in determining the appropriate fees for the blanket licenses. According to the court, the use of streaming time as a proxy for page views in calculating the MUAF was unreasonable. Also, the royalty rate did not reflect the varying nature of the companies' music uses.