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
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.
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