Background On Recent Court Decision From ASCAP CEO And SHOF Board Member John Lofrumento
I am writing to provide you with background information regarding the recent court decision concerning the existence of a performing right in a download. It is important that you know this background so that speculation and misinformation do not replace facts. Most importantly, I want you to understand that every action ASCAP took with regard to this matter was entirely driven by the goal of protecting your performing rights as a music creator and ensuring that you receive the compensation to which you are legally entitled.
The terms of the consent decree that governs ASCAP’s operations provide that, when ASCAP and a music user cannot agree on a license fee, the United States District Court for the Southern District of New York will determine a reasonable license fee after a full trial.
When negotiations failed with the three largest commercial Internet services - AOL, RealNetworks and Yahoo! - a court proceeding began in November, 2005, to determine reasonable license fees for their public performance of your music.
However, in December 2006, these Internet services asked the Court to decide the purely legal issue of whether a performing right exists in Internet downloads, before trial on the question of fees occurred. (They conceded that a performing right does exist in online streams of music.) The Court agreed to do so.
Once the Internet services had brought the issue forward - arguing that no performing right exists in a download - and once the Court indicated it would decide the matter before trial, ASCAP had no choice but to present a cross-motion supporting the existence of a performance right in a download under the United States Copyright Act.
Endorsing ASCAP’s position were legal briefs from: BMI; SOCAN; SESAC; the Songwriters Guild of America, together with the Nashville Songwriters Association International (NSAI); and the NMPA, joined by the Church Music Publishers Association, Association of Independent Music Publishers and NSAI.
Supporting the Internet music services with briefs against ASCAP were: DiMA (Digital Media Association), joined by the Entertainment Merchants Association, National Association of Recording Manufacturers, and the Consumer Electronics Association; CTIA (the Wireless Association); and RIAA (The Recording Industry Association of America).
The Court issued its decision on April 25, 2007, essentially agreeing with the Internet services’ argument that a download is a transmission of a reproduction of a musical work, not a transmission of a performance of that work. The Court indicated that the ability to simultaneously hear the music was a prerequisite for a transmission of a performance. In the Court’s words, “...in order for a song to be performed, it must be transmitted in a manner designed for contemporaneous perception.”
The Court did, however, indicate that “…a transmission might, under certain circumstances, constitute both a stream and a download, each of which implicates a different right of the copyright holder” (original emphasis). It did not elaborate on this point, for example, by indicating what those circumstances were.
Now that the Court has ruled on this legal issue, the proceeding will go to trial to determine a reasonable license fee for the Internet services. The trial is set to begin on September 10, 2007, and is scheduled to run for three weeks. There is no way to predict when the Court will issue its final judgment setting the license fees. However, once the Court rules on that issue, it will be possible for ASCAP to appeal the decision regarding downloads, as well as any other aspects of the case.
Obviously, ASCAP respectfully disagrees with the Court’s decision. We believe the law is otherwise, and must reflect the full value to these Internet services of the music created by our members.
I hope that this information will help you understand the steps that led to the court’s decision, as well as the steps ASCAP - with the support of many other writer and publisher groups - took, with the goal of protecting your rights. I will certainly keep you posted on further developments as they occur.
Sincerely,
John LoFrumento