Copyhype

The US Supreme Court began its October 2011 term on Monday, a term that many foresee will be exciting and important. That no doubt holds true for copyright law buffs in particular — the Court will be hearing oral arguments in Golan v. Holder on Wednesday.

But the Court has already addressed one case dealing with copyright law. Yesterday, it denied ASCAP’s petition to overturn a Second Circuit decision holding that downloads of a song do not constitute a public performance of the underlying musical composition.

This was not a big surprise.

In the lower courts

ASCAP administers public performance right licenses in the US — it, along with BMI and SESAC, grants licenses to radio and TV stations, physical venues, and internet services that wish to publicly perform musical compositions on behalf of songwriters and composers.

Since 1941, ASCAP has operated according to a consent decree with the United States after the Department of Justice alleged that its blanket licenses violated anti-trust laws. That decree has been amended several times over the past 60 years and currently provides that the Southern District Court of New York acts as a “rate court” to determine license fees when ASCAP and a licensee cannot agree on a reasonable rate. ¹ASCAP Second Amended Final Judgment, Sec. IX, June 11, 2001.

This dispute began when AOL, Yahoo, and RealNetworks couldn’t reach such an agreement with ASCAP. During the rate proceeding, the issue of whether a download is a public performance — which would mean any service providing downloads would require a license from ASCAP — arose.

The District Court held that it was not. ²United States v. ASCAP, 485 F.Supp 2d 438 (2007). Drawing on the language of the relevant statutes, case law, and interpretations from agencies like the US Copyright Office, it said that downloads only constitute a reproduction of a musical composition, not a public performance.

ASCAP appealed the decision (and two subsequent decisions determining the method for calculating the fees in question). The Second Circuit affirmed the District Court’s holding regarding downloads. ³United States v. ASCAP, Nos. 09-0539-cv (L), 09-0542-cv (con), 09-0666-cv (xap), 09-0692-cv (xap), 09-1572-cv (xap) (Sept. 28, 2010). It said that “Music is neither recited, rendered, nor played when a recording (electronic or otherwise) is simply delivered to a potential listener.”

ASCAP, pointing to the definition of “publicly” in § 101, argues that a download constitutes a public performance. Section 101 defines “[t]o perform or display a work ‘publicly'” as follows:

(1) to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or (2) to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.

ASCAP argues that downloads fall under clause (2) of this definition because downloads “transmit or otherwise communicate a performance,” namely the initial or underlying performance of the copyrighted work, to the public. We find this argument unavailing. The definition of “publicly” simply defines the circumstances under which a performance will be considered public; it does not define the meaning of “performance.” Moreover, ASCAP’s proposed interpretation misreads the definition of “publicly.” As we concluded in Cartoon Network LP v. CSC Holdings, Inc., “when Congress speaks of transmitting a performance to the public, it refers to the performance created by the act of transmission,” not simply to transmitting a recording of a performance. ASCAP’s alternative interpretation is flawed because, in disaggregating the “transmission” from the simultaneous “performance” and treating the transmission itself as a performance, ASCAP renders superfluous the subsequent “a performance… of the work” as the object of the transmittal.

ASCAP again appealed, this time to the Supreme Court.

At the Supreme Court

In its petition for a writ of certiorari, ASCAP argued that the Second Circuit’s decision improperly narrowed the public performance right, contradicts US obligations under intellectual property treaties, and creates profound implications for the American music industry.

ASCAP’s petition was joined by amici, including music publishers, ⁴These publishers and publisher associations included the Association of Independent Music Publishers, Church Music Publishers Association, Music Publishers’ Association of the United States, National Music Publishers’ Association, Production Music Association, the Songwriters Guild of America, the Society of Composers and Lyricists, the Recording Academy, the Game Audio Network Guild, and the Nashville Songwriters Association International. BMI, and former US Register of Copyrights Ralph Oman.

The United States argued in its brief that Supreme Court review was unnecessary. It reiterated why it believed the Second Circuit’s holding was correct and noted that no other case contradicted this holding. ASCAP’s claim that the holding violates international agreements, said the US, was also without merit.

As for ASCAP’s argument about the impact of the court’s decision on the music industry, the US said this worry is unfounded:

[D]ownloading music files clearly implicates the authors’ rights to re­produce and distribute copies of those musical works. [ASCAP]’s members are therefore paid each time a copyrighted work is lawfully downloaded. To be sure, a different agent licenses those mechanical rights, but the composer or author ultimately benefits regardless of which agent grants the license.

The Supreme Court was ultimately unconvinced by ASCAP’s petition and declined to take up the case, meaning the Second Circuit’s decision stands.

While ASCAP plays a vital role in standing up for its member songwriters, its legal arguments here were a longshot. The Second Circuit’s decision was a sound one, and the Supreme Court had little reason to revisit it.