by : Music Law, November 2011

Song Download and Performance Rights

Song Download and Performance Rights

On October 3rd 2011, the Supreme Court of the United States refused to hear the case of American Society of Composers, Authors and Publishers (ASCAP) v. United States.  This case would have dealt with the question of whether the category of a public performance extends to downloading a song via digital download. ASCAP asked the justices to review an appeals court decision, which stated that downloading songs from iTunes, Amazon, eMusic or even music-sharing services do not count as public performances.  To ASCAP, they are indeed public performances.

The 2nd U.S. Circuit Court of appeals, ruling against ASCAP, referenced the Copyright Act, Section 101, where it defines ‘perform’ as to “recite, render, play, dance or act it either directly or by means of any device or process.”    The legal question presented to the Supreme Court was “whether an Internet-based music service perform[s] … a work ‘publicly’ when it transmits a performance of a copyrighted musical work to the public by means of a digital download.”  Is the transmission of a performance via digital download a transmission that should be considered a ‘public performance,’ or is it simply a digital sale and transfer of content as if it were in physical form such as a CD or vinyl record?

ASCAP’s Case

As a Performance Rights Organization with a membership of 420,000 U.S. composers, songwriters, lyricists, and music publishers, ASCAP said it stood to lose tens of millions of dollars in potential revenues each year. However, such an interpretation relies on monetizing reproduction rights, which are different in the law to performance rights. For example, composers for television typically receive a small flat fee upfront from the production company in exchange for their reproduction right. Since today’s users are increasingly receiving television and film content by means of download transmissions through services such as iTunes and Netflix, ASCAP wishes to declare this a performance right.  Under the Second Circuit’s decision, these songwriters and composers should receive no back-end compensation for download transmissions. ASCAP has said that the ruling does not support the primary objective of the Copyright Act, which is to encourage the production of original literary, artistic, and musical expression for the good of the public.”

The US Case

The lawyers for the U.S. responded with a general ‘Bah Humbug’ and were dismissive of most of what was said in the complaint against them.  Agreeing that the Copyright Act of 1976 was the controlling statue, they staunchly opposed ASCAP’s interpretation. They relied heavily on the Second Circuit and pointed out that the definitional section of the Copyright Act provides that “to ‘perform’ a work means to recite, render, play, dance, or act it, either directly or by means of any device or process or, in the case of a motion picture or other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible.”

However, they go on to direct the Courts’ attention the rest of the Act, which provides that “to perform or display a work ‘publicly’ means: (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 time.”

By defining a performance, the lawyers for the US are holding the position that digital music downloads are not per se public performances. “Musical works traditionally have been distributed on physical media such as sheet music, records, tapes, and compact discs. More recently, however, they have also come to be distributed electronically through Internet downloads of sound recordings.”  According to them, ASCAP is trying to ‘double dip’ and receive payment twice for the same download (a performance payment that does not correspond on top of the reproduction or mechanical right).

The Overall Perspective

It appears that the decision of the Second Circuit court will remain the law of the land for the foreseeable future  (the US seems no different in this regard to Europe and the rest of the world). This is a victory for the digital music providers and a loss for the PROs and publishers. Nevertheless, a different ruling was really a long shot, considering that collections abound for broadcasted performances over the public airwaves. It made sense, for instance, to ask webcasters to contribute to a sound recording right, which is why SoundExchange was created in 2000 as a new right but only for special digital transmissions. Ultimately, in these trying times, the Supreme Court could not require the labels to pay a new performance right on top of their existing mechanical dues.

 

By Nachman N Susson

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