SoundExchange, a nonprofit entity, charged with the responsibility of collecting royalties for performing artists and copyright owners of music, filed suit under the Copyright Act, 17 U.S.C. 101 et seq., against Muzak, a company that supplies digital music channels to satellite television networks who, in turn, sell to subscribers. SoundExchange alleged that Muzak underpaid royalties owed. The district court dismissed the complaint. The court concluded that the better interpretation of the statute is that the term “service” under section 114(j)(11) contemplates a double limitation; both the business and the program offering must qualify before the transmissions are eligible for the favorable rate. Accordingly, the court reversed the district court. View “SoundExchange, Inc. v. Muzak LLC” on Justia Law
Settling Devotional Claimants v. CRB
Cable operators’ retransmission of religious and devotional programming produced a pool of royalties that Congress charged the Copyright Royalty Judges with distributing to the copyright owners. In this appeal, Devotional Claimants argue that the Royalty Judges wrongly calculated their respective shares by allowing IPG to press claims without proper authority and refusing to accept Devotional Claimants’ evidence regarding how the relative value of claims should be calculated. Devotional Claimants claim that, after the Royalty Judges rejected both their and IPG’s proposed methodologies, the Royalty Judges’ final allocation simply split the difference between the two parties, and that decision was arbitrary and capricious and unsupported by substantial evidence. The court agreed with Devotional Claimants’ latter claim, concluding that the Royalty Judges are subject to the Administrative Procedure Act (APA), 5 U.S.C. 706. The court affirmed the Royalty Judges’ procedural rulings resolving which IPG claims could go forward and whether the Devotional Claimants’ methodological evidence could be properly considered. View “Settling Devotional Claimants v. CRB” on Justia Law
Intercollegiate Broadcasting v. CRB
IBS, a nonprofit association representing college and high school radio stations, appealed the determination by the Copyright Royalty Board setting royalty rates for webcasting. The court rejected IBS’s contention that the Board’s determination violated the Appointments Clause because it was tainted by the previous Board’s decision. The court concluded that the Judges’ determination was an independent, de novo decision by a properly appointed panel seized with the full authority of the prior Board. This court has twice before considered the validity of decisions made after the replacement of an improperly appointed official and both cases support the validity of a subsequent determination when — as here — a properly appointed official has the power to conduct an independent evaluation of the merits and does so. Because neither this court’s vacatur order nor any statute bars the procedural approach the Board took on remand, the court rejected Intercollegiate’s claim that the Board’s approach contravened the court’s order. The court also rejected IBS’s challenge to the Board’s determination on the merits because the Board’s imposition of a $500 annual minimum fee for all noncommercial webcasters was not arbitrary, capricious, or contrary to law. The court concluded that substantial evidence supports the Board’s conclusion and the Board acted reasonably in setting the fee. Accordingly, the court affirmed the judgment. View “Intercollegiate Broadcasting v. CRB” on Justia Law
Independent Producers Group v. Library of Congress
IPG, representative of several copyright owners in the 2000-03 royalty fee distribution proceeding, alleged that the Board erred in determining IPG’s royalty fees in the sports programming and program suppliers categories. As a preliminary matter, the court concluded that the orders at issue are subject to judicial review as part of the Board’s final determination and therefore, the court has jurisdiction to review the merits of the appeal. The court concluded that an evidentiary sanction that the Board imposed during the preliminary evidentiary hearing is not arbitrary and capricious where the Board reasonably responded to a blatant discovery violation by IPG; no basis exists for overturning the Board’s
reasoned decision to reject IPG’s sports programming claims on behalf of FIFA and the U.S. Olympic Committee; and the court rejected IPG’s contentions that the Board improperly relied on the MPAA’s methodology for calculating the relative marketplace value of their claims and allocating royalty fees within the program suppliers category. Accordingly, the court affirmed the judgment. View “Independent Producers Group v. Library of Congress” on Justia Law
Music Choice v. Copyright Royalty Bd.
“Musical work” and the owner’s exclusive right to perform the work in public are protected by 17 U.S.C. 106(4). Broadcast of a musical work is a performance and requires a license from the copyright owner. Copyright Act amendments afford the copyright owner of a sound recording “the narrow but exclusive right ‘to perform the copyrighted work publicly by means of a digital audio transmission.’” The law requires “certain digital music services . . . to pay recording companies and recording artists when they transmit sound recordings” and provides for appointment of three Copyright Royalty Judges. If sound recording copyrights owners are unable to negotiate a royalty with digital music services, the Judges may set reasonable rates and terms. The Judges set royalty rates and defined terms for statutorily defined satellite digital audio radio services (SDARS) and preexisting subscription services (PSS). SoundExchange, which collects and distributes royalties to copyright owners, argued that the Judges set rates too low and erred in defining “Gross Revenues” and eligible deductions for SDARS. A PSS that provides music-only television channels appealed, arguing that PSS rates were set too high. The D.C. Circuit affirmed, concluding that the Judges of the Board acted within their broad discretion and on a sufficient record. View “Music Choice v. Copyright Royalty Bd.” on Justia Law
Independent Producers Group, et al. v. Library of Congress, et al.
IPG challenged the distribution of royalties from a royalty fund managed by the Copyright Office of the Library of Congress, which provides payments to copyright holders when they are statutorily obligated to license their work to third parties. IPG’s former president had signed a settlement agreement that fully disposed of IPG’s interest in the royalties at issue concerning religious programming broadcasts on cable television in 1998. In this case, IPG seeks judicial review under an inapposite jurisdictional grant of a decade-old distribution based on the actions of IPG’s then-president, on which the Royalty Judges reasonably relied, and indeed, the authority for which has never been challenged. Therefore, the court dismissed the appeal, concluding that it lacked statutory jurisdiction over the dispute. View “Independent Producers Group, et al. v. Library of Congress, et al.” on Justia Law
AF Holdings, LLC v. Does 1-1058
AF Holdings, represented by Prenda Law, filed suit in district court against 1,058 unnamed John Does who it alleged had illegally downloaded and shared the pornographic film “Popular Demand” using a file-sharing service known as BitTorrent. Prenda Law’s general approach was to identify certain unknown persons whose IP addresses were used to download pornographic films, sue them in gigantic multi-defendant suits that minimized filing fees, discover the identities of the persons to whom these IP addresses were assigned by serving subpoenas on the Internet service providers to which the addresses pertained, and then negotiate settlements with the underlying subscriber. The providers refused to comply with the district court’s issuance of subpoenas compelling them to turn over information about the underlying subscribers, arguing that the subpoenas are unduly burdensome because venue is improper, personal jurisdiction over these Doe defendants is lacking, and defendants could not properly be joined together in one action. The court agreed, concluding that AF Holdings clearly abused the discovery process by not seeking information because of its relevance to the issues that might actually be litigated here. AF Holdings could not possibly have had a good faith belief that it could successfully sue the overwhelming majority of the John Doe defendants in this district. Although AF Holdings might possibly seek discovery regarding individual defendants in the judicial districts in which they are likely located, what it certainly may not do is improperly use court processes by attempting to gain information about hundreds of IP addresses located all over the country in a single action, especially when many of those addresses fall outside of the court’s jurisdiction. Given AF Holdings’ decision to name and seek discovery regarding a vast number of defendants who downloaded the film weeks and even months apart – defendants who could not possibly be joined in this litigation – one can easily infer that its purpose was to attain information that was not, and could not be, relevant to this particular suit. Accordingly, the court vacated the order and remanded for further proceedings, including a determination of sanctions, if any, for AF Holdings’ use of a possible forgery in support of its claim. View “AF Holdings, LLC v. Does 1-1058” on Justia Law