ASCAP’s Proposed Download Royalty Bucks Congressional Intent, Groups Say
Royalties for downloads and public performances have been separate and distinct going back to the federal government’s pioneering report in 1995 on intellectual property rights on the Internet, several trade associations told the 2nd U.S. Circuit Court of Appeals in a friend-of- the-court brief late Monday. ASCAP is trying to license and profit from “the same activity that its members have already licensed directly or through a different licensing agent” as downloads, they said. The brief was filed by the Digital Media Association, Entertainment Software Association, MPAA, National Association of Recording Merchandisers, Independent Film and Television Alliance, and Entertainment Merchants Association.
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ASCAP lost its bid to collect performance royalties from download services two years ago in its rate court, the U.S. District Court in New York (WID April 27/07 p8). More recently it’s sought to collect performance royalties from AT&T for ringtones over the objections of several trade groups, including DiMA and CEA (WID July 2 p3). The 2nd Circuit tentatively scheduled oral argument in ASCAP’s bid for royalties on downloads for the week of Oct. 26.
“ASCAP is seeking to tip the balance of a working free market system” by trying to apply the same royalties for “transmission” services, such as Internet streams, to download services that “reproduce and distribute copies,” the brief said. Performance royalties are supposed to apply only to works “designed for contemporaneous perceptibility” under the Copyright Act. There’s a narrow exception approved by the New York court from the record labels’ lawsuit against XM concerning devices that can record satellite radio, but “downloads as such do not in any way communicate or perform works any more than trucks transporting DVDs,” the brief said.
ASCAP’s view that the only transmissions not requiring performance licenses are “sheet music or other textual lyrics and graphic notations” counters “the language and legislative history of the Copyright Act, analysis by expert agencies and relevant judicial decisions,” the brief said. The collection society is ignoring the “performance” requirement in the royalty, as if conflating the U.S. Postal Service’s “delivery function” with a “communication function.” In a long footnote, the associations dismissed ASCAP’s argument that both downloads and streams are capable of “near-simultaneous playback.” They pointed to the trial court’s note of “the stark differences between a vendor’s delivery of a copy which the consumer can keep and play … and delivery of a performance where the vendor provides the playing” itself.
It’s telling that Congress left the word “transmit” out of the definition of “perform” and instead provided a separate definition of “transmit” in Section 106 of the Copyright Act, and the distinction also holds in Section 115, governing “digital phonorecord deliveries,” the brief said. In the run-up to the first major update of copyright law in 1976, Congress removed the term “represent” from the definition of “perform” in draft legislation, “so that reproduction of copies within computer systems would not be considered performances.”
ASCAP argues that because the notes and lyrics of a song “must first be recorded in an audiovisual work,” that counts as a performance, “even though the statutory language clearly states that it is not a performance of the audiovisual work,” the brief said. “There is no evidence that Congress intended such a strange gerrymandering of rights as between types of works.” The collecting society made the “absurd” argument that distribution of CDs wouldn’t similarly count as a performance, the brief said.
The federal government’s Information Infrastructure Task Force laboriously considered the difference between a simple transmission and a performance when evaluating IP rights, the brief said. Transmissions “without the capability of simultaneous ‘rendering’ or ’showing'” have “clearly not been performed,” its 1995 report said. But it allowed for the possibility that a performance could happen as a work was being transmitted, just not that the two were necessarily tied, the brief said. The language of Section 115 is consistent with the task force’s report, it said. Courts similarly have found that illicit downloads violate only reproduction and distribution rights, and ASCAP’s cited cases all involve transmissions that involved a “rendering or showing” of a work.
The New York court’s 2007 ruling, while possibly the first to directly address whether downloads constitute performances, “fits squarely into a large body of related case law” with the same practical result, the brief said. ASCAP itself acknowledged, in a statement given to the House Judiciary Committee in 2001, that “'pure’ audio-only downloads should not require payment for the public performance right,” the associations said.