Advanced Copyright Issues on the Internet - Fenwick & West LLP

– On June 1, 2001, Launch and other online webcasters, acting through the DigitalMedia Association (DiMA), filed a declaratory judgment action against the RIAA, seeking adeclaration that their webcasting services were eligible for the statutory license because thesongs played “ultimately are generated by a computer in a manner designed to ensurecompliance with the DMCA’s statutory license provision”; users “do not determine the particularsound recordings or the particular artists which become the basis of the transmission; and [they]have no ability to select or obtain advance knowledge as to the particular songs that are streamedon the stations”; “[a]rtist identification on the services is representative only”; the “skip”function on the services operates only forward and users “can never know which song they are‘skipping forward to’”; and “[i]n all cases the consumer-influenced situations are available toevery member of the general public.” 2239 The United States District Court for the SouthernDistrict of New York denied the parties’ cross-motions for dismissal under F.R.C.P. 12(b)(6) andsummary judgment. 2240 Launch was later acquired by Yahoo, and settled with a number of therecord companies. 2241– On June 8, 2001, the record companies responded with three lawsuits against XACTRadio, Musicmatch, Inc., and MTVi Group, each of which provided consumers with access tostreamed music over the Internet, asserting against each the same basic allegations as containedin the complaint against Launch. The complaint asserted that the use of the “skip” button byusers will cause the defendants to exceed the performance complement restrictions. 2242Musicmatch subsequently settled its lawsuit with the record companies.Previously, on April 17, 2000, DiMA had sought to resolve the issues in the <strong>Copyright</strong>Office, filing a rulemaking petition that sought adoption of the following proposed ruleconcerning the definition of a “Service” for purposes of the statutory license:A Service making transmissions that otherwise meet the requirements for thesection 114(f) statutory license is not rendered “interactive,” and thus ineligiblefor the statutory license, simply because the consumer may express preferences tosuch Service as to the musical genres, artists and sound recordings that may beincorporated into the Service's music programming to the public. Such a Serviceis not “interactive” under section 114(j)(7), as long as: (i) Its transmissions aremade available to the public generally; (ii) the features offered by the Service donot enable the consumer to determine or learn in advance what sound recordingswill be transmitted over the Service at any particular time; and (iii) itstransmissions do not substantially consist of sound recordings performed within2239 Id.2240 See Arista Records, LLC v. Launch Media, Inc., 578 F,3d 148, 150 (2d Cir. 2009).2241 Brad King, “Yahoo Launches Into Web Music” (June 28, 2001), available as of Feb. 22, 2002 atwww.wired.com/news/mp3/0,1285,44884,00.html.2242 Parness, supra note 2238, at 4.- 487 -