Advanced Copyright Issues on the Internet - Fenwick & West LLP

Ringtones(d) Applicability of the Section 115 Compulsory License toIn October of 2006, in response to a request by the <strong>Copyright</strong> Royalty Board for a ruling,the <strong>Copyright</strong> Office issued a memorandum opinion concluding that ringtones qualify as DPDseligible for the statutory license of Section 115. Specifically, the <strong>Copyright</strong> Office ruled asfollows:We find that ringtones (including monophonic and polyphonic ringtones, as wellas mastertones) are phonorecords and the delivery of such by wire or wirelesstechnology meets the definition of DPD set forth in the <strong>Copyright</strong> Act. However,there are a variety of different types of ringtones ranging from those that aresimple excerpts taken from a larger musical work to ones that include additionalmaterial and may be considered original musical works in and of themselves.Ringtones that are merely excerpts of a preexisting sound recording fall squarelywithin the scope of the statutory license, whereas those that contain additionalmaterial may actually be considered original derivative works and thereforeoutside the scope of the Section 115 license. Moreover, we decide that a ringtoneis made and distributed for private use even though some consumers maypurchase them for the purpose of identifying themselves in public. We alsoconclude that if a newly created ringtone is considered a derivative work, and thework has been first distributed with the authorization of the copyright owner, thenany person may use the statutory license to make and distribute the musical workin the ringtone. 2284In Recording Industry Ass’n of America, Inc. v. Librarian of Congress, 2285 the D.C.Circuit held that the <strong>Copyright</strong> Royalty Board’s imposition under the Section 115 compulsorylicense of a 1.5% per month late fee and a 24 cent royalty for every ring tone sold usingcopyrighted work were fair measures to compensate copyright owners when their work is copiedabsent a negotiated license agreement and were therefore not arbitrary and capricious.5. International Licensing EffortsIn November of 2003, the International Federation of the Phonographic Industry (IFPI), aglobal trade body representing major and independent music labels, announced a “one-stop”international license for webcasters. IFPI expected collection agencies in 30 to 40 countries tosign up to the single license agreement by the end of 2003. Webcasters would pay a nationalbody a fee for songs broadcast into each individual country. The agreement would be for radiostylebroadcasts only. Internet companies would still need to secure individual licensingagreements to sell permanent song downloads. 22862284 71 Fed. Reg. 64303, 64304 (Nov. 1, 2006).2285 608 F.3d 861 (D.C. Cir. 2010).2286 “Music Industry Trumpets Global Webcast License” (Nov. 11, 2003), available as of Nov. 11, 2003 athttp://uk.news.yahoo.com/031111/80/edmp0.html.- 498 -