Advanced Copyright Issues on the Internet - Fenwick & West LLP

infringement were based on XM’s acting without authorization as a commercial content deliveryprovider that delivered permanent digital copies of sound recordings to those devices withoutpermission from the copyright owner. 220More specifically, the plaintiffs alleged that, in providing services specific to users ofXM + MP3 players, XM was acting outside the scope of its statutory license for broadcastservice under Section 114 of the copyright statute – XM’s only source of permission to use theplaintiffs’ recordings. Such unauthorized acts, according to the plaintiffs, were encroachingdirectly on their digital download business. 221 The court agreed, finding that by broadcastingand storing copyrighted music on DARDs for later recording by the consumer, XM was acting asa both a broadcaster and a distributor, but was paying license fees only to be a broadcaster. 222XM argued that its XM + MP3 player was much like a traditional radio/cassette playerand should therefore not be viewed as an improper adjunct to broadcasts. The court rejected thisanalogy, noting that, in the case of traditional radio/cassette players, the only contact betweenmanufacturers of the devices and users occurred at the point of sale. The court found it quiteapparent that the use of a radio/cassette player to record songs played over free radio did notthreaten the market for copyrighted works as would the use of a recorder which stores songsfrom private radio broadcasts on a subscription fee basis. The court further noted that, althoughXM subscribers might put XM + MP3 players to private use, several court decisions had rejectedattempts by for profit users to stand in the shoes of their customers making non-profit ornoncommercial uses. 223The court therefore denied XM’s motion to dismiss: “The Court finds that because of theunique circumstances of XM being both a broadcaster and a DARD distributor and its access tothe copyrighted music results from its license to broadcast only, that the alleged conduct of XMin making that music available for consumers to record well beyond the time when broadcast, inviolation of its broadcast license, is the basis of the Complaint, and being a distributor of aDARD is not. Thus the AHRA, on these facts, provides no protection to XM merely becausethey are distributors of a DARD.” 224B. The Right of Public PerformanceSection 106(4) of the copyright statute grants the owner of copyright in a work theexclusive right to perform the work publicly. The right applies to literary, musical, dramatic,and choreographic works, pantomimes, motion pictures and other audiovisual works. It does notapply to pictorial, graphic, sculptural, and architectural works. It also does not apply to sound220221222223224Id. at *16-18.Id. at *19.Id. at *20.Id. at *21-22.Id. at *23-24.- 64 -