• Supreme Court Rejects ASCAP Appeal: Internet Downloads Not a “Public Performance” Requiring Additional Royalty Payments
  • October 12, 2011 | Authors: Philip A. Bonomo; Louis J. Levy
  • Law Firm: Lerman Senter PLLC - Washington Office
  • In a decision that simultaneously disappointed songwriters and publishers and pleased online music providers, the Supreme Court declined to hear an appeal brought by the American Society of Composers, Authors and Publishers (“ASCAP”) seeking additional license fees for music downloads.  The October 3, 2011 ruling let stand a lower court decision holding that downloading digital files containing musical works does not constitute a public performance of the works requiring payment of additional licensing fees.

    This development marks the end of a process that began in 2007, when the U.S. District Court for the Southern District of New York, which has responsibility for determining reasonable fees for music licenses, held that downloading files containing a musical work did not qualify as a “performance” of the work for which additional copyright license fees could be levied.  This decision meant that the number of musical works downloaded from Yahoo! and RealNetworks, whose ASCAP licenses were the subject of the proceedings, would be excluded from the calculation to determine the royalty owed under the license to stream the work online (streaming does qualify as a “performance” of the work).  It is worth noting that online music providers already pay royalties for downloading music under separate licenses covering the reproduction and distribution of these works.

    ASCAP appealed to the 2nd Circuit Court of Appeals, arguing that downloading constituted a separate public performance of the works requiring additional compensation.  The appeal was denied in March 2010.  United States v. Am. Soc'y of Composers, 627 F.3d 64 (2nd Cir.).  In reaching its decision, the court focused on the language of the Copyright Act, which states specifically that “to perform” a work means “to recite, render, play, dance or act it, either directly or by means of any device or process.”  Merely downloading digital files containing music, the court concluded, involved none of these acts, and therefore did not constitute a public performance that would require an additional payment from websites offering music downloads.

    The Supreme Court’s decision not to hear the appeal affirms the status quo, at least in the 2nd Circuit.  It is, of course, possible that the issue could be raised again in another circuit, and if the circuits reach different conclusions, the Supreme Court may be inclined to accept the issue for review.  In the near-term, however, websites that allow users to download files containing music will not have to pay additional “performance right” licensing fees.