US Court Rules Digital Downloads Are Not Public Performances

30th April 2007

On 25th April 2007, a New York federal court judge handed down partial summary judgment against the American Society of Composers, Authors and Publishers (ASCAP) in a download royalty dispute.

ASCAP faced the digital music services AOL, RealNetworks and Yahoo! in this landmark court battle. The main issue in dispute was whether downloading a music file amounted to a "public performance" of the song under the United States Copyright Act and therefore whether "performance royalties" should be paid to publishers and songwriters in respect of digital downloads.

ASCAP claimed that digital music downloads should be considered to be public performances and therefore be subject to an additional performance license and royalty. It asserted that downloading music is a transmission of music to the public and that downloaded music files should be treated the same as streamed performances.

ASCAP's position was opposed by several groups including the Digital Media Association (DiMA), a trade group of webcasters who filed a "friend of the court" brief opposing the claim. The Consumer Electronics Association and National Association of Recording Merchandisers co-signed DiMA's brief.

The judge considered the issue of whether the downloading of a digital music file embodying a particular song constituted a "public performance" of that song within the meaning of the United States Copyright Act, 17 U.S.C. s.101, et seq. Although he conceded that it was possible for the same transmission to constitute both a public performance and also a reproduction, he held that in order to qualify as a public performance, a song must be played "in a manner designed for contemporaneous perception". He found this was not the case when files were downloaded.

As a consequence, digital services operating in the US will have to pay performance royalties for musical compositions which are streamed online, but in cases where a file is downloaded they only have to pay "mechanical" royalties.

Concerns have been raised on behalf of composers and publishers that they will lose out not only when music is downloaded but also when films and television episodes are delivered through digital downloads. Composers in particular will be concerned as they are generally able to collect a minimum of fifty percent of performance income direct from their performing right society. In the case of music commissioned for film and television for many composers this so-called "writer's share" of public performance income can be the only ongoing source of royalties to which the composers are entitled.

In a statement ASCAP have said "ASCAP respectfully disagrees with the court's decision... We are considering our options as the proceeding to determine reasonable license fees to be paid...goes forward to trial." The trial is scheduled to begin on May 21st 2007 in New York.

The US position contrasts with the situation in the UK as a result of changes to the UK's Copyright Designs and Patents Act 1988 which were introduced in October 2003. Since then UK composers, songwriters and music publishers have enjoyed the benefits of a new right of "communication to the public", including the right to broadcast music and lyrics and the so-called "making available" right. This covers the making available of a work to the public by electronic transmission so that members of the public can access the work from a place and at a time which they choose. In the UK the PRS administers both the right to performance in public and the right of "communication to the public". As a result, if digital services wish to make available downloads of musical compositions in the UK, they require a licence from both MCPS (in respect of the "mechanical" reproduction) and from the PRS (in respect of this so-called "making available" right). In practice MCPS and PRS operate as an alliance and many online services are covered by the Joint Online Licence (JOL) that PRS/MCPS devised together.