SMHLLAW

By Spencer Trowbridge, Swider Medeiros Haver LLP

The U.S. District Court for the Southern District of New York recently granted summary judgment in favor of Verizon on the question of whether Verizon was liable for public performance fees for ringtones. [1]  ASCAP, one of the primary performing rights organizations in the United States, had opposed Verizon on the issue.

 

At issue, in part, was whether Verizon’s transmission of a ringtone to a user’s cellular phone constitutes a public performance.  The parties focused on the second part of the definition of the term “publicly” in 17 USC § 101, which reads in part:

 

(2) to transmit or otherwise communicate a performance…by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.

 

The court ruled in favor of Verizon on the issue, saying that the transmission itself was not a public performance, further noting that “[e]ven if the customer could listen to the download as it was being received, and contemporaneously perceive it as a musical work, that would not constitute a public performance.”

 

The court then turned to ASCAP’s argument that a public performance occurs when a cellular phone plays a ringtone, and that Verizon is liable (both secondarily and directly) for such public performance.  In addressing the issue of secondary liability, the court turned its attention to the Copyright Act’s exemption for performances occurring within “the normal circle of a family and social acquaintances” and the Act’s additional exemption for:

 

[any] performance of a nondramatic literary or musical work otherwise than in transmission to the public, without any purpose of direct or indirect commercial advantage and without payment of any fee or other compensation for the performance to any of its performers, promoters, or organizers, if [ ] there is no direct or indirect admission charge…

 

According to the court, the first exemption would apply to the playing of a ringtone in the presence of family and friends.  Further, with respect to instances where there is the presence of a broader audience, the court said that the second exemption would apply, emphasizing that customers do not have any expectation of profit in connection with the playing of a ringtone. 

 

The final portion of the court’s ruling addressed the issue of direct liability for Verizon.  ASCAP’s theory was that when a ringtone plays in public on a cellular phone, Verizon is engaging in a public performance. As was the case with the other theories of liability at issue, the court dispensed with ASCAP’s argument, noting that “Verizon’s only role in the playing of a ringtone is the sending of a signal to alert a customer’s telephone to an incoming call.”  The opinion further noted that “[t]hat signal is the same whether the customer has downloaded a ringtone or not,” and that “[t]he other components of Verizon’s putative ‘control’ over the playing of the ringtone in public are too attenuated from the ‘performance’ to render Verizon liable.”

 

Note that this ruling concerns only public performance rights.  In the ruling the court readily acknowledged that mechanical rights are implicated in the reproduction and distribution of ringtones.  The current statutory mechanical royalty rate for a ringtone download is 24 cents.

 

NOTE:  The information in this, and any other article on this website, is for information, discussion and academic purposes only and should not be relied on as legal advice.  Seek legal and financial counsel in your jurisdiction before acting on any ideas presented in this website.  This article does not create an attorney-client relationship. 

 

 

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[1] The ruling is available at https://www.eff.org/files/filenode/US_v_ASCAP/ASCAP%20v%20Verizon%20Order.pdf