Access practice tools, as well as industry leading news, customizable alerts, dockets, and primary content, including a comprehensive collection of case law, dockets, and regulations. Leverage...
March 9 — A service offered by Muzak LLC is eligible for a pre-1998 royalty rate, even though the service itself wasn't offered by Muzak before that date, the U.S. District Court for the District of Columbia ruled March 8.
Interpreting a grandfather clause in a 1998 statute, the court said that the intent was to give the older rate to certain companies that existed at the time, not just to the specific services they were offering.
The court granted a motion to dismiss a claim brought against the ambient music service by royalty-collecting organization SoundExchange Inc.
Section 114(f)(2)(B) of the Digital Millennium Copyright Act of 1998, Pub. L. No. 105-304, 112 Stat. 2860, 17 U.S.C. §114(f)(2)(B), established what is known as the “willing buyer/willing seller” standard for determining royalties.
However, Section 114(j)(11) created an exception, allowing “pre-existing subscription services” to continue to pay royalties calculated under the pre-1998 standard.
In 2006, the Copyright Office determined that the grandfather clause applied only to Muzak LLC, Music Choice and DMX Inc. .
However, at some point before 2006, DMX had stopped claiming the right to pay under the older scheme. Furthermore, in 2011 and 2012, Mood Media Corp. acquired both Muzak and DMX and, under the new structure, Muzak offered a music service called SonicTap, which had been launched by DMX in 2010.
Muzak asserted that it had the right to pay royalties for SonicTap under the grandfathered system. SoundExchange sued.
In the light of the legislative history of the statute, the court determined that Congress intended that a pre-existing subscription service like Muzak could offer new services and still claim the grandfathered rates.
Thus, the court rejected SoundExchange's argument that the exception allowed Muzak to pay the old rates only for specific services launched before 1998.
The court's ruling was issued by Judge Royce C. Lamberth.
SoundExchange was represented by Jenner & Block LLP, Washington. Muzak was represented by Wilson Sonsini Goodrich & Rosati P.C., New York
To contact the reporter on this story: Anandashankar Mazumdar in Washington at email@example.com
To contact the editor responsible for this story: Mike Wilczek in Washington at firstname.lastname@example.org
Text is available at: http://src.bna.com/dbd.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)