The US Court of Appeals for the Second Circuit ruled on a case in which music rights body ASCAP was suing Yahoo! and Real Networks over licensing revenues from those companies' use of its members' music.
US copyright law creates separate rights which can be licensed and charged-for separately. Real and Yahoo! accepted that they owed licensing revenues for their users' making of copies of the works when they downloaded them.
They disputed, though, ASCAP's claim that the downloading process was a 'performance'. Performances are separately licensed and can be separately charged for.
ASCAP appealed an earlier ruling that downloading was not a performance, but the Court of Appeals ruled against it, saying that because there is no audible music while a file is being downloaded it cannot count as a performance.
"In answering the question of whether a download is a public performance, we turn to Section 101 of the Copyright Act, which states that '[t]o ‘perform’ a work means to recite, render, play, dance, or act it, either directly or by means of any device or process'," said the ruling. "A download plainly is neither a 'dance' nor an 'act'. Thus, we must determine whether a download of a musical work falls within the meaning of the terms 'recite,' 'render,' or 'play'."
"The ordinary sense of the words 'recite,' 'render,' and 'play' refer to actions that can be perceived contemporaneously," said the ruling.
"Itzakh Perlman gives a 'recital' of Beethoven’s Violin Concerto in D Major when he performs it aloud before an audience," it said. "Jimmy Hendrix [sic] memorably (or not, depending on one’s sensibility) offered a 'rendition' of the Star-Spangled Banner at Woodstock when he performed it aloud in 1969. Yo-Yo Ma 'plays' the Cello Suite No. 1 when he draws the bow across his cello strings to audibly reproduce the notes that Bach inscribed. Music is neither recited, rendered, nor played when a recording (electronic or otherwise) is simply delivered to a potential listener."
"The downloads at issue in this appeal are not musical performances that are contemporaneously perceived by the listener," said the ruling. "They are simply transfers of electronic files containing digital copies from an on-line server to a local hard drive. The downloaded songs are not performed in any perceptible manner during the transfers; the user must take some further action to play the songs after they are downloaded."
The ruling said that the same could not be said for the streaming of files which, like broadcasts, had to be licensed for their performance.
"[Yahoo! and Real's] stream transmissions, which all parties agree constitute public performances, illustrate why a download is not a public performance. A stream is an electronic transmission that renders the musical work audible as it is received by the client-computer’s temporary memory. This transmission, like a television or radio broadcast, is a performance because there is a playing of the song that is perceived simultaneously with the transmission," said the Court.
The Court rejected ASCAP's appeal that downloading was a performance, and it also overturned the basis of a lower court's award of licensing income to ASCAP. It said that the court's findings were "flawed in two major respects" and rejected the mechanism used to calculate licensing revenues.
The Court sent the case back to the lower court for reconsideration of an appropriate method of calculating the licence fees due to ASCAP.