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Judge rebukes copyright enforcer in ringtone case

Wireless carrier win

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A federal judge has handed cellular carriers a decisive victory, ruling that they don't have to pay public performance licensing fees for the ringtones they sell to customers.

If upheld, the decision by US District Judge Denise Cote of the Southern District of New York means Verizon Wireless won't have to pay millions of dollars in licensing fees to the American Society of Composers, Authors, and Publishers, better known as ASCAP. The case was closely watched by a raft of groups on both sides of the issue, including composers, wireless carriers and consumer advocates.

ASCAP argued it was entitled to the revenue because the playing of ringtones constituted a public performance akin to a movie or audiovisual work. It reasoned that because Verizon controlled the entire process that allowed a song to be played in public on a cell phone, it directly infringed the works' copyright. The group also claimed Verizon was liable for the infringement of its subscribers.

In a 34-page ruling issued Wednesday (PDF), Cote firmly disagreed. Her basis: While Verizon encourages subscribers to purchase ringtones and provides the technology needed for them to be played in public, its actions didn't rise to an actual performance as described by copyright statutes.

"Verizon does not 'recite, render, play, dance, or act [the ringtone] either directly or by means of any device,' and thus does not 'perform' the music, as that term is defined in the Copyright Act," she wrote. "Nor does Verizon engage in conduct that can be said to cause a ringtone to be played in public. 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."

She went on to reject ASCAP's arguments that Verizon was liable for the infringement of its customers. People who allow ringtones to play on their phone while in cafes or other public places do so "with no expectation of profit" and "only in the presence of the 'normal circle of a family and its social acquaintances,'" she wrote.

Under the Copyright Act, that finding exempted the subscribers from a requirement to obtain a performance license.

Such public performance licenses are only one of six exclusive rights Congress grants to copyright holders. The ruling doesn't apply to rights such as copying the musical work to a computer file or distributing works for sale. Verizon is already saddled with royalty fees of 24 cents for each ringtone download it offers, more than twice what it has to pay when its subscribers obtain the entire song.

The ruling will prevent copyright holders from double dipping and burdening Verizon, and other carriers, with additional royalty payments.

Verizon and other wireless carriers aren't the only potential beneficiaries of the ruling. It's also a victory to average joes, given ASCAP's argument that, by allowing copyrighted music to be played in public settings, they were also on the hook for infringement.

The ruling "very clearly says that consumers do not infringe copyright just by playing music in public," said Fred von Lohman, a senior staff attorney at the Electronic Frontier Foundation, which filed a friend-of-the-court brief in opposition to ASCAP. "That's not only good news if your cell phone rings in a restaurant, that's also good news if your car radio is on with the windows down or you sing happy birthday in a public park." ®

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