Yahoo! not liable in copyright case

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NEW YORK -- A federal jury in New York has decided that Yahoo! Inc.'s Launchcast is not liable to Sony BMG Music Entertainment for copyright infringement.

After a six-year litigation, the jury decided Friday that Launchcast was not required to negotiate licenses as an "interactive" service with Sony BMG. Instead, the service's compulsory licenses as a "noninteractive" service, which it obtained from SoundExchange, were sufficient.

No court has yet decided when an online music service crosses the line from noninteractive to interactive; this case only applies to Launchcast. While most experts agree that a service is interactive when a user can select and play a particular song on demand, it has been unclear whether a service that customizes playlists for a user is interactive or noninteractive. An interactive service requires the digital company to negotiate licenses with the copyright owners of sound recordings at negotiated prices; a noninteractive service may obtain a compulsory license (with or without the owner's permission) from SoundExchange at rates set by law.

Belinda Johnson, Yahoo!'s deputy general counsel, said in an interview that the verdict reinforces Yahoo!'s view that Launchcast was in compliance with copyright law.

"We disagree with the decision that the Launchcast service is nothing more than radio on the Internet, and fully intend to appeal," Sony BMG said in a statement.

Susan Butler is a senior correspondent for Billboard.
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