Yahoo's Launch wins webcasting fee case

Appeals court says service not classified as 'interactive'

NEW YORK -- A federal appeals court in New York, in a victory for Yahoo, on Friday ruled that a webcasting service that provides users with individualized Internet radio stations need not pay licensing fees to copyright holders of the recordings it plays.

The U.S. Second Circuit Court of Appeals said a webcasting service cannot be classified as an "interactive service," which would require the fees. It said a webcasting service must instead pay only a statutory licensing fee set by the Copyright Royalty Board.

The three-judge panel in the case said it was the first federal appeals court to decide the issue.

The case involved Launch Media Inc., a Yahoo unit that operates an Internet radio Web site called LAUNCHcast, which lets users create "stations" that play songs in a particular genre or similar to particular artists or songs they select.

Judge Richard Wesley, writing for the court, wrote: "There is no general right of performance in the sound recording copyright. There is only a limited right to performance of digital audio transmission with several exceptions to the copyright, including the one at issue in this case."

The plaintiff recording companies in the case include Sony Corp.'s Arista Records LLC, Bad Boy Records, BMG Music, Capital Records, Motown Records and Virgin Records America, among others.

A Sony representative declined comment. A lawyer for the recording companies did not return a call seeking comment. A lawyer for Launch Media had no immediate comment.

The case is Arista Records LLC et al v. Launch Media Inc, U.S. Second Circuit Court of Appeals, No. 07-2576.
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