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Second Circuit rules Yahoo Internet radio not subject to royalty fees

[JURIST] The US Court of Appeals for the Second Circuit [official website] ruled [opinion, PDF] Friday that Yahoo is not required to pay royalties for songs played over Internet radio. Several recording companies, all owned by Sony Corp, originally sued in 2001, claiming that Yahoo's online radio service, LAUNCHcast, was interactive, requiring the payment of royalty fees, because it allowed listeners to skip songs [NYT report]. The appeals court's decision upheld a 2007 lower court ruling in which a jury decided that skipping songs did not make the program interactive, finding:

In short, to the degree that LAUNCHcast's playlists are uniquely created for each user, that feature does not ensure predictability. Indeed, the unique nature of the playlist helps Launch ensure that it does not provide a service so specially created for the user that the user ceases to purchase music. LAUNCHcast listeners do not even enjoy the limited predictability that once graced the AM airwaves on weekends in America when "special requests" represented love-struck adolescents' attempts to communicate their feelings to "that special friend." Therefore, we cannot say LAUNCHcast falls within the scope of the DMCA's definition of an interactive service created for individual users.

It is unclear whether plaintiffs will appeal.

Friday's decision is the latest example of the recording industry attempting to regulate the way content is shared over the Internet. In July, Boston University graduate student Joel Tenenbaum was ordered to pay $675,000 in a file-sharing suit [JURIST report] brought against him by Warner Brothers. In the only other file-sharing case to go to trial, Jammie Thomas-Rasset was found liable and fined $192 million [JURIST report] last month. The suit against Tenenbaum may be the last to be brought to trial, as the Recording Industry Association of America (RIAA) [organization website] in December decided to discontinue pursuing [JURIST report] those accused of illegal file-sharing in court. The RIAA has indicated that it will work with internet service providers to identify and then deny service to those who infringe copyrights. The RIAA has also sent letters [press release] to thousands of individuals with an offer to settle infringement claims out of court.

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