14 DAY TRIAL // The Federal appeals court in New York issued a ruling on August 21, 2009 regarding an appeal filed by several music recoding companies against a previous ruling that gave Yahoo LAUNCHcast the right to play online music without paying licensing fees. The court classified LAUNCHcast as “not an interactive service;” thus, it could not be a subject to licensing fees.
The court was comprised of three judges, and it issued a final ruling in a case that started over eight years ago, in 2001. At that time, LAUNCHcast was recently acquired by Yahoo, when several recording companies led by Sony Music and Arista Records filed a lawsuit for several copyright infringement charges.
Soon after, other companies like Capital Records, Motown Records, Virgin Records America and Bad Boy Records joined the cause, motivated at that time by the Napster scandal.
LAUNCHcast, a simple music streaming service provided by Yahoo based on personal user settings and preferences, was not considered to offer any supplemental entertainment value besides its simple music playing capabilities, and was absolved of negotiating future fees with recording companies.
Taken out of the online-radio category, the Yahoo service needs to pay only small licensing fees set by the Copyright Royalty Board and SoundExchange, a non-profit organization that collects royalties and delivers them to the original authors, without any percentages going to recording or promotional companies.
Judge Richard Wesley said for Reuters that "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."
In a statement sent via email to InternetNews, a Yahoo representative stated that "We are pleased with the Court of Appeals' decision and we look forward to continuing to provide the best online music experiences to our users."