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July 19, 2002
Third Circuit Digital Transmissions Appeal

Having been directly involved in the law being appealed by NAB in the 3rd Circuit, the NAB will lose.

Basically, what occurred was that my partner in EMusic.com (and author of Kohn on Music Licensing) Bob Kohn gave a lecture at the very first MP3 summit that explained how the '95 Digital Performance Rights in Sound Recordings act worked as it related to internet broadcasters. This was in response to the RIAA sending out cease and desist letters to all internet broadcasters at the time (late '88). The original act exempted all non interactive non subscription streams from a requirement to pay for a digital right in the sound recording. Quietly, the RIAA had been starting to hassle Yahoo!, who had very recently acquired Broadcast.com from our now favorite NBA owner - Mark Cuban. The RIAA had trumped up that they would hold Broadcast strictly liable for the ephemeral copies they made to facilitate streaming of sound recordings

Presented with Bob's presentation at which Steve Marks of the RIAA attempted to claim that Bob's plain language chart of the regulation didn't say what it said and a later article in the Entertainment Law Review, the RIAA made a faustian horse trade with Yahoo! They swapped a clarification that the ephemeral recording exception applied to digital transmissions for a performance right in sound recordings for non interactive non subscription streaming into the Digital Millennium Copyright Act. The saddest part of the deal was that Yahoo! had excellent standing to claim that the ephemeral recording exception did apply to internet broadcasts.

At the time, we tried to get NAB to pay attention, but they told us that it was to "inconsequential." Now they will pay the piper.

To view Bob's article and the RIAA demand letter and response to Bob's article, scroll down Kohnmusic.com to the headline, "Legal Aspects of Webcasting and Digital Music Delivery."

Posted by hoffmang | July 19, 2002 12:25 AM


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