[Infowarrior] - Court rules ASCAP can't seek ringtone royalties

[Richard Forno]

Court rules ASCAP can't seek ringtone royalties
updated 03:45 pm EDT, Thu October 15, 2009

Ringtones not considered performances

http://www.electronista.com/articles/09/10/15/ringtones.not.considered.performances/
A Southern District of New York federal court yesterday ruled (PDF)  
that ringtones don't constitute performances and so are exempt from  
separate royalties. The decision by Judge Denise Cote rejects beliefs  
by royalty group ASCAP that the carrier is responsible for royalties  
for any ringtone played in public and grants the complainant Verizon a  
summary judgment that the only valid royalty is the original for the  
music file itself.

Judge Cote concludes in the ruling that the only role of a cellular  
service like Verizon is to transfer the file to the phone and that it  
can't be held responsible for where and when the ringtone is played.  
Customers for the ringtones are also exempt as they never profit from  
playing their ringtones in public.

The finding potentially sets the groundwork for a reversal of $5  
million in payments Verizon has made to ASCAP to temporarily resolve  
their dispute and also sets a legal precedent that may thwart attempts  
by ASCAP to collect royalties on song samples under similar conditions.

ASCAP has tried to significantly expand its reach in recent months by  
contending that any digital audio playback in public constitutes a  
performance. Critics, including representatives for Apple and other  
music store operators, have accused the association of 'double  
dipping' by trying to collect royalties twice on every song; they have  
also challenged that ASCAP is trying to compensate for a perceived  
shift away from broadcasts and concerts towards personal listening at  
home and in MP3 players.