A U.S. federal judge has rejected a music royalty collection agency's contention that a mobile operator is liable to pay public performance royalties when a ringtone is played.
The suit was filed in U.S. District Court for the Southern District of New York by The American Society of Composers, Authors and Publishers (ASCAP) against Verizon Wireless. ASCAP filed a similar suit against AT&T.
ASCAP's suit marks another attempt by the music industry to secure new revenue in light of the proliferation of digital music. ASCAP argued that Verizon "was directly and secondarily liable for public performances of music works."
In her opinion, Judge Denise Cote rejected ASCAP's argument that Verizon is directly liable due to the fact that it controls the technical processes that cause a person's phone to ring, and thus, a ringtone. The ring doesn't quality as a public performance under the Copyright Act, she wrote.
"Despite the accusation that Verizon enjoys revenue from publicly played ringtones, Verizon makes no revenue from the playing of ringtones, in public or elsewhere," Cote wrote. "It makes revenue from selling ringtones, and it already pays a mechanical licensing fee in connection with those sales."
Under the Copyright Act, it is also legal to play music within a "normal circle of a family and its social acquaintances" without any expectation of making money, which exempts people of the need to obtain a performance license, Cote wrote. It also relieves Verizon from being secondarily liable, she wrote.
"In sum, customers do not play ringtones with any expectation of profit," Cote wrote.
The Center for Democracy & Technology (CDT) praised the decision. The CDT along with the Electronic Frontier Foundation and the group Public Knowledge had earlier filed an amicus brief opposing ASCAP's suit against AT&T.
"This ruling is a win for consumers and innovation," wrote Andrew McDiarmid, policy analyst at the CDT, on the organization's blog. "The court has rejected an undue expansion of the public performance right and licensing costs, preserving the ability of consumers to make private uses of the music they legally purchase."