Academic journal article Marquette Intellectual Property Law Review

iHeartgeo-Fencing? the Section 114 Exemption That Illustrates Why Full Sound Recording Rights Are the Sine Qua Non for a Vibrant Music Industry

Academic journal article Marquette Intellectual Property Law Review

iHeartgeo-Fencing? the Section 114 Exemption That Illustrates Why Full Sound Recording Rights Are the Sine Qua Non for a Vibrant Music Industry

Article excerpt

I. INTRODUCTION  II. BACKGROUND        A. Recording Artists' Digital Royalties.       B. The Geo-Fencing Technology.       C. VerStandig Up for What You Believe In.       D. The 150-Mile Exemption Could Have          Far Reaching Implications.  III. COURTS PROBABLY SHOULD ALLOW BROADCASTERS TO USE GEO-FENCING TO AVOID COPYRIGHT ROYALTIES, BUT WILL PROBABLY FIND THEM TO BE GEO-INFRINGING.        A. The Plain Language of the Statute Seems to Support          Geo-Fencing to Avoid Royalties.       B. The Purpose and Legislative History of the DPRA Probably          Support Geo-Fencing to Avoid Royalties       C. Disruptive Innovators Threaten Copyright Rights but Also          Move Industries Ahead  IV. SWING FOR THE FENCES AND CREATE EQUAL       PUBLIC PERFORMANCE RIGHTS  V. CONCLUSION 

I. INTRODUCTION

"If you let me I could, I'd show you how to build your fences, set restrictions, separate from the world." (1) Principally, all types of radio should pay royalties for all uses of sound recordings. (2) By statute, digital radio broadcasters must pay copyright owners for the use of sound recordings produced on or after February 15, 1972. (3) Moreover, recent court decisions against Sirius XM Radio, Inc., regarding pre-1972 sound recordings, could make this statutory license even more profitable for sound recording owners. (4)

However, a statutory exemption may allow some Internet radio services to avoid paying for sound recordings entirely. (5) This exemption allows services that transmit content only within a 150-mile radius to avoid paying digital sound recording royalties. (6)

Recently, a radio broadcaster, VerStandig Broadcasting ("VerStandig"), claimed that its use of geo-fencing technology would allow it to take advantage of this exemption. (7) While one service's use of this exemption may be nominal, the aggregate use from many broadcasters could lead to the deterioration of digital recording royalties.

This Article will introduce geo-fencing technology and the applicable law. It will propose simple regulations to strike the appropriate balance for geographical technology and recording artists' rights.

II. BACKGROUND

This section will introduce the pertinent law and explain geo-fencing. It will then explain the music business' interest in geo-fencing.

A. Recording Artists' Digital Royalties

The Copyright Act gives copyright owners the exclusive right to publically perform and reproduce their work. (8) While musical compositions have received protection for public performances since about the early 1900s, recording artists did not have such rights until recently. (9) In 1995, Congress passed the Digital Performance Right in Sound Recordings Act ("DPRA"). (10) The DPRA amended the [section] 114 license to give recording artists rights for digital public performances by requiring digital radio services to pay recording artists for playing their music. (11) However, the language of the DPRA, and in turn the language of [section] 114, applies only to digital performances and not to performances over terrestrial radio. (12)

SoundExchange is the sole organization authorized to collect royalties under the [section] 114 license. (13) SoundExchange collects royalties from all digital music services and from terrestrial radio stations that simulcast their content over the Internet. (14) Thus, radio stations do not pay for over-the-air content, but must pay if they choose to distribute this same content over the Internet. (15)

The DPRA also created an exemption in [section] 114(d)(l)(B)(i) that states that the compulsory license does not apply to a "retransmission of a nonsubscription broadcast transmission" if "the radio station's broadcast transmission is not willfully or repeatedly retransmitted more than a radius of 150 miles from the site of the radio broadcast transmitter." (16) Previously, broadcasters gave this exemption limited attention; however, a new technology, geo-fencing, may make broadcasters' use of this exemption widespread. …

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