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RIAA, Webcasters Mired In Litigation

For the third consecutive Friday, litigants in the ongoing battle between webcasters and the recording industry have filed suit against each other, this time over the venue of the proceedings.

In a legal action that equates essentially to a procedural step asking the court to consolidate all legal proceedings involving the Digital Media Association and its member companies, the RIAA has filed a motion against MTVi, MusicMatch, and Xact Radio. Today’s action marks the third straight week in which one party in the ongoing battle over rules in the DMCA legislation has filed suit against another. The RIAA today asked a court in New York to rule that all filings and proceedings be conducted in New York.

A week ago, DiMA, several member companies asked the U.S. District Court in San Francisco to confirm that the companies’ consumer-influenced Internet radio services are eligible for the sound recording statutory license that Congress enacted as part of the Digital Millennium Copyright Act. A week prior to that, the RIAA asked the U.S. Copyright Office to disqualify several companies that offer consumer-influenced Internet radio services from the royalty arbitration proceeding. The U.S. Copyright Office previously ruled that offering consumer-influence features does not render a webcasting service “interactive,” and thus ineligible for this statutory license. But the agency stopped short of creating a “bright line” that delineates the type and degree of consumer influence that are permissible when a webcaster seeks to utilize the compulsory license.

DiMA member companies insist that they have committed to pay performance royalties to record companies and artists (retroactive to October 1998) as part of an industry-wide arbitration proceeding that is currently underway. That proceeding will continue in earnest on July 30th when the Copyright Arbitration Royalty Panel tackles the sticky task of setting royalty rates for the compulsory license.

Cary Sherman, RIAA senior executive vice president and general counsel said, “The actions we brought today were filed in response to the declaratory judgment action brought against us earlier this month by DiMA. DiMA’s decision to sue left us with little choice but to take this action. A district court in New York is already considering this issue, and these related cases should be heard in the same forum.”

DiMA Executive Director Jonathan Potter said in a printed statement, “The Digital Media Association is disappointed that the recording industry has chosen to initiate another in a long line of lawsuits. DiMA and webcasters have asked the courts to make a determination on this issue. Rather than wait for the courts to decide, the recording industry has initiated unnecessary and punitive actions against webcasters over an honest dispute of the Copyright Act. We hope to resolve these issues quickly.”

“MusicMatch has gone to great lengths to ensure that its Internet radio service adheres to both the letter and the spirit of the DMCA, and we continue to demonstrate our unwavering support for the rights of copyright holders. MusicMatch understands that there is a need for clarification on the degree of consumer influence permitted under the DMCA’s compulsory license and, on June 1, asked the court to clarify which services would be eligible for compulsory licenses under the DMCA.” Bob Ohlweiler, senior vice president of business development added, “This action brought by the recording industry is unnecessary, and we are completely confident that the Federal Court will agree that MusicMatch Radio is a non-interactive service and eligible for DMCA statutory licenses.”  

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