In re Cellco Partnership
| Decision Date | 14 October 2009 |
| Docket Number | No. 09 Civ. 7074(DLC)(MHD).,No. 41 Civ. 1395(DLC).,09 Civ. 7074(DLC)(MHD).,41 Civ. 1395(DLC). |
| Citation | 663 F.Supp.2d 363 |
| Parties | In re Application of CELLCO PARTNERSHIP d/b/a Verizon Wireless. Related to United States of America, Plaintiff, v. American Society of Composers, Authors, and Publishers, Defendant. |
| Court | U.S. District Court — Southern District of New York |
David Leichtman, Hillel Parness, Eleanor Lackman, Lovells LLP, Richard Reimer, Christine Pepe, American Society of Composers, Authors, and Publishers, New York, NY, for American Society of Composers, Authors, and Publishers.
Bruce Joseph, Andrew McBride, Michael Sturm, Wiley Rein LLP, Washington, DC, for Cellco Partnership d/b/a Verizon Wireless.
Michael Salzman, Jessica Feldman, Hughes Hubbard & Reed LLP, Marvin Berenson, Joseph DiMona, John Coletta, Broadcast Music, Inc., New York, NY, for Amicus Curiae Broadcast Music, Inc.
Andrea Williams, CTIA—The Wireless Association, Washington, DC, Bruce Keller, Jeffrey Cunard, Michael Potenza, Richard Lee, Debevoise & Plimpton LLP, New York, NY, for Amicus Curiae CTIA— The Wireless Association.
Gary Shapiro, Consumer Electronics Association, Arlington, VA, for Amicus Curiae Consumer Electronics Association.
Lee Knife, Digital Media Association, Washington, DC, for Amicus Curiae Digital Media Association.
Michael Elkin, Thomas Lane, Winston & Strawn, New York, NY, Fred von Lohman, Electronic Frontier Foundation, San Francisco, CA, for Amici Curiae Electronic Frontier Foundation, Public Knowledge, and Center for Democracy and Technology.
Heidi Salow, DLA Piper, Washington, DC, for Amicus Curiae Internet Commerce Coalition.
C. Paul Spurgeon, Society of Composers, Authors, and Music Publishers of Canada, Toronto, Ontario, Canada, Al Daniel, Jr., Toby Butterfield, Christopher Marino, New York, NY, for Amicus Curiae Society of Composers, Authors, and Music Publishers of Canada.
Kenan Popwell, Society of European Stage Authors & Composers, Inc., New York, NY, John Beiter, Zumwalt, Almon & Hayes PLLC, Nashville, TN, for Amicus Curiae Society of European Stage Authors & Composers, Inc.
Jonathan Banks, United States Telecom Association, Washington, DC, for Amicus Curiae United States Telecom Association.
This summary judgment motion presents the question of whether a retail wireless communications company requires a public performance license for musical compositions because it provides ringtones to its customers. For the following reasons, it does not.
Cellco Partnership d/b/a Verizon Wireless ("Verizon") began this proceeding by filing its January 23, 2009 application for a determination of reasonable fees for a blanket license for the public performance of musical compositions in the repertory of the American Society of Composers, Authors, and Publishers ("ASCAP").1 Verizon is a retail wireless communications company. ASCAP is a performing rights organization that licenses on a non-exclusive basis the non-dramatic public performance rights to musical works.2
Verizon sells ringtones, amongst other products and services. A ringtone is "a digital file of a portion of a musical composition or other sound" that is designed to be played by a customer's telephone in order to signal an incoming call in the same manner as would a telephone ring. A customer can download a ringtone either from the internet or through a Verizon telephone. To obtain a ringtone from Verizon, a customer must purchase it and download it to a cellular telephone.3 Downloading a typical thirty-second ringtone takes a matter of seconds. A ringtone cannot be played while it is being downloaded. After a ringtone has been downloaded, a digital file appears on the customer's telephone. The customer can listen to the downloaded ringtone by clicking on the digital file, but only after it has been fully downloaded.
After a ringtone is downloaded, the underlying audio file is stored on the telephone. A customer can then set her telephone to play the ringtone when her telephone receives an incoming call. The customer determines whether and where a ringtone will play when she receives a call by controlling whether her telephone is on or off, whether the telephone is set to indicate an incoming call by playing a ringtone or by some other method (e.g., normal ringing, vibrating), and where the telephone is at any given point. When a ringtone rings, the music or sound clip plays from the file stored on the telephone.
Verizon's role in playing a ringtone is that it sends a signal to a customer's telephone to indicate an incoming call. That signal is the same regardless of whether or not the customer has set her telephone to indicate an incoming call with a ringtone. Verizon does not monitor when and where customers' ringtones play, and it does not earn any money from ringtones beyond the fee paid for the initial download transaction.
On May 22, 2009, Verizon filed this motion for summary judgment on the question of whether it must pay public performance licensing fees for ringtones.4 Verizon filed its reply on June 25. On July 22, this case was reassigned to this Court. Parties were given leave to file supplemental letters discussing recent developments in the law, which became fully submitted on August 28.
ASCAP argues that Verizon engages in public performances of musical works when it downloads ringtones to customers. In addition, ASCAP argues that Verizon is both directly and secondarily liable for public performances of musical works when customers play ringtones on their telephones. Verizon seeks summary judgment in its favor on each theory of liability.
Summary judgment may not be granted unless all of the submissions taken together "show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party bears the burden of demonstrating the absence of a material factual question, and in making this determination, the court must view all facts in the light most favorable to the non-moving party. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Roe v. City of Waterbury, 542 F.3d 31, 35-36 (2d Cir.2008). When the moving party has asserted facts showing that the non-movant's claims cannot be sustained, the opposing party must "set forth specific facts showing that there is a genuine issue for trial," and cannot rest on the "mere allegations or denials" contained in the pleadings. Fed.R.Civ.P. 56(e); accord Wright v. Goord, 554 F.3d 255, 266 (2d Cir.2009). That is, the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Only disputes over material facts—facts that might affect the outcome of the suit under the governing law—will properly preclude the entry of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); accord Roe, 542 F.3d at 35.
The protection given to copyrights is wholly statutory. Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 431, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984). The Copyright Act does not give a copyright owner control over all uses of his work, but instead grants "`ex-clusive' rights to use and to authorize the use of his work" in the specific ways enumerated in the statute. Id. at 432-33, 104 S.Ct. 774.
The rights at issue in this litigation constitute only one of the many rights created by the copyright statute. To begin with, there are separate bundles of rights in a musical composition and in its embodiment in a sound recording. "Copyright protection subsists ... in original works of authorship fixed in any tangible medium of expression," including "musical works" and "sound recordings."5 17 U.S.C. § 102. "Sound recordings and their underlying musical compositions are separate works with their own distinct copyrights." Palladium Music, Inc. v. EatSleepMusic, Inc., 398 F.3d 1193, 1197 n. 3 (10th Cir.2005). Whereas "[t]he author of a musical composition is generally the composer, and the lyricist, if any," "[t]he author of a sound recording is the performer(s) whose performance is fixed, or the record producer who processes the sounds and fixes them in the final recording, or both." Copyright Office Circular 56A at 1 ("Copyright Registration of Musical Compositions and Sound Recordings") (available at http://www.copyright.gov/ circs/circ56a.pdf); see also Intercollegiate Broad. Sys., Inc. v. Copyright Royalty Bd., 571 F.3d 69, 72-73 (D.C.Cir.2009) (per curiam). ASCAP represents owners of the copyright in the musical composition only and therefore does not negotiate licenses in sound recordings.6
A copyright owner may hold as many as six exclusive rights. They are the rights
(1) to reproduce the copyrighted work in copies or phonorecords;
(2) to prepare derivative works based upon the copyrighted work;
(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;
(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and
(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.7
17 U.S.C. § 106 (emphasis supplied).
Each of these six rights may be owned and conveyed separately. 17 U.S.C. § 201. The rights to reproduce and to distribute musical works, see...
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