Yahoo! Defeats Sony BMG Infringement Suit

A federal jury in New York decided late today that Yahoo!'s Launchcast is not liable to Sony BMG Music Entertainment for copyright infringement.

After a six-year litigation, the jury decided that Launchcast was not required to negotiate licenses as an "interactive" service with Sony BMG Music Entertainment. Instead, the service's compulsory licenses as a "non-interactive" service, which it obtained from SoundExchange, were sufficient. The jury found Yahoo! not liable for copyright infringement.

No court has decided when an online music service crosses the line from non-interactive to interactive; this case only applies to Launchcast. While most experts agree that a service is interactive when a user can select and play a particular song on demand, it has been unclear whether a service that customizes playlists for a user is interactive or non-interactive. An interactive service requires the digital company to negotiate licenses with the copyright owners of sound recordings at negotiated prices; a non-interactive service may obtain a compulsory license (with or without the owner's permission) from SoundExchange at rates set by law.

Belinda Johnson, Yahoo!'s deputy general counsel, tells that the verdict reinforces Yahoo's view that Launchcast was in compliance with copyright law.

"We disagree with the decision that the Launchcast service is nothing more than radio on the Internet, and fully intend to appeal," Sony BMG said in a statement.

Check back at for a full report on this morning's closing arguments and some jurors' explanation for the verdict.