The U.S. Court of Appeals for the Second Circuit ruled against ASCAP on Tuesday, saying that digital downloads of musical works do not constitute public performances. In a separate matter, the court sent back to the district court the issue of fees Yahoo and RealNetworks must pay ASCAP. The district court, the appeals court said, did not adequately justify the way it measured the value of music to the digital service and set a 2.5% royalty rate.

A download creates a copy of a musical work, which entitles copyright owners to a statutory mechanical royalty. The two sides disputed whether or not a download is also a public performance for which copyright owners are entitled to an additional royalty. ASCAP, which collects performance royalties on behalf of its songwriter members, had argued that downloads “transmit or otherwise communicate a performance.”

“The district court held that these downloads are not public performances,” the court wrote in its ruling, “and we agree.” To arrive at its conclusion, the court looked at Section 101 of the Copyright Act. It states that “[t]o ‘perform’ a work means to recite, render, play, dance, or act it, either directly or by means of any device or process.” The court believed a download was clearly not a “dance” or an “act.” The other words in the statute -- “recite,” “play” and “render” – all believed to have a “contemporaneous perceptibility.” The ruling then put the words of the statute into musical context.

These definitions comport with our common-sense understandings of these words. Itzakh Perlman gives a “recital” of Beethoven’s Violin Concerto in D Major when he performs it aloud before an audience. Jimmy [sic] Hendrix memorably (or not, depending on one’s sensibility) offered a “rendition” of the Star-Spangled Banner at Woodstock when he performed it aloud in 1969. Yo-Yo Ma “plays” the Cello Suite No. 1 when he draws the bow across his cello strings to audibly reproduce the notes that Bach inscribed. Music is neither recited, rendered, nor played when a recording (electronic or otherwise) is simply delivered to a potential listener.

In simple terms, the court interprets Section 101 as saying if you can’t hear it, it’s not a performance. The downloads are not musical performances that are “contemporaneously perceived” by a listener. A download is a transfer of data from one server to another that is not heard during the transmission (“transmitted at one point in time and performed at another”). In contrast, a stream, the court said, is a transmission that can be perceived at the time of transmission.

In an e-mailed statement ASCAP wrote: "ASCAP and its songwriter, composer and music publisher members are, of course, disappointed in the Court's decision that there is no public performance in the transmission of certain musical downloads. We are studying the decision and will determine what further action is appropriate. The Second Circuit remanded the rate calculation back to the district court with instructions to determine whether there are "more precise or practicable" methods of fixing a rate for the use of our members' music. We anticipate that in the end, the proceeding will result in a fair and favorable license fee to be paid by commercial online services for the valuable intellectual property they use to sustain their businesses -- the music created and owned by the songwriters, composers and music publishers ASCAP represents."