The U.S. District Court for the Southern District of New York recently handed down a landmark decision upholding the rights of music creators in the Digital Age. By setting compensation rates for the public performance of music on three Internet services — AOL, RealNetworks and Yahoo — the decision establishes new ground rules for virtually every Internet content aggregator and social networking site, as well as countless online, mobile or other technology-driven services yet to be imagined.
In the broadest sense, the court reaffirmed and applied to the virtual world the momentous 1917 Supreme Court decision recognizing that music creators deserved copyright protection for the public performance of their works. Justice Oliver Wendall Holmes delivered the ruling, which included these memorable words: “If music did not pay, it would be given up . . . whether it pays or not, the purpose of employing it is profit, and that is enough.”
Again, the court acknowledged the legal right of music creators to fair compensation for the use of their creative works — works that online services have been using for years to subsidize their billion-dollar businesses, while paying little or nothing to music creators, like ASCAP’s members. The court adopted a formula that recognizes…
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