In recent years, patent issues have arisen in many areas affecting online media.  In a recent decision, the Supreme Court decided that lower Courts have more discretion to review whether a patent should be rejected for "obviousness."  To be valid, a patent must cover some degree of innovation, and should not be simply an idea that would be obvious to the normal person when looking at a particular situation.  If the claimed invention would be "obvious" to a person looking at the particular circumstances and using common sense, the Court found that a patent could be rejected.  A memo from our law firm on the details of the decision can be found, here.

As set forth in the memo, the extent to which this decision will affect existing patents and pending disputes remains to be seen.  In the on-line media world, patent issues have been arisen for many companies.  For instance, there have been patents claims asserted against companies providing on-demand digital media, pop-up billing screens, ad insertion technologies and even on-line contests.  This decision may not affect these patent claims or any of the hundreds of others that have been the subject of dispute among digital media companies.  But continuing litigation in this area should be monitored to see if developments affect any patent claims that may be asserted against technologies that your company may be employing.

The Internet Radio Equality Act was introduced in the Senate today by Senators Wyden and Brownback.  The Bill tracks the substance of the Bill that was introduced in the House of Representatives by Congressmen Inslee and Manzullo.  The Senate Bill in addition includes broader provisions providing relief to large noncommercial webcasters who were not specifically addressed by the House legislation.

The Press release on the introduction of the bill can be found here.  In introducing the legislation, the Senators cite the webcasters, the listeners and the musicians who will benefit from the preservation of Internet radio.  Of course, the bill has a long way to go before it becomes law.  See our discussion offered when the House Bill was introduced discussing the process that a bill will follow before it becomes law. 

A story in the Hollywood Reporter indicates that a coalition of record companies and associations representing performing artists are preparing to initiate a Congressional lobbying effort to push for a royalty for performance rights in sound recordings that would apply to broadcasters’ over-the-air transmissions, not just their Internet streams.  Broadcasters currently pay performance royalties  to ASCAP, BMI and SESAC for their over-the-air music programming – royalties that are paid to composers (or music publishing companies) for the use of the underlying musical composition.  Digital operators (satellite radio, Internet radio, digital cable radio) pay royalties for the composition and also pay royalties for the sound recording, i.e. the actual performance as recorded on a record, CD, or digital download.  The copyright for the sound recording is usually held by a record company.  The performance right in a sound recording did not exist in the United States until 1995, and still applies only to digital transmissions.  Obviously, if extended to broadcasting, this could result in huge expenses to broadcasters – amounts for which they probably have not planned.

This is not the first time that such a royalty has been mentioned.  In introducing the PERFORM Act earlier this year, Senator Feinstein of California suggested that this legislation, which makes certain changes in the digital royalty standards that apply to various services as well as to other copyright license provisions, was only a first step in clarifying royalty issues.  In statements made at the time, there were indications that she favored further legislation to adopt a sound recording performance right for broadcasters.  At last week’s Future of Music Conference, David Carson, General Counsel of the Copyright Office, also spoke in favor of such a right – suggesting that if SoundExchange collected money from broadcasters they might not need to seek so much from Internet Radio companies (see our coverage of the Internet radio royalty issues, here).

 

Continue Reading Lobbying Effort to Make Broadcasters Pay Sound Recording Royalties in the Works?

this article is no longer available. For more information on this topic , see  EEO Public File Reports Due By February 1 For Broadcasters in Arkansas, Kansas, Louisiana, Mississippi, Nebraska, New Jersey, New York, and Oklahoma – David Oxenford Conducts Webinar to Refresh Kansas Broadcasters on Their EEO Obligations

The FCC last week considered two requests for reconsideration of fines issued to broadcasters for violations of FCC rules relating to their broadcast towers.  While the FCC reduced one fine because of the licensee’s inability to pay the amount originally specified, both broadcasters will have to make payments to the Commission because of their failures to meet the FCC’s rules regarding the ownership of broadcast towers.  These cases remind broadcasters of their obligations to meet the Commission’s tower rules, and should cause all broadcasters to check their compliance. 

In the first case, the FCC reduced the fine of a licensee who had failed to fence its AM station’s tower, but only because the licensee proved that it could not pay a higher fine.  But a $500 fine was still imposed as the owner had no fence around a series-fed AM tower.  The FCC pointed out that its rules require that any AM tower that has the potential for an RF radiation hazard at the base of the tower must be fenced. This station had violated that rule.

Continue Reading Fines for Tower Violations Remind Broadcasters to Mind FCC Rules

In one of those "from the depths of history" moments, the FCC on Friday released a Public Notice asking that the record be refreshed as to whether television stations that program a substantial amount of home shopping programming operate in the public interest, and whether they are entitled to must-carry status on cable systems.  In 1993, the FCC found that these stations did operate in the public interest – providing shopping opportunities to the homebound and alternative programming not available on other stations.  Soon thereafter, a petition for reconsideration of that action was filed, arguing that these stations did not serve the public interest for reasons including the fact that they preempted the use of spectrum by others who could provide better service.  That petition sat at the Commission for the next 14 years.

Now, when home shopping stations have largely disappeared from the television universe, the FCC has resurrected the petition, and is asking for public comment on the issues that it raises, and is even expanding the inquiry.  The Commission asks how many television stations still program substantial amounts of shop at home programming, whether the programming is in the public interest, whether these stations preclude other more worthy uses of the television spectrum, and whether these stations meet their public interest obligations including their obligations under the FCC’s Children’s Television rules.

Comments are due 30 days after the Notice is published in the Federal Register, and Reply Comments are due 15 days later.

Last week, House Commerce and Energy Committee Chairman John Dingell reportedly stated that he favored the return of the Fairness Doctrine, and couldn’t see why broadcasters would be opposed.  We’ve suggested reasons, here and here.  But the reports are that Congressman Dingell may try to move legislation to accomplish the return of the Doctrine later this year.

But, in good news for broadcasters, Congressman Dingell said that he didn’t foresee any action on violence regulation this year – absent some triggering event – presumably something like the Janet Jackson incident which galvanized Congress into action to raise indecency penalties.  Perhaps one less concern for broadcasters, but the Fairness Doctrine appears to be a real concern to watch.

In an action announced on the blog of popular Internet radio service Pandora, the service has decided to block Internet radio streams that are requested by users with IP addresses that are not in the United States or Canada.  This action highlights that fact that it is not only the Copyright Royalty Board decision on US royalties that is causing uncertainty for many Internet radio stations.  Royalty obligations for overseas listening also adds to the uncertainty and potential liabilities of these services.  Several US Internet radio stations have in the past received royalty notices from overseas collection agencies, asking for royalties for the use of sound recordings that are streamed to users in their countries.  This had caused other US streaming companies to block access to their services to foreign listeners. As the royalties that are paid to SoundExchange only cover US listening, until there is a reciprocal agreement between these collection agencies allowing one country’s agency to collect for worldwide usage and then distribute the money to the appropriate rights holders worldwide, potential liabilities to multiple worldwide collection agencies will persist. 

At last week’s Future of Music Policy Day in Washington, DC, SoundExchange President John Simson said that SoundExchange was hosting a meeting in Washington for representatives from a number of international collection agencies in efforts to work out an agreement that would provide a reciprocal collection and distribution agreement for Internet radio services.  In this instance, Internet radio operators should be on the same side as SoundExchange, rooting for its sucess in this negotiation to provide one-stop shopping for royalties for all of their listeners.

Continue Reading Pandora Blocks International Internet Radio Streams – Highlighting Royalty Confusion

The front page of the Sunday New York Times featured a story titled "Shock Radio Shrugs at Imus’s Fall And Roughs Up the Usual Victims."  The story reports on radio station talk programming and how the Times’ reporters found numerous instances of what they refer to as "coarse, sexually explicit banter" and "meanness."  The Times reports that these programs could lead the announcers and the stations owners into dangerous territory – either from FCC fines or through advertiser cancellations.  The Times also correctly indicates that the FCC usually does not initiate actions against such programs based on its own monitoring, but instead based on listener complaints – almost an open invitation for such complaints to be filed based on the paper’s report.  With reports such as this hitting the popular press, after being brought to the forefront of public attention by the Imus affair, and earlier this year by the Sacramento contest gone wrong for the the Wii (here), can calls for regulation be far behind?

The Times own report asks the question as to whether the FCC or Congress will step up regulation in light of the Imus affair.  Interestingly, it avoids the questions raised by its own reports as to where lines would be drawn in any regulations.  For instance, in the story, the Times identified some programming that might cause concern under FCC indecency guidelines depending on the context in which the cited material was used, the report also cites several instances which assuredly do not fit within any FCC prohibitions.  In fact, some of the samples cited by the article do not seem much more "coarse" than what you might find on some Sunday morning or cable television news-talk programming.  For instance, the Times cites, seemingly as an example of "crude remarks," statements made on the Mancow syndicated radio talk programming, where Mancow allegedly asserted that radical Muslims "would not stop until they had flattened American religion like a steamroller" and then went on to say that he didn’t want his children to be killed or "brainwashed" into Islamic beliefs.  While I’m sure that the Mancow language was not the same as that which might be used on a political talk program – aren’t similar expressions about the goals of radical Islam often aired on such news talk programs – often by members of the political establishment?  Would the Times want to regulate the discussion of ideas based on how or where they were expressed?  In any content regulation, lines are hard to draw.

Continue Reading Radio Shock Jocks in the News – Calls for Regulation to Follow?