U.S. Magistrate Judge JOEL C. HOPPE has recommended that a VIRGINIA district court dismiss VERSTANDIG BROADCASTING’s suit against SOUNDEXCHANGE that sought declaratory judgment for its assertion that the 150-mile exemption to the Copyright Act allowing broadcast AM/FM stations not to have to pay royalties to copyright owners of sound recordings should apply to “geo-fenced” Internet streams that do not extend beyond 150 miles as well.
HOPPE’s 27-page advisory ruling, which can be accepted or rejected by the district court, said that “the purely voluntary cost of setting up a geo-fenced simulcast is not a cognizable injury, much less one fairly traceable to SOUNDEXCHANGE’s interpretation of sections 112 and 114” of the law. VERSTANDIG’s “unwillingness to forge ahead” with the geofencing project absent assurances from SOUNDEXCHANGE that it would be exempt from royalty payments, the judge said, was not shown to have been “effectively coerced.”
He also noted that SOUNDEXCHANGE itself holds no copyrights and that VERSTANDIG did not allege facts from which the court can reasonably infer that SOUNDEXCHANGE caused its uncertainty over the rules as opposed to individual copyright holders, who could also separately enforce their copyrights against the plaintiff.
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