Novel Copyright Action Involving Webcasting and Geofencing to be Decided in Harrisonburg

Radio stations that stream over the Internet typically have to pay performance royalties to the copyright owners of the songs that are being broadcast over the Internet.  Last month, a group of radio broadcasters in Virginia brought a copyright lawsuit challenging whether they had to pay royalties for streaming Internet if their audience was restricted to a 150-mile radius from the station's transmitter. 

Technological advances, such as geo-fencing, allows websites to restrict access to those within a certain geographic area.  If the audience of a streaming radio station is limited to a 150-mile radius, then the web-based audience is arguably the same as the AM/FM broadcast audience. 

More importantly for purposes of this case, there is a specific provision of the Copyright Act that exempts broadcasters from having to pay performance royalties for digital retransmissions of their broadcasts provided the retransmissions do not go "more than a radius of 150 miles from the site of the radio broadcast transmitter."  17 U.S.C. 114(d)(1)(B)(i).

When that provision of the Copyright Act was adopted more than a decade ago, it was not technologically possible to restrict the audience of an Internet broadcast.  Therefore, radio stations that live-stream their content have been paying performance royalties under the Copyright Act.  The technological development of geo-fencing, however, makes it possible to restrict the geographic scope of the audience and raises this novel issue of copyright law.  This is the first time that a court has been asked to consider this issue.

Digital retransmission is a major issue in all media.  A case involving the delivery of television signals over the Internet--involving very different issues of what constitutes public verses private performance under a separate provision of the Copyright Act--is currently pending before the Supreme Court and is one of the blockbuster cases that the Supreme Court has yet to decide this term.

The radio broadcast case is styled WTGD 105.1 FM v. Soundexchange, Inc. and is going to be heard by Judge Urbanski in the Harrisonburg Division of the Western District of Virginia.  The defendant was granted an extension of time in which to respond and will file an answer or motion to dismiss on June 23.

Judge Urbanski Awards Attorney Fees in Breach of Consent Injunction

Judge Urbanski recently issued an interesting opinion that highlights one of the difference between litigation in the Eastern District of Virginia and Western District of Virginia.

The case involved the defendant's breach of a non-disparagement clause in a consent injunction.  The plaintiff rented vacation cabins in the Shenandoah Valley and had previously sued defendant over certain online advertising for its vacation rentals.  That case ended with a consent injunction that required defendant to provide ads for plaintiff on its travel websites.  The injunction also included a non-disparagement clause, which plaintiff claimed defendant violated by posting an ad that advised users to beware of hidden fees and charges for plaintiff's rental property.  Judge Urbanski agreed that this ad violated the non-disparagement clause, but rejected other arguments (i.e., that defendant violated the consent order by not placing ads at the top of the webpage).

Judge Urbanski also awarded attorneys fees to plaintiff, but reduced the hourly billing rate from $650 to $350.  Plaintiff's lawyer, from Washington DC, stated that his normal billing rate was $720 per hour, which he reduced to $650 for this matter.  The court, however, stated "while an hourly rate of $650 (or $720) may be well and good for Washington, D.C., and lawsuits involving multinational corporations, it is simply an enormous rate for Harrisonburg, Virginia and and a case involving two local small businesses."  The court also reduced the fee request by one-third because plaintiff had only prevailed on one-third of its arguments in the motion to enforce.

Judge Urbanski's approach to attorney fees stands in stark contrast to some of the recent attorney fees that have been awarded by the Eastern District of Virginia.  As recently reported by Virginia Lawyers Weekly, "[a]ttorneys handling complex civil litigation in Northern Virginia are making use of a new benchmark to win higher fee awards from federal judges."

The case is Allstar Lodging Inc. v. Rookard, No. 5:13cv53 (W.D. Va. Nov. 12, 2013)

WDVa Denies Transfer of Same-Sex Marriage Case

Judge Urbanski denied a motion to transfer venue in an action challenging Virginia's ban on same sex marriage.  The State had asked the Court to transfer the lawsuit, which is pending in the Harrisonburg Division, to Norfolk so it could be consolidated with a similar lawsuit pending there.  The Court, however, declined the motion to transfer venue, finding "meaningful differences" among the plaintiffs.  One interesting difference is that the Harrisonburg case is a class action lawsuit.  It was brought by a couple in Staunton who were denied a marriage license after the Supreme Court struck down the Defense of Marriage Act this summer.  For more information about the case, click here.