function on the services operates only forward and users “can never know which song they are
‘skipping forward to’”; and “[i]n all cases the consumer-influenced situations are available to
every member of the general public.”^3238 The United States District Court for the Southern
District of New York denied the parties’ cross-motions for dismissal under F.R.C.P. 12(b)(6) and
summary judgment.^3239 Launch was later acquired by Yahoo, and settled with a number of the
record companies.^3240
- On June 8, 2001, the record companies responded with three lawsuits against XACT
Radio, Musicmatch, Inc., and MTVi Group, each of which provided consumers with access to
streamed music over the Internet, asserting against each the same basic allegations as contained
in the complaint against Launch. The complaint asserted that the use of the “skip” button by
users will cause the defendants to exceed the performance complement restrictions.^3241
Musicmatch subsequently settled its lawsuit with the record companies.
Previously, on April 17, 2000, DiMA had sought to resolve the issues in the Copyright
Office, filing a rulemaking petition that sought adoption of the following proposed rule
concerning the definition of a “Service” for purposes of the statutory license:
A Service making transmissions that otherwise meet the requirements for the
section 114(f) statutory license is not rendered “interactive,” and thus ineligible
for the statutory license, simply because the consumer may express preferences to
such Service as to the musical genres, artists and sound recordings that may be
incorporated into the Service's music programming to the public. Such a Service
is not “interactive” under section 114(j)(7), as long as: (i) Its transmissions are
made available to the public generally; (ii) the features offered by the Service do
not enable the consumer to determine or learn in advance what sound recordings
will be transmitted over the Service at any particular time; and (iii) its
transmissions do not substantially consist of sound recordings performed within
one hour of a request or at a time designated by the transmitting entity or the
individual making the request.^3242The Copyright Office denied the petition, ruling, among other things, that “[i]n light of
the rapidly changing business models emerging in today’s digital marketplace, no rule can
accurately draw the line demarcating the limits between an interactive service and a
noninteractive service. Nor can one readily classify an entity which makes transmissions as
exclusively interactive or noninteractive.”^3243 The Office concluded that the determination of
(^3238) Id.
(^3239) See Arista Records, LLC v. Launch Media, Inc., 578 F,3d 148, 150 (2d Cir. 2009).
(^3240) Brad King, “Yahoo Launches Into Web Music” (June 28, 2001), available as of Feb. 22, 2002 at
http://www.wired.com/news/mp3/0,1285,44884,00.html.
(^3241) Parness, supra note 3237, at 4.
(^3242) 65 Fed. Reg. 77330, 77331 (Dec. 11, 2000).
(^3243) Id. at 77332-33.