In re Cellco Partnership

In re Cellco Partnership
663 F.Supp.2d 363

Issue: Whether a cellular company requires a public performance license because it provides ringtones to its customers. Specifically, whether a cellular company’s transmission of a ringtone to a customer’s phone was a “public performance,” whether a customer’s playing of a ringtone in public rendered that customer liable for copyright infringement and whether a cellular company that allowed customers to play ringtones could be found to establish direct liability for copyright infringement.

Procedural Posture: Motion for summary judgment.

Facts: Cellco Partnership doing business as Verizon Wireless filed an application for a determination of reasonable fees for a blanket license for the public performance of musical compositions held by ASCAP. Verizon sells ringtones to its customers as part of its services. Ringtones play a portion of a musical composition when the customer receives a phone call. A customer has to buy the ringtone from Verizon and then it is downloaded to the customer’s phone. That part of the musical composition then remains in the phones memory and plays when the customer receives a phone call. The customer determines whether and where the ringtone plays. Verizon’s control of the ringtone after it sells it only consists of sending a signal to the customer’s phone when there is an incoming phone call for the customer. Verizon does not make any additional money after the initial payment for the ringtone.

Holding: A cellular company does not need a public performance license because a cellular company’s transmission of a ringtone to a customer’s phone is not considered a public performance, a customer that plays a ringtone in public does not render that person liable for copyright infringement, and cellular companies cannot be held directly liable for copyright infringement simply because a customer played a ringtone on his or her phone.

Critical Analysis: The court had to determine whether the playing of a ringtone constituted a “public performance” under the Copyright Act. If the playing of a ringtone is a “public performance” then cellular companies would have to pay ASCAP, which is responsible for collecting fees for its members for public performances of their work.
The first question the court looked to was whether the transmission of the musical composition from the cellular company to the customer was a “public performance” under §101(2) of the Copyright Act. The transmission involves the sending of a unique copy to the customer and limits the potential audience of that transmission. There must be a link between the transmission and a “public performance.” Simply downloading a song, in and of itself, does not constitute a “public performance.”
The next question was if the customer played a ringtone in public could Verizon be held directly or secondarily liable for copyright infringement. The court deals with secondary liability by looking to the §110(4) exemptions. Customers do not play ringtones for an expectation of profits. Therefore, it meets the exemptions. For direct liability, the court determined that Verizon’s involvement of the playing of a ringtone was too attenuated for it to be held liable for causing a “public performance.” Verizon’s only involvement is sending a signal to the customer’s phone when there is an incoming call. This is not enough to sustain a finding that Verizon engaged in a “public performance” of the work. As a result, Verizon’s motion for summary motion was granted.

Likely future impact: Cellular companies will not need to seek blanket licenses for public performances of ringtones from ASCAP.

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