Live365, our Internet broadcast provider, has filed suit in a Washington D.C. federal court challenging the constitutionality of (and thus, the legitimacy of decisions by) the U.S. Copyright Royalty Board.
The CRB is a 3-judge panel that determines statutory royalties for sound recording copyrights for Internet radio when webcasters and copyright owners can’t reach marketplace agreements (which has happened for every royalty term since the passage of the law which established this process, the Digital Millennium Copyright Act).
In announcing the suit, Live365 quoted an appellate judge: “(The CRB) exercises expansive executive authority … unsupervised by the Librarian of Congress or by any other Executive Branch official… (This) statutory structure raises a serious Constitutional issue.”
The lawsuit seeks an injunction to prevent any further proceedings before the CRB until the Constitutional question is resolved. Arbitration for webcasting royalties for the 2011-2015 term is to begin shortly.
Royalty collection agency Royalty Logic originally challenged the constitutionality of the judicial panel in a motion to the federal Appeals Court in May of 2008, then again this past March during the Appeal. And apparently, more than one appeals judge seemed to indicate the argument may have merit.
Royalty Logic argued the CRB judges were appointed in violation of the “Appointments Clause”. The CRB judges were named by the Librarian of Congress, and some interpret the Appointment Clause to require that only the Executive Branch can make such appointments.
Judging from the fact that these appointments happened during the Bush Administration, it wouldn’t surprise me that there may be some constitutional issues developing.
Originally reported in Kurt Hanson’s RAIN Newsletter 9/1/2009