We previously wrote about a Virginia federal magistrate judge’s report recommending dismissal of a declaratory judgment action brought by several radio stations asking the court to rule that webcasts limited in scope via geofencing technology to 150 miles from the site of the transmitter should be exempt from liability for copyright royalties under section 114 of the Copyright Act. This past month, the district court agreed with the magistrate’s report and dismissed the action for lack of a justiciable case or controversy between the radio stations and SoundExchange, an organization designated by the Copyright Royalty Board to collect royalties from broadcasters on behalf of copyright owners.
On February 13, 2015, the district court adopted the Magistrate’s report and dismissed the plaintiff’s complaint due to lack of standing to sue. (WTGD 105.1 FM v. Sound Exchange, Inc., No. 14-00015 (W.D. Va. Feb. 13, 2015)). Tracking the reasoning of the Magistrate’s decision, the court ruled that the radio station’s allegations against SoundExchange were “too speculative, indefinite and hypothetical” and would seek an impermissible advisory opinion about whether the proposed geofenced broadcasts would result in copyright infringement or not. The court pointed out that the radio stations have not demonstrated that using geofencing technology to limit the range of a webcast was “anything more than a pipe dream” and pointed out that the stations had only consulted with experts and had not done anything to “implement the technology or demonstrate that geofenced retransmissions will meet the § 114 exemption.” The court also noted that the real injury at issue in the dispute is the radio station’s fear of liability for copyright infringement – an injury not traceable to SoundExchange, a collector and distributor of royalties due under statutory licenses. In fact, SoundExchange’s lawyers confirmed in open court that SoundExchange (as opposed to the copyright holders themselves) would have no role in asserting copyright claims should the plaintiff implement geofenced broadcasts in the future.