Beethoven.com v. Librarian of Congress

Citation: Beethoven.com LLC v. Librarian of Congress, 394 F.3d 939 (D.C. Cir. 2005).

When Congress gave record companies and recording artists the right to be compensated for digital transmissions of their recordings, it set in motion a years-long, multi-step process for determining how much they were entitled to receive. At issue in this process was the amount to be paid by webcasters who choose to take advantage of the statutory license that Congress built into the Copyright Act itself.

The first step in the process involved negotiations between webcasters and record companies. Those were not fruitful, so a Copyright Arbitration Royalty Proceeding (CARP)was held which resulted in recommended license fee rates that pleased no one. Webcasters and record companies both appealed to the Librarian of Congress who rejected the CARP’s recommendation. The Librarian of Congress then set the statutory license fee rates himself, again pleasing no one.

Again, there were appeals, this time to the federal Court of Appeals in Washington, D.C. Webcasters wanted lower rates. Record companies (represented by the RIAA) and artists (represented by AFTRA) wanted higher rates. Several small webcasters who had not participated earlier in the case sought to intervene at the Court of Appeals level, also seeking lower rates.

The parties’ complaints on appeal were several and conflicting, and largely involved disagreements about what evidence the Librarian of Congress considered in deciding what rates to adopt. None of their complaints was successful, though. In an opinion by Judge David Sentelle, the Court of Appeals affirmed the Librarian’s decision in an opinion that denied their petitions for review.

Judge Sentelle held that the small webcasters who had not participated in earlier stages of the case did not have standing to seek judicial review of the Librarian’s decision, and would not be allowed to intervene before the Court of Appeals to raise issues that were new to the case.

Judge Sentelle also rejected the parties’ complaints about the evidence considered by the Librarian, and the weight he gave some items of evidence. And the judge concluded that the rates set by the Librarian were reasonable.