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Online Music Agreement Reached

As this issue was going to press, music industry groups and online music distributors announced that an agreement has been reached regarding compensation to music publishers and songwriters for online distribution of their music.

According to a joint press release from industry groups, including the Digital Media Association (“DiMA”), the Recording Industry Association of America (“RIAA”), the Songwriter's Guild of America (“SGA”) and the National Music Publisher's Association (“NMPA”), the agreement “proposes for the first time mechanical royalty rates for interactive streaming and limited downloads, including for subscription and ad-supported services. The agreement proposes a flexible percentage of revenue rate structure, with minimum payments in certain circumstances.” Under the agreement, online music distributors will pay a mechanical royalty of 10.5% of revenue after other royalties are calculated.

“This agreement provides a flexible structure to support innovative business models in the digital music marketplace that will benefit music fans, creators and online services,” said Mitch Bainwol, Chairman and CEO, RIAA. “The agreement demonstrates that our industries can work collaboratively to solve complex issues.”

Jonathan Potter, Executive Director of DiMA added: “DiMA is particularly pleased with the agreement to end litigation and threats of litigation involving several of our member companies, so that they can focus on building innovative businesses that can effectively fight piracy, the music industry's greatest threat.”

Virginia's anti-spam law is unconstitutionally overbroad and violates First Amendment free speech rights, the Virginia Supreme Court ruled unanimously on Sept. 12, vacating the conviction and nine-year sentence of a North Carolina man. Jaynes v. Virginia, No. 062388 (available at www.courts.state.va.us/opinions/opnscvwp/1062388.pdf).

From his Raleigh, NC, home on three occasions, Jeremy Jaynes sent 55,000 unsolicited e-mail advertisements into AOL's network, using false routing information to conceal the source. State investigators tracked the e-mails to Jaynes. A jury convicted him of violating Virginia's anti-spam law, which criminalizes the sending of more than 10,000 attempted e-mails in a 24-hour period, 100,000 in a 30-day period or 1 million in a year. An intermediate appellate court upheld Jaynes' conviction and sentence.

The Virginia Supreme Court reversed. The prohibition on false routing information was not limited to commercial or fraudulent e-mail, the court noted. Viewed under the strict scrutiny standard, the statute therefore was not narrowly drawn to protect the government's compelling interests. Therefore, the law infringes on the protected right to engage in anonymous speech, including political and religious speech. Other states' anti-spam laws are specifically restricted to commercial e-mail. The Virginia law is “unconstitutionally overbroad on its face because it prohibits the anonymous transmission of all unsolicited bulk e-mails including those containing political, religious or other speech protected by the First Amendment to the United States Constitution,” the court said.

' National Law Journal

Online Music Agreement Reached

As this issue was going to press, music industry groups and online music distributors announced that an agreement has been reached regarding compensation to music publishers and songwriters for online distribution of their music.

According to a joint press release from industry groups, including the Digital Media Association (“DiMA”), the Recording Industry Association of America (“RIAA”), the Songwriter's Guild of America (“SGA”) and the National Music Publisher's Association (“NMPA”), the agreement “proposes for the first time mechanical royalty rates for interactive streaming and limited downloads, including for subscription and ad-supported services. The agreement proposes a flexible percentage of revenue rate structure, with minimum payments in certain circumstances.” Under the agreement, online music distributors will pay a mechanical royalty of 10.5% of revenue after other royalties are calculated.

“This agreement provides a flexible structure to support innovative business models in the digital music marketplace that will benefit music fans, creators and online services,” said Mitch Bainwol, Chairman and CEO, RIAA. “The agreement demonstrates that our industries can work collaboratively to solve complex issues.”

Jonathan Potter, Executive Director of DiMA added: “DiMA is particularly pleased with the agreement to end litigation and threats of litigation involving several of our member companies, so that they can focus on building innovative businesses that can effectively fight piracy, the music industry's greatest threat.”

Virginia's anti-spam law is unconstitutionally overbroad and violates First Amendment free speech rights, the Virginia Supreme Court ruled unanimously on Sept. 12, vacating the conviction and nine-year sentence of a North Carolina man. Jaynes v. Virginia, No. 062388 (available at www.courts.state.va.us/opinions/opnscvwp/1062388.pdf).

From his Raleigh, NC, home on three occasions, Jeremy Jaynes sent 55,000 unsolicited e-mail advertisements into AOL's network, using false routing information to conceal the source. State investigators tracked the e-mails to Jaynes. A jury convicted him of violating Virginia's anti-spam law, which criminalizes the sending of more than 10,000 attempted e-mails in a 24-hour period, 100,000 in a 30-day period or 1 million in a year. An intermediate appellate court upheld Jaynes' conviction and sentence.

The Virginia Supreme Court reversed. The prohibition on false routing information was not limited to commercial or fraudulent e-mail, the court noted. Viewed under the strict scrutiny standard, the statute therefore was not narrowly drawn to protect the government's compelling interests. Therefore, the law infringes on the protected right to engage in anonymous speech, including political and religious speech. Other states' anti-spam laws are specifically restricted to commercial e-mail. The Virginia law is “unconstitutionally overbroad on its face because it prohibits the anonymous transmission of all unsolicited bulk e-mails including those containing political, religious or other speech protected by the First Amendment to the United States Constitution,” the court said.

' National Law Journal