A magistrate judge has recommended that the district court dismiss for lack of subject-matter jurisdiction a declaratory judgment complaint concerning Internet streaming royalties.   In WTGD 105.1 FM v. SoundExchange, Inc., a group of radio broadcast stations in Harrisonburg, Virginia sought to establish that when Internet streams of the stations’ broadcasts are restricted to 150 miles from the stations’ transmitter through geo-fencing technology, they would be exempt from paying statutory copyright royalties for the right to digitally perform sound recordings.   The stations had not yet employed the geo-fencing technology.

According to magistrate judge Joel C. Hoppe, “the purely voluntary cost of setting up a geo-fenced simulcast is not a cognizable injury, much less one fairly traceable to SoundExchange’s interpretation of sections 112 and 114.”

The Report and Recommendation also found that “Plaintiffs’ biggest obstacle to establishing Article III standing in this case is that their injury—uncertainty as to whether they will incur copyright liability if they simulcast exclusively to local listeners without first obtaining statutory licenses—is not traceable to SoundExchange’s designation as the music industry’s ‘sole collective’ for collecting and distributing royalties due to copyright owners under statutory licenses.”

The case is No. 5:14cv00015 in the United States District Court for the Western District of Virginia.

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