Whether a dance routine or a martial arts demonstration, legal protection for the majority of athletic movements that will be incorporated into the forthcoming wave of motion detection-based games will likely fall under copyright law’s definition of “choreography”–a form of artistic creation which secured copyright protection in 1976 when the Copyright Act (the “Act”) was amended to include “pantomimes and choreographic works” (17 U.S.C. 102(a)). Prior to that time, choreography could only be protected under copyright statutes to the extent embodied within another copyrighted work that was eligible for protection. Although the Act extended protection to “choreographic works”, it failed to define the term and what types of movements qualified as same. Other copyrightable forms, including “architectural, audiovisual, literary, pictorial, graphic and sculptural works, motion pictures, and sound recordings” are defined in the Act, but “choreographic work” is the only copyrightable form whose meaning is left unclear. In fact, the House and Senate Reports surrounding the Act indicate that Congress’ decision not to define “choreographic work” was deliberate, as legislators believed the meaning to be “fairly well settled”. In fact, the only guidance provided by Congress with respect to the category of “choreographic works” was that it does not include “social dance steps and simple routines.”

In the absence of guidance from Congress or the copyright statutes on which activities qualify for protection under copyright law as “choreographic works”, the U.S. Copyright Office (the “Office”) offered a more technical definition of “choreography” in its Compendium of Copyright Office Practices, stating that “[c]horeography is the composition and arrangement of dance movements and patterns usually intended to be accompanied by music.”

While instructive, this interpretation is not binding on the federal judiciary, and there is little case law defining the precise scope of “choreographic works”. Moreover, even if the Office’s interpretation of a “choreographic work” does not capture the essence of certain athletic movements, the fact remains that the Act’s enumeration of copyrightable subject matter is not meant to be exhaustive, and is prefaced with the statement that “[w]orks of authorship include the following categories”; and since the Act defines the term “including” as “illustrative and not limitative,” the fact that Congress did not specifically list all athletic movements that fall within the realm of copyrightable subject matter does not mean that they are not covered (just as, for example, the absence of programming code and computer programs from the Copyright Act has not prevented the courts from finding same to be well within the range of copyrightable subject matter). Further, a separate category of copyrightable subject matter known as “dramatic works” also provides some applicability to the extent the athletic movements portray a story or narrative through action, but the underlying movements, which themselves are devoid of story, would not likely find refuge here if separated from the corresponding story or narrative in the context of an interactive game.

While some athletic movements remain close enough to the Office’s definition of “choreographic works” or “dramatic works” that they should be afforded copyright protection (e.g., figure skating, rhythmic gymnastics, synchronized swimming, etc.), there has been, in recent years, a push for the copyrightability of other athletic movements under the guise of “choreographic works.”  For instance, Open Source Yoga Unity v. Choudhury, specifically addressed the question of the copyrightability of yoga moves (see 2005 WL 756558 (N.D. Cal. Apr. 1, 2005).  While the court did not settle this question, it held that it is at least possible for individual yoga positions to be “arranged in a sufficiently creative manner” to merit copyright protection. In Ahn v. Midway Manufacturing Co., a district court held that dancers who performed martial arts routines for a software developer that later incorporated the routines into the “Mortal Kombat” video game did not become joint owners of the copyright in the game only because they assigned their rights to the copyrights pursuant to a work-for-hire contract (see 965 F. Supp. 1134 (N.D. Ill. 1997)).  The court deemed the martial art performances to be “choreographic works” and stated that these “choreographic works were all original works of authorship [and] choreographic works fall within the subject matter of copyright.”  In fact, in Baltimore Orioles, Inc. v. Major League Baseball Players Ass’n, the Seventh Circuit held that “[baseball] [p]layers’ performances possess the modest creativity required for copyrightability” (see 805 F.2d 663 (7th Cir. 1986)).

Based on the foregoing decisions, there may not be a significant enough distinction between a kung fu sequence, a skateboarding demonstration set to music and a figure skating routine that would warrant extending copyright protection to one and not the others. Ultimately, though, determining which choreography or movements actually fulfill the statutory criteria, and which on the other hand are too commonplace to qualify as copyrightable subject matter, will require a case-by-case, fact-specific analysis. That being said, as the above discussion indicates, it is certain that to qualify for copyright protection, an athletic movement will have to evince a certain degree of complexity and original expression, and routine-oriented athletic performances are more likely to warrant coverage as they generally embody sufficient amounts of artistic expression and each move is specifically choreographed and designed for repetition. As one commentator described, a sport like football, even where each play is diagrammed and practiced to some extent, depends more upon the interaction and improvisation of the participants throughout the natural course of the game. A running back, for example, may go fifty yards for a touchdown, eluding opponents, breaking tackles and navigating through the defense on one play, but the next time that play is called, he may fumble the ball or be tackled for a loss of yards. A figure skating routine, on the other hand, has a repetitive nature to it; the skater will often perform the same routine countless numbers of times with minimal variations.

Once the determination is made that the athletic movement likely falls within a class of protectable subject matter under the Act, the next step is licensing the rights for inclusion in the interactive game. The clearance process for music-based interactive games, for example, relies on a well-established framework with the licensing arms of the major labels, publishers, performing rights organizations and other collectives serving as long-standing clearing houses for securing rights from multiple artists and writers. However, there are no analogous industry clearing houses or collectives for licensing choreography rights and each applicable copyright, together with any corresponding moral, publicity or privacy rights, need to be licensed from the individual owner.

In fact, this may well be the first time that movements deemed “choreography” under the Act, whether in the form of modern dance or complex wrestling moves, will be exploited and licensed as individual works on a large scale–separate and apart from the play, the music video, the movie or even the person through which it entered the public consciousness. In other words, in order to develop an interactive title based on choreography on an operational level, each individual movement will need to be reperformed and recast by professionals and technicians who will recreate the movements in a green screen-reminiscent environment using motion sensors that will allow advanced computers to precisely track a new range of activity, in particular depth-based movement, which will then be digitized and incorporated into the video game. This process will ultimately allow for the comparison of the professional recreation against the end users’ movement on a television screen and allow the game to rate and track performance, alter difficulty settings, offer training functionality, etc., all of which have become standard functionality in interactive titles. Having now extracted and recreated the choreography as a stand-alone artistic creation, the publishers and developers of motion detection games will need to begin the process of securing the rights to those popular movements crucial to a successful gaming title.

This is where the legal confusion begins for licensing athletic movements and choreography. As an example, consider the implications of the inclusion of modern or popular dance into a motion capture video game. Dances have never been the subject of lucrative licensing outside the realm of dance companies and on-stage performances because dancers were often placed at a severe disadvantage for demonstrating ownership of copyrights. As a result, attribution and credit for a dance in the dance community is frequently not equated with ownership of the copyright given the lack of economic incentive in establishing and maintaining an accurate chain of title. In these muddy waters, who holds the necessary rights required to license the dance? The music label that owns the music video? The artist who performed the dance? The artist’s choreographer who conceived of the dance? Is it jointly owned by contributing dancers and the artist? Was it created pursuant to a work for hire agreement or within the scope of employment without an agreement? Was the dance based on a pre-existing dance which could invalidate ownership? Was the dance created outside the United States thus leaving the creator with moral rights over the work that cannot be assigned? Was it previously performed and recorded on stage or in dance studio, so that the movie studio or music label is left without ownership outside of their movie or video?

The foregoing dance hypothetical is just one example of the complications associated with one form of athletic movement destined to be incorporated into motion capture games. Once the worldwide popularity of a new line of these games takes hold and creators of all forms of movements claim copyright protection after realizing the new found economic value of their works, legal disputes over the nature of copyright and the bounds of statutory protection will force the courts to take a series of bold moves–ones that can be repeated.

As always, we will keep an eye out for developments in this area of the law, particularly as the technological bounds of interactive gaming continue to expand with the introduction of gesture-based gaming.

Of course, in the alternative, AT&T claims that to the extent AT&T is not directly liable, secondary liability attaches via the doctrines of inducement, vicarious and contributory liability—essentially, liability for contributing to and benefiting from the unlawful performance of ringtones by AT&T customers. This argument is likely designed to cut against the exemption codified in the Copyright Act allowing the “performance of a nondramatic literary or musical work … to the public without any purpose of direct or indirect commercial advantage… if there is no direct or indirect admission charge.” (see 17 U.S.C. § 110(4)). This would, in theory, prevent ASCAP from proceeding against individual consumers who, although they may be publicly performing a musical work according to Copyright Act, are doing so without commercial advantage and thus not infringing.

ASCAP also reveals in its motion that it has consistently licensed other mobile carriers’ sale and distribution of ringtones, charging “2% of revenue and an alternative usage-based fee calculation.” In fact, ASCAP claims that prior to the Second Circuit’s 2007 decision that digital downloads of sound recordings do not trigger the public performance right (see United States v. ASCAP, 485 F. Supp. 2d 438 (S.D.N.Y. 2007)) (the “Download Decision”), “very few parties ever questioned or challenged ASCAP on the question of whether ringtones required public performance licenses.”

For business people and transactional lawyers alike, perhaps the most notable takeaway from ASCAP’s motion stems from AT&T’s claim that the ringtone providers (e.g., Jamster, ThumbPlay, etc.), not AT&T, “bear contractual responsibility for securing public performance rights.” In other words, AT&T is stating that if public performance royalties are due, it is the responsibility of content providers, aggregators, and ringtone creators to make payments to the performing rights organizations, not distributors like AT&T and other mobile carriers/network operators. Put simply, this contention highlights the need for parties to these types of agreements to be more explicit than ever about which party will be responsible for performance royalties if and to the extent any public performance rights are implicated. Here, AT&T is pointing the finger at the providers, and to the extent this tactic works, the providers would be responsible for paying royalties based not only on their own revenue, but the mobile carriers’ revenue, which, according to the ASCAP’s standard licensing agreements, is deemed part of the provider’s “client revenue” that is included in the “royalty base” for calculating provider payments to ASCAP. Moreover, any party ultimately saddled with responsibility for making performance payments would not only be required to pay 2% of revenue to ASCAP, but would also be required to remit similar amounts to the two other major performing rights organizations in the U.S. (i.e., BMI, SESAC), raising the total performance royalty rate to more than 6% of revenue–a sizeable payment, and in addition to the mechanical reproduction fees due to those same publishers and writers that are members of the performing rights organizations.

Ultimately, ASCAP, in its attempt to receive royalties from AT&T, devotes the majority of its motion to arguing the extensive nature of ASCAP’s control over the ringtone in an effort to distinguish ringtones from full-audio downloads addressed in the Download Decision, as the outcome of this case may very well turn on the question of the party responsible for triggering the performance. In other words, if an ongoing connection is maintained or required whenever the ringtone is played on a consumer’s phone (e.g., similar to the connection required when a sound recording is streamed over the internet), then the second kind of public performance (i.e., the digital transmission performance) may be triggered. On the other hand, if AT&T can successfully argue that the ringtone is downloaded only once to a consumer’s phone (similar to an iTunes track) without simultaneous or near simultaneous playback and continues to reside on the device exclusively, then merely prompting the playback of same by AT&T for an incoming call should fall more squarely within the confines of the Download Decision.

No matter what side you come down on, ASCAP’s PR machine has been slammed in the past for seeking payment from less than profit driven adversaries, including campfire balladeers such as the Girl Scouts. This time around though, eager to combat a slew of negative news reports trashing ASCAP’s pursuit of ringtone monies, ASCAP moved quickly to address the matter with its own membership, dispatching the following clarification to its writers and composers:

“Bottom line, ASCAP is striving to license those that make a business of transmitting its members’ music. This holds true for any medium where businesses have been built by using this music as content or a service – whether terrestrial broadcast, satellite, cable, Internet or wireless carriers providing audio and video content. To be completely clear, ASCAP’s approach has always been to license these businesses – not to charge listeners/end-users.”

Also, noteworthy in ASCAP’s response, is the fact that ASCAP states that it is “in Federal Rate Court with the two largest U.S. wireless carriers,” evidencing that ASCAP will be staging this battle for ringtone royalties on multiple fronts, including with Verizon, AT&T and possibly ringtone providers supplying the mobile carriers.

Needless to say, this will be a long, hard-fought battle and the public performance organizations, still reeling from the Download Decision (which incidentally is still in the appeals process), will not go quietly when the mobile carriers continue to enjoy revenue in the billions from the sale of ringtones. As always, we will continue to closely monitor this case given the potential impact on our clients’ businesses and the need for licensing and distribution contracts that accurately delineate each party’s roles and responsibilities in this constantly evolving digital space.

• The Performance Rights Act, which was approved by the House Judiciary Committee on May 13th, would levy fees on broadcasters for airing artists’ recordings. An indication of the heat generated by the debate over the PRA emerged this week when the musicFIRST Coalition, however, filed a complaint asking the FCC to investigate whether radio stations have been boycotting artists that support the PRA. The coalition’s filing accuses broadcasters of airing deceptive spots by portraying the proposed royalty as a “tax” and not airing musicFIRST’s own paid ad endorsements. While musicFIRST did not identify any specific station or broadcaster withholding airplay, the coalition alleged that several stations have refused to play an artist’s music based on his or her remarks or affiliation with endorsing the legislation. Spokesman Marty Machowsky said it would only identify specifics if the FCC initiates the proceeding and agrees to keep the information confidential.
• Facebook is now allowing users to select plain-language domain names for profile pages, which up until now, has been delineated by a string of letters and numbers. Facebook plans on allowing trademark holders to protect their marks and mediating all disputes internally. This, however, may not be enough to prevent lawsuits from occurring. Tim Cole, chief register liaison from the Internet Corporation for Assigned Names and Numbers, said that even careful mediation processes will not prevent skirmishes from breaking out. ICANN has been involved in quarrels over coveted web site names for more than a decade. We will be looking into this issue in depth in the coming week.
• The AACS Licensing Authority, which licenses AACS content protection scheme (DRM) used in high-definition Blu-ray discs, has included a provision in its Final Adopter Agreement which will lead to the eventual phase out of analog video output from hi-def discs. The goal of phasing out analog is to plug the “analog hole,” where digital content can be copied. The change, however, will not stop direct digital ripping. The efforts are being made in attempts to block means of casual copying, but may not be effective in thwarting commercial pirates.
• The second World Copyright Summit met in Washington, DC last week.  The conference agenda of four main points: New visions for creative industries, Challenges for creators and rights-owners in the digital era, Weather forecast on copyright climate, and Valuing the creative eco-system. Most of the concern was regarding copyright infringements on the Internet. The copyright owners and attendees also discussed the ongoing threat of internet privacy.

We would like to thank Jenny Liang, a summer associate with the Firm, who assisted in preparing this round-up.

Tomorrow a Swedish court is expected to announce it’s ruling in a criminal case that has been closely watched by nearly everyone with a stake-financial or otherwise-in the free-wheeling world of P2P file swapping.  At its core, the ruling will determine whether the operators of the Pirate Bay, the popular torrent search and indexing site, are guilty of violating Sweden’s copyright law.  A conviction-which many observers expect-could lead to imprisonment and a possible fine, as well as a shut-down of the site.  However, despite the potential immediate impact on the Pirate Bay and its operators, the broader implications of a guilty verdict, including whether or not it will serve as a deterrent against unauthorized file-sharing, are a little less certain.

For the uninitiated, a little background:  the Pirate Bay is a Swedish web site that bills itself as the world’s largest BitTorrent tracker.  According to various measurements, the site ranked 105th for daily traffic over the past three months and an estimated 2.7 million people from the US visit every month.  

BitTorrent is a peer-to-peer file sharing protocol used to transfer files, which accounts for approximately 35% of all traffic on the Internet according to one study.  BitTorrent differs from traditional P2P file-sharing in that a single file may be downloaded from numerous sources, each providing small packets of data, rather than from a single source.  A client implementing the protocol creates a small file called a “torrent” which contains metadata about the files to be shared and about a tracker computer that coordinates file distribution.  A user seeking to download the file must first obtain the torrent file associated with it and connect to the tracker computer, which then tells the user’s computer which other computers on the network have pieces of the file to be downloaded.

The defendants in the Pirate Bay case are relying on the underlying nature of the BitTorrent protocol to serve as the basis for their defense.  Specifically, they claim that since the Pirate Bay website only serves as an index for torrent files, and does not actually store any copyrighted materials, the site’s operations cannot be deemed to be infringing.  Taking the argument a bit further, they claim that because many sites and services on the Web point to or link to infringing content or allow users to upload such content-including Google-the infrastructure and inherent nature of the Internet are at issue in the case.  The defendants used the analogy of roads and telephones that sometimes are used for illegal activities: no one suggests destroying the road network or hauling phone companies into court due to offenses committed by one or more individuals using such roads or telephones.

Prosecutors countered that search services like Google, and the roads and telephone lines, were established to foster legal activities.  In contrast, the Pirate Bay’s entire raison d’être appears to be to foster primarily illegal activity in the form of infringing file-sharing. 

The trial itself, which was held over three weeks in February and March, was a bit of circus.  The defendants and their supporters posted daily accounts of the trial on the Web.  And, after the web site of the International Federation of the Phonographic Industry, the trade group for the music industry, was hacked during the trial, one of the defendants posted a note on his Twitter account saying, “Whoever is hacking the IFPI websites, please stop doing that.  It only makes us look bad!”

In many ways, the Pirate Bay’s notoriety is an “only in Sweden” affair.  Until recent amendments, the Swedish copyright law did not prohibit downloading copyrighted material for personal use.  Nearly every Swedish household has a cheap broadband connection, and polls have found that over 10% of the population engaged in some sort of P2P file-sharing and downloading.  A political party dedicated to legalizing P2P file sharing-regardless of copyright issues-was formed and has made credible efforts to gain seats in the Swedish Parliament.

However, in response to international pressure, the Swedish government has begun to take a tougher stance against illegal file-sharing.  Earlier this month, a law came into effect allowing content owners to obtain from Swedish ISPs the names and addresses of people suspected of sharing copyrighted materials without authorization.  The law, which brings to Sweden an investigation and enforcement tool available throughout the EU, had an immediate impact. On the day the law went into effect, total Internet usage decreased by 40% and has remained suppressed since such time.

During the trial, the head of the IFPI testified that 30% of the losses suffered by the global music industry were a result of illegal file sharing, citing several academic papers.  He also testified that, following successful court actions in recent years which led to the shut-down of P2P file-sharing sites Grokster and Kazaa, the Pirate Bay had become the No. 1 source for illegal music on the Web. 

Despite the fact that early in the trial prosecutors dropped charges alleging that the operators were “assisting copyright infringement”-leaving the primary allegation based on “assisting in making available” copyrighted material-it appears that the prosecution will ultimately prevail. 

However, it is unclear what impact, if any, shutting down the Pirate Bay will have on illegal file-sharing as a whole.  As has been seen numerous times over the past decade, every time a prominent P2P site or service has been successfully challenged and shut down (see Napster, Kazaa, Grokster, etc.), downloaders have simply found other sites to use.  Moreover, the Pirate Bay is merely one of many BitTorrent search and tracking services currently available to end users, including Mininova, isoHunt and btjunkie.  (Ironically, while none of these sites have become a high-profile target of the entertainment industry, Mininova actually has a higher traffic ranking than the Pirate Bay (86^th v. 105^th).  And the others aren’t shy about self-promotion:  isoHunt says it is the “most comprehensive BitTorrent search engine”; and btjunkie bills itself as “the largest and most advanced BitTorrent search engine” with over 1.5 million active torrents.)  [As an aside, in researching the information above and merely visiting the home pages of those sites via Google links, the PC we were using was apparently infected with a virus (notwithstanding the fairly extensive systems in place here).  Perhaps the media industry's strategy vis a vis these sites is based on its awareness of this "deterrent" we unwittingly and regretfully stumbled upon.]

However, in light of the brazen attitude that the Pirate Bay’s operators have taken toward illegal file-sharing, a conviction will enable the entertainment industry to claim a major victory in its fight against Internet piracy.

Regardless of the outcome, the trial-and similar enforcement efforts-should not be viewed by the entertainment and media industry as a substitute for a viable P2P business strategy.  Current and future technologies are making the digital distribution of music, video and book files faster, simpler and more ubiquitous.  Initiatives such as collective licensing-under which ISPs would pay an independent agency a fee based on its user base (presumably passed on as a fee to the users), which would in turn be pooled by the agency and used to pay royalties to content owners-are being considered viable alternatives that may effectively compensate content owners, foster the wide distribution of entertainment assets and move the digital space to a less adversarial environment.

• The FCC announced plans to impose more than $12 million in fines on 600 telecoms that failed to file paperwork last year detailing how they are going to protect the privacy of their customers.  The FCC is seeking the fines because many of the phone companies, internet telephone service providers and calling-card companies that are supposed to make the detailed annual reports are not complying with the current rules. 
• In a week where we’ve read so much about newspapers becoming obsolete, a new survey by The Rosen Group has found that the majority of Americans still consider print to be a vital source for their news and entertainment even though a third of us consider websites to be our number one source of information. 
• According to a report by PriceWaterhouseCoopers, internet gambling, which was banned in 2006, could bring in over $52 billion in tax revenue over 10 years.  That may be one of the factors driving a decision to reintroduce legislation in Congress to overturn the ban. 
• A two-year old lawsuit filed by Eminem’s production company against Universal Music Group seeking about $1.3 million in unpaid digital music royalties finally went to court this week and its outcome could have a profound effect on the digital music business.  The issue is whether digital music downloads fall under “distribution” or “licensing” agreements — the latter giving artists a 50% take on royalties earned. 

While webcasters, satellite radio, cable radio services and all other non-terrestrial broadcasters already pay performance royalties to artists and labels, terrestrial radio stations have always enjoyed an exemption from paying such royalties. This exemption arose in the infancy of the radio industry when broadcasters claimed that radio play served as promotion to drive music sales. They also asserted that compelling them to pay royalties would cripple the emerging radio industry.

Such an argument may be losing its steam since webcasters, satellite radio, cable radio services and all other non-terrestrial broadcasters have paid performance royalties since their inception. In addition, the US is one of the only countries in the world where performance royalties are not paid for radio broadcasts.

We’ll keep a eye on the bill as it is introduced and makes its way through committee.

In this case, Friskit’s patents covered technology related to creating a playlist from an on-demand server and causing the songs on the playlist to be played back in sequence.  Friskit claimed that Real’s multimedia player and subscription services infringed these patents.  Real moved for summary judgment, asserting that Friskit’s patents were invalid because they were obvious.  Real’s initial motion was denied, but following the Supreme Court’s intervening decision in KSR, Real renewed its motion and the district court granted it.

On appeal, the Federal Circuit affirmed the trial court’s decision that Friskit’s design would have been obvious to one skilled in the art.  The court found that there were only insignificant differences between the prior art and Friskit’s design, given the advanced state of knowledge in the art at the time the patent applications were filed.  As the court said, “All of the essential components of the claimed invention . . . pre-dated the patents-in-suit.”

While acknowledging that it did not invent streaming media, playlists or media players, Friskit claimed that its patents “deliver the glue to put existing technologies in a single application.”  The Federal Circuit rejected this argument based on the Supreme Court’s holding in KSR that the predictable use of prior art elements according to their established functions is likely to be within the grasp of one of ordinary skill in the art.  Since the prior art disclosed methods of “programmatic control”, and the benefits of network control of local processes were well known at the time of the invention, it was a “trivial” step to Friskit’s design. 

The Federal Circuit also found that any evidence of secondary considerations too weak to rebut a finding of obviousness.  The Federal Circuit discounted arguments of commercial success because Friskit did not show that the products’ success was attributable to a non-obvious subject matter.  Additionally, copying by the accused infringer had little persuasive value in the absence of evidence of failed development efforts by the infringer.  Finally, Friskit did not present any evidence that its design involved any “technical challenge to one of ordinary skill in the art once market forces had created a demand for integrated, streaming media services.”

KSR has led to wide-scale reexamination of the validity of issued patents, both in litigation and transactional contexts.  The framework established by KSR raises the bar for those trying to enforce patents that do not substantially advance the technologies encompassed in the patents.

If this is in fact the case, the publishers now sit squarely in the driver’s seat for determining the future of purely ad-supported business models in the digital music space, many of which cannot exist if required to make any sort of minimum payment per transaction or subscriber. Once such a rate is set by the CRB, each individual business unable to accept a minimum payment will then be forced to negotiate directly with each individual publisher for each music track, and face not only enormous advance payment demands, but an endless nightmare of tracking down each individual publisher (which for some music tracks may be 5 or more) and securing a licensing arrangement that does not involve any such minimum.

The enormity of this time and money consuming endeavor will certainly turn many current and future purveyors of digital music away from the distribution of on-demand streaming music and conditional downloads which, in comparison to the permanent downloads, do not earn enough revenue given their ephemeral nature to warrant a fixed payment amount other than a percentage of what they actually generate.

Ad-supported music distribution services offering streaming music, limited downloads, or both, should be extremely concerned at this latest development. While it is certainly encouraging to see the sides agreeing on some of the rates at issue, the publishers have been fervently opposed to any rates purely based on a percentage of revenue given the enormous difficulty in accounting for the many different business models, alternative accounting systems and various deductions and other methods of calculating revenue. As such, the publishers have continuously pushed for a minimum calculation for determining the monies they are owed, whether based on plays, streams, downloads or subscribers (e.g., a penny rate or amount per individual subscriber) in order assure themselves revenue without the need to confront and investigate every business model turning to compulsory licenses.

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