Internet radio company Live365 has filed a lawsuit in the U.S. District Court for the District of Columbia seeking an injunction to prevent any further proceedings by a three-judge panel that determines music royalty rates, officials said late Monday. In the complaint Live365, which has 5 million monthly listeners and more than 270 diverse genres, questions the constitutionality of the Copyright Royalty Board and whether its judges were appointed in violation of the Constitution's separation of powers.
The U.S. Court of Appeals for the District of Columbia recently refused to rule on the CRB's constitutionality in a case brought by licensing firm Royalty Logic. The company had argued the CRB should be forced to vacate its decision in high-profile a proceeding that set the fee structure for webcasters. The panel has convened yet another rate-setting proceeding and music labels, licensing entities, artists, broadcasters and others are expected to spend millions of dollars presenting their cases, Live365 said.
"The constitutional issue is the elephant in the room at the CRB," Live365 CEO Mark Lam said in a statement. "Before any hard-earned artists' royalties and webcaster investments are spent on a potentially invalid royalty setting court, we are just requesting, for the benefit of all parties, to have this significant concern addressed and answered. The National Music Publishers' Association wrote to House Judiciary Chairman John Conyers recently calling for legislation that would make moot any constitutional challenges to the CRB.
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