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Judge Recommends Dismissal of Streaming Royalty Suit

VerStandig/SoundExchange case involves “geo-fencing”

The recently released opinion of a Virginia magistrate appears to be a setback for a radio broadcaster attempting to use online streaming technology called “geo-fencing” to create a 150-mile royalty-free zone for its online audio stream.

Magistrate Judge Joel Hoppe recommends a Virginia district court dismiss a lawsuit filed by VerStandig Broadcasting against SoundExchange, the entity responsible for collecting music recording royalties and distributing them to copyright owners, due to the lack of a controversy between the parties.

The declaratory judgment suit, filed by VerStandig in federal court in Virginia in April 2014, argues that using geo-fencing qualifies it for an exemption under webcasting copyright law.

Geo-fencing would allow the broadcaster to cap streaming content within 150 miles of its transmitter. VerStandig, according to the latest court filings, has yet to invest in the geo-fencing technology.

According to new court documents, the plaintiffs are “unwilling to invest in geo-fencing until they know that it will exempt them from copyright liability and having to pay royalties.”

VerStandig, which owns WTGD(FM) in Harrisonburg, Va., and several other radio stations, argues the online gaming industry uses geo-fencing technology successfully to exclude access to data by users who are located in states where gaming is not legal.

SoundExchange moved to dismiss the suit in June, arguing the court lacks jurisdiction in the matter.

Hoppe’s recommendation can either be accepted or rejected by the district court.

SoundExchange Seeks Dismissal of VerStandig Suit
Geo-Fencing Technology at Heart of Streaming Royalty Dispute