Appellants seek review of a final
determination of the Copyright Royalty Judges, setting rates and
terms relating to webcasting. See Digital Performance Right in
Sound Recordings and Ephemeral Recordings (“Order”), 72
Fed. Reg. 24,084 (May 1, 2007). Webcasting is the process of
transmitting sound recordings over the Internet. This case
consolidates five separate appeals. A group of “commercial
webcaster” appellants led by the Digital Media Association (“DiMA”) argues that the rates for commercial webcasters set
by the Judges were unreasonable and that the absence of a cap
on minimum fees paid per licensee was arbitrary and capricious.
Several “small commercial webcaster” appellants argue that the
Judges’ refusal to permit them to pay royalties as a percentage
of revenues was arbitrary and capricious. “Noncommercial
broadcaster” appellants—including the Collegiate Broadcasters,
Inc., Intercollegiate Broadcasting System, Inc., and the National
Religious Broadcasters Noncommercial Music License
Committee—argue that the Judges set unreasonable rates for
noncommercial webcasters, that they established a $500
minimum fee per station without substantial evidence, and that
they improperly deferred consideration of record-keeping
requirements to a later proceeding. Appellant Royalty Logic,
Inc., a contender to serve as the clearinghouse (or “collective”)
for royalty payments, argues that the Judges exceeded their
statutory authority by naming SoundExchange, Inc. the sole
royalty collective. Respondent Copyright Royalty Board
defends the Judges’ determination. (The Board is “the
institutional entity in the Library of Congress that . . . house[s]”
the Judges. 37 C.F.R. § 301.1.) SoundExchange intervened to
defend the Judges’ determination.
Months after the briefing schedule had been set, Royalty
Logic moved to file supplementary briefs on the issue of
whether the appointment of the Copyright Royalty Judges
violated the Appointments Clause of the Constitution of the United States. A motions panel of this court granted the motion
“without prejudice to the merits panel deciding whether or not
to consider” the issue, and set a supplemental briefing schedule,
soliciting briefs from Royalty Logic, the Board, and
SoundExchange. Royalty Logic argued that the Judges’
appointment violated the Constitution. SoundExchange and the
Board argued it did not, and argued further that Royalty Logic
had forfeited consideration of the issue by not raising it in initial
briefing before this court. We hold that Royalty Logic has
forfeited the Appointments Clause issue. We vacate the $500
minimum fee for both noncommercials and commercials, and
remand those portions of the determination for reconsideration
by the Copyright Royalty Judges. In all other respects, we
affirm the determination.
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