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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