• by Wendy Davis  @wendyndavis, July 7, 2009

A group of music publishers has sued Yahoo, Microsoft and RealNetworks for infringing copyright by offering the songs for on-demand streaming and downloads.

The publishers, who represent composers of 950 tracks including the gospel hit "Oh to be Kept by Jesus" and folk song "Wild Rose of the Mountain," allege that the Web companies never got all of the needed clearances before including the songs in their repertoires.

The plaintiffs argue that on-demand streaming services as well as subscription downloads that expire after a period of time require licenses from both the record labels and the publishers. Permanent downloads also require licenses, but stores like iTunes have negotiated comprehensive deals with the labels, while the Copyright Royalty Board has long set rates for publishers. That board recently set rates for on-demand streams and temporary downloads. Those rates went into effect on March 1, but it's not clear whether they apply to songs streamed in the past.

In their complaint, filed last month in the U.S. District Court in Tennessee, the publishers allege that the Web companies infringed on copyright each time they offered one of the publishers' songs, entitling them to damages ranging from $750 to $150,000 per instance.

Microsoft, Yahoo and RealNetworks declined to comment. (Yahoo shuttered its former subscription music service last year and began directing users to RealNetworks' Rhapsody.)

The music publishers' attorney, Stephen Grauberger of Mt. Juliet, Tenn., says he believes the Web companies prioritized amassing large catalogues at the expense of securing the proper licenses. "For four or five years, they've been competing with each other to have the most tracks," he says. "In that rush, it doesn't look like all the i's have been dotted and the t's crossed."

But Chris Castle, a Los Angeles copyright attorney with expertise in music licensing issues, tells Online Media Daily that companies often have trouble tracking down composers.

"This seems like a 'gotcha' lawsuit," Castle says. He adds that the Web companies had no realistic way of obtaining all of the necessary clearances in advance. "They had to start with a solid product offering, which means you're talking about clearing millions of songs," he says. "There's no place to go, in any kind of a scalable way, to get the information that you will need."

In this case, the Web companies apparently had deals with the Harry Fox Agency, which represents many composers, but not all of them.

Many of the same publishers now suing also brought a similar lawsuit against Napster in 2007. That case was resolved last year with a confidential settlement, Grauberger says.