On Monday, the Supreme Court denied Sony BMG’s cert petition in Arista Records, LLC v. Launch Media, Inc., 2009 WL 2568733 (2d. Cir. 2009). If a person offers an “interactive service,” as defined in the Act, she must pay an individual licensing fee for musical selections and not just the compulsory license rate set by the Copyright Royalty Board. The general rationale behind the provision is to ensure that webcasters must individually clear songs if they offer an on-demand musical service, not just pay the compulsory royalty rate.

Launch Media provided an internet radio site that allowed users to create stations from their preferences, such as a genre, artist or song. Sony argued it was an interactive service, defined in the Act as a service “that enables a member of the publc to receive a transmission of a program specially created for the recipient, or on request, a transmission of a particular sound recording …, which is selected by or on behalf of the recipient.”

The Second Circuit found that Launch Media service was not an “interactive service” and that the company only needed to obtain a compulsory license to offer musical selections. Sony BMG petitioned the Supreme Court, and was denied.