In an opinion published today in Leadsinger, Inc. v. BMG Music Publishing, the Ninth Circuit held that Leadsinger’s karaoke devices, which contain copies of lyrics for display on a TV screen, are not eligible for a license under 17 U.S.C. 115 because they are “audiovisual works,” not “phonorecords.” This holding is the same as the Second Circuit’s holding on the same question in ABKCO Music, Inc. v. Stellar Records, Inc. 96 F.3d 60, 65 (2d Cir. 1996). This means that companies marketing karaoke versions of songs, when they display the lyrics, must separately negotiate licenses with the relevant music publishers rather than relying on the statutory license that would be available if the karaoke versions were marketed without the ability to simultaneously display lyrics.
Perhaps more interestingly, the court affirmed the dismissal with prejudice of the plaintiff’s declaratory judgment claim asserting noninfringement based on the fair use doctrine. The court held that resolving the fair use inquiry on a motion to dismiss is proper when the facts alleged in the complaint, if true, resolve the fair use inquiry.