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A federal jury in the Southern District of New York on Friday handed down its verdict in Sony v. Launch Media, finding that Yahoo!’s LaunchCast service was not an “interactive service” under the Copyright Act. Billboard.biz has an in-depth report on the closing arguments, along with interviews with jurors.

Here’s some quick background. Section 114 of the Copyright Act allows webcasters to obtain a statutory license for the performance of sound recordings, so long as they meet numerous conditions. One of those conditions is that they must not be an “interactive service.” Section 114(j)(7) states:

An “interactive service” is one that enables a member of the public to receive a transmission of a program specially created for the recipient, or on request, a transmission of a particular sound recording, whether or not as part of a program, which is selected by or on behalf of the recipient. The ability of individuals to request that particular sound recordings be performed for reception by the public at large, or in the case of a subscription service, by all subscribers of the service, does not make a service interactive, if the programming on each channel of the service does not substantially consist of sound recordings that are performed within 1 hour of the request or at a time designated by either the transmitting entity or the individual making such request. If an entity offers both interactive and noninteractive services (either concurrently or at different times), the noninteractive component shall not be treated as part of an interactive service.

The issue was whether LaunchCast, which allows users to list favorite artists and creates a station that plays music the user is likely to enjoy based on those preferences, is “interactive.” If it is interactive, Yahoo! has no statutory license to perform the sound recordings, and it’s a copyright infringer. If it isn’t interactive, Yahoo! has a statutory license, and isn’t liable. The judge denied both parties’ motions for summary judgment, finding that the question of interactivity was a fact question the jury should decide.

From the Billboard report, it sounds like the quality of lawyering was high on both sides, with Yahoo! emphasizing that there’s no danger of piracy and the record companies emphasizing the plain meaning of the text of the statute. I’m particularly impressed that Yahoo! convinced the jury that a webcast sent to a user based on that user’s preferences was not “a program specially created for the recipient.”