Judge Tosses VerStandig's Geo-Fencing Suit

A federal judge has dismissed the geo-fencing lawsuit brought by VerStandig Broadcasting vs. SoundExchange in an effort to create a royalty-free ring around a transmitter for stations that geo-fence a webcast.

Inside Radio reports Judge Michael Urbanski said the suit was “too speculative, indefinite and hypothetical” to move forward, agreeing with SoundExchange’s request to dismiss the case. It’s a setback for broadcasters who viewed the case as a way to cut royalty expenses.

In a lawsuit filed last May in Harrisonburg, VA, owner John VerStandig argued that the Copyright Act givesbroadcasters the right to distribute content without paying a royalty for up to 150 miles from a station’s transmitter. He sought the court’s backing before he began streaming “105.1 Bob Rocks” WTGD using geo-fencing technology. But in a 12-page ruling handed down Friday, Urbanski said that because the geo-fenced streams were yet to be implemented, and no one had gone after VerStandig for royalty payments, the court had no jurisdiction. “There is no actual case or controversy to decide,” Urbanski ruled.

The decision had been expected after a federal magistrate earlier recommended the case be dismissed since, other than writing a letter that “strongly urged” VerStandig to pay royalties, SoundExchange hadn’t taken any action against the company. He also agreed that a copyright owner, not what amounts to the record industry’s collections arm, would be the proper defendant.

While dismissing the case, the court left open the question of whether a 150-mile royalty-free zone is permitted under federal law.