Plaintiffs — the stations — asked a judge to throw out Locast’s claim that its online service is legally exempt from copyright infringement liability because it only seeks donations, not fees, from users, and only enough to keep its business running. Locast wanted a finding that it is exempt.
“Plaintiffs’ motion for partial summary judgment is granted . Defendants’ motion for summary judgment is denied,” wrote Judge Louis Stanton of the Southern District of New York in a ruling today.
Locast users pay it a minimum $5 monthly fee in exchange for month-long , uninterrupted service which the judge refused to categorize as “merely a recurring gift to a charitable cause.” Locast “still solicits, and receives, substantial amounts in charges from recipients for its uninterrupted service.”
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Locast, founded by David Goodfriend, argues that its funding model qualifies for the statutory exemption because payments from users are re-invested in the organization to cover costs of “maintaining an operating an expanding system.” The judge noted that In 2020, Locast “made far more money from user charges than was necessary to defray its costs of maintaining and operating its service.”
Locast has also been expanding into new markets. “But under the statute, income made from charges to recipients can only be used to defray the actual and reasonable costs of maintaining and operating the service , not of expanding it into new markets,” Stanton found.
Backers of Locast, which was founded in 2018, say it is adhering to copyright laws, which permit “boosters” of local broadcast signals, which are designed to secure the accessibility of broadcast signals.