Is the Copyright Royalty Board Unconstitutional?

This morning the U.S. Court of Appeals for the D.C. Circuit released its opinion in SoundExchange, Inc. v. Librarian of Congress. A three-judge panel consisting of Judges Ginsburg, Henderson, and Kavanaugh, largely rejected SoundExchange’s challenge to the royalty rate set by the Copyright Royalty Board that satellite radio services must pay to copyright owners for the use of sound recordings. The panel concluded that the rate was not arbitrary, capricious, or unsupported by substantial evidence, but found (as the government conceded) that the Board failed to set a rate for “ephemeral copies.”

While he joined the court’s opinion in full, Judge Kavanaugh wrote a brief concurrence noting a potential separation-of-powers question raised by the manner in which Board members are appointed.

As this case demonstrates, billions of dollars and the fates of entire industries can ride on the Copyright Royalty Board