## Facts

- Leadsinger, Inc. manufactured karaoke devices that played recorded songs and displayed the songs’ lyrics in real time on a television; some products also included printed lyrics.
- BMG Music Publishing and related entities owned or administered copyrights in musical compositions used in Leadsinger’s products and licensed rights through the Harry Fox Agency.
- Leadsinger obtained compulsory mechanical licenses under 17 U.S.C. § 115 for the musical compositions used with its devices.
- BMG demanded additional fees for separate “lyric reprint” rights (printed lyrics) and “synchronization” rights (lyrics displayed in time with music as audiovisual content).
- Leadsinger refused and filed a declaratory judgment action seeking a declaration that § 115 licenses authorized the lyric printing and real-time lyric display, or alternatively that the lyric uses were fair use under 17 U.S.C. § 107.
- The district court dismissed the complaint under Rule 12(b)(6) without leave to amend.
- Leadsinger appealed to the Ninth Circuit.

## Issues

1. Whether a compulsory mechanical license under 17 U.S.C. § 115 authorizes printing lyrics and displaying lyrics synchronized with music in real time without separate lyric reprint or synchronization licenses.
2. Whether printing and displaying complete song lyrics in connection with a commercial karaoke device constitutes fair use under 17 U.S.C. § 107.
3. Whether dismissal without leave to amend was an abuse of discretion.

## Decision

- The Ninth Circuit affirmed the Rule 12(b)(6) dismissal after de novo review.
- The court held § 115 authorizes only making and distributing “phonorecords” and does not authorize printed or visual lyric reproduction or synchronization of music with visual images.
- The court held Leadsinger’s lyric printing and synchronized lyric display were not fair use because the use was commercial and non-transformative, used the lyrics in their entirety, and threatened established licensing markets.
- The court held the district court did not abuse its discretion in denying leave to amend because amendment would be futile given the legal limits of § 115 and the nature of the use alleged.

## Legal Principles

- A § 115 compulsory mechanical license is limited to reproduction and distribution of nondramatic musical works in phonorecords and does not extend to separate rights to reproduce lyrics visually or in print.
- Synchronizing a musical composition with visual images implicates synchronization rights distinct from mechanical licensing.
- Under § 107, commercial, non-transformative copying of an entire creative work weighs strongly against fair use, and commercial uses can support a presumption of market harm.
- Leave to amend may be denied when the plaintiff’s theory fails as a matter of law and additional facts cannot cure the defect.

## Conclusion

The Ninth Circuit held that compulsory mechanical licenses under § 115 did not permit a karaoke manufacturer to provide printed lyrics or synchronized on-screen lyric displays, rejected fair use for the commercial, non-transformative use of complete lyrics that threatened licensing markets, and affirmed dismissal without leave to amend as futile.


Leadsinger, Inc. v. BMG Music Publ'g, 512 F.3d 522 (9th Cir. 2008)