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Yahoo wins appeal of music-streaming case

Yahoo's music services are not interactive enough to require it to pay the rights holders of songs additional royalty fees, a three-judge panel ruled in upholding an earlier verdict.

A three-judge panel ruled Friday that Yahoo will not have to pay up every time it plays a song on its Internet radio service, affirming an earlier verdict.

In what is being seen as a defeat for the music industry, Yahoo Music was not deemed "interactive" enough to require the company to negotiate with record companies for the rights to play songs over the Internet. Instead, according to Reuters, it merely has to pay licensing fees to digital music rights organization SoundExchange.

The suit arose way back in 2001, when a division of Sony sued Launch Media claiming the service was bypassing a law that requires those who provide specific playlists of songs over the Internet to pay rights holders. Yahoo also acquired Launch Media that year, but has since turned over control of the service to CBS Radio, a division of the same corporation that publishes CNET News.

Yahoo won the case in 2007, but Sony appealed, resulting in Friday's decision.