According to Reuters' report, the 2nd US Circuit Court of Appeals in Manhattan has upheld the 2007 Manhattan federal court ruling that Yahoo's LAUNCHcast is not an "interactive" digital music service. Citing the random nature of personalized playlists, the court said that LAUNCHcast was not required to pay the copyright holders individual licensing fees of each song it plays for its users.

However, the court maintained that Yahoo will still have to pay SoundExchange licensing fees for songs played on its Web radio service.

The decision by the appeals court came eight years - the lawsuit was initiated in 2001 by the subsidiaries of Sony Music Entertainment against the LAUNCHcast creator, Launch Media Inc., whereby they sought $100 million in damages alleging willful copyright infringement by LAUNCHcast.

The decision of the lawsuit, which covered operations from 1999 to 2001, had gone LAUNCHcast's way.

In the recent ruling that too went in favor of LAUNCHcast, Judge Richard Wesley wrote: "The LAUNCHcast user has control over the genre of songs to be played, but this degree of control is no different from a traditional radio listener expressing a preference for a country music station over a classic rock station. The unique nature of the playlist helps Launch ensure that it does not provide a service so specially created for the user that the user ceases to purchase music."