SiriusXM Loss on Pre-1972 Public Performance Royalties a Win for RESPECT
A summary judgment ruling for pre-1972 public performance royalties against SiriusXM in U.S. District Court in Los Angeles Monday could strengthen the argument for the full federalization of such royalties, said congressional members and music industry officials Tuesday. Judge Philip Gutierrez said California’s copyright laws include the “exclusive right to publicly perform” copyrighted sound recordings, and that SiriusXM broke that law by failing to license and compensate recordings by Flo & Eddie. The ruling came in a 15-page decision (http://bit.ly/1wKCoyz). The sound recordings of The Turtles, a music group from the 1960s, are owned by Flo & Eddie and were the subject of the lawsuit.
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The decision may increase congressional support for the Respecting Senior Performers as Essential Cultural Treasures Act (RESPECT), said HR-4772’s co-sponsors and music industry officials. The act would establish performance royalties on digital radio for pre-1972 recordings (CD June 19 p11).
House Judiciary Committee Ranking Member John Conyers, D-Mich., was “pleased” with the decision, said a spokeswoman. Conyers thinks the case “makes clear” the “need to address this issue through federal legislation, rather than have each performer go to court to fight for their royalties,” she said. House Judiciary IP Subcommittee member George Holding, R-N.C., said the decision supports the RESPECT Act, which he introduced. “Congress has a duty to act, and in the end, my bill will benefit artists, consumers, and companies operating in this ecosystem,” he said. “We're seeing a definite trend in favor of creators,” said House Judiciary IP Subcommittee member Doug Collins, R-Ga., in a statement. The decision supports the Songwriter Equity Act (HR-4079) (CD Feb 26 p13) and “other measures to make creativity fair,” he said. Collins introduced SEA, which would require the Copyright Royalty Board to “establish rates and terms that most clearly represent the rates and terms that would have been negotiated in the marketplace between a willing buyer and seller” (http://1.usa.gov/1v6yFuQ). Collins said he hopes such progress will result in more congressional “action early next year.” Collins and Conyers are co-sponsors of the RESPECT Act.
"This is a big win for artists, and in particular, older artists,” who depend on royalties, said Harvey Geller of Gradstein & Marzano, who represented Flo & Eddie in the case. Geller said he’s heading up two additional cases for Flo & Eddie in New York and Florida about pre-1972 sound recordings. The case in New York is “likely” to be decided before a similar case on pre-1972 sound recording royalties, Capitol Records v. Pandora, he said. California operates under both statutory and common law, while New York is governed only by common law, he said. Common law in California and New York are “very, very similar,” he said. The Pandora and SiriusXM cases are “very similar,” said Dina LaPolt of LaPolt Law, an IP and entertainment firm. SiriusXM didn’t comment.
Pandora is “confident in our legal position on this issue,” said Public Affairs Director Dave Grimaldi. “Pandora would be open to supporting the full federalization of Pre-72 sound recordings under a technology-neutral approach,” he said. “Full federalization would guarantee the full rights granted to these deserving recording artists, including termination rights, under Chapter 3 of the Copyright Act."
LaPolt said the ruling will “likely” increase support for the RESPECT Act, but also said she hoped the decision would “highlight the broader conversation about bringing pre-1972 recordings under federal copyright protection.” Federalization of pre-1972 sound recordings could be to SiriusXM’s “advantage,” she said. Instead of dealing with the “patchwork” of state laws that govern pre-1972 recordings and having to “likely negotiate with each individual rightsholder” to continue streaming works, federalization would give Sirius XM the right to stream such recordings, “provided they pay the appropriate royalty,” said LaPolt.
The ruling “confirms what we have always known: all sound recordings have value, and all artists deserve to be paid fairly for the use of their music,” said SoundExchange CEO Michael Huppe. “It does not -- and should not -- matter whether those recordings are protected by state or federal law,” he said. “Congress should quickly move to pass the RESPECT Act,” said Huppe. The act would give digital radio services an “easy and efficient way to get the rights that the federal court in the Turtles case has confirmed they need -- and to give the artists the payment they deserve,” he said.
SiriusXM will probably appeal, but its case isn’t “looking good,” said LaPolt. The “one-sided” summary judgment has probably left SiriusXM “most concerned about how much they will end up paying and how this will affect their business model,” she said.