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Court again dismisses Pandora’s competition law claims against comedy licensing agencies

By Chris Cooke | Published on Tuesday 11 April 2023

An American court has rejected arguments made by Pandora that two agencies representing the copyrights of comedians are acting in an anti-competitive way by basically creating a cartel of jokers.

The streaming service is facing a number of lawsuits from comedians who allege that it has been making their comedy routines available to stream without licence.

Just like with music, where there are two copyrights in a track – one in the recording and one in the song – with a recorded comedy performance there are also two copyrights, one in the recording and one in the actual routine.

With music, streaming services secure two sets of licences, one for recordings and one for songs. But with comedy, to date digital platforms have generally only got licences covering the recordings, provided by whoever uploads the actual content.

Until recently, to license the rights in the actual routine – which in copyright terms is a literary work – a streaming service would have had to negotiate a deal directly with each comedian featured on its platform.

However, the two companies involved in this legal dispute – Word Collections and Spoken Giants – have started representing the rights of multiple comedians.

Although that actually makes life easier for the streaming services, when their clients started suing Pandora over unpaid royalties it hit back at the two agencies with the allegations of anti-competitive conduct.

In its antitrust lawsuits, Pandora said of both Word Collections and Spoken Giants, its “true business model is not that of a benign licensing agent or an advocate for comedians’ intellectual property rights, it is that of a cartel leader”.

Pandora’s claims seemed somewhat optimistic from the start because both Word Collections and Spoken Giants each represent relatively small rosters of comedians. Plus the two agencies are clearly competing with each other.

To that end, legal reps for the comedians and comedy agencies saw Pandora’s cartel claims as something of a distraction tactic and called for them to be dismissed.

A judge did just that in relation to the specific allegations that had been made against Word Collections last October, but gave Pandora the option to re-file its claims, which it then did the following month.

However, last week the court dismissed the claims again, this time in relation to both Word Collections and Spoken Giants. And this time it was dismissal “without leave to amend”, meaning Pandora cannot refile again.

Welcoming that ruling, Richard Busch – legal rep for Word Collections and its clients – said: “These legendary comedians filed legitimate copyright infringement claims. Rather than defend against them on the merits, Pandora and it’s lawyers decided to file antitrust claims that we believe were clearly meant to intimidate my clients and their families, and put Word Collections out of business. It didn’t work”.

“Even when the judge dismissed Pandora’s claims the first time and told them that he was skeptical that they could plead valid claims”, he added, “they were undeterred and brazenly pressed forward with a new complaint that we believed was just as bad, if not worse, than the first one”.

“The court has now agreed”, he went on, “and has rightfully dismissed Pandora’s claims again this time with prejudice and specifically and explicitly without any right to try again. We now look forward to pursuing the infringement claims as should have been the case from the beginning”.

Both Word Collections and Spoken Giants were actually so scathing of Pandora’s competition law claims that they urged the judge to sanction the streaming firm and its lawyers for making them.

Those claims, said Spoken Giants in a legal filing earlier this year, were “based on fundamental misrepresentations of the record, allegations that lack any evidentiary basis, and frivolous legal contentions”.

However, while dismissing Pandora’s actual claims, the judge last week concluded that there were not grounds for sanctioning the company for having made them.

The alleged “misrepresentations” were “nothing more than the kind of factual disagreement that is commonplace in any litigation” he reckoned, and “although Pandora’s amended counterclaims fell short of the mark, ‘an unsuccessful argument alone does not warrant sanctions'”.