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Federal appeals court agrees to review pre-1972 case

By | Published on Friday 17 April 2015


A federal appeals court in the US has agreed to review one of the previously reported pre-1972 legal battles that is occurring in the digital copyright domain, this one between satellite radio service Sirius XM and one-time Turtles, Flo & Eddie.

As previously reported, US-wide federal copyright law only applies to sound recordings released after 1972. And that law – unusually for copyright law – does not provide sound recording owners with a ‘general public performing right’ over their works, but it does provide a ‘digital performing right’, meaning that AM/FM radio stations do not need a licence to play recordings, but satellite and digital services do.

Satellite services like Sirius and digital services like Pandora – which license recordings via the SoundExchange collective licensing system – say that because the digital performing right comes from federal law, and that only applies to post-1972 records, they shouldn’t have to pay any royalties on pre-1972 tracks. The record industry, though, disagrees, saying that pre-1972 recordings are protected by state law, and a digital performing right exists there too.

Except that state copyright laws – which generally pre-date all things web – say nothing about the digital communication of music. But, say the record labels, SoundExchange and Flo & Eddie, what if there was a generally public performing right in those state laws? Then Sirius and Pandora would still need to pay, even though the labels have never previously enforced that supposed general public performing right against anyone else before.

When Sirius were sued by Flo & Eddie in various states on this issue they were pretty confident that the state courts would say there was no general public performing right. True, actual statute was generally a little vague on the issue, but if the labels had a public performing right on pre-1972 catalogue why hadn’t they been suing golden oldie radio stations on AM and FM who likewise have no licenses?

But in both California and New York the courts have sided with Flo & Eddie, a judge in the latter last year refusing to award Sirius a summary judgement in its favour saying that “acquiescence by participants in the recording industry in a status quo where recording artists and producers were not paid royalties while songwriters were does not show that they lacked an enforceable right under the common law – only that they failed to act on it”.

Sirius wants the appeals court to review that decision, and has gone to the federal rather than the state courts to try to force a rethink. And the Second Circuit court has agreed to consider the case.

Possibly because the satellite radio firm has raised two issues in relation to the dispute: first whether a general performing right exists under New York state law, and second whether New York state should be allowed to provide that right, given it causes massive problems for services like Sirius that operate US-wide, and which would find it really hard to obey different copyright rules in different states. And that latter point is a question for the federal rather than the state courts.

According to The Hollywood Reporter, Sirius has also told the appeal courts that having this whole issue hanging unresolved is a big problem for the satellite and online radio business. They write: “Absent immediate review, the [New York] court’s ruling leaves SiriusXM and other broadcasters with tremendous uncertainty, faced with a choice between stopping the broadcast of pre-1972 recordings to the public’s detriment; submitting to shotgun negotiations with sound recording owners; or facing massive liability as this case and others wend their way through the courts”.

Of course, the record industry, for its part, is busy lobbying US Congress to introduce a general performing right into federal copyright law, and to then extent that to all copyright protected recordings, not just that from 1972 onwards. Which would address the uncertainty point here. Though not necessarily in a way Sirius would like.