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Georgia Supreme Court rules in favour of iHeart in yet another pre-1972 lawsuit

By | Published on Tuesday 21 March 2017


Another pre-1972 copyright case for the files now, though this one tests a different argument in a different state, and doesn’t involve anyone called Flo or Eddie. Instead, iHeart has defeated a copyright claim made by Arthur and Barbara Sheridan in the state of Georgia over it streaming pre-1972 recordings they control without licence.

As much previously reported, US-wide federal copyright law only protects sound recordings released since 1972. Older tracks that are still in copyright are instead protected by state law, and therefore rules vary around the country.

Under federal copyright law, traditional broadcasters are not obliged to get a licence from or pay royalties to artists and labels for the recordings they play, but online and satellite broadcasters are. That means services like Pandora and iHeartRadio need licences for post-1972 tracks, but what about older recordings?

AM/FM stations have never paid royalties when playing golden oldies either, and state-level copyright laws generally make no specific mention of online or satellite services, so the Pandoras of the world decided they didn’t need licences for pre-1972 recordings. But some of the artists and labels who control those recordings have argued otherwise.

The most high profile cases to date on this issue have involved one-time Turtles Flo & Eddie. They have argued in California, New York and Florida that state law there actually provides a general performing right for sound recordings – like copyright law in most other countries – which would mean AM/FM stations as well as online and satellite broadcasters would technically need a licence from artists and labels.

They initially enjoyed some success with that argument in both California and New York, though on appeal judges in the latter said it would be silly to rule that there had been a general performing right for sound recordings under the state’s copyright law all these years, when no artists or labels had ever enforced those rights over pre-1972 recordings by demanding royalties from AM/FM radio stations. Meanwhile in California, the matter is now heading to the state’s Supreme Court.

In Georgia, Arthur and Barbara Sheridan presented a different argument in their class action against media giant iHeart over its streaming service iHeartRadio. Rather than dwelling on whether or not there are performing rights for sound recordings in the state, they argued that the iHeart streaming platform was in the business of ‘transferring’ sound recordings, an act that is protected by copyright in the state.

More specifically, they said that iHeartRadio was in breach of a state law that “prohibits the transfer of sound recordings without permission”. The Sheridans’ lawsuit said that “iHeartMedia needed their consent to transfer their master sound recordings to iHeartRadio listeners” and that therefore the broadcaster “engaged in racketeering activity by making unauthorised transfers”.

However, the law being cited by the Sheridans provides an exception for broadcasters. It says permission is not needed for transferring a sound recording if a person “transfers or causes to be transferred any such sounds … intended for or in connection with radio or television broadcast transmission or related uses”.

Which meant that when the matter was passed over to the state’s Supreme Court, judges there had to assess whether iHeartRadio – which provides simulcasts of the broadcaster’s AM/FM services as well as a personalised radio set-up – fell under the category of “broadcast transmission or related uses”. And the court yesterday ruled that it did.

It reached this conclusion on the basis that the listener experience even with iHeart’s personalised radio service was similar to the conventional radio experience. The court wrote in its judgement that although iHeartRadio “allows users to ‘build’ their own station around a particular song, band, genre, etc” which “provides for more user input”, this “is not an on-demand service, and ultimately resembles someone selecting a terrestrial AM/FM station based on the station’s advertised genre of music”.

Quite what elements of a copyright a stream exploits remains of debate. Though at a federal level in the US, it has generally been agreed that personalised radio services only exploit the (digital) performing right elements of the copyright even though technically a stream also constitutes a copy of a track. That conclusion also implies that those services are considered more like radio than anything else.

The Sheridans have also filed lawsuits against iHeart, Pandora and Sirius in four other states. It remains to be seen how they turn out. Though, with an ever higher stack of cases now navigating the technicalities of state-level copyright laws to assess the liabilities of US-wide music services, there is an ever stronger argument that federal copyright protection should just be extended to all sound recordings still in copyright.