Pandora has asked a US court to dismiss a lawsuit filed against it by a group of comedians, insisting that it followed “longstanding custom and practice” in the comedy industry when licensing and streaming comedy content, and that late in the day allegations that it didn’t have all the necessary licences in place are unfair and invalid.
Among other things, Pandora reckons its licences from the major record companies cover rights that the comedians claim were not properly licensed. But in their own court filing, the comedians lambast that claim, insisting that “plain language” in Pandora’s deals with the majors “make it clear not only that no underlying third-party copyrights or other rights” are covered, “but also that Pandora must obtain those rights”.
Comedians including Andrew Dice Clay, Bill Engvall and Ron White, and the estates of Robin Williams and George Carlin, have all sued the streaming service over allegations it streamed recordings of their comedy with only half the required licences in place.
Pandora had licences covering the recordings of the comedians’ routines from the labels and distributors that provided them. However, they did not have explicit licences covering the material contained in those recordings - so the equivalent of the licences streaming services have to get from music publishers and songwriters when they stream recorded music.
In its latest court filing, Pandora argues that although it didn’t have explicit licences covering the comedians’ material, those rights were covered, either by an ‘implied licence’ from the comedians themselves, or a ‘pass-through licence’ from the labels that provided the recordings.
From the beginning of its latest court filing, Pandora takes aim at Word Collections, the rights management company set up by TuneCore founder Jeff Price which works for the comedians involved in the dispute. Word Collections, says Pandora, “conceived and orchestrated” this legal battle to “upend longstanding custom and practice in the spoken-word comedy industry for the purpose of creating a new market for its unnecessary licence”.
Word Collections, and the comedians they work with, are even more scathing of Pandora in their filing. Criticising the streaming service’s current and past arguments against their legal action, they say that Pandora has been “scrambling to create litigation-inspired defences” which “it knew, or should have known, were meritless when filed”, in the hope it could “bury” the comedians in “exorbitant litigation costs”.
When a streaming service streams music, it needs two sets of licences, one covering the rights in the recordings and one covering the rights in the songs contained in the recordings.
The two sets of licences are generally negotiated separately with different entities.
However, with spoken word content, streaming services have often only secured a licence for the recording. Yet, in the recording there is often a script which, in copyright terms, is a literary work which in theory also needs licensing.
In its latest filing, Pandora presents two theories for how it was licensed to stream the literary works without negotiating an explicit bespoke licence.
First, it reckons it has an implied licence. That’s based on the fact the comedians knew their material was being streamed for years, banked the royalties paid on the recordings side, “yet never once objected or asked Pandora to obtain an additional licence or pay an additional royalty”. If a second licence was required, why did no one demand a second licence be secured?
Or, if that fails, Pandora reckons its licences from the labels and distributors that provided the comedy recordings basically covered all the other rights contained in those recordings.
With music downloads in the US, a so called pass-through licensing system is used, so download platforms do deals with labels and distributors, which in turn pass through any royalties that are due to songwriters and music publishers on the songs side.
Pandora is basically arguing that something similar has been happening when spoken word content is streamed. It writes, “When the labels (or their distributors) license recordings to Pandora, they pass along all rights necessary to use the recordings, thereby fulfilling the purpose of the agreements between labels and comedians”.
Neither of those arguments stack up, the comedians argue. Pandora’s label licences are clear that the literary work rights are not covered. And Pandora itself admitted to investors, back when it was a publicly listed company, that the literary works in spoken word content were not licensed and that was a risk for the business - at no point did it say it was able to rely on implied licences.
Both Pandora and the comedians reckon their arguments are now sufficiently strong that the judge should rule in their favour by summary judgement.