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Pre-1972 copyright ruling goes in favour of music community, but does it set any precedent?

By | Published on Wednesday 24 September 2014

Sirius XM

OK, America’s pre-1972 copyright thing. Big development. Possibly. A court in California has found in favour of Flo & Eddie in their lawsuit against Sirius XM satellite radio. But what does that flippin well mean?

First, a very quick recap. Federal copyright law in the US says that satellite and online radio services – a category which would include both Sirius and Pandora – are obliged to pay royalties to the record labels for any recordings they play, though the labels are in turn obliged to licence their content to such services via the SoundExchange collective licensing system, unless the broadcaster/webcaster opts to do a direct deal.

It’s a significant bit of law because in the US, unlike Europe, traditional AM/FM radio stations are not obliged to pay any royalties to the labels, however many records they play (though they do have to pay the music publishers to cover the separate copyrights in the lyrics and musical compositions).

However, federal copyright law only directly applies to sound recordings that came into being after 1972. Records from before that date, including the still rather valuable 1950s/1960s rock n roll catalogues, are protected by state copyright law.

Which has posed two questions: do any recent innovations in federal law extend to state copyrights, and if not, what exactly does state copyright law say about satellite and online radio? Alas, ageing state laws say nothing specifically about satellite or online services, so everything is open to interpretation.

Sirius and, latterly, Pandora have interpreted the situation to the effect that they are not obliged to licence or pay for recordings that pre-date 1972. But unsurprisingly, given SoundExchange reckons satellite/online royalties due on recordings from this era could top $60 million a year, the record industry does not agree. And both SoundExchange and the major labels have begun litigation on the issue in different state jurisdictions.

As did Flo & Eddie, aka Howard Kaylan and Mark Volman, aka the two vocalists with American rock band The Turtles, a band whose heyday predates 1972. The duo has actually sued Sirius in three different states, the case in California coming first. And earlier this week a summary judgement found in the musicians’ favour, ruling that Sirius had indeed violated state copyright law by playing Turtles tracks without permission.

Lawyers for Flo & Eddie claimed that Sirius had actually violated two elements of the duo’s sound recording copyrights, firstly by copying the recordings and secondly by then instigating a public performance of them. The judge hearing the case said that the former claim would need to go to trial, but that she was ruling in favour of the plaintiffs on the latter, Sirius having been unable to deny it instigated public performances of Flo & Eddie’s recordings, and therefore relying on legal interpretation rather than disputing any facts. A hearing to assess damages for Flo & Eddie is now scheduled for next month.

Although Sirius could still appeal both this week’s ruling and any damages it is ordered to pay, the ruling could set a significant precedent, in that labels and artists in control of pre-1972 recordings could now push for royalties from Sirius, Pandora et al, both for past and future airplay. The satellite and online radio providers could also be obliged to negotiate licences for playing 1950s and 1960s records moving forward; it would be interesting to see if that would simply be handled by SoundExchange, or if any labels would argue for direct deals.

Of course, this ruling only applies to Californian law, cases in Florida and New York are pending. Though satellite and online services operate US-wide. Service providers could argue for a metric that means they only have to pay a sound recording royalty based on users in California, or work out a way to vary their services in the state, though reaching a deal with SoundExchange and/or the labels might be easier.

Though this ruling far from settles the matter of pre-1972 sound recording copyrights. Appeals will almost certainly follow plus, as Billboard pointed out yesterday, in a concurrent lawsuit between the majors and Sirius in California, a different judge has previously indicated she was erring towards the satellite broadcaster’s arguments. It remains to be seen whether that judge now feels obliged to follow this week’s ruling.

So, this judgement could have narrower implications than it first seems, or a wider impact. Indeed, some wonder if it will now force a re-evaluation of the public performance of pre-1972 sound recordings in California by all broadcasters. Which, should they ultimately lose this fight, would be a silver lining for Sirius and Pandora, who have long moaned about the fact AM/FM radio services, with whom they compete, have such an advantage when it comes to royalty commitments.