Copyright Update Part 4: Digital Music Streaming

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This paper was written and presented by Tamera H. Bennett at the 28th Annual Technology Law seminar hosted by UTLaw CLE. It has been edited into multiple blog posts. Enjoy Part 4 below, Part 3, Part 2, and Part 1.

While music publishers and record labels are fighting their own issues on getting paid (and sometimes against each other), this series of posts focuses on new media recent legal issues facing sound recording copyright owners.

ARE PRE-72 SOUND RECORDINGS PROTECTED?

Sound recordings are the fixation of a series of musical, spoken, or other sounds capturing a particular performance of an underlying musical composition. Congress acted in 1971 to grant federal copyright protection to sound recordings by extending federal protection prospectively to recordings created on or after February 15, 1972 (“Post-72” sound recordings). Sound Recording Act of 1971, 85 Stat. at 392. Sound recordings fixed before February 15, 1972 are protected by a patchwork of differing state laws (“Pre-72” sound recordings). (Bringing Pre-72 recordings under Federal Copyright Protection is outside the scope of this paper. Learn more by reading the December 2011 Copyright office report: Federal Copyright Protection for Pre-1972 Recordings).

One of the current hot litigation topics is whether or not Pre-72 recordings include a digital “public performance” right. Sound recording copyright owners for Post-72 works enjoy the exclusive right to control the public performance of their works by means of a digital audio transmission and be paid for such performances. 17 U.S.C. §106 (6). This means when you listen to a Post-72 sound recording on a non-interactive streaming services such as Sirius XM or Pandora, a payment should be made by the streaming service to Sound Exchange  - the entity that collects the payments and distributes the royalties to the sound recording copyright owners and recording artists. See Webcaster Settlement Act of 2008 and 2009.  As discussed in Part 3, interactive streaming services such as Spotify and Grooveshark must secure direct licenses with the sound recording copyright owner.

Sirius XM plays music of all genres and all decades. Sirius XM has never paid public performance royalties for digital streams of Pre-72 recordings. In 2014, three courts—two in California and one in New York—held that Sirius XM’s unauthorized public performance of Pre‐72 sound recordings violates applicable state law. Because there’s no federal copyright protection for Pre-72 sound recordings, the Pre-72 copyright owners must rely on statutory or common law rights that vary from state-to-state.

“The Central District of California Court ruled that sound recordings published prior to February 15, 1972 include a public performance right under common law and codified under Cal. Civ. Code § 980 ”

A California federal district court ruled that Sirius XM infringed rights guaranteed to plaintiffs by California state statute. See Flo & Eddie Inc. v. Sirius XM, No. 13‐cv‐5693, 2014 U.S. Dist. LEXIS 139053, at *22‐23 (C.D. Cal. Sept. 22, 2014). Flo & Eddie of the musical group The Turtles sued Sirius XM in August 2013 for infringement of sound recording copyrights because Sirius XM was not paying public performance royalties, yet performed the sound recordings owned by Flo & Eddie, Inc.  The Central District of California Court ruled that sound recordings published prior to February 15, 1972 include a public performance right under common law and codified under Cal. Civ. Code § 980  and such right may be infringed if permission is not secured before the sound recording is played on satellite radio. The Flo & Eddie No. 13‐cv‐5693 Fed. Cal. case continues on other grounds with the assumption the summary judgment ruling will be appealed by Sirius XM. 

In Flo & Eddie litigation in federal court in New York, the district court indicated that the public performance of Pre-72 sound recordings constitutes common law copyright infringement and unfair competition under New York law. See Flo & Eddie Inc. v. Sirius XM, No. 13‐cv‐5784, 2014 U.S. Dist. LEXIS 166492, at *40‐44, *50‐52 (S.D.N.Y. Nov. 14, 2014) (denying Sirius XM’s motion for summary judgment, and asking Sirius XM to show cause why judgment should not be entered on behalf of plaintiffs), reconsideration denied, 2014 U.S. Dist. LEXIS 174907 (Dec. 12, 2014).  The court held:

the New York Court of Appeals would recognize the exclusive right to public performance of a sound recording as one of the rights appurtenant to common law copyright in such a recording.

Id.  An interlocutory appeal in the case was granted on April 15, 2015.

A settlement was reached in June 2015 in similar pending litigation in a California state court case brought by major record labels against Sirius XM.   Capitol Records, LLC v. Sirius XM, No. BC520981 (Cal. Super. Ct. Oct. 14, 2014) (order regarding jury instructions).  Arguably many of the plaintiffs that settled out with Sirius XM would have joined the Turtles class action which was certified in May 2015. How does that impact the Turtles and their ability to reach a settlement?

Taking cases coast-to-coast, Flo & Eddie, Inc. also sued Sirius XM in Florida.  Flo & Eddie, Inc, v. Sirius XM Radio, Inc., No. 1:13-CV-23182 (S.D. Fla. filed Sept. 3, 2013).  

Conclusion:

New media always brings about new questions on how far copyright protection extends.  When looking at interactive and non-interactive digital services, the courts may be applying federal or state law depending on what year the sound recording was “fixed.”  In addition the courts have to look at the DMCA to determine how far the Safe Harbor provisions reach to protect the services providing the digital content.

Again, this article does not address the concerns of the music composition copyright owner.  That side of the equation has its own issues, some similar and some different, that are also being addressed via the court system and the Copyright Royalty Board.  In addition to the cases discussed, there’s plenty of pending litigation to keep an eye on for the future. 

To find links to most of the cases and articles cited herein (and bonus materials) visit https://delicious.com/tamerabennett/utlaw15.

Other cases to watch:

Flo & Eddie, Inc. v. Pandora Media, Inc., No. 2:14-cv-07648-PSG-RZ (C.A.C.D. filed Oct. 2, 2014).

Capitol Records, LLC v Pandora Media, Inc., No. 651195/2014 (N.Y. Sup. Ct. filed Apr. 17, 2014).

Zenbu Magazines LLC v. Escape Media Group, Inc., No. 1:15-cv-00349-MKB-RER (N.Y.E.D. filed Jan. 22, 2015).

Zenbu Magazines LLC v. Sony Computer Entertainment America LLC, No. 3:15-cv-00310-VC (C.A.N.D. filed Jan. 22, 2015).

UMG Recs., Inc. v. Escape Media Group, Inc., No. 1:2011cv08407 (N.Y.S.D. filed Nov. 18, 2011).