This week, the US Court of Appeals essentially ended Flo and Eddie’s New York case against Sirius XM where it tried to establish a public performance royalty in pre-1972 sound recordings. The Court of Appeals sent the case back to the US District Court with instructions that it be dismissed, finding that a December decision by New York’s state Court of Appeals resolved all issues in the case. As we wrote just before Christmas, the New York Court of Appeals determined that there was no public performance right in pre-1972 sound recordings under New York state law. That decision resulted from a certified question from the US Court of Appeals which was reviewing the decision of a federal District Court which had found that such a right exists. An issue in a Federal case is certified or referred to a state court when there are issues of state law that control the determination of the Federal case. As pre-1972 sound recordings are not covered under Federal law, state law controls the rights accorded to such recordings, thus the certified question was necessary in this case to determine the state of the law on this issue in New York state (see our article about the referral of the public performance issue in this case to the NY Court of Appeals, here, an article that also discusses more broadly the status of pre-1972 sound recording litigation and related issues).
This week’s federal Court of Appeals order was very direct, relying on the state court decision that there was no public performance right to end the case. It did briefly address the remaining arguments of Flo and Eddie by finding that no issues still remained as to liability for copies of the sound recordings made during the digital transmission process (server, buffer and cache copies) or on any claim of unfair competition. Basically, the Court found that any copies made in the transmission process were fair use necessary to engage in the legal performance, and there was no unfair competition issue as the performance was legal, hence not unfair in the eyes of the law. Continue Reading