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.
In our article in December, we noted that these issues remained, stating:
there are other claims made by Flo & Eddie that need to be resolved, including the claim that there are unauthorized digital reproductions of songs made by Sirius XM in the digital transmission process. However, if the Federal Court follows the logic that same Court applied in the Cartoon Network case dealing with Cablevision’s remote DVR (about which we wrote here), it is likely to find that these temporary buffer and cache copies that do nothing but facilitate the public performance have no independent value and need not be licensed.
Seemingly, the Court (the same court that decided the Cartoon Network case) followed the logic that we predicted in determining that no issues remain for the District Court’s consideration.
While this ends the case in NY, appellate courts in California and Florida still need to rule on the issue of whether there is a performance royalty in those states. The Florida Court just scheduled an oral argument for April, so it may be several months before we see a decision there. As pre-1972 sound recordings are not covered by Federal law, theoretically each state could reach a different determination as to whether there is a performance right in that state. However, New York state is often a leader in deciding entertainment law issues, so we would expect that the decision reached by its highest court will provide some weight to those arguing that there is no performance right in other states – but we’ll see how the other pending cases go, and whether the pre-1972 artists pursuing these cases roll out the issue in these other states after their loss in New York.