Broadcast Performance Royalty

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The Copyright Office is now a part of the Library of Congress, with the Register of Copyrights (the head of the Copyright Office) appointed by the Librarian of Congress. As part of its plans to review the Copyright Act, the House Judiciary Committee asked for comments earlier this year about structural reform of the Copyright…

The Georgia Supreme Court this week issued a decision holding that the streaming of pre-1972 sound recordings by iHeart Media does not violate the state’s criminal statutes against the “transfer” of recorded sounds without the permission of the owner of the master recording. While many trade press articles have lumped this decision in with the ongoing litigation about the public performance right in pre-1972 sound recordings, this case is actually dealing with a different issue – and does not even mention the words “public performance” that were the center of debate in the Flo & Eddie cases against Sirius XM and Pandora, leading to the decisions that we wrote about in New York (here and here), California (here), and Florida (here).

What is at issue in the Georgia case is a criminal statute similar to those found in many states that prohibits the unauthorized transfer of various recordings, including pre-1972 sound recordings, without permission of the owner of the master recording. The plaintiff in this case, argued that the illegal transfers violated criminal law, and thus gave rise to a claim of civil liability under state racketeering statutes which provide for civil recovery against a defendant engaged in multiple criminal activities. By finding that there was no criminal violation here, the Georgia Supreme Court effectively ended the racketeering claim.
Continue Reading New Wrinkle in Pre-1972 Sound Recording Cases – Georgia Supreme Court Holds that iHeart Streaming Does Not Violate State Criminal Statute

The music battle continues over the question of whether state laws provide a public performance right in pre-1972 sound recordings. While, as we wrote here and here, the highest court in New York has determined that there is no such right in that state ending the litigation there, cases continue in other states, notably California (where a Federal Court determined that there was a state right, see our summary here) and Florida (where the Federal Court determined that there was not, see our summary here). The Florida case has been referred to that state’s highest court for an advisory ruling on the state of the state’s law on the issue, and earlier this week, the same thing happened in California. The US Court of Appeals for the 9th Circuit, which was hearing an appeal of the Federal District Court decision that there was a performance right under California law, decided to turn to the experts in California state law – the California Supreme Court – and ask for an interpretation of California law to determine if there is indeed a public performance right in these pre-1972 recordings.

Flo & Eddie, the performers behind the 1960s band the Turtles, stirred up a major music rights controversy several years ago by their high-profile lawsuits against music services including Sirius XM and Pandora as to whether there is a state law public performance right in pre-1972 sound recordings (see our article here on the first of these suits). Those recordings are not covered under Federal Copyright law, so Flo & Eddie had the novel idea of bringing state law actions to enforce a purported state law performance right in these recordings – even though no such right had been enforced against any music service in the 45 years since Federal Copyright law decided to cover all new US sound recordings, and even though Federal law did not itself create any performance right in sound recordings until 1995, and then limited it solely to digital performances under a very carefully crafted statutory license scheme. Even though no state law explicitly states that there is a performance right in these pre-1972 law, in California, the band has relied on a very general statutory grant of property rights in pre-1972 sound recordings to conclude that this broad grant included a performance right – even though there were no indication as to how such a performance right would function, or what limitations would apply, as are specified under Federal law. The US Court of Appeals, in its order referring this question to the California Supreme Court, noted the general nature of this statutory grant, and asked the state court for an interpretation as whether it really is meant to include a performance right.
Continue Reading More on Flo & Eddie: Federal Court Certifies to California State Court Question of Whether There is a Public Performance Right in Pre-1972 Sound Recordings

Each year, we write about SoundExchange issuing notices of their intent to audit various digital music services to review their royalty reporting and payment.  This year is no different, with Federal Register notices recently being issued to audit certain companies in various services, including satellite radio, webcasters, broadcasters who stream, and business…

Commercial radio broadcasters have been seeing numerous communications over the last week about Global Music Rights (GMR) and its seemingly contentious music royalty negotiations with the Radio Music License Committee (RMLC). Many stations are confused about this controversy and what it is all about. The 5 questions below, and the links at the end of the questions, try to shed some light on the issues. Stations need to carefully consider their options, and seek advice where necessary, to determine what they will do by January 31 with respect to the interim license that GMR has offered to stations. The questions below hopefully provide some background on these issues.

 What is GMR and why isn’t the music they represent covered by the other organizations like BMI, ASCAP, and SESAC?

 GMR is a new performing rights organization. Like ASCAP, BMI and SESAC, they represent songwriters and collect royalties from music users for the public performance of these songwriter’s compositions. They will collect not just from radio, but from all music users – they have already reached out to business music services that provide the music played in retail stores, restaurants and other businesses and no doubt have or will license other companies that make music available to the public. Most songwriters represented by GMR used to be represented by ASCAP or BMI, but these songwriters have withdrawn from ASCAP and BMI and joined GMR, allegedly to attempt to increase the amounts that they are paid for the use of the songs that they have written. For radio, these withdrawals became effective on January 1 of this year, when the old license agreements between ASCAP and BMI and the commercial radio industry expired.

What does a station need to, in order to protect itself while negotiations are going on?

Because the penalties for playing a song without a license can be as much at $150,000 per song, stations either need to purge all GMR music from their stations or sign a license agreement with GMR. If you decide to purge their music from your stations, don’t forget about music that may appear in commercials or syndicated programming. Also remember that we are talking about the musical composition, not the recording of the song by any particular band or singer. Even the broadcast of a high school band playing a GMR song at half time of some football game, or the broadcast of a local middle school choral concert, could trigger the royalty obligation to GMR.
Continue Reading Background on the GMR/RMLC Dispute – 5 Questions on the Basics of the Controversy

There is now a vacancy in the top position at the Copyright Office, the Register of Copyrights, and the Librarian of Congress, who appoints the Register, has asked for comments on the role and qualifications for the new Register. These comments are due by January 31, 2017. While setting copyright law has…

On Saturday, RMLC announced that it has reached an “interim” agreement with the new performing rights organization Global Music Rights (GMR) for a license to perform musical compositions controlled by GMR.  This agreement (available on the RMLC website here) is an interim agreement for radio stations that elect to participate, and covers only the first 9 months of 2017.  To be covered by this license, a station must make an election by January 31, and pay the first month’s assessment to GMR by that date.  GMR has promised not to sue any stations in January while stations are deciding whether to opt into this agreement.  The amount to be paid by any individual station can be ascertained by communicating with GMR at an email address furnished by the RMLC in the notice distributed on Saturday.

This is an interim agreement as it removes the threat of a lawsuit for playing GMR music after January 1 that could potentially be faced by any radio station that does not have a license.  The rates paid by any station that opts in could be adjusted retroactively, up or down, based on the results of further negotiations between RMLC and GMR, or based on the results of the lawsuits currently being litigated between the two (see our article here on RMLC’s suit against GMR, and the article here about GMR’s follow-up lawsuit against RMLC, each accusing the other of violating the antitrust laws).  It would seem obvious that RMLC believes that the amounts being paid under this interim deal are higher than justified based on the percentage of music played by radio stations that is controlled by GMR.  If it was believed that the interim fee represented a fair price, then it would seem that RMLC would have entered into a permanent license at these rates – but instead the litigation continues.  What is a station to do?
Continue Reading GMR and RMLC Agree to Interim License for Commercial Radio Stations – Providing 9 Months to Reach Final Deal for Public Performance of Musical Compositions

The New York State Court of Appeals, the state’s highest court, has ruled that there is no public performance right in pre-1972 sound recordings in the state of New York. The decision (available here in a version subject to revision) was reached after the US Court of Appeals certified the question to the state court as being necessary to resolve the appeal of a US District Court decision which had found such a right to exist in a lawsuit brought by Flo & Eddie of the band the Turtles against Sirius XM Radio. We wrote about the District Court’s decision here, and the certification to the state court here. Certifying a question from a Federal Court to a State Court is a rare matter, done when a Federal Court needs guidance as to the state’s treatment of a legal issue under state law where there is no clear precedent, and where the state law issue is central to the resolution of the case. The NY Court of Appeals did not have to accept the certification, but it did to resolve this somewhat obscure issue of state intellectual property law (most of which is governed by Federal law).

The NY Court’s decision was not unanimous, as there was one dissenting Justice who would have found that a performance right does exist. The dissenting justice thought that there should be a state performance right – but a right co-terminus with the Federal right, thus applying only to digital services and not to terrestrial radio and presumably not to retail outlets, bars and restaurants and other businesses that may play music. That Justice seemed to be motivated by a desire to keep pace with current developments in the music industry, suggesting that common law should evolve with the times and, as streaming is now becoming more important to the music industry, there should be a royalty for such streams. Another justice concurred with the decision that there is no performance royalty in noninteractive services like that offered by Sirius XM, but there should be for interactive services like that offered by Spotify and Apple Music. The majority of the court disagreed with these justices.
Continue Reading NY State’s Highest Court Finds that There is No Public Performance Right in Pre-1972 Sound Recordings

ASCAP and the Radio Music License Committee (RMLC) announced yesterday that they have reached an agreement for the period 2017-2021, setting the performance royalties that commercial broadcasters will pay for the use of music written by composers who are represented by ASCAP. The press release issued yesterday discloses little about the details of the agreement.…

While the new Congress will not begin until after the New Year, already copyright reform has been teed up to be on the agenda.  Posted last week on the website of the House of Representative’s Judiciary Committee was an announcement that the committee would be posting policy proposals for copyright reform from time to time, and asking for public comment.  The first proposal was posted with that announcement, looking at suggestions for reform of the structure of the Copyright Office.

The initial proposals are modest, suggesting that the Register of Copyrights be independently appointed (rather than being selected by the Librarian of Congress), that the Office has greater independence to appoint advisory committees and over its technology budget, and that there be authority to set up a small copyright claims adjudicatory process.  We wrote about the small claims proposal that was advanced in Congress last year, here.  We also have written about more sweeping changes that have been proposed for the Copyright Office, here, which apparently are not yet on the table.  However, as this policy proposal solicits public comment by January 31, 2017, other ideas for the reform of the Copyright Office may be advanced in the comments that are submitted. 
Continue Reading The Next Congress Has Not Yet Begun, and Already Copyright Issues are Poised for Comment – First Up, Copyright Office Reform