Discussion of FCC, copyright, advertising and other legal issues of importance to radio and television broadcasters and other media companies
Principal Editor: David O’Connor
Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.
…
In a decision this week, the Florida Supreme Court rejected claims by Flo & Eddie (of the 1960s band the Turtles) that there was a common law public performance right in pre-1972 sound recordings in the state of Florida (the opinion is available here). The Florida court, after examining numerous avenues of argument, concluded that the establishment of such a right was a legislative task. A judicial declaration that the right existed would, in the Court’s words, “have an immediate impact on consumers beyond Florida’s borders and would affect numerous stakeholders who are not parties to this suit.” It would also upset settled expectations, as the determination that there was a right would effectively create a sound recording performance right greater than that which has ever been recognized in the US – far broader than the limited right granted under Federal law to cover digital performances of sound recordings. The Court went on to conclude that other claims raised by Flo & Eddie were similarly unavailing. The Court found that any reproductions made in the transmission process by Sirius XM (the defendant in the case) were not entitled to composition as they were transitory and made only for purposes of the transmission, not for public consumption (and as Florida law specifically permitted limited reproductions by radio broadcasters and the Court considered Sirius to fit that definition). And, as there was no violation of any rights of the plaintiffs, the use of the recordings could not constitute unfair competition or conversion.
This case reached the Florida Supreme Court when it was certified by the United State Court of Appeals which was reviewing a District Court decision reaching the same conclusion as did the Florida Supreme Court – that there was no performance right under state law for pre-1972 sound recordings (see our summary of the District Court decision here). The Supreme Court’s decision in Florida is similar to that reached by the Court of Appeals in New York (the state’s highest court), about which we wrote here, determining that there was no NY state law public performance right in pre-1972 sound recordings. As we’ve written many times, pre-1972 recordings are not governed by Federal law, which was only extended to cover reproduction rights in sound recordings in that year, leaving all pre-1972 rights in sound recordings with the states. Georgia and Illinois have reached similar decisions in slightly different cases (see our article here on the Georgia decision). In California, where a District Court found a public performance right in pre-1972 sound recordings, we are awaiting word from its Supreme Court as to whether such rights exist in that state (see our article here on the certification of this question to the California Supreme Court).
Continue Reading Florida Supreme Court Rejects Public Performance Right in Pre-1972 Sound Recordings – What’s Next?
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
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 Flo and Eddie NY Suit on Pre-1972 Sound Recordings Ordered Dismissed By Court of Appeals – No Issues with Copies Made in the Transmission Process
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
Pre-1972 sound recordings are back in the news. Yesterday, the US Court of Appeals for the Second Circuit decided to defer its consideration of an appeal of a District Court’s decision that NY law included a public performance right for pre-1972 sound recordings. The Court deferred its decision until it can get a definitive answer as to whether or not such a right exists under NY state law. To get that definitive answer, the Court of Appeals referred the question to the NY State Court of Appeals (the highest court in New York State) asking it to issue an opinion as to whether the right exists. Reading the order referring the case to the NY state court, there are a number of interesting issues addressed, including a discussion that could help decide the ramifications for over-the-air broadcasters who play these recordings.
First, we should provide a reminder about what the case here is all about. This case was brought by Flo and Eddie, members of the 1960s band The Turtles, who alleged that Sirius XM (and Pandora in a separate case) owed them royalties for playing pre-1972 sound recordings on their music services (see our article on the filing of the suit, here). Pre-1972 sound recordings first copyrighted in the United States are not covered by Federal law (see our article here and here about a Copyright Office inquiry on whether they should be brought under Federal law). While most states have laws prohibiting the reproduction of those recordings (e.g. prohibiting bootlegging of the recordings), none has an explicit statutory grant of a public performance right such as that collected by SoundExchange for post-1972 works. Sirius XM has thus excluded performances of pre-1972 sound recordings from the royalties that it has paid to SoundExchange (with the blessing of the Copyright Royalty Board in their last proceeding, see our story here). And allegedly Pandora has done the same. In this case, Flo and Eddie argued that in fact state law did convey a public performance right in sound recordings. Many observers (including this author) suggested that this argument would not succeed given that finding that a general performance right existed would be contrary to US law, and could subject all sorts of businesses that have never paid royalties for public performances of sound recordings, from over-the-air radio stations to bars and restaurants, to a performance royalty only when they played oldies. Nevertheless, Flo and Eddie were successful with their arguments in lower Federal Courts in California and New York (see our articles here and here), but a court in Florida denied their claims, finding that there is no performance right in pre-1972 sound recordings in that state (see our article here). The Court of Appeals decision yesterday was on the appeal of the NY decision referenced above. Why did the Court of Appeals need to send this case to the NY state court system?
Continue Reading Appeal of Public Performance Rights in Pre-1972 Sound Recordings Referred to NY State Court for Interpretation – What Issues Might Radio Broadcasters Be Facing?
It’s another summer with music copyright issues hitting the press almost every day. Over the next week or two, we will try to catch up on some of the legal issues raised by all the music news. First, let’s look at the significant actions in the last ten days in the battle over whether there is a public performance right in pre-1972 sound recordings. Just a few days after there was a court decision (available here) finding that there was no common law public performance right in pre-1972 sound recordings under Florida law, Sirius XM last week announced that it had settled the case brought against it by the major record labels by agreeing to pay $210 million for nationwide public performance rights to the catalog of recordings that these labels own, said by Sirius’ SEC 8-K filing to comprise about 80% of those sound recordings. Obviously, that settlement does not appear to resolve the issues with independent sound recording owners (like Flo & Eddie who brought the actions that have resulted in NY and California decisions finding a performance right in pre-1972 recordings in those two states). But what do the settlement and Florida decision mean for other users of these recordings?
First, a review of the issue with pre-1972 sound recordings. With all of the copyright issues that have been in the news in the last few weeks, that review is necessary so that readers really understand the issues involved in this case – beyond just the headlines. Pre-1972 sound recordings (sound recordings being a song or other audio material, as recorded by a particular artist) first released in the United States are different than other sound recordings, as they do not have protections under Federal copyright law. Prior to 1972, Federal copyright law did not protect sound recordings at all, only protecting what is referred to as the “musical work” or “musical composition” (the underlying words and music of a song). The actual recording of the song was protected only under state laws, and most state laws addressed only unauthorized reproductions of those recordings (e.g. bootlegged copies), not performance rights. When copyright protections over sound recordings were federalized in 1972, states were left with the right to determine how to deal with pre-1972 recordings.
Continue Reading Understanding the Murky State of the Performance Right in Pre-1972 Sound Recordings – Florida Court Rejects the Right yet Sirius XM Settles With the Record Labels
Today is Elvis Presley’s 80th birthday, so it seems appropriate to revisit the issue of pre-1972 sound recordings, and to take a deeper look at the recent decisions by courts in New York and California finding that there is a public performance right in these recordings. The NY decision in a case brought by Flo & Eddie of the band the Turtles, coming after the California cases, is in many ways the more interesting of the cases. In the California case, the Court interpreted a California statute on copyright ownership as signaling that the California legislature intended to provide the entire bundle of ownership rights that would be accorded to any other piece of property, which the California Courts found would include the right to publically perform the recording. While that may be debatable (as one does not usually think of a public performance right in connection with the ownership of tangible property – you don’t perform a house or a car), the decision at least is based on statute. But the NY court did not find any such specific statute to which it could point to find a public performance right, instead concluding that the performance right was somehow inherent in the common law and therefore existed unless there was a specific carve-out of that right by statute. This reasoning, to me, simply does not stand up to review.
The NY Court itself spends an entire footnote chronicling the history of the public performance right in the United States. It notes that there was initially no public performance right at all recognized by the Copyright Act, until Congress provided one for dramatic works (e.g. plays) in 1856. No such right was accorded to musical works (the musical composition – the words and music of a song) until 1897 when Congress specifically provided such a right by law. For sound recordings, the public performance right did not exist in the US until 1995, when it was first extended to a limited class of digital recordings. From these facts, the Court goes on to conclude “It was thus an accepted part of the background law that public performance rights would, absent a deliberate effort to exclude them, extend to sound recordings.” Presumably, the Court is talking about the background law in 1972, when Congress first accorded any protection at all to sound recordings by granting a Federal right to control reproduction and distribution of such works – but Congress specifically excluded any performance right for another 23 years.
Continue Reading On Elvis’ Birthday – Looking at the Issues with Pre-1972 Sound Recordings
On Friday, the US District Court in the Southern District of NY found that there is a public performance right in pre-1972 sound recordings in that state, following two decisions from California finding a similar right under California law (though on different grounds). Like the first decision in California (about which we wrote here), this decision was the result of a law suit by Flo and Eddie of the Turtles against Sirius XM, arguing that Sirius XM was infringing on their rights by playing old Turtles songs without paying the duo (who now own the Turtles’ copyrights) any compensation. Unlike the California decision which looked to specific language in the California statute about ownership of pre-1972 sound recordings, the NY Court reaches a decision in some ways broader than the California decision, but potentially also in some ways narrower. What does it mean for the many businesses that play such recordings?
There is no public performance right in sound recordings generally in the United States, with the limited exception of the public performance of such recordings in a digital medium. Sound recordings had not been covered by Federal copyright law at all until 1972, when they were covered for purposes of protecting reproductions and distributions and other general rights, but Federal law specifically did not include this public performance right in sound recordings until the 1990s. When sound recordings were added to Federal law in 1972, the regulation of pre-1972 sound recordings was specifically left to state regulation (where it had been prior to Federalization). The limited digital performance right was adopted in a series of laws enacted in the late 1990s, as fears of digital piracy based on Internet and other digital transmissions grew. So webcasters, satellite radio, digital cable radio and other digital users of sound recordings have paid a royalty for the performance of such recordings. That royalty is set by the Copyright Royalty Board (see our article here about the most recent CRB proceeding to set rates), paid by noninteractive services to SoundExchange, and distributed by SoundExchange to copyright holders and artists. For interactive services (like Spotify or iTunes or Rhapsody), the performance rights have to be directly negotiated with the copyright holder, leading to disputes like the recent decision of Taylor Swift to pull her new album from Spotify (see our article here about the difference between interactive and noninteractive services). As the 1990s adoption of the limited public performance right in sound recordings was a Federal act, most observers believed that there was no public performance right in sound recordings for pre-1972 recordings, as there never had been one prior to Federalization (despite many attempts by artists and labels to have one included in the law)(see our article here when the Flo and Eddie suit was first filed).
Continue Reading New York Court Finds Public Performance Right in Pre-1972 Sound Recordings – How Will This Affect Businesses that Use Music?
As the summer of copyright comes to an end, the music licensing issues which arose causing me to repeatedly write about this extremely contentious season in copyright law are by no means finished (see the most recent of our Summer of Copyright articles here). In fact, on the first full day of autumn, we received a very interesting decision out of a US District Court in California on the lawsuit brought by Flo and Eddie against Sirius XM, finding that the music service improperly failed to pay royalties for the public performance of pre-1972 sound recordings from the duo’s former band, the Turtles (a copy of the decision can be found in this Billboard article). As we have written before, Flo and Eddie brought suit against Sirius XM, arguing that the service needs to get permission to make public performances of these recordings and, by not doing so, it violated their California state law copyrights.
Pre-1972 sound recordings first registered in the US are not covered by Federal law, so the current mechanism for Sirius XM to pay for the digital public performance of sound recordings (paying a royalty, set by the Copyright Royalty Board, to SoundExchange) does not exist. To the surprise of many (including this author) the Court concluded that there is in fact a public performance right in pre-1972 sound recordings under California state law, and went on to conclude that Sirius XM violated its obligations under the law to pay for the use of music. This decision, on a summary decision motion, may quite well be appealed. The issue is also before many other courts, both in California and elsewhere. But this decision is certainly worth review, as it could have an impact not only on digital services, but also on any other company that publicly performs such recordings – including other digital music services, bars and restaurants, stadiums, and potentially even broadcasters.
Continue Reading Court Rules in Favor of Flo & Eddie in California Suit Against Sirius XM for Public Performance of Pre-1972 Sound Recordings – What Does This Decision Mean for Broadcasters, Digital Media Companies and Other Music Users?
