SiriusXM loses to Turtles again, this time in New York

FIrst of all, my apologies for the lateness of this post, and for not updating this blog in a while. There are several stories in the pipeline, but I personally haven’t had time to finish them. I’m working on it, but you know what they say about life.

As has been widely reported, the SiriusXM cable radio station has once again lost to Flo & Eddie, the two former Turtles members who hold the copyrights to the Turtles catalog. SiriusXM had already lost in California, and now they lost again, this time in New York State.

The loss was reported in a Reuters story. According to Reuters, the full name of the case is Flo & Eddie Inc v. Sirius XM Radio Inc et al, U.S. District Court, Southern District of New York, No. 13-05784. Unfortunately, it does not appear that the full text of the decision is online anywhere (yet). The case was also covered by Steve Gordon at Digital Music News, and he provides more quotes.

According to Reuters, Judge Colleen McMahon ruled that “Sirius suggests no reason why New York – a state traditionally protective of performers and performance rights – would treat sound recordings differently,” Furthermore, according to Gordon, she also ruled:

[T]he conspicuous lack of any jurisprudential history confirms that not paying royalties for public performances of sound recordings was an accepted fact of life in the broadcasting industry for the last century. [But] acquiescence by participants in the recording industry in a status quo where recording artists and producers were not paid royalties while songwriters were does not show that they lacked an enforceable right under the common law – only that they failed to act on it.

She gave SiriusXM until Dec. 5 to show cause why she should not grant a default judgement against them.

This is actually surprising, because Judge McMahon is not correct, at least with regards to New York state law. In fact, New York State has not treated performances on par with duplication or distribution of sound recordings. At least, not as far as I can tell.

When the hoopla over pre-1972 sound recordings first started, I read up on the various state laws surrounding copyright. Thanks to the magic of the Internet, this is not hard to do: the full texts of the various state laws (PDF) is available to download from the U.S. Copyright Office website. The New York laws are also available online from the New York State Law website.

Remember that, technically, “common law copyright” only applies to unpublished works. Protection for published works generally must be established by statute. And, in New York state, the statutes simply do not provide any protection for the public performance of works. (They do provide protection for unauthorized recordings of public peformances, but only for their recording, duplication, and distribution – in other words, they target people who “bootleg” live shows).

On the other hand, the statutes explicitly exempt everyone who was a public performer of sound recordings when the statutes were written:

1. This article does not apply to:
(a) any broadcaster who, in connection with or as part of a radio, television, or cable broadcast transmission, or for the purpose of archival preservation, transfers any such recorded sounds or images[.]

– New York Penal Law S.275.45

There is no question that SiriusXM, being “cable radio,” should fall under both the “radio” and “cable broadcast transmission” exemptions. So, as a matter of law, it seems that SiriusXM should have won, and won easily.

Of course, those are just the penal laws of New York; there could be civil statutes that I’m not aware of. And, as I said, the actual text of McMahon’s decision is not available online. So it’s entirely possible that there is more to the story. Gordon says that “The judge based this conclusion on a series of New York court decisions that afforded public performance rights in works such as plays and films,” which would seem to be legally questionable, given the text of the statutes. But, regardless, I expect SiriusXM to appeal, and I would be surprised if they didn’t use the language of the penal statutes to support their claims.

But if this ruling stands, it would still be bad news. The piece by Gordon gives the reason why: “Although the defendant in the case was SiriusXM Satellite Radio, which is a digital service, the ruling would appear to apply to any radio station, nightclub, or any other venue that plays recorded music in New York.” (Emphasis in original.)

Gordon believes that the end result will be royalties from terrestrial radio stations, but I very much doubt this. I listed all the reasons this is bad (for everyone, including artists) in a previous post. But, in case you’re too lazy to click, here they are again:

  • The right isn’t limited to digital performances, as Gordon correctly pointed out.
  • There are no statutory royalties, and no collection agencies. All businesses who want to use the sound recordings would have to deal with the record labels directly, and they could demand anything they want, or refuse licenses for any reason.
  • The rights accrue entirely to the legal copyright owners. There is no guarantee (or even a suggestion) that any money would be distributed to the artists themselves.
  • ASCAP and BMI can no longer guarantee the legality of their pre-1972 catalog. Even people who pay these PRO’s could (and in this case, did in fact) get sued, so there is no reason for them to deal with the PRO’s at all.

As I said in my previous post, the near-certain outcome of all this is that most businesses will simply pull pre-1972 works altogether. There’s no indication that these rulings will actually result in payouts to artists, and every indication that the net result will be a lost musical culture.

If anything, I believe that this will probably get the ball rolling on Congressional reforms. And because these rights are not limited to digital radio, it won’t be just the “partial Federalization” that is supported by the record labels (e.g. the RESPECT Act). Paradoxically, this would put digital broadcasters like Pandora or SiriusXM ahead of terrestrial radio, since they are the only ones who could take advantage of statutory royalties (terrestrial radio would have to do direct deals).

Instead, expect all pre-1972 sound recording rights to be usurped by Federal copyright law. This stance is already supported by nearly everyone, including the U.S. Copyright Office (PDF), the Library of Congress (PDF), Pandora, the Future of Music Coalition, the Electronic Frontier Foundation (PDF), and many others.

With these new court rulings, I expect the National Association of Broadcasters will follow suit. Though they previously were opposed to any type of federalization (PDF), “partial” or otherwise, much of their justification rested on the accepted notion that rights holders did not have public performance rights in sound recordings – and they were opposed to “creating” such rights. Now that those rights have been either created or recognized (depending upon your point of view), I fully expect that they’ll change their opinion.

And that’s good for everyone.

Update: Leave it to Techdirt to come through. They did include a copy of the ruling, which I have included below.

There is a lot to go through, but I don’t have time right now… More later.



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