And, Of Course, Labels Sue Pandora Over Pre-1972 Recordings

from the after-losing-on-trying-to-shake-them-down dept

Fri, Apr 18th 2014 11:10am — Mike Masnick

Just a few days ago, we wrote about how the record labels were trying to have it both ways. That is, on the one hand, they are arguing in a variety of cases that the DMCA shouldn't apply to pre-1972 sound recordings, while also arguing against any attempt to treat pre-1972 sound recordings the same as if they were under federal copyright law. At the same time, they are claiming that it's somehow unfair that Sirius XM and Pandora aren't paying statutory licensing fees on those very same pre-1972 recordings.

Having already sued Sirius XM over the issue last fall, the RIAA's record labels have now targeted a similar lawsuit at Pandora. The lawsuit itself is highly misleading, taking statements from Pandora totally out of context (the labels have a habit of doing this). The most obnoxious of these misrepresentations is the RIAA's claim that Pandora recently stated in SEC filings that there's a risk factor if the company is "required to obtain licenses from individual sound recording copyright owners for the reproduction and public performance of pre-1972 sound recordings."

The RIAA presents this as if it's Pandora trying to get out of paying. But that's not what Pandora is saying at all. It's noting that because pre-1972 works are not covered by the various rates that it pays which are set by the Copyright Royalty Board, in order to secure the rates, it would need to negotiate individually with every copyright holder for the right to stream those works in every single state. But it's noting that as a risk factor -- because, as Sirius has pointed out in its own response to the similar lawsuit, decades have gone by and the labels have never been asking for licenses for performances of pre-1972 works. And those works have been used for years, license free, by TV and radio broadcasters, bars, restaurants and a variety of other places. The real risk is that Pandora, which has relied on the fact that it can take compulsory rates, would then suddenly have to negotiate with everyone, which would be a massive headache. And this is the mess caused by the weird way in which pre-1972 sound recordings are treated.

Again, those works are not covered by federal copyright laws, which include specific rights over performances of works, which was something of a new concept when it was added to federal copyright law. The various state laws that these works are covered by are generally common law concepts around misappropriation and unfair competition. So the big question is whether or not "performing" a work falls under such common law concepts. Historically, these claims were mostly focused on making unauthorized copies. Performing the work has generally been considered a separate issue. This makes it a bit questionable that the RIAA is now suddenly seeking to reinterpret a big swath of history around how those works were legally used -- which also raises a concern about "laches" or how timely these lawsuits are. The RIAA has had decades to complain about these practices, and is just doing so now...

And, of course, remember that this is all happening just a month or so after the publishing arms of the very same labels were found to have been colluding unfairly to jack up Pandora's rates. Basically, the legacy recording industry players are now looking for just about any way possible to make Pandora pay even more. This isn't a surprise. It's how the industry has always worked. When they're struggling to figure out ways to make money, they look at anyone successful and assume it's their fault that the legacy players are making less money. So, rather than innovating, they try to find legal ways to force more money out of the innovators and into their own hands. This is just the latest example in a very long line of such cases.

218883012 Pandora Complaint Filed (PDF)218883012 Pandora Complaint Filed (Text)

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Filed Under: copyright, lawsuits, music, performance rights, pre-1972, pre-1972 sound recordings, royalties
Companies: pandora, riaa

42 Comments

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Anonymous Coward, 18 Apr 2014 @ 11:20am

...they look at anyone successful and assume it's their fault that the legacy players are making less money. So, rather than innovating, they try to find legal ways to force more money out of the innovators and into their own hands.

This is exactly why I have for years now refused to purchase any music supported by the RIAA and conglomerate. I don't want any part of my money going to such actions. I disapproved of their methods and none of the music I hear recently on the radio inspires me at all. The RIAA can go suck it up along with the labels and any artists that signed with them. Rats on a sinking ship deserve to go down with it.
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Anonymous Coward, 18 Apr 2014 @ 11:25am

Well it seems as if none of my posts for the last two days are showing up. Instead they are all labelled awaiting moderation...only moderation isn't coming around to actually moderate them.

I've posted no links, have no where I want anyone to be, and have nothing I want to sell. Guess I'll find a new home page for a while.
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- Glen, 18 Apr 2014 @ 12:23pm
  
  Re:
  Good luck with that.
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- Anonymous Coward, 18 Apr 2014 @ 6:46pm
  
  Re:
  Are you using TOR? I do and I find that about half of the time, my comments are held for moderation. I think it might be because certain exit nodes have been misused by other users in the past. In fact, when I tried to post a comment about this recently, it got stuck in moderation for at least a day and I'm not sure if it ever left moderation (haven't checked).
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- trollificus (profile), 22 Apr 2014 @ 11:03am
  
  Re:
  Did you contact them?
  
  I had a post suddenly show up as "awaiting moderation" and it was after I'd posted criticizing what I'd thought was a bit of 'groupthink' and I worried it was in some way punitive.
  
  But I got a very quick response indicating a word or combination of words might have set off the spam filters. And since it had been a typically wordy post, I had to concede that possibility. It was soon posted and haven't had a problem since.
  
  Try that, they were very nice about it.
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Anonymous Coward, 18 Apr 2014 @ 11:45am

Pandora
According to Sound Exchange, Pandora is paying absolutely nothing to them for songs recorded prior to 1972. If this is true then Pandora has created a mess for themselves. While DMCA may not apply to songs prior to 1972, it is unclear whether other laws do.

Most digital music services do pay for pre-1972 recordings. Pandora has apparently stepped out on a limb.
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- Mason Wheeler (profile), 18 Apr 2014 @ 12:07pm
  
  Re: Pandora
  From the article:
  
  But it's noting that as a risk factor -- because, as Sirius has pointed out in its own response to the similar lawsuit, decades have gone by and the labels have never been asking for licenses for performances of pre-1972 works. And those works have been used for years, license free, by TV and radio broadcasters, bars, restaurants and a variety of other places.
  
  Pandora is paying nothing for playing these songs... and neither is anyone else, because that's how the law works in this specific case.
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  - Anonymous Coward, 18 Apr 2014 @ 12:16pm
    
    Re: Re: Pandora
    No, ALL directly licensed companies (Spotify, Rdio, Rhapsody, Slacker, iTunes Radio, etc.) are paying and many radio stations licensed through Sound Exchange are as well. It is a legal gray area internet radio companies have been cautious of.
    [ link to this | view in chronology ]
- Anonymous Coward, 18 Apr 2014 @ 11:29pm
  
  Re: Pandora
  Well, honestly, the vast majority of pre-1972 protected songs should be in the public domain. Pandora has been repeatedly screwed over by the RIAA and its member labels over the royalties they were expected to pay.
  
  This is nothing but an extortionary tactic by the RIAA and the labels, and it should be treated as such, with full criminal sanctions for racketeering etc.
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  - Anonymous Coward, 19 Apr 2014 @ 4:44am
    
    Re: Re: Pandora
    The politicians and judges responsible for retroactive extensions (public domain theft) should be jailed. Both for extending copy protection lengths beyond anything reasonable against the public interest (just to serve corporate interests) and for doing it retroactively.
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Anonymous Coward, 18 Apr 2014 @ 12:01pm

I don't understand how this is "trying to have it both ways."

In both cases they are saying that pre-1972 sound recordings are not covered by federal copyright law, right?
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- Anonymous Coward, 18 Apr 2014 @ 1:03pm
  
  Re:
  Option #1:
  Federal law does apply to pre-1972 recordings, this includes paying sound exchange for pre-1972 recordings and DMCA applying to pre-1972 recordings.
  
  Option #2:
  Federal law does not apply to pre-1972 recordings, this means sound exchange does not need paid for pre-1972 recordings and the DMCA does not apply.
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  - Anonymous Coward, 18 Apr 2014 @ 1:21pm
    
    Re: Re:
    Option #2 doesn't mean that nobody needs to pay a license fee, because people using the recordings may need a license under state laws.
    
    I'm pretty sure that's the position that most labels have always taken.
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    - Chronno S. Trigger (profile), 18 Apr 2014 @ 2:24pm
      
      Re: Re: Re:
      "I'm pretty sure that's the position that most labels have always taken."
      
      You would be wrong. Radio stations paying to play music is a relatively new thing. The labels didn't start pushing for that until years after Internet radio and satellite radio started to get big.
      
      There was a scandal between the record labels and radio stations a while ago. The record labels got into trouble for paying radio stations to play their music. So the exact opposite of what you were pretty sure of.
      
      The labels took the position of "Get the music out there any way possible". I don't know why that changed.
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      - Anonymous Coward, 18 Apr 2014 @ 2:33pm
        
        Re: Re: Re: Re:
        The labels took the position of "Get the music out there any way possible". I don't know why that changed.
        
        Pandora and the like could end up replacing the labels as the means of publishing recordings. This would remove the Labels Income as the sales and Licensing of the recording that they own wind down; therefore the labels have to take over or destroy such companies.
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        Anonymous Coward, 18 Apr 2014 @ 2:58pm
        
        Re: Re: Re: Re: Re:
        Except Pandora and the like have absolutely no intention of doing anything of the sort.
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      - Anonymous Coward, 18 Apr 2014 @ 2:39pm
        
        Re: Re: Re: Re:
        Are you talking about terrestrial radio? Because that's a different ballgame.
        
        Also, payola is neither "the exact opposite" or at all inconsistent with the claim that pre-1972 sound recordings are covered by state law.
        
        Regardless, it is (a) not a new position that pre-1972 sound recordings are covered by state laws, and (b) not inconsistent to argue that pre-1972 sound recordings are not covered by federal copyright law.
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        Anonymous Coward, 18 Apr 2014 @ 2:43pm
        
        Re: Re: Re: Re: Re:
        FYI, here is what the Copyright Office says:
        
        "Although sound recordings were first given federal copyright protection in 1972, sound recordings made before February 15, 1972 remained protected under state law rather than under the federal copyright statute. As a result, there are a variety of legal regimes governing protection of pre-1972 sound recordings in the various states, and the scope of protection and of exceptions and limitations to that protection is unclear. Current law provides that pre-1972 sound recordings may remain protected under state law until February 15, 2067. After that date they will enter the public domain."
        
        www.copyright.gov/docs/sound
        
        So, again, I'm not sure what is inconsistent about saying pre-1972 sound recordings are not covered by federal copyright law, but they are covered by state law.
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        Anonymous Coward, 19 Apr 2014 @ 5:59am
        
        Re: Re: Re: Re: Re: Re:
        I think the inconsistency is in the last sentence in the first paragraph
        
        "At the same time, they are claiming that it's somehow unfair that Sirius XM and Pandora aren't paying statutory licensing fees on those very same pre-1972 recordings. "
        
        If they are saying that XM and Pandora should pay federal statutory licensing fees then that would be an inconsistency.
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        Anonymous Coward, 20 Apr 2014 @ 7:48am
        
        Re: Re: Re: Re: Re: Re: Re:
        True. Is that what they're saying?
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- Karl (profile), 19 Apr 2014 @ 3:58pm
  
  Re:
  I don't understand how this is "trying to have it both ways."
  
  They are trying to get Pandora to pay the statutory rates that are settled under FEDERAL copyright laws.
  
  This is because the various state "copyright" laws are not exactly copyright laws, but things like "unfair competition" (which usually has a "passing-off" component, like trademarks) and "unauthorized distribution" (which only covers distribution of copies).
  
  None (that I know of) establish any sort of royalty requirements for public performances, or even cover public performances at all.
  
  So, they are essentially saying that public performances of pre-1972 sound recordings should be treated as if they were covered under Federal copyright law, but that DMCA immunity regarding pre-1972 sound recordings should not be treated as if they were covered under Federal copyright law.
  
  That is "trying to have it both ways."
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  - Karl (profile), 19 Apr 2014 @ 4:06pm
    
    Re: Re:
    Oh, yeah, there's one thing to keep in mind:
    
    pre-1972 sound recordings
    
    A "sound recording" is distinct from the underlying composition. The underlying composition has been covered by Federal copyright law, for about a century. Pandora (like terrestrial radio) is, and always has, paid royalties on the underlying composition for pre-1972 recordings.
    
    What they have not been paying are the royalties for sound recordings. Those are the royalties which go to SoundExchange (as opposed to the composition royalties, which go to ASCAP, BMI, or SESAC).
    
    Terrestrial radio does not, and has never, paid any royalties on the sound recordings, pre-1972 or not.
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TheLastCzarnian (profile), 18 Apr 2014 @ 12:57pm

New York?
The Beach Boys and Elvis copyrighted their music in New York? Huh. Learn something new every day.
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Anonymous Coward, 18 Apr 2014 @ 2:08pm

So what's to stop Pandora and Sotify and others from countersuit against RIAA for all these bullshit lawsuits?
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- Anonymous Coward, 18 Apr 2014 @ 3:06pm
  
  Re:
  Spotify like most companies, pays for pre-1972 recordings and are not getting sued.
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  - Anonymous Coward, 19 Apr 2014 @ 9:34am
    
    Re: Re:
    Shhh, that was deliberately left out of the article.
    
    A truthful article here:
    
    http://www.digitalmusicnews.com/permalink/2014/04/18/pandora1972
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  - Karl (profile), 10 May 2014 @ 3:45pm
    
    Re: Re:
    Spotify like most companies, pays for pre-1972 recordings and are not getting sued.
    
    I know I'm late with this, but...
    
    Spotify isn't eligible for the type of royalties under consideration; those royalty rates are only available to non-interactive services (like Pandora and SiriusXM).
    
    So, they already must do direct deals with the rights holders. They're not paying "royalties" at all; they're entering into direct contract negotiation with the rights holders, and those rights holders pay whatever royalties are owed to artists.
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Anonymous Coward, 18 Apr 2014 @ 4:09pm

It's for exactly this bad behavior that I refuse to buy music anymore. I'll go to concerts, donate to Kickstarter, buy merch, but fuck the labels and their anti-fan, anti-musician policies.
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- This comment has been flagged by the community. Click here to show it
  
  Anonymous Coward, 19 Apr 2014 @ 9:35am
  
  Re:
  Fuck you and your lying, bullshit excuse for being a greedy pirate.
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  - That One Guy (profile), 19 Apr 2014 @ 4:51pm
    
    Re: Re:
    Ooh, touched a nerve there did they? Had you actually read what the AC wrote, you'd have noticed they didn't mention piracy anywhere in there, just that they refuse to monetarily support the hypocritical parasites, preferring to give their money directly to the creators, not the worthless middle-men of the labels.
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Anonymous Coward, 19 Apr 2014 @ 3:01am

They dont care about common sense. They dont care about the artists.
They only care about the profits
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- This comment has been flagged by the community. Click here to show it
  
  Anonymous Coward, 19 Apr 2014 @ 9:36am
  
  Re:
  You're obviously talking about these guys:
  
  http://www.washingtonpost.com/politics/how-google-is-transforming-power-and-politicsgoogle-once -disdainful-of-lobbying-now-a-master-of-washington-influence/2014/04/12/51648b92-b4d3-11e3-8cb6-2840 52554d74_story.html
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  - Anonymous Coward, 19 Apr 2014 @ 10:06am
    
    Re: Re:
    ootb has returned!
    
    Unrelated, not relevant.
    [ link to this | view in chronology ]
    - This comment has been flagged by the community. Click here to show it
      
      Anonymous Coward, 19 Apr 2014 @ 12:36pm
      
      Re: Re: Re:
      Mike Masnick is a paid Google astroturfer. Seems relevant to me.
      [ link to this | view in chronology ]
      - That One Guy (profile), 19 Apr 2014 @ 4:48pm
        
        Re: Re: Re: Re:
        Now now, just because you're paid by the 'entertainment' industry to shill for them, it doesn't automatically follow that everyone else has sunk so low.
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      - techflaws (profile), 19 Apr 2014 @ 10:31pm
        
        Re: Re: Re: Re:
        But since you're a lying scumbag, your opionion isn't relevant to anyone.
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      - Karl (profile), 20 Apr 2014 @ 9:28pm
        
        Re: Re: Re: Re:
        Mike Masnick is a paid Google astroturfer.
        
        You know, no matter how many times you repeat it, it's still not true.
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Richard (profile), 19 Apr 2014 @ 10:22am

Those state laws are unconstitutional
The constitution gave the right to set copyright laws to Congress. It was the express intention of the constitution writers to clear up the mess of state copyright laws that had already begun to cause problems by handing over the authority to set copyright laws to Congress.
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- Pragmatic, 22 Apr 2014 @ 9:23am
  
  Re: Those state laws are unconstitutional
  That's the problem; Congress isn't doing its job.
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Anonymous Coward, 21 Apr 2014 @ 9:46am

Q) May I start a streaming service that plays only pre-1972 music and not have to worry about any royalties?
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- Anonymous Coward, 21 Apr 2014 @ 12:11pm
  
  Re:
  Short answer: no. Pre-1972 sound recordings are (or may be) covered by a hodgepodge of state laws. While it may not be entirely clear whether and to what extent your service would be prevented by those laws if you don't get permission, you will at the very least have to worry lawsuits from record labels if you have any type of success (even if you were to eventually win such suits).
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- Karl (profile), 21 Apr 2014 @ 6:22pm
  
  Re:
  Q) May I start a streaming service that plays only pre-1972 music and not have to worry about any royalties?
  
  No matter what the status on state laws, you would still have to pay composition royalties to ASCAP/BMI/SESAC. These royalties have been an established part of federal law since the invention of the player piano.
  
  Until the Internet came around, you would not have to pay sound recording royalties for performances. The only entities in the United States that have to pay these royalties are Internet and cable streaming radio stations.
  
  Terrestrial radio stations, bars, restaurants, live venues, etc. do not have to pay sound recording royalties, and never have. Not under federal law, and not under any state law.
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