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

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

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.

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

Recording Industry Wants To Have It Both Ways When It Comes To Pre-1972 Recordings

from the are-they-the-same-or-different? dept

Yet another story of hypocrisy by the recording industry? Why yes, indeed. For years now, we've been covering the issue of pre-1972 sound recordings. When Congress wrote the 1909 Copyright Act, it did not cover sound recordings, because Congress didn't think that sound recordings qualified for copyright. In a statement released by Congress with the Act, it said it deliberately chose not to cover sound recordings, believing that they weren't covered by the Constitutional limitation on "writings" for copyright protection:

Indeed, the report released with the Copyright Act expressly stated that Congress did not intend to protect sound recordings: "It is not the intention of the committee to extend the right of copyright to the mechanical reproductions themselves, but only to give the composer or copyright proprietor the control, in accordance with the provisions of the bill, of the manufacture and use of such devices." According to one commentator, Congress had two principal concerns about sound recordings, leading it to decline to protect them. First, Congress wondered about the constitutional validity of such protection. The Constitution allows Congress to protect "writings," and Congress was uncertain as to whether a sound recording could constitute a writing. Second, Congress worried that allowing producers to exclusively control both the musical notation and the sound recording could lead to the creation of a music monopoly.

That latter concern certainly was prescient. When Congress did a massive overhaul of copyright law in 1976, the recording industry was a much more powerful lobby, and so sound recordings were included. However, in the years between 1909 and 1976, many states had created their own (often bizarre) "state" copyrights to protect recordings. Rather than deal with this in an intelligent way, Congress basically said the new federal copyright rules would only apply to songs recorded in 1972 or after, and pre-1972 recordings would remain in a bizarre limbo. This has created a whole host of legal issues, and the Copyright Office has been trying to figure out what to do about this for years.

However, it appears that the recording industry would like it both ways. When it's to their advantage, they claim that pre-1972 recordings should be treated just like modern song recordings. And when it's not to their advantage, they insist that pre-1972 recordings should be treated wholly differently. In various hearings about the issue, the RIAA has been one of the most vocal in arguing against treating pre-1972 recordings as if they're covered by federal copyright law. And, at the same time, they've argued in court repeatedly that the DMCA safe harbors don't apply to pre-1972 recordings, making various music storage lockers liable for any such recordings they host. Some courts have rejected this theory, while others have accepted it. Either way, the recording industry has been pretty adamant that pre-1972 recordings should be treated differently, so they can sue whomever they want.

And yet... when various streaming music companies recognize this fact, and note that pre-1972 recordings aren't covered under statutory licensing regimes... the recording industry freaks out. Michael Huppe, the President of SoundExchange -- an organization created by the RIAA -- is writing in Billboard magazine about how unfair it is that streaming services like Sirius XM and Pandora don't pay statutory rates for pre-1972 recordings. Huppe complains that "this is not fair" and notes:

It's a matter of simple fairness to offer equal treatment for all sound recordings.

Okay. If that's true, then why aren't SoundExchange and the RIAA out there in support of federalizing the copyright in pre-1972 recordings? Why aren't SoundExchange and the RIAA agreeing to the fact that the DMCA's safe harbors apply equally to pre-1972 recordings? I'm all for "equal treatment for all sound recordings" as well, but someone ought to point out to SoundExchange and the RIAA: you first.

Filed Under: copyright, pre-1972, royalties, sound recordings
Companies: pandora, riaa, sirius xm, soundexchange

Labels Use Questionable Ruling On Pre-1972 Recordings To Sue United Airlines For Streaming In Flight Music

from the DMCA-goes-from-bad-to-worse dept

The court ruling earlier this year that found in favor of Universal Music Group against Grooveshark hinged on an argument made by the plaintiff that the DMCA (and its safe harbors) doesn't apply to pre-1972 recordings, thanks to some clumsy wording within the law itself. While that may not have been the intent of the law, the wording of the law can be interpreted that way -- an argument the court felt was persuasive enough to rule in favor of UMG. Other courts haven't been so sure, but the possibility that the DMCA doesn't apply has resulted in a lot of concerns... and a whole bunch of lawsuits.

As it stands now, post-1972 recordings are clearly covered by federal law (and DMCA safe harbors apply). Pre-1972 recordings are subject to a variety of state laws and, according to the New York court's ruling, are not subject to the DMCA or its safe harbors. The attorney who represented UMG for its appeal, Andrew Bart of New York's Jenner & Block (one of the RIAA's favorite law firms), is also listed as the attorney for the four record labels who are now suing United Airlines for its making pre-1972 recordings available to stream on demand on its flights.

Arista, Sony, Zomba and LaFace Records sued United Airlines, InFlight Productions and RightsCom, in Federal Court. InFlight and RightsCom are both based in London.

The record labels claim the defendants work "in concert" to load copyrighted music onto servers that are installed on United airplanes, "where they are used to transmit performances of plaintiffs' copyrighted sound recordings and music videos to passengers."

The copyright violations are for music recorded before 1972, the labels say. Thirteen pages attached to the complaint contain more than 600 songs whose copyrights the defendants allegedly violate, by artists including Duke Ellington, Miles Davis, Aretha Franklin, Elvis Presley, Janis Joplin, and Jimi Hendrix.

The list of allegedly infringing tracks is likely pulled from United/InFlight's own playlists which seem to change periodically. The labels claim "thousands" of violations on songs that cost "millions" to produce and are seeking to collect both statutory and compensatory damages, as well as "unjust profits" and court costs.

It would seem that both Rightscom and InFlight -- both being in the licensing business -- would have nailed down their end of bargain with these labels several years ago. However, given the fact that a.) the New York court decided the DMCA doesn't apply to pre-1972 music and b.) a blanket license would very likely not satisfy the various iterations of state copyright laws, the labels now have a potentially lucrative vein to mine.

Notably, there's no accusation that any recordings post-1972 were infringed. If this was a case where licensing violations occurred or a required license was not in place, we would expect the claims of infringement to cover everything in these labels' catalogs. The fact that the claim is limited to pre-1972 music only indicates that the labels, with the help of Bart, are seeking to exploit this DMCA ruling before this loophole is closed by a ruling from a higher court or a rewrite by legislators.

Previous to this, the legal activity revolving around pre-1972 recordings has been aimed at site operators whose sites contain user-uploaded infringing content, with labels (UMG, EMI) claiming the DMCA safe harbors don't apply to these recordings. This new move, directly suing companies who make use of the content themselves, shows there's more than one problem with the New York County Supreme Court's decision in favor of UMG back in April.

Filed Under: copyright, music, pre-1972
Companies: arista records, inflight productions, laface, rightscom, sony music, united airlines, zomba

Pretty Much Everyone Sues Sirius XM Over Copyright Issues On Pre-1972 Recordings

from the it's-a-pile-on dept

Over the past few years we've covered a number of stories having to do with the copyright status of pre-1972 recordings. Because of a bit of a quirk in copyright law, sound recordings weren't actually covered by federal copyright law in the US until after 1972. Instead, they were covered by a ridiculous patchwork of state laws -- which is one reason why old songs that would have been in the public domain (even under today's laws) had they been any other form of content, will be locked up for much, much longer. As you might imagine, some of those who hold the copyrights on those older songs have been trying to leverage this in somewhat ridiculous ways, such as arguing that the DMCA safe harbors don't apply to pre-1972 songs.

In the last month and a half or so, it appears that everyone who holds a copyright on pre-1972 recordings has picked a new target: satellite radio giant Sirius-XM. You see, pretty much everyone has assumed for years (with good reason) that the statutory rates set by the Copyright Royalty Board for Sirius XM to pay SoundExchange naturally applied to all copyright-covered music. After all, once you can get past the ridiculous idea that three old judges get to decide how much satellite radio companies have to pay to play music, you'd at least think that the rules applied across the board.

Except, someone recently remembered those pre-1972 recordings. It started back in August, when lawyers for Flo & Eddie, of The Turtles, suddenly started demanding tremendous amounts of money from Sirius. That resulted in a "class action" lawsuit, seeking $100 million, being filed in California. But why stop with California when there are 49 other states? The same lawyers have followed the same basic lawsuit in other states as well. These, apparently, followed a tremendously obnoxious "PLEASE GOVERN YOURSELF ACCORDINGLY" letter.

Sensing an opportunity it was missing to suck up even more money, SoundExchange jumped into the fray with its own lawsuit. Now, SoundExchange is the organization which Sirius XM already pays all those statutory rate moneys to... and has for years... but it's arguing that Sirius XM has been trying to avoid paying even the statutory rates on pre-1972 recordings, and that it's done so for years, despite the CRB being clear that it does need to pay up.

Of course, this raises some interesting questions. If Sirius XM really has been not paying SoundExchange for pre-1972 recordings and hasn't licensed those recordings from the copyright holders directly, then, um, it might be in serious trouble. If that's the case, it sounds like an astounding strategic error on the part of Sirius XM. While it may have saved them from paying some amount of revenue to SoundExchange (estimated at 10 to 15%), opening themselves up to having to then license each of those works directly is a nightmare. At the very least, if Sirius XM had continued to pay SoundExchange's statutory rates, it would have some sort of argument against the class action lawsuits. However, if it turns out that the satellite broadcaster had tried to avoid paying anyone... that's probably not going to end well.

Sensing blood in the water (of course), all three of the major labels have now jumped in with their own lawsuit over this issue. Basically, it appears that Sirius XM is going to be fighting this battle against multiple players in multiple courts for a long time. Of course, you can bet a lot of this is just posturing over a different dispute. Sirius XM has been actively trying to route around SoundExchange (who it pays a tremendous amount to each year) and do direct licensing deals. In fact, Sirius XM sued SoundExchange for antitrust violations last year, claiming the organization was colluding to stop artists from opting-out of the SoundExchange deal and doing direct licensing deals with Sirius XM.

In other words... these are just the latest in a whole series of legal battles about how to split up the pie, with little regard to actually trying to make the pie bigger. Typical.

Filed Under: common law, copyright, flo & eddie, pre-1972, pre-1972 sound recordings, the turtles
Companies: riaa, sirius xm, soundexchange