So How Much Of The $90 Million Pandora Is Paying RIAA Labels To Settle Lawsuit Will Go To Artists?

from the we're-waiting... dept

This isn't a huge surprise, but following Sirius XM settling the lawsuit filed against it by the RIAA labels over playing pre-1972 sound recordings, Pandora has now done the same, agreeing to pay $90 million to have the lawsuit go away. In both cases, the companies recognized that, while the law was unclear and some lawsuits had gone both ways, it was probably a lot easier in the long run to just pay up than face the uncertainty and the possibility of much larger fees. Of course, both companies do still face some individual lawsuits, such as the ones by Flo & Eddie (the company behind The Turtles) who kicked off this lawsuit craze.

But... there is still a big question. As with pretty much any of these lawsuits filed by the RIAA or MPAA and its members, when they come to a settlement, how much of that money actually gets passed along to the individual creators? In the past, the answer has been slim to none with vague answers about how the money would go into some general pool, and the answer may be similar here. Eriq Gardner at the Hollywood Reporter did the heavy lifting, and got the slightly vague answers from the labels:

For example, will the proceeds of the settlement be shared by the major labels with their recording artists? What share? Upon a request for comment, an RIAA spokesperson said it was a question best directed towards the labels themselves. We've reached out. According to a Sony insider, the label intends to share proceeds in the standard way, analogous to how money from SoundExchange is shared. The source acknowledges that the mechanism is still being worked out. Another source says that Universal intends to process money directly through SoundExchange, a digital royalty collection outfit. A Warner Music spokesperson says the "the artist share [is] being distributed through SoundExchange."

So, they're basically passing the buck to SoundExchange, which handles royalties for Pandora and other digital streaming services, and has an unfortunate history of not being able to find the artists it's supposed to be paying (though, it's been much better in the past few years). But, even so, it's not clear how SoundExchange will divvy up the money, and how much will just be going directly back to the labels themselves.

Filed Under: pre-1972, pre-1972 sound recordings, settlement
Companies: pandora, riaa, soundexchange

CBS Radio Says That It Doesn't Play Pre-1972 Music, Because All Its Old Songs Are Remastered

from the well-this-should-get-interesting dept

Back in 2009, a company called Bluebeat showed up on the market offering all sorts of MP3s from musicians for $0.25 a pop -- without a license from the copyright holders. The company claimed that it didn't need to get a license because all of the songs were specially remastered, in a manner it called a "psycho-acoustic simulation." Via this, the company claimed, it was not infringing on the original artists' copyrights and, actually, held the copyright to the songs it was selling itself. This theory was, to put it mildly, completely loopy. It was a twisted attempt to reinterpret 17 USC 114(b) which said:

The exclusive rights of the owner of copyright in a sound recording under clauses (1) and (2) of section 106 do not extend to the making or duplication of another sound recording that consists entirely of an independent fixation of other sounds, even though such sounds imitate or simulate those in the copyrighted sound recording.

Not surprisingly, a judge wasted little time in saying "uh... nope" to Bluebeat.com.

However, I'm reminded of this story as it appears that CBS Radio is trying an argument that is, at least, slightly reminiscent of Bluebeat.com's in a lawsuit over pre-1972 recordings. As we noted last month, ABS Entertainment, who holds the copyright on a bunch of classic songs, filed what it hopes will be a class action lawsuit against CBS Radio and other terrestrial radio stations, arguing that it's infringing on the copyrights of pre-1972 songs that it plays on the radio. At this point, we've explained the ridiculous and complicated history of the copyright of pre-1972 sound recordings that I'm not going to repeat it. Just click on the link in this paragraph and you can read it there if you don't remember. Or you can actually read the first few pages of the legal filing embedded below which provide a decent history as well.

In the past few years, various copyright holders have been trying to use this issue of the weird copyright status of pre-1972 recordings as a wedge issue to force more money out of digital streaming platforms, with somewhat mixed results and a few settlements, including big settlements from SiriusXM and Pandora. CBS Radio is fighting back with a really unique argument. It's claiming that they don't play any pre-1972 sound recordings, because any of the music they play that was recorded prior to 1972 is played from modern digital remasters of those songs, and thus the copyright on those sound recordings is post-1972 and under federal law, rather than state copyright law. From its filing:

Contrary to those allegations, CBS’s records for the last four years show that CBS did not publicly perform any of ABS’s pre-1972 recordings. CBS does not play vinyl sound recordings.... In fact, every song CBS has played in the last four years has been a post-1972 digital sound recording that has been re-issued or re-mastered.... For example, “Tired of Being Alone” is found on UMG’s 2006 The Best of Al Green compilation.... That CD contains the re-mastered version of the song created and registered for copyright in 2000.... The “Let’s Stay Together” recording CBS played is the 2003 re-mastered sound recording as re-issued in 2009 by Fat Possum Records.... Every other song CBS played from plaintiff’s “Schedule A” also came from a CD released many years after 1972.

This is... fascinating. It seems crazy, but, then again, this legal theory was dreamed up by the copyright lawyers at Irell & Manella, the very same law firm that's pretending to represent a monkey in a copyright case. So, apparently, they like getting creative with their legal arguments.

There is one element in this argument that is so ridiculous as to almost be brilliant. Another "deep in the weeds" argument we've discussed in the past concerning copyright law is that of termination rights. Under existing copyright law, most works, even if they've been assigned to third parties, automatically return to their original creator after 35 years if those creators invoke their "termination" rights. This right cannot be signed away. And while certain works were exempt, apparently the RIAA lobbyists slept through that meeting and music was not included in the list of exempted works. And, since we just recently passed the 35-year mark since the 1976 Copyright Act went into effect (1978), some musicians have started exercising their termination rights.

And... here's the crazy bit. One of the RIAA's arguments against allowing artists to reclaim their copyrights is to argue remastered versions are subject to a separate copyright:

The second option is to re-record sound recordings in order to create new sound recording copyrights, which would reset the countdown clock at 35 years for copyright grant termination. Eveline characterized the labels' conversations with creators going something like, "Okay, you have the old mono masters if you want -- but these digital remasters are ours."

Labels already file new copyrights for remasters. For example, Sony Music filed a new copyright for the remastered version of Ben Folds Five's Whatever and Ever Amen album, and when Omega Record Group remastered a 1991 Christmas recording, the basis of its new copyright claim was "New Matter: sound recording remixed and remastered to fully utilize the sonic potential of the compact disc medium."

In other words... the RIAA labels themselves have previously argued that such digitized and remastered versions are subject to a separate copyright -- meaning, they may have screwed themselves with their own words.

From there, CBS Radio makes some more standard arguments accurately pointing out that, contrary to the claims of the copyright holders, California's state copyright law never recognized a public performance right. That argument failed when Sirius XM made it in California, but it's true. The idea that California's state copyright law ever included a public performance right is ridiculous, because such a right was never considered or exercised or even mentioned until just recently. Still, it seems slightly weird to argue the same argument that has already failed in the same court -- and, yet, once again there appears to be at least some method to this particular madness.

And that's where another odd part of the response comes in: CBS Radio invokes California's anti-SLAPP law, which allows defendants to try to get cases tossed out quickly on the basis that they were filed solely to stifle First Amendment protected speech. The SLAPP argument here seems weak, but that might be on purpose. CBS argues that broadcasting music is protected speech under the First Amendment, and that its "dissemination of the sound recordings at issue is 'connect[ed] with a public issue or an issue of public interest.'" And thus, it's effectively claiming that the lawsuit seeks to stifle its First Amendment... protected right to play music on the radio? A weak argument, yes, but perhaps on purpose. As Eriq Gardner notes in his story on this case, when SiriusXM lost its case about the public performance right in California, it was denied a chance for an immediate appeal on that issue (it would have to go through a full trial first). But, by invoking the anti-SLAPP law with the full expectation of losing, CBS Radio may hope to win the larger game, because:

One important if less known aspect of California's SLAPP law is an automatic right to appeal a denial of a motion to strike.

In other words, CBS could be thinking out its chess moves by sacrificing a pawn in order to advance its rook. Getting an appeals court to weigh in on what California law says about pre-1972 sound recordings would be particularly significant given that over on the East Coast, the 2nd Circuit Court of Appeals will consider what New York law has to say about the topic. If the appellate courts come to different conclusions, this could help set up a showdown at the U.S. Supreme Court.

So, while many of these arguments look silly on their face, the long-term strategy here seems pretty well thought out. Whether or not it succeeds, of course, is a different question entirely.

Filed Under: anti-slapp, copyright, pre-1972, pre-1972 sound recordings, remastered
Companies: abs entertainment, cbs radio

SiriusXM Finally Wins A Case Over Pre-1972 Music... And Promptly Settles Such Cases With RIAA

from the well-how-about-that... dept

We've written plenty about the mess around pre-1972 sound recordings and online streaming services. Technically, federal copyright law does not apply to sound recordings from before 1972. And while that might make you think they're in the public domain, that's not true at all. First, the compositions are still under copyright and much more importantly, a jumble of state laws did protect some aspects of those sound recordings -- and that's made a huge mess, including locking up some recordings for way, way longer than would be possible under today's federal copyright. On the flip side, however, it meant that certain aspects of federal copyright law that were not covered by state copyright law were fair game -- or so people thought.

This included in music streaming services. It had long been believed that you could publicly perform such pre-1972 songs without a license because, even under the various state and common law copyrights, there was really no concept of a "public performance" right anyway. Thus, services like SiriusXM and Pandora did not need to pay a performance fee to play those songs (for post-1972 recordings, both pay compulsory rates -- which are for different reasons that have to do with lobbying power). This whole mess could be settled by just moving pre-1972 sound recordings under federal copyright law -- which would make them subject to the same compulsory license fees as modern songs, but would also free up those old songs that state copyright law has locked up. It's a tradeoff, but probably the best result. However, the RIAA has fought very hard to block this.

Instead, it wants to have things both ways. It wants to keep those songs locked up for as long as possible, but still wants to get the benefits of federal copyright rights, such as public performance exclusivity. The reason, of course, is that it wants a big weapon -- to force SiriusXM, Pandora and others to pay much larger fees by not allowing them to rely on compulsory rates, but rather to have to come to a negotiated deal.

In order to make this happen there have been a series of lawsuits in different states. In both California and New York, courts ruled against SiriusXM, saying that the state law in California and the common law in NY could be seen to cover performance rights, and thus SiriusXM had to pay up.

However, just a few days ago, a court in Florida went the other way entirely, saying there was no such right in Florida. The state law had nothing and the common law was not established in that area, thus ruling against SiriusXM (and in favor of Flo & Eddie, the organization that brought the suit) would be creating a new right out of thin air (something some copyright experts noted that the other courts had done).

So.... that started to make things interesting. Except... just a few days later, the RIAA and SiriusXM have announced a massive settlement over pre-1972 recordings with SiriusXM agreeing to fork over $210 million. This is going to put enormous pressure on Pandora to come up with a similar settlement. But it's not actually going to answer many of the questions here. First, the settlement only covers the cases brought by the big labels (so not the Flo & Eddie cases...). Second, it only covers through the end of 2017, at which point, it's right back to the negotiating table.

Oh, and in case you're wondering, this line in the Hollywood Reporter story is probably the most important one:

The agreement announced today also doesn't deal with if and how the big record labels will share proceeds with its artists.

Because of course it doesn't.

Filed Under: compulsory, copyright, pre-1972, pre-1972 sound recordings, public performance, streaming
Companies: pandora, riaa, sirius, siriusxm

Get Ready For Classic Songs Of The 50s & 60s To Disappear From Internet Streaming Thanks To Copyright Lawsuits

from the bye-bye-1960s-classics dept

Say goodbye to the musical hits of the 50s and 60s, if you like that sort of thing and listen via online services. Chances are they may start to disappear, as the places where you now get your streaming music realize they need to protect themselves against a possible massive liability. As we've covered for some time, there have been a few lawsuits filed recently over the licensing status of pre-1972 sound recordings. There's a lot of history here, but a short explanation is that in 1909, when Congress redid copyright law, it didn't think that sound recordings (then a relatively new concept) were copyrightable subject matter. Of course, in the years following that, as the "music business" turned into the "recording industry" pressure mounted by that industry led to a bunch of state regulations and common law creating copyright or copyright-like rights for sound recordings.

With the 1976 Copyright Act, rather than "federalizing" all sound recording copyrights, Congress basically left all pre-1972 recordings under those state laws, while effectively wiping out those laws for everything else. Since then, all copyright is under federal copyright law, but old sound recordings are still subject to those state laws. But those state laws were somewhat limited -- and at no point did anyone seriously believe that there was any sort of public performance licensing required for those recordings. Well, not until a few years ago, when some big record labels started searching under the couch cushions for other ways to squeeze money out of online services. They'd already convinced Congress to force internet streaming sites to pay compulsory performance royalties (at insanely high rates), even though radio doesn't have to pay those.

But that wasn't enough. So, they started to focus on those pre-1972 recordings and said that while those aren't subject to the compulsory rates, perhaps they could hold them hostage and force the streaming sites to pay insane amounts for them. The streaming sites, rightfully, pointed out that none of those state laws really had a public performance right as a part of it, and thus there was no licensing required to perform those works and... eventually the lawsuits began.

Late last year, there was a series of separate but similar rulings in courts in California and New York that more or less upturned decades of copyright consensus about what rights were afforded to pre-1972 recordings.

And now additional lawsuits are starting to show up -- and you can expect a lot more of them. A holding company called Zenbu Magazines has sued Apple's Beats Music along with Google, Songza, Slacker, Rdio, Sony and Grooveshark using the same basic template as those earlier lawsuits. Zenbu claims to hold the copyrights for recordings by the Flying Burrito Brothers, Hot Tuna and New Riders of the Purple Sage. And it wants to get paid. Big time.

In fact, Zenbu is looking to make this a class action lawsuit, meaning that the holders of lots of other copyrights on pre-1972 recordings may pile on as well -- and the potential liability facing all of these streaming services could quickly grow to astronomical numbers.

Given that, it seems quite likely that at least some, if not all, of these services are going to quickly realize that their best move is to simply remove all pre-1972 recordings from their catalog. History for music may end in 1972 thanks to these self-defeating lawsuits from copyright holders desperate to squeeze extra money out of these services. It's hard to see how that benefits culture in the slightest.

Filed Under: classic rock, copyright, flying burrito brothers, hot tuna, music, new riders of the purple sage, oldies, pre-1972, pre-1972 sound recordings
Companies: apple, google, grooveshark, rdio, slacker, songza, sony, zenbu magazines

SiriusXM Loses For A Third Time On Public Performance Of Pre-1972 Works, This Time In New York

from the a-big-shakeup dept

A year ago, a bunch of folks in the recording industry hit on its latest strategy to squeeze more money out of services playing music: upset decades of settled copyright law, and pretend that pre-1972 works were subject to public performance rights. Suddenly lawsuits started flying like crazy, most directed at Sirius XM, with a few directed at Pandora. The key issue is the fact that pre-1972 sound recordings are not covered by federal copyright law, but a patchwork of (very messy) state laws and common law. Those state laws were never considered to have included public performance rights, but now people are going back to pretend they did. Of course, there would be a simple way to deal with this: just make those recordings subject to federal copyright laws, but the RIAA has fought hard against this.

In September, a judge ruled against Sirius XM and in favor of Flo & Eddie, the company that owns the rights to the music of the band The Turtles. In October, another California court agreed with the first (despite initially leaning in the other direction). Both of those were specific to California state law, however. But now, another month has gone by and Flo & Eddie has another big victory over Sirius XM, this time under New York's law. You can read the ruling.

The judge, Colleen McMahon, acknowledges that this ruling completely upsets decades of accepted practice, but doesn't seem too bothered by it all:

Of course, the 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. So does certain testimony cited by Sirius from record industry executives, artists and others, who argued vociferously before Congress that it was unfair for them to operate in an environment in which they were paid nothing when their sound recordings were publicly performed.... That they were paid no royalties was a matter of statutory exemption under federal law; that they demanded no royalties under the common law when their product as ineligible for federal copyright protection is, in many ways, inexplicable.

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.

Instead, she notes that the reason this is only coming up now is because Congress only created a performance right for digital music recently. That doesn't really make much sense when you think about it. If the industry was really sitting on this potential goldmine of performance royalties for decades, wouldn't it have made use of it before now?

Instead, the judge defaults to a purely maximalist approach, saying that absent any specific exemptions, we should assume that common law copyright in New York covers just about every damn thing.

Modern federal law supports the notion that an express carve-out is required in order to circumscribe the bundle of rights appurtenant to copyright

That should raise some serious First Amendment questions. In federal copyright law, the Supreme Court has argued that the First Amendment conflict is generally resolved through exceptions to copyright -- including those established in common law, like fair use. Yet here, the court is basically saying, unless an exemption is clearly stated, everything is covered. That's very troubling.

Of course, it's likely that this, like the California cases, will be appealed, and it will all eventually end up before the Supreme Court. But, in the interim, don't be surprised if "golden oldies," including pretty much all music from pre-1972, start disappearing from a variety of services. Good job, recording industry, you may succeed in driving the classics into total obscurity.

Filed Under: copyright, new york, performance rights, pre-1972, pre-1972 sound recordings, the turtles
Companies: flo & eddie, pandora, sirius xm

Sirius XM Hit Again Over Pre-1972 Recordings

from the convinced-by-the-other-ruling dept

A few weeks ago, we wrote about how Sirius XM had lost its case concerning the public performance rights over pre-1972 sound recordings by the band The Turtles. As we noted, this ruling effectively upset decades of consensus about public performance rights for pre-1972 works. When that ruling came out, we noted that the judge, in a nearly identical case brought by the RIAA, appeared to be leaning in the opposite direction. It appears that the judge, Mary Strobel, read the other ruling and found it convincing enough to lean back in the other direction. While not a final determination in the case, Strobel has issued a ruling (pdf) that makes it pretty clear that Sirius XM is likely to lose, based on her agreement with that other ruling.

Having considered the additional authority, the papers submitted and arguments of counsel, the court is persuaded that it should change its tentative ruling.

The ruling itself is more of an essay of "on the one hand, on the other hand" arguments, rather than a typical judicial ruling (in many ways making it more readable), with the judge more or less suggesting that she's not entirely comfortable with this outcome, but that based on the plain language of California's state copyright law, this is the best way to read the law.

Of course, the real mess here is because of the different treatment of pre-1972 recordings. Congress should have fixed this years ago by just making pre-1972 recordings subject to federal copyright law. Except... the recording industry has actually fought hard against this. The hypocrisy here is huge. While the recording industry has fought so hard against making pre-1972 sound recordings subject to federal copyright laws, now they suddenly want aspects of federal copyright law (like public performance rights which did not exist under previous laws) to apply to those very same works. If Congress made it so those works were under federal copyright, there wouldn't be an issue and all these works would be treated identically. But the truth is that the RIAA wants to keep these works out of federal copyright law to use them as a weapon against internet innovation. With rulings like these, it can hold companies like Pandora hostage, since those works wouldn't be subject to compulsory rates. As always, it's all about the RIAA seeking to hold back innovative services unless they'll go bankrupt in paying the RIAA.

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

How The Sirius XM Ruling Upsets Decades Of Copyright Law Consensus

from the activist-judges... dept

We recently wrote about district court judge Philip Gutierrez ruling against Sirius XM on the issue of streaming pre-1972 recordings. As we noted at the time, the ruling appeared to upset what was considered more or less a settled issue. Pre-1972 sound recordings are not covered by federal copyright laws, but rather by a hodgepodge of state laws (and common law), but those have been entirely focused on reproduction/distribution and not on public performance. But this ruling changed all that. Sirius XM, of course, has already made it clear that it's appealing the ruling, and on the other side, the victors in last week's ruling, Flo & Eddie, have already moved to sue Pandora as well.

While I tried to express how much this ruling upsets what had been considered pretty much solid law, law professor Tyler Ochoa does an astounding job actually detailing the history and just what a big change this ruling is, calling it a "seismic" ruling on the scale of the 1906 San Francisco earthquake. Here's just a snippet, though you really ought to read the whole thing, detailing historical case law that this ruling totally upends:

...in the early days of radio, sound recording copyright owners also tried to use state law to restrict unauthorized broadcasts of sound recordings (which, as explained above, were not eligible for federal copyright).  In 1937, in Waring v. WDAS Broadcasting Station, 194 A. 631 (1937), the Pennsylvania Supreme Court held that state common law prevented the unauthorized broadcast of phonograph records (when the legend “Not Licensed for Radio Broadcast” was printed on the records); but in 1940, in RCA Mfg. Co. v. Whiteman, 114 F.2d 86 (2d Cir. 1940), the U.S. Court of Appeals for the Second Circuit, in an opinion by Judge Learned Hand, held that common-law copyright prevented only the duplication of a sound recording, and that sale of phonograph records exhausted any common-law property right to prevent the unauthorized broadcast of the recording (notwithstanding the same restrictive legend).  The Supreme Court denied certiorari, which effectively meant that broadcasters did not have to pay royalties to sound recording copyright owners to play their records on the radio.  (Broadcasters still had to pay royalties to musical work copyright owners, under federal copyright law.)

... when sound recordings were added to the federal copyright act in 1972, Congress likewise limited the exclusive rights that were provided to sound recording copyright owners. Authors of most copyrightable works receive five exclusive rights: the right to reproduce the work, to adapt or prepare derivative works based on the work, to publicly distribute copies of the work, to publicly perform the work, and to publicly display the work. But broadcasters had enough lobbying power to block any action in Congress if it required them to pay more royalties. As a result, Congress gave sound recording copyright owners only the right to reproduce and distribute copies of the sound recording, and to prepare derivative works (by electronic manipulation of the sounds recorded, not by imitation or simulation). Congress did not give sound recording copyright owners any right to publicly perform their works. (The policy argument was that radio airplay served as free advertising for the sale of phonograph records.)

In other words, contrary to what you'll hear today from the record labels and copyright maximalists, this ruling was not obvious or about Sirius XM, Pandora and others ripping off artists. This was actually about them upending what had been considered completely settled law. It was only in 1995 that Congress first established that copyright had any sort of "public performance" exclusivity -- and then only for post-1972 recordings (remember, the recording industry itself has fought quite hard to exempt pre-1972 sound recordings from other aspects of federal copyright law) and only on digital streaming. So, to argue that pre-1972 state and common law somehow was intended to cover such a public performance right is almost impossible to fathom. Yet that's what the court ruled.

And the impact could be immense. Beyond just Sirius and Pandora, it could hit a lot of others as well. In a big way, in part by undermining the very foundations of the DMCA safe harbors.

The ruling is a huge victory for sound recording copyright owners, which can use the ruling not only to negotiate higher negotiated rates for public performance of pre-February 15, 1972 sound recordings, but may also use such older recordings as leverage for negotiating higher rates for post-February 15, 1972 sound recordings. (Such negotiation tactics might be deemed to be copyright misuse, but it is unclear whether state law will recognize this federally-recognized defense.) Moreover, nothing in the decision limits the state-law violations to public performance by means of digital audio transmission, so the decision gives sound recording copyright owners the general public performance right in pre-February 15, 1972 sound recordings that they have always craved, but that was previously denied to them under federal law (and was assumed not to exist in state law under Whiteman). That means that traditional AM/FM broadcasters and television broadcasters, who are expressly exempt under federal law with respect to post-February 15, 1972 sound recordings, can expect to be sued next.

Sound recording copyright owners can also use the ruling to go after internet service providers. Section 512 of the federal Copyright Act provides that internet service providers are not liable for infringements committed by their users, so long as the service provider promptly complies with the “notice-and-takedown” provisions of that section. But because Section 301(c) states that pre-February 15, 1972 sound recording copyrights are not preempted by the federal act, sound recording copyright owners have been suing internet service providers under state law, arguing that service providers are liable for reproduction and electronic distribution of pre-February 15, 1972 recordings under state law, and that the limitation of liability provided by federal law does not apply. Existing court decisions so far are split, with the New York Appellate Division holding that Section 512 does not apply to pre-February 15, 1972 sound recordings, because of the express terms of Section 301(c); while the U.S. District Court for the Southern District of New York has held that Section 512 does apply to pre-February 15, 1972 sound recordings, notwithstanding Section 301(c).

In the meantime, Ochoa notes, expect "oldies" to start disappearing from lots of different services as companies seek to limit their liability. Funny how yet another copyright ruling is likely to make music even more scarce.

Filed Under: california, copyright, history, pre-1972, pre-1972 sound recordings, public performance, radio, streaming
Companies: flo & eddie, pandora, sirius xm

Judge Rules Against Sirius XM On Pre-1972 Recordings

from the this-could-be-quite-a-mess dept

Last year, we wrote about the growing list of lawsuits against Sirius XM concerning the legal rights over pre-1972 recordings. As we've discussed, pre-1972 sound recordings are not under federal copyright law (for historical reasons too convoluted to go into now), but are covered under a hodgepodge of messy state copyright laws. Historically, those state laws have been focused on reproduction and distribution and not public performance. Furthermore, terrestrial radio stations have always been allowed to broadcast music without paying performance royalties (though they do pay songwriters/publishers). Post-1972 recordings can be streamed at statutory rates for non-interactive streaming (interactive streaming is a whole different game). It's a bit of a mess, but based on all of this Sirius XM (and Pandora and others) felt fairly confident that they did not have to separately license public performance rights for pre-1972 recordings. There had been no issue about this at all, until the lawsuits started flooding in last year.

And, in a ruling this week, the judge has... ruled against Sirius XM in a manner that may force Sirius and Pandora to eventually have to pay out big. This lawsuit was the first one against Sirius, filed by Flo & Eddie, claiming that their California state copyrights were violated. The court basically found that, because California copyright law says that the copyright holder has "exclusive ownership" of the copyright, that includes public performance rights, despite no further explanation in the law designating that as an exclusive right under California's copyright.

In short, the judge takes a very expansive "property rights" view of the situation, and assumes that California's copyright law basically restricts everything.

Commonly, to have “exclusive ownership” in something is to possess and control it and to not share that right to possess and control with others. See THE AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE 619, 1260 (Houghton Mifflin Harcourt, 5th ed. 2011) (defining “exclusive” and “ownership”). The California legislature defines “ownership” generally in the Civil Code in a manner consistent with the word’s usual and ordinary meaning—“the right of one or more persons to possess and use [a thing] to the exclusion of others.” Cal. Civ. Code § 654. Thus, at base, Flo & Eddie has the right to possess and use its sound recordings and prevent others from possessing and using them. The plain meaning of having “exclusive ownership” in a sound recording is having the right to use and possess the recording to the exclusion of others. There is nothing in that phrase to suggest that the legislature intended to exclude any right or use of the sound recording from the concept of “exclusive ownership.”

The legislature does include a limitation on the ownership right in the statute’s text, “the most reliable indicator of legislative intent.” See Esberg, 28 Cal. 4th at 268. An author has exclusive ownership in his or her sound recording “against all persons except one who independently makes or duplicates another sound recording that does not directly or indirectly recapture the actual sounds fixed in such prior recording, but consists entirely of an independent fixation of other sounds, even though such sounds imitate or simulate the sounds contained in the prior sound recording.” Cal. Civ. Code § 980(a)(2) (emphasis added). In other words, ownership of a sound recording does not include the exclusive right to make “covers” (i.e., recording the song with new instruments) – any person can make a sound recording based on a copyrighted recording, without the permission of the owner, so long as they produce the sounds independently rather than recapture the actual sounds in the copyrighted recording.

Construing the meaning of “exclusive ownership” in context with the rest of § 980(a)(2), which lists the above exception to the ownership right, the Court infers that the legislature did not intend to further limit ownership rights, otherwise it would have indicated that intent explicitly. Because the statute lists an exception, the Court should enlist the “familiar rule of construction…[that] where exceptions to a general rule are specified by statute, other exceptions are not to be implied or presumed.” Geertz v. Ausonio, 4 Cal. App. 4th 1363, 1370 (1992) (citing In re Michael G., 44 Cal. 3d 283, 291 (1988). Courts should “presume the Legislature included all the exceptions it intended to create.” Id. (citing Reynolds v. Reynolds, 54 Cal. 2d 669, 681 (1960)). If § 980(a)(2) had granted “exclusive ownership” in sound recordings without a listed exception, the argument that some limitations on property rights were already inherent in the concept of sound recording ownership might have been more persuasive to the Court. See Opp. 6:21-7:4, 8:25-9:2. However, by finding it necessary to specify an excepted right to ownership in a sound recording, the legislature conveyed that limitations on ownership did not live within the concept itself, rather they required elucidation.

Accordingly, the Court’s textual reading of § 980(a)(2), giving the words “their usual and ordinary meaning and construing them in context[,]” is that the legislature intended ownership of a sound recording in California to include all rights that can attach to intellectual property, save the singular, expressly-stated exception for making “covers” of a recording.

Sirius XM pointed out the legal problems with this, in that California law did not have a public performance right, and thus the court is effectively making up a new right under to bolt onto California's copyright law, but the judge isn't buying it. Sirius further pointed out that California's copyright law was designed to highlight what rights remained under its copyright law after the federalization of copyright for sound recordings, but again the judge isn't buying it.

It's inevitable that Sirius will appeal this ruling so it will be a while before we see where this actually ends up. Furthermore, in one of the other cases against Sirius, brought by the RIAA, it appears that the judge is leaning in the exact opposite direction. So, this situation is far from over.

Filed Under: california, copyright, flo & eddie, pre-1972, pre-1972 sound recordings, public performance, streaming
Companies: pandora, sirius xm

RESPECT Act Should Be HYPOCRISY Act After How Often Labels Screwed Over Artists

from the respect? dept

Yesterday, the music labels, under the guise of RIAA spinoff SoundExchange, along with Congressional Reps. George Holding and John Conyers, announced some new legislation and a coordinated PR campaign for what they're calling "Project72." The official name of the bill is the "Respecting Senior Performers as Essential Cultural Treasures Act" or the RESPECT Act. There is so much hypocrisy and ridiculousness here that it's difficult to know where to start. However, in short, the labels fought hard to keep the situation the way it is today, and a very large number of the musicians the RIAA rolled out in "support" of this new law -- claiming they just want to get paid by music streaming services -- are musicians who got totally screwed over by RIAA labels in the past. How about a little "respect"?

As we've been reporting, there's been an ongoing legal fight over how to handle pre-1972 sound recordings, because they are technically not covered under federal copyright law. This is because, back in 1909, Congress explicitly excluded sound recordings from the Copyright Act, noting that they didn't believe the Constitution allowed copyright to cover sound recordings (think about that for a second...). A variety of state copyright laws (or the equivalent) popped up to try to fill in the gap. With the 1976 Copyright Act, however, sound records made in 1972 and after were covered, leaving all recordings from pre-1972 in a bit of legal limbo. The copyright office has been debating what to do about this for years. So far, it's actually created something of a cultural disaster, because works that should be in the public domain won't be in the public domain for the rest of our lifetimes.

Meanwhile, many have suggested that a perfectly legitimate way of dealing with this would be to just retroactively say that all pre-1972 sound recordings should be brought under federal copyright law. However, the RIAA itself has fought very hard against this. Why? There are a few reasons, but here are a few big ones: (1) Since the copyright lasts so much longer under state laws, they get to keep the copyright longer. (2) They love to use this issue to claim the DMCA's safe harbors don't apply to any user-generated content site that includes pre-1972 sound recordings. It's a backdoor into gutting the DMCA's safe harbors. (3) Unlike federal copyright law, post-1978, there are no termination rights, allowing the original creator to take back their copyrights.

So it seemed particularly hypocritical last month to see SoundExchange suddenly go all crazy around the claim that music streaming sites don't pay royalties on pre-1972 works. Of course, this is, in part, because of the RIAA's own efforts to keep pre-1972 works from being put under federal copyright law. The various state laws don't include a public performance right, and thus there are no necessary licenses for the streaming of such works -- and that's been widely accepted as the law for years. Until now. If the RIAA wanted to change that, it should have helped move those works under federal copyright law, but it has fought hard against it.

Instead, we get "The RESPECT Act" which would effectively only extend performance rights to pre-1972 sound recordings, while leaving everything else about those works uncovered by federal copyright law. In other words, the RIAA (via SoundExchange) wants to only put the parts of copyright law it likes on pre-1972 sound recordings, while keeping the rest understate laws. And they claim this is about RESPECT?

But here's where it gets really, really ridiculous. To "support" this new legislation from Holding and Conyers, which they're calling "The RESPECT Act," and which they claim is all about getting musicians paid... they trotted out a bunch of famous musicians who support this law.

Project72 kicks off with an open letter, signed by more than 70 recording artists, calling on digital radio to treat all sound recordings equally and to "pay for all the music they play." Artists and bands urging these services to "do right by legacy artists" include: The Allman Brothers Band, The Beach Boys, Roseanne Cash, Melissa Etheridge, Al Green, B.B. King, The Moody Blues, Cyndi Lauper, Martha Reeves, members of Steely Dan, The Supremes, The Temptations, Three Dog Night, and many more.

Note that they say "pay for all the music they play." They do not say to "pay the artists for all the music they play." And that's because SoundExchange and the record labels have a rather long history of not actually paying the artists. Respect!

Hell, you'd think that the RIAA/SoundExchange would have the common sense to check to see whether or not any of the big name stars they brought out had a history of being screwed over and simply not paid by their RIAA labels before attaching them to this campaign. But it appears they did not. Looking through the list of artists who are part of the campaign (beyond just the headliners listed above), we see... quite a few disputes involving the RIAA not paying those artists. All of the following artists signed onto this campaign, despite the fact that RIAA-associated labels have a long history of screwing them over.

• The Allman Brothers have had to sue both Universal Music and Sony Music for unpaid iTunes royalties.
• The Temptations sued Universal for not paying iTunes royalties properly.
• The Beatles sued EMI over unpaid royalties.
• Martha Reeves sued Motown for unpaid royalties
• The widow of "Dave" in the famous Sam & Dave duo had to sue Atlantic Records for unpaid royalties in 2001.
• Gene Chandler's label Vee-Jay, on which he recorded "Duke of Earl," was infamous for not paying royalties and actually went bankrupt when threatened with lawsuits for unpaid royalties.
• Mark Farner, of Grand Funk Railroad, was paid $350 a week for the first two years as an "employee" and, after a dispute with the band's "manager," had to give up all the rights to the music anyway (meaning he wouldn't get paid for those songs anyway).
• Roger McGuinn, from the Byrds, has told Congress before that he never received royalties (beyond a "modest advance") for the 15 albums he recorded with the band, suggesting that the Byrds are still considered "unrecouped" and any money that might get paid out would just go to his label rather than him anyway.
• An early member of Steely Dan has been suing claiming that he hasn't received any SoundExchange royalties he's owed.
• Yoko Ono sued EMI over unpaid John Lennon royalties.

And that's just a sampling from the list (didn't have time to go through everyone, so just picked more recognizable names). While yes, they're now arguing for "royalties" from Pandora and from Sirius XM, they might want to look more closely at who they've partnered with to seek those royalties. After all, if the RIAA hadn't blocked efforts to federalize those pre-1972 recordings, this wouldn't even be an issue. And, more to the point, since the labels own the copyrights on most of these songs anyway, the royalties are going to go into their coffers, and as the list above shows, the RIAA labels seem to have nearly perfected the process of not paying artists.

If Reps. Holding and Conyers really wanted to "respect" such artists, perhaps it would focus on encouraging them to actually avoid the record labels who have worked so hard to not pay them in the past.

Filed Under: allman brothers, beatles, copyright, gene chandler, george holding, grand funk railroad, john conyers, mark farner, martha reeves, pre-1972, pre-1972 sound recordings, respect act, roger mcguinn, royalties, sam & dave, steely dan, streaming, the byrds
Companies: emi, riaa, sony music, soundexchange, universal music

Can Anyone Name A Programmer Still Getting Paid For Code He Wrote In 1962?

from the we'll-wait dept

So, we already wrote about the RIAA's big new legal attack on Pandora over royalties on pre-1972 sound recordings. The legal issues there are complex and convoluted, involving a mix of state common law along with federal copyright law. However, the RIAA has clearly decided that it's not going to delve into the nuances there, preferring to go with totally bogus spin. This started with an opinion piece by SoundExchange's CEO, in which he claimed that it was unfair that artists from pre-1972 works weren't getting paid. And with the launch of this lawsuit, the RIAA is trotting out some artists who are making similarly bogus statements:

The RIAA circulated the lawsuit on Thursday along with quotes from artists or their heirs. "It’s an injustice that boggles the mind," says Booker T. & the MG's Steve Cropper. "Just like the programmers who deserve to be paid for their work, I deserve to be paid for mine.”

This depresses me, in part, because I'm a huge Steve Cropper fan -- and have spent tons of money purchasing a variety of music from Booker T. & the MG's over the years (and plenty of other of Cropper's work both at Stax and elsewhere). However, this is a really unfortunate and misleading argument. It's obviously an attempt to hit at those terrible "techies" at Pandora, implying that Pandora's engineering staff continually gets paid for their work.

But it actually underlines how silly the RIAA's argument is here. Because no Pandora programmer expects to get paid for his work 50 years from now. They get paid today to work today. And that's it. If that person leaves Pandora tomorrow, then they don't keep getting paid for it. Nor do they expect their children and grandchildren to keep getting paid for it. Booker T. and the MG's biggest hit, Green Onions, came out in 1962. It would be great if Cropper could point to a programmer who is still getting paid for code he wrote in 1962. Because I would imagine it's not a very big list.

This is also why many of the other quotes the RIAA is pushing concerning this effort are so misleading as well. Buddy Holly's wife, Maria Elena Holly, rightly notes that "Many artists from the 1950s are retired and struggling to support themselves or have families or heirs who are trying to make ends meet." That is, no doubt, true. But that's a different issue. Copyright was never meant to be a welfare system for artists. It was never meant to keep paying them in retirement. It was meant to be an incentive to create, and once it worked, that was it. In fact, under the copyright laws that were in place in 1958 when Buddy Holly released his hit "Everyday," the absolute longest that the copyright on that song could have lasted was 56 years. In other words, when Holly released that song, he knew that by 2014 (hmmm...) that song would be in the public domain. So it seems, well, a bit unseemly to suddenly be whining about it now.

In fact, I'm sure that many programmers from the 1950s are similarly "retired and struggling to support themselves or have families or heirs who are trying to make ends meet." And many of those retired programmers created the underlying structure and systems for today's computers and internet, which has created so much value for the world. But we don't see them and their heirs whining about how the world owes them a living for work they did more than half a century ago.

And this is the problem. There are almost no professions in the world in which you get to do some work (even if it's amazing work) half a century ago, and then still have people paying you for it today. To act like this is some sort of massive offense just seems silly and misguided.

Filed Under: copyright, licensing, pre-1972, royalties, steve cropper
Companies: pandora, riaa, soundexchange