SiriusXM can fight windfall for ’60s singers, judge rules

Music lovers finally caught a break this week as a federal judge ruled SiriusXM can appeal a jaw-dropping ruling that created a new type of copyright royalty, and that could oblige digital media companies to pay the likes of the Turtles additional money for songs they sang fifty years ago.

The issue concerns so-called “sound recording rights,” which are separate from songwriter rights, and are paid to musicians whenever a recording is sold. In recent years, record labels has been claiming that companies like Pandora and SiriusXM should pay again under state laws for pre-1972 songs — even though copyright law is federal, and that no one has received such payments before. The 1960s Turtles singers, known as Flo & Eddie, have been the face of the campaign through a series of class action lawsuits.

The Turtles’ legal argument is far-fetched but, perhaps due to the complexity of music copyright, some judges have swallowed it, including Colleen McMahon, who initially gave the Turtles permission to go forward with a class action on behalf of anyone whose pre-1972 song has been performed in public or the internet. If this transpires, it would amount to a huge financial punch not just for many bars, restaurants and AM/FM radio stations, but for every digital media company — including YouTube, Apple and Vimeo — that plays Oldies.

On Tuesday, however, Judge McMahon appeared to have second thoughts and told SiriusXM that it may appeal the ruling to the Second Circuit.

“There is indeed a critically important controlling question of law in this case. If the Court’s holding that they do have such a right is incorrect, then significant portions of this lawsuit — including the public performance copyright infringement and unfair competition claims — will have to be dismissed,” she wrote in a decision cited by the Hollywood Reporter, which provides some more legal nitty-gritty on Tuesday’s ruling.

McMahon’s words are a big relief. While there’s no guarantee that the Second Circuit will put a stop to this runaway royalty theory, which has already triggered copycat class actions, it is hard to see how it could do otherwise.

As I’ve pointed out repeatedly, the original decision (and a related one in California) should be reversed for two reasons. The first is that the rulings are just wrong as a matter of law: Santa Clara law professor, Tyler Ochoa, explained why in a mic-drop of a blog post in October.

The other season is that the music industry’s pre-1972 campaign is a cynical misuse of copyright that seeks to trick the public into paying new money for old rope, under the guise of “closing a loophole” (that phrase is industry’s explanation, but it has has unfortunately been taken up by some in the press).

While we do need a new royalty regime for the digital age, it should not involve raising rates in order to grant a windfall for 50-year-old songs. Instead, if everyone is to pay more for copyright (and perhaps we should), let the new money be directed to supporting the many young musicians who would like to earn a living like the Turtles did so long ago.

Pandora: New copyright claims on oldies music violate free speech

Internet radio service Pandora is striking back against former members of the band The Turtles, claiming that the musicians’ lawsuits — which seek a new set of royalty payments for songs dating from before 1972 — amount to an illegal restriction on freedom of speech, and it is asking a court to put a stop to the Turtles’ demands.

Pandora made the request via a so-called anti-SLAPP (SLAPP stands for Strategic Litigation Against Public Participation) motion filed Friday in Los Angeles, and addressed to the judge who is overseeing an ongoing copyright case launched by a holding company named for Flo and Eddie, the musicians who performed Turtles hits in the 1960’s like “Happy Together” and “It Ain’t Me Babe.”

The purpose of anti-SLAPP laws, like the one in California on which Pandora is relying, is to provide defendants with a quick way to challenge unjustified lawsuits that threaten free speech. In this case, Pandora claims that Flo and Eddie’s copyright claims are baseless, and could intimidate everyone from radio stations to restaurants from playing popular oldies.

(“[T]he point of the anti-SLAPP statute is that you have a right not to be dragged through the courts because you exercised your constitutional rights,” Pandora wrote (original emphasis) in the filing, in a direct quote of an earlier decision.

The move is perhaps a bold one by Pandora since anti-SLAPP procedures are not typically used in copyright cases, and because Flo and Eddie have already had some success in their campaign to wring out extra royalty dollars on behalf of the music industry.

The underlying copyright issues in the case are complex even by entertainment law standards but, in essence, they amount to performers demanding new money for old recordings on the basis of obscure state laws.

Even though copyright law is almost exclusively federal, Flo and Eddie have been making the novel claim that state laws in California and New York require Pandora, SiriusXM and everyone else to pay an extra royalty for performance rights for pre-1972 songs — in addition to the royalties they already pay to songwriters.

Critics of the Flo and Eddie campaign, including me, have argued the royalties amount to an undeserved windfall and do nothing to encourage the creation of new works (which is the point of copyright in the first place). The campaign risks creating a large financial burden not only for Pandora, but to AM/FM stations and YouTube and anyone else who plays music, and is likely to result in many platforms simply removing oldies music altogether.

And, as Pandora points out in its filing, a special performance right for recordings (as opposed to songwriters) never existed at the state or federal level in the first place. In a statement, [company]Pandora[/company] spokesperson Dave Grimaldi suggested Congress should move all sound recordings under federal law:

“Pandora would be open to supporting the full federalization of Pre-72 sound recordings under a technology-neutral approach that affords libraries, music services and consumers the same rights and responsibilities that are enjoyed with respect to all other sound recordings.”

In the meantime, though, judges in Los Angeles and New York have appeared willing to recognize a new state copyright in oldies, so Pandora may face an uphill battle in winning its anti-SLAPP suit.

As the filing below explains, a key part of Pandora’s argument is based on showing that, whatever state level sound recording rights may have existed, those rights were limited to unpublished or unreleased works. Once those songs were released in record stores, however, the California copyright ended, Pandora suggests.

Pandora SLAPP

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