Tuesday, November 18, 2014

SiriusXM Suffers Another Loss When New York Judge Rules in Turtles Lawsuit

In the most recent defeat for Sirius XM in its battle to broadcast pre-1972 recordings without authorization and compensation, New York federal judge Colleen McMahon denied SiriusXM's motion for summary judgment in a second lawsuit brought by Flo & Eddie (see my prior blog for information on the other Turtles/SiriusXM action in California).

Judge McMahon refused to accept SiriusXM's argument that no public performance rights exist simplly because New York case law contains no discussion of it. She acknowledges the "accepted fact of life in the broadcast industry for the last century" is that nobody was paying royalties for public performance. Then she adds: "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."

According to Judge McMahon, there is a stronger argument that the years of judicial silence "implies exactly the opposite of what Sirius contends — not that common law copyright in sound recordings carries no right of public performance, but rather that common law copyright in sound recordings comes with the entire bundle of rights that holders of copyright in other works enjoy." She then confirms it does, and maybe goes even further than either of the California judges did in the other cases concerning pre-1972 sound recordings and finds that SiriusXM reproduced Turtles recordings in all sorts of ways, through databases, play-out servers and buffer copies, though she hedges by saying that some of these copes might not qualify as infringing reproductions. However, she then goes on to rule out the "fair use" defense and holds that SiriusXM has engaged in unfair competition and rejects a defense built upon the interstate commerce clause.

It is expected that SiriusXM will attempt an immediate appeal on this ruling. However, in the meantime, various other music users from terrestrial radio operators to digital streamers are going to be faced with some big decisions about whether or not to continue playing pre-72 music without a license from the owners of sound recordings.'

Hopefully, the tide is finally turning and this is one more small step in favor of artists and other rightsholders and the value of their sound recordings in the landscape of the future.

Wallace Collins is an entertainment and intellectual property lawyer with more than 30 years of experience based in New York. He was a recording artist for Epic Records before receiving his law degree from Fordham Law School. Tel: (212) 661-3656; www.wallacecollins.com