By Lan Du – Edited by Asher Lowenstein
Flo & Eddie, Inc. v. Sirius XM Radio, Inc., et al, No. 13 Civ. 5784 (S.D.N.Y. Nov. 14, 2014) Slip Opinion hosted by plainsite.org.
The Southern District of New York ruled against Sirius XM Radio, Inc. (“Sirius”) in a lawsuit brought by Flo & Eddie, Inc. (“Flo and Eddie”), a company owned by founding members of the legendary 1960s rock band The Turtles. The court recognized the common law copyright under New York State law in the public performance rights of The Turtles’ pre-1972 sound recordings. Sirius has until December 5 to submit factual defenses, or else the court will enter summary judgment in favor of Flo and Eddie and proceed to determine damages.
Flo and Eddie currently own all ownership interests in the recordings of The Turtles, all of which are made before 1972. Sirius, a national broadcaster of radio programs and provider of digital audio content through satellite and internet, has been performing The Turtles’ pre-1972 compositions and also reproduced the sound recordings. Sirius did not pay any royalties for the sound recordings nor did it obtain any authorization. Flo and Eddie therefore filed a $100 million class action against Sirius for copyright infringement.
This is the second case Sirius XM has lost in companion suits filed in three states. In an earlier ruling, hosted by AmLawDaily, at the U. S. District Court for the Central District of California on September 22, 2014, Sirius was held liable under California law for copyright infringement. The suit in Florida is still pending.
Not paying royalties for public performances of pre-1972 sound recordings has been “an accepted fact of life in the broadcasting industry,” slip op. at 18, because federal law does not provide copyright protection for sound recordings fixed before February 15, 1972. The Federal Copyright Act passed in 1976 states that “no sound recording fixed before February 15, 1972, shall be subject to copyright under this title before, on, or after February 15, 2067.” See 17 U.S.C. § 301(c). However, this does not mean that there is no copyright protection. Rather, “for pre-1972 sound recording, Congress left the issue to the states,” slip op. at 12, because Congress “expressly declined to preempt whatever common law copyright protection was provided to those recordings by state law until February 15, 2067,” id. at 14.
The court then “look[ed] to the background principles and history of New York copyright common law,” slip op. at 17, and deliberated whether New York State law provides protection for public performances of pre-1972 sound recordings. Particularly, as regard to Sirius’s argument that public performance rights in sound recordings did not exist because New York case law lacks precedent on this matter, the court cited the landmark case Capitol Records, Inc. v. Naxos of Am., Inc., 830 N.E.2d 250, 263–64, 267 (N.Y. 2005) hosted by Google Scholar which was “in favor of the common law copyright holder after more than a century of judicial silence.” Slip op. at 18. In addition, the court quoted the U. S. Copyright Office’s recent Music Licensing Study, which concluded that a state’s not affirmatively acknowledging a public performance right in pre-1972 recordings should not be interpreted as the state’s not recognizing such a right.
To conclude, the court held that “general principles of common law copyright dictate that public performance rights in pre-1972 sound recordings do exist,” and thus there is “no reason why New York – a state traditionally protective of performers and performance rights – would treat sound recordings differently.” Slip op. at 25.
It's also worth noting that, in rejecting Sirius’ fair use defense, the court noted the potential market for pre-1972 recordings. Courts are supposed to consider “the effect of the use upon the potential market for or value of the copyrighted work.” See 17 U.S.C. § 107. It is “common sense” that “Flo and Eddie would suffer market harm when Sirius takes its property and exploits it, unchanged and for a profit” and that “a similar market for pre-1972 recordings would develop if owners of those recordings asserted their rights.” Slip op. at 31–2.
While the judge acknowledged that her decision may cause “significant economic consequences” and even possible follow-up suits for both analog and digital broadcasting industries, she emphasized that “[t]he broader policy problems are not for me to consider.” Slip op. at 40. However, Sirius may again appeal the New York case as it proposed in the California case. Therefore, along with the pending case in Florida, the legal status of pre-1972 sound recordings is still worth exploring.
Further discussions of the possible outcomes related to this case can be found at New York Times and Digital Music News, while TechDirt also criticized the decision on the grounds of First Amendment rights. Details of this ruling are also overviewed by Hollywood Report, Digital Music News and Lexology.
Lan Du is an LLM student at Harvard Law School, Class of 2015.