Wednesday 21 December 2016

Sirius XM triumph in New York appellate court

New York's highest court has ruled that Sirius XM does not have to get permission, or pay compensation, to the owners of pre-1972 music recordings in order to play their tracks in the case brought by the owners of The Turtle's 1967 hit "Happy Together." 

The Court of Appeals determined that New York common law does not recognise a "public performance right" in their decision in Flo & Eddie v. Sirius XM Radio. The Court of Appeals' ruling comes in response to a certified question from the U.S. Court of Appeals for the Second Circuit, which inquired in April whether New York's common law provides copyright protections for recordings not covered by federal law. Southern District Judge Colleen McMahon had denied Sirius' motion for summary judgment in 2014, finding that New York common law did provide a public-right performance 

The ruling comes just weeks after a settlement between the Turtles members and SiriusXM in a related lawsuit in California. That settlement, which also covers class action claims on behalf of other performers, called for payouts of up to $99 million (an amount that is likely to be reduced as a result of  this ruling). U.S. District Judge Phillip Gutierrez ruled against SiriusXM in 2014, holding that California state law, as it is written, gives the master recording owner exclusive performance rights.

In Florida a court found that there was no state law to protect pre-1972 recorded works.  U.S. District Judge Darrin Gayles ruled in favour of SiriusXM's saying he understood why his judicial colleagues in other states ruled differently, noting that California and New York are creative centres of culture, and laws have been enacted there to protect artistic rights, but that there was no legislation or case law supporting such a property right in Florida and nor would he create one saying that it must be the job of the Florida state legislature to address the issue, and that a decision to plug the gap would bring up a host of other issues such as resolving who sets and administers licensing rates, who owns sound recordings for dead artists and what exceptions there might be to a public performance right. 

In a similar approach, the New York Court of Appeals (in a split 4-2 decision) said that whilst it understood the anomalies in copyright laws, it should be up to Congress to define the public performance rights sought by creators of the Turtles' music, as it did for post-1972 recordings under the federal Copyright Act of 1976.

Judge Leslie Stein for the majority noted that the digital age, satellite technology and now the internet had allowed subscription music on-demand services such as Sirius to become lucrative and this has distorted the previous "symbiotic" relationship between artists and broadcasters, where it was advantageous to both sides to play music recordings publicly saying for the majority:

"Indeed, it would be illogical to conclude that the right of public performance would have existed for decades without the courts recognizing such a right as a matter of state common law, and in the absence of any artist or record company attempting to enforce that right in this state until now […]. Simply stated, New York’s common-law copyright has never recognized a right of public performance for pre-1972 sound recordings. Because the consequences of doing so could be extensive and far-reaching, and there are many competing interests at stake, which we are not equipped to address, we decline to create such a right for the first time now. Even the District Court here, while finding the existence of a common-law copyright of public performance in sound recordings, acknowledged that such a right was “unprecedented,” would upset settled expectations, and would “have significant economic consequences” … Under these circumstances, the recognition of such a right should be left to the legislature."

Stein was joined by Judges Eugene Pigott Jr., Eugene Fahey and Michael Garcia.

Judge Jenny Rivera wrote in a dissent that the common-law right of public performance in New York has always been recognised as a "broad and flexible" one that the court should now extend to the pre-1972 sound recordings in the new age of satellite broadcasting saying 

"I reject a parochialism that justifies turning a blind eye to the exploitative practices of today's music industry made possible by technological advances and that, as a consequence, excludes from our common-law copyright in sound recordings a quintessential property interest in the use of these works," 

Judge Sheila Abdus-Salaam joined in Judge Rivera's dissent. Chief Judge Janet DiFiore took no part in the decision.

However Judge Fahey wrote a concurring opinion in which he said he believed that the common-law right of public performance should apply to the on-demand services sold by Apple Music, Spotify, Rhapsody and Amazon's Music Unlimited where consumers hear one song at a time from massive catalogues without downloading the individual songs, as listeners can through iTunes. Fahey said, in his view, pre-1972 public performances are protected in such on-demand "rental or lease" use of the songs.

In a related but separate matter, Capitol Records (now part of the Universal Music Group) has said it will appeal to the Supreme Court of the United States to answer the questoin of whether 'safe harbor' provisions brought in by the Digital Millennium Copyright Act should apply to pre-1972 sound recordings. In June the Second Circuit court ruled in favour of the Vimeo, saying that exempting older recordings from the safe harbour principle would “defeat the very purpose Congress sought to achieve in passing [it]”. The Second Circuit then refused to rehear the case in August and now Capitol has filed papers with the Supreme Court. arguing that “Section 301(c) of the Copyright Act explicitly protects state law remedies for infringement of pre-72 sound recordings until February 2067”.

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