1972 and all that - but does the Turtles win against SiriusXM actually settle anything?

A California federal judge has delivered a "legal earthquake" by declaring Flo & Eddie of The Turtles "the victors in a lawsuit against SiriusXM over the public performance of pre-1972 sound recordings" by finding that SiriusXM had violated the Turtles' pre-1972 master copyrights by playing their music without licensing it or paying performance royalties. Flo & Eddie was created in 1971 and is owned and controlled by Howard Kaylan and Mark Volman, two of the founding members of the Turtles, who were most popular for their 1967 hit single "Happy Together." The lawsuit was filed in August last year, seeking royalties from the satellite broadcaster. Billboard reports that the plaintiffs are seeking $100 million in damages, but says "the money is hardly the only consequence of a ruling on Monday that could eventually disrupt the operations of the satellite radio giant as well as other services like Pandora." The band members launched the case in August 2013. 

But its not been plain sailing for pre-1972 copyright owners - nor is the whole issue exactly clear. In August this year, U.S. Federal Court Judge Mary Strobel indicated that she was leaning towards rejecting a motion by Warner, Universal, Sony, Capitol and ABKCO Records to accept the labels' interpretation of the law in jury instructions in a similar matter. The plaintiffs again are arguing that state laws protect the misappropriation of older pre-1972 sound recordings that were authored before federal copyright protection applied. But in that case the judge wasn't ready to go that far and indicated that she felt the label's might be relying on inappropriate case law. 

Those Turtles

Billboard reports in the new California decision, U.S. District Judge Phillip Gutierrez ruled against SiriusXM holding that California state law, as it is written, gives the master recording owner exclusive performance rights. Consequently, the judge further ruled in Flo & Eddie's favour on all causes of action as it applied to public performance, but not to alleged reproduction copyright violations. The judge ruled that if Flo & Eddie want to pursue their allegations of copyright, that SiriusXM was making and storing temporary copies of their music for broadcast purposes, it would have to be decided in a separate trial.

With Judge Strobel's approach, as well as pending cases on the same issue in Florida and New York - almost all commentators expect SiriusXM to appeal against Judge Gutierrez's ruling although conversely it remains to be seen whether Judge Strobel now feels obliged to follow this week's ruling as a precedent. In Octoberc 2013 Sirius said "As will be shown at a later stage of these proceedings, there is no state law that requires SiriusXM (or any of the hundreds of thousands of other U.S. businesses that publicly perform music) to pay license fees for Pre-1972 Recordings," adding that "Plaintiff’s multiple court filings constitute a form of lawsuit lottery in search of an elusive new state-law right that would radically overturn decades of settled practice."

The case is 13-cv-05693, Flo & Eddie Inc. v. Sirius XM Radio Inc., et al in the United States District Court, Central District of California

Pandora opens up a box of fun

Pandora, the American streaming music service, has issued legal proceedings in the USA on the basis that the rates currently being offered by ASCAP, the US collecting society are unfair, because they are not as favourable as those offered to traditional broadcasters like Clear Channel, which have recently moved into the online music space. Arguing that Clear Channel have an advantage as it can negotiate the royalties they pay for their online services at the same time as negotiating music publisher fees for their FM networks, via the Radio Music Licensing Committee, the move comes after direct negotiations had failed. 

However, in the world of sound recordings, the collection societies are fighting back with the news that SoundExchange, the non-profit organisation that represents record labels and recording musicians, has launched its opposition to the Internet Radio Fairness Act, highlighting a letter signed by 125 artists who oppose Pandora's plan to "cut artists' pay" when music is played over Internet radio. The open letter, which has over 40 Grammy winners' signatories and the backers includes Kiss, the Dead Kennedys, Missy Elliot, Pink Floyd, Megadeath, Robert Plant, Don Henley, Billy Joel, Maroon 5, Martha Reeves, David Sanborn, Ne-Yo, Common and Roger Waters, praises Pandora saying "We are big fans" - and celebrates the company's commercial success, but asks why Pandora, with massive growth in revenues and a successful IPO under its belt, is pushing Congress to "slash musicians" pay saying "That's not fair and that's not how partners work together" telling Pandora it's time to go back to the drawing board.

“We all want Internet radio to succeed, but it won't if it tries to do so on the backs of hard working musicians and singers," said MusicFIRST Executive Director Ted Kalo, and SoundExchange President Michael Huppe added "This issue is critical to the tens-of-thousands of recording artists we represent - all of whom rely on this digital performance revenue stream to make a living,". "It is important that we protect artists and the long-term value of their music, which is, after all, the foundation of Internet radio." 

Pandora claims the internet service has paid considerably more in performance royalties than satellite radio provider SiriusXM and the legislation is needed to level the playing field. 

The proposed law, the Internet Radio Fairness Act, (H.R. 6480/S 3609) was introduced in the US Senate by Oregon Democrat Ron Wyden. The House version has bi-partisan support and is backed by Republicans Jason Chaffetz (Utah) and Darrell Issa (California) and Democrats Jared Polis (Colorado) and Zoe Lofgren (also California) The legislators claim the Internet Radio Fairness Act would modernise the music copyright royalty system by setting a more equitable standard for the calculation of royalty rates for Internet radio. Interestingly, the EFF also support the legislation saying on their website that now the 2012 presidential campaign is over, “Congress may soon be able to get back to business. One of the things it should prioritize is fixing a longstanding tax on innovation that most folks don’t know about, but they should:the unfair legal treatment of Internet radio”.

So - a tax on innovation?  or a tax on musicians and the music industry? The debate seems set to run .......

https://www.eff.org/Internet-Radio-Fairness-Act-ExplanationA musicians perspective on Pandora

http://www.musicfirstcoalition.org/sites/default/files/Artist%20Letter.pdf 

http://www.examiner.com/article/music-industry-protests-pandora-and-internet-radio-fairness-act

SiriusXM files Antitrust claims against SoundExchange and A2IM

In a very curious development, satellite and internet radio station SiriusXM Radio has filed a complaint against US collection society SoundExchange, Inc. and the American Association of Independent Music ("A2IM") charging them with unlawfully interfering in SiriusXM's efforts to secure, through a competitive market, the use of sound recordings critical to its business. The complaint contends that the conduct violates federal antitrust law, as well as New York state law, in particular violating Section 1 of the Sherman Act by interfering with the satellite channel’s efforts to obtain cheaper direct licenses that pay royalty rates of 5% to 7% instead of the 8% statutory rate for master rights owners. Sound Exchange describes itself as "the non-profit performance rights organization that collects statutory royalties from satellite radio (such as SIRIUS XM), internet radio, cable TV music channels and similar platforms for streaming sound recordings. The Copyright Royalty Board, which is appointed by The U.S. Library of Congress, has entrusted SoundExchange as the sole entity in the United States to collect and distribute these digital performance royalties on behalf of featured recording artists, master rights owners (like record labels), and independent artists who record and own their masters".

SiriusXM is seeking injunctive relief to stop SoundExchange and A2IM from impeding its efforts to directly obtain the licenses it wants to operate its business, by direct dealings with record companies instead of relying exclusively on licenses either negotiated with SoundExchange acting as the record industry's collective or on the outcome of regulatory rate-making proceedings. SoundExchange collected $292 million in royalties for 2011, up from $20 million in 2005.

The most significant redress SiriusXM asks for is for SoundExchange to be dissolved and unwound on an orderly basis, or alternatively the appointment of an independent monitor to oversee SoundExchange's compliance with antitrust laws for a period of 10 years.

The complaint also asks the defendants to pay its legal fee and whatever economic damages the court determines SiriusXM has suffered.

The complaint charges that, although SiriusXM has the legal right to negotiate with individual record companies for such licenses, SoundExchange, in collaboration with other record industry organizations (the National Academy of Recording Arts and Sciences, the American Federation of Television and Radio Artists, and the American Federation of Musicians) has orchestrated an illegal boycott designed to choke off such competition and have eliminated price competition in, among others, the market for digital transmissions of sound recordings licensable under the statutory licensing provisions of Section 114 of the Copyright Act of 1976.

The complaint was filed in the United States District Court for the Southern District of New York.

http://www.sacbee.com/2012/03/27/4370870/siriusxm-files-antitrust-claims.html

http://www.billboard.biz/bbbiz/industry/legal-and-management/siriusxm-files-lawsuit-against-soundexchange-1006591952.story