Turtle vets Flo and Eddie walk all over SiriusXM, relying on state law in copyright infringement case. A boost for possible Federal performance right royalties?

The concept of performance rights royalties has been given a limited, but potentially significant, shot in the arm by a Federal judge in California. As a result, the date of February 15, 1972 could become less of a barrier preventing artists who recorded songs prior to that date from demanding royalties for the public performance of their recordings.

This is thanks to two of the Turtles, Howard Kaylan and Mark Volman a/k/a Phlorescent Leech and Eddie a/k/a Flo and Eddie. (Curious about those alternative names? It’s a long story that involves the Mothers of Invention .) They successfully sued SiriusXM Radio for royalties arising from its performance of pre-2/15/72 Turtles tunes.

The court win opens the door for mid-20th Century artists to recover royalties from services like Sirius XM, Pandora – and even, in some instances, broadcasters – for playing their songs. And make no mistake, the number of artists in question is huge, including the Turtles, obviously, but also the Beatles, the Stones, Hendrix, Led Zeppelin, the Beach Boys, the classic Motown acts, etc., etc., to name just a small handful of artists whose works are still on many playlists today, more than 40 years down the road.

The significance of February 15, 1972 for copyright purposes is not all that well-known among the general public (though recent efforts on Capitol Hill in the form of the RESPECT Act and an accompanying campaign launched by SoundExchange called “Project 72” are changing that). It involves both little understood legal intricacies and even some basic concepts of copyright as applied to music. Let me explain.

As you should all know by now, every recorded song you hear consists of two separately copyrighted works: (a) the “musical work”, which is the underlying song (i.e., the music and lyrics); and (b) the “sound recording”, which is the version of the song you’re hearing at that particular time.

For example, the song “Happy Together” was written by Garry Bonner and Alan Gordon (fun fact: Messrs. Bonner and Gordon had been members of The Magicians. Who knew?). Anytime folks want to use “Happy Together” – whether by performing their own live cover in a bar or concert venue, or by inserting a recording of the song in a TV show, movie or commercial, or by making their own recording of it – they have to pay royalties for that privilege to whoever owns the copyright in the musical work. Here the owners were originally Bonner and Gordon, but often ownership is held by a music publishing company. Radio and televisions stations know that the royalties they pay for performance of musical works go to ASCAP, BMI or SESAC, who represent copyright owners for that purpose.

Lots of people – including Weezer, Petula Clark, the Captain and Tenille, Frank Zappa, the Red Army Band and the Leningrad Cowboys – have recorded “Happy Together”. Each different version is a distinct sound recording the copyright to which is owned by the performer (or, more often, the performer’s record label). This separate copyright is known as the “performance right” (denoted by the “P in a circle” symbol).

The performance right is relatively new. It was established by Congress in 1971 and became effective on (you guessed it) February 15, 1972, meaning that, under Federal copyright law, recordings made prior to that date were not subject to that particular statutory copyright protection.

The Federal copyright law provides considerably less protection for the performance right than it does for the “musical work” copyright. Originally, while the 1971 Act did provide the performance right copyright holder exclusive control over the reproduction and distribution of the recorded performance, it did not afford the holder any control over the public performance of the recording. It was not until 1998 that the public performance of post-2/15/72 recordings obtained any Federal protection at all, and then that protection extended only to digital transmission of sound recordings, i.e., webcasting, digital downloads, satellite radio services like Sirius XM, but NOT conventional over-the-air radio broadcasts. That still left pre-2/15/71 recorded performances with zero Federal copyright protection.

Nearly all the states – 49, to be precise – have stepped up to extend state law protections to pre-2/15/72 sound recordings. (Only Vermont has no state law in this area.) Most of these laws, however, are anti-piracy statutes, designed to prevent unauthorized copying or “bootlegging” of recordings. These laws do not apply to the over-the-air broadcast performance of sound recordings. In fact, all but one of the 49 states offering protection to older sound recordings have explicit carve outs specifying that the laws do not create any public performance right in broadcasting. (Tennessee is the lone exception on this front.)

It has not been clear, however, whether those state statutes protect any non-broadcast “public performances” of the recordings.

Flo and Eddie certainly thought the California statute provided precisely such protection, which is why they sued Sirius XM in Los Angeles Superior Court, alleging violations of California’s state law protecting sound recordings, California’s Unfair Competition Law, and the common law torts of conversion and misappropriation. (Their case was eventually removed to Federal District Court in L.A.) They’ve also filed similar lawsuits in New York and Florida. They’re not the only litigants either, as major record labels have filed suit against Sirius XM and against Pandora as well.

As a practical matter, Flo and Eddie and other older recording artists have plenty of reasons to push the issue. Think about it. One of their main revenue streams – music sales – is clearly decreasing, an industry-wide phenomenon. Others – concert tickets and related merchandise – are probably decreasing as well. After all, if you first recorded a song before February 15, 1972, you’re probably well beyond the age where you want to tour regularly (or could command significant revenues from shows or merchandising). So identifying and tapping new revenue streams is presumably important. How better to do that than by forcing Sirius XM, Pandora and others who have historically not paid royalties on the pre-1972 songs to finally do just that?

On September 22, 2014 Judge Phillip Gutierrez of the United States District Court for the Central District of California granted a summary judgment motion in favor of Flo and Eddie on their claim that SiriusXM had infringed their exclusive right to control public performance of their pre-2/15/72 recordings. (He also found for Flo and Eddie most of their other claims. Curiously, he concluded that they had not demonstrated that SiriusXM had violated their right to control reproduction of their recordings; that issue will presumably proceed to a full trial.)

The basis for Judge Gutierrez’s decision was Section 980(a)(2) of the California Civil Code. That section expressly vests “exclusive ownership” of any pre-2/15/72 recording in the recording’s copyright owner. According to Gutierrez, the concept of “exclusive ownership” in this context includes the exclusive right to perform those recordings. Sirius XM had argued that Section 980(a)(2) doesn’t explicitly include a right of public performance; Judge Gutierrez did not agree. As a result, SiriusXM’s repeated playings infringed Flo and Eddie’s performance right copyright.

What’s the impact of this case?

It could be very broad. Flo and Eddie’s cases – not only in California, but also in New York and Florida – are class actions. The California win allows – and yes, almost certainly encourages – others to jump on board as fellow members of the class entitled to damages. And there may be plenty to go around: Flo and Eddie requested $100 million in damages.

Or it could be very limited. Judge Gutierrez’s holding, after all, depends on the language of a California statute which is applicable only in California. As it happens, of the states protecting pre-1972 sound recordings, California provides some of the broadest protection. So maybe those other lawsuits in New York and Florida won’t go the same way. Furthermore, Sirius XM has already prevailed in a separate but similar lawsuit, also in California, filed by record labels. So even this case could go away. We’ll have to wait and see how that conflict is resolved.

For broadcasters, especially smaller broadcasters, the impact is likely very limited. One of the reasons I haven’t written much about this is that it doesn’t really affect most broadcasters. Remember, this is a fight about the digital performance of sound recordings created before February 15, 1972. (Sadly, in my mind) fewer and fewer radio stations are playing music that old anymore. And most of those that are streaming older songs online are probably paying royalties anyway. In my experience, it’s been hard enough for most radio stations who are streaming to properly compile all the information they are required to submit to SoundExchange. Given the relatively small royalty amounts the average station pays and the effort required just to get to that figure, it’s just not worth the effort necessary to calculate and remove the amount attributable to pre-1972 sound recordings.

Of course, this is a big deal for companies like Sirius XM and Pandora which have very popular channels and streams dedicated entirely to these older songs.

Perhaps most importantly, as with everything copyright nowadays, Judge Gutierrez’s decision is one more reflection of the growing push toward the creation of a performance right applicable to over-the-air broadcasting. The recording industry has spent years working toward that goal (which will require Congressional action). While a case like Flo and Eddie’s will not directly result in that performance right – since, again, no such right will exist unless and until Congress says it exists – such cases can build momentum by creating the impression that the performance right might have a strong basis in existing law. If Congress hears that message and feels compelled to hop on the bandwagon, major changes in Federal copyright law could be the result (assuming that Congress might someday be less dysfunctional than it currently appears to be).