Ninth Circuit sides with Sirius XM in dispute over pre-1972 music royalties

(CN) — The Ninth Circuit Court of Appeals found Monday that satellite radio station Sirius XM does not have to pay royalties to the band The Turtles for playing their pre-1972 recordings.

Unlike typical AM and FM radio stations, digital and satellite radio must pay royalties if they broadcast a song from after 1972 on their airwaves. Howard Kaylan and Mark Volman, the founding members of The Turtles, started Flo & Eddie to have control over their recordings and first sued Sirius XM Radio in 2013. They argued that their “exclusive ownership” under California copyright law entitles them to royalties when their pre-1972 songs are played on-air. A federal judge in California agreed.

Sirius XM appealed, arguing the state’s “exclusive ownership” historically never extended to public performances. And in an opinion issued Monday by U.S. Circuit Judge Kenneth Lee, the Ninth Circuit agreed.

“We must rewind back almost 150 years and look to the common law in the 19th century when California first used the phrase ‘exclusive ownership’ in its copyright statute,” the Donald Trump appointee wrote for the panel. “At that time, no state had recognized a right of public performance for music, and California protected only unpublished works. Nothing suggests that California upended this deeply rooted common law understanding of copyright protection.”

Tyler Ochoa, a professor specializing in intellectual property law and copyright law at Santa Clara University, wrote an amicus brief in the case and highlighted the history of recording artists fighting for royalties from radio broadcasts. Ochoa agreed with the Ninth Circuit’s decision.

“Ever since 1940, it’s been more or less settled law that once you released a [sound recording] to the public, it could be played on the radio without any further payment to the record label or the performing artists,” Ochoa said in an interview Monday. Ochoa noted the composers and publishers of the recordings get paid royalties for airplay, but the recording artists and record labels do not.

“The question was, ‘what does exclusive ownership mean?’ And the court says, historically, that was limited to reproduction and distribution rights,” said Ochoa. “It did not include public performance rights.”

Ochoa noted that Flo & Eddie brought cases in Florida and New York claiming that those states’ copyright laws entitled recording artists to radio royalties. Judges in both states rejected the argument that their state copyright laws granted royalties for radio plays. The Ninth Circuit’s decision examined such laws from across the country and found that the story was the same throughout many states.

“The lack of a judicially recognized right of public performance across dozens of states underscores that no such right ever existed under the common law,” Lee wrote for the panel.

Stephen Kinnaird, who served as counsel on an amicus brief filed by the National Association of Broadcasters, applauded the ruling.

“What we saw in all three decisions was a judicial restraint in not creating new common law rights,” Kinnaird said in an interview. He added he was pleased the Ninth Circuit decision did not risk “upheaval” in the radio broadcasting industry.

Pointing to the complicated nature of the statutes, Kinnaird said “it would have been a nightmare to do that judicially" and that he was glad the courts “have recognized this is something in the legislative domain.”

Ochoa said that legislation has been enacted to shift the way artists collect royalties.

“Congress has changed federal law. Sound recording owners for pre-1972 works are going to get paid for digital streaming,” said Ochoa, pointing to the 2018 the Music Modernization Act. “Flo & Eddie lost the battle, but they won the war. They got Congress to change the law for performing artists going forward.”

Though they lost at the Ninth Circuit, Flo & Eddie were the beneficiaries of a 2014 settlement ahead of the trial in the Central District of California.

“While we are disappointed in the result, we are glad class members received the benefits of the $25 million cash settlement and several years’ worth of royalty payments during the pendency of the appeal through our agreement with Sirius XM,” said Kalpana Srinivasan of the firm Susman Godfrey, Flo & Eddie's attorney for the Ninth Circuit arguments, in an email.

Sirius XM attorney Daniel Petrocelli of the firm O'Melveny & Myers, said in an email, “We are gratified that this important issue has been finally and correctly resolved."

Ochoa said that artists will have to look to Congress again to extend the public performance right to sound recordings on traditional analog radio and television broadcasts in order to collect those royalties.

“I’m very pleased that the Ninth Circuit recognized that the history of public performance rights and sound recordings was important here and that the statute should be interpreted in light of that history,” Ochoa said. “This is really for Congress now. Congress can change the rules for television performances and sound recordings if they choose to do so, but at least Congress has already done so for digital streaming.”

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