February 23, 2015

siruis-xm-copyrightAfter suffering a loss in New York State federal court, Sirius XM Radio, Inc. (“Sirius”) has now been granted the right to appeal to the Second Circuit Court of Appeals a summary judgment ruling issued by the United State District Court for the Southern District of New York in favor of recording artists Flo & Eddie Inc. (“F&E”).  In certifying the appeal, the Court stated that “there is indeed a critically important controlling question of law in this case: whether the holders of common law copyrights in pre-1972 sound recordings have, as part of the bundle of rights appurtenant to their copyright, the right to exclusive public performance.”  The district court has stayed any further proceedings in the action until the Second Circuit Court of Appeals rules on the Sirius XM copyright case appeal.

Facts Pertaining to Interlocutory Appeal

F&E is a corporation created and owned by two founding members of the music group “The Turtles.”  F&E owns all rights in and to The Turtles master sound recordings.  Over the last four decades, F&E has licensed The Turtles master sound recordings for public performances to a number of media outlets, but never to a radio station, whether online, digital or otherwise.  Nevertheless, because The Turtles’ songs were recorded in the 1960s and early 1970s, radio stations have played their songs without obtaining a license from F&E, believing that they did not have to pay a royalty for such use under applicable law.  F&E has been aware of public performances of The Turtles songs on terrestrial, satellite and streaming radio, yet has never sent cease and desist letters or sued in an effort to enforce its rights.  That is, until last year, when F&E sued Sirius for violating its copyrights in and to The Turtles’ songs.

The Ruling to be Appealed

In interpreting New York State law, the Southern District of New York held that “the New York Court of Appeals would recognize the exclusive right to public performance of a sound recording as one of the rights appurtenant to common law copyright in such a recording.”  The district court noted that New York State courts have long afforded public performance rights under the common law for plays, and that the Second Circuit recognized those same rights in compilations of film clips over three decades ago.

Sirius argued that no New York State court has ever recognized an exclusive right to public performance of sound recordings and, thus, New York State law did not give F&E such rights.  However, the district court rebuked this argument and stated that the lack of caselaw strongly suggests that “common law copyright in sound recordings comes with the entire bundle of rights that holders of copyright in other works enjoy.”  The district court subsequently denied a motion for reconsideration filed by Sirius.

Potential Impact of the Sirius XM Copyright Case Interlocutory Appeal

We previously reported on the district court’s decision to deny Sirius’ motion for summary judgment.  In granting Sirius the right to appeal its decision, the district court noted that the Second Circuit ruling will have “precedential value for a large number of cases.”  Although the Second Circuit’s ruling will be limited to federal courts in New York, Connecticut and Vermont, given their stature, it could affect how the certified question will be answered throughout the country.

If you are interested in learning more about this topic or need assistance with assessing the copyright implications associated with your business practices, please e-mail us at info@kleinmoynihan.com or call us at (212) 246-0900.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney.  Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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