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Entertainment >> Can Anyone Be Happy Together After Sirius XM Copyright Decision?

April 11, 2017

Flo & Eddie Inc., the owner of the sound recordings such as "Happy Together" created by the 1960s band The Turtles, brought suit against Sirius XM on behalf of itself and a class of pre-1972 sound recording owners for broadcasting numerous The Turtles songs without paying a royalty for such use. As part of its analysis of the federal class action lawsuit, the Second Circuit Court of Appeals asked the New York Court of Appeals to determine whether there is "a right of public performance for creators of sound recordings under New York law and, if so, what is the nature and scope of that right." In December 2016, the New York Court of Appeals ruled that New York law does not recognize a common law copyright protection for the public performance of pre-1972 sound recordings.

Because the federal statute is silent on public performance rights in pre-1972 sound recordings, any protection provided to them would stem from state law. The New York decision explained that New York law protected pre-1972 sound recordings from copying and piracy, but had never provided copyright protection for a public performance of a pre-1972 sound recording that did not involve copying. The court noted that the music business had proceeded for decades under the assumption that these public performance rights were not protected, and that it would be unwise for a court to unilaterally upend that long-held business understanding. The court, however, left the door open to pre-1972 sound recording copyright holders by indicating that other causes of action, such as unfair competition, might provide another avenue to protecting pre-1972 works.

This case is important to owners of pre-1972 sound recordings, as well as any entity that seeks to use those sound recordings in commercial or artistic speech, for a number of reasons. First, it established a clear category of rights not protected under New York law and thus works that could be used by others in New York in certain instances without permission or paying royalties. Second, because the court reasoned that "the absence of any artist or record company attempting to enforce [their rights] in this state until now" was a critical component in finding that no such right existed, artists and rights holders should reevaluate how they are protecting (or failing to protect) other aspects of their copyrights to try to ensure that inactivity does not lead to further erosions of rights they may assume they have.

The New York case was one of three similar cases initiated by Flo & Eddie Inc. against Sirius XM, and the New York court’s decision was contrary to a California decision holding that California law protected public performance rights in pre-1972 sound recordings. The California suit was settled at the end of 2016 on the eve of an appeal. This sets up a potential issue for national broadcasters in which a use in California requires permission and a royalty payment, but the same use in New York, or Florida, does not.

Key Takeaways

  • Rights holders and broadcasters should consider how evolving state law impacts their copyrights in pre-1972 sound recordings and other categories of rights and works not explicitly covered by federal copyright law.
  • Those seeking to use pre-1972 sound recordings in digital media need to navigate a patchwork of state law on the existence of public performance rights in those recordings.