Sirius Wins One in Florida, Florida, Florida!

by Akerman LLP - Marks, Works & Secrets
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On June 22, 2015, the Southern District of Florida held that artists have no public performance rights in their pre-1972 sound recordings under Florida law, in contrast to decisions from California and New York in related litigation. 

Howard Kaylan (“Kaylan”) and Mark Volman (“Volman”) are two of the original members of the band The Turtles. In 1971, Kaylan and Volman formed Flo & Eddie, Inc. (“Flo & Eddie”). Flo & Eddie owns all of the rights to The Turtles’ master recordings and has licensed those rights to others to make and sell records and to use the records in movies, TV shows and commercials. Flo & Eddie have licensed some digital uses of the recordings through Orchard, a music distributor. Orchard collects the rights to thousands of records and then licenses those recordings as a bundle. The bundles contain both pre and post-1972 sound recordings. Users purchase the entire bundle from Orchard.

Sirius XM Radio, Inc. (“Sirius”) is a satellite radio provider that operates a nationwide broadcast service. Several of Sirius’ channels are devoted solely to playing music recorded before 1972. Sirius delivers its broadcasts via satellite radio and by streaming over the Internet.  Sirius stores its library of digital music on three databases. One database is located in New York City and the other two are located in Washington, D.C. Sirius makes copies of its databases to create onsite back-up libraries and databases, as well as offsite disaster recovery libraries and databases. All of the databases contain pre and post 1972 recordings.

Sirius also creates “buffer copies” in Florida as a part of the process by which it broadcasts music. Buffer copies are not full-length versions of songs but are necessary in order for Sirius to broadcast via satellite. In Florida, each time Sirius broadcasts a recording, it creates two buffered copies, one as a part of its terrestrial repeater system and one in the receiver of its subscriber. The buffer copies range in length from a millisecond to twenty seconds. They are discarded as new data flows into the buffer and Sirius’ subscribers do not have access to the buffered copies.

Flo and Eddie filed an alleged class action against Sirius in Florida in September 2014, alleging common law copyright infringement, unfair competition, conversion and civil theft related to its sound recordings. Specifically, Flo & Eddie alleged that Sirius violated its pre-1972 rights in the sound recordings by (1) publicly performing the recordings; and (2) reproducing the recordings via the back-up and buffer copies. Flo & Eddie also filed nearly identical lawsuits in California and New York. The district courts in California and New York had already heard Flo & Eddie’s arguments on summary judgment and determined that copyright ownership, under California and New York law respectively, includes the right to publicly perform a sound recording. The decision in the New York litigation is currently on appeal to the Second Circuit.

Sirius moved for summary judgment on the basis that Flo & Eddie lacked public performance rights in The Turtles’ pre-1972 sound recordings and that the back-up and buffer copies did not violate any of Flo & Eddie’s rights. The Southern District of Florida agreed.

The Copyright Act provides federal copyright protection for “sound recordings.” However, this protection only applies to recordings created after February 15, 1972. The Copyright Act will not encompass pre-1972 recordings until February 15, 2047. As a result, states may regulate pre-1972 sound recordings, via state statute or common law. The Turtles created all of the sound recordings at issue before 1972. Flo & Eddie argued that its state law rights included the exclusive right to publicly perform the recordings and reproduce the recordings. There are no Florida statutes that address the issue so the Court turned to common law to determine the extent of Flo & Eddie’s rights in the sound recordings.

As an initial matter, the Court noted that, of the three actions filed by Flo & Eddie, the Florida case was unique because California’s copyright statute has a specific provision addressing pre-1972 recordings. Although New York did not have a statute addressing the issue, the district court in New York was able to rely on several cases interpreting New York law to find that Flo & Eddie had a public performance right. In contrast, in addition to the lack of specific Florida legislation, there is very little case law in Florida covering sound recording property rights. Flo & Eddie argued that Florida broadly defines property and, therefore, Florida common law must encompass an exclusive right of public performance. Flo & Eddie further argued for an unqualified property right that would allow the artist to control everything related to the performance of the sound recordings, including setting and receiving all royalty rates.

The Court rejected that argument because owners of post-1972 sound recordings do not have those unfettered rights. “If the Court adopts Flo & Eddie’s position, it would be creating a new property right in Florida as opposed to interpreting the law.” The Court noted that if it recognized and created such a broad right in Florida, the music industry would face several unanswered questions such as: who sets and administers the licensing rates; who owns a sound recording when the owner or artist is dead or the record company is out of business; and what, if any, are the exceptions to the public performance right. The Court held that the Florida legislature, not the courts, were in the best position to address those issues. Accordingly, Florida common law did not provide Flo & Eddie with an exclusive right of public performance.

The Court also held that the back-up and buffer copies were not unlawful reproductions under Florida law. Unlike a complete or significant portion of a compact disc or record, none of the buffer or back-up copies are maintained by Sirius or accessible to the public. Additionally, the buffer copies were not full length copies of the record. Thus, the few seconds of a buffer copy – created only to aid in transmission of the recording – were not an unlawful reproduction.

For Sirius, it truly is Florida, Florida, Florida (with apologies and a nod to Tim Russert, RIP)!

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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