Two years ago we wrote about Floe & Eddie, Inc.’s, attempt to obtain royalties from SiriusXM for performances of the Turtle’s pre-February 1972 sound recordings. Floe & Eddie filed claims in California, New York, and Florida seeking to obtain royalties for performances of their recordings under state common law. You may recall that for pre-February 1972 sound recordings, there is no federal performance right.  Simply put, this means if you are the copyright owner of a pre-1972 sound recording (e.g., a vinyl record), you will not receive royalties under federal law for playing the record over the air.

When we wrote the original article, the U.S. District Court for the Southern District of New York denied SiriusXM’s motion for summary judgment on grounds that the Turtles had New York common law performance rights in their pre-1972 sound recordings.  It turns out that our original conclusion that states may seek to protect owners of pre-1972 sound recordings may have been premature, at least as applied to New York state.  Here’s what just happened.

The United States District Court for the Southern District of New York denied defendant’s motion for reconsideration.  On appeal, the Second Circuit Court of Appeals determined that the case presented “a significant and unresolved issue of New York copyright law,” and certified the question of whether there was a pre-1972 performance right to the New York Court of Appeals (New York’s “supreme court”).  On December 20, 2016, the court issued its opinion, holding that under “New York common-law copyright does not recognize a right of public performance for creators of sound recordings….”  It looks like SiriusXM wins!

How the court arrived at its decision is a fascinating textbook on how courts render opinions on complex legal issues where legal precedents are thin. A detailed summary of the court’s opinion is beyond the scope of this short article but here’s what the court said in a nutshell.

The court begins its opinion with a summary of federal copyright law noting in particular Congress’ attempt – in granting performance rights to post 1972 sound recordings – to strike a balance between stakeholders “including digital radio services, recording companies, composers, terrestrial radio stations, businesses that play music on their premises, performing artists, and the public.”  At the outset, foreshadowing its own holding, the court notes that if New York law includes a right of performance then copyright owners “have gone decades without acting to enforce their rights.” The court proceeds with a detailed review of New York common law concluding that “our common-law copyright protection prevents only the unauthorized reproduction of the copyrighted work, but permits a purchaser to use copies of sound recordings for their intended purpose, namely, to play them…”
The court also looked to “societal expectations.” According to the court, common sense suggests that “record companies and artists had a symbiotic relationship with radio stations, and wanted them to play their records to encourage name recognition and corresponding album sales.” In other words, rights owners weren’t concerned about performance rights because the absence of such rights did not upset the relationship.  As the court put it, everyone was “happy together.”  In that context, the absence of any legal precedent on the issue is explainable.

For those interested in the details of the court’s opinion here is a link to the full opinion.

— Adam G. Garson, Esq.