Stay on Top of Enterprise Technology Trends
Get updates impacting your industry from our GigaOm Research Community
Music lovers finally caught a break this week as a federal judge ruled SiriusXM can appeal a jaw-dropping ruling that created a new type of copyright royalty, and that could oblige digital media companies to pay the likes of the Turtles additional money for songs they sang fifty years ago.
The issue concerns so-called “sound recording rights,” which are separate from songwriter rights, and are paid to musicians whenever a recording is sold. In recent years, record labels has been claiming that companies like Pandora and SiriusXM should pay again under state laws for pre-1972 songs — even though copyright law is federal, and that no one has received such payments before. The 1960s Turtles singers, known as Flo & Eddie, have been the face of the campaign through a series of class action lawsuits.
The Turtles’ legal argument is far-fetched but, perhaps due to the complexity of music copyright, some judges have swallowed it, including Colleen McMahon, who initially gave the Turtles permission to go forward with a class action on behalf of anyone whose pre-1972 song has been performed in public or the internet. If this transpires, it would amount to a huge financial punch not just for many bars, restaurants and AM/FM radio stations, but for every digital media company — including YouTube, Apple and Vimeo — that plays Oldies.
On Tuesday, however, Judge McMahon appeared to have second thoughts and told SiriusXM that it may appeal the ruling to the Second Circuit.
“There is indeed a critically important controlling question of law in this case. If the Court’s holding that they do have such a right is incorrect, then significant portions of this lawsuit — including the public performance copyright infringement and unfair competition claims — will have to be dismissed,” she wrote in a decision cited by the Hollywood Reporter, which provides some more legal nitty-gritty on Tuesday’s ruling.
McMahon’s words are a big relief. While there’s no guarantee that the Second Circuit will put a stop to this runaway royalty theory, which has already triggered copycat class actions, it is hard to see how it could do otherwise.
As I’ve pointed out repeatedly, the original decision (and a related one in California) should be reversed for two reasons. The first is that the rulings are just wrong as a matter of law: Santa Clara law professor, Tyler Ochoa, explained why in a mic-drop of a blog post in October.
The other season is that the music industry’s pre-1972 campaign is a cynical misuse of copyright that seeks to trick the public into paying new money for old rope, under the guise of “closing a loophole” (that phrase is industry’s explanation, but it has has unfortunately been taken up by some in the press).
While we do need a new royalty regime for the digital age, it should not involve raising rates in order to grant a windfall for 50-year-old songs. Instead, if everyone is to pay more for copyright (and perhaps we should), let the new money be directed to supporting the many young musicians who would like to earn a living like the Turtles did so long ago.