Rock On! In Florida, Pre-1972 Sound Recordings are Fair Game for Music Services
On October 26, the Florida Supreme Court issued a decision in Flo & Eddie, Inc. v. Sirius XM Radio, Inc., Case No. SC16-1161, holding that Florida’s common law copyright does not recognize any public performance right for sound recordings made prior to 1972. This ruling, which echoes a similar decision by New York’s highest appellate court in December of 2016, is the second consecutive appellate win for the broadcast and webcasting industries arising out of a series of similar state law copyright infringement cases filed throughout the country by Flo and Eddie of the Turtles, and is an important step towards resolving ongoing legal debates over the royalty obligations of services using sound recordings from the golden era of rock and roll.
Sound recordings created before 1972 are not protected under federal copyright law. “Musical works” – the underlying musical compositions performed in those recordings – have enjoyed federal copyright protection since 1831. In 1909, Congress expanded federal copyright protection for musical compositions to include an exclusive public performance right. It was not until 1971 that Congress extended any federal copyright protection to the recordings of those musical works. This protection took effect only for sound recordings created on or after February 15, 1972, and did not include any public performance right so that music users such as broadcasters would not be disrupted by a new royalty obligation. At that time, Congress made clear that the new prospective sound recording copyright did not preempt any state law protections for pre-1972 sound recordings. In 1995, Congress expanded federal protection for post-1972 sound recordings, creating a limited public performance right for digital audio transmissions only. Terrestrial AM/FM radio broadcasters still pay no royalties for the public performance of sound recordings (although they do pay public performance royalties for the underlying musical compositions).
Flo & Eddie, Inc, the appellant in this case, owns the master sound recordings of various musical performances recorded by the rock band The Turtles prior to 1972. SiriusXM had played the Turtles’ pre-1972 recordings on its satellite and internet radio services – a use which Flo & Eddie had never expressly licensed and for which it received no royalties. Flo & Eddie brought suits against SiriusXM in Florida, New York, and California, asserting that it had the exclusive right of public performance in its pre-1972 sound recordings under the laws of each state and that SiriusXM had violated that right, that SiriusXM’s use of buffer copies violated the exclusive reproduction right under the common law of those states, and various other state law claims based upon the alleged violations of its state law copyrights. In December of 2016, New York’s highest appellate court rejected Flo & Eddie’s claims and found for SiriusXM. Last week, the Florida Supreme Court issued a similar decision.
In Florida, the case was first ruled upon by a federal district court, which agreed with SiriusXM that Florida did not recognize any common law right of public performance for pre-1972 sound recordings. On appeal, the Eleventh Circuit, recognizing a dearth of Florida case law addressing whether Florida recognized a common law copyright in sound recordings, certified the pending questions of Florida law to the Florida Supreme Court. Following a review of the statutory and common law treatment of sound recordings under Florida law, the Florida court reached the ultimate conclusion that “Florida common law does not recognize an exclusive right of public performance in pre-1972 sound recordings,” and that to do so for the first time would be a legislative, not a judicial task.
The court noted that Flo & Eddie had sought an “unfettered” right of public performance for pre-1972 sound recordings – one far broader than the “carefully delineated” right the Congress has recognized for the public performance of post-1972 sound recordings. The court staunchly declined to reach the conclusion that “Congress eventually granted a right in 1972 that was significantly less valuable than the right Flo & Eddie claims has existed all along under the common law in Florida and elsewhere.” Instead, the court found that Florida common law has never recognized an exclusive right of public performance in pre-1972 sound recordings,
Practical considerations and concerns about market disruption underpinned the court’s decision: the opinion noted that recognizing a public performance right in pre-1972 sound recordings would have an immediate impact on consumers and businesses beyond Florida, including stakeholders not party to the case. The district court in the Florida case, and the New York court, had echoed similar concerns in their decisions.
The Florida court also rejected Flo & Eddie’s claims that SiriusXM’s use of “buffer copies” in the transmission of its broadcast violated any post-sale exclusive right of reproduction, agreeing with the Second Circuit that the use of such intermediate copies for the purpose of making otherwise lawful performances is permissible under copyright law. Having rejected Flo & Eddie’s claim that a common law property rights existed and were violated, the court found that Flo & Eddie’s remaining state law claims, all of which were predicated upon the alleged common law copyright violations, also failed.
This decision reinforces the status quo, avoiding a potential upset of the licensing practices of nationwide broadcasters and digital music services. The final outcome of the Flo & Eddie litigation strategy now hinges on the appellate decision in the pending California case. If the California case were to reach a different conclusion than those in Florida and New York, the music broadcasting industries would have two poor choices. Music services could attempt to implement a complex licensing scheme, applying different licensing practices to different states and seeking licenses from thousands of different record companies. Alternatively, services could attempt to program their music channels and stations differently for listeners located in different states, based upon each state’s recognition of pre-1972 performance rights. Unless and until that happens, however, broadcasters and webcasters can breathe a sigh of relief and continue to play those great 60’s hits on their services.
Arent Fox’s Intellectual Property group monitors updates in copyright law. For more information, please contact Paul M. Fakler, Margaret Wheeler-Frothingham, or the Arent Fox professional who regularly handles your matters.