Appeals Court Agrees to Review SiriusXM's Challenge Over Pre-1972 Music

The 2nd Circuit will take up the issue of whether New York protects the public performance of older songs — and whether that violates the U.S. Constitution.

SiriusXM's warning to a federal appeals court that broadcasters might pull all pre-1972 sound recordings from the airwaves has paid off. On Wednesday, the satellite radio giant got the 2nd Circuit to grant its petition for a review just as lawmakers get set to take up the issue as well.

When Congress amended copyright law in the 1970s, only sound recordings authored after 1972 were given protection.

In a series of lawsuits beginning in 2013, the owners of pre-'72 songs looked to state misappropriation and unfair competition laws to do something about those, like SiriusXM and Pandora, that were publicly performing their works. Although free radio airplay has been comfortably assumed for quite some time, California and New York judges have recently given legal victories to those owners of sound recordings who are suing.

SiriusXM aimed to appeal New York federal judge Colleen McMahon's decision last November denying its summary judgment motion in a lawsuit brought by Flo & Eddie of The Turtles. In her opinion, the judge addressed whether New York law protected public performance and wrote that "acquiescence by participants in the recording industry in a status quo where recording artists and producers were not paid royalties while songwriters were does not show that they lacked an enforceable right under the common law — only that they failed to act on it."

The consequences were big and not just because Sirius XM has spent years broadcasting millions of older songs without paying royalties specifically for such tunes. 

As SiriusXM told the 2nd Circuit in its attempt to get a higher authority, "Absent immediate review, the district court's ruling leaves SiriusXM and other broadcasters with tremendous uncertainty, faced with a choice between stopping the broadcast of pre-1972 recordings to the public's detriment; submitting to shotgun negotiations with sound recording owners; or facing massive liability as this case and others wend their way through the courts."

SiriusXM is presenting two questions to the 2nd Circuit.

First, "Under New York law, do the holders of common law copyrights in pre-1972 sound recordings have, as part of the bundle of rights attendant to their copyright, the right to exclusive public performance?"

Flo & Eddie, as well as all the big labels, contend the answer is "yes" because state legislatures had opportunities for carving out public performance from the "exclusive rights" enjoyed by pre-72 owners — yet they didn't. SiriusXM, in turn, argues "no" because there's been a lack of case law supporting the proposition. It also argues that a performance right can only be created legislatively.

Second, "Does the Dormant Commerce Clause prohibit the State of New York from enforcing a property right that it recognizes at common law?"

If the Supreme Court ever gets involved in this issue, it might be here. Although SiriusXM spends less time on this issue in its brief, it could have been an important consideration in why the 2nd Circuit is taking up a review rather than kicking it to a state appeals court. Essentially, SiriusXM lawyers Daniel Petrocelli and Robert Schwartz are arguing that it broadcasts to millions of subscribers across the country and that the "practical effect of applying a New York performance right to SiriusXM would thus be to require SiriusXM to comply with New York law nationwide."

A schedule on when the arguments take place will come soon. Meanwhile, Jerrold Nadler (D-NY), Marsha Blackburn (R-TN), John Conyers Jr. (D-MI), and Ted Deutch (D-FL) introduced on Monday the "Fair Play Fair Pay Act," which among other things, would establish a public performance right under federal law for recordings made before 1972.

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