9th Cir. Certifies Questions To California Supreme Court in Pre-72 Sound Recording Case

FLO & EDDIE, INC. V. PANDORA MEDIA, INC., No. 15-55287 (9th Cir. Mar. 15, 2017).

In a case concerning whether California recognizes a common law copyright in the right of public performance for pre-1972 sound recordings, the 9th Circuit certified the following questions to the California Supreme Court:

1. Under section 980(a)(2) of the California Civil Code, do copyright owners of pre-1972 sound recordings that were sold to the public before 1982 possess an exclusive right of public performance?

2. If not, does California’s common law of property or tort otherwise grant copyright owners of pre-1972 sound recordings an exclusive right of public performance?

The certification is similar to the questions certified by the 2nd Circuit to the New York Court of Appeals in a companion case involving Sirius.  See fn. 2 and fn. 6.  The 9th Circuit stated:

We agree with our sister circuits that certification is the best way to proceed on these issues, especially in California. As an incubator of both musical talent and technological innovation, California has a significant interest in the appropriate resolution of the certified questions. Resolution of these questions will likely affect the state and industries within the state in a variety of ways, and is therefore best left to the California Supreme Court.

Pandora Pre-1972 Suit Settles

Various news outlets report that the Pandora pre-1972 sound recording litigation has settled for $90 million.

FCC Denies ASCAP's Challenge To Pandora's Acquisition Of FM Radio Station

In re Pandora Radio LLC, FCC 15-129 (FCC released Sep. 17, 2015).

The FCC denied ASCAP's motion for reconsideration of (1) the Media Bureau's decision granting the application to assign the license of KXMZ FM radio station in South Dakaota to Pandora; and (2) the Commission's declaratory ruling, which held that it would serve the public interest to permit a widely dispersed group of shareholders to hold aggreage foreign ownership in Pandora in excess of the 25% benchmark set out in Section 310(b)(5) of the Communications Act of 1934 (subject to certain conditions).  The FCC re-affirmed its finding that ASCAP lacked standing to challenge the license assignment.  ASCAP also claimed that the Bureau should have examined the rationale and motivation behind Pandora's transaction, specifically, Pandora's hope by acquiring the radio station to qualify for lower music license royalty rates.  The FCC found that "whatever the impact of its acquisition on such royalty rates may be, Pandora has undertaken to offer programming responsive to the interests of its local listeners, and ASCAP has failed to identify any substantial and matieral question about Pandora's ability to provide such service in the public interest."

Second Circuit Affirms ASCAP Rate Court In Pandora Dispute Over Partial Withdrawals And License Rate

Pandora Media, Inc. v. ASCAP, 14-1158-cv(L) (2d Cir. May 6, 2015).

The Second Circuit Court of Appeals affirmed the ASCAP "rate court's" decision: (1) granting Pandora summary judgment that the ASCAP consent decree unambiguously precludes partial withdrawals of public performance licensing rights; and (2) setting the rate for the Pandora‐ASCAP license for the period of January 1, 2011 through December 31, 2015 at 1.85% of revenue.

ASCAP contended that publishers may withdraw from ASCAP its right to license their works to certain new media music users (including Pandora) while continuing to license the same works to ASCAP for licensing to other users.  The appellate court agreed with the district court’s determination that the plain language of the consent decree unambiguously precludes ASCAP from accepting such partial withdrawals. Also, the Court found that under the circumstances, it was not clearly erroneous for the district court to conclude, given the 6evidence before it, that a rate of 1.85% was reasonable for the years  in question.

NYTimes Article re Pandora

Ben Sisario, Pandora Making Bid to Unruffle Music World (Feb. 23, 2015 New York Times, B1)

This article discusses how Pandora is trying to work with labels and artist managers by opening its performance data, and also by experimenting with artist promotions.

Rate Court Sets ASCAP Fee For Pandora

IN RE PETITION OF PANDORA MEDIA, INC., No. 12 Civ. 8035 (S.D.N.Y. filed 03/18/14) [Doc. 738].

In a lengthy decision, the ASCAP rate court held that: "The headline rate for the ASCAP-Pandora license for the years 2011 through 2015 is set at 1.85% of revenue for every year of the license term. Pandora is entitled to take a deduction for any direct payments to publishers made following their partial withdrawals from ASCAP."

BMI Rate Court Holds Withdrawals Of Digital Rights Ok

BMI v. Pandora Media, Inc., 2013 ILRC 3301, No. 13-cv-4037 (S.D.N.Y. Dec. 19, 2013).

The BMI rate court (District Court Judge Louis Stanton) holds that when BMI no longer is authorized by music publisher copyright holders to license their compositions to Pandora (and other New Media Services), those compositions are no longer in BMI's "repertory" and BMI can no longer license them to Pandora or any other applicant.  Accordingly, the Court denied Pandora's motion for partial summary judgment.  The holding is contrary to the ASCAP rate court's finding.

The BMI court focused on section 106 of the Copyright Act and a copyright owners right to "license, or not license, the performance of their compositions as they see fit.  In the exercise of that right the publishers have agreed with BMI to withdraw their New Media performance licensing rights from Pandora and New Media Services.  That is well within their power as copyright holders."  The Court held that songs that publishers have withdrawn New Media licensing rights are not in BMI's new media repertory and therefore BMI cannot deal in or license those compositions to anyone.  "BMI's repertory consists of compositions whose performance BMI 'has the right to license or sublicense.'"

Notably (in fn. 4), the BMI rate court acknowledged that its finding is contrary to that of the ASCAP rate court (Judge Cote).  The BMI court stated: "The inconsistency is just a difference of view of the power of the application of Section 106 and the copyright holders' rights under the Copyright Law, and will be resolved by the Court of Appeals for the Second Circuit or decree amendment procedures, or managed commercially."

EMI and Sony Permitted To Intervene In ASCAP/Pandora Rate Court Matter

In re Petition of Pandora Media, Inc. [related to US v. ASCAP]; No. 1941-cv-01395 (S.D.N.Y. filed Dec.13, 2013) [Doc. 733].

EMI and Sony moved to intervene in the Pandora rate-court proceeding (ASCAP) after the Court's summary judgment opinion issued on September 17, 2013 in which the Court held that the Second Amended Final Judgment ("AFJ2") prevented ASCAP from withholding from Pandora the rights to compositions in its repertory while licensing those compositions to other users. In re Pandora Media, Inc., 12 Civ. 8035 (DLC), 2013 WL 5211927 (S.D.N.Y. Sept. 17, 2013) (“September 17 Opinion”). The summary judgment practice was precipitated by putative publisher partial withdrawals of rights from ASCAP.

The Court analyzed Rule 24 of the Federal Rules of Civil Procedure.  It considered whether the publishers' motion to intervene was timely (mixed finding), and whether the publishers possess an interest related to the subject of the action (yes).  Ultimately, the Court granted the motion to intervene on the condition that the Publishers "may not raise new arguments on appeal that were not raised by ASCAP, with the exception of the Section 106 of the Copyright Act argument".

ASCAP Required To License ALL Songs In Its Repertory To Pandora

In re Petition of Pandora Media, Inc., No. 1:12-cv-08035-DLC (S.D.N.Y. Opinion & Order filed 09/17/13) [Doc. 70], related to U.S. v. ASCAP, No. 41 Civ. 1395.

ASCAP must license all songs in its repertory to Pandora, even though certain music publishers have purported to withdraw from ASCAP the right to license their compositions to “New Media” services such as Pandora, holds the ASCAP rate court in interpreting the consent decree under which ASCAP operates.  "Because the language of the consent decree unambiguously requires ASCAP to provide Pandora with a license to perform all of the works in its repertory, and because ASCAP retains the works of 'withdrawing' publishers in its repertory even if it purports to lack the right to license them to a subclass of New Media entities, Pandora’s motion for summary judgment is granted."

In April 2011, ASCAP began to allow members to withdraw from ASCAP its rights to license their music to New Media outlets, while allowing ASCAP to retain the right to license those works to other outlets.  Subsequently, several music publishers withdrew their New Media licensing rights from ASCAP, and Pandora then engaged in license negotiations directly with those publishers.  On July 1, 2013, Pandora filed a motion for summary judgment, seeking a determination that “ASCAP publisher ‘withdrawals’ [of New Media rights] during the term of Pandora’s consent decree license do not affect the scope of the ASCAP
repertory subject to that license."  ASCAP argued that “’ASCAP repertory’ refers only to the rights in musical works that ASCAP has been granted by its members as of a particular moment in time.” Pandora argued that ASCAP repertory” is a “defined term[] articulated in terms of ‘works’ or ‘compositions,’ as opposed to in terms of a gerrymandered parcel of ‘rights.’” The Court found that Pandora was correct.  “ASCAP repertory” is defined in the consent decree in terms of “works” and not “individual rights” in works with respect to classes of potential licensees.  The Court also held that Pandora's subsequent negotiations with the publishers did not alter interpretation of the consent decree because Pandora is not a party to the consent decree.

BMI Brings Petition For Pandora Blanket License

Broadcast Music, Inc. v. Pandora Media, Inc., No, 1:13-cv-4037 (S.D.N.Y. filed June 13, 2013).

BMI seeks a determination of license fees/terms for a blanket license covering all BMI musical compositions performed on the streaming service Pandora.

Royalties "Trickle" - New York Times

Ben Sisario, "As Music Streaming Grows, Royalties Slow to a Trickle", New York Times (published Jan. 28, 2013).  Link here.

Blurb from NYTimes: "Companies like Spotify and Pandora are catching fire, but the money paid to artists is often tiny, perhaps half a penny per play, which has the music industry on edge."