“Exclusive Ownership” Does NOT Include Public Performance Right Under CA Statute; 9th Cir

Flo & Eddie, Inc. v Sirius XM Radio, Inc., 17-55844, 2021 WL 3716788 [9th Cir Aug. 23, 2021]

In the long running “Flo & Eddie” case involving pre-1972 sound recordings and satellite radio, the 9th Circuit holds that the California statute providing state-law copyright protection for pre-1972 sound recordings does not include a right of public performance. Taking a “textualist” approach to the statutory language, the decision is based upon a historical analysis of state law copyright protection: “the term ‘exclusive ownership’ retains a historical meaning that predates the Federal Copyright Act and differs from the modern dictionary's definitions of those two separate words.” The court held that the common law meaning of “exclusive ownership” in the 19th century did not include the right of public performance, and therefore presumed that California did not intend to upend the common law when it used the same language in its statute (amended at various times).

Thus, if “exclusive ownership” under California's common law in 1872 did not include the right of public performance, then that original meaning of “exclusive ownership” remains the only legal meaning unless the California legislature expressly changed it. Flo & Eddie does not point to any evidence suggesting that the California legislature intended to upend the common law understanding of “exclusive ownership” when it enacted its first copyright statute in 1872.

Flo & Eddie, Inc. v Sirius XM Radio, Inc., 17-55844, 2021 WL 3716788, at *8 [9th Cir Aug. 23, 2021]

The lower courts’ grant of summary judgment was reversed and the case was remanded for entry of a judgment consistent with the parties’ contingent settlement agreement.

2nd Circuit Affirms Fractional Licensing for BMI; Tells DOJ To Move To Amend Consent Decree

U.S. v. BMI, No. 16-3830 (2d Cir. Dec. 19, 2017).

The Second Circuit affirmed the District Court's judgment interpreting the consent decree between the Department of Justice and Broadcast Music, Inc. (“BMI”), in which the court ruled that the consent decree neither requires full-work licensing nor prohibits fractional licensing of BMI’s affiliates' compositions.  The DOJ had concluded that the consent decrees require ASCAP and BMI to offer full-work licenses to the exclusion of fractional licenses, which led to the lower court's decision subject to the appeal.

The Second Circuit focused on the plain language of the consent decree.  "This appeal begins and ends with the language of the consent decree."

Florida High Court Says No Common Law Exclusive Right Of Public Performance In Pre-72 Recordings

Floe & Eddie, Inc. v. Sirius XM Radio, No. SC16-1161 (Fl. Oct. 26, 2017).

In the long-running dispute between Flo & Eddie (the Turtles) and Sirius, the Florida Supreme Court held that Florida common law does not recognize an exclusive right of public performance in pre-1972 sound recordings.

The dispute in this case concerns rights in sound recordings of performances of musical works as distinct from rights in the composition of such works. The crucial question presented is whether Florida common law recognizes an exclusive right of public performance in pre-1972 sound recordings. We conclude that Florida law does not recognize any such right and that Flo & Eddie’s various state law claims fail.

Thus, Florida joined in New York, leaving it to the legislature rather than the Courts.

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.

2nd Circuit Closes Out "Turtles" Pre-72 Sound Recording Case In Favor Of Sirius

Flo & Eddie, Inc. v. Sirius, No. 15-1164-cv (2d Cir. Feb. 16, 2017).

After the New York Court of Appeals answered the Second Circuit's certified question that New York common law does not recognize a right of public performance for creators of pre-1972 sound recordings, the Second Circuit reversed the district court’s denial of Sirius's motion for summary judgment and remanded with instructions to grant Sirius's motion for summary judgment and to dismiss the case with prejudice.  The Second Circuit noted that the answer to the certified question was determinative of the other claims.

No Common Law Right of Public Performance In Pre-72 Sound Recordings; Issue Is For Legistlature

Flo & Eddie, Inc. v Sirius XM Radio, Inc., 2016 NYSlipOp 08480 (N.Y. 12/20/2016).

New York's highest court, the Court of Appeals, holds that "New York common-law copyright does not recognize a right of public performance for creators of sound recordings," answering in the negative the Second Circuit's certified question in the Flo & Eddie (Turtles) case against Sirius satellite radio concerning alleged common law copyright infringement of pre-1972 sound recordings.  In a lengthy majority opinion authored by Justice Stein, the Court discussed the historical treatment of sound-recordings at both the federal and state level, analyzed prior decisions in both New York state court and the 2nd Circuit, and ultimately held that "New York common law does not recognize a right of public performance for creators of pre-1972 sound recordings" and that the state legislature should decide "whether recognizing a right of public performance in sound recordings is a good idea.

In addition to prior decisions, the Court addressed the practice of interested stake-holders in the music industry.

Indeed, it would be illogical to conclude that the right of public performance would have existed for decades without the courts recognizing such a right as a matter of state common law, and in the absence of any artist or record company attempting to enforce that right in this state until now. The absence of a right of public performance in sound recordings was discussed at the federal level for years and became acutely highlighted in 1971, upon enactment of the Sound Recording Amendment, and again in 1995, upon enactment of the DPRA. At those times, all interested parties were placed on notice of the statute's limited rights for post-1972 sound recordings. Although parties do not lose their rights merely by failing to enforce them, the fact that holders of rights to sound recordings took no action whatsoever to assert common-law protection for at least the past four decades — when the absence of a comprehensive federal right of public performance for sound recordings was clear — supports our conclusion that artists and copyright holders did not believe such a right existed in the common law.

***

Simply stated, New York's common-law copyright has never recognized a right of public performance for pre-1972 sound recordings. Because the consequences of doing so could be extensive and far-reaching, and there are many competing interests at stake, which we are not equipped to address, we decline to create such a right for the first time now. Even the District Court here, while finding the existence of a common-law copyright of public performance in sound recordings, acknowledged that such a right was "unprecedented," would upset settled expectations, and would "have significant economic consequences" (62 F Supp 3d at 352). Under these circumstances, the recognition of such a right should be left to the legislature.

Notably, the Court did not foreclose the plaintiffs' claims under other common-law theories of recovery, like unfair competition.

Finally, we note that sound recording copyright holders may have other causes of action, such as unfair competition, which are not directly tied to copyright law. Indeed, in the present case, plaintiff prevailed in the District Court on its causes of action alleging unfair competition and unauthorized copying of sound recordings. The Second Circuit concluded that defendant had copied plaintiff's recordings, but postponed the questions of fair use and unfair competition until after our resolution of the certified question (821 F3d at 270 n 4, 272). Thus, even in the absence of a common-law right of public performance, plaintiff has other potential avenues of recovery.

The concurring opinion, by Justice Fahey, agreed that the issue should be determined by the legislature but accepted the Second Circuit's invitation to opine on how to define "public performance" and stated

To that end, while I agree with the conclusion of my colleagues in the majority that the common law of this state does not recognize a right of public performance, I would answer the pertinent part of the certified question in the negative with this caveat: "public performance" does not include the act of allowing members of the public to receive the "on-demand" transmission of particular sound recordings specifically selected by those listeners.

Lastly, Justice Rivera dissented: "New York's broad and flexible common-law copyright protections for sound recordings encompass a public performance right that extends to the outer boundaries of current federal law, and ceases upon preemption by Congress."

ASCAP & BMI Consent Decrees Will Not Be Modified; DOJ Antitrust Div.

Here is a copy of the Statement of the Department of Justice on the Closing of the Antitrust Division’s Review of the ASCAP and BMI Consent Decrees (Aug. 4, 2016).  In short:

... the consent decrees, which describe the PROs’ licenses as providing the ability to perform “works” or “compositions,” require ASCAP and BMI to offer full-work licenses. The Division reaches this determination based not only on the language of the consent decrees and its assessment of historical practices, but also because only full-work licensing can yield the substantial procompetitive benefits associated with blanket licenses that distinguish ASCAP’s and BMI’s activities from other agreements among competitors that present serious issues under the antitrust laws. Moreover, the Division has determined not to support modifying the consent decrees to allow ASCAP and BMI to offer “fractional” licenses that convey only rights to fractional shares and require additional licenses to perform works. Although stakeholders on all sides have raised some concerns with the status quo, the Division’s investigation confirmed that the current system has well served music creators and music users for decades and should remain intact. The Division’s confirmation that the consent decrees require full-work licensing is fully consistent with preserving the significant licensing and payment benefits that the PROs have provided music creators and music users for decades. 

First, the DOJ described the background of the consent decrees.  Thereafter, the DOJ found that there is broad consensus that ASCAP and BMI as currently constituted fill important and procompetitive roles in the music licensing industry; the consent decrees require full-work licensing; modification of the consent decrees to permit fractional licensing by ASCAP and BMI would not be in the public interest; and other modifications to the consent decrees would not be appropriate at this time (e.g., modified to allow PRO members to “partially withdraw” rights and thereby prevent the PROs from granting licenses that include those rights to certain users (in particular, digital music services) but not to other music users).  Further,  the DOJ stated that assuming ASCAP and BMI proceed in good faith, the Division will forbear for one year from any enforcement action based on any purported fractional licensing by ASCAP or BMI.  Also, the DOJ identified certain guidelines and practices that may be useful as the industry moves towards such a shared understanding on fullwork licensing.  Lastly, the DOJ concluded that the consent decrees remain vital to an industry that has grown up in reliance on them.  But the consent decrees are inherently limited in scope, and a more comprehensive legislative solution may be possible and preferable.

Pre-72 Sound Recordings Question Heading To Florida Supreme Court

Flo & Eddie v. Sirius XM, No. 15-13100 (11th Cir. Jun. 29, 2016).

In "The Turtles" appeal from a decision granting Sirius XM summary judgment on the common law copyright infringement claim concerning the public performance of pre-1972 sound recordings, the 11th Circuit deferred its decision pending a determination of the state-law question by Florida's highest court.  The lower court had decided, in favor of Sirius, that Florida common law does not recognize an exclusive right of performance.  On appeal, the 11th Circuit discussed an old (1943) Florida Supreme Court case involving magic tricks and found that the case "indicates that there is at least a significant argument that Florida common law may recognize a common law property right in sound recordings."  However, the 11th Circuit also indicated that the old magic trick case indicated that "publication" of the intellectual property could result in termination of the common law copyright.

Neither the Supreme Court of Florida nor any of the Florida District Courts of Appeal have addressed whether Florida common law would recognize copyright protection for sound recordings, and if so, whether the sales to the public of Flo & Eddie’s sound recordings or the public performance thereof would constitute a publication or dedication to the public which would terminate the copyright protection in whole or in part.

Accordingly, the 11th Cir. certified the following questions to the Florida Supreme Court.

Because Florida law is not clear on these matters, we certify to the Supreme Court of Florida the questions of whether Florida common law copyright extends to pre-1972 sound recordings and, if so, whether it includes an exclusive right of public performance and/or an exclusive right of reproduction. We also certify the question of whether Flo & Eddie has forfeited any common law copyright by publication. Additionally, to the extent that Florida recognizes a common law copyright in sound recordings including a right of exclusive reproduction, we certify the question of whether the backup or buffer copies made by Sirius constitute infringement of Flo & Eddie’s common law copyright.

Lastly, to the extent that Florida does not recognize a common law copyright in sound recordings, or to the extent that such a copyright was terminated by publication, the 11th Circuit certified the question of whether plaintiff nevertheless has a cause of action for common law unfair competition / misappropriation, common law conversion, or statutory civil theft.

Remastering Defeats Claims of Pre-72 Sound Recording Infringement

ABS Entertainment, Inc. v. CBS Corp., No. 15-cv-6257 (C.D. Cal. May 30, 2016) [Doc. 104].

In a putative class-action alleging that CBS was publicly performing pre-1972 sound recordings in violation of California state law, the Court granted defendants summary judgment because defendants had only publicly performed post-1972 remastered versions of Plaintiffs' works which are governed by federal copyright law.  The Court concluded that a sound engineer's remastering of pre-1972 sound recordings -- through subjectively and artistically altering the work's timbre, spatial imagery, sound balance, and loudness range, but otherwise leaving the work unedited -- is entitled to federal copyright protection.  Focusing on whether the works were derivative, the Court considered the parties' evidence of originality (or lack thereof).  Further, the Court focused on the fact that the remastered sound recordings which CBS actually performed were created pursuant to authorization from either Plaintiffs or their predecessors.

Record Company Copyright Claims Against Amway Survive Dismissal

Alticor Inc. v. UMG  Recordings, Inc., No. 6:14-cv-542 (M.D. Fla. Dec. 10, 2015).

In a complex dispute between mutliple record companies and Amway concerning alleged direct, vicarious and contributory infringement of pre- and post-'72 sound recordings in over 1,000 videos, the Court dismissed Amway's Rule 12(b)(6) motion to dismiss the record companies counter-claims.  First, the Court found that the record companies had adequately alleged violations of their exclusive right of public performance.  Amway argued that the "public performance right" applicable to musical compositions and other works was inapplicable to sound recordings; the Court rejected that argument.  Second, the Court found that even though the Copyright Act does not conver a "making available" right, the act of making a work available for use of a direct infringer was relevant to the record companies' indirect infringement claims.  Third, the Court agreed with Amway that Florida common law does not create a public performance right for pre-72 recordings, but nonetheless held that it would not grant Amway partial relief under Rule 12(b)(6).

Florida Court Rejects Pre-72 Sound Recording Rights in Turtles/Sirius Case; Contrary To NY and CA Decisions

Flo & Eddie, Inc. v. SiriusXM, No. 13-23182-CIV-GAYLES/TURNOFF (S.D. Fla. dated June 22, 2015).

A Florida federal court granted defendant Sirius summary judgment as to liability on plaintiff Flo & Eddie's (the Turtle's) common-law copyright infringement claims, although New York and California courts have found differently.  The Florida federal court observed that Florida is different from New York and California, inasmuch as as there is no Florida legislation covering sound recordings nor is there a bevy of case law interpreting common law copyright related to the arts.  "The Court finds that the issue of whether copyright protection for pre- 1972 rec ordings should include the exclusive right to public performance is for the Florida legislature."  Accordingly, the Court found that Florida common law did not provie plaintiff with the exclusive right of public performance in the Turtles' sound recordings.  Further, the Court found that back-up and buffer copies made by Sirius were not unlawful reproductions.  Because the Court found that Sirius had not infringed any of Plaintiff's copyrights, the Court also dismissed plaintiff's related claims for unfair competition, conversion and civil theft (all of which were based on alleged copyright infiringement).

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.

Copyright Royalty Board Royalty Rates For Performance Of Sound Recordings Affirmed

Music Choice v. Copyright Royalty Board, No. 13-1174/13-1183 (D.C. Cir. Dec. 19, 2014).

In 2013, the Judges of the Copyright Royalty Board (CRB) issued a determination setting royalty rates and defining terms for statutorily defined satellite digital audio radio services and preexisting subscription services.  SoundExchange, which collects and distributes royalties, argued that the CRB arbitrarily set rates too low and that the CRB erred in defining "Gross Revenue" and eligible deductions.  Music Choice, which provides music-only television channels, also appealed arguing that the Judges set the rates too high.

The Court of Appeals held that the CRB acted within its broad discretion to set rates for compulsory licenses of the digital performance of sound recordings, and therefore affirmed the determination of royalty rates.  The appellate court found that the CRB did not exercise its broad discretion in an arbitrary or capricious manner when setting royalty rates for satellite digital audio radio services and preexisting subscription services.

For satellite digital audio radio services, the rate was set at 11%; in order to avoid disruption, the CRB adopted a staggered schedule beginning at 9% in 2013 and increasing by 0.5% annually until achievement of 11% in 2017.

For preexisting subscription services, the rate was set at 8.5% with an upward adjustment for Music Choice's planned channel expansion.  The rate would start at 8% in 2013 and increase to 8.5% for 2014 through 2017.

New York Common Law Protects Public Performance of Pre-1972 Sound Recordings; NY Federal Court Joins California Federal Court

Flo & Eddie, Inc. v. Sirius XM, Inc., No. 1:13-cv-05784 (S.D.N.Y. filed Nov. 14, 2014) [Doc. 88].

Joining a California federal court in a parallel case, a New York federal court found that Flo & Eddie (the Turtles) have state common law claims against Sirius XM concerning the public performance of pre-1972 sound recordings.  "In short, general principles of common law copyright dictate that public performance rights in pre-1972 sound recordings do exist.  New York has always protected public performance rights in works other than sound recordings that enjoy the protection of common law copyright.  Sirius suggests no reason why New York -- a state traditionally protective of performers and performance rights -- would treat sound recordings differently."

First, the court found that plaintiff holds valid common law copyrights in the Turtles' sound recordings.  "The Turtles originally acquired a common law copyright in their sound recordings by expending time, effort, money and skill to create them.  That copyright was then transferred...eventually to Flo and Eddie, which now owns the sound recordings."

Second, the Court found that Flo and Eddie's common law copyright provides exclusive rights to reproduce and publicly perform Turtles recordings.  As to the absence of prior litigation on the matter, "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 court did not read too much into the fact that New York courts have never squarely addressed this particular feature of state copyright law in the context of sound recordings.

Third, the Court found that Sirius infringed plaintiff's common law copyright and engaged in unfair competition (misappropriation).  In reproducing Turtles recordings, Sirius acted without authorization.  Further, to the extent that distribution is an element of common law copyright, the Court found that publicly performing sound recordings is an act of distribution.

Moreover, even though the Court found that there is a common law fair use defense parallel to the federal fair use defense, Sirius XMs creation of multiple complete copies of the sound recordings could not be considered a fair use.  "It is a matter of economic commons sense that Sirius harms Flo and Eddie's sales and potential licensing fees (even if the latter market is not yet extant) by publicly performing Turtles sound recordings."

Lastly, the Court rejected Sirius XM's argument that plaintiff's claims are barred by the constitutional Dormant Commerce Clause, which provides that states may not interfere with interstate commerce.  U.S. Const. art. I, sec. 8.  The court found that the argument is a "red herring" because New York does not "regulate" anything by recognizing common law copyright.  Sirius objects to a "general principle respecting the liability of all persons within the jurisdiction of" New York, which under the 1876 (yes, 1876) Supreme Court decision Sherlock v. Alling, 93 U.S. 99,  is not a state-imposed regulation that might affect interstate commerce.

No Interlocutory Appeal Of Pre-72 Sound Recording Liability Holding In Turtles v Sirius Case

Flo & Eddie, Inc. v. Sirius XM Radio, Inc., No. 13-cv-5693 (C.D. Cal. Nov. 20, 2014).

The District Court denied Sirius XM's motion to certify for interlocutory appeal the Court's earlier order granting partial summary judgment.  The earlier order granted plaintiff summary judgment to the extent that its claims were premised on Sirius XM's public performance of plaintiff's pre-1972 sound recordings, ruling that owners of sound recordings have the exclusive right to publicly perform their recordings under California Civil Code 980(a)(2).  28 USC 1292(b) provides a means for litigants to bring an immediate appeal of a non-final order with the consent of both the federal district court and the federal court of appeals.  The district court denied the motion because, "[a]t this stage in the litigation and under the operative scheduling order governing the case, certification of the Order for immediate appeal would delay rather than materially advance the termination of the litigation".  Continuing, the district court observed that the case is moving swiftly toward trial and a final resolution that will be appealable to the Ninth Circuit in the customary manner.  While interpretation of Cal. Civ. Code 980(a)(2) is an issue of controlling law, an immediate appeal would not speed up the resolution of the case.

California Law Protects Public Performance Right In Pre-1972 Sound Recordings; Turtles Granted Summary Judgment Against Sirius

Flo & Eddie Inc. v. Sirius XM Radio Inc., et al., No. 2:13-cv-05693-PSG-RZ (C.D. Cal. filed Sep. 22, 2014) (Doc. 117).

Plaintiff, owner of all rights to The Turtles’ master sound recordings (including the hit "Happy Together"), was granted summary judgment against Sirius XM on its causes of action for violation of California
copyright law (California Civil Code § 980(a)(2)), California’s Unfair Competition Law (Cal. Bus. & Prof. Code §§ 17200, et seq.), and common law misappropriation and conversion, but only so far as the claims were premised on Sirius XM’s public performance of Plaintiff's recordings, not its alleged reproductions for which there were outstanding questions of fact.

Plaintiff argued that Sirius XM was liable for two distinct unauthorized uses of its sound recordings: (1) publicly performing its recordings by broadcasting and streaming the content to end consumers and to secondary delivery and broadcast partners, and (2) reproducing the recordings in the process of operating its satellite and Internet radio services.  Plaintiff contended that, in California, copyright ownership of a pre-1972 sound recording includes the exclusive right to publicly perform the recording; therefore, if anyone wishes to publicly perform such a recording, they must first seek authorization from the recording’s owner.  The Court agreed.

First, the Court found that California statutory and common law governs the rights that attach to pre-1972 sound recordings because the Federal Copyright Act does not apply to those earlier recordings and explicitly allows states to continue to regulate them.  Second, the Court examined the provision of California’s copyright statute that contains a provision directly addressing pre-1972 sound recordings. Cal. Civ. Code § 980(a)(2) ("The author of an original work of authorship consisting of a sound recording initially fixed prior to February 15, 1972, has an exclusive ownership therein until February 15, 2047, as against all persons except one who independently makes or duplicates another sound recording that does not directly or indirectly recapture the actual sounds fixed in such prior recording, but consists entirely of an independent fixation of other sounds, even though such sounds imitate or simulate the sounds contained in the prior sound
recording").

The crucial point of statutory interpretation for this case was whether “exclusive ownership” of a sound recording carries within it the exclusive right to publicly perform the recording.  The Court’s textual reading of § 980(a)(2) was that the legislature intended ownership of a sound recording in California to include all rights that can attach to intellectual property, save the singular, expressly-stated exception for making “covers” of a recording.

The Court further found that the rule of statutory construction requiring express statements to alter the common law did not apply because, when the legislature passed § 980(a)(2), there was no common law rule in California rejecting public performance rights in sound recording ownership.  Also, the legislative history of § 980(a)(2) and its comparison to the Federal Copyright Act bolstered the Court’s plain textual reading of the statute that sound recording ownership is inclusive of all ownership rights that can attach to intellectual property, including the right of public performance, excepting only the limited right expressly stated in the law (that the owner does not have the exclusive right to record and duplicate “covers").  Lastly, the Court found further support for its textual reading of the statute as inclusive of the right of public performance from the only two courts that have ruled on or discussed this right under § 980(a)(2).  Accordingly, the Court granted summary judgment on copyright infringement in violation of § 980(a)(2) in favor of Plaintiff.

Borrowing the violation of § 980, the Court found that Sirius also violated California's Unfair Competition Law because Sirius publicly performs Plaintiff's sound recordings without authorization to do so.  Also, the Court found that Sirius XM’s unauthorized performances established conversion damages in the form of license fees that Sirius XM should have paid Plaintiff in order to publicly perform its recordings.  The foregone licensing or royalty payments that Sirius XM should have paid before publicly performing the recordings also constituted misappropriation.

Lastly, the Court found that Sirius could not rely on the doctrine of laches because this was an action at law seeking money damages, and laches is an equitable defense.  Accordingly, the Court granted Plaintiff's motion for summary judgment on all causes of action, but only so far as the claims are premised on Sirius XM’s public performance of the recordings, not its alleged reproductions.

Beatles Tribute Band Trademark Registration Denied For Entertainment Services Because Specimen Did Not Show Live Performance

In re Titan Music, Inc., Serial No. 77344197 (TTAB Aug. 20, 2014).

Trademark applicant "Titan," a Beatles cover band, filed an application to register the mark FAB AGAIN for “entertainment in the nature of visual and audio performances, namely, musical band, rock group, gymnastic, dance, and ballet performances” in International Class 41.  Registration was denied, and the TTAB affirmed the denial.

The issue with registration was was the specimens provided by the applicant, which were print-outs from CDBaby and Last.fm.  The TTAB found:

Applicant’s specimens may show use of the mark on or in connection with goods (compact discs featuring music) or services (streaming of audio material via a global computer network); however, the specimens do not show use of the mark in connection with “entertainment in the nature of visual and audio performances, namely, musical band, rock group, gymnastic, dance, and ballet performances.” It is not enough for Applicant to be a provider of services; Applicant also must have used the mark to identify the identified services for which registration is sought.  [Cit. om.] As indicated above, for entertainment services such as those rendered by a musical band, the performance must be live. And while a performance can be recorded, the recording is not itself a performance.

This decision should not be read as finding that the mark FAB AGAIN, as actually used on the specimens, would not be perceived by potential purchasers as a trademark (for compact discs featuring music) or a service mark (for streaming of audio material via a global computer network). The problem is that the specimens of record fail to show use of the mark FAB AGAIN in connection with the services identified in the application, that is, “entertainment in the nature of visual and audio performances, namely, musical band, rock group, gymnastic, dance, and ballet performances.”

ASCAP and BMI Both Submit Comments Regarding Consent Decrees

Both ASCAP and BMI submitted public comments concerning the Department of Justice's review of the ASCAP and BMI consent decrees.  ASCAP's comments are here.  BMI's are here.

Monopolization Claim Against SESAC Not Subject To Dismissal

Radio Music License Committee, Inc. v. SESAC, Inc. , No. 2:12-cv-5807 (E.D. Pa. June 26, 2014).

Plaintiff sued the public performance rights organization SESAC, seeking declaratory and injunctive relief on behalf of its member radio stations under §1 and §2 of the Sherman Antitrust Act (15 U.S.C. §§1 & 2) and §16 of the Clayton Act (15 U.S.C. §26).  Plaintiff alleged three counts: horizontal price fixing, group boycott/refusal to deal, and monopolization.  The Court granted SESAC's motion to dismiss the price fixing and refusal to deal claims, but denied the motion as to plaintiff's monopolization claim.  With respect to monopolization, the Court found: "The hallmark of anticompetitive conduct is harm to competition, but the danger of anticompetitive conduct is harm to the consumer.  The most common characteristics of unlawful monopolies are price increases, output decreases, and a deterioration in quality and service, all of which the antitrust laws seek to minimize.  That is precisely what plaintiff has alleged here. SESAC’s anticompetitive conduct has driven up the price of copyright licenses and deteriorated the quality of service insofar as customers only have the option of purchasing a blanket license. The court believes that plaintiff has alleged a plausible claim for which relief can be granted under §2 of the Sherman Act."

6th Circuit: Bar Owner Liable For Vicarious Copyright Infringement

Broadcast Music, Inc. v. Meadowlake, Ltd. et al., No. 13-3933 (6th Cir. June 6, 2014) [decision].

The Sixth Circuit holds that an individual, who owned 95% a limited liability company that owned a restaurant that offered dancing and live music, was liable for vicarious copyright infringement (public performance right).  As the company’s chief (95%) owner and the restaurant’s ultimate decision maker, the individual defendant had the right and ability to supervise the infringing performances.  According to the 6th Circuit, "This case indeed falls within the heartland of vicarious liability."  The Court rejected the defendant's argument that his son was the day-to-day manager of the restaurant, that he claimed ignorance of the infringement, and that ownership via a limited liability company shielded liability.  "Either way, Roy profited from infringement at his restaurant while refusing to exercise his right to stop it. And so either way, Roy remains vicariously liable."