SoundExchange/Sirius Royalty Dispute Belongs Before Copyright Royalty Board, Not Federal Court

SoundExchange, Inc. v. Sirius XM Radio, Inc., No. 1:13-cv-1290 (D.D.C. filed August 26, 2014).

Pursuant to the "primary jurisdiction" doctrine, a federal district court judge stayed a royalties dispute between SoundExchange and Sirius, saying that the dispute belongs before the Copyright Royalty Board.  The parties already had met before the CRB in two prior proceedings, setting royalty rates for the digital broadcast of sound recordings on satellite radio  SoundExchange brought an action in federal court alleging that Sirius underpaid royalties owed from 2007-2012 (the subject of the first CRB proceeding).  The instant dispute centered on the meaning of the term "Gross Revenues" (a percentage of which are the royalties owed SoundExchange), and Sirius's alleged reductions/exclusions therefrom based on pre-72 recordings and Sirius' premiere subscriber package.  The Court agreed with Sirius that the disputes "are best suited to review in the first instance by the CRB. ... [T]he technical and policy expertise of the CRB makes referral to that body appropriate."  Because neither party was asking for a change in the royalty rates, only a clarification, the CRB was found to have continuing jurisdiction.

Aimee Mann Copyright Claim Survives Dismissal Based On Terminated License

Aimee Mann v. MediaNet Digital, Inc., et al., No. 2:13-cv-05269 (C.D. Cal. filed 11/27/13) [Doc. 26].

Plaintiff Aimee Mann (“Mann”), a songwriter and recording artist, brought this copyright infringement action against Defendant MediaNet Digital, Inc. (“MediaNet”), f/k/a MusicNet, a distributor of streaming music, online radio, and music downloads to companies like Songza, Stub Hub, Soundtracker, MTV, Yahoo Music, and Time Warner Cable (among others).  MediaNet moved to dismiss the copyright claims and Plaintiff's claim for rescission of a license agreement.  The Court denied the motion to dismiss the copyright claims, but dismissed the rescission claim with leave to replead.

On the copyright claims, MediaNet argued that Mann’s claim for direct infringement should be dismissed because: (i) MediaNet had a valid license at all relevant times and therefore cannot be liable for copyright
infringement, and (ii) the License Agreement was not terminated on December 4, 2006 as a matter of
law.  The Court found that MediaNet did not have a statutory compulsory license (17 U.S.C. 115).  The Court also found that the 2003 License Agreement was no longer in effect.  Relying on New York General Obligations Law § 5-903, Mann asserted that because MediaNet failed to alert her to the existence of the auto-renewal provision, the License Agreement was not automatically renewed after its initial term ended on December 4, 2006.  The Court agreed that the auto-renewal of the License Agreement is unenforceable under § 5-903. As such, Mann’s allegation that MediaNet exploited her pre-December 5, 2003 and post-December 4, 2006 compositions after the initial term of the License Agreement stated a claim for copyright infringement.  The Court further found that Mann had stated claims for secondary copyright liability (contributory, inducing and vicarious liability).

However, Mann's claim for rescission was dismissed with leave to replead.  The Court found rescission is an equitable remedy and that that Mann had failed to explain why the non-payment of royalties could not be adequately remedied by monetary damages. "This failure is fatal to her rescission claim."

Satellite Radio Royalty Rate Hike Reported

Sirius XM reports in an EDGAR filing:


"On December 14, 2012, the Copyright Royalty Board, or CRB, of the Library of Congress issued its determination regarding the royalty rate payable by us under the statutory license covering the performance of sound recordings over our satellite digital audio radio service, and the making of ephemeral (server) copies in support of such performances, for the five-year period starting January 1, 2013 and ending on
December 31, 2017. Under the terms of the CRB’s decision, we will pay a royalty of 9.0% of gross revenues, subject to certain exclusions, for 2013, 9.5% for 2014, 10.0% for 2015, 10.5% for 2016, and 11% for 2017. The rate for 2012 is 8.0%."

Statutory Damages Awarded To EMI For Willful Infringement

EMI Entertainment v. Karen Records, Inc. et al, No. 1:05-cv-00390 (S.D.N.Y. filed Aug. 26, 2011) (Holwell, J.) [Doc. 110 Memorandum Opinion and Order].

The court found that defendants willfully infringed EMI's copyrights in the four musical compositions at issue and awarded EMI $25,000 for infringement of each composition (total $100,000) for which all defendants -- corporate and individual -- shall be jointly and severally liable.

The Court had previously granted EMI summary judgment on liability as to sales on or after January 14, 2002 of albums containing the four musical compositions. 603 F. Supp.2d 759 (SDNY 2009). Now, the Court analyzed EMI's statutory damages request and found that defendants infringement was willful based on defendants industry experience and copyright ownership, prior lawsuit regarding similar practices and a specific warning. The next step was determining the amount of damages ($25,000 per work) and then analyzing whether the individual defendants should be jointly and severally liable. They were because they had the right and ability to supervise the infringing activity and a direct financial interest in such activities.

Copyright Royalty Board Final Rule

37 CFR Part 380: Digital Performance Right in Sound Recordings and Ephemeral Recordings;

Final Rule. The Copyright Royalty Judges announced their final determination of the rates and terms for two statutory licenses, permitting certain digital performances of sound recordings and the making of ephemeral recordings, for the period beginning January 1, 2011, and ending on December 31, 2015. (Effective Date March 9, 2011).

For example, a Commercial Webcaster will pay a royalty of: $0.0019 per performance for 2011; $0.0021 per performance for 2012; $0.0021 per performance for 2013; $0.0023 per performance for 2014; and $0.0023 per performance for 2015. Depending on the number of "tuning hours," a Noncommercial Webcaster will pay an annual per channel or per station performance royalty of $500 in 2011, 2012, 2013, 2014, and 2015; or, $0.0019 per performance for 2011; $0.0021 per performance for 2012; $0.0021 per performance for 2013; $0.0023 per performance for 2014; and $0.0023 per performance for 2015. (Section 380.3).

Ringtone Royalty Rate Approved By DC Circuit

RIAA v. Librarian of Congress, No. 09-1075 (D.C. Cir. decided June 22, 2010).

Rebuking a challenge by the Recording Industry Association of America, the DC District Court upheld a decision by the Copyright Royalty Board setting the ringtone "penny-rate" royalty rate at $0.24. The court also upheld a new late fee, 1.5%, for overdue royalty payments.

The Board's decision was "reasonable and reasonably explained."