Plaintiff Flo & Eddie Inc. was formed in 1971 and is wholly owned and controlled by Howard Kaylan and Mark Volman, two of the founding members of the band The Turtles, which recorded a number of hit songs in the 1960s. Today, Flo & Eddie owns all rights to The Turtles’ master recordings, which it has exploited for the past four decades by licensing the rights. Defendant Sirius XM Radio Inc. (Sirius) operates subscription-based satellite and Internet radio services. While Flo & Eddie has never licensed the rights to any radio station to publicly perform its recordings, Sirius allegedly publicly performed 15 of Flo & Eddie’s pre-1972 recordings without paying royalties, as well as allegedly copied some of Flo & Eddie’s recordings to databases and libraries, used small segments of songs in the creation of voice transitions, copied to “play out servers,” buffered songs, and authorized third-party copying of broadcasts. Flo & Eddie sued Sirius for violations of California’s copyright law and unfair competition law, conversion, and misappropriation and subsequently moved for summary judgment on its claims.
Flo & Eddie argued that Sirius was liable for two distinct unauthorized uses of its recordings: (1) publicly performing the recordings and (2) reproducing the recordings. Sirius did not deny that it publicly performed Flo & Eddie’s recordings but argued that the bundle of rights attaching to copyright ownership of pre-1972 recordings did not include the exclusive right to publicly perform the recording. Flo & Eddie countered that, under California law, copyright ownership of pre-1972 recordings included exclusive public performance rights.
While the Copyright Act exclusively governs many areas of copyright law, it explicitly leaves certain areas open to state regulation, including pre-1972 sound recordings. California’s copyright statute, Civil Code § 980(a)(2), provides: “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 . . . .” Sirius did not argue that it fell within the statutory exception for independent makers of sound recordings, so the issue was whether “exclusive ownership” included the exclusive right to publicly perform a recording.
Looking at the text and legislative history of the statute, the court concluded that having “exclusive ownership” in a recording includes all rights that can attach to intellectual property, except for the explicit exception for making “covers” of a recording. Copyright ownership of a sound recording under § 980(a)(2) necessarily includes the exclusive right to publicly perform the recording. The court granted summary judgment in favor of Flo & Eddie as to the public performance-based claim. The court denied summary judgment as to any claim premised on Sirius’ alleged reproduction of Flo & Eddie’s recordings, however, finding issues of material fact concerning the location and mechanics of the alleged copying.
Borrowing from its § 980(a)(2) findings, the court concluded that Sirius had also violated California’s unfair competition law and granted summary judgment on that claim. Likewise, the court granted Flo & Eddie’s motion concerning conversion and misappropriation liability, insofar as they rested on public performance of the recordings. Flo & Eddie had an ownership interest in the right to publicly perform its recordings; Sirius wrongfully disposed of that right by publicly performing those recordings, and Flo & Eddie suffered damages in the form of license fees that Sirius should have paid.