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IP/Entertainment Case Law Updates

Flo & Eddie, Inc. v. Sirius XM Radio, Inc.

In latest ruling in dispute over The Turtles’ pre-1972 sound recordings, divided New York Court of Appeals holds New York common law does not recognize right of public performance for sound recordings.

Flo & Eddie Inc., which owns all rights to the recordings of The Turtles, a 1960s rock band known for its hit song “Happy Together,” among others, brought suit in New York federal court in 2013 on behalf of itself and a class of owners of pre-1972 sound recordings against Sirius XM Radio. Flo & Eddie asserted claims for common-law copyright infringement and unfair competition under New York law, alleging that Sirius infringed its rights regarding The Turtles’ pre-1972 recordings by broadcasting and making internal reproductions of the recordings without a license, in order to facilitate its broadcasts. Flo & Eddie simultaneously filed parallel class actions in California and Florida, alleging state law copyright claims.

After the district court denied summary judgment to Sirius XM, the Second Circuit granted defendant’s petition to file an interlocutory appeal. On appeal, the Second Circuit certified to the New York Court of Appeals the following question: “Is there a right of public performance for creators of sound recordings under New York law and, if so, what is the nature and scope of that right?” (Read our summary of the Second Circuit’s decision here.)

A four-judge majority of the state high court answered the question in the negative after reviewing relevant copyright decisions under New York state law. The majority found that going back as far as 1872, most of the decisions from lower courts and federal courts applying New York law were decided in anti-piracy or unauthorized copying cases. While the court had recognized such an anti-piracy right as recently as 2005, it held that this prior authority did not support the recognition of a separate right of public performance to the creators of sound recordings. As the court noted, New York state law recognized “separate rights addressing copying and performing, with the former based in common law and the latter based in statute.” The court thus held that New York’s common law copyright prevents only “unauthorized reproduction of the copyrighted work, but permits a purchaser to use copies of sound recordings for their intended purpose, namely, to play them,” thus refusing to confer owners of pre-1972 sound recordings with an exclusive performance right.

The majority explained that when the recording industry lobbied for a federal performance right in 1995, it was understood that there was no public performance right under federal or state law, and “for at least the past four decades” creators of sound recordings took no action to assert common law protection. The majority reasoned that “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.”

Refusing to recognize a public performance right for the first time, the court explained that the recognition of such a right should be left to the legislature, because “the consequences” of creating this right “could be extensive and far-reaching, and there are many competing interests at stake” that the court was “not equipped to address.” The court noted that Congress did not create a public performance right for post-1972 sound recordings until 1995, after nearly two decades of consideration, and that “the right it created was a narrow one circumscribed by a nuanced regulatory scheme limited to digital transmissions.” The majority observed that “if this Court were to recognize a right of public performance under the common law, we would be ill-equipped – or simply unable – to create a structure of rules to properly guide the application of that right.” However, the majority noted that even in the absence of a common law public performance right, “sound recording copyright holders may have other causes of action, such as unfair competition, which are not directly tied to copyright law.”

A lone concurring opinion agreed with the majority that New York common law does not confer a public performance right, but would have excluded from the definition of “public performance” the on-demand transmission of sound recordings through streaming services such as Apple Music and Spotify that allow users to select particular recordings. The concurrence stated that “[t]o allow a user to regularly, specifically and directly access an exact sound recording ‘on-demand’ is not to facilitate the ‘public performance’ of such recording, but to publish that work and therefore infringe upon the right of the copyright holder to sell it.”

A dissenting opinion joined by one other judge stated that New York’s common-law copyright protections encompass a public performance right, and would have defined the scope of that right “as coterminous with current federal law.”

Summary prepared buy Wook Hwang and Peter Pottier

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