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IP/Entertainment Case Law Updates

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

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. Sirius XM Radio Inc., which operates a subscription-based satellite and internet radio service, broadcast The Turtles’ pre-1972 recordings without paying royalties to Flo & Eddie.

Flo & Eddie sued Sirius for violations of California’s “copyright statute” (Cal. Civ. Code § 980), statutory unfair competition, common law unfair competition, conversion and misappropriation, and subsequently moved for summary judgment as to liability on all claims. In 2014, the district court granted plaintiff’s summary judgment motion to the extent the claims were premised on Sirius’ public performance of the pre-1972 recordings, holding that Section 980 grants to owners exclusive public performance rights over pre-1972 sound recordings. Sirius then moved for summary judgment on Flo & Eddie’s request for punitive damages and disgorgement and on plaintiff’s claim of common law unfair competition.

The court granted Sirius summary judgment on the issue of punitive damages. The court noted that “[i]t is well established in California and the Ninth Circuit that punitive damages are not proper in cases of first impression,” because the intent and willfulness required for an award of punitive damages are not present in the absence of an established right. Though prior cases had opined, implicitly or in dicta, that California law would recognize a public performance right for pre-1972 recordings, these decisions, the court explained, were not “authoritative legal precedent that precludes a finding of first impression.” Because its prior decision was the first decision to hold that California law conferred a public performance right with respect to pre-1972 recordings, the court held that punitive damages were thus inappropriate in this case. 

However, the court denied Sirius’ motion for summary judgment on plaintiff’s request for disgorgement. The court explained that plaintiff’s damages model — seeking recovery of Sirius’ gross proceeds attributable to the pre-1972 recordings without deduction for costs — was appropriate in this case and, in any case, had already been approved by the court in a prior ruling.

Finally, the court granted Sirius summary judgment on plaintiff’s common law unfair competition claim. Explaining that “[i]n California, common law unfair competition is limited to cases in which a party passes off their goods as another,” the court agreed with Sirius that the plaintiffs had not alleged passing off, and they had not alleged or presented evidence of consumer confusion.

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