Business News Digital Labels & Publishers Media Top Stories

Possible setback for the labels in ongoing dispute with Sirius over pre-1972 recordings

By | Published on Friday 29 August 2014

Sirius XM

The American record industry isn’t going to get a speedy resolution to the grand debate over what, exactly, is the deal with sound recordings that pre-date 1972 when it comes satellite and online operators.

As much previously reported, in America, unlike Europe, traditional broadcasters are not obliged to pay royalties to the record labels even though they routinely play said companies’ recordings. Though they do pay royalties to the music publishers via the collective licensing system. Satellite and online broadcasters, however, do pay royalties to the labels, usually via the SoundExchange system, because of a bit of 1990s federal law.

But federal – so US-wide – copyright law only kicked in back in 1972, prior to that copyright operated at a state level in America. So, satellite broadcaster Sirius XM and various online radio services have argued, the royalty obligations set out in the 1990s federal legislation to not apply to the pre-1972 catalogue, which includes, of course, all that still rather popular 1950s and 1960s rock n roll. The labels, though, unsurprisingly, reckon that royalties are still due on the older repertoire.

There has been some discussion as to whether, in this specific case, federal law should actually apply to all copyright protected works, even if a copyright originates at a state level. Though the copyright owners themselves are divided on that viewpoint. Because they are concurrently arguing that ‘safe harbour’ protections that stem from the same 1990s federal copyright acts, and which are exploited by the likes of Grooveshark to operate without licences from most labels, should also not apply to pre-1972 recordings. And in that scenario the 1972 technicality aids the labels.

So the record companies have mainly argued, in their ongoing legal battle with Sirius over pre-1972 royalties, that an obligation for the satellite broadcaster to pay exists in state law (specifically Californian law in the main case), and precedents set under said state laws. And to that end they have been urging the judge overseeing the case to say as much when giving the jury that will eventually rule on the dispute their instructions.

It was an ambitious request, given it would pretty much settle the argument around which the whole case revolves before any actual arguments could be had. So it’s perhaps not surprising that, according to The Hollywood Reporter, judge Mary Strobel has indicated she is likely to reject the record industry’s jury instruction motion.

At a hearing on Wednesday, Strobel mused that the case law the labels have presented to back their arguments is not necessarily relevant to the Sirius XM case, indicating she would rather this debate be had before the jury, rather than it being settled before they arrive. Although a final ruling on the matter is still pending, that decision would be a set back for the labels, in that Sirius would still be in the running to win the debate in court at a later date.

The labels’ litigation against Sirius isn’t the only lawsuit relating to the pre-1972 question, though another being pursued by the aforementioned SoundExchange has been put on hold so that the US Copyright Royalty Board can first consider the arguments put forward by both sides in the dispute. That particular case centres heavily on a previous CRB ruling.



READ MORE ABOUT: