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Copyright Ruling Alarms Broadcasters, Streaming Services

October 08, 2014

​Laurence Pulgram, Fenwick & West chair of the commercial and copyright litigation groups, was interviewed by the National Law Journal regarding a California federal judge’s controversial copyright ruling against satellite radio company Sirius XM Holdings Inc.  Fenwick is not involved in the case.

On Sept. 22, U.S. District Court for the Central District of California Judge Philip Gutierrez issued a summary judgment that Sirius faces California copyright liability for broadcasting or streaming songs predating the federal copyright law’s 1972 protection date. Gutierrez categorized the broadcasts as unauthorized public performances. Sirius plans to appeal Gutierrez’s ruling.

The plaintiffs are Flo & Eddie Inc. of the 1960s cult-rock band The Turtles, who own all rights to the master recordings of the band’s songs. Its purported class action seeks $100 million in damages.

Pulgram told the Journal, “There will need to be a trial on the damages. It is unclear whether the trial court would approve a request for review of liability at the U.S. Court of Appeals for the Ninth Circuit. But it’s not that unusual in a case with significant ramifications for the court to decide that the liability should be figured out first and go up on appeal without delay.”

Federal law covers post-1972 sound recordings and is clear that there’s no royalty payable for so-called public performances of sound recordings over the radio or in bars, Pulgram said. But he added that state law, which covers pre-1972 recordings, gives all ownership to the owner of the sound recording.

“What you have here is a disconnect between federal and state legislation that has created a giant hole. Flo & Eddie just drove a truck through it,” Pulgram commented.

Responding to a question about whether these cases will spread beyond California, Pulgram answered, “Different states have different statutes. The way that cases come out in different states may depend on the language of the different statutes. A good case certainly could have influence on the way other state statutes are perceived by the courts.”

If the ruling isn’t reversed, Pulgram predicted, “It will result either in a lot of lawsuits to collect against radio stations and others who have played oldies, or a push for legislation at the federal level that would harmonize the state scheme with the federal scheme. The idea that a license is required to broadcast a pre-1972 song is a radical shift in the way that the industry has operated.”

The full interview is available through the National Law Journal website (subscription required).