Tuesday, August 24, 2021

SiriusXM Wins Appeal of Turtles' Copyright Claims

Digital radio giant Sirius XM Radio Inc scored another win in a series of disputes over music royalties with members of the rock group The Turtles on Monday, when the 9th U.S. Circuit Court of Appeals found California law doesn't require Sirius to pay to play pre-1972 music.

Reuters reports the ruling comes after "losses in every other court over the past eight years" that has considered claims by a class of copyright owners led by former band members, U.S. Circuit Judge Kenneth Lee wrote for a unanimous three-judge panel, and saves Sirius an additional $5 million it would have owed under a settlement if Flo & Eddie Inc had won.

Sirius' attorney Daniel Petrocelli of O'Melveny & Myers said in an email that he and SiriusXM were "gratified that this important issue has been finally and correctly resolved."

Kalpana Srinivasan of Susman Godfrey, who represented Flo & Eddie, a company owned by Howard Kaylan and Mark Volman of The Turtles – best known for its 1967 hit "Happy Together," said that while they were disappointed in the ruling, they were also "glad class members received the benefits of the $25 million cash settlement and several years' worth of royalty payments" while the appeal was pending.

Flo & Eddie first sued Sirius in 2013, in a case that was moved to Los Angeles federal court, under California law on behalf of copyright owners whose music Sirius allegedly played without permission. Digital radio providers like Sirius weren't required to pay royalties under federal law for pre-1972 recordings until Congress enacted the Music Modernization Act in 2018. Flo & Eddie also brought related claims against Sirius under New York and Florida law in courts in those states.

The parties settled in 2016, with Sirius agreeing to pay the class up to $99 million in royalties depending on the outcomes of appeals in the three cases.

Under the agreement, the class would receive $25 million in past royalties plus $5 million for each win on appeal. The 11th Circuit affirmed Sirius' Florida win, while the 2nd Circuit reversed Flo & Eddie's New York win.

Based on the terms of the settlement, a win at the 9th Circuit would also reduce Sirius' licensing rate for future royalties under the settlement to zero.

In California, Flo & Eddie argued the state's copyright statute required Sirius to pay royalties because it grants the makers of pre-1972 recordings "exclusive ownership" of their music. U.S. District Judge Philip Gutierrez agreed in 2014, finding the phrase covers a public-performance right.

Sirius argued on appeal that the decision ignores the law's history and context. Lee, joined by Circuit Judges Richard Tallman and Consuelo Callahan, agreed, based on what "exclusive ownership" meant when the language was first used in the statute in 1872.

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