In the latest in a series of attacks on SiriusXM Radio Inc., five big recording labels, including Capitol Records LLC, Sony Music Entertainment, and Warner Music Group Corp., filed a copyright suit in California Superior Court in Los Angeles Wednesday, alleging that the satellite radio giant has been broadcasting re-1972 recordings without paying artists and rights holders. Taken together, the suits pose a major risk for SiriusXM and others that hope to avoid paying royalties to broadcast millions of classic songs.
To fight the labels' claims, SiriusXM has tapped a defense lineup that includes R. Bruce Rich and Christopher Cox of Weil, Gothsal & Manges and Michael Oberman of Kramer Levin Naftalis & Frankel. Rich declined to comment except to confirm the representation.
Russell Frackman of Mitchell Silberberg & Knupp, who represents the record companies, said he was unable to comment. "The conduct of SiriusXM presents the paradigmatic example of a commercial business that is based on, uses, and profits from the intellectual property created by and owned by others, without obtaining the right to do so, and without paying for it," Frackman wrote in Wednesday's complaint.
The lawsuit, similar to others filed in the past few months, is based on the theory that federal copyright law does not govern sound recordings made prior to 1972. While musical compositions have been afforded federal copyright protection since 1831, it was not until the Sound Recording Act of 1971 that recordings of music, spoken words, or other sounds fell under the auspices of the federal Copyright Act. And it only applied to works after Feb. 15, 1972.
The record companies and others suing Sirius argue that state law and common law therefore dictate protections for pre-1972 sound recordings, and Sirius should be required to pay royalties under those laws.
The most recent suit comes on the heels of separate complaints filed in August. Members of the 1960s band The Turtles filed a class action suit in California, and the independent digital performance rights organization SoundExchange sued in U.S. District Court for the District of Columbia, each seeking $100 million in damages. They argue that SiriusXM can't rely on statutory royalty rates for pre-1972 recordings.
The question of how licenses for pre-1972 recordings should be handled has been debated for some time, but lawyers say the sudden spate of suits may have been triggered by an April decision in a case brought by UMG against the digital music service Grooveshark. That ruling, by the Appellate Division of New York's Supreme Court, said the safe harbor provision in the Digital Millennium Copyright Act (DMCA) — an amendment to the Copyright Act that protects online music services from federal copyright suits — doesn't apply to copyright claims originating before 1972.
That opinion, however, conflicts with a decision issued in federal court in 2011 in the Southern District of New York, finding that pre-1972 recordings do fall under the DMCA safe harbor provision.
The California suit filed Wednesday not only seeks damages but also asks for a declaratory judgment about the rights involved in pre-1972 recordings.
If pre-1972 sound recordings aren't governed by the DMCA, then companies like SiriusXM would be required to license the older works and could be vulnerable to many more lawsuits, lawyers say. The massive number of sound recordings at issue makes for high stakes on both sides.
In addition to Capitol Records, Sony Music, and Warner Music Group, the other plaintiffs are UMG Recordings Inc. and ABKCO Music & Records Inc.