On October 26, 2017, Florida’s Supreme Court ruled that the state does not recognize a “common law” right to public performance royalties for pre-1972 sound recordings. The decision, Flo & Eddie Inc. v. Sirius XM Radio Inc., Case No. SC16-1161, is in accord with a ruling by New York’s highest state court, the New York Court of Appeals, which likewise held late last year that New York state law does not recognize a right of public performance for pre-1972 sound recordings.
The plaintiffs in this instant case are the same plaintiffs who lost before the New York court. Indeed, the same parties—Flo & Eddie and Sirius XM—have a similar case pending in the Ninth Circuit, where a California district court previously ruled that the Golden State recognizes a common law right of public performance for sound recordings.
Copyright interests in sound recordings are subject to a murky combination of state and federal laws. Sound recordings produced after 1972 are protected by the US Copyright Act. Since 1995, those “post”-72 recordings have been subject to a right of public performance by means of digital audio transmission (with certain key exemptions) only, which means that terrestrial radio stations do not pay for the public performance of sound recordings at all. “Pre-72” sound recordings are only protected, if at all, by state law. Plaintiffs Flo & Eddie’s argument would thereby result in the anomalous outcome that terrestrial radio stations must pay royalties for pre-1972 recordings but not post-1972 recordings.
The unanimous Florida Supreme Court did not hesitate to recognize the enormous impact of that outcome, noting that plaintiffs are asking the state’s highest court to “recognize an unworkable common law right in pre-1972 sound recordings that is broader than any right ever previously recognized in any sound recording.” Slip op. at 22. The Court went on to state that accepting Flo & Edie’s argument would result in the conclusion that “Congress eventually granted a [a federal copyright in sound recordings] right in 1972 that was significantly less valuable than the right Flo & Eddie claims has existed all along under the common law in Florida and elsewhere.” Slip op. at 24.
The Court also addressed the question of whether Sirius’ creation of back-up or buffer copies in aid of the performance of the recordings constituted a violation of the plaintiffs’ right of reproduction. Critically, the Court stated that “[e]ven assuming that Florida common law recognizes the existence of a post-sale exclusive right of reproduction in pre-1972 sound recordings, any such right would not be unfettered and we would conclude that no violation occurred under the facts of this case.” Slip op. at 31 (emphasis added).
In reaching that decision, the Court cited to a provision in Florida’s record piracy statute that contained a specific exemption for copies made “in connection with, or as part of” radio broadcast transmissions. Slip op. at 32. This decision could have implications for the current, ongoing debate in the analogous context of musical compositions (as distinguished from recordings) as to whether a “mechanical” license, which grants the right to make copies of musical compositions, is required for streaming. Streaming services currently pay publishers royalties for both the public performance and reproduction (mechanical) right.
Attention now turns to the California Supreme Court, as the Ninth Circuit, back in March, certified the question of whether the state recognizes a public performance right allowing artists to receive royalties for pre-72 recordings. Unlike in New York and Florida, where the plaintiffs had to rely on common law, they have a concrete statute in California to sink their teeth into: section 980, which gives “the author of an original work of authorship consisting of a sound recording” a right of “exclusive ownership.” Indeed, it was that statute that led the California district court to find in favor of the plaintiffs. The decision by California’s highest state court will undoubtedly have profound effects on the music industry.