SoundExchange and SiriusXM have settled their years-long litigation surrounding outstanding claims for unpaid and underpaid royalties from January 2007 through December 2017 in exchange for a lump sum payment of $150 million.
The preforming rights organization will distribute the settlement funds to the rights holders and artists whose sound recordings were used during the settlement period.
SoundExchange’s CEO talks licensing reform and the CLASSICS Act.
A promising occurrence is unfolding in the U.S. Congress: bipartisan agreement on meaningful legislation. Republicans and Democrats on Capitol Hill are working on a broad and impactful measure to modernize and improve many of the rules that govern how music is used in the digital era. This bipartisan consensus will benefit music creators, digital services and fans.
This situation has progressed in large measure because the music industry and digital service providers — often divided — similarly worked together to craft a unified package of reforms. More than 20 organizations representing artists, songwriters, composers, record labels, music publishers, performance rights organizations and streaming services (such as Pandora) support these bills and are asking Congress to pass them as part of a unified piece of music legislation in 2018. SoundExchange endorses this package, in line with our ongoing efforts to make our country’s music licensing system more just for everyone.
There is, unfortunately, one significant naysayer: SiriusXM. In advertisements and recent statements by the company, SiriusXM says that the legislation should be rejected because it fails to address a glaring inequity in our public policy: that broadcast radio does not pay performers for the use of their sound recordings, while SiriusXM does.
SiriusXM is right about broadcast radio. This system is unfair. Broadcast radio should absolutely compensate creators of sound recordings. For far too long, terrestrial (FM) radio has used the music of hard working artists to attract listeners to their stations, while paying those artists nothing for their work.
But this is not a reason to abandon an industry wide agreement on legislation addressing other important issues.
The string trio Time for Three and S’More Entertainment filed a class action yesterday (Jan 17) in New York federal district court against “Defendants Entertainment One GP LLC and Entertainment One U.S. LP, doing business as E1 Entertainment and/or Koch Entertainment LP” for a variety of claims relating to the defendant’s direct deal with SiriusXM.
The class action complaint describes the suit:
4. In violation of the Class Member Contracts, Defendants entered into secret negotiations and agreements with satellite radio provider Sirius XM Radio (“Sirius XM”), for the exploitation of Plaintiffs’ and the Class Members’ intellectual property. Defendants have systematically failed to account for any revenue, or pay any portion of the revenue generated from the exploitation of the Class Members’ Musical Works on Sirius XM under this agreement.
5. Plaintiffs bring this nationwide class action on behalf of themselves and similarly situated Class Members arising from Defendants’ failure to properly account for and pay revenues generated for the distribution of the Class Members’ Musical Works on Sirius XM and other digital satellite radio providers. Plaintiffs bring claims including for breach of contract, breach of the implied covenant of good faith and fair dealing, an accounting, and declaratory relief. Plaintiffs seek monetary damages, injunctive, and/or declaratory relief on behalf of themselves and others similarly situated against Defendants’ for their willful violation of the Agreements….
Big congratulations to Flo & Eddie (aka The Turtles) and class counsel Henry Gradstein for a great settlement in their indie label class action against SiriusXM for pre-72 sound recordings. The settlement is a guaranteed $25 million payment against a 5.5% license for 10 years which is worth between $45.47 million to $59.2 million assuming Sirius continues to play the remaining class member’s recordings at the same play rate as the past.
Here’s a copy of the settlement–proving once again that brown shoes don’t make it!
Update: Class attorney Henry Gradstein gave us this quote about the settlement:
“We are grateful to our clients, Mark Volman and Howard Kaylan of Flo & Eddie and The Turtles, who had the tenacity to stay the course over three grueling years of litigation on behalf of all members of the class, because they believed in what was right.”
The Turtles are suing SiriusXM in a “putative” class action being heard in California, New York and in Florida for infringing pre-72 recordings under the laws of those states. Sirius and Pandora seem to be hell-bent on denying pre-72 artists and their heirs any revenues for the wide exploitation of recordings from this era for reasons known only to them.
The Florida case in federal court brought claims against SiriusXM relating to Florida state common law copyright for (1) common law copyright infringement, (2) common law misappropriation / unfair competition; (3) common law conversion; and (4) civil theft.
SiriusXM won its motion on summary judgement in the federal trial court and The Turtles (aka “Flo & Eddie”) appealed to the 11th Circuit. In order to grant the summary judgement motion for Sirius, the federal trial court had to make a number of assumptions about unsettled areas of Florida state law that the appeals court were not prepared to endorse.
Federal courts in this situation have the ability to “certify” certain questions to an appropriate authority. The 11th Circuit has certified certain questions about the interpretation of Florida state law to the Florida Supreme Court. Depending on how the Florida Supreme Court answers these certified questions, the 11th Circuit will then be able to rule on the Turtles appeal.
So–while the Turtles have not won the substantive issues in the appeal as yet, they have lived to fight another day on appeal. To the extent anyone can read the tea leaves on these things, it does seem that the 11th Circuit was at least very interested in being fair to the Turtles and the putative class.
The certified questions are:
1. Whether Florida recognizes common law copyright in sound recordings and, if so, whether that copyright includes the exclusive right of reproduction and/or the exclusive right of public performance?
2. To the extent that Florida recognizes common law copyright in sound recordings, whether the sale and distribution of phonorecords to the public or the public performance thereof constitutes a “publication” for the purpose of divesting the common law copyright protections in sound recordings embedded in the phonorecord and, if so whether the divestment terminates either or both of the exclusive right of public performance and the exclusive right of reproduction?
3. To the extent that Florida recognizes a common law copyright including a right of exclusive reproduction in sound recordings, whether Sirius’s back-up or buffer copies infringe Flo & Eddie’s common law copyright exclusive right of reproduction?
4. To the extent that Florida does not recognize a common law copyright in sound recordings, or to the extent that such a copyright was terminated by publication, whether Flo & Eddie nevertheless has a cause of action for common law unfair competition/misappropriation, common law conversion, or statutory civil theft under FLA. STAT. 772.11 and FLA. STAT. 812.014?
Here’s a copy of the 11th Circuit’s opinion: Flo + Eddie vs SiriusXM (Florida)