SiriusXM Will Appeal Last Week's Major Copyright Ruling

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The Turtles in 1970.

SiriusXM has confirmed it will appeal the decision from a U.S. District Court judge in California that determined the service must pay royalties for airing music by "Happy Together" group The Turtles made prior to 1972, when federal copyright law was expanded to include master recordings.

Judge Phillip Gutierrez ruled last week that SiriusXM violated the master recording rights of Turtles songwriters Flo & Eddie, who filed their lawsuit in 2013 seeking $100 million in damages.

Under the Digital Millennium Copyright Act, digital services (unlike terrestrial radio) must pay master recordings rights-holders a royalty for playing their music. But up to now, Sirius only paid for recordings created after 1972, when federal law began recognizing the master recording copyright.

"We think Judge Gutierrez is wrong [and] we intend to appeal his decision all the way through the appeal process," Sirius CFO David Frear told the audience at the Deutsch Bank Leveraged Conference.

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He noted that a California State court was hearing a lawsuit on the issue brought by the major labels against SiriusXM and that the judge issued a tentative ruling that there is no public performance right under California law. Since two courts came out with conflicting opinions, he said it is something that should be resolved on the federal side.

He pointed out that, under the ruling by Judge Gutierrez, every AM/FM station, bar, restaurant and stadium would also have to pay master recording rights owners, which would be a first in the U.S. Currently, those places now only pay publishing royalties. He also pointed out that there have been no cases against terrestrial radio stations since the passing of a 1982 California law giving master recordings copyright protections.

"Let me get this right: that the Rolling Stones and the Beatles and Joni Mitchell and Creedence Clearwater Revival and Frank Sinatra and Benny Goodman for that matter, anybody who recorded a song prior to 1972, for the last 33 years, has been neglectful in protecting their own economic interests," he said, according to a copy of a transcript of the panel supplied to Billboard by SiriusXM. 

"The Turtles, who recorded their songs in the '60s, and for 33 years failed to do anything to say they were being damaged, including back in maybe 1982 when the law was passed, or 1983 or 1984 when it was much closer to when their recordings were originally released. You would think their damage would have been far greater back then, for all the terrestrial radio stations that were playing 'Happy Together,' and some of those other great songs."

The ruling only applies to California, so without federal legislation this legal battle will have to be waged state-by-state. Frear said that because of the ruling's state-specificity, he doesn't think the lawsuit will have a material impact on the company's financial earnings. However, he added, "We are happy to pay; we just think there out to be an equitable law, where everybody pays."

The industry has long sought federal legislation to get terrestrial radio to pay for playing master recordings. In the last few months, both houses of Congress have had hearings on this issue and other proposed music legislation, but so far no legislation has been submitted.

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