The two digital services, Sirius and Pandora, contend that since federal copyright law covering master recordings didn't begin until Feb. 15, 1972, they don't have to pay performance royalties that were granted to labels as part of the Digital Millennium Copyright Act of 1998 for albums issued before 1972.
But labels and artists have argued that individual state copyright law covers master recordings, and that digital services like Sirius and Pandora are obligated to pay such performance royalties. When Judge Guitierrez agreed with Flo & Eddie and ruled in their favor against Sirius, the duo and their lawyers, Henry Gradstein and Harvey Geller of Gradstein & Marzanno, promptly filed a similar suit in the same court against Pandora.
But Pandora responded with an anti-SLAPP motion to dismiss the Flo & Eddie suit. In making its case, Pandora asserted that like anyone who buys a copy of a sound recording, it has a free speech right to play those recordings in any manner it desires without obtaining authorization from Flo & Eddie to do so.
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But the Judge rejected Pandora's argument and said Flo & Eddie had demonstrated the legal sufficiency of its claim and that its claims are "meritorious enough to withstand the anti-Slapp motion."
So Judge Guiterrez denied Pandora's anti-SLAPP motion to dismiss, as anticipated. But that denial now allows Pandora to file an appeal, which could move the case to another judge in the U.S. Court of Appeals for the Ninth Circuit. Since Pandora knows which way Judge Guiterrez is thinking on the pre-1972 issue, it wants to take its arguments to a different judge.
"Pandora intends to immediately appeal this ruling to the 9th Circuit Court of Appeals, where we are confident our legal position will be affirmed," the company said in a statement. "Pandora would be open to supporting the full federalization of Pre-72 sound recordings under a technology-neutral approach that affords libraries, music services and consumers the same rights and responsibilities that are enjoyed with respect to all other sound recordings."