Comedian George Lopez has joined the chorus of comedians suing Pandora over its failure to pay royalties on spoken-word compositions, according to documents filed in California federal court on Tuesday (Aug. 23).
In the copyright infringement suit, filed by attorney Richard Busch of King & Ballow, Lopez accuses Pandora of failing to obtain either public performance or mechanical reproduction licenses for – or pay royalties on – the spoken-word compositions for 37 works contained on his albums Right Now Right Now and Team Leader.
“The end result is Pandora took the Works, gained listeners, subscribers and market share with full knowledge it did not have licenses and made no royalty payments for the Works,” the complaint reads.
Lopez further alleges that Pandora exploited the works without licenses in order “to increase its stock price helping them to reorganize the company with Sirius XM…for billions all while depriving Mr. Lopez from his hard-earned royalties.” Pandora was formally acquired by Sirius XM in February 2019 for $3.5 billion.
Lopez’s complaint notes that because PROs like ASCAP and BMI do not license public performance rights for spoken-word compositions – as they do for musical compositions – it was Pandora’s responsibility to contact Lopez to obtain them. Instead, he claims, the company “chose to infringe.”
Though every piece of audio is covered by two copyrights – one for the sound recording and the other for the underlying “literary work” – streaming services have historically paid royalties only on comedy recordings. More recently, groups like Word Collections and Spoken Giants have formed in an attempt to force streaming services to pay for comedy compositions as well.
Lopez’s complaint follows a host of similar suits filed against Pandora by comedians including Andrew Dice Clay, Bill Engvall, Ron White and Nick Di Paolo as well as the estates of late comics Robin Williams and George Carlin.
To bolster his case, Lopez’s suit points to Pandora’s SEC 10K public filings with the Securities and Exchange Commission (SEC) from 2011 to 2017. In those filings, Pandora noted as a “risk factor” its failure to obtain licenses for spoken-word comedy compositions, leaving it “subject to significant liability for copyright infringement.” Lopez’s suit says that admission was removed only after Pandora’s “transaction” with Sirius XM, seemingly alluding to the latter’s acquisition of the streaming service.
For additional context, the suit cites a February 2011 CNNMoney report noting that Pandora wasn’t yet profitable and had posted a net loss of $328,000 on revenue of $90.1 million in the first nine months of its most recent fiscal year – with its biggest expense being the royalties it paid out on music streams.
Just three months later, Pandora announced it would be adding comedy recordings to its service and that those stations would include audio ads, “thereby generating additional advertising revenue for the company while excluding comedians like Mr. Lopez and many others from their hard earned royalties and licensing fees,” the suit continues. “Pandora found a cash cow in a new revenue stream, and in a brazen business decision determined that the risk was worth the gain—that is until now.”
Lopez is requesting actual damages along with Pandora’s profits relating to its exploitation of his works; or, in the alternative, statutory damages totaling $5.5 million (or $150,000 per infringed work). He also wants “a running royalty and/or ownership share” in all future exploitations by Pandora of his works or, alternatively, an injunction permanently enjoining the company from further acts of infringement.
In response to Lopez’s complaint, a Pandora spokesperson pointed Billboard to its legal response to previous lawsuits lodged by several other comedians and comedians’ estates. In that response, among other claims, the company accused Word Collections – a group formed specifically to request royalties from streaming services for comedians’ spoken-word compositions – of violating federal antitrust laws by forming a “monopolistic portfolio” of comedy rights and orchestrating lawsuits against Pandora in an effort to “dramatically” increase the prices streaming services pay for those rights.
In a statement, Busch – who is also representing other comedians in their suits against Pandora – told Billboard, “We are honored to be representing Mr. Lopez and all of our other legendary comedian clients who have individually stepped forward to protect their own very valuable intellectual property.”