Cases regarding the copyright infringement of spoken word comedy continue to mount against Pandora. On Monday, Feb. 28, comic Nick Di Paolo filed the latest in a string of recent lawsuits against the streaming service, claiming Pandora did not obtaining the necessary licenses to use Di Paolo’s 142 comedy routines on its platform for both non-interactive and interactive streaming.
The new Di Paolo case arrives shortly after at least five different lawsuits involving Pandora and other comedians like Robin Williams and George Carlin were filed earlier this month (Feb. 7) in California federal court. All complaints, including Di Paolo’s, were filed by attorney Richard S. Busch (best known for representing Marvin Gaye’s estate in the watershed “Blurred Lines” case) and alleged the same infringements.
Music contains two copyrights that streaming services must license in order to use the work on its platform: a copyright for the sound recording and a copyright for the underlying composition. In recent years, proponents argue spoken word comedy has two copyrights as well: one for the recording and one for the underlying “literary work” (or the unique jokes and sequencing of the routine). However, no streaming service has ever secured licenses for both. Historically, these companies only have licenses for the recording, meaning the comedians are getting paid for only half of the protectable elements in their work that is streamed.
The literary work copyright has been historically been ignored, but Pandora publicly acknowledged in SEC filings from the years 2011 to 2017 that a “risk factor” for its business is that its spoken word comedy content is “absent a specific license from any performing rights organization.” Until 2020, there were no performing rights organizations for spoken word recordings, but according to the complaint, Pandora should have still approached Di Paolo directly to gain the proper authorization to use his work (and to pay him royalties).
Now, a number of comedians have aligned with two new entities — Spoken Giants and Word Collections — which were created to act like spoken word’s version of ASCAP and BMI, collecting and licensing the performances of spoken word comedy. Word Collections, founded by Jeff Price, represents Di Paolo. Unlike ASCAP and BMI, however, the two comedy collection societies also are able to license mechanical (or “reproduction”) rights on their clients behalf as well and are not tied down by government consent decrees like ASCAP and BMI.
The lawsuit against Pandora alleges that “beginning in or about August of 2020,” Word Collections representatives “contacted Pandora in an effort to negotiate a licensing agreement for various copyright owners,” but they never reached an agreement with Pandora despite multiple attempts at making contact.
The lawsuit acts as a next step in an already contentious battle between streaming services and “literary works” copyright holders and their collection societies.
The mostly behind-the-scenes battle came to a head on Nov. 24, the day before Thanksgiving, when Spotify quietly removed many of its comedy recordings from major comics like Mike Birbiglia, John Mulaney, and Jeff Foxworthy amid a dispute with Spoken Giants. Spotify, according to Spoken Giants CEO Jim King, did not want to negotiate or consider licensing for literary works and began mentioning the possibility of taking down the content of their comedians in the months leading up to the takedown. Eventually, Spotify did.
Services like Spotify and Pandora, among others, have made public pushes in recent years to brand themselves as platforms providing all types of audio content, not just music. The lawsuit notes this, saying that in Feb. 2011, Pandora still had yet to become profitable because music royalties were such a great expense. Curiously, a few months later, Pandora added comedy to its content offerings, featuring interspersed advertisements. The complaint says “Pandora found a cash cow in a new revenue stream” because it could get away with not licensing and paying out for two copyrights for comedy records for many years. “And, in a brazen business decision, determined that the risk was worth the gain.”
Di Paolo requests a jury trial and hopes to receive “actual damages in addition to defendant’s profits both domestically and relating to foreign sales of other exploitation of the works” and for a “running royalty on all future exploitations of the works.”