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Today’s battle over streaming and videos

August 12, 2015

The federal Copyright Act is a layer cake of technology eras and stakeholder compromises. Most lawyers deal with it only if a client gets a cease and desist letter, departing employees go to a competitor or a long contract gives IP rights a paragraph or two. So the copyright headlines most likely to catch your attention probably stem from the entertainment industry — especially ones about a creative work that means something to you.

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The “Blurred Lines” verdict is an example. And if you like classic rock and golden oldies, the saga of Flo & Eddie may get your attention. It illustrates how the Copyright Act works, or doesn’t.

Mark Volman and Howard Kaylan’s fine voices drove The Turtles’ hit records like “Happy Together” in 1967. But musical notes and lyrics written down (a musical composition) were covered by the Copyright Act for 141 years before a record (a sound recording) was. It did not protect sound recordings in any way until 1972. In the 1990s, when it was amended to give royalties to performers on records played by Internet radio services like SiriusXM and Pandora, artists and record labels still received nothing for pre-1972 recordings.

Volman and Kaylan toured with Frank Zappa as The Phlorescent Leech and Eddie because old contracts prohibited using their own names or The Turtles. Then they were just Flo & Eddie. They acquired the rights to all their Turtles hits, but they weren’t big names again until they took the stage as class-action avengers of unpaid golden-oldies artists.

Their lawsuit relied on a small Copyright Act opening for pre-1972 records. Copyright protection is recognized in the Constitution, and the Act preempts all state laws creating the same or equivalent rights. But it doesn’t preempt protection for recordings made before 1972 under state statutes or common law until 2067, 17 U.S.C. §301(c). And the state with the music industry’s center of gravity enacted California Civil Code §980(a)(2), which does just that.

In stunning news made last year, Flo & Eddie won and Sirius XM faced having to pay them and all other pre-1972 copyright owners to stream their records, Flo & Eddie, Inc. v Sirius XM Radio, 2:13-cv-05693-PSG-RZ, 2014 WL 4725382 (C.D.Ca. Sept. 22, 2014). In short order, they won again in the other contender for music capitol, New York, Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 62 F.Supp.3d 325 (S.D.NY. Nov. 14, 2014). There is no statute protecting pre-1972 recordings in New York — it has common law copyright.

A shocker in the decision involves the fact that analog or broadcast radio, the one you probably grew up with if you like classic rock, has never paid royalties to broadcast recordings. Legislation before Congress seeks to end that, but the New York decision says broadcast radio has to pay too.

The California victory led to me-too lawsuits. In January, for example, the owner of recordings by The Flying Burrito Brothers, Hot Tuna and New Riders of the Purple Sage filed lawsuits against Beats Electronics, Sony and Google. In June, the California court certified Flo & Eddie’s lawsuit as a class action on evidence of 273 owners of pre-1972 recordings with the same claims. The actual number is probably in the thousands.

Then the momentum shifted. Flo & Eddie lost their lawsuit in Florida based on common law arguments like New York because Florida doesn’t have a body of developed common law copyright decisions, Flo & Eddie, Inc. v. Sirius XM Radio Inc., 2015 WL 3852692, 13-23182-CIV (S.D. Fla. June 22, 2015). A few days later came the biggest setback to Flo & Eddie’s class-action ambitions and the greatest victory for their arguments.

Sirius filed a report with the SEC saying it was paying Capitol, Sony, Warner and ABKO $210 million to settle their successful me-too lawsuit. Flo & Eddie made the legal arguments. The labels got the money because they excelled at deals and had rights to 80 percent of the pre-1972 recordings played on SiriusXM.

The Flo & Eddie cases are on appeal to the 2nd, 9th and 11th circuits. Meanwhile, a 2nd Circuit decision is awaited on an afterthought argument in 2009 that became a big deal. The question is whether Internet service providers are protected from copyright infringement claims on pre-1972 recordings by the liability shield, called the Digital Millennium Copyright Act safe harbor, 17 U.S.C. §512(c). The cases are EMI Blackwood Music, Inc. v. Vimeo, LLC 14-1049 [consolidated], and Capitol Records, LLC v. Vimeo, LLC 14-1067.

No.3 video sharing website Vimeo doesn’t want to pay for its users uploading videos with unlicensed recordings, and it seeks safe harbor protection. Record companies and publishers have a different view.

The DMCA became law in 1998 with changes to the Copyright Act. The safe harbor is in the “Online Copyright Infringement Liability Limitation Act” title intended to foster Internet development back then. The District court decision is about whether Vimeo meets the technical requirements for the safe harbor.

At the end, it adopts the plaintiffs’ afterthought argument that if Vimeo did meet the requirements, it can’t be protected for pre-1972 recordings because they aren’t covered by the Act. The court agrees with the copyright office and New York appellate decision that Congress should say whether pre-1972 recordings come within the harbor by amending the Act.

Nothing in the Copyright Act requires the conclusion. The safe harbor protects against “copyright infringement” claims, and the Act recognizes state laws protecting pre-1972 recordings.

No matter how Vimeo and Flo & Eddie cases end, the need for uniform national rules on rights is clear. Music moguls may be content to do deals with video sites like their deal with Sirius, tech titans would probably like legislation eliminating the need for such deals, and artists who own their copyrights like Flo & Eddie want to get paid. Their path appears to require winning in court for the moment. Stay tuned.•

? Craig Pinkus is a partner in the Intellectual Property, Litigation and Entertainment Law groups of Bose McKinney & Evans LLP and leads the firm’s Data Breach Response Team. Opinions expressed are those of the author.

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