And, Of Course, Labels Sue Pandora Over Pre-1972 Recordings
from the after-losing-on-trying-to-shake-them-down dept
Having already sued Sirius XM over the issue last fall, the RIAA's record labels have now targeted a similar lawsuit at Pandora. The lawsuit itself is highly misleading, taking statements from Pandora totally out of context (the labels have a habit of doing this). The most obnoxious of these misrepresentations is the RIAA's claim that Pandora recently stated in SEC filings that there's a risk factor if the company is "required to obtain licenses from individual sound recording copyright owners for the reproduction and public performance of pre-1972 sound recordings."
The RIAA presents this as if it's Pandora trying to get out of paying. But that's not what Pandora is saying at all. It's noting that because pre-1972 works are not covered by the various rates that it pays which are set by the Copyright Royalty Board, in order to secure the rates, it would need to negotiate individually with every copyright holder for the right to stream those works in every single state. But it's noting that as a risk factor -- because, as Sirius has pointed out in its own response to the similar lawsuit, decades have gone by and the labels have never been asking for licenses for performances of pre-1972 works. And those works have been used for years, license free, by TV and radio broadcasters, bars, restaurants and a variety of other places. The real risk is that Pandora, which has relied on the fact that it can take compulsory rates, would then suddenly have to negotiate with everyone, which would be a massive headache. And this is the mess caused by the weird way in which pre-1972 sound recordings are treated.
Again, those works are not covered by federal copyright laws, which include specific rights over performances of works, which was something of a new concept when it was added to federal copyright law. The various state laws that these works are covered by are generally common law concepts around misappropriation and unfair competition. So the big question is whether or not "performing" a work falls under such common law concepts. Historically, these claims were mostly focused on making unauthorized copies. Performing the work has generally been considered a separate issue. This makes it a bit questionable that the RIAA is now suddenly seeking to reinterpret a big swath of history around how those works were legally used -- which also raises a concern about "laches" or how timely these lawsuits are. The RIAA has had decades to complain about these practices, and is just doing so now...
And, of course, remember that this is all happening just a month or so after the publishing arms of the very same labels were found to have been colluding unfairly to jack up Pandora's rates. Basically, the legacy recording industry players are now looking for just about any way possible to make Pandora pay even more. This isn't a surprise. It's how the industry has always worked. When they're struggling to figure out ways to make money, they look at anyone successful and assume it's their fault that the legacy players are making less money. So, rather than innovating, they try to find legal ways to force more money out of the innovators and into their own hands. This is just the latest example in a very long line of such cases.