[co-authored by FMC Policy Fellow Ian Dunham]

Yesterday, the U.S. District Court of Central California ruled in favor of Flo & Eddie, Inc., allowing for a class action lawsuit to proceed against Sirius XM. Flo & Eddie—original members of The Turtles—had already achieved a victory in their initial lawsuit against Sirius XM back in 2014. The latest ruling opens up the possibility of restitution for any artist whose music was recorded before February, 15 1972 and is played by the satellite radio giant. For Sirius XM, this could mean a great deal of money spent on appeals or settlements. We wonder whether the potential expense exceeds what they’d have paid if they hadn’t stopped compensating for pre-’72s.

As Judge Philip Gutierrez writes in his decision, “given SiriusXM’s aggressive litigation tactics … and its decision to continue to perform pre-1972 recordings without authorization, it may be cost-prohibitive for owners with smaller value claims to pursue their claims against SiriusXM in this environment.” We think it’s a positive when individual creators’ rights are recognized alongside those of the big media companies. A closer examination of the case, however, indicates that Flo & Eddie sued as copyright owners, not performers. We are unclear on what this might mean for the larger community of musicians who don’t own their copyrights but should be compensated for digital performances nonetheless.

Let’s back up a bit. The whole reason this and other lawsuits came to be in the first place is because there is no federal copyright for recordings made before 1972—the year Congress enacted a copyright for sound recordings. (Musical works—underlying compositions comprising notes and/or lyrics—have enjoyed copyright protections for far longer, with a public performance right established in 1857.) Because of the lack of federal protections for sound recordings, some digital radio platforms believe that they are not obligated to pay. (Services do compensate for the use of musical works as well as for sound recordings made after February 15, 1972.)

As we explain here and here, copyright protection for older sound recordings exists in a patchwork of state statute and earlier court decisions. Flo & Eddie’s wins thus far are based on judicial interpretations of California state law in support of a performance right for sound recordings. However, there is some question about how far this right extends. Does the court’s analysis mean that AM/FM radio in California has to pay as well, something they’ve never been legally obligated to do even for post-1972 recordings due to another loophole in federal copyright law? What about venues like live music establishments, bars and restaurants, which do pay publishers and songwriters, but are not required to pay for the performance of sound recordings?

While we appreciate the potential win for artists as a result of the Flo & Eddie ruling, we think that these irregularities ultimately need to be addressed in federal law.

FMC’s position is that all artists should be compensated for the use of their work, and that pre-‘72 sound recordings should receive the full bundle of federal protections. In fact, our stance, which runs counter to the major labels, is in accordance with recommendations made by the US Copyright Office. The disparity that currently exists for older artists defies logic and makes for unbalanced copyright law. We would like to see “full federalization” of these older recordings, which would include a performance right whereby the artists’ share is paid directly to them under fair splits.

There are currently two bills making their way through Congress that also attempt to fix the problems of pre-‘72 recordings, although neither of them confer the full protections enjoyed by later works. The first bill, called the RESPECT Act, would create a more narrow obligation for services to pay on pre-’72s. The second, the Fair Play Fair Pay Act, borrows the approach of the RESPECT Act and would also establish a performance right for AM/FM radio. We support any policies that provide for compensation for artists when their work is used commercially, regardless of an artists’ vintage. However, we’d also like to see older artists eligible for a full range of rights—including the ability to recapture their sound recordings from a label after a set term.

This latest ruling may be a spur to direct negotiation through settlement or a low-impact policy fix. On the other hand, we know what industrial combat between business sectors looks like, and litigators are paid based on billiable hours. No matter where this ends up, we simply want older artists to be paid and for the mechanisms of payment to be direct, equitable and not captured exlusively by the labels. Think about the old P2P lawsuits. How much, if any, of the money awarded to the labels made its way back to the artists whose work was infringed? We can’t call it a true victory until every artist whose music is exploited is compensated for that activity.