In March, Pandora managed to escape an increase in royalty rates
to ASCAP. A federal judge ruled that Pandora would continue to pay the same royalty rate it has been paying, which is 1.85 percent, through 2015. Now Pandora is facing another battle. The major record labels have decided to sue Pandora, an Internet digital music service, for their use of pre-1972 sound recordings.
Ever since sound recordings fell under copyright protection, it’s been an unsettled issue over how to handle the pre-1972 song recordings, and numerous lawsuits have arisen as a result. If the fact that Pandora is now being sued by the record labels sounds very similar to another recent case, that’s because it is. In February, we wrote about SiriusXM Radio
being sued for the same reason. The documents for the SiriusXM suit stated, “For over 40 years, sound recordings have been protected by California common law, and for over 30 years they have been provided statutory protection under section 980 of the California Civil Code. As a result of 1972 amendments to the United States Copyright Act, sound recordings “fixed,” i.e., created before February 15, 1972 (“Pre-72 Recordings”), continue to this day to remain exclusively subject to protection under California state law, whereas sound recordings “fixed” after that date are subject to exclusive federal copyright protection. In this action, Plaintiffs seek to vindicate their valuable rights in their Pre-1972 Recordings and prevent the continued violation of those rights and the appropriation of Plaintiffs’ Pre-1972 Recordings by Defendant SiriusXM Radio Inc. (“SiriusXM”)”.
According to the Hollywood Reporter
, "Pandora's refusal to pay Plaintiffs for its use of these recordings is fundamentally unfair," says the lawsuit. Among the artists whose songs are said to be infringed by Pandora are Bob Dylan, The Beatles, David Bowie, Elvis Presley, James Brown and Led Zeppelin.”
If the plaintiffs are successful, many of the songs currently available on Pandora would then become unavailable as Capitol Records, Sony Music, Universal Music, Warner Music and ABKCO Music are demanding an injunction in addition to compensatory damages, punitive damages and all proceeds gained as a result of the exploitation of pre-1972 music. Due to Pandora’s popularity, the site now has over 250 million users.
As in the case brought against SiriusXM, the complaint
against Pandora points out that the site features specific stations that leverage the older music including "50s Rock 'n' Ross," "60s Oldies," "Motown," "Doo-Wop," "Early Jazz," and others.
Pandora’s method attempts to feed their users songs that are similar to their favorites, but the algorithm involved can sometimes be completely reliant on what the users pick in the first place. For example, the lawsuit says that on the "Beatles" station, a user can expect to hear a recording from the John Lennon group approximately four times during a three hour period.
The lawsuit against Pandora was filed by the RIAA on Thursday. Along with the lawsuit were quotes from artists or their heirs. "It’s an injustice that boggles the mind," says Booker T. & the MG's Steve Cropper. "Just like the programmers who deserve to be paid for their work, I deserve to be paid for mine.”
Also, it’s not at all surprising that the Plaintiffs are being represented by the same attorneys at Mitchell Silberberg & Knupp who are representing them in the ongoing similar case against SiriusXM.
As the Hollywood Reporter mentions, the SirusXM case was filed in a California court while the case against Pandora was filed in New York. If federal law doesn't apply, judges in different states could come to different conclusions over the issue of pre-1972 music. At the moment, there might not be anything but costs in stopping the record labels from attempting to pursue Pandora and SiriusXM in 49 other states.
Which digital music service do we think the RIAA will go after next?