Flo & Eddie Inc. v. Sirius XM Radio Inc., et al., No. 2:13-cv-05693-PSG-RZ (C.D. Cal. filed Sep. 22, 2014) (Doc. 117).
Plaintiff, owner of all rights to The Turtles’ master sound recordings (including the hit "Happy Together"), was granted summary judgment against Sirius XM on its causes of action for violation of California
copyright law (California Civil Code § 980(a)(2)), California’s Unfair Competition Law (Cal. Bus. & Prof. Code §§ 17200, et seq.), and common law misappropriation and conversion, but only so far as the claims were premised on Sirius XM’s public performance of Plaintiff's recordings, not its alleged reproductions for which there were outstanding questions of fact.
Plaintiff argued that Sirius XM was liable for two distinct unauthorized uses of its sound recordings: (1) publicly performing its recordings by broadcasting and streaming the content to end consumers and to secondary delivery and broadcast partners, and (2) reproducing the recordings in the process of operating its satellite and Internet radio services. Plaintiff contended that, in California, copyright ownership of a pre-1972 sound recording includes the exclusive right to publicly perform the recording; therefore, if anyone wishes to publicly perform such a recording, they must first seek authorization from the recording’s owner. The Court agreed.
First, the Court found that California statutory and common law governs the rights that attach to pre-1972 sound recordings because the Federal Copyright Act does not apply to those earlier recordings and explicitly allows states to continue to regulate them. Second, the Court examined the provision of California’s copyright statute that contains a provision directly addressing pre-1972 sound recordings. Cal. Civ. Code § 980(a)(2) ("The author of an original work of authorship consisting of a sound recording initially fixed prior to February 15, 1972, has an exclusive ownership therein until February 15, 2047, as against all persons except one who independently makes or duplicates another sound recording that does not directly or indirectly recapture the actual sounds fixed in such prior recording, but consists entirely of an independent fixation of other sounds, even though such sounds imitate or simulate the sounds contained in the prior sound
The crucial point of statutory interpretation for this case was whether “exclusive ownership” of a sound recording carries within it the exclusive right to publicly perform the recording. The Court’s textual reading of § 980(a)(2) was that the legislature intended ownership of a sound recording in California to include all rights that can attach to intellectual property, save the singular, expressly-stated exception for making “covers” of a recording.
The Court further found that the rule of statutory construction requiring express statements to alter the common law did not apply because, when the legislature passed § 980(a)(2), there was no common law rule in California rejecting public performance rights in sound recording ownership. Also, the legislative history of § 980(a)(2) and its comparison to the Federal Copyright Act bolstered the Court’s plain textual reading of the statute that sound recording ownership is inclusive of all ownership rights that can attach to intellectual property, including the right of public performance, excepting only the limited right expressly stated in the law (that the owner does not have the exclusive right to record and duplicate “covers"). Lastly, the Court found further support for its textual reading of the statute as inclusive of the right of public performance from the only two courts that have ruled on or discussed this right under § 980(a)(2). Accordingly, the Court granted summary judgment on copyright infringement in violation of § 980(a)(2) in favor of Plaintiff.
Borrowing the violation of § 980, the Court found that Sirius also violated California's Unfair Competition Law because Sirius publicly performs Plaintiff's sound recordings without authorization to do so. Also, the Court found that Sirius XM’s unauthorized performances established conversion damages in the form of license fees that Sirius XM should have paid Plaintiff in order to publicly perform its recordings. The foregone licensing or royalty payments that Sirius XM should have paid before publicly performing the recordings also constituted misappropriation.
Lastly, the Court found that Sirius could not rely on the doctrine of laches because this was an action at law seeking money damages, and laches is an equitable defense. Accordingly, the Court granted Plaintiff's motion for summary judgment on all causes of action, but only so far as the claims are premised on Sirius XM’s public performance of the recordings, not its alleged reproductions.