SoundExchange/Sirius Royalty Dispute Belongs Before Copyright Royalty Board, Not Federal Court

SoundExchange, Inc. v. Sirius XM Radio, Inc., No. 1:13-cv-1290 (D.D.C. filed August 26, 2014).

Pursuant to the "primary jurisdiction" doctrine, a federal district court judge stayed a royalties dispute between SoundExchange and Sirius, saying that the dispute belongs before the Copyright Royalty Board.  The parties already had met before the CRB in two prior proceedings, setting royalty rates for the digital broadcast of sound recordings on satellite radio  SoundExchange brought an action in federal court alleging that Sirius underpaid royalties owed from 2007-2012 (the subject of the first CRB proceeding).  The instant dispute centered on the meaning of the term "Gross Revenues" (a percentage of which are the royalties owed SoundExchange), and Sirius's alleged reductions/exclusions therefrom based on pre-72 recordings and Sirius' premiere subscriber package.  The Court agreed with Sirius that the disputes "are best suited to review in the first instance by the CRB. ... [T]he technical and policy expertise of the CRB makes referral to that body appropriate."  Because neither party was asking for a change in the royalty rates, only a clarification, the CRB was found to have continuing jurisdiction.

Section 115

General Counsel from Copyright Office.

Amend it? " Most important musical issue for digital music distribution".

Another look at it. Look at business models of digital music distribution. Limited download v interactive streams. All implicate copies. Is that delivery as defined in scope of license? Server copies. Steaming copies.

Important because royalty judges are hearing on new rates. Novel question of law is whether interactive streaming a digital phono record delivery? No. on demand digital transmission : should they be eligible for royalty rate?

Everything depends on definition of digital phono record delivery.

Notice of proposed rule making forthcoming.