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$210 Million?!?! Are You Sirius?

Sound recording owners won big time in a settlement with SiriusXM Satellite Radio last week. The courts have been fraught with litigation surrounding pre-1972 sound recordings because they do not fall within the ambit of the Copyright Act and are thus not entitled to federal copyright protection. Due to their lack of federal copyright protection, entities such as SiriusXM and Pandora have been able to reproduce and publicly perform these particular recordings without paying any license fees to the sound recording owner. Sound recording owners have used other theories of law in order to protect their interest in the pre-1972 sound recordings namely, misappropriation, which is equivalent to state law copyright, and many have been successful in gaining protection for these recordings in that way. The deal was struck at $210 million and called for a license for the pre-1972 recordings songs until 2017 at which time SiriusXM will have to negotiate a new license for the sound recordings. The hope is that the Pandora’s of the world will follow suit and settle with the recording owners in the same fashion.

This is actually a big victory for the recording industry. This settlement puts the pre-1972 sound recording owners at a slight advantage because they are granted both state law copyright protection which could possibly endure longer than the protection granted by the federal copyright law. In addition, by not including these recordings within the ambit of the federal copyright law, they are not subject to the compulsory license fee which forces licensees to negotiate for their license fees in order to reproduce or perform the sound recordings.

Unfortunately the lawsuit settlement only paid out to the big-wig majors so it didn’t settle anything when it comes to the smaller sound recording owners. It also didn’t provide a clear cut answer or any guidelines with how to handle this issue in the future, so absent some further precedential litigation or changes to the copyright law, we’re pretty much stuck in the same place we’ve been in for years.

At least they’ve put some monetary value on these recordings. Of course there is no indication as to how the settlement will be split amongst the artists of the recordings but that’s minor details to the labels because they’ve won and that’s really all that matters.

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