Pandora's Anti-SLAPP Motion Slapped Down; Protection of Pre-'72 Records Reaffirmed

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By Anandashankar Mazumdar

Feb. 25 — California state law does indeed grant exclusive public performance rights to the owners of copyrights in pre-1972 sound recordings, the U.S. District Court for the Central District of California ruled Feb. 23.

The court reaffirmed its own ruling in a September decision, in a case brought by the same plaintiffs—the owner of rights in the Turtles' hit records—against Sirius XM Radio.

In this case, the Pandora online streaming service failed to get the copyright claims thrown out under a California statute intended to protect free speech rights from frivolous lawsuits.

Multiple Turtles Actions 

The Turtles were a pop music group that had several hits between 1965 and 1969, including “Happy Together.” Founding members Howard Kaylan and Mark Volman formed Flo & Eddie Inc. to acquire the copyright interests in the Turtles' recordings.

Pandora Media Inc. operates a popular online music streaming service.

Pandora's service allowed users to listen to Turtles recordings in which Flo & Eddie held copyright interests. Pandora did not seek authorization from Flo & Eddie or pay royalties for its use.

Flo & Eddie sued Pandora, alleging that Pandora had infringed its rights under California state law.

Federal copyright law does not cover pre-1972 sound recordings, so Flo & Eddie alleged infringement of rights in original pre-1972 sound recordings in violation of Cal. Civ. Code §980(a)(2), misappropriation, unfair competition in violation of Cal. Bus. & Prof. Code §17,200, and conversion.

Flo & Eddie is also pursuing claims in a federal district court in New York against Sirius XM Radio Inc.

In another proceeding between Flo & Eddie and Sirius XM Radio Inc.—in California before the same judge as in the instant case—the court ruled that Sirius XM's streaming of Turtles recordings violated Flo & Eddie's rights under Section 980(a)(2) (Flo & Eddie Inc. v. Sirius XM Radio Inc., 112 U.S.P.Q.2d 1307 (C.D. Cal. Sept. 22, 2014).

Two-Part Test for Anti-SLAPP Motions 

Pandora then sought to have Flo & Eddie's claims dismissed under California's anti-SLAPP (“strategic lawsuit against public participation”) law, Cal. Code Civ. P. §525.16, which offers a defendant an opportunity to get quick dismissal of a “strategic lawsuit against public participation.”

Equilon Enters. v. Consumer Cause, Inc., 29 Cal. 4th 53 (2002), set forth a two-part test for dismissing claims under the anti-SLAPP statute.

First, the court said, there must be a threshold showing that the action objected to by Flo & Eddie constituted protected speech on the part of Pandora.

Should Pandora succeed in doing so, Martin v. Inland Empire Utilities Agency, 198 Cal.App.4th 611 (2011), shifts the burden to Flo & Eddie to establish a likelihood of success on its infringement claim.

Under the first prong, the court determined that in streaming Turtles recordings to users, Pandora was indeed engaging in speech protected by the First Amendment.

Statute Clearly Intended to Protect Released Records 

Thus, Flo & Eddie now bore the burden to establish a likelihood of success. Under this prong of the test, the court concluded that its claims were “meritorious enough to withstand the anti-SLAPP motion.”

Specifically, the court rejected Pandora's argument that its Sirius XM ruling in September had misinterpreted Section 980(a)(2) when concluding that Flo & Eddie held the exclusive right to public performance of its sound recordings.

The relevant portion of the state statute, enacted in 1982, says:

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 recording.

 

The court began by citing the Copyright Act of 1976, 17 U.S.C. §301(c), which exempts pre-1972 sound recordings from the protection of federal copyright law and states that “any rights or remedies under the common law or statutes of any state shall not be annulled or limited by this title until February 15, 2067.”

Thus, the court said, “California statutory and common law presently governs the rights that attach to pre-1972 sound recordings because the Copyright Act does not apply to those earlier recordings and explicitly allows states to continue to regulate them.”

Pandora argued that the California legislature, in enacting this provision of statutory law, intended only to protect unpublished works, and that the works in question had been published in 1960s when they were released to the public.

Pandora's argument was based on the language of state statutes in effect in the 1960s, which granted rights in a “composition in letters or art” until publication.

Thus, according to Pandora, when the Turtles released their recordings in the 1960s, their protection under California law was extinguished, and the statute enacted in 1982—like the prior law—was intended to protect only unpublished works.

“Pandora's theory results in an impotent law that protects only the tiniest class of sound recordings,” the court said. “Under Pandora's interpretation, the legislature's broadly phrased codification of ‘exclusive ownership rights … as against all persons' was only intended to protect decade-old sound recordings that were never sold to the public or played on the radio. These are sound recordings that the public has never heard. Pandora brainstorms one example of an item in this niche class—recordings of never-released historic live music performances.”

However, the court said that Pandora's argument ignored the fact that once a work was published in California, it was protected under the common law of property. It was not true that all rights were extinguished by publication.

Furthermore, the court pointed out that the 1982 statutory language discarded the “publication” language in favor of protecting works that had been fixed in a perceivable medium.

Thus, the court rejected “Pandora's argument that the legislature did not intend the expansively-phrased protections of §980(a)(2) to apply to pre-1972 sound recordings that had been previously released to the public. That law would cover practically nothing.”

Thus the court found that Flo & Eddie's claims were sufficient to defeat Pandora's anti-SLAPP motion.

Pandora immediately filed notice that it intended to appeal this decision to the U.S. Court of Appeals for the Ninth Circuit.

The court's ruling was issued by Judge Philip S. Gutierrez.

Flo & Eddie was represented by Cohen & Cohen, Los Angeles. Pandora was represented Latham & Watkins LLP, San Francisco.

To contact the reporter on this story: Anandashankar Mazumdar in Washington at amazumdar@bna.com

To contact the editor responsible for this story: Tom P. Taylor at ttaylor@bna.com

Full text at: http://www.bloomberglaw.com/public/document/Flo__Eddie_Inc_v_Pandora_Media_Inc_et_al_Docket_No_214cv07648_CD_/1