Is Sirius Facing Legal Trouble?
SiriusXM (NASDAQ:SIRI) has been battling it out with competitors, such as Pandora (NYSE:P), for market share. However, now it looks like the satellite radio company has another dispute on its hands. Members of the band the Turtles have filed a lawsuit against Sirius for infringing by playing the band’s songs.
The suit was filed in the Los Angeles Superior Court with Flo & Eddie from the Turtles as the main plaintiffs. The complaint filed in court names state law claims for misappropriation among other claims. The filing also argues that federal copyright law gives deference to protection granted by state law. California law would protect the pre-1972 recordings until 2047, says the Hollywood Reporter.
SiriusXM is able to play a lot of pre-1972 songs without having to worry about copyright issues because the federal law only applies to recordings after 1972. The Wall Street Journal reports that previously this law was not much of an issue because traditional radio broadcasters were exempt from paying royalties regardless of when the recording was made.
The WSJ reports though that federal law since 1995 has required satellite radio to pay royalties for music. The companies send the fees to an organization called SoundExchange that then distributes payments to artists. Since 2011, Sirius has reported what songs it is paying fees for, and it stopped paying for pre-1972 songs at some point, according to the WSJ.
The situation is even more serious for the satellite radio company because plaintiffs are trying to make this suit a class action suit. The Hollywood Reporter states that the plaintiffs have alleged damages of at least $100 million in the filing. According to the Wall Street Journal, a spokesman for Sirius refused to comment on the issue.
Sirius is not the only one who stopped paying royalties on pre-1972 broadcasts. Pandora ceased these royalty payments last year, according to the Wall Street Journal.