Flo & Eddie Must Choose Which Victory They Want in New York

Judge Colleen McMahon yesterday handed Flo & Eddie a take-your-pick win in their New York federal court lawsuit for pre-1972 performance royalties against SiriusXM. They asked for summary judgment that Sirius is liable to them for common law copyright infringement. Her order says such judgment “will be entered” if they give up on their lawsuit continuing as a class action. Or they can pursue the class action and she will lift the stay preventing discovery.

Flo & Eddie must tell Judge McMahon what they want to do by April 3. Sirius has lost the lawsuit on the merits and probably would like nothing better than trying their luck with the Second Circuit Court of Appeals. If Flo & Eddie stick with their class action approach, the court will allow discovery to go forward even though Sirius is asking the court to permit an appeal in the meanwhile, called an “interlocutory” appeal.

Once the court ruled that royalties for each play of a Turtles song on Sirius, “performance royalties,” could be awarded under New York’s common law copyright decisions, Sirius was left with a handful of smaller issues which all were rejected yesterday.

The first was a claim that Flo & Eddie, Inc. did not own the copyrights. Sirius had no evidence to question what the court called the “huge amount of evidence” submitted by Flo & Eddie that its principals Mark Volman and Howard Kaylan turned the rights over to their company. This happened in the ‘70’s and Sirius complained they don’t have a written assignment of rights. The court said the law doesn’t require one.

Sirius argued Flo & Eddie gave it an implied license to play the Turtles records for free. Judge McMahon analyzed what you must prove to claim an implied license, and just one of the points ends the discussion. Sirius had to show the Turtles recordings were created for it. That’s impossible of course because each was made about 45 years before Sirius existed.

Then Sirius argued the ancient equitable defenses of waiver and estoppel. For someone to waive a right under New York law, the person must both know they have the right and also intentionally relinquish it. Sirius had nothing to show there. Estoppel prevents a person from asserting an argument when they made false statements or concealed important facts from the other party. Sirius had no evidence there either.

The most creative argument by Sirius was that the statute of limitations on Flo & Eddie’s case expired because the issue was really who owned the copyrights. This failed because the lawsuit is about infringements by Sirius by playing the Turtles recordings without authorization. It is not a dispute between two people both claiming to own the copyrights. Since ownership was settled and Sirius had no claim to own Turtles recordings, they lost this too.

Judge McMahon reconsidered an earlier ruling on the rolling statute of limitations which starts with each new act of infringement. She said it was three years under New York law instead of six years. So if Flo & Eddie give up the class action, they can claim damages for the last three years’ plays of Turtles recordings. If they pursue the class, someday they may be claiming damages for nearly every rights owner of every pre-1972 sound recording played by Sirius in the last three years. What do you think they will do?

About Craig Pinkus

Craig Pinkus is a partner in the Intellectual Property Group. He also is a member of the Litigation and the Sports, Entertainment and Media Groups. He assists clients with a broad range of disputes and transactions involving all areas of intellectual property, entertainment, and other complex business arrangements. He has conducted trials and arbitrations throughout the United States and has argued appeals before the Seventh, Sixth and Federal Circuit Courts of Appeal, the Indiana appellate courts, and United States Supreme Court.
This entry was posted in Copyright, Copyright Enforcement, Sound Recordings and tagged . Bookmark the permalink.

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