Source: https://www.loeb.com/en/insights/publications/2017/11/flo--eddie-inc-v-sirius-xm-radio-inc
Timestamp: 2019-04-23 14:29:40
Document Index: 614158459

Matched Legal Cases: ['§ 772', '§ 812', '§ 543', '§ 543', '§ 543', '§ 543']

Flo & Eddie, Inc. v. Sirius XM Radio, Inc. | Publications | Loeb & Loeb LLP
IP/Entertainment Case Law Updates October 26, 2017
Supreme Court of Florida holds that Florida common law does not recognize exclusive right of public performance in pre-1972 sound recordings, and that all four of Flo & Eddie Inc.’s claims against Sirius XM Radio Inc. for broadcasting certain of The Turtles songs fail under Florida law.
Appellant and plaintiff Flo & Eddie Inc. owns the master sound recordings of certain pre-1972 performances by the musical group The Turtles. Sirius XM Radio Inc. provides internet and satellite radio services nationwide. Defendant broadcast certain The Turtles songs to its subscribers located in the state of Florida and, in the process, backed up and buffered copies of the recordings onto its servers and satellites. Sirius XM did not secure a license to broadcast the songs or pay royalties to Flo & Eddie.
Flo & Eddie sued Sirius XM in federal district court, asserting four causes of action: (1) common law copyright infringement, (2) common law misappropriation and unfair competition, (3) common law conversion and (4) civil theft. Under the copyright infringement claims, Flo & Eddie argued that defendant’s broadcasts constituted unauthorized public performances of the recordings and that defendant’s backup and buffer copies constituted unauthorized reproductions of the recordings.
While noting there is no Florida statute addressing these issues, the district court granted Sirius XM’s motion for summary judgment, holding that there was no exclusive right of public performance under Florida common law and that defendant’s act of creating backup and buffer copies did not constitute an improper reproduction. The district court dismissed all of the remaining non-copyright claims on the basis that those claims were dependent on the survival of the copyright claim.
On appeal, the Eleventh Circuit Court of Appeals found the existence of “significant doubt” regarding the answers to material questions of Florida law upon which the case turns. Consequently, the Court of Appeals certified to the Supreme Court of Florida four questions of Florida law:
Whether Florida recognizes common law copyright in sound recordings and, if so, whether that copyright includes the exclusive right of reproduction and/or the exclusive right of public performance.
To the extent that Florida recognizes common law copyright in sound recordings, whether the sale and distribution of phonorecords to the public or the public performance thereof constitutes a “publication” for the purpose of divesting the common law copyright protections in sound recordings embedded in the phonorecord and, if so, whether the divestment terminates either or both the exclusive right of public performance and the exclusive right of reproduction.
To the extent that Florida recognizes a common-law copyright including a right of exclusive reproduction in sound recordings, whether Sirius’ backup or buffer copies infringe Flo & Eddie’s common law copyright exclusive right of reproduction.
To the extent that Florida does not recognize a common law copyright in sound recordings, or to the extent that such a copyright was terminated by publication, whether Flo & Eddie nevertheless has a cause of action for common law unfair competition/misappropriation, common law conversion or statutory civil theft under Fla. Stat. § 772.11 and Fla. Stat. § 812.014.
The Supreme Court of Florida found that the controversy turned on the threshold question of whether Florida common law recognizes an exclusive right of public performance in pre-1972 sound recordings, dispositive, and therefore combined the first two questions into the following determinative question: “Does Florida common law recognize the exclusive right of public performance in pre-1972 sound recordings?” The court noted the treatment of copyright for sound recordings under Florida and federal law is instructive in resolving this issue.
After reviewing the history of federal copyright law’s treatment of sound recordings, the court found that plaintiff’s position was inconsistent with decades of history under federal law. Not only has “federal copyright law ... long distinguished the right of public performance from the right of reproduction,” but “Congress had repeatedly declined to recognize any right of public performance for any sound recordings” up until 1995, when “Congress granted a limited right of public performance for post-1972 sound recordings.”
With respect to Florida law, the court noted that while no Florida case law specifically addresses Florida common law copyright in the context of sound recordings, the Florida Legislature has addressed the issue on various occasions. First, in an effort to address conflicting case law from other jurisdictions, in 1941 the Florida Legislature enacted two statutory provisions (codified at §§ 543.02 and 543.03, Fla. Stat. (1941)), which effectively provided that the act of publication of a sound recording had the effect of terminating any common law property rights in such sound recording. Second, in 1971, the Florida Legislature adopted a criminal record piracy law. Finally, in 1977, the Florida Legislature repealed the former provisions (providing that common law copyrights terminate upon publication), but did not repeal the anti-piracy law.
After reviewing this history, the court concluded that “Florida common law has never previously recognized an exclusive right of public performance for sound recordings,” and that “[t]o recognize such a right for the first time today would be an inherently legislative task.” The court recognized that such a decision would have “extensive and far-reaching” consequences that would “upset settled expectations” and impact the “many competing interests at stake” — including numerous stakeholders who are not parties to the suit.
The court also stated that Flo & Eddie was essentially asking it to recognize an unfettered right in pre-1972 sound recordings that was broader than any right previously recognized in any sound recording. As the court noted, it was not until 1971 that Congress finally extended federal copyright protection to sound recordings — but only to post-1972 sound recordings, and solely with respect to record piracy — and not until 1995 that Congress granted a right of public performance in sound recordings. Even then, the right was recognized as severely limited and carefully delineated. According to the court, if an exclusive right of public performance had existed all along under common law, then one would have to conclude that Congress actually took away that right in 1971, and only partially restored it in 1995. The court thus “decline[d] to reach the conclusion that, despite decades of industry lobbying, Congress eventually granted a right in 1972 that was significantly less valuable than the right Flo & Eddie claims has existed all along under the common law … .”
With respect to prior legislative developments in Florida, Flo & Eddie argued the legislature’s enactment of §§ 543.02 and 543.03 — which served to repeal any common law rights attaching to sound recordings — proved the Florida common law previously recognized the existence of such rights; thus, according to Flo & Eddie, when the legislature subsequently repealed §§ 543.02 and 543.03, the effect of this repeal was to revive with full force and effect the prior existing common law that had previously been in place. The court disagreed, noting that at the time the legislature enacted §§ 543.02 and 543.03, there was no Florida case law that recognized a common law right of public performance for sound recordings, and that those provisions were adopted to prevent the development of such a common law right following decisions in other jurisdictions.
Having concluded that Florida common law does not recognize an exclusive right of public performance in pre-1972 sound recordings, the court briefly addressed the two remaining certified questions. First, the court held that, even assuming Florida common law recognizes the existence of a post-sale exclusive right of reproduction, defendant’s backup or buffer copies would not infringe such a right because the ultimate use of internal copies is permissible. In so ruling, the court recognized that finding for Flo & Eddie on this issue would require it to ignore that Florida’s anti-piracy statute, although a criminal statute, contains a specific carve-out for copies made in connection with radio broadcast transmissions. Second, the court held that plaintiff does not have a cause of action for common law unfair competition/misappropriation, common law conversion or statutory civil theft, because those claims were dependent on an alleged common law copyright. Because Flo & Eddie’s copyright claim failed, its state law claims necessarily failed as well.
Summary prepared by Jonathan Neil Strauss and Ava Badiee.