An Illinois couple seeking to receive royalties for pre-1972 sound recordings they own have been thwarted in their home state from getting any dollars from the biggest owner of broadcast radio stations in the U.S.
In a ruling handed down Monday (6/5) by Chicago-based U.S. District Judge John J. Tharp Jr., a class action lawsuit against iHeartMedia filed by Barbara and Arthur Sheridan was dismissed—a decision that affirms the current standard for pre-1972 recordings.
It’s another blow for the Sheridans and comes following a high-profile New York State defeat of the founding members of 1960s era act The Turtles — professionally known as Flo and Eddie — from collecting royalties from Sirius XM.
The Sheridans filed the lawsuit in Illinois federal court on Oct. 19, 2015. In his ruling, Tharp explained that the Sheridans own the master recordings “of many hit songs from the 1950s and 1960s.” Specifically, Arthur Sheridan owned and operated “several recording companies specializing in recording and selling doo-wop, jazz, and rhythm and blues music.” Among the artists for which they own the master sound recordings are The Flamingos, J.B. Lenoir, and The Moonglows.
Thanks to the pre-1972 royalty rules established by the courts, iHeartMedia plays these recordings on its internet and traditional broadcast radio stations without paying any sort of royalty or licensing fees to the Sheridans. To the extent that pre-1972 recordings have legal protection, it is provided by state law (statutory and common law) rather than federal law.
On this basis, the Sheridans assert iHeartMedia misappropriated their property under the Illinois Uniform Deceptive Trade Practices Act. They also say the company has also been “unjustly enriched.”
As Tharp explains, Illinois has no state copyright statute governing sound recordings, unlike some other states, such as California. The question, then, is whether Illinois provides common law copyright protection to pre-1972 sound recordings that have been sold to the public, but were not licensed by the defendant for public performance.
Illinois recognizes a common law copyright in unpublished productions of “literature, drama, music, art, etc.” that allows authors to control the initial publication of their work. In an 1874 ruling, in Rees v. Peltzer, “there is no copyright in a published work at common law.”
Tharp notes, “Under Illinois law, then, the dispositive question as to whether there is copyright protection that includes the right to exclusive public performance of a sound recording is whether the work has been ‘published.’”
In reaching his opinion, Tharp says, “Both the Illinois Supreme Court and the Seventh Circuit … have construed the concept of dedication to the public to include acts by which members of the public could access copies of the work – particularly through sales.”
Thus, under Illinois law “it is eminently clear that the broadcast of the records manufactured by the plaintiff or the sale of those records constitutes a publication or public performance. Therefore no common law copyright protection is available for those recordings.”
In conclusion, Tharp notes, “There is no dispute that the Sheridans voluntarily sold their recordings. When they did so, the Sheridans lost their common law right to control the public performance of those recordings in Illinois (and pretty much everywhere else).
Regarding deceptive trade practices claimed by the Sheridans, the judge says, “The utter dearth of case law indicating that it had any obligation to pay royalties dooms the Sheridan’s argument that it should have known the broadcasts were deceptive enough to ignore the IUDTPA’s exception for broadcasters.”
The Illinois ruling follows a March ruling by the Georgia Supreme Court that found iHeartRadio’s internet radio offerings are exempt from a state statute that prohibits the transfer of sound recordings without the consent of the copyright owner.
The unanimous ruling affirmed that iHeartRadio’s audio streams qualify as broadcasting. The plaintiffs? Arthur and Barbara Sheridan.
