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Pandora, Others Seek Certainty In Music Copyright Through Settlements, But Issues Remain

In recent weeks, music licensees have announced multiple copyright settlements, in an apparent effort to find some business certainty in the notoriously complex music licensing space.  These have included several settlements in disputes over pre-1972 sound recordings, such as deals by SiriusXM and Pandora with the labels represented by the RIAA, for $120 million and $90 million respectively.  And yesterday it was also announced that Pandora and Sony/ATV Music Publishing reached a landmark new licensing agreement (although the terms on this one are confidential).

In the complex and uncertainty music licensing landscape, arrangements such these do not resolve the outstanding legal questions, but they play an important role in shaping the music marketplace.  They provide more certainty to the individual licensees, ensuring that consumers have continue to have lawful options for listening to music.  They also allow service providers to focus on satisfying consumers, instead of litigation.

But while a licensing arrangement in the face of legal risk may afford more certainty to the music distributor party to the agreement, it doesn’t answer the underlying questions.  For example, the fact that some music services have settled with some rights holders of pre-1972 sound recordings does not prevent other owners of pre-1972 sound recordings from bringing suit over similar issues (or mean that these plaintiffs won’t go after new defendants).  In fact, it may even encourage them.  For this reason, questions and ambiguity around the music publishing market and pre-1972 sound recordings won’t be resolved anytime soon.

In addition to ongoing litigation over pre-1972 sound recordings, other government entities are considering music copyright issues too, including the Department of Justice’s review of the ASCAP/BMI consent decrees (not to mention the House Judiciary Committee’s copyright review).

Intellectual Property

The Internet enables the free exchange of ideas and content that, in turn, promote creativity, commerce, and innovation. However, a balanced approach to copyright, trademarks, and patents is critical to this creative and entrepreneurial spirit the Internet has fostered. Consequently, it is our belief that the intellectual property system should encourage innovation, while not impeding new business models and open-source developments.