Pandora, Lewis Black, & a Federal Judge Walk Into a Bar…

* Cover image by Tumisu on Pixabay.

In July 2022, comedian Lewis Black filed a lawsuit against the internet radio streaming giant, Pandora. Black is a stand-up comedian who earned his place in history through his signature rant-style comedy, which often highlights the absurdity in current events.[1] Black has now channeled another gripe into a legal battle that could create big waves for stand-up comedians and other owners of spoken word content.

Black’s complaint alleges that Pandora has infringed copyrights of sixty-eight original works contained within five comedy albums.[2] He alleges that Pandora has willfully performed and broadcasted the albums without obtaining a license to their underlying literary compositions, all of which have been registered with the U.S. Copyright Office.[3] Black argues that by failing to obtain these literary works licenses, Pandora has deprived him of royalties for the works embodied in the sound recordings of the literary compositions, despite his receiving royalties for the performance of the sound recordings.[4]

In addition to pleas for attorney’s fees and an injunction against any further unlicensed use of his work, Black claims Pandora owes future royalties and actual damages for its past infringement.[5] In the alternative, he claims statutory damages totaling over ten million dollars.[6] The complaint further asserts that Pandora not only exploited the literary works without a license, but that it did so willfully.[7] Black cites Pandora’s September 2013 public filings with the Securities Exchange Commission, in which the company identified the unlicensed use of comedy as a potentially significant liability in its disclosed “Risk Factors”:

In May 2011, we started streaming spoken word comedy content, for which the underlying literary works are not currently entitled to eligibility for licensing by any performing rights organization in the United States. While pursuant to industry-wide custom and practice . . . . there can be no assurance that this will not change or that we will not otherwise become subject to additional licensing costs for spoken word comedy content imposed by performing rights organizations in the future or be subject to damages for copyright infringement.[8]

Pandora identified this risk in its filings from 2011 to 2017, but stopped doing so after being acquired by Sirius XM.[9]

Black’s fundamental argument is an analogy between the licensing system for stand-up comedy recordings and that of the music industry. In music licensing, one musical recording encompasses two separately copyrightable works.[10] The musical work is the underlying composition and lyrics authored by a songwriter/composer, which may be fixed as sheet music or a recording.[11] The sound recording comprises the sounds that make up the recording itself.[12] In the modern music industry, it is common for sound recordings and musical works to be created, owned, and managed by different entities.[13] This means that different entities often separately own the exclusive rights to the two parts of a single “song,” and will therefore receive separate streams of revenue for the public performance of that song.

This complicated modern music licensing system first emerged in the late nineteenth century when organizations now called Performing Rights Organizations (“PROs”) were formed to administer performance rights for musical works.[14] The need for PROs was brought on by an increase in the public performance of music in cafes and restaurants around the world. At the time, these venues compensated musical performers without being required to pay the composers of the works they played.[15] One organization began advocating for those composers, and by collecting fees for the performance of their works from venues, and the modern PRO was born.

In 1897, Congress granted composers the exclusive right to publicly perform their work.[16] In the following two decades, it became clear that copyright owners, although finally able to collect fees for the performance of their work, would be unable to negotiate each license or detect all infringement on an individual basis.[17] Thus, the first American PRO was founded in 1914: The American Society of Composers, Authors, and Publishers (“ASCAP”).[18] ASCAP is still one of the main PROs for musical work royalties, alongside Broadcast Music, Inc. (“BMI”).[19]

In 2020, the first PRO for the licensing of spoken word literary works, including stand-up comedy, was founded under the name Word Collections.[20] In a press release announcing its creation, Word Collections claimed to be “the ASCAP and BMI for spoken word instead of music.”[21] The organization represents a growing body of comedy works, and states that it will recover all past royalties owed to comedians in addition to securing all future royalties for broadcasts and plays of comedy on streaming services and AM/FM radio.[22] Word Collections serves many comedians who have sued Pandora alongside Lewis Black in 2022, including the estates of Robin Williams and George Carlin.[23] These disputes are set to be the first a court will hear about the licensing of spoken word literary work.[24]

Big names in stand-up comedy and the music licensing industries have lauded Word Collections and one other literary works PRO, Spoken Giants, as necessary fixes to the lack of licensing in spoken word comedy.[25] Pandora aggressively rejects this praise in its response to one of the comedian’s complaints.[26] It has three primary arguments against the separate licensing of comedy literary works.[27] First, the longstanding industry custom for licensing comedy routines fits with the “licensing at the source” model used by all industries with relative ease, with the one exception of the “broken” and outmoded music licensing industry.[28] Second, Pandora’s non-interactive service plays a substantial role in the promotion of comedy content despite such content making up a very small proportion of its streams, implying Pandora already provides more value to comedians than comedians reciprocate.[29] Third, Pandora claims that Word Collections has invented a problem that does not actually exist for comedians, and has proposed an inefficient, illogical, and potentially anti-competitive licensing scheme as a solution to that problem.[30]

Despite Pandora’s vigorous response to the allegations of infringement, few lawyers who have publicly spoken on the dispute express confidence in the streaming company’s legal arguments.[31] Some even analogize the current conflict to the conflict between musicians and Napster, the file-sharing service that was found liable for contributory and vicarious infringement of copyrights by allowing users to pirate music online.[32]

In September, Pandora filed counterclaims that allege Word Collections and Spoken Giants are attempting to engage in price fixing, monopolization, and other anti-competitive practices, calling the organizations part of a “cartel.”[33] These claims failed in October. Judge Scarsi of the U.S. District Court for the Central District of California said that Pandora had not alleged “the necessary facts at this stage” to make the claims.[34]

Time will tell whether the streaming giants will be liable for the alleged infringement. This blog will provide continued analysis and updates on the battles as they play out. We will discuss the deeper cuts, including what a win for comedians might do to actually harm the industry in the long run. Stay tuned.

Notes

[1] About Lewis, Lewis Black.com, https://www.lewisblack.com/pages/about-lewis (visited July 27, 2022).

[2] Complaint for Copyright Infringement, Black v. Pandora Media, LLC., No. 2:22-cv-04634, 4-5 (C.D. Cal. July 7, 2022), https://perma.cc/94WQ-QSG7.

[3] Complaint, supra note 3 at 11.

[4] Id. at 12.

[5] Id.

[6] Id.

[7] Id. at 9.

[8] SEC Form S-3 Filing for Pandora Media, LLC, SEC Edgar 21 (Sept. 16, 2013) https://www.sec.gov/Archives/edgar/data/1230276/000104746913009097/a2216690zs-3asr.htm.

[9] Complaint, supra note 3 at 9.

[10] Office of General Counsel, U.S. Copyright Office, Copyright & The Music Marketplace 18 (Feb. 2015) [hereinafter The Music Marketplace], https://www.copyright.gov/policy/musiclicensingstudy/copyright-and-the-music-marketplace.pdf.

[11] Id.

[12] Id.

[13] Id.

[14] Staffan Albinsson, A Costly Glass of Water: The Bourget v. Morel case in Parisian courts 1847-1849, 96:2 Swedish J. Music Research 59 (2014).

[15] Id. at 62.

[16] The Music Marketplace, supra note 11 at 32.

[17] Id. at 32.

[18] Id. at 32-33.

[19] Id.

[20] Founder of TuneCore and Audiam Launches Unprecedented Performing Rights Collection Agency for Comedians: Word Collections (Press Release), Word Collections (Oct. 22, 2020), https://www.wordcollections.com/news/founder-of-tunecore-and-audiam-launches-unprecedented-performing-rights-collection-agency-for-comedians-word-collections.

[21] Id.

[22] Id.

[23] See Answer and Defenses of Pandora Media, LLC to Plaintiff’s Amended Consolidated Complaint, In re Pandora Media, LLC Copyright Litigation, No. 2:22-cv-00809-MCS-MAR, (C.D. Cal. May 5, 2022), https://perma.cc/9SNQ-SAKP. See also Isaiah Poritz, Comedians’ Feud with Streaming Giants Asks: Who Can Use My Joke?, Bloomberg Law (Apr. 18, 2022), https://news.bloomberglaw.com/ip-law/comedians-feud-with-streaming-giants-asks-who-can-use-my-joke.

[24] Poritz, supra note 24.

[25] Word Collections Press Release, supra note 21. See also Poritz, supra note 24.

[26] Answer and Defenses of Pandora Media, supra note 24 at 2-3.

[27] Id.

[28] Id. at 2-3.

[29] Id. at 9-10.

[30] Id. at 14-19.

[31] Josh Dickey, Comedians Are Finally Taking on Streamers – and Their Copyright Claims Are No Joke, Yahoo (July 21, 2022), https://www.yahoo.com/video/comedians-finally-taking-streamers-copyright-130000930.html.

[32] Dickey, supra note 32. See A & M Records, Inc. v. Napster, Inc., 114 F. Supp. 2d 896 (N.D. Cal. 2000). See also James V. Grimaldi, Napster Ordered to Shut Down, WSJ (July 27, 2000), https://www.washingtonpost.com/archive/politics/2000/07/27/napster-ordered-to-shut-down/c13bde0f-7710-4d85-9fcb-6767ed2f2f84/.

[33] Lauren Berg, Pandora Says Lewis Black, Agency Part of Antitrust “Cartel,” LAW360 (Sept. 26, 2022), https://www.law360.com/articles/1534195.

[34] Isaiah Poritz, Pandora’s Antitrust Claims Fail in Comedy Lawsuits, For Now, Bloomberg Law (Oct. 27, 2022), https://news.bloomberglaw.com/ip-law/pandoras-antitrust-claims-fail-in-comedy-licensing-row-for-now.