Written by Attorney Nellie C. Stoeckel for the Winter 2022 Edition of Powerhouse Points, A Quarterly Litigation Update.
Read the full issue here.
Early in his career, Robin Williams was regarded by fellow standup comedians as a notorious joke thief, a fact he openly admitted on Marc Maron’s WTF Podcast back in 2010. Stand-ups were known to walk offstage mid performance if they spotted Williams in the audience to prevent him from stealing their material, a practice Williams himself dismissed as “joke sampling.” In an ironic twist, the estate of the late comedian and actor has filed a lawsuit against Pandora Media LLC, the world’s largest digital broadcast and streaming music provider, alleging the company lifted Williams’ material by illegally airing his old performances without permission.
In addition to the Robin Williams’ estate, other celebrated stand-up comedians have hit Pandora with lawsuits alleging copyright infringement. Andrew Dice Clay, Ron White, Bill Engvall, and the estate of late comedian George Carlin similarly claim the platform illegally aired their performances by failing to obtain the necessary licenses and permissions in violation of the Copyright Act.
The five lawsuits argue that the failure was a deliberate act intended to circumvent paying royalties: Pandora took several of each comedian’s works, knowing it possessed neither the valid licenses to publicly air those works, nor the licenses required to distribute and reproduce the works. Before its acquisition by Sirius XM Radio, Pandora disclosed in its SEC filings that it “could be subject to significant liability for copyright infringement and may no longer be able to operate under their existing licensing regime.” After Sirius’ acquisition of Pandora was completed in 2018, Pandora removed the admission.
According to 17 U.S.C. §§ 106 and 204 of the Copyright Act of 1976, copyright owners have the exclusive right to reproduce, distribute, license, and publicly perform their works. Anyone seeking to obtain the right to do so must request a license from the respective copyright owner(s) of both copyrights and agree to pay royalties. The plaintiffs contend that Pandora has a duty to seek out copyright owners and obtain valid licenses, and therefore, its failure to do so constitutes copyright infringement.
A recorded performance of a literary work has two sets of copyright: one for the sound recording, the other for the underlying spoken word (composition). Similarly, a musical work is covered by two copyrights: one for the sound recording, the other for the written music. Streaming services like Pandora pay royalties to the owners of each copyright. The comedian’s composition or work is their written material: the jokes. However, streaming services like Pandora pay only for the comedian’s recording, not the material. Historically, the work of stand-up comedians has not been accorded the same breadth of protection and safeguards under copyright law, but the status quo soon may be upended pending the outcome of current litigation.
Each lawsuit seeks an accounting of Pandora profits from the alleged infringement, in addition to reasonable royalties (the maximum statutory damages, which is $150,000 per copyrighted work), attorney’s fees and interest. For each plaintiff, the amounts would be as follows: $8.4 million for the George Carlin estate; $4.1 million for the Robin Williams’ estate; more than $7.65 million for Bill Engvall; $8.56 million for Andrew Dice Clay; and $12.4 million for Ron White.
Copyright law also requires digital service providers like Pandora to obtain a mechanical digital reproduction license from the owner of the composition in order to make the recording available for reproduction and distribution through interactive streaming, even where the digital service provider has a license to interactively stream a sound recording. The comedians’ lawsuits allege that Pandora failed to obtain the required additional license when offering their works through its Premium interactive streaming service.
A similar dispute recently arose between Spotify, one of the world’s largest audio streaming providers, and Spoken Giants (SG), a global rights administration company for owners and creators of Spoken Word copyrights. SG represents comedians such as Mike Birbiglia, Tiffany Haddish, Kevin Hart, Jim Gaffigan, John Mulaney, and the estates of Bob Hope and Lucille Ball. SG argued that comedians deserve royalties on their written work, not just the audio of their performances, and demanded Spotify compensate its clients according to the music industry’s method, where royalties are paid separately to writers of works and to those who perform the master sound recording. In swift response, and without notice, Spotify removed from its platform hundreds of comedy albums represented by SG.
Should plaintiffs prevail, the outcome will have immediate, far-reaching impact upon the performance industry, and likely will push audio streaming and media service providers to reconsider how to compensate comedians, given growing demand to offer them the same protections as musicians. Streaming platforms such as Pandora and Spotify may have no recourse but to either limit or entirely remove the performances of some of world’s most celebrated comic talent, given additional royalties they may have to pay.
For entertainment clients, the law seems to be swinging in their favor as copyrights bolster the protection of their work and protect their intellectual property.
For our media clients, we would caution that the field is changing and there is an increased awareness on the value of the work and protection of the rights of the entertainers. With regards to podcasts, we may see a move towards deals where companies can pay for the full rights, as opposed to leasing them per play, such as Spotify’s large deal for the Joe Rogan podcast.
As streaming media services continue to expand and compete against one another for market share, the search for content will grow. Companies will have to choose whether to pay for the rights to use well-established artist’s work or gamble on fresh content and hope for success. The choice will be hefty either way.