Legal Newsline reports the Supreme Court of Georgia recently ruled that internet radio services are close enough to AM/FM services to fall under an exemption in the state’s criminal statute. According to the March 20 decision, all justices concurred that iHeartMedia and all of the internet radio services provided by the company are exempt from Georgia’s Criminal Reproduction and Sale of Recorded Material piracy statute, OCGA 16-8-60 (OCGA). Justice Harold Melton wrote the unanimous opinion for the court.

 

Issue Before the Court

The U.S. District Court for the Middle District of Georgia submitted a question to the Georgia Supreme Court asking whether or not internet radio services offered by iHeartMedia were allowed to fall under the exemption from the OCGA.

In September of 2015, a complaint was filed against the internet radio station by a couple, Arthur and Barbara Sheridan. The Sheridan’s alleged iHeartMedia failed to pay them for the permission to play several pre-1972 master sound recordings of popular music; they also alleged iHeartMedia did not have a license to play their music. The complaint claimed iHeartMedia violated OCGA, which comes with criminal penalties, and engaged in racketeering by making the unauthorized transfers of the sound recordings. iHeartMedia in response claimed it was exempt from OCGA, stating the law does not apply when sharing for television or radio broadcast transmission or other similar uses. The Georgia Supreme Court agreed, finding the services provided by iHeartMedia were essentially the same as those of a radio station except for how a listener accesses these services. To further support its decision, the court noted the song was used temporarily, whether on the radio waves or on the internet, and was not stored for replaying.

 

Changes in Legal Landscape

What makes this case so important, is that it is the first of its kind to allege illegal use of recordings constituted criminal record piracy and racketeering under a state RICO statute. In prior lawsuits involving pre-1972 sound recordings the issue was allegations of illegal use of performances of recordings. The lawsuit did not allege Georgia’s civil common law copyright regime grants sound recordings a right to public performance. Instead, the lawsuit alleged the state’s criminal record piracy statute applied to internet radio broadcasts and, consequently, gives rise to a civil RICO claim.

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