Sirius XM Radio hit with lawsuit over alleged failure to pay royalties

A lawsuit has been filed against Sirius XM Radio in the U.S. District Court of Washington DC by SoundExchange, a non-profit organization that works with artists to collect royalties on digital works and has its establishment roots in the Recording Industry Association of America. According to the lawsuit, Sirius XM has underpaid the organization for a statutory license by quite a hefty sum, and it wants millions in return.

With the license, Sirius XM Radio is granted the right to play SoundExchange's subscribers' recordings. In particular, the radio company is accused of "systematically" underpaying on recordings from before 1972, decreasing its gross revenues by 10- to 15-percent. These revenues are used to calculate the royalties Sirius is supposed to pay.

The reason for this, according to SoundExchange in the lawsuit it filed, is because Sirius reportedly believes the statutory license it pays for does not cover those particular songs. Audio recordings made before 1972 did not fall under federal copyright protection and were instead based on state copyright laws, an issue it apparently considers relevant because the license is established by federal law.

SoundExchange – which is itself established under federal law – obviously feels differently about the matter, and contends that Sirius has underpaid it by a substantial amount. According to the court filing, the non-proft seeks at least $50 million USD, with the figure possibly reaching $100 million USD or higher, not including interest on the missed payments and late fees.

Said SoundExchange CEO Michael Huppe in a statement on the matter: "We cannot sit by and watch this multi-billion dollar company reap record profits from the creative contributions of artists and labels without paying them everything they deserve." Sirius XM has not yet responded to these allegations.

SOURCE: Reuters