Photo Credit: Jako Janse van Rensburg
A federal judge has stayed SoundExchange’s Sonos Radio royalties lawsuit pending the resolution of an appeal in “a very similar action” involving SiriusXM.
Judge Hernán Vera just recently made that stay official following a mid-November oral argument on Sonos’ related request. Filed in June against Sonos as well as Napster, this complaint specifically accuses the defendants of failing to cough up “in excess of $3.3 million” in due royalties and fees.
(As we noted in our previous coverage, much has changed since the alleged 2022-23 underpayment in question; Sonos Radio now has a deal with Deezer, and Napster, having found a new owner in March, recently encountered a funding-round hurdle.)
Interest has boosted that sizable sum higher yet, but pressing questions remain about whether SoundExchange actually possesses the statutory authority to sue for alleged underpayments.
August saw a different federal court dismiss a years-old payments complaint against SiriusXM, finding that Section 114 of the Copyright Act “lacks an explicit provision extending SoundExchange a right of action or the power to otherwise bring an action to litigate a royalty dispute.”
Unsurprisingly, the “unfortunate and incorrect ruling” didn’t sit right with SoundExchange, which, staring down the distinct possibility of losing its enforcement teeth, promptly appealed.
Despite this ongoing appeal, Sonos didn’t hesitate to cite the SiriusXM suit dismissal when moving to end its own SoundExchange showdown.
Besides emphasizing that it “has no obligation to pay royalties to SoundExchange as that obligation solely belongs to Napster under the parties’ agreements,” Sonos underscored that “SoundExchange is collaterally estopped from asserting claims for underpayment or nonpayment of royalties under Section 114.”
“SoundExchange’s Complaint against Sonos should be dismissed with prejudice,” Sonos wrote in a September motion. “In the alternative, this action should be stayed in its entirety pending a final, non-appealable judgment in Sirius.”
In the end, Judge Vera didn’t go as far as dismissing with prejudice (which “would be premature at this point”) or staying pending a final SoundExchange v. SiriusXM judgment (which “would have too long and uncertain a duration”).
But he did rule in favor of Sonos by concluding “that a more limited stay of this action is appropriate.”
“The present case will be stayed until two weeks after the issuance of the Second Circuit’s order on the appeal in the Sirius action,” Judge Vera wrote. “At that point, the parties can present their respective positions on what effect, if any, the Sirius appellate decision has on the Court’s collateral estoppel analysis here.”
With that, all eyes are on the dismissal appeal, which’ll be worth tracking into the new year. Separately, late October brought the certification of a default judgment against Napster and its parent in a royalties suit spearheaded by Sony Music; the relevant docket doesn’t appear to have delivered additional updates in the interim.
