Word Collections Secures Win In Pandora Spoken-Word Royalties Showdown: ‘The Counterclaim Is Dismissed in Its Entirety’

George Lopez. Photo Credit: Maggiejumps

A federal judge has officially dismissed Pandora’s countersuit against Word Collections “in its entirety” amid a broader battle concerning spoken-word royalties.

Judge Mark C. Scarsi dismissed the SiriusXM-owned platform’s counterclaim in a nearly 30-page-long decision late yesterday evening. In brief, regarding the multifaceted dispute’s background, entities including Spoken Giants and Word Collections in late 2021 kicked off a campaign designed to obtain streaming-service compensation for the use of comedians’ underlying compositions (on top of existing pay for recordings themselves).

A number of stand-up stars’ comedy albums disappeared from leading streaming services as the involved parties (unsuccessfully) sought to reach an agreement. February of 2022 saw Word Collections clients Bill Engvall, Ron White, Andrew Dice Clay, and the estates of Robin Williams and George Carlin levy copyright infringement complaints against Pandora over the aforesaid compositions.

Subsequently, comedians including Nick Di Paolo, Lewis Black, and George Lopez took aim at Pandora with suits of their own, and the actions were consolidated in late August. Meanwhile, May saw Pandora file a countersuit that alleged several violations (price fixing, tying, attempted monopolization and monopolization, and conspiracy to monopolize) of the Sherman Antitrust Act.

And as initially mentioned, the presiding judge has dismissed Pandora’s countersuit against Word Collections – albeit with leave to amend.

In the interest of (relative) brevity, Judge Scarsi first rejected multiple arguments featured within the countersuit dismissal motion, including that Pandora lacks “Article III standing to pursue its counterclaim…because Pandora’s allegations of supracompetitive prices and litigation costs are not cognizable harms” and “Pandora does not have antitrust standing to sue because it did not accept the terms of a supposedly anticompetitive license.”

“Pandora alleges that it is faced with the choice of acquiescing to a supracompetitive license or canceling its comedy offerings,” the detailed ruling reads. “The counterclaim adequately alleges that the direct cause of this choice is Word Collections’ offer. Whether Word Collections’ conduct is unlawful is another question, but Pandora does not need to accept Word Collections’ offer to demonstrate antitrust injury.”

Similarly, “Noerr-Pennington immunity is thus inappropriate to apply at this stage of the case, both to the claims and the request for injunctive relief,” the court determined before denying the motion to dismiss the countersuit “for failure to seek individual licenses.”

In granting the motion to dismiss Pandora’s monopolization counterclaims, though, the presiding judge relayed that the SiriusXM subsidiary had failed “to demonstrate market power directly or circumstantially.”

“Even though Pandora adequately defines a relevant market,” the filing reads, “Pandora offers no allegations that Word Collections owns a dominant share of the market or that there are significant barriers to entry in the market. … Pandora’s description of Word Collections’ impressive but short list of comedians whose works it licenses does not suffice to demonstrate that Word Collections owns a dominant share of the comedy recording market in the United States.”

Lastly, the court described as “insufficient” Pandora’s price fixing claim (“Pandora rests its conspiracy claim on the individual comedians’ decisions to associate with Word Collections”) and said that it had failed “to state a tying claim.”

“While the Court grants leave to amend on the price fixing and tying claims, the Court doubts whether Pandora can allege the necessary facts at this stage,” the ruling states in conclusion. “The Court recognizes that discovery may yield information about the nature of the agreements between the comedians and Word Collections, at the very least in the context of Pandora’s copyright misuse defense.”