SoundExchange v. Sirius XM: A Battle on Two Fronts
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In the United States, when an artist’s sound recording or track is played by a servicer like Pandora or satellite radio,[1] a digital public performance royalty for the sound recording is collected by the organization, SoundExchange,[2] or it may be negotiated between the parties via direct licenses. These non-terrestrial broadcast platforms perform in a non-interactive manner (i.e. the platform picks the tracks for the consumer to listen to) as opposed to in an interactive manner (i.e. listener picks the track) by a platform such as Spotify or Apple Music.[3]
SoundExchange was created by the Copyright Royalty Board to grant statutory digital performance sound recording licenses and facilitate administration thereof in the United States.[4] In fact, this specific type of royalty collection is unique to the United States. For signatory states of the Rome Convention of 1961—or the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations—anytime a song plays in public,[5] two royalties will accumulate based on that country’s regulations.[6] One will go to the performer’s sound recording, broadly, under neighboring rights,[7] and the second will go to the composition under performance rights.[8] However, the United States was not a party to those agreements. Due to various historical, political, legislative, and legal reasons, in the United States, the performer will only receive; (1) a limited performance royalty for the sound recording on non-terrestrial broadcast platforms[9] and (2) a broad performance royalty for the composition.[10]
Factual and Procedural Background
With these concepts in mind, on August 16, 2023, SoundExchange sued Sirius XM Radio Inc. in the Eastern District of Virginia and later transferred to the Southern District of New York.[11] The complaint asserted a failure of Sirius XM to pay almost ten million dollars in royalties to SoundExchange in 2018 alone.[12] SoundExchange alleged that the revenue accumulated through Sirius XM’s platform during this time was altered due to a bundling of satellite and streaming radio services.[13] A percentage from the bundles should have been paid as digital public performance royalties proportional to the amount of satellite radio usage, but SoundExchange held that there were no such allocations made. Unable to come to a settlement, Sirius XM moved for a judgment on the pleadings[14] and argued that §114 of the Copyright Act did not bestow authorization onto SoundExchange to bring legal action.[15] On August 7, 2025, the court agreed SoundExchange had no standing[16] and dismissed the case.[17]
Court’s Findings
§114 of the Copyright Act of 1976[18] details the statutory licenses relating to these digital public performance rights and outlines the duties of SoundExchange including administration, settlement, and enforcement.[19] When evaluating the motion, the judge explored both express and implied rights of action. Upon looking directly at the text, there is no explicit mention of a power to litigate on behalf of SoundExchange’s clients,[20] hence, a purposeful omission by Congress. This omission is bolstered by Congress precisely defining the Mechanical Licensing Collective’s (MLC) capability to commence litigation on behalf of their artists for mechanical royalties in §115. [21] Here the drafters even go so far as to use words like “legal enforcement”, “Federal court action”, and the phrase “commence an action in an appropriate district court of the United States for damages and injunctive relief”.[22] In all, the court found that the deliberate lack of litigation language demonstrated Congress’ intent to ultimately remove this “authority as an arrow in [SoundExchange’s] quiver”.[23]
SoundExchange additionally argued that Congress could not have purposefully planned to restrict litigation when drafting the duties for their organization. The court analyzed the implied right of action claim using the Oxford Bank three-factor test.[24] For the first prong, there was no “rights-creating language” found in the statute.[25] The use of “enforcement” under §114(g)(3)(C) directly mentions “negotiations” and “arbitrations”.[26] A commonly used canon in statutory construction, expressio unius est exclusio alterius, holds that expressly referencing certain terms excludes any that may be left unmentioned.[27] The judge even drew parallels to contract law where arbitration clauses are usually negotiated to preclude litigation.[28] Since SoundExchange holds alternative enforcement tactics to negotiate, monitor, and audit royalty payments,[29] the second prong of the Oxford Bank test is also disqualified. Finally, for the third prong, there was no express cause of action given in any other part of the statute.[30]
Besides the express and implied arguments, SoundExchange submitted additional reasonings for their claim regarding policy, prior litigation, legislative history, and associational standing.[31] The judge ruled against all these arguments, abiding by a textualist statutory interpretation.[32] Combined into a full analysis, SoundExchange lacked the standing required to plead this case in court.
Takeaways
Unfortunately, the real question of whether Sirius XM wrongfully withheld royalties will not be answered today. While it is unknown why Congress failed to bestow complete rights and powers onto its statutorily created organization, this decision opens speculation on who has standing to ensure that artists are paid their rightful digital public performance share. Therefore, SoundExchange will have to look to other players in the industry for guidance on a future course of action. The United States already has a convoluted system to determine proper rights for public broadcasts, and while this decision clarifies SoundExchange’s specific scope of authority, it generates more confusion for the rest of the music industry.
From a legal standpoint, the textualist analysis by Judge Naomi Reice Buchwald adheres to modern civil procedure rules. Even though SoundExchange has spoken out against the judge’s interpretation of the law,[33] there is an element of consideration that Congress wrote the statute in a precisely intentional way. Whether there are disagreements on necessary reforms to that original iteration is an entirely different debate. For now, when evaluating the two main elements of this case, explicit citations to the MLC in §115[34] and the deliberate absence of litigation as enforcement, SoundExchange’s complaint yields a call for Congressional attention rather than legislating from the bench. In this scenario, settlements and arbitration may not be the answer, but there cannot be another alternative until legislative action is taken. With alleged total figures over four hundred million dollars[35] in withheld royalties from Sirius XM, and pending litigation against Napster and Sonos,[36] SoundExchange is fighting a battle for the music industry and against the very statute that brought it to life.
Catherine Stagliano is a Second Year Law Student at Benjamin N. Cardozo School of Law where she serves as a Staff Editor for the Cardozo Arts & Entertainment Law Journal. She is passionate about advancing her career in the music industry, with a particular focus on copyright litigation.
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[1] Ben Lowe, Songtrust vs SoundExchange, Songtrust (Aug. 18, 2021), https://blog.songtrust.com/songtrust-vs-soundexchange [https://perma.cc/9GD4-NW7J].
[2] Licensing 101, SoundExchange, https://www.soundexchange.com/service-provider/licensing-101/ [https://perma.cc/J7TR-97RP].
[3] Lowe, supra note 1.
[4] Eduardo Loret de Mola, SoundExchange Explained, Music Bus. J. (Oct. 25, 2015), https://www.thembj.org/2015/10/soundexchange-explained/ [https://perma.cc/CKE7-VEQL].
[5] World Intell. Prop. Org., Guide to the Rome Convention and to the Phonograms Convention (1981), https://tind.wipo.int/record/28745?ln=en&v=pdf [https://perma.cc/L4FB-YEYG].
[6] W. Joseph Anderson & Suna Izgi & Alex Spring, Better Know Your Neighboring Rights – A Simple Guide To A Confusing Income Stream (Guest Column), Billboard (Jan. 11, 2024), https://www.billboard.com/pro/what-are-neighboring-rights-how-collected-explained/ [https://perma.cc/GLB5-C8TP].
[7] What Are Neighboring Rights?, Royalty Exch. (Feb. 2, 2017), https://www.royaltyexchange.com/blog/what-are-neighboring-rights [https://perma.cc/53QT-Y2HD].
[8] Id.
[9] Id.
[10] Id.
[11] SoundExchange, Inc. v. Sirius XM Radio Inc., 24 Civ. 5491 (NRB), 2025 U.S. Dist. LEXIS 152546, at *2-3 (S.D.N.Y. Aug. 7, 2025).
[12] Id. at *2.
[13] Cameron Coats, Judge Strips SoundExchange of Legal Power to Enforce Royalties, Radio Ink (Aug. 8, 2025), https://radioink.com/2025/08/08/judge-strips-soundexchange-of-legal-power-to-enforce-royalties/ [https://perma.cc/S8HE-LEUZ].
[14] SoundExchange, 2025 U.S. Dist. LEXIS 152546, at *2.
[15] Id. at *28.
[16] Edward Baxter & W. Drew Kastner, Federal Court Rules SoundExchange Lacks Standing in SiriusXM Royalty Dispute, JD Supra (Aug. 20, 2025), https://www.jdsupra.com/legalnews/federal-court-rules-soundexchange-lacks-7310547/ [https://perma.cc/34LB-84MS].
[17] SoundExchange, 2025 U.S. Dist. LEXIS 152546, at *29.
[18] 17 U.S.C. § 114 (1998).
[19] Id.
[20] SoundExchange, 2025 U.S. Dist. LEXIS 152546, at 8.
[21] Id. at 9.
[22] 17 U.S.C. § 115 (1998).
[23] SoundExchange, 2025 U.S. Dist. LEXIS 152546, at 16.
[24] Id. at 18.
[25] Id.
[26] 17 U.S.C. § 114 (1998).
[27] Expressio unius est exclusion alterius, Thomson Reuters Prac. Law, https://uk.practicallaw.thomsonreuters.com/w-005-5209?transitionType=Default&contextData=(sc.Default)&firstPage=true [https://perma.cc/EP8S-VKF8].
[28] SoundExchange, 2025 U.S. Dist. LEXIS 152546, at 15.
[29] No Statutory Authority for SoundExchange to Litigate Royalty Disputes: SDNY, Thomson Reuters Prac. Law (Aug. 11, 2025), https://1.next.westlaw.com/Document/Ib3c0e29c76c611f09e79d3396e9acd90/View/FullText.html?transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1 [https://perma.cc/93NZ-QWNS].
[30] SoundExchange, 2025 U.S. Dist. LEXIS 152546, at 19.
[31] Id. at 20-21.
[32] Id. at 20-28.
[33] Mandy Dalugdug, SoundExchange Slams Judge’s Ruling In SiriusXM Case As ‘Entirely Wrong on the Law’, Music Bus. Worldwide (Aug. 11, 2025), https://www.musicbusinessworldwide.com/soundexchange-slams-judges-ruling-in-siriusxm-case-as-entirely-wrong-on-the-law/ [https://perma.cc/E7H2-E65M].
[34] 17 U.S.C. § 115 (1998).
[35] Dalugdug, supra note 31.
[36] Id.
