Sirius XM Win Erodes SoundExchange Copyright Enforcement Arsenal

A federal judge’s ruling that collective rights organization SoundExchange Inc. lacks authority to sue over unpaid royalties threatens to disrupt a two-decade old corner of the music industry established to ensure recording artists get paid.

Judge Naomi Reice Buchwald shot down SoundExchange’s lawsuit against Sirius XM Radio Inc. this month, ruling the section of the Copyright Act governing the organization doesn’t expressly give it a right to sue. SoundExchange had alleged the radio company owed more than $150 million in unpaid royalty fees.

Buchwald’s ruling surprised some copyright attorneys and law professors, several of whom disagreed over whether it was ...