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Leigh F. Gill is an attorney at Immix Law Group P.C. in Portland, Oregon, who came to the law after a dozen years in software development. His practice focuses on trademark and copyright, particularly for technology start-ups. Heather R. Liberman is an associate at Leavens, Strand & Glover, LLC in Chicago, Illinois. She specializes in entertainment, copyright, and trademark law. Gregory S. Stein is a licensing associate at Tulane University’s Technology Transfer and Intellectual Property Development Office in New Orleans, Louisiana. He is licensed to practice law in the State of Texas and focuses on intellectual property law, licensing, and start-up companies.
On January 24, 1972, Michael Jackson released his debut solo album with Motown Records, “Got to Be There.” Seven months later, on August 4, 1972, Jackson released his second solo album, “Ben.” What is the biggest difference between these two albums? Federal copyright protection is only available for “Ben.”
Pursuant to the Sound Recordings Act of 1971, only sound recordings first fixed on or after February 15, 1972, are protected under the U.S. Copyright Act.1 In contrast, pre-1972 sound recordings (pre-72s) are protected by a patchwork of state and common laws. Unfortunately, the state and common laws vary dramatically and are not always clearly articulated, which renders it difficult, and sometimes impossible, for both users and rights holders to comprehend the scope of rights afforded to pre-72s.
New technologies have exposed important questions related to the copyright treatment of pre-72s that put classic recordings such as those by the Beatles, the Temptations, David Bowie, Aretha Franklin, Elvis Presley, Patsy Cline, James Brown, and Led Zeppelin back in the legal limelight. The first line of cases ask whether the safe harbors set forth in the Digital Millennium Copyright Act (DMCA) limit the liability of service providers that make pre-72s available to third-party users without the permission of the copyright holder. In a second line of cases, federal and state courts are grappling with questions about royalties owed by digital broadcasting and streaming services for the use of pre-72s. Clarification of the federal rules may facilitate greater ease of both licensing and rights enforcement for some of these influential sound recordings.
While the DMCA and digital performance rights cases are the focal point of this article, an overview of federal and state laws pertaining to copyright and sound recordings, including the RESPECT Act, introduced to the House of Representatives on May 29, 2014, provides valuable insight into why these questions are percolating now, decades after the Sound Recordings Act of 1971 was enacted.
Today, musical works contain two separate and distinct copyrights: copyright in the underlying musical composition and copyright in the sound recording or phonorecord.2 However, federal copyright protection for sound recordings is a recent phenomenon in the history of copyright law. This imbalance was predominantly due to the technological inability to record the sound of a performance.3
In 1831, musical compositions were brought within the ambit of federal copyright protection under the Copyright Act of 1790, yet rights only extended to the publisher, not the performer.4 Later, Congress enacted the Copyright Act of 1909 in response to the Supreme Court’s decision in White-Smith v. Apollo, which held that piano player rolls were not within the scope of existing copyright.5 The 1909 Act did not extend protection to sound recordings due to concerns about the constitutionality of such inclusion and fear of a “music monopoly” if the same individual or entity owned rights in both the musical composition and the sound recording.6 Instead, Congress established a compulsory licensing right for mechanical reproductions of the musical composition.7
In the 1960s, Congress considered the effect of technology on the existing copyright law, including piracy of recorded works, which resulted in debates and new proposals during every congressional session between 1964 and 1971.8 In 1971, Congress finally responded to developments in analog recording technology by enacting the Sound Recordings Act, which added the exclusive right to “reproduce and distribute to the public by sale or other transfer of ownership, or by rental, lease or lending, reproductions of the copyrighted work if it be a sound recording.”9 That protection extended only prospectively to “sound recordings fixed, published and copyrighted on and after the effective date of [the] Act.”10 All sound recordings prior to 1972 remained outside the scope of federal copyright law.
In 1973, the Supreme Court in Goldstein v. California confirmed that pre-72s are not protected by the Copyright Act.11 Accordingly, rights holders have relied on state and common laws,12 which are inconsistent with respect to issues such as term of protection, subject matter, and statute of limitations.13
A few years later, Congress enacted the 1976 Copyright Act, which extended federal copyright protections to unpublished works and explicitly stated that Congress intended no preemptive effect for pre-72s.14 Congress also explained that, “[n]otwithstanding the provisions of section 303 [relating to the duration of copyright], no sound recording fixed before February 15, 1972, shall be subject to copyright under this title before, on, or after February 15, 2067.”15 As a result, pre-72s remained protected through the varying laws enacted by the states, but post-1972 sound records were protected exclusively by federal law. Subsequently, in 1995, Congress amended § 106 of the Act to include the exclusive right “in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.”16
Continuing to address digital performance rights, Congress enacted the DMCA in 1998 to “preserve strong incentives for service providers and copyright owners to cooperate to detect and deal with copyright infringements that take place in a digital networked environment.”17 One way that the DMCA carries out those goals is through the four “safe harbors” that allow “qualifying service providers to limit their liability for claims of copyright infringement.”18 To qualify for DMCA safe harbor protection, a party must first establish that it meets three threshold criteria,19 and then it must satisfy the safe harbor provisions under § 512(c) to gain shelter from copyright infringement actions.20
Nothing in the language of the DMCA identifies whether the safe harbors extend to service providers that use pre-72s.21 For example, would a website streaming songs from David Bowie’s “The Man Who Sold the World” (1969) be eligible for DMCA safe harbors as it would for streaming songs from Bowie’s “The Rise and Fall of Ziggy Stardust and the Spiders from Mars” (June 1972)? If the DMCA safe harbors apply to pre-72s, then service providers that qualify are insulated from legal claims, including copyright infringement, for unauthorized use of sound recordings. If the DMCA safe harbors do not apply, then service providers must proactively review content and remove or prevent uses of any unauthorized pre-72s to avoid liability. The rights holders have taken the position that the DMCA does not apply: why should federal law limit the liability of service providers for copyright infringement of pre-72s if federal law does not protect the recordings themselves? The service providers’ position is generally that the DMCA applies to pre-72s in accordance with the policy goals of the DMCA.
There have been calls to reform the Copyright Act to resolve these issues and others, and some legislation has been proposed. On May 29, 2014, Congressmen George Holding of North Carolina and John Conyers, Jr. of Michigan introduced the RESPECT Act, or Respecting Senior Performers as Essential Cultural Treasures Act to the House of Representatives. The RESPECT Act specifically does not extend federal copyright protection to pre-72s; however, it would amend Section 114(f)(4) of title 17, United States Code, and establish a federally imposed royalty for the transmission of pre-72s on “any person publicly performing sound recordings protected under this title by means of transmissions under a statutory license under this section, or making reproductions of such sound recordings under section 112(e).” Unfortunately, the RESPECT Act does not eliminate the state law analysis. Any royalty recovered through a claim brought pursuant to the RESPECT Act would be “off-set against any recovery for such violation that may be available under the laws of any State.”
The passage of the RESPECT Act remains to be seen. Nevertheless, three cases in state and federal courts, one of which was recently granted appeal, attempt to answer these same questions about protection for and use of pre-72s.
In UMG Recordings, Inc. v. Escape Media Group, Inc., a New York state appeals court ruled that the DMCA safe harbor provisions did not apply to pre-72s distributed via Grooveshark, a music streaming website that allows users to upload audio files.22 In reversing the lower court’s decision, the judge departed from precedent established by the Southern District of New York in Capitol Records, Inc. v. MP3tunes, LLC, where the court found no distinction between federal and state copyrights within the text of the DMCA.23 In UMG Recordings, the judge determined that the DMCA safe harbors as applied to state copyrights would directly violate § 301(c) of the Copyright Act, which forbids the Act from “annulling” or “limiting” common-law copyrights.24
Similarly, in September 2013, a judge in the Southern District of New York decided Capitol Records, LLC v. Vimeo, LLC, and agreed with the decision in UMG Recordings that the DMCA safe harbors did not limit New York common-law copyrights infringed by an online video-sharing platform.25 Without explicit language in the statutory text of the DMCA including pre-72s, the court felt uncomfortable with applying the safe harbors, stating “it is for Congress, not the courts, to extend the Copyright Act to pre-1972 sound recordings, both with respect to the rights granted under the Act and the limitations on those rights.”26 Upon reconsideration, the court affirmed its decision but also noted that there was room for disagreement, citing MP3tunes and the U.S. Copyright Office Report on Pre-1972 Sound Recordings.27 The court certified the question of “whether the DMCA’s safe-harbor provisions are applicable to sound recordings fixed prior to February 15, 1972,” for interlocutory appeal, which was recently approved by the Second Circuit Court of Appeals.28
Although the applicability of the DMCA to pre-72s is unclear, the recent activity in the courts has proven that both rights holders and users are calling for a resolution. Until there is binding precedent or a revision to the Copyright Act, the law will remain in flux, which means more lawsuits are likely to follow.
Meanwhile, a separate line of cases relating to digital performance rights in pre-72s are navigating their way through the courts, piloted by Howard Kaylan and Mark Volman (Flo & Eddie), the original members of the Turtles rock group, known for the song “Happy Together.” Flo & Eddie filed a class action suit in the Superior Court of California against Sirius XM Radio Inc. (Sirius), a satellite broadcasting company, for misappropriation, unfair competition, and conversion of their pre-72s under California state law, which was subsequently removed to the Central District of California.29 Flo & Eddie brought similar actions against Sirius in New York and Florida.30 In December 2013, Sirius filed a motion to transfer venue from the Central District of California to the Southern District of New York. The court denied Sirius’s motion on the following grounds:
Sirius XM has not met its burden of showing that Plaintiff’s three suits are materially identical or that the relevant laws are so closely related that it would be unjust for this Court and the courts hearing the New York and Florida actions to decide issues differently. Rather, it seems at this point that although the three suits share a common factual core, they are legally distinct and will turn on the separate interpretations of California, New York, and Florida law, respectively.31
As of the time of this writing, discovery on liability issues had begun with a deadline of July 14, 2014, while discovery on damages has been deferred.32
Flo & Eddie aren’t the only parties suing Sirius in connection with pre-72s. In August 2013, SoundExchange, designated by the Copyright Royalty Board (CRB) as the organization to collect and distribute digital performance royalties to rights holders, sued Sirius in the District Court for the District of Columbia for up to $100 million in unpaid royalties for the use of pre-72s.33 According to estimates, 10–15 percent of all songs Sirius transmits are pre-72s, which would amount to about $2.72 to $4.08 million in royalty payments per year.34
In 2011, Sirius began excluding performances of pre-72s from gross revenues (the royalty base) reported to SoundExchange for calculation of royalty payments because Sirius decided that the federal statutory license did not cover pre-72s.35 SoundExchange filed suit arguing that, under the royalty-calculation rules for satellite digital audio radio service providers set by the CRB for 2007–2012,36 no deductions are allowed for pre-72s.37 In contrast, new rules for 2013–2017 specifically allow this deduction, which SoundExchange believes implies that no deduction existed for pre-72s from 2007–2012.38 A motion by Sirius to dismiss the action in favor of proper jurisdiction before the CRB is fully briefed and pending.39
Record labels, including Capitol Records, Sony Music Entertainment, UMG Recordings, Warner Music Group, and ABKCO Music & Records, have a separate lawsuit against Sirius, which was filed in 2014 in the Superior Court of California for misappropriation, conversion, unfair competition, and violation of California common-law copyrights.40 The labels asserted in the complaint that California law recognizes an exclusive right to “publicly perform” a sound recording via digital transmission of the underlying performance.41 Currently, the record labels assert that same proposition through a pending motion for a proposed and potentially dispositive jury instruction stating that California law recognizes a property interest in pre-72s that includes a public performance right by digital transmission.42
In April 2014, the same record labels that sued Sirius filed suit against Pandora Media, Inc. (Pandora), a streaming Internet radio service, in New York state court. The record labels assert common-law copyright infringement/misappropriation and unfair competition claims, and request injunctive relief and damages—including compensatory, punitive, and a constructive trust benefiting the plaintiff for future damages.43 The complaint also alleges that Pandora acted willfully and maliciously in infringing the copyrights in pre-72s, such as the Beatles’ “Hey Jude” and the Rolling Stones’ “(I Can’t Get No) Satisfaction,” citing a recent filing by Pandora with the Federal Securities and Exchange Commission:
If we [Pandora] are required to obtain licenses from individual sound recording copyright owners for the reproduction and public performance of pre-1972 sound recordings, then the time, effort, and cost of securing such licenses could be significant and could harm our business and operating results. If we are required to obtain licenses for pre-1972 sound recordings to avoid liability and are unable to secure such licenses, then we may have to remove pre-1972 sound recordings from our service, which could harm our ability to attract and retain users.44
Although the resolution of these lawsuits may clarify the digital performance rights for pre-72s under some state laws, both rights holders and digital broadcasters and streamers must be wary of the existence or absence of these rights in all states. Furthermore, the recent flourish of cases in this vein may act as blood in the water attracting additional litigation.
Copyright protections for pre-72s by Michael Jackson, David Bowie, Bob Dylan, the Beatles, Aretha Franklin, and the Turtles will continue to be in flux until there are uniform state laws or consensus among the courts. Some have proposed federalizing copyright protection for pre-72s,45 but the congressional route is often slow and arduous, and time is running slim. On the other hand, discussions are beginning in Washington, D.C., on drafting a new copyright act, and we believe these discussions should include provisions on how to account for pre-72s in a uniform manner for the rights holders and users. While momentum is building with the introduction of the RESPECT Act, it would not extend federal copyright protection to pre-72s or replace state laws governing pre-72s. Until laws are enacted that include provisions on uniform treatment of pre-72s, digital broadcasters and other users should be aware that they may not be eligible for some limitations on copyright, such as those under the DMCA; and rights holders and their representatives should consider the copyright and related rights afforded to them for their pre-72s under state law when negotiating licenses. Resolution of the pre-1972 sound recording issues through litigation is not imminent, and any outcome will only address issues for technology in existence. Hopefully, however, the din arising from the filing of ever more pre-72s copyright infringement suits will be too loud for Congress to ignore.
1. Sound Recordings Act, Pub. L. No. 92-140, 85 Stat. 391 (1971). Surprisingly, there is federal copyright protection for foreign pre-72s. See Pub. L. No. 103-465, 108 Stat. 4809, 4973 (1994); Nat’l Recording Pres. Bd., Library of Cong., Copyright and Related Issues Relevant to Digital Preservation and Dissemination of Unpublished Pre-1972 Sound Recordings by Libraries and Archives (2009), available at http://www.clir.org/pubs/abstract/reports/pub144 (explaining federal copyright protections for foreign works).
2. Phonorecords are “material objects in which sounds, other than those accompanying a motion picture or other audiovisual work, are fixed by any method now known or later developed, and from which the sounds can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. The term . . . includes the material object in which the sounds are first fixed.” 17 U.S.C. § 101 (2012).
3. See Copyright Act, 1 Stat. 124 (1790).
4. See Copyright Act, 4 Stat. 436 (1831).
5. “But sound recordings were not treated as ‘writings’ [to which the Copyright Act extended] in the early part of this century, largely based on the decision in White-Smith Co. v. Apollo Co.” Digital Performance Right in Sound Recordings Act of 1995, Hearing on H.R. 1506 Before the Subcomm. on Courts and Intellectual Property of the H. Comm. on the Judiciary, 104th Cong., 1st Sess. (1995), available at http://www.copyright.gov/docs/regstat062895.html (statement of Marybeth Peters, Register of Copyrights); see White-Smith Music Publ’g Co. v. Apollo Co., 209 U.S. 1 (1908).
6. Peter Jaszi & Nick Lewis, Program on Info. Justice & Intellectual Prop., Wash. Coll. of Law, Am. Univ., Protection for Pre-1972 Sound Recordings under State Law and Its Impact on Use by Nonprofit Institutions: A 10-State Analysis 3 (2009) (citing Dorothy M. Schrader, Sound Recordings: Protection under State Law and under the Recent Amendment to the Copyright Code, 14 Ariz. L. Rev. 689, 691 (1972)), available at http://www.clir.org/pubs/reports/pub146/reports/pub146/pub146.pdf.
7. See Copyright Act, ch. 320, § 1(b), Pub. L. No. 60-349, 35 Stat. 1075 (1909).
8. E.g., S. 4592, 91st Cong., 2d Sess. (1970); S. 597, 91st Cong., 1st Sess. (1969); H.R. 2512 & S. 597, 90th Cong., 1st Sess. (1967); H.R. 4347 & S. 1006, 89th Cong., 1st Sess. (1965); H.R. 11947 & S. 3008, 88th Cong., 2d Sess. (1964); see also Supplementary Register, 89th Cong., 1st Sess., Rep. on the General Revision of the U.S. Copyright Law (Comm. Print 1965).
9. Sound Recordings Act, § 1(f), Pub. L. No. 92-140, 85 Stat. 391 (1971).
11. 412 U.S. 546 (1973).
12. See Blagman v. Apple, Inc., No. 12 Civ. 5453(ALC)(JCF), 2014 WL 1285496, at *7 (S.D.N.Y. Mar. 31, 2014) (noting in dicta that state laws and not federal law control in cases involving copyright infringement of pre-72s).
13. See, e.g., Decision & Order, Capitol Records, LLC. v. Harrison Greenwich, LLC, No. 652249/2012 (N.Y. Sup. Ct. Apr. 14, 2014) (comparing the statute of limitations periods for copyright infringement under New York, Alabama, and federal laws); U.S. Copyright Office & Ass’n of Research Libraries, State Criminal Laws: Pre-1972 Sound Recordings, Copyright.gov, http://www.copyright.gov/docs/sound/20111212_survey_state_criminal_laws_ARL_CO_v2.pdf (last visited May 5, 2014); Jaszi & Lewis, supra note 6.
14. See 17 U.S.C. § 301(c).
16. Digital Performance Right in Sound Recordings Act, Pub. L. No. 104-39, 109 Stat. 336 (1995) (codified at 17 U.S.C. § 106(6)).
17. Capitol Records, LLC v. Vimeo, LLC, Nos. 09 Civ. 10101(RA), 09 Civ. 10105(RA), 2013 WL 5272932, at *5 (S.D.N.Y Sept. 18, 2013) (alteration in original) (quoting S. Rep. No. 105-190, at 20 (1998); H.R. Rep. No. 105-551(II), at 49 (1998)).
18. Viacom Int’l, Inc. v. YouTube, Inc., 676 F.3d 19, 27 (2d Cir. 2012).
19. Vimeo, 2013 WL 5272932, at *6. The party “(1) must be a ‘service provider’ as defined by the statute; (2) must have adopted and reasonably implemented a policy for the termination in appropriate circumstances of users who are repeat infringers; and (3) must not interfere with standard technical measures used by copyright owners to identify or protect copyrighted works.” Id. (quoting Wolk v. Kodak Imaging Network, 840 F. Supp. 2d 724, 743 (S.D.N.Y. 2012)).
20. Id. Section 512(c) provides:
A service provider shall not be liable . . . for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider, if the service provider—
(A)(i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing;
(ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or
(iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material;
(B) does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity; and
(C) upon notification of claimed infringement . . . responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.
17 U.S.C. § 512(c)(1).
21. See 17 U.S.C. § 512(c)(1).
22. 964 N.Y.S.2d 106, 111 (App. Div. 2013).
23. 821 F. Supp. 2d 627, 640 (S.D.N.Y. 2011).
24. UMG Recordings, 964 N.Y.S.2d at 111–12. Section 301(c) of the Copyright Act states: “With respect to sound recordings fixed before February 15, 1972, any rights or remedies under the common law or statutes of any State shall not be annulled or limited by this title until February 15, 2067.” 17 U.S.C. § 301(c).
25. Vimeo, 2013 WL 5272932, at *33.
27. Id. at *33 & n.21 (citing MP3tunes, 821 F. Supp. 2d at 640; Register of Copyrights, U.S. Copyright Office, Federal Copyright Protection for Pre-1972 Sound Recordings (2011), available at http://www.copyright.gov/docs/sound/pre-72-report.pdf).
28. Capitol Records, LLC v. Vimeo, LLC, Nos. 09 Civ. 10101(RA), 09 Civ. 10105(RA), 2013 WL 6869648, at *11 (S.D.N.Y. Dec. 31, 2013); Motion Granting Leave to File Interlocutory Appeal, Capitol Records, LLC v. Vimeo, LLC, No. 1:09-cv-10101-RA (2d Cir. Apr. 9, 2014).
29. Complaint, Flo & Eddie, Inc. v. Sirius XM Radio, Inc., No. BC 517032 (Cal. Super. Ct. Aug. 1, 2013), removed to Flo & Eddie, Inc. v. Sirius XM Radio, Inc., No. CV 13-5693 PSG (RZx) (C.D. Cal. Aug. 6, 2013); see Cal. Civ. Code § 980(a)(2).
30. Complaint, Flo & Eddie, Inc. v. Sirius XM Radio, Inc., No. CV 13-23182 KMM (S.D. Fla. Sept. 3, 2013); Complaint, Flo & Eddie, Inc . v. Sirius XM Radio, Inc., No. CV 13-5784 CM (S.D.N.Y. Aug. 16, 2013).
31. Order Denying Motion to Transfer Venue at 10, Flo & Eddie, No. CV 13-5693 PSG (RZx) (C.D. Cal. Dec. 3, 2013).
32. Order, Flo & Eddie, No. CV 13-5693 PSG (RZx) (C.D. Cal. Mar. 25, 2014).
33. Complaint at 16, SoundExchange, Inc. v. Sirius XM Radio, Inc., No. 1:13-cv-01290 (D.C. Cir. Aug. 26, 2013).
34. See id. at 8.
35. Id. at 6, 9; see also 37 C.F.R. § 382.11 (defining “gross revenues”).
36. See Determination of Rates and Terms for Preexisting Subscription Services and Satellite Digital Audio Radio Services, 73 Fed. Reg. 4080, 4099 (Jan. 24, 2008).
37. Complaint, SoundExchange, supra note 33, at 4–6.
38. See Determination of Rates and Terms for Preexisting Subscription Services and Satellite Digital Audio Radio Services, 78 Fed. Reg. 23,054, 23,080 (Apr. 17, 2013).
39. See Motion to Dismiss, SoundExchange, No. 1:13-cv-01290 (D.C. Cir. Oct. 16, 2013).
40. Complaint, Capitol Records, LLC v. Sirius XM Radio, Inc., No. BC 520981 (Cal. Super. Ct. Feb. 3, 2014); see Cal. Civ. Code § 980(a)(2).
41. Complaint, Capitol Records, supra note 40; see also Capitol Records, LLC v. BlueBeat, Inc., 765 F. Supp. 2d 1198 (C.D. Cal. 2010) (applying California law to digital performance of pre-72s). Prior to BlueBeat, the only exclusive rights in pre-72s recognized under California law were production, distribution, and sale of tangible sound recordings, see Capitol Records, Inc. v. Erickson, 82 Cal. Rptr. 798 (Ct. App. 1969), and making and distributing unauthorized copies of the underlying intangible sounds transcribed in the recordings, see A&M Records, Inc. v. Heilman, 142 Cal. Rptr. 390 (Ct. App. 1977).
42. Notice of Motion and Motion of Plaintiffs for Jury Instruction Regarding a Digital Performance Right in Sound Recordings Fixed before February 15, 1972, Capitol Records, No. BC 520981 (Cal. Super. Ct. Feb. 3, 2014). Interestingly, such treatment of pre-72s mirrors federal law, which also recognizes an exclusive digital performance right in sound recordings. See 17 U.S.C. § 106(6).
43. Complaint, Capitol Records, LLC v. Pandora Media, Inc., No. 6032919/11224-00128 (N.Y. Sup. Ct. Apr. 17, 2014), available at http://www.scribd.com/doc/218883012/Pandora-Complaint-Filed.
44. Id. at 3–4.
45. See, e.g., Elizabeth Townsend Gard & Erin Anapol, Federalizing Pre-1972 Sound Recordings: An Analysis of the Current Debate, 15 Tul. J. Tech. & Intell. Prop. 123 (2013).