Music Publishing News 12.23.16: Nielsen Buys Gracenote • Facebook vs Publishers • Loudr Pays Out $1M
Identifying Your Two Types Of Fans

THE_BATTLE_OF_COPYRIGHTAlthough certainly not a new dispute, the legal battle over pre-1972 recordings recently kicked into a higher gear, with New York recently rejecting a case, and the Supreme Court being petitioned to hear another.

_____________________________

Guest Post by Mike Masnick on Techdirt

For many years now we've been covering the ridiculous legal disputes over pre-1972 sound recordings. Without going into all of the history, the short version is that while music compositions have long been covered by copyright, the actual sound recordings were not until the early 1970s, going into effect in early 1972. Under the legal regime at the time, the 1909 Copyright Act, it was widely accepted that sound recordings could not qualify for copyright under federal copyright law until that law was changed in the run-up to the 1976 Copyright Act. However, due to a lot of lobbying, many states set up either state-based copyright regulations, or a common law regime through the courts, that recognized certain copyright-like exclusive rights in sound recordings. These were all basically wiped out with the 1976 Act, which included a preemption clause that basically said all copyright is now federal and state copyright law is wiped out. That left a gray area, though, for pre-1972 sound recordings, which technically weren't covered by federal copyright law, but it was unclear if state law applied. That created some problems, including extending the length of copyright on those sound recordings way, way, way beyond when they would have gone into the public domain.

A few years ago, we wrote about how these state laws were potentially leading to the permanent loss of classic jazz recordings that might never reach the public domain, and which no one can actually listen to. There's an easy solution to this, which is just to extend federal copyright law to pre-1972 sound recordings and put them under the same regime as everything else (which has it's own problems, but it's better than the mess we're in now). But, of all things, the RIAA and record labels have rejected this, mainly because they see these state laws as a great tool to squeeze extra money out of companies (and to avoid those works ever reaching the public domain).

DownloadAfter years of arguing over what to do about pre-1972 works, the recording industry finally just started suing everyone over the use of pre-1972 sound recordings. The key issue was about public performance rights. To understand this, we have to wade further into the weeds. Federal copyright law gives copyright holders a number of "exclusive rights" under copyright. The ones you mostly hear about are the reproduction right and the distribution right. But there's also the right to prepare derivative works and the right "to perform the copyrighted work publicly."

That public performance right was a relatively new concept, and had never been seen in the various state copyright regimes prior to the 1976 Copyright Act that then (mostly) abolished state copyright laws. In fact, public performance rights in federal copyright explicitly excluded sound recordings -- until 1995 when a new copyright law extended public performance rights to sound recordings, but solely for digital radio services (and not to radio, restaurants, stores, bars, etc). But the recording industry's theory was that even if sound recordings weren't under federal copyright law, when federal copyright law created a public performance right, that right magically moved over into state copyright law as well... and, magically, it applied to all the stuff that federal copyright law said it didn't cover (though, at the same time, they insist that things like the DMCA's safe harbors do not translate into state copyright laws -- which is a neat trick).

The lawsuits to date have been a mixed bag. Sirius lost some early rounds, upsetting decades of consensus about copyright law. The first case it lost was in California, but soon after it lost a case in New York as well, even as the judge admitted this upset decades of consensus. A court in Florida eventually sided with Sirius, but the company then quickly settled with the RIAA.

However, the case in NY was appealed and Sirius has now won on appeal. This is a pretty big deal. The full ruling is long, but worth reading. As the court rightly notes (and as we did back when the original decision came out, only to be mocked by copyright maximalists) this would upset decades of widespread consensus over what state copyright laws covered, and that makes no sense at all:

Indeed, it would be illogical to conclude that the right of public performance would have existed for decades without the courts recognizing such a right as a matter of state common law, and in the absence of any artist or record company attempting to enforce that right in this state until now. The absence of a right of public performance in sound recordings was discussed at the federal level for years and became acutely highlighted in 1971, upon enactment of the Sound Recording Amendment, and again in 1995, upon enactment of the DPRA. At those times, all interested parties were placed on notice of the statute's limited rights for post-1972 sound recordings. Although parties do not lose their rights merely by failing to enforce them, the fact that holders of rights to sound recordings took no action whatsoever to assert common-law protection for at least the past four decades -- when the absence of a comprehensive federal right of public performance for sound recordings was clear -- supports our conclusion that artists and copyright holders did not believe such a right existed in the common law.

Instead, common sense supports the explanation, articulated by the Third Circuit, that the record companies and artists had a symbiotic relationship with radio stations, and wanted them to play their records to encourage name recognition and corresponding album sales

The court notes that, yes, the industry has changed due to technology, but that's no excuse for the recording industry to suddenly pretend that these rights existed for decades and everyone ignored them until now.

Simply stated, New York's common-law copyright has never recognized a right of public performance for pre-1972 sound recordings. Because the consequences of doing so could be extensive and far-reaching, and there are many competing interests at stake, which we are not equipped to address, we decline to create such a right for the first time now.

Given that, the court says, if there needs to be such a right, it should be created by the legislature through laws, not the court making it up as it goes along. The court further notes that Congress carefully analyzed this issue, and it would be wrong for courts to rush in -- especially since without the balancing act of legislators, it might create a right that (you guessed it...) the record labels would use to scoop of money without giving any to the artists:

We cannot ignore the fact that Congress studied the nature and scope of the right to the public performance of sound recordings for nearly two decades before revising the federal statutes to recognize a limited right. Indeed, in 1976, Congress "considered at length the arguments in favor of establishing a limited performance right, in the form of a compulsory license, for copyrighted sound recordings, but concluded that the problem require[d] further study".... As directed by the Copyright Act of 1976, the Register of Copyrights submitted a voluminous report in 1978, recommending that Congress enact a limited right to control public performances of sound recordings. Not until 1995 did Congress take action on that recommendation and enact any such right and, even then, the right it created was a narrow one circumscribed by a nuanced regulatory scheme limited to digital transmissions of post-1972 sound recordings.... Moreover, as part of that statutory scheme, Congress included a requirement that the copyright holder pay a portion of the royalties to the recording artist; even if we were to recognize a common-law copyright to public performance, there is no guarantee that the artists would receive any portion of the royalties, as many copyrights are apparently held by the record companies. Ultimately, it cannot be overstated that, if this Court were to recognize a right of public performance under the common law, we would be ill-equipped -- or simply unable -- to create a structure of rules to properly guide the application of that right.

There is a dissent, that says the court can just use federal copyright law's public performance rights and move them over to state copyright law, but the majority opinion points out what a mess that would create.

While the dissent notes that the federal law reflects Congress's balancing of the varied and competing interests involved, this only highlights that a legislative body -- not the courts -- should make decisions regarding such a right. Additionally, it would be highly unusual for this Court to simply adopt federal statutes as the embodiment of the scope of a state common-law right. Moreover, as a practical matter, not all aspects of the complex federal scheme can be directly incorporated under our common law. For example, in the DPRA, Congress provided a means of determining reasonable rates and royalty payments, including a dispute resolution system.... However, state courts have no authority to require the federal Copyright Royalty Judges to adjudicate challenges to royalty rates on pre-1972 sound recordings ... nor do we have the authority to create a New York State version of that dispute resolution system.

There's also a somewhat weird concurring opinion, that agrees that there's no public performance right, but based on nothing at all, theorizes that services like Spotify and Apple Music (which are not parties to this particular lawsuit) may have issues with violating the exclusivity in publishing rights.

With respect to the fourth step on my continuum, certain Internet broadcasters -- such as Apple Music, Spotify's premium subscription, Rhapsody, and Amazon's Music Unlimited offering -- permit users to peruse a catalog of millions of songs and to "call them up on any device, including [one's] phone, anytime [one] wants"....

In determining whether there is a common law right of public performance for recordings fixed prior to February 15, 1972, we necessarily have occasion to speak to the nature and the limits of such right. In the realm of federal copyright law, "publication" is defined as "the distribution of copies or phonorecords of a work to the public by sale or other transfer of ownership, or by rental, lease or lending".... To allow a user to regularly, specifically, and directly access an exact sound recording "ondemand" is not to facilitate the "public performance" of such recording, but to publish that work and therefore to infringe upon the right of the copyright holder to sell it ....

[....]

We must recognize that the rental or lease of sound recordings fixed prior to February 15, 1972 by Internet broadcasters who provide the public "on-demand" access to such recordings is a form of publication under copyright law.

3-1It seems weird and unnecessary (in the extreme) for a judge to try to address a totally different situation, one that the court wasn't fully briefed on) involving parties who aren't even a part of the lawsuit. Obviously the concurring opinion has no precedential value, but it's troubling that the judge would jump to such a conclusion anyway.

Of course, with this ruling conflicting with other rulings, this still seems like an issue that the Supreme Court is going to have to weigh in on. And... just last week, the Supreme Court was petitioned to hear another case involving pre-1972 works. This is another one that we've been following as well, where the record labels sued the online video site Vimeo, mainly over employee uploaded "lipdubs" of various songs. Part of the issue in that case was whether or not the DMCA's safe harbors applied to those pre-1972 sound recordings. While a district court rejected most of the arguments by the label, it did accept that pre-1972 sound recordings might not qualify for DMCA safe harbor protections.

The 2nd Circuit appeals court overturned that ruling earlier this year, noting that it would make no sense at all for the safe harbors not to apply to pre-1972 works, because that would undermine the very purpose of the DMCA safe harbors. Capitol Records is asking the Supreme Court to overturn the 2nd Circuit on that issue -- which may or may not get to the other issues related to pre-1972 music... but it would be nice for the Supreme Court to sort this all out one way or the other.

Comments