Almost a month to the day after a California state court became the second court in this fallÂ to recognize a public performance right for pre-1972 sound recordings, the Southern District Court of New York has held that New York State common law also recognizes such rights.
The court on Friday, November 14, 2014, denied satellite radio provider Sirius XM’s motion for summary judgment and ordered itÂ to show cause why summary judgment should not be entered in favor of the plaintiffs Flo & Eddie, the corporation owned by two of the original members of the rock band the Turtles. It did so after concluding, among other things, that â€œgeneral principles of common law copyright dictate that public performance rights in pre-1972 sound recordings do exist.â€
As previously explained, Congress extended federal copyright protection to sound recordings in 1972, but only prospectively, meaning sound recordings made before 1972 would only be protected, if at all, under state and common law. Also, unlike musical compositions, Congress did not provide sound recordings owners with a public performance right under federal law, so a songwriter would get royalties when her song is played, for example, on the radio, but the performing artist would not.
Congress extended to sound recording owners a limited public performance right for digital audio transmissions in 1995. At the same time, it created a compulsory licensing scheme for such transmissions for satellite radio providers.
In recent years, Sirius XM began discounting the amount of royalties it paid under this compulsory license, proceeding under the basis that it didnâ€™t have to pay royalties for performances of pre-1972 sound recordings under federal law.
The satellite provider faced a slew of lawsuits following that decision. SoundExchange, the organization that collects and distributes digital performance royalties under the compulsory license, filed a complaint August 2013 in federal court. A group of music labels sued Sirius XM in California state court in September 2013. And Flo & Eddie filed putative class action suits in California, New York, and Florida.
Here, the Southern District Court of New York began its decision by noting that it was undisputed that Flo & Eddie have a common law copyright in their sound recordings. Under New York law, â€œartists can acquire a common law copyright in â€˜any original material product of intellectual laborâ€™â€”including sound recordingsâ€”by expending â€˜time, effort, money, and great skillâ€™ in its creation.â€ Sirius, however, argued that this right only covers reproduction and distribution, not public performance.
The court disagreed, noting initially that this argument has to be resolved by looking â€œto the background principles and history of New York copyright common lawâ€ rather than referring to the federal copyright act. And under the common law, New York has long recognized public performance rights for copyright owners of plays and films.
Siriusâ€™s strongest argument is to ask why then, if recording artists and record labels had the exclusive right to publicly perform their works, they waited decades to assert that right. The court devotes considerable attention in response. First, it canâ€™t infer that â€œthe common law copyright in sound recordings does not encompass all of the rights traditionally accorded to copyright holders in other worksâ€ simply because this is the first case to raise the issue. The fact that participants in the recording industry had waited so long simply demonstrates a failure to act, not a lack of an enforceable common law right.
This judicial silence is not unique to the circumstances of this case. The court says, â€œThe Supreme Court, for example, failed to grapple with many fundamental constitutional questions for the first 150 years of the Constitutionâ€™s existence.â€ It cites to the opinion from DC v Heller, where the majority observed that it â€œfirst held a law to violate the First Amendment’s guarantee of freedom of speech in 1931, almost 150 years after the Amendment was ratified, and it was not until after World War II that we held a law invalid under the Establishment Clause.â€ 1554 US 570, 625 (2008). Yet we wouldn’t say that proves we don’t have freedom of speech.
The court then turns the tables, saying
An arguably stronger argument can be made that years of judicial silence implies exactly the opposite of what Sirius contendsâ€”not that common law copyright in sound recordings carries no right of public performance, but rather that common law copyright in sound recordings comes with the entire bundle of rights that holders of copyright in other works enjoy. No New York case recognizing a common law copyright in sound recordings has so much as suggested that right was in some way circumscribed, or that the bundle of rights appurtenant to that copyright was less than the bundle of rights accorded to plays and musical compositions.
The court also points to federal law as supporting the argument that copyright in sound recordings includes an exclusive right of public performance, saying â€œif public performance rights were not part of the normal bundle of rights in a copyright, Congress would not have needed to carve out an exception specifically for sound recordingsâ€ when it extended protection to them in 1971.
Next, the court responds to the policy arguments raised by Sirius. The satellite provider argued that â€œaffording public performance rights would not serve the underlying purposes of copyright law because pre-1972 recordings already exist and further rights cannot create incentives for the creation of new pre-1972 recordings.â€ But the court finds that this claim advances a far too narrow view of copyright under both New York and federal law, concluding that rewarding past creativity is just as proper a goal under either statutory or common law copyright as fostering future creativity.
Sirius also calls attention to the potential disruption and administrative difficulties that recognizing public performance rights for pre-1972 sound recordings under the common law could cause. The court is sympathetic to these policy arguments but ultimately unpersuaded.
Sirius may well be correct that a legislative solution would be best. But the common law, while a creature of the courts, exists to protect the property rights of the citizenry. And courts are hardly powerless to craft the sort of exceptions and limitations Congress has created, or to create a mechanism for administering royalties.
In the wake of this decision, Sirius replaced its legal team, which may indicate it is looking at shifting strategy. However, as noted above, two courts in Californiaâ€”state and federalâ€”similarly concluded that California state copyright law includes an exclusive right of public performance for sound recording owners. That increases the likelihood that a decision recognizing such a right survives any potential appeal.
There remains a third lawsuit filed by Flo & Eddie against Sirius XM pending in Florida. Will the court there provide a clean sweep for public performance rights in pre-1972 sound recordings, or will it break rank from the California and New York courts? Even if it does the former (the likelihood of which has increased following the New York decision), I think the court is correct in suggesting â€œa legislative solution would be best.â€ Federalization would provide far more consistency in the protection of sound recording ownersâ€™ use and enjoyment of their rights; however, such a transition implicates a host of issues, some not readily apparent. The Copyright Office discusses many of these issues in its 2011 report on Federal Copyright Protection for Pre-1972 Sound Recordings. Both the Copyright Office and the House IP Subcommittee are already interested in addressing pre-1972 and other music-related copyright issues; this decision couldÂ only serve to motivate them further.
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