Merry Christmas to the Licensee Community from New York! Appeals Court Holds No New York Performance Right in Sound Recordings

In what comes as an early Christmas gift for those who play "oldies" music - think Sirius XM Radio, radio broadcasters, and webcasters - and coal in the stockings of the owners of those recordings, New York's highest state court ruled today that New York does not recognize a public performance right in sound recordings. The ruling was issued in response to a certified question from the U.S. Court of Appeals for the Second Circuit, where an earlier - contrary - ruling from the U.S. District Court for the Southern District of New York was being challenged. In that earlier federal district court case, Flo & Eddie, Inc. - a corporation owned by two of the original members of The Turtles (famous for "Happy Together") - had sued Sirius XM Radio for publicly performing sound recordings fixed before February 15, 1972 (so-called "pre-72 recordings") without obtaining a license for those performances.

[Note: February 15, 1972 is a magic date because sound recordings fixed on or after that date are protected by federal copyright law. Sound recordings fixed before that date are protected - if at all - under the patchwork quilt of various state copyright laws, with state-law protection expiring on February 15, 2067.]

Parting ways with the federal district court, the New York high court held that its "common-law copyright protection prevents only the unauthorized reproduction of the copyrighted work, but permits a purchaser to use copies of sound recordings for their intended purpose, namely, to play them." It based its conclusion on an analysis of New York state copyright decisions, which it found granted a common law right to prevent others from making copies of sound recordings - but did not grant a public performance right.

The court also pointed to the behavior of the copyright owners over the years, observing that "the copyright holders have gone decades without acting to enforce th[e] right" of public performance. It found that:

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.

In the court's view, this behavior demonstrated that "artists and copyright holders did not believe such a right existed in the common law." But the court went even further, observing 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 also made clear that it was reluctant to effect such a sea change in common law, which it found "evolves slowly and incrementally, eschewing sudden or sweeping changes." It warned that the consequences of recognizing a public performance right "could be extensive and far-reaching, and there are many competing interests at stake, which we are not equipped to address." It therefore "decline[d] to create such a right for the first time now." Instead, "the recognition of such a right should be left to the legislature."

Judge Fahey filed a concurring opinion that largely agreed with the majority but argued that transmissions by on-demand subscription services should not be found to be public performances - and thus ineligible for protection under New York copyright common law. Rather, in his view, those transmissions should remain subject to New York copyright common law so that copyright owners could be compensated for the use of their works in this way. Judge Rivera filed a dissenting opinion arguing that he would have reached the opposite conclusion and "define[d] the scope of New York's common-law copyright protections as coterminous with current federal law."

While this decision comes as welcome holiday cheer for licensees, it is by no means the last word on the "pre-72" issue. Other cases addressing this issue are percolating under the common law of other states, such as California and Florida. Stay tuned for more on this issue.