The Battle Over Public Performance Rights Of Old Music Heats Up: NY Rejects, Supreme Court Petitioned

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).

After 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 theright of public performance would have existed for decadeswithout the courts recognizing such a right as a matter of statecommon law, and in the absence of any artist or record companyattempting to enforce that right in this state until now. Theabsence of a right of public performance in sound recordings wasdiscussed at the federal level for years and became acutelyhighlighted in 1971, upon enactment of the Sound RecordingAmendment, and again in 1995, upon enactment of the DPRA. Atthose times, all interested parties were placed on notice of thestatute's limited rights for post-1972 sound recordings.Although parties do not lose their rights merely by failing toenforce them, the fact that holders of rights to sound recordingstook no action whatsoever to assert common-law protection for atleast the past four decades -- when the absence of acomprehensive federal right of public performance for soundrecordings was clear -- supports our conclusion that artists andcopyright holders did not believe such a right existed in thecommon law.

Instead, common sense supports the explanation,articulated by the Third Circuit, that the record companies andartists had a symbiotic relationship with radio stations, andwanted them to play their records to encourage name recognitionand 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 hasnever recognized a right of public performance for pre-1972 soundrecordings. Because the consequences of doing so could beextensive and far-reaching, and there are many competinginterests at stake, which we are not equipped to address, wedecline 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 thenature and scope of the right to the public performance of soundrecordings for nearly two decades before revising the federalstatutes to recognize a limited right. Indeed, in 1976, Congress"considered at length the arguments in favor of establishing alimited performance right, in the form of a compulsory license,for copyrighted sound recordings, but concluded that the problemrequire[d] further study".... As directed by the Copyright Act of1976, the Register of Copyrights submitted a voluminous report in1978, recommending that Congress enact a limited right to controlpublic performances of sound recordings. Not until 1995 didCongress take action on that recommendation and enact any suchright and, even then, the right it created was a narrow onecircumscribed by a nuanced regulatory scheme limited to digitaltransmissions of post-1972 sound recordings.... Moreover, as part of thatstatutory scheme, Congress included a requirement that thecopyright holder pay a portion of the royalties to the recordingartist; even if we were to recognize a common-law copyright topublic performance, there is no guarantee that the artists wouldreceive any portion of the royalties, as many copyrights are apparently held by the record companies. Ultimately, it cannotbe overstated that, if this Court were to recognize a right ofpublic performance under the common law, we would be ill-equipped-- or simply unable -- to create a structure of rules to properlyguide 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'sbalancing of the varied and competing interests involved, thisonly highlights that a legislative body -- not the courts --should make decisions regarding such a right. Additionally, itwould be highly unusual for this Court to simply adopt federalstatutes as the embodiment of the scope of a state common-lawright. Moreover, as a practical matter, not all aspects of thecomplex federal scheme can be directly incorporated under ourcommon law. For example, in the DPRA, Congress provided a meansof determining reasonable rates and royalty payments, including adispute resolution system.... However, statecourts have no authority to require the federal Copyright RoyaltyJudges to adjudicate challenges to royalty rates on pre-1972sound recordings ... nor do wehave the authority to create a New York State version of thatdispute 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'spremium subscription, Rhapsody, and Amazon's Music Unlimitedoffering -- permit users to peruse a catalog of millions of songsand to "call them up on any device, including [one's] phone,anytime [one] wants"....

In determining whether there is a common law right ofpublic performance for recordings fixed prior to February 15,1972, we necessarily have occasion to speak to the nature and thelimits of such right. In the realm of federal copyright law,"publication" is defined as "the distribution of copies orphonorecords of a work to the public by sale or other transfer ofownership, 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 suchrecording, but to publish that work and therefore to infringeupon the right of the copyright holder to sell it ....

[....]

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

It 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.

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