For the third time in three months, a court has recognized a right of public performance to pre-1972 sound recordings under state copyright law. The latest is a November 14 ruling by Judge Colleen McMahon of the U.S. District Court from the Southern District of New York. The District Court’s opinion constitutes a strongly reasoned vindication of copyright protections according to state common law principles. And it adds more judicial weight to the conclusion that state copyright law protects exclusive public performance rights in pre-72 sound recordings.
As I’ve explained in a Perspective from FSF Scholars essay and in a prior blog post on this topic, the Copyright Act of 1976 largely preempted state copyright law. But Section 301(c) of the Act left state jurisdiction intact regarding rights in sound recordings fixed prior to February 15, 1972.
In Flo & Eddie, Inc. v. Sirius XM Radio, Inc. (2014), the District Court in New York acknowledged that “New York unquestionably provides holders of common law copyrights in sound recordings with an exclusive right to reproduce those recordings.” The question of first impression facing the court was “[w]hether New York provides holders of common law copyrights in sound recordings with an exclusive right to publicly perform those recordings.”
The court affirmed the exclusive right to public performance in pre-72 recordings based on a “look to the background principles and history of New York copyright common law.” Judge McMahon observed that New York jurisprudence affords public performance rights to holders of common law copyrights in plays and films. She similarly observed that “[n]o New York case recognizing 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.”
In her decision, Judge McMahon concluded Sirius XM infringed Flo and Eddie’s common law copyright for public performance of pre-72 sound recordings. Sirius XM reproduced copies of those recordings for its databases and broadcast them through its nationwide satellite radio Internet digital radio services. Yet Sirius XM did not obtain Flo and Eddie’s consent or pay royalties. She flatly rejected Sirius XM’s fair use defense.
The court also concluded that Flo & Eddie established their claim against Sirius XM for the unfair competition tort of commercial misappropriation. As the court explained, “[a]n unfair competition claim involving misappropriation usually concerns the taking and use of the plaintiff’s property to compete against the plaintiff’s own use of the same property.” In its ruling, the court called it “a matter of economic common sense” that Sirius XM’s public performances of Flo and Eddie’s Pre-72 sound recordings harm the copyright holders’ sales and licensing fees.
Finally, the court rejected Sirius XM’s arguments that Flo and Eddie’s state common law copyright claims were barred by the Dormant Commerce Clause. It conceded that Section 301(c) of the Copyright Act of 1973’s exemption for state copyright law in pre-72 recordings “is framed as a limitation on preemption, not a relaxation of Commerce Clause limitations.” However, the court reasoned that “New York does not ‘regulate’ anything by recognizing common law copyright.” It found no basis for holding that “a state’s general property law and associated liability principles could, in and of themselves, violate the Dormant Commerce Clause.” Rather, “concluding that Sirius is liable under New York property law principles would not amount to a ‘regulation’ of interstate commerce by New York.”
As Judge McMahon aptly put it, “the common law, while a creature of the courts, exists to protect the property rights of the citizenry.” Property includes the products of an artist’s “intellectual labor,” such as sound recordings created through the time, effort, money and skill of the artist. Exclusive rights of public performance are appurtenant to that right of property.
In yet another important ruling concerning pre-1972 sound recordings, the District Court’s ruling rightly reasoned from the underlying principles of New York common law to protect rights in intellectual property.