Current federal
copyright law fails to provide important copyright protections to music artists
and other copyright holders in sound recordings made before 1972. As a result,
copyright holders do not enjoy the same right under federal law to receive
royalties for public performances of pre-72 sound recordings that others enjoy
for later recordings. A new bill in Congress offers a workable, straightforward,
and long overdue solution to this glaring problem.
On July
19, Representatives Darrell Issa and Jerrold Nadler introduced HR 3301, the “Compensating
Legacy Artists for their Songs, Service, and Important Contributions to Society
Act” – or “CLASSICS Act.” If adopted, digital
audio transmissions of pre-72 sound recording would no longer be excluded from federal
protections for public performances of copyrighted sound recordings. HR 3301
would also provide a streamlined way for resolving pre-existing state law
claims for digital audio transmissions of pre-72 sound recordings. The CLASSICS
Act strongly merits consideration without delay by the 115th Congress.
As Free State
Foundation President Randolph J. May and I described in our book, The Constitutional Foundations of Intellectual Property: A
Property Rights Perspective (2015), copyright is a unique kind of private
property right, rooted in an author’s creative labor. The U.S. Constitution’s
Article I, Section 8, IP Clause authorizes Congress to protect an author’s
exclusive right to the proceeds of his or her work. Federal copyright law
establishes baseline protections for copyright holders – including exclusive
rights to proceeds from public performances of sound recordings.
Without
any apparent explanation, the Copyright Act of 1976 excluded federal protection
for the owners of copyrighted sound recordings made before February 15, 1972. Digital music services such as Sirius XM and Pandora have
publicly performed pre-72 sound recordings via digital audio transmissions without
paying royalties to copyright holders in the manner they routinely pay for
post-72 sound recordings. Although the 1976 Act largely preempted state
copyright laws, Section 301(c) left intact state jurisdiction over rights in
sound recordings fixed before 1972. This state of affairs has resulted in a handful of lawsuits against
digital music services based on state copyright law. Courts have largely – but
not entirely – recognized that owners of pre-1972 recordings have property
interests under state law and that those interests may not be misappropriated without
compensation.
In a 2015 report, the U.S.
Copyright Office reiterated its view that “pre-1972 recordings should be brought
under the protection of federal copyright law.” According to the Copyright
Office, federal recognition of public performance copyright protections in
pre-72 sound recordings “would serve the interests of licensing parity by
eliminating… market distortion” and also “allow for a federal compensation mechanism
for the artists responsible for pre-1972 works.”
The CLASSICS Act, HR 3301, is perhaps the most promising
legislative proposal to date for extending federal copyright protections to
public performances of pre-72 sound recordings. Passage of HR 3301 would bring needed
parity to federal law. HR 3301 would end free-riding commercial usage of
valuable copyrighted sound recordings. Certainly, this would be in step with
Congress’s constitutional duty to secure copyright holders’ exclusive rights to
the proceeds of their intellectual property. Going forward, copyright holders
would receive royalties based on rates established by the Copyright Royalty
Board pursuant to its “willing buyer/willing seller” standard that seeks to
approximate market prices for public performances of sound recordings via
digital audio transmissions.
Further, the CLASSICS Act would clear up existing
uncertainties tied to state copyright laws. If adopted, the HR 3301 would preempt
state law claims based on public performances of pre-72 sound recordings that meet
the requirements of federal law. The bill also provides a streamlined option
for settling prior lawsuits based on state copyright lawsuits claims. Within
nine months after the HR 3301’s effective date, if digital music providers pay
royalties for all public performances of pre-72 sound recordings taking place
during the last three years, all state law claims against such providers would
be federally preempted.
Importantly, a press release by the CLASSIC Act’s
sponsors states that HR 3301 has a broad base of support from a diverse array
of participants in the music marketplace. Listed supporters of the bill include
the Recording Industry Association of America (RIAA), Pandora, musicFIRST, the
Internet Association, SoundExchange, and the American Federation of Musicians.
This cross-section of support bodes well for the bill’s prospects in this Congress.
The
sponsors of the CLASSIC Act should be commended for introducing the bill. HR 3301would at long last recognize the rights of
copyright holders in pre-1972 sound recordings, and justly ensure they receive
compensation for commercial uses of their intellectual property. Congress
should give HR 3301 prompt attention.
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