Tuesday, October 21, 2014

Another Court Recognizes State Copyright Protections in Pre-72 Sound Recordings

It’s a basic premise of law that a person has a right to the fruits of his or her own labors. For sound recording authors and investors, royalty payments are the fruits they receive in exchange for licensing public performances of their sound recordings. Two new judicial rulings reflect this understanding in state copyright law. 
On October 14, a California trial court concluded – correctly – that state law protects public performance copyrights for sound recordings made prior to 1972. Less than a month ago, a similar ruling on state copyright protection in pre-1972 sound recordings was issued by a federal court in California. This double confirmation of state copyright protection will likely be persuasive in future court cases grappling with the unique treatment of pre-1972 sound recordings under federal and state laws.

In the Copyright Act of 1976, Congress 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. California Civil Code § 980 declares that authors of original works have “exclusive ownership” in their pre-1972 sound recordings. The scope of that “exclusive ownership” in pre-1972 sound recordings is now the subject of federal and state court rulings in California.

At issue in both Flo & Eddie v. Sirius XM and in Capitol Records v. Sirius XM is transmission of songs recorded prior to 1972. Sirius XM is a popular, nationwide satellite radio service and a subscription-based Internet digital radio service. For several years, Sirius XM has played pre-1972 recordings without paying public performance royalties.
The September 22 decision of the U.S. District Court for the District of Central California in Flo & Eddie v. Sirius XM was the subject of my recent Perspectives from FSF Scholars paper. In “Court Ruling Reaffirming State Copyright Protections Should Prompt Congress to Consider RESPECT Act,” I described how the decision vindicates intellectual property (IP) rights by recognizing that pre-1972 sound recording owners are entitled to proceeds of their creative efforts and investments. By its plain reading of federal law and logical application of state law, the District Court ruled in Flo & Eddie v. Sirius XM that a public performance right was part of the ownership interest of sound recordings fixed before 1972. And I characterized the District Court’s ruling as persuasive authority for future cases.
Now, in Capitol Records v. Sirius XM, California Superior Court Judge Mary Strobel explained that “[w]hile a federal trial court opinion is not binding on this court, the court finds the logic applied in that order interpreting Civil Code § 980 to be persuasive.” Accordingly, “the legislature intended the only limitation on ownership rights of pre-1972 recordings to be the ‘cover’ exception. The court concludes that the exclusive ownership right in pre-1972 recordings includes a public performance right, as not specifically excluded.”
The California Superior Court’s ruling was issued in response to a Capitol Records’ motion for a jury instruction. No jury has yet been convened in the case. So the final outcome of Capitol Records v. Sirius XM is yet to be determined. But the California Superior Court’s ruling answers a critical question of law in the case. That is, state law copyright protections in pre-1972 sound recordings include the exclusive right of sound recording authors to publicly perform their recordings.