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.
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