Crediting State Common Law’s Role in Protecting Intellectual Property Rights

American law stands for the proposition that people have a right to acquire and use property. Private property is therefore protected by statutes and judicial doctrines. Copyright is a unique kind of property protected primarily by federal statutes.

Yet copyright is a kind of property that is also protected by unwritten state common law. A federal court ruling in February on state copyright protections for owners of pre-1972 sound recordings provided a reminder of that vital point. The ruling also marked the fourth straight judicial vindication of state copyright protection in pre-72 sound recordings. 

At issue Flo & Eddie, Inc. v. Pandora Media, Inc. (Cal. 2015), is Pandora’s Internet-based digital transmission of sound recordings made prior to 1972 without paying public performance royalties to the copyright holders. Flo & Eddie, a corporation owned by two founding members of the music group “The Turtles,” filed suit against Pandora, seeking damages for alleged copyright violations. 

On February 23, Judge Philip S. Gutierrez of the U.S. District Court for the Central District of California, ruled that California law recognizes public performance rights in sound recordings made prior to 1972. (The federal Copyright Act of 1976 affords public performance rights in sound recordings made on or after 1972.)

Specifically, the Court rejected Pandora’s claims that transmitting pre-72 sound recordings was protected speech regarding matters of public interest. The Court concluded that Flo & Eddie brought legally sufficient claims based on California’s copyright statute, its unfair competition law, as well commercial misappropriation and conversion doctrines.

Flo & Eddie, Inc. v. Pandora Media, Inc. (Cal. 2015) is now the fourth court ruling in the last several months to recognize state law copyright protections in pre-72 sound recordings. The ruling tracks with those issued in three cases I have written about previously:

• Flo & Eddie, Inc. v. Sirius XM (Cal. 2014) – The U.S. District Court for the Central District of California ruled that the plain meaning of California’s statute specifically directed to pre-1972 recordings grants authors of original works in sound recordings “exclusive ownership,” which includes “the right to use and possess the recording to the exclusion of all others.” It also ruled “exclusive ownership” includes the exclusive right of sound recording authors to publicly perform their recordings. The District Court held the California statute’s legislative history and two prior court decisions offered additional support for public performance rights in pre-1972 sound recordings. (See “Court Ruling Reaffirming State Copyright Protections Should Prompt Congress to Consider RESPECT Act.”)

• Capitol Records v. Sirius XM (Cal. 2014) -  A California Superior Court deemed the reasoning in Flo & Eddie v. Sirius XM to be “persuasive.” It found that “the legislature intended the only limitation on ownership rights of pre-1972 recordings to be the ‘cover’ exception.” The California Superior Court concluded that “the exclusive ownership right in pre-1972 recordings includes a public performance right, as not specifically excluded.” (See “Another Court Recognizes State Copyright Protections in Pre-72 Sound Recordings.”)

• In Flo & Eddie, Inc. v. Sirius XM Radio, Inc. (2014) - The U.S. District Court for the Southern District of New York ruled that “New York unquestionably provides holders of common law copyrights in sound recordings with an exclusive right to reproduce those recordings.” The Court answered “Yes” to the question of first impression it faced: “Whether New York provides holders of common law copyrights in sound recordings with an exclusive right to publicly perform those recordings.” (See “Yet Another Court Reinforces State Law Copyrights in Pre-72 Sound Recordings.”)

Judge Gutierrez previously issued the Court’s ruling in Flo & Eddie, Inc. v. Sirius XM (Cal. 2014). But Flo & Eddie, Inc. v. Pandora Media, Inc. (Cal. 2015) builds on the logic of that earlier ruling. The Court rejected a nuanced argument presented by Pandora that was not raised by Sirius XM. In particular, Pandora argued that California’s 1982 copyright statute only protected unpublished sound recordings made prior to 1972, and that published songs recorded prior to 1972 went into the public domain.

“Pandora’s misstep is that it ignores the California common law’s role in maintaining property rights,” concluded the Court.  Importantly, the ruling in Flo & Eddie, Inc. v. Pandora Media, Inc. (Cal. 2015) reiterated that state common law includes vital protections for property rights, including copyrights. As the Court wrote, “historically, California recognized and protected property rights in sound recordings not only through its copyright statutes…but also through common law property concepts.” Further: “The case law indicates that sound recordings never dropped into the public domain so that people could freely exploit them…California still protected these recordings post-publication through the common law.” The Court determined that California statute law was intended to maintain those copyright protections recognized by common law doctrines.

Pandora has filed an appeal of the decision to the U.S. Court of Appeals for the Ninth Circuit. A future ruling by the Court of Appeals could supply binding judicial precedent on the issue of state copyright law protections in pre-72 sound recordings.

The foundation for federal protection for copyrights is provided in Article I, Section, Clause 8 of the U.S. Constitution, which empowers Congress “to promote the progress of science and useful arts, by securing, for a limited time, to authors and inventors, the exclusive right to their respective writings and discoveries.” The First Federal Congress passed the first federal copyright act in 1790, which President George Washington signed into law. Copyright’s constitutional pedigree is impressive. But state law copyright protections pre-date the Constitution of 1787. The thirteen American states protected property through their own common law and law of equity, and twelve of the thirteen states had copyright statutes in place by the time Constitution was ratified.  

The Constitution’s design calls for federal law to provide primary protection to copyright holders. Even so, this recent sweep of four judicial rulings recognizing state law protection for copyrights in pre-1972 sound recordings reflects the deeply rooted connection between state common law and private property rights. What’s most important is that both sources of legal authority share the same central purpose: protecting the rights of authors to the fruits of their labors.