Florida High Court Says No Common Law Exclusive Right Of Public Performance In Pre-72 Recordings

Floe & Eddie, Inc. v. Sirius XM Radio, No. SC16-1161 (Fl. Oct. 26, 2017).

In the long-running dispute between Flo & Eddie (the Turtles) and Sirius, the Florida Supreme Court held that Florida common law does not recognize an exclusive right of public performance in pre-1972 sound recordings.

The dispute in this case concerns rights in sound recordings of performances of musical works as distinct from rights in the composition of such works. The crucial question presented is whether Florida common law recognizes an exclusive right of public performance in pre-1972 sound recordings. We conclude that Florida law does not recognize any such right and that Flo & Eddie’s various state law claims fail.

Thus, Florida joined in New York, leaving it to the legislature rather than the Courts.

Illinois & Common Law Copyright Infringement Of Pre-1972 Songs

Sheridan v. iHeartMedia Inc., No. 1:15-cv- 09229 (N.D. Ill. June 5, 2017).

An Illinois judge dismissed a class action against iHeartMedia Inc. to start paying royalties for pre-1972 sound recordings. The judge ruled that any copyright protection afforded by the state’s common law is extinguished when a song is published. The judge said that Illinois’ common law would only protect unpublished songs and once a song was sold or broadcast, “no common-law copyright protection is available for those recordings.”

9th Cir. Certifies Questions To California Supreme Court in Pre-72 Sound Recording Case

FLO & EDDIE, INC. V. PANDORA MEDIA, INC., No. 15-55287 (9th Cir. Mar. 15, 2017).

In a case concerning whether California recognizes a common law copyright in the right of public performance for pre-1972 sound recordings, the 9th Circuit certified the following questions to the California Supreme Court:

1. Under section 980(a)(2) of the California Civil Code, do copyright owners of pre-1972 sound recordings that were sold to the public before 1982 possess an exclusive right of public performance?

2. If not, does California’s common law of property or tort otherwise grant copyright owners of pre-1972 sound recordings an exclusive right of public performance?

The certification is similar to the questions certified by the 2nd Circuit to the New York Court of Appeals in a companion case involving Sirius.  See fn. 2 and fn. 6.  The 9th Circuit stated:

We agree with our sister circuits that certification is the best way to proceed on these issues, especially in California. As an incubator of both musical talent and technological innovation, California has a significant interest in the appropriate resolution of the certified questions. Resolution of these questions will likely affect the state and industries within the state in a variety of ways, and is therefore best left to the California Supreme Court.

 

2nd Circuit Closes Out "Turtles" Pre-72 Sound Recording Case In Favor Of Sirius

Flo & Eddie, Inc. v. Sirius, No. 15-1164-cv (2d Cir. Feb. 16, 2017).

After the New York Court of Appeals answered the Second Circuit's certified question that New York common law does not recognize a right of public performance for creators of pre-1972 sound recordings, the Second Circuit reversed the district court’s denial of Sirius's motion for summary judgment and remanded with instructions to grant Sirius's motion for summary judgment and to dismiss the case with prejudice.  The Second Circuit noted that the answer to the certified question was determinative of the other claims.

No Common Law Right of Public Performance In Pre-72 Sound Recordings; Issue Is For Legistlature

Flo & Eddie, Inc. v Sirius XM Radio, Inc., 2016 NYSlipOp 08480 (N.Y. 12/20/2016).

New York's highest court, the Court of Appeals, holds that "New York common-law copyright does not recognize a right of public performance for creators of sound recordings," answering in the negative the Second Circuit's certified question in the Flo & Eddie (Turtles) case against Sirius satellite radio concerning alleged common law copyright infringement of pre-1972 sound recordings.  In a lengthy majority opinion authored by Justice Stein, the Court discussed the historical treatment of sound-recordings at both the federal and state level, analyzed prior decisions in both New York state court and the 2nd Circuit, and ultimately held that "New York common law does not recognize a right of public performance for creators of pre-1972 sound recordings" and that the state legislature should decide "whether recognizing a right of public performance in sound recordings is a good idea.

In addition to prior decisions, the Court addressed the practice of interested stake-holders in the music industry.

Indeed, it would be illogical to conclude that the right of public performance would have existed for decades without the courts recognizing such a right as a matter of state common law, and in the absence of any artist or record company attempting to enforce that right in this state until now. The absence of a right of public performance in sound recordings was discussed at the federal level for years and became acutely highlighted in 1971, upon enactment of the Sound Recording Amendment, and again in 1995, upon enactment of the DPRA. At those times, all interested parties were placed on notice of the statute's limited rights for post-1972 sound recordings. Although parties do not lose their rights merely by failing to enforce them, the fact that holders of rights to sound recordings took no action whatsoever to assert common-law protection for at least the past four decades — when the absence of a comprehensive federal right of public performance for sound recordings was clear — supports our conclusion that artists and copyright holders did not believe such a right existed in the common law.
***
Simply stated, New York's common-law copyright has never recognized a right of public performance for pre-1972 sound recordings. Because the consequences of doing so could be extensive and far-reaching, and there are many competing interests at stake, which we are not equipped to address, we decline to create such a right for the first time now. Even the District Court here, while finding the existence of a common-law copyright of public performance in sound recordings, acknowledged that such a right was "unprecedented," would upset settled expectations, and would "have significant economic consequences" (62 F Supp 3d at 352). Under these circumstances, the recognition of such a right should be left to the legislature.

Notably, the Court did not foreclose the plaintiffs' claims under other common-law theories of recovery, like unfair competition.

Finally, we note that sound recording copyright holders may have other causes of action, such as unfair competition, which are not directly tied to copyright law. Indeed, in the present case, plaintiff prevailed in the District Court on its causes of action alleging unfair competition and unauthorized copying of sound recordings. The Second Circuit concluded that defendant had copied plaintiff's recordings, but postponed the questions of fair use and unfair competition until after our resolution of the certified question (821 F3d at 270 n 4, 272). Thus, even in the absence of a common-law right of public performance, plaintiff has other potential avenues of recovery.

The concurring opinion, by Justice Fahey, agreed that the issue should be determined by the legislature but accepted the Second Circuit's invitation to opine on how to define "public performance" and stated

To that end, while I agree with the conclusion of my colleagues in the majority that the common law of this state does not recognize a right of public performance, I would answer the pertinent part of the certified question in the negative with this caveat: "public performance" does not include the act of allowing members of the public to receive the "on-demand" transmission of particular sound recordings specifically selected by those listeners.

Lastly, Justice Rivera dissented: "New York's broad and flexible common-law copyright protections for sound recordings encompass a public performance right that extends to the outer boundaries of current federal law, and ceases upon preemption by Congress."

Pre-72 Sound Recordings Question Heading To Florida Supreme Court

Flo & Eddie v. Sirius XM, No. 15-13100 (11th Cir. Jun. 29, 2016).

In "The Turtles" appeal from a decision granting Sirius XM summary judgment on the common law copyright infringement claim concerning the public performance of pre-1972 sound recordings, the 11th Circuit deferred its decision pending a determination of the state-law question by Florida's highest court.  The lower court had decided, in favor of Sirius, that Florida common law does not recognize an exclusive right of performance.  On appeal, the 11th Circuit discussed an old (1943) Florida Supreme Court case involving magic tricks and found that the case "indicates that there is at least a significant argument that Florida common law may recognize a common law property right in sound recordings."  However, the 11th Circuit also indicated that the old magic trick case indicated that "publication" of the intellectual property could result in termination of the common law copyright.

Neither the Supreme Court of Florida nor any of the Florida District Courts of Appeal have addressed whether Florida common law would recognize copyright protection for sound recordings, and if so, whether the sales to the public of Flo & Eddie’s sound recordings or the public performance thereof would constitute a publication or dedication to the public which would terminate the copyright protection in whole or in part.

Accordingly, the 11th Cir. certified the following questions to the Florida Supreme Court.

Because Florida law is not clear on these matters, we certify to the Supreme Court of Florida the questions of whether Florida common law copyright extends to pre-1972 sound recordings and, if so, whether it includes an exclusive right of public performance and/or an exclusive right of reproduction. We also certify the question of whether Flo & Eddie has forfeited any common law copyright by publication. Additionally, to the extent that Florida recognizes a common law copyright in sound recordings including a right of exclusive reproduction, we certify the question of whether the backup or buffer copies made by Sirius constitute infringement of Flo & Eddie’s common law copyright.

Lastly, to the extent that Florida does not recognize a common law copyright in sound recordings, or to the extent that such a copyright was terminated by publication, the 11th Circuit certified the question of whether plaintiff nevertheless has a cause of action for common law unfair competition / misappropriation, common law conversion, or statutory civil theft.

Federal 2nd Circuit Certifies Pre-72 Question To New York's Highest Court in Flo & Eddie Case

Flo & Eddie v. SiriusXM Radio, 15-1164cv (2d Cir. Apr. 13, 2016).

In the "Turtles" case against Sirius for common law copyright infringement of pre-1972 sound recordings under New York common-law, the Second Circuit certified the question to New York's highest court, the Court of Appeals: "This case presents a significant and unresolved issue of New York copyright law: Is there a right of public performance for creators of sound recordings under New York law and, if so, what is the nature and scope of that right? Because this question is important, its answer is unclear, and its resolution controls the present appeal, we reserve decision and certify this question to the New York Court of Appeals."

The lower court had denied Sirius' motion for summary judgment, and the Second Circuit reviewed the matter de novo.  The Circuit stated "the issue before us is whether New York common law affords copyright holders the right to control the performance of sound recordings as part of their copyright ownership."  However, New York's highest court has not ruled on the issue in any prior case, and without such guidance, the Circuit was "in doubt" whether New York provides such rights under common law.  Thus, the Court found that certification to the New York Court of Appeals was appropriate.  Accordingly, the Court reserved decision and certified the following question for decision by the New York Court of Appeals:

"Is there a right of public performance for creators of sound recordings under New York law and, if so, what is the nature and scope of that right?"

Pre-72 Class Actions Stayed In Light Of Turtles' Appeals

Sheridan v. iHeartMedia, 15-cv-7574; Sheridan v. Sirius XM, 15-cv-7576 (D.N.J. Mar. 16, 2016).

In a putative class action, the owners of sound recordings made before 1972 brought copyright infringement and unjust enrichment claims under New Jersey law against defendants for broadcasting their recordings without receiving authorization or compensation.  Defendants moved to stay the case pending the resolution of three similar actions currently before the U.S. Courts of Appeals for the 2nd, 9th and 11th Circuits.  The court granted the stay.  "Most importantly, the Court finds that staying this case until the Second, Ninth, and Eleventh Circuits have ruled on related cases will more likely than not simplify the issues presented here and promote judicial economy."

Pre-1972 Copyright Claims Limited By 3, Not 6, Year Limitation Period

ABS Entm't, Inc. v. CBS, No. 15-cv-6801 (S.D.N.Y. Feb. 17, 2016).

New York's 3 year statute of limitations "for an injury to property" applies to plaintiffs' claims for common law copyright infringement of pre-1972 sound recordings, holds the Court, not the State's 6-year "catch-all" provision.  CPLR 213(1) and 214(4).  Plaintiffs, a putative class, allege that CBS violated the public performance rights of pre-1972 sound recordings as protected under New York common law, and allege common law infringement and unfair competition.  The narrow issue before the Court was whether a 3 or 6 year limitations period applied, and Judge Koetel held that the plain meaning of "property" (as used in the 3 year statute) is broad enough to encompass intangible property, like intellectual property in the form of sound recordings (or trade secrets).  In other words, the 3 year limitations period is not limited to tangible property.  Notably, the Court recognized that "the case law is mixed" on this question, addressing both the Flo & Eddie [80 F. Supp. 3d 535 , 541 (S.D.N.Y. 2015)] and Harrison [44 Misc. 3d 428 , 986 N.Y.S.2d 837 , 838 (Sup. Ct. 2014)] cases.

Florida Court Rejects Pre-72 Sound Recording Rights in Turtles/Sirius Case; Contrary To NY and CA Decisions

Flo & Eddie, Inc. v. SiriusXM, No. 13-23182-CIV-GAYLES/TURNOFF (S.D. Fla. dated June 22, 2015).

A Florida federal court granted defendant Sirius summary judgment as to liability on plaintiff Flo & Eddie's (the Turtle's) common-law copyright infringement claims, although New York and California courts have found differently.  The Florida federal court observed that Florida is different from New York and California, inasmuch as as there is no Florida legislation covering sound recordings nor is there a bevy of case law interpreting common law copyright related to the arts.  "The Court finds that the issue of whether copyright protection for pre- 1972 rec ordings should include the exclusive right to public performance is for the Florida legislature."  Accordingly, the Court found that Florida common law did not provie plaintiff with the exclusive right of public performance in the Turtles' sound recordings.  Further, the Court found that back-up and buffer copies made by Sirius were not unlawful reproductions.  Because the Court found that Sirius had not infringed any of Plaintiff's copyrights, the Court also dismissed plaintiff's related claims for unfair competition, conversion and civil theft (all of which were based on alleged copyright infiringement).

Ghostface Killa Case, Involving "Iron Man Theme" Sample, Dismissed

Urbont v. Sony Music Entertainment et al., No, 11-cv-94516 (S.D.N.Y. April 20, 2015) [Doc. 78].

The Court granted Sony Music summary judgment dismissing the claims of plaintiff, who alleged infringement of his rights to the musical composition and sound recording of the "Iron Man Theme" in a Ghostface Killa song.  Sony successfully challenged plaintiff's ownership of a copyright interest in the song by establishing that the composition was a "work for hire" and was therefore owned by Marvel Comics, for whom plaintiff created the composition.  Notably, the Court found that Sony -- a third-party to that transaction -- had standing to challenge plaintiff's ownership under the work for hire doctrine pursuant to the 1909 Act's "instance and expense" test.

The Court also dismissed Plaintiff's state law claims for common law copyright infringement, unfair competition, and misappropriation, finding that the claims were preempted by the Copyright Act.  Plaintiff argued that the recording fell within the exception to pre-emption as a sound recording fixed before February 15, 1972.  17 U.S.C. 301.  The Court disagreed, finding that the recording was an "audiovisual work" and not a "sound recording" because it was created purely to accompany the television show Iron Man and did not exist apart from the accompanying televisuals.  Under the 1976 Act, the claims were preempted because they involve an audiovisual work.

State-Law Copyright And Unfair Competition Claims Relating To In-Flight Music Services Not Preempted

UMG Recordings v. Global Eagle Entertainment, No. 14-03466 MMM (C.D. Cal. dated Feb. 23, 2015).

The Court denied defendant airline's motion to dismiss claims for copyright infringement under California law, along with California unfair competition claims, finding that even if in-flight entertainment qualifies as a service as that term is used in the Airline Deregulation Act, any connection between the service and plaintiffs' claims was too tenuous and remote to justify preemption.

Plaintiffs were various record companies and music publishers.  They contended that defendants provided “various airlines” sound recordings and music videos that the airlines then publicly perform to their passengers.  Defendants contended that the court should dismiss the record company plaintiffs’ state law copyright infringement and unfair competition claims because the claims were preempted by the Deregulation Act.  Congress enacted the Deregulation Act in 1978 after determining that maximum reliance on competitive market forces would best further efficiency, innovation, and low prices as well as variety and quality of air transportation services."

Interlocutory Appeal Granted In Turtles/Sirius Case

Flo & Eddie v. Sirius, No. 1:13-cv-05784-CM (SDNY filed 02/10/15) (Doc. 118).

The District Court certified for interlocutory appeal to the Second Circuit the question: "Under New York law, do the holders of common law copyrights in pre-1972 sound recordings have, as part of the bundle or rights attendant to their copyright, the right to exclusive public performance of those sound recordings?"  Having certified the question for interlocutory appeal, the District Court stayed all proceedings pending a decision by the Second Circuit.

Sirius To Be Liable To Turtles On Pre-1972 Sound Recording Claims

Flo & Eddie, Inc. v. Sirius XM Radio Inc., 1:13-cv-05784 (S.D.N.Y. filed Jan. 15, 2015) [Doc. 114].

The Court found that Sirius will be found liable to the Turtles' successor in interest for common law copyright infringement of pre-1972 sound recordings, but deferred entering judgment as to liability until the plaintiff decided whether to proceed individually or as a class action representative.

First, the Court rejected Sirius' argument that the plaintiff's had not yet established ownership of the recordings.  The Court found that documentary evidence of the transfer of rights from the Turtles to the plaintiff was not required because an assignment of common law copyrights need not be in writing to be valid under New York law; that a court may infer that a transfer has taken place from subsequent conduct.

Second, the Court rejected Sirius' argument that it had an implied license.  There was no evidence that the recordings were created at Sirius' request (indeed, Sirius did not even exist when the recordings were made), nor any evidence that plaintiff "handed over" the recordings to Sirius (let alone with intent for Sirius to copy and distribute the recordings).  Mere acquiescence was insufficient.

Third, the Court rejected Sirius' waiver and estoppel defenses.  The Court found that plaintiff's failure to pursue infringement actions for many years while the recordings were played on the air did not constitute a waiver.  Inaction was insufficient.  The estoppel defense failed because there was no proof that Plaintiff made any false representations to Sirius or concealed any material fact with intent to deceive.  Even if Sirius relied on general industry practice as to pre-1972 recordings, and the lack of any lawsuits over the years challenging that practice, the Court found that was distinguishable from relying on affirmative conduct by the plaintiff.

Fourth, the Court found that there is a three year statute of limitations under New York law, and that while plaintiff's claim was not time-barred, it could only recover damages for infringement going back three years.  The Court distinguished the case from those in which ownership of the copyright is in dispute between the parties; here, infringement is the primary issue (there is no claim by Sirius that it owns the copyrights).

Lastly, the Court found that it would defer on ruling on the merits until the issue of class certification was decided.  The Court directed plaintiff to notify it if it intends to proceed individually or as a class action representative.

Sampling Case Against Jay-Z Dismissed Because No Substantial Similarity

Tufamerica Inc. v. WB Music Corp. et al., No. 1:13-cv-07874-LAK (SDNY filed 12/08/14) [Doc. 19].

The Court dismissed a claim against Jay-Z that was based on the sampling and use of the word “oh” in an audio recording and music video entitled Run This Town.  Plaintiff’s works were a composition and a pre-1972 sound recording thereof in each of which the word “oh” appears once.  The Court held that, even assuming that defendants copied, or “sampled,” a portion of plaintiff’s works, plaintiff had not stated a plausible claim because there was no substantial similarity.

According to the Court, "Run This Town bears very little and perhaps no similarity at all to [Plaintiff's song]. The melody and lyrics are entirely different. The lyrics do not contain the word 'oh'. And while the Court assumes, as plaintiff contends, that the alleged 'sample' of that word appears in the accused recording and video 42 separate times, it must be said also that it does so, if at all, only in the background and in such a way as to be audible and aurally intelligible only to the most attentive and capable listener."

The Court observed, in dicta, that plaintiff's usage of the word "oh" in the composition likely was not subject to copyright protection, though it may have been in the sound recording.  However, the Court found other grounds to dismiss and therefore assumed "oh" was protectable.  Specifically, the Court found there was no substantial similarity.

First, the "oh" was not quantitatively significant in either the composition or sound recording thereof. Second, the court found that the qualitative significance of "oh" in plaintiff's work was insufficient.  "Oh" was not the heart of the composition, having appeared only once and being a common word.  As to the recording, "oh" only appeared at the beginning, and was a replaceable term; indeed, "oh" could have been removed completely without significantly changing the essence of the recording.  That Jay-Z used the "oh" more than 40 times did not change the analysis, because what is relevant is the qualitative and quantitative significance of the copied portion in relation to the plaintiff’s work as a whole (not the significance to the defendant's work).

Court My Reconsider Pre-1972 Sound Recording Decision In Turtles/Sirius Case

Flo & Eddie, Inc. v. Sirius XM Radio, 1:13-cv-05784-CM (SDNY filed 12/03/14) [Doc. 103].

As previously reported, a New York federal court recently found that Flo & Eddie (the Turtles) have state common law claims against Sirius XM concerning the public performance of pre-1972 sound recordings.  However, defendant Sirius XM, by new counsel, subsequently brought to the Court's attention a previously un-cited decades old 2nd Circuit decision, RCA Mfg. Co. v. Whiteman, 114 F.2d 86, 87-88 (2d Cir. 1940), which held that no common law public performance right existed in sound recordings.  "Whiteman plainly should have been addressed the first time around, and it must be dealt with now- it is, after all, a Second Circuit decision (albeit a pre-Naxos decision) discussing key issues in this case."  Accordingly, the court entered a scheduling order for plaintiff to respond and discuss the case

New York Common Law Protects Public Performance of Pre-1972 Sound Recordings; NY Federal Court Joins California Federal Court

Flo & Eddie, Inc. v. Sirius XM, Inc., No. 1:13-cv-05784 (S.D.N.Y. filed Nov. 14, 2014) [Doc. 88].

Joining a California federal court in a parallel case, a New York federal court found that Flo & Eddie (the Turtles) have state common law claims against Sirius XM concerning the public performance of pre-1972 sound recordings.  "In short, general principles of common law copyright dictate that public performance rights in pre-1972 sound recordings do exist.  New York has always protected public performance rights in works other than sound recordings that enjoy the protection of common law copyright.  Sirius suggests no reason why New York -- a state traditionally protective of performers and performance rights -- would treat sound recordings differently."

First, the court found that plaintiff holds valid common law copyrights in the Turtles' sound recordings.  "The Turtles originally acquired a common law copyright in their sound recordings by expending time, effort, money and skill to create them.  That copyright was then transferred...eventually to Flo and Eddie, which now owns the sound recordings."

Second, the Court found that Flo and Eddie's common law copyright provides exclusive rights to reproduce and publicly perform Turtles recordings.  As to the absence of prior litigation on the matter, "acquiescence by participants in the recording industry in a status quo where recording artists and producers were not paid royalties while songwriters were does not show that they lacked an enforceable right under the common law -- only that they failed to act on it."  The court did not read too much into the fact that New York courts have never squarely addressed this particular feature of state copyright law in the context of sound recordings.

Third, the Court found that Sirius infringed plaintiff's common law copyright and engaged in unfair competition (misappropriation).  In reproducing Turtles recordings, Sirius acted without authorization.  Further, to the extent that distribution is an element of common law copyright, the Court found that publicly performing sound recordings is an act of distribution.

Moreover, even though the Court found that there is a common law fair use defense parallel to the federal fair use defense, Sirius XMs creation of multiple complete copies of the sound recordings could not be considered a fair use.  "It is a matter of economic commons sense that Sirius harms Flo and Eddie's sales and potential licensing fees (even if the latter market is not yet extant) by publicly performing Turtles sound recordings."

Lastly, the Court rejected Sirius XM's argument that plaintiff's claims are barred by the constitutional Dormant Commerce Clause, which provides that states may not interfere with interstate commerce.  U.S. Const. art. I, sec. 8.  The court found that the argument is a "red herring" because New York does not "regulate" anything by recognizing common law copyright.  Sirius objects to a "general principle respecting the liability of all persons within the jurisdiction of" New York, which under the 1876 (yes, 1876) Supreme Court decision Sherlock v. Alling, 93 U.S. 99,  is not a state-imposed regulation that might affect interstate commerce.

No Interlocutory Appeal Of Pre-72 Sound Recording Liability Holding In Turtles v Sirius Case

Flo & Eddie, Inc. v. Sirius XM Radio, Inc., No. 13-cv-5693 (C.D. Cal. Nov. 20, 2014).

The District Court denied Sirius XM's motion to certify for interlocutory appeal the Court's earlier order granting partial summary judgment.  The earlier order granted plaintiff summary judgment to the extent that its claims were premised on Sirius XM's public performance of plaintiff's pre-1972 sound recordings, ruling that owners of sound recordings have the exclusive right to publicly perform their recordings under California Civil Code 980(a)(2).  28 USC 1292(b) provides a means for litigants to bring an immediate appeal of a non-final order with the consent of both the federal district court and the federal court of appeals.  The district court denied the motion because, "[a]t this stage in the litigation and under the operative scheduling order governing the case, certification of the Order for immediate appeal would delay rather than materially advance the termination of the litigation".  Continuing, the district court observed that the case is moving swiftly toward trial and a final resolution that will be appealable to the Ninth Circuit in the customary manner.  While interpretation of Cal. Civ. Code 980(a)(2) is an issue of controlling law, an immediate appeal would not speed up the resolution of the case.

California Law Protects Public Performance Right In Pre-1972 Sound Recordings; Turtles Granted Summary Judgment Against Sirius

Flo & Eddie Inc. v. Sirius XM Radio Inc., et al., No. 2:13-cv-05693-PSG-RZ (C.D. Cal. filed Sep. 22, 2014) (Doc. 117).

Plaintiff, owner of all rights to The Turtles’ master sound recordings (including the hit "Happy Together"), was granted summary judgment against Sirius XM on its causes of action for violation of California
copyright law (California Civil Code § 980(a)(2)), California’s Unfair Competition Law (Cal. Bus. & Prof. Code §§ 17200, et seq.), and common law misappropriation and conversion, but only so far as the claims were premised on Sirius XM’s public performance of Plaintiff's recordings, not its alleged reproductions for which there were outstanding questions of fact.

Plaintiff argued that Sirius XM was liable for two distinct unauthorized uses of its sound recordings: (1) publicly performing its recordings by broadcasting and streaming the content to end consumers and to secondary delivery and broadcast partners, and (2) reproducing the recordings in the process of operating its satellite and Internet radio services.  Plaintiff contended that, in California, copyright ownership of a pre-1972 sound recording includes the exclusive right to publicly perform the recording; therefore, if anyone wishes to publicly perform such a recording, they must first seek authorization from the recording’s owner.  The Court agreed.

First, the Court found that California statutory and common law governs the rights that attach to pre-1972 sound recordings because the Federal Copyright Act does not apply to those earlier recordings and explicitly allows states to continue to regulate them.  Second, the Court examined the provision of California’s copyright statute that contains a provision directly addressing pre-1972 sound recordings. Cal. Civ. Code § 980(a)(2) ("The author of an original work of authorship consisting of a sound recording initially fixed prior to February 15, 1972, has an exclusive ownership therein until February 15, 2047, as against all persons except one who independently makes or duplicates another sound recording that does not directly or indirectly recapture the actual sounds fixed in such prior recording, but consists entirely of an independent fixation of other sounds, even though such sounds imitate or simulate the sounds contained in the prior sound
recording").

The crucial point of statutory interpretation for this case was whether “exclusive ownership” of a sound recording carries within it the exclusive right to publicly perform the recording.  The Court’s textual reading of § 980(a)(2) was that the legislature intended ownership of a sound recording in California to include all rights that can attach to intellectual property, save the singular, expressly-stated exception for making “covers” of a recording.

The Court further found that the rule of statutory construction requiring express statements to alter the common law did not apply because, when the legislature passed § 980(a)(2), there was no common law rule in California rejecting public performance rights in sound recording ownership.  Also, the legislative history of § 980(a)(2) and its comparison to the Federal Copyright Act bolstered the Court’s plain textual reading of the statute that sound recording ownership is inclusive of all ownership rights that can attach to intellectual property, including the right of public performance, excepting only the limited right expressly stated in the law (that the owner does not have the exclusive right to record and duplicate “covers").  Lastly, the Court found further support for its textual reading of the statute as inclusive of the right of public performance from the only two courts that have ruled on or discussed this right under § 980(a)(2).  Accordingly, the Court granted summary judgment on copyright infringement in violation of § 980(a)(2) in favor of Plaintiff.

Borrowing the violation of § 980, the Court found that Sirius also violated California's Unfair Competition Law because Sirius publicly performs Plaintiff's sound recordings without authorization to do so.  Also, the Court found that Sirius XM’s unauthorized performances established conversion damages in the form of license fees that Sirius XM should have paid Plaintiff in order to publicly perform its recordings.  The foregone licensing or royalty payments that Sirius XM should have paid before publicly performing the recordings also constituted misappropriation.

Lastly, the Court found that Sirius could not rely on the doctrine of laches because this was an action at law seeking money damages, and laches is an equitable defense.  Accordingly, the Court granted Plaintiff's motion for summary judgment on all causes of action, but only so far as the claims are premised on Sirius XM’s public performance of the recordings, not its alleged reproductions.

Pre-1972 Safe Harbor Issue Will Not Be Heard By NY's Highest Court

UMG Recordings v. Escape Media Group, 2013 NY Slip Op 87510(U) (1st Dep't Oct. 8, 2013).

The New York Appellate Division, First Department, denied defendants' motion for leave to appeal the Court's decision concerning pre-1972 sound recordings to the New York Court of Appeals, New York's highest court.