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."