Courts in NY, TN Rule on Impact of Federal Copyright Law on Pre-1972 Recordings

How federal copyright law may affect state common law copyrights in sound recordings has long been a priority concern for record labels. Two courts recently rendered decisions on this issue. One case, from New York state court, involved whether the safe harbor provisions of the Digital Millennium Copyright Act (DMCA) (www.copyright.gov/legislation/dmca.pdf) should apply to alleged unauthorized online uses of pre-Feb. 15, 1972 sound recordings ' generally protectable under state, rather than federal, copyright law. The other case, from Nashville federal court, considered the effect of federal law on pre-1972 sound recordings registered since then with the U.S. Copyright Office.

Grooveshark

In the New York case, UMG Recordings sued the owner of the file-sharing service Grooveshark, which makes recordings uploaded by users searchable via artists and song titles for other Grooveshark users to download. UMG's complaint alleges common law copyright infringement of its pre-1972 recordings and unfair competition. Grooveshark owner Escape Media responded with a DMCA safe harbor defense, under '512 of the DMCA, and argued UMG's claims are preempted by the Communications Decency Act of 1996 (CDA).

The DMCA's '512 gives immunity from copyright liability to online services under certain conditions, like responding rapidly to takedown notices from copyright owners. Meanwhile, '301(c) of the Copyright Act states: 'With respect to sound recordings fixed before [Feb.] 15, 1972, any rights or remedies under the common law or statutes of any State shall not be annulled or limited by this title until [Feb.] 15, 2067.'

On Grooveshark's '512 defense, New York County Supreme Court Justice Barbara R. Kapnick observed: 'UMG reasons that the 'safe harbor' provision in the DMCA cannot be implicated, because it can only protect [I]nternet service providers from liability for infringement of copyrights protected by the [federal] Copyright Act.'

Only one other New York court had considered the issue. In Capitol Records Inc. v. MP3tunes, 821 F.Supp.2d 627 (S.D.N.Y. 2011), U.S. District Judge William H. Pauley III reasoned that '301(c) 'is an anti-preemption provision ensuring that the grant of federal copyright protection did not interfere with common law or state rights established prior to 1972. But section 301(c) does not prohibit all subsequent regulation of pre-1972 recordings. ' It is beyond dispute that the common law meaning of the term copyright infringement encompasses violations of both federal and state protections.'

(In the MP3tunes case, record companies sued over online locker services that enable music storage. MP3tunes filed for liquidation through bankruptcy in April 2012. In a June 2012 development in the case, District Judge Pauley ruled that MP3tunes's bankruptcy didn't justify staying the record labels' copyright infringement suit against the company's founder and CEO, and now sole employee, Michael Robertson. Capitol Records Inc. v. MP3tunes, 07 Civ. 9931 (S.DN.Y.).)

Citing Judge Pauley's '301(c) position, Justice Kapnick went on to find in the Grooveshark litigation: 'Certainly, the thrust of the DMCA is to relieve [I]nternet service providers of the initial need to ascertain the copyright status of the sound recordings that they make available, to place the burden of asserting copyright ownership on the owners of such copyrights, and to require the [I]nternet service providers to 'take down' infringing material, upon receipt of a valid notice of infringement. There is no textual, or other reason, to think that Congress intended to limit that distribution of responsibilities to only post-1972 recordings.' UMG Recordings Inc. v. Escape Media Group, 100152/10.

As for Escape Media's argument that the CDA, which provides some liability protection to interactive services, preempts UMG's claims, '230(c)(1) of the CDA states: 'No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.' But UMG pointed to 47 U.S.C '230(e), which states: 'Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property.' [Emphasis added.] Citing Perfect 10 Inc. v. CCBILL LLC, 488 F3d 1102 (9th Cir. 2007), Escape Media responded that the 230(c) exemption applied to federal, not state, intellectual property law. But granting UMG's motion to dismiss Escape Media's CDA affirmative defense, Justice Kapnick agreed with Atlantic Recording Corp. v. Project Playlist Inc., 603 F.Supp.2d 690 (S.D.N.Y. 2009), to conclude: 'This Court agrees that the word 'any' in '230(e)(2) means what it says.'

(Justice Kapnick also dismissed Escape Media's counterclaim alleging injury to competition by UMG but allowed Escape Media to proceed against UMG with counterclaims for tortious interference with business relations and with contract.)

Johnny Cash Case

The case in Tennessee involving the reach of federal 'compilations' on pre-1972 recordings involves an agreement for the remix and licensing of Johnny Cash ' The Complete Sun Recordings ' 1955-1958. In 2007, Sun Entertainment agreed to exclusively license these recordings to Music World Music's Compadre Records. In 2009, the two parties agreed to 'equally split ' all net receipts from the licensing of the Album.' Sun Entertainment later filed suit in the U.S. District Court for the Middle District of Tennessee alleging that Compadre hadn't paid Sun any of the revenues. (The licensing income from the Cash recordings included $40,000 for use in a movie trailer, and $23,250 and $70,000 for uses in advertisements.) Sun's complaint alleges breach of contract and unauthorized copying.

When Music World moved to dismiss Sun's federal copyright infringement claim, Sun argued that the pre-1972 recordings were protected federally through its copyright registration in 2005 of the Cash tracks as a compilation. Section 101 of the Copyright Act defines a compilation as the 'collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship.'

District Judge Kevin H. Sharp granted Music World's motion to dismiss the infringement claim. Judge Sharp found: 'Were the Court to accept Plaintiff's position that it has a protectable interests in the sounds recordings contained in the compilation, it would have to ignore not only the provisions of 17 U.S.C. '301, which disallows copyright protection for 'sound recordings fixed before [Feb.] 17, 1972,' but also the Copyright Act's language dealing with compilations, which states that '[t]he copyright in [a compilation] is independent of, and does not affect or enlarge the scope ' of any copyright protection in the preexisting material.' 17 U.S.C. '103(b) (italics added).' Sun Entertainment Corp. v. Music World Music LLC, 3:11-00625.

Conclusion

The Escape Media and Sun Entertainment decisions thus demonstrate one clear, though inconsistent, principle: that U.S. copyright law sometimes applies to pre-1972 sound recordings, and sometimes doesn't.

How federal copyright law may affect state common law copyrights in sound recordings has long been a priority concern for record labels. Two courts recently rendered decisions on this issue. One case, from New York state court, involved whether the safe harbor provisions of the Digital Millennium Copyright Act (DMCA) (www.copyright.gov/legislation/dmca.pdf) should apply to alleged unauthorized online uses of pre-Feb. 15, 1972 sound recordings ' generally protectable under state, rather than federal, copyright law. The other case, from Nashville federal court, considered the effect of federal law on pre-1972 sound recordings registered since then with the U.S. Copyright Office.

Grooveshark

In the New York case, UMG Recordings sued the owner of the file-sharing service Grooveshark, which makes recordings uploaded by users searchable via artists and song titles for other Grooveshark users to download. UMG's complaint alleges common law copyright infringement of its pre-1972 recordings and unfair competition. Grooveshark owner Escape Media responded with a DMCA safe harbor defense, under '512 of the DMCA, and argued UMG's claims are preempted by the Communications Decency Act of 1996 (CDA).

The DMCA's '512 gives immunity from copyright liability to online services under certain conditions, like responding rapidly to takedown notices from copyright owners. Meanwhile, '301(c) of the Copyright Act states: 'With respect to sound recordings fixed before [Feb.] 15, 1972, any rights or remedies under the common law or statutes of any State shall not be annulled or limited by this title until [Feb.] 15, 2067.'

On Grooveshark's '512 defense, New York County Supreme Court Justice Barbara R. Kapnick observed: 'UMG reasons that the 'safe harbor' provision in the DMCA cannot be implicated, because it can only protect [I]nternet service providers from liability for infringement of copyrights protected by the [federal] Copyright Act.'

Only one other New York court had considered the issue. In Capitol Records Inc. v. MP3tunes, 821 F.Supp.2d 627 (S.D.N.Y. 2011), U.S. District Judge William H. Pauley III reasoned that '301(c) 'is an anti-preemption provision ensuring that the grant of federal copyright protection did not interfere with common law or state rights established prior to 1972. But section 301(c) does not prohibit all subsequent regulation of pre-1972 recordings. ' It is beyond dispute that the common law meaning of the term copyright infringement encompasses violations of both federal and state protections.'

(In the MP3tunes case, record companies sued over online locker services that enable music storage. MP3tunes filed for liquidation through bankruptcy in April 2012. In a June 2012 development in the case, District Judge Pauley ruled that MP3tunes's bankruptcy didn't justify staying the record labels' copyright infringement suit against the company's founder and CEO, and now sole employee, Michael Robertson. Capitol Records Inc. v. MP3tunes, 07 Civ. 9931 (S.DN.Y.).)

Citing Judge Pauley's '301(c) position, Justice Kapnick went on to find in the Grooveshark litigation: 'Certainly, the thrust of the DMCA is to relieve [I]nternet service providers of the initial need to ascertain the copyright status of the sound recordings that they make available, to place the burden of asserting copyright ownership on the owners of such copyrights, and to require the [I]nternet service providers to 'take down' infringing material, upon receipt of a valid notice of infringement. There is no textual, or other reason, to think that Congress intended to limit that distribution of responsibilities to only post-1972 recordings.' UMG Recordings Inc. v. Escape Media Group, 100152/10.

As for Escape Media's argument that the CDA, which provides some liability protection to interactive services, preempts UMG's claims, '230(c)(1) of the CDA states: 'No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.' But UMG pointed to 47 U.S.C '230(e), which states: 'Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property.' [Emphasis added.] Citing Perfect 10 Inc. v. CCBILL LLC , 488 F3d 1102 (9th Cir. 2007), Escape Media responded that the 230(c) exemption applied to federal, not state, intellectual property law. But granting UMG's motion to dismiss Escape Media's CDA affirmative defense, Justice Kapnick agreed with Atlantic Recording Corp. v. Project Playlist Inc. , 603 F.Supp.2d 690 (S.D.N.Y. 2009), to conclude: 'This Court agrees that the word 'any' in '230(e)(2) means what it says.'

(Justice Kapnick also dismissed Escape Media's counterclaim alleging injury to competition by UMG but allowed Escape Media to proceed against UMG with counterclaims for tortious interference with business relations and with contract.)

Johnny Cash Case

The case in Tennessee involving the reach of federal 'compilations' on pre-1972 recordings involves an agreement for the remix and licensing of Johnny Cash ' The Complete Sun Recordings ' 1955-1958. In 2007, Sun Entertainment agreed to exclusively license these recordings to Music World Music's Compadre Records. In 2009, the two parties agreed to 'equally split ' all net receipts from the licensing of the Album.' Sun Entertainment later filed suit in the U.S. District Court for the Middle District of Tennessee alleging that Compadre hadn't paid Sun any of the revenues. (The licensing income from the Cash recordings included $40,000 for use in a movie trailer, and $23,250 and $70,000 for uses in advertisements.) Sun's complaint alleges breach of contract and unauthorized copying.

When Music World moved to dismiss Sun's federal copyright infringement claim, Sun argued that the pre-1972 recordings were protected federally through its copyright registration in 2005 of the Cash tracks as a compilation. Section 101 of the Copyright Act defines a compilation as the 'collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship.'

District Judge Kevin H. Sharp granted Music World's motion to dismiss the infringement claim. Judge Sharp found: 'Were the Court to accept Plaintiff's position that it has a protectable interests in the sounds recordings contained in the compilation, it would have to ignore not only the provisions of 17 U.S.C. '301, which disallows copyright protection for 'sound recordings fixed before [Feb.] 17, 1972,' but also the Copyright Act's language dealing with compilations, which states that '[t]he copyright in [a compilation] is independent of, and does not affect or enlarge the scope ' of any copyright protection in the preexisting material.' 17 U.S.C. '103(b) (italics added).' Sun Entertainment Corp. v. Music World Music LLC, 3:11-00625.

Conclusion

The Escape Media and Sun Entertainment decisions thus demonstrate one clear, though inconsistent, principle: that U.S. copyright law sometimes applies to pre-1972 sound recordings, and sometimes doesn't.