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How The Sirius XM Ruling Upsets Decades Of Copyright Law Consensus

from the activist-judges... dept

Fri, Oct 3rd 2014 9:31am — Mike Masnick

We recently wrote about district court judge Philip Gutierrez ruling against Sirius XM on the issue of streaming pre-1972 recordings. As we noted at the time, the ruling appeared to upset what was considered more or less a settled issue. Pre-1972 sound recordings are not covered by federal copyright laws, but rather by a hodgepodge of state laws (and common law), but those have been entirely focused on reproduction/distribution and not on public performance. But this ruling changed all that. Sirius XM, of course, has already made it clear that it's appealing the ruling, and on the other side, the victors in last week's ruling, Flo & Eddie, have already moved to sue Pandora as well.

While I tried to express how much this ruling upsets what had been considered pretty much solid law, law professor Tyler Ochoa does an astounding job actually detailing the history and just what a big change this ruling is, calling it a "seismic" ruling on the scale of the 1906 San Francisco earthquake. Here's just a snippet, though you really ought to read the whole thing, detailing historical case law that this ruling totally upends:

...in the early days of radio, sound recording copyright owners also tried to use state law to restrict unauthorized broadcasts of sound recordings (which, as explained above, were not eligible for federal copyright). In 1937, in Waring v. WDAS Broadcasting Station, 194 A. 631 (1937), the Pennsylvania Supreme Court held that state common law prevented the unauthorized broadcast of phonograph records (when the legend “Not Licensed for Radio Broadcast” was printed on the records); but in 1940, in RCA Mfg. Co. v. Whiteman, 114 F.2d 86 (2d Cir. 1940), the U.S. Court of Appeals for the Second Circuit, in an opinion by Judge Learned Hand, held that common-law copyright prevented only the duplication of a sound recording, and that sale of phonograph records exhausted any common-law property right to prevent the unauthorized broadcast of the recording (notwithstanding the same restrictive legend). The Supreme Court denied certiorari, which effectively meant that broadcasters did not have to pay royalties to sound recording copyright owners to play their records on the radio. (Broadcasters still had to pay royalties to musical work copyright owners, under federal copyright law.)

... when sound recordings were added to the federal copyright act in 1972, Congress likewise limited the exclusive rights that were provided to sound recording copyright owners. Authors of most copyrightable works receive five exclusive rights: the right to reproduce the work, to adapt or prepare derivative works based on the work, to publicly distribute copies of the work, to publicly perform the work, and to publicly display the work. But broadcasters had enough lobbying power to block any action in Congress if it required them to pay more royalties. As a result, Congress gave sound recording copyright owners only the right to reproduce and distribute copies of the sound recording, and to prepare derivative works (by electronic manipulation of the sounds recorded, not by imitation or simulation). Congress did not give sound recording copyright owners any right to publicly perform their works. (The policy argument was that radio airplay served as free advertising for the sale of phonograph records.)

In other words, contrary to what you'll hear today from the record labels and copyright maximalists, this ruling was not obvious or about Sirius XM, Pandora and others ripping off artists. This was actually about them upending what had been considered completely settled law. It was only in 1995 that Congress first established that copyright had any sort of "public performance" exclusivity -- and then only for post-1972 recordings (remember, the recording industry itself has fought quite hard to exempt pre-1972 sound recordings from other aspects of federal copyright law) and only on digital streaming. So, to argue that pre-1972 state and common law somehow was intended to cover such a public performance right is almost impossible to fathom. Yet that's what the court ruled.

And the impact could be immense. Beyond just Sirius and Pandora, it could hit a lot of others as well. In a big way, in part by undermining the very foundations of the DMCA safe harbors.

The ruling is a huge victory for sound recording copyright owners, which can use the ruling not only to negotiate higher negotiated rates for public performance of pre-February 15, 1972 sound recordings, but may also use such older recordings as leverage for negotiating higher rates for post-February 15, 1972 sound recordings. (Such negotiation tactics might be deemed to be copyright misuse, but it is unclear whether state law will recognize this federally-recognized defense.) Moreover, nothing in the decision limits the state-law violations to public performance by means of digital audio transmission, so the decision gives sound recording copyright owners the general public performance right in pre-February 15, 1972 sound recordings that they have always craved, but that was previously denied to them under federal law (and was assumed not to exist in state law under Whiteman). That means that traditional AM/FM broadcasters and television broadcasters, who are expressly exempt under federal law with respect to post-February 15, 1972 sound recordings, can expect to be sued next.

Sound recording copyright owners can also use the ruling to go after internet service providers. Section 512 of the federal Copyright Act provides that internet service providers are not liable for infringements committed by their users, so long as the service provider promptly complies with the “notice-and-takedown” provisions of that section. But because Section 301(c) states that pre-February 15, 1972 sound recording copyrights are not preempted by the federal act, sound recording copyright owners have been suing internet service providers under state law, arguing that service providers are liable for reproduction and electronic distribution of pre-February 15, 1972 recordings under state law, and that the limitation of liability provided by federal law does not apply. Existing court decisions so far are split, with the New York Appellate Division holding that Section 512 does not apply to pre-February 15, 1972 sound recordings, because of the express terms of Section 301(c); while the U.S. District Court for the Southern District of New York has held that Section 512 does apply to pre-February 15, 1972 sound recordings, notwithstanding Section 301(c).

In the meantime, Ochoa notes, expect "oldies" to start disappearing from lots of different services as companies seek to limit their liability. Funny how yet another copyright ruling is likely to make music even more scarce.

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Filed Under: california, copyright, history, pre-1972, pre-1972 sound recordings, public performance, radio, streaming
Companies: flo & eddie, pandora, sirius xm

27 Comments

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antidirt (profile), 3 Oct 2014 @ 8:55am

Pre-1972 sound recordings are not covered by federal copyright laws, but rather by a hodgepodge of state laws (and common law), but those have been entirely focused on reproduction/distribution and not on public performance.

But where is the body of California common law that limits Section 980(a)(2) to just the reproduction and distribution rights? There is none. The statute itself indicates no such limitation. It just says "exclusive ownership." And the court held that the one limitation that is explicitly provided in Section 980(a)(2) (for covers) implies that no other limitations were intended. In fact, California followed Section 114 of the Copyright Act when it amended Section 980(a)(2) in 1982, but it did not include the limitation for public performances that's found in Section 114(a). That implies that it didn't want that limitation. Why leave that out? Also, why no mention of the case law cited by the court, such as the BlueBeat opinion, where the public performance right was recognized? I think you're leaving a lot out.
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Anonymous Coward, 3 Oct 2014 @ 9:53am

Looks like we'll need pirates to step up and fucking save music again.
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Ninja (profile), 3 Oct 2014 @ 9:55am

In the meantime, Ochoa notes, expect "oldies" to start disappearing from lots of different services as companies seek to limit their liability.

Copyright, promoting progress and creativity since the first drawings on cave walls.

Luckily we just need to wait a few more hundred years (depends on how many times Disney manages to renew Mickey copyrights) and we will be able to listen to these songs and more for free and even build upon them with no fear of having our guts removed and sold to pay for abstract, eternal rights. I can't wait for this LIMITED privilege to end.

Call me crazy but nothing that outlives two or more generations seem limited consider a normal lifespan.
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Kaeru, 3 Oct 2014 @ 10:15am

Looking to understand the concept of state copyright law. How does such law survive the first amendment? If art covered by copyright is protected speech, how does it become unprotected speech for someone other than the original creator? Wouldn't it be censorship for a local government to forbid it? Is the copyright clause extended to local governments or is speech that someone else spoke first not protected?
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antidirt (profile), 3 Oct 2014 @ 10:37am

Re:
Looking to understand the concept of state copyright law. How does such law survive the first amendment? If art covered by copyright is protected speech, how does it become unprotected speech for someone other than the original creator? Wouldn't it be censorship for a local government to forbid it? Is the copyright clause extended to local governments or is speech that someone else spoke first not protected?

The cases to look at are Eldred v. Ashcroft: http://scholar.google.com/scholar_case?case=12147684852241107557 and Golan v. Holder: http://scholar.google.com/scholar_case?case=3239612723066820072 The short answer is that the Supreme Court said that since copyright only protects expression, and not ideas, and since fair use permits some copying, the First Amendment isn't violated by the copyright laws. While copyright protects art insofar as it is speech, the First Amendment "bears less heavily when speakers assert the right to make other people's speeches." So the First Amendment rights of the copyist are less robust than those of the original artist. The Copyright Clause only applies to the federal government, but because of preemption, see http://en.wikipedia.org/wiki/Federal_preemption , states can't make any copyright laws that conflict with the federal copyright laws. The First Amendment, on the other hand, applies to the states under the Fourteenth Amendment. See http://en.wikipedia.org/wiki/Gitlow_v._New_York
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Anonymous Coward, 3 Oct 2014 @ 10:47am

Magic 8 ball say lots more talk radio in future
So, when they kill the goose that lays the golden eggs and sue their promotion tools (radio stations) out of musical existance, will the record companies then turn around and sue those same radio stations for not playing (and therefore not promoting) their music? Maybe the industry fools can go chat with the German newspaper industry which is headed for similar oblivion, and they can console each other.
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Anonymous Coward, 3 Oct 2014 @ 10:59am

Does this affect non-USA hosts?
Whatever copyright treaties the USA entered into are probably only at the federal level. If so, moving the old music to overseas hosts could prevent them from being lost.
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Ninja (profile), 3 Oct 2014 @ 11:10am

Re: Re:
I believe it survives the First Amendment scrutiny because of it's supposedly limited time frame (definitions up for debate). I'd add that while not in a sufficient way, copyright law (in the US at least) allows exceptions for derivative works thus leaving ample space for freedom of speech even though it does not provide any safeguards for those in the receiving end of abusive takedown notices which could violate other Amendments (due process, anyone?).

As you noted a mere copy devoid of context may not qualify as protected speech. When you add context (ie: file sharing for no profit, personal use or even backup purposes is up to debate. In the end the best any copyright can do is to impose fines for infringement as it's a civil matter so maybe there is some restraint imposed by the Constitution that works after all - would lawmakers manage to make copyright infringement a criminal offense? (Honest question)
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Ninja (profile), 3 Oct 2014 @ 11:12am

Re: Re: Re:
When you add context (ie: file sharing for no profit, personal use or even backup purposes) it is up to debate

... everything changes, some stances where perfect copies are exploited and still considered free speech if they serve a purpose.

Sorry, fingers slower than head, thought I had typed everything.
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Anonymous Coward, 3 Oct 2014 @ 11:13am

Re: Re:
"So the First Amendment rights of the copyist are less robust than those of the original artist."

Do copyright supporters not see the inherent danger in this?
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Anonymous Coward, 3 Oct 2014 @ 11:15am

this ruling is going to have a big impact on the entertainment industries and what they can do and sue for. this judge has no idea what can of worms he has opened. look what happened in the 'Net Neutrality' ruling and the crap it kicked off. i dont know if these judges are paid to purposefully kick up shit or whether they just want to be downright vindictive towards people!
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That One Guy (profile), 3 Oct 2014 @ 11:24am

Re: Re: Re:
More often than not, as far as they're concerned, that's a feature, not a bug.
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antidirt (profile), 3 Oct 2014 @ 11:28am

Re: Re: Re:
Do copyright supporters not see the inherent danger in this?

Take a movie like Apocalypse Now. The filmmaker has the full force of the First Amendment behind him. Take the pirate who downloads that film. Are you suggesting that the pirate's copying should also have the full force of the First Amendment behind him too simply because the thing he's copying does so? I don't see it that way.
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Anonymous Coward, 3 Oct 2014 @ 11:33am

Re:
The statute itself indicates no such limitation. It just says "exclusive ownership."

"Exclusive ownership" to all things related to the recordings with "no limitations" would include a lot of things. The right to resell, the right to listen to the recording, etc.. Imagine people getting sued for listening to records they thought they owned but hadn't obtained a separate "listening license" for.
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jameshogg (profile), 3 Oct 2014 @ 11:46am

Re: Re: Re: Re:
"It [freedom of expression] is not just about the right of the speaker to be heard. It is also about the right of everybody to listen, and to hear. And every time you censor literature you make yourself a prisoner of your own action because you deny yourself the right to hear something."

- Christopher Hitchens, as he was attempting to summarise the major arguments made by John Milton, John Stuart Mill and Thomas Paine.

This point is almost always overlooked by those who think slippery slopes do not apply to them in these cases.

And what best proves my point when it comes to copyright is the issue of translation, and how copyright owners can forever deny expressions be read in a language they don't agree with. It is hard to find any other issue that goes against EVERYTHING worth defending about freedom of expression like that in such an ugly and revolting manner.

Then again, perhaps not so hard. Only the most toxic religious extremists want their holy books to be expressed in one language only, whether it is Hebrew for the Bible or Arabic for the Koran.

If there is one thing the planet needs more of, it is translators. Translators that flatten borders and offer humanity a more united front of solidarity. And what do copyright believers say? "We want nothing to do with it".
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wallow-T, 3 Oct 2014 @ 12:27pm

pre-1972
IANAL, but my thinking is that it is no longer legal for ANY broadcast media, digital or analog, to play ANY pre-1972 recording, unless the right to play that recording has been individually negotiated with the owner of the sound copyright. There is no clearinghouse, and no specified rate, for the now-required payments!!
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Rock Around The Web, 3 Oct 2014 @ 12:54pm

Reality Check
A Summary Judgment decision from one Judge sitting at the lowest level of Federal Courts is not another 1906 San Francisco earthquake. SiriusXM says it will appeal, many other cases will be heard and Congress, even moving at the speed of government, will eventually resolve the issue. Meanwhile, you’ll still have your 50s-on-5 and 60s-on-6. Just don’t expect to hear Happy Together.
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antidirt (profile), 3 Oct 2014 @ 1:13pm

Re: Re:
"Exclusive ownership" to all things related to the recordings with "no limitations" would include a lot of things. The right to resell, the right to listen to the recording, etc.. Imagine people getting sued for listening to records they thought they owned but hadn't obtained a separate "listening license" for.

Good point. I'm sure there are implied limitations under the common law such that the rights are exhausted in some ways. But, here, I don't think there's any implied limitation on the public performance right. Mike claims there's a "consensus," but then he can't point to a single case interpreting this statute in the way that reflects this supposed "consensus."
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colin, 4 Oct 2014 @ 5:26am

Copyright in sound recordings
The US is pretty much shag on a rock when it comes to copyright in sound recordings. Pretty much every country recognises it and has done for many years. US artists have had a huge free-ride on other countries' copyright protections. The old ruling was an anomaly in world copyright terms - largely a result it seems, of the lobbying power of broadcasters.

As more and more artists administer their own catalogues, this right will become increasingly important, given that sales of physical goods has declined so markedly.

Don't panic. The rest of the world has proven this isn't the end of the world as we know it.

CS
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nasch (profile), 4 Oct 2014 @ 4:43pm

Re: Re: Re:
would lawmakers manage to make copyright infringement a criminal offense? (Honest question)

They already have, commercial copyright infringement can be a criminal offense.
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Adel Antado, 5 Oct 2014 @ 12:00pm

Limited means unlimited
Until Disney-paid Bono convinced Congress to expand Copyrights, the sacred words of the Constitution granted Congress power to provide limited exclusive rights for patents and copyrights. The term limited used to mean 15 years. It now means 75 years beyond the death of the author, I say Congress got it wrong.
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Adel Antado, 5 Oct 2014 @ 12:00pm

Limited means unlimited
Until Disney-paid Bono convinced Congress to expand Copyrights, the sacred words of the Constitution granted Congress power to provide limited exclusive rights for patents and copyrights. The term limited used to mean 15 years. It now means 75 years beyond the death of the author, I say Congress got it wrong.
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Anonymous Coward, 6 Oct 2014 @ 4:04pm

Re:
LOL at this question being censored. Techdirt is such a bad joke.
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Anonymous Coward, 6 Oct 2014 @ 4:07pm

Re: Re:
Got some caselaw for us on "listening" to music ever being illegal? I didn't think so.
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antidirt (profile), 6 Oct 2014 @ 5:19pm

Re: Re:
LOL at this question being censored. Techdirt is such a bad joke.

Of course it was censored. One must not challenge Mike on Techdirt.
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Inigo Montoya, 7 Oct 2014 @ 2:55pm

Re: 'censored'
You keep using that word.

"This comment has been flagged by the community. Click here to show it"

I do not think it means what you think it means.
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RonKaminsky (profile), 10 Oct 2014 @ 11:49am

Re: Re: Re:
> Got some caselaw for us on "listening" to music ever being illegal? I didn't think so.

Got some caselaw for us on pre-1972 recordings needing licensing for radio broadcasting? I didn't think so.

Oh, wait...
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