[Ecommerce] NY Copyright case keeps recording out of public domain

[Manon Ress]

RULING IS MUSIC TO INDUSTRY'S EARS
New York Copyright Case Keeps Recordings Out of Public Domain

BY STEVE SEIDENBERG

In a precedent-setting decision, New York state's highest court last
week extended the scope of common-law copyright. The ruling gives a huge
boost to those who own the rights to recorded musical
performances-almost always large music companies, not the musicians who
made the recordings.

The Court of Appeals' groundbreaking April 5 decision held that rights
to performances recorded before 1972 are protected under state common
law, even after those recordings have been put on the market. The
ruling, Capitol Records Inc. v. Naxos of America, No. 30, increases the
duration of protection for a treasure trove of recorded music, keeping
it out of the public domain until 2067. This benefits the companies that
own the rights to all pre-1972 recorded performances and prevents others
from releasing their own versions of these early recordings.

The ruling arises from a dispute over several classical music recordings
that were made in England during the 1930s and recorded by Capitol
Records' parent company, now known as EMI Records Ltd. The performers
involved signed over all their rights to these works to the company.

EMI's copyrights to the performances had ended by 1990, because United
Kingdom law states that rights to musical performances last for 50
years. The performances never received copyright protection under U.S.
law because federal law only protects recordings of musical performances
produced after Feb. 15, 1972.

Nevertheless, in 1996, an EMI subsidiary granted Capitol what purported
to be an exclusive license to exploit these recordings in the United
States. Capitol remastered the original recordings to improve their
sound quality and sold these cleaned-up versions on CDs.

After the recordings had entered the public domain in England, a
competing record company, Naxos, located copies of the original 1930s
shellac recordings, made its own remastered versions and began selling
them on CDs in the U.S. in 1999. Capitol sued, alleging, among other
claims, that Naxos was liable for common-law copyright infringement
under New York state law.

The federal district court in New York granted summary judgment to
Naxos, holding that when the U.K. copyrights to the performances
expired, EMI (and thus Capitol) had lost its intellectual property
rights to the recordings. Capitol appealed the ruling to the New York
City-based 2nd U.S. Circuit Court of Appeals, which found that the case
raised unsettled issues under New York state law.

The federal appellate panel then certified three questions to the New
York State Court of Appeals asking that court to decide whether EMI had
any rights to the musical performances under New York's common-law
copyright. The state's highest court unanimously found that EMI (and
Capitol) still had common-law copyrights to these performances.

Common-law copyright traditionally has protected only unpublished works.
In this case, the court concluded that the musical performances at issue
were unpublished, even though they had been commercially sold to the
public for decades.

"The New York court strained to reach this result," says Columbia
University law professor June Besek, a co-chair of the Broadcasting,
Sound Recordings and Performing Artists Committee in the ABA's Section
of Intellectual Property Law. Besek notes that in finding the
performances were unpublished, "the court was muddling the distinction
between publication of an underlying work [i.e., the musical
composition] and publication of a musical performance."

Prior cases have found that a composition protected by common-law
copyright is not considered published-which would cause it to lose this
protection-just because a recording of the composition is put on the
market. The New York court read those cases as concerning rights to
musical performances, thus overlooking the fact that the rights to
performances are different from rights to compositions.

EMI stated in a press release that it is "extremely pleased" with the
court's ruling. The company has good reason to be happy, because the
ruling does far more than simply help EMI/Capitol Records win its suit
against Naxos. Specifically, this ruling on common-law copyright
effectively lengthens the duration of music companies' rights to many
popular works of the 1950s and 1960s. Consider, for instance, Elvis
Presley's 1954 hit song, "That's All Right." The song's composition is
protected under federal law until 2049. The musical performance,
however, will remain protected under New York's common-law copyright for
another 18 years. Not until 2067, when federal law pre-empts state
protections for all recordings, will Presley's recorded song finally
fall into the public domain.

The case now goes back to the 2nd Circuit, which is expected to issue an
order that reverses the district court's decision on summary judgment
and send the case back down for trial. However, the case may not come to
trial anytime soon.

"The 2nd Circuit's order will probably be appealable, so we could ask
[the U.S. Supreme Court] for certiorari," says Naxos' attorney, New York
City IP lawyer Maxim Waldbaum. Naxos is seriously considering this
option, Waldbaum says. --
Manon Anne Ress
manon.ress@cptech.org,
www.cptech.org

Consumer Project on Technology in Washington, DC PO Box 19367,
Washington, DC 20036, USA Tel.:  +1.202.387.8030, fax: +1.202.234.5176

Consumer Project on Technology in Geneva, 1 Route des  Morillons, CP
2100, 1211 Geneva 2, Switzerland. Tel: +41 22 791 6727

Consumer Project on Technology in London, 24 Highbury Crescent, London,
N5 1RX, UK. Tel:+44(0)207 226 6663 ex 252. Mob:+44(0)790 386 4642. Fax:
+44(0)207 354 0607