To assess issues that might arise under state law in connection with use of pre-1972 sound recordings, we looked at a sampling of five states—California, Illinois, Michigan, New York, and Virginia. We did not do a comprehensive overview of state laws because the National Recording Preservation Board has already commissioned such a study.
Protection for pre-1972 sound recordings in the five states that we surveyed falls under three general categories: (1) criminal record piracy laws; (2) common law rights, variously cast in terms of common law copyright or unfair competition and/or misappropriation, which allow the right holder of a sound recording to stop certain unauthorized uses of the sound recording and recover monetary damages; and (3) in at least one state (California), a civil statute granting ownership rights in sound recordings.60 We offer here some general observations about state law. The Appendix contains more-detailed discussions of each of our sample states. In addition to record piracy laws, most states have laws against making unauthorized copies of live performances (known as “bootleg” copies). Because this report addresses commercial sound recordings, which were presumably made with authorization, we have not focused on antibootlegging provisions of state law.61
3.2 Criminal Statutes
Each of our five sample states had a criminal law prohibiting record piracy. A typical statute is that of Illinois, which provides that a person makes “unlawful use of recorded sounds or images” when he or she:
Intentionally, knowingly or recklessly transfers or causes to be transferred without the consent of the owner, any sounds or images recorded on any sound or audio visual recording with the purpose of selling or causing to be sold, or using or causing to be used for profit the article to which such sounds or recordings of sound are transferred.62
The common elements of these statutes are (1) transfer, or reproduction, of a sound recording; (2) without the consent of the right holder; and (3) with the intent to sell or use for profit (or “commercial advantage” or “private financial gain”) the article on which the sound recording has been reproduced. Some state statutes concern only sound recordings; others, such as that of Illinois, extend to sounds and images. It would appear that unauthorized transfer (or copying) to enable public performance (e.g., for Internet streaming) could come within these statutes, but only if done for profit or commercial advantage. Moreover, criminal laws are usually strictly construed according to their terms and thus do not have the ambiguous quality of common law, which is discussed in section 3.3.
Although some states provide explicit exemptions for libraries and archives, they do not always spell out clearly the nature of the exempt activities. In Michigan, for example, there is an exemption for “archival, library or educational purposes.”63 California law has an exemption for not-for-profit educational institutions and government entities that have as their primary purpose “the advancement of the public’s knowledge and the dissemination of information regarding America’s musical cultural heritage.”64 However, to take advantage of this exemption the entity must make efforts to identify the right holders before reproducing the sound recording, and, if unable to do so at the outset, it must make continuing efforts to do so, by periodically inserting notices in newspapers.
California’s exemption raises more questions than it resolves. If California’s statute (and other similarly worded statutes) are properly interpreted not to govern activities concerning sound recordings unless those activities are undertaken for commercial advantage or private financial gain, why is it necessary to have a specific exemption for not-for-profit educational institutions and government entities? And if it is necessary to excuse a not-for-profit entity’s activities, is that entity at risk in other states without similar exemptions, or in California if it doesn’t satisfy the statutory requirements for identifying and notifying right holders?
On the basis of our review of statutes in states other than California, there does not appear to be a significant risk of criminal liability for nonprofit archiving and preservation activity. Nevertheless, a survey of other state laws, as well as further inquiry into the purpose and scope of California’s exemption for not-for-profit entities, should be made.
3.3. Common Law
In all states we surveyed except California, civil law protection for sound recordings is exclusively common law, that is, based on judicial decisions rather than statutes. Some states protect pre-1972 sound recordings as part of their unfair competition or misappropriation law. Other states refer to “common law copyright.”65
Virtually all the cases we found involved a competitor that was reproducing sound recordings without authorization and selling them for profit. Can one conclude that, absent a profit from use of the sound recording, there is no exposure under state common law? Unfair competition law generally requires a commercial benefit to the defendant (though not always direct competition of the parties), so a nonprofit entity that derives no commercial advantage from its preservation and dissemination activities is outside the mainstream. But the language of the cases is not always consistent. Without cases involving nonprofit uses, one cannot say with certainty whether—and under what conditions—such activities would be permitted. This is particularly true in a state that looks to copyright law, rather than to unfair competition law, for guidance.
Common law development results in greater ambiguity (or provides greater flexibility, depending on one’s perspective) than exists when rights are defined by statute. As Paul Goldstein explains in his treatise Copyright:
Common law copyright is not a unitary doctrine. The fact that common law copyright is primarily a judge-made doctrine means that it will change over time, and the fact that it is a state law doctrine means that its content will vary from state to state. Further, courts have had little opportunity to flesh out common law copyright’s bare bones on such important points as standards for protection, proof of infringement and remedies for infringement.66
Similarly, they have had little opportunity to flesh out exceptions.
A recent case clarified the nature of state law rights in pre-1972 sound recordings in New York. Capitol Records, Inc. v. Naxos of America, Inc.67involved recordings of live performances of classical music by Pablo Casals, Yehudi Menuhin, and Edwin Fischer, made in the 1930s. (Example 5, above, was taken from the facts of this case.) Under a license from EMI Records (the successor to the company that contracted with the artists to record their performances), Capitol reissued the recordings. Naxos independently obtained and restored the recordings, and began marketing them. Capitol brought suit in federal court under New York law for unfair competition, misappropriation, and common law copyright infringement. The district court granted summary judgment in favor of Naxos—in part because the works were in the public domain in England, where they were originally recorded—and Capitol appealed.
The United States Court of Appeals for the Second Circuit concluded that New York law was unclear in several areas critical to Capitol’s claim against Naxos.68 It sought guidance from the New York Court of Appeals (the highest court in New York State) by “certifying” the principal state law questions in the lawsuit to the New York Court, including the following:
Does the expiration of the term of a copyright in the country of origin terminate a common law copyright in New York?
Does a cause of action for common law copyright infringement include some or all of the elements of unfair competition?
Is a claim of common law copyright infringement defeated by a defendant’s showing that the plaintiff’s work has slight if any current market value and the defendant’s work, although using components of the plaintiff’s work, is fairly to be regarded as a ‘new product’?69
As the Second Circuit explained, “The advent of modern technology to produce digitally enhanced reproductions of historic sound recordings makes it likely that a decision by the Court of Appeals will be important for this emerging field.”70
The New York Court of Appeals ruled in April 2005. It held that New York law protected the recordings, regardless of whether they were in the public domain in England.71 In its decision, the court also clarified the nature of common law copyright in New York. A claim for common law copyright, it explained, “consists of two elements: (1) the existence of a valid copyright; and (2) unauthorized reproduction of the work protected by copyright.” The court made clear that bad faith is not an element of a common law infringement claim in New York,72 and that:
Copyright infringement is distinguishable from unfair competition, which in addition to unauthorized copying and distribution requires competition in the marketplace or similar actions designed for commercial benefit.73
On the final question certified by the Second Circuit, the New York court held that the size of the market or the popularity of a product does not affect the ability to enforce a state law copyright claim. The court observed, with reference to federal copyright law, that Naxos’s recordings were not independent creations and that under the fair use doctrine, reproduction of an entire work is generally infringing.74 It ruled that even if Naxos created a “new product” through remastering, that product could still infringe Capitol’s copyright “to the extent that it utilizes the original elements of the protected performances.”75
3.4 California’s Civil Statute
California has a civil statute that provides that the author of a sound recording fixed prior to February 15, 1972, has “an exclusive ownership” interest in that sound recording until February 15, 2047, enforceable except as against anyone who independently creates a similar sound recording.76The statute neither specifies the contours of this “exclusive ownership” right nor defines who qualifies as an “author.” Both of these issues are left to be developed through case law. Cases brought under the statute to date have involved commercial uses.
3.5 Summary Concerning State Law Protection
How are pre-1972 sound recordings more or less protected than post-1972 sound recordings are? For one thing, the term of protection may not be limited by the date on which the sound recording was fixed or published, or on the basis of the life span of an individual. State law protection can last until 2067, at which time federal law preempts all state law protection for sound recordings. (In California, it lasts only until 2047 by state statute.) Second, the scope of protection can differ. The criminal laws that apply to unauthorized duplication of sound recordings are similar in some respects to those that apply to criminal copyright infringement. But where civil liability is concerned, it is difficult to generalize. State courts may look to federal copyright law in defining the contours of state law protection. Although Goldstein, in the treatise cited above, observes that courts in common law cases “frequently consult counterpart provisions in the Copyright Act to fill in doctrinal interstices,”77 there are so few cases involving educational uses of common law copyrights that it is difficult to draw any conclusions about the nature of the exceptions that a state law court would apply, especially to a published work (as common law copyright traditionally related to unpublished works). State law will not necessarily recognize exceptions within the Copyright Act, but at the same time, if the state law right is strictly limited to an “unfair competition” claim, the conduct excused by federal law may not come within the scope of the state claim in the first instance.
Significant questions remain, and the answers may differ from state to state. For example, do common law claims invariably require commercial gain in the form of profit, or is it enough that the unauthorized use obviates costs that would otherwise have to be incurred (in particular, the expenses involved in licensing sound recordings)? Even if there is no commercial gain on the part of the user, can a claim be brought against an entity whose activities result in commercial harm to the right holder? Does the copyright status of the underlying work affect state law protection for the sound recording?
As discussed above, the New York Court of Appeals recently ruled that common law copyright governs pre-1972 sound recordings, and the court referred to federal law in discussing the scope of that right. While this decision may be persuasive to courts in other states, it is not binding on them. A full survey of state law is desirable. While it is unlikely to bring complete clarity to this murky area, it should put the issues in sharper focus. Even if the survey cannot provide a road map to determining whether or where to clear rights, it may be useful in informing and supporting a decision to seek legislation to fulfill the preservation mission of archives and libraries.
61 In some cases, unauthorized or “bootleg” recordings of live performances may be the only means of preserving historic performances. The implications of copying and disseminating such recordings—made without the performers’ knowledge or approval—is an area that may warrant further study. State laws against copying and distributing bootleg recordings should be included in any comprehensive state law survey. Federal law also protects against making or distributing bootleg recordings. See 17 U.S.C. § 1101 (civil) and 18 U.S.C. § 2319A (criminal). But see U.S. v. Martignon, 364 F. Supp. 2d 413 (S.D.N.Y. 2004), appeal pending (2d Cir.) (holding 18 U.S.C. § 2319A unconstitutional) and Kiss Catalog v. Passport Int’l Prods., 350 F.Supp. 2d 823 (C.D. Cal. 2004) (holding § 1101 unconstitutional).
65 This term is a vestige of the pre-1976 Copyright Act regime under which all unpublished works were protected by common law copyright under state law and most published works were protected, if at all, under federal copyright law. Sound recordings were an exception to this general rule, since even published sound recordings fixed prior to February 15, 1972, could (and still can) be protected under state law.
68 The term of protection in the United Kingdom for sound recordings was 50 years, so the U.K. copyrights expired in the 1980s. Thus, the works were ineligible for copyright restoration under the URAA. 372 F.3d at 479.
70Id. at 484. Note that a foreign sound recording that is in the public domain in its source country may still be protected under federal copyright law. A foreign work was restored to federal copyright protection if it was still protected in its source country on the restoration date, January 1, 1996, and met other requirements for restoration (see above note 50). It received the full term of U.S. copyright protection, regardless of whether it subsequently fell into the public domain in its source country.