2.0 Legal Background: Federal Law

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Most of the discussion in this report concerns civil copyright law. Civil law governs disputes between private parties, based on claims that one individual or organization wrongfully harmed the person or property of another. Civil cases are usually brought by private parties who seek to halt the alleged wrongful activity through a court-ordered injunction, or to be compensated through an award of money damages. In extreme cases, however, a copyright violation can also be a criminal offense. Criminal violations of copyright law are discussed in section 2.2.

2.1.1 Protected Works

Copyright exists in any original work of authorship fixed in a tangible medium, such as paper, canvas or computer disc. To qualify as “original,” a work cannot be copied from another work, and must exhibit at least a small amount of creativity. Copyright protects a wide range of works, including, for example, literary works, musical works, dramatic works, and sound recordings. Sound recordings and musical works are discussed in more detail below.

Prior to January 1, 1978 (the effective date of the 1976 Copyright Act), there were two systems of copyright in the United States. State law protected unpublished works. When a work was published, it generally lost state law protection. Federal copyright law protected published works, provided the requirements of federal law were met. In particular, copies of a published work had to include a notice of copyright. If a work was published with a copyright notice, it gained federal statutory protection. If it was published without such a notice, it entered the public domain.⁹ Sound recordings were an exception to this rule. They usually did not lose all state law protection upon publication, because no federal copyright protection was available. But states achieved protection for sound recordings in different ways.

What constituted “publication” was of critical importance. Under federal law, a work was considered published if copies of the work were distributed to the public, but not if it was merely performed or displayed.¹⁰ So a work could be communicated to many people—for example, through a live performance or a radio or television broadcast—but still not be considered published. Not all states adhered to the federal definition of publication, however.¹¹

2.1.2 Term of Protection

The duration of copyright protection in the United States differs depending on when the work was created and published.

For works first created on or after January 1, 1978 (the effective date of the 1976 Copyright Act), copyright lasts for the life of the author and 70 years thereafter.¹² For anonymous and pseudonymous works and works made for hire,¹³ the term is 95 years from publication or 120 years from creation (whichever expires first).

For works first published prior to January 1, 1978, the rules are more complicated, but can be summarized as follows.

Date First Published with Copyright Notice	Term of Protection
Before 1923	Work is in the public domain.
1923-1963	If the copyright was renewed in the 28th year, the work is protected for a total of 95 years from publication. If the copyright was not renewed, the work is in the public domain.14
1964-1977	95 years from publication.

Works created but not published before January 1, 1978, were given the same term as works created on or after January 1, 1978: life of the author plus 70 years, or, for anonymous and pseudonymous works and works made for hire, 95 years from creation or 120 years from publication. However, all works unpublished as of January 1, 1978, no matter how old, were protected under federal copyright law until at least December 31, 2002. If a work that was unpublished as of January 1, 1978, was published between that date and December 31, 2002, its term of protection will not end until December 31, 2047.¹⁵

2.1.3 Rights under Copyright

Copyright provides a copyright owner with a “bundle” of rights. Those rights can be sold, licensed, or otherwise exploited separately or together, exclusively or nonexclusively, for any time period or territory. In the case of a sound recording embodying a musical composition or other copyrighted work, two separate copyrighted works exist, and each copyright owner has a separate bundle of rights. Those rights include:

Performing a work “publicly” means to perform it anywhere that is open to the public or anywhere that a “substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered.”²³Transmitting the performance or display to such a place also makes it public. It does not matter if members of the public receive the performance at the same time or different times, or at the same place or different places. For example, a radio broadcast is a public performance, even if each member of the audience listens to it in the privacy of her own home. Transmitting performances or displays of a copyrighted work to the public over the Internet is a public performance or display of the work.²⁴

Ownership of a copy of a work (even of the original copy, if there is only one) and ownership of the copyright rights are separate and distinct. For example, libraries and archives occasionally receive donations of vinyl discs or eight-track tapes, but they generally own only the physical copies and not the copyright rights.²⁵

In some cases, courts prior to 1978 found that the sale or transfer of a material object transferred common law copyright with respect to the work embodied in that object.²⁶ Sometimes referred to as the “Pushman doctrine,” this principle was repudiated by statute in New York and California, at least for works of fine art.²⁷ Still, the timing and circumstances of a sale or donation to a library of “master recordings” embodying particular sound recordings may allow the library to claim that it also owns the common law rights in those recordings. No one can transfer more rights than he or she owns, however, so the library’s claim would depend on the extent to which the donor or seller owned the common law rights, and would be a question of state law, which could vary from state to state.

2.1.4 Exceptions and Limitations

The Copyright Act contains many exceptions and limitations to the rights outlined above. The two most relevant to digital preservation and dissemination by libraries and archives—fair use, and the exceptions for libraries and archives under section 108—are described below. The distance education provisions of the Copyright Act (which permit digital dissemination by libraries under certain conditions) and special exceptions concerning news programming are also addressed.

a. Fair Use: §107

Fair use excuses a use that would otherwise be infringing. Determining whether a use is a fair use is very fact-specific. The following four factors must be considered in each case, although other relevant factors may also be taken into account:

Certain illustrative uses are listed in the statute: criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, and research. However, the enumerated uses are not automatically considered fair, nor are other uses automatically considered unfair, because all four factors have to be taken into account in the circumstances of each case.

As discussed above, until January 1, 1978, state law protected all unpublished works. In fact, under state law unpublished works enjoyed almost complete protection from unauthorized use. After unpublished works came under federal law, some federal courts concluded that the unpublished nature of a work was a nearly insurmountable hurdle to fair use. Congress subsequently amended the fair use exception to state explicitly that the unpublished nature of a work does not itself bar a finding of fair use. Nevertheless, the author’s right of first publication remains an important consideration in a fair use determination. The unpublished nature of a work is taken into account in evaluating factor two, and the scope of fair use is narrower with respect to unpublished works, particularly those that are unpublished and undisseminated.²⁹

b. Library and Archives Exceptions: §108

The Copyright Act contains a number of privileges specific to libraries and archives. To qualify for these privileges, the library or archives must be open to the public, or at least to researchers in a specialized field; the reproduction and distribution may not be for any direct or indirect commercial advantage; and the library or archives must include a copyright notice or legend on any copies provided.³⁰

(i) Copying for Maintenance and Preservation
Section 108(b) allows libraries or archives to make up to three copies of an unpublished copyrighted work “solely for purposes of preservation and security or for deposit for research use in another library or archives.” The work must be currently in the collections of the library or archives, and any copy made in digital format may not be made available to the public in that format outside the library premises. “Premises” is understood to be the physical premises of the library.
Section 108(c) allows libraries and archives to make up to three copies of a published work to replace a work in their collections that is damaged, deteriorating, lost, or stolen, or whose format has become obsolete, if the library determines after reasonable effort that an unused replacement cannot be obtained at a fair price. As with copies of unpublished works, copies in digital format may not be made available to the public outside the library premises.³¹

(ii) Use of a Work in the Last 20 Years of Its Copyright Term
Section 108(h) of the Copyright Act allows a library, an archive, or a nonprofit educational institution to “reproduce, distribute, perform or display a copy” of a published work in the last 20 years of its copyright term if done in pursuit of preservation, scholarship, or research objectives. However, the institution must first undertake a “reasonable investigation” to determine whether the work is subject to normal commercial exploitation, or available at a “fair price.”³²

(iii) Copying for Library Users
Section 108 also allows libraries and archives, under certain conditions, to reproduce and distribute to patrons all or part of a copyrighted work. However, certain works, including musical works, pictorial, graphic, and sculptural works (other than illustrations or similar adjuncts to literary works), and audiovisual works (including motion pictures), are not subject to these reproduction and distribution privileges.³³

Specifically, a library or an archives may reproduce and distribute, in response to a user’s request, “no more than one article or other contribution to a copyrighted collection or periodical issue,” or “a small part” of any other copyrighted work from its collection or that of another library or archives. It may also copy all or a substantial portion of a user-requested work if it determines, after reasonable investigation, that a copy cannot be obtained at a fair price. However, these reproduction and distribution privileges have conditions: they apply only if (i) “the library or archives has had no notice that the copy would be used for purposes other than private study, scholarship, or research”; (ii) the copy becomes the property of the requesting user (so the exemption does not become a means of collection building, as it might if the library received the copy by means of interlibrary loan for the benefit of a user who requested it); and (iii) the library or archives displays a warning about copyright where it accepts orders.³⁴

Even in cases where copying a work for preservation purposes or to supply to a user is not expressly allowed by section 108, it may still be permitted under the fair use doctrine.³⁵ However, the privileges under section 108 do not supersede any contractual obligations a library may have with respect to a work that it wishes to copy (e.g., under a subscription or donor agreement).³⁶

(iv) Special Exception for Audiovisual News Programs
Section 108(f)(3) allows libraries to make off-the-air videotape recordings of audiovisual news programs and lend copies or excerpts to users. This provision was intended to allow libraries to tape daily network newscasts “for limited distribution to scholars and researchers for use in research purposes.”³⁷ It was drafted to ensure that the television news archive maintained by Vanderbilt University and other similar archives could continue to copy and preserve television news programs. This exception was intended to be “adjunct” to the American Television and Radio Archives Act (ATRA),³⁸ which authorizes the Library of Congress (LC) to establish a permanent archive of historically or culturally significant television and radio programs and to provide historians and scholars with access to those programs. The American Television and Radio Archives is not limited to news programs, but ATRA does provide LC with special privileges with respect to news. Specifically, it allows LC to, inter alia, make off-the-air fixations of regularly scheduled newscasts or “on-the-spot coverage of news events” and reproduce and lend copies to researchers or deposit them in other libraries.³⁹

The Section 108 Study Group Report. As a result of concerns that the library exceptions are no longer practicable and need to be updated to reflect the changes brought about by digital technologies, LC created a study group to consider possible changes to section 108.⁴⁰ The Section 108 Study Group issued its report in March 2008.⁴¹ It recommended, among other things, a new exception in the federal copyright law to allow libraries qualified for digital preservation to make preservation copies of “at risk” works in their collections without waiting until their copy of the work has been lost, stolen, damaged, or deteriorated or the playback mechanism has become obsolete, as required under section 108(c).⁴² This exception would apply to published works as well as to works that have been publicly disseminated but are still technically unpublished (such as works that have been publicly broadcast but not distributed in copies). Libraries would be allowed to make a limited number of copies “as reasonably necessary to create and maintain a preservation copy” of the work, but would have to adhere to best practices for digital preservation and to restrict access to the preservation copies.⁴³

Concerning unpublished works (and the study group limited this category to works that are both unpublished and undisseminated), the Section 108 Study Group recommended eliminating the three-copy limit in section 108(b) and instead allowing a library to make “a limited number of copies of unpublished works as reasonably necessary to create and maintain a copy for preservation or security purposes.”⁴⁴ It also recommended a “reasonable limit” on the number of institutions to which the library could provide deposit copies of unpublished works.⁴⁵ Under the recommendation, libraries that receive deposit copies would not be permitted to make further copies for preservation or deposit in other libraries.The full report discusses in detail important qualifications concerning these recommendations, as well as the other recommendations of the study group, and the areas where group members did not agree. The only recommendation that specifically addressed streaming related to section 108(f)(3), the provision that currently allows libraries to make off-the-air recordings of television news broadcasts and lend them for research use. The study group recommended that libraries should be allowed to stream copies of such news programs to other libraries eligible for the section 108 exceptions for purposes of private study, scholarship, or research but that any amendment should not allow them to transmit downloadable copies.⁴⁶ (The study group also recommended a new exception that would allow libraries, under certain conditions, to copy publicly available online content for preservation purposes, subject to an “opt out” by right holders. Libraries would be permitted to make that content available for private study, scholarship or research by users on site, and after “a specified period of time has elapsed,” to remote users.)⁴⁷ The study group could not agree to recommend that libraries be permitted to make replacement copies or preservation copies available to remote users.⁴⁸

Specifically concerning pre-1972 sound recordings, the Section 108 Study Group expressed the view that “in principle, pre-1972 U.S. sound recordings should be subject to the same kind of preservation-related activities as permitted under section 108 for federally copyrighted sound recordings.”⁴⁹ However, the group questioned whether it was feasible to amend the Copyright Act for this purpose without addressing the larger issue of the existing carve-out of pre-1972 sound recordings from federal copyright law.

The Section 108 Study Group Report is currently under consideration by the Copyright Office, which will likely solicit further public input before deciding whether and when to offer specific legislative proposals.

c. Distance Education: §110(2)

There is an exception in federal copyright law for certain performances and displays of copyrighted works made in the course of instructional transmissions. Section 110(2) was amended by the Technology, Education and Copyright Harmonization (TEACH) Act in 2002 to facilitate distance education, but the authorization it provides to transmit copyrighted materials is carefully circumscribed. For example, the exemption can be invoked only by “a government body or an accredited nonprofit educational institution.” The performance or display must be made “by, at the direction of, or under the actual supervision of an instructor as an integral part of a class session,” be offered as part of “systematic mediated instructional activities,” and be relevant and material to the content of the course.⁵⁰ The transmission must be directed to students officially enrolled in the course for which it was made, or to officers or employees of governmental bodies as part of their duties. There are additional conditions, including provisions related to the security of the copyrighted materials.

The distance education provision of the Copyright Act would permit a library to transmit performances of sound recordings protected by federal copyright law, but only as part of systematic mediated instructional activities that otherwise qualify for the exemption. For the purposes of this study, it is assumed that the libraries’ activities would not fall within the distance education exception, but it is important to recognize that the exception is available for certain types of activities.

2.1.5 Musical Works

Background. Under the Copyright Act, the “author” is the initial owner of copyright in a work. In the case of musical compositions, the authors are usually the composer and lyricist (if any)—collectively, the “writers.” Writers usually enter into contracts with music publishers, transferring their copyrights to the publisher in exchange for stated royalties. The publisher then licenses rights to reproduce the work (in sound recordings or sheet music), to combine it with visual content (e.g., as part of the soundtrack of an audiovisual work), and to perform the work publicly. For historical reasons, reproduction rights and performance rights in musical compositions are commonly exercised through separate entities. The music publisher usually controls the reproduction rights (subject to a compulsory license), while nondramatic performing rights are usually exercised through a performing rights organization, generally the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI), or SESAC, through agreements with music publishers and writers. This will be discussed in detail below.

Reproduction of musical works. Reproduction of musical compositions in copies of sound recordings is governed by a form of compulsory license (known as a “mechanical license”), which sets the terms for reproduction and the rate at which the copyright owner must be paid.⁵¹ Under a mechanical license, once a musical composition has been recorded and distributed in the United States with the copyright owner’s permission, others may make their own recordings of that composition (by renting a studio, assembling musicians and singers, and so on), without seeking permission from the copyright owner of the musical composition, provided they pay the set rate and otherwise comply with the terms of the law.⁵² The mechanical license is available only if the primary purpose of the user is to distribute phonorecords to the public for private use (e.g., in CDs or audiotapes, or by means of digital downloads).⁵³ So, for example, if a performer wants to record Irving Berlin’s composition “White Christmas” for a Christmas album, the music publisher may not prevent him from doing so, provided his recording company complies with the terms of the mechanical license. (The mechanical compulsory license is available because that composition has already been recorded with the authorization of the copyright owner.) The mechanical license does not apply to musical compositions that have never been distributed in phonorecords (e.g., that are unpublished or that have been distributed only in sheet music).

A mechanical license is also available to someone who wishes to duplicate and distribute an existing sound recording, rather than create a new one, by renting a studio, assembling musicians and singers, and so on. However, there are additional conditions: the existing sound recording must have been lawfully made (and not, for example, be a bootleg copy), and permission of the right holder in the sound recording must be obtained.⁵⁴Meeting these conditions will entail negotiating a license to use the sound recording with the recording company that owns the rights. If the sound recording license is obtained, the licensee would then be entitled to reproduce the underlying musical composition under the terms of the mechanical license.

Because the requirements of the mechanical compulsory license may be burdensome (e.g., it requires a monthly accounting to copyright owners), reproduction of musical works is usually done pursuant to voluntary agreement. The statutory rate effectively acts as a cap on license fees; lower rates are often negotiated. Copyright owners of musical compositions are commonly represented by the Harry Fox Agency, an affiliate of the National Music Publishers Association.⁵⁵

Public performance of musical works. Public performance rights are an important aspect of copyright in a musical composition. Long ago, songwriters and publishers created associations—performing rights organizations, or PROs—to license public performance rights in their musical compositions, and to police unauthorized performances of their works, because it was too difficult for them to do so individually. The principal performing rights organizations in the United States today are ASCAP, BMI, and SESAC. Each PRO licenses, generally for a blanket annual fee, the nondramatic performing rights (“small rights”) in all the musical compositions in its repertoire through a bulk or collective license. They have different repertoires. They license to individuals and organizations that perform musical compositions (including, for example, webcasters, television and radio stations, orchestras, theme parks, stores, restaurants, and colleges and universities). The royalties that the PROs receive are split 50-50 between the writers and the publishers, and then distributed in proportion to the actual performance of the works, determined on the basis of monitoring, and in some cases sampling, public performances of music. Each PRO has different distribution systems and rules. It is possible to get a performing rights license directly from the copyright owner (usually the music publisher), since the PROs hold only nonexclusive rights, but it is usually more efficient to go through the PROs.

The PROs license only nondramatic performing rights. Dramatic performing rights (“grand rights”), such as the right to use musical compositions in the performance of plays or operas, as well as the right to reproduce musical compositions on the soundtracks of audiovisual works (known as “synchronization rights”) must be obtained from the music publisher.

2.1.6 Sound Recordings

Sound recordings were not protected by federal copyright law until 1972, and that law applied only prospectively. Therefore, the nature of legal protection for sound recordings varies according to the date on which the sound recording was first fixed.

Why were sound recordings not protected by federal copyright law until 1972? In 1908, the Supreme Court held that a piano roll was not a “copy” of the musical composition embodied in it because the composition could not be “read” from the roll with the naked eye. Therefore, according to the Court, the defendant did not infringe the musical composition in creating and reproducing the roll.⁵⁶ The 1909 Copyright Act, passed the following year, adopted this view. Under that act, copyright protected original works that were fixed or embodied in copies. “Copy,” however, was interpreted to mean a form that could be seen and read with the naked eye.⁵⁷ Audiotape, LPs, and other forms in which sound recordings were commonly embodied could not be read or experienced without the aid of a machine, so they were not deemed “copies,” and therefore sound recordings were not deemed copyrightable under federal law.⁵⁸

In the absence of federal copyright protection, state law developed to protect sound recordings. When Congress changed the law to make sound recordings eligible for federal copyright protection, it provided for federal protection only prospectively, for sound recordings first fixed, or recorded, on or after February 15, 1972.⁵⁹ U.S. sound recordings first fixed prior to February 15, 1972, are not protected by federal copyright law, but they remain eligible for state law protection. The nature of that protection varies from state to state. Many states protect pre-1972 sound recordings through criminal record piracy statutes, common law protection (against unfair competition, misappropriation, or infringement of common law copyright), or both.

A few years after sound recordings became eligible for federal protection, Congress passed the 1976 Copyright Act. To create a unitary federal copyright system for published and unpublished works, the 1976 Copyright Act preempted state laws that provide rights equivalent to those provided by federal law for works that come within the subject matter of copyright. Sound recordings were an exception to this scheme. Since pre-1972 sound recordings were not eligible for federal copyright protection, the 1976 Copyright Act allowed states to continue to protect them until 2047. That date has since been extended to 2067.⁶⁰

There is one exception to the rule that pre-1972 sound recordings are ineligible for federal copyright protection. The Uruguay Round Agreements Act (URAA),⁶¹ passed in 1994, restored federal copyright protection in certain foreign works that were in the public domain for lack of compliance with U.S. formalities such as copyright notice and renewal. This was done to comply with U.S. treaty obligations. In the case of sound recordings, however, the law did more than merely restore copyright: it provided protection for foreign sound recordings that would never have been entitled to federal copyright protection, even if they had been published in the United States in the first instance. It conferred copyright protection on eligible sound recordings of foreign origin fixed before February 15, 1972.⁶²Restoration occurred automatically on January 1, 1996, for most works,⁶³and was not conditioned on any act of the right holder. Restored works are protected for the remainder of the term they would have been granted if they had not entered the public domain.⁶⁴

To be eligible for restoration of U.S. copyright, a foreign work had to be protected in its source country on the restoration date (January 1, 1996, for most works).⁶⁵ In other words, if it had already entered the public domain in its source country by that time, it was not eligible for restoration. In most foreign countries, the term of protection for sound recordings (or “phonograms,” as they are commonly called abroad) is 50 years from first publication or fixation. This means that foreign sound recordings published before 1946 were already in the public domain in their source countries on the restoration date, and were not eligible for restoration. Thus, virtually all pre-1946 foreign sound recordings are in the public domain as far as federal copyright law is concerned. However, state law protection for these pre-1946 foreign sound recordings may still exist, despite their public domain status under federal copyright law. New York’s highest court has ruled that sound recordings in the public domain in their source countries can still enjoy protection in New York until the effective date of federal preemption, February 15, 2067.⁶⁶ Foreign recordings that were restored to federal copyright protection may be eligible for concurrent state and federal protection, although no case has yet arisen on this question.⁶⁷

For copyright-protected sound recordings, the principal rights of concern in this study are the reproduction right and the right of public performance, which are implicated in preservation and streaming activities.

Ownership of rights in sound recordings. Rights in commercially released sound recordings are generally held by record companies pursuant to agreements with artists. There are four major labels (Sony BMG, EMI, Universal Music Group, and Warner Music Group) and numerous small, independent companies. The owner of the rights in an unpublished sound recording, however, will depend on the circumstances of its creation. This will be discussed in detail in connection with the examples.

Reproduction of sound recordings. Sound recordings have an exclusive reproduction right. Their reproduction and distribution, unlike that of musical compositions, is not subject to a compulsory license.⁶⁸ In other words, the copyright owner can decide whether to sell or license, and if so, on what terms.

Public performance of sound recordings. The public performance right in sound recordings is limited to the right “to perform the work publicly by means of a digital audio transmission.” Performance by other means, such as analog transmission, is not restricted by copyright.⁶⁹ The law sets up a three-tiered system of protection for performances of sound recordings.⁷⁰The first tier consists of certain types of public performances that are exempt from the performance right and may be made for free, such as “live” performances of sound recordings at public venues (such as discos) and analog transmissions.⁷¹ However, it is important to bear in mind that only use of the sound recording is free; there may still be obligations with respect to the underlying work.

The second tier encompasses certain digital audio transmissions subject to a compulsory license. The sound recording copyright owner may not prevent these public performances, but the transmitting party must pay royalties to the sound recording copyright owner and performers at the rate set by the Copyright Royalty Board.⁷²

The third tier consists of certain digital audio transmissions that fall under neither the exemption (first tier) nor the compulsory license (second tier) and thus require negotiating a license with the copyright owner. These are performances such as interactive digital audio services (on-demand streaming) that are perceived to involve a high risk of copying or of substituting for the sale of copies.⁷³

2.1.7 Dissemination via Interactive, On-Demand Streaming over the Internet: Copyright-Protected Works

What copyright rights are involved in providing on-demand, interactive streaming services in which users can individually request to have specific copyrighted sound recordings streamed to them?⁷⁴ Again, it should be emphasized that federal copyright law does not cover most pre-1972 sound recordings. Nevertheless, federal copyright law is important because: (1) it does cover many “underlying works”; (2) it may be instructive for courts interpreting state laws dealing with pre-1972 sound recordings; and (3) many pre-1972 sound recordings of foreign origin are still protected by copyright.

Streaming (whether or not interactive) involves the following copyright-relevant events. First, a copy of the work to be streamed (for example, a sound recording, including the underlying musical composition) must be made on the server. Usually streaming will require multiple server copies to serve users with different technological capabilities (e.g., different media players, different bandwidths). Second, streaming involves reproductions made in the buffer of the recipients’ computers (though the copyright significance of those copies is a matter of debate, as discussed below). Third, streaming involves a public performance of the streamed works.

The discussion below considers ways in which streaming may implicate copyright rights, whether the proposed streaming activities would fall under any exception or privilege the law grants to libraries and archives, and from whom a license could be obtained.

a. Sound Recordings
Public performance. On-demand interactive streaming would be considered a public performance of copyrighted sound recordings, not subject to the compulsory license available for certain digital audio transmissions. In other words, it is in the third tier described above. Systematic on-demand streaming of copyrighted sound recordings does not fall under any exceptions generally available to libraries and archives.⁷⁵ It would require negotiating a license with the sound recording copyright owners.

Reproduction onto server to enable streaming. Reproduction onto a server for the purpose of digital streaming to remote users does not appear to fall under a specific library exception. Copies made pursuant to library preservation exceptions under sections 108(b) and (c) may not be made available outside library premises. A copy made pursuant to section 108(h) could be placed on a server, but this provision is currently of limited use, since there are virtually no sound recordings in their last 20 years of copyright protection. Section 112(a) of the Copyright Act provides another possible justification for making a server copy; it allows the creation of an ephemeral copy of a “transmission program” to facilitate a transmission allowed pursuant to an exception to copyright, a compulsory license, or by agreement with the copyright owner.⁷⁶ But there appears to be no exception or compulsory license that would authorize a library to engage in on-demand streaming of sound recordings as a general matter, and therefore presumably no right to make a copy under section 112(a) absent an agreement with the copyright owners.⁷⁷ For commercially released sound recordings of musical compositions, the copyright owner will generally be a recording company, but this is not the case for many of the unpublished recordings in the examples.

Buffer copies. As discussed above, on-demand streaming would require negotiation of an agreement with the sound recording copyright owners. Any such agreement would presumably embrace buffer copies. The question of whether making those copies is an independent event for copyright purposes is discussed below in connection with musical works.

b. Musical Compositions
Public performance. Streaming entails a public performance of the musical composition being streamed. Public performance licenses are usually obtained from the performing rights organizations (ASCAP, BMI, SESAC). ASCAP and BMI operate under antitrust consent decrees and cannot deny licenses to users who request them; the only issue is the size of license fee.

Reproduction onto server to enable streaming. Reproduction onto a server for the purpose of digital streaming to remote users does not fall under 108(b) and (c). It may be permissible under section 108(h) during the last 20 years of copyright protection, but the conditions in that provision must be met. Even for copyrighted musical compositions that do not qualify for the expanded use privileges in section 108(h), section 112(a) allows the creation of an ephemeral copy of a transmission program to facilitate a permitted transmission (including performances licensed by the performing rights organizations). A “transmission program” is defined as “a body of material that, as an aggregate, has been produced for the sole purpose of transmission to the public in sequence and as a unit.”⁷⁸ It is unclear to what extent server copies made to enable on-demand streaming by libraries could qualify as transmission programs. In any event, section 112(a) would authorize the making of only a single copy, which may be insufficient for streaming purposes.

It is also unclear whether the section 115 compulsory license for musical compositions can be interpreted to encompass the necessary server copies.⁷⁹ If not, permission to make additional server copies would have to be sought from music publishers, many of whom are represented by the Harry Fox Agency. This is an area where the law is still developing. The Copyright Office is attempting to resolve ambiguities concerning the scope of the section 115 compulsory license (including the status of server copies to enable streaming) in a pending regulatory proceeding, described further below in the context of buffer copies. In any event, musical compositions that have not been previously recorded with the right holder’s consent, or that are embodied in bootleg recordings, are not eligible for the section 115 compulsory license.

Buffer copies. There is a controversy over whether the copy created in the buffer of the recipient’s computer in the course of on-demand streaming implicates the reproduction right. One view is that although a reproduction may be made, it is incidental to the performance and does not (or should not) have independent economic significance. Others dispute this view, pointing, among other things, to the ease with which streams in buffers can be captured and retained, and to the legal definition of “digital phonorecord delivery,” which seems to distinguish between digital phonorecord deliveries in general and those “where the reproduction or distribution of a phonorecord is incidental to the transmission which constitutes the digital phonorecord delivery.”)⁸⁰ This issue is unresolved.

In order to move forward in the face of these legal ambiguities and enter the on-demand streaming market, the Harry Fox Agency, the National Music Publishers Association, and the Recording Industry Association of America (RIAA) entered into an interim agreement in 2001 that allows on-demand streaming of musical compositions (including the right to make the necessary server and buffer copies) in exchange for payments by the RIAA to the copyright owners of the musical compositions. The agreement also covers “limited downloads” (i.e., downloads limited in terms of time or number of plays). It envisioned that payment would be adjusted when the legal ambiguities are resolved and a royalty rate is established. The agreement does not address any webcasting issues.⁸¹

In summer 2008, the Copyright Office initiated a regulatory proceeding to resolve disputes in the music industry over the status of server and buffer copies of musical compositions and whether they are covered by the section 115 compulsory license. The goal of the proceeding is to amend Copyright Office regulations “in a way that would enable digital music services to utilize the compulsory license to clear all reproduction and distribution rights in musical works that might be necessary in order to engage in activities such as the making of full downloads, Limited Downloads, On-Demand Streams and non-interactive streams.”⁸² The Copyright Office sought comment on, inter alia, its tentative conclusions that buffer copies are copies (more specifically, “digital phonorecord deliveries” for purposes of the compulsory license), and that server copies fall within the scope of the section 115 compulsory license. The comment period was extended in light of Cartoon Network LP v. CSC Holdings, Inc.,⁸³ an August 2008 decision from the Second Circuit Court of Appeals which held that buffer copies of television programs made by Cablevision were too transitory to qualify as copies. The Copyright Office rule-making proceeding remains pending.

c. Other Types of Underlying Works
For other types of underlying works, such as literary or dramatic works, the analysis is essentially the same as for musical works. Authors of literary works usually enter into contracts with book publishers to license their works for reproduction in various forms. While more recent book publishing agreements have usually encompassed the right to license audio recordings of the work, earlier agreements often did not, so in many cases those rights were retained by (or have reverted to) the author or her heirs. Frequently the reproduction rights and the performance rights are held by the same party, unlike the case with musical compositions. For literary works (e.g., letters, novels, poetry) and other works besides musical compositions that may be incorporated into sound recordings (e.g., dramatic works), there are generally no agencies or rights organizations similar to the Harry Fox Agency, ASCAP, BMI, or SESAC.

2.1.8 Remedies

Remedies for violations of federal copyright law include actual damages, statutory damages, injunctions, and forfeiture of infringing copies and the means by which they were made.⁸⁴ If the copyright in a work was registered before the infringement commenced, statutory damages are available as an alternative to actual damages, and the court may award attorneys’ fees and costs to the copyright owner if the suit is successful. Statutory damages range from $750 to $30,000 per work, depending on what the court considers “just,” and up to $150,000 if the infringement is willful.⁸⁵

A court has discretion to reduce the minimum amount of statutory damages to $200 if the infringer “was not aware and had no reason to believe” that his acts were infringing. Moreover, in the case of an infringer who is an employee or agent of a nonprofit educational institution, library, or archives, who “believed and had reasonable grounds to believe” that his use was a fair use, the court may not award statutory damages.⁸⁶

Libraries that are part of state universities or other state entities are immune from damages under federal copyright law, under principles of state sovereign immunity.⁸⁷ State officials may still be liable in their individual capacity, however.⁸⁸ The sovereign immunity principles that relate to federal law claims do not extend to common law copyright and similar claims; any immunity or limitations on liability for state law claims is a matter of state law.

The only remedy available for copyright infringement against the United States government is damages, including minimum statutory damages.⁸⁹

2.1.9 Orphan Works and Orphan Works Legislation

Works whose owners cannot be identified or located are commonly referred to as “orphan works.” The inability to locate copyright owners can discourage socially beneficial uses of copyrighted works; potential users are concerned about their liability if the copyright owner later comes forward. The Copyright Office undertook a study of orphan works that culminated in a January 2006 report.⁹⁰ The report recommended that the Copyright Act be amended to limit the remedies available against users of orphan works who (1) demonstrate that they performed a reasonably diligent search to find the copyright owner, without success, and (2) provide reasonable attribution to the author and copyright owner. Under the Copyright Office’s proposal, an individual or entity that met these requirements would be liable only for reasonable compensation for the use. No monetary relief would be available where the use is noncommercial and the user ceases the use upon notice. A user who relied on the work’s orphan status could not be enjoined from exploiting a derivative work based on that orphan work, provided there is reasonable compensation to the right holder.

Orphan works legislation was introduced in the 109th Congress, but was not enacted.⁹¹ Legislation was reintroduced in 2008 with some significant modifications from the Copyright Office proposal; the new bills are more detailed and would impose additional conditions on potential users.⁹² As of October 2008, the legislation had not been enacted, but will likely be introduced again in the next Congress.

If such legislation is ultimately enacted, a limitation of liability for copyright infringement for orphan works could provide greater security for libraries that wish to copy and disseminate such works. Orphan works legislation would, however, apply only to works protected by federal copyright law, so it would not extend to pre-1972 sound recordings (though it would apply to the underlying musical composition or other work).⁹³

Even without the security of orphan works legislation, businesses and even libraries and educational institutions sometimes undertake a good faith search to find the right holder of a work, without success, and proceed to use the work. How one evaluates such a risk is discussed in section 4.4.

2.2 Federal Copyright Law: Criminal Violations

Section 506 of the Copyright Act provides that it is a criminal offense to infringe a copyright willfully either:
(1) for purposes of commercial advantage or private financial gain, or
(2) by the reproduction or distribution, including by electronic means, during any 180-day period, of 1 or more copies or phonorecords of 1 or more copyrighted works, which have a total retail value of more than $1,000.

The penalties for criminal copyright infringement are fine, imprisonment, or both.⁹⁴

In considering potential criminal liability (whether state or federal), it is important to bear in mind that such cases are brought by prosecutors, who are not likely to bring such claims against libraries. Risk assessment is discussed further in section 4.2.

2.3 Federal Antibootlegging Law

“Bootlegging” is the unauthorized recording of a live performance (or the reproduction and distribution of such a recording). Bootlegging is not a violation of federal copyright law. That is because copyright protection is limited to original works of authorship that are “fixed” in a tangible medium of expression.⁹⁵ Live performances are not generally fixed as defined by the copyright law (unless they are being transmitted and recorded at the same time) so they are not protected by copyright.

There is, however, a federal antibootlegging law. Though it is technically not part of the copyright law, it is contained in Title 17 of the U.S. Code together with the copyright law. The federal law, section 1101, creates liability for anyone who does any of the following acts without the consent of the performer:

Those who violate the law are subject to the same remedies as an infringer of copyright.⁹⁷ It appears that broadcasting or streaming bootlegged recordings would not violate this law. The clause relating to transmission refers only to “the sounds and images of a live musical performance.” The third clause, in contrast, specifically alludes to “any copy of an unauthorized fixation.” The copyright treatise Nimmer on Copyright interprets the second clause, above, to bar only the transmission of the live performance while it is taking place, which it refers to as “liability without fixation.”⁹⁸Nevertheless, there is ambiguity in the way the law is drafted, and unfortunately there is little legislative history and no case law on this point to aid in its interpretation. The possibility that the statute could be interpreted to bar streaming performances of copies of unauthorized fixations cannot be wholly dismissed. Since the library does not intend to distribute copies of the sound recordings, the only possible violation in terms of the library’s proposed activities is making of copies for the server (to enable streaming) and for preservation.

Section 1101 is a civil law, which allows a right holder to sue for an injunction and damages. Bootlegging can also be a violation of federal criminal law, as discussed in section 2.4.

Federal antibootlegging provisions apply to “acts” that occur on or after December 8, 1994.99 Although acts of recording that took place before December 8, 1994, are not actionable, distribution or copying of unauthorized recordings made before December 8, 1994, that take place on or after that date can be the basis of a claim, according to the language of the statute.¹⁰⁰

The federal antibootlegging law does not explicitly incorporate the section of the Copyright Act containing the statute of limitations. The unlimited duration of federal antibootlegging provisions has raised concerns about whether they are constitutional, but so far the courts have rejected constitutional challenges.¹⁰¹

It is unclear whether the traditional defense of “fair use” or the statutory exceptions for libraries contained in section 108 of the Copyright Act would excuse violations of section 1101. The statute does not explicitly incorporate these exceptions and defenses, and there is little legislative history to provide clarification.¹⁰² This will be discussed below.

The federal law states specifically that it does not preempt any relevant state law.¹⁰³ This is especially significant for performances not covered by the federal law, which pertains only to musical performances, and not, for example, to an unauthorized recording of a dramatic performance or of a book or poetry reading.

2.4 Federal Antibootlegging Law: Criminal Violations

Federal law provides that someone who engages in any of the activities prohibited by federal civil antibootlegging law as described in section 2.3 “without the consent of the performer or performers involved, knowingly and for purposes of commercial advantage or private financial gain” is guilty of a criminal offense.¹⁰⁴ The penalty is a fine, imprisonment, or both.¹⁰⁵

As observed in section 2.3, the law contains no explicit exception for libraries or for educational uses. But criminal statutes are strictly construed, so libraries and archives cannot be criminally liable if they refrain from engaging in these activities for commercial advantage.

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FOOTNOTES

⁸ It is possible for a remix of a pre-1972 sound recording to qualify for federal copyright protection, provided there is sufficient new authorship to meet the threshold requirement for originality. This study, however, is based on the assumption that the library seeks to use the original recording.

⁹ To avoid the severe consequences of publication without notice (known as “divestitive publication,” because it resulted in loss of the copyright), courts developed the doctrine of “limited publication.” A limited publication occurs when the work is distributed to a select group of people for a limited purpose, without the right to reproduce or redistribute. Limited publication without notice does not result in loss, or “divestiture,” of common law rights. See Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 4.13[A] (4th ed. 2008) (hereinafter, Nimmer on Copyright).

¹⁰ An authorized offer to sell could qualify as publication even if the sale did not in fact occur. See Nimmer on Copyright, supra note 9, § 4.04. Even musical compositions commercially distributed in phonorecords may not be “published” under federal law. Congress amended the Copyright Act in 1997 to provide that “[t]he distribution before January 1, 1978 of a phonorecord shall not for any purpose constitute a publication of the musical work embodied therein.” § 303(b). So if the underlying musical work was distributed in another format, e.g., sheet music, it was published; if not, it was unpublished at January 1, 1978, and received the term of protection for unpublished works. See infra note 15 and accompanying text. The 1997 amendment effectively extended the term of protection for some of the underlying musical works beyond what they would have had if they were published with notice on the phonorecord in the first instance. Nimmer on Copyright, supra note 9, § 4.05[B][7] at 4-42. The law was passed because a significant number of phonorecords released before the current law took effect failed to include a copyright notice with respect to the underlying musical works, as many believed it was unnecessary because the phonorecords were not “copies.” Some courts ruled that the distribution of phonorecords without notice under the 1909 Copyright Act injected the underlying musical works into the public domain. See, e.g., La Cienega Music Co. v. ZZ Top, 53 F.3d 950 (9th Cir. 1995), cert. denied, 516 U.S. 927 (1995). The amendment referred only to musical works, however, and therefore the law is ambiguous about whether the distribution of a phonorecord is a publication of the underlying work if that work is anything other than a musical composition (e.g., a spoken word recording). Compare id. with Rosette v. Rainbo Record Mfg. Corp., 354 F. Supp. 1183 (S.D.N.Y. 1973), aff’d, 546 F.2d 461 (2d Cir. 1976).

¹¹ What constitutes a publication of a pre-1972 sound recording is a matter of state law, and states are “free to depart from the Copyright Act’s definition of publication.” Paul Goldstein, Copyright, § 17.5.2 at 17:50.1 n.24 (3d ed. 2005 & 2008 Supp.). Publication status of pre-1972 sound recordings may not be critical to state law protection. E.g., Capitol Records, Inc. v. Naxos of America, Inc., 830 N.E.2d 250, 264 (N.Y. 2005) (in the absence of federal statutory protection, distribution of a sound recording “does not constitute a publication sufficient to divest the owner of common-law copyright protection”) (citations omitted).

¹² § 302(a).

¹³ A “work made for hire” is a work created by an employee in the course of his or her employment, or a commissioned work where the commissioning party and the creator agree in a signed writing that the product will be a work made for hire. Only certain categories of works are eligible to be commissioned works made for hire. §101. If a work qualifies as a work made for hire, the employer or commissioning party is considered the author and owns all rights, unless the parties agree otherwise in a signed writing. § 201(b).

¹⁴ Certain works of foreign origin whose copyrights were not renewed may have had their copyrights restored. See section 2.1.6.

¹⁵ 17 U.S.C. § 303(a). Under the 1909 Copyright Act, certain categories of works (e.g., lectures, dramatic works, musical compositions) could be registered as unpublished, in which case their terms ran from the date of registration and deposit. See Nimmer on Copyright, supra note 9, at § 7.16[A][2][c]; Shilkret v. Musicraft Records, Inc., 131 F.2d 929 (2d Cir. 1942).

¹⁶ § 101.

¹⁷ § 106(3).

¹⁸See, e.g., New York Times Co. v. Tasini, 533 U.S. 483, 498 (2001) (stating that Lexis/Nexis, by selling copies of allegedly infringing materials through its database, is distributing copies to the public).

¹⁹ E.g., Capitol Records Inc. v. Thomas, Civ. File No. 06-1497, 2008 WL 4405282 (D. Minn. Sept. 24, 2008); Atlantic Recording v. Howell, 554 F. Supp.2d 976 (D. Ariz. 2008).

²⁰ § 109(a). It is sometimes said that the first sale “exhausts” the distribution right for that particular copy. There are exceptions for computer programs and sound recordings, designed to deter the development of a commercial rental market which would supplant sales of these works, although lending by nonprofit libraries or educational institutions is permitted. § 109(b).

²¹ U.S. Copyright Office, DMCA Section 104 Report 44-48 (August 2001), available at http://www.copyright.gov/reports/studies/dmca/sec-104-report-vol-1.pdf.

²² § 101.

²³Id.

²⁴E.g., Playboy Enters., Inc. v. Frena, 839 F. Supp. 1552 (M.D. Fla. 1993). But see Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008), petition for cert. filed, October 6, 2008, No. 08-448 (where cable company made multiple copies of television programs, each copy at the instigation of a particular customer, and played back to each customer only the copy made for that particular customer, it was not a public performance).

²⁵ A donor of physical material frequently does not own the rights and therefore cannot convey them. For example, the copyright in letters is owned by the writer, not the recipient, though the recipient owns the physical copies. Even when the donor owns the rights, under current law they are transferred to the library or archives only if the gift includes a license or assignment. § 202.

²⁶E.g., Pushman v. New York Graphic Society, Inc., 39 N.E.2d 249 (N.Y. 1942).

²⁷See Nimmer on Copyright, supra note 9, at § 10.09[A].

²⁸ § 107.

²⁹See generally Nimmer on Copyright, supra note 9, § 13.05[A][2][b] at 185-86; Harper & Row Publisher, Inc. v. Nation Enterprises, 471 U.S. 539 (1985).

³⁰ § 108(a). Concerning the commercial advantage, the legislative history of §108 states:

[A] purely commercial enterprise could not establish a collection of copyrighted works, call itself a library or archive, and engage in for-profit reproduction and distribution of photocopies. Similarly, it would not be possible for a non-profit institution, by means of contractual arrangements with a commercial copying enterprise, to authorize the enterprise to carry out copying and distribution functions that would be exempt if conducted by the non-profit institution itself. H.R. Rep. No. 94-1476, at 74 (1976) [hereinafter, House Report].

³¹ § 108(c).

³² No case has directly addressed whether a sound recording may be copied under § 108(h) when the underlying work is protected by copyright and not in the last 20 years of its term. However, in Russell v. Price, 612 F.2d 1123 (9th Cir. 1979), the court held that copyright owners of George Bernard Shaw’s play Pygmalion, which was still covered by copyright, could prevent distribution of the film version of the play, even though the film had fallen into the public domain. Id. at 1128. Similarly, in Filmvideo Releasing Corp. v. Hastings, 668 F.2d 91 (2d Cir. 1981), the court held that even though films based on the Hopalong Cassidy stories had fallen into the public domain, a license for television exhibition had to be obtained from the owners of the copyrights in the underlying books, which were still protected by copyright. Id. at 92. Of course, § 108(h) provides only a limited privilege, and may not deprive copyright owners of the underlying work of economic rights in the same way that a contrary result in the cases discussed above might have done. On the other hand, the structure of § 108(h) clearly demonstrates congressional concern that the expanded privileges should not harm the economic interests of copyright owners whose works are subject to this privilege, and the copyright owner of a protected work still subject to commercial exploitation could be adversely affected by broad use under § 108(h) of a sound recording embodying that work.

³³ § 108(i). Audiovisual news programs are a separate category. See § 108(f)(3).

³⁴ §§ 108(d), (e). These exemptions encompass “isolated and unrelated reproduction or distribution of a single copy … of the same material on separate occasions.” § 108(g). However, they do not apply when a library or archives “is aware or has substantial reason to believe that it is engaging in the related or concerted reproduction or distribution of multiple copies” of the same material, whether at one time or over a period of time. Nor do they apply to a library or archives that “engages in the systematic reproduction or distribution of a single or multiple copies” of a work. Libraries and archives may participate in interlibrary arrangements as long as the practice is not intended to—and does not—substitute for a subscription to or purchase of the work. Id.

³⁵ § 108(f)(4). For example, according to the House Report accompanying the 1976 Copyright Act, even though musical works are excluded from the exceptions in § 108 allowing libraries to provide copies for users, fair use remains available with respect to such works: “In the case of music, for example, it would be fair use for a scholar doing musicological research to have a library supply a copy of a portion of a score or to reproduce portions of a phonorecord of a work.” House Report, supra note 30, at 78. The report also indicates that fair use remains available for preservation activities. Id. at 73.

³⁶ § 108(f)(4).

³⁷ House Report, supra note 30, at 77.

³⁸ 2 U.S.C. § 170.

³⁹Id. § 170(b). Legislation introduced in the 110th Congress to reauthorize the Library of Congress’s sound recording and film preservation programs contained a provision to expand this privilege to cover recordings acquired by the Library through purchase or other transfer. H.R. 5893, 110th Cong. §4 (2d Sess. 2008). The legislation as passed did not include this provision. Library of Congress Sound Recording and Film Preservation Programs Reauthorization Act of 2008, P.L. 110-336 (2008).

⁴⁰See The Section 108 Study Group, http://www.section108.gov (last visited October 26, 2008).

⁴¹ The Section 108 Study Group Report (March 2008), available at http://www.section108.gov/docs/Sec108StudyGroupReport.pdf.

⁴²Id. at 69-70.

⁴³Id.

⁴⁴Id. at 61.

⁴⁵Id.

⁴⁶Id. at 88.

⁴⁷Id. at 80.

⁴⁸See id. at 57-60, 66-68.

⁴⁹Id. at 129.

⁵⁰ 17 U.S.C. §110(2).

⁵¹ 17 U.S.C. § 115 (2000).

⁵²See id. There are, however, limitations on how much the musical composition may be changed. The artist may make a musical arrangement “to the extent necessary to conform it to the style or manner of interpretation of the performance involved,” but the arrangement may not “change the basic melody or fundamental character” of the musical composition. Moreover, the arrangement may not be protected as a derivative work under the Copyright Act without the express consent of the copyright owner. § 115(a)(2).

⁵³ Thus, for example, reproductions of musical compositions on recordings made by background music services such as Muzak are not covered by the mechanical license and must be negotiated, as those services are not making and distributing phonorecords to the public for personal use.

⁵⁴ § 115(a)(1). For recordings fixed before February 15, 1972, the right holder is the person who fixed the sound recording with an express license from the owner of copyright in the musical composition, or under a valid compulsory license. § 115(a)(1)(ii). Since the sound recording is a separate work, permission would have to be sought from the right holder in any event, but the effect of this provision is that if the sound recording right holder assents and all other conditions for the mechanical license are met, the copyright owner of the musical composition cannot deny permission to reproduce the composition as embodied in the sound recording. See Nimmer on Copyright, supra note 9, §8.04[E][2] at 8-66.2 to -67. This provision is a partial codification of Dutchess Music Corp. v. Stern, 458 F.2d 1305 (9th Cir. 1972), cert. denied, 409 U.S. 847 (1972) and related cases decided under the 1909 Act. See Nimmer on Copyright, supra note 9, at §8.04[E][1], [2] at 8-63 to -67.

⁵⁵ The Harry Fox Agency is not the only such agency, but it is the largest and best known. Many music publishers have authorized the Harry Fox Agency to license reproduction on their behalf to record companies and others.

⁵⁶ White-Smith Publ’g Co. v. Apollo Co., 209 U.S. 1 (1908), superseded by statute, Copyright Act of 1976, Pub. L. No. 94-553, 90 Stat. 2541 (1976).

⁵⁷ The Court’s holding in White-Smith Publ’g Co. v. Apollo—that a piano roll did not qualify as a copy of the musical composition embodied in it—was adopted in the 1909 Act not only to determine whether a reproduction was an infringement but also to determine whether a reproduction met the fixation requirement. Nimmer on Copyright, supra note 9, § 2.03[B][1] at 2-32 to -33.

⁵⁸ The 1976 Act similarly requires that a work be fixed in a copy to qualify for federal protection, but the concept of a “copy” has expanded to include any fixation “from which the work can be perceived, reproduced or otherwise communicated, either directly or with the aid of a machine or device.” § 101. Still, it is a vestige of the old law that embodiments of sound recordings are referred to as “phonorecords,” and embodiments of other types of copyrighted works as “copies.” (Those categories are defined in the law to be mutually exclusive.)

⁵⁹ The Sound Recording Amendment, Pub. L. No. 92-140, § 3, 85 Stat. 391 (1971), passed on October 15, 1971, granted copyright protection to sound recordings fixed on or after its effective date, which was four months later, on February 15, 1972.

⁶⁰ § 301(c). In Goldstein v. California, 412 U.S. 546 (1973), the Supreme Court held that California’s protection for pre-1972 sound recordings was not preempted by federal copyright law or the Constitution, regardless of whether those recordings were published or unpublished. In other words, it concluded that Congress had left the states free to act in this area.

⁶¹ Pub. L. No. 103-465, 108 Stat. 4809, 4973 (1994).

⁶²See 17 U.S.C. § 104A(a)(1) and § 104A (h)(6)(C). Eligible sound recordings were those that were not in the public domain in their source country on the date of restoration; had at least one author or right holder who was a national or domiciliary of an eligible country when the work was created, and (if published) were published in an eligible country and not published in the United States within 30 days after foreign publication. Eligible countries include members of the Berne Convention, the World Intellectual Property Organization (WIPO) Copyright Treaty, the WIPO Performances and Phonograms Treaty, and World Trade Organization members that adhere to the Uruguay Round Agreements. Id. §104A(h).

⁶³ This was the date of restoration for works whose source countries were members of the Berne Convention or the World Trade Organization on that date; for other countries, it is the date of adherence. 17 U.S.C. § 104A(h)(2).

⁶⁴ Thus, at the time of restoration a Mexican sound recording published in 1965 was eligible for protection until 2040. The Uruguay Round Agreements Act, Statement of Administrative Action, H.R. REP. 103-316 (1994), as reprinted in 1994 U.S.C.C.A.N. 4040, 4290. That date was extended by 20 years until 2060 (for a total of 95 years) by the Copyright Term Extension Act of 1998, Pub. L. No. 105-298, 112 Stat. 2827 (1998). The constitutionality of the Uruguay Round Agreements Act’s provisions removing works from the public domain was challenged in Golan v. Gonzales, 501 F.3d 1179 (10th Cir. 2007). The Tenth Circuit Court of Appeals held that although the URAA did not exceed Congress’s power under the Copyright Clause of the Constitution, its removal of works from the public domain could be a violation of the First Amendment. The court remanded the case to the district court to conduct the First Amendment analysis.

⁶⁵ The source country must be a nation other than the United States. 17 U.S.C. § 104A (h)(8). In the case of unpublished works, the source country is the country in which the author or right holder is a national or domiciliary; in the case of a published work, it is the country of publication. Id. A published work is not eligible for copyright restoration if it was first published in a foreign country but also published in the United States within 30 days of initial publication. Id. § 104A (h)(6)(D). For more detail concerning copyright restoration and eligibility therefore, see id. § 104A (a), (h).

⁶⁶ See Capitol Records, Inc. v. Naxos of America, Inc., 830 N.E.2d 250, 263-66 (N.Y. 2005), discussed in sections 3.2.3 and 4.2.4 and in Appendix C.

⁶⁷ Section 301 of the copyright law, which provides for preemption of state law but preserves state law governing pre-1972 sound recordings until 2067, was not amended to exclude pre-1972 foreign sound recordings whose copyright was restored. Nor did Congress expressly indicate whether it intended concurrent federal and state protection. See Nimmer on Copyright, supra note 9, § 8C.03[E] at 8C-10.2 to -10.3.

⁶⁸ There is a limited privilege in § 112, discussed in section 2.1.7, to make copies to facilitate public performance of sound recordings via broadcast and webcast.

⁶⁹ In 2007 bills were introduced in Congress to require over-the-air broadcasters to pay performance royalties to artists and record companies for the right to play sound recordings. See S. 2500, 110th Cong. (2007) and H.R. 4789, 110th Cong. (2007). That legislation was still pending in October 2008.

⁷⁰ Digital Performance Right in Sound Recordings Act of 1995, Pub. L. No. 104-39, 109 Stat. 336 (1995), as amended by the Digital Millennium Copyright Act of 1998, Pub. L. No. 105-304, 112 Stat. 2860, 2905 (1998) (codified at 17 U.S.C. § 114 (2000)).

⁷¹ Also included in this first tier are traditional AM and FM broadcasts, public radio, background music services, and performances and transmissions in business establishments such as stores and restaurants. §§ 106(6), 114(b), (d)(1). See supra note 70.

⁷² § 114(d)(2). Those royalties are distributed to recording companies and performers by an organization called Sound Exchange. The performances in the “second tier” include subscription digital transmissions (i.e., those limited to paying recipients) and certain eligible nonsubscription digital transmissions. A transmission may be made pursuant to the compulsory license if it (a) is not in the first tier, exempt category, (b) is accompanied, if feasible, with the title, name of copyright owner, and other information concerning the sound recording and underlying musical work, and (c) the transmitting party meets a number of specific statutory requirements that diminish the risk that the transmissions will be copied or will substitute for having copies, e.g., it does not publish its program in advance, does not play more than a specified number of selections by a particular performer or from a particular phonorecord within a specified time period, does not seek to evade these conditions by causing receivers to automatically switch program channels.

⁷³ §§ 114(d)(2), (3), (4)(A). This category also includes nonsubscription transmissions that do not meet the conditions for the compulsory license (second tier) because, for example, the transmitting party publishes the program in advance or does not abide by the limitations concerning the number of selections from a particular phonorecord or performer that can be played in a specified time period.

⁷⁴ This discussion does not address digital downloads; it assumes that the streaming involved would not result in a complete, useable copy of the streamed work in the end-user’s computer.

⁷⁵ Narrowly targeted streaming activities would be permissible if they fall under a specific exception, e.g., streaming to enrolled students by a qualifying entity as part of systematic mediated instruction that meets the conditions of the distance education exemption in § 110(2).

⁷⁶ Section 112 of the Copyright Act allows certain “ephemeral” or temporary copies to facilitate authorized transmissions (for example, radio broadcasts) of copyrighted works, and for archival purposes. The conditions under which these copies may be made and retained vary according to the nature of the transmitter and the transmission. Specifically, § 112(a) allows an organization licensed or otherwise entitled to transmit a public performance or display of a work (other than a motion picture or audiovisual work) to make no more than one copy of a particular transmission program embodying the performance or display, solely for its own use (e.g., in preparing the work for broadcast) or for archival preservation. No further copies may be made from the copy, and it must be destroyed within six months unless preserved exclusively for archival purposes. Thus, for example, an analog transmission of copyright-protected sound recordings is not covered by the performance right in sound recordings. So as long as the transmitting organization gets a license to perform the underlying works (for musical recordings, that would likely mean a license from one or more of the performing rights organizations—ASCAP, BMI, SESAC, or a combination thereof—discussed in section 2.1.5), it may make an ephemeral recording of a transmission program embodying those works under § 112(a).

⁷⁷ Server copies can be made pursuant to § 112(b) and (f) for transmissions that qualify under the distance education exception in § 110(2).

⁷⁸ § 101.

⁷⁹See generally Section 115 of the Copyright Act: In Need of an Update?: Hearing Before the Subcomm. on Courts, The Internet and Intellectual Property of the House Comm. on the Judiciary, 108th Cong. 5-17 (2004) (prepared statement of Marybeth Peters, Register of Copyrights), available at http://www.copyright.gov/docs/regstat031104.html [hereinafter, Statement of Marybeth Peters].

⁸⁰ § 115 (c)(3). See Statement of Marybeth Peters, supra note 81; AL Kohn & Bob Kohn, Kohn on Music Licensing 1328-32 (3d ed. 2002).

⁸¹ The legal conclusions on which the agreement is based are not universally accepted. See, e.g., Statement of Marybeth Peters, supra note 81, at 12.

⁸² Copyright Office, Library of Congress, “Compulsory License for Making and Distributing Phonorecords, Including Digital Phonorecord Deliveries, 73 Fed. Reg. 40802, 40805 (proposed July 16, 2008) (to be codified at 37 C.F.R. pts. 201 & 255). The office took no position on whether it is necessary to obtain a license for reproduction or distribution of a musical work to enable streaming, but sought the regulatory amendments to facilitate licensing for a service that wished to engage in such activities without incurring the risk of liability. Id.

⁸³ 536 F.3d 121 (2d Cir. 2008), petition for cert. filed October 6, 2008, No. 08-448.

⁸⁴ §§ 502-505, 509.

⁸⁵ §§ 504(c), 505.

⁸⁶ § 504(c)(2).

⁸⁷See Fla. Prepaid Postsecondary Educ. Expense Bd. v. College Savings Bank, 527 U.S. 627 (1999) (under the Eleventh Amendment to the Constitution, states are immune to money damage suits for patent infringement); Chavez v. Arte Publico Press, 204 F.3d 601 (5th Cir. 2000) (states are immune from paying damages in copyright infringement suits).

⁸⁸ Richard Anderson Photography v. Brown, 852 F.2d 114, 122-23 (4th Cir. 1988) (claim for infringement of plaintiff’s photographs could be pursued against defendant Brown, Radford University’s Director of Public Information and Relations, in her individual capacity).

⁸⁹ 28 U.S.C. § 1498.

⁹⁰ Register of Copyrights, Report on Orphan Works (Jan. 2006), available at http://www.copyright.gov/orphan/orphan-report-full.pdf.

⁹¹ H.R. 6052, 109th Cong. (2d Sess. 2006) (introduced Sept. 12, 2006) (Title II).

⁹² H.R. 5889, 110th Cong. (2d Sess. 2008) (introduced April 24, 2008); S. 2913, 110th Cong. (2d Sess. 2008) (introduced April 24, 2008).

⁹³ It is theoretically possible for Congress to modify the provision of section 301 that exempts pre-1972 sound recordings from federal preemption, or to do so for certain limited purposes, but there is no such provision in the current legislation.

⁹⁴ 18 U.S.C. § 2319.

⁹⁵ “A work is ‘fixed’ in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration. A work consisting of sounds, images, or both, that are being transmitted, is ‘fixed’ for purposes of this title if a fixation of the work is being made simultaneously with its transmission.” 17 U.S.C. § 101.

⁹⁶ 17 U.S.C. § 1101(a). Congress passed the civil antibootlegging provision discussed above, and the criminal antibootlegging provision in Title 18 of the U.S. Code in 1994, in order to comply with international obligations under the TRIPs Agreement. Nimmer on Copyright, supra note 9, § 8E.01[B]. Live performances that are transmitted and recorded simultaneously meet the definition of fixation and are protected by copyright law, not federal antibootlegging law.

⁹⁷ § 1101(a).

⁹⁸ Nimmer on Copyright, supra note 9, § 8E.03[A][2]; see id. § 8E.03 [B][1].

⁹⁹ 17 U.S.C. § 1101(c); 18 U.S.C. § 2319A(f). This is the date of the enactment of the Uruguay Round Agreement Act, Pub. L. No. 103-465, 108 Stat. 4809, 4973 (1994). Nimmer on Copyright, supra note 9, § 8E.03[C][1].

¹⁰⁰ At least one court has endorsed this reading of the statute and held that postenactment distribution of a pre-enactment recording is actionable under § 1101. Kiss Catalog v. Passport Int’l Prods., 350 F. Supp. 2d 823 (C.D. Cal. 2004), reconsidered and vacated on other grounds 405 F. Supp. 2d 1169 (C.D. Cal. 2005) (finding 17 U.S.C. § 1101 constitutional). As authority for this reading, Nimmer cites the spirit of the TRIPs Agreement and one remark from the Uruguay Round Agreement Act’s scant legislative history pertaining to “bootleg” recordings of President Clinton’s jazz performances. Nimmer on Copyright, supra note 9, § 8E.03[C][2], nn. 56-58.

¹⁰¹ The antibootlegging provisions have been challenged not just because of their unlimited duration but also on the ground that Congress lacks power to protect “unfixed” works (since they are not the “Writings” of authors) under the Copyright Clause or other grants of power in the Constitution. See United States. v. Martignon, 492 F.3d 140, 152 (2d Cir. 2007) (finding 18 U.S.C. § 2319A constitutional); United States v. Moghadam, 175 F.3d 1269 (11th Cir. 1999) (finding 18 U.S.C. § 2319A constitutional); Kiss Catalog (finding 17 U.S.C. § 1101 a constitutional exercise of Congress’ Commerce Clause power).

¹⁰² Nimmer on Copyright, supra note 9, § 8E.03[B][2].

¹⁰³ § 1101(d).

¹⁰⁴ 18 U.S.C. § 2319A(a) (2000). As with the civil statute, the prohibited acts pertain to both sound recordings and audiovisual recordings of live musical performances. Specifically, the statute refers to “sounds or sounds and images of a live musical performance.” § 2319A(a)(1)-(2). This protection is narrower than that found in certain states’ criminal antibootlegging statutes. Of the five states surveyed in Appendix A, none limited its criminal antibootlegging provisions to musical performances alone. (Virginia’s statute applies to a “concert,” a term that might be more narrowly construed than “performance.”) In addition, the state statutes vary in their protection of sounds alone as opposed to both sound and audiovisual recordings. Illinois prohibits an unauthorized “sound or audio visual recording”; California and Virginia prohibit the unauthorized transfer of “sounds”; and Michigan and New York prohibit the unauthorized recording of performances without reference to whether the recordings are audio or audiovisual.

¹⁰⁵ 18 U.S.C. § 2319A(a).