Today is Elvis Presley’s 80th birthday, so it seems appropriate to revisit the issue of pre-1972 sound recordings, and to take a deeper look at the recent decisions by courts in New York and California finding that there is a public performance right in these recordings.  The NY decision in a case brought by Flo & Eddie of the band the Turtles, coming after the California cases, is in many ways the more interesting of the cases.  In the California case, the Court interpreted a California statute on copyright ownership as signaling that the California legislature intended to provide the entire bundle of ownership rights that would be accorded to any other piece of property, which the California Courts found would include the right to publically perform the recording.  While that may be debatable (as one does not usually think of a public performance right in connection with the ownership of tangible property – you don’t perform a house or a car), the decision at least is based on statute.  But the NY court did not find any such specific statute to which it could point to find a public performance right, instead concluding that the performance right was somehow inherent in the common law and therefore existed unless there was a specific carve-out of that right by statute.  This reasoning, to me, simply does not stand up to review.

The NY Court itself spends an entire footnote chronicling the history of the public performance right in the United States.  It notes that there was initially no public performance right at all recognized by the Copyright Act, until Congress provided one for dramatic works (e.g. plays) in 1856.  No such right was accorded to musical works (the musical composition – the words and music of a song) until 1897 when Congress specifically provided such a right by law.  For sound recordings, the public performance right did not exist in the US until 1995, when it was first extended to a limited class of digital recordings.  From these facts, the Court goes on to conclude “It was thus an accepted part of the background law that public performance rights would, absent a deliberate effort to exclude them, extend to sound recordings.”  Presumably, the Court is talking about the background law in 1972, when Congress first accorded any protection at all to sound recordings by granting a Federal right to control reproduction and distribution of such works – but Congress specifically excluded any performance right for another 23 years.

From this history of the evolution of the public performance right, it would seem that it would be more reasonable to conclude that the public performance right exists in the US only when it is specifically provided by statute.  That certainly is the case for post-1972 sound recordings, as there is no general public performance right.  For any sound recording covered under Federal law, there is no requirement that a bar, restaurant, movie theater, retail store or radio station obtain a public performance license in order for that business to perform any post-1972 sound recording.  The Federal right exists only for digital performances of sound recordings, and was adopted in the 1990s when there was a great fear that digital performances of sound recordings would lead to the ability to make “perfect copies” of such recordings which could undermine the sales of sound recordings – issues that have never really existed in the analog world where the sound recording performance right has never extended.

Thus, it would seem to us that the conclusion that the sound recording performance right is somehow inherent in the common law just does not jive with the history of that right generally in the US (where that right has only been applied to specific types of intellectual property rights, and only slowly and as specifically set forth by statute).  Nor does it comport with business practices in the United States, where there simply has never been, until these recent cases were brought, any attempt to collect royalties for pre-1972 sound recordings, or any way in which such royalties would be paid by services or collected by copyright holders.

In fact, the decision raises innumerable practical questions as to how any such right could be administered.  There is no collection society for pre-1972 sound recordings, as no right has ever been thought to exist.  SoundExchange collects only for sound recordings licensed under Federal law and covered by the statutory license.  And, as some states have no laws at all dealing with pre-1972 sound recordings, any right that may be found to exist will not be a national one, but would instead it will have to be administered on a state-by-state basis.  So, if a right is finally judged to exist, each user would have to individually negotiate with each copyright holder for the right to use the sound recording in the state or states in which the user operates – if that state determines that the right exists.

Think of the issues here.  It is complicated enough for interactive music services to negotiate for the rights to current recordings with record labels that usually hold the copyrights – and even then there are holes in the catalogs of many of the on-demand digital music services that cannot rely on the statutory license that gives noninteractive services the ability to play any legally released sound recording (see our article here explaining why Internet radio stations have access to artists like the Beatles, while interactive services like Spotify do not – or look at the recent ability of Taylor Swift to withhold her recordings from Spotify, but not from noninteractive webcast services).  For services to have to find the copyright holder of recordings that are a minimum of 40 years old, and to determine what rules apply on a state-by-state basis, would be a nightmare.

Moreover, with the passage of time inherent in pre-1972 sound recordings, you are looking at a much wider dispersal of copyright ownership, as we are talking about sound recordings back the beginning of recording technology.  Think of the big band or nostalgia shows on radio stations (including many public radio stations) that focus on the roots of current music and feature obscure recordings from prior to World War II.  How many of these recordings are in the catalog of the big record labels?  Will they have easy to find owners?  It would seem that the complications in the process of clearing these recordings is likely to outweigh the benefits in being able to perform them, so a widespread performance right in these recordings may well mean that many simply will not be performed.  The digital world has created many problems with “orphan works” (copyrighted materials where the owners are difficult or impossible to find) as various sites look to exploit the “long tail” of copyrighted works, and any widespread recognition of a public performance right in sound recordings will simply make these issues even harder.

What will happen here?  Of course, there will be appeals of the decisions in New York and California, so these cases are far from over and the right is far from being definitively established.  Even if the right is upheld, how will courts assess damages for the use of these recordings, as no one ever seemed to assign any value to their performance in US history?  And how far does the right extend?  Is it just a digital right (the recent decisions were in cases are against Sirius XM, and there are also pending cases against Pandora) as under Federal law, or does it extend to areas where there is otherwise no sound recording performance right at all (e.g. broadcasting and background uses of music in retail establishments)?  The NY Court seemed to think that New York could establish appropriate boundaries for any such right – but who would do so, the Courts themselves or the legislature (and if it is the legislature, doesn’t that support the argument that there is not currently such a right as, if there was, the legislature would already have defined its limits?)? 

Could these rights be Federalized, to avoid all of the state issues?  In the last Congress, there was also a move to do so, in what was called the RESPECT Act.  While many digital services indicated that they did not have problems with Federalization if these recordings were accorded full Federal protection for all purposes, the proposed legislation stopped short of that, dealing only with the performance right and not other Federal rights (like fair use, DMCA safe harbor provisions for user-generated content, and certain rights of creators to reclaim copyrights assigned to third parties after the passage of certain periods of time).  Getting all parties to agree on Federalization of these rights may not be as easy as it sounds.

So, for the moment, there is much uncertainty about these rights, and much wrangling yet to be done.  This will be one of those issues to watch in 2015 for all music users and copyright holders.