The question of whether state laws about pre-1972 sound recordings could give copyright holders a claim against broadcasters for the over-the-air public performance of these recordings was answered in a novel manner in a decision rendered by a US District Court in California. The evidence before the Court showed that CBS, the broadcaster being sued, had played digitally remastered versions of the pre-1972 songs, not the original analog pre-1972 recordings. The Court, based on evidence provided by the sound engineers who remastered the digital versions of the songs, found that there was enough originality in the remastering process for the digital versions to be copyrightable as “derivative works.” A derivative work is a separate work, based on the original, which can itself be copyrighted if there is some creativity in the new work. As the remastered derivative work was created after 1972, the Court decided that it was covered under Federal law. As Federal law provides no royalty for the public performance of a sound recording by an over-the-air broadcaster, the Court granted CBS summary judgement in the suit brought against it, dismissing the claims of the copyright holders (the text of the decision is embedded in this Hollywood Reporter article about the case).
The question of whether digitized versions of old recordings are sufficiently creative to merit their own copyrights (whether they are “original works of authorship”) has been debated in copyright circles for some time. Here, the Court looked at a summary of the law that had been prepared in a Circular distributed by the Copyright Office, which listed certain criteria that could be applied in determining whether a re-recorded work had sufficient creativity to merit a copyright. The Court also looked at specific evidence offered by recording engineers that showed how they used independent creative judgment in deciding to enhance certain elements of the recording in the digital version and to suppress others. The testimony showed that the digital version was the result of more than simply hooking the analog source material to a digital recorder and distributing the result. Human intervention in deciding how to materially change the original work to produce a new digital work was found by the Court – deciding that this was a classic version of a derivative work, authorized by the Copyright holders themselves when they commissioned the digital versions of the recordings. Thus, these works were entitled to their own copyright – a copyright that arose when the work was created after 1972.
We wrote about this issue in our article here, an article that primarily dealt with pending appeals of the question of whether there really is a state law public performance right in pre-1972 sound recordings. We wrote there about the fact that Sirius XM and some webcasters have not raised the CBS defense, as they have argued that no such royalties are due on pre-1972 sound recordings and have not been making such payments to SoundExchange (the Court in the CBS case said that CBS was apparently making such payments). Of course, the issue was not raised in those cases as to whether these companies were playing analog versions of the old recordings, or new digitally remastered works that may be entitled, if the current decision is upheld, to new copyrights (in fact, as we wrote here, the Copyright Royalty Board itself has approved of Sirius XM not making payments for pre-1972 recordings, without addressing what constituted such a recording). What implications does this decision have on other cases where this issue has been raised?
First, it must be noted that this is a decision by a single District Court judge in a US District Court in California. This decision is not binding on other District Courts, or on other state courts where the issue may be raised. As was the case in the Aereo arguments (see our article here), and even in the pre-1972 cases (see our article here on a decision by a Florida Court determining that there was no performance right in Florida for pre-1972 sound recordings, reaching a determination different than reached by courts in NY and California), different courts may have different interpretations of Federal copyright law. This decision may well be viewed as instructive, but District Court judges in other districts could interpret Federal law in a different way. Also, this decision can be appealed to the US Court of Appeals, so it cannot be viewed as the final word on this subject. But it certainly provides an argument for broadcasters to raise in any new lawsuits brought by copyright holders alleging that there is a state law copyright in pre-1972 recordings.
Of course, to take advantage of this argument, a broadcaster needs to be playing a post-1972 digitized version of a song – not the original analog version. Also, the broadcaster, if streaming, needs to be paying SoundExchange royalties for any streaming of these songs. It has been my experience that most broadcasters do in fact pay for these recordings, as it is difficult to determine which are covered under Federal law and which are not (e.g. as we wrote here, some pre-1972 sound recordings, copyrighted first in a country other than the US, have already been covered under Federal law). So, while not a certain defense, this decision certainly adds to the quiver of defenses available to any broadcaster who is challenged alleging that it owes performance royalties for pre-1972 recordings.