The Georgia Supreme Court this week issued a decision holding that the streaming of pre-1972 sound recordings by iHeart Media does not violate the state’s criminal statutes against the “transfer” of recorded sounds without the permission of the owner of the master recording. While many trade press articles have lumped this decision in with the ongoing litigation about the public performance right in pre-1972 sound recordings, this case is actually dealing with a different issue – and does not even mention the words “public performance” that were the center of debate in the Flo & Eddie cases against Sirius XM and Pandora, leading to the decisions that we wrote about in New York (here and here), California (here), and Florida (here).
What is at issue in the Georgia case is a criminal statute similar to those found in many states that prohibits the unauthorized transfer of various recordings, including pre-1972 sound recordings, without permission of the owner of the master recording. The plaintiff in this case, argued that the illegal transfers violated criminal law, and thus gave rise to a claim of civil liability under state racketeering statutes which provide for civil recovery against a defendant engaged in multiple criminal activities. By finding that there was no criminal violation here, the Georgia Supreme Court effectively ended the racketeering claim.
The state criminal statutes prohibiting the transfer of recordings without permission were meant to prevent bootlegging of pre-1972 sound recordings – i.e. the unauthorized duplication and sale of such recordings. The Georgia statute, similar to statutes in many other states, contains a provision that excludes the transfer of sounds “in connection with radio…broadcast transmissions or related uses.” The Supreme Court of Georgia found that the user experience of iHeart’s online music was so similar in the user experience to a user of over-the-air radio, the streaming was a related use covered by the exception in the state statute.
This is yet another creative claim by copyright holders to compensation for the use of pre-1972 sound recordings. This is an area that will continue to be litigated on a state by state basis, interpreting state statutes and common law precedent, unless and until there is a change in status of these recordings under Federal law, or until the litigation runs its course in the many states were these matters are pending.