Tag Archives: Copyright Act

Copyright Equality (Article Review)

I recently read an article by Northwestern Law professor Peter DiCola entitled, “Copyright Equality: Free Speech, Efficiency, and Regulatory Parity in Distribution” 93 Boston University Law Review 1837 (2013) available here.  Prof. DiCola offers an interesting take on the disparity between royalty rates and rate setting standards for different music distribution platforms: these disparities violate the First Amendment.  How does Prof. DiCola reach this conclusion?

Unequal treatment, moreover, threatens freedom of speech and freedom of the press. The distinct features of each distribution technology represent several choices about what content will be available, in what sequence, with what user interface, and so on. For example, the playlists of AM and FM radio are vastly different than the playlists of webcasting services. By allowing some technologies, like traditional and satellite radio, to pay lower royalties, Congress is implicitly favoring the kind of content that those media tend to provide. By treating different media for music distribution unequally, both procedurally and substantively, Congress is shaping the public sphere and implicitly favoring some types of content over others. This violates the principles developed in two lines of First Amendment Supreme Court cases.  Thus, the unequal treatment of the distributors of copyrighted works is not just arcane, bureaucratic, and complicated; it is also inefficient and a violation of free speech values. (page 1842)

Prof. DiCola compares the “distortion of consumers’ choices among [music distribution platforms] … [to] an unjustified tax or subsidy that favors certain firms or industries and disfavors others. One can think of the differential royalty rates in the music industry as analogous to farm subsidies, which have caused an overemphasis on corn and other “base crops.” In the music industry, copyright’s policy on music distribution has had the effect of propping up traditional and satellite radio while hampering webcasting and on-demand streaming. Congress, in short, has been picking winners in the music industry. (page 1841)

Prof. DiCola offers three ways in which these disparities can be reduced:

First, copyright should contain a general performance right in sound recordings to require AM and FM radio to pay royalties to sound recording copyright owners. This legislative change is necessary to achieve parity with all the other music distribution services. Second, Congress should direct the Copyright Royalty Board to determine the sound recording royalty rates for different types of radio – AM, FM, satellite, cable, webcasting, and on-demand streaming – under the same process and based on the same standard. Congress mandating equality of the process would not necessarily produce equal royalty rates, but it would ensure that any deviations from equality are justified. Finally, differences in substantive royalty rates resulting from this process should have a basis in substantial evidence that could survive heightened First Amendment scrutiny. (page 1895)

I found the argument very compelling.

 

Santa Claus Is Comin’ To EMI

In 1934, John Frederick Coots and Haven Gillespie wrote the song “Santa Claus Is Comin’ to Town.”  They conveyed the copyright to Leo Feist, Inc., a prominent music publisher at the time.  The copyright in the song was covered by the 1909 Act, which provided for a 28 year initial term followed by a second 28 year renewal term.  In 1951, Coots and Gillespie entered into a new agreement granting Feist the renewal term, such that when the original term ended in 1962, Feist remained the copyright owner for the renewal term (until 1990).  Coots’ heirs claim the song still generates $1mm per year in royalties, in which they share 25% (half of the half of the writers’ share).

The 1909 Act has been extensively amended over the years, beginning in 1976.  Two significant changes involve (1) the duration of copyright and (2) the rights of authors to terminate transfers.

With respect to copyright duration, the 1976 Act provided for a term of 75 years for all works created before January 1, 1978, which would include Santa Claus Is Comin’ to Town.  In 1998, the Sonny Bono Act the term was extended another 20 years, meaning Santa Claus Is Comin’ to Town enjoys a 95 year term–from 1934 to 2029.

The 1976 Act completely changed the way in which authors could regain control of their works.  Rather than 2 separate terms, the 1976 Act has a single term, but a right to terminate any transfer after a certain period of time.  For works created before January 1, 1978, Sec. 304(c)(3) of the Act provides for termination of any transfer of copyright ownership “can be effected at any time during the period of five years beginning at the end of the fifty-six years from the date the copyright was originally secured, or beginning January 1, 1978, whichever is later.” In this case, 56 years after 1934 is 1990.  Because the Bono Act extended the term of copyright by another 20 years, there is a second termination provision in Sec. 304, which allows for termination to be effected “during a period of 5 years beginning at the end of 75 years from the date the copyright was originally secured.”  But only where the author had not previously exercised a termination right.

Importantly, Sec. 304(c) has a recordation formality: a copy of any notice of termination must be recorded with the Copyright Office “before the effective date of termination, as a condition to its taking effect.”

On September 24, 1981, pursuant to Section 304(c), Coots sent Feist a notice to terminate the 1951 Agreement, selecting October 23, 1990 as the effective date of termination.  On November 25, 1981, Coots’ attorney, M. William Krasilovsky sent the 1981 Notice to the Copyright Office for recordation.  For you collectors of copyright trading cards, William Krasilovsky is the author of This Business of Music (now in its 10th edition), one of the most respected books on the music industry.  However, on May 7, 1982, the Copyright Office sent Krasilovsky a letter, stating, “[p]ursuant to our telephone conversation of March 1, 1982, we are returning [the 1981 Notice] to you unrecorded.” Only Krasilovskywas copied on the letter. The 1981 Notice was never later recorded with the Copyright Office.

On April 6, 2004, Gloria Coots Baldwin, Patricia Bergdahl, and Christine Palmitessa (Coots’ heirs) sent EMI, which had purchased Feist, a termination notice (the “2004 Notice”), pursuant to Section 304(d) seeking to terminate Coots’ transfer effective in 2009 (1934 plus 75 years),  EMI filed a motion for summary judgment on the grounds that (a) the 1981 termination was ineffective because the notice was never recorded in the Copyright Office and (b) the 2004 notice was ineffective because it was a second attempt to terminate a transfer, which Sec. 304(d) does not allow.  Judge Scheindlin of the Southern District of New York agreed with EMI and granted its motion.  Her decision is here.

 

Google Books is (Rap) Genius!

Google Books and Rap Genius

Judge Denny Chin, formerly of the SDNY and now the Second Circuit, has issued his opinion in the Google Books case.  (Judge Chin kept a few of his cases when he moved up to the appeals court.).  For those unfamiliar with the case, in 2005 Google undertook to digitize entire libraries of books, scanning the entire book in optical text recognition format.  Many of the books Google scanned were under copyright and Google never sought permission from copyright owners prior to making its digital copies.  Several authors filed a purported class action suit against Google. 

After Judge Chin rejected a proposed settlement in 2011, the parties filed cross motions for summary judgment, with Google arguing that its digitization of entire books as ‘fair use’ under § 107.  Judge Chin agreed with Google and granted its summary judgment.

Because they typically are the most relevant in deciding a fair use claim, I focus on the first and last of the 4 fair use factors provided in § 107: whether the use is transformative and whether the use reduces the market for the original.  Judge Chin found both of these factors weighed in Google’s favor.

Judge Chin determined that “Google’s use of the copyrighted works is highly transformative. Google Books digitizes books and transforms expressive text into a comprehensive word index that helps readers, scholars, researchers, and others find books. … The use of book text to facilitate search through the display of snippets is transformative.”  Judge Chin compared Google Books to providing thumb-nails of images, citing approvingly Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007) and Bill Graham Archives v. Darling Kindersley Ltd., 448 F.3d 605 (2d Cir. 2006). 

The display of snippets of text for search is similar to the display of thumbnail images of photographs for search or small images of concert posters for reference to past events, as the snippets help users locate books and determine whether they may be of interest. Google Books thus uses words for a different purpose — it uses snippets of text to act as pointers directing users to a broad selection of books.

Judge Chin focused on the fact that Google’s scanning “transformed book text into data for purposes of substantive research, including data mining and text mining in new areas, thereby opening up new fields of research.” 

I wonder if Judge Chin would have made the same conclusion based on the scanning of a single book.  Or even scanning several hundred books.  It appears that his logic stems from the fact that millions of books were scanned, thereby enabling the searching that made the scanning transformative in the first place.  This is at least suggestive that massive copying might be transformative, where limited copying might not be.  As discussed below with respect to Rap Genius, I can imagine ways in which Judge Chin’s decision might influence business models that involve digitizing and indexing copyrighted works.

With respect to the last § 107 factor—the effect of the copying on the market for the original—Judge Chin concluded that “a reasonable factfinder could only find that Google Books enhances the sales of books to the benefit of copyright holders. An important factor in the success of an individual title is whether it is discovered … Google Books provides a way for authors’ works to become noticed, much like traditional in-store book displays.”  Because “Google provides convenient links to booksellers to make it easy for a reader to order a book … there can be no doubt but that Google Books improves books sales.”  I didn’t review the motions for summary judgment, so I don’t know if there was evidence (empirical or anecdotal) presented regarding Google Books actual impact of sales, but this seems like a pretty bold statement if it lacks evidentiary support.  Given that many books were on sale prior to Google Books, it seems at least some evidence could have been presented showing either an increase or decrease in sales of particular titles after the introduction of Google Books.

For those who pay attention to this kind of thing, Judge Chin was the district court judge who originally granted summary judgment in favor of the copyright owners in the Cablevision case.  Judge Chin’s decision was overturned by the Second Circuit in what became a bellwether for technology companies designing services that transmitted copyrighted works.  Judge Chin was the dissenting vote in the Aereo case, where the Second Circuit upheld the principles articulated in Cablevision.  I find it interesting that Judge Chin is so sure that services like Cablevision’s remote DVR and Aereo’s rebroadcast of over-the-air television transmissions are infringing technologies, while Google Books is not. 

The Google decision is here.

So, what does Google Books have to do with Rap Genius?  I recently read that Rap Genius has signed a license with music publisher Sony ATV.  If you’ve checked out Rap Genius, you might wonder why it felt the need to get a license from a music publisher.  I would argue it is a highly transformative service—a la Google Books.  It is a searchable database of lyrics (though, unlike Google Books, it provides the entire lyrics, whereas Google Books only provides up to 90% of a text).  But in addition to transcribing the lyrics, Rap Genius annotates the lyrics with possible explanations of what the writer meant.  Rap Genius’ annotations include space for comments, so people can provide their own thoughts regarding the meaning of their favorite rap lyrics. 

For example, check out Nas’ song “The World Is Mine.”  I’ve listened to that song 100 times, and I love this line because of the way Nas emphasizes “PIPE” at the end – “The fiend of hip-hop has got me stuck like a crack pipe.”  According to Rap Genius, this line either refers to “fans are fiending for his music, or if he himself is compelled to write rhymes.”  Rap Genius also tells me that this line is a “subtle shout out to Nas’ one time mentor, Rakim who was known as the Microphone Fiend.”  If Google Books is transformative—and all Google is doing is digitizing books—then Rap Genius should clearly be transformative—digitizing lyrics AND providing annotations.

Nas The World Is Mine

All of this got me to thinking about a draft article by Ben Depoorter & Robert Kirk Walker’s called Copyright False Positives, an electronic copy of which is available at: http://ssrn.com/abstract=2337684.  Depoorter and Walker argue that (a) the scope of copyright protection cannot be determined a priori, (b) copyright infringement entails statutory damages, and (c) defending copyright infringement claims is expensive.  Because of these factors, copyright owners may over-enforce their copyrights, leading to “copyright enforcement false positives, where rights holders erroneously believe that their interests in a particular work extend beyond the bounds of what is actually protected.  These false positives often “motivate copyright owners to seek enforcement of rights that are nonexistent or outside the scope of copyright. Such misguided enforcement actions impose significant social costs…”

Two of these significant social costs are obvious in our examples.  First, in the Google Book case, Google had to spend millions of dollars litigating what a federal district judge ultimately determined was a fair use of copyrighted works.  Second, in the Rap Genius case, the website took a license rather than risk the very litigation expenses Google was able to afford, even though Rap Genius’ use of the copyrighted works is arguably transformative.  In both instances, society is worse off, but in one instance a publisher is better off.

Gaye Gets in Thicke

Marvin Gaye’s estate has answered Robin Thicke’s declaratory judgment suit over Gaye’s “Got to Give It Up” and Thicke’s uber popular song “Blurred Lines” by filing counterclaims, including alleged infringement of additional Gaye songs, including the Marvin Gaye song, “After the Dance,” in the Thicke song “Love After War.”

Thicke’s own words were used against him, as Gaye’s counterclaim cited a May, 2013 interview Thicke gave GQ magazine in which he said,

Pharrell and I were in the studio and I told him that one of my favorite songs of all time was Marvin Gaye’s ‘Got to Give it Up.’ I was like, ‘Damn, we should make something like that, something with that groove.’ Then he started playing a little something and we literally wrote the song in about a half hour and recorded it.

Thicke repeated this claim in a July interview with Billboard,

Pharrell and I were in the studio making a couple records, and then on the third day I told him I wanted to do something kinda like Marvin Gaye’s ‘Got to Give it Up,’ that kind of feel ’cause it’s one of my favorite songs of all time. So he started messing with some drums and then he started going ‘Hey, hey hey .. ‘ and about an hour and a half later we had the whole record finished.

Frankly, even a cursory listening makes it hard to argue these songs are substantially similar.  The case reminds me of the Vanilla Ice initially claiming that “Ice Ice Baby” didn’t sample Queen / David Bowie’s “Under Pressure.”

The Gaye family alleges that EMI breached its fiduciary duty tp and obligations of good faith and fair dealing with the family by siding with Pharrell Williams, an EMI-affiliated writer and one of Blurred Lines co-writers.  According to the Gaye family, Gaye’s administration agreement with EMI grants EMI the exclusive right to bring infringement claims, but when the Gaye family told EMI about the alleged infringement of Got to Give It Up, EMI refused to pursue a claim against Williams.   

Among the nefarious actions alleged is the salacious claim that the chairman of EMI called a legal representative of the Gaye family suggesting that–notwithstanding the fact that Thicke had already filed his dec action against them–they not to pursue this action because Marvin Gaye’s children were “tarnishing” and “ruining an incredible song” (“Blurred Lines”) and”killing the goose that laid the golden egg,”  The EMI chairman claimed that the Gaye family’s accusations that Blurred Lines was based on Gaye’s song was responsible for “Blurred Lines” not receiving an MTV Video Music Award and might kill any chances of “Blurred Lines” winning a Grammy Award for Song of the Year.

Based on these alleged breaches, the Gaye family is seeking to rescind its publishing agreement with EMI.

The counterclaims are here.

Mayweather Says Knock You Out!

The 4th Circuit delivered a knockout punch in a copyright infringement claim against Mayweather, affirming a district court’s granting of summary judgment dismissing a songwriter’s claim for infringement damages.

Anthony Dash claimed that he wrote the composition of a song Mayweather used as a “theme song” during several appearances at WWE events and sued for infringement.  Because Dash had not filed for copyright registration until after the alleged infringement, Dash was only able to seek actual damages under §504(b).  The district court bifurcated the proceedings between liability and damages and Mayweather filed a motion for summary judgment that Dash was not entitled to damages.  Dash responded by filing an expert report that listed four benchmark licensing fees paid to other artists for the use of their music at Wrestlemania XXIV. Based on those fees, Dash’s expert concluded that Dash “would have earned a maximal sum of $3,000 for the use of his musical composition.”  Mayweather argued that Dash’s expert opinion was too speculative on which to base an award.

The 4th Circuit began by noting that “the primary measure of recovery is the extent to which the market value of the copyrighted work at the time of the infringement has been injured or destroyed by the infringement.”  One measure of the fair market value is the licensing “fee the owner was entitled to charge for [the infringer’s] use” of his copyrighted work.”  In order to recover, the copyright owner “must prove the existence of a causal connection between the alleged infringement and some loss of anticipated revenue.”

Dash’s expert attempted to determine what the license fee would have been by considering 4 songs that the WWE did license: 1 by the Red Hot Chilli Peppers, 1 by Fuel and 2 by Snoop Dogg.  Dash’s expert concluded that, “[b]ased on these benchmarks, it is safe to conclude that [Dash] would have earned a maximal sum of $3,000 for the use of his musical composition.”

The 4th Circuit seized on Dash’s expert’s reference to the maximum amount Dash would have earned as evidence that Dash might not have earned anything. (“By referencing [Dash]’s maximal value—without any actual mention of a minimum value—[Dash’s expert] failed to satisfy this burden.  Rather it appears to have concluded only that, to the extent [Dash’s work] had a market value, such value was no more than $3,000.”)  The Court also concluded that the selection of benchmarks–representing licenses with well-known artists–were too removed from the unknown Dash to be reliable.

The Court then turned to Dash’e entitlement to WWE’s profits from using the work and noted that “in order to meet his initial burden under § 504(b), a plaintiff must not merely present proof of the amount of the claimed revenue streams, but must also provide “more than mere speculation as to the existence of a causal link between the infringement and the claimed revenues.”  The Court noted that the causal link need to be direct–it must only be hypothetically possible.  Here, Dash had stipulated that he had no evidence that the playing of his composition at Wrestlemania XXIV increased any of the WWE revenue streams. By making such stipulation, Dash admitted there was not even hypothetically possible to show the performance of his song created profits WWE would not have earned but for playing the song.

The decision is here.

Are You Sirius?

As readers of this blog will recall, aging rockers Flo & Eddie filed three separate lawsuits alleging that Sirius XM has infringed certain state- or common law copyrights of a class of owners of sound recordings fixed prior to 1972. Sirius XM has filed a motion to transfer the California case, which was transferred from state to federal court, and the Florida case to the Southern District of New York.  While this legal maneuver is relatively uninteresting, the motion does indicate at least one defense that is likely to feature prominently in this and the related case filed by the so-called “major” record companies, – titled Capitol Records, LLC et al. v. Sirius XM Radio Inc., No. BC520981 – in California state court raising similar issues: laches.

Laches, an equitable defense based on the doctrine of estoppel, is the unreasonable delay in pursuing a right or claim that prejudices the opposing party.  According to Sirius XM’s motion,

Plaintiff apparently has become aggrieved by the distinction drawn by Congress in withholding copyright protection from its Pre-1972 Recordings; thus now, after decades of inaction while a wide variety of music users, including radio and television broadcasters, bars, restaurants and website operators, exploited those Pre-1972 Recordings countless millions of times without paying fees, it asserts a purported right under the law of various states to be compensated by Sirius XM for comparable unlicensed uses. Plaintiff’s multiple court filings constitute a form of lawsuit lottery in search of an elusive new state-law right that would radically overturn decades of settled practice.

The laches defense raises a number of interesting issues.  For example, since at least the late 1980s, almost all terrestrial radio stations have used digital copies stored on servers to originate performances; i.e., the days of “disc jockeys” spinning vinyl have been gone for decades.  Presumably, under Flo & Eddie’s complaint, these terrestrial radio broadcasters needed a license to make copies of Pre-72 recordings and, potentially, to perform them.

Terrestrial radio stations have been simulcasting performances over the internet for nearly 20 years, presumably implicating the right of performance by digital audio transmission that Flo & Eddie allege exist under certain state laws for Pre-72 recordings.  Has SoundExchange, which collects and distributes royalties under certain statutory licenses for the public performance of sound recordings by digital audio transmission, been collecting royalties from these terrestrial radio broadcasters and remitting such payments to Pre-72 artists?  Because federal copyright doesn’t apply to Pre-72 recordings, if SoundExchange were collecting such royalties it would owe the terrestrial radio simulcasters a refund. If SoundExchange hasn’t, why hasn’t Flo & Eddie sued terrestrial radio?

Flo & Eddie will undoubtedly respond that they had no way of knowing that they weren’t getting paid by Sirius XM until the most recent Copyright Royalty Board proceeding, at this pre-72 recordings were a significant issue.

[The allegations raised by SoundExchange against Sirius XM that Sirius XM was inappropriately deducting revenue from its royalty calculation to account for Pre-72 recordings are inapplicable in the context of a per-song royalty, where each Pre-72 recording can be identified and appropriately excluded from royalty calculations.  Per-song royalties have existed since at least 2008.]

The motion is here.

Athletes and Tattoos

In the aftermath of the copyright infringement litigation involving Hangover 2 and Mike Tyson’s face tattoo, the NFL Players Association is apparently urging players to obtain releases from tattoo artists to prevent future infringement actions.

According to this article in Forbes, the NFLPA is worried that this current batch of heavily inked players – some of whom use their art as their image – will encourage tattoo artists to sue the NFL, advertisers or video game makers for unauthorized reproduction of their art.

That Sound You Hear Is Another Lawsuit

UK label Ministry of Sound has filed suit against Spotify, alleging that Spotify users are creating playlists that are identical to compilations created by MOS. Apparently, Spotify users are creating playlists that mirror MOS compilation albums, at times even using MOS in the name of the playlist.
Photo credit:Spotify Ministry of Sound playlists

According to the story in The Guardian, “The case will hinge on whether compilation albums qualify for copyright protection due to the selection and arrangement involved in putting them together. Spotify has the rights to stream all the tracks on the playlists in question, but the issue here is whether the compilation structure – the order of the songs – can be copyrighted.”  That might be the case in the UK, but in the US I think the question is different.

The Copyright Act clearly protects compilations–a defined term in Sec. 101 (“A “compilation” is a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship.”).  The question I have is whether Spotify can be liable for the playlists created by its users.  This strikes me as a claim of secondary liability – since Spotify isn’t undertaking any volitional action in the creation of the playlist.  There might be an opportunity to issue a DMCA takedown request, but Spotify actually has the rights to stream the songs in question.

Satellite Wars

It’s been a tough few weeks for satellite radio service Sirius XM. On August 1, former Frank Zappa bandmates Mark Volman and Howard Kaylan (a/k/a Flo & Eddie), who performed together as The Turtles since 1965 and are most known for the song “Happy Together,” sued Sirius XM in California state court over the alleged unauthorized reproduction, distribution and public performance of The Turtles sound recordings. Then, on August 15, Flo & Eddie sued Sirius XM in New York federal court over the same allegations. In both cases, Flo & Eddie seek to represent a class of similarly situated plaintiffs. In the California case, Flo & Eddie allege damages exceed $100,000,000.00. Finally, on August 26, SoundExchange sued Sirius XM in the federal district court for the District of Columbia over alleged underpayments of sound recording performance royalties. SoundExchange alleges that Sirius XM owes tens of millions of dollars in underpaid royalties.

At issue in each case is an anomaly of the protection of sound recordings in the Copyright Act. While musical works have been protected by federal copyright since 1831, sound recordings did not enjoy any federal copyright protection until 1972. In 1971, as technology advances made it easier for people to make unauthorized copies of records (think peer-to-peer file sharing in the physical world), Congress extended copyright protection to sound recordings, but only with respect to the exclusive right to reproduce and distribute and only for sound recordings “fixed” on or after February 15, 1972 (sound recordings fixed prior to that date are typically referred to as “pre-72”). There are a variety of reasons why Congress decided not to grant copyright protection to all sound recordings (e.g., apply the right retroactively), but one reason was the lobbying of the record industry, which claimed that applying federal copyright protection to pre-72 recordings would cause havoc on music industry agreements written before federal protection existed.

State law protection for pre-1972 sound recordings is a complicated subject. State protection of pre-1972 sound recordings is a patchwork of criminal laws, civil statutes and common law. Early cases relied principally on unfair competition to protect sound recordings from unauthorized duplication and sale. By the 1950s, record piracy had become a serious problem, with pirates openly competing with record companies. For that reason, in the 1960s, states began to pass laws making it a criminal offense to duplicate and distribute sound recordings, without authorization, for commercial purposes. New York was the first such state in 1967; California was the second, in 1968.

In addition to the criminal penalties, some states have statutes that provide civil remedies. Section 980(a)(2) of the California statute is a good example:

The author of an original work of authorship consisting of a sound recording initially fixed prior to February 15, 1972, has an exclusive ownership therein until February 15, 2047, as against all persons except one who independently makes or duplicates another sound recording that does not directly or indirectly recapture the actual sounds fixed in such prior sound recording, but consists entirely of an independent fixation of other sounds, even though such sounds imitate or simulate the sounds contained in the prior sound recording.

The most notable case in recent years involving pre-1972 sound recordings was Capitol Records, Inc. v. Naxos of America, Inc. At issue were recordings of classical music performances originally made in the 1930s. Capitol, with a license from EMI, the successor of the original recording company, remastered the recordings, and was distributing them in the United States. Naxos obtained the original lacquer masters and restored the recordings in the UK, where they were in the public domain, and began marketing them in the United States in competition with Capitol. Capitol sued in federal court for unfair competition, misappropriation and common law copyright infringement. The district court granted summary judgment to Naxos because the recordings were in the public domain in the UK, where they were originally recorded.

When that decision was appealed, the U.S. Court of Appeals for the Second Circuit concluded that New York law was unclear in some important respects and certified the question of state law to the New York Court of Appeals. The New York Court of Appeals accepted the case, and held that foreign sound recordings remain protected under “common law copyright” in New York until 2067, even though they may be in the public domain in their home country. The court explained that a common law copyright claim in New York “consists of two elements: (1) the existence of a valid copyright; and (2) unauthorized reproduction of the work protected by copyright.” It went on to state that “[c]opyright infringement is distinguishable from unfair competition, which in addition to unauthorized copying and distribution requires competition in the marketplace or similar actions designed for commercial benefit.”

In 2009 Congress asked the Copyright Office to investigate the appropriateness of extending federal copyright protection to pre-72 recordings. In December 2011, the Copyright Office released its report, entitled Federal Copyright Protection for Pre-1972 Sound Recordings, in which it recommended that federal copyright extended to pre-72 recordings. As the Copyright Office noted in that report,

“Until 1995 there was no public performance right in sound recordings under federal law, and it does not appear that, in practice, pre-1972 sound recordings had such protection. The current right provided by federal law applies only to digital audio transmissions (not to broadcasts) of copyrighted sound recordings. It is possible that a state court would entertain a claim for unfair competition or common law copyright infringement if, for example, it were faced with a claim that pre-1972 sound recordings were being made available through internet streaming, particularly if it were persuaded that the use was substituting for purchases of the plaintiff’s recording. But no such case has yet arisen.”

Well, now such case has arisen. There are significant issues yet to be resolved, not the least of which is how you certify a class of potential plaintiffs whose sound recordings were fixed over several decades under different recording contracts. More importantly, Sirius XM will have a host of available defenses (affirmative or otherwise) that courts—including the Supreme Court—have recently suggested need to be considered as part of the class certification process.

For example, in the on-going dispute over Google’s digitization of books, the Second Circuit recently delayed class certification to consider Google’s alleged fair use defense.

Putting aside the merits of Google’s claim that plaintiffs are not representative of the certified class—an argument which, in our view, may carry some force—we believe that the resolution of Google’s fair use defense in the first instance will necessarily inform and perhaps moot our analysis of many class certification issues, including those regarding the commonality of plaintiffs’ injuries, the typicality of their claims, and the predominance of common questions of law or fact, see Fed. R. Civ. P. 23(a)(2), (3), (b)(3). See, e.g., FPX, LLC v. Google, Inc., 276 F.R.D. 543, 551 (E.D. Tex. 2011) (denying plaintiffs’ request for class certification “because of the fact-specific inquiries the court would have to evaluate to address [defendants’] affirmative defenses [including fair use of trademarks]”); Vulcan Golf, LLC v. Google Inc., 254 F.R.D. 521, 531 (N.D. Ill. 2008) (“The existence of affirmative defenses [such as fair use of trademarks] which require individual resolution can be considered as part of the court’s analysis to determine whether individual issues predominate under Rule 23(b)(3).”); see also Coopers & Lybrand v. Livesay, 437 U.S. 463, 469 n.12 (1978) (“Evaluation of many of the questions entering into determination of class action questions is intimately involved with the merits of the claims. The typicality of the representative’s claims or defenses . . . and the presence of common questions of law or fact are obvious examples.” (quotation marks omitted)); Castano v. Am. Tobacco Co., 84 F.3d 734, 744 (5th Cir. 1996) (“[A] court must understand the claims, defenses, relevant facts, and applicable substantive law in order to make a meaningful determination of the certification issues.”); cf. Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2561 (2011) (holding that “a class cannot be certified on the premise that [a defendant] will not be entitled to litigate its statutory defenses to individual claims”). Moreover, we are persuaded that holding the issue of class certification in abeyance until Google’s fair use defense has been resolved will not prejudice the interests of either party during the projected proceedings before the District Court following remand. Accordingly, we vacate the District Court’s order of June 11, 2012 certifying plaintiffs’ proposed class, and we remand the cause to the District Court, for consideration of the fair use issues.

Even assuming a class can get certified, there are still significant issues facing the plaintiff, including, but not limited to, whether a public performance right exists in state common law, how to measure damages in the absence of the statutory remedy available under federal copyright, and the scope of individual state courts over out-of-state “infringements.”

Things You Never Thought You’d Read in a 7th Cir. Opinion: “Butters sings a paean to anal sex”

Readers will recall a previous post (here) discussing the United States District Court of the Eastern District of Wisconsin finding that Comedy Central’s use of the Samwell’s viral video entitled “What What (In the Butt)” (“WWITB”) was fair use.  The copyright owner of WWITB, Brownmark Films, appealed the decision, arguing, among other things, that an unpleaded affirmative defense of fair use is an improper basis for granting a motion to dismiss under Rule 12(b)(6).  In an opinion written by Judge Cudahy, the 7th Circuit affirmed the District Court’s ruling.

Much of the 7th Circuit’s opinion is like a First Year Civil Procedure lecture, full of discussions regarding whether Comedy Central’s filing was a 12(b)(6) motion, a 12(c) motion, or a motion of summary judgment.  In the end, the 7th Circuit determined that “district court could properly consider an affirmative defense in the context of a motion for summary judgment, which it did here, regardless of the caption [Comedy Central] used.”

Central in the 7th Circuit analysis was the fact that the only 2 pieces of evidence required by the district court to make its decision were the 2 versions of the WWITB videos, which the district court had.  In a hilarious footnote, Judge Cudahy reveals himself as an avid South Park viewer:

Adopting [a summary judgment approach] would have given [Comedy Central] greater freedom in setting out its fair-use defense.  In its reply brief, Brownmark makes much of the fact that [Comedy Central] mentions Butters’ naïveté, but had not introduced evidence on Butters’ innocent nature.  While we do not feel that this case turns on any such naïveté, [Comedy Central] could have introduced previous South Park episodes to show that Butters has repeatedly demonstrated a lack of understanding of sex. See, e.g., Butters’ Very Own Episode (Comedy Central television broadcast Dec. 12, 2001) (perceiving sex as wrestling), see also Cartman Sucks (Comedy Central television broadcast Mar. 14, 2007); Stupid Spoiled Whore Video Playset (Comedy Central television broadcast Dec. 1, 2004). Indeed, in one of these episodes, Butters is dressed in the same teddy bear costume he wears in the WWITB video. Stupid Spoiled Whore Video Playset (Comedy Central television broadcast Dec. 1, 2004).

I can imagine Judges Easterbrook and Posner scatologically discussing the import of Butters sexual innocence in the context of Saddam Hussein and Satan as gay lovers, existentialism in the repeated the death of Kenny, and whether feminists can enjoy the show due to some of its misogynistic characters.

BTW – Samwell is riding this Butt song as long and as hard as he can.  He even has an iPhone app!
[youtube http://www.youtube.com/watch?v=f3WeA4o-ElY&w=560&h=315]

The 7th Circuit’s opinion is below:
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