Capitol v. Mercury was the last major phonorecord copyright case for eighteen years. However, two tangentially related cases, both in the Supreme Court in 1964, proved tremendously important. Sears, Roebuck & Co. v. Stiffel Co. and Compco Corp. v. Day-Bright Lighting were virtually identical cases. Stiffel made floor lamps; Day-Bright made overhead florescent factory lights. Both thought they had valid patents. They were wrong. Competitors copied their well-regarded products and undersold them. Lacking valid patents, the makers of the originals successfully sought relief under state laws designed to prevent unfair competition. The Supreme Court overturned each lower court. “When an article is unprotected by a patent or a copyright, state law may not forbid others to copy that article,” wrote Justice Black. “If the design is not entitled to a design patent or other federal statutory protection, then it can be copied at will.” In 1967, Barbara Ringer, Assistant Register of Copyrights, told a congressional committee that:

The Supreme Court decisions in the Sears and Compco cases raise serious doubts as to whether any rights in sound recordings survive their publication (i.e. the first sale or distribution of records) . . .Even though three and a half years have passed since the Sears and Compco decisions, their full impact remains unclear and controversial . . . In my opinion the crucial question in deciding whether published sound recordings are still entitled to common-law protection is whether the pre-emption of State common law rights applies only to works that come within the subject matter of the present Federal copyright statute, or whether it extends to works (like sound recordings) that are not now protected by federal copyright, but that are Constitutionally capable of it . . . it is my view that sound recordings are “writings of an author” and that Congress can grant them any degree of copyright protection it sees fit. However, they are not subject to statutory protection under the present law, and under the Sears, Compco, and subsequent decisions, they cannot be given common-law protection equivalent to copyright.

Admittedly, Ringer’s was a rather pessimistic assessment. In both opinions the Court had made two points clear: 1) while a state could not prohibit copying, their power to regulate false labeling, deceptive advertising, fraud, or other “palming off” violations remained untouched; and, 2) the court would likely hold that the act of copying another’s goods, when done with the deliberate intent of creating deception or confusing customers, fell within the general category of “palming off.”

It was under this rationale that New York state courts continued to successfully prosecute music piracy, most notably in a 1964 case, Capitol Records v. Greatest Records, where Capitol was able to convince the court to force Greatest Records to destroy thousands of copies of a bootleg compilation album culled from The Beatles early singles and their first two LPs. “In the unfair competition cases Sears and Compco, the Supreme Court held that when an article is unprotected by a patent or copyright, state laws may not forbid others to copy that article; but it was pointed out that state law, statutory or decisional, may, in appropriate circumstances, grant relief where deceptive or fraudulent practices [are] shown” explained the New York court.

Largely based on New York’s experience, California added its own anti-piracy provision, section 653h, to its penal code in 1968. It became the basis of the next major legal action.

To be continued…