The interim 1972 Copyright Revision Act also touched off one of the messier inter-judicial disputes in the history of copyright law, the so-called “mechanical reproduction” fee controversy. The 1972 revisions retained the original 1909 compulsory licensing fee system. You will recall that under the 1909 Copyright Act, after the first release of a composition on a phonorecord or piano roll, a composer had to let all subsequent users license the song for a similar use provided they paid two cents per copy. Everyone assumed that “similar use” meant you had to hire your own musicians and make your own version of the song, but Melville Nimmer, the great copyright authority, had for years argued that the plain language of the Act allowed one to duplicate the original phonorecord and sell copies of it with impunity, provided that the copier duly filed notice and paid his fees.

He argued this because: 1) the law left the sound recording aspect federally unprotected; 2) copying, being an identical use, was about as “similar” as one could get; and 3) the law was intended to protect the interest of composers, not artists, and it made no difference to the composer if he received his two cents a copy from Victor or Cheapco Records. While a copier always faced the threat of prosecution under a state law, such as California statute 653h in the Goldstein Supreme Court case, a copier who scrupulously did his paperwork and paid his royalties was, under Nimmer’s theory, beyond the reach of federal law.

There were a plethora of lawsuits between 1972 and 1975 that fit these facts. They ultimately resolved down to four federal circuit court cases originating in New Jersey, Alabama, California, and Oklahoma. In every instance the trial court agreed with Nimmer. In all four the circuit court reversed, finding infringement had occurred, and in each there was a (usually vociferous) dissent. The majority’s reasoning in all four was roughly the same, and was based in the 1912 case, Aeolian v. Royal Music, the one in which Royal had taken out a mechanical reproduction license with composer, then used Aeolian’s piano roll of the same song (they also had a license) to make their punching matrix rather than prepare one of their own from scratch. Back then, the Supreme Court held that Aeolian’s licensee-licensor relationship with the composer meant that harming Aeolian was tantamount to harming the composer. The implication was that licensing a composition protected the exclusivity of the licensee’s sound recording.

The dissents all pointed to the 1972 copyright revisions, which had started to allow the separate registration of sound recordings partially to prevent such abuse. The legislative report for the 1972 bill noted that “If unauthorized producers pay the statutory mechanical royalty required by the Copyright Act for the use of copyrighted music there is no Federal remedy currently available,” and that if record duplicators “satisfy the claim of the owner of the musical copyright they can and do engage in widespread unauthorized reproduction of phonograph and tapes without violating Federal copyright law.” But then Congress had changed the law only for post-1972 records. Thus, the dissenters argued, if Congress elected not to change the status of the older works, that must indicate it wanted to rely on state-law enforcement. Frankly, it was a strong argument.

The 1972 revisions also changed another provision. In addition to the existing civil penalties for copyright infringement, Congress added the possibility of criminal prosecution for “willful infringement for profit.” A month after the last of the four mechanical royalty cases concluded, the Department of Justice announced that it would began prosecuting music piracy, including pre-1972 recordings. Between 1975 and 1985, the DOJ went after music duplicators who “abused” their compulsory reproduction licenses by duplicating sound recordings, even though duplicating pre-1972 recordings didn’t violate federal law. In 1985 the Department discontinued this policy for pre-1972 recordings, determining that it had insufficient jurisdiction.

To be continued…