Part 32

ITAR-TASS was a tortured-logic case twisted around to achieve a specific outcome: if the author of a foreign work claims protection in the United States under his home-nation’s copyright laws via the Berne Convention, and alleges infringement in the United States, his case will be considered under United States law. In other words, although the Berne language claims he is “entitled to the same copyright protection in other member states as in his home nation,” in the United States that means he will be “entitled to the same copyright protection as any other American author under similar circumstances.” The critical difference between Capitol v. Naxos and ITAR-TASS was that the doctrine was shifted from a conflict between foreign and American copyright law (ITAR-TASS) to a conflict between foreign and New York state law (Capitol v. Naxos).

Many of the facts in the case of Capitol Records, Inc. v. Naxos of America, Inc. have been touched on previously, but this is a good place to gather them together in one place. The dispute concerned a series of about ten classical music recordings made between 1931 and 1939 in England by the Gramophone Company. The artists included Yehudi Menuhin, Pablo Casals, and Edwin Fischer. Composers included Elgar, Max Bruch, J. S. Bach, and others. The Gramophone Company later became EMI, an affiliate of Capitol. Although the British copyrights for the last of these recordings expired in 1986, EMI asserted that its 1930’s contracts with the artists gave it “absolute, world-wide and perpetual” ownership of the recordings. Capitol licensed all the common-law copyrights in the recordings in America through a Matrix Exchange Agreement executed with EMI in 1996, ten years after the last British copyright expired.

Naxos began distributing the disputed recordings in 1999. It created them by dubbing the best available shellac copies. These turned out to be discs made in the U.S. in the 1930s by Victor under license to the Gramophone Company. Naxos then converted them into digital format using studio playback hardware and noise reduction software.

There are some aspects of the case that puzzle me to this day. The complaint was originally brought in the federal district court for the southern district of New York in diversity. It alleged unfair competition, misappropriation of property, unjust enrichment and common law copyright infringement. But normally, as we have discussed earlier, in a diversity action (a suit between parties from different states) the appropriate venue is the federal district court of the defendant’s home. That would be the middle district of Tennessee, because Naxos’s headquarters is the Nashville suburb of Franklin. However, there is an exception to the rule: a case may be brought in the venue most proximate to where the substance of the events giving rise to the cause of action occurred. As the Second Circuit Court later put it, everyone simply assumed that New York was the appropriate location because that was “the jurisdiction where the alleged infringement occurred.” Although I am not certain because I do not have all the information, it appears that Naxos’s lawyers did not vigorously contest the issue of inappropriate venue. If so, they blew the most important single issue in the case. Had this case been adjudicated in federal court in Tennessee, there would probably be nothing for me to write about today.

To be continued…