Part 34

Capitol, of course, appealed. A year later, the Second Circuit Court of Appeals overturned the lower court’s decision. It held that while Judge Sweet correctly determined there was no applicable UK copyright, this did not fully answer the question of whether Capitol had grounds to sue Naxos under any American law. It agreed that there was no applicable federal copyright question, and also agreed that New York State’s Penal Law 275.00, its anti-music-piracy statute, was also inapplicable because it did not give the victims of music piracy a private right of action. That left only New York State common law.

Citing the footnote in the Goldstein Supreme Court case that gave states the green light to define “publication” however they wanted for pre-1972 phonorecords, the Second Circuit held that protection against copying fell within a state’s power, still ignoring Justice Berger’s admonishment that these powers only extended to copying carried out within its jurisdiction. However, the most significant point of law that the Second Circuit had to deal with was the expiration of the records’ UK copyrights. The court asserted that neither the Berne Convention nor the Universal Copyright Convention applied to sound recordings, and the treaty that did apply, the Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication, did not apply to phonorecords made before March 10, 1974. If any of these three had held, the “rule of the shorter term” would have applied, meaning that the American copyright would have expired when the home nation copyright expired. There was no guiding precedent as to whether New York State common-law copyright contained a “rule of the shorter term.” Therefore, it was necessary to refer the case to New York’s highest court (called, confusingly, the “Court of Appeals”), a process called “certification.”

Judge Victoria Graffeo’s opinion was an extended treatise on the 400-year history of common-law copyright. However, in making a few of her theoretical points, she overlooked or neglected some basic judicial mechanics. She stated that Capitol’s complaint was based on New York law because that was the situs of the alleged infringement. However, as previously discussed, Capitol never asserted a location-specific jurisdiction. They always claimed jurisdiction based on federal diversity, and never, in any brief submitted to the New York Court of Appears, did they claim that the alleged copying or distribution ever took place in New York. They implied it many times, but a careful reading of the briefs shows that they never came out and stated this.

Judge Graffeo started her analysis with the Statute of Anne. It was a fairly straightforward textbook rendition until she got to the 1909 White-Smith piano roll case. At that point she backtracked and stated that “Despite the fact that sound recordings could not be “published” under federal law they were eligible for state common-law protection.” In support of this, she did not cite White-Smith itself, but Justice Thompson’s dissent Wheaton v. Peters.

Wheaton v. Peters is cited only once in White-Smith itself, for the unremarkable proposition that there is no common-law federal copyright. Understandable, given that Wheaton v. Peters was decided three-quarters of a century before the first phonograph was sold. However, Thompson’s dissent in Wheaton v. Peters, which is far longer than the main opinion, is the principal basis for the “cupcake theory”: that federal copyrights are merely a set of rights that are slathered on top the more important state common-law copyrights, and that when federal copyrights expire, the perpetual state common-law copyrights remain.

To be continued…