Part 35

Judge Graffeo then used Wheaton v. Peters as a springboard for a lengthy analysis that has been heavily criticized because it bounced indiscriminately back and forth between cases dealing with two different issues: does the issuance (“publication”) of phonorecords under the 1909-1976 Copyright Act divest the owner’s right to the sound recording; and, does it divest the owner’s right to the composition contained on the recording? As we have seen in the previous installments of this blog, these are very different issues, each with their own history and law, but Graffeo mashed them together indiscriminately.

The Fred Waring and Paul Whiteman cases from the 1930s, the Metropolitan Opera v. Wagner-Nichols case (1950), Capitol Records v. Mercury Records (1955), Goldstein (1973), Rosette v. Rainbow Records (1976), and even the Z. Z. Top and Rolling Stones cases from the 1990s — Graffeo threw them all into the rhetorical pot. It seemed at first reading to create a nonsensical mishmash. But if you dig deeper, you can discern in Judge Graffeo’s legal ping-pong a common theme:

State common-law copyright protection can continue beyond the technical definition of publication in the absence of contrary statutory authority . . .because the federal Copyright Act did not protect musical recordings, state common-law could supply perpetual copyright protection to recordings without regard to the limitations of “publication” under the federal act . . . until 2067, no federal or state statutory impediment constricts this common-law durational component for pre-1972 sound recordings.

This meant that no “rule of the shorter term” applied. Regardless of when a work’s copyright expires in its home nation, its copyright is perpetual in the State of New York. I have argued previously that given the convoluted language of section 301 of the 1976 Copyright Act, there is some question as to what exactly will happen to the legal status of pre-1972 phonorecords on February 15, 2067. I also looked for some hint in this case that Judge Graffeo thinks that New York common-law copyright will outlast the federalization of pre-1972 phono records. But, her language is pretty ironclad; she has no doubt that they will pass out of the control of state law on February 15, 2067, unless Congress changes the date:

With the 1971, 1976 and subsequent congressional amendments to the federal Copyright Act, New York common law protection has been abrogated . . . state common-law copyright protection is no longer perpetual for sound recordings not covered by the federal act . . .The musical recordings at issue in the case, created before February 15, 1972, are therefore entitled to copyright protection under New York common-law until the effective date of federal preemption—February 15, 2067.

And finally, tucked in at the very end of her opinion, was an admission that “New York provides common-law copyright protection to sound recordings not covered by the federal Copyright Act, regardless of the public domain status in the country of origin, if the alleged act of infringement occurred in New York” [emphasis added]. In addition:

A copyright infringement cause of action in New York consists of two elements: (1) the existence of a valid copyright; and (2) unauthorized reproduction of the work protected by the copyright. 

You can read Capitol Records v. Naxos of America up, down, forwards and backwards, and you will never read a flat-out conclusion that Naxos committed copyright infringement. And the reason I believe you won’t is because they didn’t. They did not reproduce any of the CDs that were the subject of the controversy in the State of New York. So, in accordance with the 1973 Goldstein decision, Naxos could not have violated any New York music piracy or state copyright law. Moreover, they did not distribute CDs in the state knowing they had been reproduced without the permission of a legitimate owner.

From the perspective of Judge Graffeo, this was never a case about what Naxos did or didn’t do—that was irrelevant. This was a case about power. It was about who got to determine whether something was “published” or not: the state of New York or the federal government. Moreover, it will be New York’s law, not the federal government’s, that will be compared with foreign law to determine how ownership and duration should be awarded to a foreign-origin work. In essence, in matters of common-law copyright, New York will act as its own sovereign nation.

Will Capitol Records v. Naxos of America change the legal landscape? I doubt it. I don’t see it being used much as legal precedent, even in New York. I think Capitol v. Naxos was a lot of smoke and noise that didn’t really stand for much—after all, it never reached a conclusion on the core issue of infringement. The only thing you can take from it is this: don’t press your reissue CDs in the State of New York. And, it would probably be a pretty good idea to avoid selling them there as well.

Finis…

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…

Part 33

Just where did this alleged infringement take place? Like California’s statute 653h, New York has an anti-music piracy law, located in Article 275 (275.00-.45) of the penal code. At the time, Section 275.05 defined the crime of “manufacture of unauthorized recording in the second degree” as applying to one who:

1.   knowingly, and without the consent of the owner, transfers or causes to be transferred any sound recording, with the intent to rent or sell, or cause to be rented or sold for profit, such article to which such sound recording was transferred, or

2.   transports within this state, for commercial advantage or private financial gain, a recording, knowing that the sounds have been reproduced or transferred without the consent of the owner; provided however, that this section hall only apply to sound recordings initially fixed prior to February 15, 1972.

“Owner” was defined as “the person who owns, or has the exclusive license in the United States to distribute to the public copies of the sounds fixed in a master phonograph record [or other format].”

The statute only assessed criminal penalties; it did not create a private right of action to recover damages. But in its brief before the New York State Court of Appeals, Capitol Records asserted that it was entitled to civil relief under “common law copyright infringement.” To define what this was, it pointed to the above criminal statute and two civil cases, Metropolitan Opera v. Wagner-Nichols Music (1950) and Capitol Records v. Greatest Records (1964). Metropolitan Opera was the case where the opera company sued over recordings lifted from the Met’s Saturday afternoon radio broadcasts; Capitol v. Greatest involved the pirated Beatles singles and album excerpts.

The problem is that all three basically say the same thing: copyright infringement is the unauthorized manufacture or distribution of protected sound recordings within the state of New York. But this element was never established. Keep in mind that the CDs were manufactured in Nashville. Instead, Capitol’s lawyers implied, but never forthrightly stated, that the copying and distribution of the disputed recordings anywhere in the United States constituted common-law copyright infringement. That flatly contradicts what Chief Justice Berger said in the Goldstein Supreme Court case: “a copyright granted by a particular State has effect only within its boundaries . . .individuals who wish to purchase a copy of a work protected in their state will be able to buy unauthorized copies in other States where no protection exists.”

So not only am I left scratching my head about what the proper venue for this case should have been, I have reservations about whether the federal district court for the southern district of New York really had jurisdiction to hear it.

The parties submitted their pleadings, and as is typical in such litigation, Naxos tendered a motion to dismiss and Capital replied with a motion to winnow out some of Naxos’s less plausible affirmative defenses. Judge Sweet, on his own, converted Naxos’s motion to a full-blown motion for summary judgment. This was the equivalent of him saying that “I already have a sufficient factual record to fully decide the issues in the case.” This is polite legalese for “I’ve already seen enough to convince me that Capitol’s case is a hopeless dog.”

The core of Judge Sweet’s argument was simple. The original recordings were British. The last United Kingdom copyright had expired in 1986. In fact, EMI had told Richard Warren, Curator of Yale’s Historical Sound Recordings Collection in a letter that it no longer held an enforceable UK copyright to recordings made before 1957. Naxos never attempted to “palm off” the recordings as anything other than what they were. Thus, no tortuous activity occurred. Summary judgment in favor of Naxos. Case over.

To be continued…