Why The NY Court of Appeals Was Wrong Regarding Flo & Eddie

The New York (State) Court of Appeals (“COA”) recently issued an opinion on the question that had been certified to them from the Federal Second Circuit Court of Appeals, where the COA was asked to state whether New York common-law provides a right of public performance to sound recordings, and if it does, what the contours of that right are.  The case is captioned Flo & Eddie v. SiriusXM, and you can get the whole backstory here.

As folks who have been following my scholarship may know, I’ve been working on a extensive article on the problem of common-law copyright as applied to sound recordings in the 21st century for a few years now.  Due to a series of legal and legislative decisions in the first decade of the twentieth century, sound recordings had no protection under federal copyright law until a 1971 amendment, which applied only to sound recordings made February 15, or thereafter, leaving state common-law copyright as the main source of legal protection for sound recordings against unauthorized exploitation until that point.  Common-law copyright is limited to unpublished works, but a consensus emerged among the courts that a sound recording is unpublished for purposes of common-law copyright no matter how many copies of that recording are sold.

I completed a draft a few months ago (forthcoming and currently being edited by the University of Cincinnati Law Review – note that the draft online is still a bit rough), where I examined the question of whether common-law copyright includes an exclusive right to perform a work publicly, and whether that right is dependent on such a right existing at federal law.  I chose the 1880s as a period to study in detail, because it offers the most closely analogous period to the current situation in terms of the law – musical compositions did not have a performance right under federal law until 1897, just as sound recordings only have a limited performance right under federal law today.  I was curious as to whether courts found that unpublished musical works nonetheless had a performance right at common law before the 1897 federal amendment.  What I found was unanimous – a surprising number of both reported decisions and unreported dispositions where courts found that common-law provided a performance right to musical compositions, regardless of what federal law provided.

This result was even more remarkable considering that many of these works (mostly light opera) were by non-American composers, who were not eligible for any copyright protection whatsoever in the United States until 1891, and yet American Courts were not only protecting their unpublished works at common law, they were extending performance rights to their works that published musical works that had been registered for copyright did not receive.

Following that inquiry I then launched a broader study of common-law copyright more generally, and discovered that although common-law copyright often acts similarly to statutory copyright, it is different in many pertinent ways, all of which provide broader protection.  For instance, common-law copyright likely provides moral rights of attribution and integrity, which federal law only provides in a limited way under the Visual Artists Rights Act.

I was therefore disappointed to read the COA opinion.  Briefly, four Justices of the New York Court of Appeals held that New York common law does not provide a right of public performance to sound recordings.  One justice concurred, but would have held that there may be a performance right at common-law regarding “on demand” services like Spotify.  Two justices dissented, stating they would have recognized a performance right in sound recordings at common-law.

The majority opinion of the Court of Appeals speaks for itself, but the crux of the opinion is the question as to why this issue is only being raised in 2016, when the issue of performance rights in sound recordings could have been raised for almost a century.  However, as the opinion tacitly acknowledges, rightsholders did attempt to assert performance rights at common law during the latter part of the 1930s through 1940, when performers and radio were locked in a bitter struggle over the use of recordings instead of live musicians for radio broadcast.  In 1937 the Pennsylvania Supreme Court enjoined a radio station performing sound recordings created by the plaintiff.  However, three years later the Second Circuit Court of Appeals, in an opinion in RCA v. Whiteman by the famed Judge Learned Hand, held that any common-law rights in the sound recording ended when it was sold.

However, fifteen years later in 1955, the Second Circuit overruled Whiteman, and held that sale of records does not constitute a publication that destroys a work’s rights at common-law in the decision of Capitol v. Mercury.   The New York Court of Appeals unambiguously affirmed this holding regarding publication a half-century later, in 2005’s Capitol v. Naxos decision.

When the question of whether common law protected sound recordings from unauthorized broadcast came before courts in the 1930s, no court held that a work was unpublished and yet lacked a performance right – either a sound recording was unpublished and thus protected from unauthorized broadcast, or it was published and could be broadcast freely, assuming royalties were paid to the composer under federal law.1

To put this history another way, when recording artists were opposed to their records being played on radio, they were active litigants to preserve these rights, until a 1940 ruling called these rights into question.  By the time that ruling was reversed in 1955, recording artists were desperate to get radio airplay, and the idea of suing radio stations for playing music without paying additional royalties in the era of payola was simply asinine.  It was only when Sirius and Pandora stopped paying royalties on pre-1972 sound recordings circa 2012 that the lawsuits began.  Common-law copyright has always had public performance as part of its bundle of rights, regardless of what federal law provides, and failure to litigate when it would be contrary to good business does not destroy that right.

In search of support for its conclusion that common law does not include a performance right for sound recordings, the Court of Appeals attempts to argue that Whiteman remains good law regarding performance rights, and was only modified by Mercury to protect reproduction of records.  However this attempted hybrid of these cases requires a willful blindness of what Whiteman actually says.  The Whiteman case analyzes common law rights from the perspective of whether or not they exist, and having found that the commercial sale of the records constituted publication, determined that no rights existed at common law.  The Whiteman case makes no effort to split up the bundle of rights contained in common-law copyright, and makes no indication that performance might be a different question from reproduction at common law.  2  As the New York Court of Appeals expressly rejected that approach to publication in Naxos, following its rejection by the Second Circuit a half century earlier, it is unclear what relevance Whiteman has anymore.

Indeed, the majority opinion of the COA is unprecedented – for the first time I have seen a Court has found a major limitation to the protections granted by common-law copyright.  Looking at the underlying nature of common-law copyright, such a holding is surprising.  As a doctrine focused on pre-publication protection for works, the idea that they only have protection against duplication makes precious little sense.  As we have seen many times, playing a leaked rough cut of a song on the radio on the radio is deeply problematic.  Admittedly, the idea that sound recordings are not published even after they have been sold commercially is the most problematic aspect of the common-law copyright doctrine for sound recordings, but that is not at issue in this case, because the COA has unambiguously recognized this legal fiction.  Legally, playing a commercially sold pre-1972 sound recording on Sirius is no different from playing a studio bootleg – either way you’re infringing rights absent an agreement with the owner of the sound recording common law rights.

One other thing, acknowledged by the COA, is that this decision creates a split with Pennsylvania, whose common law has recognized a common-law performance right since 1937.3  It is difficult to predict what complications will arise from this, but the thought of fifty states with different rules for public performance of sound recordings makes the federalization of pre-1972 sound recordings recommended by the Copyright Office sound even more tempting.

This is a complicated issue, and I’ve simplified a number of things (explained at greater length in the article draft) for purposes of writing a readable blog post.  If people would like clarification on anything, I’d be happy to provide it in the comments.

  1. In addition to the Pennsylvania and New York cases, a North Carolina case from 1939 held substantially along the lines of the Pennsylvania case.
  2.  Whiteman does discuss whether language printed on the record that it may not be played on the radio is effective as an equitable servitude, but this is a different question from whether common-law copyright limits play on the radio, which would be effective regardless of whether such language was printed on the record
  3. I’ve wondered why Flo & Eddie didn’t attempt to find a plaintiff to bring suit in Pennsylvania – it would have been the most direct option.

Author: Zvi S. Rosen

Lawyer and sometimes academic. I've written a fair deal about the evolution of intellectual property law into its present form, this blog is a way to share things that don't fit into a full-length article.

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