BY:Neil J. Rosini, Michael I. Ruddell
(Originally published in the Entertainment Law column in the New York Law Journal on Friday, October 25, 2013)
Recordings of speech, musical instruments, bird calls, or any other sounds created before February 15, 1972 are treated very differently from other recorded sounds under United States law. Although the technology of sound recordings originated in the mid-nineteenth century, it advanced famously with Edison’s invention of the phonograph. Their numbers swelled across decades of ragtime and jazz, classical music, blues and gospel, country and folk music, oral histories and radio programs. They encompassed best-selling recordings of Benny Goodman, Elvis, and the Beatles. And the last recording in this category was made during the week that “Let’s Stay Together” by Al Green was the Billboard Hot 100 number-one single.
Each of the fifty states is free to apply its own rules to the protection of sound recordings made before February 15, 1972 (often called “pre-1972 sound recordings” for convenience), and they may continue to do so for the next 54 years. As a consequence, the scope of protection for pre-1972 sound recordings is inconsistent from state to state, often vague, and sometimes difficult to discern. In contrast, sound recordings made on and after February 15, 1972 are governed by the U.S. Copyright Act, which imposes uniform treatment nationwide. The discrepancy is explained by the fact that Congress never saw fit to bring domestic pre-1972 sound recordings within the scope of federal copyright protection. As a result, online radio stations, documentary film makers, archivists and others who copy, publicly perform, excerpt, or adapt them, are exposed to uncertainty and confusion.
The history of pre-1972 sound recordings was traced at length in Capitol Records, Inc. v. Naxos of America, Inc.,  a 2005 opinion by the New York State Court of Appeals that clarified New York State’s position on their distinct status. It was reviewed in detail in a 2011 report by the United States Copyright Office (referred to below as the “2011 Report”), which recommends adding pre-1972 sound recordings to the system of federal copyright. And it stands to be revisited again and again, particularly in the context of digital media — as in a lawsuit recently filed against the online streaming service Sirius XM by five major record labels and another by SoundExchange, an organization authorized to collect and distribute digital performance royalties only for sound recordings protected by U.S. copyright.  Both disputes illustrate difficulties encountered by digital services in using pre-1972 sound recordings that lie apart from federal copyright.
In this article, we will look at how pre-1972 sound recordings came to receive special treatment and some of its practical effects.
State law protection
Instead of federal copyright protection, pre-1972 sound recordings are protected by a patchwork of state criminal laws, civil statutes and common law, such as common law copyright — which is the protection historically provided by state law to unpublished works of authorship — and unfair competition principles. These forms of protection can vary substantially from state to state and lack the uniform treatment given to later sound recordings by federal copyright. The U.S. Copyright Act allows states to continue to protect pre-1972 sound recordings until February 15, 2067; which is equivalent to a full 95-year term of federal copyright protection measured from 1972. Only then will state protection be preempted by federal law and pre-1972 sound recordings enter the public domain. In the meanwhile, there is virtually no public domain in the U.S. for sound recordings.
To put this in perspective, compare the term of copyright of a musical composition published in 1922 and a sound recording of a performance of that composition made in the same year. The musical composition entered the public domain in 1997. The sound recording won’t enter the public domain until 70 years later – the same year that sound recordings made between February 15 and December 31, 1972 will do so.
How did this happen? As noted in Naxos, Congress declined to include sound recordings within the scope of the Copyright Act of 1909 because the U.S. Supreme Court “had declared that player piano rolls and, by implication, sound recordings could not be ‘published’ (i.e., read by a person) under federal law.” This did not affect, however, protection under state law.
Congress finally brought sound recordings under the dome of federal copyright protection through the Sound Recording Amendment passed on November 15, 1971, when audiotape recorders that allowed unauthorized distribution on a commercial scale were becoming popular. Although its legislative intent was to stem the tide of piracy by improving legal remedies, Congress chose to draw the line at February 15, 1972 and left out sound recordings fixed before that date. The issue was revived before enactment of the 1976 Copyright Act in which Congress eliminated state law protection for other types of copyrightable works. The 2011 Report poses the “interesting question” of why Congress failed to incorporate pre-1972 sound recordings into the federal statute at that time. But that question still gnaws because “neither the stakeholders nor the Copyright Office have an answer to it.”
Such artifacts of copyright history have been considered in a number of cases in which defendants attempted – usually without success — to fit the square pegs of pre-1972 sound recordings into the round holes of federal copyright principles. The Naxoscase, in which the New York Court of Appeals left no doubt as to the duration of protection for pre-1972 sound recordings in New York, is one of them.
The Naxos Decision
Considered the “most notable case in recent years involving pre-1972 sound recordings, ” Naxos involved a dispute between two music labels over recordings of classical music performances by Pablo Casals, Edwin Fischer and Yehudi Menuhin made in the United Kingdom during the 1930s. Naxos of America took original shellac records, remastered them in a “multistep restoration process,” and sold them as compact discs. Capitol Records, which had an exclusive license to exploit those recordings in the United States, also had remastered them and issued its own CDs.
Capitol brought an infringement action against Naxos in the Southern District of New York based on the law of New York, including common law copyright and unfair competition. The district court found that Capitol’s intellectual property rights in the recordings in the U.S. expired along with copyright protection in the United Kingdom. As for the unfair competition claim, it held that public policy favored the preservation and “redissemination” of classical performances and that Naxos had not engaged in the type of bad faith needed to sustain that cause of action. Moreover, rather than a “duplicate” or “imitation” of the original recordings with their obsolete format and “numerous sound imperfections,” Naxos’s records were found to be “an entirely new and commercially viable product.”. Naxos won summary judgment.
The decision was appealed to the Second Circuit, which having observed that “it is entirely up to New York to determine the scope of its common law copyright with respect to pre-1972 recordings,” certified three questions of state law to the New York Court of Appeals. They were whether expiration of the term of protection in the country of origin terminated common law copyright in New York; whether a cause of action for common law copyright infringement includes some or all of the elements of unfair competition; and whether a claim of common law copyright infringement is defeated by demonstration that a plaintiff’s work has little market value and the defendant’s work that uses components of the plaintiff’s work is to be regarded as a “new product.”
After delving into a lengthy examination of the roots, stem and branches of copyright protection starting with the introduction of the printing press in England in the 15th century, the New York Court of Appeals opined that “[i]n the absence of protective legislation, Congress intended that the owner of rights to a sound recording should rely on the ‘broad and flexible’ power of the common law to protect … property rights [in sound recordings] after public dissemination of the work.” The court also observed that although “publication” through the distribution of copies ordinarily divested works of protection under common-law copyright, U.S. Supreme Court precedent established that the concept has no application to categories of works, like pre-1972 sound recordings, that lie outside the scope of federal protection, and there was no barrier to a state’s conferring lengthy copyright protection on a work not covered under federal copyright law.
Accordingly, the court held that New York was entitled to adapt the meaning of publication for its own purposes and protect pre-1972 sound recordings through common law copyright. Answering the certified questions, it also held that nothing in federal statutory or constitutional law denied Capitol enforceable rights simply because the recordings had entered the public domain in the United Kingdom; that unfair competition requires “some type of malicious intent or bad faith” and competition in the marketplace (or similar actions designed for commercial benefit), but a common-law copyright claim does not; and thirdly, that neither the popularity or size of the market for a product nor “’new product’ analysis” would stand in the way of Capitol’s state common-law copyright infringement claim, to the extent Naxos used “original elements of the protected performances.”
Other Effects of Outlier Status
Apart from enjoying a distinct and usually lengthier term of protection compared to what the Copyright Act provides, pre-1972 sound recordings are unaffected by other Copyright Act provisions. Some of them are intended to benefit the owner of the work and others intended to benefit society, including: section 106(6) (public performance right for digital audio transmissions), section 107 (fair use), section 108 (certain reproduction and distribution by libraries and archives), section 110 (exemption for certain performances and displays), section 111 (statutory license for cable retransmissions of primary transmissions), section 112 (ephemeral recordings by broadcasters and transmitting organizations), section 114 (statutory license for certain transmissions and exemptions for certain other transmissions), section 512 (safe harbor for Internet service providers), Chapter 10 (digital audio recording devices), and Chapter 12 (copyright protection and management systems).
This disconnect between legal treatment given pre-1972 sound recordings and those recorded on or after February 15, 1972, can be particularly troublesome in the digital sphere. For example, libraries and archives with historic recordings cannot take advantage of federal copyright provisions that permit dissemination without permission from their copyright owners, and their digital preservation efforts also are affected.  Online service providers cannot depend on the DMCA’s safe harbors. And digital music streaming services cannot avail themselves of the statutory license and royalty payment mechanism through SoundExchange that facilitate use of sound recordings within the federal copyright scheme.
A case in point is the Sirius XM litigation brought by the record labels. The plaintiffs allege that Sirius XM publicly performs on its streaming service thousands of their pre-1972 recordings but “refuses to seek authorization from [p]laintiffs or pay any royalties or other compensation” in contrast to its treatment of post-72 sound recordings that are federally protected. SoundExchange also is unhappy with Sirius XM; it alleges in a separate action that the streaming service improperly reduced its calculation of royalties due to SoundExchange for post-1972 works in part by an amount attributable to performances of pre-1972 sound recordings. A single licensing and payment scheme for all sound recordings might have avoided both disputes.
In its 2011 Report, the Copyright Office concluded that pre-1972 sound recordings should be made subject to all of the rights, limitations and exceptions that apply to other sound recordings under federal copyright law, with some provisos to smooth the transition. It observed that doing so would complete the work Congress began in 1976 — when it brought most works protected by state common law copyright into the federal statutory fold — and improve certainty and consistency. It stated that federalization would best serve the interest of libraries, archives and others in preserving old sound recordings and in increasing their availability to the public. The Copyright Office did not, however, determine that the term of protection for pre-1972 sound recordings needed to be the same as that of post-1972 works; in many instances, should Congress act on its recommendations, that term still would endure until 2067.
 The term “sound recordings” refers to audio-only works, not motion picture soundtracks, which constitute a separate category that is solely subject to the federal copyright system no matter when created.
 Certain pre-1972 sound recordings of foreign origin were given U.S. federal copyright protection beginning in 1996 under the 1994 Uruguay Round Agreements Act in order to comply with U.S. treaty obligations.
 4 N.Y.3d 540 (2005).
 “Federal Copyright Protection for Pre-1972 Sound Recordings,” United States Copyright Office, December 2011; it can be found at http://www.copyright.gov/docs/sound/pre-72-report.pdf.
 Capitol Records, LLC et al. v. Sirius XM Radio Inc., Superior Court, County of Los Angeles, Case No. BC520981, filed September 11, 2013.
 SoundExchange, Inc. v. Sirius XM Radio, Inc., D.C.D.C., Case No. 1:13-cv-01290-RJL, filed August 26, 2013.
 Of course, commercial sound recordings are in fact published (as defined in Section 101 of the Copyright Act) when copies are distributed to the public. But rather than let them fall into the public domain upon publication – in the absence of federal protection to replace that common law protection – some states like New York decided to sidestep for pre-1972 sound recordings the usual effects of publication, no matter how many copies are distributed. Other states, like California, protect published sound recordings under a different theory, such as unfair competition. Ironically, little state law is directed toward sound recordings that are actually unpublished. See 2011 Report at 30-31.
 17 U.S.C. §301(c).
 See the 2011 Report at 5, from which this example is taken.
 2011 Report at 5.
 2011 Report at 32.
 Goldstein v. California, 412 U.S. 546 (1973).
 See, 2011 Report at 54-55.
 The Copyright Office recommends special provisions to address ownership issues, term of protection, transition period, and registration.