Happy Together Once More: The California Supreme Court and Congress Take Up The Question of Copyright in Old Music Recordings

Federal copyright law doesn’t give artists and labels the right to control most ways music recordings are played in public. That’s how FM and AM radio stations work. That’s how stores playing soothing “don’t you want to buy something?” music work. And that’s how restaurants playing music at an uncomfortably loud decibel so you can’t talk to your friends work. But because older recordings aren’t covered by these laws, some copyright holders keep trying to use them to gain more control over how their recordings are played – something they’ve never been able to do.

EFF just weighed in on one of these cases, in the California Supreme Court. In Flo & Eddie v. Pandora Media, we argued that state law, which governs sound recordings made before 1972, doesn’t include a right to control public performances of sound recordings, including radio play. If this sounds familiar, that’s because this fight has played out across the country over the past three years. The high courts of New York and Florida have already ruled that their own state laws don’t let pre-1972 copyright holders control public performances of their sound recordings.

These cases stem from a broader debate about copyright in sound recordings. Although federal copyrights in sound recordings cover reproduction and distribution, they don’t include a general right to control public performances, except for “digital audio transmissions” like Internet and satellite radio. That’s why AM and FM radio stations, and businesses like restaurants that play music, have never had to pay record labels or recording artists, nor ask their permission. (Songwriters and music publishers do get paid for public performances). But recordings made before February 15, 1972 aren’t covered by federal law at all. Instead, they fall under a patchwork of pre-digital state laws and court decisions. The labels have tried for many decades to win a performance right, but so far neither Congress nor state legislatures have created one.

The strange status of pre-1972 recordings created an opportunity for recording artists and labels to try getting from the courts what Congress has never given them: a right to control public performances. Flo & Eddie is a company owned by two members of the 1960s rock band the Turtles, famous for their hit “Happy Together.” Flo & Eddie sued Pandora and Sirius XM under state laws across the country, claiming they should not be allowed to play Turtles tracks and other pre-1972 recordings without permission and payment, even though that’s what people had been doing for over 50 years.

EFF filed amicus briefs in each of these cases. We argued that copyright holders should only be given new rights when necessary to encourage new creativity. And we argued that creating those rights is a job for legislatures, not courts. We also pointed out that new rights under copyright (like the digital public performance right Congress created in 1996) are always coupled with limitations. A public performance right under state law, created by courts without the limitations and exceptions that exist in federal law, would create unpredictable legal risks for digital music services, broadcasters, and even restaurants.

Creating a patchwork of new rights through state court decisions would also make complying with copyright law complex and risky for businesses that use music. Pandora and Sirius XM, major digital music businesses with a nationwide reach, could actually win by losing this case. They have the resources and expertise to negotiate licenses with thousands of copyright holders in classic music recordings, while startups and smaller competitors may not. In fact, Sirius XM and Pandora are already making these kinds of licenses through class action settlements and private agreements. In our amicus brief, we pointed out to the California Supreme Court that uniform rules give competition a chance to thrive.

The California case is particularly worrisome, because the decision on appeal, which came from the federal courts to the state supreme court through a “certified question” process, was shockingly broad. The federal district court in Los Angeles ruled that the state “record piracy” statute covered not only public performances of sound recordings but every other right that those copyright owners could possibly have—with a single exception for artists making cover recordings. On its face, that decision seemed to eliminate the fair use defense, the first sale limitation, and other vital limits on copyright.

Since two other state high courts have already ruled that their laws don’t include a public performance right in sound recordings, we’re hopeful that California’s Supreme Court will follow suit.

A final loss for Flo & Eddie would not be the end of this story, because Congress has already taken up the pre-1972 recordings issue. A bill, the CLASSICS Act [PDF], would create a federal public performance right for those recordings, even though they are otherwise governed by state law until 2067. The new federal right would cover only “digital audio transmissions,” not traditional radio broadcasts, or playing music in restaurants and stores. And the bill explicitly applies fair use, the library and archive exceptions, and part of the Section 114 statutory license used by companies like Pandora and Sirius.

Copyright is supposed to provide an incentive for people to create new creative works. The CLASSICS Act doesn’t do that, because it doesn’t apply to new works. Rather, it takes away the public’s ability to perform decades-old, lawfully purchased recordings without permission, and gives control back to the copyright holders. Rather than benefiting the public, this bill is a subsidy to the record labels, and some artists and investors, who hold the rights in hit records from the 1960s and before.

On the other hand, this bill advances some of the goals that EFF has argued for in the Flo & Eddie lawsuits: making the law on performances of pre-1972 sound recordings uniform across the U.S., and making sure it includes robust exceptions and limitations. That will give new digital music businesses a chance to thrive, and help prevent lock-in of the current music giants.

If Congress needs to act at all, a better approach would be to put pre-1972 recordings fully under federal law, as the Copyright Office recommended in its 2011 report. Full federalization would make it easier for music businesses to operate across state lines, and reduce the risk of state-by-state legal opportunism by rightsholders like Flo & Eddie.

On the whole, the Flo & Eddie decisions and the CLASSICS Act are moving this obscure but important corner of copyright law in a positive direction. A win for Pandora in California, and amending the CLASSICS Act to add a complete federalization of copyright in sound recordings, would help even more.