Pattishall IP Blog

October 2, 2014

Not Quite “Happy Together” – Recording Industry Scores Significant Victory in First Major Pre-1972 Sound Recordings Performance Rights Decision

Filed under: Copyright, Internet, Litigation — Tags: , , , , , , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 9:40 am

by Jason Koransky, Associate

When Sirius XM broadcasts “Happy Together,” “It Ain’t Me Babe,” and other hit recordings from The Turtles through its satellite and Internet radio services, it infringes the copyrights to these recordings, according to a court in the Central District of California.

In an order issued September 22, 2014, in Flo & Eddie Inc. v. Sirius XM Inc., 2:13-cv-05693 (C.D. California: Public performances of pre-1972 sound recordings protected by California copyright law)[1], the record industry scored a significant victory in the first major court ruling on the issue of state copyright protection for public performances of pre-1972 sound recordings. The court granted Flo & Eddie summary judgment on its claim that Sirius’ unlicensed public performances of its sound recordings violated California Civil Code § 980(a)(2), the section in California’s copyright statute that applies to pre-1972 sound recordings. Flo & Eddie is the corporation owned and operated by Howard Kaylan and Mark Volman, founding members and the lead singer and guitarist, respectively, of the 1960s pop group The Turtles. Because the case involves only California state law, however, the court’s ruling is limited in scope to public performances of these recordings in the state of California.

This case is one of a series of lawsuits that seek royalties for public performances by new media music services such as Sirius XM and Pandora of sound recordings created before February 15, 1972, based on the argument that state law protects these recordings from such unlicensed uses. While music compositions have long enjoyed copyright protection under U.S. copyright law, only in 1972 did Congress extend copyright protection to sound recordings. Individual states, however, had enacted their own copyright statutes, which co-existed with the federal Copyright Act until the enactment of the 1976 Copyright Revision Act, which preempted these state laws. The 1976 federal law, however, expressly carved out a preemption exemption to sound recordings created before February 15, 1972. See 17 U.S.C. § 301(c) (“With respect to sound recordings fixed before February 15, 1972, any rights or remedies under the common law or statutes of any State shall not be annulled or limited by this title until February 15, 2067.”)

In 1995, Congress expanded the rights attached to a sound recording when it passed the Digital Performance Right in Sound Recordings Act, which added digital audio transmissions of sound recordings to the exclusive bundle of rights a copyright grants. See 17 U.S.C. § 106(6). SoundExchange has emerged as the performance rights organization that collects the compulsory license fees that non-interactive digital music services—including Sirius XM—pay to perform these recordings.

But Sirius did not pay, and SoundExchange did not attempt to collect, royalties for pre-1972 recordings, as these do not have federal copyright protection. The digital public performance rights that owners of these sound recordings possess have existed in a sort of legal limbo based on the interpretations of state copyright statutes. Flo & Eddie owns the rights to The Turtles’ recordings, and tested these legal waters by suing Sirius for violating California copyright law—and bringing claims for unfair competition, conversion, and misappropriation—for broadcasting its sound recordings.

The case boiled down to statutory construction. The applicable statute, California Civil Code § 980(a)(2), reads (with emphasis added):

The author of an original work of authorship consisting of a sound recording initially fixed prior to February 15, 1972, has an exclusive ownership therein until February 15, 2047, as against all persons except one who independently makes or duplicates another sound recording that does not directly or indirectly recapture the actual sounds fixed in such prior recording, but consists entirely of an independent fixation of other sounds, even though such sounds imitate or simulate the sounds contained in the prior sound recording.

Flo & Eddie argued that “exclusive ownership” of sound recordings encompasses the right to control public performances of these recordings. Sirius argued that because the statute did not expressly specify the public performance right, it was not included in the “exclusive ownership” of a recording. Based on the plain language of the statute, its legislative history, and two court decisions which implied that the California statute granted the owner of a sound recording the exclusive right to control public performances of its recordings, the court agreed with Flo & Eddie’s interpretation. As such, because no dispute existed that Sirius had broadcast The Turtles’ recordings without a license, the court granted Flo & Eddie’s summary judgment motion that these public performances infringed their sound recording copyrights. The court also granted Flo & Eddie summary judgment on its unfair competition, conversion, and misappropriation claims.

This case has the potential to create significant revenue streams for major record labels and other owners of pre-1972 sound recordings. Conversely, it presents new licensing and business challenges to Internet, satellite, and other new media non-interactive music service providers. Of course, a treasure trove of artistically and commercially successful music was recorded before 1972—think Elvis, The Beatles, Jimi Hendrix, Miles Davis, Duke Ellington … the list could go on and on. A huge void would exist if Sirius simply stopped broadcasting these recordings. As such, the full implications of the decision in the Flo & Eddie case may take years to emerge, especially considering that the decision applies only in California. For example, a court interpreting another state’s law could issue an opposite decision. But in practicality, Sirius could most likely not block its broadcasts from California. So if this decision is affirmed on appeal, new licensing requirements will likely emerge for digital public performances of pre-1972 sound recordings.

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Jason Koransky is an associate with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois. Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, trade secret and unfair competition trials and appeals, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues. Jason’s practice focuses on trademark, trade dress, copyright and false advertising litigation, as well as domestic and international trademark prosecution and counseling. He is co-author of the book Band Law for Bands, published by the Chicago-based Lawyers for the Creative Arts.

[1] http://www.soundexchange.com/wp-content/uploads/2014/09/Flo-Eddie-v.-Sirius-XM-Order-on-MSJ.pdf

 

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June 26, 2014

Aereo’s Internet-Based Television Streaming Services May Be Wizardry, But the Supreme Court is in No Mood for Magic

Filed under: Copyright, Internet, Litigation — Tags: , , , , , , , , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 12:17 pm

Ekhoff_Jessica_2 F LRby Jessica Ekhoff, Associate

Describing its Internet-based television streaming services, tech start-up Aereo proclaims, “It’s not magic. It’s wizardry.”[1] In yesterday’s 6-3 decision the Supreme Court disagreed, or at the very least, adopted a staunchly anti-wizardry stance.[2]

Justice Breyer, writing for the majority in American Broadcasting Cos. v. Aereo, Inc., characterized the issue before the Court as whether “Aereo, Inc., infringes this exclusive right [of public performance under §106(4) of the Copyright Act] by selling its subscribers a technologically complex service that allows them to watch television programs over the Internet at about the same time as the programs are broadcast over air.”[3] Despite Aereo’s self-description as a mere equipment supplier doing no “performing” of its own, the Court held in the affirmative.

The Court analyzed the issue in two parts: whether Aereo “performed” under the Copyright Act, and if so, whether the performance was “public.”

In concluding that Aereo did, in fact, perform under the Copyright Act, the majority of the Court turned to the 1976 amendments to the Act, which were adopted, in large part, to bring community antenna television, or CATV—the precursor to cable television—within the scope of the Act. CATV functioned by placing antennas on hills above cities, then using coaxial cables to carry the television signals received by the antennas into subscribers’ homes. CATV did not select which programs to carry, but rather served as a conduit for the transmission and amplification of television signals. Before the 1976 amendments, Supreme Court precedent considered CATV to be a passive equipment supplier that did not “perform” under the Act.[4] After the amendments, to “perform” an audiovisual work such as a television program meant “to show its images in any sequence or to make the sounds accompanying it audible.”[5] CATV thus “performed” the shows it transmitted because it both showed the television programs’ images to its subscribers, and made the accompanying sounds audible. Over a strong dissent authored by Justice Scalia[6], the majority found that, because its services were so similar to those once offered by CATV, Aereo also “performed” under the post-1976 definition of the term.[7]

Having determined that Aereo’s services constitute a performance under the Copyright Act, the Court next turned to the issue of whether those performances are public. Aereo argued its services do not constitute public performance because whenever a subscriber selects a program to watch, Aereo places a unique copy of the show in that subscriber’s folder on Aereo’s hard drive, which no one other than that subscriber can view. If another subscriber wants to watch the same show, she will receive her own copy of the program in her own folder from Aereo. The Court dismissed this argument, finding the “technological difference” inconsequential in light of Congress’s clear intent to bring anything analogous to CATV within the scope of the Copyright Act’s requirements. Under the post-1976 Act, an entity performs a copyrighted work publicly any time it “transmits” a performance. A performance is “transmitted” when it is communicated by any device or process beyond the place from which it is sent, whether the recipients receive the transmission at the same time and place, or at different times and places.[8] Aereo therefore publicly performs a copyrighted television program each time its system sends a copy of that program to a subscriber’s personal Aereo folder.

The majority characterized its holding as a “limited” one, and was careful to emphasize that its decision does not apply to other new technologies, such as cloud-based storage and remote storage DVRs. But with a slew of amici curiae predicting the decision could have a catastrophic impact on the tech industry, there are surely some who will take no comfort from the Court’s assurances. Aereo, unfortunately, may not have a spell to resurrect itself.

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Jessica Ekhoff is an associate with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois. Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, trade secret and unfair competition trials and appeals, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues. Jessica’s practice focuses on trademark, trade dress, copyright and false advertising litigation, as well as film clearance, media and entertainment, and brand management.

[1] https://www.aereo.com/about

[2] http://www.supremecourt.gov/opinions/13pdf/13-461_l537.pdf

[3] American Broadcasting Cos. v. Aereo, Inc., No. 13-461, slip op. at 1, 573 U.S. __ (2014).

[4] Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390 (1968); Teleprompter Corp. v. Columbia Broadcasting System, Inc., 415 U.S. 394 (1974).

[5] 17 U.S.C. § 101.

[6] Justice Scalia argues that Aereo does not “perform” because it is the subscriber, rather than Aereo, who selects the program she wishes to watch, which in turn activates the individual antennae Aereo has assigned to her for the purpose of viewing that program. This means it is the subscriber who is doing the performing, since she is the one rousing Aereo’s antennae from dormancy and calling up a specific program to watch. Justice Scalia went on to note that although he disagrees with the majority’s interpretation of “perform,” he agrees that Aereo’s activities ought not to be allowed, either because Aereo is secondarily liable for its subscribers’ infringement of the Networks’ performance rights, or because it is directly liable for violating the Networks’ reproduction rights. If future courts fail to find Aereo liable under either of those theories, Justice Scalia advocates relying on Congress to close the loophole. Slip Op. at 12.

[7] Slip Op. at 8.

[8] 17 U.S.C. § 101.

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April 29, 2014

Performance of Magic Trick Protected Under Copyright Law, Nevada District Court Holds

Filed under: Copyright, Litigation — Tags: , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 11:03 am

SIA-LRBy: Seth I. Appel, Associate

A renowned illusionist has achieved a very real victory in court. The U.S. District Court for the District of Nevada held that Teller’s performance of his Shadows magic trick is protected under copyright law, even though the magic trick itself is not. Teller v. Dogge, 110 USPQ2d 1302 (D. Nev. 2014).[1]

Teller – a well-known magician, best known as half of Penn & Teller – has performed Shadows for over three decades. This illusion involves a spotlight pointed at a vase containing a rose, projecting a shadow onto a screen as shown below:

Magic Trick-Teller Blog Post

Teller, wielding a large knife, slowly cuts the leaves and petals of the rose’s shadow on the screen. Meanwhile, the corresponding leaves and petals of the real rose fall to the ground.

Teller brought a lawsuit against Gerard Dogge, a Dutch performer who uploaded to YouTube two videos of himself performing a similar illusion, entitled The Rose and Her Shadow.

Dogge’s caption for the videos stated: “I’ve seen the great Penn & Teller performing a similar trick and now I’m very happy to share my version in a different and more impossible way with you.” Dogge admitted that he posted the videos in an attempt to sell the illusion’s secret.

The court last month court granted Teller’s motion for summary judgment on his copyright infringement claim, holding that Teller’s performance of Shadows is subject to copyright protection. While magic tricks are not protected under copyright law, the court explained, the Copyright Act protects “dramatic works” and “pantomimes.” 17 U.S.C. § 102(a). “The mere fact that a dramatic work or pantomime includes a magic trick, or even that a particular illusion is its central feature does not render it devoid of copyright protection,” the court found.

The court rejected Dogge’s argument that Teller had waived his copyright because his partner, Penn Jillette, had issued a challenge of sorts, publicly stating that “no one will ever figure out” Shadows. This statement, the court observed, “merely provokes others to unearth the secret, not perform the work.” And for copyright purposes, the secret behind the trick is insignificant: “the performance it is used for is everything.”

Having determined that Teller’s illusion merited copyright protection, the court had no trouble finding infringement. Applying the Ninth Circuit’s two-part analysis – an “extrinsic test” and an “intrinsic test” – the court found that Teller’s Shadows and Dogge’s The Rose and Her Shadow were substantially similar.

The court noted that the two parties’ illusions were “nearly identical twins,” even though their secrets may have been different.

In discerning substantial similarity, the court compares only the observable elements of the works in question. Therefore, whether Dogge uses Teller’s method, a technique known only by various holy men of the Himalayas, or even real magic is irrelevant, as the performances appear identical to an ordinary observer.

Last week the court set trial for June 2, 2014, to determine whether Dogge committed willful infringement and to decide Teller’s unfair competition claim.

In its summary judgment order, the court noted that the magic community has traditionally blackballed performers who reveal other magicians’ secrets. This case confirms that wronged magicians also may have another avenue for relief, in federal court.

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Seth I. Appel is an associate attorney at Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois.  Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, and unfair competition trials and appeals, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues.  Mr. Appel’s practice focuses on litigation, transactions, and counseling with respect to trademark, trade dress, copyright and Internet law.

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[1]http://scholar.google.com/scholar_case?case=12052870780115350990&q=teller+v+dogge&hl=en&as_sdt=400006.

 

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