Further Thoughts on Infringement as Conversion

After my last post discussing the holding in Flo & Eddie v. Sirius XM that the defendant had converted the plaintiff’s property when it publicly performed its pre-1972 sound recordings without a license, someone asked me how that holding is reconcilable with the Supreme Court’s statement in Dowling v. United States that “interference with copyright does not easily equate with theft, conversion, or fraud.” My answer to that is two-fold: Dowling read into the National Stolen Property Act a physicality requirement that does not necessarily apply to the tort of conversion, and the fact that conversion claims can be preempted by the Copyright Act demonstrates that such claims do “easily equate” with infringement.1

Dowling sold bootleg recordings of Elvis Presley through the mail, and the issue before the Supreme Court was “whether phonorecords that include the performance of copyrighted musical compositions for the use of which no authorization has been sought nor royalties paid are consequently ‘stolen, converted or taken by fraud’” under Section 2314 of Title 18. The physical records themselves had been paid for by the defendant, but the performances recorded thereon had not. The Court said this wasn’t enough to bring it within Section 2314’s reach, since cases prosecuted under that statute “have always involved physical ‘goods, wares, [or] merchandise’ that have themselves been ‘stolen, converted or taken by fraud.’”

I think this makes sense: If I fill up my legally-bought iPhone with illegally-downloaded movies and songs, my iPhone doesn’t become stolen or converted property. The Court read Section 2314 to require that the physical goods transported across state lines be themselves stolen or converted. But I don’t think this holding is irreconcilable with the notion that infringement can be theft or conversion. My iPhone full of illicit downloads represents my theft or conversion of the victims’ intangible property rights, not of any material objects that may have belonged to the victims. And since those intangible rights have no physicality, they can’t be transported across state lines as required by Section 2314.

Generally speaking, Section 301 of the Copyright Act preempts state law claims that seek to vindicate legal or equitable rights that are equivalent to any of the exclusive rights in Section 106 for works that are copyrightable subject matter under Section 102 or Section 103. State law claims that are qualitatively different from a copyright infringement claim because they contain an extra element are not preempted. However, an element that goes to knowledge or intent is not an extra element that prevents preemption. Under this analysis, courts frequently find that state law claims for conversion are preempted under Section 301.

For example, take the case of Frontier Group v. Northwest Drafting & Design, where the plaintiff claimed that its ownership of certain architectural plans had been converted when the defendant used the plans to build a single-family residence. The court held that the plans were copyrightable subject matter under Section 102. Turning to whether the right asserted was equivalent to an exclusive right under Section 106, the court noted that the plaintiff did not seek the return of the physical plans. Instead, it sought monetary damages because the defendant had used the plans to build the residence, that is, the defendant had made a reproduction. Finding that there was no extra element alleged, the court held that the conversion claim was preempted by the Copyright Act.

Thus, the conversion claim was “easily equate[d]” with a claim for copyright infringement, and it was the act of making the copy that implicated the exclusive right to be vindicated. It should be noted, however, that there was no claim that the residence itself—that is, the copy—was converted property. Building the residence converted the plaintiff’s intangible right under Section 106, but the residence itself did not represent property that had been converted. In the same way, my iPhone full of illicit downloads is the product of my conversion of the victims’ exclusive rights, though my iPhone is not property that has been converted. And this same distinction applies to Dowling’s bootleg recordings of Elvis Presley.

The Dowling dissent faulted the majority’s reasoning:

The statutory terms at issue here, i.e., “stolen, converted or taken by fraud,” traditionally have been given broad scope by the courts. For example, in United States v. Turley, 352 U.S. 407, 77 S.Ct. 397, 1 L.Ed.2d 430 (1957), this Court held that the term “stolen” included all felonious takings with intent to deprive the owner of the rights and benefits of ownership, regardless of whether the theft would constitute larceny at common law. Id., at 417, 77 S.Ct., at 402. Similarly, in Morissette v. United States, 342 U.S. 246, 72 S.Ct. 240, 96 L.Ed. 288 (1952), the Court stated that conversion “may be consummated without any intent to keep and without any wrongful taking, where the initial possession by the converter was entirely lawful. Conversion may include misuse or abuse of property. It may reach use in an unauthorized manner or to an unauthorized extent of property placed in one’s custody for limited use.” Id., at 271–272, 72 S.Ct., at 254–255.

Dowling’s unauthorized duplication and commercial exploitation of the copyrighted performances were intended to gain for himself the rights and benefits lawfully reserved to the copyright owner. Under Turley, supra, his acts should be viewed as the theft of these performances. Likewise, Dowling’s acts constitute the unauthorized use of another’s property and are fairly cognizable as conversion under the Court’s definition in Morissette.

I agree with the dissent that Dowling’s acts constituted theft and conversion under those broad definitions; however, that wasn’t the precise question before the Court. The issue was whether the physical records—that is, the copies that resulted from that theft and conversion—were themselves stolen or converted property. As with my illicitly-filled iPhone and the illicitly-built residence in Frontier Group, Dowling’s creation of the copies converted intangible property, but the copies themselves were not tangible property that had been converted. Section 2314 explicitly requires that the physical property being transported across state lines be “the same” property that was stolen or converted. It was not: The property that Dowling stole or converted was intangible, while the property he transported was tangible.

The Dowling majority noted that “interference with copyright does not easily equate with theft, conversion, or fraud,” but, in the same paragraph, it also said it’s “less clear, however, that the taking that occurs when an infringer arrogates the use of another’s protected work comfortably fits the terms associated with physical removal employed by § 2314.” This lack of “physical removal,” as required by the statute, meant that Dowling’s infringing copies were not “the sorts of goods whose interstate shipment § 2314 makes criminal.” But this doesn’t mean that Dowling’s acts of infringement in creating the physical records were not themselves acts of theft or conversion.

Follow me on Twitter: @devlinhartline

© 2014 Devlin Hartline. Licensed under the Law Theories Public License 1.0.

Share on FacebookShare on Google+Tweet about this on TwitterShare on RedditPrint this pageEmail this to someone

  1. Of course, even if a conversion claim is preempted by the Copyright Act, it doesn’t necessarily follow that the claim would have succeeded on the merits had it not been preempted. For example, intangible personal property cannot be converted under Oklahoma state common law. See, e.g., Shebester v. Triple Crown Insurers, 826 P.2d 603, 608 (Okla. 1992) (“Conversion is an illegal taking of another’s personalty inconsistent with his ownership rights. The general rule in Oklahoma is that only tangible personal property may be converted.”) (emphasis in original; footnotes omitted).