Flo & Eddie, Inc., owned by two founding members of “The Turtles,” has scored another victory in its ongoing efforts to protect its pre-1972 sound recordings. Last October, Flo & Eddie sued Pandora, stating four separate claims for relief against the internet radio service. The first claim was that Pandora had violated its statutory rights under Section 980(a)(2) of the California Civil Code, which provides: “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 . . . .” The remaining three claims, alleging misappropriation, unfair business practices, and conversion, were grounded on its statutory rights under Section 980(a)(2) as well as its common law rights. The existence of Flo & Eddie’s rights, whether statutory or common law, has been a central issue in its litigation efforts.
The case was originally assigned to District Judge Otis D. Wright, II, of the Central District of California, but it was shortly thereafter transferred to District Judge Philip S. Gutierrez, who had been assigned Flo & Eddie’s earlier case against Sirius XM. As I wrote about in an earlier post, Judge Gutierrez held in Sirius XM that Flo & Eddie has the exclusive right to publicly perform its sound recordings in California under Section 980(a)(2). Despite this seemingly insurmountable holding to the contrary, Pandora filed a motion to strike each of Flo & Eddie’s claims for relief under California’s Anti-SLAPP statute. In its memorandum, Pandora argued that it had a “First Amendment right” to publicly perform Flo & Eddie’s sound recordings as the latter’s purported rights “simply do not exist[.]” In other words, Pandora told Judge Gutierrez that he had gotten it completely wrong in Sirius XM, handed down just months earlier.
To its credit, Pandora made an argument that Sirius XM had not. Section 980(a)(2) was enacted in 1982, many years after Flo & Eddie had sold and broadcasted its sound recordings. Prior to that, Section 980(a), which was enacted in 1947, provided: “The author or proprietor of any composition in letters or art has an exclusive ownership in the representation or expression thereof as against all persons . . . .” The subject matter was narrowed from “any composition in letters or art” in 1947 to “a sound recording” in 1982 because the intervening Copyright Act of 1976 preempted most everything else. Just as important here was Section 983(a), also from 1947, which provided: “If the owner of a composition in letters or arts publishes it the same may be used in any manner by any person, without responsibility to the owner insofar as the law of this State is concerned.” Thus, prior to 1982, the statutory rights gained under Section 980(a) were lost upon publication under Section 983(a).
The Ninth Circuit looked at Sections 980(a) and 983(a) in its Lone Ranger v. Program Radio opinion from 1984. Lone Ranger involved original scripts for radio programs about the fictional Western hero, “The Lone Ranger,” as well as sound recordings of performances of the scripts. The scripts were all protected under the Copyright Act of 1909, but the sound recordings were not. The plaintiff sued for copyright infringement and conversion. Even though the sound recordings were not copyrightable, the Ninth Circuit nonetheless held that the defendant’s use of them was copyright infringement as they were derivative works of the underlying copyrighted scripts. On the conversion claim, the Ninth Circuit held that there was an “intangible property interest in the performances on tape from the time of their recording” under California law that had been converted.
The defendant in Lone Ranger argued that the plaintiff’s statutory rights in the sound recordings under Section 980(a) were lost upon publication under Section 983(a). The plaintiff contended that it had not actually published the sound recordings within the meaning of Section 983(a), but the Ninth Circuit disagreed: “California law appears to the contrary.” The fact that the plaintiff had lost its statutory rights, however, was not fatal to its claim for conversion, as “the conversion . . . claim lies outside copyright.” The Ninth Circuit held that the loss of the plaintiff’s statutory rights had no effect on its common law rights, and as such, “protection against conversion of an intangible property right in the performances embodied in its tapes is unaffected by notions of copyright.” Having found that the plaintiff did in fact have common law rights in the sound recordings, the plaintiff’s conversion claim was affirmed.
The Ninth Circuit’s opinion in Lone Ranger formed the centerpiece of Pandora’s motion to strike: “Plaintiff’s section 980(a)(2) cause of action fails because California law divested its sound recordings of state copyright protection when the Turtles deliberately sold those recordings in stores in the 1960s.” Pandora argued that whatever rights Flo & Eddie had in its sound recordings under Section 980(a) were lost under Section 983(a) when the recordings were published. Despite the enactment of Section 980(a)(2) in 1982, which on its face protects sound recordings fixed prior to 1972, Pandora contended that it only maintained statutory protection for works that had not been published theretofore: “[T]hat revision did not, and could not, have the effect of flipping the copyright status of the entire corpus of all sound recordings ever published in California, by newly putting them back under copyright protection until 2047.”
Just as the plaintiff in Lone Ranger had lost its statutory protection when it published its sound recordings, Pandora claimed that Flo & Eddie had too. Pandora pointed out that the Ninth Circuit had not held that the newly-enacted Section 980(a)(2) “resurrected protection previously vitiated under section 983(a),” for if it had, “the case should have come out the other way on the state copyright issue.” This misstated the issue in Lone Ranger. As mentioned above, the copyright claim was based on the federal Copyright Act. There was no “state copyright issue.” The issue under state law was conversion, and the Ninth Circuit held that the plaintiff did indeed have common law rights that had been converted. Given this holding, Pandora’s claim that the Ninth Circuit thought there was “no cognizable” rights “at all” was simply incorrect. Moreover, Section 980(a)(2) did not apply to the plaintiff’s claims as the case was filed before the statutory amendments in 1982.
Pandora was correct that the Ninth Circuit did not hold that the plaintiff’s statutory rights “came back to life,” but what it conveniently failed to note was that the plaintiff did not ground its rights on the statute. The plaintiff never argued that Section 980(a)(2) resurrected its statutory rights, so the fact that the Ninth Circuit didn’t address that argument is irrelevant. Nevertheless, Pandora argued that, regardless of what the Ninth Circuit said in Lone Ranger, there was no reason to think that Section 980(a)(2) created “zombie copyrights.” The purpose of Section 980(a)(2) was to “maintain rights and remedies,” not create them anew. To hold otherwise, Pandora suggested, would be “altogether unworkable” as it would create “an impossible-to-administer system of rights.” Given all this, Pandora concluded that there was simply “no state law copyright protection today for Turtles recordings” sold and broadcasted “in the 1960s.”
In its memorandum in opposition, Flo & Eddie took Pandora to task for misrepresenting the holding in Lone Ranger. Then it proffered misstatements of its own. Rather than embrace the notion of “zombie copyrights” under Section 980(a)(2), Flo & Eddie made three arguments for why Section 983(a) did not strip its sound recordings of statutory protection: (1) it “was repealed and, by law, must be treated as if it never existed,” (2) it, “by its own plain language, did not apply to sound recordings” as it “only applied to ‘composition[s] in letters or art,’” and (3) “[p]re-1972 recordings were not ‘published’ by their sale or broadcast.” The purpose of Section 983(a), Flo & Eddie contended, was to mark the point where state statutory protection ended and federal statutory protection began—publication. But since the Copyright Act of 1976 “moved the point of federal protection from ‘publication” to ‘fixation,’” Section 983(a) “ceased to have a purpose.” As such, it was repealed “in its entirety,” and “its obliteration negated any case law dependent on it, including Lone Ranger.”
Flo & Eddie further argued that Section 983(a) would be of no help to Pandora, even if it had not been repealed. It drew a distinction between “the underlying musical compositions embodied in sound recordings,” which were “composition[s]” under Section 983(a), and the sound recordings themselves, which were not. The purpose of Section 983(a) was “to draw a bright line” between state and federal protection, but since there was no federal protection for sound recordings at the time, there was “no need to draw a dividing line” for sound recordings. Flo & Eddie pointed out that Pandora’s read of Section 983(a) would make the protections of Section 980(a)(2) “entirely illusory,” since “virtually all pre-1972 recordings” would be previously published and thus in the public domain. This was not so, Flo & Eddie urged, as “the protections provided by § 980(a)(2) were in addition to” those of the common law.
Lastly, Flo & Eddie argued that its “sound recordings were not ‘published’ under the law,” as “publication (in the legal sense) is a concept that is not applicable to recordings.” If “the sale of even one copy of a pre-1972 recording” was a publication that “divested” the owner “of its rights,” as Pandora contended, then “no one would have ever sold recordings.” According to Flo & Eddie, “traditional notions of publication simply do not apply to pre-1972 recordings.” Furthermore, Flo & Eddie maintained that Lone Ranger was not inapposite, as the Ninth Circuit “was referring to the compositions” in its discussion of Section 983(a), not the sound recordings. If the Lone Ranger court had held “that the performances embodied in the recordings ceased to be protectable upon publication, it would not have affirmed liability for conversion.”
I don’t think Flo & Eddie’s arguments concerning Section 983(a) hold water. The fact is that Section 983(a) was in force between 1947 and 1982—the same time period when Flo & Eddie sold and broadcasted its sound recordings in California. Flo & Eddie tried to bypass Sections 980(a) and 983(a) by arguing that those statutes did not apply to sound recordings. It didn’t want to admit the possibility that it had statutory rights that had been lost, but that’s exactly what the Ninth Circuit held in Lone Ranger. The Ninth Circuit also held that the loss of the statutory rights didn’t matter as the plaintiff still had its common law rights. These property rights weren’t statutory, and they weren’t nominally copyright rights, but they were nonetheless exclusive rights to prevent copying without permission. Sounds a lot like copyright, no?
The fact that published sound recordings were protected under California common law demonstrates that courts treated sound recordings differently than other subject matter. Publication was traditionally the line between state and federal protection, but with sound recordings, there was no federal protection—not until 1972. The reason for treating publication as the right-shedding event under state law simply did not exist for sound recordings, and courts implicitly acknowledged this by protecting such works after they had been published. Given this jurisprudential backdrop, the legislative history to the 1982 statutory amendments makes sense. It stated that the purpose was to “maintain rights and remedies in sound recordings fixed prior to February 15, 1972,” and it accomplished this in two ways. First, it added Section 980(a)(2) to explicitly grant statutory rights to sound recordings, and second, it deleted Section 983(a), which had provided that the statutory rights were lost upon publication. The 1982 amendments “maintain[ed]” the status quo by protecting sound recordings both pre- and post-publication.
In his order issued this past Monday, Judge Gutierrez sided with Flo & Eddie—but not before rejecting each of its arguments as to Section 983(a). Judge Gutierrez wholeheartedly adopted the theory of “zombie copyrights” that Pandora had argued was absurd and that Flo & Eddie had attempted to avoid. The problem with “Pandora’s theory,” he wrote, was that it made Section 980(a)(2) “an impotent law that protects only the tiniest class of sound recordings.” Pandora’s read of Section 980(a)(2) would only “protect decade-old sound recordings that were never sold to the public or played on the radio,” and it “would have been strange for the legislature to use such expansive language to cast a law of exceedingly limited scope.” Furthermore, he continued, the fact remained that California courts recognized exclusive rights in sound recordings that had been published. “Pandora’s misstep,” Judge Gutierrez held, was that “it ignores the California common law’s role in maintaining property rights.”
Looking at Flo & Eddie’s arguments concerning Section 983(a), Judge Gutierrez rejected the notion that its repeal meant that it never had any operative effect on Flo & Eddie’s sound recordings. He noted that Pandora’s “logic is sound” in that “the state of the law prior to 1982 is significant.” As to Flo & Eddie’s contention that Section 983(a) never applied to its sound recordings, or if it did, that the sales and broadcasts of those recordings were not publications, Judge Gutierrez noted that Lone Ranger foreclosed any such thinking. Nevertheless, he held that it didn’t matter as the Lone Ranger court “maintained that plaintiff had ‘an intangible property interest in the performances on tape from the time of their recording’ and found defendant liable for conversion.” Pandora’s arguments simply could not be reconciled with the case law, including Lone Ranger:
The case law indicates that sound recordings never dropped into the public domain so that people could freely exploit them. Regardless of whether §§ 980 and 983(a) applied to sound recordings, and regardless of whether sale of recordings “published” them, California still protected these recordings post-publication through the common law. See Lone Ranger, 740 F.2d at 726 (explaining that plaintiff could still make property-based claims regarding sound recording ownership, even if the protections of §§ 980 and 983(a) were no longer available).
While Flo & Eddie had attempted to distinguish Lone Ranger, Judge Gutierrez embraced it. Even if the statutory rights in the sound recordings had been lost upon publication, the common law still recognized property rights in the published sound recordings. And given this nonstatutory protection for sound recordings that had been published, Judge Gutierrez found that Section 980(a)(2) was “consistent with a legislative intent to maintain rights and remedies in pre-1972 sound recordings.” Judge Gutierrez “reject[ed] Pandora’s contention that the legislature did not intend the expansively-phrased protections of § 980(a)(2) to apply to pre-1972 sound recordings that had been previously released to the public,” because otherwise, that “law would cover practically nothing.” Thus, Judge Gutierrez held that Section 980(a)(2) did indeed grant statutory protection to sound recordings that had lost their statutory protection under Section 983(a). These “zombie copyrights” were not problematic as the common law never ceased to protect the sound recordings, even those that had been published.
Recall that Flo & Eddie stated four claims for relief. The first claim was based on a direct violation of its statutory rights under Section 980(a)(2). The remaining three claims were based on its rights under Section 980(a)(2) and its common law rights. Judge Gutierrez rejected Pandora’s motion to strike based only on Flo & Eddie’s statutory rights under Section 980(a)(2), and he reserved the question of whether Flo & Eddie has any common law rights separate and apart from its statutory rights. Pandora has already appealed to the Ninth Circuit—one advantage of a motion to strike under California’s Anti-SLAPP statute is that it’s immediately appealable. Whether the Ninth Circuit accepts Judge Gutierrez’s embrace of “zombie copyrights” is anyone’s guess. Based on the undeniable existence of post-publication rights in sound recordings under California common law, it seems to me that Flo & Eddie will score yet another victory on appeal.
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© 2015 Devlin Hartline. Licensed under the Law Theories Public License 1.0.