CBS Radio Remasters the Art of Not Paying Artists Royalties

Jun 06, 2016


Two years ago, a federal judge rocked the music industry in holding that pre-1972 recordings may be protected under state copyright laws and are protected by California copyright law.  This holding, in a case brought against SiriusXM, had vast potential ramifications, as it would mean that radio and internet radio stations playing such recordings would have to pay out millions of dollars in royalties that they had never anticipated paying. CBS Radio, however, just scored a legal victory that, if it stands up, would effectively eliminate any artist’s ability to recover royalties for pre-1972 recordings.

Seeking a way to shift the paradigm of the SiriusXM case and the string of similar suits that preceded and followed it, when ABS  Entertainment, which owns the pre-1972 recordings of Al Green and others, sued CBS, iHeartMedia, and Cumulus, CBS decided to throw something of a legal “Hair Mary.”  It argued that “CBS does not play vinyl sound recordings.”  Rather, it plays only re-issued or remastered versions of pre-1972 recordings.

United States District Judge Percy Anderson grabbed CBS’s Hail Mary in the end zone, finding that the sound engineering process in remastering an album constitutes “copyrightable originality.”  As such, CBS was permitted to treat the recordings as post-1972 recordings.

Judge Anderson’s ruling comes despite ABS’s warning that accepting CBS’s remastering argument would result in the owners of sound recordings trumping artists’ rights over their works in all cases.  The judge addressed this point in a footnote, distinguishing the “original expression added by a sound engineer during the remastering process” from the naked conversion between formats (i.e., vinyl to MP3).

The reason that this issue exists is that, on February 15, 1972, Congress brought sound recordings under federal copyright law, but not retroactively. Prior to 1972, musical recordings were protected only be state copyright laws, many of which are based in common law, court-made rules that are not codified in statutes and, at least in many instances, do not require registration in order to protect recorded material.  Works that are copyright protected by state common law are harder to track than those protected by a registered federal copyright.


[This post was written by Jason Horst.]


Modern Hieroglyphs: Intellectual Property Signs of the Times

Jun 04, 2015

You see them every day; those funny-looking characters and symbols splashed all over goods and advertisements.  Ⓡ.  Ⓒ.  Our friends “TM” and “SM” and even Ⓟ.  Like modern hieroglyphs, we know that these symbols have some cryptic meaning or purpose, but what do they really mean and why use them?

CartoucheAll of these symbols function as sign-posts to signal to the world that somebody has or is claiming intellectual property rights.

The Ⓡ symbol tells the viewer that he or she is face to face with someone’s registered trademark under federal law.  It puts that person on notice—take heed that someone has important and protectable rights in this particular name or mark.  15 U.S.C.A. § 1111 (a registrant of a trademark with the United States Patent and Trademark Office may give notice that a trademark is registered by displaying with the mark the words “Registered in U. S. Patent and Trademark Office” or “Reg. U.S. Pat. & Tm. Off.” or the letter R enclosed within a circle, Ⓡ).  Absent such notice, the owner’s ability to recover damages for infringement by others is limited under federal law unless the owner can show that the infringer had actual notice of the trademark registration.  Never use the Ⓡ symbol for an unregistered trademark, however.  Improper use of a registration notice with an unregistered trademark, if done with the intent to deceive, is a ground for denying the registration of an otherwise valid mark.  Copelands’ Enterprises, Inc. v. CNV, Inc. (Fed. Cir. 1991) 945 F.2d 1563, 1566.  It may also be found to be an affirmative misrepresentation raising the spectre of civil or criminal liability.

Where a trademark is not registered, those claiming a protectable trademark or servicemark can make use of the “TM” and “SM” symbols.   The former signals a claimed trademark, while the latter is used with servicemarks (a servicemark is a trademark used to identify a service rather than a product).  No specific federal statutes authorize the use of the “TM” symbol, limits its use, or states definitively what it does or does not convey to the public.  Southern Snow Manufacturing Co. v. Snow Wizard Holdings, Inc. (E.D. La. 2011) 829 F.Supp.2d 437, 452 (“Southern Snow”).  Historically, however, the designation has been used as a way of alerting the public to a claim of ownership of a trademark.  Southern Snow, at p. 452.  Such a claim does not necessarily equate with any actual, protectable rights.  “…[T]he TM symbol does not mean that the party has trademark rights in the name or can ensure that the mark is capable of serving as a trademark…”  Southern Snow, at p. 453-454.

However, using the “TM” and “SM” symbols can help establish a trademark.  The courts may consider such use as evidence demonstrating that a name or mark is being used in the sense of a trademark or servicemark to reflect the origin of the goods or services, a factor in the overall determination of the existence of trademark protection.  The fact that no symbol is used to designate an alleged trademark is evidence that the mark is not being used as a trademark.  T.A.D. Avanti, Inc. v. Phone-Mate, Inc. (C.D. Cal. 1978) 1978 WL 21444, *6.

Use of the copyright related symbols Ⓒ and Ⓟ, can be a bit more complicated.  For works first published after March 1, 1989, a formal copyright notice is optional.  17 U.S.C.A. § 401(a).  There are several formats for this notice proscribed by federal statute.  Federal law specifies that the notice may be in any one of the following forms:  (1) the symbol Ⓒ (the letter C in a circle), (2) the word “Copyright” or (3) the abbreviation “Copr.”  17 U.S.C.A. § 401(b)(1).  For sound recordings, a different form of notice is used—the symbol Ⓟ (the letter P in a circle) along with the year of first publication and the designation of the owner.  17 U.S.C.A. § 402(b).  While not required, including a copyright notice on a published work can negate an infringer’s ability to rely on the “innocent infringement” defense to avoid the imposition of certain damages.  17 U.S.C.A. §§ 401(d) and 402(d).

A copyright notice was required for works published before March 1, 1989 (the effective date, as to the United States, of the international copyright treaty known as the Berne Convention).  General publication before that date without a copyright notice could cause a work to enter the public domain if the copyright owner failed to cure the omission of the mandatory copyright notice.  There are, however, some limited circumstances in which the omission of the copyright notice from authorized copies distributed by the copyright owner does not invalidate the copyright in a work.  For example, a copyright is not lost if an otherwise required copyright notice was left off in violation of an express written requirement contained in the owner’s authorization of the public distribution of the work.  17 U.S.C.A. § 405(a)(3).

Unless you are adept at reading hieroglyphs, consulting with a trademark attorney before making use of any of these symbols in corporate logos, advertisements or other communications is a must.


Suing to the Oldies

Aug 14, 2014

I’m listening to my Classic Rock station on Pandora, and Keith Richards’ timeless guitar licks begin to blast from my laptop speakers.  I instinctively pick up my air guitar and start to wail.  Mick comes in:  “I. Can’t. Get. No. . .”  Then . . .  nothing.  I snap out of my rock star fantasy and wildly click over to Pandora to figure out what happened.  Over the picture of the Stones’ Out of Our Heads album cover, there is a message from Pandora: “This track is no longer available on Pandora.  We apologize for the inconvenience.”


Ok, the Stones didn’t really disappear.  Not yet.  In actuality, Mick went right on singing, Keith went right on riffing, and I went right on wailing on the air guitar.  Nonetheless, the following two facts are absolutely true:  1) you don’t care about the rest of my jam session—which was complete with kicked-over “mic stands” (coat racks) and a T-shirt thrown into the “crowd” (my mortified wife and children)—and 2) fans of the Stones, Beatles, Elvis, Miles, Coltrane, and many other musicians with pre-1972 recordings could soon see these recordings removed from Pandora—and other commonly-used media—if record companies prevail in a recent suit filed against the Oakland-based company.

The Pandora Suit and SoundExchange

The suit against Pandora, which the record companies filed in New York state court, involves a challenge encountered in integrating the music industry’s royalty system:  millions of people listening to music using media that did not exist even 15 to 20 years ago, let alone in 1972.  Yet, when copyrighted songs are played on Pandora, satellite radio, or streaming webcasts, the holders of the copyrights are still entitled to royalties.  Many companies using digital recordings, including Pandora and SirusXM, use a company called SoundExchange to track usage, collect digital royalties, and distribute them to copyright holders.  Problem solved, right?  Unfortunately, there’s a catch.  SoundExchange may not track usage of material recorded or “fixed” before 1972, meaning that it would not collect or distribute royalties on such recordings.

The Problem With Pre-1972 Recordings

On February 15, 1972, Congress brought sound recordings under federal copyright law.  Prior to 1972, however, musical recordings were protected only be state copyright laws, many of which are based in common law, court-made rules that are not codified in statutes and, at least in many instances, do not require registration in order to protect recorded material.  The suit against Pandora is based on New York common law.  Works that are copyright protected by state common law are harder to track than those protected by a registered federal copyright.

The record companies in the Pandora suit, as well as in a California suit against SirusXM, contend that they have not been paid for usage of their pre-1972 recordings.  Pandora appears to tacitly acknowledge as much.  According to the complaint, Pandora told the SEC that if it were required to obtain licenses for the reproduction and public performance of pre-1972 sound recordings, the expense of compliance may be so prohibitive that Pandora would simply remove all pre-1972 recordings from its service.

We will watch the Pandora and SiriusXM cases with great interest, as the cases could end up significantly diminishing both services, as well as my living room concert series.