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.]

You know those cheesy variations on the “Happy Birthday” song performed by a half-dozen waiters and waitresses that your friends make you suffer through on your birthday? You notice that for all of the birthday parties you have watched on TV and in the movies, you rarely see a family singing “Happy Birthday” to their loved ones as they turn one year older?  All of that is about to change… maybe.

Parties recently settled an action related to the copyright on “Happy Birthday.” Terms of the settlement have yet to be disclosed, but they are not expected to undo a federal judge’s recent ruling in the case that the copyright, under which Warner/Chappelle Music and its predecessors have collected licensing fees for more than six decades, is invalid. So, it appears that “Happy Birthday” now officially belongs to all of us.

The Lawsuit

As discussed in a previous post, Plaintiffs brought suit claiming that the song is in the public domain because Warner/Chappelle had no valid copyright to the “Happy Birthday” lyrics. In September, a federal judge agreed with Plaintiffs and granted summary judgment that Warner/Chappelle Music “do not own a valid copyright in the Happy Birthday lyrics.” Warner/Chappelle announced that it would seek reconsideration of the court’s order or leave to immediately appeal the ruling.

Added Complications

Shortly after this ruling, plaintiffs sought to expand the class to include anyone from whom Warner/Chappelle had collected licensing fees dating back to 1949. This move created the prospect of substantial damages to be awarded against Warner/Chappelle. Then, last month, the charity organization Association for Childhood Education International, made a competing claim to the rights to use of the song as the heir of others to whom its authorship is attributed.

The Settlement

Rather than fighting this battle in Court, the parties have settled their matter. The financial terms have not been disclosed to the public. The settlement, however, appears to leave in tact the judge’s ruling invalidating the copyright and placing “Happy Birthday” in the public domain.  So, while being serenaded by waiters in front of a restaurant full of people will still be embarrassing, at least the song they are singing will be familiar.