In 1971, Congress amended the Copyright Act to grant limited copyright protection to sound recordings fixed on or after February 15, 1972; however, property rights in sound recordings fixed before that date (“pre-1972 sound recordings”) remain governed by state law. Currently, federal law recognizes an exclusive performance right in post-1972 sound recordings performed by digital audio transmission, but performances of post-1972 sound recordings transmitted by other means, such as AM/FM radio, do not enjoy federal copyright protection.
In September 2013, Flo & Eddie Inc., which owns all rights to the recordings of The Turtles, a rock band well-known in the 1960s, sued Sirius XM Radio Inc. on behalf of itself and a class of owners of pre-1972 sound recordings, asserting claims for common-law copyright infringement and unfair competition under New York law. In particular, Flo & Eddie alleged that Sirius infringed its copyright in The Turtles’ pre-1972 recordings by broadcasting and making internal reproductions of the recordings (e.g., library, buffer and cache copies) to facilitate its broadcasts without a license. Flo & Eddie simultaneously filed parallel class actions in California and Florida, alleging state copyright claims based on California and Florida law.
Sirius moved for summary judgment on two grounds. First, Sirius argued that there is no public-performance right in pre-1972 sound recordings under New York copyright law, and that its internal reproductions of these recordings were permissible fair use. Second, Sirius argued that a state-law public performance right, if recognized, would be barred by the dormant Commerce Clause. The district court denied Sirius XM’s motion for summary judgment, concluding that New York does afford a common law public performance right to copyright holders (and therefore Sirius XM’s internal reproductions were not permissible fair use), and that recognition of such a right did not implicate the dormant Commerce Clause. Following the district court’s denial of Sirius XM’s motion for reconsideration, the Second Circuit granted Sirius XM’s petition to permit an interlocutory appeal.
On appeal, the Second Circuit framed the central issue before it as whether New York common law affords copyright holders the right to control the performance of sound recordings as part of their copyright ownership. It pointed out that, although the district court sided with Flo & Eddie on this question, the district court also noted the uncertain state of New York law and expressed its regret at not being permitted to certify the question to the New York courts. The Second Circuit concluded that the New York Court of Appeals has not addressed whether copyright holders in sound recordings have a public performance right in their works, and that certification of this unresolved, determinative question was therefore appropriate.
The Second Circuit also pointed out that the question of whether a New York public performance right would violate the dormant Commerce Clause was not something it could adjudicate without knowing what, if any, limitations New York places on these rights, if they do exist. As a result, the Court concluded that knowing what rights, if any, are provided under New York common law is determinative, and that certification remained appropriate.
Accordingly, the Second Circuit reserved judgment and certified to the New York Court of Appeals the following question: “Is there a right of public performance for creators of sound recordings under New York law and, if so, what is the nature and scope of that right?”