Source: http://about.bloomberglaw.com/law-reports/recording-of-call-subject-to-copyright-protection/
Timestamp: 2014-03-08 19:59:38
Document Index: 692759934

Matched Legal Cases: ['§ 411', '§ 411', '§ 102', '§ 101', '§ 411', '§ 411', '§ 411', '§ 411', '§ 7', '§ 107']

SDNY Finds Audio Recording of Conference Call Subject to Copyright Protection; Rules Compliance With Pre-Fixation Notice Requirement Unnecessary - Bloomberg Law
Home » Law Reports » SDNY Finds Audio Recording of Conference Call Subject to Copyright Protection; Rules Compliance With Pre-Fixation Notice Requirement Unnecessary
Swatch Group Mgmt. Services Ltd. v. Bloomberg L.P., No. 11-CV-01006, 2011 BL 231387 (S.D.N.Y. Aug. 30, 2011)
The U.S. District Court for the Southern District of New York denied Bloomberg L.P.’s motion to dismiss a copyright infringement action brought by The Swatch Group Management Services Ltd. stemming from Bloomberg’s unauthorized recording of a conference call with securities analysts and later publication of the audio recording, along with a written transcript of that recording, on its “Bloomberg Professional” news feed service. The court determined that plaintiff’s copyright in an authorized audio recording of the conference call was valid and that plaintiff, which had complied with the registration requirement of 17 U.S.C. § 411(a), was not required to comply with the pre-fixation notice requirement of 17 U.S.C. § 411(c).
Swatch’s Conference Call with Securities Analysts
On February 8, 2011, The Swatch Group Ltd. (“Swatch Group”) hosted a two hour conference call from its headquarters in Switzerland with a group of securities analysts. During the call, senior executives of the Swatch Group answered questions from the analysts and discussed at length the company’s “worldwide business performance, activities, opportunities and related matters.” Swatch at 1. The call was simultaneously recorded during its transmission by a third party at the behest of Swatch Group. At the beginning of the call, an operator informed the participants that the call would be recorded and that the call “should not otherwise be recorded for publication or broadcast.” Id. at 2.
Bloomberg, without Swatch Group’s authorization or consent, tapped into and recorded the entire call and then created a written transcript from the audio recording. Bloomberg made both the recording and the transcript available to paid subscribers of its “Bloomberg Professional” news feed service.
Meanwhile, Swatch Group had assigned its copyright in the audio recording to its subsidiary The Swatch Group Management Services Ltd. (“Swatch”). Swatch filed a copyright infringement lawsuit against Bloomberg less than one week after the call. Since that time, the U.S. Copyright Office has issued a registration for the audio recording.
Bloomberg moved to dismiss the complaint on a number of grounds.
Swatch’s Audio Recording of the Conference Call Is Copyrightable
For a work to be copyrightable, it must be both original and fixed in a tangible medium of expression. See 17 U.S.C. § 102(a). The fixation requirement is satisfied when a work’s “embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.” 17 U.S.C. § 101. “A work consisting of sounds, images, or both, that are being transmitted, is ‘fixed’ . . . if a fixation of the work is being made simultaneously with its transmission.” Id. According to the court, the latter provision “‘creates a legal fiction that the simultaneous fixation occurs before the transmission’ for purposes of an infringement claim.” Swatch at 4 (quoting United States v. Moghadam, 175 F.3d 1269, 1280-81 (11th Cir. 1999)). “In other words,” the court explained, “the law treats the unauthorized recording of sounds that are transmitted live and recorded simultaneously as an infringement of the copyright in the fixed work (assuming the work otherwise qualifies for protection), notwithstanding that the alleged infringer does not copy the fixed version of the work but rather records the live transmission directly.” Id. The court thus determined that Swatch’s audio recording of the conference call met the Copyright Act’s fixation requirement.
The court also found the audio recording sufficiently original. “Original, as the term is used in copyright, means only that the work was independently created by the author (as opposed to copied from other works), and that it possesses at least some minimal degree of creativity.” Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340, 345 (1991). Bloomberg only challenged the creativity element, arguing that the senior executives who participated in the call relied upon unprotectable facts and figures in answering analysts’ questions. The court acknowledged this point, but noted that the executives did not simply state the facts and figures. Rather, “there are protectable, creative elements in the senior executives’ ‘manner of expression, [their] analysis or interpretation of events, the way [they] structure[d] [their] material and marshal[ed] facts, [their] choice of words, and the emphasis [they] g[a]ve[] to particular developments.’” Swatch at 5 (quoting Wainwright Securities Inc. v. Wall Street Transcript Corp., 558 F.2d 91, 95-96 (2d Cir. 1977)). “At a more basic level,” the court added, “the senior executives’ unique pronunciation of words and their inflection and tone of voice, taken together, constitute ‘something irreducible, which is one man’s alone,’ and that ‘he may copyright’—at least in the form of a sound recording.” Id. at 5-6 (quoting Bleistein v. Donaldson Lithographing Co., 188 U.S. 239, 250 (1903)). Accordingly, the court determined that the spoken-word contributions of the senior executives possessed the requisite degree of creativity.
Having found that Swatch Group simultaneously recorded the conference call during its transmission, independently created the recording, and that its senior executives’ spoken-word contributions were sufficiently creative, the court held that Swatch’s copyright in the audio recording was valid and denied Bloomberg’s motion to dismiss on this basis.
Swatch Not Required to Comply with Pre-Fixation Notice Requirement
Section 411(c) of the Copyright Act provides:
In the case of a work consisting of sounds, images, or both, the first fixation of which is made simultaneously with its transmission, the copyright owner may, either before or after such fixation takes place, institute an action for infringement . . . if, in accordance with requirements that the Register of Copyrights shall prescribe by regulation, the copyright owner—
17 U.S.C. § 411(c). Bloomberg argued that Swatch failed to allege compliance with Section 411(c), and consequently, that its copyright infringement claim must fail.
The court first noted that Swatch Group could not have served such notice on Bloomberg as a factual matter, as Bloomberg recorded the call without its knowledge or consent. The court also found the pre-fixation notice requirement of Section 411(c) unnecessary in any event because Swatch had complied with the registration requirement of Section 411(a). The latter section states that “no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title.” 17 U.S.C. § 411(a). Citing the Nimmer copyright treatise, the court stated: “[E]ven where an infringement action is based on a work that consists of sounds that are fixed for the first time simultaneously with their transmission, compliance with the more conventional registration requirement of 17 U.S.C. § 411(a) suffices, rendering compliance with § 411(c) unnecessary.” Swatch at 7 (citing 2 Melville B. Nimmer & David Nimmer, Nimmer on Copyright, § 7.16[B][1][b][iii]). The court observed that the U.S. Copyright Office “appears to agree with this assessment.” Id. at 8 (citing General Provisions; Works Consisting of Sounds, Images, or Both: Advance Notice of Potential Infringement, 46 Fed. Reg. 28846 (May 29, 1981) (codified at 37 C.F.R. pt. 201)).
Court Declines to Address Fair Use Defense
While Bloomberg argued that its use of Swatch’s audio recording was a fair use under 17 U.S.C. § 107, the court noted that fair use is a fact-intensive inquiry and declined to rule on the defense at the pleadings stage before the parties have had a chance to engage in discovery.