Case Name: Flo & Eddie, Inc., a California Corporation, Individually and on Behalf of All Others Similarly Situated, Respondent, v. Sirius XM Radio, Inc., a Delaware Corporation, Appellant, et al., Defendants
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 2016-12-20
Citations: 28 N.Y.3d 583
Docket Number: 
Parties: Flo & Eddie, Inc., a California Corporation, Individually and on Behalf of All Others Similarly Situated, Respondent, v Sirius XM Radio, Inc., a Delaware Corporation, Appellant, et al., Defendants.
Judges: Judges Pigott, Fahey and Garcia concur, Judge Fahey in a separate concurring opinion; Judge Rivera dissents in an opinion in which Judge Abdus-Salaam concurs; Chief Judge DiFiore taking no part.
Reporter: New York Reports
Volume: 28
Pages: 583–635

Head Matter:
[70 NE3d 936, 48 NYS3d 269]
Flo & Eddie, Inc., a California Corporation, Individually and on Behalf of All Others Similarly Situated, Respondent, v Sirius XM Radio, Inc., a Delaware Corporation, Appellant, et al., Defendants.
Argued October 18, 2016;
decided December 20, 2016
POINTS OF COUNSEL
O’Melveny & Myers LLP, Washington, D.C. (Jonathan D. Hacker, of the District of Columbia bar, admitted pro hac vice, of counsel), O’Melveny & Myers LLP, Los Angeles, California (.Daniel M. Petrocelli, of the California bar, admitted pro hac vice, and Cassandra L. Seto, of the California bar, admitted pro hac vice, of counsel), and OMelveny & Myers LLP, New York City (Anton Metlitsky of counsel), for appellant.
Gibson, Dunn & Crutcher LLP, New York City (Caitlin J. Halligan, Ester Murdukhayeva and Kathryn M. Cherry of counsel), and Gradstein & Marzano, P.C., Los Angeles, California (Henry Gradstein, of the California bar, admitted pro hac vice, Maryann R. Marzano, of the California bar, admitted pro hac vice, and Daniel B. Lifschitz, of the California bar, admitted pro hac vice, of counsel), for respondent.
Mitchell L. Stoltz, Electronic Frontier Foundation, San Francisco, California, for Electronic Frontier Foundation, amicus curiae.
Jenner & Block LLP, Washington, D.C. (Kenneth L. Doro-show and Devi M. Rao of counsel), and George M. Borkowski, Recording Industry Association of America, Inc., Washington, D.C., for Recording Industry Association of America, Inc., amicus curiae.
Paul Hastings LLP, Washington, D.C. (Stephen B. Kinnaird of counsel), and Rick Kaplan and Suzanne Head, National Association of Broadcasters, Washington, D.C., for National Association of Broadcasters, amicus curiae.
Wilson, Elser, Moskowitz, Edelman & Dicker LLP, New York City (.Adam R. Bialek, Stephen J. Barrett and Kerianne Losier of counsel), and David L. Donovan, New York State Broadcasters Association, Inc., Albany, for New York State Broadcasters Association, Inc., amicus curiae.
Hartman & Winnicki, P.C., Ridgewood, New Jersey CDaniel L. Schmutter of counsel), for Howard B. Abrams and others, amici curiae.
King & Spalding LLP, San Francisco, California (Joseph R. Wetzel and Ethan P. Davis of counsel), for Association for Recorded Sound Collections, amicus curiae.
Irell & Manella, LLP, Los Angeles, California (Robert M. Schwartz and Victor Jih of counsel), and Kelley Drye & Warren LLP, New York City (Michael Lynch and James Saylor of counsel), for CBS Radio, Inc., amicus curiae.
Weil, Gotshal & Manges LLP, New York City (Benjamin E. Marks, Gregory Silbert and Kami Lizarraga of counsel), Latham & Watkins LLP, San Francisco, California (James K. Lynch and Andrew M. Gass of counsel), and Latham & Watkins LLP, Washington, D.C. (Jonathan Y. Ellis of counsel), for Pandora Media, Inc. and others, amici curiae.
Raza Panjwani, Public Knowledge, Washington, D.C., for Public Knowledge, amicus curiae.

Opinion:
OPINION OF THE COURT
Stein, J.
The Second Circuit Court of Appeals has certified the following question to this Court: "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?" Because New York common-law copyright does not recognize a right of public performance for creators of sound recordings, we answer the certified question in the negative.
L
Procedural History
Plaintiff is a corporation owned by two of the original members of the Turtles, a band formed in 1965 and most famous for its No. 1 hit song "Happy Together." Plaintiff controls the master recordings of approximately 100 Turtles songs that were recorded before 1972. Defendant is the nation's largest satellite digital radio service. Defendant acknowledges that it broadcasts pre-1972 sound recordings, including Turtles songs, but does not have licenses with the performers or the sound recording copyright holders, nor does it pay them for broadcasts. Plaintiff commenced this federal putative class action, on behalf of recording artists of pre-1972 sound recordings—or the owners of their rights, who are mostly record companies—alleging common-law copyright infringement and unfair competition. Defendant moved for summary judgment dismissing the complaint.
The United States District Court for the Southern District of New York denied defendant's motion for summary judgment, finding, among other things, that New York affords a common-law right of public performance to protect copyright holders of pre-1972 sound recordings, and that defendant's conduct in making internal reproductions of plaintiff's recordings to facilitate its broadcasts did not constitute fair use (62 F Supp 3d 325 [SD NY 2014]). The District Court indicated that it intended to grant plaintiff summary judgment on liability. That court later denied defendant's motion for reconsideration (113 USPQ2d 1303, 2014 WL 7178134, 2014 US Dist LEXIS 174907 [SD NY, Dec. 12, 2014, No. 13 Civ 5784(CM)]), but certified an interlocutory appeal.
On defendant's appeal, the Second Circuit Court of Appeals determined that the case presented "a significant and unresolved issue of New York copyright law," and certified the foregoing question to this Court (821 F3d 265, 267, 272 [2d Cir 2016]). This Court accepted the certified question (27 NY3d 1015 [2016]).
IL
Federal Copyright Law
Although copyright evolved in English common law and was adapted into the common law in this country, it is now primarily governed by federal statutes. Congress enacted the first federal Copyright Act in 1790 (see Act of May 31, 1790 § 1 [1st Cong, 2d Sess, ch 15], 1 US Stat 124, reprinted in Lib of Cong, Copyright Enactments, 1783-1900 at 30-32); however, federal law did not protect musical works until 1831 (see Copyright Act of 1831 [21st Cong, 2d Sess, ch 16], 4 US Stat 436). Despite a major revision of the Copyright Act in 1909, Congress did not consider audio musical works or recordings—as contrasted with the musical composition (sheet music)—to be within the scope of the act (see Capitol Records, Inc. v Naxos of Am., Inc., 4 NY3d 540, 552 [2005]). This is unsurprising, considering that sound recording was, at that time, a relatively new technology. State common law applies to copyright only to the extent that federal statutes do not (see 17 USC § 301 [a]; Naxos, 4 NY3d at 559). Pursuant to federal statute, copyright protection encompasses original works of authorship fixed in any tangible medium of expression, including the categories of literary works, musical works, dramatic works and, as relevant here, sound recordings, subject to certain limitations (see 17 USC § 102 [a]).
Sound recordings were a late addition to the federal statutes. They were first included in the Sound Recording Amendment of 1971, but the protection afforded by the amendment was limited to those recordings produced after February 15, 1972 (see Pub L 92-140, 85 US Stat 391 [1971]). The federal statutes then provided exclusive rights to the owner of a copyright to reproduce the work in copies or phonorecords, prepare derivative works, and distribute copies of the work to the public by sale or lease (see 17 USC § 106 [l]-[3]; Arista Records, LLC v Launch Media, Inc., 578 F3d 148, 152 [2d Cir 2009] [noting the right to reproduce "tangible" copies of sound recordings], cert denied 559 US 929 [2010]). Although the statutes provided a right "to perform the copyrighted work publicly," that right applied only to literary, musical, dramatic, and choreographic works, motion pictures, pantomimes and other audiovisual works; Congress expressly stated that this performance right did not extend to sound recordings (see 17 USC § 106 [4]; 114 [a] [providing that the exclusive rights of owners of sound recordings were limited and did not include any right of performance]; Arista Records, LLC, 578 F3d at 152).
A summary of the historical background of the distinction between the law's treatment of composers versus performers was articulated in Bonneville Intl. Corp. v Peters, as follows:
"The creator of a musical composition has long had a right of exclusive public performance of that musical piece. . . . However, the owner of a copyright in a sound recording of a musical composition has long had very little copyright protection. Until 1971 there was no copyright protection at all. With the Sound Recording Amendment of 1971, a limited copyright in the reproduction of sound recordings was established in an effort to combat recording piracy. However, there was still no right to public performance of that sound recording. Therefore, while playing a compact disc recording of [a particular song] in a concert hall for the paying public would still enrich [the composer's assignee], the person or company that owned the copyright on the CD recording of the music would earn no remuneration beyond the proceeds from the original sale of the recording. . . . While radio stations routinely pay copyright royalties to songwriters and composers (through associations like the American Society of Composers, Authors, and Publishers . . . CAS-CAP') and Broadcast Music, Inc. ('BMI')) for the privilege of broadcasting recorded performances of popular music, they do not pay the recording industry royalties for that same privilege. Perhaps surprisingly, this state of affairs, until [the early 1990s], produced relatively high levels of contentment for all parties. The recording industry and broadcasters existed in a sort of symbiotic relationship wherein the recording industry recognized that radio airplay was free advertising that lured consumers to retail stores where they would purchase recordings. And in return, the broadcasters paid no fees, licensing or otherwise, to the recording industry for the performance of those recordings. The recording industry had repeatedly sought, however, additional copyright protection in the form of a performance copyright. Until 1995, those efforts were rejected by Congress" (347 F3d 485, 487-488 [3d Cir 2003] [citations and footnotes omitted and some emphasis added]).
In 1995, due to concerns about the expansion of digital means of reproducing music, Congress enacted the Digital Performance Right in Sound Recordings Act (DPRA), which accorded sound recording owners a right to control or authorize the public performance of the copyrighted work, but only for performances "by means of a digital audio transmission" (17 USC § 106 [6]). At the same time, however, Congress fashioned a number of exemptions to this right. Thus, under federal law, the exclusive right of performance is circumscribed, and excludes transmissions in nonsubscription broadcasts, as well as the playing of music within a business establishment and its surrounding vicinity (see 17 USC § 114 [d]).
Essentially, the right to control performance is now limited to digital radio services, and does not apply to AM/FM radio stations, nor to bars, restaurants or stores that play music in their establishments. "This exemption was founded in Congress's desire not to impose 'new and unreasonable burdens on radio and television broadcasters, which often promote, and appear to pose no threat to, the distribution of sound recordings' " (Bonneville Intl. Corp., 347 F3d at 488, quoting HR Rep 104-274, 104th Cong, 1st Sess at 14 [1995]).
Significantly, the DPRA created a highly complex scheme that: established a statutory licensing regime for noninterac-tive digital subscription services; required copyright owners to grant a license to such services for performance of their sound recordings (in order to prevent an artist from refusing to allow digital radio play); provided a means of determining reasonable rates and royalty payments (including a dispute resolution system); and required that portions of the royalties be distributed to the recording artists, as well as to the copyright owner (see 17 USC § 114 [d], [e], [f], [g]; Bonneville Intl. Corp., 347 F3d at 488-489). The enactment of the DPRA was prompted, in part, by concerns that, without appropriate protection, the creation of new sound recordings and musical works would be discouraged, and new subscription and interactive services might adversely affect sales of sound recordings and erode the ability of copyright owners to control and be paid for their work (see Arista Records, LLC, 578 F3d at 154). After years of public comment and deliberation, Congress attempted to strike a balance between, on the one hand, protecting owners of copyright and encouraging creation of new music and, on the other hand, promoting the development of new media and distribution forms (see id.). Indeed, through the DPRA's intricate scheme of rules and exceptions, Congress balanced the interests of numerous stakeholders, including digital radio services, recording companies, composers, terrestrial radio stations, businesses that play music on their premises, performing artists, and the public.
In the DPRA, Congress specifically provided that, while the federal copyright statutes preempted other laws, they did not limit or annul the common law or statutes of any state with respect to a violation of rights unless the rights provided under state law were equivalent to the exclusive rights contained in 17 USC § 106 (see 17 USC § 301 [b] [3]). With respect to sound recordings fixed before February 15, 1972, Congress expressly stated that any rights or remedies under state statutes or common law (that do not conflict with the federal statutes) may be applied until February 15, 2067 (see 17 USC § 301 [c]). In this regard, the United States Supreme Court has held that states can regulate—by statute or common law—areas of copyright not covered by federal statutes, including recordings of musical performances fixed prior to 1972 (see Goldstein v California, 412 US 546, 570-571 [1973] [upholding California anti-piracy statute applied to pre-1972 sound recordings]). While Congress permitted the states to regulate unaddressed areas of copyright law until 2067, it neither indicated that such rights existed, nor required states to recognize or create new or additional rights.
In a case addressing statutory copyright, the Supreme Court explained that, while copyright is a form of property interest, it is not like ordinary chattels insofar as it "comprises a series of carefully defined and carefully delimited interests to which the law affords correspondingly exact protections" (Dowling v United States, 473 US 207, 216 [1985]). Consistent with that principle, 17 USC § 106 confers certain exclusive rights, including the right to publish, copy and distribute the work, but the copyright owner is subjected to defined limits and is not accorded "complete control over all possible uses of his [or her] work" (id. at 217 [internal quotation marks and citations omitted]).
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New York State Common-Law Copyright
The question now before us is whether, in light of this history, New York common law includes a right to control public performances of pre-1972 copyrighted sound recordings. If so, the copyright holders have gone decades without acting to enforce that right.
The common law, of course, evolves slowly and incrementally, eschewing sudden or sweeping changes (see Norcon Power Partners v Niagara Mohawk Power Corp., 92 NY2d 458, 467-468 [1998]). We have recognized that the legislature has the ability to step in and make drastic changes to the law, but that courts cannot do so (see Roberson v Rochester Folding Box Co., 171 NY 538, 545 [1902]). Rather, when addressing a legal question for the first time, courts must be mindful of the effect on future litigation and the development of the law (see id. at 545-547). State court cases in New York have not directly addressed the question of whether the common-law copyright for sound recordings includes the right of public performance. Thus, this issue of first impression requires a review of our state's relevant case law.
Palmer v De Witt (47 NY 532 [1872]) was an early case concerning common-law copyright of a play. In that case, this Court explained that authors have a common-law copyright— also called the right of first publication—in unpublished works of any form, including literary works, dramatic or musical compositions, designs or artwork. In accordance with such right, the author may determine whether to publish the work at all and, if so, "when, where, by whom, and in what form" (id. at 536). That exclusive right was limited to the first publication such that, under common law, once the work was published and dedicated to the public, it became the property of the world, and the author had no exclusive right to make multiple copies or control whether others could make and distribute copies (see id. at 536, 539). Nevertheless, while we did not recognize a common-law right to control distribution after the first publication, authors obtained a statutory right to multiply copies to the exclusion of others (see id. at 536; see also A. J. Sandy, Inc. v Junior City, 17 AD2d 407, 409 [1st Dept 1962]). In other words, in Palmer, this Court described the protection of literary labor as primarily statutory in nature and concluded that the common-law protection was "very slight at the best" (Palmer, 47 NY at 539).
The question then became whether the dramatic composition at issue in Palmer had been "published" by being performed on stage with the author's permission, even though the script, itself, had not been distributed to the public. In that regard, we explained that "[t]he rights of an author of a drama in his [or her] composition are two-fold. He [or she] is entitled to the profit arising from its performance, and also from the sale of the manuscript, or the printing and publishing [of] it" (id. at 543). Those rights—performance; and printing and distribu tion—were described as entirely distinct, it being possible for one to exist without the other (see id. at 542). We noted that the exclusive right of first publication existed at common law, but that the right to control public performance was created by statute; in fact, the common law permitted anyone to perform a play from memory or from a legally procured script, without paying royalties to perform it (see id.). Palmer was an early example of the principle that a copyright owner can have separate rights addressing copying and performing, with the former based in common law and the latter based in statute. We did not recognize a single, inseparable bundle of rights.
Seventy years later, in Pushman v New York Graphic Socy., this Court recognized that an artist has a common-law copyright—which we alternately called "control of the right to reproduce"—that protects the right to make reproductions of a painting, which right is separate from, and does not necessarily pass with, the sale of the painting (287 NY 302, 307 [1942]). That case similarly drew a distinction between the right to make copies and the right to the physical object itself, at times giving protection to one but not the other.
An important federal case in this discussion, decided a few years before Pushman, is RCA Mfg. Co. v Whiteman (114 F2d 86 [2d Cir 1940], certs denied 311 US 712 [1940]). Defendant contends that Whiteman definitively held that New York's common law does not provide a right of public performance to a copyright owner of a sound recording. Defendant maintains that, for the nearly 75 years between that decision in 1940 and the District Court's decision in the present case, all interested stakeholders treated Whiteman as a proper statement of New York law. In Whiteman, RCA had a contract pursuant to which it recorded Whiteman's orchestra and sold the records to the public, with a legend on each record stating that it was not licensed for radio broadcast (see id. at 87). The defendant broadcasting company purchased the records and then broadcast them on the radio. The Second Circuit considered the questions of whether Whiteman and RCA had any common-law property rights in the recordings that were invaded by such broadcasting and, if so, whether the legend limited the use that buyers might make of the records (see id.). The court began its analysis by noting that, although rights in sound recordings had been recognized only fairly recently—because it had been possible to record an artist's performance only since the advent of the phonographic record—such rights had nevertheless become valuable (see id. at 88). The court ultimately held that "the 'common-law property' in these performances ended with the sale of the records and that the restriction did not save it" (id.).
That holding is based, in part, on the premise that any form of copyright "is a monopoly [that] consists only in the power to prevent others from reproducing the copyrighted work" (id. [emphasis added]). The court concluded that the broadcaster did not invade that right, because it never copied the performances; the broadcaster "merely used those copies which [White-man and RCA] made and distributed," in the way that the performances were intended to be used—namely, by playing them (id.). Addressing publication of the work, the court then applied that premise to conclude, consistent with the old common-law copyright rule, that the copyright was extinguished once a work was published (see id. at 89). The court stated that, if the common-law copyright had dissolved, "then anyone may copy it who chances to hear it, and may use it as he [or she] pleases. It would be the height of 'unreasonableness' to forbid any uses to the owner of the record which were open to anyone who might choose to copy the rendition from the record" (id.).
Fifteen years later, in Capitol Records v Mercury Records Corp. (221 F2d 657 [2d Cir 1955]), the Second Circuit again addressed the topic, including the Whiteman decision. At that time, a sound recording itself—as opposed to the musical composition—was not a copyrightable work under the federal statutes. Finding "a complete dearth of authority" in New York state law, the court premised its decision upon principle (id. at 662). As relevant here, the court addressed the question of whether the owner of the right to make certain sound recordings lost that right as soon as it sold its first records (see id. at 663). The court summarized Whiteman as holding that "the commonlaw property in the performances of musical artists which had been recorded ended with the sale of the records and that thereafter anyone might copy them and use them as he [or she] pleased" (id.). The court then asserted, however, that "the quoted statement from Whiteman] is not the law of the State of New York" (id.). Citing a state trial-level decision handed down after Whiteman, the Second Circuit concluded that, where the originator of "records of performances by musical artists puts those records on public sale, his [or her] act does not constitute a dedication of the right to copy and sell the records" (id., citing Metropolitan Opera Assn., Inc. v Wagner-Nichols Recorder Corp., 199 Misc 786 [Sup Ct, NY County 1950], affd 279 App Div 632 [1st Dept 1951]).
In our view, Mercury Records overruled Whiteman's holding, but not the underlying premise pronounced in that case. The holding of Mercury Records—that merely selling a record to the public does not divest the copyright holder of its exclusive interest in the right to copy and distribute the protected sound recording—constitutes protection against piracy, which all of the parties and amici here recognize as valid. However, Mercury Records did not address the underlying premise stated in Whiteman—that common-law copyright of sound recordings "consists only in the power to prevent others from reproducing the copyrighted work"; that limited right does not include control over other rights in the work, such as public performance (Whiteman, 114 F2d at 88 [emphasis added]). Since the 1940s, the recording and broadcasting industries appear to have acted in conformity with that premise, as evidenced by the apparent absence of any attempt by sound recording copyright owners to assert control over the right of public performance.
In the Metropolitan Opera case (199 Misc 786), the Metropolitan Opera (the Met) entered into a contract with ABC for the exclusive right to broadcast its performances. The Met also entered into a contract with Columbia Records for the exclusive right to make and sell phonograph records of its performances, but reserved the right to approve all records before they were offered for sale (see id. at 789-790). The defendant recorded the ABC broadcast performances off the air, without permission, and used those recordings to produce records that it then sold to the public (see id. at 790). The principal claim in the action brought by the Met was for unfair competition, but the Met also argued that it and its assignees possessed protected property rights such that they could exclude others from making recordings. The court concluded that the production of an opera included creative elements that the law of copyright would recognize and protect against appropriation (see id. at 798). Specifically, the court concluded that, under the common law, the live performance of an opera on stage and the broadcast of it on the radio under an exclusive broadcasting contract was publication for only a limited purpose, which did not dissolve the Met's rights to that performance for other purposes (see id., citing Palmer, 47 NY 532). The court noted the care exercised by the Met in limiting its grants by entering into exclusive contracts and reserving the right to approve records before their release, which indicated "an attempt to retain effective control over the broadcasting and recording of its performances" (Metropolitan Opera Assn., 199 Misc at 799).
As the Second Circuit correctly stated in Mercury Records, Metropolitan Opera held that an artist or creator of a performance can, under New York common law, prevent someone without permission from exploiting a performance by making a surreptitious recording of it, reproducing that recording arid selling the copies, as the defendant did there (see Mercury Records Corp., 221 F2d at 663). In our view, however, Metropolitan Opera is essentially limited to an anti-piracy determination. Most of the other state trial-level cases also concern piracy or the meaning of the word "publication" in the copyright arena (see e.g. Capitol Records v Greatest Records, 43 Misc 2d 878, 879 [Sup Ct, NY County 1964]; Columbia Broadcasting Sys. v Documentaries Unlimited, 42 Misc 2d 723, 724-725 [Sup Ct, NY County 1964]; Brandon Films v Arjay Enters., 33 Misc 2d 794, 795 [Sup Ct, NY County 1962]; Gieseking v Urania Records, 17 Misc 2d 1034, 1035 [Sup Ct, NY County 1956]). None of those cases, including Metropolitan Opera, directly address the right of public performance.
Several cases addressing New York common law cite the decision of the Pennsylvania Supreme Court in Waring v WDAS Broadcasting Sta. (327 Pa 433, 194 A 631 [1937]). There, an orchestra sued a radio station for broadcasting the orchestra's records, despite a label on each record stating that it was not licensed for radio broadcast (see 327 Pa at 436-437, 194 A at 632-633). The radio station had appropriated and used the orchestra's efforts for the station's own profit, in competition with the orchestra itself, which performed live on the radio each week in exchange for a sizable sum (see 327 Pa at 452-453, 194 A at 640). The Pennsylvania Supreme Court reasoned in that case that the phonograph record, itself, was distinct and independent from the title to the artistic property contained on it (the orchestra's performance of a composition), and that use of the latter could be limited despite the sale of the record (see 327 Pa at 448, 194 A at 638). Accordingly, the court determined that equity would allow an injunction to protect against unfair competition (see 327 Pa at 449, 194 A at 638).
Waring has no direct bearing on whether New York common law recognizes a right of public performance of sound recordings. To the extent this 1937 out-of-state decision pronounced a public performance right for creators of sound recordings under Pennsylvania common law, we find this holding inapplicable in the context of New York state common-law copyright.
The most recent pronouncement from this Court on New York's common-law copyright came in the 2005 case of Capitol Records, Inc. v Naxos of Am., Inc. (4 NY3d 540 [2005]). There, we were presented with a certified question and sub-questions that we summarized as asking "whether there is common-law copyright protection in New York for sound recordings made prior to 1972" (id. at 544). The plaintiff recording company, Capitol Records, had recorded famous musicians in the 1930s and had contracts with the artists that permitted an absolute worldwide right to the performances, including the right to make and sell copies of the recordings to the public. The defendant conducted its own restoration of the original recordings and offered compact discs for sale in the United States, without obtaining a license. The complaint alleged common-law copyright infringement under New York law.
The Naxos decision included summaries of Waring, Metropolitan Opera and Whiteman (see id. at 553-554). Our synopsis of Waring was limited to stating that an artist's rights in records were protected by state common law, and that the sale of records with a limiting label did not constitute a publication that would divest the artist of common-law property rights, because the labels indicated a lack of intent to make the records com mon property (see id.). We observed that the Second Circuit had reconsidered its view of state common law after Metropolitan Opera, and referred to that court's announcement in Mercury Records "that the appropriate governing principle [under New York common law] was that 'where the originator . of records of performances by musical artists puts those records on public sale, his [or her] act does not constitute a dedication of the right to copy and sell the records' " (Naxos, 4 NY3d at 554, quoting Mercury Records Corp., 221 F2d at 663). This, we stated, was consistent with the long-standing practice of the United States Copyright Office and "became the accepted view within the music recording industry" (Naxos, 4 NY3d at 555). Recognizing that these decisions appear to conflict with the traditional principle that a public sale of a literary work constituted a general publication that terminated a common-law copyright, such that any further copyright protection must be statutory, we pointed out the historical distinction in the treatment of literary and musical works (see id.).
Turning to the scope of common-law copyright protection in New York, this Court indicated in Naxos that both the judiciary and the state legislature intended to fill the void left by Congress to protect owners of sound recordings (see id. at 559 [citing Penal Law art 275, and Arts and Cultural Affairs Law § 31.01 as legislative efforts]). We recognized that the federal statutes had abrogated our state common-law protection of sound recordings in two respects: first, the common law does not cover any sound recordings fixed after February 15, 1972, because the federal statutes cover them; and second, any state common-law protection for pre-1972 sound recordings is not perpetual because a federal statute mandates that state rights will cease in 2067 (see Naxos, 4 NY3d at 560; see also 17 USC § 301 [c]). Thus, we concluded that the pre-1972 sound recordings at issue therein were entitled to copyright protection under New York common law until 2067 (see Naxos, 4 NY3d at 560).
Next, it was necessary for us to determine what constituted "publication" under the facts presented. We declared that "in the realm of sound recordings, it has been the law in this state for over 50 years that, in the absence of federal statutory protection, the public sale of a sound recording otherwise unprotected by statutory copyright does not constitute a publication sufficient to divest the owner of common-law copyright protection" (id.). We concluded that the musical recordings therein were entitled to common-law copyright protection under our state law, regardless of whether they had entered the public domain in the country of origin, if the alleged infringement occurred in New York (see id. at 561-563).
In answering one of the sub-questions in Naxos, this Court delineated the elements of a cause of action alleging New York common-law copyright infringement: "(1) the existence of a valid copyright; and (2) unauthorized reproduction of the work protected by the copyright" (id. at 563 [emphasis added]). We referred to the second element as requiring "unauthorized copying and distribution" (id.); we did not include unauthorized performance as an alternative way of establishing that element. Indeed, our decision did not, in the context of rights under state common-law copyright, discuss public performance at all.
Naxos does not resolve the question presently before us. That, too, was an anti-piracy case; it reiterated that New York's common-law copyright protection would prevent the unauthorized copying and sale of records. However, Naxos did not address the right of public performance. Thus, our conclusion in Naxos that pre-1972 sound recordings are subject to some New York common-law copyright protection does not define the scope of that protection or stand for the proposition that there is a single aspect to that protection, as opposed to separate and distinct aspects of reproduction and performance.
While the cases discussed above are not directly on point, they do demonstrate that we can, and do, separate the various rights held by creators of sound recordings. Palmer recognized the two distinct rights of a play's author—the right to control copying and sales of scripts, and the right to control performances (see 47 NY at 543). These rights were described in a way that separated them for legal purposes. Pushman also discussed the separate nature of the artist's rights to sell a painting and to control the ability to make reproductions (see 287 NY at 307). Moreover, these distinct rights have been treated differently.
Most of the decisions from lower courts, or from federal courts applying New York law, have been rendered in anti-piracy cases that do not provide an answer or rationale to support a conclusion regarding the question presented here— whether New York common law provides a right of public performance to creators of sound recordings (see Mercury Rec ords Corp., 221 F2d at 663; Gieseking, 17 Misc 2d at 1035; Capitol Records v Greatest Records, 43 Misc 2d at 879; Metropolitan Opera, 199 Misc at 799). Although Whiteman was overruled in part, Mercury Records should not be read to overrule the underlying premise—not at issue in the latter case—that our common-law copyright protection prevents only the unauthorized reproduction of the copyrighted work, but permits a purchaser to use copies of sound recordings for their intended purpose, namely, to play them (see Whiteman, 114 F2d at 88). It makes sense that, consistent with its name, copyright prevents copying of a work, but does not prevent someone from using a copy, once it has been lawfully procured, in any other way the purchaser sees fit.
I—I <1
Societal Expectations
The understanding and expectations of society are also relevant to the question of what falls within the common-law copyright protection (see Motorola Credit Corp. v Standard Chartered Bank, 24 NY3d 149, 162-163 [2014] [refusing to overrule long-standing common-law rule because interested parties in the affected segment of society had relied on the rule]; Naxos, 4 NY3d at 561 n 9 [observing that our conclusion regarding state common-law copyright was the same position taken by the United States Copyright Office and sound recording industry]). In that regard, at hearings held before Congress, representatives of the recording industry have indicated that copyright owners do not have a right of performance (see e.g. Arista Records, LLC, 578 F3d at 153 [citing 1995 testimony of Jason Berman, president of the Recording Industry Association of America, that without a copyright in right of performance via Internet technology, the industry would be unable to compete in the emerging digital age]; testimony of Jason S. Berman before the House Judiciary Subcommittee on Courts and Intellectual Property: Hearing on HR 1506, June 21, 1995, 1995 WL 371088 [stating that under existing law, performers "have no rights to authorize or be compensated for the broadcast or other public performance of their works"]; Copyright Law Revision: Hearings before the Subcommittee on the Judiciary, Part 2, 90th Cong, 1st Sess at 496, 500 [1967] [stating that under existing law the record companies and performers receive nothing from public performance on radio or in clubs]).
While plaintiff suggests that this testimony, and the lobbying of Congress by the recording industry for a right of public performance, merely reflected the understanding that there was no federal statutory right to public performance in sound recordings, many of the statements reflect a broader understanding that there was no such right—including under state common law—to protect copyright holders of sound recordings. Indeed, several Registers of Copyrights have repeatedly indicated that no such public performance right exists, or at least that it was not generally recognized (see Copyright Office, Federal Copyright Protection for Pre-1972 Sound Recordings: A Report of the Register of Copyrights 44-45 [2011] [explaining that "(i)n general, state law does not appear to recognize a performance right in sound recordings"]; Performance Royalty: Hearings before the Subcommittee on Patents, Trademarks, and Copyrights of the Senate Committee on the Judiciary on S 1111, 94th Cong, 1st Sess at 10 [Comm Print 1975] [stating that creators of sound recordings have copyright protection under federal law, but "still receive no royalties whatever from the public performance for profit of their copyrighted works"]; Copyright Law Revision: Hearings before Subcommittee No. 3 of the House Committee on the Judiciary on HR 4347, HR 5680, HR 6831, HR 6835, 89th Cong, 1st Sess at 1863 [Comm Print 1965] [opining, based on experience, that the chance of enacting a bill recognizing a right of performance in sound recordings was so remote as to be nonexistent]). To be sure, the beliefs of these individuals and groups are not dispositive; however, they do shed some light on the fact that stakeholders in this arena have not understood New York common-law copyright to provide a right of public performance to the copyright holders of sound recordings (see Naxos, 4 NY3d at 561 n 9).
Indeed, it would be illogical to conclude that the right of public performance would have existed for decades without the courts recognizing such a right as a matter of state common law, and in the absence of any artist or record company attempting to enforce that right in this state until now. The absence of a right of public performance in sound recordings was discussed at the federal level for years and became acutely highlighted in 1971, upon enactment of the Sound Recording Amendment, and again in 1995, upon enactment of the DPRA. At those times, all interested parties were placed on notice of the statute's limited rights for post-1972 sound recordings. Although parties do not lose their rights merely by failing to enforce them, the fact that holders of rights to sound recordings took no action whatsoever to assert common-law protection for at least the past four decades—when the absence of a comprehensive federal right of public performance for sound recordings was clear—supports our conclusion that artists and copyright holders did not believe such a right existed in the common law.
Instead, common sense supports the explanation, articulated by the Third Circuit, that the record companies and artists had a symbiotic relationship with radio stations, and wanted them to play their records to encourage name recognition and corresponding album sales (see Bonneville Intl. Corp., 347 F3d at 487-489). As the dissent acknowledges (see dissenting op at 632-633), the Federal Copyright Office explicitly recognized the technological advances affecting the interests of the various participants in the music industry as early as 1991 (see Register of Copyrights, Report on Copyright Implications of Digital Audio Transmission Services at 154-155 [Oct. 1991]). Nevertheless, those participants have coexisted for many years and, until now, were apparently "happy together." While changing technology may have rendered it more challenging for the record companies and performing artists to profit from the sale of recordings, these changes, alone, do not now warrant the precipitous creation of a common-law right that has not previously existed.
Simply stated, New York's common-law copyright has never recognized a right of public performance for pre-1972 sound recordings. Because the consequences of doing so could be extensive and far-reaching, and there are many competing interests at stake, which we are not equipped to address, we decline to create such a right for the first time now. Even the District Court here, while finding the existence of a common-law copyright of public performance in sound recordings, acknowledged that such a right was "unprecedented," would upset settled expectations, and would "have significant economic consequences" (62 F Supp 3d at 352). Under these circumstances, the recognition of such a right should be left to the legislature.
As Congress demonstrated when it enacted the DPRA—by including mandatory licensing and a rate-setting scheme, as well as exemptions—recognizing new rights in this complex area of law involves a delicate balancing of numerous competing interests, requiring an intricate regulatory scheme that can be crafted only by a legislative body. For instance, to make practical the exercise of the right of public performance, it would certainly be necessary to have a central agency or clearinghouse—as the DPRA has established—to maintain a record of ownership rights in sound recordings.
Further, in contrast to the anti-piracy right—which is based on an acknowledgment that no relevant stakeholder has a legitimate interest in unauthorized duplication and distribution of sound recordings—some stakeholders may be harmed if we recognize a right of public performance. Composers, for instance, are paid royalties each time their song is performed publicly (see 17 USC § 106 [4]). However, if the sound recording copyright holder has control over whether and when a recording of that song is played, the composer could lose royalties. In addition, the public and the artists could be harmed by the recognition of a right of public performance. Specifically, if deterred by the costs of paying to play older songs, radio services may choose to limit or cease their broadcasts of pre-1972 music. The public will then be deprived of this music and artists will be deprived of the interest in their performances that is generated by radio broadcasting, potentially resulting in decreased revenue to the performers from record sales and from live concerts, festivals and merchandise which, in many instances, have replaced record sales as the performers' primary sources of income. These are but a few of the potential ramifications of recognizing a right of public performance; there are undoubtedly others which we have not even considered. Moreover, the requested expansion of copyright protection is not necessary to encourage the creation of music, as it would apply only to recordings that were already created more than 40 years ago.
We cannot ignore the fact that Congress studied the nature and scope of the right to the public performance of sound recordings for nearly two decades before revising the federal statutes to recognize a limited right. Indeed, in 1976, Congress "considered at length the arguments in favor of establishing a limited performance right, in the form of a compulsory license, for copyrighted sound recordings, but concluded that the problem require[d] further study" (HR Rep 94-1476, 94th Cong, 2d Sess at 106, reprinted in 1976 US Code Cong & Admin News at 5659, 5721). As directed by the Copyright Act of 1976, the Register of Copyrights submitted a voluminous report in 1978, recommending that Congress enact a limited right to control public performances of sound recordings. Not until 1995 did Congress take action on that recommendation and enact any such right and, even then, the right it created was a narrow one circumscribed by a nuanced regulatory scheme limited to digital transmissions of post-1972 sound recordings (see Pub L 104-39 § 2 [3], 109 US Stat 336 [1995]). Moreover, as part of that statutory scheme, Congress included a requirement that the copyright holder pay a portion of the royalties to the recording artist; even if we were to recognize a common-law copyright to public performance, there is no guarantee that the artists would receive any portion of the royalties, as many copyrights are apparently held by the record companies. Ultimately, it cannot be overstated that, if this Court were to recognize a right of public performance under the common law, we would be ill-equipped—or simply unable—to create a structure of rules to properly guide the application of that right. The legislative branch, on the other hand, is uniquely qualified, and imbued with the authority, to conduct the required balancing of interests and make the necessary policy choices.
V.
Scope of Right
The question certified to us also asks—if we recognize a right of public performance in sound recordings—that we define the nature and scope of that right. Because we do not recognize such a right, we need not address the second portion of the certified question. However, a brief discussion of the issue further demonstrates why we should not create the right in the first instance.
Plaintiff argues that the right of public performance should apply when a sound recording is used for "commercial purposes," but the scope of that term remains undefined. For instance, it is unclear whether the right would apply to AM/FM radio broadcasting. Traditional radio stations generate money through advertisers, who essentially pay for the music, so it may very well be that the recordings will be considered as being used for a commercial purpose in that arena. It would be irresponsible for us to recognize a right of public performance and leave open such a basic question as whether such right applies to ordinary radio. It is similarly unclear whether the right would extend only to situations in which someone is charged directly for the music—such as defendant's digital radio service, or even a jukebox—or whether the right would also apply where payment is indirect, such as to a bar that imposes a cover charge when it has a DJ who plays music. As plaintiff concedes, the public performance right might also apply to public entities, such as museums or schools. Given this uncertainty and the plethora of issues involved in deciding these questions, such line-drawing is best left to the legislature.
The dissent would recognize a right of public performance in pre-1972 sound recordings that tracks the federal right in post- 1972 sound recordings (see dissenting op at 633). While the dissent notes that the federal law reflects Congress's balancing of the varied and competing interests involved, this only highlights that a legislative body—not the courts—should make decisions regarding such a right. Additionally, it would be highly unusual for this Court to simply adopt federal statutes as the embodiment of the scope of a state common-law right. Moreover, as a practical matter, not all aspects of the complex federal scheme can be directly incorporated under our common law. For example, in the DPRA, Congress provided a means of determining reasonable rates and royalty payments, including a dispute resolution system (see 17 USC § 114 [f]). However, state courts have no authority to require the federal Copyright Royalty Judges to adjudicate challenges to royalty rates on pre-1972 sound recordings (see 17 USC § 114 [f]; 801-804), nor do we have the authority to create a New York State version of that dispute resolution system.
Further, the federal Copyright Act—on which the dissent would rely to define the scope of our state's common-law right— applies nationally, not on a state-by-state basis. The dissent acknowledges that defendant's subscribers "can travel cross-country and enjoy uninterrupted and unlimited play" of music within defendant's coast-to-coast satellite coverage area (dissenting op at 618). Defendant's license from the Federal Communications Commission requires it to broadcast the same music or programs nationwide, and does not allow defendant to customize its programming by state or region. Despite these circumstances and the portable nature of radio service, the dissent does not address the difficulties that would arise if this Court, and other state courts across the country, were to separately determine the existence and scope of a common-law right of public performance for sound recordings and were to reach different results in neighboring jurisdictions that may share radio airwaves. Those difficulties present yet another reason why the parameters of any such right should be defined by a legislative body.
Finally, we note that sound recording copyright holders may have other causes of action, such as unfair competition, which are not directly tied to copyright law. Indeed, in the present case, plaintiff prevailed in the District Court on its causes of action alleging unfair competition and unauthorized copying of sound recordings. The Second Circuit concluded that defendant had copied plaintiffs recordings, but postponed the questions of fair use and unfair competition until after our resolution of the certified question (821 F3d at 270 n 4, 272). Thus, even in the absence of a common-law right of public performance, plaintiff has other potential avenues of recovery.
At the end of the day, the question before us is not whether recognizing a right of public performance in sound recordings is a good idea, or whether the absence of such a right enures to the detriment of any particular individual or group. Rather, the question is whether that determination should be made by this Court or whether it should be left to the legislature; in our view, the answer is decidedly the latter. We hold that New York common law does not recognize a right of public performance for creators of pre-1972 sound recordings. Accordingly, the certified question should be answered in the negative.
. Although the Second Circuit held that defendant copied plaintiff's sound recordings in the course of its broadcasting protocol, the court deferred resolution of the fair use defense, unfair competition, and other issues raised, until sifter we answer its certified question (821 F3d 265, 270 n 4, 272 [2d Cir 2016]).
. The phonograph was invented in 1877.
. Publication is an important concept in common-law copyright. Copyright originally applied only to written works and, as noted above, the act of publication generally divested the author of common-law rights (see Capitol Records, Inc. v Naxos of Am., Inc., 4 NY3d 540, 551-552 [2005]; Jewelers' Mercantile Agency v Jewelers' Weekly Publ. Co., 155 NY 241, 247 [1898]). Thus, the common-law copyright was sometimes referred to as the right of first publication (see Pushman v New York Graphic Socy., 287 NY 302, 307 [1942]; Palmer v De Witt, 47 NY 532, 536 [1872]). We have recognized that, because copyright laws were originally created to protect the written word, courts have been confronted with challenges in attempting to apply those laws to new or different forms of communication or expression (see Naxos, 4 NY3d at 552). Indeed, several of the cases cited in the immediately-preceding text above, as well as many others, have addressed what constitutes a general publication of a sound recording, such as would commit the recording to the public domain and divest it of common-law copyright protection. Federal statutes define "publication," but the definition only applies to works falling within the statutes themselves; pre-1972 sound recordings are not covered (see id. at 557; 17 USC § 101). Despite this digression, publication is not at issue in our discussion of the certified question here.
. The dissent similarly asserts that, when Congress amended the Copyright Act to include post-1972 sound recordings but explicitly withheld the right of public performance, "Congress understood that state common law included a right of performance, for otherwise this express reservation would be unnecessary" (dissenting op at 630). But it is at least equally plausible that Congress believed that no right of public performance existed, even under the common law, and codified an explicit exclusion to make its understanding clear, particularly in light of the recording industry's lobbying efforts to create such a right. Even if Congress believed that such a right existed under state common law, such belief was unfounded as it pertained to New York.
. This 2011 statement was revised after the present case was commenced. The Register of Copyrights clarified that, while states could recognize a performance right in sound recordings under their common law, state law did not appear to recognize such a right at that time (see Music Licensing Study: Second Request for Comments, 79 Fed Reg 42,834 n 3 [July 23, 2014]).
. The certified question does not differentiate between different media or types of services in the continuum of public users of sound recordings, as recounted in the concurrence, such as: terrestrial radio; free Internet radio broadcasters; subscription satellite and Internet radio broadcasters (like defendant); and interactive digital services that allow a user to "rent" the provider's library of music at any time. Regardless of the media used, we hold that the creator of the sound recording is not entitled to a right of public performance under our common law. We acknowledge that a number of questions, not raised or addressed by the parties in this case, remain unresolved. For example, as noted in the concurrence, interesting questions may come to mind concerning whether obtaining a song from an interactive digital service—which permits a paying user to select any particular song and call it up on any device at any time, or even, perhaps, to download the song and play it when not connected to the Internet—violates some protected rights of the owners of sound recordings under state common law or some other copyright principles. That question—and, indeed, others not yet envisioned based upon new and emerging technologies—remains open until addressed by the legislature or until properly presented to the Court in the context of a proceeding in which all interested stakeholders have an opportunity to provide input regarding such novel issues.
. The dissent relies upon a settlement reached by these parties in a federal class action in California to support the proposition that defendant is well positioned to address claims for compensation by creators of sound recordings. Such reliance is misplaced for several reasons. First, in the California action, defendant's liability was established under a state statute providing a right of public performance in sound recordings (see Cal Civ Code § 980 [a] [2]; see also Flo & Eddie Inc. v Sirius XM Radio Inc., 112 USPQ2d 1307, 2014 WL 4725382, 2014 US Dist LEXIS 139053 [CD Cal, Sept. 22, 2014, No. CV 13-5693 PSG (RZx)]). This highlights our conclusion that such a right is most appropriately created and defined by a legislative body. Second, the amount of damages for which defendant will be responsible in that action is apparently contingent on the outcomes of two other actions pending between the parties—a case brought in the Florida federal courts, and the case currently before us (see Jonathan Stempel, Sirius May Settle Music Copyright Suit Brought by the Turtles for $100M, Insurance J, Nov. 30, 2016, available at http://www.insurancejournal.com/news/national/2016/ll/ 30/433536.htm). Third, the California settlement is not final, as it requires judicial approval (see id.; Amanda Bronstad, Sirius XM Radio Agrees to Settle Copyright Case With 60s Rock Band The Turtles, Natl LJ, Nov. 14, 2016, available at http://www.nationallawjournal.com/id=1202772377801).