This is an interesting story, but poorly reported and understood (IMO, but IANAL). I think the court is right, which is ironic, given my extended rant about copyright overreach only 2 hours ago (http://news.ycombinator.com/item?id=1453080).

Quick-but-simplistic summary: US musicians played music of dead Russian composer Shostakovich, which was in public domain in the US, for fun and profit.

Meanwhile, US complains to Russia about failure to enforce US copyrights and halt piracy there. Russia points out that those works were never copyrighted in Russia and are thus in the (Russian) public domain. US invokes Berne convention, saying that US copyright registration is sufficient for worldwide recognition. Russia points out that US has cheerfully ignored Russian copyrights. US admits Russia has a point and passes an act (URAA) to respect foreign copyrights in US.

Shostakovich's work is no longer in the US public domain as a result: performances infringe newly (and retroactively) established copyright. Copyright holders demand royalties for any future use; performers balk, and plead reliance on previous public domain status. Agreement impossible, lawsuits launched, performers as plaintiffs claim that extension of copyright to previously unprotected works violates 1st amendment.

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The court decided three basic things. First, that the US government has an interest in seeing US copyrights enforced overseas; and as this depends on treaties which in turn mean we must reciprocally enforce overseas copyright in the US, the government's interest in upholding international copyright treaties trumps that of US musicians to play the music of Shostakovic without paying any royalties.

Second, it doesn't infringe free speech insofar as it is content-neutral: the copyright status of Shostakovic has changed not because the government wishes to suppress performances of his music or because it hates the performers in question, but simply because the works of Shostakovic ought not have been in the public domain to begin with.

Why not, you ask - aren't I supposed to be against endlessly extending copyright? Indeed I am. But Shostakovic only died in 1975. Even under shorter grants of copyright, his work would normally be protected for many years to come, so that his heirs or publishers could enjoy the fruits of his creativity as he saw fit to assign his rights. The only reason for this to be overlooked, and his work to find its way into the US public domain, is that when Shostakovic died Russia was still part of the USSR, with whom we had no sort of copyright arrangements because the USSR was a communist regime which did not believe in such things anyway. Since russia is no longer communist but has since become a signatory to the Berne convention, and since they have retroactively extended the normal protections of copyright to works created before the fall of communism, under the Berne treaty we have to respect that; otherwise we would be in the curious position of saying that Shostakovic must remain in the US public domain out of deference to the (lack of) copyright protection resulting from the laws of the erstwhile Soviet Union.

Third, the performers dislike the fact that since the copyright has been extended to the works of Shostakovic, the URAA means that all the copyright holders have to do is give them a year's notice before they either pay royalties or give up performing his work. In the UK, they say, a rights holder must pay money to someone who relied upon a mistaken public domain classification, to reflect the loss of income they suffer due to their sudden inability to sell the newly-copyrighted work. The court disagreed, pointing out that while UK law would require them to be compensated for their inconvenience before the rights owner could start licensing the work, it would also impose a mandatory immediate halt to their performance activity, rather than the 12 month grace period allowed under US law - and so they are no worse off, overall.

So in a nutshell, US performers of Shostakovic music were getting something for nothing, because but for the composer having lived and died under communism, his work would never have been in the public domain to begin with. To argue otherwise would be like saying to Russians that Soviet law still applies to all property created before 1992.