Opinion ID: 1239364
Heading Depth: 1
Heading Rank: 3

Heading: State regulation by statute vis-a-vis common law

Text: Sears, Roebuck & Co. v. Stiffel Co. (1964), 376 U. S. 225, 84 Sup. Ct. 784, 11 L. Ed. 2d 661, and Compco Corp. v. Day-Brite Lighting, Inc. (1964), 376 U. S. 234, 84 Sup. Ct. 779, 11 L. Ed. 2d 669, are relied upon by defendants. In each case, plaintiffs sued the defendants in federal courts in Illinois alleging unfair competition because the defendants manufactured copies of plaintiffs' productsa pole lamp in Sears, and a fluorescent lighting fixture in Compco. In each case, the plaintiff had obtained a patent, but it was held invalid by the district courts. Sears, at page 226; Compco, at page 235. The United States Supreme Court held that plaintiffs could not maintain their actions based on state unfair competition law, because the federal patent law, under the Supremacy Clause, was controlling. The court concluded that the patent system used uniform federal standards to promote invention and preserve free competition and, under the Supremacy Clause, state unfair competition laws could not be permitted to give protection that clashed with the objectives of the federal patent laws. Sears, at pages 230, 231. In Goldstein v. California (1973), 412 U. S. 546, 93 Sup. Ct. 2303, 37 L. Ed. 2d 163, the petitioners therein were convicted of record piracy under the California penal statute. Relying on Sears and Compco, the petitioners argued that federal copyright law pre-empted the field, thus invalidating the state law. The supreme court held that the constitution neither explicitly precludes states from granting copyrights, nor grants such authority exclusively to the federal government. Goldstein, at page 560. The court affirmed the convictions and concluded that California, in enacting the law, had exercised a power it retained under the constitution and that the statute did not intrude into an area which Congress had pre-empted. The court held that Congress had not pre-empted the the area, because, until 1972, the federal Copyright Act provided no protection for sound recordings. Goldstein, at 562, 563, fn. 17. Such protection was afforded for the first time in 1971, when Congress enacted Public Law 92-140, which extends copyright protection to sound recordings fixed, published, and copyrighted after February 15, 1972. Public Law 92-140, sec. 3, 85 U. S. Stats. at Large 391, 392. The instant case deals only with recordings before that date. Defendants interpret Goldstein narrowly and argue that it permits states to provide copyright or similar protection only by statute. Defendants argue that, without a statute, Sears and Compco expressly reaffirmed, where applicable, by Goldstein still preclude protection under common law. We conclude, however, that Goldstein permits state protection by common law as well as by statute. In Goldstein, the court pointed out that, in Sears and Compco, state unfair competition laws could not be used to prevent copying of articles, because application of the state law upset the careful balance Congress had drawn, and they must necessarily give way under the Supremacy Clause. Goldstein, at pages 569, 570. The Goldstein court pointed out that such a conflict does not arise in the case of recordings of musical performances, because in this category of Writing, Congress has not drawn a balance. Goldstein, at page 570. Such is the fact in the instant case. No federal scheme has been devised that is applicable to the subject matter of this action. At least there had been none until the law effective in 1972. Under Goldstein, a state is free to apply its own law. Moreover, Goldstein made clear that Public Law 92-140 did not indicate a congressionally determined balance as to recordings made prior to February 15, 1972. In sec. 3 of the act, Congress said that nothing in the act shall be applied retroactively or be construed as affecting in any way any rights with respect to sound recordings fixed before February 15, 1972. 85 U. S. Stats. at Large 392. Goldstein, at pages 551, 552. Under the standards of Goldstein, state law may be applied. We see no indication that the United States Supreme Court put its imprimatur on statutory law, but not upon the power of a common-law court acting in accordance with the accepted public policy of its state. The same conclusion was reached in Jondora Music Publishing Co. v. Melody Recordings, Inc. (D. C. D. N. J. 1973), 362 Fed. Supp. 494, 497; Note, Copyrights: States Allowed to Protect Works Not Copyrightable Under Federal Law, 58 Minn. Law Rev. (1973), 316, 324; and Note, 8 Univ. of San Francisco Law Rev., supra, 199, 211. Defendants also argue that the compulsory licensing provision indicates congressional intent that the only person with a property interest in a song is the composer. The compulsory licensing statute (17 USC, sec. 1 (e)) [4] provides that, once a composer permits his song to be recorded, anyone else may record the song if he pays the composer two cents for each record manufactured. Under Goldstein, defendants obtain no solace under the compulsory licensing statute. In Goldstein, in footnote 23 at pages 566 and 567, the court noted that the compulsory licensing statute did not provide the direct conflict necessary to render the California statute invalid. Thus, the compulsory licensing statute does not show congressional intent to pre-empt state control in other respects involving unfair competition.