Court Opinion

ID: 9461217
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:08:49.626524+00
Date Added: 2024-06-11T17:36:57.055541
License: Public Domain

GIBBONS, Circuit Judge
(dissenting):
The issue of statutory interpretation presented by this case is of limited practical effect because of the combined effects of 17 U.S.C. § 1 et seq., Pub.L. No. 92-140, §§ 1(a), 2, 85 Stat. 391 (Oct. 11, 1971), and the recent decision in Goldstein v. California, 412 U.S. 546, 93 S.Ct. 2303, 37 L.Ed.2d 163 (1973). The new statute creates a limited copyright in sound recordings of musical compositions which were ‘.‘fixed” (first recorded) after February 15, 1972. The Goldstein case holds that the states may afford protection for sound recordings “fixed” at any time under state unfair competition laws. Thus the unwarranted interpretation of the Copyright Act of 1909 will not have widespread economic impact. It is, nevertheless, quite clearly wrong, and the error in construction of the statute cannot be cured by pejorative references to the appellees as “pirates” rather than “licensees.”
Congress first extended federal copyright protection to original musical compositions in 1831. Act of Feb. 3, 1831, eh. 16, 4 Stat. 436. The Copyright holder had the exclusive authority to sell copies (i. e. printed sheet music) of the musical score. However between 1831 and 1909, numerous machines were invented which allowed the composition to be reproduced mechanically. The mounting sale of player piano rolls , and gramophone records detracted from the value of the copyright granted for the musical composition since anyone in possession of such modern innovations had little need for a copy of the sheet music. In response, Congress began in 1905 to consider a thorough revision of the copyright laws. The necessity for legislative revision was highlighted by the decision in White-Smith Music Publishing Co. v. Apollo, 209 U.S. 1, 28 S.Ct. 319, 52 L.Ed. 655 (1908). The Apollo Company had manufactured piano rolls capable of reproducing mechanically, compositions covered by a copyright owned by appellant. Appellant, the assignee of the composer, contended that the piano rolls constituted “copies” of the copyrighted composition, and that their sale, without permission, constituted an infringement of the copyright. The Court held that neither piano rolls nor records were “copies” of the copyrighted composition, within the meaning of the federal copyright statutes, but merely component parts of a machine which executed the composition. 209 U.S. at 18, 28 S.Ct. 319. Despite the fact that the piano rolls employed the creative work of the composer, all protection was denied.
Thereafter Congress determined that the copyright statutes should be revised to insure that composers of original musical works received adequate protection to encourage further artistic and creative effort. The Supreme Court in *398Goldstein v. California, supra analyzing the historical background to the Act of 1909 admonishes us:
“To interpret accurately Congress’ intended purpose in passing the 1909 Act we must remember that our modern technology differs greatly from that which existed in 1909. The Act and the [House] report should not be read as if they were written today, for to do so would inevitably distort their, intended meaning; rather, we must read them against the background of 1909, in which they were written.” 412 U.S. at 564, 93 S.Ct. at 2313.
Under § 1(e) of the Copyright Act of 1909 records and piano rolls were thereafter to be considered as “copies” of the original composition, and could not be manufactured unless payment was made to the copyright holder of the composition. However the Goldstein decision in analyzing the 1909 Act noted that
“Composers were to have no control over the recordings themselves. Nowhere does the [House] report indicate that Congress considered records as anything but a component part of a machine, capable of reproducing an original composition, or ... as renderings of [an] original artistic performance . . . .” 412 U.S. at 566, 93 S.Ct. at 2314 (emphasis in original).
As enacted in 1909, § 1(e) of the Copyright Act, 17 U.S.C. § 1 et seq. reads in pertinent part:
“Provided . . as a condition of extending the copyright control to such mechanical reproductions, that whenever the owner of a musical copyright has used or permitted or knowingly acquiesced in the use of the copyrighted work upon the parts of instruments serving to reproduce mechanically the musical work, any other person may make similar use of the copyrighted work upon the payment to the copyright proprietor of a royalty of 2 cents on each such part manufactured, to be paid by the manufacturer thereof . . . .”
Section 101(e) of the Copyright Act, 17 U.S.C. § 101(e) provides in pertinent part:
“Interchangeable parts for use in mechanical music-producing machines.— Interchangeable parts, such as discs or tapes for use in mechanical music-producing machines adapted to reproduce copyrighted musical works shall be considered copies of the copyrighted musical works which they serve to reproduce mechanically for the purposes of this section 101 and sections 106 and 109 of this title, and the unauthorized manufacture, use, or sale of such interchangeable parts shall constitute an infringement of the copyrighted work rendering the infringer liable in accordance with all provisions of this title dealing with infringements of copyright and, in a case of willful infringement for profit, to criminal prosecution pursuant to section 104 of this title.”
Thus, under § 1(e), after the owner of the copyright in a musical composition has authorized its use in the manufacture of parts of instruments [i. e. piano rolls, records, tapes] “any other person may make a similar use ...” This is the so-called “compulsory license” provision upon which defendants relied. This provision was added to the Act when, during the course of congressional hearings in 1909, Congress learned that one dominant piano roll company, anticipating the establishment of an exclusive licensing right, had contracted with the leading music publishers for the exclusive right to record all their music. To forestall the danger that one company would acquire a monopoly in the making of piano rolls and records by acquiring the copyrights of musical compositions, the draftsmen adopted the device of the compulsory license. The compulsory license provision precluded the growth of a music monopoly by insuring that once a copyright owner licensed another to produce an original recorded performance of his work, other manufacturers would have access to that composition to make a “similar use” of it.
*399In construing the parameters of protection afforded to holders of copyrighted musical compositions the trial court recognized the limited nature of the rights granted by Congress. The exclusive right granted by the Act to composers was recognized to be “exclusive” only to the extent that the copyright holder did not permit any recording to be made of his song. However once an original sound recording of that composition had been licens'ed, the owner of the copyright composition lost further control over anyone who made a “similar use” of that composition under the compulsory license provision. The power of the copyright holders to restrict the use of the composition upon its licensing for an original recording from further reproduction by third parties was not envisaged by the Act.
Appellants argue that their claim is not based on a property interest in the recordings, and concede that recordings were not made the subject of copyright protection under the Act. They contend that as the copyright owners in the underlying musical compositions embodied in the original recordings, they have a copyright interest in the composition which extends beyond the original recording. Under this view the protectable interest in the composition is lost through the compulsory license provision only when a third party produces and manufactures his own sound recording from scratch (i.e. from the copyrighted sheet music) rather than from an unauthorized duplication of that composition already embodied in an original sound recording. Rather than the limited extent of copyright protection attributed to the Act by the trial court, the appellants contend they own an exclusive right to determine the use made of their copyrights in the musicial composition.
The crucial and narrow question upon which this appeal turns lies with the construction of the compulsory license provision. The appellants argue that this provision is a limited exception to the copyright owner’s exclusive right, and as a proviso to the copyright interest, it should be construed narrowly. In this regard appellants argue in favor of the construction given the provision in Aeolian Co. v. Royal Music Roll Co., 196 F. 926 (W.D.N.Y.1912) and followed recently in two circuit court decisions: Duchess Music Corp. v. Stern, 458 F.2d 1305 (9th Cir.), cert. denied, 409 U.S. 847, 93 S.Ct. 52, 34 L.Ed.2d 88 (1972); Edward B. Marks Music Corp. v. Colorado Magnetics, Inc., 497 F.2d 285 (10th Cir. 1974), petition for cert. filed, (No. 73—2006, July 10, 1974). See also Fame Publishing Co., Inc. v. S. & S. Distributors, Inc., 363 F.Supp. 984 (N.D.Ala.1973).
In Aeolian, a piano roll manufacturer having a license to use certain copyrighted musical compositions on its perforated rolls sought an injunction against a competitor who was duplicating the rolls. In granting the injunction the court stated
“The provision of the statute (section le) that ‘any other person make similar use of the copyrighted work’ becomes automatically operative by the grant of the license; but the subsequent user does not thereby secure the right to copy the perforated rolls or records. He cannot avail himself of the skill and labor of the original manufacturer of the perforated roll or record by copying or duplicating the same, but must resort to the copyrighted composition or sheet music, and not pirate the work of a competitor who had made an original perforated roll.” 196 F. at 927.
In Duchess Music the Ninth1 Circuit reversed the trial court, and following Aeolian concluded that defendant could not invoke the compulsory license provision as sanction for her activities.
“The statute provides that anyone who properly invokes the license provision ‘may make similar use of the copyrighted work.’ (emphasis supplied). Rosner admits that she duplicates appellants’ copyrighted compositions. She does not make ‘similar use’ of them, she makes exact and identical copies of them. This is clearly outside the scope of the compulsory license scheme.” 458 F.2d at 1310.
*400Similarly, in Marks Music, the Tenth Circuit in affirming the trial court’s decision stated:
“This means, to us, that one who complies with royalty payment called for by the statute, though not having any authorization from the copyright owner, may nonetheless then ‘use,’ not a third party’s record, but the copyrighted composition, which has been characterized as the ‘raw material,’ in a manner ‘similar’ to that employed by the ■recording company which did have authorization from the copyright owner. There is, of course, nothing in the statute which affirmatively authorizes Magnetics to duplicate and copy the recording of one licensed by the copyright owner to reproduce his composition. However, under the statute Magnetics may ‘use’ the copyright composition in a manner ‘similar’ to that made by the licensed recording company. All of which means, to us, that Magnetics may make its own arrangements, hire its own musicians and artists, and then record. It does not mean that Magnetics may use the composer’s copyrighted work by duplicating and copying the record of a licensed recording company. Such, in our view, is not a similar use.” 497 F.2d at 288.
Judge Lacey concluded that Aeolian and Duchess had been wrongly decided (Marks was decided later). 351 F.Supp. at 578-579. Aeolian was wrongly decided, since the compulsory license provision dictated that there be no exclusive license, and to allow a licensee to sue is incompatible with that provision. The practical effect of the decision is to give the licensee a copyright in his record, something Congress clearly had not intended to do.
Properly analyzed, there are three component parts in an original sound recording:
1. the musical composition
2. the performance
3. the recording itself.
Neither the performance, nor the recording itself were afforded copyright protection under the 1909 Act. As to the musical composition Professor Nimmer, in his leading treatise Copyright has stated:
“Once such a recording has been authorized, thereafter the right to record becomes non-exclusive, subject to the terms and conditions of the compulsory license provision of Sec. 1(e).”
§ 108.3, at 420-21 (1972).
“All of the other elements contained in the original record which he has without authority duplicated are not copyrightable, and hence his use of such other elements does not give rise to an action for copyright infringement.”
§ 108.4621, at 431-32 (1972).
Nimmer thus concludes:
“Assuming such a record pirate duly serves a notice of intent to use, and pays the compulsory license royalties, the somewhat astounding result is that he is not an infringer under the Copyright Act.”
§ 108.4621, at 431 (1972).
This view is reinforced by the Supreme Court’s recent opinion in Goldstein v. California, 412 U.S. 546, 93 S.Ct. 2303, 37 L.Ed.2d 163 (1973), which Judge Lacey considered in his second opinion reported at 362 F.Supp. 488. To fill the void in the federal copyright law, many states had enacted criminal statutes proscribing “pirating” activities. The difficulty with such legislation was its constitutionality under the pre-emption doctrine. The Court, applying a Cooley approach, concluded that the states were free to legislate in the area, since certain subject matter to which the copyright clause of the constitution is addressed, may be of local importance, “and not worthy of national attention or protection.” 412 U.S. at 558, 93 S.Ct. at 2310. Implicit in the Court’s holding is the necessary conclusion that the Copyright Law provided no federal remedy to either the composer or his licensee-manufacturer. If Congress had seen fit to *401provide a remedy for infringement to the composer or the manufacturer under the 1909 Act, the Court could not consistent with its Cooley analysis, have permitted the states to legislate in the area.
Finally, Judge Lacey’s conclusion is supported by the legislative history behind the Copyright Act’s 1971 Amendment, Pub.L. No. 92—140, §§ 1(a), 2, 85 Stat. 391, 17 U.S.C. § 1 et seq. (October 11, 1971). Proposed revision of the Act began in 1955, and this amendment was designed as an interim measure prior to final revision sometime in 1975. The amendment created a limited copyright in sound recordings of musical compositions which were “fixed” (first recorded) after February 15, 1972. Congress on the basis of lengthy public hearings at which it heard testimony from the various elements in the music industry as well as those governmental agencies charged with the responsibility of administering the Act concluded that under the existing law:
“If the unauthorized producers pay the statutory mechanical royalty required by the Copyright Act for the use of copyrighted music there is no Federal remedy currently available to combat the unauthorized reproduction of the recording . . . ”
1971 U.S.Code Cong. & Admin.News at p. 1567- (emphasis added) (quoted in Jondora, 351 F.Supp. at 582).
Judge Lacey properly considered the language and legislative history of the 1909 Act, the views of the leading text writers, the analysis of the conflicting opinion in the Ninth Circuit (later followed in the Tenth Circuit), the impact of the Goldstein decision, and the remedy afforded by the 1971 Amendment. It is apparent that both the Ninth and Tenth Circuits have attempted to provide a remedy which was not envisaged by the 1909 Act. We should not follow like the children of Hamelin their erroneous piping. The appropriate response to this problem lies in the hands of the Congress when it considers the final revision of the Copyright Law. The judgment below should be affirmed.