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June 14 — Music companies have been digitally remastering old records ever since people started listening to compact discs and MP3 files instead of vinyl and cassettes. What they couldn't know is that those remasters may be considered new creative works under copyright law.
That's the implication of a recent federal court ruling on a dispute between a copyright holder and a broadcaster over remastered oldies hits. And if it survives appeal—none has been made yet —it will make it easier broadcasters, music streaming services or any other businesses playing oldies for the public.
“This has a potentially significant impact,” James E. Griffith a copyright attorney with Marshall, Gerstein & Borun LLP, Chicago, told Bloomberg BNA. “If other courts were to adopt this reasoning then terrestrial broadcasters—so long as they stick to post '72 masters—then they can use those works royalty-free.”
And it's a ruling that took a lot of people by surprise, such as Jay Rosenthal a copyright attorney with Mitchell Silberberg & Knupp LLP, Washington.
“I've never been able to differentiate a lot between an analogue and a digital remaster,” Rosenthal told Bloomberg BNA. “You're getting the same entertainment value.”
For decades, the broadcasting industry has operated under what seemed to be a fairly stable set of rules regarding what they could play on the radio and who had to be paid.
But a series of legal battles threatens to throw standard practices into confusion—all because Congress didn't put pre-1972 sound recordings under federal copyright protection.
Most copyright owners—such as creators of novels and films—are limited to enforcing their rights under federal law, through the Copyright Act. But oldies records are governed by state laws, giving owners of pre-1972 sound recordings a rare opportunity to broaden their rights under state laws—and for use of their recordings not just over the radio but on TV and in cable broadcasts, stores, bars, clubs and more.
As such, cases involving pre-1972 recording rights have sprouted up in federal courts from coast-to-coast.
In one prominent example, the owners of the Turtles' “Happy Together” have waged court battles as they try to establish that various state laws give them the right to decide who can broadcast their records, and under what terms. “Turtles” cases are now under appeal in at least three states: California, Florida and New York.
But it is the most recent development in the legal fight between ABS Entertainment and CBS Corp. that could create the biggest shake-up to prevailing practices to date.
Last month, the U.S. District Court for the Central District of California decided that a pre-1972 record that was digitally remastered after 1972 is, in fact, a new recording. ABS Entm't, Inc. v. CBS Corp., No. 15-06257 (C.D. Cal. May 30, 2016).
That would put the remaster under federal law, which is clearer about who gets paid when a radio station plays a record.
Copyrights in musical recordings are split between a song's original composers and those who perform it on a particular recording.
But while traditional AM-FM radio broadcasters pay composers when their songs are broadcast, they are not obligated to pay the recording artists, who have traditionally relied on sales of their recordings for income. Composers also get proceeds from those sales.
ABS Entertainment Inc., which acquired rights in a series of old soul, funk, blues, rock and roll and R&B recordings, sued CBS Corp., which operates both traditional and digital broadcast stations.
ABS and its co-plaintiffs argued that CBS needed permission to play records by such legendary vocalists as Al Green, the Everly Brothers and Mahalia Jackson.
But on May 30, the court sided with CBS in ruling that a pre-1972 Al Green record and a post-1972 digitally remastered version of the record are two different works of authorship with two different sets of copyright interests vested in them.
CBS wanted that ruling because it allows it to follow federal law governing “public performance” of post-1972 sound recordings, which is both easier and potentially cheaper.Source Material:
ABS Entm't, Inc. v. CBS Corp.
Complaint: Aug. 17, 2015
District Court Opinion: May 30, 2016
For traditional AM-FM radio, that means CBS must pay licensing fees to composers but nothing to performers when broadcasting a song.
For some digital broadcasts, it means paying licensing fees to composers, and royalties to recording artists set by the Copyright Royalty Board under a compulsory license.
That's also good for CBS, because royalties set under compulsory licenses are generally “less than the free market rate,” Rosenthal said.
The ruling's implications—that remasters of pre-1972 recordings fall under federal law as new works—would seem to lift a weight from the shoulders of broadcasters, freeing them of the burden of wondering which state statutes and common law might apply to their programming. And it's not as though new formats of older songs are scarce.
“Generally, you can find post-1972 remasters of pretty much anything you want to use,” Griffith said.
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