Appeals Court Revives Lawsuit Against CBS Over Pre-1972 Recordings

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CBS Radio must again contend with a lawsuit brought by ABS Entertainment, owner of recordings by Al Green and others. On Monday, the 9th Circuit Court of Appeals wiped out an eye-opening 2016 summary judgment ruling by a trial court in CBS' favor that raised the prospect that music owners could enjoy perpetual copyright because remastered versions were independently copyrightable. In the decision, the appeals court concludes that the judge shouldn't have ruled so quickly for CBS and casts doubt on whether remastered sound recordings exhibit enough originality to be copyrightable.

For decades, radio broadcasters didn't have to compensate sound recordings owners for performance.

But then, owners of older recordings — those authored before Congress conferred federal copyright protection for sound recordings — asserted claims of misappropriation under state laws. Like SiriusXM and Pandora, CBS Radio has faced a wrath of litigation for broadcasting iconic songs from the dawn of the rock era.

In response to the lawsuit, CBS made a bold and novel argument. The broadcaster made the point that older recordings were mainly distributed through vinyl, and what the broadcaster now performs is really remastered versions, eligible for its own copyright protection. As such, any state misappropriation claim is preempted by federal law, and owners of pre-1972 recordings don't have any claim for compensation.

Despite word on how this argument would lead to an upheaval on limitations for copyrighted work, U.S. District Court Judge Percy Anderson gave CBS the win

Writing for a panel of 9th Circuit judges, Richard Linn reverses.

"We conclude that the district court erred in finding a lack of a genuine issue of material fact about the copyright eligibility of remastered sound recordings distributed by CBS and improperly concluded that ABS’s state copyright interest in pre-1972 sound recordings embodied in the remastered sound recordings was preempted," he writes. 

Judge Linn acknowledges that derivative works do enjoy independent copyrightability, but focuses the question on originality and whether the author of a derivative work has contributed something that is creative and easily recognizable as distinct from the original. He points to guidance from the U.S. Copyright Office that mere changes in format, declicking and noise reduction don't warrant separate copyright protection.

"[I]t should be evident that a remastered sound recording is not eligible for independent copyright protection as a derivative work unless its essential character and identity reflect a level of independent sound recording authorship that makes it a variation distinguishable from the underlying work," Linn writes, soon adding, "That is so even if the digital version would be perceived by a listener to be a brighter or cleaner rendition."

The 9th Circuit is highly skeptical about copyrights for remastered versions even if the bar for originality is a low one under copyright law. Although the appeals court doesn't go so far as to declare that remastered sound recordings can't ever be eligible for copyright, the opinion states that a digitally remastered version will "rarely" be original enough to qualify.

"If an allegedly derivative sound recording does not add or remove any sounds from the underlying sound recording, does not change the sequence of the sounds, and does not remix or otherwise alter the sounds in sequence or character, the recording is likely to be nothing more than a copy of the underlying sound recording and is presumptively devoid of the original sound recording authorship required for copyright protection," states the opinion (read here in full). "Such a work lacks originality."

Even if CBS could make a showing that a remastered work contains independent creative content, Linn believes Anderson was in error by finding no genuine issues of material fact, meaning the trial judge should have at least let the issue be contested at a jury trial.

The trial judge is faulted for placing too much reliance on CBS' musicologist expert who attempted to explain how listeners of remastered versions would perceive changes to timbre, spatial imagery, sound balance and loudness. The 9th Circuit derides these bits as "technical improvements," and while devoting some space to credit the contributions of recording engineers and producers, the panel of judges are leery of extending copyright too far.

Moreover, the 9th Circuit says the trial judge should have also considered the degree in which the remastered versions rely on preexisting material. Doing so, according to the decision, ensures that the author of a derivative work doesn't prevent the owner of the preexisting work from exercising rights.

"[T]here is at least a genuine issue of material fact whether granting copyright protection for the remastered sound recordings here would undermine ABS’s rights in the pre-1972 sound recordings to authorize additional derivative works," continues Linn. "Were ABS intent on granting an authorization to create an intentionally derivative work, for example by authorizing use of the underlying works as samples or remixes, those authorized works would be at high risk of infringement suits from the remastered sound recording copyright holders. This risk would, in effect, grant the remastered sound recording copyright holder a 'de facto monopoly' on derivative works."

The case is remanded back to the district court for further proceedings including new consideration of a class action certification. Robert Allen at McKool Smith argued the appeal for ABS while Robert Schwartz at Irell & Manella appeared for CBS.