SAN FRANCISCO – The 9th U.S. Circuit Court of Appeals recently reversed a district court decision that granted summary judgment to CBS Corp. in a copyright case brought by four record and entertainment companies.
U.S. Circuit Judge Richard Linn issued a 50-page ruling on Aug. 20 reversing the U.S. District Court
for the Central District of California decision to grant summary judgment to CBS in the suit filed by ABS Entertainment, Barnaby Records, Brunswick Record Corp. and Malaco Inc.
The four companies sued CBS over claims of copyright infringements on a state level regarding the broadcasting of remastered digital sound recordings that were originally fixed in analog format before 1972 on radio stations owned by CBS.
As stated in the ruling, "under the Sound Recording Act, sound recordings fixed after Feb. 15, 1972, are subject to a compulsory license regime for performance via digital transmission and are excused from infringement for performance via terrestrial radio," and that "Congress reserved governance of sound recordings fixed before 1972 to state statutory and common law and excluded such sound recordings from federal copyright protection until 2067."
ABS, per the ruling, "owns sound recordings embodying musical performances initially fixed in analog format prior to Feb. 15, 1972." With technological evolution, "ABS hired remastering engineers to remaster the pre-1972 sound recordings onto digital formats," optimizing those "for the new digital format using standard, technical processes to create accurate reproductions of its original pre-1972 analog recordings and did not set out to create any new and different sound recordings."
On Nov. 17, 2015, ABS filed a class action suit against CBS claiming that "CBS’s transmission and distribution of the remastered sound recordings violated California state law, specifically, California Civil Code § 980(a)(2) (protecting the property rights of an author of a sound recording fixed prior to Feb. 15, 1972); misappropriation and conversion; and unfair competition," the ruling stated.
After having a joint stipulation for deadline extension for class action certification denied, ABS filed its own motion on Nov. 19, 2015, which was stricken on Nov. 25, 2015, because the lower court "set a hearing date for the motion beyond the 35-day period after service of process as required by the court’s standing orders."
After the denial, CBS filed for summary judgment, alleging that "that there was no genuine issue of material fact that the remastered sound recordings were authorized original derivative works, subject only to federal copyright law."
After excluding two testimonials, by engineers Durant Begault and Paul Geluso, the district court granted summary judgment to CBS because the court considered the expert's analysis "undefined and unscientific," and also because ABS "authorized the creation of the remastered sound recordings," failing to "meet its burden to show that its authorization to create the remastered sound recordings did not extend to the creation of a derivative work, and because, in any event, the right to claim copyright in a non-infringing derivative work arises by operation of law, not through authority from the copyright owner of the underlying work.”
Linn also affirmed in his ruling that the remastered recordings show a change toward a new copyrighted material.
"The district court erred in concluding that plaintiffs’ state copyright interest in the pre-1972 sound recordings embodied in the remastered sound recordings was preempted by federal copyright law," the appeals court said. "The creation of an authorized digital remastering of pre-1972 analog sound recordings that qualify as copyrightable derivative works does not bring the remastered sound recordings exclusively under the ambit of federal law."
"If, on remand, the factfinder concludes that any or all of the remastered sound recordings here do manifest a change sufficient to create a derivative, copyrightable work, the factfinder should also consider the effect of recognizing a copyright in the remastered sound recording on ABS’s ability to exercise whatever copyrights it may possess in the pre-1972 sound recording," Linn said.
The panel concluded that "the district court erred in holding that there were no genuine issues of material fact that the remastered sound recordings used by CBS were independently copyright eligible."
In remanding the case back to district court, the appeals panel said, "The district court should consider ABS’s request for continuance of pre-certification discovery, and, if appropriate, the merits of ABS’s class
action motion, at an early practicable time."
It also reversed the district court's striking of the class action certification,
U.S. Court of Appeals for the 9th Circuit case number 2:15-cv-06257- PA-AGR