CBS Radio Remasters the Art of Not Paying Artists Royalties

by Wendel, Rosen, Black & Dean LLP
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Two years ago, a federal judge rocked the music industry in holding that pre-1972 recordings may be protected under state copyright laws and are protected by California copyright law.  This holding, in a case brought against SiriusXM, had vast potential ramifications, as it would mean that radio and internet radio stations playing such recordings would have to pay out millions of dollars in royalties that they had never anticipated paying. CBS Radio, however, just scored a legal victory that, if it stands up, would effectively eliminate any artist’s ability to recover royalties for pre-1972 recordings.

Seeking a way to shift the paradigm of the SiriusXM case and the string of similar suits that preceded and followed it, when ABS  Entertainment, which owns the pre-1972 recordings of Al Green and others, sued CBS, iHeartMedia, and Cumulus, CBS decided to throw something of a legal “Hair Mary.”  It argued that “CBS does not play vinyl sound recordings.”  Rather, it plays only re-issued or remastered versions of pre-1972 recordings.

United States District Judge Percy Anderson grabbed CBS’s Hail Mary in the end zone, finding that the sound engineering process in remastering an album constitutes “copyrightable originality.”  As such, CBS was permitted to treat the recordings as post-1972 recordings.

Judge Anderson’s ruling comes despite ABS’s warning that accepting CBS’s remastering argument would result in the owners of sound recordings trumping artists’ rights over their works in all cases.  The judge addressed this point in a footnote, distinguishing the “original expression added by a sound engineer during the remastering process” from the naked conversion between formats (i.e., vinyl to MP3).

The reason that this issue exists is that, on February 15, 1972, Congress brought sound recordings under federal copyright law, but not retroactively. Prior to 1972, musical recordings were protected only be state copyright laws, many of which are based in common law, court-made rules that are not codified in statutes and, at least in many instances, do not require registration in order to protect recorded material.  Works that are copyright protected by state common law are harder to track than those protected by a registered federal copyright.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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