Amicus Curiae Brief — Goldstein v. California

Supreme Court brief1973

Ask Donna

What actually matters in this document.

Text

In THE

Supreme Court of the United States

Octoser Term, 1971

No. 71-1192

—<g—

Dowatp Gotpsrein, Rutu Koven and

Doxavp Koven,

Petitioners,

—against—

State or CaLirornia,

Respondent.

ON WRIT OF CERTIORARI TO THE APPELLATE DEPARTMENT OF THE

SUPERIOR COURT OF THE COUNTY OF LOS ANGELES,

STATE OF CALIFORNIA

—<j>—_

MOTION OF RECORDING INDUSTRY ASSOCIATION

OF AMERICA, INC. FOR LEAVE TO FILE BRIEF

AMICUS CURIAE

The Recording Industry Association of America, Ine.

(“RIAA”) hereby respectfully moves for leave to file the

attached brief amicus curiae. Counsel for respondent has

consented to the filing of this brief, but counsel for peti-

tioners has declined to consent.*

—

* The letter from counsel for respondent giving consent to the

filing of this brief is on file with the Clerk of this Court. The letter

m counsel for petitioners also is on file.

Se 1 tee me arene. Pm aie =

The Interest’ of the Amicus Curiae

RIAA is a non-profit New York corporation, whose mem-

bership consists of sound recording companies which to-

gether account for close to 90% of all authorized phono-

graph records and prerecorded tapes manufactured and

sold in the United States. Among RIAA’s basic purposes

is the representation of its membership before legislative,

regulatory and judicial bodies with respect to federal, state

and local legislation and regulations affecting the entire

sound recording industry.

RIAA has urged the adoption of state legislation de-

signed to eliminate the manufacture and sale of unauthor-

ized duplications of sound recordings, including Section

653h of California’s Penal Code which is under attack in

the instant case. RIAA also has been active in representing

the sound recording industry before the Congress of the

United States. The testimony and detailed information

provided to Congress by RIAA were instrumental in the

passage of Public Law No. 92-140, 85 Stat. 391 (October

' 15, 1971), which provides federal statutory copyright pro-

tection for sound recordings made after February 15, 1972.

RIAA’s status as an appropriate representative of the

sound recording industry was specifically recognized by

the granting of its motion to intervene as a defendant in

the case of Shaab v. Kleindienst, 174 U.S.P.Q. 197 (D.D.C.

1972),** which upheld the constitutionality of Public Law

No. 92-140.

* The Membership List of RIAA is set forth as Appendix A to

the Brief annexed hereto.

** The report of this case in the advance sheets contains an error

in the name of RIAA and also identifies it incorrectly as an amicus

curiae instead of an intervenor-defendant.

Thus, RIAA is intimately acquainted with the legislative

history and purposes of the state statute which petitioners

assert is incompatible with federal copyright policy, and

also of the federal act which petitioners claim has a pre-

emptive effect. It also has developed an extensive knowl-

edge of the economics of the industry and the working

operations of the pirates.

While the respondent has a specific interest in upholding

the validity of the statute under which petitioners pleaded

nolo contendere, RIAA represents the broader interests of

the sound recording industry. These broader interests are

intimately involved in this case, because a decision that See-

tion 653h of the California Penal Code is unconstitutional

would, by implication, invalidate all state law in this area,

both civil and criminal. The result would be to permit the

unrestricted duplication of the vast majority of sound re-

cordings now in existence. These sound recordings, which

constitute the very life blood of RIAA’s members, have

been protected in an almost unbroken line of decisions for

“well over half a century. Such a decision would have a

direct and devastating impact upon the members of RIAA,

as well as on many other individuals and enterprises con-

nected with the production and sale of sound recordings.

Accordingly, because of its extensive knowledge of and

direct interest in the issue presented for decision in this

case, RIAA requests permission to file the attached brief

amicus curiae in support of respondent herein.

Respectfully submitted,

Siwyey A. Diamonp

425 Park Avenue

New York, New York 10022

wi (212) PL 9-8400

Ernest S. Meyers

74 Trinity Place

New York, New York 10006

(212) HA 2-0081

Counsel for Recording

Industry Association

of America, Inc.,

Amicus Curiae

Dated: New York, New York

September 20, 1972

To: a

ArtTHuR LEEDS

Paut T. Locke

DanieEt M. Gorr.ies

9229 Sunset Boulevard

Suite 306

Los Angeles, California 90069

(213) 278-3232

Counsel for Petitioners

Roger ARNEBERGH :

Davi M. ScHacter ©

Steven A. ScHWABEP

205 South Broadway

Suite 500

Los Angeles, California 90012

(213) 485-5483

Counsel for Respondent

cat

IN THE

Supreme Court of the Hnited States

OcroBer TERM, 1971

No. 71-1192

—<>—

DonaLD GoupsTeIn, RutH Koven and DonaLp Koven,

Petitioners,

—against—

State or CaLirorNi,

Respondent.

ON WRIT OF CERTIORARI TO THE APPELLATE DEPARTMENT OF THE

SUPERIOR COURT OF THE COUNTY OF LOS ANGELES,

STATE OF CALIFORNIA

BRIEF OF RECORDING INDUSTRY ASSOCIATION

OF AMERICA, INC., AMICUS CURIAE

Siwney A. Diamonp

425 Park Avenue

New York, New York 10022

(212) PL 9-8400

Ernest S. MEYERS

74 Trinity Place

New York, New York 10006

(212) HA 2-0081

Counsel for Recording Industry

Association of America, Inc.,

Amicus Curiae

Kaye, ScHouer, FIERMAN,

Hays & HanpLER

David Goldberg

William M. Borchard

Ronald S. Kadden

Laporte & MEYERS

Of Counsel

————————

mets? PPT RE RR OTE eR mer

A. The Interest of the Amiicus Curiae

B. Summary of Argument ..

C. Factual Background ...

I. The Sound Recordiing Industry

II. The Production of Sound Recordings ................

III. The Operation of Rtecord and Tape Pirates .... 10

‘D. Argument

IT.

ITT.

INDEX

Reversal of the Judigment Below Would Have

the Effect of Owerturning Long-Standing

Principles of State Law on Which the Owner-

ship of Sound Recordings Is Based, In-

cluding Various Recent Decisions Distin-

guishing Sears amd Compco. The Conse-

quences to the Recording Industry Would Be

Disastrous. No Overriding Considerations of

Public Policy Comprel Such a Result.

States Can Protect Sound Récordings Under

Unfair Competition Principles.

States Also Can Protect Sound Recordings

Under Common Law Copyright Principles. ....

The Sears and Compco Cases Are Distin-

guishable.

PAGE

V. The California Statute Is a Proper Exercise

of the State Interest in Punishing Conduct

Equivalent to Larceny. 42

E. Conclusion 45

Appenpix A—Recording Industry Association of

America, Inc., Membership List .............. 1-A

APPENDIX B—Glossary 1-B

AUTHORITIES CITED

: CasEs

A&M Records v. Northwest, Inc., (Ore. Cir. Ct.), in

Casx Box, Sept. 2, 1972, at 7 22n

Aeolian Co. v. Royal Music Roll Co., 196 F. 926 (W.D.

N.Y. 1912) 2in

Alfred Bell & Co. v. Catalda Fine Arts, Inc., 191 F.2d

99 (2d Cir. 1951) , 38n

American Visuals Corp. v. Holland, 239 F.2d 740 (2d

Cir. 1956) 32n

Artia v. Colosseum Records, Inc., 150 F. Supp. 550

(S.D.N.Y. 1957) 21n

Atlantic Recording Corp. v. Magnitron, Inc., No. 72 CH

3431 (Ill. Cir. Ct., Jun. 13, 1972) ... 22n

Atlantic Recording Corp. v. Superba Tapes, Inc., No.

995811 (Cal. Super. Ct., Feb. 19, 1971) 21n

Baez v. Fantasy Records, Inc., 144 U.S.P.Q. 537 (Cal.

Super. Ct., 1964) 2in

Baker v. Selden, 101 U.S. 99 (1879) 38n

Bond Buyer v. Dealers Digest Publishing Co., 25 App.

Div. 2d 158, 267 N.Y.S. 2d 944 (1st Dept. 1966) .......... 27n

PAGE

California v. Zook, 336 U.S. 725 (1949) .. 48n

Capitol Records, Inc. v. Campoy, No. 191454 (Cal.

Super. Ct., Aug. 28, 1967) 22n

Capitol Records, Inc. v. Erickson, 2 Cal. App. 3d 526,

82 Cal. Rptr. 798 (1969), cert. denied, 398 U.S. 960

(1970) 15n, 21n, 40n

Capitol Records, Ine. v. Greatest Records, Inc., 43

Mise. 2d 878, 252 N.Y.S. 2d 553 (Sup. Ct. 1964) ..22n, 32n

Capitol Records, Ine. v. Hollywood Music Program-

mers, Inc., No. 944640 (Cal. Super. Ct., Dee. a,

1968) 21n

Capitol Records, Inc. v. International Tape, Inec., No.

72 CH 301 (Ill. Cir. Ct. Feb. 23, 1972) =

Capitol Records, Inc. v. MeGettigan, No. 359-225 (Ore.

Cir. Ct., June 21, 1971) 22n

Capitol Records, Inc. v. Mercury Records Corp., 221

: F.2d 657 (2d Cir. 1955) 21n, 30n, 32n

: Capitol Records, Inc. v. Muntz, (Cal. Super. Ct.), in

- Brtpoarp, Mar. 7, 1970 2in

Capitol Records, Inc. v. Schaak Electronics, Ine., No.

671559 (Minn. Dist. Ct., Jul. 21, 197 1) 22n

Capitol Records, Ine. v. Spies, 130 Ill. App. 2d 429, 264

N.E. 2d 874 (1970) 9n, 23n, 40n

Capitol Records, Ine. v. Winokur, (Cal. Super. Ct. hi in

_ Bazpoarp, Mar. 7, 1970 21n

CBS, Ine. v. Cartridge City, Ltd., (N.Y. Sup. Ct. yin

155 N.Y.L.J. 113, at 10 (1966) 22n

CBS, Ine. v. Custom Recording Co., S.C. , 189

S.E. 2d 305 (1972) 23n

CBS, Inc. v. DeCosta, 377 F.2d 315 (1st Cir.), cert.

denied, 389 U.S. 1007 (1967) 27n

PAGE

CBS, Inc. v. Documentaries Unlimited, Inc., 42 Mise.

2d 723, 248 N.Y.S. 2d 809 (Sup. Ct. 1964) 00000... 27n, 30n

CBS, Inc. v. International Tape, Inc., No. 72 CH 302

(ill. Cir. Ct., Feb. 17, 1972) 29n

CBS, Inc. v. Spies, 167 U.S.P.Q. 492 (Ill. Cir. Ct.

1970) 9n, 22n, 26n

CBS Records v. Johnson, No. 4-71 Civil 255 and No.

4-71 Civil 436 (D. Minn., Jun. 20, 1972) 22n

Columbia Records, Inc. v. Nance, (Mo. Cir. Ct.), in

CasxH Box, Nov. 13, 1971, at 7 22n

Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234

(1964) : 2, 17, 19, 20, 21, 26, 27, 33, 34n,

35, 37, 38, 39, 39n, 40, 41, 43, 44n

Davis v. TWA, 297 F. Supp. 1145 (C.D. Cal. 1969) ........ 40n

Duchess Music Corp. v. Stern, 331 F. Supp. 127 (D.

Ariz. 1971), rev’d, 458 F.2d 1035 (9th Cir. 1972) ........ 12n

Edgar H. Wood Associates, Inc. v. Skene, 347 Mass.

351, 197 N.E. 2d 886 (1964) 30n, 31n

Ferris v. Frohman, 223 U.S. 424 (1912) 32n

Fred Fisher, Inc. v. Dillingham, 298 F. 145 (S.D.N.Y.

1924) 39n

Florida Lime & Avocado Growers, Inc. v. Paul, 373

U.S. 132 (1963) 42n

Fonotipia Ltd. v. Bradley, 171 F. 951 (E.D.N.Y. 1909) .. 21n

FTC v. Orient Music Roll Co., 2 F.T.C. 176 (1919) ..10n, 2in

Gieseking v. Urania Records, Inc., 17 Mise. 2d 1034,

155 N.Y.S. 2d 171 (Sup. Ct. 1956) 21n, 32n

PAGE

Greater Recording Co. v. Stambler, 144 U.S.P.Q. 547

(N.Y. Sup. Ct. 1965) 22n

G. Ricordi & Co. v. Haendler, 194 F.2d 914 (2d Cir.

1952) 21n, 41n

Heim v. Universal Pictures Co., 154 F.2d 480 (2d Cir.

1946) 32n

Independent Tape Merchant’s Ass’n v. Creamer, No.

72-73 Civil (M.D. Pa., Jul. 24, 1972) 23n

Independent Tape Merchant’s Ass’n v. Martin, Civil

Action No. 3-5536-A (N.D. Tex., Feb. ae, 2078) 3... 23n

International News Service v. Associated Press, 248

U.S. 215 (1918) 2, 24, 25, 26, 26n, 27, 29

International Tape Mfrs. Ass’n v. Gerstein, 174 U.S.

| P.Q. 198 (S.D. Fla. 1972) (appeal pending) .............. 23n

King v. Mister Maestro, Inc., 224 F. Supp. 101 (S.D.

Mt MD Siesta os eh ee 32n

Kortlander v. Bradford, 116 Mise. 664, 190 N.Y.S. 311

(Sup. Ct. 1921) 29n

Lear, Inc. v. Adkins, 395 U.S. 653 (1969) . 39n

Lennon v. Pulsebeat N ews, Inc., 143 U.S.P.Q. 309 (N.Y.

Sup. Ct. 1964) 27n

Liberty/UA, Inc. v. Eastern Tape Corp., 11 N.C. App.

20, 180 S.E. 2d 414, appeal dismissed, 278 N.C. 702,

mm OS. OU Ls 12n, 22n

Liberty/UA, Ine. v. Eastern Tape Corp., 70 CVS 15108,

71 CVS 2579, 71 CVS 4602, and 71 CVS 15105 (N.C.

Super. Ct., Jul. 14, 1972) 22n

PAGE

Mazer v. Stein, 347 U.S. 201 (1954) 38n, 39n

Mercury Records, Inc. v. McKenna Indus., Inc., (Il.

Cir. Ct., Mar. 22, 1972), in Reconp Wor.p, Mar. 25,

1972, at 4 22n

Metropolitan Opera Ass’n v. Wagner-Nichols Recorder

Corp., 199 Mise. 786, 101 N.Y.S. 2d 483 (Sup. Ct.

1950), aff’d per curiam, 279 App. Div. 632, 107 N.Y.S. —

2d 795 (1st Dept. 1951) 15n, 25n, 32n

Miller v. Universal Pictures Co., 11 App. Div. 2d 47,

201 N.Y.S. 2d 632 (1st Dept. 1960), aff’d, 10 N.Y.

2d 972, 224 N.Y.S. 2d 662, 180 N.E. 2d 248 (1961) .... 40n

Mutual Broadcasting System, Inc. v. Muzak Corp., 177

Misc. 489, 30 N.Y.S. 2d 419 (Sup. Ct. 1941) 200.. 25n

NBC v. Aiello, No. 970398 (Cal. Super. Ct., Apr. 13,

1970) 21n

National Tel. News Co. v. Western Tel. Co., 119 F. 294

(7th Cir. 1902) 20n

New York World’s Fair 1964-1965 Corp. v. Colourpic-

ture Publishers, Inc., 141 U.S.P.Q. 939 (N.Y. Sup.

Ct.), aff'd, 21 App. Div. 2d 896, 251 N.Y.S. 2d 885 (2d

Dept. 1964) 27n

Palmer v. DeWitt, 47 N.Y. 532 (1872) 29n

Pittsburgh Athletic Co. v. KQV Broadcasting Co., 24

F. Supp. 490 (W.D. Pa. 1938) 25n

Pottstown Daily News Publishing Co. v. Pottstown

Broadcasting Co., 247 F. Supp. 578 (E.D. Pa.

1965) 27n, 38n

Press Pub. Co. v. Monroe, 73 F. 196 (2d Cir.), appeal

dismissed, 164 U.S. 105 (1896) 29n

PAGE

Rare Earth Corp. v. Lear Jet Corp., No. 71 75821

(Mich. Cir. Ct., Jul. 1, 1971) 22n

RCA v. Premier Albums, Inc., 19 App. Div. 2d 62, 240

H.Y.5. 2d 906 (ist Dept, 1968). 15n, 21n

Schecter Poultry Corp. v. U.S., 295 U.S. 495 (1935) .... 26n

Schulenburg v. Signatrol, Inc., 50 Ill. App. 2d 402, 200

N.E. 2d 615 (1964) 28n

Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225

(1964) 2,17, 19, 20, 21, 26, 27, 30, 33, 34n, 35,

35n, 37, 38, 39, 39n, 40, 41, 41n, 43, 44n

Shaab v. Kleindienst, 174 U.S.P.Q. 197 (D.D.C.

1972) 19n, 30n

Shapiro, Bernstein & Co. v. Remington. Records, Inc.,

265 F.2d 263 (2d Cir. 1959) 44n

Shaw v. Williamsville Manor, Inc., 38 App. Div. 2d 442.

330 N.Y.S. 2d 623 (4th Dept. 1972) 31n

Sheldon v. Metro-Goldwyn Pictures Corp., 81 F.2d 49

(2d Cir. 1936), aff'd, 309 U.S. 390 SN veiisunisdaitecs 39n

Sinatra v. Goodyear Tire & Rubber Co., 435 F.2d 711

| (9th Cir. 1970) = 39n-

Smith v. Paul, 174 Cal. App. 2d 744, 345 P.2d 546

(1959) 31n

Supreme Records, Ine. v. Decca Records, Inc., 90 F.

Supp. 904 (S.D. Cal. 1950) ....- 40n

Tape Head Co. v. RCA Corp., 452 F.2d 816 (10th Cir.

1971) 37n

Tape Indus. Ass’n of America v. Younger, 316 F.

Supp. 340 (C.D. Cal. 1970), appeal dismissed, 401

U.S. 902 (1971), appeal docketed, No. 26-628, 9th Cir.,

Oct. 22, 1970 4n, 7n, 9n, 11n, 21n, 23n, 40n

PAGE

Twentieth Century Sporting Club, Inc. v. Transradio

Press Service, Inc., 165 Misc. 71, 300 N.Y.S. 159

(Sup. Ct. 1937) 25n

United Drug Co. v. Theodore Rectanus Co., 248 U.S!

90 (1918) 26n

Uproar Co. v. NBC, 8 F.Supp. 358 (D.Mass. 1934),

aff’d as mod., 81 F.2d 373 (1st Cir. 1936) .................... 32n

Victor Talking Mach. Co. v. Armstrong, 132 F. 711

(S.D.N.Y. 1904) 21n

Waring v. WDAS Broadcasting Station, 327 Pa. 433,

194 A. 631 (1937) 26n

Warner Bros. Records, Inc. v. David, (Cal. Super. Ct.),

in Brzgoarp, Sept. 2, 1972, at 66 /21n

Warner Bros. Records, Inc. v. Elliott, No. 378-969

(Ove. Chr. Ob, Fabs Dh, TTS) ccccicscisscepeentcciovinoncnnstienpharsiitih 22n

Watson v. Buck, 313 U.S. 387 (1941) 44n

Werckmeister v. American Lithograph Co., 134 F. 321

(2d\Cir. 1904) 32n

Werckmeister v. Pierce and Bushnell Mfg. Co., 72 F. 54

(1st Cir. 1896) 31n

Wheaton v. Peters, 33 U.S. (8 Pet.) 591 (1834) ............ 29n

White-Smith Music Publishing Co. v. Apollo Co., 209

. US. i (es) 35n

Woolsey v. Judd, 11 N.Y. Super. (4 Duer) 379, 11

How.Pr. 49 (1855)- 29n

Wright v. Eisle, 86 App. Div. 356, 83 N.Y.S. 887 (2d

Dept. 1903) 31n

Unrrep States Constitution

PAGE

US. Const. art. I, §8, el. 8 33n

INTERNATIONAL AGREEME

Convention for the Protection of Producers of Phono-

grams against Unauthorized Duplicatidn of their

Phonograms 24

Unitep States Statutes

Act of May 31, 1790, 1 Stat. 124, DO ietenccicd 29n

Act of Feb. 3, 1831, 4 Stat. 436, ¢ 9 : 29n

Act of Jul. 8, 1870, 16 Stat. 230, 4102... 29n

Act of Mar. 31, 1891, 26 Stat. 1106, OO vets 29n

Section 1(e), 17 U.S.C. §1(e) .. dn, 35n

|... - Section 2, 17 D.B.C. 42...) 2, 29, 30, 30n, 34n, 35, 41n

Section 5, 17 U.S.C. §2 31n

Section 8, 17 U.S.C. §8 34n

etien 10, UO CS 31n

Section 12, 17 U.S.C. § 12 \ :. 30n

Section 19,-17 U.S.C. § 19 ae Ser 31n

Section 26, 17 U.S.C. § 26 .... 33n

Patent Act of 1952, 35 U.S.C. § 1 et seq.

SIL BUA SM ‘.. oon

Section 154, 35 U.S.C. § 154 aa 38n

Section 271, 35 U.S.C. § 271 oa . 38n

Pub. L. No. 92-140, 85 Stat. 391 (Oct. 15, 1971) ....2, 18n, 28n,

33n, 36n, 40n, 41n, 42n

‘Rev. Stat. § 4967 (1875) 29n

18 U.S.C. § 2318 19n

State STATUTES

PAGE

Aniz. Rev. Stat. Ann. § 13-1024 (1971-2 Supp.) ............ 23n

Ark. Stat. Ann. § 41-4617 (1971 Supp.) -...-..-.-...220e--000 23n

Cat. Penau Cove § 653h (West 1970) .............-.....-2-000-+ 23n, 42

Pia. Beae. Ae. 4 Gee oes C19t2) 0, 23n

La. Act 350 (Reg. Sess., 1972) 23n

N.Y. Gen. Bus. Law art. 12-E, § 224 (McKinney 1968) .. 44n

N.Y. Gen. Bus. Law §$ 561 (McKinney 1968) ............ 23n

N.Y. Penat Law § 155.30 (McKinney Supp. 1971) .... 44n

N.Y. Prenat, Law $165.07 (McKinney 1967) ................ 44n

N.Y. Pena Law $170.15 (McKinney 1967) .................... 44n

Pa. Star. tit. 18, § 4878.1 (1972-3 Supp.) ........................ 28n

Tenn. Cope ‘Ann. § 39-4244 through § 39-4250 (1971

Supp.) hecinis

Trex. Penat Cope Ann. art. 1137r (1972 Supp.) ............ 23n

Va. Cove § 59.1-41.1 through § 59.1-41.6 (1972 Supp.) .. 28n

OTHER AUTHORITIES

Ahrens, The Misappropriation Doctrine After Sears-

Compco, 59 TrapemarkK Rep. 88 (1969) ............ 26n, 27n, 48n

Arnold, A Philosophy on the Protections Afforded by

Patent, Trademark, Copyright and Unfair Cumpeti-

tion Law: The Sources and Nature of Product Simu-

lation Law, 54 TrapEeMarK Rep. 413 (1964) ................ 34n

BILLBOARD

Jan. 1, 1972 ao

Jul. 22, 1972 ... 19n

BuLBoaRD INTERNATIONAL Buyer's Guiwe 1971-72, Sept.

18, 1971 ; dn

_ ae

PAGE

Boye, H., How to Make Money $ELLING THE $oncs You

i 5n

Brief for Petitioners (Appendix), Goldstein v. Cali-

fornia, No. 71-1192, U. S. Supreme Court ............. dn, lin

Brief for the United States as Amicus Curiae, Compco

Corp. v. Day-Brite Lighting, Ine., 376 U.S. 234

(1964) and Sears, Roebuck & Co. v. Stiffel Co., 376

ee Oe NN 40n

CattMann, R., Unrair Competition TRADEMARKS AND

ee ee ee SS 27n

CasH Box

a 8) SSO Stebel ORG Serna 14n

May 27, 1972 sso ensttdlswhernatweiiensenicownnstanitGnissiilins oe 14n

ee ee 19n

Chapman, The Supreme Court and Federal Law of ae

fair Competition, 54 TrapemarKk Rep. 573 (1964) .... 34n

Comment, 43 N.Y.U. L.Rev. 178 ee ee

Comment, Performers’ Rights and Copyright: The

Protection of Sound Recordings from Modern

Pirates, 59 Cauir. L. Rey. 548 (1072) 9n, 31n

Copyricut (Monthly Review of the World Intellectual

Property Organization)

RS BP dee SE re OE ona 24n

i 24n

5680, IT.R. 6831, and II.R. 6835 Before Subcomm. No.

3 of the House Comm. on the Judiciara y, 89th Cong.,

ist CO 4n, 5n, Gn

—

PAGE

the Subcomm. on Patents, Trademarks, and Copy-

rights of the Senate Comm. on the Judiciary, 90th

Cong., Ist Sess. (1967) .......6n, 7n, 8n

Corry, C., The Phonograph Record Industry; An Eeo-

nomic Study, ‘Feb. 9, 1965 (Library of Congress

Legislative Reference Service) ..................------ 3n, 4n, 6n, 7n

DELLER’s WALKER ON Patents (2d ed. 1964) -200022..... 38n

Derenberg, Consumerism and “Old-Fashioned Com-

mercial Honesty,” 15 IDEA 45 (Special Conference

TI TPE: ecanct besirccts vinccncsosiamonenstehopnsctnanceirenncition 27n, 38n

Diamond, Copyright Problems of the Phonograph Rec-

ord Industry, 15 Vanp. L. Rev. 419 (1962) ............ dn, 36n

Diamond, Sound Recordings and Copyright Revision,

53 Iowa L. Rev. 839 (1968) 30n

Diamond and Adler, Proposed Copyright Revision and

Phonograph Records, 11 Arr L. Rev. 29 (1940) ........ Sn

Hearings on H.R. 11258 Before the House Comm. on

Patents, 68th Cong., 2d Sess. (1925)... 36n

Hearings on H.R. 10431 Before the House Comm. on

Patents, 69th Cong., Ist Sess. (1926) ... 36n

Hearings on H.R. 9636 Before the House Comm. on

Patents, 7ist Cong., 2d Sess. (1930) 7 36n

Hearings on Revision of Copyright Laws Before the

House Comm. on Patents, 74th Cong., 2d Sess. (1936) .. 36n

Hearings on H.R. 1268, H.R. 1270 and H.R. 2570 Be-

fore the Subcomm. on Patents, Trademarks and

Copyrights of the House Judiciary Comm., 80th

Cong., Ist Sess. (1947) .. . 36n

H.R. Rep. No. 2222, 60th Cong., 2d Sess. (1909) ........ 29n, 35n

H.R. Rep. No. 2237, 89th Cong., 2d Sess. (1966) ........ 36n, 37n

—

xiii

PAGE

H.R. Rep. No. 92-487, 92d Cong., Ist Sess. (1971) ....15n, 23n,

30n

Kalodner and Vance, The Relation Between Federal

and State Protection of Literary and Artistic Prop-

erty, 72 Harv. L. Rev. 1079 ( 1959) ooo. 31n, 34n

Kunin, The Lindsay Bill Before and After the Stiffel

Case, 54 Trapemark Rep. 731 (1964) oon. 34n

Livingstone, Piracy in the Record Industry, STEREO

Review, Feb. 1970 srenennanAuhintnsitanessnncebesatacnensneninesatncdtansscves l1n

Murray, D., THe Wortp or Sounp REcorDING (1965) .. 8n

N.Y. Times, Jul. 17, 1972 ooo. 19n

Nimmer, M., Tue Law or Copyricut (1972) oo... 33n, 34n

Prohibiting Piracy of Sound Recordings, Hearings on

S. 646 and H.R. 6927 Before Subcomm. No. 3 of the

House Comm. on the Judiciary, 92d Cong., Ist Sess.

UPC hip ere seine sence aterne 4n, 7n, 9n, 12n, 13n,

14n, 15n, 16n, 18n

Report OF THE RecisTer oF CoryriGHTs ON THE GEN-

ERAL REVISION OF THE U.S. Copyricut Law, 87th

Cong., Ist Sess. (196L) o.oo ecccccceeccceseeeeeeee 36n

Rincer, The Unauthorized Duplication of Sound Re-

cordings, U.S. Copyricut Orrice, GENERAL REVISION

OF THE Copyricut Law (Study No. 26, 1957) .......: 30n, 36n

S. 644, 92d Cong., Ist Sess. (1971) 29n, 33n

S. Rep. No. 92-72, 92d Cong., 1st Sess. (1971) ..15n, 19n, 23n

SHEMEL, S., and M. W. Krasttovsky, Tus Business oF

Music (Rev. ed. 1971) oo 3n, 4n, 5n, 7n

PAGE

Statement of Henry Brief, Executive Director, RIAA,

Before the Commerce and Industry Committee, Ari-

zona House of Representatives, Feb. 15, 1971 ....14n, 15n,

16n

Statement gf Henry Brief, Executive Director, RIAA,

Before the Criminal Procedures Committee, Cali-

fornia State Assembly, Mar. 26, 1968 0. 14n

Symposium, Product Simulation: A Right or a

Wrong?, 64 Cotum. L. Rev. 1178 (1964) ............ 27n, 28n

Tex. Att’y Gen. Opinion No. M-1114, Apr. 3, 1972 ...... 23n

VARIETY

May 10, 1972 7n

Ftd, 26, 1972 nn iecccececesnceccceccececereresesese -19n ~

Whicher, The Ghost of Donaldson v. Beckett: An In-

quiry Into the Constitutional Distribution of Powers

Over the Law of Literary Property in the United

States, 9 Buty. Copyricut Soc’y 102 (1961) ........ 29n, 34n

IN THE

Supreme Court of the United States

OctoBer Term, 1971

No. 71-1192

——

DonaLp Gotpstern, RutH Koven and Donatp Koven,

Petitioners,

—against—

State oF Carirornia,

Respondent.

ON WRIT OF CERTIORARI TO THE APPELLATE DEPARTMENT OF THE

SUPERIOR COURT OF THE COUNTY OF LOS ANGELES,

STATE OF CALIFORNIA

BRIEF OF RECORDING INDUSTRY ASSOCIATION

OF AMERICA, INC., AMICUS CURIAE

A. THE INTEREST OF THE AMICUS CURIAE

The interest of the amicus curtae is set forth in the mo-

tion to which this brief is appended. |

B. SUMMARY OF ARGUMENT

The piracy of sound recordings is an anti-competitive

activity that would virtually destroy the recording industry

if this Court were to legalize it by reversing the judgment

below. That such pernicious conduct cannot be condoned

{ i

is the substantially unanimous view of numerous judges

in many jurisdictions, of various state legislatures, of the

Congress and Executive branch of the United States, and

of the international community.

Sound recordings have been protected under the “mis-

appropriation” unfair competition doctrine enunciated in

the INS case. This doctrine evolved on a case-by-case basis

to deal with a variety of blatantly inequitable practices,

such as record and tape piracy. The Sears and Compco

decisions relied on by petitioners did not even mention

INS, and we cannot believe that the Court could have in-

tended to overrule all misappropriation law sub silentio.

In addition, sound recordings are unpublished works

which are protectable under common law copyright. Sears

and Compco cannot be read so as to declare that state pro-

tection of unpublished works is constitutionally preempted

because this interpretation is contrary to accepted canons

of construction. Nor could Sears and Compco have de-

creed statutory preemption in view of the explicit Con-

gressional recognition of state power in Section 2 of the

the sound recording amendment to the Copyright Act,

effective February 15, 1972. Petitioners were convicted

prior to that date for acts committed much earlier, and

the application of the California statute to recordings made

after the effective date of the amendment is not an issue

here.

In any event, Sears and Compco are distinguishable in

that they dealt with patent questions which differ signifi-

cantly from copyright questions; they dealt with the imi-

tation of physical objects as distinguished from exact

electronic duplication of the performances comprising

sound recordings; and they dealt with plaintiffs who had

chosen to rely on a federal statutory form of protection

to which they subsequently were held not to be entitled,

while there was no possibility of federal statutory pro-

tection for the sound recordings duplicated by petitioners

in this case.

Moreover, there is a legitimate state interest in protect-

ing sound recordings from predatory activity which is

equivalent to larceny. Therefore, the validity of this state

criminal statute should be upheld and the judgment below

should be affirmed.

C. FACTUAL BACKGROUND

I. ”

The Sound Recording Industry

The sound recording industry of the United States “has

assumed a major role in the world of music, entertainment,

and communication. Its product has an almost universal

audience... .”?

Retail sales of recordings rose from $48,000,000 in 1940

to almost $200,000,000 in 1950, $600,000,000 in 1960 and

approximately $1,700,000,000 in 1970.2 An increasingly

large proportion of these total sales is attributable to

prerecorded tapes—mostly in the form of tape cartridges

*C. Corry, The Phonograph Record Industry; An Economic

Study, Feb. 9, 1965, at 1 (Library of Congress Legislative Reference

Service) [hereinafter cited as Corry].

*S. SHEMEL aNnp M. W. KrasiLovskKy, THIs Business or Music

xvii (Rev. ed. 1971) [hereinafter cited as SHEMEL].

or tape cassettes. In 1966 sales of prerecorded tapes

accounted for only approximately $40,000,000 at retail;

by 1970 sales of prerecorded tapes had increased to

$428,000,000, or 26% of the industry’s total sales ;* and by

1971 sales of prerecorded tapes accounted for approxi-

mately $507,000,000.°

Not only is the market vast, but access to it is relatively

easy because recording studios and manufacturing facilities

are available on a contract basis. New recording companies

accordingly are constantly making their way into the in-

dustry. In 1965 it was reported that the market share of

the five largest recording companies had been declining

steadily since the early 1950’s, a decline attributed in part

to “the ready availability of processing facilities to small

companies.” * In 1970, hundreds of record companies were

in operation in the United States.’

* For definitions of these and other terms commonly used in the

sound recording industry, see the Glossary set forth as Appendix B

hereto.

* SHEMEL, supra, at xviii; Statement of Stanley M. Gortikov on

Behalf of RIAA, Prohibiting Piracy of Sound Recordings, Hearings

on 8. 646 and H.R. 6927 Before Subcomm. No. 3 of the House Comm.

on the Judiciary, 92d Cong., Ist Sess. [hereinafter cited as Piracy

Hearings], ser. 7, at 25 (1971).

5 BILLBOARD, Jan. 1, 1972, at 29.

* Statement of John Desmond Glover, Professor of Business Ad-

ministration, Harvard University Graduate School of Business

Administration, on Behalf of RIAA, Copyright Law Revision, Hear-

ings on H.R. 4347, H.R. 5680, H.R. 6831, and H.R. 6835 Before

Subcomm. No. 3 of the House Comm. on the Judiciary, 89th Cong.,

Ist Sess. [hereinafter cited as House Revision Hearings], ser. 8,

pt. 2, at 913-14 (1965). Glover’s study is the most recent industry-

wide economic study available. See also Corry, supra, at 48.

* Tape Indus. Ass’n of America v. Younger, 316 F.Supp. 340, 343

(C.D. Cal. 1970), appeal dismissed, 401 U.S. 902 (1974), appeal

docketed, No. 26-628, 9th Cir., Oct. 22, 1970 [hereinafter cited as

TIAA v. Younger].

—

Many producers entering the market with a minimal:

investment have been able to produce “hit” recordings

which provide the basis for growth into a major record

company. A well-known example is A&M Records, which

started in 1962 with an investment of $200 to make one

recording that became a great commercial success and

supplied the capital for expansion. A&M Records went

on to become an established member of the industry.®

The consuming public has benefited from the large num-

‘ ber’ of recording companies. Every year approximately

6,000 singles and 4,000 long-playing records are released

in the United States.° Furthermore, because of special

provisions in the Copyright Act, everyone—large and small

producer alike—has the right to use the musical composi-

tions (as distinguished from the identical performances)

recorded by any competitor.”® As a result, the public often

| is given a choice between several versions of the same

song.”

*H. Boyz, How Tro Make Money $ELLING THE $oNGs You WriTE

22-3 (1970). A&M Records is the very company whose recordings

were the subject of Counts I—X of the Misdemeanor Complaint

against petitioners. Appendix to Brief of Petitioners at 15-23.

*SHEMEL, supra, at xix—xx; BILLBOARD INTERNATIONAL BuyEr’s

Guwe 1971-72, Sept. 18, 1971, at 8.

* Copyright Act §1(e), 17 U.S.C. §1(e). Whenever the copyright

owner of a musical composition permits it to be recorded, anyone

thereafter may make his own independent original recording of the

composition upon payment of a statutory royalty to the copyright

proprietor. See Diamond, Copyright Problems of the Phonograph

Record Industry, 15 Vanp. L. REv. 419, 420-29 (1962).

» Between 1953 and 1964, 62 domestic record companies made at

least 207 different releases of the song entitled “I Believe.” Several

companies released a number of ‘different recordings of the same

composition by different artists and musica] groups. Statement of

Glover, supra, House Revision 'H earings, ser. 8, pt. 2, at 785 (1965).

} a

“Although the industry is easy to enter and a newcomer

may make fantastic profits through a record hit, it is also

a highly competitive and risky business.” ?* Competition

within the industry and from other sources of entertain-

ment led to a continuous decrease from 1909 to 1963 in the

average price paid by consumers for sound recordings.”

Intense competition and the risks inherent in a business

appealing largely to the popular taste have put constant

pressure on profits. In 1964, only 300 of the approximately

3,000 individuals and companies who had phonograph rec-

ord labor contracts with the American Federation of Musi-

cians reported a profitable year.** In 1965, the net profit

of the industry, after taxes, was calculated at 1.7 percent

of net sales.’

It was estimated in 1965 that 60% to 70% of all long-

playing albums lost money.’* More recent industry esti-

mates indicate that as many as nine out of ten albums

12 Corry, supra, at 247; see also Statement of Robert R. Nathan

on Behalf of Music Publishers Protective Association, Inc., House

Revision Hearings, ser. 8, pt. 3, at 1740 (1965).

18 Statement of Clive J. Davis, Vice President and General Man-

ager of CBS Records, Copyright Law Revision, Hearings on 8S. 597

Before the Subcomm. on Patents, Trademarks, and Copyrights of

the Senate Comm. on the Judiciary, 90th Cong., 1st Sess. [herein-

after cited as Senate Revision Hearings], pt. 2, at 516 (1967). See

also Statement of Glover, supra, House Revision Hearings, ser. 8,

pt..2, at 822-823 (1965).

14 Statement of Alan W. Livingston, President of Capitol Records,

Inc., Senate Revision Hearings, pt. 2, at 495 (1967).

* Statement of Glover, supra, House Revision Hearings, ser. 8,

pt. 2, at 801 (1965).

16 Td, at 797-799.

i as

currently lose money.” “It is the small percentage of hits

that pays the tab for all.” * In the field of classical music,

the number of successful recordings is even smaller than’

one in ten. Yet, established recording companies continue

to produce classical records, even though they must be

subsidized from other revenues.”

The increase in the number of unprofitable recordings

is attributable in part to increased production costs.2° An-

other reason obviously has been the increase in the para-

sitic practice of record and tape piracy.”

Statement of Gortikov, supra, Piracy Hearings, ser. 7, at 25

(1971) ; Statement of Hon. Richard H. Fulton, Congressman from

Tennessee, Piracy Hearings, ser. 7, at 6 (1971).

* Statement of Isabelle Marks, Assistant Secretary of Decca

Records, a division of MCA, Inc., Senate, Revision H earings, pt. 2,

at 527 (1967). :

* Statement of Davis, supra, Senate Revision Hearings, pt. 2, at

516-517 (1967).

*° For a more complete discussion of production costs, see Section

C.II entitled “The Production of Sound Recordings”, infra. More

sophisticated recordiftg techniques and increasingly expensive equip-

ment and technicians are one component of this increased expense.

Another well-known component is the ever-growing expense of re-

| cording artists. An often overlooked factor is the increased cost of

musicians who provide musical accompaniment. As of 1963, ac-

cording to Corry (at 211), the minimum wage rate for American

Federation of Musicians members was $56 for a 3-hour recording

session. As of October 1, 1970 this figure had jumped to $90.

SHEMEL, supra, at 53.

"1 See Vartery, May 10, 1972, at 71. “Piracy” has become the

term normally used by the courts and the public to describe the

type of conduct for which petitioners were convicted. See TIAA

v. Younger, supra, at 351: “Plaintiffs in this action are known in

the record industry as ‘tape pirates’ and rightly so, for to the best

of our knowledge all other courts that have had occasion to consider

the conduct of such ‘tape pirates’ have sanctioned state limitations

upon their piratical activities.” See cases cited in footnotes 51 and

52, infra. :

aaa

II.

The Production of Sound Recordings

The production of an original sound recording is an

intricate and expensive process. Typically, it begins with

the selection of several musical compositions determined

to be suitable for performance .by a particular vocalist.

‘Special instrumental arrangements of these compositions

are written and musicians are engaged to perform the

orchestral accompaniment. Numerous rehearsals take place

in the recording studio. The placement of microphones

is critical and hours of experimentation may be required

to achieve the desired tonal balance. During the recording

process itself, adjustments constantly are made in the con-

trol room where the sounds of the performance are

converted electronically into impulses on magnetic tape—

sometimes on 16 or more separate tracks. The results of

a successful “take” must then be edited into a master tape,

and further electronic and mechanical processing are re-

quired before a finished disc record or prerecorded tape

can be manufactured in quantity for sale to the public.”

In addition to the obvious costs involved“in the use of

skilled personnel, studio facilities and manufacturing

plants, there are other expenses peculiar to the recording

industry. Featured artists receive royalties based on the

number of records sold. Other performers are paid for

their services at rates not less than those fixed in union

22.2). Murray, THE Wor_”p or Sounp Recorpine 44-6 (1965);

Statement of Livingston, supra, Senate Revision Hearings, pt. 2,

at 494 (1967); Diamond and Adler, Proposed Copyright Revision

and Phonograph Records, 11 Air L. Rev. 29, 47 (1940).

—

contracts, and recording companies also are required by

contract to make continuing royalty payments to trustees

for the benefit of performing artists. Finally, when copy-

righted music is used (which is the normal situation), the

recording company must pay royalties to the copyright

proprietor for every record sold.”*

5 »

Even though the initial investment to produce a record-

ing for a single can be small, the cost of producing a

recording for a long-playing album with an established

artist can be staggering. Pre-release costs (z.e., prior to

any manufacturing or advertising expense) run from a

minimum of $50,000 or $55,000 to $75,000 or $80,000,

according to various informed estimates.* The total ex-

penditure involved at the point where manufacture, dis-

tribution and promotion have been undertaken is from

$180,000 to $200,000.27 And the continuing royalty pay-

ments outlined above must be paid even though total sales

may be insufficient to recoup the recording company’s

investment.

** CBS, Inc. v. Spies, 167 U.S.P.Q. 492, 493 (Ill. Cir. Ct: 1970) ;

Comment, Performers’ Rights and Copyright: The Protection of

a Recordings from Modern Pirates, 59 Cau. L. Rev. 548, 562

1971).

** Capitol Records, Inc. v. Spies, 130 Ill. App. 2d 429, 264 N.E.2d

874, 875 (1970) ; Statement of Gortikov, supra, Piracy Hearings,

ser. 7, at 26-8 (1971) ; TIAA v’ Younger, supra, at 344.

aes of Gortikov, supra, Piracy Hearings, ser. 7, at 26

| oy

III.

The Operation of Record and Tape Pirates

Record and tape piracy has grown at an alarming rate

in recent years due to advancing technology. However,

the activity in which petitioners and others like them are

engaged has an ancient if not honorable history. In 1919,

when player pianos were in vogue, the Federal Trade

Commission issued a cease and desist order against the

unauthorized duplication of perforated paper music rolls,

based on the ultimate finding that:

“the effect of the practice on the part of the respondent

in making said duplicated or copied rolls from the

original rolls of competing manufacturers and the

sale of the same in interstate commerce in competition

with competing manufacturers or wholesalers or re-

tailers of the products of competing manufacturers is

to secure to the respondent an undue advantage over

competitors by appropriating the results of competi-

tors’ ingenuity, labor, and expense, and thus avoiding

the cost of producing the aforesaid master rolls.” *

The techniques of modern-day pirates are simple and

inexpensive:

“[They] purchase on the open market long playing

disc phonograph records which have been manufac-

tured and sold through the usual commercial channels

by record companies. Such dise phonograph records

are generally referred to as albums and they usually

contain 10 to 12 performances of one artist or group of

artists. ... After purchasing an album, [they] make

a tape recording of the exact sounds recorded on the

26 WTC vy. Orient Music Roll Co., 2 F.T.C. 176, 179 (1919).

—-

album. The tape is made by playing the album on a

record player connected to a tape recorder which turns

out a tape. When this master tape is finished, it is

played on a machine known as a ‘tape playback deck’.

The ‘tape playback deck’ is connected to machines

known as ‘tape slaves’ which in turn make additional

tape recordings of the sound which have been trans-

ferred from the record album to the master tape. A

large number of ‘tape slaves’ may be connected to one

‘tape playback deck’ so that a correspondingly large

number of tape recordings can be made at one time.

After the tapes have been made by use of the ‘tape play-

back deck’ and the ‘tape slaves’, each of the new tapes

is placed on a hub. Each hub is placed into a plastic

cartridge, and the ends of the tape are spliced together

so’ that it forms a continuous ‘loop’ in the cartridge.

The cartridge is sealed, tested, packaged, and labeled.

... Other than the small sums required to make and

distribute their tapes, [they] do not pay any other

expenses.” *”

With the increased popularity of tape cartridges and

cassettes, would-be pirates need not invest in the costly

metal presses and other equipment required to produce

dise phonograph records. All that is needed is the rela-

tively inexpensive machinery to produce tapes.?® This has

* TIAA v. Younger, supra, at 342-3 (emphasis added). The spe-

cific method of operation used by petitioners is summarized in the

Affidavit in Support of and Petition for Search Warrant. Appendix

to Brief of Petitioners, at 41-2. ,

8 “THlegally duplicating tapes turned out to be much simpler

than pirating dises. The necessary equipment was less bulky and

far quieter than the large presses needed to stamp out discs; it could

be set up in a garage, a basement or the back room of a shop.”

Livingstone, Piracy in the Record Industry, STEREO REviEw, Feb.

1970, at 63. This compactness and quietness are important to the

illegal operations, which are generally clandestine and highly mo-

bile. For descriptions of pirate enterprises utilizing such devices

made piracy even more profitable and easy to undertake,

and has further underscored the fact that pirates “circum-

vent a great portion of the costs of engaging in the record.

ing business.” *°

Indeed, compared to the costs of the producer of the

original recording, the pirates have virtually no expense,

and their profits reflect this fact. “The unauthorized re-

cordings are generally sold by the manufacturers at a

profit of at least 200% ....”* Naturally, the recording

industry cannot match the pirates’ costs: “The pirate can

go into business for as little as $500. Yet, we can’t even take

one artist into one studio for one hour for $500.”* As a

result, the price of the pirated article typically is far below

that of the original.

“Tilegally duplicated material is being supplied to re-

tailers at a price sometimes as low as $2.00, which is

about half the cost to the wholesaler of the legitimate

product. The reasons for this are clear—minimal in-

vestment by the pirate as against significant costs to

the legitimate manufacturing company which pays the

as armed guards, dummy names, telephone answering services which

do not know the identity of their clients, post office boxes and other

such devices, see Statement of Gortikov, supra, Piracy Hearings,

ser. 7, at 26 (1971) ; Statement of Robert C. Osterberg on Behalf

of The Harry Fox Agency, Inc., Piracy Hearings, ser. 7, at 64

(1971) ; see also Duchess Music Corp. v. Stern, 331 F.Supp. 127,

128 (D. Ariz. 1971), rev’d, 458 F.2d 1035 (9th Cir. 1972).

2° Liberty/UA, Inc. v. Eastern Tape Corp., 11 N. C. App. 20, 21,

180 S.E. 2d 414, 416, appeal dismissed, 278 N.C. 702, 181 S.E. 2d

600 (1971).

8° Statement of Osterberg, supra, Piracy Heorings. ser. 7, at 64

(1971).

‘1 Statement of Gortikov, supra, Piracy Hearings, ser. 7, at 25

(1971).

performers, musicians’ expenses, costs of promotion

and the like. As a result, pirated merchandise ean be

sold, as, for example, in the case of a single tape

cartridge, at retail for two or more dollars less than the

legitimate retailer must obtain for his merchandise.”

The avoidance of production costs and the resulting

profits obtained by pirates is only part Of the story. Pirates

not only circumvent costs; they eliminate risks because

“the illegal duplicator reproduces only the hit recordings

so that he severely injures the sales of those products

which must make up for the substantial investments made

by the legitimate record companies in records which prove

unsuccessful.” ** Some pirates have sought to justify their

activities as a service to the public because they make

available a collection of hit recordings by various different

_ artists at a bargain price. This argument is specious be-

} cause the alleged “right” to duplicate sound recordings

for which all pirates contend is not conditioned on a par-

ticular type of end product. Either the “right” exists or

it does not, irrespective of the form of the reproduction.

In any event, the collection of hit recordings and the bar-

gain price become possible only because the pirates avoid

the costs and risks incurred by the makers of the original

recordings. Any stolen product, for which the basic costs

are not paid, can be offered to consumers at a bargain

price whether it is a pirated recording or a stolen tele-

vision set. .

*? Statement of Jack Grossman, President of the National Associa-

tion of Record Merchandisers, Inc., Piracy Hearings, ser. 7, at 47

(1971).

*SId. See also Statement of Gortikov, supra, Piracy Hearings,

ser. 7, at 25 (1971).

The minimal investment, exorbitant profits, and avoid.

ance of risks have caused piracy to grow to alarming pro-

portions in recent years. In 1960, the annual sale of pirated

sound recordings was estimated at $20,000,000.** In 1968,

the year in which California passed the anti-piracy statute

under which petitioners were convicted, the figure was esti-

mated at $30,000,000.** In 1971, the figure was put at

$100,000,000.*° Current estimates place the sale of pirated

recordings at $150,000,000 a year.**? Recording companies

producing prerecorded tapes have been particularly hard-

hit; it is estimated that one of every four tapes produced

is pirated product.**

The victims of piracy are not limited to producers of

original recordings. The pirate does not pay royalties to

artists, to the trustees of performers’ funds_or, with rare

exceptions, to music copyright owners. Furthermote, cities,

states and the federal government all lose revenues be-

cause pirates, again with rare exceptions, do not pay

** Statement of Hon. Emanuel Celler, Chairman, House J udiciary

Comm., Piracy Hearings, ser. 7, at 4 (1971).

*° Statement of Henry Brief, Executive Director, RIAA, Before

the Criminal Procedures Committee, California State Assembly,

Mar. 26, 1968.

** Statement of Celler, supra, Piracy Hearings, ser. 7, at 51971) ;

Statement of Henry Brief, Executive Director, RIAA, Before the

Commerce and Industry Committee, Arizona House of Represen-

tatives, Feb. 15, 1971.

** CasH Box, Editorials of Feb. 5, 1972, at 3, and May 27, 1972,

at 3. .

** Statement of Celler, supra, Piracy Hearings, ser. 7, at 5

(1971) ; Statement of Gortikov, supra, Piracy Hearings, ser. 7, at

25 (1971).

taxes.*° Countless wholesalers and retailers also are being

victimized by having their business siphoned off. It has

been estimated that music publishers and the songwriters

they represent are losing more than $10,000,000 a year in

ing dises),‘° and that in 1969 the musicians of the Ameri-

can Federation of Musicians and the vocalists of the

American Federation of Television and Radio Artists lost

nearly $20,000,000 in income as a result of the sale of

pirated tapes and discs.*

Still another adverse consequence of piracy frequently

is the dissemination to the public of recordings which are

inferior to the originals from which they are taken.*

The reasons for the inferior quality of the pirated product

are several:

“[F ]Jirst, because each generation of transferred re-

corded sounds will inevitably reduce the quality of the

sound ; second, because . . . pirates do not have access

to the highly trained personnel or the sophisticated

* H.R. Rep. No. 92-487, 92d Cong., Ist Sess. 2 (1971) and S.

Rep. No. 92-72, 92d Cong., 1st Sess. 4 (1971) ; Statement of Henry

Brief, Executive Director, RIAA, Before the Commerce and In-

dustry Committee, Arizona House of Representatives, Feb. 15,

1971; Statement of Albert Berman, Managing Director of The

Harry Fox Agency, Inc., Piracy Hearings, ser. 7, at 58 (1971).

*° Marketing—The $100-Million Market in Bootleg Tapes, Busi-

ness Week, May 15, 1971, reprinted in Piracy Hearings, ser. 7,

at 44, 46 (1971). ;

“Statement of Hal C. Davis, President, American Federation

of Musicians, Piracy Hearings, ser. 7, at 59 (1971).

* See, e.g., Capitol Records, Ine. v. Erickson, 2 Cal. App. 3d

526, 530, 82 Cal. Reptr. 798, 800 (1969), cert. denied, 398 U.S.

960 (1970) [hereinafter cited as Capitol Records v. Erickson] ;

RCA v. Premier Albums, Inc., 19 App. Div.2d 62, 63, 240 N.Y‘S.

2d 995, 996 (1st Dept. 1963) ; Metropolitan Opera Ass’n vy.

Wagner-Nichols Recorder Corp., 199 Mise. 786, 790, 101 N.YS.

2d 483, 487 (Sup. Ct. 1950), aff'd per curiam, 279 App. Div. 632.

107 N.Y.S.2d 795 (1st Dept. 1951).

electronic equipment employed by the legitimate in-

dustry; and third, because they don’t care about qual-

ity—they just want to cash in on the quick buck.” *

Among the principal victims of the inferiority of pirated

recordings are the performers, because consumers attribute

poor quality to their inadequacy.** Where the original

manufacturer is known, that company may well be blamed

by the consuming public for the poor quality of the pirated

product.

From the foregoing it is clear that the recording industry

is an economically complex one, in which the compensation

of vocalists, musicians and composers for their artistic

contributions (as well as payments to trustees of per-

formers’ funds) is based in large part on sales. of the

finished product made by manufacturers of the original

sound recordings. Sales made by tape and record pirates

obviously do not contribute to the payment of the numerous

creative interests affected. Furthermore, the recording in-

dustry is a risky and competitive one, in which profits from

the relatively few “hits” are necessary to pay for the wide

variety of sound recordings now enjoyed by the consuming

public, and to make possible the entry of new competitors.

It is these very profits which are siphoned off by the

pirates, who, by appropriating the expenditures and talent

of others only after they have proved successful, circum-

vent most of the costs and all of the risks of the producers

of the original recordings.

** Statement of Henry Brief, Executive Director, RIAA, Be-

fore the Commerce and Industry Committee, Arizona House of

Representatives, Feb. 15, 1971.

** Statement of Grossman, supra, Piracy Hearings, ser. 7, at

49-50 (1971). The titles of the performances and the names of

the performing artists invariably appear on the pirated repro-

ductions without authorization.

D. ARGUMENT

Reversal of the Judgment Below Would Have the Ef.

fect of Overturning Long-Standing Principles of State

Law on Which the Ownership of Sound Recordings

Is Based, Including Various Recent Decisions Distin-

guishing Sears and Compco. The Consequences to the

Recording Industry Would Be Disastrous. No Over-

riding Considerations of Public Policy Compel Such a

Result.

Reduced to its essentials, petitioners’ position is that

the decisions of this Court in Sears, Roebuck & Co. v. Sti ffel

Co., 376 U.S. 225 (1964) and Compco Corp. v. Day-Brite

Lighting, Inc., 376 U.S. 234 (1964) prohibit the states from

protecting sound recordings against unauthorized dupli-

cation. This specific question, of course, was not raised in

the Sears and Compco cases, which dealt with lighting fix-

tures, a totally different kind of product. Moreover, as we

shall demonstrate, the policy considerations of insuring a

competitive market which supported the result in Sears and

Compco are absent here, and those identical policy consid-

erations require affirmance of the judgment below.

In Sears and Compco, federal patent policy was invoked

to prevent a state from interfering with free competition

in unpatentable objects. Although petitioners seek to hide

behind the facade of alleged competition, it has been widely

recognized that the piracy of sound recordings is essen-

tially anti-competitive in nature. The position of the De-

partment of Justice on that issue was stated in its

comments on the recent sound recording amendment to

the Copyright Act which provides statutory protection for

sound recordings against unauthorized duplication :*°

“The competition provided by the pirate record indus-

try does not promote any of the traditional benefits of

competition. Although the pirate record companies

may greatly undercut the prices charged by the crea-

tive industry, their ability to do so results in large

part from the fact that they do not compensate the

creative writers and artists involved. Such practices

discourage the investment of money and talents in new

performances and ha[ve] the potential to gravely in-

jure creative recording.” *°

A similar view was expressed by the three-judge Dis-

trict Court which upheld the constitutionality of the recent

amendment, even though the argument there was based

on a claim that there should be a compulsory license to

duplicate sound recordings (implying the payment of some

compensation) :

“Consumer choices would not be broadened since identi-

cal interpretations would be supplied first by the origi-

nator and later by the licensee. Equally important,

competition and the creative aspects of the industry

would be impaired since established recording firms

would be discouraged from investing in new arrange-

ments and performers, if they were compelled to li-

** Pub. L. No. 92-140, 85 Stat. 391 (Oct. 15, 1971) made avail-

able for the first time federal statutory copyright protection for

sound recordings. The statute went into effect on February 1),

1972 and applies only to protect sound recordings “fixed” (i.e.,

the recording process was completed) on or after that date.

** Letter from Deputy Attorney General Richard G. Kleindienst

to Hon. Emanuel Celler, Jun. 29, 1971, in Piracy Hearings, ser.

7, at 122 (1971).

cense their successful interpretations to those desiring

to take advantage of the originator’s initiative and to

add nothing themselves.” *

Nor did the Sears and Compco decisions destroy an

entire industry. Here, the only commercial value in a

master sound recording is the ability to profit from the

exclusive right to duplicate it for sale to the public—and

acceptance of petitioners’ view would nullify that right.

As a result, the inestimable value of untold numbers

of sound recordings produced over many years with

great effort, expense and artistry would be completely

destroyed.“

If the decision below were to be reversed and piracy of

sound recordings thus permitted to flourish unhindered,

the economic and creative effects on the industry would

be disastrous.*® Increased concentration of economic power

“‘Shaab v. Kleindienst, 174 U.S.P.Q. 197, 198 (D.D.C. 1972).

If this Court were to permit the unauthorized reproduction of:

sound recordings, it would be tantamount to requiring recording

companies to grant royalty-free compulsory licenses for their

recordings. Congress specifically considered and rejected any form

of compulsory license for “the finished product.” S. Rep. No.

92-72, 92d Cong., Ist Sess. 6 (1971).

“The following recent news headlines indicate the tremendous

current commercial appeal of catalogs of existing sound record-

ings: Pubs Comb Files for “Golden Oldies” As Yesteryear Rock

Hits Click Again, Variety, Jul. 26, 1972, at 47; “Oldie” Pioneer

Taps New Marts, Bripoarp, Jul. 22, 1972, at 1; “Oldies” Are

the New Sound as Radio Turns Nostalgic, N.Y. Times, Jul. 17,

1972, at 1; Only 1 New LP, But Catalog Gives London Its Top

June Sales in History, CasH Box, Jul. 8, 1972, at 7. It is common

knowledge in the industry that concert tours by well-known record-

ing artists revive interest in their previously recorded albums.

“’Shaab v. Kleindienst, 174 U.S.P.Q. 197 (D.D.C. 1972) is on

appeal to this Court; if that decision as well as the decision below

should be reversed, then the commercial value of all sound record-

ings would be destroyed. Although 18 U.S.C. § 2318 (1964)

—~

would be inevitable because the smaller companies would

not be able to withstand the effects of piracy of their

recordings. Established recording companies might be

forced to resort to piracy themselves in order to operate

profitably and to avoid criticism from their shareholders,

and this would contribute further to the elimination of the

smaller companies. Production of expensive recordings for

specialized audiences in marginal markets, especially re-

cordings of classical music, would be sharply reduced

because they could no longer be subsidized by other re-

cordings. With fewer creative enterprises in operation,

the consumer would be faced with a smaller selection of

recordings from which to choose. The end result would

be that “The parasite that killed, would itself be killed,

and the public would be left without any service at any

price.” *°

These effects are diametrically opposed to the aims of

free competition. Unlike Sears and Compco, a reversal

here would not foster the competitive free enterprise sys-

tem; it would have precisely the opposite result.

The ownership of the sound recording—not merely the

physical property, but the exclusive right to duplicate

the recorded performance embodied in it—obviously is

the economic foundation of the recording industry. In the

absence of federal legislation, the basis for such ownership

provides criminal penalties for interstate traffic in phonograph

records bearing forged or counterfeited labels, that statute in no

way protects against the vast bulk of unauthorized duplicated

recordings which are sold under the pirate’s own label or no

label at all.

50 National Tel. News Co. v. Western Union Tel. Co., 119 F.

294, 296 (7th Cir. 1902).

w—

has been found in state law. Prior to Sears and Compco,

challenges to the rights of the owner of the sound record-

ing were rare; and they were uniformly unsuccessful.”

More recently, the increased piracy resulting from tech-

nological developments and the legal arguments supplied by

the Sears and Compco decisions have enlarged the volume

of such litigation. It is a striking fact that, even after the

decisions in Sears and'Compco, virtually every one of the

dozens of courts faced with the question of unauthorized

duplication of sound recordings has declared it to be un-

lawful.*?

*! Capitol Records, Inc. v. Mercury Records Corp., 221 F.2d 657

(2d Cir. 1955) ; Artia v. Colosseum Records, Inc., 150 F.Supp. 550

(S.D.N.Y. 1957); Aeolian Co. v. Royal Musie Roll Co., 196 F.

926 (W.D.N.Y. 1912); FTC v. Orient Music Roll Co., 2 F.C,

176 (1919); RCA v. Premier Albums, Inc., 19 App. Div. 2d 62,

240 N.Y.S.2d 995 (1st Dept. 1963); Gieseking v. Urania Records,

Inc., 17 Mise. 2d 1034, 155 N.Y.S.2d 171 (Sup. Ct. 1956). Fono-

tipia Ltd. v. Bradley, 171 F. 951 (E.D.N.Y. 1909), the earliest

record piracy*case, was stated in G. Ricordi & Co. v. ITaendler,

194 F.2d 914 (2d Cir. 1952), not to extend to published works

capable of copyright protection. In the instant case, however, we

are dealing with sound recordings which were not capable of

statutory copyright protection and which were unpublished, Cf.

Vietor Talking Mach. Co. v. Armstrong, 132 F. 711, 712 (S.D.N.Y.

1904) where the court noted this “novel and interesting question”

but found no need to discuss it.

52 California —TIAA v. Younger, supra; Capitol Records

v. Erickson, supra; Baez v. Fantasy Records,

Inc., 144 U.S.P.Q. 537 (Cal. Super. Ct.

1964) ; Warner Bros. Records, Inc. v. David

(Cal. Super. Ct.), in Brutpoarp, Sept. 2,

1972, at 66; Atlantic Recording Corp. v.

Superba Tapes, Inc., No. 995811 (Cal. Super.

Ct., Feb. 19, 1971) ; NBC v. Aiello, No. 970398

(Cal. Super. Ct., Apr. 13, 1970); Capitol

Records, Inc. v. Winokur (Cal. ‘Super. Ct.),

~ in Bitipoarp, Mar. 7, 1970; Capitol Records,

Ine. v. Muntz (Cal. Super. Ct.), in Brt-

BOARD, Mar. 7, 1970; Capitol Records, Inc. v.

Hollywood Music Programmers, Inc., No.

In addition to these numerous judicial decisions, ten

states have enacted criminal statutes outlawing record and

944640 (Cal. Super. Ct., Dec. 27, 1968);

Capitol Records, Inc. v. Campoy, No. 191454

(Cal. Super. Ct., Aug. 28, 1967).

Illinois —CBS, Ince. v. Spies, 167 U.S.P.Q. 492 (IIL.

Cir. Ct. 1970); Atlantic Recording Corp. v.

. Magnitron, Inc., No. 72 CH 3431 (Ill. Cir.

Ct., Jun. 13, 1972); Mercury Records, Ince.

v. McKenna Indus., Inc. (Ill. Cir. Ct., Mar.

22, 1972), in Recorp Wor.p, Mar. 25, 1972,

at 4; CBS, Inc. v. International Tape, Inc.,

No. 72 CH 302 (Ill. Cir. Ct., Feb. 17, 1972);

Capitol Records, Inc. v. International Tape,

Inc., No. 72 CH 301 (Ill.- Cir. Ct., Feb. 23,

1972).

Michigan —Rare Earth Corp. v. Lear Jet Corp., No.

71 75821 (Mich. Cir. Ct., Jul. 1, 1971).

Minnesota —CBS Records v. Johnson, No. 4-71 Civil 225

and No. 4-71 Civil 436 (D. Minn., Jun. 20,

1972) ; Capitol Records, Inc. v. Schaak Elee-

tronics, Ine., No. 671559 (Minn. Dist. Ct.,

Jul. 21, 1971).

Missouri —Columbia Records, Inc. v. Nance (Mo. Cir.

Ct.), in Cas Box, Nov. 13, 1971, at 7.

New York —Greater Recording Co. v. Stambler, 144

U.S.P.Q. 547 (N.Y. Sup. Ct. 1965); Capitol

Records, Inc. v. Greatest Records, Inc., 43

Mise. 2d 878, 252 N.Y.S.2d 553 (Sup. Ct.

1964); CBS, Ine. v. Cartridge City, Ltd.

(N.Y. Sup. Ct.), in 155 N.Y.L.J. 113, at 10

(1966). ;

North Carolina—Liberty/UA, Inc. v. Eastern Tape Corp., 11

N.C. App. 20, 180 S.E.2d 414, appeal dis-

missed, 278 N.C. 702, 181 S.E.2d 600 (1971);

Liberty/UA, Ine. v. Eastern Tape Corp., 70

CVS 15108, 71 CVS 2579, 71 CVS 4602, and

71 CVS 15105 (N.C. Super. Ct., Jul. 14,

1972).

Oregon —A & M Records v. Northwest, Inc. (Ore. Cir.

Ct.), in Cash Box, Sept. 2, 1972, at 7;

Warner Bros. Records, Inc. v. Elliott, No.

378-969 (Ore. Cir. Ct., Jul. 11, 1972) ; Capi-

tape piracy."* The constitutionality of the California

statute involved here has been sustained by a three-judge

federal district court; attacks on the constitutionality of

the Pennsylvania and Texas statutes have been dismissed ;**

and the constitutionality of the Texas statute has been up-

held in an opinion by the Attorney-General of that state.*

After both Houses of Congress, with support from several

Executive Departments, had issued reports condemning the

practice,*’ Congress enacted an anti-piracy bill (which has

tol Records, Inc. v. McGettigan, No. 359-225

(Ore. Cir. Ct., Jun. 21, 1971).

Two contrary decisions refusing temporary injunctions were re-

versed on appeal. Capitol Records, Inc. v. Spies, 130 III. App.

2d 429, 264 N.E.2d 874 (1970); CBS, Ine. v. Custom Recording

Co., S.C. ——, 189 8.E.2d 305 (1972). The single exception

is a very recent decision concerning the Florida statute in which

appeal presently is pending. International Tape Mfrs. Ass’n v,

Gerstein, 174 U.S.P.Q. 198 (S.D. Fla. 1972) (appeal pending).

Compare Independent Tape Merchant’s Ass’n vy, Creamer, No.

72-73 Civil (M.D. Pa., Jul. 24, 1972) and Independent Tape

Merchant’s Ass’n v. Martin, Civil Action No. 3-5536-A (N.D.

Tex., Feb. 29, 1972), where the district courts left interpreta-

tion of the Pennsylvania and Texas anti-piracy statutes to the

state courts in the first instance.

* Ariz. Rev. Star. ANN. §13-1024 (1971-2 Supp.); Ark. Srar,

Ann. §41-4617 (1971 Supp.); Cav. Penau Cope §653h ( West

1970); Fua. Star. ANN. §543.041 (1972); La. Acr 350 (Reg.

Sess. 1972); N.Y. Gen. Bus. Law §561 (McKinney 1968); Pa.

Sra. tit. 18, §4878.1 (1972-3 Supp.) ; Tenn. Cope ANN. §39-4244

through §39-4250 (1971 Supp.) ; Tex. PenaL Cope ANN. art. 1137r

oo Va. Cope §59.1-41.1 through §59.1-41.6 (1972

upp.). '

* TIAA v. Younger, supra.

Independent Tape Merchant’s Ass’n y, Creamer, No. 72-73

Civil (M.D. Pa., Jul. 24, 1972); Independent Tape Merchant’s

Ass’n v. Martin, Civil Action No. 3-5536-A (N.D. Tex., Feb. 29,

1972).

°° Tex. Att’y GEN. Oprnion No. M-1114, Apr. 3, 1972.

*' H.R. Rep. No. 92-487, 92d Cong., Ist Sess. (1971); S. Rep.

No. 92-72, 92d Cong., Ist Sess. (1971) ; see note 45, supra.

only prospective effect). A diplomatic conference on record

and tape piracy in October 1971 in Geneva, Switzerland,

attended by more than fifty nations, adopted a “Convention

for the Protection of Producers of Phonograms against

Unauthorized Duplication of their Phonograms.” *

This substantially unanimous agreement that the piracy

of sound recordings is pernicious and unlawful conduct that

cannot be condoned, reached by so many judges in so many

jurisdictions, by state legislatures, by the Congress and

the Executive branch of the United States, and by the

international community, shows clearly shat basie con-

siderations of public policy dictate affirmance of the

decision below.

II.

States Can Protect Sound Recordings Under Unfair

Competition Principles.

The law of unfair competition has evolved over the

years to meet changing business developments and mal-

practices. Beginning in 1918 with the landmark decision

of this Court ip Jnternational News Service v. Associated

Press,® courts fave applied the doctrine of “misappropria-

tion” to particular fact situations in which (1) time, effort

and money have gone into something of value, generally an

intangible creation, (2) there has been appropriation of

°sThe text appears in Copyright (Monthly Review of the

World Intellectual Property Organization), Dee. 1971, at 240-242.

The treaty has been signed by 31 countries (Copy RIGHT, May 1972,

at 110), and will go into effect 3 months after formal ratification,

acceptance or accession by 5 countries. 7d. Article 11(1).

5° 248 U.S. 215 (1918).

Sie a kt

that “quasi-property” at little or no cost to the male-

factor; and (3) there has been a direct diversion of profits

from the creator to the appropriator. INS involved the

pirating of the substance of complainant’s news reports

(concededly not within the coverage of the Copyright

Act). The Court, in granting relief against this activity

which it characterized as a “misappropriation,” analyzed

the situation as follows:

“Stripped of all disguises, the process amounts to an

unauthorized interference with the normal operation of

complainant's legitimate business precisely at the point

where the profit is to be reaped, in order to divert a ma-

terial portion of the profit from those who have earned

it to those who have not; with special advantage to

defendant in the competition because of the-fact that

it is not burdened with any part of the expense. ...

The transaction speaks for itself, and a court of equity

ought not to hesitate long in characterizing it as unfair

competition in business.” ®

Courts repeatedly have applied this doctrine to redress

obvious inequities involving various similar practices,

including record piracy—a totally analogous situation

squarely meeting the three criteria mentioned above.”

° Id. at 233.

* Id. at 240.

“E.g., Pittsburgh Athletic Co. v. KQV Broadcasting Co., 24

F. Supp. 490 (W.D. Pa. 1938) (unauthorized sportsceast) ; Metro-

politan Opera ‘n v. Wagner-Nichols Recorder Corp., 199 Mise.

786, 101 N.Y.S.2d 483 (Sup. Ct. 1950), aff'd per curtam, 279 App.

Div. 632, 107 N.Y.S.2d 795 (1st Dept. 1951) (opera performances

recorded off the air and incorporated in phonograph records) ;

Mutual Broadcasting System, Ine. v. Muzak Corp., 177 Mise. 489,

30 N.Y.S.2d 419 (Sup. Ct. 1941) (sportscast taken off the air and

transmitted by telephone lines); Twentieth Century Sporting

Club, Inc. v. Transradio Press Service, Ine., 165 Mise. 71, 300

Thus, the misappropriation doctrine grew in responge to

the ethical as well as the economic needs of society, and it

developed separately from the patent and copyright laws

and from other common law rules concerning unfair com-

petition.*

Sears and Compco did not obliterate all state unfair

competition law. For example, the Court specifically

endorsed the right of the states to enjoin imitation of trade-

marks, labels or distinctive packaging**—all of which are

types of unfair competition.** ‘Sears and Compco thus do

not automatically exclude relief for misappropriation,

which is another type of unfair competition.®

The ZJNS decision was not even cited in Sears and

Compco. Despite the sweeping language of those decisions,

the Court surely could not have intended to destroy the

N.Y.S. 159 (Sup. Ct. 1937) (sportseast taken off the air and

retransmitted) ; Waring v. WDAS Broadcasting Station, 327 Pa.

433, 194 A. 631 (1937) (unauthorized radio broadcast of record-

ing). For record piracy cases, see notes 51 and 52, supra.

68 See, e.g., International News Service v. Associated Press, 248

U.S. 215, 235 (1918); CBS, Inc. v. Spies, 167 U.S.P.Q. 492, 499

(Ill. Cir. Ct. 1970); Ahrens, The Misappropriation Doctrine

After Sears-Compco, 59 TRADEMARK Rep. 88, 92 (1969). See

also Waring v. WDAS Broadcasting Station, 327 Pa. 433, 194 A.

631 (1937).

* 376 U.S. 225 at 232 (1964); 376 U.S. 234 at 238 (1964).

See also 376 U.S. at 239 (1964) (Harlan, J., concurring).

65 “The law of trade-marks is but a. part of the broader law of

unfair competition. ...” United Drug Co. v. Theodore Rectanus

Co., 248 U.S. 90, 97 (1918).

66“Tn recent years, its [unfair competition’s] scope has been

extended. It has been held to apply to misappropriation as well

as misrepresentation, to the selling of another’s goods as one’s own

—to misappropriation of what equitably belongs to a competitor.”

Schecter Poultry Corp. v. U.S., 295 U.S. 495, 532 (1935).

aiid ns eT Se OED Feo ae gh as LS MEO RE F

entire body of misappropriation law without expressly say-

ing so.” The continuing vitality of the misappropriation

doctrine has been accepted by the numerous federal and

state courts which have continued to apply it after Sears

and Compco, not only to combat record and tape piracy,

but also in various analogous situations involving blatantly

inequitable conduct. The one federal appellate court

decision which construes Sears and Compco as having

overruled NS has been severely criticized by leading com-

mentators.

Sears and Compco were product simulation cases, a well-

recognized category in unfair competition law.”? The Court

* The commentators are in agreement. E.g., Handler, in Sym-

posium, Product Simulation: A Right or a Wrong?, 64 CoLum.

L. Rev. 1178, 1190 (1964); 2 R. CaLLMANN, UNFAIR CoMPETITION

TRADEMARKS AND MOoNOPOLIES §60.4(c), at 519 (3d ed. 1968) ;

Ahrens, The Misappropriation Doctrine After Sears-Compco, 59

TRADEMARK Rep. 88, 104 (1969).

**E.g., Bond Buyer v. Dealers Digest Publishing Co., 25 App.

Div.2d 158, 267 N.Y.S.2d 944 (1st Dept. 1966) (wire service ma-

terial incorporated in newsletter) ; CBS, Ine. v. Documentaries

Unlimited, Inc., 42 Mise.2d 723, 248 N.Y.S.2d 809 (Sup. Ct. 1964)

(news announcement recorded off the air and incorporated in

phonograph record) ; Lennon v. Pulsebeat News, Inc., 143 U.S.P.Q.

309 (N:Y. Sup. Ct. 1964) (taped interviews incorporated in

phonograph records); Pottstown Daily News Publishing Co. v.

Pottstown Broadcasting Co., 247 F. Supp. 578 (E.D. Pa. 1965)

(newspaper items incorporated in news broadcast) ; cf. New York

World’s Fair 1964-1965 Corp. v. Colourpicture Publishers, Inc.,

141 U.S.P.Q. 939 (N.Y. Sup. Ct.), aff'd, 21 App. Div. 2d 896, 251

N.Y.S.2d 885 (2d Dept. 1964) (photographs of fair grounds

buildings used in postcards and the like). For record piracy

cases see note 52, supra.

* CBS, Ine. v. DeCosta, 377 F.2d 315, 318 (1st Cir.), cert.

denied, 389 U.S. 1007 (1967). See Derenberg, Consumerism and

“Old-Fashioned Commercial Honesty,” 15 IDEA 45, 56-7 (Special

Conference Issue, 1972); 2 R. CaLLMANN, Unrair CoMPeETITION

TRADEMARKS AND MONOPOLIES § 61.3, at 550-551 (3d ed. 1968).

" See, e.g., Derenberg, in Symposium, Product Simulation: A

Right or a Wrong?, 64 Cotum. L. REV. 1178, 1204-08 (1964).

left no room for Illinois to use state unfair competition

law to avoid paramount federal patent policy as applied

to product simulation. But that does not oust state

power to repress all other types of unfair competition,

whether under the rubric of misappropriation or otherwise.

With specific reference to sound recordings, Congress

clearly felt that protectable rights do exist in recordings

fixed prior to the effective date of the recent amendment to

the Copyright Act. Section 3 of that amendment states, in

part:

“,. nothing in title 17, United States Code, as amended

by section 1 of this Act, shall be applied retroactively ,

or be construed as affecting in any way any rights

with respect to sound recordings fixed before the ef-

fective date of this Act.””

The universal condemnation of record and tape piracy

compels its classification as a form of unfair competition.

“Competition is a desideratum in our economic system but

it ceases to serve an economic good when it becomes unfair.

The concept of fair play should not be shunted aside on the

theory that competition in any form serves the general

good. Only fair competition does that. Unfair competition

is not competition at all in the truest sense of the word.” ”

The public interest without question would best be served

by safeguarding the legitimate interests and property

rights of the sound recording industry from destruction at

the hands of the pirates, and the equitable misappropria-

7 Pub. L. No. 92-140, 85 Stat. 391 (Oct. 15, 1971).

72 Schulenburg v. Signatrol, Inc., 50 Ill. App. 2d 402, 200 NE.

2d 615 (1964). See also Handler, in Symposium, Product Simula-

tion: A Right or a Wrong?, 64 CoLtum. L. Rev. 1178, 1187 (1964).

3 A

SEE TALIS SEEM CII REE EI SI NIT Bi

tion doctrine of unfair competition developed from ]NS

is perfectly suited to provide protection in this unique

situation.

III.

States Also Can Protect Sound Recordings Under Com-

mon Law Copyright Principles.

Unpublished writings always have been accorded pro-

tection against unauthorized use,’* and in 1909, when the

present Copyright Act was enacted, Congress specifically

preserved common law rights in unpublished works by

stating in Section 2:

*’ Sce Wheaton v. Peters, 33 U.S. (8 Pet.) 591 (1834). The early

federal copyright statutes, unlike the present Copyright Act, pro-

vided a statutory remedy against the printing or publishing of any

manuscript whatever without the prior consent of the author or

proprietor. Act of May 31, 1790, 1 Stat. 124, §6; Act of Feb. 3,

1831, 4 Stat. 436, §9; Act of Jul. 8, 1870, 16 Stat. 230, §102;

Rev. Stat. §4967 (1875); Act of Mar. 31, 1891, 26 Stat. 1106, §9.

This provision was interpreted not to preempt the states from

concurrently protecting the common law copyright in unpublished

works. Sce, e.g., Kortlander vy. Bradford, 116 Mise. 664, 190

N.Y.S. 311 (Sup. Ct. 1921); Palmer v. DeWitt, 47 N.Y. 532, 535-

36 (1872) ; Woolsey v. Judd, 11 N.Y. Super. (4 Duer) 379, 385,

11 How. Pr. 49, 55 (1855); sce also, Press Pub. Co. vy. Monroe,

73 F. 196, 199 (2d Cir.), appeal dismissed, 164 U.S. 105 (1896) ;

Whicher, The Ghost of Donaldson v. Beckett: An Inquiry into

the Constitutional Distribution of Powers Over the Law of Lit-

erary Property in the United States, 9 ButL. CopyriGut Soc’y

102, 146 et seg. (1961) [hereinafter cited as Whicher].

*“Tt was thought best by the committee to insert the provision

in this form in order that it might be perfectly clear that nothing

in the bill was intended to impair in any way the common-law

rights in respect to this kind [unpublished] of work.” H.R. Rep.

No. 2222, GOth Cong., 2d Sess. 9 (1909). Under the current Copy-

right Revision Bill, Congress would reenter and specifically pre-

empt the field of protection for unpublished works. S. 644, 92d

Cong., Ist Sess. §104(a) (1971).

“Nothing in this title shall be construed to annul

or limit the right of the author or proprietor of an

unpublished work, at common law or in equity, to pre-

vent the copying, publication, or use of such unpub-

lished work without his consent, and to obtain damages

therefor.” **

The Sears decision, citing Section 2 of the Copyright Act,

recognized the continuing power of the states to give

common law copyright protection to unpublished writings.”

Sound recordings are “writings” in the constitutional

sense and constitute works of creative authorship that are a

proper subject for copyright protection.” Thus, by virtue

of Section 2 of the Copyright Act, any sound recording

fixed before the effective date of the recent amendment to

the Copyright Act can be protected under state common

law copyright principles if it remains unpublished.

“Publication” in copyright law is a technical concept

which varies in meaning according to circumstances and

whether the issue presented involves the divesting of

common law copyright or the investing of statutory copy-

17 US.C. §2. Section 12, 17 U.S.C. §12, continues to per-

mit, but does not require, registration of copyright in several types

of unpublished works (not including sound recordings).

76376 U.S. at 231 n. 7. Accord, Edgar H. Wood Associates,

Ine. v. Skene, 347 Mass. 351, 355, 197 N.E.2d 886, 890 (1964);

CBS, Ine. v. Documentaries Unlimited, Inc., 42 Mise. 2d 723, 726,

248 N.Y.S.2d 809, 812 (Sup. Ct. 1964).

*Shaab v. Kleindienst, 174 U.S.P.Q. 197 (D.D.C. 1972); see

Capitol Records, Inc. v. Mercury Records Corp., 221 F.2d 657,

660 (2d Cir. 1955); H.R. Rep. No. 92-487, 92d Cong., Ist Sess.

5 (1971); Diamond, Sound Recordings and Copyright Revision,

53 Iowa L. Rev. 839, 861 (1968); Rineer, The Unauthorized

Duplwation of Sound Recordings, U.S. Copyricut Orrice, GEn-

ERAL REVISION OF THE CopyRiGHT Law 11 (Study No. 26, 1957).

Ss ve PG RIT ae ON ne RIES NINE OTT LOO EC LEO BOIS nO nay career

right.” This dichotomy is necessary because publication

destroys common law copyright; it may be replaced by

statutory copyright if the work is eligible under the

categories established by the Copyright Act and if it bears

the correct notice in the proper place at the time of publica-

tion.” In order to avoid the drastic result of an unin-

tended forfeiture of rights, the identical activity has been

held to be a publication investing statutory copyright

protection in one case but not to be a publication divesting

common law copyright protection in another case. “In

*8 See Kalodner and Vance, The Relation between Federal and

State Protection of Literary and Artistic Property, 72 Harv. L.

Rev. 1079, 1092-96 (1959) [hereinafter cited as Kalodner and

Vance] ; Comment, Performers’ Rights and Copyright: The Pro-

tection of Sound Recordings from Modern Pirates, 59 Caur. L.

Rev. 548, 561 (1971).

While the question of what constitutes publication investing

federal statutory copyright is a matter of federal law, the con-

cept of publication divesting common law copyright is governed

by the case law of the particular state in which protection is

sought. Thus, in a case of first impression in California, a state

District Court of Appeal declined to follow an old decision of a

New York court in Wright v. Eisle, 86 App. Div. 356, 83 N.Y.S.

887 (2d Dept. 1903), and held instead that the mandatory filing of

architectural plans, drawings and designs with a county building

department did not indicate an intent to dedicate the plans to

the public and was not a publication divesting common law copy-

right in the plans. Smith v. Paul, 174 Cal. App.2d 744, 345 P.2d

546 (1959). As this issue has subsequently arisen in other state

courts, the California decision in Smith v. Paul has come to reflect

the increasingly accepted view. See Edgar H. Wood Associates,

Inc. v. Skene, 347 Mass. 351, 197 N.E.2d 886 (1964). The chang-

ing concept of publication is further demonstrated by the fact that

a New York appellate court recently overruled the earlier decision

in Wright v. Eisle and accepted the Smith and Skene cases as the

prevailing view of publication. Shaw v. Williamsville Manor, Inc.,

38 App. Div.2d 442, 330 N.Y.S.2d 623 (4th Dept. 1972).

917 U.S.C. §§5, 10, 19.

*° Compare, e.g., Werckmeister v. Pierce and Bushnell Mfg. Co.,

72 F. 54 (1st Cir. 1896) (holding that exhibition of a painting in a

each case the courts appear so to treat the concept of

‘publication’ as to prevent piracy.” *

A number of courts have analyzed the protection of

sound recordings under common law copyright doctrines

and have held that the sale of the physical object (the

record or tape) does not divest common law copyright and

forfeit the right to duplicate the intangible recorded per-

formance embodied in it.*? This is consonant with a long

line of authority that a performance, even before thousands

of people, does not constitute a divestitive publication.”

The record or tape is a device that is meaningless as a

physical object but possesses the capability of reperform-

ing the captured sounds. Accordingly, the sound record-

public art gallery constituted publication which invested statutory

Co., 134 F. 321 (2d Cir. 1904) (holding that exhibition of a paint-

ing in a public art gallery did not constitute publication divesting

common law copyright protection).

*1 American Visuals Corp. v. Holland, 239 F.2d 740, 744 (2d

Cir. 1956) (Frank, J.).

82 Capitol Records, Inc. v. Mercury Records Corp., 221 F.2d 657

(2d Cir. 1955) ; Capitol Records, Inc. v. Greatest Records, Inc., 43

Misc. 2d 878, 252 N.Y.S.2d 553 (Sup. Ct. 1964) ; Gieseking v. Urania

Records, Inc., 17 Misc.2d 1034, 155 N.Y.S.2d 17 (Sup. Ct. 1956) ;

Metropolitan Opera Ass’n v. Wagner-Nichols Recorder Corp., 199

Misc. 786, 101 N.Y.S.2d 483 (Sup. Ct. 1950), aff’d per-curtam, 279

App. Div. 632, 107 N.Y.S. 2d 795 (1st Dept. 1951).

83 F.g., Ferris v. Frohman, 223 U.S. 424 (1912) (performance of

a stage play, held not divestitive publication) ; Heim v. Universal

Pictures Co., 154 F.2d 480 (2d Cir. 1946) (playing of a musical

composition, held not a divestitive publication) ; King v. Mister

Maestro, Inc., 224 F. Supp. 101 (S.D.N.Y. 1963) (public delivery

of speech before 200,000 people, over radio and television, and

after distribution of advance copies to the press, held not a divesti-

tive publication) ; Uproar Co. v. NBC, 8 F. Supp. 358, 362 (D. Mass.

1934), aff'd as mod., 81 F.2d 373 (1st Cir. 1936) (broadcast of a

radio script, held not a divestitive publication).

DEE te CLL ETE OLE IIE LON MELE ELUTE SEITEN TIE at pO I: age 2s Ae

g PGA f Fy

ing—the intangible work embodied in the record or tape"

—remains unpublished.* It is not in the public domain; to

the contrary it is subject to state protection, and its un-

authorized duplication is an obvious infringement of the

owner’s common law copyright.

Petitioners argue that Sears and Compco held the states

to be preempted from protecting materials (such as sound

recordings) that are constitutionally capable of copyright

protection but for which Congress has not granted

statutory copyright protection.*® This argument seems to

rest on the theory that the copyright clause of the Constitu-

tion*’ operates, of its own force, to make the protection of

all writings an exclusively federal function. The short

answer to this contention is that, as noted above, Sears

specifically recognized the continuing validity of state

protection in the field of common law copyright.

** For the distinction between intangible works and material

objects, see the definitions of “sound recordings” and “reproductions

of sound recordings” in §1(e) of Pub. L. No. 92-140, 85 Stat. 391

(Oct. 15, 1971); cf. the definitions of “sound recordings” and

“phonorecords” in S. 644, 92d Cong., Ist Sess. §101 (1971).

*° The reference to “publication” in the Copyright Act, 17 U.S.C;

§26, insofar as it applies to sound recordings, concerns the invest-

ing of statutory copyright, and in any case it relates only to post-

February 15, 1972 recordings. For both reasons, it has no bearing

on this case.

** Professor Nimmer, upon whose views petitioners rely to support

their argument that under Scars and Compco states are preempted

from protecting sound recordings, has changed his position in the

1972 version of his text, based upon Congressional enactment of the

sound recording amendment to the Copyright Act. 1 M. NIMMER,

THE Law or Copyricnt §35.225 (1972).

87 U.S. Const. art. I, §8, el. 8.

*° 376 U.S. at 231 n.7. Moreover, any other construction of

Sears and Compco would lead to bizarre and disastrous results. If

the constitutional preemption theory were correct, Congress could

Petitioners also assert that the “limited times” phrase in

the copyright clause precludes state common law copyright

protection of writings for unlimited times.*® However,

review of the historical background of the copyright clause ,

makes it clear that the “limited times” phrase was intended

only as a restraint on federal power and does not limit the

states with respect. to common law copyright in un-

published works.” Furthermore, the “limited times” phrase

implies an affirmative policy of giving an author some

period of protection to derive a significant economic return

from his creation.”' Since record piracy precludes even a

minimum period of protection, application of the “limited

not leave protection of unpublished writings to the states, as it has

attempted to do in Section 2 of the Copyright Act. See 1 M.

NimMer, THE Law or Copyriaut §35.225, at 146.25 (1972). Un-

published writings of all kinds thus would be in the public domain

since the states could not protect them and Congress has failed to

do so. The logical extension of this line of argument is that all

statutory copyrights would be invalid because Section 8 of the

can be procured for any work in the public domain—and a work

could hardly be published if it did not first exist in unpublished

form. The Court could not have intended Sears and Compco io

lead to such absurd conclusions, especially in light of the long his-

tory of judicial protection of unpublished works under common law

principles. See also authorities cited in footnote 89.

*° The copyright clause of the Constitution does not of its own

force preempt state law. See Arnold, A Philosophy on the Protec-

tions Afforded by Patent, Trademark, Copyright and Unfair Com-

petition Law: The Sources and Nature of Product Simulation Law,

54 TRADEMARK Rep. 413, 420-21 (1964) ; Comment, 43 N.Y.U. L.

Rev. 178, 183 (1968). Cf. Chapman, The Supreme Court and

Federal Law of Unfair Competition, 54 Trapemark Rep. 573, 579

(1964) ; Kunin, The Lindsay Bill Before and After the Stiffel Case,

54 TRADEMARK Rep. 731, 744 (1964).

“eo supra, at 151; see Kalodner and Vance, supra, at

* See Kalodner and Vance, supra, at 1083-84.

enact ONE MEG SOO OO" LLL TOO SLE FEIT CTS 4 ME LR NE RDS MM

times” phrase to permit piracy manifestly would be incon-

sistent with the underlying policy of that phrase.

An alternative basis for petitioners’ argument appears

to be that Sears and Compco declare the states to be

prohibited by virtue of the supremacy clause from granting

protection to writings that Congress has not covered by

the Copyright Act. This theory implies that Congress

has occupied the field by enacting the Copyright Act of

1909 because an affirmative state grant of protection would

conflict with the exercise of Congressional power under the

right field (as distinguished from the patent field) ;” this

is clear from its explicit recognition of state power in

Section 2 of the Copyright Act.

In 1909, wheh Congress last adopted a complete revision

of the Copyright Act, consideration was given to sound

recordings as infringements of the musical compositions

embodied in them. This Court had previously decided that

a player piano roll was not a “copy” of the recorded music

embodied in it and hence could not infringe the copyright

in the musical composition under the existing statute. In

order to rectify that manifestly unjust situation, Congress

gave to copyright proprietors of musical compositions the

right to control the manufacture of “mechanical repro-

ductions” of their works but specifically did not grant

separate copyright protection to the mechanical reproduc-

tions themselves.** No reason was given for this omission.

” “Patent rights exist only by virtue of statute.” Sears, Roebuck

& Co. v. Stiffel Co., 376 U.S. 225, 229 n. 5 (1964).

** White-Smith Publishing Co. v. Apollo Co., 209 U.S. 1 (1908).

17 U.S.C. § 1(e).

* H.R. Rep. No. 2222, 60th Cong., 2nd Sess. 9 (1909).

However, many efforts have been made over the past half-

century and more to enact another complete revision of the

provisions protecting sound recordings.®* The task remains

uncompleted because of the diverse interests and _tech-

nological developments involved. When the House of

Representatives in 1967 did pass a copyright revision bill,

*° A study of the legislative history of the various bills for general

revision of the Copyright Act makes clear that there has never been

opposition to the principle of protection of sound recordings against

unauthorized duplication, The reason why sound recordings were

not until recently covered by federal law is that provisions for the

protection of sound recordings were submitted to Congress as part

of each successive bill for the general revision of the Copyright Act.

The failure of Congress to enact these revision bills was due to

controversies over issues unrelated to the protection of sound re-

cordings against unauthorized duplication. Rinaer, The Unauthor-

ized Duplication of Sound Recordings, U.S. Copyriaut OFFICE,

GENERAL REVISION OF THE CopyriGHT Law 37 (Study’No. 26, 1957) ;

Report OF THE REGISTER OF COPYRIGHT ON THE GENERAL REVISION

or THE U.S. Copyricut Law, 87th Cong., 1st Sess., at x (1961);

H.R. Rep. No. 2237, 89th Cong., 2d Sess. 31 (1966).

Furthermore, from the very earliest attempts to revise the Copy-

right Act, it was accepted by the recording industry and by Con-

gress that state law protected sound recordings from unauthorized

duplication. Hearings on H.R. 11258 Before the House Comm. on

Patents, 68th Cong., 2d Sess. 303 (1925) ; Hearings on H.R. 10431

Before the House Comm. on Patents, 69th Cong., Ist Sess. 319

(1926); Hearings on H.R. 9639 Before the House Comm. on

Patents, 71st Cong., 2d Sess. 10-11, 27, 29 (1930) ; Hearings on

Revision of Copyright Laws Before House Comm. on Patents,

74th Cong., 2d Sess. 113, 639, 653, 1181 (1936) ; Hearings on H.R.

1268, H.R. 1270 and H.R. 2570 Before the Subcomm. on Patents,

Trademarks and Copyrights of the House Judiciary Comm., 80th

Cong., Ist Sess. 54 (1947). See also Rincer, The Unauthorized

Duplication of Sound Recordings, U.S. Copyriaut OFFICE, GENERAL

REVISION OF THE Copyright Law 17-20 (Study No. 26, 1957);

Diamond, Copyright Problems of the Phonograph Record Industry,

15 Vanp. L. Rev. 419, 429 (1962). When it became clear to the

Congress that piracy had grown to such proportions that federal

with sound recordings separately by passing Public Law No. 92-140.

ROM CTRL II SALE ALAR ER NERS BYR UTR Gy anipends wey bE ORE

the accompanying committee report took pains to point out

that the extension of copyright protection to sound record-

ings was “overdue,” ” and Section 3 of the recent sound

recording amendment completely dispels any doubt about

the absence ‘of Congressional intent to preempt the field

prior to the effective date of that amendment.* The pirates

therefore are mistaken when they attempt to draw a

negative inference from the failure of Congress to enact

passage of the sound recording amendment in 1971.

Thus, at least with respect to unpublished constitutionally

copyrightable works such as sound recordings, Sears and

Compco cannot properly be construed as precluding state

protection against unauthorized duplication. We find

nothing in Sears and Compco, or elsewhere, that would

require the Court to ignore the manifest Congressional

intent to preserve common law rights in unpublished

writings—including sound recordings—and the power of

the states to give protection to such rights.

” H.R. Rep. No, 2237, 89th Cong., 2d Sess. 47 (1966).

* See Tape Head (Co. v. RCA Corp., 452 F.2d 816, 819 n.1 and ac-

companying text (10th Cir. 1971).

IV.

The Sears and Compco Cases Are Distinguishable.

Sears and Compco are specifically distinguishable from

the instant case on several significant grounds.

First, they dealt only with patent questions; therefore,

all references to copyright were obiter dicta.” Although

patents and copyrights are mentioned in the same clause of

the Constitution, there are vital differences between them,

notably in terms of the scope of protection. An invention

must be novel to be patentable." A patent confers upon

the inventor the right to exclude others from making, using

or selling the invention.” As a result, a patentee can

prohibit everyone from practicing his invention whether

or not the same idea is independently discovered. On the

other hand, a writing need only be original to be copyright-

able. A copyright confers only the right to prevent copy-

ing of the form of expression of the idea;' the basic idea

in the copyrighted work is fully usable by anyone.’* The

author or proprietor can prohibit direct copying of his

*° F.9., Pottstown Daily News Publishing Co. v. Pottstown Broad-

casting Co., 247 F. Supp. 578, 580-581 (E.D. Pa. 1965) ; Derenberg,

Consumerism and “Old-Fashioned Commercial Honesty,” 15 IDEA

45, 56 (Special Conference Issue, 1972).

200 35 U.S.C. §101; see 1 DELLER’s WALKER ON Patents §54 (2d

ed. 1964).

101 35 U.S.C. §§154, 271.

102 F.g., Alfred Bell & Co. v. Catalda Fine Arts, Inc., 191 F.2d 99

(2d Cir. 1951).

108 F'.g., Mazer v. Stein, 347 U.S. 201, 217 (1954).

104 F'.g., Baker v. Selden, 101 U.S. 99, 101-04 (1879).

work, but the public is not deprived of the right of inde-

pendent recreation of a substantially identical work not

copied from his.’** Accordingly, there can be only one

validly patented version of an invention, but there can be a

plurality of identical validly copyrighted works each of

which was independently created.’ Thus, patents and

copyrights are distinguishable to such an extent that,

despite the sweeping statements in the Sears and Compco

opinions, the Court’s discussion of policies applicable to

the patent system in those opinions cannot be applie

automatically to the copyright system.’ ;

Second, in Sears and Compco, the defendants made “sub-

stantially identical” ** or “very similar” *”. copies ° of

physical objects. A record or tape, however, is meaningless

as a physical object. It is merely a carrier for the in-

tangible recorded performance. Sound recordings are not

substantially copied by pirates in the sense of simulating

them; they are exactly duplicated by electronic means.’

*6 “(T]he law imposes no prohibition upon those who, without

copying, independently arrive at the precise combination of words

or notes which have been copyrighted.” Fred Fisher, Inc. v.

Dillingham, 298 F. 145, 147 (S.D.N.Y. 1924) (L. Hand. J.).

6 Id. at 150-51; see, e.g., Mazer v. Stein, 347 U.S. 201, 218

(1953) ; Sheldon v. Metro-Goldwyn Pictures Corp., 81 F.2d 49, 54

(2d Cir. 1936), aff'd, 309 U.S. 390 (1940).

**" See text at note 112, infra. The rule of Sears and Compco was

elucidated further by the Court in Lear, Inc. v. Adkins, 395 U.S.

653, 668 (1969), which declared that “federal law requires that all

ideas in general circulation be dedicated to the common good unless

they are protected by a valid patent.” The idea in a sound record-

ing, like that of any other copyrightable work, is not restricted by

either common law or statutory copyright.

78 376 U.S. 225 at 226.

10° 376 U.S. 234 at 235.

"0 Tmitation of a recorded performance, as distinguished from its

appropriation, is permissible. Sinatra v. Goodyear Tire & Rubber

As has been pointed out in numerous cases, the unau-

thorized copying of an article is distinguishable from the

unauthorized appropriation, reproduction or duplication of

the very article itself—the actual performance comprising

the sound recording embodied in the record or tape."

The situation here is completely unlike that presented in

Sears and Compco. A customer for lighting fixtures wants

something esthetically satisfying and functionally capable

of supplying illumination; Sears’ version of Stiffel’s pole

lamp may very well suffice. But a customer for a record or

tape wants a particular version of a certain musical com-

position performed by specific artists; and that is precisely

what the petitioners supply—not their own version, but

the identical performance created by the original producer.

Although it may also be denominated “copying” for want

of a better word, this is a totally different kind of activity

from that which was involved in Sears and Compco.":

Third, in Sears and Compco the plaintiffs had obtained

patents that subsequently were ruled invalid. It was logical

Co., 485 F.2d 711 (9th Cir. 1970) ; Davis v. TWA, 297 F. Supp.

1145 (C.D. Cal. 1969) ; Supreme Records, Inc. v. Decca Records,

Inc., 90 F. Supp. 904 (S.D. Cal. 1950) ; Miller v. Universal Pictures

Co., 11 App. Div.2d 47, 201 N.Y.S.2d 632 (1st Dept. 1960), aff'd,

10 N.Y.2d 972, 224 N.Y.S. 2d 662, 180 N.E.2d 248 (1961) ; cf. Pub.

L. No. 92-140, 85 Stat. 391, §1(a).

11 See, e.g., TIAA v. Younger, supra; Capitol Records v. Erick-

son, supra; Capitol Records v. Spies, 130 Ill. App.2d 429, 264 N.E.

2d 874 (1970).

2 The Solicitor General explicitly recognized this distinction in

his brief for the United States as amicus curiae in Sears and

Compco, at 11-12, 28.

to hold them to their choice of method of protection.

There is no parallel with sound recordings because there

was no possibility of federal statutory protection for those

works as an alternative."* In Sears and Compco, the

articles were “too slight an advance” ™* and “too lacking in

novelty” * to be entitled to patent protection; but it is

acknowledged that sound recordings constitute works of

creative authorship which constitutionally qualify for eopy-

right protection.” Thus, the facts presented in Sears and

Compco made them relatively easy cases to decide since

state protection was substantively inconsistent with the

federal statute—the state sought to protect something the

federal law dictated as being unprotcctable. In the instant

case, State protection is consistent with the federal statute

—the state seeks to protect something the federal law

specifically leaves to the states to protect."* Moreover, as

discussed above, the basic policy considerations arising

from the tenets of our free enterprise economic system led

to reversal in Sears and Compco, but should lead to

affirmance here.

“8 In this respect, G. Ricordi & Co. v. Haendler, 194 F.2d 914

(2d Cir. 1952), which was cited in Sears, is properly analogous

because that case refused to protect the typography of a book after

™ Under Pub. L. No. 92-140, 85 Stat. 391, only sound recordings

fixed and published on or after February 15, 1972 are eligible for

federal copyright protection.

18 376 U.S. 225 at 232.

116 Id.

"7 See note 77, supra.

"817 U.S.C. §2; Pub. L. No. 92-140, 85 Stat. 391, §3.

Vv.

The California Statute Is a Proper Exercise of the

State Interest in Punishing Conduct Equivalent to Lar.

ceny.

Despite the broad formulation of the question presented

by petitioners, this case actually deals only with the narrow

issue of the validity of the state penal statute under which

they were convicted and it can be decided on that ground

alone. This Court often has recognized that in our dual

system of government, “federal regulation of a field of

commerce should not be deemed preemptive of state regula-

tory power in the absence of persuasive reasons—either

that the nature of the regulated subject matter permits no

other conclusion, or that the Congress has unmistakably

so ordained.” *® There are persuasive reasons why states

should be permitted to continue to protect their citizens

from the effects of predatory theft of valuable property

rights in sound recordings, as has been demonstrated above.

Moreover, the state penal statute here in issue deals with a

subject matter long left untouched by Congress, and there

is no need to speculate about the fact that Congress ex-

pressly stated its intention not to preempt state action with

respect to sound recordings fixed prior to February 15.

1972."

This Court has specifically rejected the notion that mere

coincidence of subject matter of federal and state statutes

is enough to support a finding of preemption:

19 Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132,

142 (1963).

120 February 15, 1972 is the effective date of the sound recording

amendment, Pub. L. No. 92-140, 85 Stat. 391. Petitioners were con-

victed much earlier (June 28, 1971) for acts obviously committed

prior to that date. Thus, the application of the California statute

to recordings made after February 15, 1972 is not in issue here.

“Respondent’s automatic coincidence means _in-

validity theory, applied in an area as imbued with the

state’s interest as is this one, ... would lead us to the

conclusion that a state may not make a dealer in perish-

able agricultural commodities respect its laws on the

fraudulent nonpayment of an obligation, if that fraud

occurred after an interstate shipment, 7 U.S.C. §499

(b)(4), for Congress has not expressly saved such

prosecutions. We would hold, too, that extortion or

robbery from interstate commerce under 18 U.S.C.

§1951 or 18 U.S.C. §2117 is immune from state action;

that the wrecking of a bridge over an interstate rail-

road is an ‘exclusively federal’ offense, 18 U.S.C. §1992;

that the transmittal of a ransom note in interstate com-

merce cannot be punished by local authorities, 18 U.S.C.

§875. And see 18 U.S.C. §4331, 472, 479. In short, we

would be setting aside great numbers of state statutes

to satisfy a congressional purpose which would be only

the product of this Court’s imagination.” #2

Similar consequences would result from a holding that

Sears and Compco dictate copyright preemption:

“If the rationale of the CBS case that Sears-Compco

was a constitutional decision remains unchallenged, the

only conclusion would be that because of an alleged con-

flict with constitutional copyright policy, many tortious

competitive practices such as bridery, breach of eon-

fidence, and enticing away customers cannot be en-

joined if they concern materials which may be copy-

rightable subject matter but which are not in fact so

protected under the present copyright laws. The equit-

able doctrine of misappropriation which allowed the

courts to do justice in situations not covered by the

federal statutes or common law would be overruled.” 3?

™ California v. Zook, 336 U.S. 725, 732-33 (1949).

* Ahrens, The Misappropriation Doctrine after Sears-Compco,

59 TRADEMARK Rep. 88, 113 (1969).

Surely it could not be seriously asserted that just because

a work of fine art can be protected under the federal copy-

right law, a state cannot statutorily regulate the transfer

of reproduction rights in works of fine art;’* that just

because a corporate stock certificate is a “writing” that

could be protected under the federal copyright law, a state

cannot statutorily outlaw counterfeiting of such certifi-

cates;'** that just because secret scientific material,

although constitutionally capable of copyright protection,

may be ineligible for protection under the federal copy-

right law because it is still unpublished, a state cannot

statutorily outlaw its unauthorized reproduction’ or even

its physical theft.*** The control of such activities un-

questionably comes within legitimate state interest.’”

Similarly, California has a legitimate interest in punishing

record and tape piracy, an activity which “might better be

described by other terms connoting larceny.” ?**

123 F.g., N.Y. Gen. Bus. Law art. 12-E, §224 (McKinney 1968).

124 F.g., N.Y. Penau Law §170.15 (McKinney 1967).

128 F.g., N.Y. Penau Law §165.07 (McKinney 1967).

126 F.g., N.Y. PENAL Law §155.30 (McKinney Supp. 1971).

127In Watson v. Buck, 313 U.S. 387 (1941), Justice Black, who

later wrote the Court’s opinions in Sears and Compco, found that

Florida had the power to prohibit an organization of copyright

proprietors from setting license fees for the federally copyrighted

works of its members. “We are pointed to nothing either in the

language of the copyright laws or in the history of their enactment

to indicate any congressional purpose to deprive the states, either

in whole or in part, of their long-recognized power to regulate

combinations in restraint of trade.” 313 U.S. at 404. Clearly, if

federal copyright law allows states to prohibit anti-competitive

conduct in the marketing of federally copyrighted works, a fortiori,

states may also prohibit anti-competitive conduct in the marketing

of works whose regulation has been left by Congress to the states.

128 Shapiro, Bernstein & Co. v. Remington Records, Inc., 265

F.2d 263, 269 (2d Cir. 1959) (Chief Justice Burger, then sitting by

designation as a Circuit Judge of the Second Circuit).

45.

E. CONCLUSION

The amicus curiae respectfully submits that, because

there are no persuasive reasons calling for preemption and

to the contrary there are particularly strong reasons

against it, because Congress has expressly stated its intent

not to occupy the field, and because this state statute would

complement rather than contravene federal policy favoring

the maintenance of the competitive system, the judgment

below should be affirmed.

Respectfully submitted,

Sipney A. Diamonp

425 Park Avenue

New York, New York 10022

(212) PL 9-8400

Ernest S. Meyers

74 Trinity Place

New York, New York 10006

(212) HA 2-0081

Counsel for Recording In-

dustry Association of

America, Inc., Amicus

Curiae

Kayr, Scooter, Fierman,

Hays & Hanpier

David Goldberg

William M. Borchard

Ronald S. Kadden

Laporte & MEvErs

= Of Counsel

1-A

APPENDIX A.

Recording Industry Association of America, Inc.,

Membership List

AA Records

250 West 57th Street

New York, New York 10019

ABC/Dunhill Records

8255 Beverly Boulevard

Los Angeles, California

90048

ABKCO Records

1700 Broadway

New York, New York 10019

Abnak Music Enterprises

825 Olive at Ross

Dallas, Texas 75201

A & M Records

1416 North La Brea Avenue

Hollywood, California 90028

Ameret Records

1717 North Highland Avenue

Hollywood, California 90028

Ampex

2201 Lunt Avenue

Elk Grove Village,

Illinois 60007

Ansonia Records

802 Columbus Avenue

New York, New York 10025

Atlantic Records

1841 Broadway

New York, New York 10023

Aveo Records

1301 Avenue of the Americas

New York, New York 10019

Bee Gee Records

6430 Sunset Boulevard,

Suite 1013

Hollywood, California 90028

Bell Records

1776 Broadway

New York, New York 10019

Black Jazz Records

9255 Sunset Boulevard

Los Angeles, California

90069

Buddah Records

810 Seventh Avenue

New York, New York 10019

Capitol Industries

Hollywood and Vine

Holtywood, California 90028

CBS/Records Group

51 West 52nd Street

New York, New York 10019

2-A

Copley Record Productions

P. O. Box 517

Manchester, Pennsylvania

17345

Crescendo Records

9165 Sunset Boulevard

Hollywood, California 90069

Disneyland/Vista Records

800 Sonora Avenue

Glendale, California 91201

Elektra Records

15 Columbus Circle

New York, New York 10023

Famous Music

One Gulf + Western Plaza

New York, New York 10023

Folkways Records

50 West 44th Street

New York, New York 10036

G RT Corp.

1286 Lawrence Station Road

Sunnyvale, California 94086

GSF Productions

888 Seventh Avenue

New York, New York 10019

Icka-Delick-Music & Record

P.O. Box “C”

Chicago Ridge, Illinois 60415

Jamie Records

919 North Broad Street

Philadelphia, Pennsylvania

19123

Kelit Aurora Records

239 West 18th Street

New York, New York 10011

London Records

539 West 25th Street

New York, New York 10001

Longines-Symphonette

Recording Society —

200 Myrtle Boulevard

Larchmont, New York

MCA Records

100 Universal City Plaza

Universal City, California

91608

Mercury Records

35 East Wacker Drive

Chicago, Illinois 60601

Metromedia Records

1700 Broadway

New York, New York 10019

MGM Records

7165 Sunset Boulevard

Hollywood, California 90066

Monitor Records

156 Fifth Avenue

New York, New York 10010

Musicor Records

240 West 55th Street

New York, New York 10019

Nashboro Records

1011 Woodland Street

Nashville, Tennessee 37206

fe a8 AK acetate DG NL”

‘“ PO aPC Mek ON Oe ot etre td AR

ne ene in’

Ovation Records

1249 Waukegan Road

Glenview, Illinois 60025

Pickwick International

135 Crossways Park Drive

Woodbury, L.I., N.Y. 11797

Platinum Records (The

Music Factory)

567 N. W. 27th Street

Miami, Florida 33127

Poison Ring Records

10 George Street

Wallingford, Connecticut

06492 -

Polydor Records

1700 Broadway

New York, New York 10019

Project 3 Records

1270 Avenue of the Americas

New York, New York 10020

Ranwood International

9034 Sunset Boulevard

Los Angeles, California

90069

RCA Records

1133 Avenue of the Americas

New York, New York 10036

Request Records

66 Memorial H ighway

New Rochelle, New York

10801

Shelby Singleton Produe-

tions

3106 Belmont Boulevard

Nashville, Tennessee 37212

3-A

Silhouettes in Courage

22 East 40th Street

New York, New York 10016

Starday-King Records

3557 Dickerson Road

P.-O. Box 8188

Nashville, Tennessee 37207

“~—Phomas J. Valentino, Ine.

151 West 46th Street

New York, New York 10036.

United Artists Records

6920 Sunset Boulevard

Hollywood, California 90028

Vanguard Recording Society

71 West 23rd Street

New York, New York 10010

Vantage Recordings

P. O. Box 212

Pottstown, Pennsylvania

19464

Warner Bros. Records

4000 Warner Boulevard

Burbank, California 91505

Word Records

P. O. Box 1790

4800 W. Waco Drive

Waco, Texas 76710

Young People’s Records

225 Park Avenue South

New York, New York 10003

APPENDIX B

Glossary

1. Sound Recording—An intangible work that results

from the fixation of a series of musical, spoken or other

sounds regardless of the nature of the material object

(such as a disc, prerecorded tape, player piano roll or

other record) in which the sounds are embodied.

2. Record or tape—The material object in which sounds

are fixed by any means and from which the sounds can be

perceived, reproduced, or otherwise communicated either

directly or with the aid of a machine or device. Records

and tapes are the reproductions of sound recordings and

include phonograph records (discs) and various configura-

tions of prerecorded magnetic tapes.

3. Phonograph Record—One of the forms in which

sound recordings are embodied. Today, phonograph

records are flat discs made of various types.of vinyl and

plastic into which grooves have been pressed. Sounds are

reproduced when the phonograph record revolves on a turn-

table and a stylus passes along the grooves, creating

mechanical vibrations within the stylus which are then

transformed into electrical impulses, amplified and re-

produced audibly through a loudspeaker. Phonograph

records are sold commercially as single records and as long-

playing records (albums).

4. Single or Singles—A phonograph record consisting of

a flat disc 7 inches in diameter, which, when played on a

Phonograph, revolves at 45 revolutions per minute. Each

———

2-B

side of a single customarily contains a performance of one

musical composition and this form of phonograph record

today is limited to popular as distinguished from classical

music.

5. Long Playing (LP) Record or Album—A phonograph

record consisting of a flat disc 12 inches in diameter, which,

when played on a phonograph, revolves at 3314 revolutions

per minute. Each side of an LP or album can carry

approximately thirty minutes of recorded sound. An LP or

album of popular music usually contains performances of

between nine and twelve musical selections and customarily

runs twenty minutes on each side.

6. Prerecorded Tape—Another form in which sound

recordings are embodied. Electrical impulses are impreg-

nated magnetically within the moleewlar structure of the

tape compound. Sounds are.reproduced when the tape

moves across a tape head ‘and the electronic signals are

picked up, amplified and reproduced audibly through a loud-

speaker. Prerecorded tape commonly is sold in three forms:

reel-to-reel, cartridges and cassettes.

7. Reel-to-Reel Tape—A prerecorded tape sold com-

mercially in 14 inch width, wound upon a reel 7 inches in

diameter. The tape is played by threading it through a tape

recorder so that it runs from the full reel, over the tape

head, and on to a take-up reel. The tape moves at a speed

of either 334 inches. per second (i.p.s.) or 7% i.p.s.

8. Tape Cartridge—A prerecorded tape sold com-

mercially in 1% inch width, packed permanently in a

rectangular plastic device. The tape is wound upon a hub

3-B

to form a continuous loop so that it can play continuously

over and over again without the need to change direction

of the tape or to turn the cartridge over. The cartridge is

played by inserting it into a playback device, whereupon

the tape moves at 334 i.p.s. past the tape head. The tape

customarily embodies four pairs of individually recorded

tracks and the tape head moves into four different positions

to play each pair in sequence giving a stereophonic effect.

9, Tape Cassette—A prerecorded tape sold commercially

in ¥% inch width, packed permanently in a rectangular

plastic device which is thinner and smaller than a tape

cartridge. The tape is not in a continuous loop; rather, it

moves from one reel to another within the plastic device

and needs rewinding to be played again. The cassette is

played by inserting it into a playback deyice, whereupon

the tape moves at 1% i.p.s. past the stationary tape head.

Newer cassettes customarily embody four stereophonic

tracks, two of which are reproduced when the tape is

played moving in one direction and two of which are re-

produced when the cassette is turned over and the tape

is played moving in the opposite direction.

10. Phonogram—A term which has come into use in

international conventions to describe sound recordings

regardless of the physical form of the material object in

which they are embodied.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.