Amicus Curiae Brief — Goldstein v. California

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MICHAEL SEOTX, UR.

IN THE

SUPREME COURT OF THE UNITED STATES

g OCTOBER TERM, 1971

5 No. 71-1192

4 DONALD GOLDSTEIN, RUTH KOVEN

3 AND DONALD KOVEN,

bs Petitioners.

: Vv.

: THE STATE OF CALIFORN IA,

i Respondent.

4 On Writ of Certiorari To The Appellate Department,

2 Superior Court of California, County of Los Angeles.

:

4 BRIEF OF THE ATTORNEY GENERAL OF THE STATE

3 OF TEXAS, AMICUS CURIAE, IN SUPPORT OF

_ RESPONDENT AND THE CALIFORNIA PENAL CODE

: PROVISION §653H

4 CRAWFORD C. MARTIN

¥ ATTORNEY GENERAL OF TEXAS

i Box 12548, Capitol Station

3 Austin, Texas 78711

i CHARLES F. HERRING

: OF

ze | SMALL, HERRING, CRAIG & WERKENTHIN

4 of Counsel

3 900 Perry-Brooks Building

4 ; Austin, Texas 78701

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INDEX

Page

A. THE INTEREST OF THE AMICUS CUBIAR.... 1

B. SUMMARY OF ARGUMENT .......__—i_iwawn. 2

ees CS Se 2

I. THE PRACTICE OF SOUND RECORDING

PIRACY IS NOT UNIQUELY A CALIFOR-

NIA PROBLEM, AND THE ABUSE LED TO

ACTION BY THE LEGISLATURE IN TEXAS 2

Il. THE CALIFORNIA ANTI-PIRACY

STATUTE (CAL. PENAL CODE §653H)

LIKE THE COMPARABLE TEXAS

STATUTE (ARTICLE 1137r TEXAS ANN.

PENAL CODE), IS A CONSTITUTIONAL

EXERCISE OF STATE POLICE POWER. 4

Ill. THE ENACTMENT BY CONGRESS OF AN

AMENDMENT TO THE COPYRIGHT ACT

MAKING-RECORDINGS A COPYRIGHT-

ABLE INTEREST DOES NOT CAUSE

THESE STATE STATUTES TO BE

UNCONSTITUTIONAL

D. CONCLUSION

Appendix 1—Chapter 890 (S.B. 748), 1971 Texas

' Legislature. The Texas Sound Recording Piracy Statute 14

Appendix 2—Texas Att’y General Opinion No. M-1114,

ee eee a 15

INDEX OF AUTHORITIES

CASES:

; Page

Abate v. United States, 359 U.S. 187 (1959) ......... 4

California v. Zook, 336 U.S. 725 (1949) .............. 4

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

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

OUD COIN os sh a Peak a eee 5,6

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

2d 878, 252 N.Y.S.2d 553 (Sup.Ct. 1964) ......... 5

Capitol Records, Inc. v. Mercury Records Corp., 109

F.Supp. 330 (S.D.N.Y. 1952) affd., 221 F.2d 657

(2nd Cir. MD kee is ae ee anaes 38

Capitol Records, Inc. v.

(Tll.App. 1970) .... 5,6

Colorado Anti-Discrim. Comm. v. Continental Air Lines,

ee., CFR The TH A 2... eee 10

Columbia Broadcasting System, Inc. v. Documentaries

Unlimited, Inc., 42 Misc.2d 728, 248 N.Y.S.2d 809

ete: Gees a ee oS ee a

Compco Corp. v. Day-Brite Lighting, Inc.,

Bre US. See CRE). 2 ee a 2, 4, 5, 7, 8, 10

Fashion Originators Guild v. F.T.C., 114 F.2d 80

(2nd Cir. 1940) affd., 812 U.S. 457 (1941) .......... 4

F.T.C. v. Orient Music Roll Co., 2 F.T.C. 176 (1919) .... 6

ii >

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Se ty ing SP,

INDEX OF AUTHORITIES—Continued

CASES—Continued 3

Page

Ferris v. Frohman, 223 U.S. 424 (1912) eh te San 7

Florida Lime and Avocado Growers, Inc. v. Paul,

878 U.S. 1382 (1963) . : 10

Geiseking v. Urania Records,‘Inc. 17 Misc.2d 1034,

155 N.Y.S.2d 171 (Sup.Ct. 1956) 6

Huron Portland Cement Co. v. City of Detroit,

362 U.S. 440 (1960) . ; 9

International News Service v. Associated Press,

248 U.S. 215 (1918) 7

King v. Maestro, Inc. 224 F.Supp. 101 (S.D.N.Y. 1963) 7

Liberty/UA Inc. v. Eastern Tape Corp., 180 S.E.2d 414

(appeal dism’d 181 S.E.2d 600) (1971)

Metropolitan Opera Assn. Inc. v. Wagner Nichols

Recorder Corp., 199 Misc. 786, 101 N.Y.S.2d 483

(Sup.Ct. 1950), affd., per curiam 279 App. Div. 632,

107 N.Y.S.2d 795 (1951): sk

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

240 N.Y.S.2d 995 (1963)

Schwartz v. State of Texas, 344 U.S. 199 (1952)

Sears Roebuck & Co. v. Stiffel Co.,

5, 6

376 U.S. 225 (1964) 2, 4, 5, 7, 8, 10

Tape Industries Association of America v, Younger,

316 F.Supp. 340 (C.D. Cal. 1970), appeal dism’d,

401 U.S. 902 (1971), appeal —_— U.S. Ct. App.

9th Cir., No. 26628 _.

iii

: —_—_—a

INDEX OF AUTHORITIES—Continued

STATUTES:

California Penal Code Statute Sec. 653H

Texas Ann. Penal Code Art. 1137r

UNITED STATES CONSTITUTION

U. S. Constitution

Art. I, § 8, Cl. 8 |

OTHER AUTHORITIES:

Texas Att’y Gen. Opinion No. M-1114 April 3, 1972

iv

Page

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ae

, IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1971

No. 71-1192

DONALD GOLDSTEIN, RUTH KOVEN

AND DONALD KOVEN,

Petitioners.

Vv.

THE STATE OF CALIFORNIA,

Respondent.

On Writ of Certiorari To The Appellate Department,

Superior Court of California, County of Los Angeles.

BRIEF OF THE ATTORNEY GENERAL OF THE STATE

OF TEXAS, AMICUS CURIAE, IN SUPPORT OF

RESPONDENT AND THE CALIFORNIA PENAL CODE

PROVISION §653H WHICH PROTECTS PROPERTY

RIGHTS OF CITIZENS FROM TRAFFIC IN ILLICIT

AND CONTRABAND PROPERTY.

A. THE INTEREST OF THE AMICUS CURIAE

The Attorney General of the State of Texas files,

amicus curiae, this brief in support of a permissible

exercise of the police power of the states. Texas has

enacted a statute (Texas Ann. Penal Code, Art. 1137r)

similar to the California Penal Code Statute (§635H)

which the petitioners seek to challenge on constitu-

tional grounds.

=

B. SUMMARY OF ARGUMENT

Texas urges that the California statute be upheld as

a constitutional exercise of state police power. We

maintain that neither the California statute nor the

Texas companion statute conflicts with Federal Copy-

right Law, and that this Court’s holdings in Sears

Roebuck & Co. v. Stiffle Co., 376 U.S. 225 (1964) and

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

(1964) are not contradictory of that position. The

Sears and Compco cases, as well as Federal Copyright

Law, recognize the legitimate domain of state common

law protection of unpublished materials. The manu-

facture and sale of records and tapes is not such a

publication which would destroy the property right in

unpublished materials. One who steals the perform-

ance from the records and tapes has therefore com-

mitted a larceny, and under its police power, the state

may protect its citizens from such theft. The fact that

a revision of Federal Copyright law now extends lim-

ited protection to some owners of these “properties,”

does not create a conflict of Federal and State law.

Rather, both federal and state statutes constitution-

ally work in harmony to thwart the destruction of the

sound recording industry and the elimination of the

means of livelihood of the recording artists and asso-

ciated technicians and employees.

C. ARGUMENT

i THE PRACTICE OF SOUND RECORDING

PIRACY IS NOT UNIQUELY A CALI-

FORNIA PROBLEM, AND THE ABUSE

LED TO ACTION BY THE LEGISLATURE

OF TEXAS

The 62nd session of the Texas legislature at its reg-

ular session in 1971 enacted Chapter 890 (S.B. 748)

awit D cine

a Bd ae PLS HOR POW NICD BAS PRO Om aR A UR AE Os

¢t

(See Appendix 1), a criminal statute, in response to

widespread appropriation and marketing of recorded

sounds from tapes and phonograph records. The prac-

tice had, in fact, become so common that it had ac-

quired a widely used designation as “tape piracy” and

“record piracy.” These stolen sounds are sold by per-

sons who neither sought nor obtained the permission

or consent of the original recording artists.

The protection afforded by the federal copyright

statute, because of the nature of that act, is not com-

plete. Although certain limited federal legislation

became effective on February 15, 1972, there are liter-

ally thousands of tapes and records which were pro-

duced in the period of time prior to the enactment of

the recent federal legislation. The owners of property

interests in this particular category should not be

denied protection of their common law rights by any

strained construction seeking to invalidate the statute

here under examination. As we understand the recent

federal enactment, it specifically is made applicable

only to sound recordings “Fixed, published and copy-

righted on and after the effective date of this Act.”

The state statute affords substantial protection in this

area involving the older sound recordings.

The notion that only those persons who are currently

able to sing or perform “hit” records are entitled to

protection is highly discriminatory. The artists of old,

whose talents have faded, would soon find their: prop-

erty and income from royalties ravaged by the pirates,

leaving them unable to provide for themselves and

their families. Congress and the courts have surely

intended that these property rights be protected from

theft by appropriation. Texas, California and other

states have enacted valid legislation to insure that

these rights shall remain protected. The State of

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Sy

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MADR ATH ee re) s

Texas believes that such legislation is unquestionably

constitutional. See Attorney General’s Opinion No,

M-1114, attached as Appendix 2.

Public policy has been and continues to be the prov-

ince of the voice of the people, speaking through their

duly‘constituted legislative bodies. Absent a transgres-

sion of fundamental law, that expression is to be en-

forced. This Court has not abrogated the maxim that

the states have a prior responsibility for defining and

prosecuting criminal acts. Abate v. United States, 359

U.S. 187 (1959), California v. Zook, 386 U.S. 725

(1949.)

Il. THE CALIFORNIA ANTI-PIRACY STATUTE

(CAL. PENAL CODE §653H), LIKE THE COM-

PARABLE TEXAS STATUTE (ARTICLE 1137,

TEXAS ANN. PENAL CODE), IS A CONSTI-

TUTIONAL EXERCISE OF STATE POLICE

POWER.

It is established that three alternatives exist in the

area of copyright law. Once there has been publication,

the work may be “copyrightable” or “non-copyright-

able,” dependent upon meeting the mechanical require-

ments of the Federal Copyright Act. Prior to the

publication, works may be protected by the state under

the so-called rules of common law copyright. The Fed-

eral Copyright Act’, as well as the landmark cases of

Sears’ and Compco*, recognized the domain in which

the state is entitled to give protection.

117 U.S.C. §2, “Nothing in this title shall be construed to

annul or limit the right of the author or proprietor of an un-

published work, at common law or in equity, to prevent the

copying, publication, or use of such unpublished work without

his consent, and to obtain damages therefor.” See also Fashion

Originators Guild v. F.T.C., 114 F. 2d 80 (2nd Cir. 1940)

affd., 312 U.S. 457 (1941) which recognized the right of the

state to legislate in the unpublished domain when it held that

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We are in accord, as are the cases, with the under-

standing that published works, if they are to be pro-

tected at all, must be protected under the Federal

Copyright Act. But we submit that the manufacture

and sale of a record or a tape is not such a publication

to commit the performance to the public domain so as

to limit it to the singular protection of the Federal

Statutory Copyright Act. The courts of this nation

have consistently been in accord with this proposition.

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

2d 878, 252 N.Y.S.2d 553 (Sup. Ct. 1964) ; Columbia

Broadcasting System, Inc. v. Documentaries Unlim-

ited, Inc., 42 Misc.2d 723, 248 N.Y.S.2d 809 (Sup. Ct.

1964) ; Capitol Records, Inc. v. Spies, 264 N.E.2d 874

(Ill. App. 1970); Liberty/UA Inc. v. Eastern Tape

Corp., 180 S.E.2d 414 (appeal dism’d 181 S.E.2d 600)

(1971) ; Capitol Records, Inc. v. Erickson, 2 Cal. App.

3d 526, 82 Cal. Rptr. 798 (1969), cert. denied, 398 U.S.

960 (1970). |

The unauthorized duplicating or pirating of both

live and recorded performances has been condemned

by a line of decisions of the federal and state courts,

which began long before Sears and Compco. These de-

cisions have held such thefts unlawful and granted

injunctions to prohibit the appropriation of perform-

ances “off the air,” Columbia Broadcasting Systems,

Inc. v. Documentaries Unlimited, Inc., supra (news

whether “systematic copying of dress designs is tortious...

is a matter of state law.”

*376 U.S. at 231, n. 7, “... and that section of the Copyright

Act which expressly saves state protection of unpublished

writings but does not include published writings, 17 U.S.C.

§2.” (emphasis ours)

‘376 U.S. at 287, “. . . the federal policy ... of allowing free

access to copy whatever the federal patent and copyright laws

leave in the public domain.” (emphasis ours)

— § —

ae

reports), Metropolitan Opera Assn. Inc. v. Wagner —

Nichols Recorder Corp., 199 Misc. 786, 101 N.Y.S.2d

483 (Sup. Ct. 1950), affd., per curiam 279 App. Diy,

632, 107 N.Y.S.2d 795 (1951) (opera broadcasts) ; from

other “masters,” Capitol Records, Inc. v. Mercury Rec-

ords Corp., 109 F. Supp. 330 (S.D.N.Y. 1952) affd., 221

F.2d 657 (2nd Cir. 1955); RCA v. Premier Albums,

Inc., 19 App. Div.2d 62, 240 N.Y.S.2d 995 (1963); or

from phonograph records sold to the public, Capitol —

Records, Inc. v. Erickson, supra; Capital Records, Inc.,

v. Spies, supra; Liberty/UA Inc. v. Eastern Tape Corp.,

supra; Geiseking v. Urania Records, Inc., 17 Misc.2d

1034, 155 N.Y.S.2d 171 (Sup.Ct. 1956). The Federal

Trade Commission determined in 1919 that the unav-

thorized duplication of piano rolls constituted appropri-

ation of the ingenuity, labor and expense of the origin-

ator and was an unfair method of competition under —

Section 5 of the Federal Trade Commission Act. F.T.C. |

v. Orient Music Roll Co., 2 F.T.C. 176 (1919).

We shall not endeavor to burden this Court with any |

detailed discussion of the arguments behind the sur- |

vival of the principles of copyright protection, but shall

instead leave that to the respondents and other amici

curiae. It is sufficient for our purposes to say that

those who see cases which seem to contradict the prop-

osition that there still exists a state protectable inter-

est, fail to recognize that there is a basic distinction

between “copying” and “appropriating” property.

Copying, as it is properly used, goes to making some

thing that sounds just like or looks just like the orig-

inal, “Copying” a record would entail getting another

band and another singer and attempting as best one

could to emulate the sound of the original. As in Sears,

ert ER Ripe ere eons. . TmRr gy IIIS MER Ona r

where this Court determined that making a lamp that

looked just like the unpatentable model was not for-

bidden, this Court would also not forbid an attempt

to emulate the original sound recording.

We do not believe this Court was saying in Sears and

Compco that the states were forbidden to foreclose

someone from stealing the owner’s very lamp. So, too,

we do not believe this Court intended to restrict the

states in forbidding the theft, i.e. appropriation, of the

original sound from instruments of conveyance of the

actual performance. To “draw off” the sound from the

record or tape is to appropriate the property itself just

as it would be to tape the live performance of the

performer from the radio transmission. Ferris v. Froh-

man, 223 U.S. 424 (1912) holds that repeated public

performances do not constitute a publication or dedi-

cation of the owner’s common law rights.

The imagined right to appropriate contended for

by petitioners is contrary to cases which apply Ferris,

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

N.Y. 1963), holding that radio and television broad-

casts and the exhibition of motion picture newsreels

of a speech did not divest the owner of the speech of

his common law rights in it. The conduct proscribed

by these state larceny statutes is the very same con-

duct condemned in International News Service v. As-

sociated Press, 248 U.S. 215 (1918), where this Court

said: .

“. . . instead of selling its own goods as those of

complainant, it substitutes misappropriation in the

place of misrepresentation, and sells complainant’s

goods as its own.”

It must follow, therefore, that the sale of a record

is indeed not a publication that submits to the world

_

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the right to duplicate the record. Pirated sound record-

ings are not imitations or simulations at all of the very

thing—the recorded performance—that makes a pho-

nograph record valuable and salable; when a record is

played, the listener hears the same thing that he hears

over the radio when a person is making a live broad-

cast. The taking of that performance is the theft of

property and is as reprehensible as the theft in a per-

son’s domicile of his personal belongings. The fact that

a. performer has shown, or sung, what he owns does

not mean that he is not entitled to protection by the

state from its theft. These unpublished works are his

property.

Ill. THE ENACTMENT BY CONGRESS OF AN

AMENDMENT TO THE COPYRIGHT ACT

MAKING RECORDINGS A COPYRIGHTABLE

INTEREST DOES NOT CAUSE THESE STATE

STATUTES TO BE UNCONSTITUTIONAL.

The decision of the three-judge federal court in the

case of Tape Industries Association of America v.

Younger, 316 F.Supp. 340 (C.D. Cal. 1970), appeal

dism’d, 401 U.S. 902 (1971), appeal pending, U.S. Ct.

App. 9th Cir., No. 26628, in accord with many other

courts, correctly holds that this is a supremacy clause

question rather than a pre-emption question. The issue

there was one of whether a federal statute was in con-

flict with a state statute. Younger held that Sears and

Compco did not confer a substantive right to be free

from state interference. We submit that since Califor-

nia has enacted a statute within its legitimate realm

of police power, the California statute must be meas-

ured in light of the potential existence of conflict.

These state statutes were enacted to stem the ram-

paging theft by these pirates of valuable property of

—_

*

ee 3 1

_

the recording artists and the industry. The policy

adopted was, therefore, to stem this activity by enact-

ing both federal and state leigslation to curb these

criminal acts. Action by Congress was along the lines

of federal copyright protection prior to publication, a

power which we concede they have under Article I,

Sec. 8 of the U. S. Constitution. Federal and state laws

operate on the same subject matter with the state

providing additional protection where the federal pro-

tection does not extend. There is no federal copyright

protection for those tapes and records created prior

to February 15, 1972, and the state statute affords sub-

stantial protection in this area involving the older

sound recordings.

Lack of conflict is evidenced by the existence of an

identical.purpose in the federal and Stake statute to

stop the piracy occasioned by record duplication onto

tapes and records in order to quickly capitalize upon

the performance of another, thus avoiding the risk and

investment necessarily undertaken by the owner of

the performance. The state statute is consonant with

the federal statute in that purpose. The state statute

affords added protection in insuring that old perform-

ances on records are not stolen, as well as providing a

double sanction after new unpublished works qualify

under federal copyright protection.

This ‘Court has repeatedly emphasized that “. . . this

Court’s decisions . . . enjoin seeking out conflicts be-

tween state and federal regulation where none clearly

exists.” Huron Portland Cement Co. v. City of Detroit,

362 U.S. 440, 446, (1960). This Court has also emphati-

cally stated the rule in Schwartz v. State of Texas, 344

U.S. 199, 202, (1952) that:

—9—

——, mnGeree ee anurnavectemecen

_

“Tt should never be held that Congress intends to

supersede or, by its legislation suspend, the exer-

cise of the police powers of the states, even when

it may do so, unless its purpose to effect that result

is clearly manifested.’ Reid v. State of Colorado,

187 U.S. 137, 148, 23 S.Ct. 92, 96, 47 L.Ed. 108”

With this heavy presumption of a lack of conflict, there

is no reason for this Court to seek out a conflict be-

tween the federal and state statutes, especially in light

of the fact that the federal copyright statute leaves to

the states the power to legislate in this area. Sears and

Compco recognize the right of the state to legislate in

this area. The federal statute does not show a “purpose

to effect that result,” nor does it show that such an

intent is “clearly manifested.”

In Florida Lime and Avocado Growers, Inc. v. Paul,

373 U.S. 132, 142 (1963), this Court said:

“The test of whether both federal and state regu-

lations may operate, or the state regulation must

give way, is whether both regulations can be en-

forced without impairing the federal superinten-

dence of the field, not whether they are aimed at |

similar or different objectives.

“The principle to be derived from our decisions is

that 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. See, e.g.,

Huron Portland Cement Co. v. Detroit, supra.”

(emphasis ours)

Even more persuasive is the decision in Colorado

Anti-Discrim. Comm v. Continental Air Lines, Inc. 372

U.S. 714, 721 (1963), where this Court, in ruling on the

—10—

ee ee OLE ORO SME Ly OE OLR DEE RL es * a eee gt oe Peg ee ee

—

,

validity of a state statute under the supremacy doc-

trine, noted : .

“. .. that the mere ‘fact of identity does not mean

the automatic invalidity of State measures.’ Cali-

fornia v. Zook, 336 U.S. 725, 730 (1949). To hold

that a state statute identical in purpose with a

federal statute is invalid under the Supremacy

Clause, we must be able to conclude that the pur-

pose of the federal statute would to some extent be

frustrated by the state statute. We can reach no

such conclusion here.” (emphasis ours)

Obviously, the purpose of the federal statute in the

copyright area is in no way frustrated, but is rather

enlarged to better protect the owners of this property

interest from piracy. The state and federal statutes

are, therefore, not in conflict, and no conflict between

them should be presumed.

D. CONCLUSION

The amicus curiae respectfully submits that Califor-

nia’s Penal Statute is aimed simply at prevention of

theft of personal property in the form of preserved

performances on records and tapes. Since the state

statute complements rather than conflicts with the

federal policy of fairness in a competitive system and

affords protection to legitimate property rights of its

citizens, the judgment below should be affirmed.

f

=)

Respectfully submitted,

CRAWFORD C. MARTIN

ATTORNEY GENERAL OF TEXAS

Box 12548, Capitol Station

Austin, Texas 78711

CHARLES F. HERRING

OF

SMALL, HERRING, CRAIG & WERKENTHIN

of Counsel’

900 Perry-Brooks Building

Austin, Texas 78701

CERTIFICATE OF SERVICE

I, Charles F. Herring, a member of the Bar of

the Supreme Court of the United States, hereby certify

that on the 2A. day of September, 1972, copies of

the foregoing Brief of the Attorney General of the

State of Texas, Amicus Curiae, were mailed to:

ARTHUR LEEDs, Esq.

Gottlieb, Locke & Leeds

9229 Sunset Boulevard

Los Angeles, California 90069

Attorney for Petitioners

| Davip M. SCHACTER, Esq.

Deputy City Attorney

City of Los Angeles

205 South Broadway, Suite 500

Los Angeles, California 90012

Attorney for Respondent

FRANCIS M. PINCKNEY, Esq.

700 Law Building

Charlotte, North Carolina 28202

—12—

CHARLEs P. Just, Esq.

Deputy Attorney General =

State of California

500 Wells Fargo Bank Building

5th and Capitol Mall

Sacramento, California 95814

Louis J. LEFKOWITZ, Esq.

Attorney General of the State of New York

State Capitol

Albany, New York 12224

SIDNEY A. DIAMOND, Esq.

' 425 Park Avenue

New York, New York 10022

Counsel for Recording Industry

Association of America, Inc.

_ ERNEST S. MEYERS, Esq.

74 Trinity Place

New York, New York 10006

Counsel for Recording Industry

Association of America, Inc.

—13 —

APPENDIX 1

Art. 1137r. Reproduction for sale, or sale or offer for

sale, of a sound recording without the owner’s consent.

Section 1. As used in this Act, “owner” means the

owner of the master recording, master disc, master

tape, master film, or other device used for reproducing

recorded sound on a phonograph record, disc, tape,

film or other material on which sound is recorded and

from which the transferred recorded sound is directly

or indirectly derived.

Sec. 2. A person commits a misdemeanor punishable

by a fine not to exceed $2,000 if he:

(1) knowingly reproduces for sale any sound record-

ing without the written consent of the owner of the

original recording; or

(2) sells or offers for sale any sound recording that

he knows has been reproduced without the written con-

sent of the owner of the original recording.

Sec. 3. A second offense under this Act shall be a

felony punishable by a fine of not more than $25,000,

or imprisonment for not more than five years, or both.

Sec. 4. The provisions of this Act shall not apply to

any fees due ASCAP.

Acts 1971, 62nd Leg., p. 2730, ch. 890, eff. Aug. 30, 1971.

—144—

APPENDIX 2

THE ATTORNEY GENERAL

OF TEXAS

AUSTIN, TEXAS 78711

CRAWFORD C. MARTIN

ATTORNEY GENERAL

. April 3, 1972

Honorable W. T. McDonald, Jr.

County Attorney

Brazos County

Bryan, Texas 77801

Opinion No. M-1114

Re: Whether Art. 1187r, Sec. 1-4, Vernon’s

Penal Code, prohibiting the reproduction

for sale of sound recordings without the

original owner’s consent is unconstitution-

al as in conflict with the Copyright Clause,

Art. I, Sec. 8, Cl. 8, United States Constitu-

tion, and the implementing federal stat-

utes, 17 USC §§ 1-215, the Copyright Act.

Dear Mr. McDonald:

You have asked us for an opinion as to whether Art.

1137r, Sections 1-4, Vernon’s Penal Code, prohibiting

the reproduction of sound recordings without the orig-

inal owner’s consent is unconstitutional as in conflict

with the Copyright Clause, Article I, Section 8, Clause

8, United States Constitution, and the implementing

federal statutes, 17 USC §§ 1-215, the Copyright Act.

In this connection we have carefully examined the

materials forwarded with the opinion request which

raise the issue of whether the preemption doctrine ap-

plied in the companion landmark decisions of the

United States Supreme Court in Sears, Roebuck & Co.

v. Stiffel Co., 376 U.S. 225 (1964) and Compco Corp. v.

— 15 —

Day-Brite Lighting, Inc., 376 U.S. 234 (1964) pre-

cludes the States from enacting statutes proscribing

the duplication of uncopyrighted material. Also as you

point out, we note that on October 15, 1971, effective

four (4) months after enactment, the 92nd Congress

of the United States, through a series of amendments

to the Copyright Act, provided a limited prospective

protection to owners of original sound recordings in

Public Law 92-140 (S.646).’

The magnitude of the problem involved which .

prompted the federal legislation is described in House

Report (Judiciary Committee) No. 92-487, dated Octo-

ber 4, 1971, on Public Law 92-140, as follows:

“The attention of the Committee has been di-

rected to the widespread unauthorized reproduc-

tion of phonograph records and tapes. While it is

difficult to establish the exact volume or dollar

value of current piracy activity, it is estimated

by reliable trade sources that the annual volume

of such piracy is now in excess of $100 million. It

has been estimated that legitimate prerecorded

tape sales have an annual value of approximately

$300 million. The pirating of records and tapes is

not only depriving legitimate manufacturers of

substantial income, but of equal importance is

denying performing artists and musicians of

royalties and contributions to pension and welfare

funds and Federal and State governments are los-

ing tax revenues.”

The desire to attack this abuse no doubt moved the

62nd Legislature of the State of Texas to enact Art.

1137r, Sections 1-4, Vernon’s Penal Code, prohibiting

the “piracy” of sound recordings.

11971 U.S. Code Cong. & Adm. News Pamph. No. 9, pp.

2469-2471.

21971 U.S. Code Cong. & Adm. News Pamph. No. 9, p. 2551.

— 16 —

a ee a en en |

F

Initially, it is to be presumed that a duly enacted

statute of the State of Texas is valid against objection

on constitutional grounds. 12 Tex. Jur. 2d, Const. Law,

Sec. 42, pp. 385-386:

“. + + a statute will not be declared constitutional

for the mere reason that it has been enacted by

the legislature, it is presumed that the legislature

has acted within its powers, and a duly enacted

statute is presumed to be constitutional. And if

there could be a state of facts justifying the legis-

lative action, it is presumed that such a state of

facts exist.”

Likewise, the Supreme Court of the United States

has emphasized that “. . . this Court’s decisions ue

enjoin(s) seeking out conflicts between state and fed-

eral regulation where none clearly exists.” Huron

Portland Cement Co. v. City of Detroit, 362 U.S. 440,

446 (1960). A clear showing of conflict is required. As

stated in Schwartz v. State of Texas, 344 U.S. 199, 203

(1952), the rule is that:

“It should never be held that Congress intends to

supersede, or by its legislation suspend, the exer-

cise of the police powers of the states, even when

it may do so, unless its purpose to effect that result

is clearly manifested.’ Reid v. State of Colorado,

187 U.S. 187, 148, 23 S. Ct. 92, 96, 47 L.Ed 108.”

In Florida Lime and Avocado Growers, Inc. v. Paul,

373 U.S. 182, 142 (1963) the court held:

“The test of whether both federal and state regu-

lations may operate, or the state regulation must

ive way, is whether both regulations can be en-

orced without impairing the federal superinten-

dence of the field, not iether they are aimed at

similar or different objectives.

“The principle to be derived from our decisions is

that federal regulation of a field of commerce

—17—

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. See, e.g.,

Huron Portland Cement Co. v. Detroit, Supra.”

(Emphasis supplied)

Further in Colorado Anti-Discrim. Comm. v. Conti-

nental Air Lines, 372 U.S. 714, 721 (1963), the Supreme

Court, in ruling on the validity of a state statute under

the Supremacy Doctrine, held:

“.. that the mere ‘fact of identity does not mean

the automatic invalidity of State measures’. Cali-

fornia v. Zook, 336 U.S. 725, 730 (1949). To hold

that a state statute identical in purpose with a

_ federal statute is invalid under the Supremacy

~ Clause, we must be able to conclude that the pur-

se of the federal statute_would to some extent

frustrated by the state statite..We can reach

no such conclusion here.” (Emphasis supplied)

It is noteworthy that the Judiciary Committee Re-

port on Public Law 92-140, referred to above, while

mentioning the preemption argument concerning the

“,.. jurisdiction of States to adopt legislation specifi-

cally aimed at the elimination of record and tape

piracy ...”, expressly refused to express an “. . . opin-

ion concerning this legal question, . . . .”* Hence, it

can hardly be contended from the legislative history

of Public Law 92-140 that Congress clearly intended

to supersede existing state statutes on this subject

matter.

Our research fails to reveal any case which makes

the doctrine of the Sears and Compco cases applicable

to the piracy of sound recordings. To the contrary, we

find that the courts of California, Mlinois, New York

21971 U.S. Code Cong. & Adm. News Pamph. No. 9, p. 2552.

| oo

b

s

and North Carolina have specifically rejected this ap-

plication in upholding state statutes prohibiting the

“piracy” of sound recordings. See Capitol Records,

Inc. v. Erickson, 2 Cal. App. 3d 526, 82 Cal. 798 (1969),

40 ALR 3d 553; Capitol Records, Inc. v. Greatest Rec-

ords, Inc., 43 ‘Misc. 2d 878, 252 N.Y.S. 2d 553 (Sup. Ct.

1964) ; Columbia Broadcasting System v. Documen-

taries Unlimited, Inc., 42 Misc. 2d 728, 248 N.Y.S. 2d

809 (Sup. Ct. 1964) ; Capitol Records, Inc. v. Spies, 264

N.E. 2d 874 (Ill. App. 1970); Liberty/UA Ine. v.

Eastern Tape Corp., Superior Court of Mecklenburg

County, No. 70-CVS-15018 (Jan. 6, 1971).

An excellent discussion of this question is contained

in the three judge court’s opinion in Tape Industries

Association of America v. Younger, 316 F. Supp. 340

(C.D. Calif. 1970), appeal dism. 401 U.S. 902 (1971).

Therein plaintiffs sued to enjoin the enforcement of

the California “tape piracy” statute, Penal Code, Sec.

653h (1968) *:

“Plaintiffs contend that the so-called “tape pi-

racy’ law of California, Penal Code, Section 653h

(1968) is in conflict with the Copyright Clause of

the United States Constitution, Art. I, Sec. 8, Cl.

8, and the implementing Federal copyright stat-

utes, 17 USC §§ 1-215.” (316 F. Supp. at 341-342).

““8653h. Transfer of recorded sounds for unlawful use; sale

(a) Every person is guilty of a misdemeanor who:

(1) Knowingly and willfully transfers or causes to

be transferred any sound recorded on a phonograph rec-

ord, disc, wire, tape, film or other article on which sounds

are recorded, with intent to sell or cause to be sold, or to

use or cause to be used for profit through public perform-

ance, such article on which such sounds are so trans-

ferred, without the consent of the owner.

(2) Sells any such article with the knowledge that

the sounds thereon have been so transferred without the

consent of the owner.”

—19—

The court distinguished Columbia Broadcasting Sys-

tem v. DeCosta, 377 F2d 315 (1st Cir 1967), Cable Vi-

sion, Inc. v. KUTV, Inc., 335 F2d 348 (9th Cir. 1964),

Smith v. Chanel, Inc., 402 F2d 562 (9th Cir. 1968) and

the Sears and Compco cases, supra, on the basis that:

“In contrast, plaintiffs in the instant case do not

imitate the product of the record companies. They

actually take and appropriate the product itself—

the sounds recorded on the albums—and commer-

cially exploit the product.” (316 F. Supp at 350)

The Sears and Compco cases, supra, involved suits

for damages and injunctive relief under the Illinois

“unfair Competition” statute with respect to the copy-

ing of designs for lighting fixtures which were either

unpatentable or unpatented. In this situation the Su-

preme Court held that the Illinois statute could not be

applied constitutionally to prevent the copying of

these designs even though the products were virtually

identical. However, the Supreme Court expressly re-

served to the States the right to prohibit practices

such as here involved. In the Compco case, the Supreme

Court specifically restricted its ruling as follows:

“As we have said in Sears, while the federal

patent laws prevent a State from prohibiting the

the copying and selling of unpatented articles,

they do not stand in the way of state law, statu-

oy or decisional, which requires those who make

and sell copies to take precautions to identify

their products as their own. A State of course has

power to impose liability upon those who, knowing

that the public is relying upon an original manu-

facturer’s reputation for quality and integrity,

deceive the public by palming off their copies as

the original.”

An appropriate area for State legislation was found

to exist by the three judge court in the Tape Industries

— 20 —

ee SS EB, PRE VOY Meee egg I RTA a

Beam, . eras

as

case, Supra, which was not precluded by the Sears and

Compco decisions. At page 351 of the opinion the Court

held:

“Undoubtedly, tape pirates are costing legiti-

mate and authorized tape producers substantial

amounts of money, and the State of California has

properly and reasonably concluded that these par-

asitic tape pirates must be controlled. Regardless

of whether Calif. P.C. §653h (1968) is deemed a

larceny statute or an unfair competition law, it

is clear that the California Legislature is not pre-

cluded by the Federal Copyright laws from pro-

hibiting the activities of tape pirates. Nor should

we intervene in the legitimate enforcement of the

statutorily expressed desires of the California

Legislature by the authorized prosecution officials

who are the defendants.” (Emphasis supplied.)

Recently, on February 29, 1972, in Civil Action No.

3-55386-A, styled Independent Tape Merchant’s Asso-

ciation v. Crawford Martin, et, al., filed in the United

States District Court for the Northern District of

Texas, a suit similar to the Tape Industries case, to

enjoin the enforcement of Art. 1137r, Vernon’s Penal

Code, was dismissed by the court on the finding that:

“... this Court should not interfere with the state

criminal court’s enforcement of state law under

the circumstances as set forth by plaintiff in this

action,...”

Finally, it should be observed that while the situa-

tion under the Patent Act, 35 USC §§ 1-298, is one of

either protection or no protection, a different situa-

tion is presented by the Copyright Act, 17 USC 1-215,

even as amended, in that under §2 of the Act provision

is made for protection of so-called “common law”

— 21 —

>

copyrights.* The weight of authority is that the giving

of a performance and the sale of a recording does not

constitute publication, Columbia Broadcasting Sys-

tems, Inc. v. Documentaries Unlimited, Inc., supra

(news reports), Metropolitan Opera Association, Inc.,

v. Wagner Nichols Recorder Corp., 199 Misc. 786, 101

N.Y.S. 2d 483 (Sup. Ct. 1950), aff’d., 279 App. Div. 782,

107 N.Y.S. 2d 795 (1951) (opera broadcasts); from

other “masters”, Capitol Records, Inc. v. Mercury

Records Corp., 109 F. Supp. 330 (S.D.N.Y. 1952) ; RCA

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

2d 995 (1963); from phonograph records sold to the

public, Capitol Records, Inc. v. Greatest Records, Inc.

supra; Capitol Records, Inc. v. Erickson, supra; Cap-

itol Records, Inc. v. Spies, supra; Liberty/UA Inc. v.

Eastern Tape Corp., supra; Geiseking v. Urania Rec-

ords, Inc., 17 Mise. 2d 1034, 155 N.Y.S. 2d 171 (Sup.

Ct. 1956).

The opposite view is taken in Granz v. Harris, 98 F.

Supp. 906 (S.D.N.Y. 1951); McIntyre v. Double A.

Music Co., 166 F. Supp. 681 (C.D. Cal. 1958) ; Mills

Music v. Cromwell Music Co., 126 F. Supp. 54 (S.D.

N.Y. 1954) ; Shapiro, Bernstein & Co. v. Miracle Rec-

ord Co., 91 F. Supp. 478 (N.D. Ill. 1950). It is respect-

fully submitted that these cases are cited because

they erroneously fail to recognize the distinction be-

tween “copying” and “appropriating”. Here we are

not concerned with a situation where the recordings

are being imitated but rather the actual sounds, the

performance itself, is being appropriated. Each of

*“Nothing in this title shall be construed to annul or limit

the right of the author or proprietor of an unpublished work,

at the common law or in equity, to prevent the copying, pub-

lishing, or use of such unpublished work without his consent,

and to obtain damages therefor.”

== 22 —

— IPO GE TE NET OPEL EE LE: OO EERIE TEN REESE PARE free go }

Y PS eer co er i 1 Pe

the cases cited above rely on RCA Manufacturing Co.

v. Whitman, 114 F2d 86 (2nd Cir. 1940) for their re-

sult. However, this case was expressly overruled in

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

F2d 657 (2nd Cir. 1955). Therein at page 663 the

Court held:

“Our conclusion is that the quoted statement

from the RCA case is not the law of the State of

New York.

“Since its decision the New York courts have

had close contact with the question in Metropoli-

tan Opera Assn. v. Wagner Nichols Recorder

Corp., 199 Misc. 786, 101 N.Y.S. 2d 483, Id., 279

App. Div. 632, 107 N.Y.S. 2d 795. We believe that

the inescapable result of that case is that, where

the originator, or the assignee of the originator,

of records of performances by musical artists

puts those records on public sale, his aet does not

constitute a dedication of the right to copy and

sell the records.”

A very excellent annotation is contained in 40 ALR

3d 553, following Capitol Records, Inc. v. Erickson,

supra, which may be referred to for a rather more

extensive treatment of this whole subject. Note-

worthy is the citation in the court’s opinion in the

Erickson case, 40 ALR 3d at 561, to Pottstown Daily

News Publishing Co. v. Pottstown Broadcasting Co.,

411 Pa. 383, 192 A2d 657, 662 (1963) which holds that

while unfair competition law originally related to

“palming off” of one’s goods as those of another, “In

recent years its scope has been extended. It has been

held to apply to misappropriation as well as misrepre-

sentation”, quoting from A.L.A. Schechter Poultry

Corp. v. United States, 295 U.S. 495, 531-532 (1935).

The courts of the State of Texas have apparently

long recognized the distinction between copying and .

appropriation. In Gilmore v. Sammons, 269 SW 861

(Tex. Civ. App. 1925, writ dism.), it was held that

‘ appropriation of news items by a competitor consti-

tuted unfair competition under the doctrine of Inter-

national News Service v. Associated Press, 248 U.S.

215 (1918). On the other hand the simulation of a

sporting event broadcast by a non-competitor to the

original broadcaster was found not to constitute un-

fair competition, and the Gilmore case, supra, was

distinguished. See Loeb v. Turner, 257 SW2d 800 (Tex.

Civ. App. 1953, no writ).

In conclusion, our opinion is that by the enactment

of Article 1137r, the 62nd Legislature has done no

more than the California Legislature did in its pas-

sage of §653h, P.C. and such constitutes the adoption

of either an unfair competition law or a theft statute

which has been held in the Tape Industries case, supra,

to constitute a valid exercise of the State’s legislative

powers and not to constitute any undue interference

or conflict with the federal copyright policy devised

pursuant to the Constitutional authority of Congress

in the Copyright Act, 17 USC §§ 1-215.

—24—

a

SUMMARY

It is our opinion that Article 1137r, Vernon’s

Penal Code, is valid and is not in conflict with

Art. I, Sec. 8, Cl. 8, United States Constitution, or

the Copyright Clause, and the implementing fed-

eral statutes, 17 USC §§ 1-215, the Copyright Act.

Very truly yours,

CRAWFORD C. MARTIN

Attorney General of Texas

PREPARED BY:

VAN THOMPSON, JR.

Assistant Attorney General

APPROVED:

OPINION COMMITTEE

KERNS TAYLOR, Chairman

BILL ALLEN, Co-Chairman

ScoTT GARRISON

ROLAND ALLEN

HOUGHTON BROWNLEE

RALPH RASH

WAYNE RODGERS

SAMUEL D. McDANIEL

Staff Legal Assistant

ALFRED WALKER

Executive Assistant

NOLA WHITE

First Assistant

=