CTQ-2016-00001 Court of Appeals of the State of New York FLO & EDDIE, INC., a California Corporation, individually and on behalf of all others similarly situated, Plaintiff-Respondent, - against - SIRIUS XM RADIO INC., a Delaware Corporation, Defendant-Appellant, DOES, 1 THROUGH 10, Defendants. ------------------------------ ON APPEAL FROM THE QUESTION CERTIFIED BY THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT IN DOCKET NO. 15-1164-CV BRIEF AMICUS CURIAE OF THE NEW YORK STATE BROADCASTERS ASSOCIATION, INC. IN SUPPORT OF SIRIUS RADIO XM, INC. DAVID L. DONOVAN NEW YORK STATE BROADCASTERS ASSOCIATION, INC. 1805 Western Avenue Albany, New York 12203 Tel.: (518) 456-8888 Fax: (518) 456-8943 ADAM R. BIALEK STEPHEN BARRETT KERIANNE LOSIER WILSON, ELSER, MOSKOWITZ, EDELMAN & DICKER LLP 150 East 42nd Street, 22nd Floor New York, New York 10017 Tel.: (212) 490-3000 Fax: (212) 490-3038 Attorneys for Amicus Curiae New York State Broadcasters Association, Inc. Dated: September 1, 2016 RULE 500.1(0 CORPORATE DISCLOSURE STATEMENT Pursuant to 22 NYCRR § 500.l(f), amicus curiae The New York State Broadcasters Association, Inc. states that it is a tax-exempt, not-for-profit corporation incorporated in the State of New York. The New York State Broadcasters Association, Inc. has no parent corporations, subsidiaries, or affiliates. TABLE OF CONTENTS RULE 500.1(f) CORPORATE DISCLOSURE STATEMENT ............................... .i TABLE OF CONTENTS .......................................................................................... ii TABLE OF AUTHORITIES ................................................................................... iii INTEREST OF AMICUS CURIAE .......................................................................... ! SUMMARY OF ARGUMENT ................................................................................. 2 ARGUMENT ............................................................................................................. 4 I. The History of New York's Music and Broadcasting Industries Belies the Existence of a Common Law Right of Performance in Sound Recordings ................................................................................. 4 II. The Recognition of a Common Law Performance Right in Sound Recordings Would Be Impractical and Destructive ............................ 12 a. The Local Costs ........................................................................ 13 b. The Uncertain National Implications for New York ................ 22 III. As a Matter of Law, Performance Rights in Sound Recordings Do ·Not Exist .............................................................................................. 23 1. Common Law Copyrights in Sound Recordings Do Not Include Perfonnance Rights ...................................................... 23 2. Common Law Performance Rights in Other Media Are Not Analogous ................................................................................. 30 3. The Scope of the Federal Copyright Act Supports the Conclusion that the Common Law Does Not Recognize Performance Rights in Sound Recordings ................................ 3 3 CONCLUSION ........................................................................................................ 38 ll TABLE OF AUTHORITIES Page(s) CASES Arista Records LLS v. Lime Grp. LLC, 2010 U.S. Dist. LEXIS 144554 (S.D.N.Y. Oct. 15, 2010) ............................. 18, 20 Barker v. Parnossa, Inc., 39 N.Y.2d 926 (1976) ....................................................................................... 4, 11 Bonneville Int 'l v. Peters, 347 U.S. 485 (3d Cir. 2003) ................................................................................... 9 Campaign for Fiscal Equity, Inc. v. New York, 8 N.Y.3d 14 (2006) ............................................................................................... 12 Capitol Records, Inc. v. Mercury Records Corp., 221 F.2d 657 (2d Cir. 1955) ............................................................................. 4, 24 Capitol Records, Inc. v. Naxos of Am., Inc., 4 N.Y.3d 540 (2005) ................................................................ 4, 23, 27, 30, 34, 37 Chamberlain v. Feldman, 300 N.Y. 135 (1949) ............................................................................................. 12 Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 62 F. Supp. 3d 325 (S.D.N.Y. 2014) ............................................................ !, 2, 18 Gee v. Prichard, 2 Swanst. 402 ........................................................................................................ 26 Gieseking v. Urania Records, Inc., 17 Misc. 2d 1034, 155 N.Y.S.2d 171 (N.Y. Sup. Ct. 1956) ........................... 26, 27 Ippolito v. Lennon, 150 A.D.2d 300 (1st Dept. 1989) ......................................................................... 26 King v. Macri, 993 F .2d 294 (2d Cir. 1993) ................................................................................. 18 Ill Metropolitan Opera Ass 'n v. Wagner-Nichols Recorder Corp., 101 N.Y.S.2d 483 (N.Y. Sup. Ct. 1950) ......................................................... 24, 25 Norcon Power Partners, L.P. v. Niagara Mohawk Power Corp., 92 N.Y.2d 458 (1998) ........................................................................................... 12 People v. Kane, 14 Misc. 3d 283, 823 N.Y.S.2d 658 (N.Y. City Crim. Ct. 2006) ......................... 25 RCA Mfg. Co. v. Whiteman, 114 F .2d 86 (2d Cir. 1940) ................................................................................... 24 Roberson v. Rochester Folding Box Co., 171 N.Y. 538 (1902) ................................................................................. 25, 26, 27 Roy Exp. Co. Establishment v. Columbia Broad. Sys., Inc., 672 F .2d 1095 (2d Cir. 1982) ............................................................................... 18 Urbont v. Sony Music Entm 't, 863 F. Supp. 2d 279 (S.D.N.Y. 2012) .................................................................. 19 STATUTES 17 U.S.C. § 106 ........................................................................................................ 32 17 U.S.C. § 114 ............................................................................................ 17, 35, 36 17 U.S.C. § 115 ........................................................................................................ 32 Copyright Act of Aug. 18, 1856, 11 Stat. 138 (1856) ............................................. 31 Copyright Act of Aug. 24, 1912, 37 Stat. 488 (1912) ............................................. 31 Copyright Act of Jan. 6, 1897,29 Stat. 481 ............................................................ 32 N.Y. C.L.S. Penal Law§ 275.00 ............................................................................. 25 N.Y. Civil Rights Law§ 51 ..................................................................................... 26 N.Y. Gen. Bus. Law art. 29-D ................................................................................. 25 OTHER AUTHORITIES 76th Cong., 3d Sess. (1940) ..................................................................................... 33 IV Barbara Ringer, The Unauthorized Duplication of Sound Recordings, Copyright Law Revision Studies, Study No. 26 (1957) ................................. 24, 33 Bishop Cheen, Radio v. the Music Business: An Update on Discord, SNL Kagan Financial Blog (Aprill2, 2015) ................................................................ 14 Copyright Law Revision, Hearings Before the Subcomn1ittee on Patents, Trade-marks, and Copyright of the Senate Judiciary Committee, 90th Cong., 1st Sess., sec. 15, "sec. 177(a)" (1967); S. 543 Sec. 114(c)(3), 9lst Cong., 1st Sess. (Committee Print 1969); H.R. 6063, 95th Cong., 1st Sess. (1977) .................................................................................................................... 17 Copyright Law Revision, Hearings on HR. 4347, I-I.R. 5080, H.R. 68351 Before Subcommittee No. 3 of the I-Iouse Judiciary Cotntnittee, 89th Cong., 1st Sess. Part 2 (1965) ......................................................................... 16, 29 Digital Performance Right in Sound Recordings Act of 1995, 1 04th Cong., 1st Sess., August 4, 1995, S.Rept. 104 ..................................................... 17, 35,36 Fredric Dannen, HIT MEN 7 (1990) ........................................................................... 8 Government Accountability Office, Telecommunications: The Proposed Performance Rights Act would result in additional costs for Broadcast Radio and Additional Revenue for Record Co1npanies, Musicians and Performers (Aug. 201 0) ........................................................................................ 14 H.R. Rep. 94-1476, Sec. 114 (1976) ........................................................................ 33 Hearing on the Economic Conditions in the Performing Arts Before the Select Subcommittee on Education of the House Co1n1nittee on Education and Labor, 87th Cong., 1st and 2d Sess. ( 1961-62) ............................................... 9 Hearings Before the House Committee on Patents on Revision of Copyright Laws, 74th Cong., 2d Sess. 113, 639, 1181 (1936) .............................................. 28 Hearings Before the Subcon1n1ittee on Patents, Trade-Marks, and Copyright of the House Committee on the Judiciary on H.R. 1270, and H.R. 2570, 80th Cong., 1st Sess. (1947) ............................................................... 29 Hearings Before the Subcommittee on Patents, Trade-marks, and Copyrights of the Senate Judiciary CoFnJnittee, 90th Con g., 1st Sess., pt. 4 (1967) .................................................................................................................... 29 v Herman Finkelstein, Public Performance Rights in Music and Performance Rights Societies, in 7 Copyright Problems Analyzed (Theodore R. Kupferman ed., 1952) ............................................................................................. 5 How ASCAP Cuts a Melon: Songwriters' Payoff for '33, Variety, Dec. 4, 1935 .............................................................................................. 7 Isaac Goldberg, Tin Pan Alley; A Chronical of the America Popular Music Racket (1930) .......................................................................................................... 6 James N. Dertouzos, Radio Airplay and the Record Industry: An Economic Analysis (2008) ............................................................................................... 1 0, 3 1 Kerry Segrave, Payola in the Music Industry: A History 1880-1991 ( 1994 ) ............ 6 Law Revision, Hearings on H.R. 4347, H.R. 5080, H.R .. 6831, H.R. 68351, Before Subcommittee No.3 of the House Judiciary Committee, 89th Cong., 1st Sess., Part 3 .......................................................................................... 29 Mario Trujillo, FEMA Administrator warns of cellphone vulnerabilities during emergencies, The Hill, Oct. 20, 2014 ........................................................ 21 Mark R. Fratrik, How Will the Radio Industry Be Affected by Pre-1972 Music Performers' Fees (July 27, 2015) ............................................ 13, 14, 15,20 Michael C. Keith, THE RADIO STATION 106 (8th ed. 2010) ....................................... 8 Oliver Wendell Holmes, Jr., The Common Law (1891) ......................................... 37 Performance Rights in Sound Recordings, Subcommittee on Courts, Civil Liberties, and the Administration of Justice, House Conun. on the Judiciary, 95th Cong., 2d Sess. (1978) ....................................................... 7, 32, 33 Pluggers war on old curse, Billboard Magazine (October 29, 1949) ....................... 8 R. Serge Denisoff, SOLID GOLD, THE POPULAR RECORD INDUSTRY 260 (1975) ...................................................................................................................... 8 Radio Listening Explodes During Superstonn Sandy in New York Metro Area, All Access (Nov. 19, 2012) ......................................................................... 21 Register's supplementary report at 51, H.R. 4347, 89th Cong., 1st Sess. Sec 112 (1965) ............................................................................................................. 29 VI Robert L. Bard & Lewis S. Kurlantzick, A Public Performance Right in Recordings: How to Alter the Copyright System Without Improving It, 43 Geo. Wash. L. Rev. 152 (1974) .............................................................................. 9 See The Po-wer of Radio: Nielsen Study Show Radio Drives Music Sales, Inside Radio (Oct. 29, 2012- Oct. 27, 2013); Nielsen, Radio Airplay and Music Sales 2013 .................................................................................................. 11 Shourin Sen, The Denial of General Performance Right in Sound Recordings: A Policy that Facilitates Our Democratic Society, 21 Harv. J. Law & Tee 233 (Fal12007) ................................................................ 5, 6, 7, 13, 16 Statement of' the Department of Justice on Closing of the Antitrust Division's Review of the ASCAP and BMI Consent Decrees (August 4, 2016) ..................................................................................................................... 16 U.S. Copyright Office, Federal Copyright Protection for Pre-1972 Sound Recordings: A Report of the Register of Copyrights 44 (20 11 ) ..................... 29, 35 Walter L. Welch & Leah Brodbeck Stenzel Burt, From Tinfoil to Stereo (1994) ...................................................................................................................... 5 RULES 22 NYCRR § 500.1 ..................................................................................................... i C.P.L.R. 901 ............................................................................................................. 19 VII The New York State Broadcasters Association, Inc. ("NYSBA") respectfully submits this amicus curiae brief in support of the position of Defendant-Appellant, Sirius XM Radio, Inc., that the certified question should be answered in the negative. INTEREST OF AMICUS CURIAE NYSBA is a New York not-for-profit corporation representing the interests of over 450 television and radio stations across New York State. 1 As broadcasters engaged in the transmission of programming that may incorporate pre-1972 sound recordings, the members of NYSBA have a substantial interest in preventing the unprecedented expansion of the cotnmon law sought by Plaintiff Flo & Eddie, Inc. ("F&E"). The creation of a new, expansive performance right threatens to cast aside almost 1 00 years of accepted practices in the music broadcasting industry, while simultaneously circumnavigating the legislature and throwing copyright licensing into total disarray. NYSBA's members would be directly impacted by the ensuing chaos. In particular, smaller independent radio stations would face an uncertain economic future, as well as the probability that cetiain musical formats would be forced from New York's airwaves-a result that would harm not only NYSBA's 1 NYSBA certifies that no party's counsel authored this brief in whole or in part; no party or party's counsel contributed money intended to fund the preparation or submission of the brief; and no person other than NYSBA or its members contributed money intended to fund the preparation or submission of the brief. 1 membership, but also recording artists and the public at large as well. Accordingly, NYSBA respectfully submits this brief as anzicus curiae in support of Defendant-Appellant. SUMMARY OF ARGUMENT New York has never recognized a public performance right in sound recordings, and such a sweeping alteration of the law is unsupported by prior case law, legislative history at the federal level, and the history of the recording and broadcasting industries in New York State. Despite the absence of any applicable precedent, the federal District Court held that such a public performance right not only exists, but suggested in dicta that the right may be "broader than the right legislated by Congress, encompassing analog broadcasting." Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 62 F. Supp. 3d 325, 343 (S.D.N.Y. 2014). But broadcast radio is funda1nentally different from satellite radio; broadcast radio is not subscription based and has been a fixture in the music industry for decades. In fact, broadcast radio is the very medium that made F &E' s music famous by disseminating it to the public at large at no cost. See A-79. After concededly benefiting immensely from radio play in the 1960s when their musical format was at peak popularity (A-79), and despite never seeking royalties under any legal theory at the time (A-84 ), F &E now seeks to belatedly assert rights that will predominantly harm broadcasters that play less popular niche fonnats that 2 continue to promote F &E' s back catalogue. Such a result would be perverse both historically and legally. There is no question that the performance right now advocated by F &E has never been recognized by a single court in New York State. Despite this dearth of precedent, Plaintiff asks this Court-in no uncertain terms-to fashion a new common law performance right in sound recordings that has heretofore never existed. The wholesale creation of new rights at common law should be sparingly countenanced and, in this case, cannot be justified. To do so would ignore past rules that were born out of the unique history of New York's music and broadcasting industries. It would disregard the present economic realities of those industries, and the resulting hann and inefficiencies that the newly fashioned right will unleash. And it would require the Court to turn a blind eye to the lessons learned from the 1nethodical, carefully crafted history of the federal framework under the Copyright Act. There is no legal or historical rationale for such a course. Accordingly, the certified question should be answered in the negative. 3 ARGUMENT I. The History of New York's Music and Broadcasting Industries Belies the Existence of a Common Law Right of Performance in Sound Recordings. As this Court once aptly noted, "when examining copyright law, a page of history is worth a volume of logic." Capitol Records, Inc. v. Naxos oj'An1., Inc., 4 N.Y.3d 540, 546 (2005) (Naxos II) (internal quotations omitted). Throughout its history, New York has been known as an epicenter for entertainment. It is unsurprising, therefore, that the radio and music industries in the United States trace their roots to the state. The absence of any case law directly, unambiguously addressing performance rights in sound recordings 1night therefore seem curious. But when one considers the pages of history, it is not odd at all. Everyone has always known-and accepted-that no such performance right exists at common law in New York. This truth is evident in the practicalities of how the radio and 1nus1c industries symbiotically evolved at the turn of the 20th century. The existence and enforcement of the right now advocated by F &E would have crushed these nascent industries. The common law would not, and did not, develop in such a manner. See Barker v. Parnossa, Inc., 39 N.Y.2d 926, 927 (1976) (Breitel, C.J., concurring). Therefore, Plaintiffs position is not only legally flawed, it is counter- historical. 4 Sound recording in the United States began with Thomas Edison's invention ofthe phonograph in 1877. See, e.g., WALTER L. WELCH & LEAH BRODBECK STENZEL BURT, FROM TINFOIL TO STEREO 8-18 (1994). The music industry, however, was not driven by commercial recordings until decades later. In the 1920s and 1930s, "[t]he music industry was 'dominated' by Tin Pan Alley, a powerful sheet music publishing conglomerate that George Gershwin labeled 'Racket Row.'" Shourin Sen, THE DENIAL OF GENERAL PERFORMANCE RIGHT IN SOUND RECORDINGS: A POLICY THAT FACILITATES OUR DEMOCRATIC SOCIETY, 21 Harv. J. Law & Tee 233, 243 (Fall 2007) [hereinafter "Sen"] (quoting Herman Finkelstein, PUBLIC PERFORMANCE RIGHTS IN MUSIC AND PERFORMANCE RIGHTS SOCIETIES, in 7 COPYRIGHT PROBLEMS ANALYZED 73 (Theodore R. Kupferman ed., 1952)). The market paradigm of the era was to use radio airplay to drive sheet music sales, and New York's Tin Pan Alley led the way? Radio exposure was generated by the use of "pluggers," whose job description was as follows: He ... who, by all the a1is of persuasion, intrigue, bribery, mayhem, malfeasance, cajolery, entreaty, threat, insinuation, persistence, and whatever else he has, sees to it that his employer's music shall be heard. 2 "Tin Pan Alley" referred to the 1nusic publishers located on West 28th Street between Broadway and Sixth Avenue in New York City who dominated the industry in the era between 1885 and the early 1940s. A plaque on 28th Street between Broadway and Sixth A venue still commemorates the music juggernaut to this day. 5 ISAAC GOLDBERG, TIN PAN ALLEY; A CHRONICAL OF THE AMERICA POPULAR MUSIC RACKET, at 203 (1930). In other words, Tin Pan Alley paid substantial sums to see their songs become hits through radio play, and it turned that exposure into profits through sheet music sales. See, Sen at 246 (citing KERRY SEGRAVE, PAYOLA IN THE MUSIC INDUSTRY: A HISTORY 1880-1991, at 37 (1994)). This system created an environment in which it was "unprofitable for performers to write their own repertoire." !d. It paid to be a performer (as opposed to a composer) because playing Tin Pan Alley's existing repertoire of music was simply more lucrative than writing one's own songs-despite a composer's entitlement to copyright protection, and the potential royalties associated with such rights. No performer would have sought to disincentive radio airplay of their renditions of Tin Pan's Alley's catalogue by assetting a performance right in a resultant recording. In fact, no one ever conceived of such a right because it was antithetical to the entire business model. Radio airplay was advertising. The dynamics of the industry began to shift in the 1940s, but the fundamental relationship between the radio and music industries stayed constant: radio airplay was the primary driver of sales. Following the 1941 consent decrees entered into by ASCAP and BMI in response to government actions brought under the Sherman Act, the performing rights societies (and their distribution of 6 royalties) became less '"subject to the whims' of their boards of directors" than they were in the 1930s. !d. at 244 (citing How ASCAP Cuts a Melon: Songwriters' Payoff for '33, VARIETY, Dec. 4, 1935, at 37.). This develop1nent gradually made royalty collection more lucrative than selling sheet music, thereby loosening the grip of Tin Pan Alley. But the market still lusted after radio play. Now, with 1nore organized and equitable royalty collection, individual composers had a greater interest in having their songs played on the radio. Id. at 251. Around the same time, in 1945, the Federal Communications Commission lifted the freeze on radio licensing, which saw the number of radio stations more than double (from approximately 600 to 1 ,517) by 1950. !d. at 24 7 (citations omitted). Radio airplay was now even bigger business, and each play or "spin" 1neant greater royalties for the composer. As a result, composers did not want anything to disincentivize their airplay. In particular, cotnposers (backed by ASCAP) strenuously fought the recognition of performance rights in sound recordings at the federal level throughout the 1940s and 1950s. See Perfonnance Rights in Sound Recordings, Subcommittee on Courts, Civil Liberties, and the Adtninistration of· Justice, House Comm. on the Judiciary, 95th Cong., 2d Sess. ( 1978) [hereinafter "1978 Performance Rights Report"], at 34-35. This fight was waged because a performance right in sound recordings would have increased the cost-per-play 7 incurred by radio stations by adding a second set of royalties in which composers had no stake, and composers wanted as many spins as possible. Notably, there is no evidence during this period that anyone-not the performers, not the composers, not ASCAP-believed that performers had an independent common law right in sound recordings that could have disrupted the prevailing business model enjoyed by the composers. Meanwhile, for the record companies, the old habits of Tin Pan Alley died hard. The tactics previously employed by Tin Pan Alley to sell sheet music were adopted by the newly emerging recording industry, which was fueled by the rise of smaller independent radio stations and record labels. See Pluggers war on old curse, Billboard Magazine, at 3, 13, 47 (October 29, 1949). So, while the dynamics of the music industry shifted from sheet music sales to record sales (as shellac used to make records became more available at the close of World War II), radio airplay remained synonymous with advertising in the music industry. This relationship continued past the 1940s, and throughout the 1950s and 1960s, with "promotion men" tasked by the large record companies to urge radio stations to play new singles. See Fredric Dannen, 1-Irr MEN 7 ( 1990); R. Serge Denisoff, SOLID GOLD, THE POPULAR RECORD INDUSTRY 260 (1975); cf Michael C. Keith, THE RADIO STATION 106 (8th ed. 201 0) ("radio stations seldom pay for their 1nusic" because "recording companies send demos of their new product to 8 most stations"). In fact, in 1962 the recording industry's reliance on the radio industry for promotion was so significant that the House Committee on Education and Labor made the following observation: One of the conclusions reached ... is that the broadcasting industry is an indispensible promotion arm of the record industry. Hearing on the Economic Conditions in the Performing Arts Before the Select Subcommittee on Education of the rlouse Committee on Education and Labor, 87th Cong., 1st and 2d Sess. ( 1961-62) (emphasis added). As succinctly summarized by commentators in the 1970s, it was simply "an accepted fact that radio play stimulates record sales by exposing new releases to potential buyers; in other words, radio play advetiises records." Robert L. Bard & Lewis S. Kurlantzick, A Public Perfornzance Right in Recordings: How to Alter the Copyright System Without Improving It, 43 Geo. Wash. L. Rev. 152 (1974). More recently, the Third Circuit aptly described the confluence between the industries as follows: The recording industry and broadcasters existed in a sort of symbiotic relationship wherein the recording industry recognized that radio airplay was free advertising that lured consumers to retail stores where they would purchase recordings. And in return, the broadcasters paid no fees, licensing or otherwise, to the recording industry for the performance of those recordings. Bonneville Int'l v. Peters, 347 U.S. 485, 487-88 (3d Cir. 2003) (footnote o1nitted). 9 This dynamic persisted into the modern era. In 2008, Stanford University's James Dertouzos, Ph.D conducted a study designed to quantify the symbiosis between the music and broadcast industries. One might expect that the interrelationship would have waned by the late-2000s as by then consumers enjoyed many additional avenues (e.g. the Internet) to learn about new music. Despite this plausible assumption, Dr. Dertouzos found that "a significant portion of music industry sales of albums and digital tracks can be attributed to radio airplay - at minimum 14 percent and as high as 23 percent," and his study "show[ ed] that music played on the radio affects 1nusic sales more than other factors, including local demographics such as age, race, geographical location and income." James N. Dertouzos, Radio Airplay and the Record Industry: An Economic Analysis (2008) [hereinafter "Dertouzos"] at 5, available at https:/ /www.nab.org/documents/resources/061 008 _ Dertouzos Ptax.pdf. Translating those record sales spurred by radio play into real world dollars, Dr. Dertouzos estimated that radio airplay "provid[ es] a significant sales benefit that ranges between $1.5 and $2.4 billion in incre1nental revenue annually." !d. at 72. This correlation between radio airplay and music sales remains constant today. A 2013 Nielsen Company study reported a significant and immediate impact of radio airplay upon song sales, with over-the-air radio re1naining "by far the nu1nber one method for discovering music" among consumers. See The Povver of Radio: 10 Nielsen Study Show Radio Drives Music Sales, Inside Radio (Oct. 29, 2012 Oct. 27, 2013); Nielsen, Radio Airplay and Music Sales 2013, http://www .nab.org/ documents/newsRoom/pdfs/Nielsen Airplay_ Sales_ Study. pdf. Plaintiff admittedly participated in, and benefited from, this historical structure. See e.g. A-79, A-84, A-99. But now, years later, Plaintiff posits that the bedrock foundation of the music industry violates a never before recognized common law copyright. Contrary to Plaintiff's position, the historical background leads inevitably to the opposition conclusion. There is simply nothing in the historical record to support the proposition that the New York co1nmon law evolved to recognize a performance right in sound recordings. Such recognition would have disrupted two organically developing, interrelated industries to the detriment of all parties. This is not how the common law operates. The common law is nothing if it is not pragmatic. As this Court recognizes, "The common law is served best by changes in its doctrine based on the progression of actual cases and a process of evolution which does not disrupt the essential pragmatism of the common law ... " Barker, 39 N.Y.2d at 927. Here, the recording and broadcast industries were shepherded by rational economic actors into a mutually beneficial symbiotic relationship that endured for more than a century. The common law should not, and cannot, be morphed into a weapon that disrupts the settled business expectations created by that symbiosis. To do so 11 would undermine the essential nature of the common law as it has been understood by jurists throughout the country's history. As this Court has held, "sweeping" changes to the cotnmon law "clash with our customary incremental common-law developmental process ... " Norcon Po-wer Partners, L.P. v. Niagara Moha·wk Pawer Corp., 92 N.Y.2d 458, 467 (1998). Fundatnental shifts in New York's law and industry, such as those at issue here, can only be properly effectuated by an act of the Legislature. See, e.g., Campaign for Fiscal Equity, Inc. v. New York, 8 N.Y.3d 14, 28 (2006); Cha1nberlain v. Feldman, 300 N.Y. 135, 139-40 (1949). Therefore, the Court should answer the certified question in the negative, and hold that no performance right in sound recordings exists at common law in New Y ark. II. The Recognition of a Common Law Performance Right in Sound Recordings Would Be Impractical and Destructive. Just as the recognition of a performance right was unthinkable across the first 100 years of New York's broadcasting history, it remains completely impractical today. As discussed supra, the common law promotes pragtnatism; it does not invite chaos. If the unprecedented expansion of the cotnmon law advocated by F&E is adopted, business expectations developed over the course of a century will be upheaved with dire consequences for New Y ark State's broadcasters. The negative outcomes wrought by such a ruling would take three 12 broad forms: financial distress for broadcasters, perverse incentives for artists, 3 and uncertainty for everyone. a. The Local Costs Of the 398 licensed commercial radio stations in New York State, there are approximately 86 stations that broadcast in oldies, classic rock, or Nostalgia/Big Band formats. 4 See Mark R. Fratrik, Haw Will the Radio Industry Be Affected by Pre-1972 Music Performers' Fees 1 (July 27, 2015), available at biakelsey.co1n [hereinafter "Fratrik"]. In other words, approximately 22% of New York's commercial radio stations carry an oldies-style fonnat. 5 These formats-the ones 3 Briefly stated, a retroactive expansion of con1mon law copyrights spurs no incentive for future creation by performers. Such a dramatic policy shift also threatens to undermine a system that has incentivized the en1ergence of singer- songwriters over the last 75 years. As one commentator explains, the incentive to compose in order to obtain performance royalties has caused the number of writer- performers to steadily increase for decades: "7o/o in 1950; 22o/o in 1960; 50o/o in 1970; 60% in 1980; 64% in 1990; 68°/o in 2000; and 88o/o in 2004." Sen at 235. The end result is that "[t)he denial of a full performance right in sound recording benefits democracy by decentralizing the music production process ... " Jd. at 265. Recognition of a new retroactive performance right would offer nothing to foster innovation or creation. Rather, the right now sought would serve only as a windfall to performers who actively encouraged royalty free performance of their recordings for decades. 4 There are also a number of stations that play different fonnats during different parts of the day, which may include formats (like oldies) that rely heavily on pre- 1972 recordings. See Fratrik at 2. 5 New York State has 198 non-commercial radio stations that may also utilize pre- 1972 recordings, and these public radio stations also face potential hardship if the common law is suddenly altered. 13 most likely to be impacted by pre-1972 performance rights-are already among the least prosperous in the New York broadcasting industry. "In terms of revenue, 'Oldies' or 'Nostalgia/Big Band' formats rank fairly low (lOth and 14th, respectively)." !d. at 4. As a result, any increase in these stations' licensing overhead threatens to force them from the market. While it is impossible to predict how much any particular station's overhead would increase if a broad common law perfonnance right was applied to terrestrial radio, there are approximations that can be made. None of them are good for the viability of stations that would play pre-1972 sound recordings in New York. Media and advertising experts BIA Kelsey recently conducted a survey of studies aimed at quantifying the potential impact of a new perfonnance right in sound recordings in New York. The report found that radio stations nationwide face millions (perhaps billions) of dollars of expense if a performance right in sound recordings is adopted. Fratrik at 7-8.6 The report also estimated that New York radio stations, in particular, face a potential royalty expense ranging perhaps as high as 15o/o of their total revenues should a new common law copyright in sound recordings be recognized. !d. 6 See Government Accountability Office, Teleco1n1nunications: The Proposed Performance Rights Act would result in additional costs for Broadcast Radio and Additional Revenue for Record Companies) Musicians and Perfonners (Aug. 201 0); Bishop Cheen, Radio v. the Music Business: An Update on Discord, SNL Kagan Financial Blog (April 12, 2015). 14 It is highly likely that such a significant reduction in profitability could drive a number of pre-1972 formatted radio stations from the airwaves in New York. The 86 New York local stations with a primary format directed toward pre-1972 titles have a median annual revenue of a mere $375,000. !d. at 5. As these stations already operate at the margin, any significant reduction in profitability could sound the death knell for such stations. Moreover, the studies considered by BIA Kelsey necessarily underesti1nate the potential impact for terrestrial radio stations because the cited studies are predicated on the adoption of a nationwide, uniformly administered sche1ne under the Copyright Act. By contrast, if a new performance right is suddenly created as a creature of state common law, the administrative costs will be incalculably greater, and there is no way to aggregate and distribute these new costs across the marketplace. For example, simply determining the proper copyright owners would be a monumental task given the age and multitude of the recording contracts at issue. There is no state registry of copyrights to consult for guidance, and the courts cannot fashion one. 15 Royalty collection poses an even larger morass.7 In the past, even proponents of a federal performance right have acknowledged the need for legislated oversight of the administrative costs attendant to the licensing issues that such a right would create. For that reason, most proposed federal legislation in this area has included a compulsory license system coupled with rate oversight by the Register of Copyrights or another third party entity. See, e.g., Copyright Law Revision, Hearings on H.R. 4347, H.R. 5080, H.R. 68351 Before Subcommittee No. 3 of the House Judiciary Committee, 89th Cong., 1st Sess. Part 2, at 1419 ( 1965); Copyright Law Revision, Hearings Before the Subcommittee on Patents, Trade-marks, and Copyright of the Senate Judiciary Con1mittee, 90th Cong., 1st Sess., sec. 15, "sec. 177(a)" (1967); S. 543 Sec. 114(c)(3), 9lst Cong., 1st Sess. 7 ASCAP and BMI suffered significant growing pains in their first 25 years of existence between 1914 and 1941, and only became workable because they were national in scope. See Sen at 244-45. The blanket licensing model of these performing rights organizations would become unwieldy if applied in a state by state patchwork under the common law. Moreover, the Department of Justice recently declined to amend the consent decrees governing the performance rights currently administered by ASCAP and BMI "because the industry has developed in the context of, and in reliance on, these consent decrees ... " Statement of the Department of Justice on Closing of the Antitrust Division's Review of the ASCAP and BMI Consent Decrees, at 22 (August 4, 20 16), available at https:/ /www.justice.gov/atr/file/8821 0 1/download. The Department of Justice went on to suggest that any changes to the decrees, which would fundamentally alter the dynamics of the 1nusic and broadcasting industries, should be determined by "a comprehensive legislative solution." Jd. The same guiding principal should be applied here. 16 (Committee Print 1969); H.R. 6063, 95th Cong., 1st Sess. (1977). Similarly, the public performance right for digital audio transmissions in the Digital Performance Right in Sound Recordings Act of 1995 is subject to a statutory license for non- interactive transmissions. See 17 U.S.C. § 114. A new expansion of the common law provides no such safety net. By contrast, a new, unregulated co1nmon law scheme would allow all newly recognized rights holder to demand separate, shotgun negotiations for the titles in their catalogue. Establishing a uniform system to grant and ad1ninister blanket licenses on a state-by-state basis would be impossibly inefficient. No state has ever established such a blanket licensing system, and the Legislature is unprepared and unwilling to proceed. Meanwhile, the courts are not e1npowered to fashion the kind of regulatory solution that would be necessary. The United States District Court for the Southern District of Florida aptly recognized these issues when declining to recognize performance rights under Florida's common law: if this Court was to recognize and create this broad right in Florida, the music industry - including perfonners, copyright owners, and broadcasters would be faced with many unanswered questions and difficult regulatory issues including: ( 1) who sets and ad1ninisters the licensing rates; (2) who owns a sound recording when the owner or artist is dead or the record company is out of business; and (3) what, if any, are the exceptions to the public performance right. The Florida legislature is in the best position to address these issues, not the Court. 17 Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 2015 U.S. Dist. LEXIS 80535, at* 14 (S.D. Fla. June 22, 2015). In the absence of legislative guidance, New York State will endure a chaotic hodgepodge of licensing disputes. Instead of uniform rate setting, New York will have rampant litigation. Undoubtedly, this litigation will be marred by inconsistent jury verdicts and forum shopping, as an analysis of co1nmon law copyright damages has no guiding precedent in the current context. In other common law copyright contexts, copyright owners are entitled to actual damages. In New York, actual damages are generally calculated as lost profits. See Arista Records LLS v. Lime Grp. LLC, 2010 U.S. Dist. LEXIS 144554, at *10 (S.D.N.Y. Oct. 15, 2010). In assessing lost profits, the courts look to "actual and potential licensing arrangements [that] might shed light on the amount of profits that Plaintiffs would have made ... " !d. Some plaintiffs 1nay also inappropriately seek punitive awards, even in the absence of proof of actual damages. See King v. Macri, 993 F.2d 294, 297 (2d Cir. 1993); Roy Exp. Co. Establish1nent v. Columbia Broad. Sys., Inc., 672 F.2d 1095, 1106 (2d Cir. 1982). Despite the long history of music broadcasting in New York, there is not a single case that serves as a guidepost for judges and juries to apply these damages standards in a case involving the broadcast of sound recordings. 18 In addition, most radio stations in New York broadcast into several different counties. Multi-county jurisdiction coupled with a lack of guidance from the case law is a recipe for inconsistent verdicts and forum shopping. Given the reach of any particular radio station's broadcast signal, each broadcaster in the state may find themselves defending suits in multiple counties si1nultaneously-subject to the differing whims of each county's respective jury pools. And these inevitable consequences cannot be avoided via efficient class action practice because individualized damages calculations, as well as party-specific license and estoppel defenses, would likely prevail over common questions. See N.Y. C.P.L.R. 901(a)(2). The threat of unpredictable verdicts is further compounded by New York's three year statute of limitations for common law copyright claims. See Urbont v. Sony Music Entm 't, 863 F. Supp. 2d 279, 286 (S.D.N.Y. 2012). Retroactively analyzing three years of radio airplay will subject stations to burdensome costs and incalculable damages exposure-all related to a performance right that Plaintiff and all legal scholars agree has never been enforced in over 100 years of radio broadcasting in the state. All of the foregoing will unleash untold negative repercussions on at least 22o/o of New York's commercial radio stations that operate in formats relying heavily on pre-1972 recordings. These stations simply cannot internalize the 19 magnitude of these costs. Advertisers enjoy a very competitive market such that even slight increases in pricing make other media outlets immediately more appealing. Fratrik at 3. While some stations could atte1npt to screen out pre-1972 recordings to avoid increased licensing costs, the need to employ additional staff for this purpose would likely outpace any realized savings. !d. at 3. Other stations (e.g. Big Band formats) would have no practical way to even attempt such screening because pre-1972 recordings comprise 100% of their play lists. !d. As a result, stations employing these formats will face a single logical option: switch formats. !d. at 3-5. This inevitable result is inherently inefficient. As rational economic actors, stations employing oldies formats do so because, despite focusing on niche 1narkets, the progra111111ers have determined that these formats are the most profitable for them in the marketplace. By economically forcing these stations to switch formats, the stations will become less effective and less competitive. !d. at 5. As these stations become less economically viable, they will also have fewer resources to devote to public service. For example, "during emergencies [such as hurricanes] radio stations often forego traditional advertising (and revenue) to provide news 24 hours a day." !d. at 6. Federal E1nergency Management Agency Administrator Craig Fugate has stated that broadcast radio is, at times, the only way to receive emergency information during a disaster, when other services are 20 jammed with over use. The public's reliance on over-the-air radio during Superstorm Sandy in New York exemplifies this point. 8 Stations are only able to provide this type of 24/7 e1nergency coverage because they have the economic resources to continue broadcasting, often without cotnmercials. If an entire subset of radio stations is pushed further toward the margins of unsustainablity, these stations will be unable to forego revenue producing content in favor of free broadcasts aimed solely toward the public welfare. In sum, the community of broadcasters, performers, and listeners will suffer a net loss. The public will lose free over-the-air access to pre-1972 recordings, while performers (even those who never intended to seek royalties on their recordings) will lose the benefit of free advertising that radio provides. These destructive policy implications are exactly why performance rights were 8 Mario Trujillo, FEMA Administrator warns of cellphone vulnerabilities during emergencies, The Hill, Oct. 20, 2014, available at http://thehill.com/policy/technology/2213 01-fema-administrator-warns-of-cell- vulnerabilities-during-disasters. For example, unlike other communications systems that suffered significant outages, New York's radio stations continued to broadcast during Superstorm Sandy to the most devastated areas of Long Island and the five boroughs. During the storm there was an increase in radio listenership by 70% in Manhattan and 245% on Long Island. See Radio Listening Explodes During Superstorm Sandy in New York Metro Area, All Access (Nov. 19, 2012), available at http://www.allaccess.com/net-news/archive/story/112 711 /radio listening-explodes- during -superstorm-sandy-i. 21 historically controversial, and why such rights simply cannot anse under the common law. b. The Uncertain National Implications for New York In addition to irreparable cost increases locally, an expansion of New York's common law threatens to open several "Pandora's Boxes" on a national level that will only serve to isolate New York State, and undermine its preeminence as a leader in the entertainment industry. For example, many radio stations In New York receive pre-packaged nationally syndicated content that frequently contains pre-1972 recordings. In response to New York's new, ambiguous performance licensing obligations, it is unlikely that these national syndicators will begin crafting state specific programming (as that undermines the purpose of national syndication). As a result, New York may be shunned and ostracized, becoining the only state in the union that does not receive the same nationally syndicated programining. In the alternative, if New York creates a new compliance floor, all pre-1972 recordings may be purged from markets around the country for the benefit of nationwide uniformity. It Is also unclear how neighboring states will be affected. Stations in abutting jurisdictions, such as New Jersey, Connecticut, Pennsylvania, Massachusetts, and Vermont have broadcast signals that spill into New York. New 22 York's choice of law principals may subject these stations' program1ning choices to the contours of New York's common law copyright rules-even if only a fraction of their listenership is located in New York. The net result of the foregoing will be widespread inefficiency, confusion, and damage: overburdened courthouses, skyrocketing litigation costs, and untenable, unpredictable settlement and licensing negotiations. The common law is designed to remedy conflicts and fashion efficient outco1nes-not create chaos. This Court should therefore answer the certified question in the negative. III. As a Matter of Law, Performance Rights in Sound I~ccordings Do Not Exist. As discussed supra Points I and II, the common law would not have historically evolved to recognize a performance right in sound recordings because such a development would have caused inefficient and destructive results for multiple stakeholders and industries. A review of New York State and federal jurisprudence supports this conclusion. 1. Common Law Copyrights in Sound R.ecordings Do Not Include Performance Rights In Naxos II, this Court reiterated and clarified the longstanding rule in New York that common law rights in sound recordings protect against unauthorized reproduction only. The Court expressly held that "[a] copyright infringement cause of action in New York consists of two elements: ( 1) the existence of a valid 23 copyright; and (2) unauthorized reproduction of the work protected by the copyright." Naxos II, 4 N.Y.3d at 563 (e1nphasis added); see also RCA Mfg. Co. v. Whiteman, 114 F.2d 86, 87 (2d Cir. 1940) ("Copyright. .. consists only in the power to prevent others from reproducing the copyrighted work."). Aside from arcane issues surrounding publication's destruction of common law rights, it has been long understood in New York that a performer can enjoin unauthorized reproduction of her recordings at common law. See Metropolitan Opera Ass 'n v. Wagner-Nichols Recorder Corp., 101 N.Y.S.2d 483 (N.Y. Sup. Ct. 1950); see also Capitol Records, Inc. v. Mercury Records Corp., 221 F.2d 657 (2d Cir. 1955). Immediately following Metropolitan Opera, the New York Legislature passed bills making unauthorized dubbing of sound recordings a penal offense in 1952, 1953, and 1955. See, Barbara Ringer, The Unauthorized Duplication of Sound Recordings, Copyright Law Revision Studies, Study No. 26, at 9 (1957) [hereinafter "Study No. 26"] (citing New York's legislative history). While these criminal statutes were vetoed by the Governor's office, the Legislature's strong support of these bills in the early 1950s buttressed the civil law's understanding that unauthorized reproduction violates public policy. In fact, on a nationwide basis, "[t]here was practically no direct opposition to the principle of protection of sound recordings against unauthorized dubbing" by 1957. I d. at 3 7. New York ultimately became the first state to pass a criminal prohibition of 24 illegal dubbing in 1967. See N.Y. Gen. Bus. Law art. 29-D; see also N.Y. C.L.S. Penal Law § 275.00, which "transferred offenses that previously had been in the General Business Law to the Penal Law ... " People v. Kane, 14 Misc. 3d 283, 286, 823 N.Y.S.2d 658 (N.Y. City Crim. Ct. 2006). As such, New York's recognition of a common law reproduction right in sound recordings in Metropolitan Opera was consistent with contemporaneous legislative action in the 1950s. This recognition dovetailed, not surprisingly, with the proliferation of phonograph records after World War II rationing ended. By contrast, New York courts never envisioned the grant of performance rights in sound recordings, and no analogous legislative guideposts even suggest the existence of such rights. Notwithstanding the foregoing, F&E urges the Court to recognize an exclusive property right in the performance of sound recordings based on the notion that the right to such commercial exploitation flows inextricably fro1n the fruits of unique intellectual labor. New York's common law is not, and has never been, so broad. For example, over a century ago, this Court, recognizing that it was "without authority to legislate," ruled that individuals do not enjoy the right to commercially exploit their own name and likeness at common law. Roberson v. Rochester Folding Box Co., 171 N.Y. 538, 544, 556 (1902). The Roberson ruling ulti1nately 25 led to the legislative enactment ofN.Y. Civil J{_ights Law§ 51. If the common law does not afford the right to commercially exploit one's own na1ne and likeness in the absence of a statute, it defies logic that an abstract performance right arises in sound recordings simply by virtue of the unique elements that a performer might add to an underlying composition. While the Roberson court was addressing the slightly different question of whether a "right to privacy" existed at common law, it expressly fra1ned the inquiry as whether the law was equipped to "afford[ ] protection to thoughts and sentiments expressed through the medium of writing, printing and the arts ... " !d. at 54 7. The Court concluded that the common law did not protect such intangible property except to the extent that it was embodied in a physical object, and the physical object was used for a purpose that was unintended by its creator. !d. at 549 (citing Gee v. Prichard, 2 Swanst. 402). 9 This principle was later applied to sound recordings in Gieseking v. Urania Records, Inc., 17 Misc. 2d 1034, 155 N.Y.S.2d 171 (N.Y. Sup. Ct. 1956). Gieseking involved the reproduction and sale of unauthorized copies of plaintiffs piano performances. There, the New York Supreme Court, New York County held that "[a] performer has a property right in his perfonnance that it shall not be used 9 This holding was consistent with the common law principle that New York State "does not generally recognize a cause of action for conversion of intangible property." Ippolito v. Lennon, 150 A.D.2d 300, 302-03 (1st Dept. 1989). 26 for a purpose not intended ... " I d. at 1034 (emphasis added). In other words, the common law protects sound recordings from unauthorized duplication and distribution because sound recordings are not distributed to the public with the intention that they be duplicated and re-sold. By contrast, public performance is the very reason why sound recordings are created. Accordingly, there can be no common law right precluding third parties from making such a use. Stated differently, F &E is not claiming a right to protect against the misuse of the physical object containing the sound recording, i.e. the phonorecord itself. That right is well-established: third parties cannot copy a sound recording without permission. Naxos II, 4 N.Y.3d at 563. Rather, F&E now claims a right to the intangible perfonnance embodied in the physical object. In essence, F&E argues that a performance right arises because F &E' s rendition of the underlying composition is unique and, therefore, F&E is entitled to the fruits of their intellectual labor. No such intangible rights exist at com1non law. The common law does not protect the right to commercially exploit intangible property-just as it does not protect the right to exploit one's na1ne, voice, or likeness. Roberson, 171 N.Y. at 556. The com1non law only protects against the misuse of tangible objects, when they are exploited for unintended purposes. I d. at 549; Gieseking, 17 Misc. 2d at 1034. With respect to sound 27 recordings, performance is not an unintended purpose. Rather, it is the sole purpose for which sound recordings exist. Thus, the common law does not provide for performance rights in sound recordings and, as discussed supra Point I, everyone in the broadcasting and music industries has recognized this fact for decades. For this reason, performers repeatedly lobbied at the federal level for the creation of a performance right-expressly la1nenting that state common law offered no protection. As those federal proceedings show, the fact that sound recordings do not enjoy comtnon law performance rights has been uncontested for almost 100 years. For example: • 1936: It was "assumed generally that ordinary dubbing of sound recordings could be effectively prevented at com1non law," but performers were concerned that they could not "control [ ] broadcasting and public performance." Study 26 at 29 (citing Hearings Before the House Committee on Patents on Revision of Copyright Laws, 74th Cong., 2d Sess. 113, 639, 653, 655- 656,1181 (1936)). • · "[P]erformers sought [federal] copyright protection for their own products," and "stressed the inadequacy of [state] common law protection in this area." !d. at 33 (sutntnarizing letters submitted by stakeholders to the Committee for the Study of Copyright). • 194 7: Performers advocated a bill described as designed "to prevent the broadcasting and public performance of records" by "insist[ing] upon ... the inadequacy of common law protection." 28 !d. at 36 (citing Hearings Before the Subco1nn1ittee on Patents, Trade-Marks, and Copyright of the House Com1nittee on the Judiciary on HR. 1270, and HR. 2570, 80th Cong., 1st Sess. ( 194 7)). • 1965: A federal performance right in sound recordings was abandoned by Congress because "under the situation now existing in the United States, [the] recognition of a right of public performance in sound recordings would 1nake the general revision bill so controversial that the chances of its passage would be seriously impaired." Register's supplementary report at 51-52, 1--I.R. 434 7, 89th Cong., 1st Sess. Sec 112 (1965). • 1965: The Register of Copyrights, Abraham L. Kaminstein, testified that a bill "denying [sound recordings] rights of public performance ... reflects-accurately, I think-the present state of thinking on this subject in the United States." Copyright Law Revision, Hearings on Ii.R. 4347, f!.R. 5080, H.R. 6831, H.R. 68351, Before Subcommittee No. 3 of the House Judiciary Committee, 89th Cong., 1st Sess., Parts 1, 2, and 3 (1965). • 1967: Barbara Ringer, future Register of Copyrights, testified that if Congress "withholds performing rights in sound recordings, it should do so with the full realization that no such rights can be sought alternatively under state co1n1non law theories ... " Copyright Law l{evisions, Hearings Before the Subcommittee on Patents, Trade-n1arks, and Copyrights of the Senate Judiciary Committee, 90th Con g., 1st Sess., pt. 4 at 1177 (1967). • 2011: The U.S. Copyright Office stated: "In general, state law does not appear to recognize a performance right in sound recordings." U.S. COPYRIGHT OFFICE, FEDERAL COPYRIGHT PROTECTION FOR PRE-1972 SOUND RECORDINGS: A REPORT OF THE REGISTER OF COPYRIGHTS 44 (2011) [hereinafter "2011 Copyright Office Report"]. 29 The foregoing represents an unbroken chain of analysis set forth by the U.S. Congress, the U.S. Copyright Office and its officials, and the interested performers themselves over the course of 75-plus years. Performers' failure to assert a common law right in their sound recording over those years is far from inexplicable; rather, it is logical. Everyone always understood what Naxos II confirmed in 2005: New York common law rights in sound recordings only protect against unauthorized reproduction, and no right of public performance exists for such recordings at common law. 2. Common Law Performance Rights 1n Other Media Are Not Analogous In the federal court proceedings, it was argued that New York's recognition of performance rights in plays and films suggests that analogous rights in sound recordings should be similarly recognized. This flawed conflation of plays/films with sound recordings is made without any consideration of the funda1nental differences between these media, or the history of their exploitation. First, New York's protection of films and plays at com1non law was si1nply a gap-filling measure that reconciled state law with the federal scheme. Before the 1976 Copyright Act's broad federalization, copyright law operated in a dual system of federal and state copyright protection where the dividing line was publication. 30 On the federal level, Congress granted performance rights in plays in 1856. See Copyright Act of Aug. 18, 1856, ch. 169, 11 Stat. 138 (1856). Likewise, films received federal protection in 1912. See Act of Aug. 24, 1912, ch. 356, 37 Stat. 488 (1912). However, under the 1909 Copyright Act, these federal protections applied only to "published" works. The New York common law subsequently extended common law protection to unpublished films and plays to 1nake the law consistent. By contrast, Congress never granted a general performance right in sound recordings and, consistent with federal law, neither did New York State. Second, New York's common law protection for unpublished films and plays was only relevant in the pre-1976 world, i.e. prior to the eradication of the publication distinction. Prior to 1976, before com1non usage of the VCIZ, perfonnances of films and plays were not subject to repeat consumption- consumers typically saw a movie or film once at the theater. As a result, a single unauthorized performance of a play or film could destroy the market for the work in a way that simply never applied to performances of recorded musical works. In fact, a single performance of a musical recording generates n1ore interest 1n public consumption of the copyrighted work, not less. Radio airplay in particular has been shown to increase music industry sales of albums and digital tracks by "at minimum 14 percent and as high as 23 percent." Dertouzos at 5. Therefore, while unpublished films and plays may have needed a robust co1nmon 31 law performance right to guard against illicit performances, 1nusical sound recordings did not, and do not, suffer from similar economic harms through unfettered play-in fact, these recordings enjoy substantial benefits. Third, New York's recognition of a performance right in plays and fihns did not create overlapping (and potentially conflicting) performance rights between authors and performers. Composers of musical works have enjoyed federal performance rights in their compositions since 1897-contemporaneous with the emergence of commercial sound recording. See Act of Jan. 6, 1897, ch. 4, 29 Stat. 481, 481-82; 17 U.S.C. § 106(4). Unsurprisingly, with the e1nergence of that medium, composers strenuously objected to the creation of a performance right in sound recordings because they did not want their ability to exploit their works burdened by newly created rights inuring to third parties (especially in light of composers' inability to selectively refuse which performers recorded their compositions due to the compulsory licensing tenns of 17 U.S.C. § 115). See 1978 Performance Rights Report at 34-5 (cataloguing composers' objections to performance rights in sound recordings throughout the 1930s, -40s and -50s). There are simply no analogous competing policy considerations underlying the common law rights of performance in plays or fihns. Accordingly, existence of common law copyrights in these media is of no moment to the present inquiry. 32 3. The Scope of the Federal Copyright Act Supports the Conclusion that the Common Law Does Not Recognize Performance Rights in Sound Recordings Finally, as alluded to above, the history of the performance rights debate at the federal level is instructive when considering the status and scope of common law copyright. Prior to the 1971 amendments to the Copyright Act, there was a rich and complex debate over whether copyrights appurtenant to sound recordings should be recognized at all and, if so, to what extent. 10 That debate weighed numerous considerations 11 , and still no performance right in sound recordings was created. Congress was only spurred to extend lilnited copyright protection to sound recordings in 1971 because "the unauthorized duplication of sound recordings became widespread." H.R. Rep. 94-1476, Sec. 114 (1976). In other words, the Io See Study No. 26, at 21-3 7 for a detailed overview of the debate between 1925 and 1951. See the 1978 Perfonnance Rights Report, at 3 7-5 8 for an overview of the debate between 1957 and 1977. In total, 1nore than 30 bills were introduced with the intention of extending copyright protection to sound recordings before the 1971 Sound Recording Amendment was passed. II There was a constitutional debate. See 76th Cong., 3d Sess. ( 1940) ("there is considerable opposition to giving copyright in recordings for they are not commonly creations of literary or artistic works but uses of them."). There was debate over whether the performer, the producer, the record company, or some combination thereof should be the owner of the proposed sound recording copyright. See 1978 Performance Rights Report at 33-3 5, 43 (discussing the legislative history). And there was a considerable debate surrounding the need to sufficiently protect the already-established rights of co1nposers under any expansion of the law that would inure to the benefit of performers. Jd. at 33-35. 33 1971 amendments were a reaction to a new set of 1narket conditions that warranted, for the first time, the grant of a limited copyright in sound recordings in order to prevent unauthorized duplication. But, importantly, the 1971 amendments did not suggest the existence of rights appurtenant to sound recordings at co1nmon law. Rather, the 1971 amendments afforded rights to sound recordings that never before existed at the federal level. Notably, the scope of the protection ultimately afforded to sound recordings at the federal level reflects the same balance struck by the New York common law (as described in Naxos II), i.e. both protect against unauthorized reproduction only. The question then arises as to why pre-1972 recordings were exempted fro1n the federal scheme, and whether that is suggestive of a differing set of co1nmon law rights appurtenant to these recordings. But the exemption of pre-1972 recordings from the federal system was not intended to preserve pre-existing common law performance rights. }{_ather, the exemption was a recognition that state legislatures and courts were better positioned to protect pre-1972 recordings from illegal copying because the amendments to the Copyright Act could only be applied prospectively. Specifically, the U.S. Justice Department and the Recording Industry Association of America were concerned that federal abrogation of state anti-piracy 34 rules-those recognized by New York in the 1950s and 1960s-would lead to a resurgence of piracy for pre-1972 recordings because such recordings were fixed prior to the new federal protections set forth in the 1971 amendments. See 2011 Copyright Office Report at 15-16. As such, pre-1972 sound recordings were exempted from the 1971 amendments solely to ensure that illicit copying would not re-emerge. Had a common light right of perfonnance existed at the time, the 1971 amendments, and the subsequent 1976 Copyright Act, would have divested post- 1972 sound recordings of those rights. As stated in the 1976 Copyright Act, "[t]he exclusive rights of the owner of copyright in a sound recording ... do not include any right of performance under section 1 06( 4)." 17 U.S.C. § 114(a). Why would performers and record labels agree to such a divesture at that time? And why was there no notation in the legislative history that co1nmon law rights were being stripped away if that is what was taking place? The answer is clear: the 1971 amendments were designed exclusively with an anti-piracy focus, and in no way reflected an intent to preserve, create, or destory performance rights in sound recordings under the common law. No such rights ever existed. After 197 6, Congress next addressed the topic of performance rights in sound recordings in connection with the Digital Performance Right in Sound Recordings Act of 1995 ("DPRA"). Recognizing that no performance rights in 35 sound recordings existed at either the state or federal level, the Congress weighed the need to provide sound recordings with a limited perfonnance right for digital audio transmissions. In that context, the Senate recognized the fundamental difference between over-the-air terrestrial radio and other types of audio transmissions, saying: ... performers have benefitted considerably from airplay and other promotional activities provided by ... free over- the-air broadcast. .. [The Digital Performance Right in Sound Recordings Act of 1995] should do nothing to change or jeopardize [the recording and broadcast industries'] mutually beneficial relationship. U. S. Congress, Senate Judiciary Committee on the Judiciary, Digital Performance Right in Sound Recordings Act of 1995, 104th Cong., 1st Sess., August 4, 1995, S.Rept. 104-128, pp. 14-15. The Congress appreciated the unique role that free, over-the-air, terrestrial radio plays in promoting the works of performers to their great financial benefit-a benefit that F&E concedes it enjoyed. See A-79. Broadcast radio was therefore exempted from the DPRA in recognition of this unique relationship and history. See 17 U.S.C. § 114(d). Congress also exempted other analog performances as well (such as at restaurants, bars, and retail establishments). See id. In this way, the federal scheme developed narrowly, in direct response to new technology, and only provided a limited performance right that balanced the complex, interrelated concerns of the various stakeholders. 36 Plaintiff requests that this Court take an approach that is antithetical to the federal legislature's-casting aside years of historical debate to retroactively recognize a right at common law that would apply across the board to all broadcasting of any kind. Such a broad right was not recognized at the federal level for good reason, and could never have been asserted under New York's common law in light of the unique history of New York's music and broadcasting industries. Accordingly, the Court should reject F&E's attempts to create new rights that are applicable only to old works. The right now sought would serve only as a windfall to performers who actively encouraged royalty free performance of their recordings for decades. These newly imagined rights would not incentivize new creation, but would create economic chaos and uncertainty. The co1nmon law is not a blunt instrument to be wielded to such effect. To the contrary, Justice Oliver Wendell Holmes, Jr. famously argued that developments in the common law are driven by judicial reconciliation of prior rules with present realities. See generally OLIVER WENDELL HOLMES, JR., THE COMMON LAw ( 1891 ). Such developments are only appropriate when they "reach just and realistic results." Naxos II, 4 N.Y.3d at 555. Here, Plaintiff cannot articulate any prior rule in New York that supports its position, and points to no 37 present reality that warrants affording greater protection today to recordings that enjoyed no such protection for decades. Therefore, the certified question must be answered in the negative. Common law performance rights in sound recordings simply do not exist at common law, and the fashioning of such a right is unwarranted. CONCLUSION For the reasons set forth above, this Court should answer the certified question in the negative. Respectfully submitted, WILSON, ELSER, MOSKOWITZ, EDELMAN & DICI