P. W. Martin Topic 11 Federalism Questions Where does this body of intellectual property fit in the federal-state matrix?

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Introduction to Copyright - LII 2000
P.W. Martin

Topic 11 - Federalism Questions - Where does this body of intellectual property fit in the federal-state matrix?

  1. Goldstein v. California, 412 U.S. 546 (1973)

  2. PROCD Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996)

  3. NBA v. Motorola, 105 F.3d 841 (2d Cir. 1997) [See Topic 2]

  4. Brown v. Ames, 201 F.3d 654 (5th Cir. 2000)

  5. Comedy III v. New Line Cinema, 200 F.3d 593 (9th Cir. 2000)


GOLDSTEIN v. CALIFORNIA, 412 U.S. 546 (1973)

BURGER, C.J., delivered the opinion of the Court, in which STEWART, WHITE, POWELL, and REHNQUIST, JJ., joined. DOUGLAS, J., post, p. 572, and MARSHALL, J., post, p. 576, filed dissenting opinions, in which BRENNAN and BLACKMUN, JJ., joined. [p*548].

MR. CHIEF JUSTICE BURGER delivered the opinion of the Court.

[1] We granted certiorari to review petitioners' conviction under a California statute making it a criminal offense to "pirate" recordings produced by others.

[2] In 1971, an information was filed by the State of California, charging petitioners in 140 counts with violating § 653h of the California Penal Code. The information charged that, between April, 1970, and March, 1971, petitioners had copied several musical performances from commercially sold recordings without the permission of the owner of the master record or tape.[n1] Petitioners moved to dismiss the complaint on the grounds that § 653h was in conflict with Art. I, § 8, cl. 8, of the Constitution,[n2] [p*549] the "Copyright Clause," and the federal statutes enacted thereunder. Upon denial of their motion, petitioners entered pleas of nolo contendere to 10 of the 140 counts; the remaining counts were dismissed. On appeal, the Appellate Department of the California Superior Court sustained the validity of the statute. After exhausting other state appellate remedies, petitioners sought review in this Court.


[3] Petitioners were engaged in what has commonly been called "record piracy" or "tape piracy" -- the unauthorized duplication of recordings of performances by major musical artists.[n3] Petitioners would purchase from a retail distributor a single tape or phonograph recording of the popular performances they wished to duplicate. The original recordings were produced and marketed by recording companies with which petitioners had no contractual relationship. At petitioners' plant, the recording was reproduced on blank tapes, which could in turn be used to replay the music on a tape player. The tape was then wound on a cartridge. A label was attached, stating the title of the recorded performance -- the same title as had appeared on the original recording, and the name of the performing artists.[n4] After final packaging, [p*550] the tapes were distributed to retail outlets for sale to the public, in competition with those petitioners had copied.

[4] Petitioners made no payments to the artists whose performances they reproduced and sold, or to the various trust funds established for their benefit; no payments were made to the producer, technicians, or other staff personnel responsible for producing the original recording and paying the large expenses incurred in production.[n5] No payments were made for the use of the artists' names or the album title.

[5] The challenged California statute forbids petitioners to transfer any performance fixed on a tape or record onto other records or tapes with the intention of selling the duplicates unless they have first received permission from those who, under state law, are the owners of the master recording. Although the protection afforded to each master recording is substantial, lasting for an unlimited time, the scope of the proscribed activities is narrow. No limitation is placed on the use of the music, lyrics, or arrangement employed in making the master recording. Petitioners are not precluded from hiring their own musicians and artists and recording an exact imitation of the performance embodied on the master recording. Petitioners are even free to hire the same artists who made the initial recording in order to [p*551] duplicate the performance. In essence, the statute thus provides copyright protection solely for the specific expressions which compose the master record or tape.

[6] Petitioners' attack on the constitutionality of § 653h has many facets. First, they contend that the statute establishes a state copyright of unlimited duration, and thus conflicts with Art. I, § 8, cl. 8, of the Constitution. Second, petitioners claim that the state statute interferes with the implementation of federal policies inherent in the federal copyright statutes. 17 U.S.C. § 1 et seq. According to petitioners, it was the intention of Congress, as interpreted by this Court in Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964), and Compco Corp. v. Day-Brite Lighting, 376 U.S. 234 (1964), to establish a uniform law throughout the United States to protect original writings. As part of the federal scheme, it is urged that Congress intended to allow individuals to copy any work which was not protected by a federal copyright. Since § 653h effectively prohibits the copying of works which are not entitled to federal protection, petitioners contend that it conflicts directly with congressional policy, and must fall under the Supremacy Clause of the Constitution. Finally, petitioners argue that 17 U.S.C. § 2, which allows States to protect unpublished writings,[n6] does not authorize the challenged state provision; since the records which petitioners copied had previously been released to the public, petitioners contend that they had, under federal law, been published.

[7] We note at the outset that the federal copyright statutes to which petitioners refer were amended by Congress [p*552] while their case was pending in the state courts. In 1971, Pub.L. 92-140, 85 Stat. 391, 17 U.S.C. §§ 1(f), 5 (n), 19, 20, 26, 101(e), was passed to allow federal copyright protection of recordings. However, § 3 of the amendment specifically provides that such protection is to be available only to sound recordings "fixed, published, and copyrighted" on and after February 15, 1972, and before January 1, 1975, and that nothing in Title 17, as amended is to "be applied retroactively or [to] be construed as affecting in any way any rights with respect to sound recordings fixed before" February 15, 1972. The recordings which petitioners copied were all "fixed" prior to February 15, 1972. Since, according to the language of § 3 of the amendment, Congress did not intend to alter the legal relationships which govern these recordings, the amendments have no application in petitioners' case.[n7]


[8] Petitioners' first argument rests on the premise that the state statute under which they were convicted lies beyond the powers which the States reserved in our federal system. If this is correct, petitioners must prevail, since the States cannot exercise a sovereign power which, under the Constitution, they have relinquished to the Federal Government for its exclusive exercise.


[9] The principles which the Court has followed in construing state power were stated by Alexander Hamilton in Number 32 of The Federalist:

An entire consolidation of the States into one complete national sovereignty would imply an entire subordination of the parts; and whatever powers might remain in them, would be altogether dependent [p*553] on the general will. But as the plan of the [Constitutional] convention aims only at a partial union or consolidation, the State governments would clearly retain all the rights of sovereignty which they before had, and which were not, by that act, exclusively delegated to the United States. This exclusive delegation, or rather this alienation, of State sovereignty, would only exist in three cases: where the Constitution in express terms granted an exclusive authority to the Union; where it granted in one instance an authority to the Union, and in another prohibited the States from exercising the like authority; and where it granted an authority to the Union to which a similar authority in the States would be absolutely and totally contradictory and repugnant.[n8]

[10] The first two instances mentioned present no barrier to a State's enactment of copyright statutes. The clause of the Constitution granting to Congress the power to issue copyrights does not provide that such power shall vest exclusively in the Federal Government. Nor does the Constitution expressly provide that such power shall not be exercised by the States.

[11] In applying the third phase of the test, we must examine the manner in which the power to grant copyrights may operate in our federal system. The objectives of our inquiry were recognized in Cooley v. Board of Wardens, 12 How. 299 (1852), when, in determining whether the power granted to Congress to regulate commerce[n9] was "compatible with the existence of a similar power in the States," the Court noted:

Whatever subjects of this power are in their nature [p*554] national, or admit only of one uniform system, or plan of regulation, may justly be said to be of such a nature as to require exclusive legislation by Congress.

Id. at 319. The Court's determination that Congress alone may legislate over matters which are necessarily national in import reflects the basic principle of federalism. Mr. Chief Justice Marshall said,

The genius and character of the [federal] government seem to be that its action is to be applied to all the external concerns of the nation, and to those internal concerns which affect the States generally, but not to those which are completely within a particular State, which do not affect other States, and with which it is not necessary to interfere for the purpose of executing some of the general powers of the government.

Gibbons v. Ogden, 9 Wheat. 1, 195 (1824).

[12] The question whether exclusive federal power must be inferred is not a simple one, for the powers recognized in the Constitution are broad, and the nature of their application varied. The warning sounded by the Court in Cooley may equally be applicable to the Copyright Clause:

Either absolutely to affirm, or deny that the nature of [the federal power over commerce] requires exclusive legislation by Congress, is to lose sight of the nature of the subjects of this power and to assert concerning all of them what is really applicable but to a part.

12 How. at 319. We must also be careful to distinguish those situations in which the concurrent exercise of a power by the Federal Government and the States or by the States alone may possibly lead to conflicts and those situations where conflicts will necessarily arise.

It is not . . . a [p*555] mere possibility of inconvenience in the exercise of powers, but an immediate constitutional repugnancy, that can by implication alienate and extinguish a preexisting right of [state] sovereignty.

The Federalist No. 32, p. 243 (B. Wright ed.1961).

[13] Article I, § 8, cl. 8, of the Constitution gives to Congress the power --

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries. . . .

[14] The clause thus describes both the objective which Congress may seek and the means to achieve it. The objective is to promote the progress of science and the arts. As employed, the terms "to promote" are synonymous with the words "to stimulate," "to encourage," or "to induce."[n10] To accomplish its purpose, Congress may grant to authors the exclusive right to the fruits of their respective works. An author who possesses an unlimited copyright may preclude others from copying his creation for commercial purposes without permission. In other words, to encourage people to devote themselves to intellectual and artistic creation, Congress may guarantee to authors and inventors a reward in the form of control over the sale or commercial use of copies of their works.

[15] The objective of the Copyright Clause was clearly to facilitate the granting of rights national in scope. While the debates on the clause at the Constitutional Convention were extremely limited, its purpose was described by James Madison in the Federalist:

The utility of this power will scarcely be questioned. The copyright of authors has been solemnly [p*556] adjudged, in Great Britain, to be a right of common law. The right to useful inventions seems with equal reason to belong to the inventors. The public good fully coincides in both cases with the claims of individuals. The States cannot separately make effectual provision for either of the cases, and most of them have anticipated the decision of this point, by laws passed at the instance of Congress.[n11]

[16] The difficulty noted by Madison relates to the burden placed on an author or inventor who wishes to achieve protection in all States when no federal system of protection is available. To do so, a separate application is required to each state government; the right which, in turn, may be granted has effect only within the granting State's borders.[n12] The national system which Madison supported eliminates the need for multiple applications and the expense and difficulty involved. In effect, it allows Congress to provide a reward greater in scope than any particular State may grant to promote progress in those fields which Congress determines are worthy of national action.

[17] Although the Copyright Clause thus recognizes the potential benefits of a national system, it does not indicate [p*557] that all writings are of national interest or that state legislation is, in all cases, unnecessary or precluded. The patents granted by the States in the 18th century show, to the contrary, a willingness on the part of the States to promote those portions of science and the arts which were of local importance.[n13] Whatever the diversity of people's backgrounds, origins, and interests, and whatever the variety of business and industry in the 13 Colonies, the range of diversity is obviously far greater today in a country of 210 million people in 50 States. In view of that enormous diversity, it is unlikely that all citizens in all parts of the country place the same importance on [p*558] works relating to all subjects. Since the subject matter to which the Copyright Clause is addressed may thus be of purely local importance, and not worthy of national attention or protection, we cannot discern such an unyielding national interest as to require an inference that state power to grant copyrights has been relinquished to exclusive federal control.

[18] The question to which we next turn is whether, in actual operation, the exercise of the power to grant copyrights by some States will prejudice the interests of other States. As we have noted, a copyright granted by a particular State has effect only within its boundaries. If one State grants such protection, the interests of States which do not are not prejudiced, since their citizens remain free to copy within their borders those works which may be protected elsewhere. The interests of a State which grants copyright protection may, however, be adversely affected by other States that do not; individuals who wish to purchase a copy of a work protected in their own State will be able to buy unauthorized copies in other States where no protection exists. However, this conflict is neither so inevitable nor so severe as to compel the conclusion, that state power has been relinquished to the exclusive jurisdiction of the Congress. Obviously when some States do not grant copyright protection -- and most do not -- that circumstance reduces the economic value of a state copyright, but it will hardly render the copyright worthless. The situation is no different from that which may arise in regard to other state monopolies such as a state lottery, or a food concession in a limited enclosure like a state park; in each case, citizens may escape the effect of one State's monopoly by making purchases in another area or another State. Similarly, in the case of state copyrights, except as to individuals willing to travel across state lines in order to purchase records or other writings protected in their own State, each State's [p*559] copyrights will still serve to induce new artistic creations within that State -- the very objective of the grant of protection. We do not see here the type of prejudicial conflicts which would arise, for example, if each State exercised a sovereign power to impose imposts and tariffs;[n14] nor can we discern a need for uniformity such as that which may apply to the regulation of interstate shipments.[n15]

[19] Similarly, it is difficult to see how the concurrent exercise of the power to grant copyrights by Congress and the States will necessarily and inevitably lead to difficulty. At any time Congress determines that a particular category of "writing" is worthy of national protection and the incidental expenses of federal administration, federal copyright protection may be authorized. Where the need for free and unrestricted distribution of a writing is thought to be required by the national interest, the Copyright Clause and the Commerce Clause would allow Congress to eschew all protection. In such cases, a conflict would develop if a State attempted to protect that which Congress intended to be free from restraint or to free that which Congress had protected. However, where Congress determines that neither federal protection nor freedom from restraint is required by the national interest, it is at liberty to stay its hand entirely.[n16] Since state protection would not then conflict with federal action, total relinquishment of the States' power to grant copyright protection cannot be inferred. [p*560]

[20] As we have seen, the language of the Constitution neither explicitly precludes the States from granting copyrights nor grants such authority exclusively to the Federal Government. The subject matter to which the Copyright Clause is addressed may, at times, be of purely local concern. No conflict will necessarily arise from a lack of uniform state regulation, nor will the interest of one State be significantly prejudiced by the actions of another. No reason exists why Congress must take affirmative action either to authorize protection of all categories of writings or to free them from all restraint. We therefore conclude that, under the Constitution, the States have not relinquished all power to grant to authors "the exclusive Right to their respective Writings."


[21] Petitioners base an additional argument on the language of the Constitution. The California statute forbids individuals to appropriate recordings at any time after release. From this, petitioners argue that the State has created a copyright of unlimited duration, in violation of that portion of Art. I, § 8, cl. 8, which provides that copyrights may only be granted "for limited Times." Read literally, the text of Art. I does not support petitioners' position. Section 8 enumerates those powers which have been granted to Congress; whatever limitations have been appended to such powers can only be understood as a limit on congressional, and not state, action. Moreover, it is not clear that the dangers to which this limitation was addressed apply with equal force to both the Federal Government and the States. When Congress grants an exclusive right or monopoly, its effects are pervasive; no citizen or State may escape its reach. As we have noted, however, the exclusive right granted by a State is confined to its [p*561] borders. Consequently, even when the right is unlimited in duration, any tendency to inhibit further progress in science or the arts is narrowly circumscribed. The challenged statute cannot be voided for lack of a durational limitation.


[22] Our conclusion that California did not surrender its power to issue copyrights does not end the inquiry. We must proceed to determine whether the challenged state statute is void under the Supremacy Clause. No simple formula can capture the complexities of this determination; the conflicts which may develop between state and federal action are as varied as the fields to which congressional action may apply.

Our primary function is to determine whether, under the circumstances of this particular case, [the state] law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.

Hines v. Davidowitz, 312 U.S. 52, 67 (1941). We turn, then, to federal copyright law to determine what objectives Congress intended to fulfill.

[23] By Art. I, § 8, cl. 8, of the Constitution, the States granted to Congress the power to protect the "Writings" of "Authors." These terms have not been construed in their narrow literal sense, but rather with the reach necessary to reflect the broad scope of constitutional principles. While an "author" may be viewed as an individual who writes an original composition, the term, in its constitutional sense, has been construed to mean an "originator," "he to whom anything owes its origin." Burrow-Giles Lithographic Co. v. Sarony, 111 U.S. 53, 58 (1884). Similarly, although the word "writings" might be limited to script or printed material, it may be interpreted to include any physical rendering of the fruits of creative intellectual or aesthetic labor. [p*562] Ibid.; Trade-Mark Cases, 100 U.S. 82, 94 (1879). Thus, recordings of artistic performances may be within the reach of Clause 8.

[24] While the area in which Congress may act is broad, the enabling provision of Clause 8 does not require that Congress act in regard to all categories of materials which meet the constitutional definitions. Rather, whether any specific category of "Writings" is to be brought within the purview of the federal statutory scheme is left to the discretion of the Congress. The history of federal copyright statutes indicates that the congressional determination to consider specific classes of writings is dependent not only on the character of the writing, but also on the commercial importance of the product to the national economy. As our technology has expanded the means available for creative activity and has provided economical means for reproducing manifestations of such activity, new areas of federal protection have been initiated.[n17] [p*563]

[25] Petitioners contend that the actions taken by Congress in establishing federal copyright protection preclude the States from granting similar protection to recordings of musical performances. According to petitioners, Congress addressed the question of whether recordings of performances should be granted protection in 1909; Congress determined that any individual who was entitled to a copyright on an original musical composition should have the right to control to a limited extent the use of that composition on recordings, but that the record itself, and the performance which it was capable of reproducing, were not worthy of such protection.[n18] In [p*564] support of their claim, petitioners cite the House Report on the 1909 Act, which states:

It is not the intention of the committee to extend the right of copyright to the mechanical reproductions themselves, but only to give the composer or copyright proprietor the control, in accordance with the provisions of the bill, of the manufacture and use of such devices.

H.R.Rep. No. 2222, 60th Cong., 2d Sess., 9 (1909).

[26] To interpret accurately Congress' intended purpose in passing the 1909 Act and the meaning of the House Report petitioners cite, we must remember that our modern technology differs greatly from that which existed in 1909. The Act and the report should not be read as if they were written today, for to do so would inevitably distort their intended meaning; rather, we must read them against the background of 1909, in which they were written.

[27] In 1831, Congress first extended federal copyright protection to original musical compositions. An individual who possessed such a copyright had the exclusive authority to sell copies of the musical score; individuals who purchased such a copy did so, for the most part, to play the composition at home on a piano or other instrument. Between 1831 and 1909, numerous machines were invented which allowed the composition to be reproduced mechanically. For example, one had only to insert a piano roll or disc with perforations in appropriate places into a player piano to achieve almost the same results which previously required someone capable of playing the instrument. The mounting sales of such devices detracted from the value of the copyright granted for the musical composition. Individuals who had use of a piano roll and an appropriate instrument had little, if any, need for a copy of the sheet [p*565] music.[n19] The problems which arose eventually reached this Court in 1908 in the case of White-Smith Music Publishing Co. v. Apollo Co., 209 U.S. 1. There, the Apollo Company had manufactured piano rolls capable of reproducing mechanically compositions covered by a copyright owned by appellant. Appellant contended that the piano rolls constituted "copies" of the copyrighted composition, and that their sale, without permission, constituted an infringement of the copyright. The Court held that piano rolls, as well as records, were not "copies" of the copyrighted composition, in terms of the federal copyright statutes, but were merely component parts of a machine which executed the composition.[n20] Despite the fact that the piano rolls employed the creative work of the composer, all protection was denied.

[28] It is against this background that Congress passed the 1909 statute. After pointedly waiting for the Court's decision in White-Smith Music Publishing Co.,[n21] Congress determined that the copyright statutes should be amended to insure that composers of original musical works received adequate protection to encourage further artistic and creative effort. Henceforth, under § 1(e), [p*566] records and piano rolls were to be considered as "copies" of the original composition they were capable of reproducing, and could not be manufactured unless payment was made to the proprietor of the composition copyright. The section of the House Report cited by petitioners was intended only to establish the limits of the composer's right; composers were to have no control over the recordings themselves. Nowhere does the report indicate that Congress considered records as anything but a component part of a machine, capable of reproducing an original composition[n22] or that Congress intended records, as renderings of original artistic performance, to be free from state control.[n23] [p*567]

[29] Petitioners' argument does not rest entirely on the belief that Congress intended specifically to exempt recordings of performances from state control. Assuming that no such intention may be found, they argue that Congress so occupied the field of copyright protection as to preempt all comparable state action. Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (1947). This assertion is based on the language of 17 U.S.C. §§ 4 and 5, and on this Court's opinions in Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964), and Compco Corp. v. Day-Brite Lighting, 376 U.S. 234 (1964).

[30] Section 4 of the federal copyright laws provides:

The works for which copyright may be secured under this title shall include all the writings of an author.

17 U.S.C. § 4.

[31] Section 5, which lists specific categories of protected works, adds:

The above specifications shall not be held to limit the subject matter of copyright as defined in section 4 of this title. . . .

17 U.S.C. § 5. Since § 4 employs the constitutional term "writings,"[n24] it may be argued that Congress intended to exercise its authority over all works to which the constitutional provision might apply. However, in the more than 60 years which have elapsed since enactment of this provision, neither the Copyright Office, the courts, nor the Congress has so interpreted it. The Register of Copyrights, [p*568] who is charged with administration of the statute, has consistently ruled that "claims to exclusive rights in mechanical recordings . . . or in the performances they reproduce" are not entitled to protection under § 4. 37 CFR § 202.8(b) (1972).[n25] With one early exception,[n26] American courts have agreed with this interpretation;[n27] and, in 1971, prior to passage of the statute which extended federal protection to recordings fixed on or after February 15, 1972, Congress acknowledged the validity of that interpretation. Both the House and Senate Reports on the proposed legislation recognized that recordings qualified as "writings" within the meaning of the Constitution, but had not previously been protected under the federal copyright statute. H.R.Rep. No. 92-487, pp. 2, 5 (1971); S.Rep. No. 92-72, p. 4 (1971). In light of this consistent interpretation by the courts, the agency empowered to administer the copyright statutes, [p*569] and Congress itself, we cannot agree that §§ 4 and 5 have the broad scope petitioners claim.

[32] Sears and Compco, on which petitioners rely, do not support their position. In those cases, the question was whether a State could, under principles of a state unfair competition law, preclude the copying of mechanical configurations which did not possess the qualities required for the granting of a federal design or mechanical patent. The Court stated:

[T]he patent system is one in which uniform federal standards are carefully used to promote invention while, at the same time, preserving free competition. Obviously a State could not, consistently with the Supremacy Clause of the Constitution, extend the life of a patent beyond its expiration date or give a patent on an article which lacked the level of invention required for federal patents. To do either would run counter to the policy of Congress of granting patents only to true inventions, and then only for a limited time. Just as a State cannot encroach upon the federal patent laws directly, it cannot, under some other law, such as that forbidding unfair competition, give protection of a kind that clashes with the objectives of the federal patent laws.

Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. at 230-231 (footnotes omitted).

[33] In regard to mechanical configurations, Congress had balanced the need to encourage innovation and originality of invention against the need to insure competition in the sale of identical or substantially identical products. The standards established for granting federal patent protection to machines thus indicated not only which articles in this particular category Congress wished to protect, but which configurations it wished to remain free. The application of state law in these cases to prevent [p*570] the copying of articles which did not meet the requirements for federal protection disturbed the careful balance which Congress had drawn, and thereby necessarily gave way under the Supremacy Clause of the Constitution. No comparable conflict between state law and federal law arises in the case of recordings of musical performances. In regard to this category of "Writings," Congress has drawn no balance; rather, it has left the area unattended, and no reason exists why the State should not be free to act.[n28]

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