The Ninth Circuit just doesn’t like karaoke. At least, that’s what plaintiffs, manufacturers of karaoke machines, in two recent opinions involving copyright law would likely say. In both decisions, the Ninth Circuit affirmed the district courts’ dismissal of the complaints without leave to amend. Both of these decisions discussed the various copyrights that are implicated in a karaoke device, including the copyright of the performance of the song itself, the song lyrics, and the synchronization of the two. Both decisions also involved the licenses required by karaoke device manufacturers.
In the first, Leadsinger, Inc. v. BMG Music Publishing, 512 F3d 522 (9th Cir. 2008), the court addressed a matter of first impression in the Circuit: How does the Copyright Act apply to karaoke devices? Plaintiff Leadsinger is a karaoke device manufacturer. The device it manufactures is “an all-in-one microphone player” that connects directly to a television and has recorded songs imbedded in a microchip in the microphone. While playing, the Leadsinger device, like most karaoke devices, plays music and projects the song lyrics visually on the screen synchronized with the music.
Copyright law grants the copyright owner the exclusive rights reproduce and distribute the copyrighted work in “phonorecords.” However, as the Leadsinger court noted these exclusive rights are subject to a compulsory license under section 115, which “subjects phonorecords to a compulsory licensing scheme that authorizes any person who complies with its provisions to obtain a license to make and distribute phonorecords of a nondramatic musical work.” If, as Leadsinger argued, its karaoke device was a “phonorecord,” then the compulsory license under section 115 would allow the use of the songs and lyrics.
The gravamen of the dispute involved license fees that BMG demanded of Leadsinger. As the court explained, “in addition to the mechanical fee required under to secure a compulsory license, BMG has demanded that Leadsinger and other karaoke companies pay a ‘lyric reprint’ fee and a ‘synchronization fee.’ Leadsinger has refused to pay these additional fees and filed for declaratory judgment to resolve whether it has the right to visually display song lyrics in real time with song recordings….” In essence, Leadsinger believes that the compulsory mechanical license under 17 U.S.C. § 115 should cover everything, and it should not be required to pay a separate fee to show the lyrics or to synchronize the lyrics with the music.
The Copyright Act defines “phonorecords” as “material objects in which sounds, other than those accompanying a motion picture or other audiovisual work, are fixed by any method now known or later developed, and from which the sounds can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.” 17 U.S.C. § 101. “Audiovisual works” are defined as “works that consist of a series of related images which are intrinsically intended to be shown by the use of machines, or devices such as projectors, viewers, or electronic equipment, together with accompanying sounds, if any….” Id.
The Ninth Circuit found that the use of the lyrics, in projecting them on the screen synchronized with the music, met every element of an “audiovisual work,” and therefore was not a phonorecord. The court found that the “images of successive portions of song lyrics are ‘intrinsically intended to be shown by the use of machine [sic] … together with accompanying sounds.’” As an audiovisual work, it was excluded from the compulsory licensing scheme in § 115.
The end result was that Leadsinger could not rely just on the compulsory license fees it paid to BMG to make and distribute copies of phonorecords, it also had to pay BMG fees for synchronization licenses and reprint licenses to display the song lyrics.
In the second case, Sybersound Records, Inc. v. UAV Corp. et al., — F3d —, 2008 WL 509245 (9th Cir. 2008), the Ninth Circuit continued its apparent disdain for karaoke. In that case, Plaintiff Sybersound Records, another karaoke device manufacturer, sued several of its competitors over the same licenses that were at issue in Leadsinger. In Sybersound, however, the complaint was that the other manufacturer defendants were not paying the license fees, therefore they were able to undercut Sybersound’s prices and compete unfairly. Sybersound claimed it was injured because it did pay all required license fees, and therefore its costs were higher than his competitors.
Sybersound’s problem, however, is that they didn’t own the copyrights on which they claimed the license fees were due. Because it didn’t own the copyrights, Sybersound did not have standing to complain about the actual infringement due to failure to pay the license fees. Apparently recognizing this problem, Sybersound sued instead for violations of California’s unfair competition law, RICO violations, and intentional interference. But all of these claims rested on one alleged wrong – the infringement of the copyrights Sybersound lacked standing to address. The court held that because Sybersound lacked standing to sue for copyright infringement, it also lacked standing to sue for related claims that required the copyright claims to be decided. The court also held that the unfair competition claim was preempted by the federal Copyright Act. Therefore, the court affirmed the dismissal of the complaint without leave to amend.
Thus, for the second time in two months, the Ninth Circuit pulled the plug on karaoke plaintiffs. However, in so doing, it left us with a few reminders of what should probably be obvious points. First, karaoke devices, and the recordings that are played on them, contain more than one copyright. Each of these rights is separate and requires a separate license. Second, a plaintiff can only complain of the infringement of rights it owns. And third, a plaintiff cannot easily plead around this standing requirement by recasting its complaint in terms of other related claims. Or perhaps it’s really as simple as the Ninth Circuit just doesn’t like karaoke.