Abs Entertainment, Inc. v. CBS Corp. ( 2018 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ABS ENTERTAINMENT, INC., an No. 16-55917
Arkansas corporation; BARNABY
RECORDS, INC., a New York D.C. No.
corporation; BRUNSWICK RECORD 2:15-cv-06257-
CORPORATION, a New York PA-AGR
corporation; MALACO INC., a
Mississippi corporation, each
individually and on behalf of all ORDER AND
others similarly situated., AMENDED
Plaintiffs-Appellants, OPINION
v.
CBS CORPORATION, a Delaware
corporation; CBS RADIO, INC., a
Delaware corporation; DOES, 1
through 10,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Percy Anderson, District Judge, Presiding
Argued and Submitted November 9, 2017
Pasadena, California
Filed August 20, 2018
Amended October 31, 2018
2 ABS ENTERTAINMENT V. CBS CORPORATION
Before: Richard Linn, * Marsha S. Berzon,
and Paul J. Watford, Circuit Judges.
Order;
Opinion by Judge Linn
SUMMARY **
Copyright
The panel reversed the district court’s grant of summary
judgment in favor of the defendants on claims of violation of
state law copyrights possessed by the plaintiffs in sound
recordings originally fixed before 1972.
Under the Sound Recording Act, sound recordings fixed
after February 15, 1972, are subject to a compulsory license
regime for performance via digital transmission and are
excused from infringement for performance via terrestrial
radio. Congress reserved governance of sound recordings
fixed before 1972 to state statutory and common law and
excluded such sound recordings from federal copyright
protection until 2067.
The plaintiffs owned sound recordings embodying
musical performances initially fixed in analog format prior
*
The Honorable Richard Linn, United States Circuit Judge for the
U.S. Court of Appeals for the Federal Circuit, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
ABS ENTERTAINMENT V. CBS CORPORATION 3
to February 15, 1972. They remastered these pre-1972
sound recordings onto digital formats.
The panel held that the district court erred in finding a
lack of a genuine issue of material fact about the copyright
eligibility of remastered sound recordings distributed by the
defendants. The panel concluded that a derivative sound
recording distinctly identifiable solely by the changes in
medium generally does not exhibit the minimum level of
originality to be copyrightable.
The panel held that the district court erred in concluding
that plaintiffs’ state copyright interest in the pre-1972 sound
recordings embodied in the remastered sound recordings
was preempted by federal copyright law. The panel held that
the creation of an authorized digital remastering of pre-1972
analog sound recordings that qualify as copyrightable
derivative works does not bring the remastered sound
recordings exclusively under the ambit of federal law.
The panel held that the district court abused its discretion
by excluding the testimony of plaintiffs’ expert, excluding
certain reports as evidence of defendants’ performance of
plaintiffs’ sound recordings in California, and granting
partial summary judgment of no infringement with respect
to the samples contained in those reports.
The panel concluded that the district court’s strict
application of its local rules with respect to the timeliness of
plaintiffs’ motion for class action certification was
inconsistent with the Federal Rules of Civil Procedure and
was thus an abuse of discretion.
4 ABS ENTERTAINMENT V. CBS CORPORATION
The panel reversed the grant of summary judgment and
the striking of class certification and remanded for further
proceedings.
COUNSEL
Robert Edward Allen (argued), Alan P. Block, Roderick G.
Dorman, and Lawrence M. Hadley, McKool Smith
Hennigan P.C., Los Angeles, California; Kathleen E.
Boychuck, Andrew Szot, and Marvin A. Miller, Miller Law
LLC, Chicago, Illinois; for Plaintiffs-Appellants.
Robert M. Schwartz (argued), Amit Q. Gressel, Andrew J.
Strabone, Victor Jih, and Moon Hee Lee, Irell & Manella
LLP, Los Angeles, California, for Defendants-Appellees.
Richard S. Mandel, Cown Liebowitz & Latman P.C., New
York, New York; George M. Borowsky, Recording Industry
Association of America Inc., Washington, D.C.; for Amicus
Curiae Recording Industry Association of America Inc.
Morgan E. Pietz, Gerard Fox Law P.C., Los Angeles,
California; Katrina Novak, Lowe & Associates P.C., Los
Angeles, California; for Amicus Curiae California Society
of Entertainment Lawyers.
Steven G. Sklaver, Kalpana Srinivasan, and Stephen E.
Morrissey, Susman Godfrey LLP, Los Angeles, California;
Daniel B. Lifschitz, Maryann R. Marzano, and Henry
Gradstein, Gradstein & Marzano P.C., Los Angeles,
California; for Amicus Curiae Flo & Eddie Inc.
Andrew M. Gass and Elizabeth H. Yandell, Latham &
Watkins LLP, San Francisco, California; Roman Martinez,
ABS ENTERTAINMENT V. CBS CORPORATION 5
Latham & Watkins, Washington, D.C.; Sarang v. Damle,
Latham & Watkins LLP, Washington, D.C.; for Amici
Curiae iHeartMedia Inc. and National Association of
Broadcasters.
Stephen B. Kinnard, Paul Hastings LLP, Washington, D.C.;
Emmy Parsons, Garrett Levin, and Rick Kaplan, National
Association of Broadcasters, Washington, D.C.; for Amicus
Curiae National Association of Broadcasters.
ORDER
The Opinion filed August 20, 2018, and reported at
900 F.3d 1113, is hereby amended. The amended opinion
will be filed concurrently with this order.
The panel has unanimously voted to deny Appellees’
petition for panel rehearing. Judge Berzon and Judge
Watford have voted to deny the petition for rehearing en
banc. Judge Linn recommends denial of the petition for
rehearing en banc. The full court has been advised of the
petition for rehearing en banc, and no judge has requested a
vote on whether to rehear the matter en banc. Fed. R. App.
P. 35. The petition for panel rehearing and the petition for
rehearing en banc are DENIED.
Future petitions for rehearing or rehearing en banc will
not be entertained in this case.
6 ABS ENTERTAINMENT V. CBS CORPORATION
OPINION
LINN, Circuit Judge:
Appellants ABS Entertainment, Inc., Barnaby Records,
Inc., Brunswick Record Corp. and Malaco, Inc.
(collectively, “ABS”) appeal from the grant of summary
judgment by the Central District of California in favor of
CBS Corporation and CBS Radio, Inc. (collectively,
“CBS”), holding that CBS did not violate any state law
copyrights possessed by ABS in sound recordings originally
fixed before 1972. ABS also appeals from the district
court’s striking of its class action certification, and certain
evidentiary rulings.
We conclude that the district court erred in finding a lack
of a genuine issue of material fact about the copyright
eligibility of remastered sound recordings distributed by
CBS. We also conclude that the district court abused its
discretion by excluding the testimony of ABS’s expert Paul
Geluso, excluding the Triton Reports as evidence of CBS’s
performance of ABS’s sound recordings in California, and
granting partial summary judgment of no infringement with
respect to the samples contained in those reports. Finally,
we conclude that the district court’s strict application of its
local rules with respect to the timeliness of ABS’s motion
for class action certification was inconsistent with the
Federal Rules of Civil Procedure and was thus an abuse of
discretion.
For the reasons set forth below, we reverse the grant of
summary judgment and the striking of class certification,
and remand for further proceedings consistent with this
opinion.
ABS ENTERTAINMENT V. CBS CORPORATION 7
I
In 1971, Congress passed the Sound Recording Act.
This Act for the first time created federal copyright
protection for certain sound recordings. Under that law,
sound recordings fixed after February 15, 1972 were made
subject to a compulsory license regime for performance via
digital transmission and were excused from infringement for
performance via terrestrial radio. 17 U.S.C. §§ 114, 301(c).
ABS owns sound recordings embodying musical
performances initially fixed in analog format prior to
February 15, 1972 (“pre-1972 sound recordings”). 1 As
digital formats replaced analog ones, ABS hired remastering
engineers to remaster the pre-1972 sound recordings onto
digital formats (“remastered sound recordings”). In doing
so, ABS determined to optimize the recordings for the new
digital format using standard, technical processes to create
accurate reproductions of its original pre-1972 analog
recordings and did not set out to create any new and different
sound recordings. ABS contends that this resulted in a
change in quality but not a substantial difference in the
identity or essential character of the sound recordings
themselves. ABS argues that injecting a substantial
difference in the digital remasters from their analog originals
would have diminished the value of the remastered sound
recordings, contrary to ABS’s objective in seeking to fully
exploit its intellectual property in those sound recordings.
1
For purposes of this appeal, the sound recordings at issue are
defined by a series of 174 “representative samples” by artists including
Al Green, the Everly Brothers, Jackie Wilson, King Floyd, and other
artists.
8 ABS ENTERTAINMENT V. CBS CORPORATION
ABS did not enter copies of the contracts between ABS
and the remastering engineers into the record, but both
parties agree that ABS authorized the creation of the
remastered sound recordings at issue here. 2 There is no
dispute that the remastered sound recordings contain only
the sounds (i.e. the vocals and instruments) originally
performed and fixed in the studio before 1972 and contained
in the pre-1972 sound recordings, and that no sounds were
removed or rearranged from the original fixed version. ABS
agrees that the remastered sound recordings are not identical
to the pre-1972 sound recordings, but contends that any
differences were trivial and of no copyrightable
consequence.
CBS delivers music content through terrestrial radio and
digital streaming, including 18 music stations in California
that are themselves streamed over the internet in
“simulcast.” CBS’s Radio 2.0 system logs “all sound
recordings it digitally transmits over the Internet,” and a
third party, Triton, tracks CBS’s simulcasts. CBS does not
use any analog sound recordings; it exclusively relies on
digitally mastered or remastered sound recordings for the
content it delivers to its customers. For all the broadcast
content, CBS paid a royalty to the owner of the underlying
musical composition. For the digitally streamed content,
CBS paid the compulsory license fee under the Sound
Recording Act to Sound Exchange. For content delivered by
terrestrial radio, CBS does not pay a license fee pursuant, as
2
The parties vigorously dispute whether the authorization to create
the remastered sound recordings also authorizes the creation of
derivative works, and which party bears the burden of proving such
authorization (or lack thereof).
ABS ENTERTAINMENT V. CBS CORPORATION 9
permitted, to the Sound Recording Act’s safe haven for
terrestrial radio performance. See 17 U.S.C. § 114(d).
II
On August 17, 2015, ABS filed a putative class action
against CBS in the Central District of California, alleging
that CBS’s transmission and distribution of the remastered
sound recordings violated California state law—specifically,
California Civil Code § 980(a)(2) (protecting the property
rights of an author of a sound recording fixed prior to
February 15, 1972); misappropriation and conversion; and
unfair competition, under California Business and
Professions Code § 17200.
On November 17, 2015, the district court denied a joint
stipulation to extend the 90-day deadline for filing a motion
for class action certification to allow for class certification
discovery, explaining that there was “no show of cause, let
alone good cause.” On November 19, 2015, the expiration
date of the local rule’s 90-day deadline for filing of class
certification, the court denied without explanation another
joint stipulation to extend the filing date. That same day,
ABS timely filed a motion for class certification. On
November 25, 2015, the district court struck the motion for
class certification because it set a hearing date for the motion
beyond the 35-day period after service of process as required
by the court’s standing orders and it did not include a
statement pursuant to Local Rule 7-3 that a “conference of
counsel” took place prior to the filing of the motion. The
court then struck ABS’s class allegations as untimely filed
under Local Rule 23-3.
CBS thereafter filed a motion for summary judgment,
arguing that there was no genuine issue of material fact that
the remastered sound recordings were authorized original
10 ABS ENTERTAINMENT V. CBS CORPORATION
derivative works, subject only to federal copyright law. In
support of its motion, CBS submitted declarations from
music engineers, including from Durand R. Begault,
attesting that the remastering process involved originality
and aesthetic judgment. In response, ABS submitted expert
declarations of its own, including from Paul Geluso, who
testified that the pre-1972 and remastered recordings
“embodied” the same performance based on waveform,
spectral, and critical listening analysis.
The district court decided two important evidentiary
issues and granted summary judgment to CBS. The district
court excluded Geluso’s testimony under Federal Rule of
Evidence 702 and Daubert v. Merrell Dow Pharms., Inc.,
509 U.S. 579, 589–90 (1993) as “unscientific” and
“unnecessary to aid a fact finder capable of listening to the
sound recordings on his or her own,” and, “[a]lternatively”
because Geluso’s testimony was “irrelevant.” The court
reasoned that Geluso limited his forensic analysis to only the
first five seconds of each sound recording, which was
“clearly inadequate to rule out the possibility that non-trivial
differences exist between the [pre-1972 and remastered
sound recordings].” The court also rejected Geluso’s
reliance on “critical listening” as undefined and unscientific,
and objected to Geluso’s failure to include in his report the
results of his phase inversion testing, which the court
categorized as “adverse to Plaintiffs’ position.”
Considering only Begault’s expert testimony, the district
court then held that there was no genuine issue of material
fact that the remastering created original derivative works
protected by federal copyright law. The district court
explained that “during the remastering process, at least some
perceptible changes were made to Plaintiff’s Pre-1972
Sound Recordings,” and that these changes were not merely
ABS ENTERTAINMENT V. CBS CORPORATION 11
“mechanical” or “trivial” changes, but rather “reflect
multiple kinds of creative authorship, such as adjustments of
equalization, sound editing, and channel assignment.” The
court thus concluded that as to the 57 works reviewed by
both parties’ experts, the remastered sound recordings were
entitled to federal copyright protection as original derivative
works.
Next, the district court concluded that ABS authorized
the creation of the remastered sound recordings, because
ABS had failed to meet its burden to show that its
authorization to create the remastered sound recordings did
not extend to the creation of a derivative work, and because,
in any event, “the right to claim copyright in a non-infringing
derivative work arises by operation of law, not through
authority from the copyright owner of the underlying work.”
The district court also concluded that, because the
remastered sound recordings, created after 1972, were
original and authorized, the remastered sound recordings
were exclusively governed by federal copyright law.
Therefore, the district court held, CBS had the right to
perform the remastered sound recordings by complying with
the statutory compulsory license obligations and taking
advantage of the terrestrial radio performance safe harbor
under 17 U.S.C. § 114. The district court assumed that
because the right to perform the remastered sound recordings
had been secured, CBS’s performance of the remastered
sound recordings could not infringe the pre-1972 sound
recordings.
The district court also held, in the alternative, that CBS
was entitled to partial summary judgment of non-
infringement with respect to 126 of the 174 representative
remastered sound recordings because ABS failed to provide
evidence of CBS’s performance of those sound recordings.
12 ABS ENTERTAINMENT V. CBS CORPORATION
The evidence presented with respect to the 174 samples
breaks down as follows. Sixty samples were contained in
CBS’s internal digital audio library, Radio 2.0, which tracks
broadcast or transmission via CBS’s internet-only radio
stations. The parties agree that for 48 of these, ABS
presented evidence of CBS’s broadcast or transmission of
sound recordings embodying the same performances as
ABS’s pre-1972 sound recordings. The parties also agree
that nine sound recordings were not infringing because
CBS’s records show that it broadcast versions based on
different performances than the pre-1972 sound recordings.
Three of these sound recordings were not reviewed by the
parties’ experts. An additional 40 samples were contained
exclusively in the Triton Reports, which are created by a
third-party company to track “simulcasts”—live internet
streams—of CBS’s radio broadcasts across the United
States. The parties do not discuss on appeal the evidence
available with respect to the remaining 74 sound recordings.
The district court concluded that the Triton Reports were
hearsay and did not fall within the business records
exception because “Plaintiffs have failed to establish any one
of the requirements necessary for them to be admitted under
the business records exceptions.” The district court thus
concluded that ABS had failed to raise a genuine issue of
material fact as to CBS’s transmission or broadcast in
California of all but the 48 samples both parties agree CBS
transmitted.
ABS appealed each of the adverse rulings.
III
We review the district court’s grant of summary
judgment de novo, asking whether the moving party has met
its burden to prove the absence of genuine issues of material
ABS ENTERTAINMENT V. CBS CORPORATION 13
fact. U.S. Auto Parts Net., Inc. v. Parts Geek, LLC, 692 F.3d
1009, 1014 (9th Cir. 2012). A genuine issue of material fact
exists if, drawing all inferences in favor of the non-moving
party, a reasonable jury could find in favor of the non-
moving party. Id. Whether a work is protected by copyright
law is a mixed question of law and fact, which we review de
novo. Ets-Hokin v. Skyy Spirits, Inc., 225 F.3d 1068, 1073
(9th Cir. 2000). We review the district court’s evidentiary
rulings for an abuse of discretion. Fonseca v. Sysco Food
Servs. Of Ariz., Inc., 374 F.3d 840, 845 (9th Cir. 2004).
IV
We begin with the district court’s determination that
“there is no genuine dispute of material fact that CBS
performed a post-1972 version of Plaintiffs’ pre-1972 Sound
Recordings which contained federally-copyrightable
original expression added during the remastering process.”
A
The constitutional purpose of copyright law is “to
promote the Progress of Science and the useful Arts” by
securing to “authors the right to their original expression, but
encourage[ing] others to build freely upon the ideas and
information conveyed by a work.” Feist Pubs., Inc. v. Rural
Tel. Serv. Co., 499 U.S. 340, 349–50 (1991). “The sine qua
non of copyright is originality.” Id. at 345. “Original, as the
term is used in copyright, means only that the work was
independently created by the author (as opposed to copied
from other works), and that it possesses at least some
minimal degree of creativity.” Id. A product of independent
creation is distinguished from a copy in that it contains
something which “owes its origin” to the independent
creator. Burrow-Giles Lithographic Co. v. Sarony, 111 U.S.
53, 58 (1884). A copy, on the other hand, is not a separate
14 ABS ENTERTAINMENT V. CBS CORPORATION
work, but a mere representation or duplication of a prior
creative expression. 3
A “derivative work” is defined in the Copyright Act as a
work “based upon one or more preexisting works” that
“recast[s], transform[s], or adapt[s]” a preexisting work and
“consist[s] of editorial revisions, annotations, elaborations,
or other modifications which, as a whole, represent an
original work of authorship.” 17 U.S.C. § 101. A derivative
work is copyrightable when it meets two criteria: (1) “the
original aspects of a derivative work must be more than
trivial,” and (2) “the original aspects of a derivative work
must reflect the degree to which it relies on preexisting
material and must not in any way affect the scope of any
copyright protection in that preexisting material.” U.S. Auto
Parts, 692 F.3d at 1016 (citing Durham Indus. v. Tomy
Corp., 630 F.2d 905, 909 (2d Cir. 1980)). This is known as
the Durham test. Both prongs arise out of Copyright’s basic
focus on originality. The first prong asks “whether the
derivative work is original to the author and non-trivial” and
the second prong ensures that the derivative work author
does not hinder the original copyright owner’s ability to
exercise all of its rights. Id. at 1017.
3
The Copyright Act defines “Copies” as “material objects, other
than phonorecords, in which a work is fixed by any method now known
or later developed, and from which the work can be perceived,
reproduced, or otherwise communicated, either directly or with the aid
of a machine or device. The term ‘copies’ includes the material object,
other than a phonorecord, in which the work is first fixed.” 17 U.S.C.
§ 101. “Phonorecords” are “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.” Id.
ABS ENTERTAINMENT V. CBS CORPORATION 15
Because derivative works do not start from scratch,
courts have endeavored to determine the kinds of
contributions in the derivative work that qualify as original.
In most circumstances, derivative works contain obvious
creative contributions and so are easily recognizable as
distinct from the underlying work. The casting, lighting,
cinematography, props, editing, acting, and directing
required to craft a movie from a screenplay, for example,
easily render the movie distinct from the screenplay.
Likewise, the authors of most sound recordings that use a
sample of another sound recording to create distinct
derivative works do so by adding new vocals, instruments,
and edits to the underlying sample. Where the alleged
derivative work, however, is intended as, and is in fact, a
direct representation of the original work, the contributions
of the derivative work author are harder to identify.
This court applied the two-part Durham test in
Entertainment Research Group, Inc. v. Genesis Creative
Group, Inc., 122 F.3d 1211 (9th Cir. 1997). In that case,
Entertainment Research Group (“ERG”) made three-
dimensional inflatable costumes based on copyrighted
characters like “Toucan Sam” and “Cap’n Crunch.” Id. at
1217–18. In relevant part, the court, in applying the
originality prong, concluded that the costume-maker’s
contributions—including the change in format from 2D to
3D; changes in the proportion of textures, facial features and
facial expressions; and the changes attendant to the
functional addition of movement—were insufficient to
render the costumes copyright eligible as derivative works.
Id. at 1223.
The court first discounted the changes occasioned by
technical, functional, and utilitarian concerns, such as the
differences in proportion (necessitated by the requirement
16 ABS ENTERTAINMENT V. CBS CORPORATION
that a human body must fit within the costume) and texture
(necessitated by the material choice), because copyright in a
sculptural work is limited to its form and cannot extend to its
mechanical or utilitarian aspects under 17 U.S.C. § 101. Id.
at 1221. The remaining changes in the facial expressions
were also deemed insufficient to support a derivative work
copyright, because “no reasonable trier of fact would see
anything but a direct replica of the underlying characters.”
Id. at 1224. “Viewing the three-dimensional costumes and
the two-dimensional drawings upon which they are based, it
is immediately apparent that the costumes are not exact
replicas of the two-dimensional drawings.” Id. at 1223.
These identifiable changes “themselves reflect[] no
independent creation, no distinguishable variation from
preexisting works, nothing recognizably the author’s own
contribution that sets [ERG’s costumes] apart from the
prototypical [characters]” the costumes represented. Id. at
1223 (quoting Durham, 630 F.2d at 910). In other words,
the costumes did not constitute new works, despite the
independent decision-making involved in their creation. Id.
at 1224 (holding that the different facial expressions,
proportions, and functional capabilities were “clearly not the
defining aspect[s] of the costumes” when viewed “in the
context of the overall costume” and, thus, were not
considered distinguishable variations capable of supporting
independent copyright protection). The court then went on
to apply the second prong of Durham, noting that because of
the similarity between ERG’s costumes and the underlying
characters, granting a derivative work copyright in the
costumes would improperly give ERG “a de facto monopoly
on all inflatable costumes depicting the copyrighted
characters also in ERG’s costumes.” Id.
The Tenth Circuit similarly held that a digital work must
be more than a copy of an underlying analog work to support
ABS ENTERTAINMENT V. CBS CORPORATION 17
copyright as a derivative work. In Meshwerks, Inc. v. Toyota
Motor Sales U.S.A., 528 F.3d 1258 (10th Cir. 2008), the
Tenth Circuit considered the copyright eligibility of
Meshwerks’ digital wire frame models used as skeletons for
the interactive display of Toyota’s vehicle designs online
and in advertising. Id. at 1260. Meshwerks measured
Toyota’s vehicles with an articulated arm tethered to a
computer and mapped the results onto a computerized grid
using modeling software; connected the measured points to
create a wire frame; and manually adjusted about ninety-
percent of the data points to make the models more closely
resemble the vehicles. Id. at 1260–61. The Tenth Circuit
drew a sharp distinction between copies and original works,
explaining that copies cannot qualify for copyright
protection “since obviously a copier is not a creator, much
less an ‘independent’ creator.” Id. at 1267 (citing Patry on
Copyright § 3:28). The wire frames were copies, according
to the court, because they “depict nothing more than
unadorned Toyota vehicles—the car as car,” the visual
designs of “which do not owe their origins to Meshwerks.”
Id. at 1265, 1268.
Meshwerks relied on three important doctrines in coming
to that conclusion. First, as in Entertainment Research
Group, the mere act of translating the derivative work into a
different medium did not confer a distinct identity on the
derivative work. Id. at 1267 (“[T]he fact that a work in one
medium has been copied from a work in another medium
does not render it any the less a ‘copy.’” (citing 2 Nimmer
on Copyright § 8.01[B])); id. (noting that although the wire
models did not “recreate Toyota vehicles outright—steel,
rubber, and all,” “what Meshwerks accomplished was a
peculiar kind of copying”). Second, the court analyzed
originality by comparing the start and end products—the
underlying vehicle designs and the wire models—not the
18 ABS ENTERTAINMENT V. CBS CORPORATION
process used to get from one to the other. Id. at 1268 (“[I]n
assessing the originality of a work for which copyright
protection is sought, we look only at the final product, not
the process, and the fact that intensive, skillful, and even
creative labor is invested in the process of creating a product
does not guarantee its copyrightability.”). Finally, the court
considered Toyota’s intent in authorizing Meshwerks to
create an accurate representation of Toyota’s vehicles, not
something new and different: “If an artist affirmatively sets
out to be unoriginal—to make a copy of someone else’s
creation, rather than to create an original work—it is far
more likely that the resultant product will, in fact, be
unoriginal.” Id.
The Second Circuit considered the originality needed to
justify copyright protection for a derivative work in L. Batlin
& Son, Inc. v. Snyder. 536 F.2d 486 (2d Cir. 1976). In that
case, appellant Snyder obtained a copyright registration for
a plastic version of a cast metal Uncle Sam bank that had
previously entered the public domain. 4 Snyder made several
changes in the plastic version: he made it shorter “in order to
fit into the required price range and quality and quantity of
material to be used;” changed the proportions of Uncle
Sam’s face, bag, hat, and eagle; changed the textures of
several components; created a single-piece mold
incorporating the umbrella instead of the two-piece mold of
4
The public domain metal bank comprised: “Uncle Sam, dressed in
his usual stove pipe hat, blue full dress coat, starred vest and red and
white striped trousers, and leaning on his umbrella, stands on a four- or
five-inch wide base, on which sits his carpetbag. A coin may be placed
in Uncle Sam's extended hand. When a lever is pressed, the arm lowers,
and the coin falls into the bag, while Uncle Sam's whiskers move up and
down. The base has an embossed American eagle on it with the words
‘Uncle Sam’ on streamers above it, as well as the word ‘Bank’ on each
side.” 536 F.2d at 488.
ABS ENTERTAINMENT V. CBS CORPORATION 19
the metal bank; and replaced the arrows in the eagle’s talons
with leaves, because “the arrows did not reproduce well in
plastic on a smaller size.” Id. at 488–89.
Even though the plastic bank was not identical to the
metal original, the Second Circuit held that the changes did
not amount to a distinguishable variation in the identity or
essential character of the original work. Id. at 491. The
transfer of the expression from the underlying cast iron
Uncle Sam to a plastic version, despite overcoming technical
challenges and, arguably, improving the original in terms of
lowering the price, did not result in a copyrightable
derivative work, because the changes did not constitute the
“substantial variation” necessary to support copyright.
Instead, they were merely the “trivial” results of the
“translation to a different medium.” Id. The plastic bank
was not a new work—it did not embody “the author’s
tangible expression of his ideas,” id. at 492 (quoting Mazer
v. Stein, 347 U.S. 201, 214 (1954)), and was thus a mere
copy of the underlying work.
The Copyright Office guidance provided in Circular 56
reflects that a similar analysis applies specifically to
derivative sound recordings. 5 In relevant part, Circular 56
explains the following about derivative sound recordings:
A derivative sound recording is an audio
recording that incorporates preexisting
sounds, such as sounds that were previously
registered or published or sounds that were
5
Circulars provide Copyright Office guidance on various issues.
We may rely on them as persuasive but not binding authority. See
Kitchens of Sara Lee, Inc. v. Nifty Foods Corp., 266 F.2d 541, 544 (2d
Cir. 1959) (citing Copyright Office publication); In re World Aux. Power
Co., 303 F.3d 1120, 1131 n.73 (9th Cir. 2002) (citing Circular 4).
20 ABS ENTERTAINMENT V. CBS CORPORATION
fixed before February 15, 1972. The
preexisting recorded sounds must be
rearranged, remixed, or otherwise altered in
sequence or character, or the recording must
contain additional new sounds. The new or
revised sounds must contain at least a
minimum amount of original sound recording
authorship.
Examples of derivative sound recordings
include:
• A mashup comprising tracks and sounds
from multiple sources.
• Additional tracks added to a previously
published album.
Mechanical changes or processes, such as a
change in format, declicking, or noise
reduction, generally do not contain enough
original authorship to warrant registration
United States Copyright Office’s Circular No. 56, Copyright
Registration for Sound Recordings, Revised Sept. 2017
(“Circular 56”), available at . 6 In common with the cases noted above,
Circular 56 identifies original authorship as the touchstone
6
The district court discussed an earlier version of Copyright Office
Circular 56 and cited a key example therein of a derivative sound
recording: “a remastering that involves multiple kinds of creative
authorship, such as adjustments of equalization, sound editing, and
channel assignment.” This example has since been removed from the
updated version of Circular 56.
ABS ENTERTAINMENT V. CBS CORPORATION 21
of a copyright eligible derivative work and calls for either
“additional new sounds” or some other minimum amount of
original sound recording authorship, such as the
rearrangement, remixing, or alteration of sounds in sequence
or character. Id. According to the Circular, changes to
format, declicking and noise reduction, even if perceptible,
do not amount to the minimal amount of original sound
recording authorship necessary under the law and do not
warrant separate copyright protection.
From the foregoing, it should be evident that a
remastered sound recording is not eligible for independent
copyright protection as a derivative work unless its essential
character and identity reflect a level of independent sound
recording authorship that makes it a variation
distinguishable from the underlying work. The essential
character and identity of a sound recording include, inter
alia, the aggregate of the “emphasis or the shading of a
musical note, the tone of voice, the inflection, the timing of
a vocal rendition, musical or spoken,” 1 Nimmer on
Copyright § 2.10 (2018); the choice of instrumental, vocal
and percussion components; and the subtleties of dynamics
and other performance characteristics that together result in
“something irreducible, which is one [band’s] alone.” See
Bleistein v. Donaldson Lithographing Co., 188 U.S. 239,
250 (1903) (Holmes, J.). Such factors distinguish an original
vocal rendition of a song from the vocal rendition of the
same song by another singer and are not present when an
original vocal rendition is merely remastered. A
remastering, for example, of Tony Bennett’s “I Left My
Heart in San Francisco” recording from its original analog
format into digital format, even with declicking, noise
reduction and small changes in volume or emphasis, is no
less Bennett’s “I Left My Heart in San Francisco”
recording—it retains the same essential character and
22 ABS ENTERTAINMENT V. CBS CORPORATION
identity as the underlying original sound recording,
notwithstanding the presence of trivial, minor or
insignificant changes from the original. That is so even if
the digital version would be perceived by a listener to be a
brighter or cleaner rendition.
If an allegedly derivative sound recording does not add
or remove any sounds from the underlying sound recording,
does not change the sequence of the sounds, and does not
remix or otherwise alter the sounds in sequence or character,
the recording is likely to be nothing more than a copy of the
underlying sound recording and is presumptively devoid of
the original sound recording authorship required for
copyright protection. Such a work lacks originality. This
presumption may, of course, be overcome, by showing that
the work contains independent creative content,
recognizable contributions of sound recording authorship or
variations in defining aspects that give a derivative sound
recording a new and different essential character and
identity.
A number of practical considerations, including but not
limited to the considerations that follow, inform a
determination of the essential character and identity of a
remastered sound recording. First, the mere translation of a
work from an analog to a digital medium to take advantage
of technological improvements does not itself transform the
essential character and identity of the underlying work. See
Meshwerks, 528 F.3d at 1267 (“[W]e hold, as many before
us have already suggested, that standing alone, ‘[t]he fact
that a work in one medium has been copied from a work in
another medium does not render it any the less a ‘copy’’”
(citing 2 Nimmer on Copyright § 8.01[B])); L. Batlin,
536 F.2d at 489 (holding that changes in the plastic bank,
such as the “functional one of making a more suitable (and
ABS ENTERTAINMENT V. CBS CORPORATION 23
probably less expensive) figure in the plastic medium” and
the aesthetic decision to replace the arrows with feathers
because arrows did not reproduce well in plastic, were not
original); Entm’t Res. Grp., 122 F.3d at 1221, 1223 (with
respect to sculptural works, explaining that “any aspects of
ERG’s costumes that are purely functional, utilitarian or
mechanical will not be given any copyright protection” and
agreeing “with the district court's conclusion that the
differences in form, texture and proportionality that ERG
points to as nontrivial differences all stemmed from
functional considerations”). See also Durham, 630 F.2d at
913 (“[C]opyright protection extends only to the artistic
aspects, but not the mechanical or utilitarian features, of a
protected work.”). Such functionally driven decision-
making does not demonstrate the kind of originality with
which copyright is exclusively concerned.
Second, a remastering engineer’s objective “to make a
copy of someone else’s creation, rather than to create an
original work,” Meshwerks, 528 F.3d at 1268, even if that
task seeks to improve quality, brightness or crispness of
sound, is persuasive evidence that the final product likely
contains little more than a trivial contribution and does not,
in fact, result in an original work. See Entm’t Res. Grp.,
122 F.3d at 1223 (“ERG’s customers—the companies—
wanted costumes replicating their characters. Thus, because
ERG followed detailed instructions from its customers
regarding exactly how they wanted the costumes to appear,
it cannot be said that ERG’s artistic contributions were more
than merely trivial contributions.”).
Finally, the process used to create the derivative work is
seldom informative of originality in the copyright sense.
Meshwerks, 528 F.3d at 1268. The remastering engineer’s
application of “intensive, skillful, and even creative labor . . .
24 ABS ENTERTAINMENT V. CBS CORPORATION
does not guarantee its copyrightability.” Id.; see also L.
Batlin, 536 F.2d at 491 (“Nor can the requirement of
originality be satisfied simply by the demonstration of
‘physical skill’ or ‘special training.’”). In Meshwerks, the
exercise of independent technical and aesthetic judgment in
adjusting the wire-frames did not result in a copyright
eligible work, as those efforts were directed wholly to more
effectively representing the underlying works, not to
changing or adding to those works. 528 F.3d at 1268.
B
In this case, the district court determined that “at least
some perceptible changes were made to Plaintiff’s Pre-1972
Sound Recordings” and that these changes were not merely
“mechanical” or “trivial.” Therefore, the district court held,
there was no genuine dispute of material fact that the
remastered works performed by CBS were “sufficient[ly]
original[].” Id. at 12. This conclusion was legal error.
In Entertainment Research Group, for example, the
costumes were clearly distinguishable from the underlying
characters. We nevertheless held that the costume-makers’
contributions were not original because the costumes would
not be identified as distinguishable variations; i.e., the
essential character and identity of each were not changed.
Entm’t Res. Grp., 122 F.3d at 1223–24 (“Viewing the three-
dimensional costumes and the two-dimensional drawings
upon which they are based, it is immediately apparent that
the costumes are not exact replicas of the two-dimensional
drawings,” but there was no originality because “no
reasonable trier of fact would see anything but a direct
replica of the underlying characters.”); see also Meshwerks,
528 F.3d at 1267 (holding that the derivative digital wire
frame models were “a peculiar kind of copy” of Toyota
vehicles, although the wire models did not “recreate Toyota
ABS ENTERTAINMENT V. CBS CORPORATION 25
vehicles outright—steel, rubber, and all”); Durham,
630 F.2d at 909 (“The three Tomy figures are instantly
identifiable as embodiments of the Disney characters in yet
another form: Mickey, Donald and Pluto are now
represented as small, plastic, wind-up toys,” although the
underlying Disney characters did not include the wind-up
mechanism in the derivative toys.).
Here, there is no dispute that all of the sounds contained
in the remastered sound recordings—the vocals,
instruments, inflection, dynamics, rhythms, and
sequences—were initially fixed in a studio before 1972.
There is also no dispute that the remastering engineers did
not add or remove any sounds and did not edit or resequence
the fixed performances. For these reasons, the remasters
presumptively lacked the originality necessary to support
copyright protection as derivative works.
The district court, in ruling otherwise and concluding
that no genuine issues of material fact exist on the originality
of the digital remasters, applied an incorrect test. In doing
so, the district court placed critical reliance on the testimony
of CBS’s expert, Begault. Begault explained that the
digitally perceptible changes to “timbre, spatial imagery,
sound balance, and loudness range” that he identified in the
remastered sound recordings were measures of sound
quality. 7 Such technical improvements associated with the
7
Title 17, Section 114(b) explains that the exclusive right of a
copyright holder in a sound recording “is limited to the right to prepare
a derivative work in which the actual sounds fixed in the sound recording
are rearranged, remixed, or otherwise altered in sequence or quality.”
(emphasis added). We read “quality” in § 114 to be referring to character
and identity rather than a measure of improvement. See Quality, Miriam-
Webster (July 19, 2018), https://www.merriam-webster.com/
dictionary/quality.
26 ABS ENTERTAINMENT V. CBS CORPORATION
translation of the analog pre-1972 sound recordings into a
digital medium, however, do not support a finding of
originality. See L. Batlin, 536 F.2d at 489 (rejecting changes
made for the “functional” purpose “of making a more
suitable (and probably less expensive) figure in the plastic
medium”); Entm’t Res. Grp., 122 F.3d at 1223 (discounting
differences in form, texture and proportionality arising out
of the need to create space for a human to fit into a 3-D
costume); Meshwerks, 528 F.3d at 1267 (holding that the
technical adjustments of data points to more accurately
reflect Toyota vehicles in a digital medium did not constitute
the kind of contribution to qualify for copyright).
The purpose and effect of the remastering here was
similarly a technical improvement. In its brief to this court,
CBS explained that the reason for the remastering was to
overcome the technical limitations of vinyl using the “nearly
unlimited” sound range that CDs could reproduce. William
Inglot, a remastering engineer responsible for some of the
remastered sound recordings here and one of CBS’s
witnesses, testified that his goal was to do a “good job,” to
“do a better version of maybe what the production process
was at that time because you have a little more control than
maybe they had,” by “taking advantage of the technology.”
Begault analyzed the differences between the pre-1972
sound recordings and the remastered sound recordings using
sensitive digital analysis and concluded that the remastered
sound recordings would be different if there was any
difference in any of the four analyzed characteristics. But
Begault nowhere analyzed whether the changes he identified
reflected any original sound recording authorship that might
have changed the essential character and identity of the
resulting sound recordings. The technical changes as
measured by sensitive digital analysis does not necessarily
ABS ENTERTAINMENT V. CBS CORPORATION 27
result in a change in the essential character and identity of
the work in question. ABS’s expert, Geluso, aptly explained
this shortcoming of Begault’s analysis: “I believe that two
sound recordings would have to be nearly identical to pass
all four of [Begault’s] tests. For example, Begault set a
standard of 1 dB of loudness differential for two recordings
as his passing mark. This is unreasonably extreme. In my
experience, 1dB of dynamic range compression is barely
audible and will most likely go undetected by a listener.”
Geluso also explained that the spectral balance of a sound
recording can be adjusted on most consumer listening
equipment, and the loudness can be adjusted on most
consumer software used to create and edit music. It is
unlikely that such changes—even if made with more
technical expertise by a remastering engineer and fixed in a
sound recording—would amount to a change in the essential
character and identity of the sound recording.
The district court excluded several paragraphs of
Geluso’s declaration as unscientific, based on unreliable
methodology, lacking adequate foundation as expert
testimony, unnecessary and irrelevant. The district court
found Geluso’s critical listening methods to be unscientific,
and “unexplained in Mr. Geluso’s declaration.” But in his
declaration, Geluso cited an FBI report on forensic sound
recording analysis that held out critical listening as an
essential component of forensic audio analysis. Also,
despite Geluso’s testimony that he critically listened to all of
the recordings he examined, the district court found fatally
deficient the fact that Geluso limited his waveform and
spectral analysis to the first five seconds of each recording.
While the shortness of the technical analysis impacts the
weight of that testimony, there is no reason to question the
science behind or the methodology of such testing for
whatever it may show. And the district court failed to
28 ABS ENTERTAINMENT V. CBS CORPORATION
explain why five seconds of waveform analysis was
insufficient to determine whether the pre-1972 and
remastered sound recordings embodied the same
performances. Moreover, Geluso’s testimony, offered in
rebuttal to the testimony of CBS’s expert, Begualt, addressed
the nature and extent of the differences between the original
analog recordings and the digitally remastered sound
recordings and was thus directly relevant to the issue of
originality before the court. The district court also found
deficient the fact that Geluso excluded from his report a
phase inversion test from the first test he attempted. But that
is not an adequate basis to exclude Geluso’s testimony. That
test merely identifies the fact of difference—something that
ABS and Geluso do not contest exists between the pre-1972
and remastered sound recordings. The district court’s
exclusion of Geluso’s testimony was an abuse of discretion,
and his testimony should be considered in full by the district
court on remand.
The district court also erred in failing to consider ABS’s
objective in creating the digital remasters. ABS hired
recording engineers to create digitally remastered sound
recordings of the pre-1972 sound recordings in order to
allow for digital distribution and compilation albums and to
take advantage of the improvements enabled by digital
technology, not to introduce any substantive changes. As
one ABS representative explained: “we understood as the
technology increased, as things went from LP and cassette
to CD [that the recordings would be re-mastered] . . . in such
a way that they could be CD’s made out of them. They had
to go digital. We knew they were going to have to be
converted analog to digital.” Plaintiff Brunswick’s
representative agreed, stating that “in order to release
recordings in a digital format that they would in fact be
remastered.” And Inglot testified that his goal was to “do a
ABS ENTERTAINMENT V. CBS CORPORATION 29
better version of maybe what the production process was at
that time because you have a little more control than maybe
they had” by “taking advantage of the technology.” Another
declaration submitted by Plaintiffs averred that they “never
would have permitted a Licensee to make any substantial or
non-trivial changes to the sound of the Recordings when
creating a remastered copy.” Nothing in the record suggests
that ABS set out to make any substantive changes or
distinguishable variations that would give the digital
remasters a different essential character or identity, to add
any original sound recording authorship or to do anything
other than make accurate copies in digital format of the
original analog sound recordings.
Notwithstanding the above, CBS argues that all that is
needed to support copyright is “more than a merely trivial
variation,” Schrock v. Learning Curve Int’l, Inc., 586 F.3d
513, 521 (7th Cir. 2009), and that this is the test mandated
by U.S. Auto Parts and properly adopted by the district court.
CBS argues that it met its burden when it pointed out
deficiencies in ABS’s claims, and that ABS failed to provide
significant probative evidence that the differences between
the pre-1972 and the remastered sound recordings were
mechanical, trivial, or insufficiently original.
CBS is correct that the threshold of creativity for
copyright eligibility often is characterized as minimal, and
that the courts police the amount of creativity only within the
“narrowest and most obvious limits.” Bleistein, 188 U.S. at
251; 1 Nimmer on Copyright § 2.01[B][1] (2018). But that
relatively low bar does not eliminate the fundamental
requirement of originality that is the touchstone of copyright
protection. Here, the district court’s identification of
“perceptible changes” between the recordings in
characteristics relating to “quality” did not ensure that the
30 ABS ENTERTAINMENT V. CBS CORPORATION
remastered versions contained anything of consequence
owing its origin to the remastering engineers. As discussed
above, a derivative sound recording that merely exhibits
perceptible changes does not necessarily exhibit a change to
the essential character and identity of the work or reflect the
addition of even a minimal amount of sound recording
authorship or originality. See also 1 Nimmer on Copyright
§ 3.03 (2018) (“Any variation will not suffice, but one that
is sufficient to render the derivative work distinguishable
from its prior work in any meaningful manner will be
sufficient.”).
CBS also argues that “copyrightability is [] purpose-
agnostic,” and that the creation of a derivative work for “the
purpose of migrating expression from one format to another”
is a proper copyrightable purpose, relying on New York
Times Co. v. Tasini, 533 U.S. 483 (2001). CBS is incorrect.
In Tasini, freelance article authors authorized the inclusion
of their articles into a newspaper, a collective work. The
authors sued when their articles were included in an
electronic database of newspapers in a form excised from the
newspaper of which they were a part. Id. at 491. The
Supreme Court concluded that the authors maintained their
copyright in the articles, and that the electronic database
infringed the authors’ copyright in their articles. Id. at 503–
04. Tasini does not say that a mere migration of a work into
a new medium justifies an independent copyright.
Finally, CBS argues that the district court was correct to
rely on Maljack Prods., Inc. v. UAV Corp., 964 F. Supp.
1416 (C.D. Cal. 1997), aff'd sub nom. Batjac Prods. Inc. v.
GoodTimes Home Video Corp., 160 F.3d 1223 (9th Cir.
1998) to support its understanding that changes in
equalization and quality in a sound recording support a
derivative work copyright. In Maljack, the derivative work
ABS ENTERTAINMENT V. CBS CORPORATION 31
was a “panned and scanned” adaptation of a movie and its
soundtrack. 964 F. Supp. at 1418. The enhancements to the
public domain soundtrack there included “edit[ing] the
motion picture’s monoaural soundtrack by remixing,
resequencing, sweetening, equalizing, balancing, and
stereoizing it, and also add[ing] entirely new sound
material.” Id. Here the remastering process did not include
remixing or stereoizing. The changes in the soundtrack in
Maljack accompanied and had to track the changes to the
visual changes resulting from the pan-and-scan film
reformatting, which resulted in a cut of 44% of the film. Id.
at 1427. Also, the soundtrack accompanying the pan-and-
scan version was independently registered by the copyright
office as a derivative work, creating a presumption of
copyright validity that the court found was not overcome. Id.
at 1428. None of these circumstances are present here. To
the extent that Maljack held that the “noticeable
improvement [in quality] over the public domain version”
could create copyright eligibility, we do not consider that
aspect of Maljack persuasive. See id.
We therefore conclude that a derivative sound recording
distinctly identifiable solely by the changes incident to the
change in medium generally does not exhibit the minimum
level of originality to be copyrightable. In this case, the
district court did not analyze whether the changes in quality
identified by Begault were anything other than merely
incidental to the transfer from the analog to the digital
medium.
Nothing in this opinion should be construed to question
or limit the creative contributions of the recording engineers
and/or record producers responsible for the recording
session that led to the initial fixation of the sound recording.
The initial producer/engineer’s role is often to work in
32 ABS ENTERTAINMENT V. CBS CORPORATION
collaboration with the performing artists to make many of
the creative decisions that define the overall sound of the
recording as fixed, including such things as microphone
choice, microphone placement, setting sound levels,
equipment used, processing filters employed, tapes selected,
session structure, and other similar decisions analogous to
the creative choices of photographers that courts have
consistently held to be original. See United States Copyright
Office and Sound Recordings as Works Made for Hire:
Hearing Before the Subcomm. on Courts and Intellectual
Property of the H. Comm. on the Judiciary, 106th Cong. 2nd
Sess. (2000) (statement of Marybeth Peters, Register of
Copyrights) (“The copyrightable elements in a sound
recording will usually, though not always, involve
‘authorship’ both on the part of the performers whose
performance is captured and on the part of the record
producer responsible for setting up the recording session,
capturing and electronically processing the sounds, and
compiling and editing them to make the final sound
recording.”); cf. Burrow-Giles, 111 U.S. at 60 (holding that
photographs are copyrightable to the extent of the
photographer’s decisions with respect to costume,
accessories, pose of subjects, light and shade and evoking
the desired expression).
The role of remastering engineers, however is usually
very different from the role of the studio engineers. Studio
engineers’ decisions almost always contribute to the
essential character and identity contained in the original
sound recording. By contrast, the remastering engineer’s
role is ordinarily to preserve and protect the essential
character and identity of the original sound recording, and to
present that original sound recording in the best light
possible by taking advantage of technological
improvements. For example, Inglot testified that his goal
ABS ENTERTAINMENT V. CBS CORPORATION 33
was to “do a better version of maybe what the production
process was at that time because you have a little more
control than maybe they had” by “taking advantage of the
technology.” Although we do not hold that a remastered
sound recording cannot be eligible for a derivative work
copyright, a digitally remastered sound recording made as a
copy of the original analog sound recording will rarely
exhibit the necessary originality to qualify for independent
copyright protection.
C
The second prong of the U.S. Auto Parts/Durham test
requires that a copyright-eligible derivative work must
“reflect the degree to which it relies on preexisting material
and must not in any way affect the scope of any copyright
protection in that preexisting material.” U.S. Auto Parts,
692 F.3d at 1016. This prong ensures that a derivative work
author—even one who contributes the requisite amount of
creative authorship under the first prong—does not “prevent
the owner of the preexisting work from exercising some of
its rights under copyright law.” Id. at 1017. This prong
protects the author’s right to authorize later derivative works
without concern for aggressive enforcement against those
later derivative works by the earlier derivative work
copyright holder. In Entertainment Research Group, for
example, we explained that “if ERG had copyrights for its
costumes, any future licensee who was hired to manufacture
costumes depicting these characters would likely face a
strong copyright infringement suit from ERG.” 122 F.3d at
1224; see also U.S. Auto Parts, 692 F.3d at 1020 (applying
the second prong of the Durham test and concluding in that
case, copyright in a derivative work would not circumscribe
rights of the copyright holder in the underlying work).
34 ABS ENTERTAINMENT V. CBS CORPORATION
The district court’s failure to fully consider this second
prong here was legal error. See Entm’t Res. Grp., 122 F.3d
at 1219 (adopting the Durham test over the previously
applicable Doran test that looked only at substantial
difference between the derivative and underlying work,
“because the Doran test completely fails to take into account
the rights of the holder of the copyright for the underlying
work,” and therefore “should not be applied to determine the
copyrightability of a derivative work that is based on a
preexisting work that is itself copyrighted.”). Moreover,
applying that prong, there is at least a genuine issue of
material fact whether granting copyright protection for the
remastered sound recordings here would undermine ABS’s
rights in the pre-1972 sound recordings to authorize
additional derivative works. Were ABS intent on granting
an authorization to create an intentionally derivative work,
for example by authorizing use of the underlying works as
samples or remixes, those authorized works would be at high
risk of infringement suits from the remastered sound
recording copyright holders. This risk would, in effect, grant
the remastered sound recording copyright holder a “de facto
monopoly” on derivative works. See id. at 1224. Indeed, in
this case, where the underlying and derivative works are both
sound recordings with few, if any, readily discernable
differences, and the derivative work is the only one available
in the vastly more accessible and marketable digital medium,
the danger that the copyright holder of the derivative work
could bring suit against a potential licensee of the underlying
work is particularly acute.
If, on remand, the factfinder concludes that any or all of
the remastered sound recordings here do manifest a change
sufficient to create a derivative, copyrightable work, the
factfinder should also consider the effect of recognizing a
copyright in the remastered sound recording on ABS’s
ABS ENTERTAINMENT V. CBS CORPORATION 35
ability to exercise whatever copyrights it may possess in the
pre-1972 sound recording.
For the above reasons, we conclude that the district court
erred in holding that there were no genuine issues of material
fact that the remastered sound recordings used by CBS were
independently copyright eligible. We therefore reverse the
grant of summary judgment to CBS as to that issue.
D
The parties here dispute whether ABS authorized the
remastering engineer to create derivative works, whether
such permission was necessary, and which party bears the
burden to show such authorization (or lack thereof). This
issue arises, of course, only if the remastered recordings
were derivative works. As we have determined that CBS was
not entitled to summary judgment on that question, we
address the authorization issue for guidance on remand.
The owner of a copyright has the exclusive right to
prepare derivative works, 17 U.S.C. § 106(2), and to grant
or withhold authorization to create such derivative works.
Schrock, 586 F.3d at 522–23. In Schrock, photographer
Schrock was hired by Learning Curve to photograph Thomas
the Tank Engine. Id. at 515. Learning Curve and HIT
Entertainment, the Thomas the Tank Engine copyright
holder, used Schrock’s photographs for several years. Id.
When Learning Curve stopped hiring Schrock as a
photographer, he registered his photographs and sued
Learning Curve and HIT for infringement. Id. Like here, it
was undisputed that Schrock had permission to make the
photographs. But Learning Curve argued that the
photographer also needed Learning Curve’s permission to
copyright the photographs. Id. The district court granted
summary judgment to Learning Curve, concluding that the
36 ABS ENTERTAINMENT V. CBS CORPORATION
photographs were derivative works, and that although
Schrock had permission to make the photographs, he did not
have permission to copyright them. Id. The Seventh Circuit
reversed, stating: “As long as he was authorized to make the
photos (he was), he owned the copyright in the photos to the
extent of their incremental original expression.” Id. We
agree with that holding. The Seventh Circuit also explained
that although this was the default rule, parties could alter this
rule by contract. Id. at 523–24. Because the license
agreements among the parties were not entered into the
record, the Seventh Circuit remanded to the district court to
determine whether the parties altered the default rule by
contract. Id. at 525.
It is undisputed here that the remastering engineers were
authorized to do exactly what they did. On remand, if the
authorization issue is raised in a further summary judgment
motion or at trial, the district court should give ABS the
opportunity to produce copies of its license agreements and
should determine whether any such agreements altered the
default rule on authorization.
V
We next address whether the district court abused its
discretion in excluding the Triton Reports as evidence under
the business records exception. Business records may be
admitted under Fed. R. Evidence 803(6) when:
(A) the record was made at or near the time
by—or from information transmitted by—
someone with knowledge;
(B) the record was kept in the course of a
regularly conducted activity of a business. . .
ABS ENTERTAINMENT V. CBS CORPORATION 37
(C) making the record was a regular practice
of that activity;
(D) all these conditions are shown by the
testimony of the custodian or another
qualified witness, . . . and
(E) the opponent does not show that the
source of information or the method or
circumstances of preparation indicate a lack
of trustworthiness.
Fed. R. Evidence 803(6).
ABS argues that the district court abused its discretion in
rejecting the Triton Reports because those reports fit
squarely within the business records hearsay exception.
CBS argues that Mr. Neiman, a CBS employee relied upon
by ABS to provide the foundation for the business records
exception, did not know how the Triton Reports were made
or maintained, see NLRB v. First Termite Control Co.,
646 F.2d 424, 427 (9th Cir. 1981), and was not a Triton
employee.
We conclude that Mr. Neiman was qualified to establish
the foundation for the business records exception, and that
the district court abused its discretion in excluding the Triton
Reports. The business records exception only requires
“someone with knowledge” about the record-keeping, not
necessarily an employee of the business or someone with
knowledge of how the reports were made or maintained. See
FDIC v. Staudinger, 797 F.2d 908, 910 (10th Cir. 1986). Mr.
Neiman testified that Triton was hired by CBS to create the
reports, and that CBS sent those reports to Sound Exchange
to determine artist royalties.
38 ABS ENTERTAINMENT V. CBS CORPORATION
We agree with ABS that First Termite Control is
inapposite here. First Termite Control held that business
records, to be admissible under the business records
exception, must be supported by testimony of a witness
knowledgeable about the creation and maintenance of those
records. 646 F.2d at 417. But in that case, the accuracy of
the records was contested. Here, CBS itself relied on the
reports to establish its royalty payments to Sound Exchange
in the ordinary course of business. The accuracy of the
records is not in question. In a similar situation, we have
held that third party reports of this kind fall within the
business records exception. See United States v. Childs,
5 F.3d 1328, 1334 and n.3 (9th Cir. 1993) (distinguishing
First Termite Control due to reliance on third party reports
by company challenging their admissibility). CBS has
presented no evidence or argument showing that the Triton
Reports were unreliable or inaccurate.
The district court also held that, if it were to consider the
Triton Reports, it would nevertheless conclude that the
listing of a name and song title in the Triton Reports was
legally insufficient to create a genuine issue of material fact
“[a]bsent the comparative analysis” to show that the
performed sound recordings were not different recordings.
We conclude that the district court here erroneously
decided a genuine issue of material fact at summary
judgment. We agree with ABS that the Triton Reports
contain an album title, and sometimes the company label,
and so would be sufficient for a jury to infer that the records
CBS performed were the versions captured in Plaintiffs’ pre-
1972 sound recordings. The Triton Reports were used by
CBS to govern the royalties paid to recording artists via
Sound Exchange; CBS has failed to present evidence that
these same reports were not sufficient to identify the
ABS ENTERTAINMENT V. CBS CORPORATION 39
recording artists or the versions performed. The district
court erred in finding the absence of a genuine issue of
material fact with respect to the samples listed in the Triton
Reports.
VI
Finally, we address the district court’s dismissal of
ABS’s class certification motion.
Central District of California Local Rule 23-3 requires
Plaintiffs to file a motion for class certification within ninety
days after service of the complaint. The parties here twice
stipulated to extend the deadline, explaining in the second
stipulation that ABS needed more time for class action-
focused discovery. The district court denied the first
stipulation for failure to show good cause, and denied the
second without explanation. The district court did not
address the asserted need for pre-certification discovery.
Despite the district court’s rulings, ABS timely filed its
motion for class certification on November 19, 2015. The
district court struck the motion because of two technical
deficiencies: (1) noticing the hearing outside the thirty-five-
day period required by the Judge’s Standing Order and
(2) not including in the notice of motion a statement that the
parties had met and conferred and the date on which such a
conference took place, as required by Local Rule 7-3.
Having thus stricken the timely motion, the district court
then dismissed the motion for class certification for failure
to file a timely motion for class certification under Local
Rule 23-3.
ABS argues that the district court abused its discretion in
striking the timely filed motion as a sanction for what it
categorizes as “trivial” omissions in the notice.
40 ABS ENTERTAINMENT V. CBS CORPORATION
Central District of California Local Rule 23-3 sets a strict
90-day time frame from the filing of a complaint to the
motion for class action certification. This bright line rule is
in direct contrast to the flexibility of the Federal Rule, which
calls for a determination on class certification “[a]t an early
practicable time after a person sues or is sued as a class
representative.” Fed. R. Civ. P. 23(c)(1)(A). That flexible
approach makes sense. The class action determination can
only be decided after the district court undertakes a “rigorous
analysis” of the prerequisites for certification. Wal-Mart
Stores, Inc. v. Dukes, 564 U.S. 338, 350–51 (2011) (quoting
Gen. Tele. Co. of SW v. Falcon, 457 U.S. 147, 161 (1982)).
To undertake that analysis may require discovery. Kamm v.
Cal. City Dev. Co., 509 F.2d 205, 210 (9th Cir.1975) (“The
propriety of a class action cannot be determined in some
cases without discovery;” “To deny discovery in [such
cases] would be an abuse of discretion.”).
The district court’s actions here demonstrate the
impracticability of the 90-day limit, particularly in
combination with the district court’s summary and
unexplained denial of the parties’ joint stipulation to extend
the 90-day deadline based on the need for pre-certification
discovery. See Barbara J. Rothstein & Thomas E. Willging,
Federal Judicial Center, Managing Class Action Litigation:
A Pocket Guide for Judges 9 (3d ed. 2010) (“Considering
[Fed. R. Civ. P. 23(c)(1)], you should feel free to ignore local
rules calling for specific time limits; such local rules appear
to be inconsistent with the federal rules and, as such,
obsolete.”); Federal Judicial Center, Manual for Complex
Litigation, Fourth § 21.133 (“Some local rules specify a
short period within which the plaintiff must file a motion to
certify a class action. Such rules, however, may be
inconsistent with Rule 23(c)(1)(A)’s emphasis on the
parties’ obligation to present the court with sufficient
ABS ENTERTAINMENT V. CBS CORPORATION 41
information to support an informed decision on certification.
Parties need sufficient time to develop an adequate record.”).
Although the district court’s application and
interpretation of its Local Rules is entitled to “a large
measure of discretion,” Lance, Inc. v. Dewco Servs., Inc.,
422 F.2d 778, 784 (9th Cir. 1970), Local Rules cannot be
incompatible with Federal Rules. Fed. R. Civ. P. 83(a)(1).
We conclude that the bright-line of Local Rule 23-3 is
incompatible with Federal Rule of Civil Procedure 23.
We therefore reverse the district court’s striking of
ABS’s certification motion, and remand for consideration of
the class action motion on the merits, including
reconsideration of whether pre-certification discovery is
warranted.
VII
On October 11, 2018, Congress enacted the Orrin G.
Hatch-Bob Goodlatte Music Modernization Act, Pub. L. No.
115-264 (“Music Modernization Act”). That Act replaced
17 U.S.C. § 301(c) with a new section preempting certain
state law claims for digital transmissions of pre-1972 sound
recordings that occur after the effective date of the Act. See
Pub. L. No. 115-264, sec. 202(a)(1). The Act also includes
a provision that
preempts any claim of common law
copyright or equivalent right under the laws
of any State arising from a digital audio
transmission or reproduction that is made
before the date of enactment of this section of
a sound recording fixed before February 15,
1972, if [certain requirements for compulsory
licensing and other criteria are met].
42 ABS ENTERTAINMENT V. CBS CORPORATION
Pub. L. No. 115-264, sec. 202(a)(2) (to be codified at
17 U.S.C. § 1401(e)).
We need not and do not decide the extent to which these
and other sections of the newly passed legislation may be
relevant to any remaining issues and leave those
determinations to the district court to decide in the first
instance on remand.
VIII
For the reasons discussed above, we REVERSE the
district court’s grant of summary judgment. We also
REVERSE the district court’s striking of ABS’s class action
motion as untimely, and the exclusion of Geluso’s
testimony. We REMAND for further proceedings
consistent with this opinion. The district court should
consider ABS’s request for continuance of pre-certification
discovery, and, if appropriate, the merits of ABS’s class
action motion, at an early practicable time, as well as any
other issues it deems necessary.