Digital Copyright Question: Fair use of Karaoke CDGs

By Robin Gross and Jeremy Woodburn*
April 2004

For those not familiar with Karaoke, it is a form of participatory entertainment in which the participants sing along with a recorded arrangement of songs without the vocal tracks, while the lyrics are displayed in time with the music. Karaoke is performed most often as a group activity in bars, restaurants, and nightclubs with large selections of Karaoke songs, or at group events where the Karaoke song selection is provided by a paid mobile Karaoke host.

The owners of Karaoke bars or hosting businesses rely on their accumulated selection of Karaoke songs for their income, and have often invested substantial amounts of money in building that selection through the purchase of Karaoke CDGs. Accordingly, for the use of the music in their facilities, they pay performance license fees to organizations such as the American Society of Composers and Publishers (ASCAP) for ultimate distribution to the artists. Karaoke CDGs contain songs packaged in digital files in a Compact Disk+Graphics format. The CD+Graphics file format consists of the audio samples and the data representing the lyric display interleaved throughout the file. The data is embedded with and inclusive of the audio samples throughout each file.

These CDG owners have the lawful right to make backup copies of the CDGs they have purchased under copyright law's fair use doctrine, which permits copies for reasonable uses. CDG owners also need to transfer the contents of the CDGs to computer hard drives both for backup purposes, and in order to make the menu of their selections more accessible for the participants. In the case of mobile Karaoke hosts, storing the contents of the CDGs on a hard drive allows them to safeguard the original CDGs in the security of their home base, and it makes their selection much easier to carry to and set up at their engagements.

Unfortunately, under copyright law as the music and film corporations would have it, neither of these quite reasonable uses of the CDGs would be allowed. The general thrust of the arguments by the music and film corporations for tighter regulation of digital music, movies and television is that "digital is different" because digital copies are bit-for-bit perfect copies of the original, while analog copies degrade with each generation away from the original. Because "digital is different", the content industries insist that no copying of any sort of digital content should be allowed.

This position, despite what the the music and film corporations may say, is inconsistent with the historical balance of the interests of the copyright holder and the public, traditionally considered under the rubric of "fair use" analysis. The position of the movie and record companies is even inconsistent with specific new law governing copyright in digital content. Under United States copyright law, the holder of the copyright in a Karaoke CDG (or for that matter, almost any copyrighted work) has the exclusive right to make copies of that CDG, and to prevent others from copying that CDG, unless there is a recognized exception . This means that unless there is an exception to that exclusive right, any copy of a Karaoke CDG or any song on the CDG is an infringement. Fair use copies are exactly the type of exception that permits unauthorized copying.

However, in each of the cases where congress or a court has directly considered whether consumers have the right to copy digital media, they have declined to eliminate the right to make a copy for personal use or backup, and in two relatively recent laws, they've explicitly endorsed that right. The law that exists today clearly and correctly implies that copying of legitimately-purchased Karaoke CDGs for backup and convenience is a lawful fair use of the copyrighted works on those CDGs.

While a Karaoke CDG does not specifically fit into any of the specific legislative safe harbors for copying, discussed below, the reasons for backups or personal use copies are just as strong for a Karaoke CDG as for the forms of digital content which have already been determined to be specifically eligible for backup and personal use copying.

While it seems at first blush that a Karaoke CDG would be considered a digital musical recording for purposes of copyright law, in fact, in the one case that has considered the question, the courts at both the district court and appellate court level determined that because of the display of the lyrics in conjunction with the music playing, a Karaoke CDG is an audiovisual work, not a sound recording. [1].

However, of the media for which there are exceptions allowing personal use copies, Karaoke CDGs are closest in format and in form to pure digital music. The Audio Home Recording Act of 1992, (" AHRA ") represented a compromise among the competing commercial interests involved in the music industry, in which consumers received a specific exemption from infringement for copying digital music for personal use:

No action may be brought under [copyright law] alleging infringement of copyright based on the manufacture, importation, or distribution of a digital audio recording device, a digital audio recording medium, an analog recording device, or an analog recording medium, or based on the noncommercial use by a consumer of such a device or medium for making digital musical recordings or analog musical recordings . [2]

This legislation clearly endorses and allows the copying of digital musical recordings (i.e., CDs and Digital Audio Tapes) for personal use. The single court that has discussed the AHRA in any detail has reaffirmed that non-commercial copying of a digital musical recording, to whatever format, is expressly allowed by the AHRA, and that is in fact one of the main purposes of the AHRA. [3] Implicit in this endorsement are two ideas. First, what the consumer buys with a digital music recording is the right to play and copy the digital music on that recording, particularly if the copying is for non-commercial uses. Second, the market for new replacement copies of digital media to replace or supplement existing copies that a consumer already owns is a less important market than the market for the first copy purchased by the consumer. This is clearly analogous to backup copies and format-changing copies of Karaoke CDG content by the owner of the CDG.

In 1980, Congress passed the Computer Software Copyright Act, which included an express provision allowing the purchasers of software to copy that software for backup purposes:

[I]t is not an infringement for the owner of a copy of a computer program to make or authorize the making of another copy or adaptation of that computer program provided ... that such new copy or adaptation is for archival purposes only and that all archival copies are destroyed in the event that continued possession of the computer program should cease to be rightful.

Any exact copies prepared in accordance with the provisions of this section may be leased, sold, or otherwise transferred, along with the copy from which such copies were prepared, only as part of the lease, sale, or other transfer of all rights in the program. ... [4]

This has been restated in two separate cases since 1980, and the right of the owner of a purchased copy of software to make backup copies of digital media was affirmed by both courts. Implicit in this law are two ideas that are similar to the ideas implied by the AHRA. First, what the consumer buys with a copy of a software program is the right to use and copy that program, particularly if the copying is for archival purposes. Second, the market for replacement copies of a copy of a computer program to replace an existing copy that a consumer already owns is a substantially less important market than the market for the first copy purchased by the consumer. Again, it is clearly analogous to the need for Karaoke-dependent business owners to be able to copy the Karaoke CDG for backup purposes.

The traditional exception to the copyright holder's exclusive rights is the "fair use" exception. This exception is a subject of many court opinions, and much dispute among legal experts. The actual test for whether or not a use of copyrighted work is "fair use" and thus permitted has at least four factors: the purpose and character of the use; the nature of the copyrighted work (creative work or merely factual); how much of the copyrighted work was used; and the effect of the use upon the potential market for or value of the copyrighted work. [5]

Given the specific exceptions for digital music and software already in the copyright law, and the underlying positions reflected in those exceptions, it seems obvious that making a copy of a Karaoke CDG for backup, archive, or other personal uses should be considered a fair use of the copyrighted work embodied in the Karaoke CDG.

• Purpose and Character: The purpose and character of the proposed use is likely non-commercial. That is, the owner of the Karaoke CDG, whether a professional who performs or hosts public shows or a private individual, is not trying to profit from copying and reselling the CDG. They are either backing up the content of the CDG, or simply moving the content from the CDG format to a Hard Drive format (for example) for ease and efficiency of use. This is exactly the type of copy contemplated for digital music in the AHRA. However, an argument could be made that the use is commercial, since the music contributes to the ability of karaoke DJs and nightclubs to profit. Even if ultimately found to be a primarily commercial use, this factor will not by itself be determinative in finding the overall use an infringement under US copyright law. For example, the US Supreme Court found the 2 Live Crew's use of a Roy Orbison song "Pretty Woman" to be a fair use even though the use was use for commercial purposes.
  
  
• Nature of Work: The copyrighted works on a Karaoke CDG are creative works but typically not an original creative work. This would normally tip against copies as fair use, except that in the copyright law, it's already been made clear by the AHRA and the Computer Software Copyright Act that creative works in the form of music or software on digital media can be copied in certain limited circumstances, like for backup or non-commercial use. So this factor is essentially neutral.
  
  
• Portion of Work Used: Typically, the question here is whether the minimal amount of the copyrighted work was used, or if more was used than was strictly necessary to accomplish the purpose. For the purposes of backing up a digital copy of a copyrighted work, or for the purpose of copying for personal use, there is no amount smaller than the whole work that would be meaningful. And again, the AHRA and the CSCA have already endorsed copying of the entire copyrighted work in a digital format for non-commercial or archival use. This factor is also essentially neutral.
  
  
• Market Effect: Copying a Karaoke CDG for backup purposes or for ease of use will have relatively little effect on the market for or value of the copyrighted work on that CDG. First, it is unlikely that a backup copy is going to create an incentive for a consumer to buy fewer of the original works, except to the extent that they might require a second copy for backup, or replacement purposes. That market is already denigrated for digital media, as discussed above. The alternative reason for copying, to change the medium in which the copyrighted work is stored, can even encourage investing in the first copy and so can have an overall positive market effect on the market for the copyrighted works. In addition, the AHRA's express permission for non-commercial copying of digital media argues that copying for format change is squarely in the center of the fair use zone for CDGs as well. The 9 th Circuit Court of Appeals reiterated this core tenet of the AHRA and fair use law in RIAA v. Diamond Multimedia as it expressly upheld the legality of digital music players, as enabling "paradigmatic non-commercial personal use". [6]

Making a copy of a Karaoke CDG, whether as a backup, or a change in format to a hard drive, to the extent analyzed under the fair use rubric, should be considered a fair use. Under the court's ruling in Riaa v. Diamond Multimedia , it seems likely that personal use or backup copies of electronic media (like CDGs, ebooks, or DVDs) would be found fair use if the issue were ever litigated. [7].

The owners of Karaoke CDGs, facilities, mobile hosting services and consumers, have invested substantially in the purchase of large libraries of Karaoke CDGs. Allowing them to copy the contents of their CDGs for backup or format-shifting to hard drives would also be a fair use, and is entirely consistent both with the legislation on copying digital media passed to date, and with traditional fair use analysis ruled on by the US courts.

[1] ABKCO Music, Inc. v. Stellar Records, Inc., 96 F.3d 60 (2d Cir. 1996).
[2] 17 U.S.C. § 1008.
[3] Recording Industry Association of America v. Diamond Multimedia Systems Inc., 180 F.3d 1072 (9th Cir. 1999).
[4] 17 U.S.C. § 117.
[5] 17 U.S.C. § 107.
[7] See United States v. Elcom Ltd. , 203 F.Supp.2d 1111 (N.D.CA 2002).

* Robin Gross is an intellectual property law attorney and Executive Director of IP Justice. Jeremy Woodburn is an intellectual property law attorney based in San Francisco, California, USA.