The case revolved around Naxos's reissues of recordings released by the British label Gramophone in the 1930s featuring Yehudi Menuhin, Pablo Casals, and others. Gramophone is now part of EMI/Capitol.

The recordings were not protected by British copyright, which expires after 50 years, or by U.S. federal copyright, which does not apply to recordings made before 1972. But Capitol asserted in U.S. federal court that its copyright had been infringed under New York State common law—the body of unwritten civil law created by court rulings. A New York court found in April that Capitol did hold copyright under New York State law, but the settlement was reached before the federal court issued a ruling.