Erickson

Defendants (Phoenix, hereinafter) appeal from an order granting a preliminary injunction restraining Phoenix, pending the hearing and determination of the action, from transferring to magnetic tape any performances embodied in phonographic recordings produced and sold by plaintiff recording company (Capitol, hereinafter).

Phoenix contends that the court erred in granting the injunction.

For the purposes of the preliminary injunction, there is no dispute as to the facts. Phoenix is admittedly in the business of selling prerecorded stereophonic tape cartridges, which it produces as follows: Phoenix purchases on the open market records and tapes of musical performances which have been produced, recorded, and sold by Capitol. Phoenix then makes “master” recordings from the records and tapes which it purchased, and uses the master recordings to produce tape cartridges which it sells to the general public. On the front of each cartridge package Phoenix affixes a label which bears the title of the recorded performance and the names of the performing artists; and, on the back of the cartridge package, it affixes a label bearing the following word's: “No relationship of any kind…