U.S. District Court Judge R. Gary Klausner in Los Angeles ruled late last week that Browne had alleged sufficient facts to warrant a trial on his claims, including copyright infringement.
The 80-second spot, which was posted on YouTube last August as part of McCain's presidential run, used Browne's 1977 "Running on Empty" as its soundtrack. The ad criticized Barack Obama's energy policy.
Browne, a well-known Democratic supporter, sued McCain, the Republican National Committee and the Ohio Republican Party. Among other allegations, Browne argued that the use of the song infringed on his copyright and his right of publicity--that is, his right to control the commercial use of his image.
McCain and the other defendants asked for the case to be dismissed, arguing that they had made fair use of "Running on Empty."
"Given the political, non-commercial, public interest transformative nature of the use of a long-ago published song, the miniscule amount used and the lack of any effect on the market for the song (other than perhaps increase sales of the song), these claims are barred by the fair use doctrine," they argued in court papers.
They also said the ad was a form of political speech and should be dismissed under California's anti-SLAPP (Strategic Lawsuits Against Public Participation) law, which provides for dismissal of lawsuits that aim to prevent people from speaking about public matters.
McCain also filed papers with the court stating that he was not involved in creating the video. "I was completely unaware that this video even existed until I was informed of it after the filing of this lawsuit," he wrote.
Browne argued that copyright law protects his song even in the context of a political ad. "Defendants flood the court with paper and essentially argue that because they are politicians and political parties, they have an unfettered right to use musical compositions in political campaign commercials, and to associate themselves with any person they want to, with or without consent. The law does not support these extreme arguments," his lawyers wrote in papers filed with the court.
Klausner dismissed the case against the Ohio Republican Party, but ruled that the lawsuit could proceed against McCain and the Republican National Committee. "Senator McCain, at this point, has not shown that the mere fact that the composition was used in the context of a political campaign, alone, bars Browne's claim," he wrote.
McCain and the Republican National Committee are considering appealing the decision, said Lincoln Bandlow, their lawyer.