After months and months of blood, sweat, and tears – not to mention countless loans – your dream of becoming a business owner is about to come true. Finally, your new business is ready to open its doors to the public. You hook up your radio or plug in your iPod
® to your stereo system, turn up the volume, and wait to greet your first customers. Weeks later, you receive a demand letter in the mail alleging possible copyright infringement. What went wrong?
In the United States, three performing rights organizations (“PROs”) – the American Society of Composers, Authors, and Publishers (“ASCAP”), Broadcast Music, Inc. (“BMI”), and Society of European Stage Authors and Composers (“SESAC”) – represent, license, and protect the public performance rights of their songwriter, composer, and music publisher members. The PROs receive from their members a non-exclusive right to license the performing rights in each member’s copyrighted musical compositions to other third-parties. In turn, the PROs license public performances of its members’ musical works, collect license fees associated with those performances, and distribute applicable royalties to their members. Over the last few years, PROs have sent an increasing number of letters demanding payment of such licensing fees or threatening lawsuits for copyright infringement based upon unlicensed public performances of copyrighted works. If not careful, your business could be one of them.
You might ask: how can playing songs from an iPod
® lead to a possible lawsuit? People often wrongly assume that purchasing a digital song provides the right to play that song in public. It does not. Copyright law provides the author of a song with various exclusive rights, including the right to reproduce the song, adapt it, distribute it, and to perform the song in public. Each right is independent of another. Because of that, purchasing a digital song does not bring with it a right or license to perform that song in public. Instead, you must obtain a license through the applicable PRO. This requirement also applies when local musicians perform covers of other musicians’ songs or even when you are merely re-broadcasting music from the radio (with certain exceptions for smaller locations). With very limited exceptions, such as for worship services, the venue hosting the performance must have a license to allow public performance of those cover songs. You even need a license if you plan to play “on hold” music on your phone system.
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Do not assume that the law does not apply to your business. The ASCAP recently filed a number of lawsuits against establishments for failing to pay the required licensing fees to play musical compositions to the public. The lawsuits follow on the heels of countless demand letters seeking pre-litigation settlement payments, which have increased in number in recent years. Establishments open to the public should verify licensing compliance and review applicable company policies for broadcasting music or live performances with their employees to avoid inadvertent violations.
For advice on these or related issues, please contact Frantz Ward partner
Mark Rodio or another member of the
Litigation Group.