Performing rights organizations (PROs) such as BMI, ASCAP, and SESAC vigorously monitor and sue businesses for playing music for which they are authorized by the copyright holders to collect royalties. The damages can be exorbitant but business owners have some important rights they should be aware of.
Broadcast Music
17 U.S.C. § 110(5) was enacted to protect businesses against copyright infringement for simply playing the radio or TV for their customers. To enjoy this protection, the establishment cannot charge customers for enjoying the music and the music cannot be retransmitted. Under those conditions, an establishment may play a single radio or TV such as those for private home use. The broadcasts may be received over-the-air or by cable or satellite, but not internet. Stricter rules govern more substantial audio-visual systems.
Establishments smaller than 2,000 sq. ft., not including space used exclusively for parking, may play broadcast music. Restaurants and bars are subject to a more generous 3,750 sq. ft. limit. Larger establishments that exceed those sizes are protected only if the music is played over no more than six speakers with no more than four speakers in any one room or outdoor space. TV broadcasts of music are limited to four TVs no bigger than 55 inches each with no more than one TV per room.
Recorded or Live Music
If none of the foregoing exemptions apply, e.g., the establishment exceeds the size limits and employs more than six speakers, or if the music is from a CD, iPod, Pandora or any other medium besides radio and TV, the business-owner must obtain a license for the music from the PROs in order to avoid a lawsuit for copyright infringement. The licenses are typically non-negotiable form contracts based on the establishment’s maximum occupancy.
Unauthorized Performance
Once a business receives notice from a PRO that the establishment is infringing, the business-owner may be subject to substantial damages and even a permanent injunction prohibiting the establishment from playing the music in the future. 17 U.S.C. §502(a). Statutory damages are between $750 and $30,000 per infringement. 17 U.S.C. § 504(c)(1). Ignoring the notice may constitute “willful infringement” and increase the damages significantly. Prater Music v. Williams, 5 U.S.P.Q. 2d 1813 (W.D. Mo. 1987). Courts have awarded damages of up to three times what the business would have paid for a license for the music. Broadcast Music, Inc. v. Crawford, No. 1:12-cv-01903-JLT (E.D. Cal. 2014); Broadcast Music, Inc. v. Edcon Enterprises, LLC, No. 4:11-CV-1950-JAR (E.D. Mo. 2012). Broadcast Music, Inc. v. Leyland Co., LLC, No. 5:11CV2264 (N.D. Ohio 2012). Broadcast Music, Inc. v. Rooster’s Inc., Civil Action No. 04-140-DLB (E.D. Ky. 2006).
Written by Leo Kim. Please note that the above discussion is for general information purposes only. For more information, please contact John H. Choi & Associates LLC at email@jchoilaw.com or 201.580.0816.