This article first appeared in Entertainment Law Matters, a Frankfurt Kurnit legal blog.
Have you ever walked into a neighborhood bar and wondered whether the owners of the place paid to license the music playing in the background?
Section 106 of the U.S. Copyright Act clearly prohibits the unauthorized performance of musical works in public (which would includes bars), but do small bars and restaurants actually comply with this law? Do any of them ever get caught and what happens when they do? Are there droves of rock stars roaming from town to town on some kind of copyright enforcement bar hop to make sure that their songs are not being played without permission?
The answer, of course, is that most musicians do not attempt to police the public performance of their works alone. Instead, they usually hire one of three major performance rights organizations ("PROs") – ASCAP, BMI or SESAC– to negotiate licensing arrangements with shopping malls, bars and restaurants and to spot check public venues across the country to make sure that no copyright violations are taking place. When they find a violation, the PROs are not afraid to take all necessary steps, including commencing legal action, to protect and enforce their clients' rights.
A small neighborhood bar in Agawam, Massachusetts (population 28,438) was recently taught a hard lesson in PRO enforcement. In Sixx Gunner Music v. The Quest, Inc., 2011 WL 1460437 (D. Mass. Apr. 15, 2011), representatives of ASCAP first visited Michael Anthony's Bar & Grill in April 2002 when they heard unlicensed tunes being played on the jukebox. ASCAP contacted the bar more than forty times to complain, but the owner refused to listen (perhaps because the music was too loud). Six years later, in 2008, an ASCAP investigator went to the bar and heard forty-nine songs, including four bar classics – Wildside, Plush, You Shook Me All Night Long and Alive – owned by ASCAP artists.
ASCAP sued the bar the following year, seeking statutory damages, attorney's fees and an injunction prohibiting future infringements. Because the bar did not dispute that the songs were played or that it was liable for copyright infringement, the only issue remaining for the court was to fashion an appropriate remedy. The court noted that in the absence of proof of actual damages, the court has discretion to set an award for statutory damages under 17 U.S.C. § 504(c)(1), keeping in mind the goals of compensating the aggrieved copyright holder and deterring future misconduct. "The damages awards in such cases," observed the court (applying a standard that is far from universally accepted), "generally range from two to six times the amount saved by the defendant by not paying the license fees."
The evidence showed that the bar would have paid approximately $7,213.06 in licensing fees. Accordingly, ASCAP sought $22,000 in statutory damages, or approximately three times the unpaid license fees. Not surprisingly, the bar owner asked to be fined the statutory minimum of $750 per violation, or $3,000 in total.
The court ultimately awarded ASCAP a total of $14,000, or twice the unpaid license fee, plus attorneys' fees. Although the court refused to award the minimum fine given that it would be less than the unpaid license fees, it found several mitigating factors warranting a lower amount than ASCAP demanded. The judge noted that the defendant was a small neighborhood bar (a maximum capacity of 100 people) that earned little money. On the day of the investigator's visit, no more than sixteen people were in the bar at any one time. Second, the amount of the award, especially when combined with the amount plaintiff's attorney's fees (which were also awarded), was adequate to act as a deterrent against future abuse. Finally, the court noted that the bar had recently negotiated a licensing arrangement with ASCAP's competitor BMI, which showed that the deterrent effect had already worked.
In short, the bar learned its lesson: the PROs are listening!
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