Are You Guilty of Copyright Violation?

U.S. copyright law protects both published and unpublished original works, including music. Violating another’s copyrights can result in fines from $750 to $150,000 per violation, or each song illegally played.

Did you know that U.S. copyright law might consider you a “performer” if you play music, live or recorded, at your place of business? If your place of business is open to the public and you’re playing music for their entertainment, U.S. copyright law generally considers that to be a “public performance.” And unless you have a license for those “performances,” you could be violating someone’s copyrights.

Performing rights organizations (PROs) regularly make incognito visits to small businesses, such as restaurants, health clubs, bars and retail stores, to check for violations. If these businesses play recorded music and fail to have a license, they could find themselves on the hook for penalties totaling tens of thousands of dollars. Failing to pay fines could lead to lawsuits for copyright violation…which PROs seldom lose.

What Does the Law Say About Copyright Violators?

U.S. copyright law has applied to musical works since 1831. Copyright law provides legal protection to the authors of original works, including literary, dramatic, musical, architectural, cartographic, choreographic, pantomimic, pictorial, graphic, sculptural, and audiovisual creations.

The owner of a copyright has the exclusive right to reproduce, distribute, and, in the case of certain works, publicly perform or display the work. In the case of sound recordings, the copyright owner has the right to perform the work publicly by means of a digital audio transmission; or to license others to engage in the same acts under specific terms and conditions.

If you want to host a public performance, you could contact each copyright holder separately to obtain rights. But PROs, such as BMI, ASCAP and SESAC, can license businesses to play copyrighted music. When performers and songwriters contract with a PRO, the organization will represent them and pay them royalties whenever their music is played. PROs will also file lawsuits against copyright violators on behalf of their performing artists and songwriters. Businesses that play music for the public can protect themselves from lawsuits or expensive out-of-court settlements by ensuring they have the proper licenses.

Exclusively playing CDs or music you have legally downloaded onto an iPod or other device doesn’t excuse you from having to pay licensing fees. Even if you own that CD or music file, under copyright law, you actually own only the “container.” The copyright holder retains all ownership rights to the work itself, including the right of public performance.

Likewise, playing music from a radio station, satellite service or online music program such as Pandora doesn’t protect you. Although these broadcasters have their own licenses, they do not cover “rebroadcasters.”

Certain exceptions to the public performance rules exist. Businesses that are not a food or drinking establishment are exempt if:

• They have less than 2,000 gross square feet of space, not including parking
• They are playing music over not more than six loudspeakers, with no more than four in any one room or adjoining space

Bars and restaurants might be exempt for playing radios and televisions if the establishment is less than 3,750 square feet, but if you charge patrons a cover, the exception does not apply. Venues that host live music might be surprised to know that they, rather than performers, are responsible for ensuring that they have the appropriate licenses to play any cover songs.

Will Insurance Cover You?

Your commercial general liability or business owner’s policy provides some protection for copyright violations. However, this coverage applies only to “advertising injury,” or instances where you inadvertently violate someone’s copyright in your advertising or marketing. It would not apply to public performances.