Under the Copyright Act, public venues such as bars, restaurants, nightclubs, gyms, and the like (as well as terrestrial and online radio stations) must obtain public performance licenses from music copyright owners in order to play music. The three performing rights societies - ASCAP, BMI, and SESAC - represent music copyright owners and collect blanket licenses from the various venues where music is played in public. The performing rights organizations then distribute the income collected to the copyright owners. ASCAP has reported revenues at record high levels, totaling $935 million in 2010 alone. The reputation of the performing rights societies has been that they generally focus more on compliance rather than enforcement. However, the following case should be a cautionary tale for those who refuse to obtain the proper licenses from performing rights societies.
East Coast Foods, Inc., owner of the chain of restaurants known as "Roscoe's House of Chicken and Waffles," has lost an appeal of a judgment awarding damages, attorney's fees and costs arising out of the restaurant's failure to obtain a license from ASCAP to play music in the restaurant. The district court granted summary judgment to the Plaintiffs (consisting of various songwriters and music publishers, represented by ASCAP), based primarily on the testimony of an ASCAP representative that visited Roscoe's and heard numerous recognizable songs played by both a DJ and a live band in the restaurant. East Coast Foods challenged the testimony as expert testimony by a lay witness that should have been excluded from evidence by the district court. The Court of Appeals disagreed:
"[I]dentifying popular songs does not require scientific, technical, or other specialized knowledge...On the contrary, identifying music is a reflexive daily process for millions of radio listeners, amateur karaoke singers, and fans of Name That Tune reruns...Clearly, the district court correctly determined that [the representative's] testimony was admissible."
The Court of Appeals concluded that the district court correctly determined that there was no issue of material fact that the Defendant committed copyright infringement. The Court of Appeals affirmed the award of statutory damages against the Defendant in the amount of $36,000, as well as the far greater award of $162,728.22 against the Defendant for the Plaintiffs' attorney's fees and costs. Although the fee award was discretionary, the Court of Appeals showed little empathy, finding that the Defendant could have avoided liability by purchasing a valid license at any point during the seven years in which ASCAP made repeated requests for Defendant to do so.
Moral of the story: don't ignore a request by a performing rights society to obtain a proper license to play music at your venue. The case is Range Road Music, Inc. et. al. v. East Coast Foods, Inc., et. al., Docket No. 10-55691, U.S. Ninth Circuit Court of Appeals, filed February 16, 2012. A copy of the full opinion can be found here.