The California Assoc.of Realtors has correctly identified a potential major liabilty issue for Brokers and Realtors across the entire country (indeed around the world). I am a Realtor and a Music/Motion Picture/Television Industries luminary (Linkedin) considered an expert in intellectual property licensing, especially digital distribution of content.
During my entire career, for some reason I seemed to be able to visualize the future before most. Some considered me visionary. After I left Fremantle (“American Idol”) and became its consultant, I was likely the first executive in the entertainment industry to license music en masse for digital distribution. The televison series I worked on was “Baywatch”, the # 1 program in the world at that time. Soon after completing the “Baywatch” project, I created an elegant solution to licensing of rich content for digital distribution. Before Blackberries and i-Phones and our discovery of what they can deliver wirelessly, I could not gain enough traction to sustain my nascent business. Today it would be different. Interestingly, there has been no significant solution since my ideas.
I urge you to read through CAR’s admonishments and to contact me for solutions to avoiding copyriight infringement. I look forward to helping you. – Stephen C. Love
From California Association of Realtors: September 1, 2009
Introduction
Music is an important component of many activities sponsored by a real estate office and a Board/Association of REALTORS®. For example, a real estate office’s telephone system may play recorded music or a radio station while placing a caller on hold, or a Board/Association may hire a live band to play at a Board/Association sponsored function. Depending on the music played, the copyright laws of the United States may be implicated and even violated. The questions and answers which follow discuss the basics of copyrighted music and how a real estate office or Board/Association can license copyrighted music and avoid violating the copyright laws.
BASICS
Q 1. What is a copyright?
A A copyright is a form of legal protection provided by the laws of the United States to authors of “original works of authorship” including literary, dramatic, musical, artistic, and certain other intellectual property works. See the U.S. Copyright Office’s website (www.copyright.gov) for a good synopsis of copyright law.
Q 2. What kind of protection does copyright law provide?
A In general, copyright law gives the owner of the copyright the exclusive right to do and to authorize others to do the following:
(i) to reproduce the copyrighted work in copies or phono-records;
(ii) to prepare derivative works based upon the copyrighted material;
(iii) to distribute copies or phono-records of the copyrighted work to the public by sale, rental, lease or lending;
(iv) to perform the copyrighted work publicly,
(v) to display the copyrighted work publicly, and
(vi) in the case of sound recordings, to perform the copyrighted work publicly by means of digital audio transmission. For purposes of this Legal Q&A, we are mainly concerned with the exclusive right of owner of the copyright to do and authorize others to perform the copyrighted work publicly.
(17 U.S.C. § 106.)
Q 3. Is music protected by copyright law?
A Yes. Copyright law protects “musical works” including any accompanying words to such musical works. (17 U.S.C. § 102.)
Q 4. How is a musical work copyrighted?
A Copyright protection arises immediately when the musical work is fixed in a tangible form such as an electronic file, CD or DVD and regardless if the musical work is actually registered with the United States Copyright Office. However, an author of an original musical work will usually register the musical work with the United States Copyright Office to obtain the maximum protections of the United States copyright law. (17 U.S.C. § 102.)
Q 5. Is all music protected by copyright law?
A No. Some music is considered “in the public domain” and is not protected by copyright law. Some musical works may not be entitled to copyright protection based on other reasons such as lack of originality. However, unless it is clear the musical work is in the public domain or the musical work is otherwise not protected by copyright law, it is a good idea to always assume music is copyrighted to minimize the chance of a copyright infringement suit. (17 U.S.C. § 102.)
Q 6. How can one tell if a musical work is “in the public domain?”
A Musical works are considered in the public domain when the author cannot be identified or the copyright protection has expired on that particular musical work. For example, many classical composers’ musical works, such as Mozart’s, are in the public domain since copyright protection has expired. Folksongs are also considered in the public domain since they cannot be identified with a particular author. (17 U.S.C. §§ 102, 301-306.)
Q 7. How can one find out if a musical work is copyrighted?
A There are a couple of ways to find out if a musical work is copyrighted. One way is by personally searching and inspecting the records of the United States Copyright Office. The Copyright Office’s records are open for inspection and searching by the public specifically for this purpose. Moreover, on request, the Copyright Office will search its records for a particular copyright at a statutory rate for each hour or fraction of an hour. To get information from the Copyright Office regarding this or any other copyright issue, call 202.707.5959 between 8:30 a.m. – 5:00 p.m. Eastern Time, Monday to Friday, except for federal holidays. General information is also available online and can be obtained at the Copyright Office (www.copyright.gov).
The second and more common way used to find out if a musical work is copyrighted is to contact Broadcast Music Incorporated (“BMI”) and the American Society of Composers, Authors and Publishers (“ASCAP”). BMI and ASCAP will indicate if a particular musical work is copyrighted and in their repertory.
See later questions for further information on BMI and ASCAP.
Of course, almost all copyrighted musical works also contain the familiar copyright notice. While such notice is usually accurate and indicative of a copyright on the particular musical work, use of one of the above two methods insures a more accurate determination of whether a particular musical work is protected by a copyright.
REAL ESTATE OFFICE ISSUES
Q 8. My office wants to play recorded music at an office function or even hire a band to play music. Will we be violating the copyright laws if we do this?
A You may be. Assuming the recorded or live music is protected by copyright law, your office function is considered a “public performance.” If your office does not have a valid music licensing agreement for the public performance of the music, your office will be violating copyright law.
Q 9. What is a “public performance”?
A Under copyright law, “public performance” is defined as the performance of music at a place open to the public or where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered. Under this definition, any function hosted by your office at which recorded or live music is played is probably a public performance of the musical work(s). (17 U.S.C. § 101.)
Q 10. If my office charges no fee for admission to the function, will this make a difference?
A Generally, no. A copyright violation can be found regardless of whether or not viewers of the public performance were charged an admission fee.
Q 11. My office’s telephone system plays recorded music and/or a local radio station when callers are on hold. Is this a violation of copyright law?
A It may be. The term “public performance” also includes any transmission of a copyrighted work to the public, by means of any device or process, whether the members of the public capable of receiving the transmission receive it in the same place or in separate places and at different times. Under this definition, the transmission of recorded music or radio programs while callers are on hold is probably a public performance of the musical work(s).
Q 12. My office plays a local radio station in the reception area or throughout the office. Is this a violation of copyright law?
A It may be. Playing a radio in the office is probably a public performance of the musical work(s).
Q 13. How can my office avoid violating copyright law?
A Your office can obtain a music license to publicly perform copyrighted music. See later questions discussing the procedure of obtaining a music license.
BOARD/ASSOCIATION ISSUES
Q 14. Recorded or live music is sometimes played at Board/Association functions. Is this a violation of copyright law?
A It may be. Assuming the recorded or live music is protected by copyright law, the Board/Association functions are considered “public performances.” If the Board/Association does not have a valid music licensing agreement for the public performance of the music, the Board/Association will be violating copyright law.
Q 15. Are Board/Association functions at which music is played considered public performances if no admission is charged?
A Generally, yes. A copyright violation can be found regardless of whether or not viewers of the public performance were charged an admission fee.
Q 16. The Board/Association’s telephone system plays recorded music and/or a local radio station when callers are on hold. Is this a violation of copyright law?
A Possibly. The term “public performance” also includes any transmission of a copyrighted work to the public, by means of any device or process, whether the members of the public capable of receiving the transmission receive it in the same place or in separate places or at the same time or at different times. Under this definition, the transmission of recorded music or radio programs while callers are on hold is probably a public performance of the musical work(s).
Q 17. The Board/Association plays a local radio station in the reception area or throughout the office. Is this a violation of copyright law?
A Possibly. Playing a radio at the Board/Association in the reception area or throughout the Board/Association is probably a public performance of the musical work(s).
Q 18. How can a Board/Association avoid violating copyright law?
A A Board/Association can obtain a music license to publicly perform any copyrighted music. See later questions discussing the procedure of obtaining a music license.
OBTAINING A LICENSE TO USE COPYRIGHTED MUSIC
Q 19. What is music licensing?
A Music licensing is the process of allowing others to use copyrighted music in exchange for a payment. Under this process, the owner of the musical copyright grants a license to a person(s) allowing such person(s) to perform the music in public. By having a music license, one may publicly perform a copyrighted musical work without infringing on the exclusive rights of the copyright owner.
Q 20. How does one license copyrighted music?
A To license copyrighted music, one must obtain a valid music license from the music copyright owner. While it is possible to go directly to the owner of the music copyright, the usual method of licensing copyrighted music is to obtain a license from BMI and/or ASCAP.
Q 21. What are BMI and ASCAP?
A BMI and ASCAP are member organizations whose members include authors, composers and publishers of copyrighted works, including music. BMI and ASCAP licenses to the general public the rights to publicly perform the copyrighted musical works of its members. BMI and ASCAP draft and administer the licensing agreements and collect a fee or royalties on behalf of their members for such license. BMI and ASCAP can be reached at:
BMI: 1.800.925.8451 (310.659.9009 Los Angeles office)
ASCAP: 1.800.99-ASCAP (323.883.1000 Los Angeles office)
Q 22. Are all music copyright owners members of BMI or ASCAP?
A No. Not all composers are members of BMI or ASCAP and not all copyrighted music is licensed by these organizations. However, BMI and ASCAP estimate that they license about 95% of copyrighted music in the United States.
Q 23. May a music license be obtained directly from the owner of the copyright?
A Yes. As mentioned above, a license to perform a copyrighted work publicly may be obtained directly from the owner of the copyright. However, by obtaining a license from either BMI or ASCAP or both, the trouble and expense of having to contact individually each copyright owner(s) of any musical work(s) sought to be publicly performed can be saved.
Q 24. What types of music licenses are available through BMI and ASCAP?
A BMI and ASCAP have a number of licenses available to cover a variety of situations. For example, there are licenses for radio stations, hotels, television stations, trade shows and conventions and even a license for music used while placing a caller on hold. In most of the above mentioned licenses, BMI and ASCAP grant a “blanket” license which permits the licensee to perform publicly any musical work in the BMI or ASCAP repertory. Boards/Associations and real estate offices that sponsor public performances of music may wish to consider obtaining a blanket license.
Q 25. How are the fees calculated under the BMI and ASCAP licenses?
A The fees are based upon the number of persons attending the events where copyrighted music is performed. There are different rates for live performances and performances of recorded music. The rates are also different for large events versus smaller events. Music license holders are responsible for reporting to BMI and or ASCAP when public performances are held and how many persons attended the event.
Q 26. How are the fees calculated under the music while on hold licenses?
A Under the music while on hold license, you pay a flat rate annual fee.
Q 27. Why do we have to pay a fee for the music we use?
A To promote the advancement of original musical creation, the United States copyright law gives the owners of music copyrights the right to be paid for public performances of their music. Since owners of musical copyrights, usually the song writer, are interested in earning a living, it is not surprising they exercise their rights under the copyright law and require royalties or fees for public performances of the music they write.
Q 28. How will the copyright owner know if my Board/Association or office performs their copyrighted works publicly without obtaining a license?
A Let’s face it. It is highly unlikely that an individual composer will actually learn that your Board/Association or office has performed his or her copyrighted work publicly. For example, Madonna would probably have to be at your office to learn of the copyright infringement if your office chose to play a public performance of ray of Light,” without her permission.
However, one reason copyright owners join BMI and ASCAP and give those organizations the right to license their music is because BMI and ASCAP have better resources to learn of and take actions against copyright infringements. For example, both BMI and ASCAP have initiated campaigns to crack down on musical copyright infringement by trade associations and the meeting services industry.
Therefore, it may not be wise to rely on the unlikely possibility that your office or Board/Association will ever be detected of violating the copyright law.
Q 29. Does my Board/Association or office need a music license if we require the musicians or entertainers who perform the music to obtain a music license?
A Yes. The organization which is primarily responsible for the event itself is required to obtain permission to perform the music publicly.
Q 30. If a Board/Association or office holds an event at a public place, such as a restaurant or hotel, are they covered by the restaurant or hotel’s music license?
A It depends. Some hotels and restaurants have music licenses which cover all copyrighted music played on their premises; others do not. Only if it is absolutely clear that the restaurant or hotel’s music license will cover public performances of copyrighted musical works sponsored by your office or Board/Association should you rely on this coverage.
Q 31. Must a Board/Association or office obtain a license from both BMI and ASCAP?
A No. It is not required to obtain a license from both organizations. You may opt to obtain a license from neither, both or one of the two. However, be aware that the repertory for either one of these organizations does not include all copyrighted music. If you decide not to obtain a license from either, you risk both civil and criminal liability.
Q 32. What are some alternatives to obtaining a license from BMI or ASCAP?
A Some alternatives to obtaining a license from BMI or ASCAP are to: (1) negotiate directly with the copyright owner for a right to perform his or her compositions publicly; (2) use only music in the public domain; and (3) obtain recorded music from a music library which hires its own composers, producers, singers and musicians to produce music. These libraries retain the copyrights on their music.
Q 33. If the choice is made not to get a music license, what are the penalties for copyright infringement?
A Under copyright law, the penalties for copyright infringement can be very significant, and both civil and criminal remedies are available. Civil remedies allow the copyright owner to recover his or her actual damages and the infringer’s profits, if any, or the owner may elect statutory damages up to $30,000 (for willful infringement up to $150,000). Attorney’s fees and costs may be available in some cases. Criminal penalties include fines of up to $100,000 ($200,000 for organizations), up to a year in prison, or both. Increased fines and longer jail time are available if the infringement is wilful and is for the purpose of commercial advantage or private financial gain.
Most likely, neither your Board/Association nor your office will be fined to the limit or be found guilty of criminal infringement; however, the magnitude of the possible liability should demonstrate the seriousness with which the United States government and copyright law views copyright infringement.
