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Legal Eagles: Music licensing -- Do we really have to do this? 

by Kim Hibbard, NCLM General Counsel

It is the time of year when local governments typically receive communications from ASCAP, BMI and/or SESAC, the major music licensing companies, asking for payment of licensing fees for the public performance of copyrighted music. We often receive questions from our members about the legitimacy of these requests and if municipalities are really required to comply. The answer may very well be yes depending on your municipality’s programs and activities.

Federal copyright law is complex, but in essence it protects copyrighted creative work by granting the owner the exclusive right to publicly perform the work or to authorize others to do so. “Public performance” is broadly defined so that it includes both live performances and transmission of recordings in places open to the public or in any place where a substantial number of people outside the normal circle of a family and its social acquaintances are gathered. While there are limited exceptions to the copyright infringement provisions for certain types of uses, there is no general exemption protecting local government units. In fact, federal law makes clear that all remedies available to a copyright owner for infringement are available to the same extent against governmental units.

The upshot is that local governments can incur substantial liability for failure to obtain a license to use copyrighted music in their programs and activities. A few examples of potential municipal exposure include music performed at festivals and events, music used in recreational programs and classes, “music on-hold” for telephone callers, and music piped into elevators and other areas of government buildings. Copyright holders can seek monetary payment for actual damages and profits, or statutory damages of up to $30,000 per infringement ($150,000 if committed willfully), plus attorneys’ fees.

Some years ago ASCAP became quite active in targeting non-compliance among local governments. As a result, the International Municipal Lawyers Association negotiated with the major licensing organizations to develop blanket licenses for local governments. Under a blanket license, a municipality need not obtain individual licenses for each work to be performed, but for an annual fee may publicly perform any of the works in the organization’s repertoire. ASCAP and BMI hold the licensing rights to the majority of musical works, with SESAC holding a smaller but growing repertoire. Blanket licensing fees are on a sliding scale based on population. Special events with gross revenues in excess of $25,000 may require separate coverage.

If your municipality uses music in its programs and activities, we encourage you to discuss the options with your municipal attorney and determine the best approach to help your city or town avoid copyright infringement exposure.

More information is available here:

www.imla.org/membership/music-licensing-agreements

www.bmi.com/licensing/entry/local_governmental_entities

www.ascap.com/licensing/types/international-municipal-lawyers-association-imla.aspx