The Universal Music Group (UMG) was recently awarded a $53 million dollar judgment in its copyright infringement lawsuit against, Inc. for the unlicensed use of published music.  In March of 2008, the American Society of Composers, Authors and Publishers (ASCAP) filed 29 separate infringement lawsuits against restaurants and nightclubs in 22 different states seeking similarly significant damages. And just in case you think they don’t bother going after the little guy, in 2004 the Recording Industry Association of America (RIAA) set out to make example of a small but consistent group of copyright infringers by suing students from 21 different colleges for the illegal use of music (unauthorized computer downloading).  The majority of the student cases were settled, with fines paid by the offenders ranging from approximately $12,000 to $17,000.

Has this grabbed your attention?  That was precisely the intent.  The goal of each of these lawsuits was to heighten awareness by making an example of those who use copyrighted materials such as music and movies without first obtaining the proper license to do so.  Organizations such as ASCAP, UMG, and RIAA not only have the right to collect license fees from the users of music and movies, but they also have the responsibility to protect their members and ensure they are adequately compensated for their work.

How does this effect your Association?  The Copyright Act applies equally to for-profit and non-profit companies, and generally requires that any public performance of copyrighted music or movies be properly authorized.  There are a number of scenarios where this issue may arise for your Association.  Does the Association have a movie night where it plays or projects a popular DVD on a common area TV or blow-up screen?  Does the Association play popular music CDs over a sound system in the clubhouse during Association events?  In both of these cases, the performance in a common area or clubhouse of the published music or movie goes beyond private use, and may be considered an unlicensed public performance under the Copyright Act.  In the event of such an infringement, the violator can be punished with damages ranging from $750 to $30,000 per infringement (PER PLAY!), plus attorney fees.

The good news is that in most cases, the publishing organizations have tended to warn the infringing business of their unauthorized use, and attempt to convince them to obtain the proper licenses.  However, as the examples above illustrate, relying on the good will of the protective organizations can be dangerous and costly.

In addition, there may be certain exceptions applicable to your Association’s intended use.  However, these exceptions tend to be very narrow and somewhat confusing.  For example, protected music can be performed live without permission, so long as the performance is not for commercial gain.  This exception may not apply, however, if the Association pays a party band to play at their annual event, regardless of the fact the Association is charging no entrance fee and does not expect to profit from the event.

How can your Association protect itself?  If the scenarios set forth above are common occurrences in your community, the Association should strongly consider obtaining the required licenses for the use of desired music and/or movies.  The licensing fees are relatively modest (see below), and when compared to the potential fines and damages, the balance clearly tips in favor of Associations obtaining the necessary license for use.

Altitude Community Law, P.C., or your Association’s regular counsel, can assist you in navigating the vast copyright waters and determining whether your intended use is fair or infringing.  Also, ASCAP, Broadcast Music, Inc. (BMI), RIAA, UMG, and the Motion Picture Licensing Corporation (MPLC) all have websites from which additional information can be obtained.  For example, the MPLC website provides an application for a blanket license that will provide unlimited showings for a flat annual fee (approximately $500 for one year).

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