You may have heard about restaurants and other small business in Connecticut being sued over playing music for their customers. It can be extremely damaging to a business, and it seems to be happening more and more. What’s going on?
Well, these types of actions tend to start off when a mass licensing agency sends one of its employees to a business location, and tells the employee to write down every song that is played while they are there. If someone had done this at your business, chances are good that you would never even have noticed them. The employee is typically instructed to act naturally, and to make full use of the establishment. At a restaurant, the employee may sit down and eat; and at a store, he/she may actually shop (it sounds like a great job).
The employee then sends the list he made to his boss, who runs it through a computer and determines which of those titles the company owns a license to. If (or more likely, when – the registries are pretty extensive) there is a hit for a song that the licensing company has an interest in, legal action begins.
Generally, a cease and desist letter is sent to the business before anything gets taken further. Often times, this letter will include a settlement demand and a draft complaint of a complaint to be filed in Federal Court. These documents will typically allege a litany of Federal claims, most often involving copyright infringement (I call this practice “copyright trolling,” due to the similarities between it and patent trolling). While which particular law (if any) was violated depends heavily on the situation, the result is often the same.
If a business owner has not looked into the surrounding law (e.g., 17 U.S.C. § 110), the licensing company may have him or her “dead to rights.” Intellectual property law is astoundingly complex, and often requires oddly specific things (for instance, the number of speakers through which music is played may be the key to whether a business owner has to pay). Relatively few attorneys practice intellectual property law, and copyright is an area that is constantly changing to react to technology. Further, copyrights are governed by Federal law, and Federal Courts are notoriously slow, in part because of the complexity of their procedural rules (in contrast to those of State court).
The result of all this is that settlement is often times much cheaper than fighting. Between the complexity of governing law and the general practice of barring disclosure after settlement, many small business owners become aware of this problem after they have been sued.
So what can be done? Well, that depends on where you are in the process. If you are a business owner looking to avoid suit, contact an attorney for advice on how to avoid this and other common pitfalls. If you have received a cease and desist letter, take the letter seriously. Do not, under any circumstance, ignore it; doing so could result in increased damages. If you are unsure on how to proceed, contact an attorney.
Life’s not always fair, but it may be fairer than you think it is. If your business is in a bind, The Law Office of Christopher J. Mutchler may be able to help. Give us a call, shoot us a text, send us an email, or Contact Us.
By: Christopher J. Mutchler, Esq.