Many long term care (“LTC”) facilities play music on radios and televisions for the pleasure of residents and their guests. Under the Copyright Act (the “Act”), the owners of copyrights in music have the exclusive right to perform or display copyrighted work publicly. For LTC facilities, this may mean that turning on a television or radio, singing, dancing or active performance in a location open to the public or before people not family members and their social acquaintances may be Act violations. Thus, facilities have become the targets of copyright enforcement businesses, such as BMI, SESAC and ASCAP.
These enforcers employ caseworkers who search the Internet for information describing facility use of music. Facility websites with music mentioned may trigger violation letters with attached license agreements requiring facilities to pay flat rates per resident room, per facility. These form contracts are generally not negotiated and renew annually, with rate increases. As of May 2016, no reporting source indicates that these contracts or application of the Act have been challenged by a LTC facility.
The Act contains numerous exemptions and limitations. Uncompensated performances without transmission to the public, such as volunteers playing music to residents or residents playing a facility piano in common rooms, do not appear to be violations of the Act. The Act exempts compensated performances if admission proceeds are used for educational, religious or charitable purposes.
The Act’s “homestyle exemption” excludes public reception of a radio or television transmission on a single receiving apparatus like used in private homes, which are not further re-transmitted to the public and for which there are no admission fees. The “establishment” exception to this exemption applies to businesses open to the general public with the majority of their nonresidential space used for selling goods or services. When the establishment allows the general public to hear the radio or television transmission, it is exempt if it is not a restaurant and has less than 2000 square feet of non-parking space or exceeds 2000 square feet and the audio performance uses 6 speakers or less with no more than 4 speakers in any 1 room or adjoining outdoor space and any visual component has 4 or fewer devices with 1 per room and with a diagonal screen size of no more than 55 inches.
Because the Act’s application to LTC facilities does not appear to have been challenged, the question of whether playing music at a facility is a public performance has not been determined. Whether facilities are “establishments” is unknown, but we do know that they are generally not considered to be open to the public and their common space is not usually used for sale of goods or services. If the facility uses a sound system with speaker size and receiver wattage akin to a home setting, it can likely be exempt from the Act. Court decisions indicate that this assessment is applied on a facility-by-facility basis and not on a chain as a whole.
Enforcement of the Act against LTC facilities is ripe for challenge, but the cost of the licensing fee versus risks of litigation should be considered. Losing a lawsuit may require payment of the opponent’s costs and attorney fees. A judgment will either include the copyright owner’s actual sales losses plus profits of the infringer or statutory damages from $750.00 to $30,000, per work performed. Willful violations include additional awards up to $150,000.
SESAC, BMI and ASCAP are targeting LTC facilities. Because they enforce rights of different owners, facilities pay each entity to play music. Challenges to the blanket license agreement require careful consideration and thorough review of the agreement. Paying the fee may be a bitter pill to swallow, but it may make the best business sense.