Fairness in Music Licensing Act of 1998
Encyclopedia
The Fairness in Music Licensing Act increased the number of bars and restaurants that were exempted from needing a public performance license to play music or television during business hours. The bill was companion legislation passed along with the Sonny Bono Copyright Term Extension Act in 1998.
gives copyright owners the exclusive right to publicly perform their works. Performance Rights Organizations (PRO) - like ASCAP, BMI
, SESAC
and Acemla- administer public performance rights for songwriters and composers, providing blanket licenses to venues allowing them to play music for their customers.
Section 110(5) of the Copyright Act of 1976 exempted the need for a public performance license for music played on "a single receiving apparatus of a kind commonly used in private homes" and without a "direct charge" made to listen to the performance. In the years following, courts have interpreted the provision in widely divergent ways, leading to uncertainty for bar and restaurant owners who played music on their premises. Many restaurant and bar owners also complained about "disruptive" and "coercive" tactics employed by field agents of the PRO's investigating unlicensed establishments.
As a result, the National Restaurant Association
, the National Licensed Beverage Association, and similar interest groups began lobbying for a more favorable exemption in the early 1990s. Their legislative attempts were strongly opposed by the PRO's, who argued that music played in bars and restaurants draws customers in and songwriters deserve to be compensated for the use of their works in this manner.
Despite the opposition, the bill was ultimately successful, after having been attached as an amendment to the Sonny Bono Copyright Term Extension Act, and was signed into law on October 27, 1998. The new provision kept the 'homestyle' exemption of the original provision but added specific exemptions based on the type of establishment, size of establishment, and type of equipment used to play music. Several studies have concluded that the Act exempts around 70% of eating and drinking establishments.
began dispute proceedings against the United States
in front of the World Trade Organization
, claiming the new exemption violated the Berne Convention
's protection of an author's exclusive public performance right. On July 27, 2000, the WTO's Dispute Settlement Body sided with the EC and held that the exemption violated Articles 11bis(1)(iii) and 11(1)(ii) of the Berne Convention (1971) as incorporated into the TRIPS Agreement by Article 9.1. The US and EC announced a temporary settlement arrangement on June 23, 2003, though the Fairness in Music Licensing Act remains in effect. Under the Temporary Settlement, effective June 23, 2003 through December 20, 2004, the US paid $3.3 million to a fund established in the EU for the benefit of rights-holders. As of May 7, 2010, the US continues to file required status reports with the WTO stating that "The US Administration is working closely with the US Congress and will continue to confer with the European Communities in order to reach a mutually satisfactory resolution of this matter."
Background and passage
United States copyright lawUnited States copyright law
The copyright law of the United States governs the legally enforceable rights of creative and artistic works under the laws of the United States.Copyright law in the United States is part of federal law, and is authorized by the U.S. Constitution...
gives copyright owners the exclusive right to publicly perform their works. Performance Rights Organizations (PRO) - like ASCAP, BMI
Broadcast Music Incorporated
Broadcast Music, Inc. is one of three United States performing rights organizations, along with ASCAP and SESAC. It collects license fees on behalf of songwriters, composers, and music publishers and distributes them as royalties to those members whose works have been performed...
, SESAC
SESAC
SESAC, originally the Society of European Stage Authors & Composers, is the smallest of the three performance rights organizations in the United States. SESAC was founded in 1930, making it the second-oldest performing rights organization in the U.S. SESAC is also the fastest-growing PRO in the...
and Acemla- administer public performance rights for songwriters and composers, providing blanket licenses to venues allowing them to play music for their customers.
Section 110(5) of the Copyright Act of 1976 exempted the need for a public performance license for music played on "a single receiving apparatus of a kind commonly used in private homes" and without a "direct charge" made to listen to the performance. In the years following, courts have interpreted the provision in widely divergent ways, leading to uncertainty for bar and restaurant owners who played music on their premises. Many restaurant and bar owners also complained about "disruptive" and "coercive" tactics employed by field agents of the PRO's investigating unlicensed establishments.
As a result, the National Restaurant Association
National Restaurant Association
thumb|National Restaurant Association logoThe National Restaurant Association is a restaurant industry business association in the United States, representing more than 380,000 restaurant locations. It also operates the National Restaurant Association Educational Foundation...
, the National Licensed Beverage Association, and similar interest groups began lobbying for a more favorable exemption in the early 1990s. Their legislative attempts were strongly opposed by the PRO's, who argued that music played in bars and restaurants draws customers in and songwriters deserve to be compensated for the use of their works in this manner.
Despite the opposition, the bill was ultimately successful, after having been attached as an amendment to the Sonny Bono Copyright Term Extension Act, and was signed into law on October 27, 1998. The new provision kept the 'homestyle' exemption of the original provision but added specific exemptions based on the type of establishment, size of establishment, and type of equipment used to play music. Several studies have concluded that the Act exempts around 70% of eating and drinking establishments.
WTO Dispute
Shortly after the bill went into effect, the European CommunitiesEuropean Communities
The European Communities were three international organisations that were governed by the same set of institutions...
began dispute proceedings against the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
in front of the World Trade Organization
World Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...
, claiming the new exemption violated the Berne Convention
Berne Convention for the Protection of Literary and Artistic Works
The Berne Convention for the Protection of Literary and Artistic Works, usually known as the Berne Convention, is an international agreement governing copyright, which was first accepted in Berne, Switzerland in 1886.- Content :...
's protection of an author's exclusive public performance right. On July 27, 2000, the WTO's Dispute Settlement Body sided with the EC and held that the exemption violated Articles 11bis(1)(iii) and 11(1)(ii) of the Berne Convention (1971) as incorporated into the TRIPS Agreement by Article 9.1. The US and EC announced a temporary settlement arrangement on June 23, 2003, though the Fairness in Music Licensing Act remains in effect. Under the Temporary Settlement, effective June 23, 2003 through December 20, 2004, the US paid $3.3 million to a fund established in the EU for the benefit of rights-holders. As of May 7, 2010, the US continues to file required status reports with the WTO stating that "The US Administration is working closely with the US Congress and will continue to confer with the European Communities in order to reach a mutually satisfactory resolution of this matter."