David Didio • October 18, 2021
Pass Me the Aux: Insulating Your Business from Copyright Shakedowns
New faces are owning familiar places all across America. With thousands of bars, restaurants, and cafés closing since the onset of the pandemic, many of those establishments have begun to reopen under new management. While this is certainly a breath of fresh air for the majority of Americans, it is blood-in-the-water for the shakedown-sharks hoping to catch novice business owners in violation of music licensing laws (and to extract payment from them).
While most seasoned business owners are aware of the potential liability that can arise from playing their own music, fledgling business owners are often unaware of the laws that govern playing your personal music in a business environment. With the sheer volume of new businesses popping up, shakedown-sharks are on the prowl hoping to catch a business in violation and earn themselves a payday at your expense.
“Who are these ‘shakedown-sharks’?”
“Shake-down Sharks” are executives for Performance Right’s Organizations (PROs) who tour the country to ensure that the owners of songs are compensated when music is played in a commercial setting. Part of their job is entering into licensing deals with radio stations and larger venues, the other part of their job is walking into your small business to demand compensation for unlicensed music.
“But I pay for a premium streaming service, why can’t I just plug in my phone?”
Although you pay for a premium service, the vast majority of individual users have a “Consumer License” to listen to the music. So even though you are paying to stream the music you don’t own the rights to it, you are essentially leasing the music from the artists for your own private listening. Your Consumer License is perfectly fine for listening to in the car or hopping on the AUX at a party, even one with hundreds of people at it, but it does not grant you to “Publicly Perform” any of those songs you are leasing from the artists.
“What is a ‘Public Performance’?”
Without getting too deep into the legal jargon, a Public Performance is any time you are playing music in an environment where money is changing hands (this is why professional DJs cost so much). U.S. Copyright Law is set up so that if someone is profiting off an Artist’s work, either directly or indirectly, that Artist (or most commonly, whoever owns the rights to the song) is entitled to be compensated. Although this can be good for Artists, it can also land a novice business owner in hot water if they are unaware of the need to compensate an Artist above-and-beyond the consumer streaming rates.
“What if I bought the music on iTunes, can I play that?”
Unfortunately, even though you “bought” the song/album from iTunes you still don’t technically “own” it. Instead, you purchased a license to play the song whenever you want privately forever. As such, even music purchased from a music store is not yours to publicly perform.
“How do I make sure I’m paying the Public Performance Rates?”
Thankfully there are a number of options available for business owners who want to curate an audio-aesthetic without running afoul of Copyright Law. Popular services like Pandora, Apple Music, and Spotify (and others) have created a business-tier of music streaming services that automatically send the Artists the Public Performance Rate – insulating your business from potential liability while maintaining your ability to curate a particular vibe.
If you are interested in learning more about insulating your business from a copyright shakedown, message us today.
Cozza Law Group Business Law Blog
the 5 d's of business - a must read for business owners
How Business Litigation Protects Companies From Costly Disputes Although there are many costs involved in doing business, disputes can take a particularly high toll on a company's finances. These disputes might involve contract breaches, copyright violations, premises liability lawsuits, allegations of fraud, and much more. The obvious strategy is to avoid these disputes at all costs. How does business litigation fit into this equation? Can a company use business litigation to strategically protect itself from disputes? These are questions you might want to explore with an experienced business litigation lawyer in Pittsburgh . Business Litigation Strategies Are Often Preventive in Nature Many business litigation strategies are preventative in nature. In other words, companies take effective, early legal steps to eliminate the chances of disputes and legal action at a later date. One example of this is an effective business contract. When drafted properly, a business contract leaves little room for litigation or any other disputes. Many contracts contain arbitration or mediation clauses. These clauses force parties toward private negotiations instead of the courtroom floor. This private “alternative dispute resolution” (ADR) process is inherently cheaper, faster, and more private than litigation. Once a dispute reaches the courtroom, companies must pay much higher legal fees. They also face longer timelines. One of the biggest downsides of litigation for companies is its public nature. Many companies desperately need to keep sensitive information out of the public eye, whether that includes baseless allegations, copyrighted material, trade secrets, or more. Private negotiations can be so quick that they can hardly be called “disputes,” and issues may be resolved in a matter of weeks. In an ideal world, these disputes never even happen in the first place. A strong contract lays out clear responsibilities and privileges for each party, leaving little room for misinterpretation. Another obvious way to avoid business litigation is by choosing appropriate business partners. Another preventative business litigation strategy involves liability waivers. Although these waivers are not as effective as some company leaders assume, they can nonetheless prevent many needless or frivolous lawsuits. Liability waivers are not appropriate or possible in all industries, but they could be worth considering for businesses that welcome large numbers of patrons onto their premises. Business Litigation Strategies May Involve Regulatory Compliance Sometimes, the biggest legal threat to a business is not a partner or a customer, but rather the government. Regulatory compliance is an incredibly important business litigation strategy, and company leaders should consider consulting with lawyers who understand the specific regulations and laws that pertain to their industries. For example, a company that deals with industrial waste or chemicals may need to become highly familiar with the environmental laws. Generally speaking, these laws become more restrictive each year. Company leaders may need to keep a close eye on regulatory changes to ensure compliance. A company in another industry might deal with a substantial number of employees. If this is the case, the company might need to pay close attention to labor laws, discrimination laws, religious rights, and many other factors that can lead to employment lawsuits. Poaching is another issue that could be concerning, as are non-compete clauses. An experienced business litigation law firm may be able to help companies draft policies and contracts that drastically limit the number of employment-based legal issues in the future. For example, a company might have to follow strict guidelines if it wants to create enforceable non-compete clauses in Pennsylvania. Organized Corporate Governance Can Reduce Litigation and Disputes Many business disputes stem from poor, disorganized corporate governance. When the working relationship between shareholders, partners, and the executive suite begins to fall apart, disputes are inevitable. Effective shareholder agreements and organized record-keeping can go a long way in making sure everyone is on the same page. Business Litigation Attorneys Can Help With Risk Assessment Sometimes, dispute prevention starts with risk assessment. If company leaders become aware of a potential legal risk, they might consider a different approach or business strategy. For example, a company might consider entering into a new contract with a supplier. A business litigation attorney may be able to conduct effective legal research into the new supplier to determine the legal risk associated with a new contract. Perhaps the new supplier tends to get into lawsuits with its partners. Maybe the company is already in the process of being sued. Whatever the case may be, an experienced lawyer can help company leaders assess the legal risks associated with certain actions before moving forward. Most Disputes Never Reach the Trial Stage Since parties usually understand the downsides of going to trial, they tend to settle their disputes outside of court. This means that disputes rarely escalate into trials. However, this does not necessarily mean that a privately settled dispute is not costly for a company. Instead, a settlement could be disastrous for a company. This is why it makes sense to negotiate effectively, even if you’re dealing with someone who agrees to mediation or arbitration. Business litigation attorneys are often effective negotiators, and they can guide both parties toward mutually beneficial outcomes. If the goal is to reduce the cost of a dispute, a lawyer can push back with effective counterpoints and counteroffers. If the goal is to gain as large a settlement as possible, your lawyer can advocate on your behalf and reject lowball offers. Can a Business Litigation Lawyer in Pittsburgh Help My Company? Whether you are facing a dispute or you simply want to avoid the possibility of legal action in the future, a business litigation lawyer in Pittsburgh may be able to help. These lawyers can help your company take preventative steps, such as creating effective contracts or liability waivers. A business litigation attorney can also help you if your company is already facing a serious dispute or lawsuit. Consider reaching out to Cozza Law Group, PLLC, at (412) 790-2789 to learn more about your next potential steps. You can also find us online .
