QUESTION: We play music in our clubhouse and have a movie night each week. One of our members said we have to pay a license fee because everything is copyrighted. Is that true?
ANSWER: It depends. Congress
allowed for limited exemptions to the licensing rule that some clubhouse
music may fall into (such as playing a radio or television in a public
place if the association does not charge a fee to watch or listen to the
performance). Following are some of the guidelines for deciding whether
Intellectual Property. Music and movies are the intellectual property of those who create and copyright them. If you authorize the "performance" of their work, you are required to pay a fee. This applies to radio and TV stations, restaurants, department stores, etc. It also applies to community associations that put on "public" (17 U.S.C., §101(1)) performances of music and movies in their clubhouses.
Clubhouse Considered Public. A clubhouse is considered a public forum within the development. (Fermata Int'l Melodies, Inc. v. Champions Golf Club, Inc., 712 F.Supp. 1257 (S.D. Tex.1989); Damon v. Ocean Hills.) One condominium association was found in violation when it played copyrighted songs for a dance held in its clubhouse where it did not charge a fee to attend but asked for a donation, which the court deemed an admission fee. (Hinton v. Mainlands of Tamarac, 611 F.Supp. 494 (S.D. Fla. 1985).)
Clubhouse Movie Night. Unless license fees are paid, clubhouse movie nights for members violate copyright laws. The Motion Picture Licensing Corporation posted the following on its website:
Licensing. Associations can purchase annual licenses for music from ASCAP (American Society of Composers, Authors and Publishers), BMI (Broadcast Music Inc.), UMG (Universal Music Group), RIAA (Recording Industry Association of America), and SESAC (Society
of European Stage Authors and Composers). A license from any of the
above organizations only applies to copyrighted material in that
organization's collection. Accordingly, it may be necessary for an HOA
to obtain licenses from more than one organization. For movies, the
licensing organizations are MPLC (Motion Picture Licensing Corporation) and Criterion Pictures.
Motion pictures and other audiovisual works that are available for
rental or purchase are intended for personal, private, home use only. If
you wish to show the work in any other place, you must have a separate license that specifically authorizes the public performance of that work. These rules are detailed in the federal Copyright Act, as amended, Title 17 of the United States Code.
According to The Copyright Act, only the copyright owner holds
the exclusive right, among others, “to perform the copyrighted work
publicly.” (Section 106)
The rental or purchase of a motion picture or other audiovisual
work does not include the right to perform the copyrighted work publicly.
Films may be shown without a separate license in the home to a
normal circle of family and its social acquaintances (Section 101)
because such showings are not considered public.
Films may be shown without a license to non-profit educational
institutions for “face-to-face teaching activities” because the law
provides a limited exception for such showings. (Section 110(1))
All other public performances of motion pictures and other
audiovisual works are illegal unless they have been authorized by
license. Even performances in semi-public places such as clubs,
lodges, factories, summer camps and schools are public performances
subject to copyright control. (Senate Report No. 94-473, page 60; House
Report No. 94-1476, page 64).
Both for-profit organizations and non-profit institutions must
secure a license to show films, regardless of whether an admission fee
is charged. (Senate Report No. 94-473, page 59; House Report No.94-1476,
Penalties. Inadvertent violation of copyright laws can result in
statutory damages ranging from $750 to $30,000 per violation plus
attorneys' fees and costs. Intentional violations can result in damages
up to $150,000 per violation plus attorneys' fees and costs.
Recommendation: The laws
are wide ranging and the exceptions can be confusing. Boards should
consult legal counsel to see if they qualify for an exception.
ASSISTANCE: Associations needing legal assistance can contact us.
To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.