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© C in a Circle - Exceptions To The Rule: When Unlicensed Uses of a Copyright Are Not Infringements

For various reasons, Congress has identified ten types of unlicensed uses that they chose to allow to be made without requiring the users to compensate the copyright owners.

Posted in Songwriter 101 on June 14, 2006

By Gary Roth

As I’ve previously indicated, if a copyrighted song is used without permission (a license), it is considered an infringement, and the copyright owner is entitled to damages if his or her claims are proved in a lawsuit.

But for various reasons, Congress identified ten types of unlicensed uses that they chose to allow to be made without requiring the users to compensate the copyright owners. They all deal with the public performance or public display right that is granted to a copyright owner. Those that are performance-based are ones that the PROs cannot license, so members of ASCAP, BMI and SESAC will not receive royalties in those contexts.

Here is a summary of the eight exemptions that relate to music. Keep in mind that many of these are subject to past and future interpretation by the courts and many of the actual words used in the statute are defined specifically. I am paraphrasing for your information. Because they are a limitation on the exclusive rights of a copyright owner, these exemptions are rather specific in their requirements. The names of the exemptions are mine, not Congress’s.

The educational exemption: This exemption generally allows the performance or display of any work to be made in the course of face-to-face teaching in a formal or informal classroom of a non-profit educational institution. So if a teacher or student wants to play a song or show a film clip in that context, they can do so without having to get permission. However, if a video known to be a bootleg is shown, the exemption is lost and it is an infringement.

The educational exemption is limited to the performance and display rights. The exercise of the reproduction right, which needs to be licensed if a copy of the song or film clip is made (such as onto a computer hard drive), is not part of this exemption. But fair use principles may apply to that.

The closed-circuit exemption: This one is rather complex because it is in the nature of transmissions that they are open to an abuse of rights, so some additional protections were built in for the copyright owners. With one exception, the closed-circuit exemption covers the performance right in all non-dramatic literary or musical works and “reasonable and limited portions” of all other kinds of works, and the right to display a work comparable to what would be displayed in a live class.

This exemption can be used when a government or an accredited nonprofit educational institution transmits a work, if the use is made or overseen by an instructor as an integral part of a regular class session, if using the transmission is directly related to and of material assistance to the teaching content of the transmission, and if the transmission is made solely for and limited to students officially enrolled in the course or the officers or employees of the government as part of their official duties or employment. The transmitting body or institution also is required to institute copyright policies, provide informational materials that promote copyright law compliance and provide notice to students that the materials used in connection with the course may be subject to copyright protection. If the transmission is digital, technological measures must be implemented that reasonably prevent whoever gets it from retaining the work in accessible form for longer than the class session lasts and from making any unauthorized further dissemination. Also, the government or institution can’t engage in conduct that could reasonably be expected to interfere with any copyright owner’s controls against retention or unauthorized dissemination of the transmission.

As with the educational exemption, if the transmission is given by means of an illegal copy or phonorecord and the body or institution knew or had reason to believe it was illegal, the exemption is lost.

The religious exemption: This applies to the performance right in non-dramatic literary or musical works and to dramatic-musical works of a religious nature (such as “Jesus Christ Superstar”), as well as to the display rights in all works.

If the work is performed or displayed in the course of services at a place of worship or other religious assembly the unlicensed use is not an infringement. Thus, a church does not have to pay to perform copyrighted music during services. It does need to obtain a license to play the same music in the social hall when no services are in session.

The non-profit exemption: This exemption covers the performance of a non-dramatic literary or musical work if the performance is without any purpose of direct or indirect commercial advantage and without payment of any compensation to any performer, promoter or organizer, there is no direct or indirect admission charge and proceeds net of reasonable production costs are used exclusively for educational, religious or charitable purposes, and not for private financial gain. This is the exemption that a concert for charity would use, assuming all of the above requirements are met.

The exemption is lost if the performance is publicly transmitted or if the copyright owner objects to the performance in a signed writing of the proper kind at least a week in advance. That rule allows a copyright owner to pull his music from a charitable event that supports a cause that he or she does not support.

The transmission exemptions: There are two exemptions that I’ll call the transmission exemptions. One involves a single receiver and one involves more elaborate equipment used in small business places.

The first of the transmission exemptions covers the performance and display right in all works and allows a transmission to be heard in public on a single receiving apparatus of a kind commonly used in private homes. However, the exemption is lost if a direct charge is made to see or hear the transmission or the transmission is further transmitted to public. You can imagine how the definition of a single receiver “commonly found in private homes” has changed over the years. This exemption basically allows a commercial establishment to play one home-style radio or TV and not have to pay licensing fees for the music or videos that are heard by the employees and the patrons, which otherwise they do.

The other exemption involves multiple receivers used in small commercial establishments. This covers performance and display of non-dramatic musical works. The establishment is allowed to communicate a transmission or retransmission from a radio or TV station or (if audio-visual) by a cable or satellite carrier, but the place has to be of a certain size, which varies with whether or not it sells food and drink.

For a non-food/drink business, such as a clothing store, either the business must have less than 2000 gross square feet excluding parking, or if the business has more than that, it can be exempt if it uses a maximum of six audio speakers (of which no more than four can be in one room or adjoining outdoor space), or uses no more than four audio-visual devices (of which no more than one is in any room) and no device is bigger than 55 inches and the sound for the video is transmitted over no more than six speakers, again of which not more than four are in any room or adjoining outdoor space.

For a food/drink business, either the business must have less than 3750 gross square feet excluding parking, or if the business has more than that it uses a max of six speakers for audio with no more than four in one room or adjoining outdoor space, or no more than four audio-visual devices of which no more than one is in any room, no device is bigger than 55 inches and the sound is transmitted over no more than six speakers of which not more than four are in any room or adjoining outdoor space.

In both kinds of businesses, the exemption is lost if a direct charge is made to see or hear the transmission or retransmission, if the transmission or retransmission is further transmitted beyond the business area or the transmission or retransmission is not licensed by the copyright owner.

The county fair exemption: This covers performance of non-dramatic musical works made by a governmental body or non-profit agricultural or horticultural organization in the course of an annual agricultural or horticultural fair or exhibition conducted by the body or organization. Note that, while the body or organization running the fair is protected from being responsible for the infringement of a concessionaire, a business or a person at the fair, those persons and businesses themselves are not covered by this exemption.

The record store exemption: The record store exemption covers performances of non-dramatic musical works made by a vending establishment open to the public for the sole purpose of promoting retail sale of copies or recordings of the music or of the devices used to perform the music. So when you go into Best Buy to listen to new CDs or to shop for a stereo receiver, the store does not need to have a license to play the music coming from the listening kiosk or the stereo.

If there is any direct or indirect admission charge or the musical performances are transmitted beyond the immediate area where the sale is occurring or to outside of the establishment, the exemption will not apply.

The veterans and fraternal exemption: Finally, the veterans and fraternal exemption covers performances of non-dramatic literary and musical works used in the course of a social function organized and promoted by a nonprofit veterans or fraternal organization to which the general public isn’t invited (other than those people who the organization invites) if the proceeds net of reasonable production costs are used exclusively for charitable purposes and not for financial gain.

If this exemption is claimed by a college or university for its fraternities or sororities, it is not applicable if their social functions that use the music aren’t solely to raise funds for a specific charitable purpose.

Why are these particular kinds of performances and displays exempt? Most of them were the result of political compromises over the years to resolve matters that Congress felt needed to be addressed. Others were included to balance the rights of copyright owners and certain types of users that Congress felt obliged in the interest of public policy (or perhaps politics) to allow using copyrighted material without charge.

Now you know who can use your music under certain circumstances without having to pay for doing so. You may not agree with the exemptions, but since they are part of our law, you are obliged to accept them.

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