IP Law Daily, COPYRIGHT—S.D. Tex.: Hotel, restaurant, bar operator liable for statutory damages, attorneys’ fees for unlicensed public performances of songs, (Jul 12, 2013)

By Thomas Long, J.D.

A hotel, bar, and restaurant operator was liable for $45,000 in statutory damages and over $11,000 in attorneys’ fees and costs to performing rights organization Broadcast Music, Inc. (“BMI”) for unauthorized performances of musical compositions from BMI’s repertoire, the federal district court in Houston has ruled (Broadcast Music, Inc. v. Midtown Beverage, LLC, July 11, 2013, Ellison, K.). The operator (Midtown Beverage, LLC) also was permanently enjoined from further infringing acts.

BMI asserted 15 claims of willful copyright infringement against Midtown. It was undisputed that, between July 2010 and October 2011, BMI repeatedly informed Midtown of the need to obtain permission for public performances of copyrighted music. BMI sent 31 letters to Midtown advising it of the need to enter into a license agreement. Midtown ignored all communications from BMI. Despite a cease-and-desist letter from BMI sent on July 11, 2011, public performances of songs licensed by BMI continued at the hotel. A BMI investigator visited the hotel on September 17, 2011 and generated an audio recording and written report of the songs played at the hotel’s bar that day, which included all 15 of the songs that were the subject of the current action.

Innocent infringer. Midtown did not dispute any of the elements of copyright infringement. BMI established that public performances of the compositions at issue took place, and Midtown did not deny that the songs were performed. Midtown also conceded that it lacked authorization to perform the works. The only remaining issues were whether Midtown was an “innocent infringer” and what the appropriate remedies should be.

In its amended answer to BMI’s complaint, Midtown asserted an “innocent infringer” defense. The only evidence offered in support of this assertion was an affidavit from an employee who stated that she “believed the karaoke provider was licensed.” This belief was not personal knowledge and did not raise a genuine issue of material fact, the court said.

Furthermore, Midtown could not be considered an innocent infringer because it was given ample notice of its infringing acts. Despite being warned by BMI on numerous occasions that a license was necessary for Midtown to legally perform BMI-licensed music, and multiple offers from BMI to enter into a license agreement, Midtown continued performing the songs without authorization.

Injunctive relief. In the court’s view, injunctive relief was appropriate because Midtown had demonstrated a blatant disregard of BMI’s repeated requests to cease infringement. There was a substantial risk of future infringement, the court said. Any damage that Midtown would sustain from not being able to perform the music could have been avoided if it had entered into a license with BMI. An injunction would serve the public interest by enforcing copyright law.

Statutory damages. BMI requested statutory damages under Sec. 504(c)(2) of the Copyright Act in the amount of $3,000 for each of the 15 songs infringed, for a total of $45,000. Given Midtown’s deliberate indifference toward the copyright laws and its willful disregard of BMI’s repeated attempts to enter into a license agreement, BMI’s request was reasonable, the court determined.

Attorneys’ fees. Midtown’s deliberate misconduct also warranted an award of BMI’s attorneys’ fees under Sec. 505 of the Copyright Act, the court decided. BMI set forth its attorneys’ fees and costs in a declaration and other records, and Midtown did not dispute that BMI had incurred fees and costs in the amount of $11,243,36.

The case is Civil Action No. 4:12-CV-1617.

Attorneys: Tan Hoang Pham (Baker & McKenzie) for Broadcast Music, Inc. John Steven Dwyre (John Dwyre Assoc. PLLC) for Midtown Beverage, LLC.

Companies: Broadcast Music, Inc.; Midtown Beverage, LLC

Cases: Copyright TexasNews