ASSEMBLY, No. 1698
STATE OF NEW JERSEY
INTRODUCED MARCH 4, 1996
By Assemblymen BAGGER, DORIA, Cohen, Bateman, Gregg, Assemblywoman Wright, Assemblymen Bucco, Bodine, Assemblywoman Bark, Assemblymen Garrett, Corodemus, Green, Roma, Romano, Assemblywoman Allen, Assemblymen Kavanaugh, DeCroce, Assemblywomen Murphy, Heck, Assemblymen Kelly, Geist, Assemblywoman Farragher, Assemblymen T. Smith, Blee, LeFevre, Moran, DiGaetano, Assemblywoman J. Smith, Assemblyman Kramer, Assemblywoman Turner, Assemblymen Azzolina, Rocco, Impreveduto, Pascrell, Garcia, Suliga, Steele, Holzapfel, Asselta, Gibson, Connors, DeSopo, Zecker and Assemblywoman Vandervalk
An Act concerning the enforcement of certain music licenses and supplementing Title 56 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known and may be cited as the "Music Licensing Practices Act."
2. As used in this act:
"Area" means a circular geographic region having a 25 mile radius surrounding each business location of a proprietor;
"Copyright owner" means the owner of a copyright of a nondramatic musical work, other than a motion picture or audiovisual work;
"Performing rights society" means an association or corporation that licenses the public performance of nondramatic musical works on behalf of copyright owners, such as the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI) and SESAC, Inc.;
"Proprietor" means the owner of a retail establishment, restaurant, inn, bar, tavern or any other similar place of business or professional office located in this State in which the public may assemble and in which nondramatic musical works may be performed, broadcast, or otherwise transmitted for the enjoyment of the members of the public there assembled;
"Royalty" or "royalties" means the fees payable to a copyright owner or performing rights society for the public performance of a nondramatic musical work.
3. a. Every performing rights society doing business in this State shall file a current list of the copyrighted nondramatic musical works for which the performing rights society collects royalties on behalf of copyright owners with the Secretary of State at least annually.
b. The list required by this section may be relied upon by a proprietor in making an informed decision before entering into a contract with a performing rights society and shall be binding between the parties for the period of any contract once executed pursuant to this act.
c. The list required by this section shall be provided at a reasonable cost to any person upon request.
d. Every performing rights society doing business in this State shall establish a toll free telephone number which can be used to answer inquiries regarding specific nondramatic musical works licensed by that performing rights society.
4. A performing rights society shall not enter into or execute a contract for the payment of royalties by a proprietor unless, no later than 72 hours prior to the execution of the contract, the performing rights society provides to the proprietor, in writing, the following:
a. a schedule of the rates and terms of royalties under the contract;
b. a schedule of the rates and terms of royalties under agreements executed by the performing rights society and proprietors of comparable businesses in the area;
c. notice of its most recent filing with the Secretary of State pursuant to section 3 of this act and the rights and responsibilities of the performing rights society and the proprietor appurtenant thereto;
d. the toll free telephone number required by subsection d. of section 3 of this act;
e. in the case of a performing rights society which offers discounts to proprietors in the area on any basis, the amounts and terms of those discounts; and
f. notice that the proprietor is entitled to the information required under this act and that the failure of the performing rights society to provide that information is a violation of this act and may render a contract unenforceable under this act.
5. A contract between a performing rights society and a proprietor for the payment of royalties shall be offered for a term of one year, but the parties may agree to contract for a term other than one year.
6. Every contract between a performing rights society and a proprietor for the payment of royalties executed or renewed in this State shall:
a. be in writing;
b. be signed by the parties to the contract; and
c. include at least the following information:
(1) the proprietors' name and business address and the name and location of each place of business to which the contract applies;
(2) the name and business address of the performing rights society;
(3) the duration of the contract; and
(4) the schedule of rates and terms of royalties to be collected under the contract, including any sliding scale, discount or schedule for any increase or decrease of those rates for the duration of the contract.
7. No performing rights society, or any agent or employee thereof shall:
a. enter onto the premises of a proprietor's business for the purpose of discussing a contract for the payment of royalties by that proprietor without first identifying himself to the proprietor or his employees and disclosing that he is acting on behalf of the performing rights society and disclosing the purpose of the discussion;
b. collect or attempt to collect a royalty payment or any other fee except as provided in a contract executed pursuant to the provisions of this act on or after the effective date of this act;
c. use or attempt to use any act or practice in negotiating with a proprietor, or in retaliation for a proprietor's failure or refusal to negotiate, with the intent of coercing the proprietor to negotiate or enter into a contract for the payment of royalties, including, but not limited to:
(1) any act or practice that disrupts the proprietor's business; or
(2) threatening to commence legal proceedings in connection with an alleged copyright violation.
8. Nothing in this act shall be construed to prevent a performing rights society from informing the proprietor of the proprietor's obligations under the federal copyright law pursuant to Title 17 of the United States Code.
9. A person who violates any provision of this act shall be liable to pay a penalty of not more than $2,500 for a first violation and not more than $10,000 for a second or subsequent violation. The penalty shall be collected and enforced in the name of the State by the Attorney General in a court of competent jurisdiction in a summary proceeding pursuant to "the penalty enforcement law," N.J.S.2A:58-1 et seq.
10. a. A proprietor may bring an action in a court of competent jurisdiction or assert a counterclaim against a performing rights society to enjoin a violation of this act and to recover any damages sustained as a result of that violation.
b. The prevailing party in an action brought under this act shall be awarded reasonable attorney's fees and costs of suit.
11. This act shall take effect immediately.
STATEMENT
This bill establishes certain rights and responsibilities between the parties to contracts for the payment of royalties for the performance of nondramatic musical works on certain business premises. The owners of copyrighted music are usually represented by "performing rights societies," such as ASCAP (the American Society of Composers, Authors and Publishers) and BMI (Broadcast Music, Inc.). Among their other activities on behalf of the copyright owners they represent, these societies negotiate "blanket" contracts with individual small businesses, such as restaurants, bars and retail establishments, for the performance, either live or recorded, or broadcast on television or radio, of the copyrighted works in their respective repertoires. Because of the powerful position these performing rights societies have assumed, the average small business owner is at a disadvantage in negotiating a fair contract. Often times, the proprietor is left feeling he has no choice but to contract with several performing rights societies, just to be certain that he doesn't run afoul of the federal copyright laws and open himself up to litigation.
This bill requires performing rights societies to make certain information regarding the musical works represented available so that the proprietor may make an informed decision; and provides certain safeguards and remedies once the contract is executed. Specifically, the bill requires performing rights societies doing business in the State to file a current list of songs for which they collect royalties on behalf of copyright owners with the Secretary of State annually. The list may be used by the proprietor of a business in making an informed decision before entering into a contract with a performing rights society to use music in his place of business. The required list must be provided at a reasonable cost to anyone requesting it. A performing rights society must also establish and maintain a toll free telephone number through which inquiries regarding specific musical works may be made. The bill requires that certain information, including information regarding the list and the toll free telephone number, be provided to a proprietor at least 72 hours before a contract for the payment of royalties is executed; and that certain information be included in the contract. Contracts must be offered for a term of one year, but the parties may agree to a contract of another duration.
Finally, the bill prohibits certain unfair or coercive practices by performing rights societies in their dealings with proprietors and establishes penalties for violations of its provisions. The maximum penalty for a first violation is $2,500, and for subsequent violations, $10,000. The bill also establishes a private cause of action for violation of its provisions.
Regulates certain music licensing practices.