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AMOA Vows To Push For Action After Analysis On iPod Nights

Posted On: 11/22/2005

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CHICAGO -- The Amusement & Music Operators Association on Oct. 5 released its attorneys' report on the legality of "iPod nights," along with a "white paper" policy statement declaring that AMOA will press the music industry to enforce copyrights in an effort to defend the jukebox market. Earlier this year, AMOA commissioned the law firm of Serling, Rooks and Ferrara LLP to investigate the legal status of public performance of music through use of Apple's iPod, a personal digital music storage and playback device.

The resulting legal analysis, given to AMOA leadership on Sept. 27, states: "While, under current U.S. Copyright law it is likely that the performance of recorded music by means of a patron plugging his MP3 player into a location's sound system constitutes copyright infringement both by the 'iPod DJ' performing the recordings and the owners of the location, the question is how AMOA and its membership can combat it...Despite suffering economic loss, the operators and the AMOA unfortunately have no legal standing to bring legal action..."

In the association's position paper released in early October, AMOA leaders stated: "AMOA intends to use every resource at its disposal to motivate the RIAA [Recording Industry Association of America], the U. S. Performing Rights Organizations (ASCAP, BMI and SESAC) and other appropriate associations and entities to enforce their rights under copyright law and otherwise.... AMOA has sought the assistance of the Recording Industry Association of America to urge its record company members to expand printed warnings pertaining to unauthorized copying to include unauthorized public performances and to insist that their digital download licenses emphasize such prohibitions in connection with all downloads. To that end, AMOA urges its members to monitor locations and establishments that are promoting the use of iPods and other MP3 players in order to determine specific illegal and potentially illegal activity, including for example, illegal file sharing. This information should be used to further encourage AMOA's allies (RIAA, ASCAP, BMI, SESAC, iTunes, Napster, etc.) to take swift and appropriate legal action."

In a further statement, AMOA's Kelleher pointed out that the legal issues surrounding iPod nights and music licensing are considerably complex. "iPod Nights -- like today's digital music -- are examples of a dynamic, rapidly-evolving technology," he pointed out. "For example, some of the issues and concepts referenced in the memorandum and position paper are tied to the Digital Millennium Copyright Act, which have not yet been challenged in court. While AMOA, and many others, desire more definitive answers in this area, only over time will these matters be tested and ultimately determined."

AMOA took note of "the growing trend of bars and other facilities hosting so-called 'iPod Nights,' where patrons are permitted and encouraged to play amateur disc jockey" by performing music previously downloaded on their personal iPods or other MP3 players, using the bar's sound system and in some cases equipment owned by AMOA members without permission.

Pointing to fines of up to $150,000 for willful infringements with respect to any one work under U. S. Copyright Law Section 504 (c), AMOA stated, "Such activity also almost certainly constitutes a violation of the prohibition against commercial use of the music under the Terms of Use of the digital download provider (e.g. iTunes, Napster, etc.), and exposes the location owner to further actions for such illegal use."

AMOA continued: "The unauthorized use of an AMOA member operator's equipment in connection with a location's use of iPods or other MP3 players may result in legal action against the location owner. In addition, the sponsoring of such iPod or MP3 player use may violate provisions of the operator's location agreement regarding competing music sources and such provisions may be strictly enforced even if full compliance was previously overlooked."

In the Sept. 27 analysis from AMOA's attorneys it was noted: "Whether or not 'iPod Nights' (IPNs) turn out to be an 'iFad,' the problem faced by AMOA members is a very real one." The firm suggested that "AMOA and its membership can combat [this problem through] a combination of educating those involved that unauthorized public performance of copyrighted material may result in significant penalties... and that they are in fact violating copyright rights, just as if they were engaged in illegal 'peer-to-peer' downloading of material protected by copyright."

Attorneys went on to say that fewer than 10% of music buyers of recorded music (both CDs and MP3) may realize their purchase carries with it only the right to "personal, noncommercial use," and that it is illegal to make copies or publicly perform the music. "Only as a result of a lengthy and expensive public relations and legal campaign has the general public become somewhat aware that illegal duplication is unethical and constitutes risky criminal behavior," the attorneys said. "We can anticipate it will be even more difficult to wage a successful campaign against unethical and illegal public performance, an admittedly more illusive concept for the public to grasp... [Yet] however daunting the task, an educational effort is essential."

Location owners should be the first targets of any educational campaign conducted by AMOA, the attorneys suggested. The reason: "[they] are profiting from the unauthorized public performance of copyrighted materials" and will probably get no sympathy from the public if they are held accountable by the music industry. The attorneys also urged AMOA and individual operators to realize that iPod nights are "destructive to the location's relationship with the operator.... The owner must be reminded that, long after the 'IPN' fad has run its course, the continuation of a mutually beneficial relationship between owner and operator is a valuable asset. Obviously, if there are any contractual prohibitions, they should be brought to the owner's attention," the attorneys added.

Enforcement of the law and enforcement of contractual obligations remains the most potent weapon to combat the problem, AMOA's attorneys conceded. But they cautioned that this tool "may be the most difficult to employ." Only the music industry has legal standing to sue, but "at this time are indicating only that they are aware of the issue, [and] are exhibiting very little interest in combating it in any manner whatsoever, let alone by making efforts to legally enforce their rights," said the lawfirm. "The only exception appears to be ASCAP, BMI and SESAC, the three PROs, which have shown a willingness to enforce their members' rights by directly licensing the locations with 'IPN.'"