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January 21, 2013

Millbury Restaurant Accused In Music Copyright Case

April 21, 2012, was a bad day for the Wheelock Inn in Millbury, though its owner, Steven Nevalsky, may not have known it at the time.

It was on that Saturday when Broadcast Music Inc. (BMI), one of the largest music licensing firms in the country, chose to send a representative to listen to a band that was playing at the bar and restaurant.

Nine months later, the inn and Nevalsky could be on the hook for tens of thousands of dollars in copyright damages.

BMI and a group of copyright holders filed suit against the Wheelock in October, alleging that a live music performance that day had included eight copyrighted songs licensed by BMI.

The list includes such well-known songs as “Dead Flowers” and “Get Off Of My Cloud” by the Rolling Stones, “Folsom Prison Blues” by Johnny Cash and “Born To Be Wild” by Mars Bonfire.

Court records from the U.S. District Court in Worcester show that Nevalsky has not responded to a summons, prompting BMI's attorney to request a notice of default, which, if granted, could lead to a judge ordering Nevalsky to pay fines.

BMI has sued five establishments in Massachusetts since 2004, records show, though none were in Central Massachusetts. The fines paid have varied, but can range from $750 to as much as $50,000 per violation.

Indeed, it turns out that buying music does not give a restaurant or bar the right to play it as entertainment for its guests. It must pay licensing fees, usually in the form of a subscription to one of the three major licensing firms.

In the most recent suit in the Bay State, a judge in June 2011 ordered a Salem bar and restaurant to pay BMI $15,000 after it was alleged to have played five BMI-controlled songs.

Less than two months later, a North Carolina judge ordered an establishment in that state to pay more than $30,000 to BMI for just four songs.

BMI: We Reached Out

Leah Luddine, a spokeswoman for BMI, said the Wheelock Inn came to the company's attention after Nevalsky bought the property in 2008. The previous owner had an up-to-date license, but the fees stopped coming under Nevalsky's ownership, Luddine said.

“After an extensive number of phone calls and dozens of letters sent to the establishment, the owner refused to obtain a BMI license,” Luddine wrote in an email. “A member of the BMI staff visited the establishment two times to try to rectify the situation, but the owner would not agree to obtain a license in order to follow proper copyright law.”

Nevalsky did not return a message seeking comment and was not at the Wheelock Inn when a reporter went there this month.

If an establishment is playing recorded music for patrons, odds are there are plenty of BMI songs that will be played. BMI holds the right to license 7.5 million copyrighted musical compositions, according to its website, which also said it has rights to approximately one of every two songs played on the radio.

Knowing The Rules

The fact that restaurant owners can't offer copyrighted musical entertainment to their patrons without paying for it comes as a shock to some of them.

Stephen Clark, head of legislative affairs for the Southborough-based Massachusetts Restaurant Association (MRA), said he has taken phone calls from members who are surprised to receive correspondence from one of the major licensing firms (which also include the American Society of Composers, Authors and Publishers, or ASCAP, and SESAC Inc.) telling them they have to pay annual licensing subscription fees, which can range from several hundred dollars to several thousand dollars, depending on the size of the establishment and other factors.

Clark said business owners are often upset because they had not anticipated or planned for the additional cost to pay for licensing.

“It's probably the most frustrating call we get from restaurateurs and the most frustrating news we have to pass on to restaurants,” Clark said.

Licensing fees vary according to the size of the establishment, whether or not it's a part of a larger chain and what sort of music is being played.

According to a fee calculator on BMI's website, an establishment with an occupancy of 100 that plays recorded music from an mp3 player or other digital source, and that offers live music once a week with dancing (there's a charge for dancing included in the fee calculation), would pay about $880 a year for a license subscription.

Negotiate On Licensing?

Though it may not work, Clark usually recommends that restaurateurs call the licensing companies and try to negotiate a price.

A cheaper price can also be had through MRA membership. The organization receives a discounted price from BMI through an agreement with the Council of State Restaurant Associations, he said.

“It's not something you're going to hear about in Restaurant 101,” Clark said. “When the companies initially reach out to them, it seems like the fees are very high and, unfortunately, they have federal law on their side.”

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