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March 31, 2014

Sued for a Song: Music licensing lawsuits hit CT restaurants

Photo | Pablo Robles John Vazzano, owner of Vazzy's Cucina in Shelton, was upset when his restaurant had to pay $18,000 to settle a music copyright lawsuit.
Photo | Pablo Robles After settling a music copyright lawsuit for $18,000, Vazzano purchased a BMI license for about $4,500 a year.

A few years ago, nine songs were played inside Shelton's Vazzy's Cucina restaurant that ended up costing owners John Vazzano and Vincent L. Noce $18,000.

That's because an agent of licensing giant Broadcast Music Inc., which represents the artists who owned the tracks, attested to being present when the tunes were played and sued Vazzano and Noce for copyright infringement, claiming the restaurant's music qualified as a public performance. Under federal copyright law, that meant the restaurant had to pay for the rights to play the songs, BMI said.

Vazzano said he thinks a private party actually played the tunes. He also thought his Muzak and cable subscriptions protected him from copyright infringement, but that wasn't the case in this instance.

Instead of going through a costly legal fight, the restaurateurs settled the suit, something Vazzano says he is still bitter about today.

“How do you recoup that?” Vazzano asked. “You can't raise your prices.”

Restaurateurs know plenty about the cost of liquor licenses, staffing and ingredients, but a surprising number continue to be entangled by music licensing lawsuits.

Three Connecticut restaurants, including Greater Hartford's Plan B Burger Bar, are currently involved in music copyright infringement suits, federal court records show. Since 2012, at least another eight eateries have settled suits with BMI, or had judges rule against them, court records show.

BMI, which represents the families of artists like Johnny Cash and about 600,000 other clients, has nearly 9.5 million songs in its catalog and brought in $944 million in licensing revenue last year.

The New York-based company has been suing restaurants in Connecticut and beyond since at least the 1980s, court records show. BMI also appears to be more litigious — at least in this state — than its rival, The American Society of Composers, Authors and Publishers (ASCAP).

Besides the parent company of Plan B, BMI has active lawsuits against the owners of Cheshire's Waverly Inn and Willimantic's Lucky Frog. Also, a number of restaurants, court records show, have settled or reached judgments with BMI including: West Hartford's Barcelona Wine Bar; Eli's on the Hill in Branford; Guilford Mooring in Guilford; Lanza's Restaurant in Ansonia; Lumberyard Pub in West Redding; Ash Creek Saloon in Norwalk; and Cobb's Mill Inn in Weston.

While Vazzano's $18,000 settlement is disclosed in court filings, almost all other BMI settlements with area restaurants appear to be confidential.

The steady number of lawsuits over the past few years suggests that restaurants and bars either don't understand copyright rules, or underestimate the likelihood of getting contacted and/or sued by license owners.

Some restaurateurs wonder if BMI's demands are legitimate when they first get a letter or phone call, said Nicole Griffin, executive director of the Connecticut Restaurant Association.

“I think they wonder if it's legitimate because they don't necessarily understand they have to pay a licensing fee for music,” Griffin said.

The association, like its fellow entities in other states, has an agreement with BMI to offer its members licenses at a discount as high as 20 percent, Griffin said.

But not every restaurant is an association member. And some business owners think there isn't much risk, she said.

“There are probably some businesses who think 'eh, I don't have to do this,'” Griffin said.

Costly lack of subscription

BMI's recent lawsuits come at a time when music has never been more accessible, from online offerings like Spotify, Pandora and YouTube, to megabytes worth of songs stored on tiny iPods.

But for restaurants and other businesses, the copyright laws regarding the public performance of music — live or recorded — were first established around the time of the phonograph in 1896.

An explosion in music technology since then hasn't changed the rules or loosened restrictions.

Spotify and Pandora both warn on their respective websites that business owners don't have permission to use their products for public performance.

A bar or restaurant is even liable for musicians playing live tunes on their premises. If a band plays a cover song for which the bar has no license, the bar is legally liable, according to BMI and ASCAP.

There are exceptions for radios and televisions playing in restaurants and bars, but even those are convoluted. The exception only applies to establishments under 3,750 square feet. Larger venues must seek licenses, but only if they have more than four loudspeakers in any single room, or if they charge patrons a cover.

A restaurant owner risks paying penalties even if they play music through an iPod connected to a speaker, BMI and ASCAP say.

After Vazzy's Cucina settled its suit, Vazzano said he decided to play it safe and buy a BMI license for his Shelton location. It costs him about $4,500 a year, he estimated, and allows him to play any song in BMI's vast catalog.

He said BMI has been trying to get him to buy licenses for his four other locations — in Bridgeport, Fairfield, Monroe and Stratford — but he has refused because he said he doesn't play BMI music there.

The companies that operate five Plan B burger restaurants in Connecticut — LGF LLC and Local 8 LLC — were sued by BMI last July for playing at their Glastonbury location seven unlicensed songs, including Queen's “We Are the Champions” and Lynyrd Skynyrd's “Gimme Three Steps.”

Hartford attorney John Kennelly, who represents Plan B, said the restaurants had a license from The American Society of Composers, Authors and Artists, but not BMI.

Kennelly said many restaurants get confused about the risks they take playing music because rules are written in “very complicated, very esoteric IP statutes.”

Kennelly said his clients, Allie Gamble and Shawn Skehan, believe musicians should be compensated for their work, but he said the lawsuits are a heavy penalty for trying to provide a little ambience to customers. And he feels that BMI's litigious strategy may result in some establishments wanting to give up playing any music at all.

“A lot of companies can't be successful with these, in my opinion, frivolous lawsuits,” Kennelly said. “This is about big companies who have gobbled up the right to these forms of entertainment and now are going after the little guy.”

Of course, BMI doesn't see it that way. The company says its legal actions provide songwriters a way to earn a living from their music.

“BMI makes every effort to educate business owners as to the value of a license and the significant costs associated with copyright infringement,” BMI spokeswoman Leah Lupo wrote in an email. “Legal action is a last resort after all other efforts have been exhausted.”

BMI reaches out to businesses, sometimes “dozens of times,” before a lawsuit is initiated, Lupo said.

But those discussions don't always pan out. Costs and resentment quickly mount for the venues that are sued, Vazzano said.

Some may find the rules unjust, but BMI isn't afraid to sue over just a few songs. That leaves business owners spending thousands of dollars on a license — or risking it and hoping that a court summons won't appear on their door step. 

“You can't even sing 'Happy Birthday' without paying them,” Vazzano said.

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