Senate Bill No. 499

(By Senators Craigo, Anderson and Chafin)

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[Introduced February 20, 1995; referred to the Committee
on the Judiciary.]
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A BILL to amend chapter forty-seven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article two-a, relating to copyrighted works; legislative findings; definitions; applicability; contracts between proprietors and copyright owners; prohibited acts of copyright owners; remedies of proprietors; and penalties.

Be it enacted by the Legislature of West Virginia:
That chapter forty-seven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article two-a, to read as follows:
ARTICLE 2A. COPYRIGHT PROTECTION.
§47-2A-1. Legislative findings.
The Legislature finds and declares that:
(a) Under the copyright laws of the United States, a copyright owner may enforce the rights thereof against the owners of restaurants, bars, retail establishments, entertainment and sports facilities, doctors' and other professionals' offices, and similar places of business where members of the public may assemble, for the public performance of music and other similar copyrighted works, whether it be in person by a performing artist hired by the proprietor, or on radio stations or other electronic media transmitted, received and rebroadcast by the proprietor at those places of business;
(b) The proprietors of such establishments are frequently subject to arbitrary and capricious enforcement and collection practices by the owners of these copyrights or their agents, who: (1) Enter the premises without identification and question employees; (2) collect fees on an irregular basis; (3) arbitrarily increase and charge fees in excess of those agreed to by the proprietors under existing contracts; or (4) charge similar businesses vastly differing fees for essentially the same use of copyrighted works;
(c) These proprietors, usually business men and women who through their businesses and professions contribute to the economy of this state and employ its citizens, recognize the copyright laws of the United States and the purposes for which they were enacted and should be enforced, and acknowledge their obligations thereunder for use of copyrighted works in their places of business;
(d) Nevertheless, these proprietors are entitled to certain safeguards in the operation of their businesses, which will protect them from such arbitrary, capricious and unfair trade practices, permit them to negotiate fairly with the copyright owners or their agents in arriving at appropriate terms and conditions for the use of the copyrighted work in their places of business, and thereafter will assure them, with some reasonable degree of certainty, the ability to ascertain their true obligations and rights in the future use of the copyrighted work;
(e) Although the rights and responsibilities regarding copyrighted works are founded in Article I, Section VIII, clause 8 of the United States Constitution and exclusively governed by Title 17 of the United States Code, it is nonetheless essential that the state of West Virginia protect its business owners and citizens from the practices of those who would enforce their rights under the federal law in an arbitrary and capricious manner.
It is therefore in the best interests of the state, its business community and consumers alike, that such arbitrary, capricious and unfair trade practices be prohibited and the agreements under which such rights and responsibilities are established be regulated by this state.
§47-2A-2. Definitions.
As used in this article:
(a) "Area" means a circular geographical region having a twenty-five mile radius surrounding the business location of a proprietor. In the case of a proprietor with more than one business location, there shall be a separate area for each location for the purposes of this article.
(b) "Copyright owner" means the owner of a copyright of a nondramatic musical or similar work recognized and enforceable under the copyright laws of the United States pursuant to Title 17 of the United States Code, Public Law 94-553 (17 U.S.C.(101 et seq.)).
(c) "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.
(d) "Proprietor" means the owner of a retail establishment, restaurant, inn, bar, tavern, sports or entertainment facility 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 or similar copyrighted works may be performed, broadcast or otherwise transmitted for the enjoyment of the members of the public there assembled.
(e) "Royalty" or "royalties" means the fees payable to a copyright owner or performing rights society for the public performance of nondramatic musical or other similar work.
§47-2A-3. Contract for the payment of royalties.
(a) No copyright owner or performing rights society may enter into, or offer to enter into, a contract for the payment of royalties by a proprietor unless at the time of the offer, or any time thereafter, but no later than seventy-two hours prior to the execution of the contract, the copyright owner provides to the proprietor, in writing, the following:
(1) A schedule of the rates and terms of royalties under the contract;
(2) A schedule of the rates and terms of royalties under agreements executed by the copyright owner or performing rights society and proprietors of comparable businesses in the area;
(3) In the case of a performing rights society, the copyright owners represented by that society and the works licensed under the contract; and
(4) Notice, in a form prescribed by the attorney general, that the proprietor is entitled to the information contained in subdivisions (1), (2) and (3) of this subsection, and that the failure of the copyright owner or performing rights society to provide that information is a violation of this article, and may render the contract unenforceable.
(b) Every contract for the payment of royalties executed in this state:
(1) Shall be in writing;
(2) Shall be signed by the parties;
(3) May not exceed one year; and
(4) Shall include at least the following information:
(A) The proprietor's name and business address and the name and location of each place of business to which the contract applies;
(B) The name and address of the copyright owner and any performing rights society authorized by him or her to act on his or her behalf;
(C) The copyrighted works licensed under the contract;
(D) The duration of the contract; and
(E) The schedule of rates and terms of the royalties to be collected under the contract, including any sliding scale or schedule for any increase or decrease of those rates for the duration of the contract.
§47-2A-4. Prohibited acts of copyright owners.
No copyright owner or performing rights society, or any agent or employee thereof may:
(a) Enter the premises of a proprietor's business for the purpose of investigating as to the use of copyrighted works by that proprietor without first identifying himself or herself to the proprietor or his or her employees and making known to them the purpose of the investigation;
(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 article;
(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 respect to a contract for the payment of royalties, including, but not limited to:
(1) Threatening to take legal action in connection with an alleged copyright violation with the intent of coercing the proprietor to negotiate or enter into a contract for the payment of royalties; and
(2) Charging or collecting a royalty which is unreasonable in comparison to the royalties for similar licenses in the same area.
§47-2A-5. Penalties.
A person who violates any provision of this article shall be fined not more than seven thousand five hundred dollars for the first offense and not more than fifteen thousand dollars for a second and each subsequent offense. 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.
§47-2A-6. Proprietor remedies.
(a) A proprietor may bring an action or assert a counterclaim, in a court of competent jurisdiction, against a copyright owner or performing rights society, or both, to enjoin any violation of this article and to recover any damages sustained by the proprietor as a result of a violation of this article. The proprietor may petition the court to terminate a contract which violates the provisions of this article, and the court in its discretion may void the contract. If successful, the proprietor is entitled to recover threefold the damages sustained by him or her, together with reasonable attorney's fees, filing fees and reasonable costs of suit, in addition to any other legal or equitable relief available to the proprietor.
(b) The rights, remedies and prohibitions accorded by the provisions of this article shall be in addition to and cumulative of any other right, remedy or prohibition accorded by common law, federal law or the statutes of this state, and nothing contained herein may be construed to deny, abrogate or impair any such common law or statutory right, remedy or prohibition.
§47-2A-7. Applicability.
This article does not apply to contracts between copyright owners or performing rights societies and broadcasters licensed by the federal communications commission, except that if a copyright owner or performing rights society is licensed by the federal communications commission, this article shall apply to contracts between that copyright owner or performing rights society and a proprietor as otherwise provided herein.


NOTE: The purpose of this bill is to regulate the use of copyrighted artistic works and to protect proprietors from arbitrary and capricious enforcement and collection practices by the owners of copyrights.

This article is new; therefore, strike-throughs and underscoring have been omitted.