The Akron Legal News

Restaurant owner convicted for music copyright infringement

JESSICA SHAMBAUGH
Special to the Legal News
Published: July 1, 2014

The 6th U.S. Circuit Court of Appeals recently held that a restaurant owner was vicariously liable for a copyright infringement that took place in his dance hall.

The facts of the case state that Roy Barr and his son Philip owned Meadowlake, a limited liability company that operated Rafters Bar and Grill in Canton.

Roy controlled 95 percent of the company and admittedly made all of the “significant decisions” about its operation while Philip owned the remaining percentage and managed the golf-course restaurant’s day to day operations.

Rafters often offered music and dancing and was known for its “taste for rock,” including everything from Queen and Pink Floyd to ZZ Top and Lynyrd Skynyrd, according to case summary.

The bar sometimes played recordings of the music and other times hosted live performers.

“Less known for its taste for compliance with the copyright laws, it hosts performances of the music without getting the copyright owners’ permission,” case summary stated.

Such performances violated the copyright owners’ rights and Rafters soon came to the attention of Broadcast Music, Inc., an organization that collects royalties on behalf of songwriters and composers.

BMI sent Rafters “more than a score” of letters warning it not to infringe its copyrights and offering to license its music.

Rafters failed to respond to numerous letters over the course of approximately three years and BMI eventually sued Roy, Philip and Meadowlake for copyright infringement.

Philip and Meadowlake escaped the case by declaring bankruptcy and Roy consented to have a magistrate judge handle the case.

Ultimately, the U.S. District Court for the Northern District of Ohio granted BMI summary judgment and Roy appealed to the 6th Circuit.

“The one wrinkle in the case, and the key source of Roy’s appeal, is that he did not perform any of the copyrighted music. The bands that played at the restaurant and the people who turned on the recordings did that,” Judge Jeffrey Sutton wrote on behalf of the three-judge appellate panel.

Upon review, the appellate judges found that courts have developed a handful of doctrines related to the Copyright Act, including a vicarious liability doctrine that would hold a defendant responsible when he or she profits from an infringement while failing to exercise the right to stop it.

The first half of the test for vicarious liability asks if the defendant had the right or ability to supervise the infringing conduct.

“Roy does not dispute that, as the company’s chief owner and the restaurant’s ultimate decision-maker, he had the right and ability to supervise the infringing performances,” Judge Sutton stated.

In the second half of the test, the judges considered if Roy had “an obvious and direct financial interest in the infringement.”

They found that he did have such an interest because the infringement drew more customers to his restaurant.

“This case indeed falls within the heartland of vicarious liability. In the canonical illustration of the doctrine, the owner of a dance hall became vicariously liable when an orchestra hired to play music for the customers performed a copyrighted work. Substitute ‘restaurant that offers dancing’ for ‘dance hall,’ and you have this case,” Judge Sutton stated.

The judges found that it did not make a difference that Philip managed the day to day operation of the restaurant because Roy had the right and ability to supervise the music being played because he was high in the businesses chain of command.

Rather than interfere, however, he allowed the infringement to continue and reaped the profits, the judges stated.

“A copyright holder can seldom identify (let alone get relief from) the guitarist who strummed his tune or the bartender who turned on his recording. Vicarious liability responds to this reality by shifting the costs of copyright enforcement from the holder of the copyright to those in a better position to police the infringing conduct,” Judge Sutton continued.

Roy continued to challenge his conviction, claiming that he had no knowledge of the infringing performances.

Nevertheless, the judges ruled that a defendant’s ignorance does not blunt vicarious liability because the point of the doctrine is to encourage business owners to police their company for infringements in the first place.

“Roy, who represents himself, makes a handful of other arguments against the district court’s judgment. We have considered them all and find merit in none of them,” Judge Sutton concluded.

Judges Danny Boggs and Helene White joined Judge Sutton in affirming the lower court’s ruling.

The case is cited Broadcast Music Inc. v. Meadowlake Ltd., case No. 13-3933.

[Back]