BP BHEAD INT S

AN ACT Relating to collection of broadcast copyright royalty fees from Washington businesses; adding a new chapter to Title 19 RCW; prescribing penalties; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. (1) Under the copyright laws of the United States, owners of copyrights in nondramatic musical works are entitled to royalties for certain performances of these works, including performances broadcast over radio and television to the public. The laws exempt from copyright royalty obligations those businesses that use television and radio equipment of a kind commonly used in private homes, so long as no direct charge is made to customers to see or hear the transmission and so long as no transmission received by the business is retransmitted. The legislature believes that the federal copyright law and its exemptions fairly reward artistic endeavor and compensate artists for the use of their intellectual property.

(2) The legislature finds that there is significant confusion over the extent to which retailers, restaurants, taverns, and other businesses are required to pay licensing fees for copyright material broadcast to the public and received by television sets or radio receivers in their stores.

(3) The legislature finds that performing rights companies acting as agents for composers and publishers often demand payment from these businesses beyond that required by copyright law, use unfounded threats of legal action to persuade businesses to enter into unfavorable contracts with them, fail to supply businesses with true information regarding their rights under the copyright laws, and set unreasonable terms and conditions in licensing contracts on such matters as arbitration and rates.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Copyright owner" means the owner of a copyright of a nondramatic musical work or similar work recognized and enforceable under the copyright laws of the United States.

(2) "Performing rights society" means an association or corporation that licenses the public performance of nondramatic musical works on behalf of copyright owners.

(3) "Proprietor" means the owner of a retail establishment, restaurant, inn, bar, tavern, professional office, or other business in the state of Washington in which the public may assemble and to which nondramatic musical works or similar copyrighted works may be broadcast.

(4) "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 works.

NEW SECTION. Sec. 3. A copyright owner or performing rights society, or agent or employee thereof, who requests, demands, or otherwise seeks payment of royalties from a proprietor for playing broadcast programming from radio or television stations in the proprietor's establishment shall provide to the proprietor at least forty-eight hours before the execution of a contract or the collection of royalties, the following written information:

(1) The name, address, and telephone number of the agent or employee of the performing rights society, and the name and address of each location to which the contract applies;

(2) The duration of the contract;

(3) A copy of all pertinent sections of the United States Code that:

(a) Set forth the basis for the performing rights society's or the copyright owner's claim that the proprietor is or would be liable for copyright infringement but for either entering a licensing agreement or paying a royalty fee, or both;

(b) Set forth exemptions from copyright infringement for certain categories of persons or uses of copyrighted works;

(4) A schedule of rates and terms of the royalties to be collected under the contract, including any sliding scale or schedule for an increase or decrease of those rates for the duration of the contract;

(5) A list of the highest, lowest, and mean licensing fees charged to similar businesses within the county and within the state in which the proprietor is located; and

(6) A list of all song titles licensed by the performing rights society that may be transmitted on a broadcast radio and television station the coverage area of which includes the proprietor's establishment.

NEW SECTION. Sec. 4. A copyright owner or performing rights society, or agent or employee thereof, may not knowingly misrepresent to a proprietor the performing rights society's or its members' or licensees' legal rights under the copyright act, or knowingly misrepresent to the proprietor the proprietor's obligations under the copyright act. For purposes of this section, a material omission is deemed a misrepresentation.

NEW SECTION. Sec. 5. A copyright owner or performing rights society, or agent or employee thereof, may not request, demand, or otherwise seek a royalty payment from a proprietor that is unreasonable in comparison to royalties for similar licenses in the state.

NEW SECTION. Sec. 6. A contract between a copyright owner or performing rights society and a proprietor for payment of royalties for playing broadcast programming in an establishment may not require the proprietor to be subject to binding arbitration by an arbitrator residing outside the state of Washington, an arbitration panel the majority of whose members reside outside the state of Washington, or an arbitration proceeding taking place outside the state of Washington.

NEW SECTION. Sec. 7. A copyright owner or performing rights society, or agent or employee thereof, may not contract with a proprietor in a manner that would constitute the proprietor's agreement to waive the rights enumerated in this chapter.

NEW SECTION. Sec. 8. (1) A violation of any part of this chapter is a matter vitally affecting the public interest, and is not reasonable in relation to the development or preservation of business. A violation of this chapter is an unfair or deceptive act or practice in trade and commerce for the purpose of applying the consumer protection act, chapter 19.86 RCW, and shall be in addition to the provisions in RCW 19.86.020 and 19.56.030.

(2) The attorney general or the commission may bring action against a copyright owner, performing rights society, or agent or employee thereof, who violates this chapter.

(3) For purposes of penalties and remedies established under RCW 19.86.020, 19.86.030, and 19.86.140, a violation of a section of this chapter as it applies to each proprietor is deemed a separate violation.

(4) The penalties and remedies set forth under this chapter and in RCW 19.86.020, 19.86.030, and 19.86.140, are in addition to any other right, remedy, or prohibition accorded by common law, federal law, or the statutes of this state, and nothing in this chapter may be construed to deny, abrogate, or impair such a common law or statutory right, remedy, or prohibition.

NEW SECTION. Sec. 9. Sections 1 through 8 of this act shall constitute a new chapter in Title 19 RCW.

NEW SECTION. Sec. 10. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect immediately.