PAABA, of course, wants to help!  Events have already been calendared for the remainder of the year.  More develop but confirmed meetings can be found on our website and on our Facebook page.

Given the fact that the California State Bar is going to increase audits of our Continuing Legal Education credits, everyone should take this opportunity to get organized and assemble their associated materials.  PAABA members are well organized however if any supporting materials are required, we advise that requests be made in advance.  Plan ahead.

In other news, we were very pleased to have a table at the Palo Alto Chamber of Commerce Tall Tree Dinner.  During this event, the entire Palo Alto community thanked citizens who contributed a substantial amount of time and effort in improving this wonderful city.  It was a real pleasure communing with PAABA members as guests and not hosts for once!  Thanks to Board Member Mark Shepherd for organizing our table.

In addition, I was pleased to meet Palo Alto Mayor Yeh who will speak at our Staff Appreciation Lunch on May 3rd at Ming’s.  The city benefits from his leadership and we are happy to welcome him.  Also, Phil Hwang, the new Executive Director of Community Legal Services, East Palo Alto, and I met to discuss the collaboration between our organizations.  The concerns of our community are vast and dynamic.  We are lucky to have such able leaders in our community.

As always, we strive to help our members in their practices and increase their enjoyment of the profession.  Yes, I said enjoy: Everyone has a duty to live a fulfilling life, as demanding and chaotic as it is.

There is one fantasy, though, that we hold dear — and we may as well admit we believe in unicorns for they are more probable than — our pursuit of Perfection.

Our language makes it plain: we don’t just use the word “should”; it is watermarked onto our lens of the world.

It makes us crazy.  Any outsider would be baffled at why we do not bound gleefully from sunrise to sunset. After all, we survived law school and the bar exam.  Our employment opportunities may be limited at any given time but the range of options is a veritable cornucopia.

They do not understand, we answer, because they never saw how it could have been.   There exists two realities, just as in science fiction, and we compare them obsessively.  Either we made a fictional plan that real life derailed, and we bitterly rue real life for not being fictional; or, an ordeal taught us an important lesson and we separate the lesson from the ordeal (immediately recharacterized as a “mistake”) and wish for the lesson as if it could ever have existed separately from the ordeal.  It makes us crazy because it is crazy.

“I’m stupid for not knowing that . . . I should have done it differently . . .  If I’d only known that this would be the result . . .” we sigh.  There was no way to know though, because we only live forwards in time.  Only forwards and in one reality.

Professionally, in small doses, driving forward may improve your practice, however, everyone needs to regularly recognize this fiction to step away and appreciate who we have become in real life, in our draft versions.  We are always only in draft form.

As for PAABA, we’re not therapists or philosophers (professionally, anyway) but the bar provides perspective and information so that our members can help themselves. Who needs another CLE provider?  It is a tremendous benefit, but not the goal.  PAABA was formed amidst an assortment of orchards between San Francisco and San Jose because our members wanted to enjoy work but only while enjoying life.  Unexpectedly, technology and industry formed around us so that now we practice in one of the most dynamic neighborhoods in the world.  Progress is change; perfection is not.

So shake off the backward looking “shoulds” and reap the benefits of an old bar association that developed its wisdom from simpler times.  Renew your membership, attend events and reach out to one another.  Our calendar is perfectly poised to provide an assortment of upcoming events but, what gives it all life and meaning, is you.

Soyeun D. Choi, President, Palo Alto Area Bar Association

Stay calm in the face of stress (Source: Mad Maydel via Creative Commons license)

Your poor heart.  As you sit there, reading while eating or texting or otherwise multitasking, your heart is hard at work.  It has the singular purpose of moving nutrients, oxygen and cleansing your body.  It is a muscle that contracts harder than a sprinter’s leg muscle and consistently beats about 2.5 billion times by the age of 70.

And most likely, yours is bathed in stress.  (That’s just a guess but in this industry, in this economy, it’s most likely true.)

While the nervous system deploys quickly, like an electric current, the endocrine system sends its messages through the blood, moving slower and is not retracted as much as purged.

So when your nervous system detects danger in that email message or meeting, your endocrine system immediately secretes the appropriate chemicals into the blood to prepare for the threat.  You may discover that there is no threat after all but your endocrine system has already unleashed its chemical message into the blood.  Dreading phone calls or getting angry with opposing counsel are modern day permutations of our most basic fight or flight instincts.  Amazingly, the body doesn’t understand that these are lesser threats so that, all day long, your heart is awash in chemical instructions to prepare for danger.

The best way to help your heart is to let the chemicals purge completely.  The best way to help your heart is to rest.

It might seem impossible to take a day off but you know that’s just language.  Your choices are, in fact, the only aspect of your life you control..  Biologically mandated responses evolved within the species cannot be changed.

PAABA’s running group can help trim the fat from around the heart.  Positive interactions at our CLE courses, our section meetings, events and mixers produce uplifting endorphins.  Check out our calendar for the myriad of beneficial programs, and if you have other ideas, let us know.

But only you can take care of the rest.  Now that the holidays are over, make plans to stay healthy this year.  We are nothing without our members so plan on staying with us a long, long time.

Soyeun D. Choi, President

SOPA/PIPA protest (Source: Photo by JustGrimes under a Creative Commons Attribution-ShareAlike licence)

On January 18, 2012, the tech community in Silicon Valley gathered in front of San Francisco’s City Hall to protest the proposed Stop Online Piracy Act (SOPA) and Protect Intellectual Property Act (PIPA) bills being considered by Congress and the House of Representatives. PIPA was approved by a senate committee and is now pending before the whole senate, and SOPA is in the House. The purpose of the bills is to prevent foreign-based websites from selling copyrighted materials, and if passed the federal government would have the authority to close U.S. based websites that contain pirated content. While preventing piracy is an important concern for the government to tackle, it is vital for any legislation under consideration to be specific to avoid resulting in implementation of censorship.

The rally in San Francisco was just one of many held throughout the country. Additionally, several large mainstream websites, such as Google and Wikipedia, visibly lent their support to the cause on their homepages as well. In total, two million websites pledged to participate in the strike. It was thrilling to see so many people willing take the time out of their work day to perform their civic duty and urge their representatives to take action on this issue.

The results of the strike can be considered effective: at least nineteen senators went on to announce they no longer supported it the next day. Over two million emails were sent to public officials to oppose the proposed. In total, 205 members of Congress are now leaning against SOPA and PIPA. It has been stated that the strike was the largest internet protest in history. Although the votes on the bills have been delayed, it is clear that the issues facing copyright law and illegal piracy remain pertinent.

Liz Bugarin

Liz Bugarin is a PAABA intern and a tech savvy, community minded Peninsula native who will apply to law school in the upcoming year.

References:

http://en.wikipedia.org/wiki/Wikipedia:SOPA_initiative/Learn_more

http://www.globalpost.com/dispatch/news/regions/americas/united-states/120119/sopa-blackout-protest-yields-results

http://projects.propublica.org/sopa/

PAABA maintains that the best buffer for time and adversity is each other and so keeps its steady course, by continuing to provide informative, low cost CLE events, mixers and other activities through which to meet legal professionals.  In addition, we now have four practice area sections: Family, Patent, Tax and Trust and Estates Planning.

These sections were implemented directly by members and are examples of how we all contribute to our bar association and its evolution.  Even the most jaded cynics acknowledge that involvement with PAABA broadens networks, enhances opportunity and strengthens community.  The discovery of new assets and friends amongst neighbors takes time but is worth the investment.  Our group consistently reveals itself to be fascinating in breadth and depth of experiences, both professionally and personally.

Make the best of 2012 and let us know how we can serve you!

Soyeun D. Choi, President

subtenant near California Avenue train station and the Palo Alto County Courthouse.

Conveniently located near El Camino Real and Oregon Expwy./Page Mill Rd. Reception

area, use of large conference room, kitchen access, furnished or unfurnished, free

parking, daily cleaning. Services available: network services and copier. The corner

office is 700 sq. ft. for $1,800. The inner office is 500 sq. ft. for $1,300. A cubicle is

also available for $600. Please call Terry 650-566-2290 or email tquinlan@millerlg.com.

When: 6:00-8:00 p.m. on January 11, 12 & 31, and February 2, 7, 9 &16.
**Volunteers may sign up for one or more of the evenings**

Where: Alameda County Superior Court Administration Bldg, 1221 Oak St., Oakland

Attorneys are needed to score high school teams from the jury box.
Judges/commissioners are needed to preside over the bench trial competitions.

If you or someone you know is interested, please contact Jenny Keystone
at 510.206.7366 or mokstone@gmail.com. For more information, visit:

http://www.acoe.org/acoe/EdServices/ProgramsandServices/YouthDev/MockTrial

Unbeknownst to them, you reduced technology use by fifty percent the moment you disembarked.  Proof: As they rushed around searching for a pen, you refrained from texting the information.  You also waited through ten minutes of conjecture about a song title instead of looking it up.  Oh, the holidays.

After a few days, you’ll appreciate being unplugged.

Before you embark on travels home, be sure to familiarize yourself with the remainder of the 2011 PAABA calendar: On the evening of December 5^th, attorneys from Chinese and U.S. firms discuss the perils of foreign investments in that immense and complex nation.  Join practitioners for lunch on December 6^th for the inaugural Family Law Section meeting.  Later that evening, we are pleased to co-sponsor an event at the Little Fox in Redwood City celebrating 50 years of African American jurisprudence. On December 9th, we are pleased to co-sponsor an event on managing your first arbitration.

December 13^th presents an opportunity to catch a drink with members at the Rosewood.  The next day, our Estates Planning and Trusts Committee convenes on December 14^th for lively discussions over lunch.

In January, we have an opportunity to clear out a substance abuse CLE on the 5^th.  The 10^th provides an opportunity for the Tax Salon to discuss updates.  January 19^th the very active Patent Group convenes to continue the search for meaning after this year’s reform.  The Estates Planning and Trusts Group and Family Law Section will also have their meetings scheduled for that month and other 2012 events can be found at our website.

From all of us at PAABA, enjoy a safe and happy holiday season!

Small businesses and licensing fees to performing rights organizations

Ganka Hadjipetrova, Esq.

A growing number of small businesses are being unpleasantly surprised with letters from performing rights organizations, such as the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music, Inc. (BMI), with indirect or direct threats of copyright infringement.  The performing rights organizations, or PROs, which manage musical copyrights on behalf of their owners, request that businesses pay a licensing fee for playing in their shops musical recordings from the PROs repertoires.  Small mom and pop stores, for whom legal advice may be prohibitively expensive, must then decide whether to pay the PROs or disregard the letter and possibly face a court action for copyright infringement.  This article focuses on the small business’ risk of incurring copyright liability for playing music in its business space without the rights owners’ authorization and suggests courses of action to minimize that risk.

The brief answer to the question of whether playing musical recordings within a small business’ space amounts to copyright infringement is:

-        “no” for radio and television broadcasts over the air, whether played in public or not; and

-       “possibly yes” for musical recordings played in any other manner, for instance, MP3 files on a computer or free Internet radio, and in public.

The right to perform musical recordings belongs exclusively to the copyright holders.

United States copyright law protects original works of authorship[i] and entitles the authors to a number of exclusive rights.[ii]  The owners of copyrights in sound recordings, for example, have exclusive rights of reproduction, adaptation, distribution, and public performance of the recordings.[iii]  These rights are independent from one another and a waiver of one right does not waive the others.  For example, purchasing a copy of a sound recording only gives reproduction and distribution rights and does not permit the purchaser to further reproduce and distribute the copy or to perform the sound recording in public.  Under the Copyright Act, to perform a sound recording means to play the sound recording directly or by means of any device.[iv]

Thus, a store or other small business playing musical recordings through a playback device or a radio receiver engages in a performance under the terms of the Copyright Act.  Performing the recordings in public therefore creates copyright liability for the business unless such performance is authorized by the copyright owners, fits within a statutory exemption, or falls outside the statutory definition of “public performance.”

The law provides two defenses against claims of infringement of the public performance right.

Assuming that a small business is not authorized to play the recordings, the discussion below analyzes the two potential defenses against a claim of infringement: (1) whether the “homestyle exemption” applies to the situation; and (2) whether the playing of music recordings in the business can be considered a non-public performance.

1)    Section 110(5) exemption (“homestyle exemption”)

Section 110(5) of the Copyright Act provides an exemption for the reception of radio or TV broadcasts in an establishment open to the public for business.[v]  The purpose of the “homestyle” exemption is to release from copyright liability anyone who merely turns on, in a public place, an ordinary radio or television receiving apparatus of a kind commonly sold to members of the public for private use.  The basic rationale of this clause is that the secondary use of the transmission by turning on an ordinary receiver in public is so remote and minimal that no further liability should be imposed.

The exemption only applies to a single radio or television receiving apparatus of the type used in one’s home.  If the broadcast signal is received in an establishment of an area smaller than a certain gross square footage – less than 3,750 square feet for a food service and drinking establishment and less than 2,000 square feet for any other type of business – the law puts no limitation on the number of loudspeakers and TV monitors that may be connected to the receiving apparatus.[vi]  Where the gross area of the business exceeds these minimums, the law imposes limits on the number of loudspeakers and TV monitors as well as on their placement and – in the case of audiovisual monitors – their size.  The device must be relatively small and of limited sound producing capacity.  In addition, the business may not directly charge customers for listening or watching the broadcasts and the signal may not be further transmitted.  The broadcaster itself must be licensed by the Federal Communications Commission.[vii]

The case of playing music on so-called Internet radio (e.g., Pandora) likely falls outside the scope of the homestyle exemption.  The language of the statute expressly limits the exemption to “a radio or television broadcast station licensed as such by the Federal Communications Commission.”  Internet radio transmissions, although seemingly fitting the same logic as radio and TV broadcasts over the air, do not require licensing by the FCC and are thus not squarely covered by the 110(5) exemption.

On the other hand, Pandora and other free Internet radio webcasters are usually licensed by the performing rights societies such as ASCAP and BMI and one could argue that the logic of the “homestyle exemption” should be extended to such radios as well.  This argument, however, has not been tested in court yet and it is not clear whether courts would accept it.  The safest course of action is to avoid playing Internet radio without authorization from the copyright holders.

An alternative to free Internet radio is satellite radio.  In contrast to an Internet radio service such as Pandora, satellite radio subscription for businesses is covered by the homestyle exemption.  SiriusXM for Business is a paid subscription service which handles copyright royalties for businesses.[viii]  Through such a subscription, the business would avoid having to pay licensing fees to the different performing rights organizations.  The business may choose to listen through an internet reception or through a satellite receiver.  It should be noted, however, that the licensing fees for most performing rights organizations amount to an annual sum not substantially different than that charged by satellite radio.  Depending on the negotiated price, a company may be indifferent between paying to one performing rights organization and subscribing to satellite radio.  The advantage of a general license to play that society’s repertoire regardless of the device chosen, e.g., personal computer or another audio system, may be overridden by the need to pay a licensing fee to several PROs, not just to one.

2)    Definition of Public Performance

Another possible defense against a claim for infringement is that the performance of the recordings is not public.  According to the statutory definition, a sound recording is performed publicly when played “at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered.”[ix]  Courts have ruled that public performance of musical pieces encompasses the playing of recordings over a stereo system in a business establishment for the entertainment of customers.[x]  Public performance occurs even where the customers are not directly charged for listening to the music.[xi]

The question arises whether the performance is public if the place where the music is played is the staff’s work space to which customers do not have access.  In that case, there would be a strong argument that the performance is not a place open to the public.  This argument may not be applicable to stores where, as is commonly the case with bakeries, for example, the staff’s work space is not fully enclosed but is separated from the customer space by a half-wall sales counter.  Because the enclosure is only partial, the sound from the sound system located in the work space easily travels to the customer space.  As long as the sound is loud enough for the music to be distinguishable to the customers, it may be difficult to argue that the playing of the music is not a public performance.

Conclusion:

Where mom and pop stores play musical recordings, they engage in a performance of copyrighted material under the Copyright Act.  If the music sound is clearly audible in the space designated for customers, the playing most likely infringes the owners’ exclusive public performance rights in the sound recordings.

Possible Courses of Action:

1. Switch to broadcast radio only.

If the business switches to playing broadcast radio through one homestyle apparatus only, it may do so without risk of any copyright infringement liability.  In the case of a food service and drinking establishment of less than 3,750 gross square feet or of another type of business with an area of less than 2,000 gross square feet, the business may connect any number of loudspeakers or TV monitors to the receiving apparatus.  The loudspeakers and monitors may be located at any place within the business and the adjoining outside space.

        2.   Play music at a reduced volume.

The business may play musical recordings in the staff work space but do so at a low volume so that customers would not be able to hear the music or would hear it at a level that would not meaningfully add to the atmosphere of the customer space.  Where the business has a half-wall or an open-wall counter, the wall may be built higher or into a full wall so as to prevent or decrease the traveling of the sound to the customer areas.

Such a course of action would necessarily involve a certain risk.  It is possible in this case that copyright holders in the music played may choose to sue for infringement of their public performance right.  In a case where the rights owners prevail, the business may be subject to injunctive relief and substantial damages.[xii]  The law allows the owners to sue for either actual damages[xiii] or statutory damages.[xiv]  A performing rights organization would likely sue for statutory damages as it would be difficult to prove actual losses and profits.  The court has discretion to determine the amount of statutory damages in a range between $750 and $30,000 per individual copyrighted work infringed, i.e., for each song played.[xv]  It must be noted, however, that a PRO will likely face challenging proof issues in identifying the pieces infringed.

Although it is unlikely that the PRO will choose the expensive path of litigation, it must be kept in mind that this option is available to them.

       3.   Pay the respective annual PRO license fee.

In view of the potential risks of an infringement lawsuit and the cost associated with litigation, which may run in the tens of thousands of dollars, the better course of action may be to enter into a licensing agreement with the PRO.  It must be noted that businesses always have the option of negotiating a lower fee than asked based on their individual circumstances.  Knowledge of the law in the area would help in such negotiations.

It must be noted that each performing rights organization manages the rights to a separate repertoire of musical works.  To ensure that all music played in its space is authorized, businesses must obtain licenses from all PROs.  Currently there are three PROs – the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI), and SESAC.  ASCAP and BMI control the rights to most musical pieces.  If a business chooses this course of action, it will then face the decision whether to buy licenses from one, two, or all three PROs.  The licensing fees will vary according to the individual circumstances of the business, such as type of business, customer space, and business hours.  Typically, the cost to a small business to obtain an annual license from one of the larger PROs, such as ASCAP, is in the range of 300 to 500 US dollars.

      4.   Do nothing.

Once the business has received a warning letter from a performing rights organization requesting a fee payment, the PRO will continue to keep track of the business and insist on payment.  Failure to respond to the PRO’s letter may lead to a much greater risk of litigation and the business would be ill-advised to follow such a course of action.