H 4078 Session 111 (1995-1996)
H 4078 General Bill, By Kelley, T. Brown, Keegan, W.D. Keyserling, L.M. Martin,
Riser, P.H. Thomas, Wilkes, H.G. Worley and W.J. Young
A Bill to amend Title 39, Code of Laws of South Carolina, 1976, relating to
trade and commerce by adding Chapter 18 so as to regulate practices and
agreements concerning the licensing of copyrighted nondramatic musical works,
to authorize certain civil remedies for violations including injunctive relief
and petition for termination of contract, and to provide criminal penalties
for violations.
04/12/95 House Introduced and read first time HJ-42
04/12/95 House Referred to Committee on Labor, Commerce and
Industry HJ-42
02/21/96 House Committee report: Favorable with amendment Labor,
Commerce and Industry HJ-5
02/26/96 House Amended HJ-20
02/26/96 House Read second time HJ-24
02/26/96 House Unanimous consent for third reading on next
legislative day HJ-24
02/27/96 House Read third time and sent to Senate HJ-8
02/27/96 Senate Introduced and read first time SJ-11
02/27/96 Senate Referred to Committee on Judiciary SJ-11
AMENDED
February 26, 1996
H. 4078
Introduced by REPS. Kelley, Keyserling, Thomas, Martin, Riser,
Wilkes, Worley, Keegan, J. Young and T. Brown
S. Printed 2/26/96--H.
Read the first time April 12, 1995.
A BILL
TO AMEND TITLE 39, CODE OF LAWS OF SOUTH
CAROLINA, 1976, RELATING TO TRADE AND COMMERCE
BY ADDING CHAPTER 18 SO AS TO REGULATE PRACTICES
AND AGREEMENTS CONCERNING THE LICENSING OF
COPYRIGHTED NONDRAMATIC MUSICAL WORKS, TO
AUTHORIZE CERTAIN CIVIL REMEDIES FOR VIOLATIONS
INCLUDING INJUNCTIVE RELIEF AND PETITION FOR
TERMINATION OF CONTRACT, AND TO PROVIDE
CRIMINAL PENALTIES FOR VIOLATIONS.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. The General Assembly 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, doctors' and other
professionals' offices, and similar places of business where
members of the public may assemble, for the public performance of
music, whether it be in person by a performing artist hired by the
proprietor, or on radio stations or other electronic media
transmitted, received or rebroadcast by the proprietor at those places
of business.
(B) These proprietors, usually small businessmen 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.
(C) The proprietors of such establishments have raised
substantial concerns as to enforcement and collections practices by
the owners of these copyrights or their agents. These proprietors
are entitled to certain safeguards in the operation of their
businesses, which will protect them from any 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 such copyrighted work.
(D) 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 South Carolina 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.
(E) It is therefore in the best interests of the State, its business
community and consumers alike, that the following be enacted.
SECTION 2. Title 39 of the 1976 Code is amended by adding:
"CHAPTER 18
Musical Copyrights
Section 39-18-10. As used in this chapter:
(1) `Copyright owner' means the owner of a copyright of a
nondramatic musical 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. `Copyright owner' shall
not include the owner of a copyright in a motion picture or
audiovisual work, or in part of a motion picture or audiovisual
work.
(2) `Performing rights society' means an association or
corporation that licenses the public performance of nondramatic
musical works on behalf of copyright owners, including but not
limited to the American Society of Composers, Authors and
Publishers (ASCAP), Broadcast Music, Inc. (BMI), and SESAC,
Inc.
(3) `Proprietor' means the owner of a retail establishment,
restaurant, inn, bar, tavern, 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 may be
performed, broadcast, or otherwise transmitted for the enjoyment of
the members of the public there assembled.
(4) `Royalty' or `royalties' means the fees payable to a
copyright owner or performing rights society for the public
performance of nondramatic musical work.
Section 39-18-20. No performing rights society shall 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 before the execution of that
contract, it provides to the proprietor in writing, the following:
(1) a schedule of the rates and terms of royalties under the
contract;
(2) notice, that it will make available upon the written request
of a proprietor, the most current available list of members or
affiliates represented by the performing rights society and the most
current available list of no less than the performed works that it
licenses. The lists required by this subsection (2) shall be provided
to the proprietor electronically at his option. The performing rights
society may charge the proprietor for such information an amount
not to exceed its actual cost of producing such information.
Section 39-18-30. Every contract for the payment of royalties
executed, issued or renewed in this State on or after the effective
date of this chapter shall:
(1) be in writing;
(2) be signed by the parties;
(3) be for a specific period after which term the contract shall
be automatically renewed upon the same terms and conditions
unless either party thereto provides written notice at least thirty
days before the termination date of that contract of its desire to
terminate that contract or to change its terms and conditions,
utilizing the same annual percentage of increases, if any, as
provided in the initial contract. This provision shall not apply to a
contract offered to a proprietor if the terms of the contract were
negotiated between a performing rights society and a bona fide
national or state trade association, representing similarly situated
proprietors, or determined by a federal court to be applicable to
similarly situated proprietors;
(4) 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 duration of the contract; and
(c) 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 that
contract.
Section 39-18-40. No performing rights society, or any agent or
employee thereof shall:
(1) on the premises of the proprietor's business, discuss with the
proprietor or his employees, or inquire of them regarding, a contract
for the payment of royalties by a proprietor or the use of
copyrighted works by that proprietor without first identifying
himself to the proprietor or his employees;
(2) with respect to contracts executed, issued or renewed on or
after the effective date of this chapter, 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 chapter;
(3) engage in any coercive conduct, act or practice in negotiating
with a proprietor that is disruptive to the proprietor's business, or
charging or collecting a royalty which is unreasonably higher or
lower than the music licensing agency's published rate charts in the
area for similar businesses consistent with federal consent decrees.
Section 39-18-50. Any person who suffers a violation of this
chapter may bring an action to recover actual damages and
reasonable attorney's fees, may seek an injunction to enjoin the
violation, and may seek any other available remedy allowed by law.
Section 39-18-60. The rights, remedies, and prohibitions
accorded by the provisions of this chapter 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 in this chapter shall be construed to deny,
abrogate, or impair any such common law or statutory right,
remedy, or prohibition.
Section 39-18-70. This chapter shall not apply to:
(1) contracts between copyright owners or performing rights
societies and broadcasters licensed by the Federal Communications
Commission; and
(2) investigations conducted by law enforcement agencies or
other persons with respect to a suspected violation of Sections
16-11-910, 16-11-915, 16-11-920, 16-11-930, 16-11-940, or any
combination of these sections.
Section 39-18-80. Nothing in this chapter shall be construed to
prevent the performing rights society from informing the proprietor
of the proprietor's obligations under the federal copyright law, Title
17 of the United State Code, or from exercising any exclusive
rights preempted under Section 301(a) of the Title 17 of the United
States Code."
SECTION 3. If any provision of Chapter 18, Title 39 of the
1976 Code or the application thereof to any person or circumstance
is held to be unconstitutional or otherwise invalid, the remainder of
this chapter and the application of such provision to other persons
or circumstances are not affected thereby, and it is to be
conclusively presumed that the General Assembly would have
enacted the remainder of this chapter without such invalid or
unconstitutional provision.
SECTION 4. This act takes effect July 1, 1996.
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