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How Do I Protect My Personal Assets From Claims of Copyright Infringement?

Wednesday, June 13th, 2012

By Brian Taylor Goldstein

Dear FTM Arts Law:

Could owning copyrights individually (as opposed to being owned by a corporate entity) ever be a personal liability?  I understand that if copyrights are held in the name of a S-corp, C-corp, or possibly LLC, the corporate veil would shield my personal assets.

There is no liability in “owning” a copyright—unless you’ve written something really horrible and would rather not be credited. However, there can be considerable personal liability in stealing (or what attorneys call “infringing”) someone else’s copyright.

Let’s assume, for the sake of argument, that you are a composer and another composer claims that portions of your famous zither concerto contains unlicensed portions of the other composer’s music. If you own the copyright in your zither concerto personally, then you can be personally liable. But what if you had transferred or assigned the copyright to your publishing company and your publishing company is a Limited Liability Company (LLC)? Then both you and your company can be sued! In other words, a corporate veil does not protect you or your personal assets from liability for copyright infringement!

In most cases, you are correct that when your form a valid corporate entity (C-corp, S-corp, or LLC), then a “corporate veil” descends between the entity and the owners (even if there is only one owner) and the owners are not personally responsible or liable for the debts of the corporate entity. If, for example, your corporate entity enters into a contract to pay for services, and your corporate entity breaches the contract and refuses to pay, then only the corporate entity is liable, not you personally. However, this “corporate veil” only protects you from liability for debts, bad business deals, or contract breaches. It does not protect you from liability from what are called “torts.”

A “tort” is any thing other than a breach of contract which causes damages to another person and includes such things as fraud, negligence, assault, battery, defamation, and….copyright infringement. So, if the president of a corporate entity commits fraud, then both the corporate entity can be liable as well as the person who “personally” committed the fraud. Or, if a truck driver runs a red light and causes an accident, then both the truck driver can be sued, as well as the company he or she works for. It is the same with copyright infringement.

If you are accused of using unlicensed material in your zither concerto, it doesn’t matter who holds or owns the copyright. If it is ultimately determined that you used someone else’s copyrighted materials when creating the work in the first place, then you are personally liable. And it gets worse. Through a legal theory called “vicarious liability”, the musicians who perform you work could be liable, the agent or manager who promoted it could be liable, even the venue where it is performed could be liable.

In the end, the smartest way to protect your personal assets from potential claims of copyright infringement is either by using only original works or by ensuring that you have all of the proper licenses and permissions in the first place. Also, in order to protect yourself from frivolous lawsuits and false claims of infringement, register your copyrights with the US Copyright and Trademark Office.

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For additional information and resources on this and other legal and business issues for the performing arts, visit ftmartslaw-pc.com.

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. FTM Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Arts Management, Contracts, Copyrights, Law and Disorder: Performing Arts Division, Liability, Licensing, Limited Liability Companies | Comments Closed

I Want To Engage A Foreign Artist. Tell Me Everything I Need To Know!

Wednesday, May 30th, 2012

By Brian Taylor Goldstein

Dear FTM:

What needs to be done to bring a performing artist from a foreign country to play in a US concert? How is their pay reported to the IRS? Is withholding required? Do they have to pay taxes on the money that they earn in the US? Etc.

Wow, this is a pretty broad question. In general…and this is very general…in order for a foreign artist to perform legally in the US, he or she will need to obtain a visa. In most cases, this will be either an O or a P visa. (There are almost no instances when a foreign artist can legally perform in the US on a visitor visa—regardless of whether or not the artist is paid or tickets are sold.) In order to obtain the necessary visa, someone in the US—such as the presenter or the artist’s US-based manager or agent—will need to file a visa petition on the artist’s behalf with United States Citizenship and Immigration Services (USCIS). The petition consists of the forms, evidence, and documents required for USCIS to “approve” the artist for the requested visa. As you may imagine, USCIS also requires a petition fee. Once approved, USICS will issue an “approval notice.” The artist will then use this “approval notice” to apply for the actual visa at a US Consulate. This will involve more forms…and fees.

Depending on where the artist is from, and how much they earn, they may or may not have to pay taxes on money that they earn in the US. With some exceptions, all artists who perform in the US are subject to 30% withholding from their gross engagement fees. Then, the artist is then required to file a tax return (just like you and I), declare all payments and withholdings, claim any applicable deductions and exemptions, and seek either a full or partial refund. Alternatively, an artist can apply to the IRS in advance of his or her performance and seek a withholding deduction. As you may imagine, all withholding is reported to the IRS on a form. The artist will also need to obtain either a social security number or a taxpayer identification number. This, too, involves forms.

While this can all seem overwhelming, the good news is that everything you need to know is contained in a website: artistsfromabroad.org. Produced by the League of American Orchestras and Association of Performing Arts Presenters, and authored by FTM Arts Law, artistsfromabroad.org is the most complete and up-to-date online resource for engaging foreign guest artists and non-US arts professionals, and includes essential guidance, forms, sample documents, and useful links. Even better—the entire website has recently been fully updated, redesigned, and re-launched, making it even easier to find the information performing arts organizations and artist managers need to successfully navigate the U.S. visa and tax procedures required when engaging international artists for performances in the U.S.

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For additional information and resources on this and other legal and business issues for the performing arts, visit ftmartslaw-pc.com.

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. FTM Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Central Withholding Agreements, Law and Disorder: Performing Arts Division, Taxes, Touring, Visas | Comments Closed

Am I Obligated To Accept Unsolicited Emails from Managers?

Wednesday, May 23rd, 2012

By Brian Taylor Goldstein

Dear FTM Arts Law:

I am the executive director of a well-established regional symphony orchestra. As with most orchestras, I frequently receive emails from managers and agents asking me to consider their artists. After a number of emails from the same manager all within the same week, I wrote and told them that I was aware of their roster and asked to be removed from their email list. He wrote back and said that because our orchestra was a 501(c)(3) and also received state funding, we were obligated by law to accept his emails. He also said that because we were non-profit, these were not “commercial” emails and we had no right to refuse his emails. Is this true?

First, someone needs to remind this manager that desperation is never a good sales technique! No, in addition to being generally obnoxious, the manager is wrong on every possible level upon which there is to be wrong in this instance.

The law the manager is attempting to reference is the CAN-SPAM act, a federal law that governs the sending of unsolicited commercial emails. This law states that anyone who receives an unsolicited commercial email has the right to request that he or she be removed from future mailings and places a number specific requirements on those who send such emails, including requiring the sender to provide an opt-out mechanism, a physical address, and to remove anyone who requests to be removed from the mailing list. It covers all commercial messages, which the law defines as “any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service.” The law makes no exceptions for tax-exempt 501(c)(3) organizations. Under the CAN-SPAM act, anytime you ask someone to “buy” something or spend money, its considered “commercial.” Sending emails to promote an artist or an ensemble is just as “commercial” as sending emails soliciting donations or promoting a concert, a fundraising event, or any program where tickets are sold. As a result, any organization, for profit or non-profit, that sends such emails and fails to provide an opt-out mechanism and/or to remove someone from its email list upon request can be prosecuted for violating CAN-SPAM.

In your situation, you are the recipient of an unsolicited commercial email. The fact that you are a 501(c)(3) organization or an organization that receives public funds doesn’t alter the fact that the manager sent you an unsolicited email asking you to engage or hire an artist…and that makes it an unsolicited “commercial” email. Thus, in this case, the CAN-SPAM act protects you, not the manager, and you have every right to demand that you be removed from the manager’s email list. If he fails to comply with your request, the manager would be in violation of the CAN-SPAM act and you could report him to the Federal Trade Commission…or, at least, you would have every right to avoid his booth at APAP!

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For additional information and resources on this and other legal and business issues for the performing arts, visit ftmartslaw-pc.com.

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. FTM Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Agents, Artist Management, Law and Disorder: Performing Arts Division, Liability, Non-Profits, Presenters | Comments Closed

How Do I Draft An Engagement Agreement For My Trio?

Wednesday, May 16th, 2012

By Brian Taylor Goldstein

Dear FTM Arts Law,

I am a manager who will be writing contracts on behalf of a trio. They don’t have a corporation and there is no “leader.” They just get together and perform together. How do I handle their engagement fees so that I do not look like their employer? None of the three wants to collect the money on behalf of the others. So, that leaves me to disperse the money.  I know I must be careful not to appear as a producer or employer, so I want to be sure that I write my contracts properly, as well, handle the payment of fees.  So, when writing the actual contract, do I make it out between all three musicians and the presenter?  What if one of them is paid to his/her corporation? Does this make sense?

This makes absolute sense…and the answer is pretty easy! You want each engagement contract to be between the presenter and each of the individual members of the trio. Something like this: “Presenter hereby engages Musician 1, Musician 2, and Musician 3 to perform at ___________.” The same engagement contract would also specify that the engagement fee would be paid directly to you “as the agent of Musician 1, Musician 2, and Musician 3.” You can even sign the engagement contract, provided it is clear that you are signing “as the agent of Musician 1, Musician 2, and Musician 3.” (I know, you said you were their “manager”, but “manager” is a title that describes your duties. For purposes of determining liability, fiduciary duties, and other legal obligations, managers and agents are both legally considered to be “agents”).

Once you collect the fee, you can pay each of the artists directly. For you purposes, it doesn’t matter whether you pay an artist individually or pay the artist’s corporation. Nonetheless, you must issue a 1099 for the FULL FEE. In other words, if the total engagement fee is $3000, and you take a 20% commission, and everything is split evenly, then you would pay each artist $1000 and deduct a commission of $200 from each payment—but you would also issue a 1099 to each artist for $1000. Why? Because you are working for the artists, they are not working for you. If you don’t want to be perceived, either for liability or tax purposes as their employer or producer, then you need to set up the transaction so it is clear that it is the artists are paying you and you are not paying them. Technically, each artist should issue you a 1099 to reflect that they paid you a commission of $200. However, in my experience, as artists are even more adverse to paperwork and forms than managers and agents, it is highly unlikely that the artists will actually issue you the 1099. It doesn’t matter. You would hardly be the first person who received a payment without an accompanying 1099.  So long as you have issued a 1099 to each artist for $1000 and report your commissions on your income taxes, you are fine. It may drive your accountant a bit nuts, but they’ll deal with it!

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For additional information and resources on this and other legal and business issues for the performing arts, visit ftmartslaw-pc.com.

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. FTM Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Agents, Artist Management, Contracts, Employees, Independent Contractors, Law and Disorder: Performing Arts Division, Taxes | Comments Closed

If We Paid For It, Don’t We Own It?

Wednesday, May 9th, 2012

By Brian Taylor Goldstein

Dear FTM Arts Law:

I am writing on behalf of our non-profit theater group. Several years ago, one of our volunteers designed a new logo for our theater. We paid her $500. At the time, she was friends with our Artistic Director, but they had a falling out. She recently sent us a letter saying we can no longer use our logo. She claims she owns the design and we can’t use it without her permission. Although we have nothing in writing, we did pay her, so don’t we own it? Is she right?

Hell hath no fury like a volunteer scorned! Sadly, she may be right. Designs, just like scripts, music, novels, and choreography, are subject to copyright protection. Paying someone a fee to design, compose, or create something doesn’t necessarily mean you own what they create—much less acquire any rights to use it.  Except in the case of employers who, in most cases, own whatever their employees create for them, when you pay someone a fee to create or design something you are merely paying for their time. If you also want to have right to use the design or creation, you must negotiate those rights separately and have a written agreement specifying what rights are being granted. This does not necessarily mean you must pay additional fees for rights or ownership. That’s all part of the negotiation. You can certainly negotiate a single fee to pay someone to design or create something as well as transfer all rights to you or give you a license (permission) to use it, but such details must be negotiated and written down. Otherwise, all you are purchasing is an implied license for you to use it, which the creator or designer can revoke at any time. In your specific case, you paid $500 for a logo and the right to use it until the designer told you to stop—and it sounds like she just did.

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For additional information and resources on this and other legal and business issues for the performing arts, visit ftmartslaw-pc.com.

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. FTM Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Contracts, Copyrights, Law and Disorder: Performing Arts Division, Licensing, Music Rights | Comments Closed

Generic Forms: A Prescription For Trouble

Tuesday, May 1st, 2012

By Brian Taylor Goldstein

HELLO –

How can an organization that presents music programs, and puts some of them on the Internet, find a good general release form for artists/speakers to sign?

The tricky part about forms is not finding them, but choosing which one is right. There are lots of sources for good general release forms—the Internet, formbooks, colleagues, etc. We provide a list of formbooks that we recommend on our website www.ftmartslaw-pc.com. However, to select the right form, you need to know what you need.

A “release” is just another word for “permission”, and, like all other contracts, it memorializes an agreement between two parties. So, in order to know what form you need, you need to know what permissions you need and what permission the other party is willing to grant. For example, if you are presenting a music program and you want a form through which a musician will give you the right to record their performance and place it on the internet, you will want a form that addresses the following issues: (1) Is the musician expecting to get an extra fee in exchange for granting permission?(2) Do you want to place the entire performance on the Internet, or just excerpts?(3) Will you be posting the performing on your own website or on other websites such as YouTube?(4) Can you leave the recording up indefinitely, or will the musician be able to tell you to take it down? (5) If there is more than one musician performing, such as a band or ensemble, will you require a release from each performer or does one person have the right to grant permission on behalf of everyone else? and, perhaps most importantly, (6) Is the musician performing his or her own music? Remember: unless the musician is also performing music he or she wrote themselves, they cannot give you permission to record it. You will need to get that permission from the composer as well as from the musicians.

There is no “generic” permission form or release that will apply to everyone in every situation. Any form or any contract is only “good” if it addresses all of the elements of your specific circumstances and successfully communicates the understanding between the parties and covers all of the necessary. It may not surprise you to learn how often I have been contacted by someone who found what they believed was a “generic” form, filled in the blanks, and found out too late that it didn’t give them the rights or permissions they needed for their specific circumstances. So, when it comes to forms, don’t go for the generic…go for the prescription you need. Before you go hunting around for the right form, first figure out what you need, then start reading and editing forms and until you get the one that fits just right.

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For additional information and resources on this and other legal and business issues for the performing arts, visit ftmartslaw-pc.com.

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. FTM Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Arts Management, Contracts, Copyrights, Law and Disorder: Performing Arts Division, Licensing, Music Rights, Recordings, Venues | Comments Closed

Sneaking Artists Into The US: How Lucky Do You Feel?

Wednesday, April 25th, 2012

By Brian Taylor Goldstein

Dear FTM Arts Law:

I represent a British group that frequently tours the US. In the past, the guys have just entered as visitors under the ESTA/Visa Waiver Scheme. So far, we have never had any problems, but I was recently told this was wrong. Is this true? Couldn’t they just say they are not performing?

This one is easy: Is this true? YES. Couldn’t they just say they are not performing? NO!

The ESTA/Visa Waiver Scheme is a program through which citizens of 36 countries (Andorra, Australia, Austria, Belgium, Brunei, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, Netherlands, New Zealand, Norway, Portugal, San Marino, Singapore, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland and United Kingdom) can enter the US as “visitors” with only their passports. Unlike citizens from countries such as Russia, China, or Iran, citizens of one of the 36 “visa waiver” countries do not need to obtain an actual visitor visa from a US Consulate before entering the US. All they need to do is pre-register through the on-line Electronic System for Travel Authorization (“ESTA”) website. However, the ESTA/Visa Waiver Scheme only allows such citizens to enter as “visitors”, subject to all of the limitations and restrictions of a visitor visa.

If an artist from a visa waiver country wishes to perform in the US, he or she needs to obtain an actual artist visa, such as an O or a P visa. Artists from a visa waiver country who enter the US under the ESTA/Visa Waiver Scheme cannot perform, regardless of whether or not they are paid and regardless of whether or not tickets are sold. The need for an artist visa (either an O or a P) is triggered by performance, not payment.

If an artist tells a US border officer that they are not performing, when, in fact, they intend to perform, this constitutes a fraudulent entry. Fraud is always a bad thing. Fraud against the US Government is a very bad thing. While you may have not have had any problems thus far, this has been due to pure luck. I know of a group from Canada that for more than five years regularly entered the US as visitors to perform their concerts. Typically, they told the border officer they were coming to “rehearse” or “jam with friends.” However, last year, their luck ran out. A border officer on a slow day decided to Google the name of one of the musicians and discovered their website listing all of their forthcoming US engagements. The group has now been barred from performing in the US! I know of other instances where, though the artists have not been barred from future US travel, their ESTA/Visa Waiver privileges have been permanently revoked, requiring them to forever obtain visitor visas even where they legitimately wish to enter the US as visitors.  In short, your odds of continued success decrease each time your artists enter the US on the Visa Waiver Scheme with the intent to perform. As for lying to a border officer…I hear the weather in Guantanamo is quite lovely this time of year!

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For additional information and resources on this and other legal and business issues for the performing arts, visit ftmartslaw-pc.com.

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. FTM Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Artist Management, Law and Disorder: Performing Arts Division, Touring, Uncategorized, Visas | Comments Closed

Do We Need ASCAP/BMI Licenses?

Wednesday, April 18th, 2012

By Brian Taylor Goldstein

Hello Law and Disorder,

We have met numerous times at conferences, (I love going to your sessions!) and you have been very helpful with questions about our presenting contracts. We also rent our facility and I now have a question about that side.  We recently received a letter from BMI stating that a few of our rental clients have not paid their licensing fees and that we are now responsible for the fees. Can they do that?  We have it stated in our rental contract that the user is responsible of ASCAP/BMI fees, is that enough to get us out of it? If BMI can hold us accountable for the artist fees how do we protect our self in the future? I appreciate your advice, thank you.

Thanks for coming to our sessions! As for your question: Yes, they can do that! As the owner/operator of a performance space/venue, it is your legal responsibility to ensure that necessary rights and authorizations have been obtained with respect to all copyrighted music which is publicly performed in your venue. (Actually, your legal responsibility is not limited to performance rights, but extends to dramatic rights as well as any other required rights and licenses which pertain to music, images, trademarks, recordings, images, or other protected rights or materials being used or performed in your space.) In other words, while there is certainly nothing wrong with requiring your “users” to be responsible for ASCAP/BMI fees, that will not relieve you from ultimate responsibility if they fail to do so. In fact, there is no contract, release, or any other document which will protect your venue from liability should one of your users fail to obtain the necessary authorization or licenses they need for their performance. However, there are several things you can do to better manage your liability and minimize your risk:

First, you’ll not only want to ensure that your contract states that the user is responsible for all licenses and authorizations, but you’ll also want your contract to state that the user will “hold harmless and indemnify” your venue if they fail to obtain the necessary licenses and authorizations. In essence, this means that the user will have to reimburse you for any costs and expenses you incur if you are required to pay for licenses, incur legal expenses, or suffer any other damages or losses because your users failed to obtain the rights and licenses they were supposed to. (They’d probably have to do that anyway, but an indemnification and hold harmless provisions makes that obligation explicit.)

Second, there are many venues which require users to produce “proof” that they have all of the required licenses prior to the first performance date as a condition of being allowed to use the space. This gives you a chance to assess whether or not the appropriate licenses have actually been obtained.

Third, you should obtain your obtain your own blanket licenses directly from ASCAP and BMI, as well as from SESAC. These three organizations issues blanket licenses directly to venues such as yours to ensure that any music from their catalogs is properly licensed for public performances. While this will require you to keep a running account of all music publicly performed at your venue as well as to incur the license costs yourself, you can pass the costs along to your users through your rental fees. Its also the best and only way to ensure that your legal responsibility as the owner/manager of the venue is being met, at least with regard to performances licenses. You’ll still need to make sure your users obtain the other right and licenses they may require for their performances.

Lastly, I would consult with other venues of similar size and nature to your own and see if they already have licensing policies and procedures that you might be able to adopt for your own use. There’s no need to reinvent the wheel where others have already rolled it up the hill—just beware of any venue that tells you either: “We just ignore all of that stuff and haven’t been caught yet!” or “Those rules don’t apply to non-profits.” Run away!

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For additional information and resources on this and other legal and business issues for the performing arts, visit ftmartslaw-pc.com.

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. FTM Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Arts Management, Contracts, Copyrights, Law and Disorder: Performing Arts Division, Licensing, Music Rights, Non-Profits, Presenters, Venues | Comments Closed

Can I Fire My Board Members?

Wednesday, April 11th, 2012

By Brian Taylor Goldstein

Dear Law and Disorder:

Many years ago I founded a successful non-profit dance company. Over the years, we have continued to grow by adding board members, increasing donations, and critically acclaimed performances. However, my current board has become too invasive. In the past, I have always given them reports about the upcoming season, plans, new artists, etc, and they have focused on fundraising. As the founder and artistic director, it has always been clear that I was always in charge. Now, some of the newer board members are starting to demand financial reports and budgetary control. The new board chair recently wanted to be involved in interviewing a new development director I wanted to hire! My understanding has always been that the legal role of the board was only to raise money. How do I stop this situation before it gets worse? Is this something I can address in the by-laws? Can I fire the board members? What are my legal options?

 

First, and foremost, congratulations! Clearly, under your leadership, you have created a viable and sustainable organization for which you deserve an extraordinary amount of credit. For the purposes of your question, I am going to presume your non-profit has also been approved for 501(c)(3) tax-exempt status by the IRS. This is important because not all non-profit organizations are also tax exempt. A non-profit organization, like its for-profit cousin, can organize and operate in whatever manner its founder or owners decide—subject only to whatever restrictions may be imposed by the law of the state in which it is formed. However, a non-profit which has also applied and been granted tax-exempt status under 501(c)(3) of the Internal Revenue Code must operate under very specific guidelines in order to maintain its tax-exempt status.

In applying for and receiving 501(c)(3) tax-exempt status, the founders of the non-profit are striking a grand bargain with the IRS pursuant to which, in exchange for permitting donations to the organization to be deductible and exempting the organization from having to pay taxes on its income, the founder must forfeit sole control and ownership. Like a scene from a Dickensian novel, once a non-profit organization applies for and receives 501(c)(3) status, its founder abandons the organization on the steps of society. It becomes an “orphan” whose care and welfare is left to the community. The community is represented by the board of directors, which is then charged with overseeing the management and operations of the tax-exempt non-profit to ensure that it continues to serve its mission and tax-exempt purposes. The artistic director and founder can—and, in my opinion, should—serve on the board of directors, but the organization is no longer owned by anyone. In short, it is not “your” organization. It is not anyone’s organization. It belongs to the community and, as such, the authority and control of the organization rests solely in the board of directors.

In your situation, it sounds as if your board is transitioning from a culture where you have understandably been given much deference to one where the board wants to assert more control and oversight. While I understand that this can be frustrating in many respects, it can also offer many positive opportunities for growth and sustainability. A healthy tax-exempt organization requires a constant exchange of expertise and experience between the board members, administration, and artistic leaders who must in turn balance many competing considerations in carrying out the organization’s mission: art and business; emotion and practicality; innovation and tradition. Even in a situation where an organization’s founder might be perceived as the best person to arbitrate such things, the organization’s by-laws cannot legally bestow upon any one individual—the founder, the board chairman, the artistic director—sole control and authority. Unless the board has some degree of meaningful control and oversight authority, not only does the organization risk losing its 501(c)(3) status, but also jeopardizes its relevancy and viability as a community institution. On the other hand, while the board needs to have control over major decisions—such as the hiring and firing of the artistic director or whether or not to raise funds for a new production—if the board asserts too much control, it risks losing its artistic legitimacy. The surest path to artistic disaster is to allow a board of well-meaning attorneys, business leaders, and wealthy patrons to dictate casting, programming, or other similar artistic decisions. These are extraordinarily difficult and perilous paths to navigate, to be sure, and are littered with organizations who, in either failing to address these issues correctly or ignoring them completely, have fallen into the abyss of bitter feelings, splintered boards, burned out staff, depleted endowments, and even bankruptcy.

Rather than looking for a means to assert—or maintain—absolute control, it sounds as if the time has come for you and your board to evaluate the organization’s operations and structure. Among other things, does your organization have the right balance of wealth and wisdom, both financial and artistic, on its board? Is there a plan should you, as artistic director, want to retire or take a less active role? What if an overly-aggressive board chair presents itself? How are decisions made? Now is the time to reflect not just upon your by-laws, but the policies, strategies, and procedures necessary to ensure a healthy balance that can sustain the future of the organization you have nurtured this far.

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For additional information and resources on this and other legal and business issues for the performing arts, visit ftmartslaw-pc.com.

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. FTM Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Arts Management, For Profits, Law and Disorder: Performing Arts Division, Non-Profits, Presenters | Comments Closed

Posting Musical Performances on YouTube

Wednesday, April 4th, 2012

By Robyn Guilliams

Dear Law and Disorder,

What are the copyright issues in posting a performance of a piece of music on YouTube for global streaming?  And, since people can easily download YouTube content, what are the implications for the person who’s posted it, or the downloaders for that matter?

Before answering your question, I want to clarify that there are two separate copyrights in a videotape of a musical performance – the copyright in the music contained in the video, and the copyright in the video itself.  The copyright is usually owned by the creator of a work.  In the case of the musical composition, the copyright would be owned by the composer (or perhaps the composer’s publisher, if he or she has one.)  In the case of the video, the owner of the copyright would be whoever created the video (and NOT the individual performers – which is a common misconception!)

Now, on to your question…  The answer depends on who owns the copyrights to the video, and the underlying music in the video.  If you make a video of yourself performing your own music, and you post that video on YouTube, there are no copyright issues.  Because you own the music being performed, AND you own the video, you have the right to post that video on YouTube or anywhere else on the Internet.

However, the answer changes if you don’t own the music.  If the musical copyright is owned by someone else, you would need that person’s permission to perform the music (i.e., a performance license for the music), to videotape the performance (a synchronization license), AND to broadcast that video via the Internet (a performance license for the video).  Of course, it’s not necessary to have three separate documents, but you would want to be sure you have all of the permissions you need in one license!

The answer also depends on who owns the videotape of the performance.  As noted above, the owner of a video usually will be the person who creates the video.  So, if you perform your own music, but someone else records that performance, then that person will own the video, and you would need that person’s permission to post the video on YouTube.

Downloads implicate yet another potential license requirement – a distribution license!  If you don’t have a right to distribute the video – or the music contained in the video – both you and the illegal downloader could be liable to the copyright holders.

The moral here is that, before posting any audio or video recording on the Internet, be sure you have all of the necessary permissions – preferably in writing!

__________________________________________________________________________

For additional information and resources on this and other legal and business issues for the performing arts, visit ftmartslaw-pc.com.

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. FTM Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Copyrights, Law and Disorder: Performing Arts Division, Licensing, Music Rights, Recordings, Uncategorized | Comments Closed

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