§513 Determination of reasonable license fees for individual proprietors

Summary

If a small business owner who runs fewer than 7 places (not part of a publicly traded company) where nondramatic music is played thinks a performing rights society’s license price is unreasonable, they can ask a court to set a fair fee. The owner must file an application and give a copy to the society, and must start the court case within 90 days after giving that copy, subject to the court’s filing rules. The owner can choose to have the case in either the district court that handles the society’s consent decree or in the district court in the federal circuit where the owner’s business is located. The judge in charge of the consent decree will hear the case, but may assign a special master or magistrate to handle it; any advisor named in the consent decree can serve as that special master. The industry rate is presumed reasonable for when it was set, and the owner may keep playing the music while the case goes on by paying an interim fee into an interest-bearing escrow account with the court clerk equal to the industry rate (or the most recent agreed fee) until a final fee is set. A special master’s or magistrate’s decision is reviewed by the judge, and the whole process must finish within 6 months. The final decision only binds the owner who brought the case and that specific society; it does not apply to others, and the society is relieved of any duty under the consent decree to treat similar users the same. An owner may bring only one such case against a given society. “Industry rate” means the fee a society has agreed to with, or a court has set for, a large part of the music-user industry the owner belongs to.