. . . 

The Attorney General of Texas 

October 31, 1978 

JOHN L. HILL 

Attorney General 

Opinion No. I-i- 12 6 0 

Re: Application of Copyright 

Revision Act of 1976 to performances of musical works at state 

colleges and universities. 

You inquire about the application of federal copyright law to musical 

performances at state colleges and universities. The Copyright Revision Act 

of 1976, 17 U.S.C. SS 101-810, gives a copyright owner the exclusive right to 

authorize the public performance of his musical works, subject to the Fair 

Use Doctrine and certain specific exceptions. 17 U.S.C, SS 106(4); 107; 110. 

Other persons who wish to-perform copyrighted music publicly must secure 

the copyright holder’s permission, usually by paying him a licensing fee. See 

17 U.S.C. S 501(a). 

- 

Many copyright owners have authorized private performing rights 

organizations, the American Society of Composers, Authors, and Publishing 

(ASCAP) and Broadcast Music, Inc. (BMD, to license their works. These 

organizations have asked state supported colleges and universities to sign 

blanket licensing agreements, which require the payment of a yearly fee in 

exchange for the right to perform any composition in the society’s repertory. 

The fee is based on the institution’s enrollment and the number of major 

concerts it holds each year. 

You first ask whether state supported colleges and universities must 

secure permission for the performance of copyrighted works on campus. 

Although prior law required a license only when a performance was “for 

profit,” Act of July 30, 1947, ch. 391, S 104, 61 Stat. 652; see also Annot., 23 

A.L.R. Fed. 974 (1975), the new law also requires licenir nonprofit 

performances, with certain specific exceptions. The following provisions are 

most relevant to your questions: 

Notwithstanding the provisions of section 106 [17 

U.S.C. S 1061, the following are not infringements of 

copyright: 

(1) performance or display of a work by instructors 

or pupils in the course of face-to-face teaching 

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activiti~es of a nonprofit educational institution, in a classroom or similar place devoted to instruction. . .; 

. . . . 

(4) performance of a nondramatic literary or musical work 

otherwise than in a transmission to the public, without any 

purpose of direct or indirect commercial advantage and 

without payment of any fee or other compensation for the 

performance to any of its performers, promoters, or 

organizers, if - 

(A) there is no direct or indirect admission charge; or 

(B) the proceeds, after deducting the reasonable 

costs of producing the performance, are used 

exclusively for educational, religious, or charitable 

purposes and not for private financial gain, except 

where the copyright owner has served notice of 

objection to the performance under the following 

conditions; 

(i) the notice shall be in writing and signed by the’ 

copyright owner or such owner’s duly authorized 

agent; and 

(ii) the notice shall be served on the person 

responsible for the performance at least seven 

days before the date of the performance, and shall 

state the reasons for the objection; and 

(iii) the notice shall comply, in form, content, and 

manner of service, with requirements that the 

Register of Copyrights shall prescribe by 

regulation; 

17 U.S.C. S ll0. Section 110(Z) exempts the performance of musical works in certain 

instructional broadcasts. 

In our opinion, these provisions do not exempt all uses of copyrighted music 

which customarily occur at state colleges and universities. Section llO(1) excepts 

the performance of a work in the course of face-to-face teaching activities. The 

exempted teaching activities do not include performances given for the entertainment of any part of the audience. l-l. R. Rep. No. 1476, 94th Cong., 2d Sass. 81 

(1976) reprinted in t19761 U.S. Code Cong. & Ad News 5659, 5695 [hereinafter cited 

as PI. R. Rep. No. 14761. 

Section llO(4) states the conditions under which an institution may hold 

noninstructional public performances without securing permission to use copyrighted works. There are two threshhold conditions. The performance must be (1) 

without the purpose of direct or indirect commercial advantage and (2) without 

payment of a fee or compensation to any performer, promoter, or organizer. The 

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first condition requires that the performance be nonprofit; a free performance 

sponsored in connection with a profit-making enterprise is “for profit.” H. R. Rep. 

No. 1476 at 85; see Herbert v. Stanley Co., 242 U.S. 591 (1917) (performance of 

music in restaurant to entertain guests was public performance). The second 

condition is designed to prevent the free use of copyrighted material where fees or 

percentages are paid to performers, promoters, and producers. H. R. Rep. No. 1476 

at 85. However, it does not prevent the free use of copyrighted material where the 

performers and organizers receive a salary for duties encompassing the performance instead of being paid directly for the performance. A legislative report 

gives as an example a school orchestra performance directed by a music teacher 

who receives an annual salary. g In the case of colleges and universities, musical 

performances in which salaried employees participate as organizers, directors or 

performers would fit the second condition. However, if an outside performer 

receives a fee for an appearance, the second condition would be violated, and 

permission for his use of copyrighted material would have to be secured. 

Once the threshhold conditions in section llO(4) are satisfied, one of two 

additional standards must also be met. Either there must be no direct or indirect 

admission charge, or the proceeds must be “used exclusively for educational, 

religious, or charitable purposes and not for private financial gain.” Thus, a 

university could charge admission for a concert by the student orchestra, but would 

not have to seek permission to use copyrighted music if the proceeds were used for 

bona fide educational purposes. H. R. Rep. No. 1476 at 86. Section 110(4)(B) 

empowers the copyright owner to stop a performance for which ,admission is 

charged by serving notice on the person responsible for it at least seven days in 

advance. The burden is on the copyright owner to object in accordance with 

procedures established by federal regulations. See 42 Fed. Reg. 64, 684 (1977) (to 

be codified as 37 C.F.R. S 201.13(c)); 17 U.S.CT. (Supp. 1978). Whether the 

proceeds of concert admission fees are used for educational purposes must be 

determined on the facts of each case. 

You suggest that article 3, section 51 of the Texas Constitution, which forbids 

the gift of public funds, would prevent you from signing blanket license 

agreements. We believe you may pay license fees, consistently with article 3, 

section 51, for performances not within the exceptions of section ll0, such as a 

performance ,by an outside person who receives a fee for his appearance. In 

addition, when a copyright holder objects to a proposed performance pursuant to 

section 110(4)(B), payment of licensing fees will undoubtedly be necessary to secure 

the withdrawal of his objection. Under these circumstances, the licensing fees 

would generally constitute a reasonable expense of authorized university activities. 

Whether or not an institution may also enter into a particular licensing 

agreement depends upon all the relevant facts. Article 3, section 51 requires that 

the college or university receive adequate consideration for its payment of license 

fees. See Dodson v. Marshall, 118 S.W.2d 621 (Tex. Civ. App. - Waco 1938, writ 

dism’d);ttorney General Opinions H-520 (1974); H-403 (1974). The adequacy of 

consideration received for licensing fees depends on such factors as the extent to 

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which the school will use music covered by the license in nonexempt performances, 

the administrative convenience afforded by the blanket licensing scheme, and the 

costs of securing permission for performances through alternative means. This 

determination is for college and university authorities. 

You also ask whether these agreements violate federal anti-trust laws. 

Combinations to restrain competition or fix prices in performing rights can violate 

federal anti-trust laws. Alden-Rochelle, In& v. American Society of Composers, 

Authors and Publishers, 80 F. Supp. 888 (S.D.N.Y. 1948); Alfred Bell & Co., Ltd, v. 

Catalda Fme Arts, Iii& 74 F. Supp. 973 (S.D.N.Y. 1947). ASCAP has been th; 

defendant in I anti-trust suits brought by the Department of Justice and is operating 

under a 1950 consent decree entered in the District Court for the Southern District 

of New York. Columbia Broadcasting System, Inc. v. American Societv of 

Composers, Authors, and Publisher- CCn 73 n.. 3-n I..> “IU.S.L.W. 3187 (U.S. Oct. 3, 1978 

-377), cert. granted, 47 

[hereinafter CBS v. 

‘s, ~0.z r.zo ~a” \zo Lir. I: 

;T (Nos. 77-1578, 77-15831, 

CAP]. Although the consent decree authorizes the district court to set a 

reasonable licensing fee when a licensee and ,ASCAP cannot agree, private 

plaintiffs are not restricted to this method of pressing claims against ASCAP. E 

at 134, 139. 

The Columbia Broadcasting System recently sued ASCAP and BMI, alleging 

that their blanket licensing method violated the Sherman Act. 15 U.S.C. S 1; CBS 

ASCAP, supra, at 132. The performing rights associations offered television 

stations an annual license and a per program license, but CBS sought a method of 

licensing which reflected its actual use of music. They alleged that the blanket 

licensing system constituted an illegal tying or block-booking arrangement, in that 

the station was compelled to pay license fees for music it did not use, in order to 

license the music it wanted. The trial court found no anti-trust violations. 

Columbia Broadcasting System, Inc. v. American Society of Composers, 400 F. 

supp. 737 (S.D.N.Y. 1975). 

The court of appeals reversed, holding that the blanket licensing agreement 

constituted an illegal price-fixing device, because copyright owners received an 

artificial price through combining to sell their product. CBS v. ASCAP, 562 F.2d at 

136. Price fixing may be legal when it is absolutely necessary for the market to 

function at all. Ia, However, the court accepted the trial court’s conclusion that 

television stations could negotiate directly for performing rights, and held that the 

price fixing scheme could not be saved by a “market necessity” defense. & at 140. 

See K-91, Inc. v. Gershwin Publishing Corp., 372 F.2d 1 (9th Cir. 1967) cert. denied6 

389 U.S. 1045 (1968). IThe agreements offered to state colleges and universities by the performing 

rights societies resemble in significant respects the blanket licensing agreements at 

issue in CBS v. ASCAP. They in fact offer less flexibility since there is no 

provision for per program or per performance licensing. Whether or not these 

agreements violate the anti-trust laws depends on the facts relating to the college 

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and university market for performing rights. Facts showing coercion would tend to 

prove illegal block booking, see 400 F. Supp. at 749-51, while facts showing the 

feasibility of direct negotiationwould undermine the market necessity defense to 

price fixing. We do not resolve fact questions in the opinion process and cannot 

determine whether these agreements would constitute restraints of trade as a 

matter of law. 

SUMMARY 

State colleges and universities must secure the copyright 

holder’s permission for their musical performances unless 

the performance is exempted by section 107 or ll0 of the 

Copyright Revison Law of 1976. Payment of licensing fees. 

to secure permission for such performances would not 

violate article 3, section 51 of the Texas Constitution. State 

institutions of higher education may pay for blanket licenses 

from performing rights societies if they receive adequate 

consideration for the payment. Whether or not the blanket 

licensing agreements violate the federal anti-trust laws is a 

fact question. 

q Very truly yours, 

APPROVED: 

DAVID M. KENDALL, First Assistant 

a C. ROBERT HEATH. Chairman 

Opinion Committee 

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