M&J Tavern owner Rick Whittemore does not remember exactly when the business started hosting live music. But he remembers why.

“It started out and always has been just simply to help local musicians,” Whittemore said recently while sitting in the M&J office. He and his wife, Pamela Whittemore, have owned the tavern for more than 35 years. “They’d come to us and ask if they could perform because they were tired of the garage I guess, or their moms kicked them out of the front room. So I always said sure; I didn’t see any problem with it.”

That is, until Broadcast Music Inc., or BMI, one of several performing-rights organizations, or PROs, that collects licensing fees for songwriters and publishing companies, contacted Whittemore. BMI made more than 25 attempts to contact M&J by phone, letter and in-person visits since January 2015, according to a lawsuit filed Nov. 26 in U.S. District Court in Eugene against M&J Tavern and the Whittemores, alleging six claims of willful copyright infringement. The owners canceled all the tavern’s upcoming shows when they received the lawsuit.

Venues that provide music in a public setting — including live bands, DJs, karaoke or recorded music — must pay a licensing fee to one or more of these organizations to comply with copyright law, rather than contacting and paying individual songwriters or publishers.

With the performing rights organizations cracking down on restaurants and bars in the last decade, other venues in Bend that aren’t in compliance with BMI, SESAC, the American Society of Composers, Authors and Publishers (ASCAP) or any of the other performing rights organizations could be next, leading to much quieter nights in Central Oregon. And M&J’s legal fight is not an isolated incident locally or nationally.

Live music returned to M&J on June 5 after its owners settled the lawsuit and arranged to pay licensing fees to BMI and the other two big performing-rights organizations, ASCAP and SESAC. (Whittemore, BMI and ASCAP declined to comment on the specifics of the agreements.)

Although the lawsuit states 2015 as the first date of contact with M&J, BMI initially reached out to the bar earlier than that, according to Whittemore and Jodie Thomas, executive director of corporate communications and media relations for BMI.

“It kind of gave me the impression it was like the mafia or something,” Whittemore said. “I asked them, both ASCAP and BMI, for lists of their music — their songs, whatever you call it, their rights (they had) or whatever — and the response I got was, ‘It’s too big; we can’t give you that.’

“They try to keep it as mysterious as possible in my opinion,” Whittemore added.

A lack of transparency

Many Bend venue owners seem reluctant to comment on performing rights organizations. Derek Sitter at Volcanic Theatre Pub, Nate Edgell at The Capitol and the owners of Crux Fermentation Project did not return phone calls to their businesses or messages seeking comment.

Spoken Moto co-owner ­Brian Gingerich said he received letters and emails from ASCAP starting within a month of the hybrid bar/motorcycle shop’s opening in summer 2016.

“I don’t know how they find you,” Gingerich said. “There was no reference to somebody physically being here. There was just, ‘We’re aware that you use music.’ And I don’t know how they do that.”

John Johnson, ASCAP’s senior vice president of licensing, said ASCAP prefers when venues reach out about licenses. But if a venue is not compliant, the organization will use a variety of sources to determine where music is hosted, including advertising on social media and in newspapers, word of mouth, whistle-­blowers and other venues, Johnson said. The process is similar with BMI.

Gingerich said ASCAP was “pretty aggressive at first” in its outreach.

“They were (saying), ‘You can’t stream music; you can’t do this, you can’t do that; you can’t have live performances without paying for these licenses,’” he said. “So I dug into the code of federal regulations and actually read the rules, and because we use a commercial streaming service — we use Pandora for Business, and they pay ASCAP and BMI and SESAC and all those.”

The processes used by ASCAP and BMI to determine licensing fees are similar. Fees are based on a venue’s occupancy, whether the venue plays live music or recorded music and the frequency of shows if the venue presents live music.

“The fees that we charge venues are very much in line with other, similar establishments across the country,” Johnson said.

But Gingerich found ASCAP’s methods for determining these conditions confusing, to say the least. He received a contract from ASCAP that initially calculated a much higher fee based on an incorrect occupancy number, among other problems. The venue’s occupancy is 81 people, Gingerich said.

“They were attempting to charge for our streaming music — our recorded music — which because (we are) using Pandora, they can’t,” he said. “They were assuming we did live music seven days a week, which we don’t — we do it two days a week. And all of those things impact what they’re allowed to charge.

Johnson said occupancy figures used by ASCAP are the ones established by the city the venue is in or the fire code.

“It’s usually a pretty reliable third-party source or an official document about what the occupancy is to make sure that everybody in that area is treated the same,” Johnson said. “When that’s available, we do that. When it’s not available, we can also take a look at the square footage and that will also be somewhat in line with the occupancy rating as well.”

Representatives from ASCAP and BMI would not discuss specific contracts with venues or the specific formula used to determine its licensing fees.

The licensing crackdown

M&J’s situation is part of a bigger trend over the last five to seven years of performing rights organizations focusing on bars and restaurants in particular for nonpayment of licensing fees, said Portland intellectual property lawyer Sheila Fox Morrison. Morrison has worked with trademarks and brand protection for 20 years and has counseled businesses on copyright issues for the last 15 years. “The way ASCAP and the PROs function is they identify an industry and then they make a concerted effort to send letters and target that particular industry,” she said.

“Under the copyright law there’s a carve-out for restaurants for playing music over the air through a radio or a TV,” Morrison said. “But since streaming has become the dominant way people listen to music, it became more of an issue recently, and there’s no carve-out for that. So everybody’s on the hook.”

This discrepancy caught the attention of the U.S. Justice Department, too. This month, the Justice Department opened a formal review of music-licensing rules, which were entered into in 1941 and require the organizations to issue blanket licenses for their music catalogs to the venues that offer music in order to comply with copyright law. (The Justice Department declined to comment on this story.)

The performing rights organizations’ focus now seems to have progressed to live music licenses, Morrison said. “Now everybody’s got their recorded music licenses in place; live music is the next frontier. But they’re really related.”

BMI’s license fee can run anywhere from $378 per year to thousands of dollars per year depending on the capacity of the establishment, the type of performance (live, recorded, DJ, karaoke) and the number of times the venue hosts live music per week, month or year, Thomas said. The BMI license covers “more than 14 million musical works by over 900,000 songwriters, composers and publishers in the BMI repertoire,” Thomas said, with roughly 90 cents of every dollar collected in licensing fees going to songwriters and publishers.

Similarly, ASCAP’s members receive 88 cents of every dollar collected, with the remaining 12 cents going to the organization’s operating costs, Johnson said.

The organizations do have searchable databases of their music collections, Morrison said.

“Live music is sort of a different animal — you can’t go to Pandora for (Business) and get your license that way,” Morrison said. “Your options are more limited. You do have to go to each of the PROS, and each PRO has a different catalog of music.”

That means a venue owner has to either know exactly what songs each artist is going to play inside the venue, or obtain blanket licenses from the three main organizations.

“The hardest thing about copyright and dealing with that is (a song) might have multiple copyright owners, and so it gets a little complicated,” Morrison said. “These PROs are trying to make it as easy as possible. It’s just complicated because it’s the way copyright law — it hasn’t been updated in quite some time.”

The onus falls on the venue and not the artist playing cover songs because the venue receives the benefit of having live music, according to ASCAP and BMI. An artist would need to seek permission to record a cover song and sell it, however, due to the difference between mechanical royalties, which deals with a recording of a song, and performance royalties.

Paying the artists

Portland-based indie rock group Portugal. The Man has been represented by ASCAP since its formation in Alaska in the early 2000s. The band has a personal connection to the organization: Songwriter and ASCAP President Paul Williams recently collaborated with the group in the studio, guitarist and vocalist John Gourley said.

As a musician who came up playing small bars and venues, Gourley saw first-hand how these places form their identities based on the style of music being played, whether live or recorded. “It all comes down to this aesthetic that is given to you by Motörhead or Tim McGraw. It’s so important to every business,” he said.

For Gourley, the situation comes down to respect and understanding between venue owners and musicians. The licensing fees are a relatively small price to pay for the music that will often help drive people to visit the venue, Gourley said.

“These checks (for artists), they can be like $5; they can be two bucks — it’s just whatever it is for that spot,” Gourley said. “… It’s just the way these checks build up is how the artist gets paid. So to the business, it’s a really small fee to compensate the writers that inform your clientele of what type of business you are.”

But artists at a smaller level who rely on venues such as M&J for performances don’t necessarily agree.

Local ­singer-songwriter Brian Hinderberger, who got his start in music at M&J about 12 years ago, was back at the bar for the first open mic night June 5.

“This place is very special because … you’re welcome to play and then you’re welcome to learn and meet other people,” he said. “The vibe was here, and it’s always been here, and I think I developed myself as an artist performing just for the mere fact of the welcomeness of this place.”

Hinderberger also is an ASCAP artist, but he said he doesn’t agree with the way it and similar organizations seem to be targeting venues in specific markets.

“My perspective (is) it was directed towards an area in a market and they said, ‘OK, well, this is not right,’” he said. “And it did create shock waves. I had venues that were booking me saying, ‘Are you gonna play original music, or am I gonna have to be worried about this?’ I think it was more of — it was a big foot that just said no, and this is who we are. It was really unfortunate.

“So my perspective is I respect what they do for artists by protecting their rights when they do get paid — if they do get paid — but to go in and squash a cultural thing or to pinpoint it is pretty — I don’t know,” he continued. “I don’t respect it.”

Getting licensed

Morrison, the Portland intellectual property lawyer, advised venues to negotiate with these organizations to make sure they have the correct information.

“If somebody gets a letter and the information is incorrect, correct the information,” Morrison said. “Tell them that I didn’t play that song, or that song wasn’t played. In order to bring an actual claim, (the organization has) to identify specific music that is in their catalog, otherwise they don’t have a basis for a claim. … The usual defense is, prove to me what have I done wrong and asking them for some specifics.”

Some venues will try to get around the fees by insisting artists only play original material, but this has some dangerous pitfalls.

“The question you have to ask in that situation is, ‘Are you represented by a record company?’” Morrison said. “Because if it’s (the artist’s) own music and they’ve written all the songs and they are not represented by a record company, then your chances are higher that you’re in the clear. But if they have representation by a record company, the record company probably owns a piece of that music.”

In the end, the best option is to negotiate and get a license, or licenses, in place, Morrison said.

ASCAP and BMI claim they only take legal action against a venue as a last resort. Their focus is on education, which is why the process can drag out for years, as it did for M&J.

“Our approach is to educate business owners about the value that music brings to their establishment, the requirements of copyright law, and the importance of maintaining a music license,” Thomas of BMI wrote via email.

She added that the organization is “very pleased that we could come to an agreement with the M&J Tavern. We never want to see the music go away and are thrilled that it will continue playing in their establishment.”

While Whittemore said he is not happy with how the situation at M&J turned out, he said he “bit the bullet” to keep live music going. The venue’s open mic night, especially, is considered by many to be the music scene’s “living room” — a place for musicians just starting out to get their first performance time in front of an audience.

“I think CJ (Hitchcock), my manager, called it the bridge between the garage and Nashville, and that’s what we were always hoping to do,” Whittemore said. “There’s a tremendous amount of talent in this town that nobody ever hears, nobody ever knows about, and we were hoping that some of it could be displayed.”

— Reporter: 541-617-7814, bmcelhiney@bendbulletin.com

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