it transmits the network broadcast; a cable broad-
cast television system is performing when it
retransmits the broadcast to its subscribers; and
any individual is performing whenever he or she
plays a phonorecord embodying the performance or
communicates the performance by turning on a
receiving set. Although any act by which the
initial performance or display is transmitted,
repeated, or made to recur would itself be a
"performance" or "display" under the bill, it
would not be actionable as an infringement unless
it were done "publicly," as defined in Section
101.

H.R. Rep. No. 94-1476, 94th Cong., 2d Sess. 63 (1976) (hereinafter "House Report") (emphasis added); see also S. Rep. No. 94-473, 94th Cong., 1st Sess. 59-60 (1975).

There has never been any doubt that the Copyright Law affords protection to copyright owners whose music is being performed mechanically by means of records or tapes. The quoted language of the legislative history expresses this intent, and the courts have held, for example, that unauthorized performances of recorded music furnished to an establishment by an unlicensed background music service were infringements of copyright, Harms. Inc. v. Sansom House Enterprises, Inc., 162 F. Supp. 129 (E.D. Pa. 1958); that unauthorized performances of phonorecords being played throughout a retail establishment were infringements of copyright, Chappell & Co. v. Middletown Farmers Market & Auction Co., 334 F.2d 303 (3rd Cir. 1964); and that unauthorized performances given by a disk jockey playing records in a nightclub were also infringements of copyright, Wow & Flutter Music v. Len's Top Jones Tavern, Inc., 606 F. Supp. 554 (W.D.N.Y. 1985).

The 1976 Copyright Act provided a very limited exemption for certain radio-over-speaker and television performances. The pertinent statutory language, the legislative history and cases which have interpreted the exemption make it clear that it is narrow in scope and available only to a small category of

users.

The exemption for certain radio-over-speaker and television performances is found in Section 110 (5). The exemption applies to:

[C]ommunication of a transmission embodying a
performance or display of a work by the public

reception of the transmission on a single receiving apparatus of a kind commonly used in private homes, unless

(A) a direct charge is made to see or hear the transmission; or

(B) the transmission thus received is
further transmitted to the public.
added.)

(Emphasis

Most radio-over-speaker systems and large-screen television installations are not found in establishments which directly charge their customers to see or hear such transmissions. Exceptions do exist, however: to cite three examples, so-called "laser-music" shows, coin-operated television sets in airport lounges, and hotels or arenas which furnish closedcircuit telecasts of championship boxing matches.

In most cases, the Section 110 (5) exemption is inapplicable because the receiving apparatuses being employed are clearly not "of a kind commonly used in private homes" or the transmissions being received by the establishments are "further transmitted to the public."

Apart from limiting the applicability of this exemption, Congress also intended that the new copyright statute overturn the legal rationale for a 1975 Supreme Court decision, Twentieth Century Music Corp. v. Aiken, 422 U.S. 151. In that case, the Court had held that retransmissions of radio broadcasts in a small fast-food shop were not performances under the 1909 Copyright Law. The House Judiciary Committee, in its report on the proposed Section 110 (5) exemption, noted:

Under the particular fact situation in the Aiken
case, assuming a small commercial establishment
and the use of a home receiver with four ordinary
loudspeakers grouped within a relatively narrow
circumference from the set, it is intended that
the performances would be exempt under clause (5).
However, the Committee considers this fact situa-
tion to represent the outer limit of the exemp-
tion, and believes that the line should be drawn
at that point. Thus, the clause would exempt
small commercial establishments whose proprietors
merely bring onto their premises standard radio or
television equipment and turn it on for their
customers' enjoyment, but it would impose liabil-
ity where the proprietor has a commercial "sound
system" installed or converts a standard home
receiving apparatus (by augmenting it with sophis-
ticated or extensive amplification equipment) into

the equivalent of a commercial sound system. Factors to consider in particular cases would include the size, physical arrangement, and noise level of the areas within the establishment where the transmissions are made audible or visible, and the extent to which the receiving apparatus is altered or augmented for the purpose of improving the aural or visual quality of the performance for individual members of the public using those

areas.

H.R. Rep. No. 94-1476, 94th Cong., 2d Sess. 87 (1976).

Before the 1976 Copyright Revision Bill was enacted into law, it was the subject of a House-Senate conference. As a result, a Conference Report was issued, and it, too, discussed the Section 110 (5) exemption:

With respect to section 110(5), the conference
substitute conforms to the language in the Senate
bill. It is the intent of the conferees that a
small commercial establishment of the type
involved in Twentieth Century Music Corp. v.
Aiken, 422 U.S. 151 (1975), which merely augmented
a home-type receiver and which was not of suffi-
cient size to justify, as a practical matter,
subscription to a commercial background music
service, would be exempt. However, where the
public communication was by means of something
other than a home-type receiving apparatus, or
where the establishment actually makes a further
transmission to the public, the exemption would
not apply.

Conf. Rep. No. 94-1733, 94th Cong., 2d Sess. 75 (1976).

In practical terms, the legislative history teaches that to determine whether a particular radio-over-speaker or television system is within the scope of the exemption, one must analyze the nature of the receiving apparatus and the business itself. The starting point for such an analysis is the fact situation in the Aiken case: a small fast food restaurant with a public area of 620 square feet and a radio receiver connected to four ceiling-installed speakers. With these facts as the "outer limit" of the exemption, courts have held that the exemption is not applicable to:

--"The Gap" chain of clothing stores, having an average selling area of 3500 square feet and employing radio receivers augmented with amplification equipment, connected to recessed speakers arranged so that music was audible throughout the

stores. Sailor Music v. Gap Stores, Inc., 516 F. Supp. 923 (S.D.N.Y. 1981), aff'd per curiam, 668 F.2d 84 (2d Cir. 1981), cert. denied, 456 U.S. 945 (1982).

--The "Casual Corner" chain of women's clothing stores, employing commercial monaural receivers and four or more recessed ceiling speakers. Broadcast Music Inc. v. United States Shoe Corp., 211 U.S.P.Q. 43 (C.D. Cal. 1980), aff'd, 678 F.2d 816 (9th Cir. 1982).

--A small chain of grocery stores with public selling areas ranging from 10,000 to 14,500 square feet, employing "Radio Shack" radio receivers connected to six to ten ceiling-mounted speakers not arranged within a narrow circumference from the receivers. (The court concluded that such systems were not "receiving apparatuses of a kind commonly used in private homes"; rather, they were "akin to a commercial background music system.") Lamminations Music v. P & X Markets, Inc., 1985 Copyright Law Decisions 25,790 (N.D. Cal. 1985).

--The "Eighty Four Lumber Company" chain of stores, each with a public area larger than 10,000 square feet and employing systems comprised of radio receivers, separate amplifiers and microphones connected with 2 to 5 speakers mounted throughout the stores' interior selling areas and 1 to 3 speakers mounted outside the stores, all speakers being approximately 150 feet away from the radio receivers and amplifiers. (The court rejected the argument that the exemption was applicable because the sole purpose for using music was to muffle the industrial noise of the workplace.) Rodgers v. Eighty Four Lumber Company, 617 F. Supp. 1021, 1022 (W.D. Pa. 1985).

--A restaurant employing a satellite dish antenna connected to a television receiver to pick up signals for "blacked out" football games. (Considering the various components of the system, the court held that it was not a receiving apparatus of a kind "commonly found in private hores.") National Football League v. McBee & Bruno's, Inc., 792 F.2d 726 (8th Cir. 1986).

--A 2,664-square foot, 200-seat restaurant, employing a sound system comprised of a radio receiver -- located in a private office, with paging capabilities and able to drive up to 40

speakers

connected via concealed wiring to eight ceiling-mounted speakers dispersed throughout the public areas of the restaurant. (The court held that the restaurant's system "successfully served as background music -- creating an atmosphere and muffling unpleasant noises -- precisely the type of performance which is not exempted under the Act.") International Korwin Corp. v. Kowalczyk, 665 F. Supp. 652, 658 n.2 (N.D. Ill. 1987), aff'd on other grounds, 855 F.2d 375 (7th Cir. 1988).

--A hardware store with 13,000 square feet of floor area open to the public, employing 14 or 15 recessed ceiling speakers interconnected to a radio receiver which broadcast music throughout the store 24 hours a day, a paging override device providing public address functions, and a musicon-hold component. (The court rejected the argument that there had been no infringement because the music was for the benefit of employees rather than customers; rather, the purpose of using music was in part "to increase employee productivity and thereby indirectly increase and enhance sales.") Merrill v. County Stores, Inc. 669 F. Supp. 1164, 1170 (D.N.H. 1987).

--A chain of 36 restaurants, each between 1000 and 1500 square feet in size and seating from 100 to 125 people, with only two functioning ceiling-mounted speakers spaced 30 feet apart, connected by hidden wires to a receiver in a storage room or closet. Each set of one receiver and two speakers cost about $118.00. (The court observed that "[t]he fact that individual components of the entire apparatus may be 'hometype' does not make the entire apparatus 'hometype.' Rather, all the features of the complete apparatus must be considered in determining whether it is 'home-type' ...") Merrill v. Bill Miller's Bar-B-O Enterprises. Inc., 688 F. Supp. 1172, 1175 (W.D. Tex. 1988).

--A small chain of supermarkets with public areas of between 10,000 and 18,500 square feet with six to ten speakers in each store. (The court held that the receiving apparatuses were not of a type commonly found in homes; and the infringing performances were "further transmitted to the public," both because of the square footage of the supermarkets (the "size" test) and because the transmissions were received in the manager's