Appeal from the United States District Court for the Northern District of Ohio at Akron. No. 5:12-cv-01024--George J. Limbert, Magistrate Judge.
Robert E. Chudakoff, ULMER & BERNE LLP, Cleveland, Ohio, for Appellees.
Roy E. Barr, Canton, Ohio, Pro se.
Before: BOGGS, SUTTON and WHITE, Circuit Judges.
SUTTON, Circuit Judge.
A restaurant played live and recorded music without permission of the copyright holders. At stake is whether the Copyright Act imposes vicarious liability on the owners of the restaurant for the infringement.
Roy Barr and his son Philip own Meadowlake, a limited liability company that runs Rafters Bar and Grill, a golf-course restaurant in Canton, Ohio. Roy owns 95% of the company and makes all " significant decisions" about the restaurant. R. 32-4 at 3. Philip owns 5% of the company and manages the restaurant from day to day.
Rafters offers music and dancing for its customers. Known for its taste for rock, the restaurant plays everything from Queen and Pink Floyd to ZZ Top and Lynyrd Skynyrd--sometimes turning on a recording, sometimes bringing in live performers. Less known for its taste for compliance with the copyright laws, it hosts performances of the music without getting the copyright owners' permission. These performances violated the copyright owners' exclusive right " to perform the copyrighted work[s] publicly." 17 U.S.C. § 106(4). Rafters' lapses came to the attention of Broadcast Music, Inc., an organization of songwriters and composers that licenses music and collects royalties on behalf of its members. Over three years, BMI sent Rafters more than a score of letters, warning the restaurant not to infringe its copyrights and offering to license its music. It got no response. BMI sued Roy for copyright infringement. (It sued Meadowlake and Philip as well, but these defendants escaped the lawsuit by declaring bankruptcy.) The parties consented to have a magistrate judge handle the case. The district court granted summary judgment to BMI.
The one wrinkle in the case, and the key source of Roy's appeal, is that he did not perform any of the copyrighted music. The bands that played at the restaurant and the people who turned on the recordings did that. In interpreting the Copyright Act against its common law background, however, courts have developed a handful of doctrines that make people liable for copyright infringement committed by others. Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, 545 U.S. 913, 930, 125 S.Ct. 2764, 162 L.Ed.2d 781 (2005). Under one of these doctrines, a defendant becomes vicariously liable for a direct infringement of a copyright " by profiting from [the] infringement while declining to exercise a right to stop or limit it." Id.; see Gordon v. Nextel Commc'ns, 345 F.3d 922, 925 (6th Cir. 2003).
Under these precedents, Roy is vicariously liable for the pervasive copyright infringement at his restaurant. The first half of the test for vicarious liability asks whether the defendant had " the right and ability to supervise the infringing conduct." Gordon, 345 F.3d at 925 . Roy does not dispute that, as the company's chief (95%) owner and the restaurant's ultimate decisionmaker, he had the right and ability to supervise the infringing performances. The second half of the test asks whether the defendant had " an obvious and direct financial interest in the infringement." Id. Roy does not dispute that he had a financial interest in the infringing performances, which drew more customers to his restaurant. That makes him liable.
This case indeed falls within the heartland of vicarious liability. In the canonical illustration of the doctrine, the owner of a dance hall became vicariously liable when an orchestra hired to play music for the customers performed a copyrighted ...