Peloton's Infringement Lawsuit and What It May Mean for Health and Fitness Clubs
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Paul R. Bedard, Esquire
Whether in the form of an instructor's playlist or as background noise, most health clubs rely on music to enhance their members' experience. However, a lawsuit involving Peloton and members of the National Music Publishers Association (NMPA) highlights the legal aspects of utilizing music for commercial purposes. This lawsuit remains open and will continue to be worthy of monitoring for what it will mean to the licensing of music for commercial purposes.
The $150 million lawsuit filed against Peloton by members of the NMPA claims that Peloton has been using their music without obtaining the proper licensing. NMPA President and CEO, David Israelite, has publicly elaborated by alleging that Peloton has, "properly licensed some music but not all music."
As a result of the lawsuit, Peloton removed hundreds of classes from its on-demand platform. However, Peloton responded to the lawsuit by filing a counterclaim against the music publishers alleging antitrust behavior, teaming up against Peloton in a coordinated effort to fix prices on the publishers' part. Peloton also claims that the NMPA has committed "tortious interference" that has prevented Peloton from being able to arrange agreements with the individual\music publishers.
The publishers have filed a motion to dismiss the counterclaim, alleging that Peloton has failed to establish collusion on the part of the publisher or interference on the part of the NMPA. Compounding legal matters, a Peloton rider has filed a class-action lawsuit claiming that the removal of the classes from Peloton's on-demand platform has significantly diminished the riding experience.
The stakes and claims involved within the Peloton lawsuit serve as a reminder that health clubs must obtain a public performance license when using music for commercial purposes. A public performance license ensures that owners of copyrighted music are compensated for the use of their intellectual property. Performance rights organizations handle these licenses by representing songwriters and copyright owners. The top three performance rights organizations in the United States are the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music Inc. (BMI) and SESAC Performing Rights.
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