Star Wars MMORPG is having an interesting problem: how to let people play virtual instruments without violating copyrights? Adding a smart melody detector wouldn't work for technical reasons, probably not for another ten years so.
More practical solution would be to introduce a virtual gadget that lets people record music, more specifically record the notes generated from the music instrument a targeted player is using. Since the instruments are probably simply generating MIDI notes, storage won't be a problem. The recorder should be invisible though so it can be used without others noticing. For fairness, the recorder could easily take into account the number of players within listening distance and the nature of the space (private or public).
Yes, I am talking about using reward and penalty combined with evidence collecting device to solve the problem. So when a player playing a Madonna song gets reported, reporting player gets some online money anonymously (voiding the violation event pointed to by the evidence void). Copyright violating player can pay a fine ($1 on the next bill) or choose to buy a reasonably priced license to perform publically in the online world a month. If they don't pay up, their musician skill is suspended for escalating durations.
As to how the violation is determined, violating player is sent a notice of violation and, if they dispute, a reward-motivated player playing the mediator/judge decides whether the violation claim is bogus or not. If not, then it's kicked up to another level and so on. Ratings on each player prevents abuse of the system.
The solution outlined above will make both players as well as copyright holders happy without stressing resource. It will add a lot of emotion to the game as well. LOL.