United States v. Broadcast Music, Inc
Filing
100
OPINION AND DECLARATORY JUDGMENT. The phrase in Art. II (C) of the Consent Decree defining BMI's repertory as "those compositions, the right of public performance of which [BMI] has the right to license or sublicense" is descriptive, n ot prescriptive. The "right of public performance" is left undefined as to scope or form, to be determined by processes outside the Consent Decree. The Consent Decree neither bars fractional licensing nor requires full-work licensing. (Signed by Judge Louis L. Stanton on 9/16/2016) (rjm) (Additional attachment(s) added on 9/16/2016: # 1 Right to Appeal Form #1, # 2 Right to Appeal #2) (rjm).
Case 1:64-cv-03787-LLS Document 100 Filed 09/16/16 Page 1 of 6
ORIGINAL
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DOCl \IL\T
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
ELECTH.O\lCALLY FILED
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DOC tt:----...,..---.---
0.-\ TE FILED:
9/161J6.
UNITED STATES OF AMERICA,
Plaintiff,
64 Civ. 3787 (LLS)
-v.
OPINION & DECLARATORY
BROADCAST MUSIC, INC.,
JUDGMENT
Defendant.
----------------------------------------X
This application for a
("Consent Decree")
1
Final Judgment
construction of the
in this case is stimulated by the August 4, 2016
publication of the Anti trust
Division of the U.S.
Department of
Justice's "Statement of the Department of Justice on the Closing of
the
Antitrust
Decrees"
Division's
Review
of
the
ASCAP
and
BMI
Consent
("Statement"), which asserts that:
. the consent decrees, which describe PROs' [2 1 licenses
as
providing
the
ability
to
perform
"works"
or
"compositions," require ASCAP and BMI to offer full-work
licenses.[3J
The Division reaches this determination
1 1966 U.S. Dist. LEXIS 10449, 1966 Trade Cas.
(CCH) ~ 71,941
(S.D.N.Y. 1966), modified by 1994 WL 901652, 1994 U.S. Dist. LEXIS
21476, 1996-1 Trade Cas. (CCH) ~ 71,378 (S.D.N.Y. 1994).
are "performing rights organizations" who "provide
2 PROs
licenses to users .
to publicly perform the musical works of
the PROs' thousands of songwriter and music publisher members."
[Statement p. 2]
3 The Statement defines these:
Under a "full-work" license, each PRO would offer
non-exclusive licenses to the work entitling the
Case 1:64-cv-03787-LLS Document 100 Filed 09/16/16 Page 2 of 6
based not only on the language of the consent decrees and
its assessment of historical practices, but also because
only full-work licensing can yield the substantial
procompetitive benefits associated with blanket licenses
that distinguish ASCAP's and BMI's activities from other
agreements among competitors that present serious issues
under the antitrust laws.
[Statement p. 3]
*
*
*
If PROs offer fractional licenses, a music user, before
performing any multi-owner work in a PRO's repertory,
would need a license to the fractional interests held by
each of the work's co-owners.
A full-work license from
a PRO, on the other hand, would provide infringement
protection to a music user seeking to perform any work in
the repertory of the PRO.
[id. p. 10]
*
*
*
If the licenses were fractional, they would not provide
immediate use of covered compositions; users would need
to obtain additional licenses before using many of the
covered compositions. And such fractional licenses would
not avoid the delay of additional negotiations, because
users would need to clear rights from additional owners
of fractional interests in songs before performing the
works in the ASCAP and BMI repertories.
Similarly, the
Second Circuit has held that ASCAP is "required to license
its entire repertory to all eligible users," and that the
repertory includes "all works contained in the ASCAP
3
(cont'd)
user to perform the work without risk of infringement
liability.
Under a "fractional" license, each PRO
would offer a license only to the interests it holds
in a work, and require that the licensee obtain
additional licenses from the PROs representing other
co-owners before performing the work.
[Statement
p.
8]
2
Case 1:64-cv-03787-LLS Document 100 Filed 09/16/16 Page 3 of 6
repertory."
Pandora Media, Inc. v. ASCAP, 785 F.3d 73,
77-78 (2d Cir. 2015) (emphasis removed).
The Second
Circuit rejected arguments that this decree requirement
conflicted with copyright law, noting that "[i]ndividual
copyright holders remain free to choose whether to license
their works through ASCAP." Id. at 78. The logic of the
Second Circuit's decision applies to BMI as well.
Accordingly, the consent decrees must be read as requiring
full-work licensing. ASCAP and BMI can include in their
repertories only those songs they can license on such a
basis.
[id. p.l2]
*
*
*
Moreover, nothing in this interpretation contradicts
copyright law.
To the extent allowed by copyright law,
co-owners of a song remain free to impose limitations on
one another's ability to license the song. Such an action
may, however, make it impossible for ASCAP or
BMI--consistent with the full-work licensing requirement
of the antitrust consent decrees--to include that song in
their blanket licenses.
[ id. p. 13]
BMI promptly sought a declaratory judgment that the Consent
Decree does not require 100% ("full-work") licensing.
DISCUSSION
Nothing in the Consent Decree gives support to the Division's
views.
If a fractionally-licensed composition is disqualified from
inclusion
in
BMI' s
repertory,
provision of the Consent Decree.
it
is
not
for
violation
of
any
While the Consent Decree requires
3
Case 1:64-cv-03787-LLS Document 100 Filed 09/16/16 Page 4 of 6
BMI
to license performances of those compositions
"the right of
public performances of which [BMI] has or hereafter shall have the
right
to
license
or
sublicense"
provision regarding the source,
It
does
not
address
the
(Art.
II(C)),
extent,
it
contains
no
or nature of that right.
possibilities
that
BMI
might
license
performances of a composition without sufficient legal right to do
so, or under a worthless or invalid copyright, or users might perform
a music composition licensed by fewer than all of its creators.
The parties to it stipulated that the Consent Decree did not
extend to problems such as those involved in determining the value
or validity of copyrights of compositions in BMI's repertory.
The
Consent Decree states in Article XIV (D):
(D)
Nothing in this Article XIV shall prevent any
applicant from attacking in the aforesaid [rate court]
proceedings or in any other controversy the validity of
the copyright of any of the compositions in defendant's
repertory nor shall this Judgment be construed as
importing any validity or value to any of said copyrights.
The Consent Decree does not regulate the elements of the right
to perform compositions.
Performance of a
composition under an
ineffective license may infringe an author's rights under copyright,
contract or other law, but it does not infringe the Consent Decree,
which does not extend to matters such as the invalidity or value of
copyrights of any of the compositions in BMI's repertory.
of
the
validity,
scope
and
limits
4
of
the
right
Questions
to
perform
Case 1:64-cv-03787-LLS Document 100 Filed 09/16/16 Page 5 of 6
compositions are left to the congruent and competing interests in
the music copyright market,
laws,
to
continue
to
and to copyright,
resolve
and
enforce.
property and other
Infringements
(and
fractional infringements) and remedies are not part of the Consent
Decree's subject-matter.
The structural difference between the issue of the fractional
licenses and BMI v.
Pandora Media,
Inc.,
No.
13 Civ.
4037
(LLS),
2018 WL 6697788 (S.D.N.Y. Dec. 19, 2013) illustrates the point.
the Pandora case,
the conduct:
In
the Consent Decree itself explicitly regulated
"The BMI Consent Decree requires that all compositions
in the BMI repertory be offered to all applicants" id. at *3;
"Under
Section XIV of the BMI Consent Decree, when an applicant requests a
license for
repertory,'
any,
BMI
some or all of the compositions in defendant's
must
grant
requested compositions
a
license
for
performance
of
to all applicants, with fees that do
not discriminate between applicants similarly situated." [Id.]
language
of
the
Consent
the
Decree
was
mandatory
and
The
unambiguous.
Compositions, whose copyright-holders persuaded BMI to exclude them
from BMI's offer to Pandora and New Media
(digital)
services, did
not meet the standards of the BMI Consent Decree and were accordingly
disqualified
under
its
own
terms
from
participation
in
BMI's
repertory.
The Consent Decree contains no analogous provision concerning
the values of fractional versus full-work licensing.
dispute is left to the applicable law.
5
That area of
Case 1:64-cv-03787-LLS Document 100 Filed 09/16/16 Page 6 of 6
DECLARATORY JUDGMENT
The phrase in Art. II (C) of the Consent Decree defining BMI's
repertory as "those compositions,
of which
[BMI]
descriptive,
the right of public performance
the right to license or sublicense" is
has
not prescriptive.
The "right of public performance"
is left undefined as to scope or form, to be determined by processes
outside
the
Consent
Decree.
The
Consent
Decree
neither
fractional licensing nor requires full-work licensing.
DATED:
New York, New York
September 16, 2016
LOUIS L. STANTON
U. S. D. J.
6
bars
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