United States v. Broadcast Music, Inc. Case Summary

Case 16-3830, Document 202-1, 12/19/2017, 2197329

Issue: Does the consent decree prevent full-work licensing or prohibit fractional licensing of BMI’s affiliates’ compositions?

Decision: The judge affirmed the district court’s judgment.

Summary: This case arose from a 1966 consent decree (amended in 1994), wherein the Department of Justice (DOJ) challenged the blanket licenses that BMI entered into as an illegal restraint of trade. The dispute in this case is whether, under the consent decree, “fractional” interests BMI has acquired through its affiliates to a co-owned work are included in BMI’s repertory and may be included in the blanket license.

On August 4, 2016, the DOJ closed a review of the ASCAP and BMI Consent Decrees. It concluded that “the consent decrees, which describe PROs’ licenses as providing the ability to perform ‘works’ or ‘compositions,’ require ASCAP and BMI to offer full-work licenses” to the exclusion of fractional licenses.

Immediately afterwards, BMI asked Judge Stanton for a pre-motion conference. BMI argued that because the decree did not prohibit fractional licensing, it was permitted. The Court of appeals focused on the principle that the language of a consent decree must dictate what a party is required to do and not do. Therefore, since the decree is silent on fractional licensing, BMI may (and perhaps must) offer them unless a clear and unambiguous command of the decree states otherwise.

The appeals court also added that “the right of public performance” is a term of art and that the deference is to what is the normal usage of the copyright. The court found that the right may be transferred in whole or part and each co-owner has the right to public performance. The appellate court agreed that the blanket license itself “does not necessarily confer a right of immediate public performance.”