In a win for Broadcast Music Inc (BMI), a federal judge has thrown out a recent determination by the U.S. Department of Justice (DoJ) that performance rights organisations cannot undertake so-called fractional licensing. Not only had the DoJ had refused alter the 70 year old anti-trust ‘consent decrees’ that both ASCAP and BMI operate under, the DoJ insisted that the societies had to introduce 100% licensing, which allows one party to license a whole song even without that licensor owning 100% of the copyright.
BMI decided to pursue the litigation to reverse the DoJ’s decision. BMI was seeking a declaratory judgement that the consent decree did not require 100% licensing or what is called “full-work” licensing. In a six-page ruling, U.S. District Judge Louis Stanton in Manhattan rejected the DOJ’s consent decree determination who said: “The consent decree neither bars fractional licensing nor requires full-work licensing” adding “If a fractionally licensed composition is disqualified from inclusion in BMI’ s repertory, it is not for violation of any provision of the consent decree”
A separate consent decree governs ASCAP (the American Society of Composers, Authors and Publishers) and this is administered by rate court Judge Denise Cote of the United States District Court for the Southern District of New York. Jay Rosenthal, former General Counsel of the National Music Publishers Association and now a partner at Washington, DC-based law firm Mitchell Silberberg & Knupp, told Music Week that “while Stanton’s decision is the right decision, and it carries a lot of weight, it is not certain that the two courts will agree.” The DoJ has several possible options, including appealing Judge Stanton’s decision to the Second Circuit Court of Appeals.
BMI president and CEO Mike O’Neill: “As we have said from the very beginning, we believed our consent decree allowed for the decades-long practice of fractional licensing and today we are gratified that Judge Stanton confirmed that belief. Our mission has always been to protect the interests of our songwriters, composers and publishers, and we feel we have done just that. Today’s decision is a victory for the entire music community.”
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