News September 19, 2016

Judge rules against DoJ 100% licensing decision

Charts & New Music Editor
Judge rules against DoJ 100% licensing decision

Image: United States Congress

In a surprise decision, US performance rights organisation BMI is now free to engage in fractional licensing of musical works.

In a Friday decision, US Federal Judge Louis Stanton determined that fractional licensing is allowed under the consent decree that BMI and fellow performing rights organisation ASCAP, operate under. 

The ruling overturns the recent interpretation of the decree by the US Department of Justice (DoJ) that called for BMI and ASCAP to mandate 100% licensing of all works within one year. The decision reversal means BMI will not need licensees to obtain permission from each copyright owner of a song in order for it to be commercially exploited.

Having been subject to the consent decrees since 1941, BMI and ASCAP have long argued that the decrees are widely out-dated and hinder the interests of publishers, writers and licensors. 

A failure to amend the consent decrees on June 30 saw the Department of Justice come under fire from music industry figures, as well as BMI and ASCAP, with one unnamed music publishing executive calling the ordeal a ‘clusterfuck’.

Although the DoJ’s interpretation of the decree worked against the interests of performing rights organisations and their affiliates, digital services and radio players embraced the Department’s decision. Digitals services, such as Spotify and Apple Music, hold the belief that copyright and the laws governing the issue are over complicated and contradict their purpose, while also contributing to financial difficulties that affect many of these services.

However, Friday’s ruling was met with elation by BMI President and CEO Mike O’Neill. In a statement after the hearing, O’Neill said: “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.”

Sony/ATV Music Publishing chairman and CEO Martin Bandier said of Stanton’s decision: “While the DOJ’s interpretation would have upended decades of licensing practices and caused uncertainty and disorder to everyone in the marketplace, Judge Stanton’s ruling is in the public interest and will benefit all interested parties in the music industry, including songwriters, music publishers and licensors.”

Warner/Chappell chairman/CEO John Platt said: “While I’m sure this story will continue to unfold, this is a fantastic result which should give us hope that the status quo for US performance rights licensing will not be upended.”

While the Department of Justice deal with the aftermath of the BMI ruling, they are facing another separate legal battle with the Songwriters Of North America (SONA). The group have filed a lawsuit against the Department over its decision claiming a “gross violation of plaintiff’s due process rights”.

With the court finalising the licensing dispute with BMI on Saturday, it is unclear whether the Department of Justice will turn to the Court of Appeals for the Second Circuit to contend the decision.

Stanton’s full ruling can be viewed over at Market Wired.

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