Dept. of Justice Slams BMI's Protest of Licensing Changes

BRENDAN SMIALOWSKI/AFP/Getty Images
     

The Dept. sends its own letter to the judge in charge of BMI's rate court.

In a letter to Judge Louis Stanton, who presides over the rate court that determines what performance rights organization (PRO) BMI can charge for various uses of its members' work, the U.S. Dept of Justice has responded to BMI’s challenge of its interpretation that the consent decree requires the performing rights organization to license songs on a "full-works" basis. The DoJ's letter aims to remind Stanton of all the places and times BMI has claimed its blanket license entitles a licensee to play any song in its catalog, including in his own courtroom. "Just five months ago, BMI told this Court that its licenses provide “immediate access to the more than 10.5 million works in BMI’s repertoire," according to the DOJ letter.

The letter refers back to BMI's initial request to the Dept. of Justice for amendments to the consent decree (an antitrust agreement that dictates how BMI can operate), in which the PRO acknowledged copyright law has followed “common real estate law," wherein the PRO was referring to a parallel between it and undivided tenancies in common real estate law. "Each [copyright] co-owner is free to make use of the entire property on an non-exclusive basis,” the BMI document read and which was included as an exhibit to the DoJ's letter to Stanton..

That principal is at odds to BMI's current position, the DoJ notes in seeking to have the consent decree modified, the DoJ notes, in which the document goes on to state "as with tenancies in common, co-owners of copyrights are free to divide up their interests as they see fit and thereby limit each co-owner’s right to license independently." However, the DOJ argues that this would be a departure from the way BMI has operated.

Nevertheless, the DoJ says it took ASCAP and BMI’s requests for modifications to the consent decree seriously. “The Antitrust Division devoted months to analyzing BMI’s request to modify the decree to endorse fractional licensing and determined that doing so would undermine the virtues of the blanket license and not be in the public interest,” the letter states.  “In now moving to make that modification over the United States’ opposition... BMI bears the burden of establishing that a significant change in circumstances warrants revision of the decree… But BMI identifies no such change.” 

The DoJ also noted that BMI is urging the court to defer to the U.S. Copyright’s Office’s interpretation of the consent decree, which is at odds with the DoJ stance. But, DoJ writes, “the question at issue, however, is one of antitrust law and decree interpretation, not copyright law.”

In closing, the letter, submitted by Kelsey Shannon, notes that after its review, the agency “concluded that modifying the consent decrees to allow fractional licensing would undermine the traditional role of the ASCAP and BMI licenses, impair the functioning of the market for public performance licensing, and potentially reduce the playing of music.”

BMI issued a statement in response to the DOJ letter to the court. "We fully expected the DOJ to disagree with our submission but were surprised by the distortion and misinterpretation of statements we made during the course of our attempted negotiations," the BMI statement reads. "We look forward to the opportunity to challenge the DOJ’s interpretation of our decree before Judge Stanton on behalf of our songwriters, composers and publishers."