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BMI’s victory over DOJ’s rule of 100% licencing

BMI promptly sought a declaratory judgment that the Consent Decree does not require 100% (“full-work”) licensing. 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, it is not for violation of any provision of the Consent Decree.

While the Consent Decree requires 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”, it contains no provision regarding the source, extent, or nature of that right. It does not address the 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 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. Questions of the validity, scope and limits of the right to perform compositions are left to the congruent and competing interests in the music copyright market, and to copyright, property and other laws, to continue to resolve and enforce. 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., illustrates the point. In the Pandora case, the Consent Decree itself explicitly regulated the conduct: “The BMI Consent Decree requires that all compositions in the BMI repertory be offered to all applicants”; “Under Section XIV of the BMI Consent Decree, when an applicant requests a license for any, some or all of the compositions in defendant’s repertory,’ BMI must grant a license for performance of the requested compositions to all applicants, with fees that do not discriminate between applicants similarly situated.”

The language of the Consent Decree was mandatory and 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. That area of dispute is left to the applicable law.

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, 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 bars fractional licensing nor requires full-work licensing.