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ASCAP Joins BMI in Dept. of Justice Licensing Smackdown

As the U.S. Department of Justice continues its effort to upend the licensing terms governing songwriters, it now faces a unified front of resistance, with ASCAP throwing its lot in with BMI, filing an amicus brief in support of what is normally a competing performing rights organization.

SESAC and GMR also filed friend-of-the-court briefs supporting BMI’s position, leaving the DOJ to faces off against every major performing rights organization and, essentially, federal court judge Louis Stanton whose September ruling on the matter favored BMI. The DOJ then appealed to the Second Circuit, filing multiple requests for extension, the last of which was denied. With battle lines drawn, the DOJ has loaded for bear with friendly firepower from tech firms like Google, Netflix and iHeart Media, among others. Oral arguments are expected to commence late this year or early in 2018.

At the heart of the battle is whether or not the government has the authority to go beyond the language of the actual consent decrees rules under which BMI and ASCAP have been operating since 1941. ASCAP contends that since the government’s arguments concerning the BMI decree would in theory also apply to ASCAP’s consent decree, it has a vested interest.

Indeed, ASCAP, seeming to bank on a favorable outcome for BMI, is actively requesting that any decision issued by the Second Circuit apply equally to ASCAP. “As the Government has previously acknowledged, it is important that ASCAP and BMI operate under the same set of rules and that the industry have a ‘common understanding’ of both decrees,” the organization states.

In filing the amicus brief, ASCAP CEO Elizabeth Matthews commented that “ASCAP, and its more than 625,000 members, stands shoulder to shoulder with BMI in our unified fight for the rights of songwriters.” ASCAP calls out the DOJ, pointing out that “although the government argues that ‘years of interpretations by federal courts’ support its interpretations of the decrees, there is, in fact, no case that holds that consent decrees require full-work licensing.”

The full-work licensing the government seeks to impose on songwriters would allow for any copyright holder in a song that has multiple “owners” (or writers) to license the song on behalf of the entire group, with first-mover deals setting terms for everyone.

The Songwriters of North America (SONA) have separately filed suit against the DOJ, combating the same 100-percent licensing principle. SONA argues that by forcing property owners to surrender ownership rights either against their will or at the very least without their specific approval, the government’s vision of 100 percent licensing violates the fifth amendment of the U.S. Constitution, also known as the “takings clause.”

BMI, ASCAP and the other friendly PRO amicus briefers contend that this new and seemingly novel government interpretation of the consent decrees, if implemented, would be extremely disruptive to the licensing marketplace.

It is accepted industry practice for license fees to be priced, and music creators’ royalties paid, on the basis of fractional shares. Music users typically obtain licenses from all PROs and do not rely on a single PRO license for a full-work grant. The switch to a single-license system could impact songwriters’ already ailing bottom-lines, the tunesmiths contend.

The DOJ now has a week to reply to the songwriter-favoring comments.

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