×
You will be redirected back to your article in seconds

BMI Battles Department of Justice Over Song Licensing

BMI fired back today in its ongoing battle to prevent the U.S. Department of Justice from foisting 100% licensing on the songwriting industry. In a brief filed in the 2nd Circuit Court of Appeals in Manhattan, BMI drew on contract law to argue “if it’s not prohibited, it’s permitted.”

“BMI’s appeal argument is extremely simple in that it comes down to the language of our decree,” BMI President and CEO Mike O’Neill said in a statement accompanying the public release of its brief.

The ultimate outcome of the three-year-long fight will have significant ramifications for all songwriters and the music industry as a whole, as the DOJ seeks to replace the fractional licensing that has been the industry norm for more than 75 years with a methodology favored by radio stations, streaming services and other third-party licensees: that anyone with an interest in a song can license it on behalf of the other owners – so-called 100 percent licensing.

The two large songwriting performing rights organizations (PROs), BMI and ASCAP, operate under consent decrees implemented in 1941, and last updated in 1994. In 2014, BMI requested a DOJ review in light of  technological changes. While considering the points raised by BMI, the DOJ saw fit to raise a novel issue, one it was not specifically asked to review – fractional licensing. On Aug. 4, 2016 the DOJ released a “closing statement” that put forth its controversial interpretation of the consent decree prohibiting fractional licensing.

The same day the opinion was issued, BMI filed a lawsuit in U.S. Federal District Court for the Southern District of New York, where Judge Louis Stanton is on permanent assignment overseeing the BMI consent decree. On Sept. 15, Judge Stanton ruled in BMI’s favor, indicating the contract language does not prohibit fractional licensing. The DOJ is appealing that ruling to the 2nd Circuit, and the brief filed today is part of the ongoing appeals process and a response to the DOJ’s own brief, filed May 18.

“As Judge Stanton clearly stated, there is nothing in the BMI decree that prevents us from engaging in the industry-wide practice of fractional licensing,” O’Neill further stated. “What is not simple, however, is the impact the DOJ’s interpretation of our decree would have on the marketplace. It would stifle competition, hinder collaboration and unfairly benefit music users at the expense of the American songwriter.  As always, we hope for the opportunity to sit down with the new leadership of the DOJ to educate it about the negative ripple effect its 100% licensing interpretation would have on the entire music industry.”

Following BMI’s filing (against a deadline of midnight), there will now be a one-week response period for amicus curiae, or third-party “friend of the court” briefs, and then an additional week for the DOJ to file a reply to BMI’s response. Oral arguments  are expected to take place between mid-October and sometime in January, with a trial to follow, most likely in 2018.

The National Music Publishers’ Association plans to file an amicus brief in support of BMI, but NMPA president and CEO David Israelite preempted that by issuing the following statement: “NMPA and the entire music publishing and songwriting community stands behind BMI in this unwarranted attack by the Justice Department of the previous administration. There is a reason the Copyright Office and federal judge overseeing the BMI consent decree have agreed with us — forced 100% licensing has no basis in copyright law or accepted industry practice.”

The legal battle is complicated by the fact that the DOJ leadership changed when the Trump administration took charge of government, and the DOJ antitrust chief spot is still vacant. Makan Delrahim (who emigrated here with his family at age 10 from Iran and worked as an assistant U.S. Attorney General under president George W. Bush) has been selected to be the U.S. assistant attorney general in charge of anti-trust and is expected to undergo senate confirmation after Labor Day.

While the general feeling among songwriters is that the Republican administration is stronger on copyright protections than the democrats, it is unclear whether that goodwill will spill over to this battle.

In today’s market it is not uncommon for songs to be written by anywhere from two to four or more writers, and oftentimes they are represented by different PROs – which license the songs and collect and distribute the royalty payments.

The songwriters argue that 100 percent licensing will impact everything from who writes songs with whom, to how songwriters are paid, and will cause a huge mess with regard to remuneration. For one thing, there is a first-sale aspect that means whoever moves first with a sales contract will bind any song co-owners in a deal they cannot subsequently undo. There are also complications with regards to songs that are already licensed fractionally and how that would transition over.

If the 2nd Circuit rules in BMI’s favor, it will would have implications to ASCAP’s consent decree and possibly the overall implementation of copyright law as pertains to song. Ironically, the ongoing litigation has no impact on the overall improvements that BMI has originally requested the DOJ review in 2014. The organization will have to pursue those separately, likely after this lawsuit is concluded.

On Sept. 13, the Songwriters of North American (SONA) also sued the DOJ over the 100 percent licensing issue, citing the Fifth Amendment “Takings Clause,” and arguing that forcing songwriting partners to relinquish their claim on a song was an illegal taking of property. That suit is ongoing.

More Music

  • Danny Bennett, Tony Bennett, Sir Lucian

    Verve President Danny Bennett Steps Down as UMG Restructures Jazz and Classical Divisions

    Verve Label Group president/CEO Danny Bennett has stepped down, Universal Music Group announced Thursday. Oversight of Verve will be taken over by Dickon Stainer, president/CEO of Universal Classics and Jazz, who will add the labels to a stable that already includes heading up Deutsche Grammophon and the Decca Label Group. The restructuring was cited by the [...]

  • Exclusive All RoundMandatory Credit: Photo by

    Lennon Stella's Post-'Nashville' Pop Video Shows 'Bitch'-iness Cuts Across Genders

    What happens when a Canadian country girl goes pop? America is finding out this year via Lennon Stella, the 19-year-old former co-star of TV’s “Nashville,” who signed to Barry Weiss’ Records imprint (which has a deal via Columbia Records) in the winter of 2018, and who this month released a stellar new song, “Bitch (Takes [...]

  • Members of the public mourn at

    Guy Oseary’s New Zealand Fundraiser Nears $150,000, Continues Raising Money

    In the wake of the horrific shootings at New Zealand mosques last week that killed some 49 people, Maverick chief Guy Oseary launched a GoFundMe campaign to “support those affected by this tragedy at this very difficult time,” and began it with an $18,000 donation. Boosted by donations from many celebrities — including Amy Schumer, [...]

  • Justin Carter Dead: Country Singer Dies

    Country Singer Justin Carter Dies After Accidental Shooting on Music Video Set

    Texas country music upstart Justin Carter has died from a gunshot wound, in an accident that took place while a gun was being as a prop for a music video being filmed in his apartment, according to reports out of Houston. Carter, 35, died Saturday, the same week he had signed a management deal and [...]

  • Karen O

    Karen O & Danger Mouse Talk ‘Lux Prima,’ Perform at New York Times Event

    “We’re gonna do one more song…” Karen O said at her and Danger Mouse’s performance and chat in New York Wednesday night, “… and then comes the hard part, which is talking about music.” She was probably inadvertently paraphrasing the age-old adage that attempting to write about music is like “dancing about architecture,” but the [...]

  • Roger Daltrey, Pete Townshend Roger Daltrey,

    Why Aren't the Who Playing Woodstock 50?

    Whither the Who? That’s a big question for anyone perusing the Woodstock 50 lineup and noticing that the biggest act from the original 1969 lineup that is still around and active is not on the bill. The timing might have even seemed fortuitous, since the band recently announced plans for a 29-city American tour this [...]

  • KCRW

    KCRW Moves Into New Headquarters as Star DJ Jason Bentley Mulls His Future

    Influential public radio station KCRW has finally left the basement and entered its new home: a sparkling, 34,000-square-foot, three-story $21.7 million glass structure on the campus of Santa Monica College. Part of a $115 million development of its Center for Media and Design, it’s a glittering, shiny and massive step up from its previous studio [...]

More From Our Brands

Access exclusive content