From “Reuters” – A U.S. federal appeals court on Tuesday ruled that music licensing giant BMI did not have to abide by the Obama administration’s more restrictive interpretation of how royalties should be collected.
ASCAP and BMI argued the requirement raised problems in situations where songs were co-authored but did not specifically authorize licensing by both authors. The licensing services had issued “fractional” licenses for those songs and assumed that all royalties would be paid if licensees paid BMI and ASCAP.
In its ruling, the U.S. Court of Appeals for the Second Circuit upheld a New York district court decision that found the consent decree with BMI did not require the licensing company to only issue full-work licenses.
“We have said from the very beginning that BMI’s consent decree allowed for fractional licensing, and we are incredibly gratified that Judge (Louis) Stanton and the Second Circuit agreed with our position,” BMI President Mike O‘Neill said in a statement.
ASCAP also said it was pleased with the appeals court decision. The Justice Department had no immediate comment.
BMI has some 800,000 U.S. composers, songwriters and music publishers among its members, while ASCAP counts some 640,000.
In other words, parties seeking to use songs written by multiple songwriters must obtain a license from all of the songwriters, or their representatives. Previously, the DOJ had ruled that the consent decree called for “full-works” or 100% licensing, whereby a user was required to obtain a license from only one of the songwriters.
The performing rights organizations were quick to issue statements applauding the decision.
“This is a massive victory for songwriters, composers, music publishers and the entire industry,” said BMI president Mike O’Neill. “We have said from the very beginning that BMI’s consent decree allowed for fractional licensing, and we are incredibly gratified that Judge Stanton and the Second Circuit agreed with our position. We thank all the songwriters, composers, publishers and organizations who supported us throughout this process, which unfortunately, has been a nearly two-year distraction from our original intent which was to update our outdated consent decree and modernize music licensing. We look forward to our continued efforts to protect and grow the value of music.”