Litigation is one of the ways by which BMI’s Legal
department protects copyright and, in particular, the
company’s repertoire. Copyright infringement litigation
is commenced against business establishments that
refuse to enter into a BMI License Agreement when that
business publicly performs music in the BMI repertoire.
The Legal department continued to commence copyright
infringement suits during the fiscal year ending June 30,
2011, and, in fact, the number of such suits increased
over the prior fiscal year.
Additionally, a major avenue used by the Legal
department to protect the value of the BMI repertoire is
through litigation in the BMI Rate Court, which exists
to set reasonable license fees and terms in the event
BMI and its licensees cannot agree on the terms of new
license agreements. While, in most situations, BMI has
been able to negotiate reasonable license terms, there
are instances in which BMI and users of BMI-licensed
music have utilized the rate court route when impasses
in negotiations have occurred.
During fiscal 2011, two major rate-court proceedings
continued to wend their way through the BMI Rate
Court. In 2009, the Television Music License Committee
filed a petition to set reasonable final license fee rates
and terms on behalf of those local television stations
that it represents for the period beginning January 1,
2005. The TMLC requested an adjustable form blanket
license in addition to a per-program license agreement.
BMI submitted its response to the TMLC’s filing and
pre-trial discovery is underway. At issue is whether BMI
must offer an adjustable form blanket license to local
television stations. The issue was submitted to Judge
Louis Stanton, BMI’s Rate Court Judge, who ruled that
BMI did have to offer such a license. BMI has appealed
Judge Stanton’s decision for review by the Court of
Appeals for the Second Circuit and it is anticipated that
this will be heard in the fall of 2011. With respect to the
trial of the rate case itself, it is anticipated that a trial in
this matter will start spring 2012. A decision of the Court
will be retroactive to January 1, 2005.
On January 12, 2010, the Radio Music License
Committee (RMLC) filed a request for the BMI Rate Court
to set reasonable final license fees and terms for those
radio stations it represents for the period commencing
January 1, 2010. BMI agreed to interim industry license
fees to be paid to BMI in the sum of $192+ million
for those stations represented by the RMLC. When
rendered, the Rate Court’s decision with respect to final
license fees and terms will be retroactive to January 1,
2010. In addition to those stations represented by the
RMLC, a large number of stations agreed to be bound
by either a final rate determination made by the Court
or any settlement between the RMLC and BMI. Pre-trial
discovery has commenced and will continue through
2011. The trial in this matter is not expected to start
before winter 2012
During fiscal year 2011, proceedings pending before
the BMI Rate Court included the commercial music
service DMX, which concerned the establishment of an
adjustable blanket license fee. After a full trial, Judge
Stanton issued his decision on July 26, 2010. While
the decision contained some favorable rulings for BMI,
overall, it was not favorable. Since BMI believes that
Judge Stanton’s decision was flawed, BMI appealed to
the federal Court of Appeals for the Second Circuit. On
June 16, 2011, the appeal was heard before a panel of
three judges. We await the Court’s decision.
In a rate proceeding involving ASCAP, Judge Conner, the
ASCAP Rate Court Judge at the time, ruled that downloads
of music did not implicate the public performing right.
ASCAP appealed that decision to the federal Court of
Appeals for the Second Circuit. After argument, the Court
of Appeals sided with Judge Conner. The Second Circuit’s
decision inserts a new requirement of “contemporaneous”
or “simultaneous” perception into the Copyright Act’s
definition of a public performance. This new requirement
imposed by the Court, which appears nowhere in the Act or
in earlier case law, adversely affects BMI. ASCAP is seeking
a writ of certiorari to the U.S. Supreme Court so that this
issue can be heard by the nation’s highest court. BMI has
submitted an amicus brief urging the Supreme Court to hear
this case.
BMI was active on a variety of public policy issues
affecting copyright law during the past fiscal year,
continuing its efforts to prevent any erosion of the
public performing right and ensure that our songwriters,
composers and music publishers are fairly compensated
for their creative efforts. A number of bills introduced
in the past year have the potential to impact BMI and its
affiliates.
The Protect IP Act, which aims to reduce piracy of
copyrighted works in the online environment, is a
primary focus of this year’s copyright agenda. Senator
Patrick Leahy (D-VT) introduced the Act to authorize
the Attorney General or an intellectual property rights
holder harmed by an Internet site dedicated to infringing
activities to commence an action against that site or its
owner. In May of 2011, the Senate Judiciary reported
favorably on S. 968, with an amendment containing a
provision that would allow organizations like BMI that