United States v. Broadcast Music, Inc.
16-3830-cv
| 2d Cir. | Dec 19, 2017Background
- BMI is a non-profit performance rights organization (PRO) that licenses public performance rights in millions of musical works via blanket licenses to users.
- The DOJ challenged BMI’s blanket licensing practices decades ago, leading to a 1966 consent decree (amended 1994) that governs BMI’s licensing obligations.
- Some compositions are co-owned; co-owners may allocate fractional public-performance rights and affiliate with different PROs, so BMI sometimes holds only fractional interests in a work.
- The DOJ concluded in 2016 that the consent decrees require PROs to offer full-work licenses (not fractional licenses) because the decrees refer to licensing “works” or “compositions.”
- BMI sought declaratory relief; the district court held the consent decree neither requires full-work licensing nor prohibits fractional licensing.
- The Second Circuit affirmed, applying ordinary contract/consent-decree interpretation and rejecting DOJ’s effort to read a full-work requirement into the decree.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the consent decree requires PROs to offer only full-work licenses (prohibits fractional licensing). | DOJ: “right of public performance” in the decree means the immediate, complete right to perform a work; decree therefore requires full-work licenses and excludes fractional licenses. | BMI: The decree is silent; copyright law recognizes divisible public-performance rights, so fractional licenses fall within BMI’s repertory unless expressly prohibited. | The decree does not require full-work licensing nor bar fractional licensing; language must control and no clear prohibition exists. |
| Whether extrinsic materials or precedent (Pandora, BMI v. CBS) mandate reading a full-work requirement into the decree. | DOJ: Prior decisions and procompetitive goals of blanket licenses support reading in a full-work requirement to preserve immediate-use benefits. | BMI: Precedents do not interpret the decree to forbid fractional licensing; policy goals cannot add requirements absent clear decree language. | Court: Precedent does not compel a different reading; courts cannot supplement a consent decree to achieve policy objectives. |
Key Cases Cited
- Broad. Music, Inc. v. Columbia Broad. Sys., Inc., 441 U.S. 1 (discusses procompetitive features of blanket licensing)
- Perez v. Danbury Hosp., 347 F.3d 419 (2d Cir.) (consent-decree interpretation controlled by its language)
- United States v. Armour & Co., 402 U.S. 673 (consent decrees cannot be expanded beyond their terms)
- Pandora Media, Inc. v. ASCAP, 785 F.3d 73 (2d Cir.) (interpreting an ASCAP decree to prohibit partial withdrawals to discriminate between users)
- Broad. Music, Inc. v. DMX, Inc., 683 F.3d 32 (2d Cir.) (standard of review: de novo for consent-decree interpretation)
- United States v. Int’l Bhd. of Teamsters, 998 F.2d 1101 (2d Cir.) (courts may not read additional obligations into decrees)