*1 MUSIC, BROADCAST INC., v. COLUMBIA et al. BROADCASTING SYSTEM, INC., et al. No. 77-1578. Argued January 15, April 17, 1979 Decided 1979* *Together with No. 77-1583, Society American Composers, Authors and Publishers et al. v. Columbia Broadcasting System, Inc., al., et also certiorari to the same court. *2 J., delivered White, opinion of the Court, in which Burger, J.,C. and BreNNAN, Stewart, Marshall, BlackmuN, and RehN- Powell, quist, JJ., joined. SteveNS, J., filed a dissenting opinion, post, p. 25. Amalya L. Kearse argued the cause for petitioners in No. 77-1578. With her on the briefs were George A. Davidson *3 and Conley E. Brian, Jr. Jay Topkis argued the for cause petitioners in No. 77-1583. With him on the briefs were Ber- nard Korman, Simon H. Rifkind, Herman Finkelstein, and Allan Blumstein.
Alan J. Hruska argued the cause for respondents in both cases. With him on the briefs were John D. Appel and Robert M. Sondak.
Deputy Solicitor General Easterbrook argued the cause for the United States as amicus curiae urging him reversal. With on the briefs were Solicitor General McCree, Assistant Attor ney General Shenefield, William Alsup, John J. III, Powers Dimmer.† and Andrea †Briefs of amici curiae urging reversal by were filed Karp Irwin for the League Authors of America, by Inc.; Philip Elman and M. Robert Lichtman for the Performing Right Society, Ltd., ah; by et and H. Robert Bork for Aaron Copland et al. Briefs of amici curiae urging affirmance by were filed Ira M. Millstein for the All-Industry Television Music License Committee; by Clarence Fried for American Broadcasting Companies, Inc.; by Hyde David R. for National Broadcasting Company, Inc.; by John H. Midlen, Jr., for Nа- tional Religious Broadcasters, Inc.; by and John Hill, L. Attorney General Texas, of David M. Kendall, First Assistant Attorney General, and Robert Court. the of opinion the delivered White Justice Mr. copy- and antitrust the under action involves case This Broadcasting Columbia respondent by brought laws right Society American petitioners, against (CBS), Inc. System, Broadcast and (ASCAP) Publishers and Authors Composers, affiliates.1 and members their and (BMI), Inc. Music, ASCAP issuance the whether is presented question basic musical copyrighted licenses to CBS BMI and se fixing is them negotiated fees compositions laws. antitrust under unlawful
I television commercial national of three one operates CBS affiliated approximately programs supplying networks, pro- network 7,500 approximately telecasting stations make programs of these all, not but Many, year. grams CBS soundtrack. on the recorded music copyrighted use is It cities. various in stations radio television owns also “ ” the rights/ music use in world The giant ” 2 “ of entertainment.’ history outlet ‘No. owner vested have laws Since right exclusive composition musical copyrighted of a right legal profit,3 publicly the work perform handful Herbert Victor In self-enforcing. per- who those because organized composers other *4 Uni- General, for Attorneys Dasher, Assistant Susan Bickerstafj and S. al. et of Texas the State versities License Music All-Industry Radio for the a brief filed Irving Moshovitz curiae. аmicus as Committee action. class a defendant as case certified District 1 The 1975). (SDNY 2n. 737, 741 Supp. F. leading music a is also CBS witness. a CBS quoting 771, Id., at and with both affiliated subsidiaries publishing publisher, of records seller manufacturer largest world’s BMI, and is Ibid. tapes. 481. 1897, 29 Stat. Jan. Act of
formed copyrighted music profit for were so numerous and widespread, and performances most so fleeting, a prac- as tical matter it was impossible for the many individual copy- right owners to negotiate with and license the users detect unauthorized uses. “ASCAP was organized a 'clearing-house’ for copyright owners and users to solve these problems” associated with the licensing of music. 400 F. Supp. (SDNY 1975). As ASCAP operates today, 22,000 grant members it nonexclusive rights to license non- performances dramatic of their works, and ASCAP issues licenses and royalties distributes to copyright owners in ac- cordance with a schedule reflecting nature and amount of use their music and other factors. a BMI, nonprofit corporation owned by members broadcasting industry,4 was organized in 1939, is affiliated with or represents some 10,000 publishing companies and 20,000 authors and composers, and operates in much the same manner as ASCAP. Almost every domestic copyrighted composition is in the repertory either of ASCAP, with a total of three million compositions, or of BMI, with one million. Both organizations operate primarily through li- blankеt
censes, which give the licensees the right to perform any and
all of the compositions
owned
the members or affiliates
as often as the licensees desire
stated term. Fees for
licenses are
ordinarily
percentage of total revenues
or a flat dollar amount, and do not directly depend on the
amount
type
of music used. Radio and television broad-
casters
the largest
users of music, and
all of
almost
them
hold blanket licenses from both ASCAP and BMI. Until this
litigation, CBS held blanket
licenses from both organizations
for its television network on a continuous basis since the late
1940’s and had never attempted to secure any other form of
4 CBS was a leader of the broadcasters who
BMI,
formed
disposed
of all of its interest in
corporation
in 1959.
license 752-754. of violations various charged by CBS filed complaint The that argued CBS laws.7 copyright and Act6 the Sherman the the that and monopolies unlawful BMI and ASCAP arrange- tying unlawful fixing, illegal price is license blanket copyrights. of misuse and deal, refusal a concerted ment, judgment summary denying though Court, District The within not fall did practice the ruled that defendants, certain After 1972). (SDNY 398 394, Supp. F. 337 se rule. per the dis- court the liability, of issue to the limited trial, an 8-week the claim again rejecting complaint, missed 1 of §of se violation and fixing price was license blanket negotiation direct since hоlding that and Act, Sherman feasible and is available owners individual of misuse tying, illegal trade, of restraint undue no there at 781-783. Supp., 400 F. monopolization. copyrights, factfinding and Court's District with the agreeing
Though antitrust the other on conclusions legal its disturbing held Appeals Court of liability,8 the theories formawas networks television issued license blanket 2dF. 562 Act. the Sherman under illegal se fixing price settled more, conclusion, without This 1977). (CA2 140 copy- established Act, the Sherman liability under the issue Court's District reversal required and misuse,9 right 5 alone otherwise, references to indicates the context Unless See n. well. to BMI as usually apply infra. opinion 2. 6 15 S. C. U. §§ a declara violations the antitrust relief seeks injunctive CBS 741. Supp., at F. copyright misuse. tion of CBS’s rejection of Court’s the District affirmed Appeals the District on rule did not tying contentions monopolization not an unreasonable was conclusion Court’s 1977). (CA2 135, 141 n. 29 130, 132, F. 2d trade. See restraint challenged Appeals held that Court of suggestion, CBS’s At finding solely basis copyrights misuse of constituted conduct n. 29. Id., fixing. at 141 of unlawful
7 appropriate to consider as a remand as well judgment, remedy.10 presenting certiorari, BMI for petitioned and
ASCAP of whether se rule and applicability per of the questions not cross did copyrights. misuse of CBS this constitutes other antitrust sustain its to the failure to petition challenge importance because of the We certiorari granted claims. 817 lаws. 439 U. S. issues to the antitrust Appeals’ con- we with the Court of (1978). disagree Because of the blanket respect illegality to the se clusions the cause for and remand license, judgment we reverse appropriate proceedings. further
II against ban In Act’s construing applying the Sherman trade, in restraint of contracts, and combinations conspiracies, 10 guidelines suggest some as to Appeals Court of went on to liability remedy, indicating despite on the blanket license that its conclusion totally Appeals said: forbidden. The Court was not remedy injunction price-fixing, is an “Normally, finding a after case, think, price-fixing license. how- against the the blanket We —in remedy which will ensure that ever, if remand a can be fashioned for direct negotiations affect or the blanket license will not circumstances. licenses, prohibited need not be all the blanket license ineluctably doomed simply license is a 'naked restraint’ The blanket present in the record enough There is not evidence to extinction. need for a market compel finding that blanket license does not serve who, for some protection against infringement suits or full those who wish The blanket reason, license desirable. deem the blanket other business infringement practical includes a covenant not to sue against suits others. copyright as well as an indemnification price cоmpetition objection is that it reduces to the blanket license “Our provides compete. think We among the members and disinclination required to may objections be removed if ASCAP itself these competition licensing ensure provide which will some form use among respect to those networks which wish the individual members with (footnotes omitted). licensing.” Id., 140 engage per use 8 agreements practices
the Court has held that certain Society “plainly anticompetitive,” so National Professional Engineers States, Con- (1978); United 679, U. S. V., Sylvania T. Inc., tinental Inc. v. GTE U. S. North- (1977), any redeeming virtue,” often “lack so . . . States, ern Pac. R. Co. v. United (1958), U. S. they are conclusively presumed illegal without further exami- *7 nation generally applied under the rule of reason in Sherman per Act cases. This se rule is a tool anti- valid and useful policy agreements and enforcement.11 And among trust com- petitors to fix prices goods their individual are services those among concerted activities has held to be Court the per category.12 easy always within se But labels do not supply ready answers.
A To the of Appeals and license in- CBS, the blanket “price fixing” volves composers the literal sense: the and publishing joined together have into an organization houses price that sets its .the it sells.13 But this 11 principle per “This only se type unreasonableness not makes proscribed restraints which are the Sherman Act more certain to the everyone concerned, benefit of necessity it also avoids the for an incredibly complicated prolonged investigation economic the entire into history industry involved, of the industries, as well related in an effort large particular to determine at a whether restraint has been unreasonable— inquiry wholly so often fruitless when undertaken.” Northern Pac. R. States, 1, (1958). Co. v. United 356 U. S. 5 Sylvania V., See Continental T. Inc., 36, Inc. v. GTE 433 U. 50 n. 16 S. (1977); Topco United Associates, Inc., States v. 405 596, U. S. 609 n. 10 (1972). 14, See cases discussed in n. infra. complains pays CBS also it regardless a flat fee of the amount of use makes compositions of ASCAP though many pro and even of its grams contain little or no music. We are unable to that alone see how could make out an antitrust copyrights: violation or misuse of judgment “Sound business represents payment could such indicate that most fixing privileges convenient method of the business value or more determining whether two simply of question
is not a
As
“price.”
literally “fixed”
potential competitors have
fixing” is
short-
“price
antitrust
generally
field,
used
business behavior
way
categories
hand
certain
describing
applicable.
rule
held
The Court
to which the
se
has been
that this
approach
literal
does not alone establish
Appeals’
“plainly
or that
it is
particular practice
types
is one of those
“redeеming virtue.”
anticompetitive”
very likely
without
often
When
overly simplistic
Literalness is
overbroad.
are
they
price
goods
of their
or services
partners
two
set
in violation of
literally
they
not
se
“price fixing,” but
&
Addyston Pipe
Act.
United States v.
the Sherman
Co.,
(CA6
F.
175 U. S.
aff’d,
Steel
1898),
challenged
(1899).
necessary
it is
to characterize
Thus,
of behavior
falling
category
conduct as
within or without
fixing.” That will
apply
“per
we
the label
se
to which
simple matter.14
often, but
be a
always,
Topco
in United States
Consequently,
recognized
as we
Inc.,
only
Associates,
(1972),
607-608
405 U. S.
“[i]t
*8
business relation
experience
considerable
with certain
after
classify
that courts
them as
se violations . . . .” See
ships
complain
by
granted
licensing agreement.
. . . Petitioner
cannot
royalties
pay
not.
patents
because it must
whether it uses Hazeltine
acquired by
agreement
privilege
it
into which it entered was the
What
developments
patents
use
to use
or all of the
and
as it desired to
Mfg.
Research, Inc.,
Radio
Co. Hazeltine
339
them.” Automatic
v.
U. S.
(1950).
827, 834
Corp.
Research,
(1969).
Inc.,
Zenith Radio
v.
also
Hazeltine
395 U. S.
g.,
Cf.,
Robbins, Inc.,
e.
United States McKesson &
prices
charged
manufactured);
to
States v.
be
United
Socony-Vacuum
Co.,
(1940) (firms
Oil
310 U.
substan
controlling
S.
industry
part
agreed
purchase “surplus”
tial
gasoline
to
with the
necessary
increasing
pricе);
and
effect of
United States
intent
(manufacturers
Co.,
(1927)
Potteries
Trenton
B litigation involving This ASCAP and its and other cases licensing practices have arisen out of the efforts the crea- collect for copyrighted compositions tors musical public performance they of their entitled to do works, as already under the Copyright indicated, Act. As ASCAP and dealings originated BMI possible make and to facilitate between owners those who desire to use their and music. Both organizations plainly involve concerted action in a large surpris- active line of commerce, and it is ing that, found, as the District either ASCAP nor “[n] BMI is stranger litigation.” Supp., antitrust F. 743. Department investigated allegations of Justice first
anticompetitive years conduct ASCAP over 50 A ago.15 criminal complaint was filed but the Government was granted a midtrial continuance never returned to In seрarate courtroom. complaints 1941, the United States charged that the blanket which license, only was then the offered ASCAP and BMI, illegal was an restraint of trade arbitrary prices being charged were as the *9 result of an illegal copyright pool.16 The sought Government 15Cohn, Music, Radio Broadcasters and Act, the Sherman J. Geo. L. (1941). 424 n. 91 g., complaint E. in United ASCAP, (SDNY States v. Civ. No. 13-95 1941), pp. 3-4.
to enjoin ASCAP’s licensing exclusive powers and to require different form of licensing by organization. The case was settled a consent imposed decree that tight restrictions on ASCAP’s operations.17 Following complaints relating to the television industry, successful private litigation against ASCAP movie theaters,18 and a challenge Government to ASCAP’s arrangements with foreign similar organizations, 1941 decree reopened was and extensively amended 1950.19
Under the amended which decree, still substantially con- trols activities of ASCAP, may grant members ASCAP only nonexclusive rights to license their works for public performance. Members, therefore, rights retain the individ- ually to license public performances, along the rights to license the use their compositions for purposes. other ASCAP itself is forbidden grant to any to perform one or specified more compositions in the ASCAP repertory unless both the user and the owner have requested it in writing to do so. required ASCAP is grant to user making writ- application ten a nonexсlusive license perform all ASCAP compositions, period either for a time a per-program basis. may not insist on the blanket license, and fee per-program license, which is to be based on the revenues for program on which ASCAP music is played, must offer applicant a genuine economic choice between the per-program license and the more common blanket license. If ASCAP and a putative licensee are unable agree aon fee within 60 days, applicant may apply to the District Court 17United States v. ASCAP, 1940-1943 (SDNY Trade 56,104 Cases ¶ 1941). 18See Alden-Rochelle, Inc. ASCAP, Supp. (SDNY 80 F. 1948); M. Witmark & Sons v. Jenson, 80 Supp. F. (Minn. 1948), appeal dismissed sub nom. M. Berger Witmark & Sons v. Co., Amusement 177 F. (CA8 2d 1949). 19United ASCAP, States v. 1950-1951 62,595 (SDNY Trade Cases ¶ 1950). *10 12
for having a determination of a reasonable with ASCAP fee, the burden of proving reasonableness.20
The decree, time, 1950 from continues amended time in effect, primary blanket license continues to be the through instrument which under ASCAP conducts its business the decree. The courts construed the decree not have twice require its portions ASCAP to issue for licenses selected repertory.21 It also guarantees remains true that decree legal availability licensing performance rights of direct members; ASCAP and the found, District respect Appeals the Court of no agreed, that there are practical impediments preventing dealing by direct the tele- vision if they networks so they desire. not have Historically, done so. Since 1946, CBS and other television have networks taken blanket licenses from ASCAP and BMI. It was until this suit arose that CBS network demanded other kind license.22 20BMI is in a similar original situation. The against BMI decree reported as United BMI, States v. 56,096 (ED 1940-1943 Trade Cases ¶ 1941). Wis. judgment A new consent following was entered in 1966 monopolization complaint filed in 1964. BMI, United States 1966 Trade v. 71,941 (SDNY). Cases ¶ The ASCAP vary and BMI decrees do respects. some BMI specify decree does not may only that BMI rights obtain nonexclusive from its affiliates or that the District Court may set parties the fee if the agree. Nonetheless, unable to parties stipulated, and the courts accepted, below that “CBS could secure direct licenses from BMI affiliates with the difficulty, same ease or as the may be, case as from ASCAP 400 Supp., members.” F. at 745. (Application United States v. ASCAP Valley Shenandoah Broad casting, Inc.), 208 Supp. (SDNY F. 1962), aff’d, (CA2), 2dF. denied, cert. (1964); U. S. 997 (Application United States v. ASCAP Broadcasting National Co.), 1971 ¶73,491 Trade (SDNY 1970). Cases See also United (Motion States ASCAP Metromedia, Inc.), 341 F. (CA2 1965). 2d 1003 22National Broadcasting did, in 1971, request Co. annual 2,217 specific compositions frequently most used on its variety shows. It acquire intended to remaining rights background
and theme music through direct transactions it and program pack- one entered even judgment, course,
Of
consent
de-
immunize
does not
Division,
of the Antitrust
behest
*11
contem-
including those
for
liability
actions,
from
fendant
nonparties.
rights
the
that violate
plated by
decree,
the
States, 366 U. S.
United
Publishing
Fox
Co.
v.
Sam
See
it cannot
decree. But
same
which involved this
690 (1961),
Judiciary have
Executive and
the Federal
ignored that
be
have
conduct,
challenged
and the
carefully scrutinized ASCAP
by
and,
practices,
on
of ASCAP’s
restrictions
various
imposed
con-
further
ready
provide
stand
terms of the decree,
the
of asserted
invalidation
perhaps
supervision, and
sideration,
have
we
circumstances,
In these
anticompetitive practices.23
may have
challenged practice
the
unique indicator
those
for
the search
and that
redeeming competitive virtues
although
Thus,
in
be
vain.24
not almost sure to
values is
the
actions,
Division’s
the
by
bound
Antitrust
CBS is not
industry,
in
legal life
this
of economic and
decree is a fact
completely
ignored it
have
Appeals
should not
the Court
id.,
fact
694-695. That
at
analyzing
practice.
the
See
the
from
scheme
price-fixing
naked
might not remove a
alone
here
infra,
III,
Part
se rule,
as discussed
but,
ambit
has the
on
face
practice
the
whether
we are uncertain
of restrain-
spurred
purpose,
the
or could have been
effect,
composers.
among
individual
ing competition
the
license
legality of the blanket
the
decrees,
After the consent
members
brought by certain ASCAP
сhallenged
suits
was
infringement.
copyright
for
radio stations
against
individual
was a
that the blanket
raised as a defense
The stations
par-
The
Act.
illegal under the
fixing
Sherman
form of
(Application
Broadcast-
National
agers.
United States v.
ing
supra.
Co.),
62,595, p. 63,756.
Trade Cases
1950-1951
¶
Sylvania
Inc.,
S.,
16.
V.,
v.
433 U.
n.
Continental T.
Inc. GTE
Cf.
might upset
unthinking application of the
se rule
Moreover,
anticompetitive
power
procompetitive and
balancing
economic
and of
presumably worked out in the decree.
effects
stipulated
nearly
for each
impossible
ties
would be
negotiate
separate
radio station to
with each
holder
performance
Against
licenses for
of his works
on radio.
relying heavily
this
1950 consent
background,
judgment,
Appeals
rejected
the Court of
Ninth Circuit
claims that ASCAP
a combination in
of trade
was
restraint
price fixing.
license constituted illegal
Inc. Gershwin
K-91,
Publishing
(1967),
2d
Corp.,
F.
cert. denied,
(1968).
“The
always
Sherman Act has
been discriminatingly
applied in the
light
economic realities. There are situ-
in
ations which competitors
permitted
have been
form
to
joint selling agencies
pooled
or other
subject
activities,
strict
limitations under the antitrust
guarantee
laws to
against abuse of the
power
collective
thus created. Asso-
States,
ciated Press v. United
1;S.U.
United States v.
Terminal,
St. Louis
383; Appalachian Coals,
U. S.
States,
Inc. v. United
344; Chicago
U. S.
Board of
States,
Trade v. United
of copyrighted compositions, the quantity enormous separate performances each year, the impracticability negotiating individual licenses for each composition, ephemeral performance nature each all combine to create unique for performance rights market conditions Id., recorded music.” (footnote omitted). Department concluded in that, the circumstances of that case, blanket licenses issued by ASCAP to individual radio stations were nеither a se violation of the Sherman Act nor an unreasonable restraint of trade.
As evidenced its amicus brief in the present case, Department remains of that view. Furthermore, United disagrees States with the Appeals Court of in this case and urges that the blanket which licenses, the consent decree au- thorizes ASCAP to issue to television networks, se violations of the Sherman Act. It takes no position, how- ever, whether practice is an unreasonable restraint of trade context the network industry. television Finally, we note that Congress new itself, Copyright Act, has chosen to employ the blanket similar practices. Congress created compulsory blanket license for secondary transmissions cable systems television pro- “ vided that any provisions otwithstanding [n] of the antitrust laws, . . may . claimants agree among themselves as to proportionate division of compulsory licensing among fees may them, lump their claims together and them jointly file *13 a single or claim, may designate a agent common to receive payment on their behalf.” App. (d) (5) U. S. C. (A). § And the newly created compulsory license for the use of copy- righted compositions jukeboxes in is also a license, blanket payable which to the performing-rights societies such as ASCAP an unless individual copyright prove can holder his a entitlement to share. (c)(4). § Moreover, requir- ing noncommercial broadcasters pay to for their use of copy- “ righted music, Congress again provided that otwithstand- [n] copyright laws” owners of the antitrust any provision ing agree negotiate, to, pay, to “may designate agents common are (b). provisions these Though payments.” § receive opinion they do reflect directly controlling, not at economically beneficial in license, ASCAP, blanket least some circumstances. holding various have been District cases
There be vio- practices, to practices, including licensing ASCAP nearly is no even there Act,25 so, lative of the Sherman per-program view that either the blanket or universal by it form prices negotiated issued are a licenses subject to condemnation under fixing automatic under the Act, rather than to a careful assessment Sherman rule of reason.
Ill views Of is CBS course, we are no more bound than lower Department prior of the the results Justice, merits cases, opinions experts court or the of various about the independently license. But while we must ex- blanket practice, against amine this all those factors should caution us easily finding licensing subject too blanket se invalidation.
A preliminary As matter, a are mindful the Court we Appeals’ holding appear quite would con- be difficult to tain. as the court there is a If, held, se antitrust violation whenever ASCAP issues net- liсense to a television why work for single automatically would fee, also be illegal for negotiate ASCAP to and issue blanket licenses to supra. See cases cited n. Those cases involved sold licenses “perform” movie compositions already individual theaters to on the motion pictures’ soundtracks. ASCAP had barred its assigning members from performing rights producers to movie rights at the same recording time licensed, effectively were and the theaters engage were in direct unable to performing rights transactions with individual owners. *14 individual radio or television stations or to other users who perform copyrighted profit?26 music for if the Likewise, present network licenses issued through on behalf its members per why se violations, would equally it not be illegal for the members to authorize ASCAP issue licenses to establishing various categories of might uses that a network have for copyrighted music setting a standard fee for each use? described
Although the Court Appeals apparently thought the blanket license could be in saved some many or even applica- tions, it seems to us per that the se rule does not accommodate itself to such flexibility and that the observations the Court of Appeals respect remedy to tend to impeach the per se basis for the holding of liability.27 26Certain individual television stations, and radio appearing here as curiae, argue per amici se rule should extend to ASCAP’s blanket licenses with them as well. The television stations filed have an antitrust suit to that Broadcasting effect. Co. ASCAP, 78 Civ. 5670 Buffalo (SDNY, 27, 1978). filed Nov. 27 Seen. supra. The Appeals Court of apparently would not outlaw the blanket license across the permit board but would in various circumstances where necessary it is deemed sufficiently desirable. It did not enjoin even blanket licensing with the networks, television relief it normally realized would finding per follow a illegality se license in that Instead, requested context. CBS, it remanded to the require District Court to ASCAP to offer in licensing addition blanket competitive some per-use form licensing. per-use licensing by But ASCAP, as recognized in the decrees, might consent be suscept even more per ible to the se rule than licensing. blanket rationale for this unusual relief se case was that “[t]he simply license is not ineluctably 'naked restraint’ doomed to 2d, extinction.” 562 F. at 140. To contrary, Appeals found that might blanket license well “serve a market need” for some. Ibid. This, it us, seems is not approach, se which does not yield readily so circumstances, effect a rather bobtailed application reason, of the rule of bobtailed in the sense that it is unac- companied by necessary analysis demonstrating why particular licensing system competitive is an undue restraint. *15 indeed di- authоrized, that ASCAP be prefer CBS would standard available at compositions its make all rected, Supp., 400 F. of use. negotiated categories rates within per-use conjunction if this in itself or But 747 n. 7.28 by copyright fixing illegal constitutes licensing forbidding ASCAP an issue injunction urges that owners, CBS on any except fee negotiate license or to any blanket to issue copy- of his own for the use individual member behalf to determine upon arewe called work or works.29 righted Thus, the We are across board. licensing is unlawful that blanket require se rule does not that the quite sure, however, holding. such
B being re- allegedly In line of commerce place, the first exists rights copyrighted music, performing strained, who would copyright laws. Those only at all because of the must secure con- public performances music in copyrighted use for the copyright from the owner or be liable at least sent if the conduct statutory damages infringement and, for each to criminal purpose gain, is willful and for the of financial Act of penalties.30 Furthermore, nothing Copyright in the slightest Congress intended to 1976 indicates in the public rights copyright weaken the owners-to control the 28Surely, if the issuance of all licenses and confined ASCAP abandoned hardly suing infringers, its market policing activities to it could copyright be said that member owners would be in violation of the anti having agent per-use trust laws licenses. Under a common issue copyright laws, publicly perform copyrighted those who music have Corp. obtaining prior the burden of Hazel consent. Cf. Zenith Radio Research, Inc., S., tine 395 U. at 139-140. 29In complaint, alleged “wholly impracticable” CBS that it would be directly composers for it to obtain individual licenses from the houses, says publishing willing exactly it now it would be to do enjoined if granting that ASCAP were from blanket licenses to CBS or its competitors in the network television business. App.
30 17U. S. C. 506. § compositions. Quite contrary performance musical copy- Although rights true.31 laws confer no fix right prices among owners to themselves otherwise any mar- expect violate the laws, antitrust we would not reasonably necessary rights ket arrangements to effectuate granted that are would be deemed a se violation anticipated by the Otherwise, Sherman Act. the commerce Copyright protected Act and restraint against Sherman only pale would Act not exist at all or would exist *16 reminder of what Congress envisioned.32
C
the
characterizing
More
conduct under
generally,
this
and,
se
our
the effect
rule,33
inquiry must focus on whether
v.
here
United States
effect,
because it tends to show
see
Co.,
Gypsum
(1978),
United States
436 n. 13
almost tend to restrict and decrease portion designed and in or instead one what the market, efficiency rather more, “increase economic and render markets Id., Society National competitive.” than less, 16; at see n. Engineers States, v. United 688; 435 U. atS., of Professional V., Inc., Continental Sylvania T. Inc. v. GTE 433 U. at 50 S., States, Northern Pac. R. Co. v. United 16; n. U. 4. S., The blanket a “naked as we see is not restrain license, it, [t] purpose except of trade with stifling competition,” no States, White Motor Co. United (1963), S. U. accompanies integration rather of sales, monitoring, against enforcement copyright unauthorized use. L. Handbook of 59, p. (1977). the Law of Antitrust Sullivan, § As we already have indicated, ASCAP and blanket license developed together practical situation in mar- out ketplace: thousands of thousands of users, owners, compositions. millions of users want unplanned, Most rapid, and indemnified access to and all of repertory compositions, and the owners want reliable method of col- lecting the use their copyrights. Individual sales trans- actions industry are quite expensive, as would be in- *17 dividual and monitoring enforcement, especially light resources of single composers. Indeed, as both the Appeals and CBS prohibitive the costs recognize, are licenses with individual radio stations, nightclubs, and restau- rants, 2d, 562 F. at 140 n. and it was in that milieu blanket license arose.
A middleman with a blanket license was obvious neces- sity if the thousands of individual negotiations, a virtual im- possibility, were to be avoided. Also, individual fees for the use individual compositions presuppose would an intricate schedule of fees and uses, as well as difficult and expensive rеporting problem for the user policing and task for copy- right owner. Historically, the market for public-performance rights organized largely itself around the single-fee blanket which
license, gave unlimited access to the repertory reli- and protection able against infringement. major When ASCAP’s and user-created competitor, came on also BMI, scene, turned to the blanket license.
With the advent of radio and television market networks, conditions changed, necessity and the advantages for and of a license for may those be far obvious is users less than the case potential when the users individual television radio stations, or the thousands of other individuals and organizations performing copyrighted compositions public.34 But even for television network licenses, ASCAP reduces costs absolutely by creating a blanket only few, license is sold instead of thousands,35 of times, and that obviates the need for closely monitoring the they networks to see that do not use they more pay than for.36 provides ASCAP also necessary resources for blanket sales re- enforcement, sources unavailable to the majority composers vast publishing houses. Moreover, a bulk type license of some a necessary consequence of the integration necessary to achieve efficiencies, these necessary and a consequence of an aggregate license is must be established.
D
This
lowering
substantial
of costs, which is of
po-
course
tentially beneficial
both
sellers and buyers, differentiates
the blanket
from
individual use licenses. The blanket
license is composed of the individual compositions plus the
aggregating service. Here, the
truly greater
whole is
than the
34And of
changes
course
brought
technology
about
new
or new
marketing techniques might also
justification
undercut the
practice.
for the
35The District Court found
require
that CBS would
4,000
between
8,000 individual license
per year.
transactions
sum its It unique characteristics: has certain license The blanket compositions, immediate use of covered licensee allows the great and delay prior negotiations,37 individual without the of Many consumers musical flexibility in choice of material. advantages of and cost clearly prefer the characteristics performing-rights even small so- package,38 marketable and occasionally compete with have arisen to ASCAP cieties that BMI offered blanket licenses.39 extent Thus, and have really is not blanket license is ASCAP product, different many joint agency offering the individual goods sales separate license, seller its blanket sellers, offering but is a compositions are raw ASCAP, which the individual material.40 37 Timberg, Aspects Merchandising The Antitrust Modem Music: Judgment 1950, Contemp. 294, The ASCAP Consent 19 Law & Prob. (1954) (“The disk-jockey’s itchy fingers and bandleader’s restive baton, said, for cannot wait contracts to be drawn with ASCAP’s publisher members, acquiescence individual much less for the formal of a characteristically author”). composer Significantly, unavailable only performance rights. nature, deals with nondramatic Because of their musicals, rights, negotiated individually dramatic such as can be performance. weE in advance the time of The same is true of various rights, music, synchronization, other such as recording, sheet which licensed on individual basis. Corp., Cf. United States Grinnell 563, (1966); v. 384 U. S. 572-573 Philadelphia Bank, United States Nat. (1963). 321, 374 U. S. 356-357 39Comment, Copyright Laws, Music Associations the Antitrust (1950). L. United States v. ASCAP: 168, Gamer, Ind. J. See also Licensing Judgment Provisions of the Amended Final Copyright (“no Bull. (1975) Soc. performing rights are licensed on other than a world”). blanket basis in nation in the 40Moreover, product because of the nature composition can —a simultaneously by many be “consumed” composers have numerous users — markets and numerous produce, incentives to so the blanket license is unlikely output, to cause decreased one of the normal undesirable effects of a cartel. pоpular songs get And since an increased share of ASCAP’s distributions, composers revenue compete even within the blanket productivity terms of and consumer satisfaction.
23 made a short, market which composers individual are inherently to compete fully effectively.41 unable
E Finally, we enough ap- have some against counsel doubt — plication of per se prac- the extent to which rule —about tice threatens the system economy,” “central nervous United States Socony-Vacuum v. Oil 226 n. Co., U. S. 59 (1940), competitive is, pricing that the free market’s as means of allocating arrangements among resources. Not all actual or potential competitors impact price have on that an are se violations of the Sherman or unreasonable Act even restraints. Mergers among competitors eliminate competition, price including they but competition, illegal, are not se many of them withstand attack under any existing antitrust standard. Joint ventures and other cooperative arrangements usually also not unlawful, at least not price-fixing schemes, agreement where the price on necessary is market the product at all.
Here, blanket-license fee set competition not among individual owners, it is fee for the use compositions covered But the license. the blanket wholly cannot be equated simplе with a arrangement horizontal among competitors. set ASCAP does its blanket license, quite license is dif- ferent from anything any individual owner The could issue. individual composers and agreed authors have neither individually sell in any other market nor use the blanket Socony-Vacuum Cf. United States Co., v. Oil S., at 217 U. Chicago (distinguishing Bd. States, Trade United U. S. (1918), ground on among challenged the effects of the rule there public “was the creation of market”); United States Pot v. Trenton Co., S., teries 273 U. 401 (distinguishing Chicago Bd. Trade on the ground that it did not price agreement involve “a among competitors in open market”). license to price fixing mask in such other markets.42 More- over, placed substantial restraints ASCAP and by the members decree ignored. consent not be must found District Court there was no practical, legal, *20 conspiratorial impediment to CBS’s li- obtaining individual ; censes in had CBS, short, a real choice. background
With this in mind, plainly enough which indi- cates that over years, the the face of available alterna- the tives, provided blanket license has an acceptable mecha- nism for at large part least a the for performing market the rights to copyrighted musical compositions, agree we cannot automatically that should illegal be declared in all of its many manifestations. when Rather, it should be attacked, subjected to a more discriminating rule examination the under may reason. ultimately It survive attack, that is that not the today. issue us before
IV As we have supra, n. noted, enigmatic remarks of the Court of Appeals respect remedy appear to have departed from the strict, court’s approach se and to have invited a more analysis. careful But left the general import of its judgment that the licensing practices of ASCAP and BMI under the consent decree are se of the violations Sherman Act. We reverse judgment, and the copyright judgment misuse dependent upon it, see supra, n. remand further proceedings to consider unresolved issues that may CBS have properly brought to the Court of Appeals.43 Of course, this will include an assessment under 42“CBS does not claim that the individual members and affiliates ('sellers’) of ASCAP agreed and BMI have among themselves as prices charged to be particular for the ‘products’ (compositions) offered by each of them.” Supp., F. at 748. 43It argued is judgment Appeals Court of should never theless be ground affirmed tying blanket license is a employed
the rule of reason of the blanket license in the industry, preserved television if that issue was CBS of Appeals.44 Court and the judgment Appeals reversed,
The Is the Court con- proceedings for further cases remanded to that court opinion. sistent with this orcfered R & so dissenting. Mr. Justice Stevens, is not a Court holds that ASCAP’s forbidden the Sherman spеcies price fixing categorically I holding. The Cburt remands agree Act. with that leaving open question to the cases Appeals, BMI ASCAP and employed by whether the blanket license as I think that inquiry. is unlawful under a rule-of-reason be answered before now should question properly us *21 affirmatively. of judgment ample precedent
There is affirmance its ration- Appeals ground on a that differs from the Court of modify judgment.1 not its provided of course that we do ale, was Appeals In judgment this the Court of litigation, arrangement ground or on the of 1 of the Sherman Act in violation § contrary monopolized BMI the relevant market that ASCAP and have rejected Appeals both The District Court the Court §2. respects, submissions, judgment in do not disturb latter’s these and we petition chal- particularly did file own for certiorari since CBS not its tying monopolization lenging Appeals’ its the Court of failure to sustain claims. issue, and Appeals did address the rule-of-reason The Court of not In preserve question in court. BMI that did not that insists CBS that event, Appeals, prefer that open if the is in the Court of we issue in the the United interest court first address the matter. Because of States’ play a decree, it will continue to enforcement of consent we assume litigation role in on remand. 8; Telephone Co., 159, 166 n.
1 See United States v. New York 434 U. S. Dayton Brinkman, 406, 419; Massachu Board Education v. 433 U. S. 480-481; Ludwig, setts Mutual Ins. Co. 426 U. United States v. S. Life Railway Express Co., American 435. U. S. not that blanket licenses may never be offered and BMI. Rather, judgment directed the District Court to fashion relief them to requiring offer additional forms of license as well.2 Even though judgment that may not be consistent with its stated that conclusion “illegal se” as a is kind of fixing, it is con entirely sistent with a conclusion petitioners’ exclusive all-or- nothing policy blanket-license violates the rule reason.3
The Court Appeals may well In so decide remand. my judgment, however, a remand is necessary.4 record before this Court full reflecting one, extensive discovery and eight weeks trial. The District find- Court’s ings of fact are thorough and well supported. They clearly reveal challenged policy does a significant have adverse impact on competition. I would affirm therefore judgment of the Court of Appeals.
I In December 1969, the president of the CBS television network wrote to ASCAP and BMI requesting each . . “promptly grant . performance new rights license which 2 130,140-141 (CA2 F. 2d 1977). ante, at 17 n. (describing relief ordered of Appeals se case, and suggesting that “unusual” for a ap that court’s decision pears more consistent with a approach). rule-of-reason 4 That the rule-of-reason issues have been raised preserved through out seems me clear. See 2d, 562 F. (“CBS at 134. contends that *22 blanket licensing only method not illegal is an tie-in blockbooking or which practical terms is effect, coercivе in is illegal also price-fixing device, a id., se violation ...”); (“As at 141 n. 29 noted, CBS also claims violation of 2 of the Sherman § Act. go need We legal into the arguments point on this they because grounded on its factual claim that there are barriers to direct licensing and ‘bypass’ of the ASCAP blanket license. The District Court, noted, rejected this and contention its findings are not clearly erroneous. The 2 claim must § fail therefore at this time and on record”); for Respondents Brief 41.
27 January payments for measured 1970, will effective provide, 5 and BMI each music.” ASCAP your actual use of be an request by stating that it considered CBS’s responded provisions with the for license in accordance application a though and treat it as even such,6 its consent decree would or licensing per-composition for on a provides neither decree CBS pursuing discussion, further per-use basis.7 Rather than instituted this suit. proper or not letter is considered
Whether CBS only on the per-use all, demand for if at licensing relevant, be seriously question is, of relief. For the fact it cannot steadfastly BMI adhered questioned, have ASCAP policy only per-program to the overall blanket or offering authoriza- licenses,8 requests for more limited notwithstanding for rejected request tions. a 1971 NBC ASCAP Thus, earlier 2,217 specific licenses for as well as an compositions,9 more limited request by of television statiоns for group they then authority than the blanket which were licenses 5 (SDNY 1975). Supp. 737, 400 F. counsel, stating responded general in a letter it ASCAP from its request meeting, would consider the at next board of directors regarded application it it as an for a the decree. license consistent with president pro BMI The letter from BMI’s stated: “The Consent Decree ready explore vides several alternative licenses and we are you.” Id., these with at 753-754. ante, and n. 21. requires The 1941 per-program decree ASCAP to as an offer licenses ASCAP, license. United States alternative to the blanket 1940-1943 56,104, p. (SDNY). Trade Cases Analytically, however, ¶ there is little per-program difference between the two. A license also covers the entire repertoire; simply ASCAP is therefore a miniblanket license. As is long-term license, way true of a dependent the fees set are in no infra, quantity quality on the of the music used. See at 30-33. Broadcasting (Application See United States v. National Co.), (SDNY ¶73,491 1970). 1971 Trade Cases *23 28 BMI ever offered to nor has Neither ASCAP
purchasing.10 even on portfolio, its entire less than anything license to the CBS response if the Moreover, basis. experimental policy, consistent to characterize their letter were not sufficient is the refusal surely is. It lawsuit the defense of this than repertoire than the entire anything license less —rather raises licenses decision to offer themselves —that in this case. questions antitrust the serious
II question no about there would be prior Under our cases, if blanket-only licensing policy ASCAP illegality A copyright, all licenses. BMI exclusive sources of were the privileges. statutory monopoly a patent, grant like is a his patentee enlarging a from statu- prohibit The rules which purchase a tory by conditioning license on monopoly a license under one refusing unpatented goods,11 grant under patent another, unless the licensee takes license also are equally applicable copyrights.12 however,
It the mere fact that the holder clear, patents single package covering several has granted any illegality. point them was all does not establish This Research, Mfg. settled Automatic Radio v. Hazeltine Co. Inc., Corp. and reconfirmed in Zenith 339 U. Radio S. 827, (Application Valley United States v. Shenandoah Broadcasting, Inc.), (SDNY Supp. 1962), 208 F. aff’d, 331 F. 2d (CA2 1964), denied, cert. U. 997. S. Corp. Co., 11 Mercoid v. Mid-Continent Investment 661; 320 U. S. Ethyl Corp. States, Gasoline v. United Busi 436; International 309 U. S. Corp. States, ness Machines v. United United 131; Shoe S. U.
Machinery Corp.
States,
v. United
258 U. S. 451.
12Indeed,
leading
condemning
cases
practice
“blockbookmg”
copyrighted
pictures,
See United
patents.
involved
motion
rather
than
Pictures,
Inc.,
States v. Paramount
United States v. Loew’s
131;
334 U. S.
v. Hazeltine 395 U. S. in conclusion unquestionably is its that therefore correct in its entire issuance of blanket licenses ASCAP’s covering automatically unlawful. But ventory alone, is standing not, an this identify important both of cases limitation on those out point rule. In the the Court was careful to that former, package present question the record did not whether the the license would have been unlawful if Hazeltine had refused And in license on other basis. 339 at 831. the S.,U. case, illegal latter the Court held license was package that a because of such refusal. atS., 395 U. 140-141. licensing only blanket Since ASCAP offers its- licenses, practices by fall on the illegal side the line drawn two Hazeltine cases. But there is a distinction: unlike significant ASCAP does not have exclusive control Hazeltine, in copyrights perfectly its is least possible- it portfolio, —at a directly as legal matter —for user music to negotiate with composers publishers rights may he whatever availability The a practical desire. alternative alters the competitive blanket-licensing policy. effect of a blockbooking ASCAP quite is therefore correct its insistence that blanket license cannot condemned on the categorically be authority of package-licensing cases. blockbooking they directly While these cases are do not answer instructive, the question whether practice is unlawful. ASCAP
The answer to that question depends on evaluation the effect of practice competition on mar- the relevant And, ket. of course, practice is well settled a sales permissible is for a small vendor, at least when no coercion is may present, be employed company unreasonable when that dominates the market.13 We therefore must consider Tampa Electric Co. Co., v. Nashville Coal 365 U. S. requirements (upholding ground contract is here “[t]here position neither a seller with a dominant in the market in Standard character competitive the record tells us about what market. Ill wholly dominated is market for music here at issue Virtually every domestic licenses.14 ASCAP-issued repertoire of either composition is in the copyrighted only exception, virtually And without again, or BMI. authority perform such that has been used secure means compositions is the blanket license. discriminat patently all-or-nothing
The blanket *25 access to ASCAP’s entire ory.15 purchases The user full Magrane-Houston myriad Co., 346]; out v. U. S. nor Fashion 258 [Co. industry-wide volume, coupled practice lets with substantial sales relying contracts, Oil v. United upon exclusive as in Standard [Co. States, 293]; tying arrangement plainly 337 U. a restrictive S. nor States, 392]”); Salt v. United Times- International 332 U. S. [Co. Picayune Publishing States, 594, (up Co. United 610-612 v. 345 U. S. holding challenged advertising practice because, while the volume of “ ” insubstantial,’ 'insignificant commerce affected not was seller was occupy position” market). found not to a “dominant in the relevant requires our cases make While clear that a violation of the Sherman Act both that the volume of commerce affected be substantial and that enjoy position, id., 608-609, proof seller a dominant see of actual com Royster pulsion required, Theatres, has not been but cf. Drive-In Inc. v. Broadcasting-Paramount Inc., American Theatres, 268 F. 2d 251 (CA2 1959), Corp. Loew’s, denied, 885; cert. 361 Milwaukee Towne U. S. Inc., (CA7 190 1951), denied, F. 2d 561 cert. 342 S. 909. The critical U. question likely practical is one of arrangement: effect of the whether probable performance the “court believes it fore contract will competition close in a substantial share of the line of commerce affected.” Tampa Co., supra, Electric Co. v. Nashville Coal at 327. majority opinion, my As in the generally references to ASCAP encom pass BMI as well. Cirace, Analysis See CBS v. ASCAP: An Economic of A Political Problem, (“the (1978) Ford. all-or-nothing bargain L. Rev. monopolist reap allows the perfect price to the benefits of discrimination confronting without problems posed by buyers dealing with different terms”). on different
repertoire,
though
even
his needs could be
satisfied
far
a
more limited selection.
price
pays
he
for this access is
unrelated either to the quantity or the quality of the
he
music
actually uses, or, indeed, to what he
probably
would
use in a
competitive system.
in this
Rather,
unique all-or-nothing
system,
price
is based on a percentage of the user's adver-
tising
revenues,16 measure that reflects the
ability
customer’s
pay17
to
totally
but is
unrelated to factors —such as the cost,
quality, or quantity of
product
normally affect price
—that
in a competitive market. The
system
requires users
buy
more music than they want at
which, while
beyond their ability
pay
and perhaps not
beyond
even
what
is “reasonable” for the
they
access
getting,18 may
well be
higher
far
than
they
what
would
to spend
choose
for music in
16 many years
For
prior to the
action,
commencement of this
the BMI
blanket-license fee amounted to
receipts
of net
sponsors
from
after
1.09%
specified
certain
deductions. 400
Supp.,
F.
at 743. The fee for
access
larger repertoire
ASCAP’s
was set at
receipts;
net
years,
recent
2.5%
however,
paid
CBS has
negotiated
a flat
fee, rather than a percentage, to
ASCAP.
App.
23 Jt.
in CA2 No. 75-7600, pp. E1051-E1052, E1135.
Cirace,
supra, at 288:
*26
“This history
that,
indicates
from inception,
ASCAP exhibited a tend-
ency to
price.
discriminate in
A license
upon
fee based
a percentage of
gross revenue is discriminatory in
grants
that it
the same
rights
number of
to different licensees for different total
amounts,
dollar
depending upon
ability
their
pay.
to
The
price
effectiveness of
signifi-
discrimination is
cantly
enhanced
all-or-nothing
the
blanket license.”
18Under the ASCAP consent decree,
receipt
on
of an application,
required
ASCAP is
to “advise
applicant
the
writing
in
of
fee which it
the
deems reasonable for
requested.”
the license
parties
If the
are unable to
agree on the fee
days
within 60
of the application,
applicant may
the
apply
to the United States District Court for the Southern District of New
York for the determination of a “reasonable fee.” United States v.
ASCAP,
The Under compositions.19 musical separate between tition play to network for a expensive more no it is license, blanket use is to than time prime hit current popular the most opera. soap in a music background composition unknown used amount by the is unaffected the user to cost Because incentive has no user programs, all or on any program on other- would what substituting example, by, to economize favorites for established songs expensive less be wise The program. aon used of music quantity reducing of more use encourage the thereby tends to license blanket really more is what lаrger share and also music, competitive in a expected be would than music, valuable revenues since And licenses. by separate system characterized character reflecting the basis on a composers toon are passed is tendency music,20 use of their frequency composers at the established rewards increase to prospect Perhaps the known. less well those expense does unlikely, but event try any opportunity songwriter a new present unequivocal on this Nathan, was expert, Robert economic 19 ASCAP’s point: separate system musical between competition under
“Q. there Is compositions? Tr. 3983. “A. sir." No dis royalties ASCAP determining n. 15. In 2d, at 136 F. The of music. background uses theme, feature,
tinguishes between royalties “a basis requires distribute decree 1950 amended compositions.” performance of the consideration to the gives primary which royalties receiving option of the additional provided for 1960 decree compensation based on provides additional plan which a deferred under recognized the individual’s works. membership status of length 76,469-76,470 ASCAP, 69,612, pp. Cases States Trade See United ¶ *27 1960). (SDNY
33 break into the by market offering product his for sale at an unusually price. low The absence of that opportunity, how- ever unlikely may be, is characteristic aof cartelized rather than a competitive market.21
The current state of the market cannot be explained on the ground that it could not operate or that competitively, issu- ance of more limited —and thus less by restrictive —licenses ASCAP is not feasible. The District Court’s findings disclose no why reason music-performing rights could not be nego- on tiated a per-composition or per-use basis, either with the composer or publisher directly or with an agent such as ASCAP. In fact, ASCAP now compensates composers and publishers on precisely those bases.22 If royal- distributions of ties can be calculated a per-use and per-composition basis, it is difficult see why royalties could not also be collected in way. same Moreover, the record also shows that where ASCAP’s blanket-license scheme does not govern, competitive markets do. A competitive market for “synch” rights exists,23 and after the use of blanket licenses in the motion picture industry was such a market promptly developed discontinued,24 in that In sum, the record demonstrates that the industry.25 market at issue here one that could highly be competitive, but is not competitive at all.
21
generally
See
2 P. Areeda & D. Turner, Antitrust Law 280-281, 342-
345 (1978); Cirace, supra
n.
at 286-292.
n. 20, supra.
See
“synch”
right is
right
to record a copyrighted song
syn
chronization with the film or videotape, and is
separately
obtained
from
right
perform
the music.
It is the latter which is
controlled
ASCAP and BMI.
CBS,
See
Inc. v. ASCAP,
IV competi- be could a market describes the record Since by two is dominated market is since not, tive surely dealing, method in engaged single, firms un- restrained has been trade to conclude that logical seems CBS, as to at least however, that argues, reasonably. ASCAP free to network since the no all has been restraint at there copyright holders. directly with deal failed to establish had found that District Court CBS from ASCAP. take a blanket compelled to that it was significant suggesting introduced evidence While CBS with they as are satisfied composers publishers, number of directly deal “disinclined” to system, would be the ASCAP unpersuasive evidence court found such network, indus- music power substantial market light CBS’s network holders of try importance and the could that CBS exposure.26 Moreover, arguable it is television use networks, television and, further with the other go along competition exploit resources to its economic destructive performance by driving of music among purveyors of this demon- rights to a far lower level. But none down lawful, or that practices strates that ASCAP’s are request. relief at injunctive cannot be held CBS’s liable not powеr market does The fact that has substantial CBS is restrained. deprive right complain it of the when trade by the antitrust Large buyers, small, protected as well as conspiracy even if the is himself a laws. victim a Indeed, law.27 wrongdoer, protection he has not forfeited the competition a conclusion would cause Moreover, that excessive may justify a good one side of the market more harm than exemption laws, from legislative the antitrust does Supp., F. at 767-771. See Perma 392 U. S. v. International Parts Mufflers, Corp., Inc. Life 134, 138-140; 16-17; v. Union Oil Simpson 377 U. S. Co., Kiefer- Stewart Co. Seagram 340 U. 214. Joseph S. Sons, Inc., E. &
constitute a defense to a violation of the Sherman Act.28 Even though characterizing CBS an oligopolist may be relevant to the question of remedy, and even though free competition might adversely affect the income of a good many composers and publishers, these considerations do not affect *29 legality ASCAP’s conduct.
More basically, ASCAP’s underlying argument that CBS must be viewed as having acted complete with freedom in choosing the blanket license is supported not by the District Court’s findings. The District did not find that CBS could cancel its blanket license “tomorrow” and continue to use music in its programming compete and with the other networks. Nor did the District Court find that such a course was any without risk or expense. Rather, the District Court’s finding was that within a year, during which it would con- tinue pay to some millions of dollаrs for its annual blanket license, CBS would be able to develop the needed machinery and enter into the necessary contracts.29 In other words, although the barriers to direct dealing as an CBS alterna- tive to paying for a blanket license are real and significant, they are not insurmountable.
Far from establishing ASCAP’s immunity from liability, these District Court in my findings, confirm judgment, illegality of its conduct. Neither any CBS nor other user has been willing to assume the and costs risks associated with attempt an to purchase music on competitive a basis. The fact that an attempt by CBS break down the ASCAP monopoly might well succeed preclude does not the conclusion that smaller and less powerful buyers totally foreclosed from competitive market.30 Despite its size, CBS itself Society Engineers See National States, United of Professional U. S. 689-690. Supp., See 400 F. at 762-765. 30For user, an individual the transaction costs involved in direct dealing with may individual holders prohibitively well be high, at least incur- without basis competitive a music not may obtain unpredict- fear risks. costs unprecedented ring predictable the certain with coupled consequences, able its method change associated delays costs man- any CBS inhibits music, unquestionably purchasing Even crusade. competitive aon embark decision agement any such to forestall bargain special aCBS offered if ASCAP the market- cure not wоuld arrangement special crusade, restraint. wide have might should CBS decision management
Whatever competi- whether question clear that perfectly it is made, not one unduly restrained been has market tion to answer. is authorized management company’s single competitors among arrangement the case is often It only to forever, but competition eliminate will serve entry. of new costs increase or to appearance delay its *30 Even without market. the state may well be That eventually might monopoly ASCAP intervention, the judicial the outweigh doing so benefits if the by CBS, broken be deal- commencing direct involved risks costs and significant blanket-licensing the that hardly means that But ing.31 requests. handling routinely such agency any broker absence of in the support publishers writers found that Court Moreover, the District their Id., 767. at While dealing. system to direct ASCAP prefer the District overcome, the be CBS could dealing with at direct apprehension of television importance power and the market found, by CBS’s respect other users. likely to far is less a similar conclusion exposure, One be substantial. appear to a venture in such involved The risks members, directly and its may be traced risk, which significant shows performed been has can”' —music which “in the to music relates the network inventory, for which already network’s in the movies substantial networks accumulate rights. The perfоrming secure must still pointed has And, as the Government “in the can.” shows inventories curiae: amicus out as the discontinue were to and television they stations] networks “If [the rights performance required obtain be they would license, then
blanket policy here produces issue is lawful. An arrangement that price marketwide significant discrimination and barriers to entry unreasonably restrains trade if even the discrimination only and the barriers expectancy. History have limited life suggests, however, that enduring these restraints have character. policy requires
Antitrust great of economic aggregations power closely be duty scrutinized. That especially impor- tant when aggregation is composed statutory monopoly privileges. repeatedly Our cases have stressed the need to limit the privileges conferred patent strictly and copyright scope to the statutory grant. The record in this case plainly discloses limits have been exceeded and that ASCAP and BMI monopoly exercise powers that far exceed the sum of the privileges copyright individual holders. already-produced these attempt shows. oppor- This would create an tunity for the owners, granting performing as a condition of rights, attempt to obtain the entire value of the ‘in the shows can.’ produce, It would words, in other a case of monopoly. bilateral Becаuse pricing is indeterminate in monopoly, a bilateral television networks would not terminate their they agree- licenses until had concluded an every ment with copyrighted owner of music ‘in can’ to allow future performance price; for an identified the networks then would determine sufficiently whether that was low that termination of the blanket profitable. prospect would be But negotiations of such offers copyrights ability owners an rights way to misuse their in a ensures the licensing continuation of blanket despite change in market may conditions that make other licensing preferable.” forms of Brief for United States as Amicus Curiae 24-25. analysis
This is in sense no inconsistent with findings of the District *31 reject Court. The District Court did argument CBS’s coercion as to music “in the can.” But again as the points out, Government the Dis- findings trict Court’s essentially were addressed claim; to a tie-in “the possibility court did not consider the that owners’ self- interested, compensation non-coercive demands for might nevertheless dropping make the cost of CBS’ sufficiently the blanket license high that ASCAP and BMI could take this penalty’ ‘termination into account in setting Id., fees for the blanket license.” at 25 n. 23. consti- its blanket that argues itself Indeed, the sum from different significantly product tutes I con- premise, I agree parts. component of trade restraint monopolistic ais aggregate clude Act. by the Sherman proscribed