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BMI formally responds to Department Of Justice’s 100% licensing appeal

By | Published on Friday 18 August 2017


US collecting society BMI yesterday filed its formal response to the Department Of Justice’s appeal over the whole 100% licensing rigmarole.

Recap! The US Department Of Justice last year declared that – by its reading of the so called consent decrees that regulate American performing rights organisations BMI and ASCAP – the two PROs are obliged to offer licensees so called 100% licences. Which would mean a licensee with a BMI licence could make use of a song even if BMI only controlled 15% of said song. Under the current ‘fractional licensing’ system the licensee would also need licences from whichever societies or publishers control the other 85%.

BMI, ASCAP and the US songwriting community hit out at that DoJ declaration, which would require a major change in how collective licensing works and performing right royalties flow Stateside. BMI took the matter to the court that oversees its consent decree where judge Louis L Stanton immediately sided with the society. The DoJ is now appealing that ruling.

BMI’s response to the DoJ’s appeal restates its arguments as to why 100% licensing is not required under its consent decree, as well as running back through why introducing a 100% licensing system now would be major pain in the arse.

BMI boss Mike O’Neill summarised the society’s position as the court papers were filed yesterday. He stated: “BMI’s appeal argument is extremely simple in that it comes down to the language of our decree. 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”.

“What is not simple, however”, he went on, “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”.

While the court proceedings in relation to the 100% licensing debate continue to go through the motions, it’s also hoped that lawmakers in US Congress could ultimately amend copyright law to give the all-clear to fractional licensing in the collective licensing domain.

Plus, of course, there has been a post-Presidential election change of leadership at the DoJ since last year’s proclamation on 100% licensing, so there is always a chance the government agency could be persuaded to change its mind.

O’Neill added: “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”.