 The Clarinet BBoard
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Author: Mark Charette
Date: 2012-06-18 12:39
DMX went direct to the music publishers for licensing and requested that ASCAP and BMI reduce their blanket licensing rates accordingly. ASCAP & BMI proposed rates significantly higher than DMX wanted to pay and took the case to court and won, with the court essentially adopting DMX's proposed substantially lower rates (a "carve-out"). BMI & ASCAP appealed, and the Second Circuit Court came back affirming the lower court decision. The court in this decision shows that it understands something about the music "business".
http://caselaw.findlaw.com/us-2nd-circuit/1603198.html?DCMP=NWL-pro_ip
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Author: Ken Shaw ★2017
Date: 2012-06-18 18:31
I read my way through the opinion, which is stupefyingly complex.
The parties are fighting over from licensing fees paid for the use of copyrighted music (e.g., radio play). ASCAP and BMI for many years had a wonderful game. They didn't produce the music, but only oversaw the licensing, charging a few pennies per air-play for their services. Those pennies added up to a huge flow of cash. DMX is an upstart competitor. Each tries to bully the others, making overreaching and oppressive demands. It got so bad that the government brought antitrust actions against them and forced them to sign settlement agreements. The carrot was that they had a chance to play nicely together and enjoy the income. The stick was that if the played too rough, a court would impose a solution. Of course they fought madly, and this appeal was about the courts' allocations of the cash flow.
For this bet-the-company litigation, the parties hired super high powered lawyers - former Solicitor General Seth Waxman for BMI, former Solicitor General Ted Olson for ASCAP and Bruce Rich for DMX. Young associates undoubtedly spent many associate-years of time untangling the facts and boiling them down to something that would sound perfectly reasonable and require that their side win. It's just that they reached opposite conclusions.
We're lucky they got Judge Chin, who is a major league intellect. It's no criticism of him that his understanding of the music business was guided by the legal briefs from the best lawyers in the country, each of which laid out plausible reasoning, ready for adoption.
For what it's worth, I think the decision was correct.
Ken Shaw
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