Yesterday, the US Court of Appeals for the Second Circuit in a “Summary Order” that the Court said does “not have precedential effect,” upheld an even briefer decision of the US District Court Judge who oversees the BMI antitrust consent decree, determining that the Department of Justice was wrong in its interpretation of the consent decree requiring that all songs licensed by BMI represent 100% of the musical work. This is a very arcane issue very deep into the nitty-gritty of copyright law – and an issue that we wrote about several times before, including our articles here and here.

The issue arises as many songs are written by several co-writers. Often times, it is simply a composer of the music and someone else who writes the lyrics. But more and more in many musical genres, there are multiple people who receive songwriting credits on any single song. Each of these authors is deemed to have a “fractional interest” in the song. When these multiple authors of a song belong to different performing rights organizations (e.g. ASCAP, BMI, SESAC and GMR, organizations which authors and their publishing companies join to simplify music licensing to users of lots of music – like radio stations, digital music services, and even bars, restaurants and retail establishments that play music to entertain customers), the issue addressed in this case arises. The question that parties before the court have been debating is whether, when one of these PROs signs a deal with a music user, the user gets the rights to actually perform the song, or whether they simply get the fractional interest in the song that is held by the songwriter who is a member of the PRO, which would require that the user also get the rights to the other fractional interests before the user can play the song.
Continue Reading Court of Appeals Upholds BMI Decision Allowing Fractional Music Licensing – What Are the Issues?