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provided by ASCAP and BMI to broadcast networks amount to per
se illegal price fixing (because a single price is set for
multiple competing copyrighted musical works) and tying
(because a licensee is forced to take a license for all the
compositions in the catalog).
That case ultimately found its
way to the Supreme Court.
In one of the most important
antitrust decisions in the last thirty years, the Court held
that the blanket license had to be examined under the rule of
BMI, Inc. v. CBS, Inc., 441 U.S. 1 (1979).
it to say that in light of the tremendous inherent
efficiencies of a blanket license and against the background
of the Department of Justice decrees, it is very difficult for
a plaintiff to prove that ASCAP and/or BMI unreasonably
Second, a licensee or group of licensees might
challenge an abusive licensing practice by ASCAP and/or BMI as
copyright misuse, which might be established even if it cannot
be proven that ASCAP and BMI have violated the antitrust
In its Lasercomb decision, the Fourth Circuit
Court of Appeals refused to enforce a copyright against
admitted infringers because the copyright holder had enforced
a broad non-compete provision against third parties.
2/ See Lasercomb America, Inc. v. Reynolds, 911 F.2d 970 (4th Cir. 1990) ("The question is not whether the copyright is being used in a manner violative of antitrust law (such as whether the licensing agreement is 'reasonable'), but whether the copyright is being used in a manner violative of the public policy embodied in the grant of a patent").
According to the court, that broad non-compete was a misuse of
the copyright (even if it did not violate the antitrust laws)
because the copyright holder attempted to use its copyright
"to control competition in an area outside the copyright. "3/
Lasercomb notwithstanding, it would likely be difficult to prove that ASCAP and/or BMI have misused their
It is not clear for example that any of the
anecdotes amount to a claim that the organizations have
attempted to control competition outside the copyrights. More fundamentally, the doctrine of copyright misuse, unlike the
doctrine of patent misuse, has not been widely accepted by the
Indeed, no court of appeals other than the Fourth
Circuit has clearly embraced the doctrine.
There is good
reason for the reluctance on the part of other courts:
remedy for a misuse
i.e., non-enforcement of the copyright
even against third-parties not affected by the misuse
Moreover, there is reason to be concerned when the
enforceability of property rights turns on the whims of what a
federal judge believes is good "public policy."
Third, those who feel aggrieved by some practice of
ASCAP and/or BMI could try to persuade the Department of
Justice to modify the ASCAP and BMI decrees to prohibit the
allegedly abusive practice.
As explained above, the decrees
have been modified before.
However, unless ASCAP and BMI were
willing to consent to the modification, the Department would
3/911 F.2d at 979.
essentially have to prove through litigation that the
challenged practice violates the antitrust laws.
Department, like a private plaintiff, however, would have to surmount the Supreme Court's BMI decision in order to prove the practice unreasonably restrains trade.
None of these options makes as much sense as
As a practical matter, what the National
Restaurant Association and others are complaining about is
really not an antitrust issue or at least not one that
clear, however, whether the law gives them too much or not
On the one hand, when a restaurant tunes its sound
system to a local radio station to improve its ambiance and to
attract more business it is profiting from performance of a
non-dramatic musical work.
There is some appeal to the
argument that the copyright owner has a right to share in
From society's point of view, to the extent
that copyright holders effectively cannot share in those
profits, then at the margin and in theory fewer copyrighted
works will be produced.
On the other hand, there is no way of which I am
aware to determine whether we as a country currently devote
too much, too little, or just the right amount of resources to
copyright creation. If we devote too many resources to such endeavors, then society will be better off by denying copyright protection to incidental performances of works of
There is no correct answer in an absolute sense to
Rather it is essentially a political question
best resolved in a political forum, namely Congress.
we antitrust lawyers could help, but I fear you are on your
own on this one!