Court Opinion

ID: 8925150
Source: CourtListenerOpinion
Date Created: 2022-11-27 06:36:14.196979+00
Date Added: 2024-06-11T17:09:22.862084
License: Public Domain

WINTER, Circuit Judge,
concurring:
I disagree with little stated in Judge Newman’s thoughtful and comprehensive opinion. I write separately because I believe that it demonstrates that the blanket license as presently used cannot have an anti-competitive effect and hope that his analysis, used out of context, will not lead to future needless litigation over blanket licenses in the music industry.
In Broadcast Music, Inc. v. Columbia Broadcasting System, 441 U.S. 1, 99 S.Ct. 1551, 60 L.Ed.2d 1 (1979), the Supreme Court remanded to us to apply rule of reason analysis to ASCAP’s and BMI’s blanket licenses. We concluded that the blanket *934licenses had no anti-competitive effect with regard to the CBS network. CBS, Inc. v. ASCAP, 620 F.2d 930 (2d Cir.1980), cert. denied, 450 U.S. 970, 101 S.Ct. 1491, 67 L.Ed.2d 621 (1981). We have now engaged in a similar analysis with regard to the broadcasters and have reached the same conclusion.
The result of this scrutiny has been to demonstrate that so long as composers or producers have no horizontal agreement among themselves to refrain from source or direct licensing and there is no other artificial barrier, such as a statute, to their use, a non-exclusive blanket license cannot restrain competition. In those circumstances, it is simply one alternative competing on the basis of price and services with others. The lack of use of the alternatives does not signal a restraint on competition but merely reflects the competitive superiority of the blanket license. So long as resort to the alternatives is not impeded by agreement among composers or producers or by some other artificial barrier, the rights and services afforded by the blanket license must be priced at a competitive level and no injury to consumers is possible.
Our scrutiny in CBS and in the instant case fully verifies the conclusion that blanket licenses reduce the costs of licensing copyrighted musical compositions. They eliminate costly, multiple negotiations of the various rights and provide an efficient means of monitoring the use of musical compositions. They also allow users of copyrighted music to avoid exposure to liability for copyright infringement. ASCAP and BMI blanket licenses almost invariably include not only the compositions to be used but also all others that might assert an infringement claim. The alternatives of source or direct licensing grant rights only to particular compositions and not to those with potential infringement claims. The limited number of notes on a scale creates a potential for a multitude of infringement actions, and avoiding exposure to such litigation and possible liability may be valuable indeed to users of musical compositions.
The point, however, is not that any particular efficiencies are available through blanket licensing but that such licenses will be purchased only if they are less costly than the next best alternative. Why else would producers, who generally own the musical copyrights used in their programs, choose to use ASCAP, which retains part of the revenues collected? The point is best made by comparing these blanket licenses with the arrangement struck down in NCAA v. Board of Regents of the University of Oklahoma, — U.S. -, 104 S.Ct. 2948, 82 L.Ed.2d 70 (1984). In that case, the NCAA attempted to sell exclusive television rights to football games between member colleges. The member institutions had agreed among themselves to abide by the rules of the NCAA and to boycott collectively any institution that violated those rules. I think all would agree that, if the NCAA merely offered a non-exclusive license to all football games between member schools and the member schools were free to negotiate television rights on their own, the action would have been dismissed on the pleadings. Indeed, the NCAA license would obviously enhance rather than restrict the competitive alternatives. In my view, the non-exclusive blanket licenses at issue here are indistinguishable from that hypothetical.
With these additional observations, I concur in Judge Newman’s opinion.