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Pandora v. ASCAP

Pandora v. ASCAP

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Published by Mark H. Jaffe
In re Petition of Pandora, related to United States v. ASCAP
In re Petition of Pandora, related to United States v. ASCAP

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Categories:Business/Law
Published by: Mark H. Jaffe on Sep 18, 2013
Copyright:Attribution Non-commercial

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09/18/2013

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 UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEWYORK ---------------------------------------IN RE PETITION OF PANDORA MEDIA, INC.---------------------------------------Related toUNITED STATES OF AMERICA,Plaintifv.AMERICAN SOCIETY OF COMPOSERS, AUTHORS,AND PUBLISHERS,Defendant.---------------------------------------X::::::::::::::::X12 Civ. 8035 (DLC)41 Civ. 1395 (DLC)OPINION & ORDERFor applicant Pandora Media, Inc.:Kenneth L. Steinthal Joseph R. WetzelKing & Spalding, LLP101 Second Street, Suite 2300San Francisco, CA 94105For ASCAP: Jay CohenLynn B. BayardDarren W. JohnsonPaul, Weiss, Rifkind, Wharton & Garrison, LLP1285 Avenue of the AmericasNew York, New York 10019DENISE COTE, District Judge:Pandora Media, Inc. (“Pandora”) provides internet radioservices. In 2010, Pandora sought a blanket, through to theaudience, license fromthe American Society of Composers, Authors
Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 1 of 30
 
2& Publishers (“ASCAP”) for a five year period beginning January1, 2011. Through this motion for summary judgment, Pandoraargues that the antitrust consent decree under which ASCAPoperates requires ASCAP to license Pandora to performfor fiveyears all of the works in the ASCAP repertory as of January 1,2011, even though certain music publishers beginning in January2013 have purported to withdraw fromASCAP the right to licensetheir compositions to “New Media” services such as Pandora.Because the language of the consent decree unambiguously requiresASCAP to provide Pandora with a license to performall of theworks in its repertory, and because ASCAP retains the works of “withdrawing” publishers in its repertory even if it purports tolack the right to license themto a subclass of New Mediaentities, Pandoras motion for summary judgment is granted.BACKGROUND The following facts are undisputed or taken in the lightmost favorable to ASCAP. Pandora is company that providesstreaming internet radio services using songs licensed fromartists and their agents and licensees. ASCAP is a “performingrights organization” (“PRO”) composed of voluntary writer andpublisher-members, which exists in part to facilitate licensingof artists’ works to third parties. ASCAP collects license feeson behalf of its 460,000 members fromthird parties.
Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 2 of 30
 
3 The ASCAP Consent DecreeSince 1941, ASCAP has been operating under a consent decreestemming froma Department of Justice antitrust lawsuit thatalleged monopolization of performance rights licenses. Sincethen, ASCAP has been governed by this consent decree, which hasbeen modified fromtime to time. The most recent version of theconsent decree was issued in 2001 and is known as the SecondAmended Final Judgment (“AFJ2”). See United States v. Am. Soc’yof Composers, Authors & Publishers, Civ. No. 41-CV-1395, 2001 WL1589999 (S.D.N.Y. June 11, 2001).In an attempt to ameliorate the anti-competitive concernsraised by ASCAPs consolidation of music licenses, AFJ2 restrictshow ASCAP may issue licenses in a variety of ways. First, AFJ2provides a mechanismwhereby a judge on the United StatesDistrict Court for the Southern District of New York (the “ratecourt”) will determine a reasonable fee for ASCAP licenses whenASCAP and an applicant for a license cannot reach an agreement.See AFJ2 § IX(D).AFJ2 also sets out the characteristics of the licenses ASCAPissues. “The AFJ2 defines four types of licenses: blanketlicenses, per-programlicenses, per-segment licenses, andthrough-to-the-audience licenses.Broad. Music, Inc. v. DMXInc., 683 F.3d 32, 36 (2d Cir. 2012) (citation omitted). Threeof the provisions create categories of licenses, which are
Case 1:12-cv-08035-DLC Document 70 Filed 09/17/13 Page 3 of 30

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