The federal court in the Southern District of New York has granted summary judgment in Pandora's favor in the company's rate proceeding with the American Society of Composers, Authors and Publishers (ASCAP). This judgment upholds Pandora's right to perform all compositions in the ASCAP repertory.
U.S. District Judge Denise Cote said an existing antitrust consent decree
that requires the American Society of Composers, Authors & Publishers to
license its works to Pandora from 2011 to 2015 "unambiguously" covers all
its works, even if publishers seek to "withdraw" authority to license to
"new media" services.
"We welcome the court's decision," said Chris Harrison, Pandora's Assistant
General Counsel. "We hope this will put an end to the attempt by certain
ASCAP-member publishers to unfairly and selectively withhold their catalogs
The motion for summary judgment, which sought an interpretation of the
consent decree under which ASCAP has operated since 1941, was entered on
July 1, 2013. It asked the court to determine that selective withdrawals of
so-called "new media" rights by ASCAP-member publishers could not be
implemented against Pandora without violating the consent decree. The
decision makes clear that Pandora is entitled to a blanket license the
scope of which is not diminished in any manner by the publishers' attempts
to "withdraw" these rights from ASCAP. The ruling has no impact on the
royalty rates Pandora currently pays to ASCAP.
"Pandora continues to firmly believe that musicians must be fairly
compensated for their work. We are committed to a responsible, sustainable
and equitable royalty structure that benefits and grows the entire industry
and does not discriminate against new technologies," concluded Harrison.
The case arose after EMI Music Publishing Ltd, Sony/ATV Music Publishing
LLC and Universal Music Publishing Group tried to withdraw new media
licensing rights from ASCAP, allowing them to negotiate directly with
Internet radio services.
"ASCAP argues that 'ASCAP repertory' refers only to the rights in music
works that ASCAP has been granted by its members as of a particular moment
in time," the judge wrote. "Pandora argues that 'ASCAP repertory' is a
defined term articulated in terms of 'works' or 'compositions,' as opposed
to in terms of a gerrymandered parcel of 'rights.' Pandora is correct."
The decision could strengthen Pandora's case as it pursues related
litigation on what constitutes "reasonable" licensing fees. The Judge has
scheduled a December 4 trial on that matter.
"The court's decision to grant summary judgment on this matter has no
impact on our fundamental position in this case that songwriters deserve
fair pay for their hard work, an issue that the court has not yet decided,"
ASCAP Chief Executive John Lofrumento said.
Lofrumento added that ASCAP looks forward to the December 4 trial where the
group will once again reiterate its stance.